Manhattan Associates Reports Record Revenue and Earnings

ATLANTA--(BUSINESS WIRE)--Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $266.7 million for the third quarter ended September 30, 2024. GAAP diluted earnings per share for Q3 2024 was $1.03 compared to $0.79 in Q3 2023. Non-GAAP adjusted diluted earnings per share for Q3 2024 was $1.35 compared to $1.05 in Q3 2023.

"Manhattan delivered record third quarter and year-to-date results. Our fundamentals are strong, and we continue to deliver a balanced financial performance across top-line growth and profitability and industry leading innovation each quarter," said Manhattan Associates president and CEO Eddie Capel.

"While we remain appropriately cautious on the global economy, we are optimistic on our growing market opportunity and our long-term strategy. Our fourth quarter is off to a solid start, and we are providing responsible 2025 parameters," Mr. Capel concluded.

THIRD QUARTER 2024 FINANCIAL SUMMARY:

• Consolidated total revenue was $266.7 million for Q3 2024, compared to $238.4 million for Q3 2023.
  • Cloud subscription revenue was $86.5 million for Q3 2024, compared to $65.0 million for Q3 2023.
  • License revenue was $3.8 million for Q3 2024, compared to $3.9 million for Q3 2023.
  • Services revenue was $137.0 million for Q3 2024, compared to $128.0 million for Q3 2023.
• GAAP diluted earnings per share was $1.03 for Q3 2024, compared to $0.79 for Q3 2023.
• Adjusted diluted earnings per share, a non-GAAP measure, was $1.35 for Q3 2024, compared to $1.05 for Q3 2023.
• GAAP operating income was $75.1 million for Q3 2024, compared to $53.4 million for Q3 2023.
• Adjusted operating income, a non-GAAP measure, was $98.9 million for Q3 2024, compared to $72.5 million for Q3 2023.
• Cash flow from operations was $62.3 million for Q3 2024, compared to $58.6 million for Q3 2023. Days Sales Outstanding was 69 days at September 30, 2024, compared to 66 days at June 30, 2024.
• Cash totaled $215.0 million at September 30, 2024, compared to $202.7 million at June 30, 2024.
• During the three months ended September 30, 2024, the Company repurchased 194,712 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors for a total investment of $49.7 million. In October 2024, our Board of Directors approved replenishing the Company's remaining share repurchase authority to an aggregate of $75.0 million of our common stock.

NINE MONTH 2024 FINANCIAL SUMMARY:

• Consolidated total revenue for the nine months ended September 30, 2024, was $786.6 million, compared to $690.5 million for the nine months ended September 30, 2023.
  • Cloud subscription revenue was $246.9 million for the nine months ended September 30, 2024, compared to $183.2 million for the nine months ended September 30, 2023.
  • License revenue was $9.6 million for the nine months ended September 30, 2024, compared to $13.0 million for the nine months ended September 30, 2023.
  • Services revenue was $406.0 million for the nine months ended September 30, 2024, compared to $368.7 million for the nine months ended September 30, 2023.
• GAAP diluted earnings per share for the nine months ended September 30, 2024, was $2.74, compared to $2.05 for the nine months ended September 30, 2023.
• Adjusted diluted earnings per share, a non-GAAP measure, was $3.55 for the nine months ended September 30, 2024, compared to $2.72 for the nine months ended September 30, 2023.
• GAAP operating income was $200.9 million for the nine months ended September 30, 2024, compared to $151.0 million for the nine months ended September 30, 2023.
• Adjusted operating income, a non-GAAP measure, was $271.5 million for the nine months ended September 30, 2024, compared to $204.6 million for the nine months ended September 30, 2023.
• Cash flow from operations was $190.3 million for the nine months ended September 30, 2024, compared to $157.9 million for the nine months ended September 30, 2023.
• During the nine months ended September 30, 2024, the Company repurchased 831,111 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $198.1 million. In October 2024, our Board of Directors approved replenishing the Company's remaining share repurchase authority to an aggregate of $75.0 million of our common stock.

