Core Viewpoint - A class action lawsuit has been filed against Manhattan Associates, Inc. following a significant drop in its stock price after the company issued reduced revenue guidance for fiscal year 2025 [1][3]. Group 1: Lawsuit Details - The lawsuit, Timothy Prime v. Manhattan Associates, Inc., was initiated in the United States District Court for the Northern District of Georgia [1]. - Investors who purchased securities of Manhattan Associates between October 22, 2024, and January 28, 2025, are eligible to participate in the lawsuit [1][4]. Group 2: Financial Performance and Guidance - On January 28, 2025, Manhattan Associates reported its financial results for Q4 and the full fiscal year 2024, along with a lowered revenue guidance for fiscal year 2025 [3]. - The company attributed the reduced guidance to a shift in professional services work to future periods, reduced customization, and higher partner utilization [3]. Group 3: Stock Price Reaction - Following the announcement of the lowered guidance, Manhattan Associates' stock price fell from $295.10 per share on January 28, 2025, to $222.84 per share on January 29, 2025, marking a decline of approximately 24.49% in one day [3].

Core Viewpoint - The Schall Law Firm is investigating Manhattan Associates, Inc. for potential violations of securities laws related to misleading statements and inadequate disclosures to investors [1][2]. Group 1: Investigation Details - The investigation centers on whether Manhattan Associates issued false or misleading statements and failed to disclose critical information to investors [2]. - The company's Q4 2024 financial results, released on January 28, 2025, included guidance for fiscal 2025 that significantly missed market expectations, attributed to issues in its services segment and "considerable FX noise" [2]. Group 2: Investor Information - Shareholders who have experienced losses are encouraged to participate in the investigation and can contact the Schall Law Firm for a free discussion of their rights [3].

Key Metrics - Revenue for Q4 2023 was $238.3 million, up 7% from Q4 2022, and exceeded expectations [1] - Earnings per share increased to $1.03, a 14% rise compared to the previous year, also beating expectations [1] - Cloud subscription revenue reached $71.4 million, growing by 26% year over year [1] - Cash flow from operations was $88.4 million, an 18% increase from the prior year [1] Growth Outlook - The company forecasts a slowdown in sales growth to 2% to 3% for 2025, projecting revenue between $1.06 billion and $1.07 billion, which is below the Wall Street consensus of $1.1 billion [2] - Customer uncertainty regarding the economy is impacting spending plans, with about 10% of customers reducing their planned services work for 2025 [3] Cloud Transition - Manhattan Associates is transitioning its business to the cloud, with cloud subscription revenue representing 35% of total revenue and growing at a faster rate than overall revenue [4] CEO Transition - CEO Eddie Capel will retire on February 12, 2024, after serving since January 2013, and will be succeeded by Eric Clark [5] - Capel stated that the company is in a strong position for a CEO transition, but his departure adds uncertainty post-earnings [6] Market Reaction - Following the earnings report, shares fell 24% on January 29, and have declined over 40% from the day before the report to February 11 [8] - Investor expectations were high prior to the earnings report, with valuation multiples near historical highs [9] Financial Health - The company remains profitable, generating nearly $300 million in cash flow from operations in 2024, with significant cash returned to shareholders through buybacks [11]

