Form 10-Q
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Cornerstone OnDemand, Inc.
|
(Exact name of registrant as specified in its charter)
|
Delaware
|
13-4068197
|
(State or other jurisdiction of
incorporation or organization)
|
(IRS Employer
Identification No.)
|
Registrant’s telephone number, including area code:
(310) 752-0200
|
Large accelerated filer
|
x
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Accelerated filer
|
¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
Class
|
Outstanding as of August 1, 2016
|
Common Stock
|
55,931,617
|
|
|
Page No.
|
|
|
|
|
||
|
||
|
||
|
||
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||
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|
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ITEM 1.
|
Condensed Consolidated Financial Statements
|
|
June 30,
2016 |
|
December 31, 2015
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
112,575
|
|
|
$
|
107,691
|
|
Short-term investments
|
154,052
|
|
|
136,841
|
|
||
Accounts receivable, net
|
103,278
|
|
|
104,686
|
|
||
Deferred commissions
|
33,040
|
|
|
35,910
|
|
||
Prepaid expenses and other current assets
|
17,887
|
|
|
15,297
|
|
||
Total current assets
|
420,832
|
|
|
400,425
|
|
||
Capitalized software development costs, net
|
26,811
|
|
|
23,089
|
|
||
Property and equipment, net
|
25,506
|
|
|
27,021
|
|
||
Long-term investments
|
31,145
|
|
|
64,247
|
|
||
Intangible assets, net
|
11,867
|
|
|
16,713
|
|
||
Goodwill
|
25,894
|
|
|
25,894
|
|
||
Other assets, net
|
467
|
|
|
878
|
|
||
Total Assets
|
$
|
542,522
|
|
|
$
|
558,267
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
16,495
|
|
|
$
|
18,954
|
|
Accrued expenses
|
37,310
|
|
|
44,111
|
|
||
Deferred revenue, current portion
|
226,608
|
|
|
237,679
|
|
||
Capital lease obligations, current portion
|
—
|
|
|
33
|
|
||
Other liabilities
|
2,147
|
|
|
2,663
|
|
||
Total current liabilities
|
282,560
|
|
|
303,440
|
|
||
Convertible notes, net
|
233,814
|
|
|
229,305
|
|
||
Other liabilities, non-current
|
2,512
|
|
|
3,240
|
|
||
Deferred revenue, net of current portion
|
9,226
|
|
|
14,460
|
|
||
Total liabilities
|
528,112
|
|
|
550,445
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
||||
Stockholders’ Equity:
|
|
|
|
||||
Common stock, $0.0001 par value; 1,000,000 shares authorized, 55,693 and 54,704 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively
|
6
|
|
|
5
|
|
||
Additional paid-in capital
|
434,417
|
|
|
394,089
|
|
||
Accumulated deficit
|
(422,713
|
)
|
|
(386,882
|
)
|
||
Accumulated other comprehensive income
|
2,700
|
|
|
610
|
|
||
Total stockholders’ equity
|
14,410
|
|
|
7,822
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
542,522
|
|
|
$
|
558,267
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
107,013
|
|
|
$
|
82,563
|
|
|
$
|
206,337
|
|
|
$
|
156,518
|
|
Cost of revenue
|
35,955
|
|
|
27,893
|
|
|
67,605
|
|
|
52,555
|
|
||||
Gross profit
|
71,058
|
|
|
54,670
|
|
|
138,732
|
|
|
103,963
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
57,835
|
|
|
51,446
|
|
|
114,536
|
|
|
97,404
|
|
||||
Research and development
|
11,782
|
|
|
9,983
|
|
|
22,797
|
|
|
19,750
|
|
||||
General and administrative
|
16,538
|
|
|
12,260
|
|
|
33,003
|
|
|
23,351
|
|
||||
Amortization of certain acquired intangible assets
|
—
|
|
|
150
|
|
|
150
|
|
|
300
|
|
||||
Total operating expenses
|
86,155
|
|
|
73,839
|
|
|
170,486
|
|
|
140,805
|
|
||||
Loss from operations
|
(15,097
|
)
|
|
(19,169
|
)
|
|
(31,754
|
)
|
|
(36,842
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
385
|
|
|
202
|
|
|
731
|
|
|
372
|
|
||||
Interest expense
|
(3,217
|
)
|
|
(3,114
|
)
|
|
(6,407
|
)
|
|
(6,205
|
)
|
||||