2024 GUIDANCE

Manhattan Associates provides the following revenue, operating margin and diluted earnings per share guidance for the full year 2024:

		Guidance Range - 2024 Full Year
	($'s in millions, except operating margin and EPS)	$ Range				% Growth Range
	Total revenue - current guidance	$1,039		$1,041		12%		12%
	Operating margin:
	GAAP operating margin - current guidance	24.9%		25.0%
	Equity-based compensation	9.1%		9.1%
	Adjusted operating margin(1) - current guidance	34.0%		34.1%
	Diluted earnings per share (EPS):
	GAAP EPS - current guidance	$3.47		$3.49		23%		24%
	Equity-based compensation, net of tax	1.28		1.28
	Excess tax benefit on stock vesting(2)	(0.15)		(0.15)
	Adjusted EPS(1) - current guidance	$4.60		$4.62		23%		24%
	(1) Adjusted operating margin and adjusted EPS are non-GAAP measures that exclude the impact of equity-based
	compensation and related income tax effects.
	(2) Excess tax benefit on stock vesting expected to occur primarily in the first quarter of 2024.

Manhattan Associates currently intends to publish in each quarterly earnings release certain expectations with respect to future financial performance. Those statements, including the guidance provided above, are forward looking. Actual results may differ materially. See our cautionary note regarding "forward-looking statements" below.

Manhattan Associates will make this earnings release and published expectations available on the investor relations section of the Manhattan Associates website at ir.manh.com. Following publication of this earnings release, any expectations with respect to future financial performance contained in this release, including the guidance, should be considered historical only, and Manhattan Associates disclaims any obligation to update them.

CONFERENCE CALL

Manhattan Associates' conference call regarding its third quarter financial results will be held today, October 22, 2024, at 4:30 p.m. Eastern Time. The Company will also discuss its business and expectations for the year and next quarter in additional detail during the call. We invite investors to a live webcast of the conference call through the Investor Relations section of the Manhattan Associates website at ir.manh.com. To listen to the live webcast, please go to the website at least 15 minutes before the call to download and install any necessary audio software. The Internet webcast will be available until Manhattan Associates' fourth quarter 2024 earnings release.

GAAP VERSUS NON-GAAP PRESENTATION

Manhattan Associates provides adjusted operating income and margin, adjusted income tax provision, adjusted net income, and adjusted diluted earnings per share in this press release as additional information regarding the Company's historical and projected operating results. These measures are not in accordance with, or alternatives to, GAAP, and may be different from similarly titled non-GAAP measures used by other companies. The Company believes the presentation of these non-GAAP financial measures facilitates investors' ability to understand and compare the Company's results and guidance, because the measures provide supplemental information in evaluating the operating results of its business, as distinct from results that include items not indicative of ongoing operating results, and because the Company believes its peers typically publish similar non-GAAP measures. This release should be read in conjunction with the Company's Form 8-K earnings release filing for the three and nine months ended September 30, 2024.

Non-GAAP adjusted operating income and margin, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share exclude the impact of equity-based compensation - net of income tax effects. They also exclude the tax benefits or deficiencies of vested stock awards caused by differences in the amount deductible for tax purposes from the compensation expense recorded for financial reporting purposes. We include reconciliations of the Company's GAAP financial measures to non-GAAP adjustments in the supplemental information attached to this release.

ABOUT MANHATTAN ASSOCIATES

Manhattan Associates is a global technology leader in supply chain and omnichannel commerce. We unite information across the enterprise, converging front-end sales with back-end supply chain execution. Our software, platform technology and unmatched experience help drive both top-line growth and bottom-line profitability for our customers.

Manhattan Associates designs, builds and delivers leading edge cloud solutions so that across the store, through your network or from your fulfillment center, you are ready to reap the rewards of the omnichannel marketplace. For more information, please visit www.manh.com.

