Kronos Incorporated today announced financial results, company advancements, and customer successes for Fiscal 2016. Kronos recognized revenue for the year was $1.2 billion. Annual Recurring Revenue (ARR) now represents more than 60 percent of total revenues and remains the fastest-growing part of the business.
“Thanks to our engaged and inspired Kronites; our customer-first mentality; and our innovative workforce management and human capital management solutions, Kronos reported yet another fantastic year,” said Aron Ain, Kronos chief executive officer. “All Kronites collaborated across every region and every vertical market to exceed our financial expectations. I am incredibly proud of this amazing company, and thankful to customers and partners around the globe for placing their trust in Kronos on our quest to deliver workforce solutions that help create and manage engaged workforces. What’s even more exciting than these financial results? Our bright future!”
SaaS Driving Strong Recurring Revenue Growth
Kronos delivered superior growth in the Kronos Cloud, with subscription revenue surging forward across the globe.
- Nearly 90 percent of new customer bookings came from an array of Kronos Cloud offerings.
- More than 20,000 organizations around the world now run in the Kronos Cloud, representing the majority of the company’s global customer base.
- The pace of conversions of long-standing, on-premise customers migrating to software-as-a-service (SaaS) continues to rapidly increase. In 2016, hundreds of existing Kronos on-premise customers migrated to SaaS, a significant increase from the prior fiscal year.
- Significant new Kronos Cloud deployments include: a global consumer and commercial services organization with millions of customers around the world; a producer and distributor of an award-winning line of premier wines; the parks and recreation department of a major U.S. city; an award-winning luxury designer of clothing and accessories with stores around the globe; one of the fastest-growing universities in the U.S.; and an online, global transportation company.
Explosive Growth of Kronos Human Capital ManagementSuite
Kronos – long known as the global leader in workforce management – is rapidly expanding its footprint in the human capital management (HCM) market as customers leverage the Kronos HCM suite to attract and retain top talent, engage the workforce, and manage the entire employee lifecycle. Fiscal 2016 HCM highlights include:
- Subscription revenue for the Kronos Workforce Ready suite increased 66 percent year-over-year, as organizations recognize the value of leveraging a unified platform with a full suite of applications for managing and nurturing the entire workforce from pre-hire to retire.
- Kronos installed nearly 2,000 Workforce Ready applications, a 50-percent increase.
- Customers are increasingly leveraging the full potential of Workforce Ready, with a steady increase in full-suite purchases, including payroll and human resources applications.
- To deliver advanced scheduling functionality to Workforce Ready customers, Kronos acquired substantially all intellectual property assets of EmLogis, Inc. The EmLogis SmartRules Scheduler application is being integrated into Workforce Ready to help organizations match the availability and skills of employees with business demand to create efficient and effective schedules.
- Kronos established a new software development relationship with Google Cloud (formerly Google for Work) to integrate G Suite applications with Workforce Ready.
- Kronos and Cornerstone OnDemand formed an alliance to collaborate on new business opportunities and develop software integrations, beginning with Workforce Ready.
- Global expansion of Workforce Ready continued with the product now offered in Australia, Canada, parts of continental Europe, Mexico, the U.K., and New Zealand.
Stellar Momentum for Kronos Workforce Management Solutions
Kronos industry-leading workforce management solutions help organizations increase productivity, minimize compliance risk, control labor costs, and engage employees. Highlights of the year include:
- Kronos topped its all-time record for $1+ million contracts representing success across all targeted vertical markets – healthcare, retail and hospitality, public sector, manufacturing, and services and distribution – including a world-famous academic health system in Ohio; a large cable communications company with more than 20,000 employees; a major online retailer and cloud computing company with more than 500,000 employees on the Kronos system; a health system in Florida with more than 12,000 employees; a manufacturer and retailer of paints and household project supplies with more than 4,000 locations; a retailer offering home improvement and appliances with more than 1,000 locations; an award-winning healthcare network in Massachusetts; and the governing agencies and departments of a major U.S. city.
- These transactions added to an already robust enterprise customer community that includes more than half of Fortune 1000® companies. Some of these organizations expanded their use of Kronos solutions 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.
Global Presence, Large Multinational Deals Accelerate
International product bookings increased to record levels, as organizations around the world – including multinational organizations in many regions – recognize that Kronos is unmatched when it comes to accommodating complex and unique pay rules and labor laws that vary country by country across the globe.
- All regions experienced strong growth across the Asia-Pacific region, Europe, the Middle East, and Latin America. Significant international customer transactions included a large bottling partner of a major soft drink company in India; a major manufacturer of household and paper products in China; an airline with nearly 50 destinations worldwide headquartered in Mexico; a large national public sector organization in New Zealand; one of the busiest airports in the Middle East with more than 900 flights per day; and an internationally recognized hospital in Australia.
- Significant multinational contracts included a global provider of industrial and infrastructure products and services with more than 13,000 employees worldwide; a major consumer electronic retailer with more than 1,000 locations; a global manufacturer and distributor of food and beverage products with brands available in hundreds of countries around the world; a major automotive manufacturer with more than 30,000 employees worldwide; and a provider of global supply chain services to companies and individuals across the globe.
- Kronos significantly expanded its global partner network to meet heightened demand for its workforce solutions and drive its aggressive international growth strategy. To achieve these objectives, Kronos formed reseller agreements with new international partners: Ataway (China, France, Latin America); Birchman (Spain); CPI (Philippines); Gavdi (Denmark); Geconex (Switzerland); MQA (Colombia); NGA (global); Orbit Consultancy (China); Simms & Associates (Spain); and Transform Advisory (Hong Kong).