Other, net
|
482
|
|
|
(801
|
)
|
|
2,275
|
|
|
(3,191
|
)
|
||||
Other income (expense), net
|
(2,350
|
)
|
|
(3,713
|
)
|
|
(3,401
|
)
|
|
(9,024
|
)
|
||||
Loss before income tax provision
|
(17,447
|
)
|
|
(22,882
|
)
|
|
(35,155
|
)
|
|
(45,866
|
)
|
||||
Income tax provision
|
(141
|
)
|
|
(380
|
)
|
|
(676
|
)
|
|
(658
|
)
|
||||
Net loss
|
$
|
(17,588
|
)
|
|
$
|
(23,262
|
)
|
|
$
|
(35,831
|
)
|
|
$
|
(46,524
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.32
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(0.86
|
)
|
Weighted average common shares outstanding, basic and diluted
|
55,278
|
|
|
53,987
|
|
|
55,053
|
|
|
53,886
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net loss
|
$
|
(17,588
|
)
|
|
$
|
(23,262
|
)
|
|
$
|
(35,831
|
)
|
|
$
|
(46,524
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
1,113
|
|
|
(536
|
)
|
|
1,623
|
|
|
(235
|
)
|
||||
Net change in unrealized gains (losses) on investments
|
128
|
|
|
(4
|
)
|
|
467
|
|
|
64
|
|
||||
Other comprehensive income (loss), net of tax
|
1,241
|
|
|
(540
|
)
|
|
2,090
|
|
|
(171
|
)
|
||||
Total comprehensive loss
|
$
|
(16,347
|
)
|
|
$
|
(23,802
|
)
|
|
$
|
(33,741
|
)
|
|
$
|
(46,695
|
)
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(35,831
|
)
|
|
$
|
(46,524
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
15,451
|
|
|
12,904
|
|
||
Accretion of debt discount and amortization of debt issuance costs
|
4,509
|
|
|
4,292
|
|
||
Purchased investment premium, net of amortization
|
562
|
|
|
112
|
|
||
Net foreign currency (gain) loss
|
(1,210
|
)
|
|
2,198
|
|
||
Stock-based compensation expense
|
26,004
|
|
|
18,501
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(1,178
|
)
|
|
3,486
|
|
||
Deferred commissions
|
1,724
|
|
|
(1,242
|
)
|
||
Prepaid expenses and other assets
|
(2,549
|
)
|
|
(3,572
|
)
|
||
Accounts payable
|
(2,680
|
)
|
|
(1,707
|
)
|
||
Accrued expenses
|
(5,888
|
)
|
|
(508
|
)
|
||
Deferred revenue
|
(9,323
|
)
|
|
(2,210
|
)
|
||
Other liabilities
|
(705
|
)
|
|
(1,062
|
)
|
||
Net cash used in operating activities
|
(11,114
|
)
|
|
(15,332
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of investments
|
(61,514
|
)
|
|
(104,039
|
)
|
||
Maturities of investments
|
77,195
|
|
|
45,806
|
|
||
Capital expenditures
|
(3,361
|
)
|
|
(8,509
|
)
|
||
Capitalized software costs
|
(8,227
|
)
|
|
(6,630
|
)
|
||
Net cash provided by (used in) investing activities
|
4,093
|
|
|
(73,372
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayment of debt
|
—
|
|
|
(216
|
)
|
||
Principal payments under capital lease obligations
|
(33
|
)
|
|
(148
|
)
|
||
Proceeds from employee stock plans
|
12,476
|
|
|
3,658
|
|
||
Net cash provided by financing activities
|
12,443
|
|
|
3,294
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(538
|
)
|
|
(1,768
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
4,884
|
|
|
(87,178
|
)
|
||
Cash and cash equivalents at beginning of period
|
107,691
|
|
|
166,557
|
|
||
Cash and cash equivalents at end of period
|
$
|
112,575
|
|
|
$
|
79,379
|
|
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
1,898
|
|
|
$
|
14
|
|
Cash paid for income taxes
|
1,096
|
|
|
644
|
|
||
Proceeds from employee stock plans received in advance of stock issuance
|
202
|
|
|
171
|
|
||
Non-cash investing and financing activities:
|
|
|
|
||||
Capitalized assets financed by accounts payable and accrued expenses
|
$
|
902
|
|
|
$
|
5,825
|
|
Capitalized stock-based compensation
|
1,885
|
|
|
1,221
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net loss
|
$
|
(17,588
|
)
|
|
$
|
(23,262
|
)
|
|
$
|
(35,831
|
)
|
|
$
|
(46,524
|
)
|
Weighted-average shares of common stock outstanding
