Manhattan Associates Blows Through Guidance to Report Record Revenue and Earnings

Rhea-AI Summary

Manhattan Associates (NASDAQ: MANH) reported record Q2 2024 results, surpassing expectations. Key highlights include:

- Revenue: $265.3 million (up from $231.0 million in Q2 2023)
- GAAP EPS: $0.85 (up from $0.63 in Q2 2023)
- Non-GAAP EPS: $1.18 (up from $0.88 in Q2 2023)
- Cloud subscription revenue: $82.4 million (up from $60.9 million in Q2 2023)
- RPO bookings increased 29% year-over-year

The company raised its 2024 full-year guidance, citing strong demand and a record pipeline. Manhattan Associates repurchased 342,807 shares for $75.0 million in Q2 and the Board approved replenishing the share repurchase authority to $75.0 million in July 2024.

Positive

• Record Q2 and first half results, exceeding expectations
• Revenue increased to $265.3 million, up 14.8% year-over-year
• GAAP EPS grew to $0.85, a 34.9% increase from Q2 2023
• Non-GAAP EPS rose to $1.18, a 34.1% increase from Q2 2023
• Cloud subscription revenue grew to $82.4 million, up 35.3% year-over-year
• RPO bookings increased 29% over the prior year
• Cash flow from operations improved to $73.3 million, up 80.5% from Q2 2023
• Company raised 2024 full-year guidance
• Board approved replenishing share repurchase authority to $75.0 million

Negative

• License revenue decreased to $3.1 million from $3.7 million in Q2 2023
• Cash balance slightly decreased to $202.7 million from $207.5 million in the previous quarter

Insights

Financial Analyst

Manhattan Associates' Q2 2024 results demonstrate robust financial performance, significantly outpacing expectations. The company's revenue surged to $265.3 million, marking a 14.8% year-over-year increase. This growth was primarily driven by the cloud subscription segment, which saw a remarkable 35.3% jump to $82.4 million.

The company's profitability metrics are equally impressive. GAAP diluted EPS rose by 34.9% to $0.85, while non-GAAP adjusted diluted EPS increased by 34.1% to $1.18. These figures underscore Manhattan Associates' ability to translate revenue growth into bottom-line results efficiently.

Of particular note is the company's improving operational efficiency. The Days Sales Outstanding (DSO) decreased from 74 days to 66 days, indicating better working capital management. Additionally, cash flow from operations nearly doubled to $73.3 million, highlighting the company's strong cash generation capabilities.

The 29% increase in RPO (Remaining Performance Obligation) bookings is a strong leading indicator of future revenue growth. This, coupled with management's decision to raise full-year guidance, suggests continued momentum in the coming quarters.

However, investors should note the slight decline in license revenue and monitor this trend, as it may indicate a shift in the company's revenue mix towards cloud-based solutions. Overall, Manhattan Associates' financial performance demonstrates strong execution and positions the company well in the competitive supply chain and omnichannel commerce solutions market.

Tech Industry Analyst

Manhattan Associates' stellar Q2 performance underscores the accelerating digital transformation in supply chain and omnichannel commerce sectors. The substantial 35.3% growth in cloud subscription revenue reflects a clear market shift towards cloud-based solutions, aligning with broader industry trends favoring flexibility, scalability and reduced IT overhead.

The company's success can be attributed to its strategic focus on innovation and market-responsive solutions. The record pipeline mentioned by CEO Eddie Capel suggests that Manhattan Associates' product offerings are resonating strongly with customers' evolving needs in an increasingly complex supply chain landscape.

Notably, the services revenue growth of 9.8% indicates that Manhattan Associates is successfully leveraging its software sales to drive additional high-margin service engagements. This trend is important for long-term customer retention and expanding the company's footprint within existing accounts.

The robust increase in RPO bookings is particularly significant. It not only provides visibility into future revenue streams but also suggests that customers are committing to longer-term engagements with Manhattan Associates. This trend could lead to more stable, predictable revenue growth and potentially higher customer lifetime values.

While the global economic outlook remains uncertain, Manhattan Associates' performance and optimistic guidance indicate that investment in supply chain and omnichannel technologies remains a priority for businesses. The company's ability to outperform in this environment positions it well to capitalize on potential market share gains as the industry continues to evolve.

RPO Bookings Increase 29% over Prior Year on Strong Demand Company Raises 2024 Full-Year Guidance

LONDON--(BUSINESS WIRE)-- Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $265.3 million for the second quarter ended June 30, 2024. GAAP diluted earnings per share for Q2 2024 was $0.85 compared to $0.63 in Q2 2023. Non-GAAP adjusted diluted earnings per share for Q2 2024 was $1.18 compared to $0.88 in Q2 2023.

