ATLANTA, April 23, 2024 (BUSINESS WIRE) --
--Company Raises 2024 Full-Year Guidance
Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $254.6 million for the first quarter ended March 31, 2024. GAAP diluted earnings per share for Q1 2024 was $0.86 compared to $0.62 in Q1 2023. Non-GAAP adjusted diluted earnings per share for Q1 2024 was $1.03 compared to $0.80 in Q1 2023.
"We are very pleased with our solid start to 2024 and better than expected first quarter results. Manhattan's fundamentals are strong, as demand continues to drive favorable pipeline and revenue momentum," said Manhattan Associates president and CEO Eddie Capel.
"While macro volatility persists, we are optimistic about our growing market opportunity. Our global teams are executing very well for our customers and are focused on delivering leading innovation across supply chain execution, Omni-channel solutions, and retail point of sale markets," Mr. Capel concluded.
FIRST QUARTER 2024 FINANCIAL SUMMARY:
Consolidated total revenue for the three months ended March 31, 2024, was $254.6 million, compared to $221.0 million for the three months ended March 31, 2023.
Cloud subscription revenue was $78.0 million for the three months ended March 31, 2024, compared to $57.2 million for the three months ended March 31, 2023.
License revenue was $2.8 million for the three months ended March 31, 2024, compared to $5.4 million for the three months ended March 31, 2023.
Services revenue was $132.2 million for the three months ended March 31, 2024, compared to $116.2 million for the three months ended March 31, 2023.
GAAP diluted earnings per share for the three months ended March 31, 2024, was $0.86, compared to $0.62 for the three months ended March 31, 2023.
Adjusted diluted earnings per share, a non-GAAP measure, was $1.03 for the three months ended March 31, 2024, compared to $0.80 for the three months ended March 31, 2023.
GAAP operating income was $57.6 million for the three months ended March 31, 2024, compared to $47.1 million for the three months ended March 31, 2023.
Adjusted operating income, a non-GAAP measure, was $79.7 million for the three months ended March 31, 2024, compared to $63.7 million for the three months ended March 31, 2023.
Cash flow from operations was $54.7 million for the three months ended March 31, 2024, compared to $58.7 million for the three months ended March 31, 2023. Days Sales Outstanding was 74 days at March 31, 2024, compared to 70 days at December 2023.
Cash totaled $207.5 million at March 31, 2024, compared to $270.7 million at December 31, 2023.
During the three months ended March 31, 2024, the Company repurchased 293,592 shares of Manhattan Associates 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 $75.0 million of our common stock.
2024 GUIDANCE
Manhattan Associates provides the following revenue, operating margin and diluted earnings per share guidance for the full year 2024:
Guidance Range - 2024 Full Year
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($'s in millions, except operating margin and EPS) $ Range % Growth Range
------------------------------------------------------------------------------------------------------------------ ----------------------------------------------------------
Total revenue - current guidance $ 1,026 $ 1,034 10 % 11 %
Operating margin:
GAAP operating margin - current guidance 20.8 % 21.2 %
Equity-based compensation 8.8 % 8.7 %
-------------------- ------- -------------------- -------------------- ------- --------------------
Adjusted operating margin(1) - current guidance 29.6 % 29.9 %
==================== ======= ==================== ==================== ======= ====================
Diluted earnings per share (EPS):
GAAP EPS - current guidance $ 2.78 $ 2.86 -1 % 1 %
Equity-based compensation, net of tax 1.22 1.22
Excess tax benefit on stock vesting(2) (0.14 ) (0.14 )
-------------------- ------- -------------------- -------------------- ------- --------------------
Adjusted EPS(1) - current guidance $ 3.86 $ 3.94 3 % 5 %
==================== ======= ==================== ==================== ======= ====================
(1) Adjusted operating margin and adjusted EPS are non-GAAP measures that exclude the impact of equity-based
compensation and related income tax effects.
(2) Excess tax benefit on stock vesting expected to occur primarily in the first quarter of 2024.
