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Corporate Overview Fourth Quarter 2015

Csod investor deck third quarter1052015

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Page 1: Csod investor deck third quarter1052015

Corporate Overview Fourth Quarter 2015

Page 2: Csod investor deck third quarter1052015

Safe Harbor This 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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Page 3: Csod investor deck third quarter1052015

1999

Our Evolution 15 Years Ago…

3

Page 4: Csod investor deck third quarter1052015

2010

Our Evolution The Last Decade…

4

Page 5: Csod investor deck third quarter1052015

2015

Our Evolution Today

5

Page 6: Csod investor deck third quarter1052015

The Opportunity

Page 7: Csod investor deck third quarter1052015

Work is Changing

7

WHO

WHAT

WHERE

WHEN

HOW

Page 8: Csod investor deck third quarter1052015

The Market Need is Real

8

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

Page 9: Csod investor deck third quarter1052015

The Market is HUGE

9

22.2M USERS

ADDRESSABLE MARKET

$31B

81M EST. USERS

CURRENT MARKET

400M ADDRESSABLE SEATS

CORNERSTONE

Source: Adapted from Gartner, IDC, US Census Bureau

Page 10: Csod investor deck third quarter1052015

Scale to Meet the Need

Page 11: Csod investor deck third quarter1052015

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

CLIENTS

2,400+ USERS

22M+ COUNTRIES

191 LANGUAGES

42 OFFICES

19

San Francisco

Santa Monica

Sunnyvale

Sao Paulo

Madrid Paris

London Amsterdam

Stockholm

Dusseldorf Munich

Tel Aviv

Bangalore

Mumbai

Hong Kong

Tokyo

Sydney

Auckland

Global Reach

As of September 30, 2015

New Delhi

Page 12: Csod investor deck third quarter1052015

Leadership Position in Talent Management

12

Niche Players Visionaries

Challengers Leaders

Magic Quadrant for Talent Management Suites

Lumesse

COMPLETENESS OF VISION

ABI

LITY

TO

EX

ECU

TE

Source: Gartner (August 2015)

Deltek (HRsmart)

Technomedia

Haufe PeopleFluent

SumTotal

Halogen Software

Saba

Oracle (Talent Management Cloud)

SAP (SuccessFactors)

Talentsoft

Page 13: Csod investor deck third quarter1052015

Organically-Grown Core Suite

Acquired by

Acquired by

Acquired by

Acquired by

Acquired by

13

Page 14: Csod investor deck third quarter1052015

Marching to $1Billion

Page 15: Csod investor deck third quarter1052015

•  Focus on innovation •  Organically grown

•  Pure SaaS

•  System of engagement

•  Focus on client success

•  Focus on integration

•  Built through acquisition

•  Mix of SaaS and On-Premise

•  System of record

•  Clients multiple levels removed

ERP Suite Best Of Breed

The Competitive Landscape

15

Page 16: Csod investor deck third quarter1052015

2003-2004 2009 2011 2013 2007

2008 2010 2012 2014 2005-2006

Key Client Additions

CSOD has Accelerating Client Traction

12 21 44 73 105 168 280 481

805

1,237

1,631

2,153

0

400

800

1,200

1,600

2,000

2,400

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

16

Page 17: Csod investor deck third quarter1052015

Expanded Global Footprint

17

Europe, Middle East & Africa

Select Notable Clients Select Notable Clients

JAPAN CHINA

AUSTRALIA

JAPAN

INDIA CHINA

Asia Pacific

SOUTH AFRICA SPAIN

AUSTRIA FRANCE UNITED KINGDOM

GERMANY

8 29 OFFICES LANGUAGES EST. USERS

7 9 1.8M OFFICES LANGUAGES EST. USERS

6.2M

Page 18: Csod investor deck third quarter1052015

Growth Across All Metrics

18

$11.0 $19.6

$29.3

$46.6

$75.5

$117.9

$185.1

$263.6

2007 2008 2009 2010 2011 2012 2013 2014

Revenue Growth

105 168

280

481

805

1,237

1,631

2,153

2007 2008 2009 2010 2011 2012 2013 2014

Client Growth

0.9

2.1

3.3

4.9

7.5

10.6

14.0

18.1

2007 2008 2009 2010 2011 2012 2013 2014

User Growth (in millions) (in millions)