This press release contains "forward-looking statements" relating to Manhattan Associates, Inc. Forward-looking statements in this press release include, without limitation, the information set forth under "2024 Guidance" and statements identified by words such as "may," "expect," "forecast," "anticipate," "intend," "plan," "believe," "could," "seek," "project," "estimate" and similar expressions. Prospective investors are cautioned that any of those forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by those forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by those forward-looking statements are: economic conditions, including inflation; disruption and transformation in the retail sector and our vertical markets; delays in product development; competitive and pricing pressures; software errors and information technology failures, disruption and security breaches; risks related to our products' technology and customer implementations; global instability, including the wars in Ukraine and the Middle East; and the other risk factors set forth in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and in Item 1A of Part II in subsequent Quarterly Reports on Form 10-Q. Manhattan Associates undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (in thousands, except per share amounts)
		Three Months Ended September 30,				Nine Months Ended September 30,
		2024		2023		2024		2023
		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenue:
Cloud subscriptions		$86,485		$65,033		$246,873		$183,196
Software license		3,762		3,870		9,633		12,967
Maintenance		34,491		35,296		104,736		106,772
Services		137,009		127,965		406,035		368,744
Hardware		4,934		6,277		19,274		18,791
Total revenue		266,681		238,441		786,551		690,470
Costs and expenses:
Cost of cloud subscriptions, maintenance and services		118,269		111,142		356,920		322,914
Cost of software license		391		297		1,068		967
Research and development		34,349		33,093		104,693		95,487
Sales and marketing		16,586		17,650		55,669		54,278
General and administrative		20,308		21,371		62,623		61,561
Depreciation and amortization		1,688		1,440		4,670		4,247
Total costs and expenses		191,591		184,993		585,643		539,454
Operating income		75,090		53,448		200,908		151,016
Other income, net		1,312		1,739		3,222		2,923
Income before income taxes		76,402		55,187		204,130		153,939
Income tax provision		12,621		5,766		33,782		26,107
Net income		$63,781		$49,421		$170,348		$127,832
Basic earnings per share		$1.04		$0.80		$2.77		$2.07
Diluted earnings per share		$1.03		$0.79		$2.74		$2.05
Weighted average number of shares:
Basic		61,169		61,639		61,404		61,902
Diluted		61,948		62,310		62,186		62,501

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES Reconciliation of Selected GAAP to Non-GAAP Measures (in thousands, except per share amounts)
		Three Months Ended September 30,				Nine Months Ended September 30,
		2024		2023		2024		2023
Operating income		$75,090		$53,448		$200,908		$151,016
Equity-based compensation (a)		23,853		19,030		70,614		53,598
Adjusted operating income (Non-GAAP)		$98,943		$72,478		$271,522		$204,614
Income tax provision		$12,621		$5,766		$33,782		$26,107
Equity-based compensation (a)		3,683		3,030		10,967		8,067
Tax benefit of stock awards vested (b)		579		218		9,063		3,454
Adjusted income tax provision (Non-GAAP)		$16,883		$9,014		$53,812		$37,628
Net income		$63,781		$49,421		$170,348		$127,832
Equity-based compensation (a)		20,170		16,000		59,647		45,531
Tax benefit of stock awards vested (b)		(579)		(218)		(9,063)		(3,454)
Adjusted net income (Non-GAAP)		$83,372		$65,203		$220,932		$169,909
Diluted EPS		$1.03		$0.79		$2.74		$2.05
Equity-based compensation (a)		0.33		0.26		0.96		0.73
Tax benefit of stock awards vested (b)		(0.01)		-		(0.15)		(0.06)
Adjusted diluted EPS (Non-GAAP)		$1.35		$1.05		$3.55		$2.72
Fully diluted shares		61,948		62,310		62,186		62,501

(a)

Adjusted results exclude all equity-based compensation, as detailed below, to facilitate comparison with our peers and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. We do not receive a GAAP tax benefit for a portion of our equity-based compensation, mainly because of Section 162(m) of the Internal Revenue Code, which limits tax deductions for compensation granted to certain executives.

		Three Months Ended September 30,				Nine Months Ended September 30,
		2024		2023		2024		2023
Cost of services		$10,835		$7,643		$31,482		$21,337
Research and development		5,117		4,141		15,812		11,711
Sales and marketing		2,189		1,878		6,295		5,333
General and administrative		5,712		5,368		17,025		15,217
Total equity-based compensation		$23,853		$19,030		$70,614		$53,598

(b)

Adjustments represent the excess tax benefits and tax deficiencies of the equity awards vested during the period. Excess tax benefits (deficiencies) occur when the amount deductible on our tax return for an equity award is more (less) than the cumulative compensation cost recognized for financial reporting purposes. As discussed above, we exclude equity-based compensation from adjusted non-GAAP results to be consistent with other companies in the software industry and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. Therefore, we also exclude the related tax benefit (expense) generated upon their vesting.

