LOWELL, Mass., Jul 31, 2018
Kronos Incorporated today announced financial results, company advancements, and customer successes for the third quarter of Fiscal 2018. Kronos recognized revenue for the quarter was $336 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) was $91 million1.
“I’m so proud of this company and our people,” said Aron Ain, Kronos chief executive officer. “What we are doing to reshape the future of work with Workforce Dimensions is nothing short of remarkable, and our overall success was truly a team effort, as we showed strong growth across various market segments. The mix of SaaS deals was the highest ever this quarter – spread nicely across the Workforce Dimensions, Workforce Central, and Kronos Workforce Ready product suites – as the Kronos Cloud showed significant growth. We entered the fourth quarter of Fiscal 2018 with exceptional momentum, eyeing $1.4 billion in annual revenue and fortifying the building blocks for an even brighter future with innovative offerings and growing SaaS success.”
Workforce Dimensions Deals Triple in the Third Quarter Versus First Two Quarters Combined
Customer interest and sales momentum surged in the third quarter for Workforce Dimensions, as organizations future-proofed their workforce management solutions with a breakthrough user interface; embedded artificial intelligence and machine learning algorithms; the industry’s first personal digital assistant; and its open cloud platform, Kronos D5.
- Workforce Dimensions deals more than tripled in the third quarter compared with the first two quarters of Fiscal 2018 combined.
- Nearly a half a million Workforce Dimensions licenses for hourly and salaried employees have been sold in just the first two full quarters of availability.
- Existing Workforce Central customers across all verticals are migrating to Workforce Dimensions in great numbers, with the largest population of transactions in the quarter coming from existing on-premise customers. For the remaining Workforce Dimensions orders, there was an equal split of net-new customers and existing customers migrating from a Workforce Central SaaS solution.
- The University of Colorado Boulder’s Housing & Dining Services went live on Workforce Dimensions with more than 2,100 employees, including a mix of hourly, salaried, full-time, part-time, and student workers, while Kronos and the department’s director of human resources headlined a SHRM Mega Session on the future of work.
- To continually promote interoperability through open APIs and deliver innovative solutions that dramatically improve the employee experience while driving business results, more than 600 software integrations are available for Workforce Dimensions as well as applications that extend workforce management capabilities from a growing lineup of development partners, including a powerful integration with Microsoft Outlook and Microsoft Teams, highlighted by a Workforce Dimensions-powered chatbot.
- Significant, $1 million+ Workforce Dimensions deals in the quarter included: a leading in-home healthcare company specializing in autism therapy headquartered in the midwestern U.S.; a restaurant chain employing more than 70,000 people at locations across the U.S., Canada, France, Germany, and the U.K.; one of the world’s largest global airlines serving 150 million+ travelers each year; a nationally ranked hospital providing care to patients across several U.S. states; a Fortune 500 company and one of the largest U.S. banks with locations in 39 states; and an integrated sales and marketing services leader, serving hundreds of companies worldwide.
Record Number of $1 Million+ Product Bookings, ARR Deals Drive Kronos Cloud Business
More than 27,000 organizations worldwide leverage a Kronos Cloud solution, including an all-time high percentage of net-new customers in the quarter, breaking the latest mark set in the second quarter of Fiscal 2018.
- Subscription revenue for Kronos workforce management and human capital management (HCM) solutions grew by 29 percent.
- Total annual recurring revenue (ARR) bookings for the last 12 months is at an all-time high.
- Kronos set an all-time high of $1 million+ product bookings in the quarter, driven mostly by SaaS deals across Workforce Dimensions, Workforce Central, and Workforce Ready, including: a global provider of industrial tools, household hardware, and security products and locks; one of the world’s largest producers of meat products employing more than 100,000 people globally; a supermarket chain with more than 18,000 employees at 100+ stores across the U.S.; a comprehensive healthcare system comprised of five nationally accredited hospitals; and a U.S. pork processor whose products are featured in restaurants, stores, and foodservice providers in more than 25 countries.
Workforce Ready Recognized as Innovator and Leader, as Kronos Payroll Momentum Surges
Kronos Workforce Ready was recognized for rapid growth, product innovation, and dedication to customer success in the NelsonHall 2018 Next Generation HCM Technology Report, while organizations of all sizes and across all industries are leveraging Kronos Payroll with Workforce Ready or Workforce Dimensions to improve payroll accuracy, reduce processing time, mitigate compliance risk, and create the perfect paycheck for both hourly and salaried employees.