|
55,278
|
|
|
53,987
|
|
|
55,053
|
|
|
53,886
|
|
||||
Net loss per share – basic and diluted
|
$
|
(0.32
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(0.86
|
)
|
|
June 30, 2016
|
||||||||||||||
|
Amortized Cost Basis
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
Money market funds
|
$
|
75,498
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,498
|
|
Corporate bonds
|
44,947
|
|
|
35
|
|
|
(7
|
)
|
|
44,975
|
|
||||
Agency bonds
|
50,029
|
|
|
13
|
|
|
—
|
|
|
50,042
|
|
||||
U.S. treasury securities
|
73,734
|
|
|
122
|
|
|
—
|
|
|
73,856
|
|
||||
Commercial paper
|
14,752
|
|
|
—
|
|
|
—
|
|
|
14,752
|
|
||||
|
$
|
258,960
|
|
|
$
|
170
|
|
|
$
|
(7
|
)
|
|
$
|
259,123
|
|
|
December 31, 2015
|
||||||||||||||
|
Amortized Cost Basis
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
Money market funds
|
$
|
61,986
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
61,986
|
|
Corporate bonds
|
56,205
|
|
|
3
|
|
|
(99
|
)
|
|
56,109
|
|
||||
Agency bonds
|
85,572
|
|
|
—
|
|
|
(111
|
)
|
|
85,461
|
|
||||
U.S. treasury securities
|
58,004
|
|
|
2
|
|
|
(98
|
)
|
|
57,908
|
|
||||
|
$
|
261,767
|
|
|
$
|
5
|
|
|
$
|
(308
|
)
|
|
$
|
261,464
|
|
|
June 30, 2016
|
||
April 2016 investment
|
$
|
112
|
|
December 2015 investment
|
350
|
|
|
July 2015 investment
|
250
|
|
|
May 2015 investment
|
500
|
|
|
September 2014 investment
|
360
|
|
|
|
$
|
1,572
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Developed technology
|
$
|
29,984
|
|
|
$
|
(18,347
|
)
|
|
$
|
11,637
|
|
|
$
|
29,984
|
|
|
$
|
(13,732
|
)
|
|
$
|
16,252
|
|
Customer relationships
|
2,400
|
|
|
(2,400
|
)
|
|
—
|
|
|
2,400
|
|
|
(2,242
|
)
|
|
158
|
|
||||||
Software license rights
|
1,654
|
|
|
(1,424
|
)
|
|
230
|
|
|
1,654
|
|
|
(1,351
|
)
|
|
303
|
|
||||||
Total
|
$
|
34,038
|
|
|
$
|
(22,171
|
)
|
|
$
|
11,867
|
|
|
$
|
34,038
|
|
|
$
|
(17,325
|
)
|
|
$
|
16,713
|
|
Remainder of 2016
|
$
|
4,436
|
|
2017
|
7,431
|
|
|
Total
|
$
|
11,867
|
|
•
|
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
|
•
|
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
•
|
Level 3 – Unobservable inputs.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Cash equivalents
|
$
|
75,498
|
|
|
$
|
75,498
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
61,986
|
|
|
$
|
61,986
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate bonds
|
44,975
|
|
|
—
|
|
|
44,975
|
|
|
—
|
|
|
56,109
|
|
|
—
|
|
|
56,109
|
|
|
—
|
|
||||||||
Agency bonds
|
50,042
|
|
|
—
|
|
|
50,042
|
|
|
—
|
|
|
85,461
|
|
|
—
|
|
|
85,461
|
|
|
—
|
|
||||||||
U.S. treasury securities
|
73,856
|
|
|
—
|
|
|
73,856
|
|
|
—
|
|
|
57,908
|
|
|
—
|
|
|
57,908
|
|
|
—
|
|
||||||||
Commercial paper
|
14,752
|
|
|
—
|
|
|
14,752
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Strategic investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|
—
|
|
|
—
|
|
|
150
|
|
||||||||
|
$
|
259,123
|
|
|
$
|
75,498
|
|
|
$
|
183,625
|
|
|
$
|
—
|
|
|
$
|
261,614
|
|
|
$
|
61,986
|
|
|
$
|
199,478
|
|
|
$
|
150
|
|
Balance as of December 31, 2015
|
$
|
150
|
|
Change in value
|
(150
|
)
|
|
Balance as of June 30, 2016
|
$
|
—
|
|
•
|
during any calendar quarter after September 30, 2013, if the last reported sale price of common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day;
|
•
|
during the
five
business day period after any
five
consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each trading day of that five consecutive trading day period was less than
98%
of the product of the last reported sale price of common stock and the conversion rate on each such trading day; or
|
•
|
upon the occurrence of specified corporate events as defined in the Indenture.
