SANTA MONICA, Calif. — May 06, 2021 — People development solutions provider Cornerstone OnDemand, Inc. (NASDAQ: CSOD) today announced results1 for its first quarter ended March 31, 2021. 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.

First Quarter 2021 Results:

  • Revenue for the first quarter of 2021 was $209.3 million. This represents a 39.4% increase compared to the same period of the prior year.
  • Subscription revenue for the first quarter of 2021 was $200.6 million. This represents a 38.9% increase compared to the same period of the prior year.
  • Income (loss) from operations for the first quarter of 2021 was $9.1 million, yielding a margin of 4.3%, compared to income (loss) from operations of $(2.7) million and a margin of (1.8)% in the same period of the prior year.
  • Non-GAAP operating income for the first quarter of 2021 was $59.2 million, yielding a non-GAAP operating margin of 28.3%, compared to non-GAAP operating income of $24.9 million and a non-GAAP operating margin of 16.6% in the same period of the prior year.
  • Net loss for the first quarter of 2021 was $(12.5) million, or $(0.19) diluted net loss per share, compared to net loss of $(13.8) million, or $(0.22) diluted net loss per share, in the same period of the prior year.
  • Non-GAAP net income for the first quarter of 2021 was $48.4 million, or $0.70 non-GAAP diluted net income per share, compared to non-GAAP net income of $15.0 million, or $0.23 non-GAAP diluted net income per share, in the same period of the prior year.
  • Unlevered free cash flow for the first quarter of 2021 was $88.4 million, yielding a margin of 42.3%, compared to unlevered free cash flow of $6.3 million and a margin of 4.2% in the same period of the prior year. Unlevered free cash flow for the first quarter of 2021 includes approximately $7.8 million of restructuring and acquisition-related cash outflows.

“I’m very pleased with a solid first quarter and a strong start to Cornerstone’s fiscal year 2021, despite these unprecedented times,” said Phil Saunders, Chief Executive Officer. “We have continued to execute on our transformation roadmap, and while we believe we have an aggressive roadmap to implement this year, we remain confident in our ability to unlock growth and earnings power within the business.”

Recent Highlights:

  • The Company announced its Strategic Leader position in the Fosway 9-Grid for Learning Systems for 2021, retaining its leading position for the eighth year in a row.
  • Cornerstone mobilized internal executive talent to drive innovation for its content business and align international leadership to better support customers worldwide. Heidi Spirgi transitioned into the role of Chief Strategy and Growth Officer, Theresa Damato was named the Company’s Chief Marketing Officer, and Vincent Belliveau was appointed Chief International Officer.

“We are proud of our first quarter business and operational accomplishments, and the resulting financial performance,” said Chirag Shah, Chief Financial Officer. “We are raising our profitability estimates for 2021 to reflect our positive business trends and the strong start to the year.”

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 second quarter ending June 30, 2021, the Company provides the following outlook:

  • Revenue between $208.0 million and $210.0 million.
  • Subscription revenue between $203.0 million and $205.0 million.
  • Non-GAAP operating income between $49.0 million and $51.0 million.

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

  • Revenue between $851.0 million and $859.0 million.
  • Subscription revenue between $827.0 million and $835.0 million.
  • Annual recurring revenue between $868.0 million and $878.0 million.
  • Non-GAAP operating income between $215.0 million and $222.0 million.
  • Unlevered free cash flow between $208.0 million and $216.0 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.

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 and EUR to USD, the following exchange rates have been applied:

Exchange rate applied to revenue for the second 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 second quarter of 2021

$1.19 USD per EUR

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

$1.19 USD per EUR

Quarterly Conference Call

Cornerstone will host a conference call to discuss its first quarter 2021 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). 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 May 13, 2021 by dialing (855) 859-2056 (US) or (404) 537-3406 (outside the US).

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.

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