With its web-based learning and talent management platform, Cornerstone OnDemand has been helping Fortune 100 customers maximize employee productivity since 2001 and targets a significantly underpenetrated software market. One of two deals on the IPO Calendar for the week of March 14, Cornerstone OnDemand plans to raise $105 million by selling 10.5 million shares at a range of $9-$11 per share. Existing shareholders are selling 3 million shares, representing 29% of the expected IPO proceeds. Goldman Sachs and Barclays Capital are the lead underwriters on the deal.
Founded in 1999, Cornerstone OnDemand provides a comprehensive software-as-a-service (SaaS) platform consisting of five integrated modules for learning management, performance management, enterprise social networking, succession planning and extended enterprise (e.g. vendor/distributor approval, trade association training programs). The company has 481 clients representing 4.92 million users across 164 countries and 23 languages. Clients include multinational corporations and large domestic enterprises (Barclays, Microsoft, ADP, Pearson), as well as mid-market companies, public sector organizations, higher education institutions and non-profit entities. In fiscal 2010, Cornerstone OnDemand had revenue of $47 million and an operating loss of $10 million; however, cash flow from operations turned slightly positive thanks to strong bookings, which grew 77% y/y to $61 million. Management believes the subscription model can eventually support 20% cash operating margins, which is consistent with those of other on-demand software vendors.
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