Photo Credit: Gerd Altmann from Pixabay

According to a recent report, the global Corporate Learning Management System (LMS) market is expected to grow at 23% CAGR to reach $7.6 billion by 2026 from $1.8 billion in 2019. Cornerstone OnDemand (Nasdaq: CSOD) recently reported its fourth-quarter results that surpassed market expectations, clearly cashing in on this high growth.

Cornerstone OnDemand’s Financials

Revenues for the quarter grew 38.3% to $206.9 million with subscription revenues growing 39.6% to $197.9 million. The market was looking for revenues of $195.99 million. EPS of $0.64 surpassed the market’s estimates of $0.24 for the quarter.

For the full year, revenues grew 28.5% to $790.4 million and EPS was $1.78.

The company forecast revenues between $203-$205 million for the first quarter and between $847-$857 million for the year. The market was looking for revenues of $203.54 million for the quarter with an EPS of $0.43 and revenues of $853.05 million for the year with an EPS of $2.10.

Cornerstone OnDemand’s Product Growth

Earlier this year, Cornerstone became one of the first Learning Management Software partners for Microsoft Viva, Microsoft’s new Employee Experience Platform. As part of the new platform, Cornerstone Learning and Saba Cloud will be integrated in Microsoft’s Viva Learning app.

Microsoft Viva, powered by Microsoft 365, is an integrated, insights-driven employee experience platform that helps organizations integrate communications, knowledge, learning, and workplace insights. Microsoft Viva Learning will bring this functionality to Teams to help create a single-stop-shop for learning within the flow of work. Employees will be able to access training modules and learning content from Cornerstone in a single workflow. They can share, assign, and learn from content libraries directly from Teams without having to switch applications.

The remote working conditions have strengthened the requirement for virtual training programs. Earlier this year, Cornerstone was ranked among the leader in Fosway 9-Grid for Learning Systems for 2021. It was rated high for its innovation and product roadmap that helps meet the evolving needs of large and complex organizations. This was the eighth consecutive year that Cornerstone was ranked among the leaders in the market. But the market is fraught with stiff competition from big vendors such as SAP’s Success Factors, Oracle, and Workday who have their own learning platforms. Additionally, competition also comes from other content providers like Microsoft’s LinkedIn and Pluralsight. Tie-ups with players like Microsoft will help it win a bigger pie of the market.

Cornerstone’s stock is trading at $42.39 with a market capitalization of $2.8 billion. It had fallen to year low levels of $27.69 in March last year. The stock was trading at year high levels of $55.50 in February.