Cloud Solutions and Software Development - Manhattan Associates offers cloud-based software solutions for supply chain, inventory, and omnichannel operations, with a focus on subscription-based SaaS delivery[15]. - The company’s Supply Chain Execution solutions optimize distribution and transportation costs, while its Warehouse Management solutions are recognized as industry-leading[16]. - Manhattan Active solutions provide quarterly updates and zero downtime, ensuring customers always operate on the latest version of the software[15]. - Manhattan's Warehouse Management Solutions (WMS) are delivered via the cloud on Google Cloud Platform, offering state-of-the-art fulfillment optimization technology[20]. - Manhattan Active Omni solutions integrate order management, store inventory fulfillment, and customer engagement tools into a single application[20]. - The company focuses on developing and enhancing software solutions, aiming to provide the broadest and most feature-rich software portfolio in the market[35]. - The company evaluates strategic acquisition opportunities to enhance and expand its offerings, targeting technologies and businesses that complement its existing solutions[38]. - The company’s business model focuses on developing and implementing complex commerce enablement software solutions to optimize supply chains and retail operations[171]. Investment and Growth Strategy - The company plans to continue investing in sales, services, and marketing across the Americas, EMEA, and APAC regions to drive growth[39]. - The company is investing in artificial intelligence, particularly generative AI, to enhance its supply chain execution and planning applications, with new capabilities expected in the coming quarters[26]. - The company may require additional capital for growth, acquisitions, or investments, influenced by various factors including product demand and competitive pressures[99]. - The company anticipates retaining all earnings and cash resources for investment in its business, including share repurchases, and does not intend to declare or pay cash dividends in the foreseeable future[163]. Financial Performance - In 2024, the company generated total revenue of $1,042.4 million, with a revenue mix of 32% from cloud subscriptions, 1% from software licenses, 13% from maintenance, 51% from services revenue, and 3% from hardware[172]. - Total revenue for 2024 was $1,042.4 million, compared to $928.7 million in 2023, reflecting solid growth[203]. - Operating income for 2024 was $261.6 million, with operating margins improving to 25.1% from 22.6% in 2023[203]. - Cloud revenue increased by 32% year-over-year, totaling $337.2 million in 2024, which is 32% of total revenue[184]. - Services revenue accounted for 51% of total revenue in 2024, totaling $525.5 million[191]. - The Americas segment generated $802.5 million in total revenue for 2024, a 12% increase from $719.2 million in 2023[206]. - EMEA segment revenue grew by 14% to $190.5 million in 2024, up from $166.6 million in 2023[206]. - APAC segment revenue increased by 15% to $49.3 million in 2024, compared to $42.9 million in 2023[206]. Employee and Workforce Management - The company employs approximately 2,750 employees in international operations as of December 31, 2024[51]. - The company has approximately 4,690 employees worldwide as of December 31, 2024, emphasizing a diverse and educated workforce[55]. - The company employs a robust in-house recruiting program focused on diverse candidate pools, including individuals with disabilities and veterans, to build a steady pipeline of talent[58]. - The company provides competitive compensation, benefits programs, and career development opportunities to attract and retain employees[59]. - The company prioritizes continuous learning and employee well-being through various programs, including free virtual mental health counseling and gym access[63]. Risks and Challenges - The company faces risks related to the use of generative AI tools, including potential operational, compliance, and legal liabilities[77]. - The company relies on third-party data centers for cloud-based solutions, which poses risks related to service interruptions and operational costs[70]. - The company faces intense competition from established players with greater resources, which could lead to pricing pressure and loss of market share[91]. - Revenue is primarily derived from supply chain cloud solutions, making the company vulnerable to adverse market conditions in this sector[92]. - The company is subject to stringent data security regulations, and any breaches could damage its reputation and financial condition[105]. - Liability for intellectual property claims could result in significant costs and negatively impact the company's business, cash flow, and financial condition[112]. - The use of open source software may expose the company to additional risks that could harm its intellectual property and financial condition[114]. - Changes in tax laws, such as the 1% excise tax on corporate stock repurchases enacted in 2022, could have a material adverse impact on the company in the future[118]. Cybersecurity Measures - The company has engaged outside independent auditors and cybersecurity service providers as part of its Cyber Program to enhance protection against cybersecurity threats[152]. - The company maintains a Cyber Program that includes a governance structure overseen by the Board Audit Committee, with quarterly updates provided to the full Board[144]. - The company has a Cybersecurity Committee that reviews risks, discusses emerging threats, and prioritizes cybersecurity efforts[146]. - The company has incorporated industry-recognized cybersecurity frameworks into its Cyber Program, including those from NIST and ISO, and continues to invest in enhancing its cybersecurity measures[148]. Market Dynamics - The retail market, the company's largest segment, is undergoing significant disruption due to digital commerce, which may lead to delayed purchase decisions from traditional retailers[88]. - The company’s future revenue is dependent on continuing sales from cloud subscriptions, which drive sales of professional services[69]. - The sales cycles for the company's products typically extend from nine to twelve months and may take up to several years, impacting revenue predictability[84]. - Lengthy and uncertain sales cycles make it difficult for the company to predict customer purchases, affecting revenue recognition and operating results[85].

Core Viewpoint - Manhattan Associates, Inc. experienced a significant decline in stock price following disappointing Q4 and FY 2024 financial results, along with lower-than-expected revenue guidance for 2025, leading to an investigation into the company's public statements regarding its services business [1][7]. Financial Performance - For Q4 2024, Manhattan Associates reported services revenue of $119.5 million, reflecting a minimal growth of 0.3% year-over-year, which was approximately $2 million below prior guidance [4]. - The company anticipates modest total revenue growth of 2% to 3% for FY 2025, with GAAP EPS expected to decline by 10% to 13% [6]. Business Challenges - The company cited delays in professional services work and deferred deals as contributing factors to its disappointing performance, predicting that services revenue would reach a low point in Q1 2025 [5]. - Approximately 10% of customers with ongoing implementations have reduced their planned services work for the upcoming calendar and fiscal year, indicating emerging challenges in the services business [6]. Market Reaction - Following the announcements, Manhattan Associates' stock price fell by approximately 24% on January 29, 2025, resulting in a loss of over $4 billion in shareholder value [7].

