0000950170-24-117433 | 10-Q | XBRL Viewer

Basic and Diluted Net Income Per Share

9 Months Ended

Sep. 30, 2024

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 and nine months ended September 30, 2024 and 2023 (in thousands, except per share data):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
	(in thousands, except per share data)						(in thousands, except per share data)

Net income	$	63,781		$	49,421		$	170,348		$	127,832
Earnings per share:
Basic	$	1.04		$	0.80		$	2.77		$	2.07
Effect of CESs		(0.01	)		(0.01	)		(0.03	)		(0.02	)
Diluted	$	1.03		$	0.79		$	2.74		$	2.05

Weighted average number of shares:
Basic		61,169			61,639			61,404			61,902
Effect of CESs		779			671			782			599
Diluted		61,948			62,310			62,186			62,501

The number of anti-dilutive CESs during the three and nine months ended September 30, 2024 and 2023 was immaterial.

Fair Value Measurement - Additional Information (Detail)	Sep. 30, 2024 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Cash balance	$ 102,400,000
Cash equivalents	112,600,000
Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Investments	0
Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Investments	$ 0

- Definition

Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation.

+ References + Details

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating activities:
Net income	$ 170,348	$ 127,832
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,670	4,247
Equity-based compensation	70,614	53,598
(Gain) loss on disposal of equipment	(131)	42
Deferred income taxes	(20,544)	(18,359)
Unrealized foreign currency loss	906	922
Changes in operating assets and liabilities:
Accounts receivable, net	(17,515)	(17,168)
Other assets	(9,688)	(7,747)
Accounts payable, accrued and other liabilities	(13,367)	13,477
Income taxes	(7,956)	(4,347)
Deferred revenue	12,962	5,362
Net cash provided by operating activities	190,299	157,859
Investing activities:
Purchase of property and equipment	(5,547)	(2,761)
Net cash used in investing activities	(5,547)	(2,761)
Financing activities:
Repurchase of common stock	(241,150)	(195,716)
Net cash used in financing activities	(241,150)	(195,716)
Foreign currency impact on cash	609	(2,533)
Net change in cash and cash equivalents	(55,789)	(43,151)
Cash and cash equivalents at beginning of period	270,741	225,463
Cash and cash equivalents at end of period	$ 214,952	$ 182,312

Reportable Segments (Tables)

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Schedule of Financial Information by Reportable Segment

In accordance with ASC 280, Segment Reporting, we present below certain financial information by reportable segment for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,
	2024								2023
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	67,708	$	16,158	$	2,619	$	86,485	$	52,846	$	10,343	$	1,844	$	65,033
Software license		3,112		278		372		3,762		3,502		51		317		3,870
Maintenance		27,541		4,725		2,225		34,491		27,951		5,159		2,186		35,296
Services		102,616		26,862		7,531		137,009		96,045		25,594		6,326		127,965
Hardware		4,875		59		-		4,934		6,220		57		-		6,277
Total revenue		205,852		48,082		12,747		266,681		186,564		41,204		10,673		238,441

Costs and Expenses:
Cost of revenue		88,997		23,934		5,729		118,660		84,275		22,134		5,030		111,439
Operating expenses		66,422		3,380		1,441		71,243		66,356		4,514		1,244		72,114
Depreciation and amortization		1,400		247		41		1,688		1,278		141		21		1,440
Total costs and expenses		156,819		27,561		7,211		191,591		151,909		26,789		6,295		184,993
Operating income	$	49,033	$	20,521	$	5,536	$	75,090	$	34,655	$	14,415	$	4,378	$	53,448

	Nine Months Ended September 30,
	2024								2023
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	193,505	$	46,030	$	7,338	$	246,873	$	148,812	$	29,454	$	4,930	$	183,196
Software license		7,371		1,126		1,136		9,633		8,556		1,902		2,509		12,967
Maintenance		84,038		13,930		6,768		104,736		84,938		14,919		6,915		106,772
Services		304,200		80,265		21,570		406,035		275,602		75,321		17,821		368,744
Hardware		19,005		269		-		19,274		18,623		168		-		18,791
Total revenue		608,119		141,620		36,812		786,551		536,531		121,764		32,175		690,470

