10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

[Mark One]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 0-23999

MANHATTAN ASSOCIATES, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Georgia

 

 

58-2373424

(State or Other Jurisdiction of

Incorporation or Organization)

 

 

(I.R.S. Employer

Identification No.)

 

2300 Windy Ridge Parkway, Tenth Floor

 

 

 

Atlanta, Georgia

 

 

30339

(Address of Principal Executive Offices)

 

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (770) 955-7070

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common stock

MANH

Nasdaq Global Select Market

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging Growth Company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

The number of shares of the Registrant’s class of capital stock outstanding as of April 24, 2024, the latest practicable date, is as follows: 61,569,883 shares of common stock, $0.01 par value per share.

 

 

 


 

MANHATTAN ASSOCIATES, INC.

FORM 10-Q

Quarter Ended March 31, 2024

TABLE OF CONTENTS

PART I

 

 

Financial Information

 

 

 

 

Item 1.

Financial Statements.

 

 

 

 

Condensed Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023

3

 

 

Condensed Consolidated Statements of Income for the three months ended March 31, 2024 and 2023 (unaudited)

4

 

 

Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2024 and 2023 (unaudited)

5

 

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited)

6

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2024 and 2023 (unaudited)

7

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

8

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

13

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

21

 

 

 

Item 4.

Controls and Procedures.

21

 

 

 

 

PART II

 

 

 

 

 

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings.

23

 

 

 

Item 1A.

Risk Factors.

23

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

23

 

 

 

Item 3.

Defaults Upon Senior Securities.

23

 

 

 

Item 4.

Mine Safety Disclosures.

23

 

 

 

Item 5.

Other Information.

23

 

 

 

Item 6.

Exhibits.

24

 

 

 

Signatures.

25

 

 

 

 

2


 

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

207,524

 

 

$

270,741

 

Accounts receivable, net

 

 

205,701

 

 

 

181,173

 

Prepaid expenses and other current assets

 

 

31,981

 

 

 

27,276

 

Total current assets

 

 

445,206

 

 

 

479,190

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

12,684

 

 

 

11,795

 

Operating lease right-of-use assets

 

 

52,031

 

 

 

21,645

 

Goodwill, net

 

 

62,232

 

 

 

62,235

 

Deferred income taxes

 

 

69,868

 

 

 

66,043

 

Other assets

 

 

32,741

 

 

 

32,445

 

Total assets

 

$

674,762

 

 

$

673,353

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

26,401

 

 

$

24,508

 

Accrued compensation and benefits

 

 

48,517

 

 

 

73,210

 

Accrued and other liabilities

 

 

24,920

 

 

 

27,374

 

Deferred revenue

 

 

263,905

 

 

 

237,793

 

Income taxes payable

 

 

8,277

 

 

 

3,030

 

Total current liabilities

 

 

372,020

 

 

 

365,915

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

51,813

 

 

 

17,694

 

Other non-current liabilities

 

 

11,322

 

 

 

11,466

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2024 and 2023

 

 

-

 

 

 

-

 

Common stock, $0.01 par value; 200,000,000 shares authorized; 61,569,549 and 61,566,037 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

 

 

615

 

 

 

615

 

Retained earnings

 

 

266,757

 

 

 

304,701

 

Accumulated other comprehensive loss

 

 

(27,765

)

 

 

(27,038

)

Total shareholders' equity

 

 

239,607

 

 

 

278,278

 

Total liabilities and shareholders' equity

 

$

674,762

 

 

$

673,353

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

3


 

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

(unaudited)

 

 

(unaudited)

 

Revenue:

 

 

 

 

 

 

Cloud subscriptions

 

$

78,027

 

 

$

57,220

 

Software license

 

 

2,810

 

 

 

5,352

 

Maintenance

 

 

34,972

 

 

 

35,650

 

Services

 

 

132,195

 

 

 

116,170

 

Hardware

 

 

6,548

 

 

 

6,621

 

Total revenue

 

 

254,552

 

 

 

221,013

 

Costs and expenses:

 

 

 

 

 

 

Cost of cloud subscriptions, maintenance and services

 

 

118,955

 

 

 

103,327

 

Cost of software license

 

 

332

 

 

 

302

 

Research and development

 

 

35,010

 

 

 

30,794

 

Sales and marketing

 

 

19,929

 

 

 

18,065

 

General and administrative

 

 

21,203

 

 

 

19,953

 

Depreciation and amortization

 

 

1,493

 

 

 

1,487

 

Total costs and expenses

 

 

196,922

 

 

 

173,928

 

Operating income

 

 

57,630

 

 

 

47,085

 

Other income, net

 

 

996

 

 

 

143

 

Income before income taxes

 

 

58,626

 

 

 

47,228

 

Income tax provision

 

 

4,825

 

 

 

8,437

 

Net income

 

$

53,801

 

 

$

38,791

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.87

 

 

$

0.62

 

Diluted earnings per share

 

$

0.86

 

 

$

0.62

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

Basic

 

 

61,625

 

 

 

62,211

 

Diluted

 

 

62,493

 

 

 

62,767

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

4


 

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(in thousands)

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

(unaudited)

 

 

(unaudited)

 

Net income

 

$

53,801

 

 

$

38,791

 

Foreign currency translation adjustment, net of tax

 

 

(727

)

 

 

808

 

Comprehensive income

 

$

53,074

 

 

$

39,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

5


 

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

Net income

 

$

53,801

 

 

$

38,791

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

1,493

 

 

 

1,487

 

Equity-based compensation

 

 

22,095

 

 

 

16,640

 

(Gain) loss on disposal of equipment

 

 

(138

)

 

 

16

 

Deferred income taxes

 

 

(3,869

)

 

 

(2,523

)

Unrealized foreign currency loss

 

 

501

 

 

 

1,167

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(25,434

)

 

 

6,730

 

Other assets

 

 

(4,520

)

 

 

(8,760

)

Accounts payable, accrued and other liabilities

 

 

(20,809

)

 

 

(10,009

)

Income taxes

 

 

4,594

 

 

 

7,850

 

Deferred revenue

 

 

27,024

 

 

 

7,327

 

Net cash provided by operating activities

 

 

54,738

 

 

 

58,716

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(2,321

)

 

 

(666

)

Net cash used in investing activities

 

 

(2,321

)

 

 

(666

)

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

Repurchase of common stock

 

 

(113,834

)

 

 

(101,688

)

Net cash used in financing activities

 

 

(113,834

)

 

 

(101,688

)

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

(1,800

)

 

 

(230

)

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(63,217

)

 

 

(43,868

)

Cash and cash equivalents at beginning of period

 

 

270,741

 

 

 

225,463

 

Cash and cash equivalents at end of period

 

$

207,524

 

 

$

181,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

6


 

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Total

 

 

 

Common Stock

 

 

Paid-In

 

 

Retained

 

Comprehensive

Shareholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Equity

 

For the Three Months Ended March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2023 (unaudited)

 

 

61,566,037

 

 

$

615

 

 

$

-

 

 

$

304,701

 

 

$

(27,038

)

 

$

278,278

 

Repurchase of common stock

 

 

(458,736

)

 

 

(5

)

 

 

(22,084

)

 

 

(91,745

)

 

 

-

 

 

 

(113,834

)

Restricted stock units issuance

 

 

462,248

 

 

 

5

 

 

 

(5

)

 

 

-

 

 

 

-

 

 

 

-

 

