Cornerstone OnDemand Q3 Revenues Beat Estimates, But Earnings Miss By $0.01 (CSOD)

Yesterday, for the fourth day in a row, the share price of talent management software provider Cornerstone OnDemand (NASDAQ: CSOD) continued its downhill journey. After the market closed, the company reported its fiscal 2012 third-quarter revenues that beat estimates. However, the earnings per share missed the consensus estimate by $0.01.

The California-based Cornerstone OnDemand offers three integrated cloud-based solutions for learning management, performance management and extended enterprise. Apart from reselling third-party e-learning content, the company also provides consulting services comprising implementation, integration and business consulting.

Gross revenue for the fiscal 2012 third quarter increased 54% to $30.77 million from $20.02 million in the similar period last year.

Non-GAAP revenue for the third quarter increased to $31.2 million from $20.02 million in the corresponding quarter of 2011. The revenue estimate of analysts was $30.22 million for the third quarter of fiscal 2012.

The net loss for the reported quarter widened to $7.63 million, or $0.15 per share, from $4.28 million, or $0.09 per share, in the third quarter of fiscal 2011.

The non-GAAP net loss for the third quarter was $3.57 million, or $0.07 per share, compared to a net loss of $2.63 million, or $0.05 per share, in the comparable period of fiscal 2011. The consensus estimate of analysts was a net loss of $0.06 per share for the third quarter of fiscal 2012.

Commenting on the results, Adam Miller, Cornerstone’s President and CEO, said, “The third quarter was another exceptional quarter for Cornerstone OnDemand, and a continuation of what has been an outstanding year of growth for the company. We believe our bookings performance demonstrates that the recent wave of consolidation in talent management has improved our competitive positioning. With our commitment to the ongoing innovation and expansion of our product suite, we believe we will continue to strengthen our position as a leading talent management partner to organizations of all sizes.”

A 59% growth in the fiscal 2011 fourth-quarter revenue reported on the second week of February 2012 provided the necessary impetus for the share price of Cornerstone to reach close to its 2011 high of $22.74. The news of the New Zealand-based Sonar6’ acquisition revealed on March 8 stabilized the share price of Cornerstone at around $22.00. On June 20, quoting a research analyst at Nomura, Forbes published a report underlining the performance of Cornerstone and the future promise it holds for investors. Three weeks later, the company reported a 54% rise in the fiscal 2012 second-quarter revenue, which was in line with Wall Street expectations. These positive events took the share price to $27.47 on August 28. On Sep 5, UBS initiated Cornerstone with a “neutral” rating. The rating initiation was quickly followed by a Reuters report describing the way Cornerstone outcasts other well-known names in the same business domain. The rating and report triggered another rally that took the share price to $31.91 per share, an appreciation of around 65% in fiscal 2012. Earlier this month, the company announced significant enhancements to its award-winning talent acquisition solution, the Cornerstone Recruiting Cloud, and showcased new mobile applications at the 2012 HR Technology Conference & Expo held in Chicago.

Cornerstone OnDemand ended yesterday’s trading session at $26.33 per share, down $1.28 or 4.6% on a volume of 510,246 shares.

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Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.