LOWELL, Mass. ,
Kronos Incorporated today announced financial results, company advancements, and customer successes for the second quarter of Fiscal 2018. Kronos recognized revenue for the quarter was $330 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) was $91 million1.
“What an exciting quarter. It’s remarkable what Kronites continue to accomplish day after day,” said Aron Ain, chief executive officer. “In my 39 years as a Kronite, I’ve never experienced more excitement or momentum around a product launch than we’re seeing right now with Workforce Dimensions. Organizations around the world voted on the future of workforce management with their Workforce Dimensions purchase orders in the first months of availability. Workforce Ready and Workforce Central also continue to drive strong ARR business, including closing the largest SaaS deal in our history, while all vertical sales teams overperformed in the second quarter. And, as icing on the cake, we made the prestigious Fortune 100 Best Companies to Work For list for the first time!”
Workforce Dimensions Makes Tremendous Strides in First Full Quarter of Availability
Workforce Dimensions has redefined workforce management – with a breakthrough user interface (UI); embedded artificial intelligence (AI) and machine learning algorithms; the industry’s first personal digital assistant, Workforce Advisor; and its open cloud platform, Kronos D5 – enabling organizations, managers, and employees to work their way, work smarter, and work in a modern cloud. Following its much-anticipated launch at KronosWorks in November (watch video replay), Workforce Dimensions entered the market strong with interest from longtime Kronos customers and new organizations alike.
- Hundreds of thousands of employees will soon be live on Workforce Dimensions, including a surge during summer and holiday seasons as organizations take advantage of the unique seasonal worker licensing option of the solution.
- Kronos saw a balanced mix of net-new customer deals, existing customers who will upgrade from an older on-premise Kronos solution, and customers who future-proofed their workforce management solution by moving from Workforce Central SaaS to Workforce Dimensions.
- More than 150 software integrations have been built to-date for Workforce Dimensions early adopters, including Brookstone, as these progressive organizations dramatically improve the employee experience as they go live on Workforce Dimensions.
- Significant, large Workforce Dimensions deals in the quarter included: a multi-million dollar deal with an international fashion retailer with tens of thousands of employees globally – including a significant seasonal worker swell – who intended to purchase a Workforce Central solution last quarter but opted for Workforce Dimensions after seeing the industry-changing technology in action; a leading global manufacturer of semiconductor production equipment, located in Japan, with dozens of locations worldwide; an integrated healthcare system in Midwestern U.S. operating several hospitals, clinics, surgical centers, and long-term care facilities; an operator of fully automated cold storage warehouses serving customers across Canada; a family-owned, regional supermarket chain with dozens of locations across several Northeastern states; an internationally known producer, processor, and marketer of high-quality almonds, based in the U.S.; and Mackenzie Health, who selected Workforce Dimensions to help create a world-class healthcare experience within a smart hospital setting.
Transformation Complete: Nearly All Net-New Deals Include a Kronos Cloud Solution
Driven by SaaS growth across all three major product suites – Workforce Dimensions, Workforce Ready, and Workforce Central – more than 26,000 organizations worldwide leverage a Kronos Cloud solution, including an all-time high percentage of net-new customers in the second quarter.
- Subscription revenue for Kronos workforce management and human capital management (HCM) solutions grew by 29 percent in the quarter, as total SaaS run-rate business is now more than $400 million annually.
- Total annual recurring revenue (ARR) bookings across all product suites increased by 58 percent over last year.
- SaaS deals in the quarter also set a new record globally, including Kronos signing the largest SaaS deal in company history with a U.S. state government. Other significant SaaS deals in the quarter included: a $1 million+ deal with a west coast manufacturer and marketer of wood products serving customers throughout North America, who migrated to a Workforce Ready HCM solution; a multinational corporation and one of the largest suppliers of industrial and environmental machinery; a SaaS upgrade with one of the world’s largest automakers, employing more than 130,000 workers in North America; a healthcare organization in Southeastern U.S. with nearly 1,000 care locations and 60,000 employees; and a $1 million+ Workforce Ready expansion with a leading hotel and resort management company with more than 12,000 associates.
Verticalization, Innovation, HR Growth Drive Customer Success and Exceptional Performance
All Kronos vertical industry teams surpassed goals in the quarter, which saw at least double-digit percentage growth in each industry segment over last year, led by public sector at 133 percent. Additionally, the Kronos Workforce Ready HCM suite continues to be one of the fastest-growing segments of the business.
- Kronos launched a reimagined mobile experience for Kronos Workforce Ready, empowering employees and managers with on-the-go access to a wide array of vital tools, an enhanced applicant mobile portal, and compliance enhancements to help organizations mitigate risk in today’s complex regulatory landscape, which The Workforce Institute at Kronos examined in a recent HR and payroll survey.