|
Principal amount
|
$
|
253,000
|
|
Unamortized debt discount
|
(16,532
|
)
|
|
Net carrying amount before unamortized debt issuance costs
|
236,468
|
|
|
Unamortized debt issuance costs
|
(2,654
|
)
|
|
Net carrying amount
|
$
|
233,814
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Contractual interest expense at 1.5% per annum
|
$
|
949
|
|
|
$
|
949
|
|
|
$
|
1,898
|
|
|
$
|
1,898
|
|
Amortization of debt issuance costs
|
314
|
|
|
299
|
|
|
624
|
|
|
594
|
|
||||
Accretion of debt discount
|
1,954
|
|
|
1,860
|
|
|
3,885
|
|
|
3,698
|
|
||||
Total
|
$
|
3,217
|
|
|
$
|
3,108
|
|
|
$
|
6,407
|
|
|
$
|
6,190
|
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding, December 31, 2015
|
7,264
|
|
|
$
|
30.75
|
|
|
7.1
|
|
$
|
63,328
|
|
Granted
|
101
|
|
|
38.67
|
|
|
|
|
|
|||
Exercised
|
(633
|
)
|
|
16.40
|
|
|
|
|
|
|||
Forfeited
|
(166
|
)
|
|
43.25
|
|
|
|
|
|
|||
Outstanding, June 30, 2016
|
6,566
|
|
|
$
|
31.93
|
|
|
6.7
|
|
$
|
64,153
|
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
Exercisable at June 30, 2016
|
4,727
|
|
|
$
|
28.21
|
|
|
6.2
|
|
$
|
61,485
|
|
Vested and expected to vest at June 30, 2016
|
6,502
|
|
|
31.84
|
|
|
6.7
|
|
64,042
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cost of revenue
|
$
|
1,170
|
|
|
$
|
845
|
|
|
$
|
2,262
|
|
|
$
|
1,663
|
|
Sales and marketing expense
|
6,266
|
|
|
5,500
|
|
|
12,445
|
|
|
10,197
|
|
||||
Research and development expense
|
1,846
|
|
|
1,344
|
|
|
3,633
|
|
|
2,512
|
|
||||
General and administrative expense
|
3,726
|
|
|
2,095
|
|
|
7,664
|
|
|
4,129
|
|
||||
Total
|
$
|
13,008
|
|
|
$
|
9,784
|
|
|
$
|
26,004
|
|
|
$
|
18,501
|
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
our ability to attract new clients;
|
•
|
the timing and rate at which we enter into agreements for our solutions with new clients;
|
•
|
the timing and duration of our client implementations, which is often outside of our direct control, and our ability to provide resources for client implementations and consulting projects;
|
•
|
the extent to which our existing clients renew their subscriptions for our solutions and the timing of those renewals;
|
•
|
the extent to which our existing clients purchase additional products or add incremental users;
|
•
|
the extent to which our clients request enhancements to underlying features and functionality of our solutions and the timing for us to deliver the enhancements to our clients;
|
•
|
changes in the mix of our sales between new and existing clients;
|
•
|
changes in the mix of our sales between subscription and professional consulting services;
|
•
|
changes to the proportion of our client base that is comprised of enterprise or mid-sized organizations;
|
•
|
seasonal factors affecting the demand for our solutions;
|
•
|
our ability to manage growth, including in terms of new clients, additional users, additional headcount and new geographies;
|
•
|
our ability to expand our enterprise and mid-market sales teams;
|
•
|
our ability to maintain stable and consistent quota attainment rates;
|
•
|
our ability to exploit Big Data to drive increased demand for our products;
|
•
|
continued strong demand for talent management in the United States and internationally;
|
•
|
fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies;
|
•
|
the timing and success of solutions offered by our competitors;
|
•
|
changes in our pricing policies and those of our competitors;
|
•
|
our ability to successfully integrate our operations with those of recently acquired privately-held companies; and
|
•
|
general economic and market conditions including fluctuations in foreign exchange rates.
|
•
|
Revenue.
We generally recognize subscription revenue over the contract period, and as a result of our revenue recognition policy and the seasonality of when we enter into new client agreements, revenue from client agreements signed in the current period may not be fully reflected in the current period.
|
•
|
Billings
. Under our revenue recognition policy, we generally recognize subscription revenue from our client agreements ratably over the terms of those agreements. For this reason, the major portion of our revenue for a period will be from client agreements signed in prior periods rather than from new business activity during the current period. In order to assess our business performance with a metric that more fully reflects current period business activity, we track billings (formerly referred to as “bookings”), which is a non-GAAP financial measure we define as the sum of revenue and the change in the deferred revenue balance for the period. We include changes in the deferred revenue balance to calculate billings so it better reflects new business activity in the period as evidenced by prepayments or billings under our billing policies arising from acquisition of new clients, sales of additional products to existing clients, the addition of incremental users by existing clients and client renewals. Billings are affected by our billing terms, and any changes in those billing terms may shift billings between periods. Due to the seasonality of our sales, billings growth is inconsistent from quarter to quarter throughout a calendar year. Additionally, billings growth can be impacted by fluctuations in foreign exchange rates. For a reconciliation of billings to revenue, please see “
Results of Operations – Revenue and Metrics
.”
|
•
|
Number of Clients
. We believe that our ability to expand our client base is an indicator of our market penetration and the growth of our business as we continue to invest in our direct sales teams and distributors. Our client count includes contracted clients for our Enterprise and Mid-Market solution as of the end of the period and excludes clients of our Cornerstone for Salesforce and Cornerstone Growth Edition solutions.
|
•
|
Number of Users.
Since our clients generally pay fees based on the number of users of our solutions within their organizations, we believe the total number of users is an indicator of the growth of our business. Our user count includes active users for our Enterprise and Mid-Market solution and excludes users of our Cornerstone for Salesforce and Cornerstone Growth Edition solutions.
|
•
|
Subscriptions to Our Solutions.
Clients pay subscription fees for access to our solutions and support for a specified period of time, typically three years for our Enterprise and Mid-Market solution. Fees are based on a number of factors, including the number of products purchased, which may include e-learning content, and the number of users having access to a solution. We generally recognize revenue from subscriptions ratably over the term of the agreements.
|
•
|
Professional Consulting Services and Other.
We offer our clients assistance in implementing our solutions and optimizing their use. Consulting services include application configuration, system integration, business process re-engineering, change management and training services. Services are billed either on a time-and-material or a fixed-fee basis. These services are generally purchased as part of a subscription arrangement and are typically performed within the first several months of the arrangement. Clients may also purchase consulting services at any other time. We generally recognize revenue from fixed fee consulting services using the proportional performance method over the period the services are performed and as time is incurred for time-and-material arrangements.
|
•
|
Sales and Marketing.
