Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are presented in accordance with accounting standards generally accepted in the United States of America (“GAAP”), and include the accounts of Cornerstone OnDemand, Inc. and its wholly owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an on-going basis, management evaluates its estimates, including among others those related to: (i) the realization of tax assets and estimates of tax liabilities and reserves, (ii) the recognition and disclosure of contingent liabilities, (iii) the evaluation of revenue recognition criteria, including the determination of standalone value and estimates of the selling price of multiple-deliverables in the Company’s revenue arrangements, (iv) fair values of investments in marketable securities and strategic investments carried at fair value, (v) the fair values of acquired assets and assumed liabilities in business combinations, (vi) the useful lives of property and equipment, capitalized software and intangible assets, (vii) impairment of long-lived assets, (viii) the period of amortization of the commission payments to record to expense and (ix) determination of the number of shares that are probable of vesting for performance-based restricted stock unit awards. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company engages third-party valuation specialists to assist with the allocation of the purchase price in business combinations. Such estimates required the selection of appropriate valuation methodologies and models and significant judgment in evaluating ranges of assumptions and financial inputs. Business Combinations The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. The Company performs valuations of assets acquired and liabilities assumed for an acquisition and allocates the purchase price to its respective net tangible and intangible assets. The Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities assumed in a business combination. Revenue Recognition Effective January 1, 2018, the Company adopted the guidance under Topic 606 on a modified retrospective approach. All balances reported prior to this date are presented under Topic 605. Refer to the discussion under Recently Adopted Accounting Pronouncements below to understand the impacts of adopting Topic 606 on our financial statements. The Company derives its revenue from the following sources: Subscriptions to the Company’s products and other offerings on a recurring basis Clients pay subscription fees for access to the Company’s enterprise human capital management platform, other products and support on a recurring basis. Fees are based on a number of factors, including the number of products purchased, which may include e-learning content, and the number of users having access to a product. The Company generally recognizes revenue from subscriptions ratably over the term of the agreements beginning on the date the subscription service is made available to the client. Subscription agreements are typically three years, billed annually in advance, and non-cancelable, with payment due within 30 days of the invoice date. Professional services and other The Company offers its clients and implementation partners assistance in implementing its products and optimizing their use. Professional services include application configuration, system integration, business process re-engineering, change management and training services. Services are generally billed up-front on a fixed fee basis and to a lesser degree on a time-and-material basis. These services are generally purchased as part of a subscription arrangement and are typically performed within the first several months of the arrangement. Clients may also purchase professional services at any other time. The Company generally recognizes revenue from fixed fee professional services contracts as services are performed based on the proportion performed to date relative to the total expected services to be performed. Revenue associated with time-and-material contracts are recorded as such time-and-materials are incurred. The Company recognizes revenue from contracts with customers based on the following five steps: 1) Identification of the contract, or contracts, with a customer 2) Identification of all performance obligations in the contract 3) Determination of the transaction price 4) Allocation of the transaction price to the performance obligations in the contract 5) Recognition of revenue as the Company satisfies a performance obligation The Company identifies enforceable contracts with a customer when the agreement is signed. The Company accounts for individual performance obligations separately if they are distinct. The transaction price is generally based on fixed fees stated in the contract. The Company excludes from the transaction price any amounts relating to taxes from product sales which are collected from customers and remitted to governmental authorities. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis. The Company is not able to directly observe a standalone selling price for its performance obligations, as the performance obligations are sold separately and within a sufficiently narrow price range only infrequently, and because management has determined that there are no third-party offerings reasonably comparable to the Company’s products. Accordingly, total contract values are allocated to subscriptions to the products and professional services based on the standalone selling price (“SSP”). The determination of SSP requires the Company to make certain estimates and judgments. The Company considers numerous factors, including the nature and complexity of the performance obligations themselves; the geography, market conditions and competitive landscape for the sale; internal costs; and pricing and discounting practices. The Company updates its estimates of SSP on an ongoing basis through internal periodic reviews and as events or circumstances may require. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised service to a customer. The Company satisfies performance obligations over time. In a limited number of cases, the client’s intended use of a product requires contractually specified enhancements to its underlying features and functionality. In some of these cases, revenue is recognized as a combined single performance obligation on a straight-line basis from the point at which access to the enhanced product(s) have been provided, through the remaining term of the agreement. In other cases where the enhancement is not contractually specified by the customer for its initial use, revenue is recognized separately for the enhancement and the product as a second distinct performance obligation. In such cases where a second performance obligation exists, the enhancement revenue is recognized based on a SSP allocation on a straight-line basis once access to the enhancement has been provided, through the remaining term of the agreement. For arrangements in which the Company resells third-party e-learning training content to clients, revenue is recognized in accordance with accounting guidance as to when to report gross revenue as a principal or report net revenue as an agent. The Company typically recognizes third-party content revenue at the gross amount invoiced to clients as (i) the Company is primarily responsible for hosting the content on the Company's platform for the term of the agreement, (ii) the Company controls the content before access is provided to the customer, and (iii) the Company typically has discretion to establish the price charged. Deferred Revenue The Company records amounts that have been invoiced to its clients in accounts receivable and in either deferred revenue or revenue depending on whether the revenue recognition criteria described above have been met. Deferred revenue that will be recognized during the succeeding twelve-month period from the respective balance sheet date is recorded as current deferred revenue and the remaining portion is recorded as noncurrent. The decrease in the deferred revenue balance for the year ended December 31, 2018 is primarily driven by $301.6 million of revenue recognized that were included in the deferred revenue balances as of January 1, 2018 offset by invoices billed in advance of satisfying performance obligations in accordance with contract payment terms. Transaction Price Allocated to Remaining Performance Obligations As of December 31, 2018 , approximately $876.0 million of revenue is expected to be recognized from remaining performance obligations. This amount mainly comprises subscription revenue, with less than 10% attributable to professional services and other revenue. The Company expects to recognize revenue on approximately two thirds of these remaining performance obligations over the next 18 months , with the balance recognized thereafter. The estimated revenues from the remaining performance obligations do not include uncommitted contract amounts such as (i) amounts which are cancelable by the client without any significant penalty, (ii) future billings for time-and-material contracts, and (iii) amounts associated with optional renewal periods. Sales Commission The Company defers commissions paid to its sales force and related payroll taxes as these amounts are incremental costs of obtaining a contract with a customer and are recoverable from future revenue due to the non-cancelable client agreements that gave rise to the commissions. Commissions for initial contracts are deferred on the consolidated balance sheets and amortized on a straight-line basis over a period of benefit that has been determined to be six years. The Company took into consideration technology and other factors in estimating the benefit period. Sales commissions for renewal contracts are deferred and amortized on a straight-line basis over the related contract renewal period. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of operations. The Company generally commences payment of commissions within 45 to 75 days after execution of client agreements. During the years ended December 31, 2018 , 2017 and 2016 , the Company deferred $65.3 million , $48.2 million and $33.3 million , respectively, of commissions on the consolidated balance sheets. During the years ended December 31, 2018 , 2017 and 2016 , the Company recognized $37.9 million , $41.7 million and $33.0 million in commissions expense to sales and marketing expense, respectively. As of December 31, 2018 and 2017 , deferred commissions on the Company’s consolidated balance sheets totaled $69.9 million and $42.8 million , respectively. Impact of New Standard on Financial Statement Line Items The following tables summarize the effect of the adoption of Topic 606 on the Company’s select line items, included in the consolidated condensed financial statements as of and for the year ended December 31, 2018 , as if the previous accounting was in effect (in thousands). December 31, 2018 Consolidated Condensed Balance Sheet As Reported Impacts of Adoption Without Adoption Assets Deferred commissions, current portion $ 24,467 $ 30,624 $ 55,091 