Excise tax on net stock repurchases

 

 

-

 

 

 

-

 

 

 

(6

)

 

 

-

 

 

 

-

 

 

 

(6

)

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

22,095

 

 

 

-

 

 

 

-

 

 

 

22,095

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(727

)

 

 

(727

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

53,801

 

 

 

-

 

 

 

53,801

 

Balance, March 31, 2024 (unaudited)

 

 

61,569,549

 

 

$

615

 

 

$

-

 

 

$

266,757

 

 

$

(27,765

)

 

$

239,607

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2022 (audited)

 

 

62,191,570

 

 

$

621

 

 

$

-

 

 

$

253,711

 

 

$

(27,532

)

 

$

226,800

 

Repurchase of common stock

 

 

(723,368

)

 

 

(7

)

 

 

(16,355

)

 

 

(85,326

)

 

 

-

 

 

 

(101,688

)

Restricted stock units issuance

 

 

558,638

 

 

 

6

 

 

 

(6

)

 

 

-

 

 

 

-

 

 

 

-

 

Excise tax on net stock repurchases

 

 

-

 

 

 

-

 

 

 

(279

)

 

 

-

 

 

 

-

 

 

 

(279

)

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

16,640

 

 

 

-

 

 

 

-

 

 

 

16,640

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

808

 

 

 

808

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

38,791

 

 

 

-

 

 

 

38,791

 

Balance, March 31, 2023 (unaudited)

 

 

62,026,840

 

 

$

620

 

 

$

-

 

 

$

207,176

 

 

$

(26,724

)

 

$

181,072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

7


 

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

1.
Basis of Presentation and Principles of Consolidation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Manhattan Associates, Inc. and its subsidiaries (the “Company,” “we,” “us,” “our,” or “Manhattan”) have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information, with the instructions to Form 10-Q and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal recurring adjustments considered necessary for a fair presentation of our financial position at March 31, 2024, the results of operations for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023. The results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year or any other interim period. These statements should be read in conjunction with our audited consolidated financial statements and management’s discussion and analysis included in our annual report on Form 10-K for the year ended December 31, 2023.

Principles of Consolidation

The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. We expect to adopt the updated accounting guidance in our Annual Report on Form 10-K for the year ended December 31, 2024. We are currently evaluating the impact the adoption of the new accounting guidance will have on our segment disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The updated accounting guidance, among other things, requires additional disclosure primarily related to the income tax rate reconciliation and income taxes paid. We expect to adopt the updated accounting guidance in our Annual Report on Form 10-K for the year ended December 31, 2025. We are currently evaluating the impact the adoption of the new accounting guidance will have on our income tax disclosures.

2.
Revenue Recognition

We recognize revenue when we transfer control of the promised products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. We derive our revenue from cloud subscriptions, software licenses, customer support services and software enhancements (“maintenance”), implementation and training services, and sales of hardware. We exclude sales and usage-based taxes from revenue.

Nature of Products and Services

Cloud subscriptions includes software as a service (SaaS) and arrangements which provide customers with the right to use our software within a cloud environment that we provide and manage, where the customer does not have the right to take possession of the software without significant penalty. SaaS and hosting revenues are recognized ratably over the contract period.

Our perpetual software licenses provide the customer with a right to use the software as it exists at the time of purchase. We recognize revenue for distinct software licenses once the license period has begun and we have made the software available to the customer. Our perpetual software licenses are typically sold with maintenance under which we provide a comprehensive 24 hours per day, 365 days per year program that provides customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives. Revenue related to maintenance is generally paid in advance and recognized ratably over the term of the agreement, typically twelve months. Perpetual software license revenue accounts for approximately 1% of total revenue.

Our services revenue consists of fees generated from implementation, training, and application managed services, including reimbursements of out-of-pocket expenses in connection with our implementation services. Implementation services include system planning, design, configuration, testing, and other software implementation support, and are typically optional and distinct from our software. Following implementation, customers who have purchased perpetual licenses may purchase application managed services to support and maintain our software. Fees for our services are separately priced and are generally billed on an hourly basis, and revenue

 

8


 

is recognized over time as the services are performed. In certain situations, we render professional services under agreements based upon a fixed fee for portions of or all of the engagement. Revenue related to fixed-fee-based services contracts is recognized over time based on the proportion performed.

As part of a complete solution, our customers periodically purchase hardware products developed and manufactured by third parties from us for use with the software licenses purchased from us. These products include computer hardware, radio frequency terminal networks, radio frequency identification (RFID) chip readers, bar code printers and scanners, and other peripherals. As we do not physically control the hardware that we sell, we are acting as an agent in the transaction and recognize our hardware revenue net of related cost. We recognize hardware revenue when control is transferred to the customer upon shipment.

Significant Judgments

Our contracts with customers typically contain promises to transfer multiple products and services to a customer. Judgment is required to determine whether each product and service is considered to be a distinct performance obligation that should be accounted for separately under the contract. We allocate the transaction price to the distinct performance obligations based on relative standalone selling price (“SSP”). We estimate SSP based on the prices charged to customers, or by using information such as market conditions and other observable inputs. However, the selling price of our cloud subscriptions and software licenses are highly variable. Thus, we estimate SSP for our cloud subscriptions and software licenses using the residual approach, determined based on total transaction price less the SSP of other goods and services promised in the contract.

Contract Balances

Cloud subscriptions and maintenance for perpetual software licenses are typically billed annually in advance. Timing of invoicing to customers may differ from timing of revenue recognition. Payment terms for our software licenses vary. We have an established history of collecting under the terms of our software license contracts without providing refunds or concessions to our customers. We typically bill our professional services monthly as performed. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with predictable ways to purchase our software and services, not to provide or receive financing. Additionally, we are applying the practical expedient to exclude from consideration any contracts with payment terms of one year or less as we rarely offer terms extending beyond one year or invoice more than a year in advance.

Deferred revenue represents amounts collected prior to having completed performance of cloud subscriptions, maintenance, and professional services. In the three months ended March 31, 2024, we recognized $101.4 million of revenue that was included in the deferred revenue balance as of December 31, 2023.

Remaining Performance Obligations

As of March 31, 2024, approximately $1.5 billion of revenue - over 98% of which is cloud-native subscriptions - is expected to be recognized from remaining performance obligations (RPO) with a non-cancelable term greater than 1 year (including deferred revenue as well as amounts that are expected to be invoiced and recognized as revenue in future periods). We expect to recognize revenue on approximately 40% of these remaining performance obligations over the next 24 months with the majority of the remaining balance recognized over the following 36 months. We have elected not to provide disclosures regarding remaining performance obligations for contracts with a term of 1 year or less.

Returns and Allowances

We have not experienced significant returns or warranty claims to date and, as a result, have not recorded a provision for the cost of returns and product warranty claims.

 

9


 

We record an allowance for credit losses utilizing a model of internal historical losses data. In estimating the allowance for credit losses, we considered our historical write-offs, the historical creditworthiness of the customer, and other factors. We also analyzed expected credit losses given future risks in projected economic conditions and future risks of customer collection. Should any of these factors change, the estimates made by us will also change accordingly, which could affect the level of our future allowances. Additions to the allowance for credit losses are recorded in general and administrative expense and were immaterial in all periods presented. Our credit loss reserve was $0.9 million and $0.9 million as of March 31, 2024 and December 31, 2023, respectively.

