Cornerstone OnDemand Announces Fourth Quarter and Fiscal Year 2020 Financial Results

SANTA MONICA, Calif.--()--People development solutions provider Cornerstone OnDemand, Inc. (NASDAQ: CSOD) today announced results1 for its fourth quarter and fiscal year ended December 31, 2020. The Company has provided supplemental financial information located on its Investor Relations website. On April 22, 2020, the Company acquired Saba Software, Inc. (“Saba”); the discussion below includes Saba’s results for the post-acquisition period.

Fourth Quarter 2020 Results:

  • Revenue for the fourth quarter of 2020 was $206.9 million. This represents a 38.3% increase compared to the same period of the prior year. Without giving effect to the acquisition of Saba, revenue would have increased 4.7%.
  • Subscription revenue for the fourth quarter of 2020 was $197.9 million. This represents a 39.6% increase compared to the same period of the prior year. Without giving effect to the acquisition of Saba, subscription revenue would have increased 7.3%.
  • (Loss) income from operations for the fourth quarter of 2020 was $(4.8) million, yielding a margin of (2.3)%, compared to (loss) income from operations of $10.6 million and margin of 7.1% in the same period of the prior year.
  • Non-GAAP operating income for the fourth quarter of 2020 was $52.1 million, yielding a non-GAAP operating margin of 25.2%, compared to non-GAAP operating income of $28.3 million and a non-GAAP operating margin of 18.9% in the same period of the prior year.
  • Net income for the fourth quarter of 2020 was $1.6 million, or $0.02 diluted net income per share, compared to net income of $9.4 million and $0.15 diluted net income per share in the same period of the prior year.
  • Non-GAAP net income for the fourth quarter of 2020 was $44.0 million, or $0.64 non-GAAP diluted net income per share, compared to non-GAAP net income of $28.3 million and $0.43 non-GAAP diluted net income per share in the same period of the prior year.
  • Unlevered free cash flow for the fourth quarter of 2020 was $36.4 million, yielding a margin of 17.6%, compared to unlevered free cash flow of $54.7 million and a margin of 36.6%, in the same period of the prior year. Unlevered free cash flow for the fourth quarter of 2020 includes approximately $11.2 million of restructuring and acquisition-related cash outflows.

Fiscal Year 2020 Results:

  • Revenue for the full year of 2020 was $740.9 million. This represents a 28.5% increase compared to the prior year. Without giving effect to the acquisition of Saba, revenue would have increased 6.5%.
  • Subscription revenue for the full year of 2020 was $705.2 million. This represents a 29.9% increase compared to the prior year. Without giving effect to the acquisition of Saba, subscription revenue would have increased 9.4%.
  • (Loss) income from operations for the full year of 2020 was $(31.6) million, yielding a margin of (4.3)%, compared to (loss) income from operations of $11.9 million and margin of 2.1% in the prior year.
  • Non-GAAP operating income for the full year of 2020 was $163.5 million, yielding a non-GAAP operating margin of 22.1%, compared to non-GAAP operating income of $88.8 million and a non-GAAP operating margin of 15.4% in the prior year.
  • Net loss for the full year of 2020 was $(40.0) million, or $(0.63) diluted net loss per share, compared to net loss of $(4.1) million and $(0.07) diluted net loss per share in the prior year.
  • Non-GAAP net income for the full year of 2020 was $121.4 million, or $1.78 non-GAAP diluted net income per share, compared to non-GAAP net income of $77.0 million and $1.17 non-GAAP diluted net income per share in the prior year.
  • Unlevered free cash flow for the full year of 2020 was $113.9 million, yielding a margin of 15.4%, compared to unlevered free cash flow of $90.2 million and a margin of 15.6%, in the prior year. Unlevered free cash flow for the full year of 2020 includes approximately $47.4 million of restructuring and acquisition-related cash outflows.

I’m very pleased with our fourth quarter and full year 2020 results, which show operational and financial strength,” said Phil Saunders, Chief Executive Officer. “While we have a long roadmap of execution ahead of us, I believe we are starting to unlock the growth and earnings power of this company.”

Recent Highlights:

  • The Company announced the appointment of Chirag Shah as Chief Financial Officer.
  • The Company appointed two new members to the board of directors: Felicia Alvaro, former Chief Financial Officer and Treasurer for Ultimate Software, and Nancy Altobello, former Global Vice Chair of Talent for Ernst & Young.
  • The Company announced the formation of the Cornerstone Innovation lab for AI, a new center of excellence within the Company composed of data scientists and machine learning experts who specialize in innovating practical and ethical ways to apply AI technology to the workplace.

Our financial results represent a strong finish to 2020, and I am proud of our accomplishments as a team,” said Chirag Shah, Chief Financial Officer. “After a year in which we completed a major acquisition, navigated a pandemic, transitioned leadership, and initiated significant internal transformation, we believe our fourth quarter performance is indicative of the strength of this company’s opportunity, and we are confident that the steps taken over the past year will position us for sustained long-term success.”

Financial Outlook:

The following outlook2 is based on information available as of the date of this press release and is subject to change in the future.

For the first quarter ending March 31, 2021, the Company provides the following outlook:

  • Revenue between $203.0 million and $205.0 million.
  • Subscription revenue between $198.0 million and $200.0 million.
  • Non-GAAP operating income between $44.0 million and $46.0 million.

For the year ending December 31, 2021, the Company provides the following outlook:

  • Revenue between $847.0 million and $857.0 million.
  • Subscription revenue between $825.0 million and $835.0 million.
  • Annual recurring revenue between $868.0 million and $878.0 million.
  • Non-GAAP operating income between $205.0 million and $212.0 million.
  • Unlevered free cash flow between $195.0 million and $205.0 million. Captured in this is approximately $50.0 million in non-recurring cash outflows for restructuring and integration activities related to the Saba acquisition.

The revenue, subscription revenue, and non-GAAP operating income numbers above are impacted by a deferred revenue write-down related to purchase accounting. For more information, refer to the Company’s investor relations presentation.

The Company has not reconciled the guidance for non-GAAP operating income or unlevered free cash flow to the corresponding GAAP measures because it does not provide guidance for such GAAP measures and would not be able to present the reconciling items between such GAAP and non-GAAP measures without unreasonable efforts. For example, stock-based compensation expense is excluded from the Company’s non-GAAP operating income as the quantification requires additional unknown inputs such as the number of shares granted and market prices that are not ascertainable.

1 Financial measures presented on a constant currency basis, non-GAAP operating income, non-GAAP operating income margin, non-GAAP net income, non-GAAP diluted net income per share, unlevered free cash flow, and unlevered free cash flow margin are non-GAAP financial measures. See the discussion in the section titled “Non-GAAP Financial Measures and Other Key Metrics” and the reconciliations at the end of this press release.

