Cornerstone OnDemand (CSOD) had good financial results for both the 4th quarter and year-end 2018. Here are some financial highlights:
4th Quarter 2018
- Revenue for the quarter was $137.2 million up 4.5% versus prior year
- Subscription Revenue was $127.5 million up 20.0% versus prior year
- Non-GAAP net income was $15.1 million versus $12.1 million prior year
Fiscal Year 2018 Results:
- Revenue for the year was $537.9 million which was an 11.5% increase versus prior year
- Annual Recurring Revenue (ARR) for the year was $510 million which was a 16.2 % growth year-over-year
- Non-GAAP income was $47.3 million for the year versus $25.2 million prior year
As we have mentioned in previous financial blog posts, Cornerstone is still implementing a 5-point transformation plan to:
- Focus on revenue
- Improve operating margins and free cash flow
- Develop new recurring revenue streams
- Bolster the management team to help CSOD scale
- Strengthen corporate governance
From our vantage point, CSOD has been making significant progress on their transformation plan.
One of the important changes that CSOD is making is the wind-down of their enterprise delivery services and focus on recurring revenue going forward. CSOD is transferring that business to their global partner ecosystem, of which Bluewater is a key service provider. We have worked closely with Cornerstone on this and continue to play an important role in addressing the needs of Cornerstone users.
The total global client base for Cornerstone is now 3,500 organizations and the global user base exceeds 40 million users in more than 190 countries with 43 languages. The continuing international growth for Cornerstone is an exciting area and the 10-year compounded annual growth rate is an amazing 47%. EMEA (Europe, the Middle East, and Africa) represents most of the international growth that CSOD has seen so far. However, the potential growth in Asia and Japan looks to be an important focus in the years ahead.
What should we look for from CSOD in 2019? Continued innovation, expansion of content offerings via Content Anytime, and the expansion of their Cornerstone HR Suite in Europe. You should also expect that Cornerstone HR will eventually expand beyond Europe and into other countries.
Bluewater is a key Cornerstone service partner and we look forward to enhancing that partnership by helping our joint customers achieve success in 2019 and beyond.