Costs and Expenses:
Cost of revenue		267,797		73,830		16,361		357,988		242,998		66,401		14,482		323,881
Operating expenses		205,455		13,486		4,044		222,985		193,080		14,238		4,008		211,326
Depreciation and amortization		3,847		704		119		4,670		3,825		361		61		4,247
Total costs and expenses		477,099		88,020		20,524		585,643		439,903		81,000		18,551		539,454
Operating income	$	131,020	$	53,600	$	16,288	$	200,908	$	96,628	$	40,764	$	13,624	$	151,016

Basis of Presentation and Principles of Consolidation (Policies)	9 Months Ended
	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	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 September 30, 2024, the results of operations for the three and nine months ended September 30, 2024 and 2023, and cash flows for the nine months ended September 30, 2024 and 2023. The results for the three and nine months ended September 30, 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	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	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.

Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Our effective tax rate was 16.5% and 10.4% for the three months ended September 30, 2024 and 2023, respectively, and 16.5% and 17.0% for the nine months ended September 30, 2024 and 2023, respectively. The increase in the effective tax rate for three months ended September 30, 2024 is primarily due to a decrease of benefit in recording return to provision estimates in the quarter,

offset by a reduction in expense related to statute of limitations expiration on uncertain tax positions. The decrease in the effective tax rate for the nine months ended September 30, 2024 is due to an increase of excess tax benefits on restricted stock vesting and a reduction in expense related to statute of limitations expiration on uncertain tax positions, partially offset by a decrease of benefit in recording return to provision estimates.

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 September 30, 2024, our uncertain tax positions decreased by $3.0 million primarily due to statute of limitations expiration.

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.

- Definition

The entire disclosure for income tax.