We also reduce accounts receivable with a corresponding reduction in services revenue for the most likely amount of potential service revenue adjustments based on a detailed assessment of accounts receivable. The total amount recorded to services revenue was $0.3 million and $0.5 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, we have reduced our accounts receivable balance by $3.7 million and $4.4 million, respectively, for these potential adjustments.

Deferred Commissions

We consider sales commissions to be incremental costs of obtaining a contract with a customer. We defer and recognize an asset for sales commissions related to performance obligations with an expected period of benefit of more than one year. We amortize these amounts over the expected benefit period, which we estimate by considering several factors, including the rate of technological change and duration of our customer contracts. Sales commission for renewal contracts are amortized over the related contractual renewal period. We apply the practical expedient to expense sales commissions when the amortization period would have been one year or less. Deferred commissions were $40.0 million as of March 31, 2024, of which $29.6 million is included in other assets and $10.4 million is included in prepaid expenses. Sales commission expense is included in Sales and Marketing expense in the accompanying Consolidated Statements of Income. Amortization of sales commissions was $2.7 million and $2.3 million for the three months ended March 31, 2024 and 2023, respectively. No impairment losses were recognized during the periods.

3.
Fair Value Measurement

We measure our investments based on a fair value hierarchy disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is affected by a number of factors, including the type of asset or liability and its characteristics. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1–Quoted prices in active markets for identical instruments.
Level 2–Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
Level 3–Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents; investments with maturities of greater than 90 days from the date of purchase but less than one year are generally classified as short-term investments; and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments. Unrealized holding gains and losses are reflected as a net amount in a separate component of shareholders’ equity until realized. For the purposes of computing realized gains and losses, cost is determined on a specific identification basis.

At March 31, 2024, our cash and cash equivalents were $115.5 million and $92.0 million, respectively. We had neither short-term investments nor long-term investments at March 31, 2024. Cash equivalents consist of highly liquid money market funds. For money market funds, we use quoted prices from active markets that are classified at Level 1, the highest level of observable input in the disclosure hierarchy framework. We had no investments classified at Level 2 or Level 3 at March 31, 2024.

4.
Equity-Based Compensation

We granted 539,328 and 570,226 restricted stock units (RSUs) during the three months ended March 31, 2024 and 2023, respectively. Equity-based compensation expense related to RSUs was $22.1 million and $16.6 million during the three months ended March 31, 2024 and 2023, respectively.

 

10


 

We present below a summary of changes during the three months ended March 31, 2024 in our unvested units of restricted stock:

 

 

Number of shares/units

 

Outstanding at December 31, 2023

 

 

1,376,063

 

Granted

 

 

539,328

 

Vested

 

 

(462,248

)

Forfeited

 

(4,901

)

Outstanding at March 31, 2024

 

 

1,448,242

 

 

5.
Income Taxes

Our effective tax rate was 8.2% and 17.9% for the three months ended March 31, 2024 and 2023, respectively. The decrease in the effective tax rate for the three months ended March 31, 2024 is due to an increase of excess tax benefits on vesting of restricted stock and a decrease of expense from a favorable tax law change allowing creditability of foreign tax.

We apply the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements in accordance with Accounting Standards Classification (ASC) 740, Income Taxes. For the three months ended March 31, 2024, there were no material changes to our uncertain tax positions.

We conduct business globally and, as a result, file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, Manhattan is subject to examination by taxing authorities throughout the world. We are no longer subject to U.S. federal, substantially all state and local income tax examinations and substantially all non-U.S. income tax examinations for years before 2010.

Under the Inflation Reduction Act of 2022, we are subject to a 1% excise tax on stock repurchases, net of stock issuances, beginning in 2023. We have included the tax in the cost of our stock repurchases as a reduction of shareholders' equity.

 

6.
Basic and Diluted Net Income Per Share

Basic net income per share is computed using net income divided by the weighted average number of shares of common stock outstanding (“Weighted Shares”) for the period presented.

Diluted net income per share is computed using net income divided by Weighted Shares and the treasury stock method effect of common equivalent shares (CESs) outstanding for each period presented.

In the following table, we present a reconciliation of earnings per share and the shares used in the computation of earnings per share for the three months ended March 31, 2024 and 2023 (in thousands, except per share data):

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

Net income

 

$

53,801

 

 

$

38,791

 

Earnings per share:

 

 

 

 

 

 

Basic

 

$

0.87

 

 

$

0.62

 

Effect of CESs

 

 

(0.01

)

 

 

-

 

Diluted

 

$

0.86

 

 

$

0.62

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

Basic

 

 

61,625

 

 

 

62,211

 

Effect of CESs

 

 

868

 

 

 

556

 

Diluted

 

 

62,493

 

 

 

62,767

 

The number of anti-dilutive CESs during the three months ended March 31, 2024 and 2023 was immaterial.

7.
Contingencies

From time to time, we may be involved in litigation relating to claims arising out of the ordinary course of business, and occasionally legal proceedings not in the ordinary course. Many of our installations involve products that are critical to the operations of our clients’ businesses. Any failure in one of our products could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to limit contractually our liability for damages arising from product failures or

 

11


 

negligent acts or omissions, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable in all instances. We are not currently a party to any legal proceedings the result of which we believe is likely to have a material adverse impact on our business, financial position, results of operations, or cash flows. We expense legal costs associated with loss contingencies as such legal costs are incurred.

8.
Reportable Segments

We manage our business by geographic region and have three geographic reportable segments: North and Latin America (the “Americas”); Europe, the Middle East and Africa (EMEA); and Asia Pacific (APAC). All segments derive revenue from the sale and implementation of our supply chain commerce solutions. The individual products sold by the segments are similar in nature and are all designed to help companies manage the effectiveness and efficiency of their supply chain commerce. We use the same accounting policies for each reportable segment. The chief operating decision maker (chief executive officer and chief financial officer) evaluate performance based on revenue and operating results for each reportable segment.

The Americas segment charges royalty fees to the other segments based on software licenses and cloud subscriptions sold by those reportable segments. The royalties, which totaled approximately $4.4 million and $3.4 million for the three months ended March 31, 2024 and 2023, respectively, are included in costs of revenue for each segment with a corresponding reduction in the Americas segment’s cost of revenue. The revenues represented below are from external customers only. The geography-based costs consist of costs for professional services personnel, direct sales and marketing expenses, infrastructure costs to support the employee and customer base, billing and financial systems, management and general and administrative support. Certain corporate expenses included in the Americas segment are not charged to the other segments. Such expenses include research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Costs in the Americas segment include all research and development costs, including the costs associated with our operations in India.

