MANH — Manhattan Associates, Inc.

Summary of Manhattan Associates, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 Revenue: $270 million, up 6% year-over-year.
• Cloud Revenue: $109 million, up 20% year-over-year; full-year cloud revenue reached $408 million, a 21% increase.
• Adjusted Earnings per Share: $1.21, a 3% increase; full-year adjusted EPS was $5.06, up 7%.
• RPO (Remaining Performance Obligations): Increased 25% to $2.2 billion.
• Operating Cash Flow: Increased 40% to $147 million; full-year operating cash flow rose 32% to $389 million.
• Free Cash Flow Margin: 52.7% in Q4; full-year margin was 34.6%.
• Deferred Revenue: Increased 21% year-over-year to $337 million.
• No Debt: Ended the year with $329 million in cash.

2. Strategic Updates and Business Highlights

• Record Cloud Bookings: Achieved record cloud bookings in Q4, with over 70% competitive win rates.
• AI Initiatives: Launched commercial availability of AI agents and an agent foundry, enabling customers to build custom agents.
• Sales and Marketing Enhancements: Reorganized global sales team and made key hires, including a new Chief Marketing Officer.
• Diverse Customer Base: Expanded footprint across various sectors, including retail, life sciences, and logistics.
• New Product Offerings: Introduced enterprise promise and fulfill for B2B order management and fulfillment.

3. Forward Guidance and Outlook

• 2026 RPO Target: $2.62 billion to $2.68 billion, representing 18% to 20% growth.
• Total Revenue Guidance for 2026: $1.133 billion to $1.153 billion, implying a 10% growth rate excluding license and maintenance attrition.
• Q1 2026 Revenue Target: $272 million to $274 million, representing 10% growth excluding license and maintenance attrition.
• Adjusted Operating Margin: Expected to range from 34.5% to 35% for 2026.
• Cloud Revenue Growth: Anticipated to increase 21% to $492 million in 2026.

4. Bad News, Challenges, or Points of Concern

• Customer Liquidation Headwind: Faced a $1.3 million headwind in Q4, with an annualized impact of $2.5 million expected in 2026.
• Services Revenue Decline: Full-year services revenue declined 4% to $503 million, though Q4 showed a return to growth.
• Tax Rate Increase: Higher tax rates due to changes in domestic R&D cost deductions, impacting cash taxes.

5. Notable Q&A Insights

• Cloud Migrations: Progress on converting on-premise customers to cloud solutions is underway, with early success noted in Q1 2026.
• Implementation Times: Improvements in implementation speed are being realized, allowing for quicker revenue ramp-up.
• Renewal Strategy: A conservative approach to renewals may limit RPO growth but allows for potential price increases sooner.
• Services Outlook: Confidence in mid-single-digit growth for services, driven by strong bookings and the introduction of AgenTic AI.
• Customer Sentiment: CIO sentiment remains stable, with ongoing demand for WMS and TMS projects, emphasizing the need for efficiency and ROI.

Overall, Manhattan Associates demonstrated strong financial performance in Q4 2025, with significant growth in cloud revenue and bookings. The company is strategically positioned for continued growth in 2026, despite facing some challenges related to customer liquidations and services revenue.