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+ Details

Reportable Segments - Schedule of Financial Information by Reportable Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Segment Reporting Information [Line Items]
Total revenue	$ 266,681	$ 238,441	$ 786,551	$ 690,470
Cost of revenue	118,660	111,439	357,988	323,881
Operating expenses	71,243	72,114	222,985	211,326
Depreciation and amortization	1,688	1,440	4,670	4,247
Total costs and expenses	191,591	184,993	585,643	539,454
Operating income	75,090	53,448	200,908	151,016
Cloud Subscriptions
Segment Reporting Information [Line Items]
Total revenue	86,485	65,033	246,873	183,196
Software License
Segment Reporting Information [Line Items]
Total revenue	3,762	3,870	9,633	12,967
Cost of revenue	391	297	1,068	967
Maintenance
Segment Reporting Information [Line Items]
Total revenue	34,491	35,296	104,736	106,772
Services
Segment Reporting Information [Line Items]
Total revenue	137,009	127,965	406,035	368,744
Hardware
Segment Reporting Information [Line Items]
Total revenue	4,934	6,277	19,274	18,791
Americas
Segment Reporting Information [Line Items]
Total revenue	205,852	186,564	608,119	536,531
Cost of revenue	88,997	84,275	267,797	242,998
Operating expenses	66,422	66,356	205,455	193,080
Depreciation and amortization	1,400	1,278	3,847	3,825
Total costs and expenses	156,819	151,909	477,099	439,903
Operating income	49,033	34,655	131,020	96,628
Americas \| Cloud Subscriptions
Segment Reporting Information [Line Items]
Total revenue	67,708	52,846	193,505	148,812
Americas \| Software License
Segment Reporting Information [Line Items]
Total revenue	3,112	3,502	7,371	8,556
Americas \| Maintenance
Segment Reporting Information [Line Items]
Total revenue	27,541	27,951	84,038	84,938
Americas \| Services
Segment Reporting Information [Line Items]
Total revenue	102,616	96,045	304,200	275,602
Americas \| Hardware
Segment Reporting Information [Line Items]
Total revenue	4,875	6,220	19,005	18,623
EMEA
Segment Reporting Information [Line Items]
Total revenue	48,082	41,204	141,620	121,764
Cost of revenue	23,934	22,134	73,830	66,401
Operating expenses	3,380	4,514	13,486	14,238
Depreciation and amortization	247	141	704	361
Total costs and expenses	27,561	26,789	88,020	81,000
Operating income	20,521	14,415	53,600	40,764
EMEA \| Cloud Subscriptions
Segment Reporting Information [Line Items]
Total revenue	16,158	10,343	46,030	29,454
EMEA \| Software License
Segment Reporting Information [Line Items]
Total revenue	278	51	1,126	1,902
EMEA \| Maintenance
Segment Reporting Information [Line Items]
Total revenue	4,725	5,159	13,930	14,919
EMEA \| Services
Segment Reporting Information [Line Items]
Total revenue	26,862	25,594	80,265	75,321
EMEA \| Hardware
Segment Reporting Information [Line Items]
Total revenue	59	57	269	168
APAC
Segment Reporting Information [Line Items]
Total revenue	12,747	10,673	36,812	32,175
Cost of revenue	5,729	5,030	16,361	14,482
Operating expenses	1,441	1,244	4,044	4,008
Depreciation and amortization	41	21	119	61
Total costs and expenses	7,211	6,295	20,524	18,551
Operating income	5,536	4,378	16,288	13,624
APAC \| Cloud Subscriptions
Segment Reporting Information [Line Items]
Total revenue	2,619	1,844	7,338	4,930
APAC \| Software License
Segment Reporting Information [Line Items]
Total revenue	372	317	1,136	2,509
APAC \| Maintenance
Segment Reporting Information [Line Items]
Total revenue	2,225	2,186	6,768	6,915
APAC \| Services
Segment Reporting Information [Line Items]
Total revenue	$ 7,531	$ 6,326	$ 21,570	$ 17,821

Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Effective tax rate	16.50%	10.40%	16.50%	17.00%
Unrecognized tax benefits decrease	$ 3.0

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Basic and Diluted Net Income Per Share - Reconciliation of Earnings per Share and Shares in Computation of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Earnings Per Share [Abstract]
Net income	$ 63,781	$ 49,421	$ 170,348	$ 127,832
Earnings per share:
Basic	$ 1.04	$ 0.8	$ 2.77	$ 2.07
Effect of CESs	(0.01)	(0.01)	(0.03)	(0.02)
Diluted	$ 1.03	$ 0.79	$ 2.74	$ 2.05
Weighted average number of shares:
Basic	61,169	61,639	61,404	61,902
Effect of CESs	779	671	782	599
Diluted	61,948	62,310	62,186	62,501

Fair Value Measurement

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

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 September 30, 2024, our cash and cash equivalents were $102.4 million and $112.6 million, respectively. We had neither short-term investments nor long-term investments at September 30, 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 September 30, 2024.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

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-Topic 820
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

