UKG (Ultimate Kronos Group), a leading global provider of human capital management (HCM), payroll, HR service delivery (HRSD), and workforce management solutions, today announced financial results for the fourth quarter of Fiscal 2021 and the full year of Fiscal 2021, ending September 30, 20211.
Total revenue for the quarter achieved double-digit growth, increasing to $872 million2, with full-year revenue increasing to $3.26 billion, up 10% versus the prior year excluding float. Subscription revenue excluding float grew 19% for the quarter and 17% year over year. Earnings before interest, tax, depreciation, and amortisation (EBITDA) for Fiscal 2021 grew to $801 million.
“We closed out our first full fiscal year as UKG exceptionally strong,” said Aron Ain, chairman and CEO at UKG. “We grew our business significantly from a year ago while increasing our profitability, with EBITDA for the year exceeding our expectations. At the same time, we are continuing to invest back in the business, increasing our spend on R&D substantially versus the previous year. Our products are driving innovation all over the world, and we’re delivering on our promise to customers in helping them navigate the ever-changing business landscape and take care of their people every day.”
“We are energised by our strong close to our first fiscal year as UKG. We had incredible bookings momentum to finish the year, a sign of the strong demand for UKG solutions and an indication of our potential for Fiscal 2022,” said Chris Todd, president at UKG. “The strength of our bookings came from both existing customers adding UKG solutions and new customers around the globe joining the UKG family. Our existing customers trust us to deliver great solutions, and new customers are drawn to UKG technology that drives organisational performance, and we are thrilled that our momentum continues with our recent recognition as a Leader and the only HCM provider with two offerings on the Gartner Magic Quadrant for Cloud HCM Suites.”
Business Highlights
- UKG spent more than $530 million on research and development in Fiscal 2021 and enhanced its industry-leading HCM and workforce management offerings, including:
- unveiling its Life-work Technology Vision, which brings people and HCM technology together in ways designed to support and guide people along their personal life-work journeys;
- announcing enhancements to the analytics in its UKG Pro and UKG Ready platforms to help businesses better adapt to changing market conditions and respond in times of crisis;
- maximising existing product functionality and introducing a variety of enhancements to help organisations adapt to each new phase of the COVID-19 pandemic, including the UKG Wellbeing at Work toolset, which includes contact tracing, pre-shift health and wellness surveys, cohort- or pod-based scheduling (also known as A/B scheduling), touchless timekeeping options, and a suite of workforce continuity solutions;
- expanding strategic collaboration with Microsoft to enhance the technology experience for millions of employees globally; and
- surpassing 250 technology and services partners, creating one of the largest and most collaborative global ecosystems in the industry.
- Additionally, UKG solutions received recognition from the American Payroll Association and the Global Payroll Management Institute as a “Showcase Standout Award” recipient during its inaugural 2021 Payroll Solutions Showcase and earned the prestigious “Top HR Product of the Year” honor at the HR Technology Conference for UKG Pro Coaching and Development.
- Moreover, UKG is the only enterprise HCM and workforce management provider ranked as a Leader by all analysts and customer peer-review sites and, on top of being the only vendor named twice in the Gartner Magic Quadrant for Cloud HCM Suites in both Fiscal 2021 and 2022:
- Gartner ranked UKG the highest for North America mid-market use cases in its Critical Capabilities for Cloud HCM Suites report for the fifth time.
- UKG scored the highest overall rating— with a 4.6 out of 5.0, based on verified end-user reviews — in the Gartner Peer Insights “Voice of the Customer” Cloud HCM Suites for 1,000+ Employee Enterprises report.
- Nucleus Research named UKG a Leader in the HCM Technology Value Matrix 2021, where the company was positioned with the best functionality in the HCM market, as well as the Nucleus WFM Technology Value Matrix 2021 for the company’s ability to harness the power of service delivery components while meeting the current needs of frontline workers.
- Forrester research demonstrated that an 89% return on investment within six months is achieved by mid-market enterprises using UKG solutions, according to Forrester’s “The Total Economic Impact of UKG Pro and UKG Dimensions.”
- Global research analysts NelsonHall named UKG a Leader in its NelsonHall Vendor Evaluation and Assessment Tool (NEAT) for payroll services.
- UKG was named to the Constellation Research ShortList for Payroll for North American SMBs.
- The company received top honors for its products and customer reviews on influential customer-review sites Trust Radius, G2, and SoftwareReviews.
