Research Update: Cornerstone OnDemand Inc. Outlook Revised To Stable On Improving Credit Metrics; 'B-' Rating Affirmed

Cornerstone OnDemand Inc., a learning and people development software provider, has seen stable demand for its products and improved EBITDA margin profile over the past 12 months. We expect Cornerstone to continue improving its credit metrics in 2024 on stable financial performance. Therefore, we revised our outlook on Cornerstone to stable from negative and affirmed its 'B-' issuer credit rating. We also affirmed our 'B-' issue-level and '3' recovery rating on its first-lien term loan and 'CCC+' issue-level and '5' recovery rating on its second-lien term loan. The stable outlook reflects our expectation that Cornerstone's mid-single-digit percent growth, mid-90% recurring revenue, EBITDA margins in the low-30% area, positive free operating cash flow (FOCF) generation, and good total liquidity will help

...- Cornerstone OnDemand Inc., a learning and people development software provider, has seen stable demand for its products and improved EBITDA margin profile over the past 12 months. - We expect Cornerstone to continue improving its credit metrics in 2024 on stable financial performance. - Therefore, we revised our outlook on Cornerstone to stable from negative and affirmed its 'B-' issuer credit rating. - We also affirmed our 'B-' issue-level and '3' recovery rating on its first-lien term loan and '###+' issue-level and '5' recovery rating on its second-lien term loan. - The stable outlook reflects our expectation that Cornerstone's mid-single-digit percent growth, mid-90% recurring revenue, EBITDA margins in the low-30% area, positive free operating cash flow (FOCF) generation, and good total liquidity will help it sustain its capital structure through its high leverage and tough enterprise spending environment....

Research Update