In accordance with ASC 280, Segment Reporting, we present below certain financial information by reportable segment for the three months ended March 31, 2024 and 2023 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

Americas

 

 

EMEA

 

 

APAC

 

 

Consolidated

 

 

Americas

 

 

EMEA

 

 

APAC

 

 

Consolidated

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions

 

$

61,132

 

 

$

14,501

 

 

$

2,394

 

 

$

78,027

 

 

$

46,354

 

 

$

9,329

 

 

$

1,537

 

 

$

57,220

 

Software license

 

 

1,829

 

 

 

486

 

 

 

495

 

 

 

2,810

 

 

 

2,586

 

 

 

1,350

 

 

 

1,416

 

 

 

5,352

 

Maintenance

 

 

27,876

 

 

 

4,674

 

 

 

2,422

 

 

 

34,972

 

 

 

28,416

 

 

 

4,858

 

 

 

2,376

 

 

 

35,650

 

Services

 

 

99,115

 

 

 

26,771

 

 

 

6,309

 

 

 

132,195

 

 

 

86,814

 

 

 

24,089

 

 

 

5,267

 

 

 

116,170

 

Hardware

 

 

6,360

 

 

 

188

 

 

 

-

 

 

 

6,548

 

 

 

6,589

 

 

 

32

 

 

 

-

 

 

 

6,621

 

    Total revenue

 

 

196,312

 

 

 

46,620

 

 

 

11,620

 

 

 

254,552

 

 

 

170,759

 

 

 

39,658

 

 

 

10,596

 

 

 

221,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

88,982

 

 

 

25,086

 

 

 

5,219

 

 

 

119,287

 

 

 

77,367

 

 

 

21,675

 

 

 

4,587

 

 

 

103,629

 

Operating expenses

 

 

69,405

 

 

 

5,433

 

 

 

1,304

 

 

 

76,142

 

 

 

62,368

 

 

 

5,098

 

 

 

1,346

 

 

 

68,812

 

Depreciation and amortization

 

 

1,238

 

 

 

217

 

 

 

38

 

 

 

1,493

 

 

 

1,377

 

 

 

92

 

 

 

18

 

 

 

1,487

 

Total costs and expenses

 

 

159,625

 

 

 

30,736

 

 

 

6,561

 

 

 

196,922

 

 

 

141,112

 

 

 

26,865

 

 

 

5,951

 

 

 

173,928

 

Operating income

 

$

36,687

 

 

$

15,884

 

 

$

5,059

 

 

$

57,630

 

 

$

29,647

 

 

$

12,793

 

 

$

4,645

 

 

$

47,085

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel, warehouse management solutions, and transportation management solutions for the three months ended March 31, 2024. The majority of our software license revenue (over 80%) relates to our warehouse management product group for the three months ended March 31, 2024.

At March 31, 2024, total assets for the Americas, EMEA and APAC segments were $554.8 million, $98.1 million, and $21.9 million, respectively.

 

12


 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the condensed consolidated financial statements for the three months ended March 31, 2024 and 2023, including the notes to those statements, included elsewhere in this quarterly report. We also recommend the following discussion be read in conjunction with management’s discussion and analysis and consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2023. Statements in the following discussion that are not statements of historical fact are “forward-looking statements.” Actual results may differ materially from the results predicted in such forward-looking statements, for a variety of factors. See “Forward-Looking Statements” below.

References in this filing to the “Company,” “Manhattan,” “Manhattan Associates,” “we,” “our,” and “us” refer to Manhattan Associates, Inc., our predecessors, and our wholly owned and consolidated subsidiaries.

Business Overview

We develop, sell, deploy, service and maintain software solutions designed to manage Unified Omnichannel Commerce and Digital Supply Chain, inventory and omnichannel operations for retailers, wholesalers, manufacturers, logistics providers and other organizations. Our customers include many of the world’s most premier and profitable brands.

Our business model is singularly focused on the development and implementation of complex commerce enablement software solutions that are designed to optimize supply chains, and retail store operations including point-of-sale effectiveness and efficiency for our customers.

We have five principal sources of revenue:

cloud subscriptions, including software as a service (SaaS);
licenses of our software;
customer support services and software enhancements (collectively, “maintenance”);
professional services, including solutions planning and implementation, related consulting, customer training, and reimbursements from customers for out-of-pocket expenses (collectively, “services”); and
hardware sales.

In the three months ended March 31, 2024, we generated $254.6 million in total revenue. The revenue mix for the three months ended March 31, 2024 was: cloud subscriptions 30%; software license 1%; maintenance 14%; services 52%; and hardware 3%.

We have three geographic reportable segments: North and Latin America (the “Americas”), Europe, the Middle East and Africa (EMEA), and Asia-Pacific (APAC). Geographic revenue is based on the location of the sale. Our international revenue was approximately $83.7 million for the three months ended March 31, 2024, which represents approximately 33% of our total revenue for the three months ended March 31, 2024. International revenue includes all revenue derived from sales to customers outside the United States. At March 31, 2024, we employed approximately 4,700 employees worldwide. We have offices in Australia, Chile, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Spain, the United Kingdom, and the United States, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia.

Future Expectations

While we remain cautious about the global economy, our results for the first three months of 2024 exceeded our expectations due to solid demand for our cloud solutions. Our solutions are mission critical, supporting complex global supply chains. We believe that favorable secular tailwinds, such as the digital transformation of businesses in manufacturing, wholesale and retail, coupled with our commitment to investing in organic innovation to deliver leading cloud supply chain, inventory and omnichannel commerce solutions is in synergistic alignment with current market demand. We believe that this alignment is contributing to our strong financial results, higher demand and strong win rates for our solutions for the period. We remain committed to investing in our business to drive customer success and expand our total addressable market, which we believe will position us well to achieve long-term sustainable growth and earnings.

Going forward, we are investing in our cloud business, including enterprise investments in innovation, and strategic operating expenses to support growth objectives.

For the remainder of 2024, our five strategic goals remain to:

Focus on employees, customer success and drive sustainable long-term growth;
Invest in innovation to expand our products and total addressable market;
Expand our Manhattan Active Suite of Cloud Solutions;

 

13


 

Develop and grow our cloud business and cloud subscription revenue; and
Expand our global sales and marketing teams.

 

Cloud Subscription

Under our Manhattan Active® Solutions cloud subscription offering, customers pay a periodic fee for the right to use our software within a cloud environment that we provide and manage over a specified period of time. Adoption of our Manhattan Active® cloud solutions continues to increase nicely, with cloud revenue up 36% over the same quarter in the prior year. Cloud revenue now represents about 97% of our total software revenue. Customers on our legacy perpetual license program can convert their maintenance contracts to cloud subscription contracts.

Global Economic Trends and Industry Factors

Global macro-economic trends, technology spending, and supply chain management market growth are important barometers for our business. In both the three months ended March 31, 2024, approximately 67% of our total revenue was generated in the United States, 18% in EMEA, and the remaining balance in APAC, Canada, and Latin America. In addition, Gartner Inc. (“Gartner”), an information technology research and advisory company, estimates that approximately 77% of every supply chain software solutions dollar invested is spent in North America and Western Europe; consequently, the health of the U.S. and the Western European economies have a meaningful impact on our financial results.

We sell technology-based solutions with total pricing, including software and services, in many cases exceeding $1.0 million. Our software is often a part of our customers’ and prospects’ much larger capital commitment associated with facilities expansion and business improvement. We believe that, given the mission critical nature of our software, combined with a challenging global macro environment, our current sales cycles for large cloud subscriptions in our target markets could be extended. While demand for our solutions is solid, the current business climate within the United States and geographic regions in which we operate may affect customers’ and prospects’ decisions regarding timing of strategic capital expenditures.

While we are encouraged by our results, we remain cautious regarding the pace of global economic growth. We believe global geopolitical and economic volatility likely will continue to shape customers’ and prospects’ enterprise software buying decisions.

Key Performance Metrics

We regularly review metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We believe cloud subscriptions revenue growth and remaining performance obligation (RPO) growth are the leading indicators of our business performance, primarily derived from cloud subscription fees that customers pay for our Unified Omnichannel Commerce and Digital Supply Chain solutions.

