LOWELL, Mass., 31 Jan, 2018
Kronos Incorporated today announced financial results, company advancements, and customer successes for the first quarter of Fiscal 2018. Kronos recognized revenue for the quarter was $324.5 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) increased to $94.9 million1.
“The energy at Kronos has never been stronger,” said Aron Ain, chief executive officer. “The opportunity to truly revolutionize the workforce management industry with the launch of Workforce Dimensions combined with the exceptional growth of our Workforce Ready HCM solution has positioned us for the next 40 years of SaaS success. Nearly 26,000 organizations worldwide leverage a Kronos Cloud solution – including 97 percent of net new customers – as subscription revenue grew 38 percent in the first quarter. A day doesn’t go by where I don’t marvel at the efforts of Kronites around the world to successfully shift our business model these past several years while continuing to grow and deepen long-term partnerships with our customers.”
Launch of Workforce Dimensions Reshapes the Future of Workforce Management
In the most-anticipated launch in the company’s 40-year-history, Kronos unveiled its next-generation workforce management solution, Workforce Dimensions, during the opening session of KronosWorks in November, which was streamed live around the world for the first time.
- Workforce Dimensions redefines workforce management and pushes the limits of innovation while capitalizing on decades of Kronos customer success around the world, enabling organizations to:
- Work their way with the industry’s first fully responsive UI, allowing managers and employees unprecedented and customizable control over how they consume information with one-click actions and collaborative self-scheduling to simplify common workflows, empower employees, and remove burdensome administrative tasks from managers;
- Work smarter by transforming the role of frontline managers through artificial intelligence (AI) and advanced machine learning, leveraging the industry’s first personal digital consultant –Workforce Advisor – proactive compliance, advanced forecasting, and embedded analytics to optimize workforce operations while delivering strategic insights in real-time; and
- Work in a modern cloud leveraging the Kronos D5 platform, the industry’s first specifically designed workforce management cloud platform with an open API, foundational AI, and lightning fast in-memory computing to meet the challenges of today’s global enterprises.
- Kronos D5 Platform is being used to develop product extensions and connectors from leading global technology and HCM partners, including Google, Microsoft, Oracle, and SAP.
- Workforce Dimensions early adopters around the world – including Brookstone, GATE Petroleum Company, LondonEnergy, Snyder’s-Lance, Things Remembered, Tru Blu Beverages, and University of Colorado, Boulder – led the charge of high demand in the mere weeks following the KronosWorks announcement and were instrumental in development alongside the wider Workforce Dimensions customer advisory board.
- Early adopters and technology partners from Google, LondonEnergy, and University of Colorado, Boulder discussed the future of work, workplace technology, and how Workforce Dimensions will reshape both on a Workforce Institute Radio podcast from KronosWorks.
Workforce Ready Innovations Drive HR Growth with Record Small and Midsize Market Success
Workforce Ready, which combines the power of Kronos workforce management with human resources, talent acquisition, onboarding, performance management, benefits and compensation, and payroll into one unified cloud platform, continues to be the fastest-growing part of the business with annual recurring revenue (ARR) up another 52 percent in the quarter for direct sales.
- Overall deal size for Workforce Ready increased 24 percent as customers increasingly opt for a full suite solution, capitalizing on Kronos’ continued investments in powerful HR- and payroll-focused enhancements with each new product release, including:
- Employee Perspectives that leverages metric-backed scorecards to provide real-time feedback and performance management specifically for frontline workers;
- Succession Planning via a talent matrix dashboard to identify and groom top talent to reach the next level in their careers;
- Position Management to help organizations better manage employees who work multiple roles while providing clearer visibility into recruiting and staffing needs; and
- Predictive scheduling compliance to help remove guesswork from schedule stability regulations arising in more states and municipalities, such as in San Francisco and Seattle.
- Workforce Ready had a record first quarter for large ARR deals with small and midsized organizations.
- Some of the largest Workforce Ready deals in the quarter included: one of the world’s largest manufacturers of pumps, valves, and seals, serving customers worldwide; a global provider of transit services; a North American supplier of fully cooked and ready to cook meats; and a major cargo management, documentation management, and aircraft load and unload provider to airlines in the U.S.
- The Kronos Workforce Ready Partner Network, which held the 10th annual Partner Community Workshop in November, saw subscription revenue from partners increase 23 percent while nearly doubling the number of new partners added compared to the first quarter of last year.
Workforce Central Enhancements, Integration, and Thought Leadership Spur Global Success
Kronos strengthened its position as the world leader in workforce management with enhancements to its Workforce Central 8 suite while expanding global integration and thought leadership.