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

Page 19: Csod investor deck third quarter1052015

Now with More People, More to Sell

ANALYTICS LEARNING PERFORMANCE RECURITING

Page 20: Csod investor deck third quarter1052015

Bolstered by Tier One Global Partners

20

Content Partners Service Partners Technology Partners

Page 21: Csod investor deck third quarter1052015

Opportunities Abound

Page 22: Csod investor deck third quarter1052015

Investment Landscape

ü  Market Segments

ü  Vertical Opportunity

ü  Installed Base Opportunity

ü  Extended Enterprise

ü  Big Data

ü  Link

ü  Platform

22

Page 23: Csod investor deck third quarter1052015

STRATEGIC ACCOUNTS

GROWTH EDITION

ENTERPRISE

MID-MARKET

5000+ Employees

1000-5000 Employees (Nationals)

400-1000 Employees

(Majors)

<400 Employees

UP MARKET

DOWN MARKET

23

Top

150 Accounts

Opportunities Across All Market Segments

Page 24: Csod investor deck third quarter1052015

Healthcare

Vertical Opportunity

Public Sector Life Sciences

24

Page 25: Csod investor deck third quarter1052015

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

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Page 26: Csod investor deck third quarter1052015

Installed Base Opportunity

26

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

Learning Performance Succession Connect Compensation Recruiting Onboarding

Existing Client Penetration Client Opportunity

Num

ber o

f Clie

nts

Approximately $1.5B opportunity within installed base

60% penetration

among other

products results in nearly $700M

opportunity

Calculated based on 2,466 clients with approximately 9,000 users on average

Page 27: Csod investor deck third quarter1052015

Extended Enterprise Opportunity

Engage and enable the entire ecosystem

•  Training for profit

•  Partner enablement

•  Customer engagement

•  Crowdsourcing

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Page 28: Csod investor deck third quarter1052015

Cornerstone has “Massive Data”

28

User

ü  Position ü  Previous Position ü  Education ü  Skills ü  Certifications ü  Accomplishments ü  Languages ü  Organization ü  Preferences

Collaboration

ü  Connections ü  Live Feed (Status) ü  Feedback ü  Actions ü  Snapshot ü  Teams ü  Discussions ü  Badges ü  Likes ü  Comments

Talent Organization

ü  Transcript ü  Performance ü  Skills ü  Goals ü  Assessments ü  Dev Plans ü  Succession ü  Compensation ü  Applicants ü  Applicant Status

ü  Industry ü  Business Unit ü  Department ü  Division ü  Region ü  Groups ü  Hierarchies ü  Cost Center ü  Grade ü  Location

22.2M USERS | 191 COUNTRIES | DECADE OF DATA

Page 29: Csod investor deck third quarter1052015

Cornerstone Analytics

29

REPORT DISCOVER PREDICT PLAN

Cornerstone Reporting

Standard & custom reports embedded with Cornerstone

Cornerstone View

Highly visual dashboards that can easily slice/dice talent

information

Cornerstone Insights

Predictive analytics for managing talent decisions

Cornerstone Planning

Big data solution for workforce planning

Page 30: Csod investor deck third quarter1052015

30

DEEPER INSIGHTS

Understand the real dynamics behind

your business.

SMARTER DECISIONS

Tap into real-time data to drive smarter talent

decisions.

DATA-DRIVEN RECOMMENDATIONS

Actionable predictions & recommendations.

The Power of Predictive Analytics

Page 31: Csod investor deck third quarter1052015

One Global System of Record

•  Unify employee and talent data •  Gain a complete workforce view

•  Manage the complete employee lifecycle

•  Easily feed data to/from other systems

Cornerstone Link

Page 32: Csod investor deck third quarter1052015

32

GLOBAL VIEW

Maintain one centralized source of

employee data.