2 In order to translate the financial outlook for entities reporting in GBP to USD and EUR to USD, the following exchange rates have been applied:

Exchange rate applied to revenue for the first quarter of 2021

$1.37 USD per GBP

Exchange rate applied to revenue and annual recurring revenue for fiscal 2021

$1.37 USD per GBP

Exchange rate applied to revenue for the first quarter of 2021

$1.22 USD per EUR

Exchange rate applied to annual recurring revenue for fiscal 2021

$1.22 USD per EUR

Quarterly Conference Call

Cornerstone will host a conference call to discuss its fourth quarter and fiscal year 2020 results at 2:00 p.m. PT (5:00 p.m. ET) today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the Company’s Investor Relations website at http://investors.cornerstoneondemand.com. The live call can be accessed by dialing (877) 445-4619 (US) or (484) 653-6763 (outside the US) and referencing passcode: 6062779. A replay of the call will also be available at http://investors.cornerstoneondemand.com/investors/news-and-events/events/default.aspx or via telephone until 5:00 p.m. PT (8:00 p.m. ET) on February 23, 2020 by dialing (855) 859-2056 (US) or (404) 537-3406 (outside the US), and referencing passcode: 6062779.

Featured Presentation

An accompanying featured presentation will be available at https://investors.cornerstoneondemand.com/investors/overview/default.aspx.

About Cornerstone

Cornerstone is a premier people development company. We believe people can achieve anything when they have the right development and growth opportunities. We offer organizations the technology, content, expertise, and specialized focus to help them realize the potential of their people. Featuring comprehensive recruiting, personalized learning, modern training content, development-driven performance management, and holistic employee data management and insights, Cornerstone’s people development solutions are used by over 6,000 customers of all sizes, spanning more than 75 million users across over 180 countries and nearly 50 languages. Learn more at www.cornerstoneondemand.com.

Note: Cornerstone® and Cornerstone OnDemand® are registered trademarks of Cornerstone OnDemand, Inc.

Forward-looking Statements

This press release and the quarterly conference call referenced above contain forward-looking statements, including, but not limited to, statements regarding the expected performance of our business, our future financial and operating performance, including our non-GAAP guidance, strategy, long-term growth and overall future prospects, the demand for our offerings, our competitive position, general business conditions, our ability to execute our strategies and business plans, the integration of Saba into our business, anticipated synergies from our acquisition of Saba, the recent departure of our chief financial officer and appointment of a new chief financial officer, and our expectations regarding certain financial measures including subscription revenue, capital expenditures, unlevered free cash flow, recurring revenue growth, and operating margins. Any forward-looking statements contained in this press release or the quarterly conference call are based upon our historical performance and our current plans, estimates, and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent our expectations as of the date of this press release. Subsequent events may cause these expectations to change, and we disclaim any obligation to update the forward-looking statements in the future, except as required by law. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from our current expectations. Important factors that could cause actual results to differ materially from those anticipated in our forward-looking statements include, but are not limited to: our ability to attract new customers; the extent to which customers renew their subscriptions for our solutions; the timing of when consulting services are delivered to new and existing customers by our services organization and implementation subcontractors; the complexity of deployments and product implementations, which can impact the timing of when revenue is recognized from new and existing customers; allowing our implementation subcontractors to contract directly with customers for implementation services; our shift to focusing on recurring revenue streams; our ability to compete as the learning and people development provider for organizations of all sizes; changes in the proportion of our customer base that is composed of enterprise or mid-sized organizations; our ability to manage our growth, including additional headcount and entry into new geographies; our ability to expand our enterprise and mid-market sales opportunities; our ability to maintain stable and consistent quota attainment rates; continued strong demand for learning and people development in Europe, the Middle East, Africa, Asia-Pacific, and Japan; the timing and success of efforts to increase operational efficiency and cost containment; the timing and success of solutions offered by our competitors; unpredictable macro-economic conditions; the impact of foreign exchange rates; reductions in information technology spending; the success of our new product and service introductions; a disruption in our hosting network infrastructure; problems caused by security breaches; costs and reputational harm that could result from defects in our solutions; the success of our strategic relationships with third parties; the loss of any of our key employees and our ability to locate qualified replacements; failure to protect our intellectual property; acts of terrorism or other vandalism, war, natural disasters, or the ongoing COVID-19 pandemic; changes in current tax or accounting rules; legal or political changes in local or foreign jurisdictions that decrease demand for, or restrict our ability to sell or provide, our products; the failure to achieve expected synergies and efficiencies of operations between us and Saba; our ability to successfully integrate Saba’s market opportunities, technology, products, personnel, and operations; and unanticipated costs or liabilities related to businesses that we acquire. Further information on factors that could cause actual results to differ materially from the results anticipated by our forward-looking statements is included in the reports we have filed with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2020.

Non-GAAP Financial Measures and Other Key Metrics

To supplement its consolidated financial statements, which are prepared and presented in accordance with US generally accepted accounting principles, or GAAP, the Company has provided in this press release and the quarterly conference call held on the date hereof certain non-GAAP financial measures and other key metrics. These non-GAAP financial measures and other key metrics include:

(i)

non-GAAP cost of revenue, which is defined as cost of revenue less stock-based compensation and amortization of intangible assets;

(ii)

annual recurring revenue, which is defined as the annualized recurring value of all active contracts at the end of a reporting period;

(iii)

net annual dollar retention rate, which is defined as the percentage of annual recurring revenue from all customers on the first day of a fiscal year that is retained from those same customers on the last day of that same fiscal year. This percentage excludes all annual recurring revenue from new customers added during the fiscal year. Incremental sales during the fiscal year to customers are included in the calculation solely for customers that existed as of the first day of the fiscal year. Therefore, it is possible for our net annual dollar retention rate to exceed 100% in a given year if incremental sales to existing customers exceed the churn in annual recurring revenue from those same customers during the fiscal year.

