Manhattan Associates Q4 Earnings Call Highlights

Core Insights - Manhattan Associates reported better-than-expected fourth-quarter and full-year results for 2025, highlighting record cloud bookings and significant growth in remaining performance obligations (RPO) and total revenue [4][6][19] Financial Performance - For the full year, revenue totaled $1.08 billion, reflecting a 4% increase on an as-reported basis, with a 5% growth when excluding license and maintenance revenue [1] - Fourth-quarter revenue reached $270 million, up 6% year over year, with cloud revenue increasing by 20% to $109 million [3][6] - Full-year cloud revenue rose 21% to $408 million, while services revenue declined 4% to $503 million [1][3] Remaining Performance Obligations (RPO) - RPO ended the quarter at $2.2 billion, marking a 25% year-over-year increase and a 7% sequential rise [2][6] - The company guided for RPO of $2.62 billion to $2.68 billion for 2026, implying 18% to 20% growth [5][14] Cloud Revenue and Growth Metrics - Management introduced a new "ramped ARR" metric, which exceeded $600 million, up 23% year-over-year, indicating strong cloud revenue growth as subscription contracts ramp to full pricing [5][9] - Cloud revenue is expected to increase by 21% to $492 million in 2026 [16] Profitability and Cash Flow - Adjusted operating profit for Q4 was $91 million, representing a 33.8% margin, while full-year adjusted operating profit was $387 million with a 35.8% margin [6] - Fourth-quarter operating cash flow increased by 40% to $147 million, with a free cash flow margin of 52.7% [7] Strategic Initiatives - The company emphasized investments in AI agents and the Active platform, aiming to enhance customer productivity and satisfaction [11][12] - A reorganization of the global sales team and hiring of key executives were noted to support growth initiatives [13] Guidance and Outlook - Total revenue guidance for 2026 is set between $1.133 billion and $1.153 billion, implying a 10% growth excluding license and maintenance attrition [15] - Adjusted EPS guidance for 2026 is projected between $5.04 and $5.20, with GAAP EPS expected to be between $3.37 and $3.53 [16]