- Workforce Ready continues to be adopted by larger organizations, as the average total employee population managed by the HCM solution increased 38 percent compared to last year. Additionally, business for the Workforce Ready Talent Acquisition module has doubled over the last 12 months, all while onboarding was identified as one of HR’s biggest challenges in 2018.
- KLAS, a research and insights firm on a global mission to improve healthcare delivery, ranked Kronos number one for time and attendance in its “2018 Best In KLAS: Software & Services” report; while Kronos continues to deepen investments in healthcare by streamlining physician scheduling for better patient care with an AMiON integration.
- Globally, Kronos commenced its international multi-city KronosLIVE event tour, empowering customers, partners, and prospects to explore the new dimensions in work while learning how Kronos workforce management and HCM solutions can help manage their workforces today and into the future.
Fortune Named Kronos to 100 Best Companies to Work For® List, WorkInspired Soars Globally
Admiration for Kronos’ WorkInspired corporate culture continues quarter-after-quarter, most recently with the company making the prestigious FORTUNE 100 Best Companies to Work For list. Kronos received several other global accolades in the second quarter that reinforces its belief that great businesses are powered by great people, including:
- Fortune and Great Place to Work® also naming Kronos one of the 20 “Best Workplaces in Technology,” while Vice President of Engineering Susan Rossnick was a recipient of the inaugural Great Place to Work For All Leadership Award.
- In Canada, Kronites were honored with three awards: Great Place to Work listed Kronos as a Best Workplace for Women for the fourth consecutive year and one of the 25 Best Workplaces for Inclusion; while the Montreal Gazette again included Kronos as one of Montreal’s Top Employers.
- In Asia, Kronos was named a Best Place to Work in Greater China for the first time.
- The Kronos HR team continues to spread best practices gleaned from its own employee experience journey – which has Kronite employee engagement soaring at an all-time high – including a standing room-only presentation about the company’s innovative Manager Effectiveness Index initiative at the 2018 Great Place to Work For All™ Summit.
Second Quarter Customer Success Around the Globe
In the second quarter of Fiscal 2018, Kronos signed agreements with organizations around the world, including: Catholic Medical Center, one of New Hampshire’s largest medical centers and a leader in comprehensive cardiovascular and vascular services; CoxHealth, the only locally-owned, non-profit health system based in Springfield, Missouri; Columbia University, a private Ivy League research university located in New York City and one of the oldest and most prestigious universities in the world; Garland ISD, a public school district comprised of 72 schools located in Garland, Texas; Inn of the Mountain Gods, a premier resort and casino in New Mexico owned and operated by the Mescalero Apache Tribe; JBS USA Food Company, a leading processor of beef, pork, poultry, and lamb throughout North America, Australia, and New Zealand; Longfor Properties, a nationwide property company in China with more than 10,000 employees; Manhattan Beer Distributors, one of the largest beer and beverage distributors in the U.S., based in metro New York; R+L Carriers, a global freight transportation and logistics company; Sonoco, a global provider of a variety of consumer packaging, industrial products, protective packaging, and displays and packaging supply chain services; Supermercados Peruanos, one of the largest supermarket and hypermarket chains in Peru; Texas Children’s Hospital, one of the nation's largest pediatric hospitals located in Houston, Texas; Town of Danvers, a town in Essex County, Massachusetts; and UMass Amherst, a nationally ranked public research university and the flagship campus of the University of Massachusetts.
- Connect with Kronos via Facebook, Twitter, LinkedIn, Instagram, and YouTube.
- Take a look at the lighter side of the workforce in our Time Well Spent cartoons.
- Subscribe to follow The Workforce Institute at Kronos for insight, research, blogs, and podcasts on how organizations can manage today’s modern workforce to drive engagement and performance.
- Learn about the Kronos WorkInspired culture and check out Kronos job openings.
About Kronos Incorporated
Kronos is a leading provider of workforce management and human capital management cloud solutions. Kronos industry-centric workforce applications are purpose-built for businesses, healthcare providers, educational institutions, and government agencies of all sizes. Tens of thousands of organizations — including half of the Fortune 1000® — and more than 40 million people in over 100 countries use Kronos every day. Visit www.kronos.com. Kronos: Workforce Innovation That Works.
© 2018 Kronos Incorporated. All rights reserved. Kronos and the Kronos logo are registered trademarks and Workforce Innovation That Works is a registered 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) depreciation of property, plant, and equipment; (3) amortization of intangible assets; (4) acquisition-related deferred revenue write-downs and expenses including advisory, legal, accounting, acquired employee-related costs, and integration costs; and (5) unusual costs related to relocation of corporate HQ and certain consulting and financing-related expenses that are excluded from the definition of EBITDA under the terms of the company’s Credit Agreement.