Manhattan Associates (MANH) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 and year-to-date revenue and earnings, with Q3 revenue up 12% to $266.7 million and adjusted EPS up 29% to $1.35, driven by 33% cloud subscription growth and strong services demand.

• Cloud subscriptions revenue rose 33% year-over-year to $86.5 million, now representing 33% of total revenue.

• RPO bookings increased 27% year-over-year to $1.7 billion, with a strong pipeline and 70% win rates.

• Product innovation included the launch of Manhattan Active Supply Chain Planning and new generative AI features.

• Management remains cautiously optimistic about the global economy and market opportunities.

Financial highlights

• Q3 2024 revenue: $266.7 million, up 12% year-over-year; cloud revenue: $86.5 million, up 33%; services revenue: $137 million, up 7%.

• Adjusted operating profit: $98.9 million; adjusted operating margin: 37.1%, up 670 basis points year-over-year.

• Adjusted EPS: $1.35, up 29%; GAAP EPS: $1.03, up 30%.

• Operating cash flow: $62.3 million in Q3; cash: $215 million; zero debt.

• $50 million in share repurchases in Q3; $198 million year-to-date.

Outlook and guidance

• 2024 revenue guidance: $1.039–$1.041 billion (12% growth); operating margin midpoint raised to 34%.

• 2024 adjusted EPS midpoint increased to $4.61 (23% growth); GAAP EPS midpoint to $3.48 (23% growth).

• Q4 revenue expected at $253.5 million, with cloud revenue target raised to $89.5 million.

• 2025 preliminary targets: revenue of $1.13–$1.14 billion (9–10% growth), cloud revenue of $415 million (23% growth), RPO of $2.15 billion (21% growth), and operating margin of 33.5%.

• Guidance is forward-looking and subject to material risks and uncertainties.