Manhattan Associates currently intends to publish in each quarterly earnings release certain expectations with respect to future financial performance. Those statements, including the guidance provided above, are forward looking. Actual results may differ materially. See our cautionary note regarding "forward-looking statements" below.
Manhattan Associates will make this earnings release and published expectations available on the investor relations section of the Manhattan Associates website at ir.manh.com. Following publication of this earnings release, any expectations with respect to future financial performance contained in this release, including the guidance, should be considered historical only, and Manhattan Associates disclaims any obligation to update them.
CONFERENCE CALL
Manhattan Associates' conference call regarding its first quarter financial results will be held today, April 23, 2024, at 4:30 p.m. Eastern Time. The Company will also discuss its business and expectations for the year and next quarter in additional detail during the call. We invite investors to a live webcast of the conference call through the Investor Relations section of the Manhattan Associates website at ir.manh.com. To listen to the live webcast, please go to the website at least 15 minutes before the call to download and install any necessary audio software. The Internet webcast will be available until Manhattan Associates' second quarter 2024 earnings release.
GAAP VERSUS NON-GAAP PRESENTATION
Manhattan Associates provides adjusted operating income and margin, adjusted income tax provision, adjusted net income, and adjusted diluted earnings per share in this press release as additional information regarding the Company's historical and projected operating results. These measures are not in accordance with, or alternatives to, GAAP, and may be different from similarly titled non-GAAP measures used by other companies. The Company believes the presentation of these non-GAAP financial measures facilitates investors' ability to understand and compare the Company's results and guidance, because the measures provide supplemental information in evaluating the operating results of its business, as distinct from results that include items not indicative of ongoing operating results, and because the Company believes its peers typically publish similar non-GAAP measures. This release should be read in conjunction with the Company's Form 8-K earnings release filing for the three months ended March 31, 2024.
Non-GAAP adjusted operating income and margin, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share exclude the impact of equity-based compensation - net of income tax effects. They also exclude the tax benefits or deficiencies of vested stock awards caused by differences in the amount deductible for tax purposes from the compensation expense recorded for financial reporting purposes. We include reconciliations of the Company's GAAP financial measures to non-GAAP adjustments in the supplemental information attached to this release.
ABOUT MANHATTAN ASSOCIATES
Manhattan Associates is a global technology leader in supply chain and omnichannel commerce. We unite information across the enterprise, converging front-end sales with back-end supply chain execution. Our software, platform technology and unmatched experience help drive both top-line growth and bottom-line profitability for our customers.
Manhattan Associates designs, builds and delivers leading edge cloud solutions so that across the store, through your network or from your fulfillment center, you are ready to reap the rewards of the omnichannel marketplace. For more information, please visit www.manh.com.
This press release contains "forward-looking statements" relating to Manhattan Associates, Inc. Forward-looking statements in this press release include, without limitation, the information set forth under "2024 Guidance" and statements identified by words such as "may," "expect," "forecast," "anticipate," "intend," "plan," "believe," "could," "seek," "project," "estimate" and similar expressions. Prospective investors are cautioned that any of those 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 those forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by those forward-looking statements are: economic conditions, including inflation; disruption and transformation in the retail sector and our vertical markets; delays in product development; competitive and pricing pressures; software errors and information technology failures, disruption and security breaches; risks related to our products' technology and customer implementations; global instability, including the wars in Ukraine and the Middle East; and the other risk factors set forth in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and in Item 1A of Part II in subsequent Quarterly Reports on Form 10-Q. Manhattan Associates undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.