Cloud Subscriptions Revenue Growth

Our cloud revenue growth provides insight into our ability to maintain and grow our cloud customer base. Total cloud revenue increased to $78.0 million in the three months ended March 31, 2024 from $57.2 million for the same period in the prior year, representing a 36% year-over-year increase. Cloud revenue growth is being driven by strong demand for our cloud offerings.

Remaining Performance Obligations

Transaction price allocated to RPO represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that we expect to invoice and recognize as revenue in future periods. Over 98% of our RPO represent cloud native subscriptions with a non-cancelable term greater than one year. Maintenance contracts typically are for one year and not included in RPO. RPO provides insight into our contracted backlog of future business. As of March 31, 2024, our RPO was approximately $1.5 billion, an increase of 31% over March 31, 2023 on strong demand.

Revenue

Cloud Subscriptions and Software License Revenue. In the three months ended March 31, 2024, cloud subscriptions revenue was 97% of total cloud and software license revenue. In the three months ended March 31, 2024, cloud subscriptions revenue totaled $78.0 million or 30% of total revenues. The Americas, EMEA, and APAC segments recognized $61.1 million, $14.5 million, and $2.4 million in cloud subscriptions revenue, respectively, in the three months ended March 31, 2024. Cloud subscriptions revenue is recognized over the term of the agreement, typically five years or more. Cloud subscription revenue growth is influenced by the strength of general economic and business conditions and the competitive position of our software products. These revenues generally have long sales cycles. Approximately 31% of the total value of new non-cancelable cloud subscriptions (excluding renewals) signed during the three months ended March 31, 2024 was with new customers and 69% was with existing customers. We define new customers as entities from which we either have never earned revenue or have not recognized revenue in the last five years.

 

14


 

In the three months ended March 31, 2024, license revenue totaled $2.8 million, or 1% of total revenue. The Americas, EMEA, and APAC segments totaled $1.8 million, $0.5 million, and $0.5 million in license revenue, respectively, in the three months ended March 31, 2024.

Our Unified Omnichannel Commerce and Digital Supply Chain solutions are focused on core omnichannel operation (e-commerce, retail store operations and POS), supply chain commerce operations (Warehouse Management, Transportation Management and Labor Management), and Inventory Optimization, which are intensely competitive markets characterized by rapid technological change. We are a market leader in the supply chain management and omnichannel software solutions market as defined by industry analysts such as ARC Advisory Group and Gartner. Our goal is to extend our position as a leading global supply chain solutions provider by growing our cloud subscriptions and software license revenues faster than our competitors through investment in innovation.

Maintenance Revenue. Our maintenance revenue for the three months ended March 31, 2024 totaled $35.0 million, or 14% of total revenue. The Americas, EMEA and APAC segments recognized $27.9 million, $4.7 million, and $2.4 million, respectively, in maintenance revenue in the three months ended March 31, 2024. For maintenance, we offer a comprehensive 24 hours per day, 365 days per year program that provides our customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives.

Maintenance relates to our traditional perpetual license sales. We expect maintenance revenues to decline as we continue to develop our cloud offerings, and be offset by additional cloud revenue, including from customers converting their maintenance contracts to cloud subscriptions. The growth of maintenance revenues is influenced by: (1) new software license revenue growth; (2) annual renewal of support contracts; and (3) fluctuations in currency rates. Substantially all of our customers renew their annual support contracts or convert their maintenance contracts to cloud subscriptions. Maintenance revenue is generally paid in advance and recognized over the term of the agreement, typically twelve months. Maintenance renewal revenue is recognized over the renewal period once we have a contract upon payment from the customer.

Services Revenue. In the three months ended March 31, 2024, our services revenue totaled $132.2 million, or 52% of total revenue. The Americas, EMEA, and APAC segments recognized $99.1 million, $26.8 million, and $6.3 million, respectively, in services revenue in the three months ended March 31, 2024.

Our professional services organization provides our customers with expertise and assistance in planning and implementing our solutions. To ensure a successful product implementation, consultants assist customers with the initial implementation of a system or service, the conversion and transfer of the customer’s historical data to the new system or service, and ongoing training, education, and system/service upgrades. We believe our professional services enable customers to implement our software rapidly, ensure the customer’s success with our solutions, strengthen our customer relationships, and add to our industry-specific knowledge base for use in future implementations and product innovations.

Although our professional services are optional, the majority of our customers use at least some portion of these services for their planning, implementation, or related needs. Professional services are typically rendered under time and materials-based contracts with services typically billed on an hourly basis. Professional services are sometimes rendered under fixed-fee based contracts with payments due on specific dates or milestones.

Services revenue growth is contingent upon cloud sales and customer upgrade cycles, which are influenced by the strength of general economic and business conditions and the competitive position of our software products. In addition, our professional services business has competitive exposure to offshore providers and other consulting companies.

Hardware Revenue. Our hardware revenue, which we recognize net of related costs, totaled $6.5 million in the three months ended March 31, 2024 representing 3% of total revenue. As a convenience for our cloud and software customers, we resell a variety of hardware products developed and manufactured by third parties. These products include computer hardware, radio frequency terminal networks, RFID chip readers, bar code printers and scanners, and other peripherals. We resell all third-party hardware products and related maintenance pursuant to agreements with manufacturers or through distributor-authorized reseller agreements, pursuant to which we are entitled to purchase hardware products and services at discount prices. We generally purchase hardware from our vendors only after receiving an order from a customer. As a result, we do not maintain hardware inventory.

Product Development

We continue to invest significantly in research and development (R&D) to provide leading Unified Omnichannel Commerce and Digital Supply Chain solutions to enable global retailers, manufacturers, wholesalers, distributors, and logistics providers to successfully manage accelerating and fluctuating demands as well as the increasing complexity and volatility of their local and global supply chains, retail store operations and points of sale. Our R&D expenses were $35.0 million for the three months ended March 31, 2024.

We expect to continue to focus our R&D resources on the development and enhancement of our core supply chain, inventory optimization, omnichannel and point-of-sale software solutions. We offer what we believe to be the broadest solutions portfolio in the

 

15


 

supply chain solutions marketplace, addressing all aspects of inventory optimization, transportation management, distribution management, planning, and omnichannel operations including order management, store inventory & fulfillment, call center and point-of-sale.

We also plan to continue to enhance our existing solutions and to introduce new solutions to address evolving industry standards and market needs. We identify opportunities to further enhance our solutions and to develop and provide new solutions through our customer support organization, as well as through ongoing customer consulting engagements and implementations, interactions with our user groups, association with leading industry analysts and market research firms, and participation in industry standards and research committees. Our solutions address the needs of customers in various vertical markets, including retail, consumer goods, food and grocery, logistics service providers, industrial and wholesale, high technology and electronics, life sciences, and government.

Cash Flow and Financial Condition

For the three months ended March 31, 2024, we generated cash flow from operating activities of $54.7 million. Our cash and cash equivalents at March 31, 2024 totaled $207.5 million, with no debt on our balance sheet. We currently have no credit facilities. Our primary uses of cash have been for funding investments in R&D in our Unified Omnichannel Commerce and Digital Supply Chain solutions to drive revenue and earnings growth. In addition, during the three months ended March 31, 2024, we repurchased approximately $73.4 million of Manhattan Associates’ outstanding common stock under the share repurchase program approved by our Board of Directors. In April 2024, our Board of Directors approved replenishing the Company’s remaining share repurchase authority to an aggregate of $75.0 million of our common stock.