Sales and marketing expenses consist primarily of personnel and related expenses for our sales and marketing staff, including salaries, benefits, bonuses, stock-based compensation and commissions; costs of marketing and promotional events, corporate communications, online marketing, product marketing and other brand-building activities; and allocated overhead.
|
•
|
Research and Development.
Research and development expenses consist primarily of personnel and related expenses for our research and development staff, including salaries, benefits, bonuses and stock-based compensation; the cost of certain third-party service providers; and allocated overhead. Research and development costs, other than software development costs qualifying for capitalization, are expensed as incurred.
|
•
|
General and Administrative.
General and administrative expenses consist primarily of personnel and related expenses for administrative, legal, finance and human resource staff, including salaries, benefits, bonuses and stock-based compensation; professional fees; insurance premiums; other corporate expenses; and allocated overhead. We expect our general and administrative expenses to increase in absolute dollars as we continue to expand our operations.
|
•
|
Amortization of Certain Acquired Intangible Assets.
Amortization of certain acquired intangible assets consists of amortization of acquisition-related intangibles for customer relationships.
|
•
|
Interest Income.
Interest income consists primarily of interest income from investment securities partially offset by amortization of investment premiums. We expect interest income to vary depending on the level of our investments in marketable securities, which include corporate bonds, agency bonds, U.S. treasury securities and commercial paper in the three and
six
months ended
June 30, 2016
.
|
•
|
Interest Expense.
Interest expense consists primarily of interest expense from our convertible debt, accretion of debt discount and amortization of debt issuance costs.
|
•
|
Other, Net.
Other, net consists of income and expense associated with fluctuations in foreign currency exchange rates, fair value adjustments to strategic investments and other non-operating expenses. We expect other income (expense) to vary depending on the movement in foreign currency exchange rates and the related impact on our foreign exchange gain (loss).
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
107,013
|
|
|
$
|
82,563
|
|
|
$
|
206,337
|
|
|
$
|
156,518
|
|
Cost of revenue
|
35,955
|
|
|
27,893
|
|
|
67,605
|
|
|
52,555
|
|
||||
Gross profit
|
71,058
|
|
|
54,670
|
|
|
138,732
|
|
|
103,963
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
57,835
|
|
|
51,446
|
|
|
114,536
|
|
|
97,404
|
|
||||
Research and development
|
11,782
|
|
|
9,983
|
|
|
22,797
|
|
|
19,750
|
|
||||
General and administrative
|
16,538
|
|
|
12,260
|
|
|
33,003
|
|
|
23,351
|
|
||||
Amortization of certain acquired intangibles
|
—
|
|
|
150
|
|
|
150
|
|
|
300
|
|
||||
Total operating expenses
|
86,155
|
|
|
73,839
|
|
|
170,486
|
|
|
140,805
|
|
||||
Loss from operations
|
(15,097
|
)
|
|
(19,169
|
)
|
|
(31,754
|
)
|
|
(36,842
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
385
|
|
|
202
|
|
|
731
|
|
|
372
|
|
||||
Interest expense
|
(3,217
|
)
|
|
(3,114
|
)
|
|
(6,407
|
)
|
|
(6,205
|
)
|
||||
Other, net
|
482
|
|
|
(801
|
)
|
|
2,275
|
|
|
(3,191
|
)
|
||||
Loss before income tax provision
|
(17,447
|
)
|
|
(22,882
|
)
|
|
(35,155
|
)
|
|
(45,866
|
)
|
||||
Income tax provision
|
(141
|
)
|
|
(380
|
)
|
|
(676
|
)
|
|
(658
|
)
|
||||
Net loss
|
$
|
(17,588
|
)
|
|
$
|
(23,262
|
)
|
|
$
|
(35,831
|
)
|
|
$
|
(46,524
|
)
|
|
At or For Three Months Ended
June 30,
|
|
At or For Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue (in thousands)
|
$
|
107,013
|
|
|
$
|
82,563
|
|
|
$
|
206,337
|
|
|
$
|
156,518
|
|
Billings (in thousands)
|
$
|
106,337
|
|
|
$
|
91,291
|
|
|
$
|
190,032
|
|
|
$
|
154,766
|
|
Number of clients
|
2,730
|
|
|
2,362
|
|
|
2,730
|
|
|
2,362
|
|
||||
Number of users (in millions)
|
26.3
|
|
|
20.5
