Kronos Incorporated today announced financial results, company advancements, and customer successes for the second quarter of Fiscal 2017. Kronos recognized revenue for the quarter was $317 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) was $91.2 million.1
“We had a solid second quarter, continuing our momentum with enterprise customers expanding in the Kronos Cloud. During the quarter we secured the second-largest software bookings transaction in our history from an existing customer that expanded its use of a Kronos solution in the Kronos Cloud,” said Aron Ain, Kronos chief executive officer. “With a robust pipeline across our entire product portfolio, we are poised for continued growth as we prepare to celebrate our 40th anniversary.”
SaaS Continues to Drive Recurring Revenue Growth
Kronos again delivered strong growth in the cloud, with subscription revenue increasing 46 percent.
- Nearly 90 percent of new customer bookings came from an array of Kronos Cloud offerings, which marks the 9th consecutive quarter that cloud bookings accounted for at least 80 percent of new deals.
- More than 21,000 organizations around the globe now run in the Kronos Cloud, representing the majority of the company’s global customer base.
- Long-standing, on-premise customers continue to migrate to software-as-a-service. Significant on-premise to SaaS conversions included: a global leader in the manufacturing of construction and building materials; a worldwide manufacturer of medical equipment with more than 25,000 employees; the local government of a large city in southern Florida; a private university in the Northeast U.S. with 10,000 students; a high-end Italian fashion company; a movie theater chain with hundreds of locations in the U.S.; a quick-service restaurant with more than 2,500 locations in the U.S.; and a major multinational sportswear retailer.
- Significant new Kronos Cloud deployments include: a private research university in Washington, D.C.; the local government of a city in central Louisiana; a boutique hospitality organization specializing in operating fine dining establishments; a multinational manufacturer of hot tub spas and bathtubs; and a country club in California known for dining, golfing, and tennis amenities.
Large Workforce Management Deals Globally
- Kronos secured a multimillion dollar transaction – the second-largest software bookings transaction in its history – with one of the largest healthcare organizations in the U.S. expanding its use of Kronos with multiple strategic products hosted in the Kronos Cloud, including mobile, scheduling, and attestation for more than 160,000 employees.
- Other large transactions included a discount retailer with more than 200,000 employees; a global food services and facilities organization with more than 250,000 employees; a large multinational manufacturer of automotive parts and equipment; and a leader in landscaping services with clients in a variety of industries across the U.S. 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.
Human Capital Management Momentum
Long known as the global leader in workforce management, Kronos is rapidly expanding its footprint in the human capital management (HCM) market as customers leverage the Kronos HCM suite to engage employees, from pre-hire to retire, with insight and data to help drive performance. Recent HCM highlights include:
- SaaShr celebrated its fifth anniversary as part of Kronos. SaaShr is the most successful acquisition in the history of Kronos, growing from a $5 million business to what will exceed $100 million in 2017.
- Customers are increasingly leveraging the full potential of Workforce Ready, with more new customers purchasing a full suite of HCM applications, including payroll and human resources.
- Subscription revenue for the Kronos Workforce Ready suite increased 57 percent year over year.
- Kronos and the Kronos partner channel combined to increase implementations by 40 percent year over year.
Double-digit Year-to-date Increase in Product Bookings
With a double-digit year-to-date increase in product bookings, Kronos continues to invest in product development and services enablement, delivering enhancements and new innovations across its product and services portfolio.
- Underscoring its focus on innovation, Kronos again claimed the top ranking in Ventana Research’s Value Index for Workforce Management. The Value Index is an independent analysis of how well vendor offerings meet buyers’ requirements for software that enables and supports global workforce management. In addition to being the overall Value Index leader, Ventana Research also recognized Kronos and its solutions in categories such as manageability of the product; reliability of the product; and validation of the vendor.
WorkInspired Culture of Caring and Executive Recognition
Kronos has become widely recognized for its corporate culture, which emphasizes a focus on caring for colleagues and customers.
- The most recent Global Employee Engagement Survey conducted by CEB for Kronos revealed an employee engagement score of 87 percent. This statistic is one in a range of proof points about exceptionally high employee engagement at Kronos stemming from this survey completed by nearly 90 percent of Kronos employees worldwide.