 

Prior to 2020, incremental sales were only included to the extent those sales offset any decrease in annual recurring revenue from the original amount on the first day of the fiscal year and therefore, the historical net annual dollar retention rate could never exceed 100%. This ratio for 2020 includes all customers. Previously, Cornerstone for Salesforce, Cornerstone PiiQ, Grovo, and Workpop customers were excluded from the calculation. We believe that our net annual dollar retention rate is an important metric to measure the long-term value of customer agreements and our ability to retain and incrementally sell to our customers;

(iv)

unlevered free cash flow, a non-GAAP financial measure, which is defined as net cash provided by operating activities minus capital expenditures and capitalized software costs plus cash paid for interest;

(v)

unlevered free cash flow margin, a non-GAAP financial measure, which is defined as unlevered free cash flow divided by revenue;

(vi)

non-GAAP net income and non-GAAP diluted net income per share, which exclude, for the periods in which they are presented, stock-based compensation, amortization of intangible assets, acquisition-related and integration expenses, restructuring expenses, accretion of debt discount and amortization of debt issuance costs, discrete tax items, fair value adjustments on strategic investments, and excludes the impacts of unamortized stock-based compensation expense in applying the treasury method for determining the non-GAAP weighted average number of dilutive shares outstanding;

(vii)

non-GAAP gross profit and non-GAAP gross margin, which exclude stock-based compensation and amortization of intangible assets reflected in cost of revenue;

(viii)

non-GAAP operating income and non-GAAP operating income margin, which are defined as income or loss from operations excluding stock-based compensation, amortization of intangible assets, acquisition-related and integration expenses, and restructuring expenses;

(ix)

non-GAAP operating expenses, which exclude stock-based compensation, amortization of intangible assets, acquisition-related and integration expenses, and restructuring expenses; and

(x)

non-GAAP sales and marketing expense, non-GAAP research and development expense, and non-GAAP general and administrative expense, each of which excludes stock-based compensation and amortization of intangible assets attributable to the corresponding GAAP financial measures.

The Company’s management uses these non-GAAP financial measures and other key metrics internally in analyzing its financial results and believes they are useful to investors, as a supplement to the corresponding GAAP measures, in evaluating the Company’s ongoing operational performance and trends and in comparing its financial measures with other companies in the same industry, many of which present similar non-GAAP financial measures and key metrics to help investors understand the operational performance of their businesses. In addition, the Company believes that the following non-GAAP adjustments are useful to management and investors for the following reasons:

  • Stock-based compensation. The Company excludes stock-based compensation expense because it is non-cash in nature, and management believes that its exclusion provides additional insight into the Company’s operational performance and also provides a useful comparison of the Company’s operating results to prior periods and its peer companies. Additionally, determining the fair value of certain stock-based awards involves a high degree of judgment and estimation. The expense recorded may bear little resemblance to the actual value realized upon the vesting or future exercise of such awards.
  • Amortization of intangible assets. The Company excludes amortization of acquired intangible assets because the expense is a non-cash item and management believes that its exclusion provides meaningful supplemental information regarding the Company’s operational performance and allows for a useful comparison of its operating results to prior periods and its peer companies.
  • Acquisition-related and integration. The Company excludes expenses related to acquisitions and integration because the expenses are discrete to specific acquisitions and are not necessarily indicative of its continuing operations. The Company believes that the exclusion of these expenses provides investors with a supplemental view of the Company’s operational performance.
  • Restructuring. The Company excludes expenses related to restructuring because the expense is not indicative of its continuing operations. The Company believes that the exclusion of these expenses provides investors with a supplemental view of the Company’s operational performance.
  • Accretion of debt discount and amortization of debt issuance costs. The Company recognizes effective interest expense on its debt. The difference between the effective interest expense and the contractual interest expense, which is composed of accretion of debt discounts and amortization of issuance costs, is excluded from management’s assessment of the Company’s operating performance because management believes that these non-cash expenses are not indicative of ongoing operating performance. In addition, the exclusion of these items provides a useful comparison of the Company’s operating results to prior periods and its peer companies.
  • Discrete tax items. The Company excludes discrete income tax charges or benefits that are not expected to recur because the items are not indicative of continuing operations. The Company believes that the exclusion of these items provides investors with a supplemental view of the Company’s operational performance.
  • Fair value adjustments on strategic investments. The Company views the increase or decrease in the fair value of its strategic investments as not indicative of operational performance during any particular period and believes that the exclusion of these gains or losses provides investors with a supplemental view of the Company’s operational performance.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly-titled measures presented by other companies. For the periods presented, reconciliations of the non-GAAP financial measures to their most directly comparable GAAP measures have been provided in the tables included as part of this press release.

Cornerstone OnDemand, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands)

 

December 31, 2020

 

December 31, 2019

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

153,151

 

 

 

$

215,907

 

 

Short-term investments

 

 

 

201,579

 

 

Accounts receivable, net

221,461

 

 

 

131,105

 

 

Deferred commissions, current portion

45,786

 

 

 

33,215

 

 

Prepaid expenses and other current assets

30,615

 

 

 

30,512

 

 

Total current assets

451,013

 

 

 

612,318

 

 

Capitalized software development costs, net

50,812

 

 

 

50,023

 

 

Property and equipment, net

32,271

 

 

 

36,526

 

 

Operating right-of-use assets

74,419

 

 

 

72,944

 

 

Deferred commissions, net of current portion

89,698

 

 

 

74,563

 

 

Long-term investments

8,565

 

 

 

60,192

 

 

Intangible assets, net

436,290

 

 

 

9,440

 

 

Goodwill

961,322

 

 

 

47,453

 

 

Deferred tax assets

19,169

 

 

 

1,045

 

 

Other assets

11,010

 

 

 

1,597

 

 

Total assets

$

2,134,569

 

 

 

$

966,101

 

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

1,424

 

 

 

$

3,803

 

 

Accrued expenses

112,274

 

 

 

78,075

 

 

Deferred revenue, current portion

446,886

 

 

 

339,522

 

 

Operating lease liabilities, current portion

10,830

 

 

 

7,235

 

 

Debt, current portion

10,047

 

 

 

 

 

Other liabilities

16,210

 

 

 

11,015

 

 

Total current liabilities

597,671

 

 

 

439,650

 

 

Debt, net of current portion

1,176,239

 

 

 

293,174

 

 

Deferred revenue, net of current portion

5,184

 

 

 

6,945

 

 

Operating lease liabilities, net of current portion

65,911

 

 

 

67,195

 

 

Deferred tax liabilities

11,936

 

 

 

 

 

Other liabilities, non-current

8,754

 

 

 

655

 

 

Total liabilities

1,865,695

 

 

 

807,619

 

 

Stockholders’ equity:

 

 

 

Common stock, $0.0001 par value

6

 

 

 

6

 

 

Additional paid-in capital

835,069

 

 

 

682,717

 

 

Accumulated deficit

(564,662

)

 

 

(524,680

)

 

Accumulated other comprehensive income

(1,539

)

 

 

439

 

 

Total stockholders’ equity

268,874

 

 

 

158,482

 

 

Total liabilities and stockholders’ equity

$

2,134,569

 

 

 

$

966,101

 

 

Cornerstone OnDemand, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue

$

206,924

 

 

 

$

149,594

 

 

 

$

740,916

 

 

 

$

576,523

 

 

Cost of revenue 1,2

62,587

 