- Around the world, new and longtime customers placed orders in the fourth quarter for UKG HCM, payroll, talent, workforce management and scheduling, and HRSD solutions, including:
- one of the largest supermarket chains in North America with 280,000 employees;
- a not-for-profit Catholic health system employing more than 120,000 people who serve more than 30 million people across 25 U.S. states;
- a Fortune 500 manufacturer of industrial tools and household hardware with 60,000 employees;
- a leading multinational manufacturer of consumer-packaged goods with more than 3,000 employees in Central America, Mexico, and the U.S., distributed across eight plants, 10 distribution centers, and five warehouses;
- one of the largest retail banks in the U.S. with more than 5 million customers;
- a multinational provider of shipping, transportation, e-commerce, and business services with more than half a million employees;
- a specialty retailer of home furnishings and gourmet cookware employing 28,000 people;
- a network of medical centres, emergency centres, and outpatient facilities with nearly 14,000 employees;
- Australia’s largest provider of early learning and care facilities with nearly 700 centres across the country;
- a multinational conglomerate that designs and sells goods and home services with 19,000 employees;
- a public research university in Canada with 10,000 faculty and staff; and
- a leading, global, multicategory consumer goods business, spread across six continents receiving over 150 million consumer interactions every day.
- UKG also received numerous awards for its people-centered culture and belonging, diversity, and equity initiatives this year, including:
- Ranking #6 on Fortune’s 100 Best Companies to Work For list, marking the first time in history that two companies on the previous year’s Fortune100 Best list merged and then appeared on the 100 Best list a year later as a new entity. Fortune also named UKG to both the Best Workplaces for Millennials and Best Workplaces for Parents lists3;
- Ranking #2 on Forbes’ list of America’s Best Large Employers for 2021. Forbes also recognised UKG on its Best Employers for Diversity list;
- Scoring 100% on the Corporate Equality Index, a top benchmarking survey and report measuring corporate policies and practices related to lesbian, gay, bisexual, transgender, and queer (LGBTQ) workplace equality, administered by the Human Rights Campaign Foundation;
- Receiving multiple accolades across the world as a best workplace for women from both Great Place to Work and Fairygodboss.
- Being named a great place to work in every country where UKG has a significant presence, including Australia, Canada, India, Mexico, and the United Kingdom.
- Being recognised as a 2021 AnitaB.org Top Companies for Women Technologists Leader;
- Earning a perfect score of 100% on the Disability:IN Disability Equality Index; and
- Being named to the Computerworld Best Places to Work in IT On top of its #6 overall ranking, UKG also ranked #4 for Benefits and #6 for Diversity.
- Industry leaders Brian Reaves and Hugo Sarrazin joined the UKG leadership team. Reaves joined UKG as its Chief Belonging, Diversity, and Equity Officer and leads the company’s global belonging, diversity, and equity efforts. Sarrazin joined the organisation as Chief Product Officer and is responsible for UKG product direction, strategy, and roadmap.
- UKG added decades of experience in the fields of organisational transformation, HR, diversity, belonging, and workplace productivity to its board of directors by welcoming Melissa Thomas-Hunt, senior advisor and former global head of diversity and belonging at Airbnb; Jennifer Morgan, head of portfolio operations at Blackstone; Pat Wadors, chief people officer at Procore Technologies; and Timothy Campos, founder and CEO at Woven.
- In the fiscal year, UKG hired more than 2,000 new employees across the globe and grew through acquisitions of businesses, adding to its offerings that support every workplace, including:
- Great Place to Work Institute, Inc., the world’s most trusted authority on workplace culture; and
- EverythingBenefits, Inc., a leading provider of end-to-end benefits technology solutions.
“UKG has had a year of tremendous accomplishments and growth, and I believe we have only just begun,” said Ain. “Augmenting our technology offerings, we were thrilled to bring Great Place to Work into our family this year — giving UKG’s ‘our purpose is people’ philosophy even more meaning as we extend our mission to focus as much on helping other organizations build their cultures as we do our own. We are positioned to deliver not only on our commitment to our people, but also to help other companies build remarkable cultures and to evangelise UKG’s values worldwide. We are incredibly proud of what we’ve achieved in our first full fiscal year, and we are very optimistic about the future.”
About UKG
At UKG (Ultimate Kronos Group), our purpose is people. Built from a merger that created one of the largest cloud companies in the world, UKG believes organisations succeed when they focus on their people. As a leading global provider of HCM, payroll, HR service delivery, and workforce management solutions, UKG delivers award-winning Pro, Dimensions, and Ready solutions to help tens of thousands of organisations across geographies and in every industry drive better business outcomes, improve HR effectiveness, streamline the payroll process, and help make work a better, more connected experience for everyone. UKG has 13,000 employees around the globe and is known for an inclusive workplace culture. The company has earned numerous awards for culture, products, and services, including consecutive years on Fortune’s 100 Best Companies to Work For list. To learn more, visit ukg.com/en-GB.
Footnote 1: Excludes company’s acquisition of Great Place to Work in September 2021.
Footnote 2: UKG fiscal results are pro forma as though Kronos Incorporated and Ultimate Software were combined for all periods presented. Ultimate Software’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 are approximate amounts. 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 Incorporated and Ultimate Software.
Footnote 3: Results are based on Great Place to Work Certification for 2020. UKG acquired Great Place to Work on Sept. 1, 2021 and will be ineligible for rankings that consider Certification in 2021 and beyond.
© 2021 UKG Inc. All rights reserved. For a full list of UKG trademarks, please visit ukg.com/trademarks. All other trademarks, if any, are property of their respective owners. All specifications are subject to change.
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