Kronos Announces Exceptional Third Quarter Results with Subscription Revenue Up 30% Fueled by Workforce Dimensions and HCM Acceleration

Kronos Incorporated today announced financial results, company advancements, and customer successes for the third quarter of Fiscal 2019. Subscription revenue increased 30% with total company revenue for the quarter exceeding $367 million¹.

"What an absolutely energizing quarter. Kronos is firing on all cylinders as we accelerate into our next phase of growth by capitalizing on the deep investments we've made in our products, SaaS business, customer experience, and talented people," said Aron Ain, Kronos chief executive officer, who was named to the Glassdoor Top CEOs list for the fourth straight year. "Our international teams had another fantastic quarter with over 50% growth; Workforce Dimensions is changing the industry, with continued acceleration in customer migrations; we saw significant growth for HCM bookings, led by a record number of new Workforce Ready customers; and we hired the most Kronites in a 12-month period ever ? wow!"

Subscription Revenue Continues to Accelerate Across SaaS Solutions

Kronos set a record for new customers added to the Kronos Cloud in a quarter as subscription revenue grew 30% across workforce management and human capital management (HCM) product suites.

• Annual recurring revenue (ARR) bookings were up over 20% driven by strong performance in North America and sparked by international SaaS growth, including Workforce Ready success in Australia and the U.K. and Workforce Dimensions deals through the new SAP global reseller agreement.
• Kronos also set a record for total ARR from large deals through both Workforce Dimensions momentum and continued customer investment in Workforce Central SaaS.

Award-winning Workforce Dimensions Penetrates the Market at a Rapid Pace

Strong adoption of Workforce Dimensions across all regions and industries continues, as both overall deals and customer migrations from existing on-premise solutions more than doubled over last year.

• With more than 2 million employee licenses sold, organizations across all industries ? including City of Santa Barbara, Community Bank, and Modell's Sporting Goods ? will deliver the employee experience of the future while leveraging intelligence, integration, and predictive capabilities to drive better business outcomes, enhance the customer experience, and mitigate compliance risk.
• Ventana Research ranked Workforce Dimensions first overall in its 2019 Workforce Management Value Index as the top-rated product by capability thanks to its "robust...native-mobile, and cloud-native" features as well as AI-generated best-fit schedules and employee timecard notifications.
• The Workforce Dimensions Technology Partner Network continues to expand with the introduction of new partner integrations and solution extensions that help customers solve specific business challenges while improving employee and manager productivity across a variety of industries.
• Significant Workforce Dimensions deals in the third quarter included: one of the largest U.S. grocers with thousands of stores and distribution centers; a global building materials company based in Mexico; one of the largest chicken producers in the U.S.; a major fashion retailer in Australia; one of the largest healthcare systems in New England; a U.S. food distributor serving tens of thousands of customers across restaurants, theaters, big box retailers, and hospitals; and a U.K. provider of high-quality care, support, and housing to senior residents.

Record-setting Quarter for Workforce Ready Drives Kronos HCM Success Worldwide

Kronos HCM bookings rose an amazing 48% in the third quarter and up 56% over the last 12 months with a record-setting quarter for new Workforce Ready customers and high attach rates of HR and payroll solutions on Workforce Dimensions deals.

• Workforce Ready business grew by more than 30% led by continued international expansion and driven in the U.S. by a dedicated team of experts focused on the needs of organizations across all industries.
• Kronos Payroll Services saw exceptional market adoption, with the number of live customers growing by 2.5 times since last year, as organizations across all industries are transforming payroll processing to drive accuracy, efficiency, and visibility while mitigating compliance risk ? including Jasper Group in manufacturing, Kalamazoo Anesthesiology in healthcare, and Sprint Mart in retail.
• Kronos HCM innovations in usability, visibility into employee adoption, predictive analytics, and the customer experience help organizations leverage industry-leading workforce management to drive strategic HR decisions through real-time workforce data and features such as the award-winning Employee Perspectives, recruiting analytics, and enhanced succession planning visualizations.
• G2 Crowd, HRO Today, Software Advice (a Gartner company), and TrustRadius all recognized Kronos HCM for award-winning capabilities across Workforce Ready and Workforce Dimensions.
• Significant Kronos HCM deals in the quarter included: a restaurant operator with hundreds of locations across 25 U.S. states; a developer, owner, and operator of gaming and entertainment facilities; a large provider of metal stamping and fine-blanked components to the automotive industry; an engineering consulting firm specializing in the design and construction of building products and transportation infrastructure; an Australian food production company; and a school district serving nearly 50,000 students in one of the largest cities in Texas.