For the remainder of 2024, we expect our first priority for use of cash will continue to be investments in our Unified Omnichannel Commerce and Digital Supply Chain solutions. We also expect to prioritize capital allocation in our global teams to fund growth, and share repurchases. We do not anticipate any borrowing requirements in 2024 for general corporate purposes.

Results of Operations

In the following table, we present a summary of our consolidated results for the three months ended March 31, 2024 and 2023.

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

Revenue

 

$

254,552

 

 

$

221,013

 

Costs and expenses

 

 

196,922

 

 

 

173,928

 

Operating income

 

 

57,630

 

 

 

47,085

 

Other income, net

 

 

996

 

 

 

143

 

Income before income taxes

 

 

58,626

 

 

 

47,228

 

Net income

 

$

53,801

 

 

$

38,791

 

Diluted earnings per share

 

$

0.86

 

 

$

0.62

 

Diluted weighted average number of shares

 

 

62,493

 

 

 

62,767

 

We have three geographic reportable segments: the Americas, EMEA, and APAC. Geographic revenue information is based on the location of sale. The revenues represented below are from external customers only. The geography-based expenses include costs of personnel, direct sales, marketing expenses, and general and administrative costs to support the business. There are certain corporate expenses included in the Americas segment that we do not charge to the other segments, including R&D, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas costs are all R&D costs, including the costs associated with our operations in India. During the three months ended March 31, 2024 and 2023, we derived the majority of our revenues from sales to customers within our Americas segment. In the following table, we present a summary of revenue and operating income by segment:

 

16


 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

% Change vs.
Prior Year

 

Revenue:

 

(in thousands)

 

 

Cloud subscriptions

 

 

 

 

 

 

 

 

 

Americas

 

 

61,132

 

 

 

46,354

 

 

 

32

%

EMEA

 

 

14,501

 

 

 

9,329

 

 

 

55

%

APAC

 

 

2,394

 

 

 

1,537

 

 

 

56

%

Total cloud subscriptions

 

 

78,027

 

 

 

57,220

 

 

 

36

%

 

 

 

 

 

 

 

 

 

 

Software license

 

 

 

 

 

 

 

 

 

Americas

 

 

1,829

 

 

 

2,586

 

 

 

-29

%

EMEA

 

 

486

 

 

 

1,350

 

 

 

-64

%

APAC

 

 

495

 

 

 

1,416

 

 

 

-65

%

Total software license

 

 

2,810

 

 

 

5,352

 

 

 

-47

%

 

 

 

 

 

 

 

 

 

 

Maintenance

 

 

 

 

 

 

 

 

 

Americas

 

 

27,876

 

 

 

28,416

 

 

 

-2

%

EMEA

 

 

4,674

 

 

 

4,858

 

 

 

-4

%

APAC

 

 

2,422

 

 

 

2,376

 

 

 

2

%

Total maintenance

 

 

34,972

 

 

 

35,650

 

 

 

-2

%

 

 

 

 

 

 

 

 

 

 

Services

 

 

 

 

 

 

 

 

 

Americas

 

 

99,115

 

 

 

86,814

 

 

 

14

%

EMEA

 

 

26,771

 

 

 

24,089

 

 

 

11

%

APAC

 

 

6,309

 

 

 

5,267

 

 

 

20

%

Total services

 

 

132,195

 

 

 

116,170

 

 

 

14

%

 

 

 

 

 

 

 

 

 

 

Hardware

 

 

 

 

 

 

 

 

 

Americas

 

6,360

 

 

 

6,589

 

 

 

-3

%

EMEA

 

 

188

 

 

 

32

 

 

 

488

%

APAC

 

 

-

 

 

 

-

 

 

-

 

Total hardware and other

 

 

6,548

 

 

 

6,621

 

 

 

-1

%

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

 

 

 

 

 

 

 

 

Americas

 

 

196,312

 

 

 

170,759

 

 

 

15

%

EMEA

 

 

46,620

 

 

 

39,658

 

 

 

18

%

APAC

 

 

11,620

 

 

 

10,596

 

 

 

10

%

Total revenue

 

$

254,552

 

 

$

221,013

 

 

 

15

%

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

Americas

 

 

36,687

 

 

 

29,647

 

 

 

24

%

EMEA

 

 

15,884

 

 

 

12,793

 

 

 

24

%

APAC

 

 

5,059

 

 

 

4,645

 

 

 

9

%

Total operating income

 

$

57,630

 

 

$

47,085

 

 

 

22

%

 

Condensed Consolidated Financial Summary - First Quarter 2024

Consolidated total revenue: $254.6 million for the first quarter of 2024, compared to $221.0 million for the first quarter of 2023;
Cloud subscription revenue: $78.0 million for the first quarter of 2024, compared to $57.2 million for the first quarter of 2023;
Software license revenue: $2.8 million for the first quarter of 2024, compared to $5.4 million for the first quarter of 2023;
Services revenue: $132.2 million for the first quarter of 2024, compared to $116.2 million for the first quarter of 2023;
Operating income: $57.6 million for the first quarter of 2024, compared to $47.1 million for the first quarter of 2023;
Operating margins: 22.6% for the first quarter of 2024, compared to 21.3% for the first quarter of 2023;

 

17


 

Diluted earnings per share: $0.86 for the first quarter of 2024 compared to $0.62 for the first quarter of 2023;
Cash flow from operations: $54.7 million in the first quarter of 2024, compared to $58.7 million in the first quarter of 2023;
Days sales outstanding: 74 days at March 31, 2024, compared to 70 days at December 31, 2023;
Cash: $207.5 million at March 31, 2024, compared to $270.7 million at December 31, 2023;
Share repurchases: In the three months ended March 31, 2024, we reduced our common shares outstanding through the repurchase of approximately 0.3 million shares of our common stock, under the share repurchase program authorized by our board of directors for a total investment of $73.4 million. In April 2024, our Board of Directors approved replenishing the Company’s remaining share repurchase authority to an aggregate of $75.0 million of our common stock.

 

Below we discuss our consolidated results of operations for the first quarters of 2024 and 2023.

 

Revenue

 

 

Three Months Ended March 31,

 

 

 

 

 

% Change vs.

 

 

% of Total Revenue

 

 

 

2024

 

 

2023

 

 

Prior Year

 

 

2024

 

 

2023

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions

 

$

78,027

 

 

$

57,220

 

 

 

36

%

 

 

30

%

 

 

26

%

Software license

 

 

2,810

 

 

 

5,352

 

 

 

-47

%

 

 

1

%

 

 

2

%

Maintenance

 

 

34,972

 

 

 

35,650

 

 

 

-2

%

 

 

14

%

 

 

16

%

Services

 

 

132,195

 

 

 

116,170

 

 

 

14

%

 

 

52

%

 

 

53

%

Hardware

 

 

6,548

 

 

 

6,621

 

 

 

-1

%

 

 

3

%

 

 

3

%

Total revenue

 

$

254,552

 

 

$

221,013

 

 

 

15

%

 

 

100

%

 

 

100

%

Cloud Subscriptions Revenue. In the first quarter of 2024, cloud subscriptions revenue increased $20.8 million compared to the same quarter in the prior year. Our customers have demonstrated a clear preference for cloud-based solutions, including existing customers that are migrating from on-premise to cloud-based offerings. Cloud subscriptions revenue for the Americas, EMEA and APAC segments increased $14.8 million, $5.2 million and $0.8 million in the first quarter of 2024, respectively.

