Kronos Incorporated today announced financial results, company advancements, and customer successes for the second quarter of Fiscal 2015. Kronos recognized revenue for the quarter increased to $262.1 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) increased to $84.3 million1.
"Kronos had yet another strong quarter with high performance in the small and midsize business and enterprise segments of the market, and within all targeted vertical industry sectors," said Aron Ain, Kronos chief executive officer. "One of the most gratifying achievements of our second quarter is our outstanding employee engagement survey results and external recognition of Kronos as an employer of choice. Our winning Kronos Cloud strategy and adoption rate, delivery of innovative products, and aggressive global expansion efforts would not be possible without the collective, inspiring efforts of our employees."
Second-Quarter News Facts
- Kronos Cloud expansion - Kronos workforce management cloud revenue increased 58 percent, as new customers deploy in the cloud and existing customers move their on-premise instances to the cloud. In continuation of a trend, the majority of new customer bookings in the quarter were from an array of Kronos Cloud offerings. The pace of existing customers converting from on-premise instances to a Kronos Cloud offering is exceeding Kronos' expectations. More than 14,000 organizations now run in the Kronos Cloud.
- Employer of choice - Shortly after The Boston Globe named Massachusetts-based Kronos the most admired large employer in its annual Top Places to Work ranking:
- Forbes named Kronos one of America's Best Employers and one of America's top places to work in IT, Internet, Software, and Services;
- The Globe and Mail named Kronos a top place to work in its Best Workplaces in Canada ranking of the most admired workplaces; and
- Boston Business Journal named Kronos one of the region's healthiest employers.
- Global successes - Kronos international product bookings increased 21 percent year over year2.
- Kronos is experiencing rapid growth in India - 50 percent year-over-year - as more organizations turn to Kronos to better manage their workforces, with particular strength in targeted vertical markets such as retail, manufacturing, and services and distribution. In addition to customer momentum, Kronos is also expanding its partner network by establishing relationships with organizations such as Bluetree and Tech Mahindra, adding to existing relationships with other leading systems integrators in India.
- Kronos is seeing significant growth in China. In the last six months alone, Kronos won significant customer contracts in the manufacturing and retail sectors and expanded its partner network to provide more complete distribution and implementation support across Greater China. Kronos recently established relationships with organizations such as Elitesland in the dining industry, as well as SIE Consulting in the manufacturing sector.
- Kronos continues to invest in regions where it sees strong growth potential. In its first quarter of Fiscal 2015, Kronos opened a new Latin America headquarters in Mexico City. In March, Kronos relocated its Delhi/Noida, India operation to a 93,000 square-foot space to support its growing software development, Kronos Cloud, professional services, finance, and information technology functions.
- Market adoption in small and midsize (SMB) sector - Momentum in the SMB sector was driven by sales of the Kronos Workforce Ready and Kronos Workforce Central suites, and included sales to new customers as well as the migration of existing Kronos customers to Workforce Ready. Kronos also continues to experience significant traction in the Kronos SaaShr partner channel.
- Kronos launched its Workforce Ready software suite in Australia, adding to a variety of regions that offer the solution to SMBs. Workforce Ready helps SMBs improve productivity and agility, providing benefits for both employers and employees.
- The Kronos Workforce Ready suite now integrates with the SuccessFactors Employee Central solution, enabling SMBs to effectively manage employees through integrated human resources, payroll, time and attendance, and talent management offerings in the cloud with a unified interface.
- Expansion in the enterprise and within targeted industry segments - Kronos secured one of its largest-ever product transactions during the quarter in a multi-million dollar contract for the Kronos TeleStaff public safety scheduling solution from a long-standing U.S. federal government agency customer. Additional enterprise transactions included new and existing customers such as a 12,000-employee, highly reputable healthcare organization operating four hospitals; a clothing and accessories retailer with nearly 40,000 employees in approximately 1,000 locations; one of the world's largest nutrition, health, and wellness companies; and a state in the southeast region of the U.S.
- Growth through innovation - Kronos product bookings increased 11 percent year over year1. Kronos delivered several new products, the highlights of which include:
- The latest release of the Kronos Workforce Ready suite delivers enterprise-class workforce management solutions in the cloud to SMBs, providing powerful functionality to recruit, manage, and reward the workforce; leverage industry-leading time and attendance to control labor costs and maximize productivity; and adhere to ever-changing compliance requirements.
- Global big data solution to optimize store productivity - Kronos and Axsium Group jointly launched a retail store performance plug-in to add ease and effectiveness to corporate, store, and field manager work days through automated, guided decision-making. Powered by the Kronos Workforce Analytics application, the new plug-in uncovers gaps in important areas that impact customer and employee satisfaction, helping create optimized schedules by balancing working hours, employee availability, and consumer demand.
- Expansion of leadership - Amit Singh, president of Google for Work, joined the Kronos Board of Directors, adding a tremendous asset to Kronos as the company executes on its winning growth strategy and brings even more innovative solutions and value to its customers around the world.
- Customer success around the globe - In the second quarter of Fiscal 2015, Kronos signed agreements with organizations around the world including: Autometal, an automotive component manufacturer and supplier in Mexico; Avis Australia, a leading provider of vehicle rental services in Australia; City of Tucson, a city in Arizona; Curae Health,a not-for-profit rural healthcare company; Dallas Area Rapid Transit (DART), a transit agency based in Dallas, Texas; Edenred, a global leader in prepaid corporate services in Mexico; First Solar, a global leader in solar energy solutions; Heritage Enterprises, owner and operator of more than 40 eldercare facilities in Illinois; Houston Methodist Hospital, a leading academic medical center in the Texas Medical Center and six community hospitals serving the greater Houston area; Japara Healthcare, one of Australia's largest enterprises in the aged care and retirement industry; Mercy Hospital, an acute care hospital and regional referral center in Iowa City, Iowa; Mondelez Shanghai Food Corporate Management Company, a subsidiary factory of a leading food manufacturer; Reid Hospital, a not-for-profit 217-bed regional referral medical center serving east central Indiana and west central Ohio; Shanghai SAIFEI Aviation EWIS Manufacturing Co., Ltd., a designer and manufacturer of aircraft in Shanghai; Shore Medical Center, a full-service acute care community hospital in New Jersey; The Pep Boys: Manny, Moe & Jack, a full-service and tire automotive aftermarket chain; and Tradelink, a leading provider of plumbing supplies in Australia.
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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.