Cornerstone OnDemand (CSOD) held their Q1 2018 earnings call with investors on May 8.  Here’s a short summary of their earnings for those keeping score at home.

Adam Miller, CEO, is pushing ahead with CSOD’ s strategic transformation plan. One of the important financial parts of the strategic transformation plan is that CSOD will focus on recurring revenue and is exiting the services delivery business. The goal of improving operating margins looks on track too which eventually improve free cash flow. Important management additions have been made as a part of the plan and this will help the CSOD executive team complete the new strategic goals.

Total Revenue was $133.1 million and that represented an increased 19.0% for 1Q compared the quarter a year ago.

Revenue beat expectations which were in a range of $126 million to $128 million. Nicely done by eclipsing the high end of the range. Non-GAAP operating margins of 9.7% for 1Q is a nice improvement from 4.4% versus a 1Q 2017, a year ago. So, improvement here too.

Subscription revenue aka recurring revenue hit $113 million which was an increase of 22% for 1Q.

So again, nice job especially when a company exceeds 20% on this kind of metric. This will be one of the most important metrics for the company going forward.

The balance sheet saw important changes in 4Q 2017 where a new issue convertible bond was placed with Silver Lake and LinkedIn.

The stated purpose being paying off an older convertible debt issue that matures in July 2018. This is good debt management and one would expect the balance sheet to see more improvements as the company continues to execute their financial plan.

CSOD added 800,000 users in Q1 and the total user base for subscribers is now 36 million. So CSOD did a nice job growing users in their customer base. CSOD has seen growth in Europe and the company believes this trend will continue. According to the company, recent successes in France, Italy, the U.K., Switzerland, and Sweden is helping to build sales momentum in Europe.

Look for more collaboration with technology partners. And don’t forget their new capital partners, Silver Lake and LinkedIn, going forward. Bottom line, it was a good quarter and the future is bright.

If you want to know more, check out Cornerstone’s press release for their Q1 2018 earnings.

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