UKG Announces First-Quarter Fiscal 2022 Financial Results, Subscription Revenue Growth Continues

LOWELL, Mass. & WESTON, Fla.--(BUSINESS WIRE)--UKG, a leading global provider of human capital management (HCM), payroll, HR service delivery (HRSD), and workforce management solutions, today announced financial results for the first quarter of Fiscal 2022, ending December 31, 2021.

Total revenue for the quarter increased to $872 million, with subscription revenue excluding float growing 15% year over year.¹ Earnings before interest, tax, depreciation, and amortization (EBITDA) was $200 million.

“Our diverse business achieved and exceeded many of our financial goals in an unprecedented quarter, which produced a strong quarterly bookings finish,” said Chris Todd, president at UKG. “We achieved our plan for the quarter for bookings and annual recurring revenue under contract. Our trend in subscription revenue, the largest and fastest-growing revenue generator for UKG, is up strongly for the past six quarters due to the momentum of UKG Pro and UKG Dimensions. I firmly believe the strength of our business is solidly based on the continued dedication of U Krewers around the world and the partnerships we have with our remarkable customers.”

Business Highlights

• Around the world, new and longtime customers placed orders for UKG HCM, payroll, talent, workforce management, scheduling, and HRSD solutions, including:
  • the largest integrated, not-for-profit medical group in the world with 73,000 employees;
  • a provider of facility management and building maintenance with 24,000 employees serving organizations across the U.S. and Canada;
  • a lingerie, clothing, and beauty retailer with a global team of 30,000 associates;
  • a U.S.-based national janitorial, staffing, and security services provider with more than 10,000 employees;
  • a world leader in commercial refrigeration, dedicated to the design, development, and manufacturing of refrigeration equipment, and one of the largest manufacturers of consumer-packaged goods in Mexico;
  • a global leader in design, engineering, and delivery of facilities for high-tech industries, based in Germany, with more than 5,000 employees across 20 countries;
  • a British aerospace, defense, and nuclear engineering services company with 36,000 employees;
  • the largest parcel delivery service in Europe, with 97,000 delivery experts and a network of more than 58,000 pickup points; and
  • an Irish global nutrition group with operations in 32 countries.
    
• UKG honored 13 deserving customers with Innovation Awards celebrating their pioneering use of UKG HCM and workforce management products at customer conferences UKG Works and UKG Connections.
  
• UKG received awards and accolades from influential software-review sites that are a direct result of user ratings and reviews. These sites include:
  • G2, which rated Pro #1 in its Enterprise Relationship Index for Core HR and Payroll for Fall 2021. In addition to Pro, UKG Ready is included on the G2 Enterprise Relationship Index for Core HR.
  • SoftwareReviews, which ranked Pro #1 in its 2021 Emotional Footprint Awards for HCM. The Emotional Footprint Awards evaluate products based on scores drawn from many aspects of the vendor-client relationship, as well as product effectiveness, to create accurate and unbiased overall end-user impressions.
  • TrustRadius, which recognized UKG for the second consecutive year with a TrustRadius Tech Cares Award for its focus on corporate social responsibility. The TrustRadius Tech Cares Award is given to technology companies that demonstrate environmental sustainability, positive workplace culture, and robust diversity, equality, and inclusion programs, as well as philanthropy and volunteerism.
    
• UKG continues to be the only HCM vendor recognized as a leader by all major industry analysts and peer-review sites, with first quarter analyst accolades including:
  • UKG was named a Leader in the 2021 Gartner Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises. For the second year running, UKG is also the only solution provider with two offerings included on the Magic Quadrant.
  • UKG received the highest overall score in the 2021 Gartner Critical Capabilities for Cloud HCM Suites for 1,000+ Employee Enterprises in the North America Midmarket Use Case. Both Pro and Ready were named in the 2021 evaluation.
  • UKG was named a Global Leader in the ISG Provider Lends 2021 report for HCM and a Core Leader for Cloud HR by EMEA-based Fosway Group.
  • Driven by its Life-work Technology approach, UKG earned a prestigious “Top HR Product of the Year” award from the HR Technology Conference and Human Resource Executive magazine for UKG Pro Coaching and Development.
    
• Organizations worldwide surpassed 15 million approved time-off requests in Dimensions in early October 2021, and more recently helped approve the 22 millionth time-off request, an increase of more than 41% in just one quarter.
  
• UKG enhanced the UKG InTouch DX with UKG TouchFree ID, a facial-scan option that helps people feel safer, clock in faster, and securely unlock access to scheduling, time off, and other workplace information through a contactless experience.
  
• With one of the largest and most collaborative partner ecosystems focused wholly on the HCM industry, UKG welcomed nearly two dozen additional technology partners who share the UKG vision for a frictionless employee-technology experience to the UKG Marketplace and whose solutions serve key markets spanning North America, Latin America, EMEA, and APAC.
  
• UKG Wallet was introduced, delivering a new financial-wellness platform designed to provide people with immediate access to their earned wages while empowering them with budgeting tools, educational resources, and financial counseling.
  
• UKG announced the UKG Close the Gap Initiative — a multimillion-dollar global pay equity initiative to drive global awareness and action to resolve pay disparities among men, women, and underrepresented groups that continue to significantly impact today’s workforce.
  
• UKG was honored with several awards for its workplace culture and innovative HR practices in the quarter, including being named by Comparably as one of the Best Companies for Women and Best Companies for Diversity; The Boston Globe again naming UKG a Top Place to Work in Mass., where the company is co-headquartered, and the UKG HR team ranking #7 in Technology and #24 overall in HRO Today’s inaugural HR 100: Top Teams in HR awards.

“As I reflect on the past months, I am inspired by the many people who have gone above and beyond during this challenging time,” said Aron Ain, chairman and CEO at UKG. “We are excited for the future. We all succeed together.”

About UKG

At UKG, 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.

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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