Software License Revenue. Software license revenue decreased $2.5 million in the first quarter of 2024 compared to the same quarter in the prior year on strong market preference for our cloud-native solutions. The perpetual license sales percentage mix across our product suite in the first quarter ended March 31, 2024 was over 80% warehouse management solutions.

Maintenance Revenue. Maintenance revenue decreased $0.7 million in the first quarter of 2024 compared to the same quarter in the prior year. Across the Americas, EMEA, and APAC segments, maintenance revenue remained relatively flat.

Services Revenue. Services revenue increased $16.0 million in the first quarter of 2024 compared to the same quarter in the prior year. Services revenue for the Americas, EMEA and APAC segments increased $12.3 million, $2.7 million, and $1.0 million, respectively, compared to the same quarter in the prior year, primarily driven by the increase in cloud subscriptions. The percentage of professional services revenue that relates to cloud subscriptions in the first quarter of 2024 and 2023 was approximately 73% and 64%, respectively. The remainder of our professional services revenue relates to implementations, ongoing support, and upgrades of licensed software.

Hardware Revenue. Hardware sales decreased $0.1 million in the first quarter of 2024 compared to the same quarter in the prior year. The majority of our hardware revenue is derived from our Americas segment. Sales of hardware is largely dependent upon customer-specific desires, which fluctuate.

 

Cost of Revenue

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

% Change vs.
Prior Year

 

Cost of cloud subscriptions, maintenance and services

 

$

118,955

 

 

$

103,327

 

 

 

15

%

Cost of software license

 

$

332

 

 

$

302

 

 

 

10

%

Total cost of revenue

 

$

119,287

 

 

$

103,629

 

 

 

15

%

Cost of Cloud Subscriptions, Maintenance and Services. Costs of cloud subscriptions, maintenance and services consist primarily of salaries and other personnel-related expenses of employees dedicated to cloud subscriptions; maintenance services; and

 

18


 

professional and technical services as well as hosting fees. The $15.6 million increase in the quarter ended March 31, 2024 compared to the same quarter in the prior year was principally due to a $14.3 million increase in compensation and other personnel-related expenses and a $1.3 million increase in computer infrastructure cost.

Cost of Software License. Cost of software license consists of the costs associated with software reproduction; media, packaging and delivery; documentation, and other related costs; and royalties on third-party software sold with or as part of our products. Cost of software license remained relatively flat in the first quarter of 2024 compared with the same quarter in the prior year.

 

Operating Expenses

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

% Change vs.
Prior Year

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

35,010

 

 

$

30,794

 

 

 

14

%

Sales and marketing

 

 

19,929

 

 

 

18,065

 

 

 

10

%

General and administrative

 

 

21,203

 

 

 

19,953

 

 

 

6

%

Depreciation and amortization

 

 

1,493

 

 

 

1,487

 

 

 

0

%

Operating expenses

 

$

77,635

 

 

$

70,299

 

 

 

10

%

Research and Development. Our principal R&D activities have focused on the expansion and integration of new products and releases, including cloud-based solutions, while expanding the product footprint of our software solution suites in Supply Chain, Inventory Optimization, Omnichannel and point-of-sale.

R&D expenses primarily consist of salaries and other personnel-related costs for personnel involved in our R&D activities. R&D expenses for the quarter ended March 31, 2024 increased by $4.2 million, compared to the same quarter of 2023 principally due to an increase in compensation and other personnel-related expenses.

Sales and Marketing. Sales and marketing expenses include salaries, commissions, travel and other personnel-related costs and the costs of our marketing and alliance programs and related activities. Sales and marketing expenses increased $1.9 million in the quarter ended March 31, 2024 compared to the same quarter in the prior year primarily due to a $1.0 million increase in compensation and other personnel-related expenses and a $0.8 million increase in marketing and campaign program expenses.

General and Administrative (G&A). G&A expenses consist primarily of salaries and other personnel-related costs of executive, financial, human resources, information technology, and administrative personnel, as well as facilities, legal, insurance, accounting, and other administrative expenses. G&A expenses increased $1.3 million, in the current year quarter compared to the same quarter in the prior year, primarily due to a $1.6 million increase in compensation and other personnel-related expenses.

Depreciation and Amortization. Depreciation and amortization of intangibles and software expense for the first quarter of 2024 and 2023 was $1.5 million.

 

Operating Income

Operating income in the first quarter of 2024 was $57.6 million compared to $47.1 million in the same quarter in the prior year. Operating margin was 22.6% for the first quarter of 2024 versus 21.3% for the same quarter in the prior year. Operating income and margin increased primarily due to increased cloud subscriptions and services revenues.

Other Income and Income Taxes

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

% Change vs.
Prior Year

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

$

996

 

 

$

143

 

 

 

597

%

Income tax provision

 

 

4,825

 

 

 

8,437

 

 

 

-43

%

 

Other income, net. Other income, net primarily includes interest income, foreign currency gains and losses, and other non-operating expenses. Other income, net increased $0.8 million in the first quarter of 2024 compared to the same quarter in the prior year due to a $0.4 million increase in interest income and a $0.3 million increase in foreign currency gains. The increase of foreign currency gains is mainly due to gains or losses on intercompany transactions denominated in foreign currencies with subsidiaries due to the fluctuation of the U.S. dollar relative to other foreign currencies, primarily the Indian Rupee. We recorded net foreign currency losses of $0.6 million in the first quarter of 2024, and $0.8 million of net foreign currency losses in the same quarter in the prior year.

 

19


 

Income tax provision. Our effective income tax rate was 8.2% and 17.9% for the quarters ended March 31, 2024 and 2023, respectively. The decrease in the effective tax rate for the three months ended March 31, 2024 is due to an increase of excess tax benefits on restricted stock vestings and a decrease of expense from a favorable tax law change allowing creditability of foreign tax.

 

Liquidity and Capital Resources

During the first three months of 2024, we funded our business exclusively through cash generated from operations. Our cash and cash equivalents as of March 31, 2024 included $138.3 million held in the U.S. and $69.2 million held by our foreign subsidiaries. We believe that our cash balances in the U.S. are sufficient to fund our U.S. operations. In the future, if we elect to repatriate the unremitted earnings of our foreign subsidiaries, we would not be subject to additional U.S. income taxes on such earnings, but we could be subject to additional local withholding taxes.

Cash flow from operating activities totaled $54.7 million and $58.7 million in the three months ended March 31, 2024 and 2023, respectively. Typical factors affecting our cash provided by operating activities include our level of revenue and earnings for the period, the timing and amount of employee bonus and income tax payments, and the timing of cash collections from our customers which is our primary source of operating cash flow. Cash flow from operating activities for the three months ended March 31, 2024 decreased $4.0 million compared to the same period in the prior year, which is mainly due to an increase in bonus payments and the timing of cash collections from our customers.

Cash flow used in investing activities totaled $2.3 million and $0.7 million in the three months ended March 31, 2024 and 2022, respectively. Our investing activities for both the three months ended March 31, 2024 and 2023 consisted of capital spending to support company growth.

Financing activities used cash of $113.8 million and $101.7 million for the three months ended March 31, 2024 and 2023, respectively. The principal use of cash for financing activities in both periods was to purchase our common stock, including shares withheld for taxes due upon vesting of restricted stock. Repurchases of our common stock for the three months ended March 31, 2024 and 2023 totaled $113.8 million and $101.7 million, respectively, including shares withheld for taxes of $40.4 million and $27.5 million, respectively.

