UKG Announces Second-Quarter Fiscal 2022 Financial Results, Strong Sales Performance Sets Stage for Continued Growth

UKG, a leading provider of HR, payroll, and workforce management solutions for all people, today announced financial results for the second quarter of Fiscal 2022, ending March 31, 2022.

Total revenue for the quarter was $895 million, with subscription revenue excluding float growing 16% year over year.¹

"Our sales team had an incredible quarter, with bookings up 24% compared with the previous year and well exceeding our plan," said Chris Todd, president at UKG. "Our sales success covered the entire spectrum of opportunities, including customers new to UKG, existing customers expanding their UKG solutions, and migrating customers to newer flagship solutions. Over 70% of new customers selected UKG's full suite of HR, payroll, and workforce management solutions, showing how organizations around the world are drawn to our comprehensive suite that represents our complete offering and value proposition."

"Our special culture at UKG is the fuel that powers our business," said Aron Ain, chairman and CEO at UKG. "I am delighted by the growth of our business, which is a credit to our product design teams, who recognize that life and work are interconnected, and driven further by how U Krewers care for one another and our customers. Our deep understanding of people and work opens up better and happier outcomes for everyone."

Business Highlights

• Around the world, new and longtime customers placed orders for UKG human capital management (HCM), payroll, talent, workforce management, scheduling, and HR service delivery solutions, including:
  • the largest public healthcare system in the U.S., with more than 40,000 employees;
  • a privately held thrift store retail chain, with more than 20,000 associates and hundreds of locations in Australia, Canada, and the U.S.;
  • a federal U.S. agency with 20,000 employees;
  • a large distributor of food products across the U.S., employing more than 14,000 people;
  • a multinational power management company with 85,000 employees, doing business in more than 175 countries;
  • a U.S. supermarket chain employing 18,000 associates nationwide;
  • a global, technology-based materials and solutions organization that delivers essential innovations to the transportation, construction, water, healthcare, and electronics markets;
  • a global digital sports platform and ecommerce site for the world's biggest sports brands, with vendors, suppliers, and employees across 11 countries;
  • a leading Canadian hardware and construction materials chain based in Quebec, with over 30 branches and 5,000 employees;
  • one of the largest supermarket chains in the Netherlands, employing over 70,000 workers across more than 700 store locations in the Netherlands and Belgium;
  • a leading developer and manufacturer of innovative solutions for the global automotive industry, with over 10,000 employees in Mexico; and
  • one of the world's largest family entertainment enterprises operating indoor and outdoor theme parks and attractions, serving millions of guests worldwide with more than 140 locations in 24 countries, headquartered in the U.K.

• UKG released the winners of its annual customer Innovation Awards in four categories ? Innovation Evangelist, ROI/Measurable Benefits, UKG Product Suite, and HR Transformation ? by honoring Trexon, The Vertex Company, FLEXcon, and First PREMIER Bank and Bankcard for using people-centric UKG technology to succeed as early adopters of new offerings, solve strategic business challenges, and improve the employee experience.
   
• UKG announced three acquisitions in the quarter:
  • Ascentis Corporation, a provider of full-suite HR and workforce management solutions, with nearly 5,000 customers and several hundred employees in the U.S. and Uruguay;
  • Interboro Systems Corporation, a longtime reseller partner with 70 employees providing direct sales, services, and support for Puerto Rico and the Caribbean; and
  • SpotCues and its award-winning mobile communications platform, Groupe.io, specifically designed for the frontline workforce, with its 50-person team from India joining UKG to accelerate development while also integrating the solution within UKG Dimensions, UKG Pro, and UKG Ready.

• UKG received awards and accolades from influential software-review sites that are a direct result of user ratings and reviews. These sites include:
  • TrustRadius, which ranked Pro #1 for Best Customer Relationships and #2 for Best Feature Set in the HR Management Software Best of Awards. Additionally, TrustRadius once again included both Pro and Ready on its influential Most Loved products list for 2022.
  • G2, which recognized Pro in the categories of Best Overall Software Products, Enterprise Products, Fastest-Growing Products, and Highest-Satisfaction Products. UKG is the only solution provider with three products ? Pro, Dimensions, and Ready ? featured in G2's Best HR Products category. G2 also included UKG on its lists of Best Global Sellers and Best Mid-Market Products.
  • FeaturedCustomers, which named UKG a premium payroll software vendor and market leader in its 2022 Payroll Customer Success Report, with an overall rating of 4.8/5. The FeaturedCustomers report is based on authenticated customer references and is intended to give businesses better insight into the best payroll software products for their people.

• UKG continues to be the only HCM vendor recognized as a leader by all major industry analysts and peer-review sites, with second-quarter analyst accolades that included earning the top overall ranking in the Nucleus Research HCM Technology Value Matrix.
   
• UKG was honored with several awards for its workplace culture and innovative HR practices, including being named again to Forbes magazine's list of America's Best Large Employers and receiving a 100% score on the Corporate Equality Index for the second consecutive year, making UKG a Best Place to Work for LGBTQ+ Equality.
   
• UKG welcomed Pat Wadors as its new chief people officer, who will lead the company's world-class HR organization and guide its people-related business strategy as UKG continues to grow its organization and award-winning culture.
   
• UKG announced its sponsorship of now-seven-time Paralympic medalist and veteran Dan Cnossen, whose story and UKG partnership were featured in People magazine.

"The quarter's results demonstrate the strength of our business," said Todd. "We build value for our customers through intelligent systems and meaningful relationships that deliver a premium experience. We are grateful for the confidence our customers have in us, and we are proud that our technology helps them support their teams."

About UKG

At UKG, our purpose is people. As strong believers in the power of culture and belonging as the secret to success, we champion great workplaces and build lifelong partnerships with our customers to show what's possible when businesses invest in their people. Born from a historic merger that created one of the world's leading HCM cloud companies, our Life-work Technology approach to HR, payroll, and workforce management solutions for all people helps more than 70,000 organizations around the globe and across every industry anticipate and adapt to their employees' needs beyond just work. To learn more, visit ukg.com.

Footnote 1: UKG fiscal results are pro forma as though Kronos Incorporated and Ultimate Software were combined for all periods presented. Ultimate's results have also been pro forma to align with the UKG fiscal year calendar, which closes September 30. All financial information within this press release is presented using non-GAAP financial measures and amounts are approximate. UKG believes that non-GAAP measures of financial results provide useful information regarding certain financial and business trends relating to UKG 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 mergers and acquisitions. EBITDA consists of EBITDA per the definition under the company's credit agreement, which excludes items such as: (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 and prepaid commissions write-downs and expenses including advisory, legal, accounting, acquired employee-related costs, and integration costs; and (5) unusual costs or one-time expenses. For purposes of calculating growth rates, prior years have been restated for acquisitions, dispositions, and pro forma for the combination of Kronos and Ultimate.

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