Cornerstone OnDemand (CSOD -7.3%) missed Q2 estimates and guided on its CC (transcript) for Q3 revenue of $67M-$69M, below a $69.7M consensus. However, full-year guidance for revenue of $267.5M-$270.5M is reiterated (consensus is at $269.5M).
CFO Perry Wallack suggested the timing of services delivery for enterprise and government clients is responsible for near-term weakness. He added Q2 sales were "unusually back-weighted, leading to less-than-anticipated software and services revenue recognized from new client sales in that quarter."
Bookings rose 44% Y/Y in Q2 to $70.1M, exceeding revenue of $61.5M (+39%). The cloud talent management software vendor's client base rose by 123 Q/Q and 415 Y/Y to 1,411. Users grew by 1M Q/Q and 3.2M Y/Y to 15.5M.
Ultimate Software (ULTI +7.4%) beat Q2 estimates on the back of a 26% Y/Y increase in recurring revenue (84% of total revenue). The cloud HR software vendor also disclosed on its CC (transcript) it added three new enterprise clients with 10K or more employees; the largest has 40K.
Full-year guidance for 23% revenue growth (25% recurring growth) has been reiterated. Q3 guidance for revenue of $127M is roughly in-line with a $127.3M consensus.
A number of cloud software peers have also rallied. Cloud HR/talent management peers Workday (WDAY +6.5%) and Cornerstone OnDemand (CSOD +5.1%) are among the biggest gainers, but others are also doing quite well. CRM +2.7%. NOW +4.7%. LPSN +5.3%. MKTO +4.1%. CNQR +4.8%. JIVE +3.6%. N +4.2%.
Much as consumer Web plays are rising in sympathy with Facebook, enterprise cloud software names are sharply higher after cloud IT service desk software leader ServiceNow (NOW +14.3%) beat Q4 revenue estimates, provided very strong guidance, and reported its deferred revenue/backlog balance rose 59% Y/Y.
Salesforce (CRM +5.5%), Workday (WDAY +5.4%), NetSuite (N +6.2%), Textura (TXTR +9.8%), Cornerstone OnDemand (CSOD +3.6%), Jive Software (JIVE +3.4%), Ultimate Software (ULTI +3.4%), InContact (SAAS +3.9%), Tangoe (TNGO +3.7%), and LivePerson (LPSN +5.4%) are among the winners.
Baird has upgraded ServiceNow to Outperform, and several other firms have upped their PTs. Raymond James (Strong Buy) praises ServiceNow's efforts to expand into complementary markets such as HR automation, grow both its packaged and custom app sales, and to keep taking share from on-premise IT service desk vendors such as CA, BMC Software, H-P, and IBM.
On the CC (transcript), CEO Frank Slootman mentioned ServiceNow's installed base has grown to 2,060 accounts and 400 global 2000 customers. That's up from 1,900 and 360 three months earlier.
He added 80% of customers are now deploying custom apps, and that 20% of the annual contract value recorded in Q4 involved products other than tradition IT service desk licensing.
Cornerstone OnDemand (CSOD +11.9%) shares climb following a relatively in-line Q3 after management hiked guidance and spoke optimistically of cross-selling revenue opportunities.
The company now expects revenue of Q4 in $54.2M-$55.7M (vs. consensus of $54.5M), which represents 51% Y/Y growth at the mid-point. The company re-affirmed full-year EPS guidance of -$0.21 (which implies EPS of $0.00 in Q4, in-line with expectations).
CEO Adam Miller on the conference call: "We now have nearly 13 million users with an average of two products each. What many of you may not realize is that we actually have six products and multiple product add-ons across our clouds ... So conservatively, we believe there is at least a 3x opportunity for revenue growth for us within our existing installed base alone. Meaning, we could conceivably exceed $500 million in revenue without capturing a single additional seat."
Cornerstone OnDemand (CSOD +5.7%) is on the move after Q2 EPS of -$0.07 missed by $0.01, and revenue of $44.3M beat consensus by $2.2M.
CFO Perry Wallack also provided higher-than-expected guidance on the CC. Given the strength of Cornerstone's Q2, Wallack expects Q3 revenues of $47.5M-48.5M (+55.8% Y/Y at the midpoint and mostly above a consensus of $47.6M). 2013 revenue guidance has been lifted from $181M-183M to $183.5M-185.5M (+56.5% Y/Y at the midpoint and above a consensus of $182.2M).
The results are being well-received by analysts. Piper Jaffray writes Cornerstone's 55% Y/Y Q2 bookings jump was the best in its peer group of cloud HR software providers, which includes Ultimate Software, Workday, and Salesforce.com.
Piper Jaffray maintains its Buy rating, and hikes Cornerstone's PT from $55 to $57.