Deferred commissions, non-current 45,444 (45,444 ) — Liabilities Accrued expenses 68,331 (1,697 ) 66,634 Deferred revenue, current portion 312,526 6,751 319,277 Stockholders’ Equity Accumulated deficit (529,962 ) (19,874 ) (549,836 ) Year Ended December 31, 2018 Consolidated Condensed Statement of Operations As Reported Impacts of Adoption Without Adoption Revenue $ 537,891 $ (696 ) $ 537,195 Operating expenses: Sales and marketing 224,635 (992 ) 223,643 Net loss (33,842 ) 296 (33,546 ) Net loss per share, basic and diluted (0.58 ) (0.58 ) Weighted average common shares outstanding, basic and diluted 58,159 58,159 The adoption of Topic 606 had no impact to net cash provided by or used in operating, investing or financing activities in the Company’s consolidated statements of cash flows for the year ended December 31, 2018. Cost of Revenue Cost of revenue consists primarily of costs related to hosting our products and delivery of professional services, and includes the following: • personnel and related expenses, including stock-based compensation; • expenses for network-related infrastructure and IT support; • delivery of contracted professional services and on-going client support staff; • payments to external service providers contracted to perform implementation services; • depreciation of data centers and amortization of capitalized software costs, developed technology software license rights, content and licensing fees and referral fees. In addition, the Company allocates a portion of overhead, such as rent, IT costs, depreciation and amortization and employee benefits costs, to cost of revenue based on headcount. Costs associated with providing professional services are recognized as incurred when the services are performed. Out-of-pocket travel costs related to the delivery of professional services are typically reimbursed by the client and are accounted for as both revenue and cost of revenue in the period in which the cost is incurred. Research and Development Research and development expenses consist primarily of personnel and related expenses for the Company’s research and development staff, including salaries, benefits, bonuses and stock-based compensation; the cost of certain third-party service providers; and allocated overhead. Research and development expenses, other than software development costs qualifying for capitalization, are expensed as incurred. Advertising Advertising expenses for 2018 , 2017 and 2016 were $7.1 million , $9.0 million and $6.6 million , respectively, and are expensed as incurred and is recorded within Sales and Marketing in the accompanying consolidated statements of operations. Stock-Based Compensation The Company accounts for stock-based awards granted to employees and directors by recording compensation expense based on the awards’ estimated fair values. The Company grants stock options and restricted stock units that vest over time based on the continuing employment of the employee, as well as restricted stock units that vest based on meeting certain performance targets. The Company estimates the fair value of its restricted stock units based on the closing price of its common stock as of the date of grant. The Company estimates the fair value of its stock options as of the date of grant using the Black-Scholes option-pricing model. Determining the fair value of stock options under this model requires judgment, including estimating (i) the value per share of the Company's common stock, (ii) volatility, (iii) the term of the awards, (iv) the dividend yield and (v) the risk-free interest rate. The assumptions used in calculating the fair value of stock based awards represent the Company’s best estimates, based on management’s judgment and subjective future expectations. These estimates involve inherent uncertainties. If any of the assumptions used in the model change significantly, stock-based compensation recorded for future awards may differ materially from that recorded for awards granted previously. Beginning in 2017, the Company began estimating expected volatility based solely on its historical volatility as a public company. In previous years, the Company estimated this using the average volatility of similar publicly traded companies as sufficient trading history of the Company’s stock was not available. For purposes of determining the expected term of the awards in the absence of sufficient historical data relating to stock option exercises for the Company, it applies a simplified approach in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. The risk-free interest rate for periods within the expected life of an award, as applicable, is based on the United States Treasury yield curve in effect during the period the award was granted. The estimated dividend yield is zero, as the Company has not declared dividends in the past and does not currently intend to declare dividends in the foreseeable future. The following information represents the weighted average of the assumptions used in the Black-Scholes option-pricing model for stock options granted during each of the last three years: For the Years Ended December 31, 2018 2017 2016 Risk-free interest rate n/a n/a 1.4 % Expected term (in years) n/a n/a 5.8 Estimated dividend yield n/a n/a — % Estimated volatility n/a n/a 48.8 % Once the Company has determined the estimated fair value of its stock-based awards, it recognizes the portion of that value that corresponds to the portion of the award that is ultimately expected to vest, taking estimated forfeitures into account. This amount