Innovations to Best Manage and Engage the Workforce
Kronos invested more than $600 million in gross research and development spend over the past five years. Some results of this investment include:
- The latest version of the Kronos Workforce Central suite continues to be the fastest-adopted product release in company history, with more than 2,000 customers using or implementing the product.
- The new Workforce Auditor solution helps organizations take a data-driven approach to their workforce, offering the ability to turn big data into actionable intelligence, resulting in improved workforce productivity, minimized compliance risk, and increased employee engagement.
- Significant enhancements to Workforce Mobile and Workforce Tablet applications further empower employees around the world to increase ownership of their work schedules with powerful and convenient self-service functionality.
- The new Workforce Ready user interface leverages a clean, flat visual design with intuitive navigation paths to help drive user adoption by drawing focus to actionable tasks and critical data.
- A new Kronos Attestation Tool Kit helps organizations navigate the complex regulatory landscape by providing a way for employees and managers to be engaged in the timecard review and documentation process by reviewing, approving, and rejecting timecards.
- Kronos shipped an all-time record number of Kronos InTouch time clocks, as organizations increasingly seize the benefits of automating the collection of time-worked data. Even when excluding channel partner-driven implementations, there are currently more than 130,000 Kronos InTouch time clocks being used around the globe.
- The new Kronos Paragon implementation methodology expedites time to value for customers by as much as 30 percent, using innovative technology and decades of Kronos knowledge from thousands of workforce management implementations to accelerate the building, configuration, and testing of countless organization-specific work rules and complex compliance regulations that vary by industry, country, state, and region.
- Kronos Workforce Analytics-as-a-Service allows organizations to visualize workforce data using interactive visualization technology to understand how labor hours are being spent as well as gain insight into overall workforce management processes.
- For the 16th consecutive year, Kronos received a NorthFace ScoreBoard AwardSM from the Omega Management Group Corp. for excellence in customer satisfaction.
Evolving its Award-Winning WorkInspired Culture
- Kronos unveiled a series of new benefits to enhance the lives of Kronites and their families. New benefits, which vary by region, include an open paid time off policy; student loan repayment assistance; childcare financial assistance; a scholarship program for children of Kronos employees; an increase in matching contributions for retirement/savings plans; a child adoption assistance program; and enhanced parental leave programs for new moms and dads.
- In addition to recently investing in significant renovations of its India, Mexico, and U.K. facilities, Kronos announced plans to relocate its global headquarters into a nearly 475,000 sq. ft. modern and innovative facility.
- Kronos, with nearly 5,000 employees worldwide, is actively hiring and currently has close to 300 job openings. Thirty percent of all new hires were employee referrals over the past 12 months.
Fourth Quarter News Facts
In the fourth quarter of Fiscal 2016, Kronos signed agreements with organizations around the world, such as: Air Medical Group Holdings, the largest independent provider of air medical services in the world; Billings Fairchild Center, an intermediate care facility for individuals with intellectual disabilities in Oklahoma with 24-hour nursing care, 7 days a week; The Cameron Group, specialists in paper-based direct marketing; Cascade Engineering, a manufacturer of injection modular molded plastics and recycling solutions; County of Champaign, a county in Illinois; CTB Incorporated, a leading global provider of systems for storing, conveying, and preserving grain, producing poultry, pigs, and eggs, and processing poultry; Cullman Regional Medical Center, a 145-bed medical center in Alabama; DubaiAirports, the busiest airport in the world in terms of international passenger traffic and third-busiest in terms of total passenger traffic; Duke Manufacturing, a manufacturer of equipment for the food industry; East Waste, a provider of waste collection services; Enerflex, a leading supplier of products, services, and integrated solutions for the global oil and natural gas industry; Gaylord Specialty Healthcare, an acute long-term care provider in Connecticut; GoodLife, an operator of health clubs in Australia; Hikma Pharmaceuticals, the second-largest pharmaceutical company in the Middle East with over 9,000 employees and 29 plants in 11 countries; Melbourne Water, a government-owned statutory authority that controls much of the water system in Melbourne, Australia; The Monarch Cement Company, a producer of high-quality cement serving the Midwest U.S. for more than 10 decades; Multiquip, a provider of solutions for engineering and agriculture; The Nebraska Medical Center, a 621-bed acute care facility and the largest hospital in Nebraska; Peterbilt Motors Company, an industry-leading manufacturer of trucks based in Texas; Poundland, a leading value retail brand with more than 500 stores across the U.K. and Republic of Ireland; Sanden International USA, an independent manufacturer of automotive air conditioning compressors; Scotts, one of the leading garden products and solutions providers in Australia; Southcoast Health System, one of the leading health systems in the Northeast U.S. employing more than 7,400 across 50 medical facilities; SUNY Downstate Medical Center, one of the nation’s leading urban medical centers, serving the people of Brooklyn, New York since 1860; Super AMart, an iconic Australian line of furniture, bedding, and outdoor superstores; Vivo Smartphone, a multinational smartphone manufacturer headquartered in China; Voyages Indigenous Tourism Australia, an operator of resorts and tourism programs; and Women’s Health USA, a management organization providing business services to help providers in the women’s health sector stay independent, succeed economically, and excel in patient care.