Cornerstone OnDemand Announces
Fourth Quarter and Fiscal Year
2016 Financial Results

SANTA MONICA, Calif. — February 13, 2017 — Human capital management software provider Cornerstone OnDemand, Inc. (NASDAQ: CSOD) today announced results for its fourth quarter and year ended December 31, 2016. A summary of the Company’s Operational and Financial Highlights is available on the Company’s Investor Relations website at http://investors.cornerstoneondemand.com.

“The fourth quarter capped off another strong year with 29% constant currency revenue growth,” said Adam Miller, the Company’s President and CEO. “We believe the tremendous market opportunity in learning and human capital management, combined with our position as the long-standing talent management leader and our proven ability to innovate, will continue to fuel Cornerstone’s long-term growth and margin expansion.”

Fourth Quarter 2016 Results:

• Revenue for the fourth quarter of 2016 was $109.0 million, representing a 13.7% increase compared to the same period in 2015. Revenue growth on a constant currency basis represented a 20.4% increase compared to the prior year.1

• Billings were $156.3 million for the fourth quarter of 2016, representing a 10.1% increase compared to the same period in 2015.1 Billings growth on a constant currency basis represented a 18.4% increase compared to the prior year.1

• The Company’s operating loss for the fourth quarter of 2016 was $(14.5) million, yielding an operating loss margin of (13.3)%, compared to an operating loss of $(14.8) million, yielding an operating loss margin of (15.5)%, for the fourth quarter of 2015. This represents an improvement of 220 basis points year-over-year.

• Non-GAAP operating income for the fourth quarter of 2016 was $1.6 million, yielding a non-GAAP operating income margin of 1.5%, compared to a non-GAAP operating income of $0.2 million, yielding a non-GAAP operating income margin of 0.2%, for the fourth quarter of 2015.1 This represents an improvement of 130 basis points year-over-year.

• The Company’s net loss for the fourth quarter of 2016 was $(18.6) million, or a $(0.33) diluted net loss per share, compared to a net loss of $(18.8) million, or a $(0.35) diluted net loss per share, for the fourth quarter of 2015.

• Non-GAAP net loss for the fourth quarter of 2016 was $(0.1) million, or a $0.00 non-GAAP diluted net loss per share, compared to a non-GAAP net loss of $(1.2) million, or a $(0.02) non-GAAP diluted net loss per share, for the fourth quarter of 2015.1

• Free cash flow for the fourth quarter of 2016 was $27.5 million compared to free cash flow of $49.2 million for the fourth quarter of 2015.1

Fiscal Year 2016 Results:

• Revenue for the full year of 2016 was $423.1 million, representing a 24.6% increase compared to the same period in 2015. Revenue growth on a constant currency basis represented a 29.1% increase compared to the prior year.1

• Billings were $453.3 million for the full year of 2016, representing a 13.2% increase compared to the same period in 2015.1 Billings growth on a constant currency basis represented a 20.2% increase compared to the prior year.1

• The Company’s operating loss for the full year of 2016 was $(56.3) million, yielding an operating loss margin of (13.3)%, compared to an operating loss of $(68.7) million, yielding an operating loss margin of (20.2)%, for the full year of 2015. This represents an improvement of 690 basis points year-over-year.

• Non-GAAP operating income for the full year of 2016 was $7.6 million, yielding a non-GAAP operating income margin of 1.8%, compared to a non-GAAP operating loss of $(15.1) million, yielding a non-GAAP operating loss margin of (4.4)% for the full year of 2015.1 This represents an improvement of 620 basis points year-over-year

• The Company’s net loss for the full year of 2016 was $(66.8) million, or a $(1.20) diluted net loss per share, compared to a net loss of $(85.5) million, or a $(1.58) diluted net loss per share, for the full year of 2015.

