Manhattan Associates(MANH) - 2025 Q2 - Quarterly Results

Executive Summary Q2 2025 Performance Highlights Manhattan Associates reported strong Q2 2025 results with increased consolidated revenue, significant cloud revenue growth, and RPO surpassing the $2 billion milestone | Metric | Q2 2025 | Q2 2024 | | :--------------------------- | :------ | :------ | | Consolidated Total Revenue | $272.4M | $265.3M | | GAAP Diluted EPS | $0.93 | $0.85 | | Non-GAAP Adjusted Diluted EPS | $1.31 | $1.18 | - RPO Bookings increased 26% over the prior year, surpassing the $2 billion milestone[1][3] - Cloud revenue grew by 22% in Q2 2025[3] CEO Commentary and Strategic Outlook The CEO highlighted record Q2 results driven by strong cloud demand and expressed optimism about the company's business fundamentals and sustained growth opportunities - Manhattan delivered record second quarter results, with solid demand driving Q2 cloud revenue growth of 22% and RPO surpassing the $2 billion milestone[3] - The company believes its cloud platform leadership advantage positions it as the clear choice for modern supply chain commerce solutions, despite a challenging global macro environment[4] - The unified cloud platform is expected to increase leadership advantage, expand the addressable market, and drive optimal results for customers[4] Financial Results Overview Second Quarter 2025 Financial Summary Q2 2025 saw increased consolidated revenue driven by robust cloud subscription growth, with positive year-over-year growth in operating income and diluted EPS | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Change | | :----------------------- | :----------------- | :----------------- | :--------- | | Consolidated Total Revenue | $272.4 | $265.3 | +2.7% | | Cloud Subscription Revenue | $100.4 | $82.4 | +21.8% | | License Revenue | $1.5 | $3.1 | -51.6% | | Services Revenue | $128.9 | $136.8 | -5.8% | | GAAP Diluted EPS | $0.93 | $0.85 | +9.4% | | Adjusted Diluted EPS | $1.31 | $1.18 | +11.0% | | GAAP Operating Income | $73.8 | $68.2 | +8.2% | | Adjusted Operating Income| $101.1 | $92.9 | +8.8% | | Cash Flow from Operations| $74.0 | $73.3 | +1.0% | | Cash Balance (June 30, 2025) | $230.6 | N/A | N/A | | Days Sales Outstanding (June 30, 2025) | 70 days | N/A | N/A | - The company repurchased 262,341 shares of common stock for $49.6 million during Q2 2025 and the Board of Directors replenished the share repurchase authority to an aggregate of $100.0 million[7] Six Months 2025 Financial Summary For the first six months of 2025, consolidated revenue increased, driven by a significant rise in cloud subscription revenue and improvements in earnings and cash flow | Metric | 6 Months 2025 (Millions) | 6 Months 2024 (Millions) | YoY Change | | :----------------------- | :----------------------- | :----------------------- | :--------- | | Consolidated Total Revenue | $535.2 | $519.9 | +2.9% | | Cloud Subscription Revenue | $194.7 | $160.4 | +21.4% | | License Revenue | $10.8 | $5.9 | +83.1% | | Services Revenue | $250.0 | $269.0 | -7.0% | | GAAP Diluted EPS | $1.78 | $1.71 | +4.1% | | Adjusted Diluted EPS | $2.50 | $2.21 | +13.1% | | GAAP Operating Income | $137.0 | $125.8 | +8.9% | | Adjusted Operating Income| $192.3 | $172.6 | +11.4% | | Cash Flow from Operations| $149.3 | $128.0 | +16.6% | - During the six months ended June 30, 2025, the company repurchased 801,669 shares of common stock for a total investment of $149.6 million[8] 2025 Financial Guidance Full Year 2025 Outlook The company provided full-year 2025 guidance projecting modest growth in total revenue and adjusted diluted EPS, with specific ranges for operating margins | Metric | 2025 Guidance Range | % Growth Range | | :-------------------- | :------------------ | :------------- | | Total Revenue | $1,071 - $1,075 M | 3% | | GAAP Operating Margin | 24.1% - 24.6% | | | Adjusted Operating Margin | 34.8% - 35.3% | | | GAAP EPS | $3.23 - $3.31 | -8% to -6% | | Adjusted EPS | $4.76 - $4.84 | 1% to 3% | Non-GAAP Adjustments and Definitions Non-GAAP financial measures are used to clarify core operating performance by excluding items like equity-based compensation and restructuring expenses - Non-GAAP measures exclude equity-based