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Corporate Overview Fourth Quarter 2016
Transcript
Page 1: CSOD Investor Deck Fourth Quarter - v19s2.q4cdn.com/.../2016/CSOD-Investor-Deck-Fourth-Quarter-v19.pdf · SumTotal Halogen Software Saba Oracle (Talent Management Cloud) SAP (SuccessFactors)

Corporate OverviewFourth Quarter 2016

Page 2: CSOD Investor Deck Fourth Quarter - v19s2.q4cdn.com/.../2016/CSOD-Investor-Deck-Fourth-Quarter-v19.pdf · SumTotal Halogen Software Saba Oracle (Talent Management Cloud) SAP (SuccessFactors)

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:

• The Company’s ability to execute its business strategies;

• The Company’s ability to accurately forecast revenue and appropriately plan its expenses;

• The accuracy of Company estimates regarding its total addressable market;

• The Company’s ability to manage growth, including additional headcount and expansion into new geographies and markets;

• The Company’s ability to attract new clients to enter into subscriptions for its solutions;

• The Company’s ability to service those clients effectively and induce them to renew and upgrade their deployments of the Company’s solutions;

• The timing and success of Company efforts to increase operational efficiency;

• The success of the Company’s strategic relationships with third parties;

• The Company’s ability to attract and retain qualified employees and key personnel;

• Changes in the competitive environment in the Company’s industry and the markets in which the Company operates;

• Continued and/or increased market acceptance of Company solutions and SaaS generally;

• The Company’s ability to innovate and introduce new and improved solutions;

• The impact of foreign exchange rates;

• The Company’s ability to protect and defend its intellectual property, as well as costs associated with such protection and defense;

• Future regulatory, judicial and legislative changes in the Company’s industry;

• 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.

2

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Cornerstone Today

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1999

Our Evolution16 Years Ago…

4

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2010

Our EvolutionThe Last Decade…

5

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2016

Our EvolutionToday

6

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7Note: User and client count figures exclude Growth Edition and Cornerstone for Salesforce.

CLIENTS

2,800+USERS

28MCOUNTRIES

191LANGUAGES

42OFFICES

20

San Francisco

Santa Monica

Sunnyvale

Sao Paulo

MadridParis

LondonAmsterdam

Stockholm

DusseldorfMunich

Tel Aviv

Bangalore

MumbaiShanghai

Tokyo

Sydney

Auckland

Today with Global Reach…

As of September 30, 2016

New Delhi Hong Kong

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Acquired by

Acquired by

Acquired by

Acquired by

Acquired by

8

…and an Organically-Grown Core Suite

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Cornerstone is the Talent Management Leader

9

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 Leading Partners Around the Globe

10

Select Alliances

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11

The Ability to Integrate with Everyone

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12

Global Infrastructure Statistics

CSOD has World-Class Infrastructure

Total GlobalBandwidth:

3+ Petabytes

Average response time

(all clients):

500ms

YTD web volume in 2016:

22+ Billion Requests

Daily Database Transactions:

15 Billion

Uptime guaranteed by

SLA

Global YTD uptime across

all swimlanes in 2016:

99.99%

Page 13: CSOD Investor Deck Fourth Quarter - v19s2.q4cdn.com/.../2016/CSOD-Investor-Deck-Fourth-Quarter-v19.pdf · SumTotal Halogen Software Saba Oracle (Talent Management Cloud) SAP (SuccessFactors)

Our Opportunity

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Work is Changing

14

WHO

WHAT

WHERE

WHEN

HOW

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The Market Need is Real

15

Thuy Sindell & Milo Sindell June 15, 2016

Why Leadership Development Needs to

Be Updated

Bruce Pfau| April 17, 2016

What Do Millennials Really Want at Work? The Same Things the Rest of Us Do

Heather Clancy | May 11, 2016

What Your HR Data Can Tell You About Your

Business

Karsten StraussSeptember 13, 2016

How Your Millennial And Gen Z Employees Are

Changing Your Workplace

Sramana Mitra | July 5, 2016

The Future of Work:Utopia or Dystopia?

