30 Oct Kronos Announces Record 2019 Results as Annual Recurring Revenue Crosses $1 Billion
Historic Workforce Dimensions Adoption and Record Year for HCM Drives Subscription Revenue Growth to 30%
LOWELL, Mass.–(BUSINESS WIRE)–#HCM–Kronos Incorporated today announced financial results, company advancements, and customer successes for Fiscal 2019. Kronos revenue for the year was $1.433 billion. Earnings before interest, tax, depreciation, and amortization (EBITDA) was over $378 million1.
“Kronos set a new mark with the best quarter in the best year in company history. Our performance across all aspects of the business driven by the energy, passion, and compassion for how Kronites support our customers continues to energize me every day,” said Aron Ain, Kronos chief executive officer. “Workforce Dimensions has officially become the fastest-adopted solution in our history, while our exceptional growth in HCM led by Workforce Ready continues to drive new cloud opportunities worldwide. It took Kronos 30 years to cross $500 million in recurring revenue – yet in less than a decade, annual recurring revenue crossed $1 billion and is the fastest-growing part of our business. And even with our aggressive investments across the company, profitability remains ahead of plan – simply incredible.”
SaaS Success Fueled by Workforce Dimensions and HCM, as ARR Catapults Beyond $1 Billion
In a year when Kronos was celebrated for its groundbreaking cloud transformation – including Fast Company naming it one of the Best Workplaces for Innovators – Kronos again delivered exceptional SaaS growth. With 33,000 organizations worldwide leveraging a Kronos Cloud solution across Workforce Dimensions, Workforce Ready, Workforce Central, and other product offerings, SaaS is now the choice for nearly all new customers.
Kronos annual recurring revenue (ARR) exceeded $1 billion for the first time ever.
Percent of total revenue from ARR increased to over 70%, making it the largest and fastest-growing aspect of the business.
Subscription revenue was up 30%, fueled by Workforce Dimensions adoption and an all-time best year for human capital management (HCM) deals.
With overall customer retention across all suites remaining very strong throughout the year, Kronos had another record year converting existing on-premise customers to a SaaS solution, as hundreds of existing on-premise customers migrated to the Kronos Cloud.
Record-breaking Workforce Dimensions Adoption Accelerates Future of Work Innovation
In the first 18 months of availability, Workforce Dimensions soared past 600 customers worldwide, making it the fastest-adopted solution in the company’s history.
Workforce Dimensions orders accelerated dramatically, including the best-ever quarter for new customers and a high number of orders coming from international and global multi-national brands.
The number of live Workforce Dimensions customers increased 10 times in six months, highlighted by organizations transforming the employee experience and driving business success, including City of Santa Barbara, Community Bank, LondonEnergy, Mackenzie Health, and Modell’s.
Nearly three out of four Workforce Dimensions deals came from existing Kronos customers migrating to realize all the benefits of the future-ready solution – including the intelligent Kronos D5 platform, unprecedented operational insight, and application extensibility.
Workforce Dimensions earned many industry accolades – including AI Breakthrough Award honors for AIMEE and Ventana Research ranking Workforce Dimensions #1 on its 2019 Workforce Management Value Index – as powerful enhancements streamline operational execution by combining advanced labor volume forecasting, predictive scheduling, and task management.
Continued HCM Business Growth Driven by New Workforce Ready Customers
Following Kronos being named “HR Technology Solutions Provider of the Year,” HCM subscription bookings increased 29%, driven by a surge of Workforce Ready orders worldwide and complemented by Workforce Dimensions customers adding HR applications, cloud payroll, and payroll services.
Kronos saw a record quarter and year for new customers choosing Workforce Ready – including Inframark – as the HCM cloud solution continues to scale to meet the needs of larger organizations worldwide.
Workforce Ready alone is a $200+ million business today, up from $5 million when Kronos acquired SaaShr.
Kronos HCM helps customers like Sprint Mart and YMCAs nationwide tap into industry-leading workforce management to drive strategic HR decisions with innovations in usability, visibility into employee adoption, predictive analytics, the introduction of Kronos Benefits Center, and the customer experience.
Kronos ushered in a new era for HCM with the launch of Workforce Dimensions HCM, as a significant number of customers attached HCM capabilities.
Kronos Cloud Payroll saw quarter-over-quarter growth and customer success with organizations recognizing the value of unifying HR, workforce management, talent, and payroll into a single cloud suite.
Workforce Ready landed several industry honors, including Employee Perspectives winning “Best New Talent Management Solution”; Constellation Research naming Kronos to the Constellation ShortListTM for Payroll for North American small and midsize businesses; and G2 Crowd, HRO Today, Software Advice (a Gartner company), and TrustRadius lauding Kronos HCM capabilities.
Record Year for Large Deals, International Success, and R&D Investments Fortifies Kronos Position as Global Workforce Management Leader
Kronos topped last year’s record-setting mark for large deals, while international teams saw remarkable growth, strengthening the company’s position as the global leader in enterprise workforce management.
International regions grew bookings 35% overall, including exceptional growth in APAC, Canada, and EMEA, as each region dramatically exceeded goals.
With more than 2,000 engineers working worldwide to deliver next-generation enhancements, features, and functionality across Workforce Dimensions, Workforce Ready, Workforce Central, and other product offerings, Kronos invested a record $200 million in R&D in Fiscal 2019.
Workforce Central enhancements – including an unrelenting focus on complex and ever-changing labor requirements to meet the needs of customers in multiple countries – helped bring the employee experience to life at customers such as Dave & Buster’s while driving payroll accuracy and efficiency with automated time and attendance at customers including the University of Toronto.
