Ultimate Software has been making big bets that enterprises want to use the cloud to simplify human resources management and that wager has been paying off. The Weston, Florida-based software as a service company was able to show an acceleration in revenue and beat Wall Street’s estimates for its third quarter which it reported on October 31st.
For the three months ending in September, Ultimate Software reported revenue growth of 22% year over year and reported its recurring revenue mix is now close to 90% of total sales. That is expected to greatly improve its revenue guidance and provide more stability to the software as a service company. In addition to surpassing Wall Street’s views, Ultimate Software is also forecasting 20% revenue growth for its fiscal year 2019, indicating it can maintain double-digit revenue growth in that range beyond the third quarter.
“Our third-quarter financial performance keeps us on target to achieve all of our 2018 objectives, including surpassing $1 billion in total revenues and starts the ball rolling toward our new 2021 objective of $2 billion in total revenues. At the same time, we maintained our year-over-year customer retention rate of approximately 96%,” said Scott Scherr, founder, president, and CEO of Ultimate Software, in a press release announcing results.
Ultimate Software Forging Alliances To Provide It All
With the workforce increasingly going remote, Ultimate Software wants to be the HR management and payroll platform of choice for enterprises around the globe. According to the SaaS company, 40% of the workforce is now remote and that is expected to grow. Its cloud offerings help companies with payroll, talent management, workforce management, and workforce intelligence among other things. The company has 4,400 customers counting the Phoenix Suns, Red Roof Inn, SUBWAY, Texas Roadhouse, and Yamaha Corporation of America as customers.
In addition to showing solid results for its third quarter and signaling double-digit growth will continue into the next year, Ultimate Software inked a deal in late September with Deloitte Canada, the business consulting firm, enabling enterprise companies in North America to optimize its offering through Deloitte’s business technology services and capabilities. Ultimate Software and Deloitte plan to leverage each other's products to provide a wider breadth of services for enterprises. “Our alliance with Deloitte represents our ability to support the largest and most complex businesses,” said Julie Dodd, chief services officer at Ultimate in announcing the alliance. “By working together, our mutual customers will benefit from UltiPro’s advanced HCM functionality leveraging Deloitte’s world-class consulting services.” The alliance also underscores the direction the industry is heading as the workforce grows increasingly remote.