- Kronos has officially been certified as a great workplace by independent analysts at Great Place to Work®. Kronos earned this esteemed credential based on extensive ratings given by its employees in an anonymous employee engagement survey conducted by Great Place to Work. Based on the organization’s assessment, 96 percent of Kronos employees have great pride in the company.
- Kronos was named one of the 2017 Best Workplaces for Giving Back by Fortune magazine in conjunction with consultancy Great Place to Work. Kronos’ GiveInspired corporate giving initiative is driven by a two-pronged approach: to support causes that empower the next-generation workforce and give back to communities where Kronites live and work.
- Two Kronos executives have been named finalists for prestigious awards: David Almeda, chief people officer, is a finalist for the Chief Human Resources Officer award hosted by HRO Today and John McGregor, chief information officer, is a finalist for the Chief Information Officer award hosted by the Boston CIO Leadership Association.
- Kronos, with more than 5,000 employees worldwide, is actively hiring and currently has nearly 300 job openings.
- Deepening its expertise in and demonstrating its commitment to the financial services market, Kronos acquired Financial Management Solutions Inc. (FMSI), a leading provider of workforce management and analytics applications for the credit union and retail banking industry.
- Kronos hosted a range of KronosLIVE customer events on its multi-city tour throughout the Asia-Pacific region, North America, and Latin America, with more scheduled for May.
- Kronos formed a strategic relationship with Press Ganey to facilitate collaboration on behalf of joint customers to participate in research and analysis. Combining data from the Kronos Workforce Central solution and Press Ganey’s National Database of Nursing Quality Indicators, the research will assess, measure, and analyze the impact of workforce characteristics and behaviors on both patient and caregiver outcomes such as safety, quality, staff engagement, and turnover.
Second Quarter Customer Success Around the Globe
In the second quarter of Fiscal 2017, Kronos signed agreements with organizations around the world, such as: Americold Logistics, a global leader in cold storage, refrigerated warehousing, trucking, and freight logistics; Central Ohio Transit Authority, a public sector transit agency serving Central Ohio; City Central Group, an Australia cleaning and event services company; CSL, an Australia-based multinational biotherapeutics company; Czarnowski Display Service, a full-service exhibit and event marketing company; Fort Worth Fire, serving the residents of Fort Worth, Texas; Health First, a locally-owned, not-for-profit community healthcare system serving the residents of Brevard County, Florida through its hospitals, health insurance plans, and outpatient and wellness services; Hospital For Special Care, a not-for-profit long-term care facility with expertise for patients with a variety of special healthcare needs; Kyrene Elementary School District, an Arizona public school district with 25 schools, serving the communities of Tempe, Chandler and Phoenix, Arizona; Merivale, a hospitality group in Australia; NOW Foods, one of the largest independent manufacturers of natural products in the U.S. health food store channel; Northeast Georgia Health System, a top-ranked community health system serving the residents of northeast Georgia; Penn Highlands Dubois, a leading health center serving the community of west central Pennsylvania; Reyes Holdings, a food service wholesaler distributing some of the best-known food and beverage brands around the world; Rochester Regional Health, a leading integrated health system in New York with more than 15,000 employees; Roper St. Francis Healthcare, the largest healthcare system for adults in Charleston, South Carolina with more than 110 facilities in seven counties; Safelite AutoGlass , the nation’s largest provider of vehicle glass repair and replacement services with more than 7,800 MobileGlassShops and stores in all 50 states; SSL, a world leading provider of innovative satellites and spacecraft systems; St Lukes Cornwall Hospital, a not-for-profit hospital serving the residents of the Hudson Valley in New York; Teleflex Incorporated, a provider of specialty medical devices for a range of procedures in critical care and surgery; Tempe School District, a school district serving the Tempe, Arizona region; and The Warrell Corporation, one of the top candy manufacturing companies in North America.
- Connect with Kronos via Facebook, Twitter, LinkedIn, Instagram, and YouTube.
- Take a look at the lighter side of workforce management in our Time Well Spent cartoons.
- 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.
© 2017 Kronos Incorporated. All rights reserved. Kronos, the Kronos logo, Kronos Workforce Ready, and Kronos Workforce Central are registered trademarks and Workforce Institute, and Time Well Spent, and Workforce Innovation That Works are trademarks 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 deferred revenue write-downs and expenses including advisory, legal, accounting, acquired employee-related costs, and integration costs; and (6) 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.