UKG Inc.

Overview Key strengths Key risks Strong position in the human capital management market (HCM) and workforce management (WFM) with success in domestic enterprise-level customers. Lingering risks from the Kronos Private Cloud ransomware attack. Secular demand trends are favorable for HCM and WFM solution Highly leveraged balance sheet and financial-sponsor ownership. High recurring revenue base with strong retention rates. Potential for large than expected restricted stock unit-related cash payouts, straining liquidity. Well diversified customer and end-market exposure. Operates in an intensely fragmented and highly competitive market with both larger-scaled and better-capitalized competitors and niche competitors. Although UKG has since restored disruptions to its KPC timekeeping and payroll solutions and its latest cloud products or solutions, such as UKG Pro, UKGReady, and

...Longer-term risks to UKG's credit quality are likely to linger from the Kronos Private Cloud (KPC) ransomware attack, despite it weathering the fallout from the incident to date. Although UKG has since restored disruptions to its KPC timekeeping and payroll solutions and its latest cloud products or solutions, such as UKG Pro, UKGReady, and UKG Dimensions, were not involved in the...

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