Cloud Momentum, Product Innovation, and Global Expansion Drive Kronos Beyond $1 Billion in Revenue in Fiscal 2014
CHELMSFORD, Mass., Nov. 5, 2014 - Kronos Incorporated today announced financial results, company advancements, and customer successes for Fiscal 2014, which closed Sept. 30. Product bookings continued to accelerate, with Kronos Cloud bookings the fastest-growing part of the business. Kronos recognized revenue for the year increased to $1.040 billion. Earnings before interest, tax, depreciation, and amortization (EBITDA) increased to $343 million.1
"Based on our tremendous momentum over 37 years and our achievement of $1 billion in annual revenue, we are often asked 'What is Kronos' secret?'", said Aron Ain, Kronos chief executive officer. "Our company strategy is multi-dimensional and clear. We have a passion for innovation and delivering great products. We have a winning global distribution strategy. We have a commitment to our customers to provide world-class product support. And we have exceptional employees who make a difference every single day. These attributes drove us to be a $1 billion company. In our next phase of growth, Kronos will become synonymous with workforce management in the cloud. Our future has never been brighter."
Fiscal 2014 News Facts
Explosive growth of the Kronos Cloud - Kronos added thousands of Kronos Cloud customers, as new customers deploy in the cloud and existing customers move their on-premise instances to the cloud. Kronos workforce management cloud revenue increased 58 percent and SaaS bookings increased 69 percent. Demonstrating this increasing momentum, in the second half of the fiscal year, 75 percent of new customer bookings were from an array of Kronos Cloud offerings. Kronos continues to aggressively invest in its cloud infrastructure in anticipation of even more rapid growth.
Growth in the enterprise - Kronos secured more than twenty $1,000,000+ contracts. Transactions included new customers as well as existing customers from around the world, such as one of the largest operators of acute care hospitals in the U.S. with more than 200 hospitals; a Fortune 500 multinational organization that purchased Kronos in the cloud for 115,000 salaried employees around the world following its deployment of Kronos to hourly employees in more than 50 countries; a multinational hospitality organization with more than 500 properties worldwide; a U.K.-based multinational automotive company; a leading services company with more than 12,000 locations worldwide; one of the largest retailers in the world with nearly 2,500 stores; and a U.S. state with 35,000 employees.
Growth in SMB sector - In Fiscal 2014, Kronos added more than 3,800 organizations to its SMB customer community. Product bookings in the small and midsize business (SMB) sector increased 25 percent driven by strong performance of the Kronos Workforce Ready and Kronos Workforce Central suites. This momentum included sales to new customers as well as the migration of hundreds of existing Kronos customers to Workforce Ready. Kronos continues to bolster Workforce Ready by adding enhancements and new applications which will accelerate adoption of this platform. Kronos also continues to experience significant traction in the Kronos SaaShr partner channel where the customer count has doubled since Kronos acquired SaaShr in 2012.
Growth through product innovation - Kronos product bookings enjoyed a double-digit increase, providing further indication of the company's growth trajectory and global market share advancements. Kronos delivered an unprecedented level of innovative new products and enhancements, which are transforming the way organizations manage their workforces including:
Growth across all targeted industry segments - Verticalizing its sales, services, and marketing teams is a recent cornerstone of Kronos' success, setting the company apart from other vendors by delivering a strong value proposition across targeted industry segments. In Fiscal 2014, Kronos delivered strong financial results across all targeted industry markets as organizations large and small seek to align with the workforce management market leader and its proven industry-specific expertise. All targeted segments surpassed their financial goals, including the services and distribution, healthcare, manufacturing, retail and hospitality, and public sector groups.
Growth internationally and among multinationals - Kronos international product bookings increased 27 percent in the fourth quarter, as new customer adoption and the size of transactions continues to rise. India experienced its best-ever year with a range of new customer wins, including its first $1,000,000+ contract with a major food services company, and multiple Kronos Cloud and SaaS customer transactions. Australia continued on its market-leading growth trajectory. In the U.K., Kronos experienced a record quarter for product bookings across a broad segment of industries. In addition, Kronos launched its Workforce Ready suite in various regions to give SMBs the advantages of an enterprise-class workforce management solution in the cloud with single-source access to easily analyze and manage real-time employee data.