is recognized as an expense over the vesting period of the award using the straight-line method for awards which contain only service conditions, and using the graded vesting method based upon the probability of the performance condition being met for awards which contain performance conditions. The Company estimates forfeitures based upon its historical experience and for each period, the Company reviews the estimated forfeiture rate and makes changes as factors affecting the forfeiture rate calculations and assumptions change. In addition, the Company has issued performance-based restricted stock units that vest based upon continued service over the vesting term and achievement of certain performance goals, established by the Board of Directors, for a predetermined period. The fair value of the performance-based awards are determined based upon the closing price of the Company’s common stock on the date of the grant and the Company recognizes the fair value of awards only if it is probable the performance condition will be met. For performance-based awards, the fair value is not determined until all of the terms and conditions of the award are established. Due to the full valuation allowance provided on its net deferred tax assets, the Company has not recorded any significant tax benefit attributable to stock-based compensation expense as of December 31, 2018 , 2017 and 2016. Capitalized Software Costs The Company capitalizes the costs associated with software developed or obtained for internal use, including costs incurred in connection with the development of its products, when the preliminary project stage is completed, management has decided to make the project a part of its future offering and the software will be used to perform the function intended. These capitalized costs include external direct costs of materials and services consumed in developing or obtaining internal-use software, personnel and related expenses for employees who are directly associated with and who devote time to internal-use software projects and, when material, interest costs incurred during the development. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Costs incurred for upgrades and enhancements to the products are also capitalized. Post-configuration training and maintenance costs are expensed as incurred. Capitalized software costs are amortized to cost of revenue using the straight-line method over an estimated useful life of the software, which is typically three years , commencing when the software is ready for its intended use. The Company does not transfer ownership of or lease its software to its clients. During the years ended December 31, 2018 , 2017 and 2016 , the Company capitalized $31.6 million , $24.3 million and $20.9 million , respectively, of software development costs to the consolidated balance sheets. During the years ended December 31, 2018 , 2017 and 2016 , the Company amortized $23.5 million , $17.6 million and $13.2 million to cost of revenue, respectively. Based on the Company’s capitalized software costs at December 31, 2018 , estimated amortization expense of $22.3 million , $13.5 million , $4.6 million and $0.1 million is expected to be recognized in 2019 , 2020 , 2021 and 2022 , respectively. Comprehensive Loss Comprehensive loss encompasses all changes in equity other than those arising from transactions with stockholders, and consists of net loss, currency translation adjustments and unrealized gains or losses on investments. For the years ended December 31, 2018 , 2017 and 2016 , accumulated other comprehensive income (loss) comprised a cumulative translation adjustment and also included net unrealized gains (losses) on investments. Income Taxes The Company uses the liability method of accounting for income taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities, using tax rates expected to be in effect during the years in which the bases differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need for valuation allowances, the Company considers projected future taxable income and future reversals of existing taxable differences. The Company has recorded a full valuation allowance to reduce its United States, United Kingdom, New Zealand, Hong Kong and Brazil net deferred tax assets to zero, as it has determined that it is not more likely than not that any of these net deferred tax assets will be realized. The Company has assessed its income tax positions and recorded tax benefits for all years subject to examination, based upon its evaluation of the facts, circumstances and information available at each period end. For those tax positions where the Company has determined there is a greater than 50% likelihood that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is determined there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized. Cash and Cash Equivalents The Company considers cash and cash equivalents to include short-term, highly liquid investments that are readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value, including investments with original or remaining maturities from the date of purchase of three months or less. At December 31, 2018 and 2017 , cash and cash equivalents consisted of cash balances of $54.4 million and $24.7 million , respectively, money market funds backed by U.S. treasury securities of $129.2 million and $358.9 million , respectively, and certificates of deposit of $0.0 million and $10.0 million , respectively. Investments in Marketable Securities During the year ended December 31, 2018 the Company prospectively adopted ASU 2016-01, which requires equity securities to be measured at fair value and recognize any changes in fair value within the consolidated statements of operations. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. The cost of marketable securities sold is determined based on the specific identification method and any realized gains or losses on the sale of investments are reflected as a component of interest income or expense. In addition, the Company classifies marketable securities as current or non-current based upon the maturity dates of the securities. At December 31, 2018 and 2017 , the Company had $204.7 million and $263.5 million , respectively, of investments in marketable securities. Strategic Investments The Company has invested in equity securities of multiple privately-held companies. The Company accounted for each of these investment using the cost method of accounting, as the Company does not have significant influence or a controlling financial interest over these entities. These investments are subject to periodic impairment reviews and are considered to be impaired when a decline in fair value is judged to be other-than-temporary. These investments are included in long-term investments on the consolidated balance sheets, and any impairment losses are recorded in other, net in the accompanying consolidated statements of operations. Allowance for Doubtful Accounts The Company bases its allowance for doubtful accounts on its historical collection experience and a review in each period of the status of the then-outstanding accounts receivable. A reconciliation of the beginning and ending amount of allowance for doubtful accounts for the years ended December 31, 2018 , 2017 and 2016 , is as follows (in thousands): 2018 2017 2016 Beginning balance, January 1 $ 7,478 $ 3,532 $ 2,578 Additions and adjustments 1,691 7,680 3,165 Write-offs (6,740 ) (3,734 ) (2,211 ) Ending balance, December 31 $ 2,429 $ 7,478 $ 3,532 The Company recognized bad debt expense of $0.8 million , $1.4 million and $0.8 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Property and Equipment, Net Property and equipment are recorded at historical cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets, generally two to seven years (See Note 7 ). Leasehold improvements are depreciated on a straight-line basis over the shorter of their estimated useful lives or lease terms. Repair and maintenance costs are charged to expense as incurred, while renewals and improvements are capitalized. Impairment of Long Lived Assets The Company evaluates the recoverability of its long-lived assets with finite useful lives, including intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable and the expected undiscounted future cash flows attributable to the asset group are less than the carrying amount of the asset group, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is determined based upon estimated undiscounted future cash flows. There were no impairment charges related to identifiable long lived assets in the year ended December 31, 2018 . During the year ended December 31, 2017 , the Company determined that previously capitalized software costs were impaired resulting in the write-off of $1.3 million , which was recorded in research and development expense in the accompanying consolidated statements of operations. Intangible Assets Identifiable intangible assets primarily consist of acquisition-related intangibles. The Company determines the appropriate useful life of its intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives ranging from three to six years, generally using the straight-line method which approximates the pattern in which the economic benefits are consumed. Goodwill Goodwill is not amortized, but instead is required to be tested for impairment annually and under certain circumstances. The Company performs such testing of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Events or changes in circumstances which could trigger an impairment review include a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. As part of the annual impairment test, the Company may conduct an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on the results of the qualitative assessment, no impairment of goodwill existed at December 31, 2018 or 2017 . Convertible Notes In June 2013, the Company issued 1.50% convertible notes due July 1, 2018 with a principal amount of $253.0 million (the “2018 Notes”). In December 2017, the Company issued 5.75% senior convertible notes due July 1, 2021 with a principal amount of $300.0 million (the “2021 Notes”). In accounting for the 2018 Notes at issuance, the Company separated the 2018 Notes into debt and equity components pursuant to the accounting standards for convertible debt instruments that may be fully or partially settled in cash upon conversion. The fair value of the debt component was estimated using an interest rate, with terms similar to the 2018 Notes, excluding the conversion feature. The carrying amount of the liability component was calculated by measuring the fair value of similar liabilities that do not have an associated convertible feature. The excess of the principal amount of the 2018 Notes over the fair value of the debt component was recorded as a debt discount and a corresponding increase in additional paid-in capital. The debt discount is accreted to interest expense over the term of the 2018 Notes using the interest method. The equity component of the 2018 Notes recorded to additional paid-in capital is not to be remeasur |