Revenue Recognition - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Disaggregation Of Revenue [Line Items]
Revenue expected to be recognized from remaining performance obligations	$ 1,700,000,000		$ 1,700,000,000
Credit loss reserve	900,000		$ 900,000		$ 900,000
Remaining performance obligation, explanation			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.
Percentage of expected revenue recognition			40.00%
Other provisions for doubtful accounts valuation allowance	3,200,000		$ 3,200,000		$ 4,400,000
Revenue, practical expedient, remaining performance obligation, description			We apply the practical expedient to expense sales commissions when the amortization period would have been one year or less.
Amortization of sales commissions	2,600,000	$ 2,400,000	$ 7,900,000	$ 7,000,000
Impairment losses			0	0
Balance as of December 31, 2023
Disaggregation Of Revenue [Line Items]
Deferred revenue recognized	43,800,000		213,500,000
Balance as of March 31, 2024
Disaggregation Of Revenue [Line Items]
Deferred revenue recognized	117,700,000
Sales Commission
Disaggregation Of Revenue [Line Items]
Deferred commissions	40,400,000		40,400,000
Sales Commission \| Other Assets
Disaggregation Of Revenue [Line Items]
Deferred commissions	30,200,000		30,200,000
Sales Commission \| Prepaid Expenses
Disaggregation Of Revenue [Line Items]
Deferred commissions	$ 10,200,000		$ 10,200,000
Cloud Subscriptions
Disaggregation Of Revenue [Line Items]
Percentage of remaining performance obligation to be recognized as cloud revenue	98.00%		98.00%
Perpetual Software License Revenue \| Sales Revenue, Net \| Product Concentration Risk
Disaggregation Of Revenue [Line Items]
Total software revenue, perpetual software license percentage			1.00%
Services
Disaggregation Of Revenue [Line Items]
Amount recorded for potential service revenue adjustments	$ 100,000	$ 2,800,000	$ 1,000,000	$ 4,000,000

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	61,072,619	61,566,037
Common stock, shares outstanding	61,072,619	61,566,037

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Total revenue	$ 266,681	$ 238,441	$ 786,551	$ 690,470
Total costs	118,660	111,439	357,988	323,881
Research and development	34,349	33,093	104,693	95,487
Sales and marketing	16,586	17,650	55,669	54,278
General and administrative	20,308	21,371	62,623	61,561
Depreciation and amortization	1,688	1,440	4,670	4,247
Total costs and expenses	191,591	184,993	585,643	539,454
Operating income	75,090	53,448	200,908	151,016
Other income, net	1,312	1,739	3,222	2,923
Income before income taxes	76,402	55,187	204,130	153,939
Income tax provision	12,621	5,766	33,782	26,107
Net income	$ 63,781	$ 49,421	$ 170,348	$ 127,832
Basic earnings per share	$ 1.04	$ 0.8	$ 2.77	$ 2.07
Diluted earnings per share	$ 1.03	$ 0.79	$ 2.74	$ 2.05
Weighted average number of shares:
Basic	61,169	61,639	61,404	61,902
Diluted	61,948	62,310	62,186	62,501
Cloud Subscriptions
Total revenue	$ 86,485	$ 65,033	$ 246,873	$ 183,196
Software License
Total revenue	3,762	3,870	9,633	12,967
Total costs	391	297	1,068	967
Maintenance
Total revenue	34,491	35,296	104,736	106,772
Services
Total revenue	137,009	127,965	406,035	368,744
Hardware
Total revenue	4,934	6,277	19,274	18,791
Cloud Subscriptions, Maintenance and Services
Total costs	$ 118,269	$ 111,142	$ 356,920	$ 322,914

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Oct. 22, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Entity Registrant Name	MANHATTAN ASSOCIATES, INC.
Trading Symbol	MANH
Entity Central Index Key	0001056696
Current Fiscal Year End Date	--12-31
Entity Incorporation, State or Country Code	GA
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		61,075,279
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-23999
Entity Tax Identification Number	58-2373424
Entity Address, Address Line One	2300 Windy Ridge Parkway
Entity Address, Address Line Two	Tenth Floor
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30339
City Area Code	770
Local Phone Number	955-7070
Title of each class	Common stock
Name of each exchange on which registered	NASDAQ

Basic and Diluted Net Income Per Share (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Reconciliation of Earnings per Share and Shares in Computation of Earnings Per Share


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
	(in thousands, except per share data)						(in thousands, except per share data)

Net income	$	63,781		$	49,421		$	170,348		$	127,832
Earnings per share:
Basic	$	1.04		$	0.80		$	2.77		$	2.07
Effect of CESs		(0.01	)		(0.01	)		(0.03	)		(0.02	)
Diluted	$	1.03		$	0.79		$	2.74		$	2.05

Weighted average number of shares:
Basic		61,169			61,639			61,404			61,902
Effect of CESs		779			671			782			599
Diluted		61,948			62,310			62,186			62,501

Contingencies	9 Months Ended
Contingencies	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Contingencies	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 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.