Kronos to host record number of attendees at KronosWorks - The world's largest vendor-led workforce management gathering is taking place Nov. 9-12 in Las Vegas. With more than 2,500 attendees from around the world and hundreds of industry- and product-specific sessions, KronosWorks 2014 will offer deep-dive product demonstrations, customer success sessions, and a forum for customers to network with peers and Kronos experts. Thousands of Kronos customers also recently attended KronosLIVE events throughout the U.S. and international locations such as London, Mexico City, Montreal, Mumbai, and Shanghai.
Fourth Quarter News Facts
- In the fourth quarter of Fiscal 2014, Kronos signed agreements with organizations around the world such as: American Woodmark Corporation, a kitchen and bath cabinet manufacturer; Autoliv ASP Inc., a worldwide leader in automotive safety systems; City of Abilene, the largest city in west central Texas; Correct Care Solutions, a community healthcare provider offering comprehensive medical, dental, and behavioral health services for inmates; County of Richmond, a county in the U.S. state of North Carolina; District of Columbia Housing Authority, a provider of quality affordable housing to extremely low- through moderate-income households in the Washington, D.C. area; Emerson Fisher, one of the largest control valve manufacturers in the world with locations across the U.S. and Canada; Froedtert & the Medical College of Wisconsin, a regional healthcare network in southeastern Wisconsin; Geisinger Health Services, an integrated health services organization serving more than 2.6 million residents throughout 44 counties in the U.S. state of Pennsylvania; The GEO Group, Inc., a leading provider of correctional, detention, and community reentry services; JEVS Human Services, the largest nonprofit social services agency of its kind serving the Greater Philadelphia region; Marc Community Resources, a not-for-profit community organization providing day treatment, vocational, residential, respite, and behavioral health/outpatient services to children and adults with developmental disabilities and behavioral health challenges; Marcus Theatres Corporation, a leader in the entertainment industry; Medicalodges, Inc., an employee-owned nursing system operating over 30 facilities in the U.S. states of Kansas, Missouri, and Oklahoma; The MetroHealth System, one of the largest, most comprehensive healthcare providers in Northeast Ohio and the region's only Level I trauma center; Niagara Falls Memorial Medical Center, a provider of a full range of medical, surgical, rehabilitation, skilled nursing and adult mental health services in Niagara Falls, New York as well as outpatient facilities located in Wheatfield, North Tonawanda, and Grand Island; Tacoma Public Schools, the third-largest school district in the U.S. state of Washington with more than 65 sites; YMCA of Middle Tennessee, a nonprofit organization with 18 family wellness centers and hundreds of program locations dedicated to strengthening communities across Middle Tennessee.
About Kronos Incorporated
Kronos is the global leader in delivering workforce management solutions in the cloud. Tens of thousands of organizations in more than 100 countries - including more than half of the Fortune 1000® - use Kronos to control labor costs, minimize compliance risk, and improve workforce productivity. Learn more about Kronos industry-specific time and attendance, scheduling, absence management, HR and payroll, hiring, and labor analytics applications at www.kronos.com. Kronos: Workforce Innovation That Works™.
© 2014 Kronos Incorporated. All rights reserved. Kronos and the Kronos logo are registered trademarks and Workforce Innovation That Works is a trademark of Kronos Incorporated or a related company. See a complete list of Kronos trademarks. All other trademarks, if any, are property of their respective owners.
Footnote 1: All financial information within this press release is presented using non-GAAP financial measures. Kronos believes that non-GAAP measures of financial results provide useful information regarding certain financial and business trends relating to Kronos' results of operations. Non-GAAP revenue consists of GAAP revenue excluding the effect of the write-down of deferred revenue associated with purchase accounting for certain acquisitions and includes timing adjustments related to international product deliveries which management includes when evaluating operating results. Product bookings represent gross product value of product orders and the product equivalent value of SaaS orders. EBITDA consists of GAAP income from operations excluding: (1) share-based compensation expense for stock options and stock awards in accordance with ASC 718 and compensation expenses related to ordinary dividends; (2) amortization of capitalized software development costs; (3) depreciation of property, plant and equipment; (4) amortization of acquired intangible assets; (5) acquisition-related expenses including advisory, legal, accounting, acquired employee-related costs, and integration costs; and (6) consulting and other financing-related expenses that are excluded from the definition of EBITDA under the terms of the company's Credit Agreement.