- Two new releases of Kronos Workforce Central 8 brought an array of enhancements to help organizations engage and empower their employees, control labor costs, minimize compliance risk, and improve productivity, including:
- Scheduling enhancements that make it easier to apply a 9/80 compressed work week to help employees manage work-life balance; contract definitions to ensure employees work a defined number of hours to maintain compliance; and smart scheduling solutions;
- Advanced HR reporting tools to help human resources leaders make data-driven decisions and identify workforce trends – like performance, hiring, and turnover – before problems arise;
- Customizable dashboards to provide at-a-glance, detailed visualizations to identify undiagnosed issues potentially lurking in heaps of data;
- Tools to help mitigate compliance risk of complex international labor laws while expanding the number of standard languages supported with the additions of Hindi and Czech; and
- Mobile tools and self-service features – including technology that enables an employee’s smartphone to be used as a badge at an InTouch terminal and configurable employee access profiles – to help strike better work-life balance while enabling more control over schedules.
- Kronos announced an enhanced integration with Kronos Workforce Central and longtime global cloud partner SAP SuccessFactors to further simplify complex and challenging global HCM requirement for multinational organizations.
- The Workforce Institute at Kronos, a think tank focused on empowering organizations and their employees through education and research, announced the launch of a European chapter on its 10th anniversary with its first European-focused study showing that French and German workers are outperforming their U.K. counterparts.
- Significant new Workforce Central deals in the quarter included: a multi-million dollar order with one of the world’s largest food, snack, and beverages companies with hundreds of thousands of employees; two separate $1 million+ Workforce Central SaaS orders in healthcare with the leading pediatric hospital in the U.S. plus the first health system serving the state of Nebraska; a Canadian corporation engaged in structures and logistics, electricity, pipelines and liquids, and retail energy; a SaaS deployment in a large Maryland county; a Kronos Cloud deal with one of the top wireless network operators in the U.S.; and a warehouse services company and third-party logistics provider.
Vertical Expertise, Investments Continue to Differentiate Kronos
Kronos’ vertical success – led by the manufacturing sector (up 35 percent) and services and distribution teams (up 23 percent) in the first quarter – is driven by deep industry knowledge and continued investments.
- The Kronos award-winning global Professional Services team continues to provide innovative solutions to help customers across all verticals achieve value-based business outcomes while leveraging Kronos’ Paragon solution to expedite implementations by 30 percent.
- Faced with an increased need to efficiently respond to emergencies and natural disasters on a global scale, public safety departments worldwide are turning to Workforce TeleStaff to provide more than half a million employees with more effective communication and greater control over schedules in order to keep communities safe.
- In the same quarter that Frost & Sullivan recognized Kronos with a Market Leadership Award for healthcare workforce management, the company announced that longstanding customer University Medical Center enhanced quality care in the surgical services suite with Workforce periOp Scheduler.
Kronos Celebrates 40th Birthday by Opening New Home, Culture Accolades Break New Ground
Kronos followed on a record year for global accolades honoring its WorkInspired culture of caring and innovation by breaking new ground in Fiscal 2018 for its exceptional employee experience:
- On October 31, Kronos celebrated its 40th anniversary with the grand opening of its new global headquarters, a half-a-million square foot, $68 million state-of-the-art home for 1,500 Kronites.
- In December, Kronos was honored to be named a Glassdoor Employees’ Choice Award as a Top 100 Best Place to Work for the first time.
- On the heels of the new office opening, Kronos was honored by MassEcon for its significant contributions to economic growth in the Commonwealth of Massachusetts.
- The Boston Globe named Kronos the top technology employer in Massachusetts, marking the fifth straight year the company was named a top four employer in the state across any industry.
- Adding to its growing list of global workplace culture accolades in Australia, China, and India, Great Place to Work® Canada name Kronos one of the Best Workplaces in Technology.
First Quarter Customer Success Around the Globe
In the first quarter of Fiscal 2018, Kronos signed agreements with organizations around the world, including: Adidas China, a sport chain retailer with over 300 stores in China; City of Miami Gardens, a city located in north-central Miami-Dade County, Florida; County of Onondaga, a county located in the state of New York; Denton County, a county located in the state of Texas; Eldorado Resorts Inc., a leading casino entertainment company that owns and operates 20 properties in 10 states; Forrest General Hospital, the Mississippi-based flagship hospital of Forrest Health; Froedtert Health, eastern Wisconsin's only academic medical center and regional healthcare network; Joyu Group, a travel services provider in China; Mackenzie Health, a dynamic regional healthcare provider serving a population of more than a half a million people in Canada; Molded Fiber Glass Companies, a diversified, custom molder of fiber reinforced plastic and composite products; Solomon Corporation, the largest full-service transformer repair and recycling business in the U.S.; YT Express, one of the top three logistics companies in China.
- Connect with Kronos via Facebook, Twitter, LinkedIn, Instagram, and YouTube.
- Take a look at the lighter side of the workforce in our Time Well Spent
- 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.
© 2018 Kronos Incorporated. All rights reserved. Kronos, the Kronos logo, Workforce Central, and Kronos Workforce Ready are registered trademarks and Workforce Innovation That Works, Workforce Dimensions, and Kronos D5 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.