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; 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.

2. Strategic 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.

3. Forward 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.

4. Bad 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.

5. Notable 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.