Revenue Recognition - Additional Information (Detail 1)	Sep. 30, 2024
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-10-01
Disaggregation Of Revenue [Line Items]
Revenue recognized on remaining performance obligations period	24 months

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2022	$ 226,800	$ 621		$ 253,711	$ (27,532)
Balance (in shares) at Dec. 31, 2022		62,191,570
Repurchase of common stock	(195,716)	$ (11)	$ (52,477)	(143,228)
Repurchase of common stock (in shares)		(1,244,580)
Restricted stock units issuance		$ 6	(6)
Restricted stock units issuance (in shares)		615,490
Excise tax on net stock repurchases	(1,115)		(1,115)
Equity-based compensation	53,598		53,598
Foreign currency translation adjustment	(1,294)				(1,294)
Net income	127,832			127,832
Balance at Sep. 30, 2023	210,105	$ 616		238,315	(28,826)
Balance (in shares) at Sep. 30, 2023		61,562,480
Balance at Jun. 30, 2023	170,550	$ 617		196,673	(26,740)
Balance (in shares) at Jun. 30, 2023		61,668,512
Repurchase of common stock	(26,601)	$ (1)	(18,821)	(7,779)
Repurchase of common stock (in shares)		(136,165)
Restricted stock units issuance (in shares)		30,133
Excise tax on net stock repurchases	(209)		(209)
Equity-based compensation	19,030		19,030
Foreign currency translation adjustment	(2,086)				(2,086)
Net income	49,421			49,421
Balance at Sep. 30, 2023	210,105	$ 616		238,315	(28,826)
Balance (in shares) at Sep. 30, 2023		61,562,480
Balance at Dec. 31, 2023	278,278	$ 615		304,701	(27,038)
Balance (in shares) at Dec. 31, 2023		61,566,037
Repurchase of common stock	(241,150)	$ (10)	(69,452)	(171,688)
Repurchase of common stock (in shares)		(1,007,013)
Restricted stock units issuance		$ 5	(5)
Restricted stock units issuance (in shares)		513,595
Excise tax on net stock repurchases	(1,157)		(1,157)
Equity-based compensation	70,614		70,614
Foreign currency translation adjustment	1,018				1,018
Net income	170,348			170,348
Balance at Sep. 30, 2024	277,951	$ 610		303,361	(26,020)
Balance (in shares) at Sep. 30, 2024		61,072,619
Balance at Jun. 30, 2024	240,629	$ 612		267,771	(27,754)
Balance (in shares) at Jun. 30, 2024		61,245,638
Repurchase of common stock	(51,604)	$ (2)	(23,411)	(28,191)
Repurchase of common stock (in shares)		(202,209)
Restricted stock units issuance (in shares)		29,190
Excise tax on net stock repurchases	(442)		(442)
Equity-based compensation	23,853		$ 23,853
Foreign currency translation adjustment	1,734				1,734
Net income	63,781			63,781
Balance at Sep. 30, 2024	$ 277,951	$ 610		$ 303,361	$ (26,020)
Balance (in shares) at Sep. 30, 2024		61,072,619