 

 

38,166

 

 

 

227,014

 

 

 

149,215

 

 

Gross profit

144,337

 

 

 

111,428

 

 

 

513,902

 

 

 

427,308

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing 1,2

73,394

 

 

 

56,722

 

 

 

265,516

 

 

 

227,733

 

 

Research and development 1

30,857

 

 

 

23,373

 

 

 

112,945

 

 

 

101,151

 

 

General and administrative 1,2

31,408

 

 

 

20,750

 

 

 

110,637

 

 

 

86,491

 

 

Acquisition-related and integration

5,533

 

 

 

 

 

 

37,289

 

 

 

 

 

Restructuring1

7,971

 

 

 

 

 

 

19,066

 

 

 

 

 

Total operating expenses

149,163

 

 

 

100,845

 

 

 

545,453

 

 

 

415,375

 

 

(Loss) income from operations

(4,826

)

 

 

10,583

 

 

 

(31,551

)

 

 

11,933

 

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense

(19,687

)

 

 

(5,416

)

 

 

(63,016

)

 

 

(21,559

)

 

Other, net

7,884

 

 

 

4,728

 

 

 

7,823

 

 

 

8,262

 

 

Other expense, net

(11,803

)

 

 

(688

)

 

 

(55,193

)

 

 

(13,297

)

 

(Loss) income before income tax provision

(16,629

)

 

 

9,895

 

 

 

(86,744

)

 

 

(1,364

)

 

Income tax benefit (provision)3

18,190

 

 

 

(463

)

 

 

46,762

 

 

 

(2,690

)

 

Net income (loss)

$

1,561

 

 

 

$

9,432

 

 

 

$

(39,982

)

 

 

$

(4,054

)

 

Net income (loss) per share, basic

$

0.02

 

 

 

$

0.16

 

 

 

$

(0.63

)

 

 

$

(0.07

)

 

Net income (loss) per share, diluted

$

0.02

 

 

 

$

0.15

 

 

 

$

(0.63

)

 

 

$

(0.07

)

 

Weighted average common shares outstanding, basic

64,717

 

 

 

60,813

 

 

 

63,585

 

 

 

60,086

 

 

Weighted average common shares outstanding, diluted

66,092

 

 

 

63,482

 

 

 

63,585

 

 

 

60,086

 

 

1 Includes stock-based compensation as follows:

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

Cost of revenue

$

1,817

 

 

$

1,612

 

 

$

8,845

 

 

$

6,282

 

Sales and marketing

6,894

 

 

7,009

 

 

28,303

 

 

27,780

 

Research and development

5,329

 

 

3,203

 

 

17,136

 

 

16,003

 

General and administrative

5,320

 

 

4,892

 

 

19,873

 

 

22,365

 

Restructuring

671

 

 

 

 

1,071

 

 

 

Total

$

20,031

 

 

$

16,716

 

 

$

75,228

 

 

$

72,430

 

2 Includes amortization of intangible assets as follows:

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

Cost of revenue

$

9,405

 

 

$

1,047

 

 

$

27,864

 

 

$

4,427

 

Sales and marketing

14,039

 

 

 

 

39,078

 

 

 

General and administrative

597

 

 

 

 

1,657

 

 

 

Total

$

24,041

 

 

$

1,047

 

 

$

68,599

 

 

$

4,427

 

3 Includes a discrete income tax benefit of approximately $18.8 million and $45.5 million during the three and twelve months ended December 31, 2020, respectively, related to release of valuation allowance against previously reserved deferred tax assets.

 

Cornerstone OnDemand, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Cash flows from operating activities

 

 

 

 

 

 

 

Net income (loss)

$

1,561

 

 

 

$

9,432

 

 

 

$

(39,982

)

 

 

$

(4,054

)

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

36,796

 

 

 

10,751

 

 

 

116,986

 

 

 

41,599

 

 

Accretion of debt discount and amortization of debt issuance costs

4,290

 

 

 

1,077

 

 

 

11,792

 

 

 

4,207

 

 

Amortization (accretion) of purchased investment premium or discount, net

 

 

 

(57

)

 

 

41

 

 

 

(957

)

 

Net foreign currency and other gain

(7,901

)

 

 

(3,179

)

 

 

(6,239

)

 

 

(1,079

)

 

Stock-based compensation expense

20,031

 

 

 

16,716

 

 

 

75,228

 

 

 

72,430

 

 

Deferred income taxes

(22,108

)

 

 

61

 

 

 

(54,189

)

 

 

61

 

 

Bad debt expense

712

 

 

 

46

 

 

 

3,113

 

 

 

450

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

Accounts receivable

(63,212

)

 

 

(29,454

)

 

 

(30,969

)

 

 

(5,554

)

 

Deferred commissions

(17,151

)

 

 

(13,111

)

 

 

(25,866

)

 

 

(27,241

)

 

Prepaid expenses and other assets

(2,678

)

 

 

245

 

 

 

13,213

 

 

 

12,834

 

 

Accounts payable

(5,059

)

 

 

(2,719

)

 

 

(11,911

)

 

 

(8,759

)

 

Accrued expenses

19,414

 

 

 

13,991

 

 

 

14,869

 

 

 

8,428

 

 

Deferred revenue

72,533

 

 

 

58,683

 

 

 

29,184

 

 

 

19,635

 

 

Other liabilities

(2,203

)

 

 

112

 

 

 

1,664

 

 

 

3,549

 

 

Net cash provided by operating activities

35,025

 

 

 

62,594

 

 

 

96,934

 

 

 

115,549

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchases of marketable investments

 

 

 

(79,001

)

 

 

(20,419

)

 

 

(282,426

)

 

Purchases of non-marketable investments

 

 

 

(9,000

)

 

 

 

 

 

(9,000

)

 

Maturities and sales of investments

 

 

 

28,917

 

 

 

272,173

 

 

 

236,401

 

 

Capital expenditures

(2,875

)

 

 

(2,047

)

 

 

(5,785

)

 

 

(18,034

)

 

Capitalized software costs

(6,779

)

 

 

(5,833

)

 

 

(27,075

)

 

 

(24,668

)

 

Cash paid for acquisitions, net of cash acquired

 

 

 

 

 

 

(1,295,508

)

 

 

 

 

Other, net

(1,387

)

 

 

 

 

 

(1,387

)

 

 

 

 

Net cash used in investing activities

(11,041

)

 

 

(66,964

)

 

 

(1,078,001

)

 

 

(97,727

)

 

Cash flows from financing activities

 

 

 

 

 

 

 

Proceeds from term loan debt, net of discount

 

 

 

 

 

 

979,582

 

 

 

 

 

Payments of debt issuance and modification costs

 

