CSOD Investor Deck Second Quarter...
Transcript of CSOD Investor Deck Second Quarter...
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Corporate OverviewSecond Quarter 2016
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Safe HarborThis 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 forward-looking 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.
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Cornerstone Today
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1999
Our Evolution16 Years Ago…
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2010
Our EvolutionThe Last Decade…
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2016
Our EvolutionToday
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7Note: User and client count figures exclude Growth Edition and Cornerstone for Salesforce.
CLIENTS
2,600+USERS
25MCOUNTRIES
191LANGUAGES
42OFFICES
19
San Francisco
Santa Monica
Sunnyvale
Sao Paulo
MadridParis
LondonAmsterdam
Stockholm
DusseldorfMunich
Tel Aviv
Bangalore
MumbaiHong Kong
Tokyo
Sydney
Auckland
Today with Global Reach…
As of March 31, 2016
New Delhi
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Acquired by
Acquired by
Acquired by
Acquired by
Acquired by
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…and an Organically-Grown Core Suite
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Cornerstone is the Talent Management Leader
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Niche Players Visionaries
Challengers Leaders
Magic Quadrant for Talent Management Suites
Lumesse
COMPLETENESS OF VISION
ABI
LITY
TO E
XEC
UTE
Source: Gartner (August 2015)
Deltek (HRsmart)
Technomedia
Haufe PeopleFluentSumTotal
Halogen Software
Saba
Oracle (Talent Management Cloud)
SAP (SuccessFactors)
Talentsoft
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Bolstered by Tier One Global Partners
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Select Alliances
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OVER TIME, MORE PEOPLE + MORE TO SELL
LEARNING
PERFORMANCE
RECRUITING
ANALYTICS
Now with More People with More to Sell
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Strong Results
13
$11.0 $19.6
$29.3 $46.6
$75.5
$117.9
$185.1
$263.6
$339.7
$0
$50
$100
$150
$200
$250
$300
$350
2007 2008 2009 2010 2011 2012 2013 2014 2015
$15.0 $24.9
$34.5
$60.9
$97.6
$154.3
$231.7
$316.1
$400.5
$0
$60
$120
$180
$240
$300
$360
$420
2007 2008 2009 2010 2011 2012 2013 2014 2015
(in millions) (in millions)
Revenue Bookings
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Growing ASPs Across All Geographies
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+48%
+15%
+44%
North America Europe,
Middle East & Africa
Asia Pacific
Note: ASP values reflect year-over-year growth for FY2015.
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Growth Across All Metrics
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$11.0$19.6
$29.3$46.6
$75.5
$117.9
$185.1
$263.6
$339.7
2007 2008 2009 2010 2011 2012 2013 2014 2015
Revenue Growth
105 168
280
481
805
1,237
1,631
2,153
2,595
2007 2008 2009 2010 2011 2012 2013 2014 2015
Client Growth
0.92.1
3.3
4.9
7.5
10.6
14.0
18.1
23.8
2007 2008 2009 2010 2011 2012 2013 2014 2015
User Growth(in millions) (in millions)
Note: User and client count figures exclude Growth Edition and Cornerstone for Salesforce.
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Clear Path to Profitability
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$(2.5) $(2.0)
$4.1 $5.0
$12.8 $16.0
$34.0
($10)
$0
$10
$20
$30
$40
2010 2011 2012 2013 2014 2015 2016E
(in millions)
-21.9%
-17.0%
-13.4%
-6.7% -6.4% -6.2%
0.5%
-25%
-20%
-15%
-10%
-5%
0%
5%
2010 2011 2012 2013 2014 2015 2016E
Non-GAAP Free Cash Flow
Non-GAAP Net Loss Margin
Note: 2016E values reflect the latest issued guidance. 2016E non-GAAP net loss margin uses the midpoint of the revenue guidance range of $428 - $434M.
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Long-Term Margin Improvement
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2015 Improvement 2018E
Gross Margin 72% 2-3% 74-75%
S&M (% of Rev.) 54% 10-14% 40-44%
R&D (% of Rev.) 10% - 10%
G&A (% of Rev.) 12% 2% 10%
Operating Margin -4% 14%+ 10%+
Free Cash Flow Margin 5% 11%+ 16%+
Note: All values are non-GAAP metrics.
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Our OpportunityMarching to $1 Billion
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Work is Changing
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WHO
WHAT
WHERE
WHEN
HOW
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The Market Need is Real
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Ben Schiller | May 8, 2015
What Do Workers Want from the Boss?
