Kronos Announces Another Strong Quarter as SaaS Bookings Grow 97 Percent
CHELMSFORD, Mass., July 23, 2014—Kronos Incorporated – which recently surpassed $1 billion in annual revenue1 – today announced financial results, company advancements, and customer successes for the third quarter of Fiscal 2014. Product bookings continued to accelerate, with Kronos Cloud bookings as the fastest-growing part of the business. Kronos recognized revenue for the quarter increased to $265 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) increased to $88.5 million.2
“It’s thrilling to be part of the exclusive group of software companies that have grown beyond $1 billion in annual revenue, and the first vendor to do so in the workforce management market,” said Aron Ain, Kronos chief executive officer. “Equally thrilling is the pace of our growth compared to the global workforce management market, our increasing market share, and our rapidly expanding cloud footprint. Kronos is in a fantastic position moving into the final quarter of our Fiscal 2014. Our strong financial results and the investments we are making in our company – including continued product innovation, expansion of our sales force, and delivery of a superior customer experience – all reinforce that the best days are still ahead for Kronos.”
Third-Quarter News Facts
Outpacing the workforce management market – Deployed in more than 100 countries, Kronos is the leader in the global workforce management market. According to a global study of workforce management solutions3 published by IHS Technology (NYSE: IHS), Kronos grew more than 11 percent. The IHS report determined that the overall worldwide workforce management market grew 7.9 percent during the same period, indicating that Kronos continues to increase its market share. Only Kronos was found to have positive market share growth in all global regions during this period, while the share of other leading suppliers of workforce management solutions declined. Also according to IHS, Kronos led all vendors with more than 25 percent share of the global workforce management market. In the Americas, Kronos broadened its number-one position by increasing its share to nearly 38 percent.
Tremendous growth of the Kronos Cloud – The Kronos Cloud is experiencing significant growth across all market segments. 77 percent of new customer bookings were from an array of Kronos Cloud offerings, bringing the total number of organizations leveraging the Kronos Cloud to nearly 12,000. Kronos workforce management cloud revenue increased 57 percent and SaaS bookings increased 97 percent during the quarter.
Vertical expertise – Kronos experienced strong momentum across targeted vertical segments – including retail and hospitality, healthcare, services and distribution, manufacturing, and the public sector. The services and distribution sector was particularly strong, having its best-ever product bookings quarterly performance.
Extraordinary growth in SMB sector – Product bookings in the small and midsize business (SMB) sector increased 42 percent driven by strong performance of the Workforce Ready® and Workforce Central® suites and increased traction in the SaaShr partner channel. Workforce Ready is increasingly being adopted by new customers, as well as those upgrading from prior generations of Kronos solutions. During the quarter, Kronos delivered the latest release of Workforce Ready, providing even greater value to SMBs, making it easier than ever for them to effectively manage their workforces.
Rapid pace of innovation – Continued innovations in Kronos workforce management solutions was a key driver in the strong double-digit increase in product bookings during the quarter. Recent product releases include: the latest version of the Kronos Workforce Central suite including hundreds of enhancements; Workforce Collaboration™ social networking and collaboration; Workforce Analytics™ and Workforce Analytics on Tablet with visualization and exploration;Workforce Mobile™ and Workforce Tablet™ with geo-fencing capabilities; the latest version of the Kronos InTouch® time clock with new biometric technology; availability of Workforce Task Management™ via tablet devices; the latest version of the Kronos Workforce Ready® suite; many enhancements to meet specific vertical and global requirements; and additions and advancements to many other Kronos applications. There has never before been a timeframe in which Kronos has released so many new product offerings in such a short period of time.
Engaged and satisfied customers – During the quarter, Kronos hosted thousands of customers in a 30-city world tour of KronosLIVE, a series of events that offered the latest insights into how Kronos’ game-changing workforce management solutions combine ease of use and deep functionality to help organizations control labor costs, minimize compliance risk, and improve workforce productivity. KronosLIVE was offered in cities throughout the U.S. and in international locations such as London, Mexico City, Montreal, Mumbai, and Shanghai. In addition, during the quarter Kronos was recognized for consistently exceeding customer expectations by Omega Management Group Corp. Kronos is one of only two companies to receive this award 14 consecutive years.
Customer successes around the globe – In the third quarter of Fiscal 2014, Kronos signed agreements with organizations around the world such as: Allity Pty Ltd., a for-profit organization with 31 aged care facilities in Australia; CenterLight Health System, a leading resource for long-term residential and community-based healthcare; Century 21 Department Stores, a retailer located in New York City offering designer merchandise; Charleston County School District, a K-12 school system comprised of 80 schools; City of Hampton, a city in Virginia; Country Fire Authority, a volunteer- and community-based fire and emergency services organization in Australia; Crittenton Hospital Medical Center, a full continuum provider of nationally ranked clinical programs representing a wide range of medical specialties providing primary, secondary, and tertiary-level care; Department of Justice Federal Prison Industries (FPI), a U.S. government corporation that employs and provides job opportunities to inmates in the Federal Bureau of Prisons; Dulsco, a leading provider ofhuman resource solutions and waste management services headquartered in Dubai with operations throughout the UAE and Qatar; Element Fresh, a fast-growing dining chain company with more than 20 locations in Beijing, Guangzhou, Nanjing, and Shanghai; Emory Healthcare, a comprehensive hospital system in Georgia; EnviroWaste, a company that delivers EnviroSolutions to address the waste and recycling needs of New Zealand’s communities and businesses; Hastings Entertainment, Inc., a leading multimedia entertainment retailer; Indiana University Health, a comprehensive healthcare system in Indiana; Nebraska Department of Roads, a state agency responsible for surface transportation programs; NYC Transit Authority, one of the largest transit systems in North America; Presence Health, the second-largest healthcare system in Illinois; Ridley Family Markets, a family-owned chain of grocery stores operating 24 supermarkets in Idaho, Utah, Nevada, and Wyoming; Sky Lakes Medical Center, an internationally accredited, community-owned acute-care hospital in Oregon; Silver Reef Casino, a casino resort serving the northwestern region of the U.S.; St Andrews Healthcare, one of the largest charities in the UK providing specialist mental healthcare services; Town Sports International, an operator of fitness centers in the U.S. and Switzerland; Trusthouse Services, provider of outsourced food management services, operating primarily in the education and healthcare sectors; and Wyoming Department of Health, an organization dedicated to supporting and enhancing the health of citizens in Wyoming.
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. Kronos, the Kronos logo, Workforce Central, InTouch, and Workforce Ready are registered trademarks and Workforce Collaboration, Workforce Analytics, Workforce Mobile, Workforce Tablet, Workforce Task Management, and Workforce Innovation That Works are trademarks of Kronos Incorporated or a related company. All other trademarks are property of their respective owners.
Footnote 1: As announced May 7, 2014 on a last-twelve-month basis, ending March 29, 2014.
Footnote 2: 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; (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 expenses that are excluded from the definition of EBITDA under the terms of the Company’s Credit Agreement.
Footnote 3: “The Workforce Management Solutions – World Report” (2011-2013), published April 2014 and written by Sam Grinter, market analyst at IHS.