Investor Presentation Second Quarter 2015
Safe Harbor This presentation includes forward-looking statements. In this presentation, the words believe, may, will, estimate, continue, anticipate, intend, expect, predict, potential and similar expressions, as they relate to Cornerstone OnDemand, Inc. ( Cornerstone OnDemand or the Company ), business and management, are intended to identify forward-looking statements. In light of the risks and uncertainties outlined below, the future events and circumstances discussed in this presentation may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends affecting its business. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the date of this presentation and management s good faith belief as of such date with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to: statements regarding the Company s business strategies; the Company s anticipated future operating results and operating expenses; the Company s ability to attract new clients to enter into subscriptions for its solution; the Company s ability to service those clients effectively and induce them to renew and upgrade their deployments of the Company s solution; the Company s ability to expand its sales organization to address effectively the new industries, geographies and types of organizations the company intends to target; the Company s ability to accurately forecast revenue and appropriately plan its expenses; market acceptance of enhanced solutions, alternate ways of addressing learning and talent management needs or new technologies generally by the Company and its competitors; continued acceptance of SaaS as an effective method for delivering learning and talent management solutions and other business management applications; the attraction and retention of qualified employees and key personnel; the Company s ability to protect and defend its intellectual property; costs associated with defending intellectual property infringement and other claims; events in the markets for the Company s solution and alternatives to the Company s solution, as well as in the United States and global markets generally; future regulatory, judicial and legislative changes in the Company s industry; changes in the competitive environment in the Company s industry and the markets in which the Company operates; and other factors discussed under Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations in the Company s periodic reports filed with the Securities and Exchange Commission (the SEC ). Forward-looking statements speak only as of the date of this presentation. You should not put undue reliance on any forward-looking statement. The Company assumes no obligation to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting future performance or results, except to the extent required by applicable laws. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forwardlooking statements. In considering investing in the Company s securities, you should read the documents the Company has filed with the SEC for more complete information about the Company. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Global Leader in SaaS Talent Management 19M+ 2,200+ 191 42 17 Users Clients Countries Languages Offices As of March 31, 2015 Note: User and client count figures exclude Growth Edition and Cornerstone for Salesforce. 3
Best-of-Breed Product Suite 4
Established Market Leadership LEADER LEADER LEADER 2014 Integrated Talent Management Marketscape Strong functional capabilities Solid customer references and customer service Streamlined, attractive user experience Non-learning modules are equally robust and capable of being offered alone 2014 Magic Quadrant for Talent Management Suites A leader in overall vendor satisfaction Best-in-class learning and performance, strong mobile support, and good use of social collaboration and game mechanics to engage employees A natively developed suite with a high degree of configurability 2013 Forrester Wave for Talent Management A forward-looking company Flexible/adaptable products Making mobile and social everywhere Significant investment in non-us localization
Flourishing Ecosystem of Alliances Select Technology Alliances Select Distribution & Deployment Alliances Global Global Global Global 6
Proven Growth Story Revenue Growth (in millions) $263.6 Client Growth 2,153 User Growth (in millions) 18.1 1,631 14.0 $185.1 1,237 10.6 $117.9 805 7.5 $29.3 $19.6 $11.0 $46.6 $75.5 105 168 280 481 0.9 2.1 3.3 4.9 2007 2008 2009 2010 2011 2012 2013 2014 2007 2008 2009 2010 2011 2012 2013 2014 2007 2008 2009 2010 2011 2012 2013 2014 Note: User and client count figures exclude Growth Edition and Cornerstone for Salesforce. 7
