MANH — Manhattan Associates, Inc.

Summary of Manhattan Associates Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Revenue: $282 million, up 7% year-over-year; excluding license and maintenance revenue, growth was 13%.
• Cloud Revenue: Increased 24% to $117 million, driven by strong execution and lower churn rates.
• Services Revenue: Grew 4% to $126 million.
• Remaining Performance Obligation (RPO): $2.35 billion, up 24% year-over-year and 5% sequentially.
• Adjusted Operating Profit: $91 million with an operating margin of 32.4%.
• Adjusted EPS: $1.24, up 4%; GAAP EPS was $0.82, down 4% due to higher tax expenses.
• Operating Cash Flow: Increased 12% to $84 million, with a free cash flow margin of 28.3%.
• Deferred Revenue: Increased 20% year-over-year to $356 million.
• Share Repurchases: $150 million executed in Q1, with $350 million remaining in the repurchase authority.

2. Strategic Updates and Business Highlights

• Strong Demand: Q1 saw record bookings with over 55% from new logos, reflecting successful go-to-market strategies.
• Active Agent Program: The pilot program for AI agents is gaining traction, with positive early results and customer interest.
• Diverse Customer Base: New deals across various sectors, including retail, healthcare, and logistics, with notable wins from large global retailers.
• Unified Solutions: Continued emphasis on the benefits of a unified platform for warehouse and transportation solutions, enhancing customer value.
• Forward Deployed Engineers: Expansion of services team to support AI deployments, with 120 new hires and additional positions pending.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Raised to $1.147 billion to $1.157 billion, representing 11% growth (excluding license and maintenance attrition).
• Q2 Revenue Target: $285 million to $289 million.
• Adjusted Operating Margin: Increased midpoint to 35%.
• Adjusted EPS Guidance: Raised to $5.29 to $5.37 for the full year.
• Cloud Revenue Target: Increased to $495 million, representing 21% growth.

4. Bad News, Challenges, or Points of Concern

• FX Impact: Foreign exchange volatility continues to affect revenue growth, with a mixed impact on RPO.
• Conservative Outlook: Despite strong Q1 results, management remains cautious about the macroeconomic environment, opting for conservative guidance for the remainder of the year.
• Churn Rates: While churn rates were lower than expected, the company is still navigating the transition from on-premise to cloud solutions, which may present challenges.

5. Notable Q&A Insights

• Agentic AI Deployment: Discussions around scaling pilot programs into subscriptions are ongoing, with early adopters showing willingness to justify ROI based on reduced operational costs.
• Deal Volume: The increase in deal volume is attributed to strategic investments made in the previous year, with a focus on cross-selling and upselling within the existing customer base.
• Market Dynamics: There is a noted shift in customer sentiment towards modernization and cloud adoption, which may accelerate conversion rates from on-premise to cloud solutions.
• Competitive Landscape: Manhattan continues to gain market share from competitors lacking cloud capabilities, with strong win rates reported.

Overall, Manhattan Associates reported a strong start to 2026, with positive financial metrics and strategic initiatives positioning the company for continued growth, despite some macroeconomic uncertainties.