###
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:
$ 78,027 $ 57,220
Cloud subscriptions
2,810 5,352
Software license
34,972 35,650
Maintenance
132,195 116,170
Services
6,548 6,621
Hardware
-------------------- ---------- -------------------- ----------
254,552 221,013
Total revenue
Costs and expenses:
118,955 103,327
Cost of cloud subscriptions, maintenance and services
332 302
Cost of software license
35,010 30,794
Research and development
19,929 18,065
Sales and marketing
21,203 19,953
General and administrative
1,493 1,487
Depreciation and amortization
-------------------- ---------- -------------------- ----------
196,922 173,928
Total costs and expenses
-------------------- ---------- -------------------- ----------
Operating income 57,630 47,085
996 143
Other income, net
-------------------- ---------- -------------------- ----------
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:
61,625 62,211
Basic
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Reconciliation of Selected GAAP to Non-GAAP Measures
(in thousands, except per share amounts)
Three Months Ended March 31,
----------------------------------------------------------------------------------------------------------------
2024 2023
-------------------- ------ -------------------- -------------------- ------ --------------------
Operating income $ 57,630 $ 47,085
22,095 16,640
Equity-based compensation (a)
-------------------- ------ -------------------- -------------------- ------ --------------------
Adjusted operating income (Non-GAAP) $ 79,725 $ 63,725
==================== ====== ==================== ==================== ====== ====================
Income tax provision $ 4,825 $ 8,437
3,436 2,409
Equity-based compensation (a)
8,157 2,955
Tax benefit of stock awards vested (b)
-------------------- ------ -------------------- -------------------- ------ --------------------
Adjusted income tax provision (Non-GAAP) $ 16,418 $ 13,801
==================== ====== ==================== ==================== ====== ====================
Net income $ 53,801 $ 38,791
18,659 14,231
Equity-based compensation (a)
(8,157 ) (2,955 )
Tax benefit of stock awards vested (b)
-------------------- ------ -------------------- -------------------- ------ --------------------
Adjusted net income (Non-GAAP) $ 64,303 $ 50,067
==================== ====== ==================== ==================== ====== ====================
Diluted EPS $ 0.86 $ 0.62
0.30 0.23
Equity-based compensation (a)
(0.13 ) (0.05 )
Tax benefit of stock awards vested (b)
-------------------- ------ -------------------- -------------------- ------ --------------------
Adjusted diluted EPS (Non-GAAP) $ 1.03 $ 0.80
==================== ====== ==================== ==================== ====== ====================
(a) Adjusted results exclude all equity-based compensation, as detailed below, to facilitate comparison with our peers and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. We do not receive a GAAP tax benefit for a portion of our equity-based compensation, mainly because of Section 162(m) of the Internal Revenue Code, which limits tax deductions for compensation granted to certain executives.
Three Months Ended March 31,
--------------------------------------------------------------------------------
2024 2023
------------------------------ ------------------------------
$ 9,289 $ 6,516
Cost of services
5,240 3,655
Research and development
1,990 1,648
Sales and marketing
5,576 4,821
General and administrative
-------------------- ---------- -------------------- ----------
(b) Adjustments represent the excess tax benefits and tax deficiencies of the equity awards vested during the period. Excess tax benefits (deficiencies) occur when the amount deductible on our tax return for an equity award is more (less) than the cumulative compensation cost recognized for financial reporting purposes. As discussed above, we exclude equity-based compensation from adjusted non-GAAP results to be consistent with other companies in the software industry and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. Therefore, we also exclude the related tax benefit (expense) generated upon their vesting.
