Manhattan Associates, Inc. Q2 FY2025 earnings call

• Eddie Capel commended Eric Clark on his first 160 days as CEO and announced his transition to Chairman of the Board effective January 1, 2026.
• Eric Clark highlighted Q2 results better than expected, with 22% cloud revenue growth, RPO surpassing $2 billion, win rates against top 5 competitors over 70%, and diverse vertical market presence including retail, grocery, and life sciences.
• Promoted Bob Howell to Chief Sales Officer, hired new sales leaders, added sales talent, and expanded partnerships with Google and Shopify.
• Agentic AI updates: Manhattan Assist with new capabilities for customer-specific operational documentation, purpose-built agents in platform applications starting fall 2025, and Agent Foundry for customers to build their own agents.
• Cross-sell results strong with unified product platform, 80% of MATM customers also buying MAWM over past 5 quarters.

Total revenue for Q2 2025 was $272 million, up 3%. Cloud revenue increased 22% to $100 million (36.7% of total revenue), while services revenue declined 6% to $129 million (47.4% of total revenue). RPO ended at $2.01 billion, up 26% year-over-year and 6% sequentially. Adjusted operating profit was $101 million with an adjusted operating margin of 37.1%, up 210 basis points year-over-year. The solid Q2 performance was driven by strength in new customers and existing customers, with RPO surpassing the $2 billion milestone.

• Raised full-year 2025 total revenue outlook to $1.071 billion to $1.075 billion (midpoint $1.073B).
• Adjusted operating margin midpoint increased to 35% (previously 33.25%).
• Adjusted EPS midpoint increased to $4.80 (previously $4.59).
• Q3 total revenue target $270M to $272M, Q4 midpoint $267M.
• Cloud revenue midpoint for full year $408.5M, services midpoint $497M, maintenance midpoint $128M.

• Turbulent global macro environment could impact performance.
• Uncertainty in services revenue growth due to time and material contracts and macro volatility.
• Potential for actual results to differ from forward-looking statements due to various risk factors.

Q: On supply chain unification, what can be done to drive more unification deals?

A: Invest in engineering team for unified functional advantages, product council for customer feedback, and sales and awareness efforts.

Q: Confidence in sustaining 20% cloud subscription growth?

A: Confident due to large RPO, solid bookings/pipeline, TAM expansion, sales acceleration efforts, and renewal cycle opportunities.

Q: Parceling out RPO bookings improvement?

A: Solid sales execution, customers adapting to macro, and solid pipeline.

Q: Maintenance and on-prem to cloud migration?

A: Continuing to focus on conversions, ~20% of on-prem customers started conversion, ERP migration is a tailwind.

Q: Efficiency gains in delivery/implementation and TAM unlock?

A: Leveraging automation/AI to reduce timelines and complexity, increasing TAM.

Q: Renewal cycle in 2026?

A: Similar to past cycles, preparing with structured approach to maximize upsell/cross-sell.

Q: CIO sentiment on large WMS/TMS upgrades?

A: Forward-leaning companies investing in supply chain as differentiator, but flexibility in rollout cycles.

Q: Marketing front updates?

A: Open search for CMO, investing to change market awareness.

Q: Go-to-market changes progress?

A: Recent hires from competitors, focused on building market awareness.

Q: Services revenue outlook?

A: Staying conservative due to time and material contracts and macro uncertainty.