Manhattan Associates, Inc. Q4 FY2025 earnings call

• 2025 was a successful year for Manhattan Associates, achieving record cloud bookings in the fourth quarter and setting annual records across various metrics like RPO, cloud bookings, total revenue, etc. - In 2025, the company extended its position as a leading innovator in the supply chain commerce universe, launched AI agents and an agent foundry, and the R&D team rolled out new offerings such as enterprise promise and fulfill. - There were organizational changes in sales and marketing, including reorganizing the global sales team, hiring key executives like the Chief Operating Officer and Chief Marketing Officer, and hosting a partner day. - Q4 was a record quarter with 6% revenue growth, 20% cloud growth, and adjusted earnings per diluted share reaching $1.21. Full-year new cloud bookings had over 55% from net new logos.

In Q4 2025, total revenue reached $270 million, marking a 6% increase. Cloud revenue saw a significant 20% growth, amounting to $109 million, and services revenue was $120 million. For the full year 2025, total revenue stood at $1.08 billion, up 4%. Cloud revenue for the full year was $408 million, a 21% increase, while services revenue declined 4% to $503 million. RPO (Remaining Performance Obligation) was $2.2 billion, surging 25% year over year. The ramped ARR (annualized value of recurring revenue) at the end of 2025 exceeded $600 million, representing a 23% growth compared to the previous year.

• For 2026, RPO is targeted to be in the range of $2.62 billion to $2.68 billion, representing an 18%-20% growth. - Total revenue for 2026 is expected to be between $1.133 billion and $1.153 billion. Q1 revenue is targeted at $272 million to $274 million. - Adjusted operating margin for 2026 is anticipated to be in the range of 34.5%-35%. Full-year adjusted EPS is guided to be between $5.04 and $5.2, and GAAP EPS between $3.37 and $3.53. - Cloud revenue is projected to increase 21% to $492 million, and services revenue is expected to rise 3% to $517 million.

• The turbulent global macro environment could impact the company's outperformance and cause actual results to deviate materially from projections.

Q: Terry Tillman with Truist Securities asked about progress on cloud migrations and fast renewals.

A: Eric Clark responded that they saw early success in on-prem to active warehouse conversions, added services headcount, and made progress in faster implementation times and faster time to value, with ramped ARR growing 23% year over year.

Q: Brian Peterson with Raymond James asked about Q4 RPO strength.

A: Eric Clark said the strength came from a variety of products, deal types, and across geos, with the pipeline building and strong bookings in Q4.

Q: George Kurosawa with Citi asked about renewals and services outlook.

A: Eric Clark mentioned conservatism on renewal duration and services growth driven by pipeline and ramp timelines.

Q: Joe Vruwink with Baird asked about new bookings and services pipeline.

A: Eric Clark said new bookings include new logos, expansions, and conversions, and services outlook is based on pipeline and ramp timelines.

Q: Dylan Becker with William Blair asked about RPO and ramped ARR.

A: Eric Clark explained about ramped ARR being committed revenue and GRR being world-class.

Q: Parker Lane with Stifel asked about AI agent monetization and adoption.

A: Eric Clark said they offer low-risk pilots and monetize through uplifts, with anticipation of customer adoption.

Q: Christopher Quintero with Morgan Stanley asked about services growth and implementation updates.

A: Eric Clark said services growth is mid-single-digit and implementations are back on track.

Q: Guy Hardwick with Barclays asked about RPO guidance and Q4 bookings.

A: Eric Clark said AI is incremental and Q4 bookings were overperformance.

Q: Mark Schappel with Loop Capital Markets asked about CIO sentiment and sales mix.

A: Eric Clark said CIO sentiment is positive and sales mix includes new logos, expansions, and conversions.

Q: Clark Wright with D.A. Davidson asked about services upsell and vertical traction.

A: Eric Clark said services upsell is through quarterly updates and verticals are diverse beyond retail.