- Workforce Ready, which launched in France as its ninth international market, introduced Workforce Ready People Analytics, a suite of analytics tools to help transform HR, payroll, talent, and timekeeping data into employee-centric decisions that drive operational excellence, manage succession planning, and support the development of a highly-engaged workforce.
- Kronos Payroll Services is a fast-growing payroll services offering that provides Kronos Workforce Ready and Workforce Dimensions customers with a complete, end-to-end solution for tax filing, garnishment processing, distribution of pay checks, and payroll documentation.
- Kronos announced that it would acquire substantially all the assets of longtime partner Advanced Payroll Systems, a payroll services bureau and HCM solutions provider.
Customer Success Spread Across Vertical Markets Propels Performance
Kronos vertical industry teams had strong quarters, led by services and distribution (89 percent growth), retail (65 percent growth), and manufacturing (29 percent growth), as Kronos continues to be recognized for customer success.
- Workforce Central helped customer Mission Heath save $500,000 at its flagship facility, while the six-hospital health system is projected to save millions across the enterprise.
- Longtime Kronos customer Goodyear Auto Service enhanced visibility and transformed data into actionable insights, including a significant reduction in overtime spend, with Workforce Analytics.
- For the 18th consecutive year, Kronos was recognized for leadership in customer success by the Customer Relationship Management Institute, while Vice President of Global Customer Success Jennifer Dearman was named a “Top 100 Customer Success Strategist.”
Kronite Engagement Continues to Drive Record-Breaking Success for the Company
Led by CEO Aron Ain – who ranked 27 out of 100 CEOs in Glassdoor’s Top CEOs in 2018 and who is publishing a book in the fall about how to create an inspiring organization where everyone loves to work – Kronos third quarter accolades for its WorkInspired culture included:
- Fortune and Great Place to Work® naming Kronos a Best Workplace for Millennials on the heels of also naming the company to the prestigious 100 Best Companies to Work For® list;
- Forbes magazine listing Kronos as one of the top three places to work in software;
- In Massachusetts, where the company is headquartered, Kronos was named a Best Place to Work by the Boston Business Journal for the ninth consecutive year; and
- In Indianapolis, where Kronos has had a strong presence since 2012, the company was named a top 10 Best Place to Work in Indiana, while the local team was honored with a TechPoint Mira Award in the Best Tech Event category for its innovative and engaging interview process: the Kronos Indianapolis Tech Center of Excellence Interview Blitz.
Third Quarter Customer Success Around the Globe
In the third quarter of Fiscal 2018, Kronos signed agreements with organizations around the world, including: Catholic Social Services, a Canadian organization with more than 120 programs offering safe places, strengthened relationships, and compassionate support; Correct Care Solutions, an international leader in public healthcare with 12,000+ employees serving patients in correctional environments, state psychiatric hospitals, and forensic mental health facilities across the U.S. and Australia; County of Gloucester, one of the 21 county governments located in the state of New Jersey; Dairy Farm, a leading pan-Asian retailer with more than 7,000 locations, headquartered in Hong Kong; Gerdau, the leading producer of long steel in the Americas and one of the leading suppliers of special steel worldwide; Grimmway Farms, a global produce leader and the world's largest producer of carrots; Inframark, an independent leader in water infrastructure operations and infrastructure management services serving more than 4 million customers across the U.S.; International Students House, a charitable organization in the U.K. that offers accommodation, social, and support services to British and overseas students; Munson Healthcare, a regional, non-profit healthcare system comprised of nine hospitals, serving tens of thousands of patients annually across northern Michigan; Nourish, a health food retailer in Ireland; Olathe School District, the second largest school district in the state of Kansas serving more than 30,000 students in 53 schools; Osmose, a leading provider of inspection, life-extension, and rehabilitation services and products for electric and telecommunications utilities across North America; SINE, a pharmaceutical company based in Shanghai, China; and Southwest Key Programs, an organization committed to keeping children out of institutions and home with their families through youth justice alternatives, immigrant children's shelters, and education programs.
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- 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.