“Our second quarter was another solid quarter of growth, margin expansion, and cash flow. We have achieved record second quarter and first half results, each exceeding expectations,” said Manhattan Associates president and CEO Eddie Capel.

“Manhattan’s business fundamentals are solid, as our global teams continue to execute well for our customers and deliver industry leading innovation to the market. While we remain appropriately cautious regarding the global economy, we enter the second half of the year with a record pipeline and are optimistic on our growing opportunity,” Mr. Capel concluded.

SECOND QUARTER 2024 FINANCIAL SUMMARY:

• Consolidated total revenue was $265.3 million for Q2 2024, compared to $231.0 million for Q2 2023.
• Cloud subscription revenue was $82.4 million for Q2 2024, compared to $60.9 million for Q2 2023.
• License revenue was $3.1 million for Q2 2024, compared to $3.7 million for Q2 2023.
• Services revenue was $136.8 million for Q2 2024, compared to $124.6 million for Q2 2023.
  • GAAP diluted earnings per share was $0.85 for Q2 2024, compared to $0.63 for Q2 2023.
  • Adjusted diluted earnings per share, a non-GAAP measure, was $1.18 for Q2 2024, compared to $0.88 for Q2 2023.
  • GAAP operating income was $68.2 million for Q2 2024, compared to $50.5 million for Q2 2023.
  • Adjusted operating income, a non-GAAP measure, was $92.9 million for Q2 2024, compared to $68.4 million for Q2 2023.
  • Cash flow from operations was $73.3 million for Q2 2024, compared to $40.6 million for Q2 2023. Days Sales Outstanding was 66 days at June 30, 2024, compared to 74 days at March 31, 2024.
  • Cash totalled $202.7 million at June 30, 2024, compared to $207.5 million at March 31, 2024.
  • During the three months ended June 30, 2024, the Company repurchased 342,807 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors for a total investment of $75.0 million. In July 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.

SIX MONTH 2024 FINANCIAL SUMMARY:

• Consolidated total revenue for the six months ended June 30, 2024, was $519.9 million, compared to $452.0 million for the six months ended June 30, 2023.
• Cloud subscription revenue was $160.4 million for the six months ended June 30, 2024, compared to $118.2 million for the six months ended June 30, 2023.
• License revenue was $5.9 million for the six months ended June 30,2024, compared to $9.1 million for the six months ended June 30, 2023.
• Services revenue was $269.0 million for the six months ended June 30,2024, compared to $240.8 million for the six months ended June 30, 2023.
  • GAAP diluted earnings per share for the six months ended June 30, 2024, was $1.71, compared to $1.25 for the six months ended June 30, 2023.
  • Adjusted diluted earnings per share, a non-GAAP measure, was $2.21 for the six months ended June 30, 2024, compared to $1.67 for the six months ended June 30, 2023.
  • GAAP operating income was $125.8 million for the six months ended June 30, 2024, compared to $97.6 million for the six months ended June 30, 2023.
  • Adjusted operating income, a non-GAAP measure, was $172.6 million for the six months ended June 30, 2024, compared to $132.1 million for the six months ended June 30, 2023.
  • Cash flow from operations was $128.0 million for the six months ended June 30, 2024, compared to $99.3 million for the six months ended June 30, 2023.
  • During the six months ended June 30, 2024, the Company repurchased 636,399 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $148.4 million. In July 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.

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 and on-premises solutions so that across the store, through your network or from your fulfilment centre, you are ready to reap the rewards of the omnichannel marketplace. For more information, please visit www.manh.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731537401/en/

James Canham-Ash

Manhattan Associates

jash@manh.com

Source: Manhattan Associates Inc.

FAQ

What was Manhattan Associates' (MANH) revenue for Q2 2024?

Manhattan Associates reported revenue of $265.3 million for Q2 2024, compared to $231.0 million for Q2 2023.

How much did Manhattan Associates' (MANH) cloud subscription revenue grow in Q2 2024?

Manhattan Associates' cloud subscription revenue grew to $82.4 million in Q2 2024, a 35.3% increase from $60.9 million in Q2 2023.

What was Manhattan Associates' (MANH) GAAP EPS for Q2 2024?

Manhattan Associates reported GAAP diluted earnings per share of $0.85 for Q2 2024, compared to $0.63 for Q2 2023.

How much did Manhattan Associates (MANH) spend on share repurchases in Q2 2024?

Manhattan Associates repurchased 342,807 shares of common stock for a total investment of $75.0 million in Q2 2024.

Did Manhattan Associates (MANH) update its guidance for 2024?

Yes, Manhattan Associates raised its 2024 full-year guidance, citing strong demand and a record pipeline.