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The Market is HUGE

16Source: Adapted from Gartner, IDC, US Census Bureau

93MEST. SAASUSERS

28MCSOD

400MADDRESSABLE SEATS

BY MARKET SEGMENT

BY GEOGRAPHY

ADDRESSABLE MARKET

$50B+ ~150M ENTERPRISE ~150M

MID MARKET ~100M SMB

~155M

NORTHAMERICA

~30M

LATINAMERICA

~140M

EUROPE, MIDDLE EAST

& AFRICA

~75M

ASIAPACIFIC

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CSOD has Marquis Clients Across the GlobeAPJUS & LATAM EMEA

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HAVE 2+ SUITES

Approximately

70%

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+ SUITES

18

2+

Approximately

40%

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Installed Base Opportunity

19

0

400

800

1,200

1,600

2,000

2,400

2,800

Learning Performance Recruiting Cornerstone HR

Existing Client Penetration

Num

ber o

f Clie

nts

Four key pillars, each a suite, and half of it GREENFIELD

Calculated based on 2,805 clients with approximately 9,900 users on average

60% penetration

among other

products results in

incremental $1.2B+

opportunity

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Financial & Operating Results

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Strong Results

21

$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 Billings

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Growth Across All Metrics

22

$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

23

-21.9%

-17.3%

-14.9%

-7.5% -6.9% -6.7%

0.6%

-25%

-15%

-5%

5%

Non-GAAP Net Profit Margin

Note: Historical values have been restated to reflect updated definitions of recently published SEC guidance. 2016E non-GAAP net profit margin reflects the latest issued guidance and uses the

midpoint of the revenue guidance range.

2010 2011 2012 2013 2014 2015 2016E

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Long-Term Margin Improvement

24

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 4% 12%+ 16%+

Note: All values are non-GAAP metrics.

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The FutureBeyond 2016

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Opportunities Abound

26

GLOBAL EXPANSION

MARKET SEGMENTATION

CONTINUED CORE MARKET

SALES

INSTALLED BASE OPPORTUNITY

EXTENDED ENTERPRISE

VERTICAL OPPORTUNITY

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27

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

Page 28: CSOD Investor Deck Fourth Quarter - v19s2.q4cdn.com/.../2016/CSOD-Investor-Deck-Fourth-Quarter-v19.pdf · SumTotal Halogen Software Saba Oracle (Talent Management Cloud) SAP (SuccessFactors)

Cornerstone has “Massive Data”

28

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

28M USERS | 191 COUNTRIES | DECADE OF DATA

Page 29: CSOD Investor Deck Fourth Quarter - v19s2.q4cdn.com/.../2016/CSOD-Investor-Deck-Fourth-Quarter-v19.pdf · SumTotal Halogen Software Saba Oracle (Talent Management Cloud) SAP (SuccessFactors)

29

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

29

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30

CENTRALIZED DATA

PEOPLE MANAGEMENT

LEGACY EXTENSION

Hub

Gain a complete view of your organization across subsidiaries and regions

Extend

Extend legacy systems while improving end user capabilities,

including empowering self-service

Bridge

Easy-to-use people management tools to engage & align talent to

business strategy

REIMAGINE PEOPLE MANAGEMENT

Cornerstone HR

Page 31: CSOD Investor Deck Fourth Quarter - v19s2.q4cdn.com/.../2016/CSOD-Investor-Deck-Fourth-Quarter-v19.pdf · SumTotal Halogen Software Saba Oracle (Talent Management Cloud) SAP (SuccessFactors)

Investment Summary

31

Organically-developed, best-of-breed SaaS platform

Huge, untapped market opportunity

Industry-leading customer retention

Highly scalable business

Strong client economics

Top line growth with significant profitability improvement

A leader in human capital management


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