Cornerstone OnDemand founder and CEO Adam Miller is stepping down from the role after 20 years, the company announced Monday. Former Saba Software CEO Phil Saunders will take over as CEO effective June 15, just about two months after Cornerstone finalized its acquisition of Saba.
Cornerstone closed the $1.295 billion Saba deal on April 22, giving Cornerstone more talent experience tools to complement its base of learning and skills development products.
"I founded Cornerstone with a mission to help educate the world, and we have never wavered from that goal," Miller said in a statement. "Cornerstone has brought learning to millions of people around the globe and has become one of the world's largest cloud computing companies in the process. I am proud of all that we have accomplished, and after two decades, I am excited to commit more fully to my passion for social entrepreneurship and public service."
Once he steps down, Miller will become co-chair of the Cornerstone board of directors.
The human capital management software provider also reported its first quarter financial results on Monday, noting that synergies from the Saba acquisition have helped it offset the impact of COVID-19 pandemic headwinds.
Non-GAAP net income for the first quarter of 2020 was $15 million, or 23 cents per share. Revenue was $150.1 million, a 7.2 percent increase compared to the same period of the prior year.
Analysts were looking for earnings of 24 cents on revenue of $147.66 million.
Subscription revenue for the first quarter was $144.4 million, a 10 percent year-over-year increase.
"Our combination with Saba is a significant milestone for Cornerstone and, more importantly, for our expanded community of clients around the world," Miller said in a statement. "With our shared passion for people development and our combined depth of expertise, we expect to accelerate product innovation and help tens of millions of people develop new skills to navigate the future. Although we are definitely not immune to the impact of COVID-19, we believe that our combined scale with approximately 7,000 customers and over 75 million users, along with the significant cash flow generation capabilities that our synergistic model provides, will enable us to drive meaningful shareholder value over time."
The first quarter was progressing well until the pandemic began to slow new sales at the end of March, according to Cornerstone CFO Brian Swartz.
"To offset the impact of these headwinds, we have been able to augment and accelerate the synergies from the Saba acquisition as our integration progresses ahead of plan," he said. "We now expect to realize $50 million in run-rate synergies as we exit 2020, as compared to our prior guidance of $35 million over twenty-four months."
After analyzing the company's liquidity position, Swartz said that even assuming no new sales through the end of 2021, Cornerstone still expects to increase its cash balances through the end of 2021.