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 214,952	$ 270,741
Accounts receivable, net	199,756	181,173
Prepaid expenses and other current assets	37,605	27,276
Total current assets	452,313	479,190
Property and equipment, net	12,809	11,795
Operating lease right-of-use assets	50,094	21,645
Goodwill, net	62,236	62,235
Deferred income taxes	86,551	66,043
Other assets	34,137	32,445
Total assets	698,140	673,353
Current liabilities:
Accounts payable	23,183	24,508
Accrued compensation and benefits	63,010	73,210
Accrued and other liabilities	23,227	27,374
Deferred revenue	252,537	237,793
Income taxes payable	286	3,030
Total current liabilities	362,243	365,915
Operating lease liabilities, long-term	50,028	17,694
Other non-current liabilities	7,918	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; 61,072,619 and 61,566,037 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	610	615
Retained earnings	303,361	304,701
Accumulated other comprehensive loss	(26,020)	(27,038)
Total shareholders' equity	277,951	278,278
Total liabilities and shareholders' equity	$ 698,140	$ 673,353

Equity-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

We granted 1,273 and 876 restricted stock units (RSUs) during the three months ended September 30, 2024 and 2023, respectively, and granted 549,122 and 582,209 RSUs during the nine months ended September 30, 2024 and 2023, respectively. Equity-based compensation expense related to RSUs was $23.9 million and $19.0 million during the three months ended September 30, 2024 and 2023, respectively, and $70.6 million and $53.6 million during the nine months ended September 30, 2024 and 2023, respectively.

We present below a summary of changes during the nine months ended September 30, 2024 in our unvested units of restricted stock:


	Number of shares/units
Outstanding at December 31, 2023		1,376,063
Granted		549,122
Vested		(513,595	)
Forfeited		(14,500	)
Outstanding at September 30, 2024		1,397,090

Equity-Based Compensation - Summary of Changes in Unvested Units of Restricted Stock (Detail) - Restricted Stock Units - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of units, Outstanding at December 31, 2023			1,376,063
Number of units, Granted	1,273	876	549,122	582,209
Number of units, Vested			(513,595)
Number of units, Forfeited			(14,500)
Number of units, Outstanding at March 31, 2024	1,397,090		1,397,090

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 63,781	$ 49,421	$ 170,348	$ 127,832

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Equity-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock expense	$ 23.9	$ 19.0	$ 70.6	$ 53.6
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of restricted units granted in the period	1,273	876	549,122	582,209

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Equity-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Changes in Unvested Units of Restricted Stock

We present below a summary of changes during the nine months ended September 30, 2024 in our unvested units of restricted stock:


	Number of shares/units
Outstanding at December 31, 2023		1,376,063
Granted		549,122
Vested		(513,595	)
Forfeited		(14,500	)
Outstanding at September 30, 2024		1,397,090

Reportable Segments - Additional Information (Detail) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) Segment	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| Segment			3
Total assets	$ 698,140		$ 698,140		$ 673,353
Warehouse Management Product Group \| Product Concentration Risk \| Sales Revenue, Net
Segment Reporting Information [Line Items]
Percentage of software license revenue	80.00%		80.00%
Americas
Segment Reporting Information [Line Items]
Americas royalty fees	$ 4,800	$ 3,100	$ 13,900	$ 9,700
Total assets	570,000		570,000
EMEA
Segment Reporting Information [Line Items]
Total assets	99,800		99,800
APAC
Segment Reporting Information [Line Items]
Total assets	$ 28,300		$ 28,300

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 63,781	$ 49,421	$ 170,348	$ 127,832
Foreign currency translation adjustment, net of tax	1,734	(2,086)	1,018	(1,294)
Comprehensive income	$ 65,515	$ 47,335	$ 171,366	$ 126,538

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Basis of Presentation and Principles of Consolidation	9 Months Ended
Basis of Presentation and Principles of Consolidation	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Principles of Consolidation	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 September 30, 2024, the results of operations for the three and nine months ended September 30, 2024 and 2023, and cash flows for the nine months ended September 30, 2024 and 2023. The results for the three and nine months ended September 30, 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.