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands, except share and per share data)
		September 30, 2024				December 31, 2023
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	214,952			$	270,741
Accounts receivable, net			199,756				181,173
Prepaid expenses and other current assets			37,605				27,276
Total current assets			452,313				479,190
Property and equipment, net			12,809				11,795
Operating lease right-of-use assets			50,094				21,645
Goodwill, net			62,236				62,235
Deferred income taxes			86,551				66,043
Other assets			34,137				32,445
Total assets		$	698,140			$	673,353
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	23,183			$	24,508
Accrued compensation and benefits			63,010				73,210
Accrued and other liabilities			23,227				27,374
Deferred revenue			252,537				237,793
Income taxes payable			286				3,030
Total current liabilities			362,243				365,915
Operating lease liabilities, long-term			50,028				17,694
Other non-current liabilities			7,918				11,466
Shareholders' equity:
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2024 and 2023			-				-
Common stock, $0.01 par value; 200,000,000 shares authorized; 61,072,619 and 61,566,037 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively			610				615
Retained earnings			303,361				304,701
Accumulated other comprehensive loss			(26,020	)			(27,038	)
Total shareholders' equity			277,951				278,278
Total liabilities and shareholders' equity		$	698,140			$	673,353

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (in thousands)
		Nine Months Ended September 30,
		2024				2023
		(unaudited)				(unaudited)
Operating activities:
Net income		$	170,348			$	127,832
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			4,670				4,247
Equity-based compensation			70,614				53,598
(Gain) loss on disposal of equipment			(131	)			42
Deferred income taxes			(20,544	)			(18,359	)
Unrealized foreign currency loss			906				922
Changes in operating assets and liabilities:
Accounts receivable, net			(17,515	)			(17,168	)
Other assets			(9,688	)			(7,747	)
Accounts payable, accrued and other liabilities			(13,367	)			13,477
Income taxes			(7,956	)			(4,347	)
Deferred revenue			12,962				5,362
Net cash provided by operating activities			190,299				157,859
Investing activities:
Purchase of property and equipment			(5,547	)			(2,761	)
Net cash used in investing activities			(5,547	)			(2,761	)
Financing activities:
Repurchase of common stock			(241,150	)			(195,716	)
Net cash used in financing activities			(241,150	)			(195,716	)
Foreign currency impact on cash			609				(2,533	)
Net change in cash and cash equivalents			(55,789	)			(43,151	)
Cash and cash equivalents at beginning of period			270,741				225,463
Cash and cash equivalents at end of period		$	214,952			$	182,312

MANHATTAN ASSOCIATES, INC. SUPPLEMENTAL INFORMATION 1. GAAP and adjusted earnings per share by quarter are as follows:
	2023										2024
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		YTD
GAAP Diluted EPS	$0.62		$0.63		$0.79		$0.78		$2.82		$0.86		$0.85		$1.03		$2.74
Adjustments to GAAP:
Equity-based compensation	0.23		0.25		0.26		0.25		0.97		0.30		0.34		0.33		0.96
Tax benefit of stock awards vested	(0.05)		-		-		-		(0.06)		(0.13)		(0.01)		(0.01)		(0.15)
Adjusted Diluted EPS	$0.80		$0.88		$1.05		$1.03		$3.74		$1.03		$1.18		$1.35		$3.55
Fully Diluted Shares	62,767		62,432		62,310		62,555		62,608		62,493		62,118		61,948		62,186

2. Revenues and operating income by reportable segment are as follows (in thousands):
	2023										2024
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		YTD
Revenue:
Americas	$170,759		$179,208		$186,564		$182,664		$719,195		$196,312		$205,955		$205,852		$608,119
EMEA	39,658		40,902		41,204		44,874		166,638		46,620		46,918		48,082		141,620
APAC	10,596		10,906		10,673		10,717		42,892		11,620		12,445		12,747		36,812
	$221,013		$231,016		$238,441		$238,255		$928,725		$254,552		$265,318		$266,681		$786,551
GAAP Operating Income:
Americas	$29,647		$32,326		$34,655		$38,530		$135,158		$36,687		$45,300		$49,033		$131,020
EMEA	12,793		13,556		14,415		15,959		56,723		15,884		17,195		20,521		53,600
APAC	4,645		4,601		4,378		4,376		18,000		5,059		5,693		5,536		16,288
	$47,085		$50,483		$53,448		$58,865		$209,881		$57,630		$68,188		$75,090		$200,908
Adjustments (pre-tax):
Americas:
Equity-based compensation	$16,640		$17,928		$19,030		$17,973		$71,571		$22,095		$24,666		$23,853		$70,614
	$16,640		$17,928		$19,030		$17,973		$71,571		$22,095		$24,666		$23,853		$70,614
Adjusted non-GAAP Operating Income:
Americas	$46,287		$50,254		$53,685		$56,503		$206,729		$58,782		$69,966		$72,886		$201,634
EMEA	12,793		13,556		14,415		15,959		56,723		15,884		17,195		20,521		53,600
APAC	4,645		4,601		4,378		4,376		18,000		5,059		5,693		5,536		16,288
	$63,725		$68,411		$72,478		$76,838		$281,452		$79,725		$92,854		$98,943		$271,522