|
|
|
26.3
|
|
|
20.5
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Subscription revenue
|
$
|
84,242
|
|
|
$
|
65,123
|
|
|
$
|
163,934
|
|
|
$
|
125,465
|
|
Percentage of subscription revenue to total revenue
|
78.7
|
%
|
|
78.9
|
%
|
|
79.4
|
%
|
|
80.2
|
%
|
||||
Professional services revenue
|
$
|
22,771
|
|
|
$
|
17,440
|
|
|
$
|
42,403
|
|
|
$
|
31,053
|
|
Percentage of professional services to total revenue
|
21.3
|
%
|
|
21.1
|
%
|
|
20.6
|
%
|
|
19.8
|
%
|
||||
|
$
|
107,013
|
|
|
$
|
82,563
|
|
|
$
|
206,337
|
|
|
$
|
156,518
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue for United States
|
$
|
71,857
|
|
|
$
|
57,112
|
|
|
$
|
139,542
|
|
|
$
|
108,059
|
|
Percentage of total revenue for United States
|
67.1
|
%
|
|
69.2
|
%
|
|
67.6
|
%
|
|
69.0
|
%
|
||||
Revenue for all other countries
|
$
|
35,156
|
|
|
$
|
25,451
|
|
|
$
|
66,795
|
|
|
$
|
48,459
|
|
Percentage of total revenue for all other countries
|
32.9
|
%
|
|
30.8
|
%
|
|
32.4
|
%
|
|
31.0
|
%
|
||||
|
$
|
107,013
|
|
|
$
|
82,563
|
|
|
$
|
206,337
|
|
|
$
|
156,518
|
|
|
Deferred
Revenue
Balance
|
|
Three Months Ended
June 30, 2016
|
||||
Revenue
|
|
|
$
|
107,013
|
|
||
Deferred revenue at March 31, 2016
|
$
|
236,510
|
|
|
|
||
Deferred revenue at June 30, 2016
|
235,834
|
|
|
|
|||
Change in deferred revenue
|
|
|
|
(676
|
)
|
||
Billings
|
|
|
$
|
106,337
|
|
||
|
Deferred
Revenue
Balance
|
|
Three Months Ended
June 30, 2015
|
||||
Revenue
|
|
|
$
|
82,563
|
|
||
Deferred revenue at March 31, 2015
|
$
|
180,856
|
|
|
|
||
Deferred revenue at June 30, 2015
|
189,584
|
|
|
|
|||
Change in deferred revenue
|
|
|
|
8,728
|
|
||
Billings
|
|
|
$
|
91,291
|
|
||
|
|
|
|
||||
|
Deferred
Revenue
Balance
|
|
Six Months Ended
June 30, 2016
|
||||
Revenue
|
|
|
$
|
206,337
|
|
||
Deferred revenue at December 31, 2015
|
$
|
252,139
|
|
|
|
||
Deferred revenue at June 30, 2016
|
235,834
|
|
|
|
|||
Change in deferred revenue
|
|
|
(16,305
|
)
|
|||
Billings
|
|
|
$
|
190,032
|
|
||
|
Deferred
Revenue
Balance
|
|
Six Months Ended
June 30, 2015
|
||||
Revenue
|
|
|
$
|
156,518
|
|
||
Deferred revenue at December 31, 2014
|
$
|
191,336
|
|
|
|
||
Deferred revenue at June 30, 2015
|
189,584
|
|
|
|
|||
Change in deferred revenue
|
|
|
(1,752
|
)
|
|||
Billings
|
|
|
$
|
154,766
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Cost of revenue
|
$
|
35,955
|
|
|
$
|
27,893
|
|
|
$
|
67,605
|
|
|
$
|
52,555
|
|
Gross profit
|
$
|
71,058
|
|
|
$
|
54,670
|
|
|
$
|
138,732
|
|
|
$
|
103,963
|
|
Gross margin
|
66
|
%
|
|
66
|
%
|
|
67
|
%
|
|
66
|
%
|
Remainder of 2016
|
$
|
4,436
|
|
2017
|
7,431
|
|
|
Total
|
$
|
11,867
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Sales and marketing
|
$
|
57,835
|
|
|
$
|
51,446
|
|
|
$
|
114,536
|
|
|
$
|
97,404
|
|
Percent of revenue
|
54
|
%
|
|
62
|
%
|
|
56
|
%
|
|
62
|
%
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Research and development
|
$
|
11,782
|
|
|
$
|
9,983
|
|
|
$
|
22,797
|
|
|
$
|
19,750
|
|
Percent of revenue
|
11
|
%
|
|
12
|
%
|
|
11
|
%
|
|
13
|
%
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
General and administrative
|
$
|
16,538
|
|
|
$
|
12,260
|
|
|
$
|
33,003
|
|
|
$
|
23,351
|
|
Percent of revenue
|
15
|
%
|
|
15
|
%
|
|
16
|
%
|
|
15
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Amortization of certain acquired intangible assets
|
$
|
—
|
|
|
$
|
150
|
|
|
$
|
150
|
|
|
$
|
300
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Interest income
|
$
|
385
|
|
|
$
|
202
|
|
|
$
|
731
|
|
|
$
|
372
|
|
Interest expense
|
(3,217
|
)
|
|
(3,114
|
)
|
|
(6,407
|
)
|
|
(6,205
|
)
|
||||
Other, net
|
482
|
|
|
(801
|
)
|
|
2,275
|
|
|
(3,191
|
)
|
||||
Total
|
$
|
(2,350
|
)
|
|
$
|
(3,713
|
)
|
|
$
|
(3,401
|
)
|
|
$
|
(9,024
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Net cash used in operating activities
|
$
|
(11,114
|
)
|
|
$
|
(15,332
|
)
|
Net cash provided by (used in) investing activities
|
4,093
|
|
|
(73,372
|
)
|
||
Net cash provided by financing activities
|
12,443
|
|
|
3,294
|
|
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 4.