Reportable Segments

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

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 $4.8 million and $3.1 million for the three months ended September 30, 2024 and 2023, respectively, and $13.9 million and $9.7 million for the nine months ended September 30, 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 and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,
	2024								2023
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	67,708	$	16,158	$	2,619	$	86,485	$	52,846	$	10,343	$	1,844	$	65,033
Software license		3,112		278		372		3,762		3,502		51		317		3,870
Maintenance		27,541		4,725		2,225		34,491		27,951		5,159		2,186		35,296
Services		102,616		26,862		7,531		137,009		96,045		25,594		6,326		127,965
Hardware		4,875		59		-		4,934		6,220		57		-		6,277
Total revenue		205,852		48,082		12,747		266,681		186,564		41,204		10,673		238,441

Costs and Expenses:
Cost of revenue		88,997		23,934		5,729		118,660		84,275		22,134		5,030		111,439
Operating expenses		66,422		3,380		1,441		71,243		66,356		4,514		1,244		72,114
Depreciation and amortization		1,400		247		41		1,688		1,278		141		21		1,440
Total costs and expenses		156,819		27,561		7,211		191,591		151,909		26,789		6,295		184,993
Operating income	$	49,033	$	20,521	$	5,536	$	75,090	$	34,655	$	14,415	$	4,378	$	53,448

	Nine Months Ended September 30,
	2024								2023
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	193,505	$	46,030	$	7,338	$	246,873	$	148,812	$	29,454	$	4,930	$	183,196
Software license		7,371		1,126		1,136		9,633		8,556		1,902		2,509		12,967
Maintenance		84,038		13,930		6,768		104,736		84,938		14,919		6,915		106,772
Services		304,200		80,265		21,570		406,035		275,602		75,321		17,821		368,744
Hardware		19,005		269		-		19,274		18,623		168		-		18,791
Total revenue		608,119		141,620		36,812		786,551		536,531		121,764		32,175		690,470

Costs and Expenses:
Cost of revenue		267,797		73,830		16,361		357,988		242,998		66,401		14,482		323,881
Operating expenses		205,455		13,486		4,044		222,985		193,080		14,238		4,008		211,326
Depreciation and amortization		3,847		704		119		4,670		3,825		361		61		4,247
Total costs and expenses		477,099		88,020		20,524		585,643		439,903		81,000		18,551		539,454
Operating income	$	131,020	$	53,600	$	16,288	$	200,908	$	96,628	$	40,764	$	13,624	$	151,016

Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel, warehouse management solutions, and transportation management solutions for the three and nine months ended September 30, 2024. The majority of our software license revenue (over 80%) relates to our warehouse management product group for the three and nine months ended September 30, 2024.

At September 30, 2024, total assets for the Americas, EMEA and APAC segments were $570.0 million, $99.8 million, and $28.3 million, respectively.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Revenue Recognition

9 Months Ended

Sep. 30, 2024

Revenue Recognition [Abstract]

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 report sales and usage-based taxes net within 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. Maintenance renewal revenue is recognized over the renewal period once we have a contract upon payment from the customer. 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 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 and nine months ended September 30, 2024, we recognized $43.8 million and $213.5 million of revenue that was included in the deferred revenue balance as of December 31, 2023. In the three months ended September 30, 2024, we recognized $117.7 million of revenue that was included in the deferred revenue balance as of June 30, 2024.

Remaining Performance Obligations

As of September 30, 2024, approximately $1.7 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.

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, our estimates 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 as of September 30, 2024 and December 31, 2023.

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 $0.1 million and $2.8 million for the three months ended September 30, 2024 and 2023, respectively, and $1.0 million and $4.0

million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31, 2023, we have reduced our accounts receivable balance by $3.2 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 $40.4 million as of September 30, 2024, of which $30.2 million is included in other assets and $10.2 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 $2.6 million and $2.4 million for the three months ended September 30, 2024 and 2023, respectively, and $7.9 million and $7.0 million for the nine months ended September 30, 2024 and 2023, respectively. No impairment losses were recognized during the periods.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

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+ Details