compensation, an expense related to an unusual health insurance claim, restructuring expense, and related income tax effects[9][13] - An unusual health insurance claim is excluded from adjusted non-GAAP results due to its uncommonly large magnitude and nature[9][23] - Restructuring expense from the elimination of approximately 100 positions is excluded from adjusted non-GAAP results as it is not a common operating cost[9][23] Corporate Information Conference Call Information A conference call was held on July 22, 2025, to discuss Q2 financial results, with a webcast available on the company's investor relations website - A conference call was held on July 22, 2025, at 4:30 p.m. Eastern Time[11] - A live webcast and recording of the conference call are available on the investor relations section of the Manhattan Associates website at ir.manh.com[10][11] About Manhattan Associates Manhattan Associates is a global technology leader in supply chain and omnichannel commerce solutions, providing leading-edge cloud platforms - Manhattan Associates is a global technology leader in supply chain and omnichannel commerce[14] - The company unites information across the enterprise, converging front-end sales with back-end supply chain execution[14] - They design, build, and deliver leading-edge cloud solutions to help customers reap the rewards of the omnichannel marketplace[15] Forward-Looking Statements Disclaimer The press release contains forward-looking statements subject to risks and uncertainties, and the company undertakes no obligation to update these statements - Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, with actual results potentially differing materially[16] - Key risk factors include economic conditions, competitive and pricing pressures, software errors, global instability, and other factors detailed in SEC filings[16] - Manhattan Associates disclaims any obligation to update or revise forward-looking statements to reflect changed assumptions or unanticipated events[10][16] Condensed Consolidated Financial Statements Condensed Consolidated Statements of Income These statements detail revenue and expenses for Q2 and the first six months of 2025, highlighting strong cloud subscription growth and increased net income | Revenue Category (Thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--------------------------- | :------ | :------ | :------------ | :------------ | | Cloud subscriptions | $100,422 | $82,361 | $194,728 | $160,388 | | Software license | $1,528 | $3,061 | $10,820 | $5,871 | | Maintenance | $35,057 | $35,273 | $67,201 | $70,245 | | Services | $128,899 | $136,831 | $250,026 | $269,026 | | Hardware | $6,515 | $7,792 | $12,433 | $14,340 | | Total Revenue | $272,421 | $265,318 | $535,208 | $519,870 | | Operating Income | $73,788 | $68,188 | $136,960 | $125,818 | | Net Income | $56,780 | $52,766 | $109,362 | $106,567 | | Diluted EPS | $0.93 | $0.85 | $1.78 | $1.71 | Reconciliation of Selected GAAP to Non-GAAP Measures This section reconciles GAAP to non-GAAP measures, adjusting for items like equity-based compensation to clarify underlying operational performance | Metric (Thousands) | Q2 2025 GAAP | Q2 2025 Non-GAAP | 6 Months 2025 GAAP | 6 Months 2025 Non-GAAP | | :----------------- | :----------- | :--------------- | :----------------- | :--------------------- | | Operating Income | $73,788 | $101,071 | $136,960 | $192,340 | | Net Income | $56,780 | $80,121 | $109,362 | $153,094 | | Diluted EPS | $0.93 | $1.31 | $1.78 | $2.50 | - Total equity-based compensation, a key adjustment, amounted to $24.3 million in Q2 2025 and $53.1 million for the six months ended June 30, 2025[21][22] - Adjustments also include an unusual health insurance claim ($3.0 million expense in Q2 2025) and restructuring expense ($2.9 million for six months 2025), both excluded from non-GAAP results[21][23] Condensed Consolidated Balance Sheets The balance sheets show the company's financial position as of June 30, 2025, reflecting a decrease in cash and an increase in deferred revenue | Balance Sheet Item (Thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Total Assets | $744,684 | $757,551 | | Cash and cash equivalents | $230,593 | $266,230 | | Accounts