Manhattan Associates Reports Record Revenue and Earnings

Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $238.4 million for the third quarter ended September 30, 2023. GAAP diluted earnings per share for Q3 2023 was $0.79 compared to $0.47 in Q3 2022. Non-GAAP adjusted diluted earnings per share for Q3 2023 was $1.05 compared to $0.66 in Q3 2022.

“We are pleased with our quarterly and year-to-date results. Solid demand for our industry leading cloud solutions and services drove record results on the top and bottom lines,” said Manhattan Associates president and CEO Eddie Capel.

“Manhattan’s business fundamentals are strong, and our commitment to delivering innovation to our customers across mission-critical commerce and supply chain systems remains resolute. While we remain appropriately cautious and anticipate continued volatility, we are very optimistic about our expanding market opportunities. We are raising our 2023 outlook across all metrics and are providing preliminary solid 2024 parameters,” Mr. Capel concluded.

THIRD QUARTER 2023 FINANCIAL SUMMARY:

• Consolidated total revenue was $238.4 million for Q3 2023, compared to $198.1 million for Q3 2022.
  • Cloud subscription revenue was $65.0 million for Q3 2023, compared to $45.3 million for Q3 2022.
  • License revenue was $3.9 million for Q3 2023, compared to $6.4 million for Q3 2022.
  • Services revenue was $128.0 million for Q3 2023, compared to $103.4 million for Q3 2022.

• GAAP diluted earnings per share was $0.79for Q3 2023, compared to $0.47 for Q3 2022.
• Adjusted diluted earnings per share, a non-GAAP measure, was $1.05for Q3 2023, compared to $0.66 for Q3 2022.
• GAAP operating income was $53.4 million for Q3 2023, compared to $36.8 million for Q3 2022.
• Adjusted operating income, a non-GAAP measure, was $72.5 million for Q3 2023, compared to $51.3 million for Q3 2022.
• Cash flow from operations was $58.6 million for Q3 2023, compared to $39.9 million for Q3 2022. Days Sales Outstanding was 71 days at September 30, 2023, compared to 70 days at June 30, 2023.
• Cash totaled $182.3 million at September 30, 2023, compared to $153.3 million at June 30, 2023.
• During the three months ended September 30, 2023, the Company repurchased 128,133 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors for a total investment of $25.1 million. In October 2023, our Board of Directors approved replenishing our remaining share repurchase authority to an aggregate of $75.0 million of our common stock.

NINE MONTH 2023 FINANCIAL SUMMARY:

• Consolidated total revenue for the nine months ended September 30, 2023, was $690.5 million, compared to $569.0 million for the nine months ended September 30, 2022.
  • Cloud subscription revenue was $183.2 million for the nine months ended September 30, 2023, compared to $124.8 million for the nine months ended September 30, 2022.
  • License revenue was $13.0 million for the nine months ended September 30, 2023, compared to $19.9 million for the nine months ended September 30, 2022.
  • Services revenue was $368.7 million for the nine months ended September 30, 2023, compared to $294.3 million for the nine months ended September 30, 2022.
• GAAP diluted earnings per share for the nine months ended September 30, 2023, was $2.05, compared to $1.43 for the nine months ended September 30, 2022.
• Adjusted diluted earnings per share, a non-GAAP measure, was $2.72 for the nine months ended September 30, 2023, compared to $1.95 for the nine months ended September 30, 2022.
• GAAP operating income was $151.0 million for the nine months ended September 30, 2023, compared to $108.0 million for the nine months ended September 30, 2022.
• Adjusted operating income, a non-GAAP measure, was $204.6 million for the nine months ended September 30, 2023, compared to $152.2 million for the nine months ended September 30, 2022.
• Cash flow from operations was $157.9 million for the nine months ended September 30, 2023, compared to $124.4 million for the nine months ended September 30, 2022.
• During the nine months ended September 30, 2023, the Company repurchased 1,024,328 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $166.0 million.

2023 GUIDANCE

Manhattan Associates provides the following revenue, operating margin and diluted earnings per share guidance for the full year 2023:

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 2023 financial results will be held today, October 24, 2023, 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 2023 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, 2023.

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 “2023 Guidance,” statements we make about market adoption of our cloud-based solution and other 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 in the retail sector; delays in product development; competitive and pricing pressures; software errors and information technology failures, disruption and security breaches; disruption in the retail sector; 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, 2022, 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.