|
Controls and Procedures
|
ITEM 1.
|
Legal Proceedings
|
ITEM 1A.
|
Risk Factors
|
•
|
the need to educate potential clients about the uses and benefits of our solutions;
|
•
|
the relatively long duration of the commitment clients make in their agreements with us;
|
•
|
the discretionary nature of potential clients’ purchasing and budget cycles and decisions;
|
•
|
the competitive nature of potential clients’ evaluation and purchasing processes;
|
•
|
the lengthy purchasing approval processes of potential clients;
|
•
|
the evolving functionality demands of potential clients;
|
•
|
fluctuations in the talent management needs of potential clients; and
|
•
|
announcements or planned introductions of new products by us or our competitors.
|
•
|
changes in billing cycles and the size of advance payments relative to overall contract value in client agreements;
|
•
|
the extent to which new clients are attracted to our solutions to satisfy their talent management needs;
|
•
|
the timing and rate at which we sign agreements with new clients;
|
•
|
our access to service providers when we outsource client service projects and our ability to manage the quality and completion of the related client implementations;
|
•
|
the timing and duration of our client implementations, which is often outside of our direct control, and our ability to provide resources for client implementations and consulting projects;
|
•
|
the extent to which we retain existing clients and satisfy their requirements;
|
•
|
the extent to which existing clients renew their subscriptions to our solutions and the timing of those renewals;
|
•
|
the extent to which existing clients purchase or discontinue the use of additional solutions and add or decrease the number of users;
|
•
|
the extent to which our clients request enhancements to underlying features and functionality of our solutions and the timing of our delivery of these enhancements to our clients;
|
•
|
the addition or loss of large clients, including through acquisitions or consolidations;
|
•
|
the number and size of new clients, as well as the number and size of renewal clients in a particular period;
|
•
|
the mix of clients among small, mid-sized and large organizations;
|
•
|
changes in our pricing policies or those of our competitors;
|
•
|
seasonal factors affecting demand for our solutions or potential clients’ purchasing decisions;
|
•
|
the financial condition and creditworthiness of our clients;
|
•
|
the amount and timing of our operating expenses, including those related to the maintenance and expansion of our business, operations and infrastructure;
|
•
|
the timing and success of our new product and service introductions;
|
•
|
the timing of expenses of the development of new products and technologies, including enhancements to our solutions;
|
•
|
our ability to exploit Big Data to drive increased demand for our products;
|
•
|
continued strong demand for talent management in the U.S., Europe, Asia Pacific and Latin America;
|
•
|
our ability to successfully integrate our operations with those of recently acquired privately-held companies;
|
•
|
the success of current and new competitive products and services by our competitors;
|
•
|
other changes in the competitive dynamics of our industry, including consolidation among competitors, clients or strategic partners;
|
•
|
our ability to manage our existing business and future growth, including in terms of additional headcount, additional clients, incremental users and new geographic regions;
|
•
|
expenses related to our network and data centers and the expansion of such networks and data centers;
|
•
|
the effects of, and expenses associated with, acquisitions of third-party technologies or businesses and any potential future charges for impairment of goodwill resulting from those acquisitions;
|
•
|
equity issuances, including as consideration in acquisitions or due to the conversion of our outstanding convertible notes;
|
•
|
fluctuations in foreign currency exchange rates, including any fluctuation caused by uncertainties relating to Brexit;
|
•
|
general economic, industry and market conditions; and
|
•
|
various factors related to disruptions in our SaaS hosting network infrastructure, defects in our solutions, privacy and data security, and exchange rate fluctuations, each of which is described elsewhere in these risk factors.
|
•
|
unanticipated costs or liabilities associated with the acquisition;
|
•
|
incurrence of acquisition-related costs;
|
•
|
diversion of management’s attention from other business concerns;
|
•
|
harm to our existing relationships with distributors and clients as a result of the acquisition;
|
•
|
the potential loss of key employees;
|
•
|
exposure to claims and disputes by third parties, including intellectual property claims and disputes;
|
•
|
the use of resources that are needed in other parts of our business; and
|
•
|
the use of substantial portions of our available cash to consummate the acquisition.
|
•
|
human error;
|
•
|
security breaches;
|
•
|
telecommunications outages from third-party providers;
|
•
|
computer viruses;
|
•
|
acts of terrorism, sabotage or other intentional acts of vandalism, including cyber attacks;
|
•
|
unforeseen interruption or damages experienced in moving hardware to a new location;
|
•
|
fire, earthquake, flood and other natural disasters; and
|
•
|
power loss.
|
•
|
lost or delayed market acceptance and sales of our solutions;
|
•
|
early termination of client agreements or loss of clients;
|
•
|
credits or refunds to clients;
|
•
|
product liability suits against us;
|
•
|
diversion of development resources;
|
•
|
injury to our reputation; and
|
•
|
increased maintenance and warranty costs.
