Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Manhattan Associates Inc (MANH, Financial) reported better-than-expected top- and bottom-line results for Q1 2025, with a 21% growth in Cloud revenue.
- The company achieved a 25% year-over-year increase in Remaining Performance Obligations (RPO), reaching approximately $1.9 billion.
- Manhattan Associates Inc (MANH) was named Google Cloud's Business Applications Partner of the Year for Supply Chain and Logistics, highlighting its innovation and customer success.
- The company launched a new product, Enterprise Promise and Fulfill, designed to optimize B2B order promising and fulfillment, enhancing customer experiences.
- Manhattan Associates Inc (MANH) maintained a strong competitive win rate of about 70%, with 50% of new Cloud bookings coming from net new logos.
Negative Points
- The macro environment remains uncertain, with potential impacts from tariffs and global economic conditions, leading to cautious near-term outlooks.
- Services revenue declined by 8% year-over-year, reflecting customer budgetary constraints and shifting services work to future periods.
- FX volatility posed a $2 million headwind to Q1 total revenue, although it provided a $14 million tailwind to sequential RPO growth.
- The company remains cautious about near-term Services revenue growth due to the flexibility of time and materials contracts and the changing tariff environment.
- The average contract duration remains at 5.5 to 6 years, with some customers electing longer ramp timelines, potentially delaying revenue recognition.
Q & A Highlights
Q: Can you provide insights into the sales pipeline and how the year might unfold given the current macroeconomic uncertainties, particularly with tariffs?
A: Eric Clark, President and CEO, stated that despite the uncertainties, Manhattan Associates had a solid Q1 with strong pipeline visibility into Q2. They remain confident in their guidance, noting that any challenges would likely first appear in Services. However, they are not currently seeing such challenges and continue to experience strong bookings and demand.
Q: What are some growth investments Manhattan Associates is focusing on this year?
A: Eric Clark highlighted that the company is investing in sales and marketing to drive growth. They plan to invest in sales specialists for new products to maintain high win rates against competitors and compete for more deals.
Q: How did the linearity of bookings and RPO progress throughout the quarter, and how has Q2 started?
A: Eddie Capel, Executive Vice Chairman, noted that Q1 was balanced across product portfolios, vertical industries, and geographies, with no significant fluctuations. The pipeline for Q2 is strong, and they have high expectations for the quarter.
Q: Is there a particular segment of Cloud bookings that is more resilient in the current environment?
A: Eddie Capel explained that no specific segment is more resilient than others. While new logos had a strong quarter, the distribution of bookings typically balances out over time. The focus remains on precise supply chain execution due to unchanged customer expectations.
Q: How does the current macro environment affect the decision-making process for customers considering cloud migration?
A: Eddie Capel mentioned that while the macro environment is volatile, it is unlikely to trigger immediate cloud migration decisions. However, the flexibility and agility of Manhattan's Cloud solutions are advantageous, allowing customers to adapt quickly to changes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
