Kronos Reports Strong Third-Quarter Results; Cloud Business Rapidly Accelerating
CHELMSFORD, Mass., Aug. 13, 2012 — Underscoring the rapid acceleration of its Kronos Cloud business, Kronos Incorporated today announced a 60 percent year-over-year increase in cloud revenue and a 50 percent increase in cloud customer adoption. Kronos also today announced financial results, company advancements, and customer successes for the third quarter of Fiscal 2012, including double-digit growth in new customer contracts. Kronos revenues for the quarter increased to $224.8 million. Earnings before interest, tax, and amortization (EBITA) was $59.9 million.1
"Customers are enthusiastically embracing our Kronos Cloud and SMB offerings," said Aron Ain, Kronos chief executive officer. "In addition, the explosion of Big Data is driving rapid adoption of our labor analytics solution. The powerful combination of Kronos Cloud adoption, SMB, and our next-generation workforce management solutions – along with our aggressive international expansion efforts and deep vertical market expertise – position Kronos very well."
Third-Quarter News Facts
- Accelerated SMB strategy – Kronos is revolutionizing the way small and midsize businesses (SMBs) manage their workforce. Kronos unveiled its new SaaS Workforce Ready™ product suite designed to help SMBs stay competitive through single-source access to real-time employee data. Capitalizing on a hosted, multi-tenant architecture and shared common technology platform to provide a universal employee record and single user interface, Workforce Ready includes time and attendance, HR, and payroll solutions. Momentum also continued in the company’s reseller partner channel where more than 1,100 new SMB customers were added in the past 120 days alone. Today, nearly 400,000 employees across more than 5,400 organizations use the Kronos SMB platform.
- Fast-growing cloud business – As more organizations around the world adopt cloud computing, Kronos is actively responding to a rapid increase in demand. Kronos Cloud revenues increased 60 percent year over year and the Kronos Cloud customer base increased 50 percent. The Kronos Cloud is now being used successfully at thousands of organizations on a global basis including one of the world’s largest hotel chains, one of the world’s most successful online retailers, a leading global cosmetics company, one of the largest healthcare systems, a leading financial services institution, a leading multinational manufacturing company, and some of the largest state and local government entities. Combined with rapidly building demand for Kronos’ new cloud-based Workforce Ready suite, Kronos is successfully bringing customers of all sizes into a cloud computing environment.
- Enhanced Big Data labor analytics capabilities – With the release of an enhanced labor analytics solution built to deliver instant insights that inform fact-based decisions, Kronos is making it easier than ever for organizations to find value in Big Data and turn their workforce into a competitive advantage. Workforce Analytics™ is now the fastest-growing product in Kronos’ workforce management portfolio, enabling organizations to easily access and leverage their workforce data to identify, predict, and manage opportunities for cost savings and productivity gains.
- Aggressive international growth strategy – Kronos continues to experience double-digit year-over-year international product revenue growth. Supporting its international growth strategy and strengthening its presence in the Europe, Middle East, and Africa (EMEA) region, Kronos acquired UK-based SMART Computer Holdings and its Spanish affiliate SMART Human Logistics. The acquisition gives Kronos a leadership position in the UK healthcare market through SMART’s domain expertise and well-established base of NHS Trust customers, and also establishes a physical presence for Kronos in Spain. In addition, Kronos extended its reach into the Middle East through a reseller agreement with OCSHI.
- Vertical performance – Kronos continued to gain market share and traction as the company experienced another quarter of double-digit growth in contracts with new customers. The company’s highly focused vertical go-to-market strategy is contributing to Kronos’ high win rate in competitive deals.
- In the third quarter of Fiscal 2012, Kronos signed agreements with organizations around the world such as: Airgas, Inc., the largest U.S. distributor of industrial, medical, and specialty gases, and hardgoods such as welding equipment and supplies; Cathay Pacific, an international airline registered and based in Hong Kong, offering scheduled cargo and passenger services to more than 140 destinations around the world; City of Cleveland, a city in Ohio, the county seat of Cuyahoga County, the most populous county in the state; City of Jackson, the capital and the most populous city in Mississippi; Englefield Oil Company, a diversified, full line fuel and lubricants supplier and related services to wholesale and retail markets in Ohio; European Care Group, a leading independent provider of health and social care in the UK; Five Below, a rapidly growing specialty value retailer offering a range of trend-right, high-quality merchandise all priced at $5 and below targeted at teen and pre-teen customers; The Fresh Market, a full-service upscale specialty grocery store; Gala Bingo, the UK's leading bingo operator; Intelligrated, a leading North American-based, single-point provider of automated material handling solutions with operations in the U.S., Canada, Mexico, and Brazil; Noodles & Company, a U.S.-based chain of fast casual restaurants; Riverview Hospital, a state-of-the-art healthcare facility in Hamilton County, Indiana;Safelite, a leading provider of vehicle glass repair and replacement services; and Yale New Haven Health System, consisting of Yale-New Haven, Bridgeport, Greenwich, and Northeast Medical Group Delivery Networks.
About Kronos Incorporated
Kronos is the global leader in workforce management solutions that enable organizations to control labor costs, minimize compliance risk, and improve workforce productivity. Tens of thousands of organizations in 100 countries — including more than half of the Fortune 1000® — use Kronos time and attendance, scheduling, absence management, HR and payroll, hiring, and labor analytics applications. To learn how Kronos uniquely delivers complete automation and high-quality information in an easy-to-use solution, visit www.kronos.com.
© 2012 Kronos Incorporated. All rights reserved. Kronos is a registered trademark and Workforce Ready and Workforce Analytics are trademarks of Kronos Incorporated or a related company. All other trademarks are property of their respective owners.
Footnote 1: This press release contains 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. EBITA 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 acquired intangible assets; and (3) acquisition-related expenses including advisory, legal, accounting, acquired employee-related costs, and integration costs.