Cornerstone OnDemand Announces Second Quarter 2012 Financial Results
- Q2 Bookings of $31.5 million, up 51% year-over-year
- Record quarterly revenue of $26.7 million, up 54% year-over-year based on gross revenue
- Record quarterly gross profit of $18.8 million, up 52% year-over-year based on gross revenue
- Quarterly gross margin of 70%, up 378 basis-points year-over-year, and non-GAAP gross margin1 of 74%, up 224 basis points year-over-year
- Ended the quarter with over 1,000 clients and over 9.4 million users
SANTA MONICA, Calif. — August 9, 2012 — Learning and talent management software provider Cornerstone OnDemand (NASDAQ: CSOD) today announced results for its quarter ended June 30, 2012.
Revenue for the second quarter of 2012 was $26.7 million, representing a 54% increase compared to gross revenue2 for the same period in 2011.
Gross profit for the second quarter of 2012 was $18.8 million, representing a 52% year-over-year improvement compared to the same period in 2011, after excluding the $2.5 million reduction of revenue related to a common stock warrant issued in the same period in 2011.
Gross margin for the second quarter of 2012 was 70% compared to 71% in the same period in 2011, after excluding the $2.5 million reduction of revenue described above.
Bookings1, which Cornerstone defines as gross revenue plus the change in deferred revenue for the period, were $31.5 million for the second quarter of 2012, representing a 51% increase compared to the same period of 2011 and a 32% sequential increase from the first quarter of 2012. Deferred revenue at June 30, 2012 was $60.7 million, which was 69% higher than the balance at June 30, 2011 and 9% higher than the balance at March 31, 2012.
Cornerstone ended the quarter with over 1,000 clients and over 9.4 million users, representing 55% and 57% year-over-year growth and 12% and 15% sequential quarter growth, of Cornerstone’s client base and users, respectively.
“We have clearly seen a positive impact from the acquisitions of our primary competitors, not only in the segments of SMB and mid-market, but also in the large enterprise segment. Cornerstone’s momentum continued unabated through the first half of 2012, and we are investing in expanding our worldwide sales coverage to meet global demand while remaining fully committed to our clients’ success,” said Adam Miller, Cornerstone’s President and CEO.
Cornerstone’s net loss for the second quarter of 2012 was $8.2 million, or $0.17 loss per share, compared to a net loss of $7.1 million, or $0.15 loss per share, for the second quarter of 2011.
Cornerstone closed the acquisition of Sonar Limited, a provider of cloud-based talent management solutions, on April 5, 2012. Due to purchase accounting rules applicable to the acquisition, Cornerstone recorded an adjustment of $1.6 million to reduce to fair value the balance of deferred revenue attributable to contracts assumed from Sonar Limited. This fair value adjustment has the impact of reducing the amount of revenue attributable to contracts assumed from Sonar Limited by $0.7 million for the quarter ended June 30, 2012. Non-GAAP revenue, which excludes this $0.7 million reduction, was $27.4 million, representing a 58% increase compared to the same period of 2011.
Non-GAAP gross profit for the second quarter of 2012 was $20.4 million, representing a 63% year-over-year improvement compared to non-GAAP gross profit for the same period in 2011. Non-GAAP gross margin for the second quarter of 2012 was 74% compared to 72% in the same period of 2011.
Non-GAAP net loss for the second quarter of 2012 was $4.7 million, or $(0.09) per share, compared to non-GAAP net loss of $3.4 million, or $(0.07) per share, for the same period in 2011.1 Non-GAAP net loss is based on non-GAAP revenue and excludes, for the periods in which they are present, stock-based compensation and employer-related payroll taxes, amortization of intangible assets, acquisition costs, amortization of debt discount and issuance costs, early debt retirement expense, change in the fair value of preferred stock warrant liabilities, adjustments to taxes related to acquisition adjustments, and accretion related to preferred stock.
During the second quarter of 2012, net cash used in operating activities was $5.4 million compared to cash used of $5.0 million in the same period in 2011. Non-GAAP net cash used in operating activities was $5.3 million for the second quarter of 2012 compared to cash used of $5.0 million in the same period in 2011.1 Net cash used in operating activities was $2.4 million for the six months ended June 30, 2012 compared to cash used of $3.6 million during the same period in 2011.1 Non-GAAP net cash used in operating activities was $2.1 million compared to cash used of $3.6 million in the same period in 2011.
At June 30, 2012, Cornerstone’s total cash and cash equivalents were $67.0 million and accounts receivable were $32.8 million, yielding a total of $99.8 million.
1 Non-GAAP revenue, bookings, non-GAAP net cash used in operating activities, non-GAAP net loss, non-GAAP net loss per share, non-GAAP gross profit, and non-GAAP gross margin are non-GAAP financial measures. Please see the discussion in the section “Non-GAAP Financial Measures” and the reconciliations at the end of this release.
2 Gross revenue in the second quarter of 2011 excludes the impact of a non-cash reduction of revenue related to a common stock warrant issued to ADP of $2.5 million. Net revenue and net loss for the second quarter of 2011 was impacted by this non-cash reduction of revenue.
3 Includes contracted clients and active users of any combination of our four integrated cloud-based solutions, consisting of recruiting, learning, performance, and extended enterprise as of the end of the period. Our client and user counts exclude our Cornerstone Small Business Solution, or “CSB”.
Quarterly Conference Call
Cornerstone OnDemand will host a conference call to discuss its second quarter 2012 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 Web site at http://investors.cornerstoneondemand.com/events.cfm. The live call can be accessed by dialing (888) 357-3694 (U.S.) or (973) 890-8276 (outside the U.S.) and referencing passcode: 17894091. 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 12:00 a.m. PT on August 13, 2012 by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (outside the U.S.), and referencing passcode: 17894091.