3. Impact of Currency Fluctuation The following table reflects the increases (decreases) in the results of operations for each period attributable to the change in foreign currency exchange rates from the prior period as well as foreign currency gains (losses) included in other income, net for each period (in thousands):
	2023										2024
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		YTD
Revenue	$(3,084)		$104		$2,755		$2,341		$2,116		$648		$(531)		$936		$1,053
Costs and expenses	(3,616)		(1,133)		1,033		1,212		(2,504)		176		(673)		211		(286)
Operating income	532		1,237		1,722		1,129		4,620		472		142		725		1,339
Foreign currency gains (losses) in other income	(810)		(516)		387		(527)		(1,466)		(564)		(577)		(331)		$(1,472)
	$(278)		$721		$2,109		$602		$3,154		$(92)		$(435)		$394		$(133)

Manhattan Associates has a large research and development center in Bangalore, India. The following table reflects the increases (decreases) in the financial results for each period attributable to changes in the Indian Rupee exchange rate (in thousands):
	2023										2024
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		YTD
Operating income	$1,632		$1,222		$728		$267		$3,849		$185		$307		$261		$753
Foreign currency gains (losses) in other income	(283)		(31)		812		(105)		393		164		41		284		489
Total impact of changes in the Indian Rupee	$1,349		$1,191		$1,540		$162		$4,242		$349		$348		$545		$1,242

4. Other income includes the following components (in thousands):
	2023										2024
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		YTD
Interest income	$969		$1,555		$1,371		$1,409		$5,304		$1,414		$1,503		$1,636		$4,553
Foreign currency gains (losses)	(810)		(516)		387		(527)		(1,466)		(564)		(577)		(331)		(1,472)
Other non-operating income (expense)	(16)		2		(19)		(15)		(48)		146		(12)		7		141
Total other income (loss)	$143		$1,041		$1,739		$867		$3,790		$996		$914		$1,312		$3,222

5. Capital expenditures are as follows (in thousands):
	2023										2024
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		YTD
Capital expenditures	$666		$1,009		$1,086		$1,969		$4,730		$2,321		$2,217		$1,009		$5,547

6. Stock Repurchase Activity (in thousands):
	2023										2024
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		YTD
Shares purchased under publicly announced buy-back program	515		381		128		-		1,024		294		343		194		831
Shares withheld for taxes due upon vesting of restricted stock units	208		4		8		2		222		165		3		8		176
Total shares purchased	723		385		136		2		1,246		459		346		202		1,007
Total cash paid for shares purchased under publicly announced buy-back program	$74,177		$66,769		$25,072		$0		$166,018		$73,411		$74,999		$49,687		$198,097
Total cash paid for shares withheld for taxes due upon vesting of restricted stock units	27,511		658		1,529		331		30,029		40,423		713		1,917		43,053
Total cash paid for shares repurchased	$101,688		$67,427		$26,601		$331		$196,047		$113,834		$75,712		$51,604		$241,150

7. Remaining Performance Obligations We disclose revenue we expect to recognize from our remaining performance obligations ("RPO"). Over 98% of our RPO represents cloud native subscriptions with non-cancelable terms greater than one year (including cloud-deferred revenue as well as amounts we will invoice and recognize as revenue from our performance of cloud services in future periods). Maintenance contracts are typically one year and not included in the RPO. Our RPO as of the end of each period appears below (in thousands):
	March 31, 2023		June 30, 2023		September 30, 2023		December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024
Remaining Performance Obligations	$1,153,404		$1,238,672		$1,324,861		$1,427,854		$1,516,430		$1,601,531		$1,686,421

Contacts

Michael Bauer
Senior Director,
Investor Relations
Manhattan Associates, Inc.
678-597-7538
[e-mail]

Rick Fernandez
Director,
Corporate Communications
Manhattan Associates, Inc.
678-597-6988
[e-mail]