Periodically, opportunities may arise to grow our business through the acquisition of complementary products, and technologies. Any material acquisition could result in a decrease to our working capital depending on the amount, timing, and nature of the consideration to be paid. We believe that our existing cash will be sufficient to meet our working capital and capital expenditure needs at least for the next twelve months, although there can be no assurance that this will be the case. We continue to focus on managing liquidity, while investing in and growing our headcount capacity to support our customers and grow our business. For the remainder of 2024, we anticipate that our priorities for use of cash will be similar to prior years, with our first priority being continued investment in product development and profitably investing in our business to extend our market leadership. We will continue to weigh our share repurchase options against cash for acquisitions and investing in the business. We will also continue to evaluate acquisition opportunities that are complementary to our product footprint and technology direction. At this time, we do not anticipate any borrowing requirements for the remainder of 2024 for general corporate purposes.

Aggregate Contractual Obligations

Our principal commitments consist of multiple non-cancellable contracts for cloud infrastructure services and obligations under operating leases. As of March 31, 2024, our cloud infrastructure obligations are approximately $102.3 million over the next 4 years. We also enter into non-cancellable subscriptions in the ordinary course of business for internal software to support our operations. Our obligations, as of March 31, 2024, are approximately $26.2 million over the next 4 years. We expect to fulfill all these commitments from our working capital.

Critical Accounting Policies and Estimates

In the first three months of 2024, there were no significant changes to our critical accounting policies and estimates from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2023.

Forward-Looking Statements

Certain statements contained in this filing are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements related to expectations about global macroeconomic trends and industry developments, plans for future business development activities, anticipated costs of revenues, product mix and service revenues, research and development, selling, general and administrative activities, and liquidity and capital needs and resources. When used in this quarterly report, the words “may,” “expect,” “forecast,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “project,” “estimate,” and similar expressions are generally intended to identify forward-looking statements. Undue reliance should not be placed on these forward-looking statements, which reflect opinions only as of the date of this quarterly report. Such

 

20


 

forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Some of the factors that could cause actual results to differ materially from the results discussed in forward-looking statements include:

ongoing disruption and transformation in our vertical markets;
general economic, political and market conditions, including inflation;
our ability to attract and retain highly skilled employees;
competition;
our dependence on a single line of business;
our dependence on generating revenue from cloud subscriptions and software licenses to drive business;
undetected errors or “bugs” in our software;
the risk of defects, delays or interruptions in our cloud subscription services;
possible compromises of our data protection and IT security measures;
risks associated with large system implementations; possible liability to customers if our products fail;
the requirement to maintain high quality professional service capabilities;
the risks of international operations, including foreign currency exchange risk;
the possibility that research and developments investments may not yield sufficient returns;
the long sales cycle associated with our products;
the difficulty of predicting operating results;
the need to continually improve our technology;
risks associated with managing growth;
reliance on third party and open source software;
the need for our products to interoperate with other systems;
the need to protect our intellectual property, and our exposure to intellectual property claims of others;
the effects of wars, such as the wars in Ukraine and the Middle East, natural disasters and pandemics, such as the Covid-19 pandemic;
the possible effects on international commerce of new or increased tariffs, or a “trade war;”
and other risks described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as these may be updated from time to time in subsequent quarterly reports.

We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There were no material changes to the Quantitative and Qualitative Disclosures about Market Risk previously disclosed in our annual report on Form 10-K for the year ended December 31, 2023.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our

 

21


 

management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that the system of controls has operated effectively in all cases. Our disclosure controls and procedures however are designed to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

As of the end of the period covered by this report, our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

Changes in Internal Control over Financial Reporting

During the three months ended March 31, 2024, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, including any corrective actions with regard to material weaknesses.

 

 

22


 

PART II

OTHER INFORMATION

From time to time, we may be a party to legal proceedings arising in the ordinary course of business, and we could be a party to legal proceedings not in the ordinary course of business. We are not currently a party to any legal proceeding the result of which we believe could have a material adverse impact upon our business, financial position, results of operations, or cash flows.

Many of our product installations involve software products that are critical to the operations of our customers’ businesses. Any downtime or failure of our services or products could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to contractually limit our liability for damages arising from services or product downtime or failures or negligent acts or omissions, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A, “Risk Factors,” of our annual report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table provides information regarding common stock purchases under our publicly announced repurchase program for the quarter ended March 31, 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period

 

Total Number of Shares Purchased

 

 

Average Price Paid per Share

 

 

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

 

 

Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs

 

January 1 - January 31, 2024

 

 

-

 

 

$

-

 

 

 

-

 

 

$

75,000,000

 

February 1 - February 29, 2024

 

 

176,738

 

 

 

246.94

 

 

 

176,738

 

 

 

31,356,018

 

March 1 - March 31, 2024

 

 

116,854

 

 

 

254.74

 

 

 

116,854

 

 

 

1,588,811

 

Total

 

 

293,592

 

 

 

 

 

 

293,592

 

 

 

 

 

Item 3. Defaults Upon Senior Securities.

No events occurred during the quarter covered by this report that would require a response to this item.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Rule 10b5-1 Trading Plans

During the quarter ended March 31, 2024, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading agreement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in item 408(a) of Regulation S-K.

 

 

23


 

Item 6. Exhibits.

 

 

Exhibit 31.1

Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

Exhibit 31.2

Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

Exhibit 32*

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

Exhibit 101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

 

 

Exhibit 101.SCH

Inline XBRL Taxonomy Extension Schema Document

 

 

Exhibit 101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

 

 

Exhibit 101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

 

 

Exhibit 101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

 

 

Exhibit 101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

 

 

Exhibit 104

The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, has been formatted in Inline XBRL.

 

* In accordance with Item 601(b)(32)(ii) of the SEC’s Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.

 

24


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MANHATTAN ASSOCIATES, INC.

 

       Date:

April 26, 2024

/s/ Eddie Capel

 

 

Eddie Capel

 

 

President and Chief Executive Officer

 

 

(Principal Executive Officer)

 

 

 

 

       Date:

April 26, 2024

/s/ Dennis B. Story

 

 

Dennis B. Story

 

 

Executive Vice President, Chief Financial Officer and Treasurer

 

 

(Principal Financial Officer)

 

 

25


EX-31.1

 

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eddie Capel, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of the registrant;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 26th day of April, 2024

 

/s/ Eddie Capel

Eddie Capel

President and Chief Executive Officer

 

 


EX-31.2

 

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis B. Story, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of the registrant;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 26th day of April, 2024

 

/s/ Dennis B. Story

Dennis B. Story

Executive Vice President, Chief Financial Officer and Treasurer

 

 

 


EX-32

Exhibit 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This Certificate is being delivered pursuant to the requirements of Section 1350 of Chapter 63 (Mail Fraud) of Title 18 (Crimes and Criminal Procedures) of the United States Code and shall not be relied on by any person for any other purpose.

The undersigned, who are the Chief Executive Officer and Chief Financial Officer, respectively, of Manhattan Associates, Inc. (the “Company”), hereby each certify that, to the undersigned’s knowledge:

The Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2024 (the “Report”), which accompanies this Certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and all information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 26th day of April, 2024

 

/s/ Eddie Capel

Eddie Capel

President and Chief Executive Officer

 

/s/ Dennis B. Story

Dennis B. Story

Executive Vice President, Chief Financial Officer and Treasurer

 

In accordance with SEC Release No. 34-47986, this Exhibit is furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.