Focus on Partners, Unmatched Customer Experience Unlocks Better Business Outcomes
Partner-influenced business increased significantly while exponential growth of the Workforce Dimensions Technology Partner Network complements the award-winning customer experience at Kronos to drive ROI and solve specific business challenges across a variety of industries worldwide.
The Workforce Dimensions Technology Partner Program tripled in size with global technology and HCM partners developing applications, product extensions, and integrations leveraging the Kronos D5 platform to help customers solve specific business challenges while improving employee and manager productivity and financial wellness, including:
A scheduling chatbot in Workplace by Facebook;
Integration with Microsoft Teams, Microsoft Outlook, and Microsoft Power BI;
Many new healthcare-specific partners and integrations; and
Financial wellness and on-demand pay options for frontline, salary, and gig workers.
For the 19th consecutive year, Kronos was recognized with the NorthFace ScoreBoard Award for far exceeding customer experience expectations in professionalism, responsiveness, and overall support while the Kronos Community won the top award for “Innovation in Customer Service.”
Kronos announced a global agreement for SAP to resell Workforce Dimensions under the name “SAP Time Management by Kronos.”
Award-winning Employee Engagement Reaches Record Heights Around the World
Kronos surpassed 6,000 employees worldwide – hiring more Kronites in 12 months than ever before – as employee engagement reached an all-time high of 89% with a 91% survey participation rate.
The Kronos workplace culture journey – which was chronicled by four-time Glassdoor Top CEO winner Aron Ain in “WorkInspired: How to Build an Organization Where Everyone Loves to Work” – earned numerous best-ever and “Top 10” accolades for offices worldwide, including being named a:
Best Place to Work in Massachusetts, where Kronos is headquartered, by The Boston Globe; Best Place to Work in New Jersey; and Best Place to Work in Indiana;
Great Place to Work in every country where Kronos operates, including Australia; Canada; China; India; Mexico; and the U.K.; and
One of the 25 Best Multinational Workplaces in Asia.
In the U.S., Kronos was again named a top 100 Glassdoor Best Place to Work and a FORTUNE 100 Best Companies to Work For® winner for the second consecutive year.
In its continued commitment to be a great place to work for all, Kronos was named a Best Workplace for Women in Canada for the fifth-consecutive year and in India for the second year; a Best Workplace for Inclusion for the second time by Great Place to Work Canada; and a Best Workplace for Millennials by Fortune for the second time.
Kronos was named the No. 3 Best Place to Work in IT by Computerworld and a Best Workplace in Technology in Canada, India, Mexico, the U.K., and the U.S., all in separate competitions.
Fourth Quarter Customer Success Around the Globe
In the fourth quarter of Fiscal 2019, Kronos signed agreements with organizations around the world, including: Atlanta Public Schools, one of the largest school districts in Georgia serving 52,000 students across 18 schools, organized into nine K-12 clusters with 58 neighborhood schools, six partner schools, 18 charter schools, two citywide single-gender academies, and three alternative programs; Bond University, Australia’s #1 university for the student experience; City of Southlake, located near Dallas, Texas with a population of 27,000 residents; Community College of Allegheny County, a nationally renowned community college serving 43,000+ students each year; DART, a public transit agency serving Dallas, Texas and 12 surrounding North Texas cities with a multi-modal network of buses, light rail, commuter rail, and paratransit services for more than 200,000 passengers each day; Fishers Service Ltd., a U.K. provider of commercial laundry services; The Distribution Center for Bestseller, a famous Denmark fashion brand with 8,000 stores in China; Healius, one of Australia’s leading healthcare companies; Lifespan Corporation, Rhode Island’s largest health system and largest employer with a network of nationally recognized hospitals; Luxottica, a leader in the design, manufacture, and distribution of fashion, luxury, and sports eyewear; Marriott Middle East, part of the largest hotel operator in the world, encompassing a portfolio of more than 7,000 properties globally; Metro Mechanical Services Ltd., a U.K. commercial drainage specialist; Mingara Recreation Club, the destination for Australia’s Central Coast restaurants and bars, entertainment, promotions, kids play areas, sport and fitness facilities, corporate events, celebrations, and community involvement; Moffitt Cancer Center, a top-10 cancer hospital and National Cancer Institute Comprehensive Cancer Center, pioneering advances such as CAR T cell therapy; Monash Health, Victoria, Australia’s largest public health service; National Timber Group, the largest independent added-value timber distribution and processing group in the U.K. created through the acquisitions of market-leading brands Arnold Laver, North Yorkshire Timber, Rembrand, and Thornbridge; UTMB Health, an academic medical center and comprehensive health system of hospitals and a network of clinics; and Whistl U.K. Ltd., a leading delivery management company.
This announcement was made ahead of KronosWorks, the world’s largest workforce information exchange. KronosWorks is taking place from Nov. 10-13 in Las Vegas. Watch the KronosWorks live stream and join the conversation by using #KronosWorks across social media channels.
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Take a look at the lighter side of the workforce in the Time Well Spent cartoon series from Kronos.
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Learn about the Kronos WorkInspired culture and check out Kronos job openings.
Visit the Kronos Corporate Social Responsibility (CSR) page to learn how Kronites strive to be great people every day.
Kronos CEO Aron Ain shares how to transform employee engagement into a growth strategy in his book, “WorkInspired: How to Build an Organization Where Everyone Loves to Work.”
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.
© 2019 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. 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 or one-time expenses that are excluded from the definition of EBITDA under the terms of the company’s Credit Agreement.