Cornerstone OnDemand (CSOD) generated another good quarter as evidenced by their financial results released on May 7, 2019.
Here are the financial highlights for the first quarter:
- Revenue for the quarter was $140.1 million, a 5.3% increase over the prior year period
- Subscription Revenue was $131.3 million, a 16% increase over the prior year period
- Non-GAAP operating income was a 9.7% increase over the prior year period
Cornerstone grew revenue by over 5% and beat forecasted Earnings Per Share (EPS) by $.06 a share. Revenue exceeded forecasts by $4.6 million. Again, a good quarter with their financial results and progress was made in other areas too.
Growing content business is one of the focus areas for Cornerstone. Adam Miller, Founder & CEO, described it as “creating a flywheel effect in distancing us from our traditional competitors. One of the greatest assets we have is the scale we have developed over the years. In 2018, for example, we had over 520 million online course registrations on our platform.”
Miller believes this is still an early beginning to capturing more of the corporate leaning business and it’s similar to how Consumer Media businesses are currently growing. Cornerstone is committed to providing the platform for content as they broaden and execute this strategy going forward.
Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.
The impressive installed base and other metrics for Cornerstone:
- 40 million+ users
- 3,500+ clients
- 192 countries
- 43 languages
The quarterly shareholder letter listed the 2019 Key Focus Areas to increase their competitive moat and distance themselves from their competitors as follows:
- Leverage our dominant position in learning
- Drive content subscription to our learning installed base
- Deepen our footprint within our installed base
The next quarter for Cornerstone will be driven by many things internally and externally in a highly competitive landscape. Not only domestically, but within EMEA countries as well. Headwinds that may be challenging for double-digit growth is the continued weakness in Europe and perhaps a slowdown in growth for North America. However, the market opportunities are ultimately very large – perhaps as large as $40 billion as referenced by a 2017 Training Industry Report in the shareholder letter.
Bottom line, this was a quarter with good financial results and Cornerstone set their full guidance for ARR (Annualized Recurring Revenue) in a range estimated to produce 13%-16% growth for the full year 2019.