Walter Frick | November 3, 2015
When Treating Workers Well Leads to More
Innovation
Adam Miller | March 26, 2015
3 Things Millennials Want in a Career
(hint: it’s not more money)
Sylvia Voerhauser-Smith | October 15, 2015
Is HR Disconnected? Here’s How HR Can
Reconnect and Embrace the Future
Lauren Weber | September 30, 2015
How to Get More Women Into the Workforce
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The Market is HUGE
21
25.0MUSERS
ADDRESSABLE MARKET
$31B
88MEST. USERS
CURRENT MARKET
400MADDRESSABLE SEATS
CORNERSTONE
Source: Adapted from Gartner, IDC, US Census Bureau
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Opportunities Abound
ü Continued Core Market Sales
ü Global Expansion
ü Market Segmentation
ü Vertical Opportunity
ü Installed Base Opportunity
ü Extended Enterprise
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Accelerating Client Traction
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2003-2005 2010 2012 20142008
2009 2011 2013 20152006-2007
Key Client Additions
12 21 44 73 105 168 280481
805
1,2371,631
2,153
2,595
0400800
1,2001,6002,0002,4002,800
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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Expanded Global Footprint
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Europe, Middle East & Africa
Select Notable Clients Select Notable Clients
JAPAN CHINA
AUSTRALIA
JAPAN
INDIACHINA
Asia Pacific
SWITZERLAND SPAIN
NETHERLANDSFRANCEUNITED KINGDOM
GERMANY
8 29OFFICES LANGUAGES EST. USERS
7 9 1.9MOFFICES LANGUAGES EST. USERS
6.8M
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HAVE 2+ MODULES
2/3
Installed Base Penetration
2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+
2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+ 2+
3+ 3+ 3+ 3+ 3+ 3+ 3+ 3+ 3+ 3+
3+ 3+ 3+
HAVE 3+ MODULES
1/2Nearly
26
More Than
2+
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Installed Base Opportunity
27
0200400600800
1,0001,2001,4001,6001,8002,0002,2002,4002,600
Learning Performance Recruiting Analytics
Existing Client Penetration Client Opportunity
Num
ber o
f Clie
nts
Four key pillars, each a suite, and half of it GREENFIELD
Calculated based on 2,670 clients with approximately 9,400 users on average
60% penetration
among other
products results in nearly $800M
opportunity
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Extended Enterprise Opportunity
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Engage & enable the entire ecosystem
• Training for profit
• Partner enablement
• Customer engagement
• Crowdsourcing
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The FutureBeyond 2016
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üFIRST to the Cloud
üFIRST to do Integrated Talent Management
üFIRST to include SocialNetworking in TalentManagement
üFIRST to do client success management
üFIRST to understand consumerization of the enterprise
üFIRST to integrate full machine learning
Cornerstone is Visionary
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Cornerstone has “Massive Data”
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Userü Positionü Previous Positionü Educationü Skillsü Certificationsü Accomplishmentsü Languagesü Organizationü Preferences
Collaborationü Connectionsü Live Feed (Status)ü Feedbackü Actionsü Snapshotü Teamsü Discussionsü Badgesü Likesü Comments
Talent Organizationü Transcriptü Performanceü Skills ü Goalsü Assessmentsü Dev Plansü Successionü Compensationü Applicantsü Applicant Status
ü Industryü Business Unitü Departmentü Divisionü Regionü Groupsü Hierarchiesü Cost Centerü Gradeü Location
25.0M USERS | 191 COUNTRIES | DECADE OF DATA
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REPORT
Cornerstone Reporting
Standard & custom reports embedded
with Cornerstone
DISCOVER
Cornerstone View
Highly visual dashboards that can easily slice/ dice
talent information
PLAN
Cornerstone Planning
Big data solution for workforce planning
PREDICT
Cornerstone Insights
Predictive analytics for managing
talent decisions
Cornerstone Analytics
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IMPORT INTEGRATE
Edge Import
Easily map and load data into Cornerstone
Edge Integrate
Easy build & manage integrations with 3rd-party apps
BUILD
Edge Build
Create new apps using Edge APIs & developer tools
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The Power of Platform
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Multi-tenant REST APIs Mobile-Ready
Cornerstone Apps Partner Apps Custom AppsOne unified suite to recruit, train, develop, & connect
employees
Marketplace of apps integrated & embedded within
Cornerstone
Client-specific applications designed & built by clients
or partners
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Thank You!