• Non-GAAP net income for the full year of 2016 was $6.4 million, or a $0.11 non-GAAP diluted net income per share, compared to a non-GAAP net loss of $(22.8) million, or a $(0.42) non-GAAP diluted net loss per share, for the full year of 2015.1

• Free cash flow for the full year of 2016 was $12.6 million compared to free cash flow of $14.9 million for the full year of 2015.1

“2016 marks a significant milestone for Cornerstone, achieving full year non-GAAP net income for the first time in the Company’s history,” said Brian Swartz, the Company’s CFO. “This was the result of wins across many of our operational excellence initiatives for the year and we believe there are clear opportunities to further improve margins and drive continued profitability in 2017 and beyond.”

Recent Highlights:

• The Company was recognized as a Leader in both The Forrester WaveTM: Learning and Performance Management, Q4 2016, as well as the 2016 Nucleus Research Talent Management Technology Value Matrix. http://csod.info/2kDuPK7

• Western Union, a worldwide leader in payment services, has built an award-winning and dynamic learning and development program using the Company’s software, that not only links directly to business outcomes, but also has created efficiencies and trimmed costs. http://csod.info/2kpsvFx

• Canali, an Italian luxury menswear brand, implemented the Company’s unified talent management suite to better recruit, develop and manage its global workforce. http://csod.info/2ftmysv

• The Company ended the fourth quarter of 2016 with 2,918 clients and more than 29.9 million users.2

Financial Outlook:

The following outlook 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, 2017, the Company provides the following outlook:

• Revenue between $109.0 million and $111.0 million, representing year-over-year growth at the mid-point of 10.8%3, or 15.9%4 on a constant currency basis.

For the year ending December 31, 2017, the Company provides the following outlook:

• Revenue between $475.0 million and $485.0 million, representing year-over-year growth at the mid-point of 13.4%5, or 16.6%6 on a constant currency basis.

• Non-GAAP operating margin of approximately 5.0% to 6.0% of revenue.

• Non-GAAP net income margin of approximately 4.0% to 5.0% of revenue.

• Free cash flow margin of approximately 6.0% to 7.0% of revenue.

The Company has not reconciled the guidance for non-GAAP operating margin or non-GAAP net income margin 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 non-GAAP operating margin and non-GAAP net income margin, the Company excludes stock-based compensation expense, which is impacted by factors that are outside of the Company’s control and can be difficult to predict. The actual amount of stock-based compensation expense in the first quarter ending March 31, 2017 and the year ending December 31, 2017 will have a significant impact on the Company’s GAAP operating margin and GAAP net income margin.

1 Billings, financial measures presented on a constant currency basis, non-GAAP operating income (loss), non-GAAP operating income (loss) margin, non-GAAP net income (loss), non-GAAP diluted net income (loss) per share and free cash flow are non-GAAP financial measures. Please see the discussion in the section titled “Non-GAAP Financial Measures” and the reconciliations at the end of this press release. 2 Includes contracted clients and active users of our Enterprise and Mid-Market solution, excluding Cornerstone for Salesforce and Cornerstone Growth Edition.

In order to translate the financial outlook for entities reporting in British pounds (GBP) to United States dollars (USD), the following exchange rates have been applied: 3 Exchange rate applied to revenue for the first quarter of 2017 $1.25 USD per GBP 4 Exchange rate from the first quarter of 2016 applied to calculate revenue growth for the first quarter of 2017 on a constant currency basis $1.43 USD per GBP 5 Exchange rate applied to revenue for fiscal 2017 $1.25 USD per GBP 6 Exchange rate from fiscal 2016 applied to calculate revenue growth for fiscal 2017 on a constant currency basis $1.35 USD per GBP
Quarterly Conference Call

Cornerstone OnDemand, Inc. will host a conference call to discuss its fourth quarter and fiscal year 2016 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 (U.S.) or (484) 653-6763 (outside the U.S.) and referencing passcode: 43721797. 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 11:59 p.m. PT on February 16, 2017 by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (outside the U.S.), and referencing passcode: 43721797.