 

 

 

 

 

(30,429

)

 

 

 

 

Repayment of debt

(52,512

)

 

 

 

 

 

(52,512

)

 

 

 

 

Proceeds from employee stock plans

4,592

 

 

 

9,528

 

 

 

20,545

 

 

 

42,600

 

 

Repurchases of common stock

 

 

 

(8,826

)

 

 

 

 

 

(22,356

)

 

Payment of tax withholdings for employee stock plans

 

 

 

 

 

 

 

 

 

(5,469

)

 

Net cash (used in) provided by financing activities

(47,920

)

 

 

702

 

 

 

917,186

 

 

 

14,775

 

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

3,825

 

 

 

837

 

 

 

3,828

 

 

 

(286

)

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

(20,111

)

 

 

(2,831

)

 

 

(60,053

)

 

 

32,311

 

 

Cash, cash equivalents, and restricted cash at beginning of period

175,965

 

 

 

218,738

 

 

 

215,907

 

 

 

183,596

 

 

Cash, cash equivalents, and restricted cash at end of period1

$

155,854

 

 

 

$

215,907

 

 

 

$

155,854

 

 

 

$

215,907

 

 

Supplemental cash flow data

 

 

 

 

 

 

 

Cash paid for interest

$

10,985

 

 

 

$

 

 

 

$

49,858

 

 

 

$

17,356

 

 

Cash paid for income taxes

2,465

 

 

 

216

 

 

 

6,190

 

 

 

1,704

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

Capitalized stock-based compensation

(333

)

 

 

1,420

 

 

 

5,134

 

 

 

4,847

 

 

Issuance of common stock for partial consideration for acquisition

 

 

 

 

 

 

32,889

 

 

 

 

 

Increase in debt discount as a result of modification of Convertible Notes

 

 

 

 

 

 

18,598

 

 

 

 

 

1 Below is a reconciliation of cash, cash equivalents, and restricted cash:

 

As of December 31,

 

2020

 

2019

Cash and cash equivalents

$

153,151

 

 

$

215,907

 

Restricted cash included in prepaid expenses and other current assets

484

 

 

 

Restricted cash included in other assets

2,219

 

 

 

Total cash, cash equivalents, and restricted cash

$

155,854

 

 

$

215,907

 

 

Cornerstone OnDemand, Inc.

RECONCILIATIONS OF COST OF REVENUE TO NON-GAAP COST OF REVENUE, GROSS PROFIT, AND GROSS MARGIN TO NON-GAAP GROSS PROFIT AND NON-GAAP GROSS MARGIN, (LOSS) INCOME FROM OPERATIONS TO NON-GAAP OPERATING INCOME, AND OPERATING MARGIN TO NON-GAAP OPERATING MARGIN

(in thousands)

(unaudited)

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

Reconciliation of cost of revenue, gross profit, and gross margin:

 

 

 

 

 

 

Revenue

$

206,924

 

 

$

149,594

 

 

$

740,916

 

 

$

576,523

 

Cost of revenue

62,587

 

 

38,166

 

 

227,014

 

 

149,215

 

Gross profit

$

144,337

 

 

$

111,428

 

 

$

513,902

 

 

$

427,308

 

Gross margin

69.8

%

 

74.5

%

 

69.4

%

 

74.1

%

 

 

 

 

 

 

 

 

Cost of revenue

$

62,587

 

 

$

38,166

 

 

$

227,014

 

 

$

149,215

 

Adjustments to cost of revenue:

 

 

 

 

 

 

 

Stock-based compensation1

(1,817

)

 

(1,612

)

 

(8,282

)

 

(6,282

)

Amortization of intangible assets

(9,405

)

 

(1,047

)

 

(27,864

)

 

(4,427

)

Total adjustments to cost of revenue

(11,222

)

 

(2,659

)

 

(36,146

)

 

(10,709

)

Non-GAAP cost of revenue

51,365

 

 

35,507

 

 

190,868

 

 

138,506

 

Non-GAAP gross profit

$

155,559

 

 

$

114,087

 

 

$

550,048

 

 

$

438,017

 

Non-GAAP gross margin

75.2

%

 

76.3

%

 

74.2

%

 

76.0

%

 

 

 

 

 

 

 

 

Reconciliation of (loss) income from operations and operating margin:

 

 

 

 

 

 

(Loss) income from operations

$

(4,826

)

 

$

10,583

 

 

$

(31,551

)

 

$

11,933

 

Operating margin

(2.3

)%

 

7.1

%

 

(4.3

)%

 

2.1

%

Adjustments to (loss) income from operations:

 

 

 

 

 

 

 

Stock-based compensation1, 3

19,360

 

 

16,716

 

 

70,096

 

 

72,430

 

Amortization of intangible assets

24,041

 

 

1,047

 

 

68,599

 

 

4,427

 

Acquisition-related and integration2

5,533

 

 

 

 

37,289

 

 

 

Restructuring3

7,971

 

 

 

 

19,066

 

 

 

Total adjustments to (loss) income from operations

56,905

 

 

17,763

 

 

195,050

 

 

76,857

 

Non-GAAP operating income

$

52,079

 

 

$

28,346

 

 

$

163,499

 

 

$

88,790

 

Non-GAAP operating margin

25.2

%

 

18.9

%

 

22.1

%

 

15.4

%

1 The difference between stock-based compensation presented above and stock-based compensation as reported in the consolidated statement of operations for the twelve months ended December 31, 2020, represents an amount accrued for cash bonuses as of December 31, 2019, which was settled in equity during the first quarter of 2020.

 

Twelve Months Ended

 

December 31,

 

2020

Cost of revenue

$

8,282 

 

Sales and marketing

27,393 

 

Research and development

15,722 

 

General and administrative

18,699 

 

Total

$

70,096 

 

 

 

 

 

 

 

 

 

Expenses related to the acquisitions of Saba Software, Inc. and Clustree SAS primarily consisting of external professional services directly associated with the acquisitions, such as advisory fees, accounting and legal costs, filing fees, due diligence, and integration costs.

3 Stock-based compensation related to restructuring is presented in the restructuring line item.

 

Cornerstone OnDemand, Inc.

