Kronos Workforce Management Cloud Revenue Increases 74 Percent as Shift to SaaS Drives Recurring Revenue Growth
CHELMSFORD, Mass., Jan. 26, 2016 - Kronos Incorporated today announced financial results, company advancements, and customer successes for the first quarter of Fiscal 2016. Kronos recognized revenue for the quarter increased to $273.2 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) was $77.6 million.1
"Without a doubt, this is the most exciting time to be at Kronos," said Aron Ain, Kronos chief executive officer. "Kronos is leading the industry's paradigm shift from an on-premise, software licensing model to a cloud world where SaaS drives productivity, faster time to value, and unparalleled efficiencies. We continue to invest heavily in our products, technology, and people to continuously delight our customers around the world by delivering unprecedented value. As we expand globally and roll out innovations that push the boundaries of user experience, data insight, and accessibility, it's our extremely innovative, dedicated, and talented Kronites that remain the lynchpin to our success."
Shift to SaaS Drives Recurring Revenue Growth as Customer Flock to the Kronos Cloud - Kronos again delivered strong growth in the cloud, with workforce management cloud revenue increasing 74 percent.
- Nearly 90 percent of new customer bookings came from an array of Kronos Cloud offerings, which marks the fourth consecutive quarter that cloud bookings accounted for at least 80 percent of new deals.
- Total recurring revenue as a percentage of total revenue grew to more than 60 percent, with software subscription revenue increasing 49 percent year-over-year.
- More than 16,000 organizations around the globe now run in the Kronos Cloud, representing the majority of the company's global customer base.
Kronos Innovation Revolutionizes Workforce Management for Customers Large and Small - Kronos total product bookings increased 14 percent compared to last year, with sales increasing across all deal sizes. Kronos continues to invest in product development and services enablement, delivering enhancements and new innovations across its entire product portfolio, including:
Workforce Central 8
, the fastest-adopted product release in company history, with powerful new updates and ease-of-use enhancements tailored for every industry, as well as mobile capabilities that empower the workforce, a new attendance insight and analytics dashboard, innovative scheduling and self-service capabilities, and enhanced global features.
- A sleek, elegant, and powerful new Workforce Ready user interface with updates to talent management, benefits management, timekeeping, scheduling, and compliance reporting to help small and midsize businesses (SMBs) manage their workforces with full human capital management (HCM) capabilities.
, a unique and revolutionary implementation methodology for Workforce Central customers designed to significantly expedite time to value.
, an award-winning solution powered by Kronos Workforce Analytics that allows organizations to turn big data into actionable intelligence, resulting in improved workforce productivity, minimized compliance risk, and increased employee engagement.
Global Momentum Accelerates in Targeted Industry Segments Across the Enterprise - Many $1+ million contracts were signed spanning a variety of targeted industry segments. This included an agreement with one of the first comprehensive cancer treatment and research centers in the U.S., which upgraded to a new version of a Kronos solution and added analytics, scheduling, mobile, and tablet capabilities. One of the largest internet-based retailers expanded its use of Kronos solutions to accommodate its rapid growth. A large home improvement and hardware retailer in the U.S. added solutions including mobile and tablet and upgraded to a new version of its Kronos solution. Other noteworthy transactions were from new and existing customers around the world, including one of the leading food retailers in Canada; a major Massachusetts-based healthcare provider; a multinational dairy co-operative based in New Zealand; the parent company of multiple major luxury golf and resort brands; and a large independent school district in Texas. Some of these organizations expanded their use of Kronos to accommodate growth or add additional applications; some chose Kronos to replace competitive workforce management applications; and others automated manual processes for the first time or replaced legacy homegrown applications.
Accelerated Adoption in the SMB Sector - Kronos and the Kronos SaaShr partner channel combined to install a record number of Workforce Ready applications, with a nearly 100-percent increase in implementations.
Kronos Continues to be Recognized Globally for its WorkInspired Culture - Kronos has become widely recognized for its corporate culture, which emphasizes a focus on caring for customers, as featured in its Kronos Culture of Inspiration and Caring for Customers video.
Kronos was once again named a Top Place to Work by The Boston Globe in the annual ranking of most admired workplaces in Massachusetts, where Kronos is headquartered. The survey measured employee responses regarding company direction, execution, employee connection, workload and responsibility, management, and pay and benefits.
- Kronos secured accolades around the world for its culture, with Workforce magazine recently recognizing the Kronos wellness program in its annual Optimas Awards; The New England Employee Benefits Council honoring Kronos with a Best Practice award in the Total Reward Strategies category; and SHRM India awarding Kronos with the Excellence in HR-MSME category in its annual Numero Uno awards.
- Kronos, with more than 4,500 employees worldwide, is actively hiring and currently has more than 300 job openings.
First Quarter Customer Success Around the Globe - In the first quarter of Fiscal 2016, Kronos signed agreements with organizations around the world, such as: Benchmark Senior Living, one of the leading providers of senior living services in the Northeast, U.S.; Best Market, a family-owned supermarket with locations in the New York metropolitan area; Best Sunshine, a luxury hotel and entertainment complex in Saipan; City of Dallas, a city in Texas; City of Hampton, a city in Virginia;Dansk Supermarked Group, Denmark's leading retailer with stores including Bilko and føtex; David J. Joseph Company, a provider of scrap brokerage, recycling, and transportation services; Dental Care Alliance, a leading dental support organization; Ector County Independent School District, a school district in Odessa, Texas; Fletcher Building Holdings, a manufacturing and construction company and one of New Zealand's largest employers; Fox Cable Network, an American entertainment industry company; Frisbie Memorial Hospital, an acute care community hospital in New Hampshire; Fonterra, one of the largest dairy exporters in the world based in New Zealand; Gray Television Inc., a television broadcast company headquartered in Georgia; IngramMicro, a provider of global technology and supply chain services; Northern Tool & Equipment, a family-owned provider of tools and equipment based in Minnesota; Orlando Health Inc., a provider of world-class healthcare services in Central Florida; Sedano's Supermarkets, a grocer with locations throughout Florida; TowerJazz, the Global Specialty Foundry Leader and a manufacturer of integrated circuits; Toyota Boshoku America Inc., a supplier of automotive interiors; Transition Health Services, an operator of skilled nursing facilities and provider of rehab, hospice, and management services and consultation for nursing, assisted living, and retirement facilities; Ward Transport & Logistics, a freight transportation provider serving the U.S. and Canada; Washington State Convention Center, one of the premier meeting and event venues in Seattle, Washington; and Willamette Dental Group, a full-service dental group with more than 50 locations throughout Oregon, Idaho, and Washington.
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™.
© 2016 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.