Core Insights - Manhattan Associates (NASDAQ: MANH) is an enterprise software company that provides software and services to major brands for managing supply chain and commerce operations on a unified platform [1] Group 1 - The company has been under observation since last year, indicating a growing interest in its business model and market performance [1] - Manhattan Associates focuses on delivering integrated solutions that enhance operational efficiency for its clients [1]

Core Insights - Manhattan Associates is under investigation for potential securities fraud and unlawful business practices [1] - The company reported a services revenue of $119.5 million for Q4 2024, reflecting a minimal growth of 0.3% year-over-year and falling short of previous guidance by approximately $2 million [2] - The company anticipates a low point in services revenue in Q1 2025, with modest revenue growth projected at 2% to 3% for 2025 and a decline in GAAP EPS by 10% to 13% [2] - Following the financial results announcement, Manhattan Associates' stock price dropped by 24.49%, closing at $222.84 per share [3] Financial Performance - Q4 2024 services revenue: $119.5 million, up 0.3% year-over-year [2] - Revenue guidance missed by approximately $2 million [2] - Projected revenue growth for 2025: 2% to 3% [2] - Expected decline in GAAP EPS: 10% to 13% [2] Market Reaction - Stock price decline: $72.26 per share, or 24.49%, closing at $222.84 on January 29, 2025 [3]

Core Viewpoint - Manhattan Associates (MANH) has experienced a significant decline of 20.4% over the past four weeks, but it is now positioned for a potential trend reversal as it is in oversold territory, with analysts expecting better earnings than previously predicted [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2]. - MANH has an RSI reading of 22.31, suggesting that the heavy selling pressure may be exhausting, indicating a possible bounce back towards equilibrium [5]. Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts that earnings estimates for MANH have increased by 3.8% over the last 30 days, which often correlates with price appreciation in the near term [6]. - MANH holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [7].

Core Viewpoint - Shares of Manhattan Associates experienced a significant decline of approximately 25% following its fourth-quarter earnings report, which, despite beating expectations, provided disappointing guidance for 2025 [1][3]. Financial Performance - Heading into the fourth quarter, Manhattan Associates was trading at 63 times free cash flow (FCF) and had achieved an average sales growth of 16% over the past three years, indicating high market expectations [2]. - The company reported a 7% revenue growth and a 14% adjusted earnings per share (EPS) growth, surpassing analysts' expectations [3]. Future Guidance - The guidance for 2025 projected only a 2.5% revenue growth and a 5% decline in adjusted EPS, leading to a reassessment of the company's valuation by the market [3]. Market Position - Despite short-term cyclicality affecting services revenue, Manhattan Associates maintains strong long-term prospects, being recognized as a leader in order management and point-of-sale systems by Forrester [4]. - The company is the first software provider to lead in both order management and point-of-sale systems, providing a competitive advantage as retail shifts towards omnichannel operations [5]. Growth Indicators - Remaining performance obligations (RPO) increased by 25% from the end of 2023, suggesting that the anticipated growth deceleration in 2025 may be short-lived [5]. - The company's valuation stands at 47 times FCF, with a remarkable return on invested capital (ROIC) of 82%, indicating a potentially strong investment opportunity at a more reasonable price [6].

Core Insights - Manhattan Associates (MANH) shares dropped over 20% following a surprise decline in profit outlook due to a "turbulent macro environment" [1][4] - The company forecasts a 4% to 6% year-over-year decrease in adjusted earnings per share (EPS) for full-year 2025, estimating EPS between $4.45 and $4.55, while revenue is expected to rise 2% to 3% to $1.06 billion to $1.07 billion [1][4] - Analysts had anticipated adjusted EPS of $4.57 and revenue of $1.07 billion [1] Financial Performance - Despite the negative outlook, the company reported better-than-expected fourth-quarter results, with adjusted EPS of $1.17 and revenue growth of 7% to $255.8 million, surpassing forecasts [2] - Remaining performance obligation (RPO) bookings increased by 25% to a record high, with expected revenue from these bookings at $1.78 billion [3]