receivable, net | $209,843 | $205,475 | | Deferred revenue | $299,836 | $277,970 | | Total Shareholders' Equity | $278,759 | $299,126 | Condensed Consolidated Statements of Cash Flows Cash flow statements for the first six months of 2025 show a significant increase in net cash from operations, with financing activities dominated by stock repurchases | Cash Flow Item (Thousands) | 6 Months 2025 | 6 Months 2024 | | :------------------------- | :------------ | :------------ | | Net cash from operating activities | $149,310 | $128,000 | | Net cash used in investing activities | $(4,871) | $(4,538) | | Net cash used in financing activities | $(186,638) | $(189,546) | | Net change in cash and cash equivalents | $(35,637) | $(68,032) | | Cash and cash equivalents at end of period | $230,593 | $202,709 | - Repurchase of common stock was the primary use of cash in financing activities, totaling $186.6 million for the six months ended June 30, 2025[27] Supplemental Financial Data Quarterly GAAP and Adjusted EPS This section provides a quarterly breakdown of GAAP and Adjusted Diluted EPS for 2024 and H1 2025, detailing specific non-GAAP adjustments | Metric | Q1 2024 | Q2 2024 | Q1 2025 | Q2 2025 | YTD 2025 | | :-------------------- | :------ | :------ | :------ | :------ | :------- | | GAAP Diluted EPS | $0.86 | $0.85 | $0.85 | $0.93 | $1.78 | | Adjusted Diluted EPS | $1.03 | $1.18 | $1.19 | $1.31 | $2.50 | | Equity-based compensation adjustment | $0.30 | $0.34 | $0.40 | $0.35 | $0.74 | Revenue and Operating Income by Reportable Segment This section breaks down revenue and operating income by segment, with the Americas consistently representing the largest portion of both | Segment (Thousands) | Q2 2025 Revenue | Q2 2024 Revenue | Q2 2025 GAAP Op. Income | Q2 2025 Adj. Op. Income | | :------------------ | :-------------- | :-------------- | :---------------------- | :---------------------- | | Americas | $206,606 | $205,955 | $48,051 | $75,334 | | EMEA | $52,301 | $46,918 | $19,807 | $19,807 | | APAC | $13,514 | $12,445 | $5,930 | $5,930 | | Total | $272,421 | $265,318 | $73,788 | $101,071 | Impact of Currency Fluctuation Foreign currency exchange rate changes had a positive impact on Q2 2025 revenue and operating income | Metric (Thousands) | Q2 2025 Impact | 6 Months 2025 Impact | | :----------------- | :------------- | :------------------- | | Revenue | $2,724 | $1,133 | | Operating income | $1,544 | $1,919 | | Indian Rupee impact on Operating income | $514 | $1,299 | Other Income Components This table breaks down other income components, with interest income being a significant contributor | Component (Thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------- | :------ | :------ | :------------ | :------------ | | Interest income | $852 | $1,503 | $1,953 | $2,917 | | Foreign currency gains (losses) | $(65) | $(577) | $65 | $(953) | | Other non-operating income (expense) | $(72) | $(12) | $34 | $142 | | Total other income (loss) | $715 | $914 | $2,052 | $2,318 | Capital Expenditures This section summarizes capital expenditures, which amounted to $3.98 million in Q2 2025 | Period | Capital Expenditures (Thousands) | | :----- | :------------------------------- | | Q2 2025 | $3,980 | | YTD 2025 | $4,871 | | Q2 2024 | $2,217 | | YTD 2024 | $4,538 | Stock Repurchase Activity The company repurchased 263,000 shares for $49.6 million under its buyback program in Q2 2025 | Metric (Thousands) | Q2 2025 | YTD 2025 | Q2 2024 | YTD 2024 | | :----------------- | :------ | :------- | :------ | :------- | | Shares purchased under buy-back program | 263 | 802 | 343 | 637 | | Total cash paid for shares purchased under buy-back program | $49,596 | $149,596 | $74,999 | $148,410 | Remaining Performance Obligations (RPO) RPO reached $2.01 billion as of June 30, 2025, with over 98% attributed to cloud native subscriptions | Date | RPO (Thousands) | | :--------------- | :-------------- | | March 31, 2024 | $1,516,430 | | June 30, 2024 | $1,601,531 | | September 30, 2024 | $1,686,421 | | December 31, 2024 | $1,780,400 | | March 31, 2025 | $1,891,384 | | June 30, 2025 | $2,013,756 | - Over 98% of RPO represents cloud native subscriptions with non-cancelable terms greater than one year[33]