REDUCE RISKS

Eliminate error-prone manual processes to

improve compliance.

SAVINGS

Free up valuable human capital resources and streamline

processes.

INSIGHTS

Integrate employee data

for deeper insights.

The Power of Link

Page 33: Csod investor deck third quarter1052015

Platform Opportunity: Cornerstone Edge

33

LEARN INTEGRATE BUILD MARKET

Cornerstone Developer

Developer community to learn and access key resources for

Cornerstone Edge

Cornerstone API Services

Review Cornerstone API library, documentation, tutorials

Cornerstone App Builder

Create new, unique applications leveraging Cornerstone APIs &

development tools

Cornerstone Marketplace

Easily access, download, install and configure custom and 3rd

party apps

Page 34: Csod investor deck third quarter1052015

Cornerstone Platform Changes Everything

34

Multi-tenant REST APIs Mobile-Ready

Cornerstone Apps Partner Apps Custom Apps One unified suite to recruit, train,

develop, and connect employees Marketplace of apps integrated and

embedded within Cornerstone Client-specific applications designed

and built by clients or partners

Page 35: Csod investor deck third quarter1052015

35

The Power of Platform

AGILITY

Solve your rapidly

changing business needs.

SPEED

Build and deploy apps quickly, or

use existing apps.

SIMPLICITY

Create apps with ease using EDGE

builder tools.

COST

Save money leveraging our state-of-the-art

SaaS infrastructure.

Page 36: Csod investor deck third quarter1052015

Financial Highlights

Page 37: Csod investor deck third quarter1052015

Strong Momentum

37

$11.0 $19.6

$29.3

$46.6

$75.5

$117.9

$185.1

$263.6

$0

$60

$120

$180

$240

$300

2007 2008 2009 2010 2011 2012 2013 2014

$15.0 $24.9

$34.5

$60.9

$97.6

$154.3

$231.7

$316.1

$0

$65

$130

$195

$260

$325

2007 2008 2009 2010 2011 2012 2013 2014

(in millions) (in millions)

Revenue Bookings

Page 38: Csod investor deck third quarter1052015

Growing Revenue Per User

38

$11.27

$12.14

$13.05

$15.04

$16.40

$10

$11

$12

$13

$14

$15

$16

$17

2010 2011 2012 2013 2014

Calculated using full-year revenue for the period divided by the midpoint of the beginning and ending user base during the period.

Page 39: Csod investor deck third quarter1052015

Bootstrapped Mentality Since Inception

39

November 1999

Founded with

raised from angel investors

September 2007

in first round of funding led by

Bessemer Venture Partners & Bay Partners

Primarily financed

through debt and revenue

March 2009

in second round of funding led by Meritech Capital

Partners

Initial public offering

March 2011

$32.0M

$12.7M

$700K

Page 40: Csod investor deck third quarter1052015

Clear Path to Profitability

40

$0.2 $2.2

$11.2

$20.6

$33.3

$43.0

$0

$9

$18

$27

$36

$45

2010 2011 2012 2013 2014 2015E

(in millions)

-21.9%

-17.0%

-13.5%

-6.7% -6.4% -5.6%

-25%

-20%

-15%

-10%

-5%

0% 2010 2011 2012 2013 2014 2015E

Non-GAAP Operating Cash Flow

Non-GAAP Net Loss Margin

Note: 2015E values reflect the latest issued guidance. 2015E non-GAAP net loss margin uses the

midpoint of the revenue guidance range of $340.5 - $342.0M

Page 41: Csod investor deck third quarter1052015

41

Not Just Software, But Service too! •  95% average dollar

retention since inception

•  Many repeat buyers

•  Pioneering Client Success Framework

•  Business consulting, client success management and solution architecture

41

Page 42: Csod investor deck third quarter1052015

Thank You!