Market Overview

Kronos Announces Strong Third Quarter Fiscal 2018 Results

Share:

Workforce Dimensions Deals Skyrocket, Record Bookings in Kronos
Cloud

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.

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.

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:

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.

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 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.

View Comments and Join the Discussion!