RECONCILIATIONS OF NET INCOME (LOSS) TO NON-GAAP NET INCOME AND NON-GAAP NET INCOME PER SHARE

(in thousands, except per share amounts)

(unaudited)

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

 

2019

 

2020

 

 

2019

 

Net income (loss)

$

1,561

 

 

 

$

9,432

 

 

$

(39,982

)

 

 

$

(4,054

)

 

Adjustments to net income (loss)

 

 

 

 

 

 

 

Stock-based compensation1, 3

19,360

 

 

 

16,716

 

 

70,096

 

 

 

72,430

 

 

Amortization of intangible assets

24,041

 

 

 

1,047

 

 

68,599

 

 

 

4,427

 

 

Acquisition-related and integration2

5,533

 

 

 

 

 

37,289

 

 

 

 

 

Restructuring3

7,971

 

 

 

 

 

19,066

 

 

 

 

 

Accretion of debt discount and amortization of debt issuance costs4

4,290

 

 

 

1,077

 

 

11,792

 

 

 

4,207

 

 

Income tax benefit5

(18,795

)

 

 

 

 

(45,454

)

 

 

 

 

Total adjustments to net income (loss)

42,400

 

 

 

18,840

 

 

161,388

 

 

 

81,064

 

 

Non-GAAP net income

$

43,961

 

 

 

$

28,272

 

 

$

121,406

 

 

 

$

77,010

 

 

Non-GAAP basic net income per share

$

0.68

 

 

 

$

0.46

 

 

$

1.91

 

 

 

$

1.28

 

 

Non-GAAP diluted net income per share

$

0.64

 

 

 

$

0.43

 

 

$

1.78

 

 

 

$

1.17

 

 

Weighted-average common shares outstanding, basic

64,717

 

 

 

60,813

 

 

63,585

 

 

 

60,086

 

 

Non-GAAP weighted-average common shares outstanding, diluted

69,067

 

 

 

66,072

 

 

68,365

 

 

 

65,605

 

 

1 The difference between stock-based compensation presented above and stock-based compensation as reported in the consolidated statement of operations for the twelve months ended December 31, 2020, represents an amount accrued for cash bonuses as of December 31, 2019, which was settled in equity during the first quarter of 2020.

2 Expenses related to the acquisitions of Saba Software, Inc. and Clustree SAS primarily consisting of external professional services directly associated with the acquisitions, such as advisory fees, accounting and legal costs, filing fees, due diligence, and integration costs.

3 Stock-based compensation related to restructuring is presented in the restructuring line item.

4 Debt discount accretion and debt issuance cost amortization have been recorded in connection with our issuance of (i) $1.0047 billion of term loan debt on April 22, 2020; and (ii) $300.0 million in convertible notes on December 8, 2017 as well as the modification of these convertible notes on April 20, 2020 to extend the maturity date from July 1, 2021 to March 17, 2023. These expenses represent non-cash charges that have been recorded in accordance with the authoritative accounting literature for such transactions.

5 Discrete income tax benefits of approximately $18.8 million and $45.5 million were recognized during the three and twelve months ended December 31, 2020, respectively, related to release of valuation allowance against previously reserved deferred tax assets.

 

Cornerstone OnDemand, Inc.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO UNLEVERED FREE CASH FLOW AND UNLEVERED FREE CASH FLOW MARGIN

(A Non-GAAP Financial Measure)

(in thousands)

(unaudited)

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

Reconciliation of unlevered free cash flow:

 

 

 

 

 

 

 

Net cash provided by operating activities

$

35,025

 

 

$

62,594

 

 

$

96,934

 

 

$

115,549

 

Capital expenditures

(2,875

)

 

(2,047

)

 

(5,785

)

 

(18,034

)

Capitalized software costs

(6,779

)

 

(5,833

)

 

(27,075

)

 

(24,668

)

Cash paid for interest

10,985

 

 

 

 

49,858

 

 

17,356

 

Unlevered free cash flow

$

36,356

 

 

$

54,714

 

 

$

113,932

 

 

$

90,203

 

Unlevered free cash flow margin

17.6

%

 

36.6

%

 

15.4

%

 

15.6

%

Cornerstone OnDemand, Inc.

TRENDED OPERATIONAL & FINANCIAL HIGHLIGHTS

(unaudited)

The following metrics are intended as a supplement to the financial statements found in this press release and other information furnished to or filed with the SEC. In the event of discrepancies between amounts in these tables and the Company’s historical disclosures or financial statements, readers should rely on the Company’s filings with the SEC and financial statements in the Company’s most recent earnings press release.

The Company intends to periodically review and refine the definition, methodology, and appropriateness of each of these supplemental metrics. As a result, metrics are subject to removal and/or change, and such changes could be material.

 

FY 2019

FY 2020

 

 

 

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

FY18

FY19

FY20

SELECTED METRICS:

 

 

 

 

 

 

 

 

 

 

 

Number of customers1

3,367

 

3,423

 

3,446

 

3,508

 

3,522

 

6,308

 

6,229

 

6,157

 

3,333

 

3,508

 

6,157

 

% y/y

8.6

%

6.9

%

5.7

%

5.3

%

4.6

%

84.3

%

80.8

%

75.5

%

2.6

%

5.3

%

75.5

%

% q/q

1.0

%

1.7

%

0.7

%

1.8

%

0.4

%

79.1

%

(1.3

)%

(1.2

)%

n/a

n/a

n/a

Number of employees

2,017

 

2,034

 

1,986

 

1,993

 

1,975

 

3,184

 

3,027

 

2,919

 

1,953

 

1,993

 

2,919

 

% y/y

10.3

%

9.9

%

5.0

%

2.0

%

(2.1

)%

56.5

%

52.4

%

46.5

%

3.3

%

2.0

%

46.5

%

% q/q

3.3

%

0.8

%

(2.4

)%

0.4

%

(0.9

)%

61.2

%

(4.9

)%

(3.6

)%

n/a

n/a

n/a

Net annual dollar retention rate2

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

105.7

%

104.6

%

95.1

%

Annual recurring revenue (in thousands)

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

510,000

 

575,000

 

840,000

 

Net cash provided by operating activities (in thousands)

7,294

 

21,183

 

24,478

 

62,594

 

5,988

 

22,774

 

33,147

 

35,025

 

90,253

 

115,549

 

96,934

 

Unlevered free cash flow (in thousands)

4,337

 

9,470

 

21,682

 

54,714

 

6,253

 

15,394

 

55,929

 

36,356

 

63,471

 

90,203

 

113,932

 

Unlevered free cash flow margin

3.1

%

6.7

%

15.0

%

36.6

%

4.2

%

8.4

%

28.0

%

17.6

%

11.8

%

15.6

%

15.4

%

FINANCIAL DATA (in thousands, except percentages):

 

 

 

 

 

 

 

 

 

 

 

Revenue

140,117

 

141,860

 

144,952

 

149,594

 

150,136

 

184,358

 

199,498

 

206,924

 

537,891

 

576,523

 

740,916

 

Subscription revenue

131,256

 

132,562

 

137,446

 

141,704

 

144,421

 

177,217

 

185,643

 

197,878

 

473,052

 

542,968

 

705,159

 