Competitive Differentiation
The New Competitive Landscape ERP Suite Focus on integration Built through acquisition Mix of SaaS and On-Premise System of record Clients multiple levels removed Best Of Breed Focus on innovation Organically grown Pure SaaS System of engagement Focus on client success 9
Organically Grown Core Suite Acquired by Acquired by Acquired by Acquired by Acquired by
The Organic Advantage Unified Data Model Easy to integrate multiple applications Single Support Organization Only one call to make Single Reporting Environment Data consolidated into a single, centralized repository Consistent User Interface Same look-and-feel across clouds 11
Not just Software, but Service 95 % average dollar retention since inception Many repeat buyers Pioneering Client Success Framework Business consulting, client success management and solution architecture 12
Financial Results
Financial Snapshot Financial Model Highlights Predictable recurring revenue model Typically sign three year contracts billed annually Highly efficient use of capital 07 14 CAGR Compelling Financial Metrics Revenue Growth* Bookings Growth* Dollar Retention** 58% 55% 95% * 2010 and 2011 values exclude the $2.9mm and $2.5mm reductions of revenue during Q4 2010 and Q2 2011, respectively, associated with non-cash charges for common stock warrants issued to ADP * Bookings defined as gross revenue plus change in deferred revenue for the period ** Historical dollar retention percentage is from 02-14 ** Annual dollar retention rate defined as the implied monthly recurring revenue under client agreements at the end of a fiscal year, excluding any upsells during that fiscal year, divided by the implied monthly recurring revenue for the same client base at the end of the prior fiscal year
Strong Momentum (in millions) Revenue (in millions) Bookings $300 $263.6 $325 $316.1 $240 $260 $231.7 $180 $185.1 $195 $154.3 $120 $60 $0 $11.0 $46.6 $29.3 $19.6 $75.5 $117.9 2007 2008 2009 2010 2011 2012 2013 2014 $130 $65 $0 $97.6 $60.9 $34.5 $24.9 $15.0 2007 2008 2009 2010 2011 2012 2013 2014 15
Growing Revenue Per User $17 $16 $15 $15.04 $16.40 $14 $13 $12 $11 $11.27 $12.14 $13.05 $10 2010 2011 2012 2013 2014 16 Calculated using full-year revenue for the period divided by the midpoint of the beginning and ending user base during the period.
Consistent Improvement in Profitability Non-GAAP Operating Cash Flow Non-GAAP Net Loss Margin (in millions) $36 $33.3 0% 2010 2011 2012 2013 2014 $30-4% $24 $20.6-8% -7% -6% $18-12% $12 $11.2-16% -14% $6 $0 $2.2 $0.2 2010 2011 2012 2013 2014-20% -24% -22% -17% 17
Getting to $1 Billion
Two Paths to $1 Billion 1. Increase breadth of market reach 2. Increase level of client penetration 19
Getting to $1 Billion Increase Breadth
Large Underpenetrated Market Addressable Market $31 Billion 19.1 Million Users Current Market 72 Million Est. Users 400 Million Addressable Seats Source: Adapted from Gartner, IDC, US Census Bureau 21
Accelerating Client Traction 2,400 2,000 1,600 1,200 800 400 0 2,153 1,631 1,237 805 481 280 12 21 44 73 105 168 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Key Client Additions 2003-2004 2007 2009 2011 2013 22 2005-2006 2008 2010 2012 2014
Expanded Global Footprint Europe, Middle East & Africa Asia Pacific 8 Offices 29 Languages 5.6M Est. Users 5 Offices 9 Languages 1.6M Est. Users Select Notable Clients Select Notable Clients Germany South Africa Spain Japan China Australia United Kingdom France Austria China India Japan 23
Pushing Up & Down Market Select Global 500 Clients Select Growth Edition Clients x 24
Increasing Market Share Market Share 27% Current SaaS Market Share 25
Getting to $1 Billion Increase Depth
Huge Opportunity Within Installed Base 2,250 2,000 1,750 1,500 Approximately $1.5B opportunity within installed base Number of Clients 1,250 1,000 750 500 250 0 Learning Performance Succession Connect Compensation Recruiting Onboarding Existing Client Penetration Client Opportunity 27 Calculated based on 2,237 clients with approximately 8,500 users on average.
Extended Enterprise Opportunity Numerous Use Cases Client Spotlight Dealers Contingent Laborers Customers Client Ecosystem Partners Franchisees ABA is the industry's premier membership group providing training and education to the banking industry Live Since: Employees: 2009 <1,000 Resellers Members Members: Users: 3,400+ Banks 150,000+ 28
Enhanced Analytics with Evolv 1 6 Strengthens Cornerstone s core talent management application suite Accelerates roadmap for workforce planning and predictive analytics strategy Seasoned team with deep machine learning and data science experience 29
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