UKG Announces Strong Third-Quarter Financial Results, Subscription Revenue Grows 20%

August 17, 2021, LOWELL, Mass., and WESTON, Fla.

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 third quarter of Fiscal 2021, ending June 30, 2021.

Total revenue for the quarter achieved double-digit growth, increasing to $811 million with subscription revenue excluding float growing 20% year over year.1 Earnings before interest, tax, depreciation, and amortization (EBITDA) excluding float continued growing year over year to $208 million.

“The momentum we are experiencing is incredible,” said Aron Ain, chairman and CEO at UKG. “We continue to grow in every area of the business — adding amazing new customers and earning accolades for our solutions and culture — all while we invest in our people, grow our brand, and deliver on the promise of UKG to customers all over the world.”

“We are excited about our success this quarter and how it bodes for the opportunities ahead as we close out our first fiscal year as UKG,” said Chris Todd, president at UKG. “Our customer retention remains high as existing customers continue to migrate to our flagship cloud solutions while continuing to choose our full suite of solutions. We are also thrilled to welcome hundreds of new customers from across the world to our UKG family and look forward to the transformational results they will achieve for their people and their business by leveraging our solutions.”

Business Highlights

  • From around the world, new and longtime customers placed orders in the third quarter for UKG HR, payroll, talent, workforce management and scheduling, and HRSD solutions, including:
    • one of the world’s largest technology and e-commerce companies employing more than 1 million people worldwide;
    • a French multinational retail corporation with more than 13,000 stores in 30 countries;
    • one of the largest publicly held insurers in the United States with 43,000 employees;
    • a multinational bakery manufacturer in Mexico with more than 125,000 employees;
    • a leading supplier to the global life-science industry with 24,000 employees;
    • a widely recognized high-growth value retailer with more than 1,000 stores and 36,000 employees in nearly 40 U.S. states;
    • an iconic international beer brand with 80,000 employees;
    • the court system of a large state in the Northeast United States with 18,500 employees;
    • a not-for-profit system of hospitals, surgery centers, and clinics with 40,000 caregivers in the United States;
    • a multinational specialty pharmaceutical company headquartered in Canada with 20,000 employees;
    • a large community services organization operating more than 190 locations throughout Australia;
    • the largest and most famous luxury department store in Europe with more than 4,000 employees.
  • TrustRadius, an industry standard for end-user software reviews, honored UKG with nine TrustRadius 2021 Top Rated Awards. The awards span the entire HCM lifecycle, in categories such as Compensation Management, HR Management, Payroll, Talent Management, Timekeeping, and Workforce Management.
  • 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
  • UKGDimensions was recognized as a Leader in the Nucleus WFM Technology Value Matrix 2021, for its ability to harness the power of service delivery components while meeting the current needs of frontline workers. UKG was also named a Leader in the NelsonHall Payroll Services report, positioned ahead of competitors in terms of ability to meet future client requirements.
  • With the addition of four new board members, UKG added decades of experience in the fields of organizational transformation, HR, diversity, belonging, and workplace productivity 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.
  • UKG hired its first-ever Chief Belonging, Diversity, and Equity Officer, Brian Reaves, to lead the company’s global belonging, diversity, and equity practices and programs, expanding existing UKG initiatives while working to strengthen a culture built on trust, fairness, and equality, so all people can thrive in their careers.
  • UKG received numerous awards for its people-centered culture, such as ranking:
  • UKG hosted the first-ever virtual UKG Connections customer conference April 21-22, attended by 6,700 people, where the company recognized customers with Innovation Awards for excellence in use of UKG solutions to power their businesses and help their people prosper.
  • UKG acquired EverythingBenefits, a leading provider of end-to-end benefits technology solutions, to help UKG reach even more small and mid-sized businesses.
  • On Memorial Day, UKG introduced the “Every Single Day” brand campaign, which celebrates the commitment of everyday employees — diverse people, in different types of jobs, across every industry. The commercial debuted during ABC’s Good Morning America and is being featured in 20+ broadcast channels. Additionally, UKG welcomed #1-ranked tennis player, Ashleigh Barty, to its family of athletes.
  • To continue to empower businesses, HR leaders, and managers to operate with a people-first focus throughout any crisis or disruptive event, UKG launched its Wellbeing at Work solutions.
  • By surpassing 250 technology and services partners and launching the expanded UKG Marketplace, UKG created one of the largest and most collaborative global ecosystems wholly focused on the HCM industry.

“We are heading into the final stretch of a very successful year, and we are on track to become one of the world’s greatest people companies,” said Ain. “Since announcing our merger, our employees have served as ambassadors of our special culture, with a steadfast commitment to our customers and their people, as well as helping others in need throughout our communities during this life-changing pandemic. I believe that companies achieve better business outcomes when they take care of their people, value diversity and inclusion, and listen to the voices of their employees. Our outstanding results this quarter are a reflection of who we are as UKG.”

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 organizations 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 organizations 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.

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Footnote 1: 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.

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