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
March 31, December 31,
2024 2023
------------------------------ ------------------------------
(unaudited)
ASSETS
Current assets:
$ 207,524 $ 270,741
Cash and cash equivalents
205,701 181,173
Accounts receivable, net of allowance
31,981 27,276
Prepaid expenses and other current assets
-------------------- ---------- -------------------- ----------
445,206 479,190
Total current assets
12,684 11,795
Property and equipment, net
52,031 21,645
Operating lease right-of-use assets
62,232 62,235
Goodwill, net
69,868 66,043
Deferred income taxes
32,741 32,445
Other assets
-------------------- ---------- -------------------- ----------
$ 674,762 $ 673,353
Total assets
==================== ========== ==================== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
$ 26,401 $ 24,508
Accounts payable
48,517 73,210
Accrued compensation and benefits
24,920 27,374
Accrued and other liabilities
263,905 237,793
Deferred revenue
8,277 3,030
Income taxes payable
-------------------- ---------- -------------------- ----------
372,020 365,915
Total current liabilities
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
615 615
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
266,757 304,701
Retained earnings
(27,765 ) (27,038 )
Accumulated other comprehensive loss
-------------------- ---------- -------------------- ----------
239,607 278,278
Total shareholders' equity
-------------------- ---------- -------------------- ----------
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended March 31,
----------------------------------------------------------------------------------------------------
2024 2023
------------------------------ ------------------------------
(unaudited) (unaudited)
Operating activities:
$ 53,801 $ 38,791
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
1,493 1,487
Depreciation and amortization
22,095 16,640
Equity-based compensation
(138 ) 16
(Gain) loss on disposal of equipment
(3,869 ) (2,523 )
Deferred income taxes
501 1,167
Unrealized foreign currency loss
Changes in operating assets and liabilities:
(25,434 ) 6,730
Accounts receivable, net
(4,520 ) (8,760 )
Other assets
(20,809 ) (10,009 )
Accounts payable, accrued and other liabilities
4,594 7,850
Income taxes
27,024 7,327
Deferred revenue
-------------------- ---------- -------------------- ----------
54,738 58,716
Net cash provided by operating activities
-------------------- ---------- -------------------- ----------
Investing activities:
(2,321 ) (666 )
Purchase of property and equipment
-------------------- ---------- -------------------- ----------
(2,321 ) (666 )
Net cash used in investing activities
-------------------- ---------- -------------------- ----------
Financing activities:
(113,834 ) (101,688 )
Repurchase of common stock
-------------------- ---------- -------------------- ----------
(113,834 ) (101,688 )
Net cash used in financing activities
-------------------- ---------- -------------------- ----------
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
==================== ========== ==================== ==========
MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
1. GAAP and adjusted earnings per share by quarter are as follows:
2023 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ -------------------- ----------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr
---------------------------------------------- ------------------------------ ------------------------------ ------------------------------ ---------------------------------------------- ----------------------------------------------
GAAP Diluted EPS $ 0.62 $ 0.63 $ 0.79 $ 0.78 $ 2.82 $ 0.86
Adjustments to GAAP:
0.23 0.25 0.26 0.25 0.97 0.30
Equity-based compensation
(0.05 ) - - - (0.06 ) (0.13 )
Tax benefit of stock awards vested
-------------------- ------ -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------
Adjusted Diluted EPS $ 0.80 $ 0.88 $ 1.05 $ 1.03 $ 3.74 $ 1.03
==================== ====== ==================== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ========== ==================== ==================== ====== ==================== ==================== ==================== ====== ====================
2. Revenues and operating income by reportable segment are as follows (in thousands):
2023 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr
------------------------------ ------------------------------ ------------------------------ ------------------------------ ------------------------------ ------------------------------
Revenue:
Americas $ 170,759 $ 179,208 $ 186,564 $ 182,664 $ 719,195 $ 196,312
EMEA 39,658 40,902 41,204 44,874 166,638 46,620
APAC 10,596 10,906 10,673 10,717 42,892 11,620
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
$ 221,013 $ 231,016 $ 238,441 $ 238,255 $ 928,725 $ 254,552
==================== ========== ==================== ========== ==================== ========== ==================== ========== ==================== ========== ==================== ==========
GAAP Operating Income:
Americas $ 29,647 $ 32,326 $ 34,655 $ 38,530 $ 135,158 $ 36,687
EMEA 12,793 13,556 14,415 15,959 56,723 15,884
APAC 4,645 4,601 4,378 4,376 18,000 5,059
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
$ 47,085 $ 50,483 $ 53,448 $ 58,865 $ 209,881 $ 57,630
