Kronos Incorporated today announced financial results, company advancements, and customer successes for Fiscal 2015. Cloud bookings continued to accelerate across multiple product lines. Kronos recognized revenue for the year increased to $1.1 billion. Earnings before interest, tax, depreciation, and amortization (EBITDA) increased to $355 million.1
"Kronos continued its fantastic growth trajectory in Fiscal 2015, with remarkable momentum across all dimensions of our business. We yet again executed wonderfully, the highlights of which include rapid acceleration of growth of the Kronos Cloud; delivery of a vast array of innovative workforce management solutions; aggressive global expansion; and fantastic employee engagement scores and external recognition as a top place to work," said Aron Ain, Kronos chief executive officer. "As a privately held company, we have the advantage of making strategic and significant investments back into our business. With these investments and our thousands of incredibly talented and engaged Kronites worldwide, Kronos is in an excellent position to grow well beyond the $1.1 billion company we are today."
Remarkable Growth of the Kronos Cloud
- Kronos again delivered strong growth in the cloud, with SaaS bookings increasing 87 percent and workforce management cloud revenue increasing 62 percent.
- Ninety percent of new customer bookings were from an array of Kronos Cloud offerings and hundreds of existing customers moved their on-premise instances to the Kronos Cloud.
- Kronos secured its largest-ever new SaaS transaction, representing $22 million over a multi-year period.
- More than 16,000 organizations now run in the Kronos Cloud, representing the majority of Kronos' global customer base.
- In Fiscal 2016, Kronos will make unprecedented investments in its products, infrastructure, and delivery models to further accelerate its transition to SaaS and expedite customer migrations to the Kronos Cloud.
Exceptional Pace of Product Innovation and Market Adoption
- In the past year, Kronos delivered an array of innovative new products and enhancements, which are transforming the way organizations manage their workforces including:
- Workforce Central 8 - the most rapidly adopted product release in the company's history.
- Workforce Ready - the industry's fastest-growing suite of cloud human capital management (HCM) solutions for small and midsize businesses (SMBs)
- New grant and project tracking solution for the public sector.
- New professional project tracking for services industries.
- Enhanced production labor tracking solution for manufacturers.
- New gamification functionality.
- Various human resources enhancements.
- Formation of the Kronos Big Data for Workforce Management practice group.
- In Fiscal 2016, Kronos plans to spend more than $130 million on research and development, continuing on its path of revolutionizing the way organizations manage their workforces.
Tremendous Momentum in the Enterprise and Across all Targeted Industry Segments
- Kronos secured a record-breaking number of $1,000,000+ product booking contracts1 and delivered strong financial results across all targeted industry markets. Some of the largest and most noteworthy transactions included:
- Public sector - departments in states spanning across the U.S., as well as a multi-million dollar contract for the Kronos TeleStaff public safety scheduling solution from a long-standing U.S. federal government agency customer.
- Healthcare - results reached new heights with record bookings performance, including one of the largest children's hospitals in the U.S.; a 12,000-employee, highly reputable healthcare organization; and a large provider of senior housing. In addition, Kronos acquired physician scheduling vendor Productive Scheduling Solutions.
- Manufacturing - continued growth and expansion including to one of the world's largest international oil and gas companies; a global supplier of office products and services; and an American multinational automotive manufacturer. In addition, Kronos acquired the AutoTime business from Kaba Workforce Solutions, LLC.
- Services and Distribution - achieved its best year ever with a myriad of successes including one of the world's largest express transportation companies; a leading waste management company with 34,000 employees; a major financial institution; and a global provider of business process and technology management services.
- Retail and Hospitality - a leading food retailer; a leading lifestyle specialty retail company; a clothing and accessories retailer with nearly 40,000 employees; and a world-class entertainment and hospitality organization with 8,000 employees.
- In Fiscal 2016, Kronos anticipates investing in additional company and product acquisitions to gain access to valuable vertical-specific functionality to address the unique workforce management needs of customers in targeted industry segments.
Accelerated Adoption of HCM Solutions in SMB Sector
- HCM revenue in the SMB sector continued to accelerate helped by a 75 percent increase in Workforce Ready and SaaShr group revenues1. Kronos added more than 3,700 organizations to its SMB customer community in Fiscal 2015.
- In Fiscal 2016, Kronos will significantly increase investments to deliver even more HCM capabilities.
Growth Internationally and Among Multinationals
- Kronos international product bookings increased 12 percent2, as new customer adoption and the size of transactions continues to rise.
- China experienced its best-ever year with new customer wins, including its first $1,000,000+ transaction. Kronos continued to expand its partner network, adding relationships with organizations such as Elitesland and SIE Consulting.
- The EMEA region experienced a strong year, particularly in the UK which secured transactions with organizations such as a leading supermarket retailer with more than 160,000 employees and a multinational logistics provider - both of which will deploy in the Kronos Cloud. In addition, Kronos successfully launched Workforce Ready in the UK, Belgium, and Holland to serve the SMB market opportunity in these countries.
- Canada experienced its best-ever year, closing multiple $1,000,000+ contracts including its largest-ever transaction; major customer wins included one of the largest provincial health authorities in Canada and one of the largest cities in Canada.
- In addition to customer momentum in India, Kronos expanded its partner network by establishing relationships with organizations such as Bluetree and Tech Mahindra.
- The Latin America region experienced its most successful year ever, closing a variety of strategic transactions including a significant $1,000,000+ contract with a large public sector entity.
- Australia, which is the latest international region to offer the Kronos Workforce Ready suite, secured significant contracts such as with a well-known timber manufacturer and a $1,000,000+ order from a community services organization.
- Kronos opened a new Latin America headquarters in Mexico City; relocated its Delhi/Noida, India operation to a 93,000 square-foot space to accommodate future growth; and relocated its EMEA headquarters to Bracknell, UK.
- In Fiscal 2016, Kronos will further expand its partner network to meet the needs of locally based organizations as well as its large multinational customer base, and anticipates investing in additional company acquisitions in strategic regions.
Exceptional Place to Work
- Kronos has become widely recognized as an employer of choice according to its exceptional employee engagement survey results and external recognition such as recently being named a top place to work by the Boston Business Journal, The Boston Globe, and Forbes, and The Great Place to Work Institute® rankings in Canada and India.
- In Fiscal 2016, Kronos anticipates hiring more than 1,000 employees. Kronos is actively hiring with more than 300 current Kronos job openings worldwide.
Fourth Quarter News Facts
- In the fourth quarter of Fiscal 2015, Kronos signed agreements with organizations around the world such as: Brookshire Brothers, a chain of supermarkets in Texas and Louisiana; Blount Memorial Hospital, a general medical and surgical hospital in Tennessee; City of Sunrise, a city in Florida; Comprehensive Pharmacy Services, a leading pharmacy services company; County of Denton, a county in Texas; HHS, a provider of forward-thinking solutions for healthcare support services management that streamline facility operations and improve the patient and resident experience; MGM Resorts International, one of the world's leading global hospitality companies, operating a portfolio of destination resort brands; Mondelēz International, a leading global supplier of snacks and confectionery; National Amusements, a world leader in the motion picture exhibition industry; Niemann Foods Inc., an operator of more than 100 retail locations with grocery, pet, hardware, pharmacy, and convenience stores in Illinois, Missouri, and Iowa; Orange Lake Resorts, a leader in the vacation ownership industry; Southcoast Health System, Inc., a community-based health system in Massachusetts and Rhode Island; and TS Tech Americas, Inc., a global supplier of automobile seats and interiors with 71 locations in 13 countries.
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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™.
© 2015 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.
Footnote 2: Constant currency.