Market Overview

Kronos Announces Fiscal 2017 Results


More than 24,000 Customers in the Kronos Cloud as Company Enters 40th
Year in Business

Global Workforce Management Success, Record Human Capital
Management Growth Push Kronos Over $1.3 Billion

today announced financial results, company
advancements, and customer successes for Fiscal 2017. Kronos recognized
revenue for the year was $1.3 billion. Earnings before interest, tax,
depreciation, and amortization (EBITDA) was $390 million1,
up nine percent compared to Fiscal 2016.

"What another tremendously exciting year at Kronos. Kronites from every
corner of the world continue to amaze and inspire me each and every
day," said Aron Ain, Kronos chief executive officer. "As we enter our 40th
year in business, it's remarkable and near-unprecedented that we
remained profitable year-over-year with strong EBITDA growth while
aggressively and successfully transitioning the business into a pure
SaaS provider. The next phase of Kronos' history is upon us: Our
continued innovations in workforce management and human capital
management, commitment to customers and their vertical-specific needs,
and exceptionally talented and engaged team of Kronites will take us to
our next major milestone as a $2 billion global cloud company."

Kronos Cloud, Shift to SaaS Drive the Business
having successfully transitioned to a pure software-as-a-service (SaaS)
provider, again delivered exceptional growth in the Kronos Cloud and
ended the year with very strong subscription growth in the fourth
quarter. Kronos' annualized run-rate business is now $863 million of
annual recurring revenue.

  • In Fiscal 2017 alone, Kronos added 4,500 customers to the Kronos Cloud
    with a mix of net-new deals and customers that migrated from their
    on-premise instances to the cloud, resulting in more than 24,000
    organizations around the globe leveraging a Kronos Cloud solution.
  • In the year, 87 percent of new customer bookings came from an array of
    Kronos Cloud offerings.
  • The pace of conversions of long-standing, on-premise customers
    migrating to SaaS continues to rapidly increase with another record
    year, as hundreds of existing Kronos on-premise customers migrated to
  • Significant new $1 million+ Kronos Cloud SaaS deployments included: a
    world-leading entertainment resort based in the U.S. with more than
    70,000 employees; one of the largest pharmaceutical companies in the
    world and a Fortune 500 company headquartered in the U.S.; a global
    provider of mission-critical equipment for vital applications in data
    centers, communications networks, and commercial and industrial
    environments employing tens of thousands of workers in five countries;
    one of the world's largest auto manufacturers; a nationally
    recognized U.S. integrated healthcare system; a Fortune 1000
    diversified industrial company that provides products and services to
    the energy, chemical, agriculture, transportation, and construction

Workforce Ready HCM Cloud Suite Represents the Fastest-growing Part
of the Business

Workforce Ready, which combines the power of
workforce management, human resources, talent acquisition, talent
management, and payroll into one unified cloud platform, had a record
year as the company continues to develop and scale its full-suite HCM

Record Year for Large, Global Deals as Kronos Deepens Vertical

Kronos strengthened its position as the worldwide
leader in workforce management with all-time highs for product bookings
in most key vertical segments and geographic regions while the company
deepened industry expertise worldwide.

Product and Services Innovation for the Future of Workforce Solutions
invested more than $182 million on R&D in Fiscal 2017 to deliver
next-generation enhancements, features, and functionality.

Employee Engagement Climbs to Record Heights, Landing 20+ Employer of
Choice Awards

Kronos has grown to more than 5,300 employees
and, with employee
engagement at an all-time high of 87 percent
, the company earned
more than 20 employer of choice accolades worldwide, including:

Fourth Quarter Customer Success Around the Globe
In the
fourth quarter of Fiscal 2017, Kronos signed agreements with
organizations around the world, including: Air Medical Group Holdings
, the largest independent provider of emergency air medical
services in the world; Arc, a world leader in tableware producing
high quality, innovative collections; Arkansas Department of
, the department responsible for managing and
maintaining the transportation system in the state of Arkansas; City
of Albuquerque
, the most populous city in New Mexico; Columbia
Public Schools
, a public school district in Missouri serving more
than 18,000 students in 32 different schools; Community Hospital
, an acute care hospital in Indiana and the only locally
owned and operated hospital in Madison County; DAA, which owns
and operates Dublin Airport and Cork Airport in Ireland; Inova, a
leader in personalized health serving the Washington, D.C. metro area; Masco
, a global leader in the design, manufacture, and
distribution of branded home improvement and building products; Medline
, the largest privately held manufacturer and distributor
of medical supplies, based in the U.S., with offices in 20 countries; MultiCare
Health System
, a non-profit healthcare organization and the largest
community-based, locally governed health care system in the state of
Washington; Rogers Corporation, a technology leader in highly
engineered materials that power, protect, and connect our world; Smithfield
, a leading consumer packaged meats company and the world's
largest pork processor and hog producer; and Warburtons, the
largest bakery brand in the U.K.

Supporting Resources

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
Kronos: Workforce Innovation That Works.

© 2017 Kronos Incorporated. All rights reserved. Kronos, the Kronos
logo, Workforce Central, and Workforce Ready are registered trademarks
and Workforce Innovation That Works is a trademark of Kronos
Incorporated or a related company. See a complete list of Kronos
. 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.

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