Summary of Manhattan Associates Q1 2026 Earnings Call

1Key Financial Results and Metrics

Total Revenue: $282 million, up 7% year-over-year; 13% growth excluding license and maintenance revenue.

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.

2Strategic Updates and Business Highlights

Strong demand for cloud solutions and services, with over 55% of new cloud bookings from net new logos.

Successful pilot program for Active Agents, with several notable customer deployments and positive early results.

Increased focus on go-to-market effectiveness and selling velocity, resulting in improved deal volume across all types.

Significant wins included large orders from global retailers and successful transitions from on-premise to cloud solutions.

Introduction of a unified cloud-native API-first architecture, enhancing customer experience and operational efficiency.

3Forward Guidance and Outlook

2026 Revenue Guidance: Increased 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%.

Full Year Adjusted EPS: Range increased to $5.29 to $5.37.

Cloud Revenue Target: Midpoint raised to $495 million, representing 21% growth.

4Bad News, Challenges, or Points of Concern

GAAP EPS declined 4% due to increased tax expenses.

FX volatility continues to impact results, with a $5 million headwind to sequential RPO growth.

The macroeconomic environment remains volatile, which could affect future performance.

While cloud revenue growth is strong, some components (like one-time overage fees) may not be sustainable.

5Notable Q&A Insights

Management is optimistic about scaling AI agent pilots into subscription revenue, with initial customer feedback indicating strong ROI justifications.

The company is cautious about future revenue projections, maintaining conservative estimates due to macroeconomic uncertainties.

The forward-deployed engineer concept is gaining traction, with 120 new hires to support service delivery and AI deployments.

The largest deal this quarter was facilitated through Google Cloud Marketplace, indicating a growing trend in leveraging partnerships for deal closures. Overall, Manhattan Associates reported a strong start to 2026 with significant growth in cloud revenue and strategic initiatives yielding positive results, while remaining vigilant about external economic factors and their potential impact on future performance.