Manhattan Associates, Inc. Q1 FY2026 earnings call

Manhattan had a strong start to 2026, with Q1 revenue growth accelerated, 24% growth in cloud revenue, and services revenue growth improving. RPO increased 24% to $2.35 billion. New customer bookings were strong, over 55% of new cloud bookings from net new logos. Had notable deal volume improvements across all deal types and strong bookings from all regions. Win rate above 70%, renewal performance solid. End markets diverse with healthy footprints. Active agent pilot program off to better-than-expected start. Agentic AI capabilities with base agents and agent foundry enabling quick deployment. Case studies showed meaningful improvements from agents. Momentum User Conference next month with active agent focus. Closed substantial new logo order management deal and large unified warehouse and transportation deal. New CFO introduced, thanking Dennis Story for contributions.

Total revenue was $282 million, up 7%. Cloud revenue increased 24% to $117 million. Services revenue increased 4% to $126 million. RPO was $2.35 billion, up 24% compared to the prior year, and 5% sequentially. Q1 adjusted operating profit was $91 million, with an operating margin of 32.4%. Adjusted earnings per share was $1.24, up 4%. Operating cash flow increased 12% to $84 million. Deferred revenue increased 20% year-over-year to $356 million. Ended the quarter with $226 million in cash and zero debt. Cloud revenue midpoint increased to $495 million, services revenue expected to increase 3% to 518 million, maintenance to decline 17% to about 108 million, license about $1 million per quarter, hardware between $6 million and $6.5 million per quarter. Adjusted operating margin midpoint increased to 35%. Full-year adjusted EPS range increased to $5.29 to $5.37.

Target RPO of $2.62 billion to $2.68 billion (18% to 20% growth). Total revenue expected $1.147 billion to $1.157 billion ($1.152 billion midpoint), 11% growth excluding license and maintenance attrition, 7% all-in with one-point tailwind from FX. Q2 total revenue target $285 million to $289 million. Rest of year targets: Q3 about $296 million, Q4 $287 million. Adjusted operating margin midpoint increased to 35%, with Q2 at about 34.7%, Q3 at 36.9%, Q4 at 36.1% accounting for retail peak seasonality. Full-year adjusted EPS range $5.29 to $5.37, Q2 EPS $1.30, Q3 $1.43, Q4 $1.36 accounting for retail peak seasonality. Cloud revenue midpoint $495 million, services revenue expected 3% to 518 million, maintenance decline 17% to about 108 million, license $1 million per quarter, hardware $6 - $6.5 million per quarter. Tax rate about 22%, diluted share count about 60 million shares.

Turbulent global macro environment could impact performance and cause actual results to differ materially from projections. Uncertainty around external variables affecting financial performance. Volatility in FX could impact revenue growth.

Q: Terry Tillman asked about agents progression from pilots to scaled revenue and autonomous agents.

A: Primary go-to-market is 90-day paid pilot, conversations with Q1 customers about conversion to subscriptions already begun. Most agents designed to be autonomous if user chooses.

Q: Terry Tillman followed up on cloud subscription revenue growth and FX impact.

A: Quarter had little over 1% tailwind on cloud revenue, full year expected about 1% overall tailwind on revenue.

Q: Brian Peterson asked on RPO net new mix and fixed services uptake.

A: Investments increasing deal volume across deal types, 55% net new mix continuing, services team actively engaging for cross-sells and upsells.

Q: Joe Rewink asked on customer mindset change for modernization and ERP upgrades.

A: More interest in conversion due to fixed fee deployments and base agents, significant pipeline from ERP upgrades and competitors not investing in cloud/unified platform.

Q: Dylan Becker asked on agentic deployments scaling and services impact.

A: Excitement about agentic opportunity, customers willing to pay for ROI, services team with forward deployed engineers as advantage.

Q: George Kurosawa asked on cloud revenue upside sustainability.

A: Drivers included strong execution, one-time overage fees, lower than modeled churn, but conservative outlook for Q2 - Q4 due to macro volatility.

Q: George Kurosawa asked on forward-deployed engineer impact.

A: Added about 120 headcount to services team, bulk of FDEs from Manhattan employees.

Q: Guy Hardwick asked on pilot percentage uplift to SAS contracts and fixed fee services revenue.

A: Uplift varies by customer usage, margin modeled similar to SaaS, not modeling fixed fee services revenue percentage.

Q: Parker Lane asked on agent pricing model.

A: Intention to make pricing simple, based on consumption identified from POC and pilot, works as customers have committed uplift.

Q: Mark Schapel asked on large deal through Google Marketplace and base agents interest.

A: Largest deals in Europe and APAC through marketplace reducing friction, wave planning and labor agents generating strong interest.

Q: Chris Quintero asked on go-to-market changes impact and services macro sensitivity.

A: Go-to-market changes increasing volume in pipeline areas, not seeing services projects delayed due to macro volatility.

Q: Lachlan Brown asked on agent consumption and upward revenue guidance revision.

A: Customers actively using agents across products, consumption as expected, upward guidance due to Q1 beat and keeping out quarters same due to macro volatility