Exceptional International Growth Highlighted by Kronos Culture and CX Accolades

International regions grew by more than 50% ? led by Asia-Pacific (up 99%); Latin America (up 42%); and Europe, Middle East, and Africa (up 39%) ? as Kronos continues to land accolades for its global focus on the customer experience (CX) and employee engagement.

• For the 19^th consecutive year, Kronos was recognized with the NorthFace ScoreBoard Award from the Customer Relationship Management Institute for far exceeding customer experience expectations in professionalism, responsiveness, and overall support.
• The Kronos workplace culture journey ? which was the topic of a MEGA SESSION at SHRM19 ? continues to garner best-ever accolades and Top 10 finishes worldwide, including being named:
  • No. 2 best place to work in Mexico by Great Place to Work;
  • No. 3 Best Place to Work in IT by Computerworld;
  • No. 6 Best Place to Work in New Jersey;
  • No. 8 best workplace in Canada ? its highest-ever ranking ? as well as one of the Best Workplaces for Women for the fifth-consecutive year by Great Place to Work;
  • No. 8 Best Place to Work in Indiana;
  • Inside the top 20 Best Workplaces in the U.K., as well as being granted an Excellence in Wellbeing distinction;
  • One of the 25 Best Multinational Workplaces in Asia for the second year; and
  • One of Workforce magazine's Workforce 100 for the first time.

Third Quarter Customer Success Around the Globe

In the third quarter of Fiscal 2019, Kronos signed agreements with organizations around the world, including: ALDI, a German supermarket chain with locations in more than 20 countries including two new stores in Shanghai; Anglia Restaurants, an operator of pub restaurants and diners in the U.K.; Australia Post, the government-owned corporation that provides postal services in Australia and, with more than 4,000 post offices, facilitates 82% of the nation's eCommerce; Chesapeake Public Schools, a public school system in Virginia serving 39,000+ students in 45 schools; Huntsville Hospital Health System, the second-largest hospital in Alabama with 14,000 employees; Kilroy Pastoral Company Limited, one of Australia's leading premium grain-fed beef processors and exporters; Ochsner LSU Health Shreveport, a Louisiana health system with numerous Centers of Excellence including the area's only Level 1 Trauma Center; Orlando Health, a non-profit healthcare organization and community-based network of hospitals, physician practices, and outpatient care centers across Central Florida serving more than 2 million patients each year; Port Consolidated, the leading supplier of high-quality motor fuels, lubricants, and additives in Florida, the Caribbean, and Latin America; Regal Amusement Machine Sales Ltd, a leading U.K. supplier of amusement equipment; Rochester Regional Health, an integrated health services organization serving 1.2 million residents across Western New York and the Finger Lakes region; South32, a globally diversified mining and metals company and the world's 12^th largest mining company with 10,000+ employees across Africa, Australia, North America, and South America; and TJ Morris Ltd, trading as Home Bargains, one of the U.K.'s fastest-growing retailers.

Supporting Resources

• Connect with Kronos via Facebook, Instagram, LinkedIn, Twitter, and YouTube.
• Take a look at the lighter side of the workforce in the Time Well Spent cartoon series from Kronos.
• Kronos CEO Aron Ain shares how to transform employee engagement into a growth strategy in his new book, "WorkInspired: How to Build an Organization Where Everyone Loves to Work."
• Subscribe to 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.
• Visit the Kronos Corporate Social Responsibility (CSR) page to learn how Kronites strive to be great people every day.

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.