==================== ========== ==================== ========== ==================== ========== ==================== ========== ==================== ========== ==================== ==========
Adjustments (pre-tax):
Americas:
Equity-based $ 16,640 $ 17,928 $ 19,030 $ 17,973 $ 71,571 $ 22,095
compensation
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
$ 16,640 $ 17,928 $ 19,030 $ 17,973 $ 71,571 $ 22,095
==================== ========== ==================== ========== ==================== ========== ==================== ========== ==================== ========== ==================== ==========
Adjusted non-GAAP Operating Income:
Americas $ 46,287 $ 50,254 $ 53,685 $ 56,503 $ 206,729 $ 58,782
EMEA 12,793 13,556 14,415 15,959 56,723 15,884
APAC 4,645 4,601 4,378 4,376 18,000 5,059
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
$ 63,725 $ 68,411 $ 72,478 $ 76,838 $ 281,452 $ 79,725
==================== ========== ==================== ========== ==================== ========== ==================== ========== ==================== ========== ==================== ==========
3. Impact of Currency Fluctuation
The following table reflects the increases (decreases) in the results of operations for each period attributable to the change in foreign currency exchange rates from the prior period as well as foreign currency gains (losses) included in other income, net for each period (in thousands):
2023 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr
---------------------------------------------- ---------------------------------------------- ------------------------------ ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Revenue $ (3,084 ) $ 104 $ 2,755 $ 2,341 $ 2,116 $ 648
Costs and expenses (3,616 ) (1,133 ) 1,033 1,212 (2,504 ) 176
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ---------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ --------------------
Operating income 532 1,237 1,722 1,129 4,620 472
Foreign currency gains (losses) (810 ) (516 ) 387 (527 ) (1,466 ) (564 )
in other income
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ---------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ --------------------
Manhattan Associates has a large research and development center in Bangalore, India. The following table reflects the increases (decreases) in the financial results for each period attributable to changes in the Indian Rupee exchange rate (in thousands):
2023 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ -----------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr
--------------------------------------------- --------------------------------------------- ----------------------- -------------------------------------------- ------------------------- -----------------------
Operating income $ 1,632 $ 1,222 $ 728 $ 267 $ 3,849 $ 185
Foreign currency gains (losses) (283 ) (31 ) 812 (105 ) 393 164
in other income
-------------------- ----- -------------------- -------------------- ----- -------------------- -------------------- --- -------------------- ---- -------------------- -------------------- ----- -------------------- ---
4. Other income includes the following components (in thousands):
2023 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ---------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr
-------------------------------------------- --------------------------------------------- --------------------------------------------- --------------------------------------------- ---------------------------------------------- ---------------------------------------------
Interest income $ 969 $ 1,555 $ 1,371 $ 1,409 $ 5,304 $ 1,414
Foreign currency gains (losses) (810 ) (516 ) 387 (527 ) (1,466 ) (564 )
Other non-operating (16 ) 2 (19 ) (15 ) (48 ) 146
income (expense)
-------------------- ---- -------------------- -------------------- ----- -------------------- -------------------- ----- -------------------- -------------------- ----- -------------------- -------------------- ------ -------------------- -------------------- ----- --------------------
5. Capital expenditures are as follows (in thousands):
2023 2024
---------------------------------------------------------------------------------------------------------------- ------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr
------ ------ ------ ------ -------- ------
6. Stock Repurchase Activity (in thousands):
2023 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr
------------------------------ ------------------------------ ------------------------------ ------------------------------ ------------------------------ ------------------------------
Shares purchased under publicly announced buy-back program 515 381 128 - 1,024 294
Shares withheld for taxes due upon vesting of restricted stock units 208 4 8 2 222 165
-------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ---------- -------------------- ----------
Total shares purchased 723 385 136 2 1,246 459
==================== ========== ==================== ========== ==================== ========== ==================== ========== ==================== ========== ==================== ==========
Total cash paid for shares purchased under publicly announced buy-back program $ 74,177 $ 66,769 $ 25,072 $ 0 $ 166,018 $ 73,411
Total cash paid for shares withheld for taxes due upon vesting of restricted stock units 27,511 658 1,529 331
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