% y/y growth

16.0

%

15.5

%

15.7

%

12.2

%

10.0

%

33.7

%

35.1

%

39.6

%

n/a

14.8

%

29.9

%

% y/y growth constant currency3

18.2

%

17.3

%

17.2

%

12.4

%

10.7

%

n/a

n/a

n/a

n/a

16.2

%

n/a

Subscription revenue % of total revenue

93.7

%

93.4

%

94.8

%

94.7

%

96.2

%

96.1

%

93.1

%

95.6

%

87.9

%

94.2

%

95.2

%

Income (loss) from operations

1,231

 

(3,594

)

3,713

 

10,583

 

(2,739

)

(22,368

)

(1,618

)

(4,826

)

(7,769

)

11,933

 

(31,551

)

MARGIN DATA:

 

 

 

 

 

 

 

 

 

 

 

Gross margin

76.0

%

71.7

%

74.4

%

74.5

%

72.1

%

68.5

%

67.7

%

69.8

%

73.2

%

74.1

%

69.4

%

Sales and marketing % of revenue

38.9

%

41.4

%

39.9

%

37.9

%

36.9

%

35.2

%

36.0

%

35.5

%

41.8

%

39.5

%

35.8

%

Research and development % of revenue

19.8

%

17.2

%

17.7

%

15.6

%

16.0

%

15.4

%

14.9

%

14.9

%

14.3

%

17.5

%

15.2

%

General and administrative % of revenue

16.4

%

15.6

%

14.2

%

13.9

%

16.5

%

13.8

%

14.5

%

15.2

%

16.7

%

15.0

%

14.9

%

Acquisition-related and integration % of revenue

 

 

 

 

4.5

%

10.9

%

2.4

%

2.7

%

0.2

%

 

5.0

%

Restructuring % of revenue

 

 

 

 

 

5.3

%

0.7

%

3.9

%

1.7

%

 

2.6

%

Operating margin

0.9

%

(2.5

)%

2.6

%

7.1

%

(1.8

)%

(12.1

)%

(0.8

)%

(2.3

)%

(1.4

)%

2.1

%

(4.3

)%

NON-GAAP MARGIN DATA:

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP gross margin

77.7

%

73.7

%

76.3

%

76.3

%

74.6

%

73.7

%

73.5

%

75.2

%

74.1

%

76.0

%

74.2

%

Non-GAAP sales and marketing % of revenue

34.6

%

36.6

%

34.4

%

33.2

%

31.7

%

26.4

%

25.3

%

25.4

%

37.2

%

34.7

%

26.9

%

Non-GAAP research and development % of revenue

16.8

%

14.1

%

14.8

%

13.5

%

13.8

%

13.9

%

12.7

%

12.3

%

12.1

%

14.8

%

13.1

%

Non-GAAP general and administrative % of revenue

12.3

%

11.3

%

10.3

%

10.6

%

12.5

%

11.8

%

12.1

%

12.3

%

13.2

%

11.1

%

12.2

%

Non-GAAP operating margin

14.0

%

11.7

%

16.7

%

18.9

%

16.6

%

21.6

%

23.4

%

25.2

%

11.8

%

15.4

%

22.1

%

Non-GAAP research and development plus capitalized software % of revenue

22.1

%

18.8

%

18.0

%

17.4

%

18.7

%

17.2

%

16.1

%

15.6

%

16.8

%

19.1

%

16.8

%

FOREIGN EXCHANGE RATES:

 

 

 

 

 

 

 

 

 

 

 

GBP to USD average period rate

1.30

 

1.29

 

1.23

 

1.29

 

1.28

 

1.26

 

1.29

 

1.32

 

1.34

 

1.28

 

1.29

 

GBP to USD end of period spot rate

1.30

 

1.27

 

1.23

 

1.32

 

1.23

 

1.23

 

1.28

 

1.37

 

1.27

 

1.32

 

1.37

 

EUR to USD average period rate

1.14

 

1.12

 

1.11

 

1.11

 

1.10

 

1.11

 

1.17

 

1.19

 

1.18

 

1.12

 

1.14

 

EUR to USD end of period spot rate

1.12

 

1.14

 

1.09

 

1.12

 

1.10

 

1.12

 

1.17

 

1.23

 

1.14

 

1.12

 

1.23

 

1 During the second quarter of 2020, we adjusted our method of determining customer count to exclude customers that are sold through resellers that share one tenant or instance of our product. The numbers included here reflect this change. We continue to exclude customers from our Cornerstone for Salesforce, PiiQ, Grovo, Workpop, and Clustree products from our customer count metrics.

2 During 2020, we adjusted our method of determining our net annual dollar retention rate. Prior to 2020, incremental sales were only included to the extent those sales offset any decrease in annual recurring revenue from the original amount on the first day of the fiscal year and therefore, the historical net annual dollar retention rate could never exceed 100%. This ratio for 2020 includes all customers. Previously, Cornerstone for Salesforce, Cornerstone PiiQ, Grovo, and Workpop customers were excluded from the calculation. The percentages included here reflect these changes.

3 We have historically presented constant currency information, a non-GAAP financial measure, to provide a framework for assessing how our underlying business performed excluding the effect of foreign currency fluctuations. However, due to the acquisition of Saba in the second quarter of 2020, constant currency results on a combined company basis were not presented for the second, third, and fourth quarters in 2020 as the historical comparative periods did not include the combined company results for a full quarter.

 

FY 2019

FY 2020

 

 

 

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

FY18

FY19

FY20

NON-GAAP RECONCILIATIONS FOR SELECTED METRICS
(in thousands, except percentages):

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

7,294

 

 

21,183

 

 

24,478

 

 

62,594

 

 

5,988

 

 

22,774

 

 

33,147

 

 

35,025

 

 

90,253

 

 

115,549

 

 

96,934

 

 

Capital expenditures

(4,243

)

 

(5,031

)

 

(6,713

)

 

(2,047

)

 

(971

)

 

(1,304

)

 

(635

)

 

(2,875

)

 

(14,895

)

 

(18,034

)

 

(5,785

)

 

Capitalized software costs

(7,399

)

 

(6,728

)

 

(4,708

)

 

(5,833

)

 

(7,389

)

 

(6,135

)

 

(6,772

)

 

(6,779

)

 

(25,515

)

 

(24,668

)

 

(27,075

)

 

Cash paid for interest

8,685

 

 

46

 

 

8,625

 

 

 

 

8,625

 

 

59

 

 

30,189

 

 

10,985

 

 

13,628

 

 

17,356

 

 

49,858

 

 

Unlevered free cash flow

4,337

 

 

9,470

 

 

21,682

 

 

54,714

 

 

6,253

 

 

15,394

 