|
•
|
unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions;
|
•
|
differing labor regulations;
|
•
|
regulations relating to data security and the unauthorized use of, or access to, commercial and personal information;
|
•
|
potential penalties or other adverse consequences for violations of anti-corruption, anti-bribery and other similar laws and regulations, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act;
|
•
|
greater difficulty in supporting and localizing our products;
|
•
|
unrest and/or changes in a specific country’s or region’s political or economic conditions;
|
•
|
challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, controls, policies, benefits and compliance programs;
|
•
|
currency exchange rate fluctuations, including any fluctuations caused by uncertainties relating to Brexit;
|
•
|
limited or unfavorable intellectual property protection; and
|
•
|
restrictions on repatriation of earnings.
|
•
|
Selling to governmental entities can be more competitive, expensive and time consuming than selling to private entities;
|
•
|
Governmental entities may have significant leverage in negotiations, thereby enabling such entities to demand contract terms that differ from what we generally agree to in our standard agreements, including, for example, most favored nation clauses and terms allowing contract termination for convenience;
|
•
|
Government demand and payment for our solutions may be influenced by public sector budgetary cycles and funding authorizations, with funding reductions or delays having an adverse impact on public sector demand for our solutions; and
|
•
|
Government contracts are generally subject to audits and investigations, which we have no experience with, including termination of contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from future government business.
|
•
|
our operating performance and the performance of other similar companies;
|
•
|
the financial or non-financial metric projections we provide to the public, including the failure of the projections to meet the expectations of securities analysts or investors, and any changes in these projections or our failure to meet or exceed these projections;
|
•
|
the overall performance of the equity markets;
|
•
|
developments with respect to intellectual property rights;
|
•
|
publication of unfavorable research reports about us or our industry or withdrawal of research coverage by securities analysts;
|
•
|
speculation in the press or investment community;
|
•
|
the size of our public float;
|
•
|
natural disasters or terrorist acts;
|
•
|
announcements by us or our competitors of significant contracts, new technologies, acquisitions, commercial relationships, joint ventures or capital commitments; and
|
•
|
global economic, legal and regulatory factors unrelated to our performance.
|
•
|
authorize “blank check” preferred stock, which could be issued by the board without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;
|
•
|
create a classified board of directors whose members serve staggered three-year terms;
|
•
|
specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of the board, the chief executive officer or the president;
|
•
|
establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;
|
•
|
provide that our directors may be removed only for cause;
|
•
|
provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;
|
•
|
specify that no stockholder is permitted to cumulate votes at any election of directors; and
|
•
|
require supermajority votes of the holders of our common stock to amend specified provisions of our charter documents.
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
ITEM 3.
|
Defaults Upon Senior Securities
|
ITEM 4.
|
Mine Safety Disclosures
|
ITEM 5.
|
Other Information
|
ITEM 6.
|
Exhibits
|
Cornerstone OnDemand, Inc.
|
(Registrant)
|
|
/s/ Brian L. Swartz
|
Brian L. Swartz
|
Chief Financial Officer
|
(Duly Authorized Officer and Principal Financial and Accounting Officer)
|
*
|
Indicates a management contract or compensatory plan or arrangement
|
†
|
The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Cornerstone OnDemand, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
|
††
|
The financial information contained in these XBRL documents are unaudited.
|
(a)
|
unemployment benefits pursuant to the terms of applicable law (to the extent available to Executive under applicable law);
|
(b)
|
workers’ compensation insurance benefits pursuant to Division 4 of the California Labor Code or a comparable and applicable state law, under the terms of any worker’s compensation insurance policy or fund of the Company (for which Executive represents that he has reported all work-related injuries, if any, that Executive has suffered or sustained during his employment with the Company;
|
(c)
|
continued participation in certain of the Company’s group health benefit plans pursuant to the terms and conditions of the federal law known as “COBRA,” if applicable, and/or any applicable state law counterpart to COBRA;
|
(d)
|
any benefit entitlements vested as of the Actual Termination Date, pursuant to written terms of any applicable employee benefit plan sponsored by the Company;
|
(e)
|
indemnification protection under the Company’s Articles of Incorporation or Bylaws, pursuant to contract or applicable law; and
|
(f)
|
any claims that, as a matter of applicable law, are not waivable.
|
1.
|
|
I have reviewed this Quarterly Report on Form 10-Q of Cornerstone OnDemand, Inc.;
|
2.
|
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Adam L. Miller
|
Adam L. Miller
|
President and Chief Executive Officer
|
1.
|
|
I have reviewed this Quarterly Report on Form 10-Q of Cornerstone OnDemand, Inc.;
|
2.
|
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Brian L. Swartz
|
Brian L. Swartz
|
Chief Financial Officer
|
/s/ Adam L. Miller
|
Adam L. Miller
|
President and Chief Executive Officer
|
/s/ Brian L. Swartz
|
Brian L. Swartz
|
Chief Financial Officer
|