Key Highlights

  • Third-quarter revenue was $306.2 million, up about 11% from $275.8 million.
  • Cloud subscription revenue rose 28% to $134.4 million.
  • Adjusted diluted EPS was $1.55 against $1.36 a year earlier and a screen estimate of $1.46.
  • Remaining performance obligations reached $2.59 billion, up 25% year over year.
  • Full-year adjusted EPS guidance was raised to $5.54 to $5.56 from $5.44 to $5.50.

Manhattan Associates Earnings: Did Cloud Growth Lift the Outlook?

Manhattan Associates (NASDAQ:MANH) reported third-quarter results on Tuesday, October 27, with revenue of $306.2 million, up about 11% from $275.8 million, as calculated. Adjusted diluted EPS was $1.55, against $1.36 a year earlier and a screen estimate of $1.46 (the 5.92% surprise is as screened). GAAP diluted EPS was $1.04 versus $0.96.

Management raised its 2026 outlook, with revenue of $1,176 million to $1,178 million, about 9% growth, and adjusted EPS of $5.54 to $5.56, up 9% to 10%. The company supplies cloud-based supply chain and commerce software, and said fourth-quarter expectations would be covered on its call.

Cloud and Services Mix: What Drove Revenue Past $300 Million?

Cloud subscription revenue rose 28% to $134.4 million from $104.9 million. Services revenue was $134.4 million, against $133.0 million, and the chief executive said cloud revenue has now passed services revenue. He also cited quarterly revenue above $300 million as a milestone.

Software license revenue was $3.6 million versus $1.4 million, while maintenance fell to $29.2 million from $30.5 million and hardware to $4.5 million from $6.1 million. For nine months, revenue was $886.2 million against $811.0 million, with cloud revenue of $378.3 million versus $299.6 million.

Margins and Cash Flow: Why Did Operating Cash Generation Slow?

Adjusted operating income was $115.2 million, a margin of about 37.6% as calculated, compared with $103.4 million and about 37.5%. GAAP operating income was $81.0 million, or about 26.5% of revenue, against $75.8 million and about 27.5%. Nine-month adjusted operating margin was about 35.0% versus 36.5%.

Operating cash flow was $68.6 million, down from $93.1 million, while days sales outstanding rose to 81 days from 67 days at June 30. Nine-month operating cash flow was $243.3 million, against $242.4 million. Cash ended September at $199.4 million.

Backlog, Buybacks and Guidance: How Much Visibility Does $2.59 Billion of RPO Give?

Remaining performance obligations were $2.59 billion, up 25% year over year and up from $2.47 billion at June 30. More than 99% is cloud-native subscription with non-cancelable terms longer than one year. The chief executive described a record bookings quarter driven by strong demand and cited market-leading solutions and targeted go-to-market investments.

The company repurchased 244,748 shares for $50.0 million in the quarter and 2,162,089 shares for $325.0 million over nine months. About $175.0 million remains under the $500 million authorisation approved in March.

July guidance was revenue of $1,160 million to $1,166 million and adjusted EPS of $5.44 to $5.50; GAAP EPS is now $3.62 to $3.64 from $3.59 to $3.65, and the adjusted operating margin range rose to 35.2% to 35.4% from 35.0% to 35.2%. The GAAP operating margin range is 24.1% to 24.3%, from 24.2% to 24.4%.

What to Watch Next After Manhattan Associates' Third-Quarter Earnings?

The release says macroeconomic headwinds persist but fundamentals are solid. By calculation, the full-year guidance implies fourth-quarter revenue of about $290 million to $292 million and adjusted EPS of about $1.36 to $1.38, which sets the bar for the next report. Investors will follow cloud bookings, RPO conversion, receivables collection and the pace of repurchases.