ADP, Kronos Report Quarterly Earnings Growth

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ADP continued its trend of steady earnings growth while Kronos reported double-digit revenue increases during their most recent fiscal quarters.

ADP said its fiscal second-quarter earnings rose 5 percent compared to last year’s period, to $3.7 billion. Net earnings increased 17 percent, to $652 million, while adjusted earnings before interest and taxes rose 9 percent, to $854 million.

#HRTech earnings: @ADP continues steady growth while @KronosInc reports double-digit revenue increases. #HR #HRTribe #Earnings Click To Tweet

The adjusted EBIT margin expanded by 70 basis points, to 23.3 percent, driven by transformation initiatives and operating efficiencies, the company said. Those were offset by incremental sales and marketing, amortization and PEO pass-through expenses.

President and CEO Carlos Rodriguez said ADP is “continuing to execute well as we balance near-term transformation initiatives with long-term growth investments.” Meanwhile, CFO Kathleen Winters reiterated the company’s commitment to “driving efficiency throughout our organization.”

ADP’s Employer Services unit posted a revenue increase of 4 percent while new business bookings rose 3 percent. PEO Services revenue grew 9 percent compared to last year’s second quarter. The average worksite employees paid through the unit increased 6 percent, to about 579,000.

During 2019, ADP launched several products, modestly rebranded itself and began showing off new features to analysts and the media. Those new features are wrapped around “Next Gen,” which has gained favorable reviews from those who’ve seen it. HRExaminer Principal Analyst John Sumser, for example, described it as “a universal tool that comprehensively meets the needs of individual customers.” Human Resource Executive named it one the year’s top HR products.

Kronos Sees Double-Digit Gains

Kronos said its bookings for annual recurring revenue increased 29 percent during its fiscal first quarter, while total revenue approached $370 million and EBITDA passed $95 million. Subscription revenue grew 33 percent, the company said, and more than 34,000 organizations worldwide are now in the Kronos Cloud.

Operationally, Kronos accomplished a lot during the quarter, announcing a range of product enhancements including improved people analytics and a new take on the intelligent time clock. It also announced mobile-first enhancements to Workforce Dimensions that improved usability and flexibility.

Kronos closed its largest-ever order for Workforce Dimensions, which the company described as “a multimillion-dollar on-premise migration.” Sales of the new time-clock tool, Kronos InTouch DX, surpassed expectations during its first quarter of availability.

Kronos HCM bookings rose 29 percent, the company said, largely driven by SMB adoption of Workforce Ready. Workforce Ready ARR bookings grew 61 percent from a mix of new customers and existing users who expanded their solutions.

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