 

55,929

 

 

36,356

 

 

63,471

 

 

90,203

 

 

113,932

 

 

Unlevered free cash flow margin

3.1

 

%

6.7

 

%

15.0

 

%

36.6

 

%

4.2

 

%

8.4

 

%

28.0

 

%

17.6

 

%

11.8

 

%

15.6

 

%

15.4

 

%

Gross margin

76.0

 

%

71.7

 

%

74.4

 

%

74.5

 

%

72.1

 

%

68.5

 

%

67.7

 

%

69.8

 

%

73.2

 

%

74.1

 

%

69.4

 

%

Stock-based compensation

0.8

 

%

1.3

 

%

1.2

 

%

1.1

 

%

1.4

 

%

1.2

 

%

1.1

 

%

0.9

 

%

0.7

 

%

1.1

 

%

1.0

 

%

Amortization of intangible assets

0.9

 

%

0.7

 

%

0.7

 

%

0.7

 

%

1.1

 

%

4.0

 

%

4.7

 

%

4.5

 

%

0.2

 

%

0.8

 

%

3.8

 

%

Non-GAAP gross margin

77.7

 

%

73.7

 

%

76.3

 

%

76.3

 

%

74.6

 

%

73.7

 

%

73.5

 

%

75.2

 

%

74.1

 

%

76.0

 

%

74.2

 

%

Sales and marketing % of revenue

38.9

 

%

41.4

 

%

39.9

 

%

37.9

 

%

36.9

 

%

35.2

 

%

36.0

 

%

35.5

 

%

41.8

 

%

39.5

 

%

35.8

 

%

Stock-based compensation

(4.3

)

%

(4.8

)

%

(5.5

)

%

(4.7

)

%

(5.1

)

%

(3.0

)

%

(3.5

)

%

(3.3

)

%

(4.6

)

%

(4.8

)

%

(3.6

)

%

Amortization of intangible assets

 

%

 

%

 

%

 

%

(0.1

)

%

(5.8

)

%

(7.2

)

%

(6.8

)

%

 

%

 

%

(5.3

)

%

Non-GAAP sales and marketing % of revenue

34.6

 

%

36.6

 

%

34.4

 

%

33.2

 

%

31.7

 

%

26.4

 

%

25.3

 

%

25.4

 

%

37.2

 

%

34.7

 

%

26.9

 

%

Research and development % of revenue

19.8

 

%

17.2

 

%

17.7

 

%

15.6

 

%

16.0

 

%

15.4

 

%

14.9

 

%

14.9

 

%

14.3

 

%

17.5

 

%

15.2

 

%

Stock-based compensation

(3.0

)

%

(3.1

)

%

(2.9

)

%

(2.1

)

%

(2.2

)

%

(1.5

)

%

(2.2

)

%

(2.6

)

%

(2.2

)

%

(2.7

)

%

(2.1

)

%

Non-GAAP research and development % of revenue

16.8

 

%

14.1

 

%

14.8

 

%

13.5

 

%

13.8

 

%

13.9

 

%

12.7

 

%

12.3

 

%

12.1

 

%

14.8

 

%

13.1

 

%

General and administrative % of revenue

16.4

 

%

15.6

 

%

14.2

 

%

13.9

 

%

16.5

 

%

13.8

 

%

14.5

 

%

15.2

 

%

16.7

 

%

15.0

 

%

14.9

 

%

Stock-based compensation

(4.1

)

%

(4.3

)

%

(3.9

)

%

(3.3

)

%

(4.0

)

%

(1.8

)

%

(2.1

)

%

(2.6

)

%

(3.5

)

%

(3.9

)

%

(2.5

)

%

Amortization of intangible assets

 

%

 

%

 

%

 

%

 

%

(0.2

)

%

(0.3

)

%

(0.3

)

%

 

%

 

%

(0.2

)

%

Non-GAAP general and administrative % of revenue

12.3

 

%

11.3

 

%

10.3

 

%

10.6

 

%

12.5

 

%

11.8

 

%

12.1

 

%

12.3

 

%

13.2

 

%

11.1

 

%

12.2

 

%

Operating margin

0.9

 

%

(2.5

)

%

2.6

 

%

7.1

 

%

(1.8

)

%

(12.1

)

%

(0.8

)

%

(2.3

)

%

(1.4

)

%

2.1

 

%

(4.3

)

%

Stock-based compensation

12.2

 

%

13.5

 

%

13.4

 

%

11.1

 

%

12.7

 

%

7.4

 

%

8.9

 

%

9.3

 

%

11.1

 

%

12.5

 

%

9.5

 

%

Amortization of intangible assets

0.9

 

%

0.7

 

%

0.7

 

%

0.7

 

%

1.2

 

%

10.1

 

%

12.2

 

%

11.6

 

%

0.2

 

%

0.8

 

%

9.3

 

%

Restructuring

 

%

 

%

 

%

 

%

 

%

5.3

 

%

0.7

 

%

3.9

 

%

1.7

 

%

 

%

2.6

 

%

Acquisition-related and integration

 

%

 

%

 

%

 

%

4.5

 

%

10.9

 

%

2.4

 

%

2.7

 

%

0.2

 

%

 

%

5.0

 

%

Non-GAAP operating margin

14.0

 

%

11.7

 

%

16.7

 

%

18.9

 

%

16.6

 

%

21.6

 

%

23.4

 

%

25.2

 

%

11.8

 

%

15.4

 

%

22.1

 

%

Research and development plus capitalized software % of revenue

25.1

 

%

21.9

 

%

20.9

 

%

19.5

 

%

20.9

 

%

18.7

 

%

18.3

 

%

18.2

 

%

19.0

 

%

21.8

 

%

18.9

 

%

Stock-based compensation

(3.0

)

%

(3.1

)

%

(2.9

)

%

(2.1

)

%

(2.2

)

%

(1.5

)

%

(2.2

)

%

(2.6

)

%

(2.2

)

%

(2.7

)

%

(2.1

)

%

Non-GAAP research and development plus capitalized software % of revenue

22.1

 

%

18.8

 

%

18.0

 

%

17.4

 

%

18.7

 

%

17.2

 

%

16.1

 

%

15.6

 

%

16.8

 

%

19.1

 

%

16.8

 

%

 

Contacts

Investor Relations Contact:
Jason Gold
Phone: +1 (310) 526-2531
jgold@csod.com

Media Contact:
Deaira Irons
Phone: +1 (310) 752-0164
dirons@csod.com

Contacts

Investor Relations Contact:
Jason Gold
Phone: +1 (310) 526-2531
jgold@csod.com

Media Contact:
Deaira Irons
Phone: +1 (310) 752-0164
dirons@csod.com