Manhattan Associates Reports Fourth Quarter Results

ATLANTA--( BUSINESS WIRE)--Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $270.4 million for the fourth quarter ended December 31, 2025, compared to $255.8 million in Q4 2024. GAAP diluted earnings per share for Q4 2025 was $0.86 compared to $0.77 in Q4 2024. Non-GAAP adjusted diluted earnings per share for Q4 2025 was $1.21 compared to $1.17 in Q4 2024.

“Manhattan's business momentum continues to strengthen. We delivered record fourth quarter cloud bookings, and our industry leading solutions are gaining market share,” said Manhattan Associates president and CEO Eric Clark.

“Manhattan enters 2026 with an expanded go-to-market footprint and numerous opportunities to drive growth from new and existing customers. Our global team is dedicated to our customers’ success, and we are excited for our newly released AI agents to help deliver optimal results for our entire Active customer community,” Mr. Clark concluded.

FOURTH QUARTER 2025 FINANCIAL SUMMARY:

FULL YEAR 2025 FINANCIAL SUMMARY:

2026 GUIDANCE

Manhattan Associates provides the following revenue, operating margin, and diluted earnings per share guidance for the full year 2026:

Guidance Range - 2026 Full Year

($'s in millions, except operating margin and EPS)

$ Range

% Growth Range

Total revenue

$1,133

$1,153

Operating Margin:

GAAP operating margin

24.1%

24.7%

Equity-based compensation

10.4%

10.3%

Adjusted operating margin (1)

34.5%

35.0%

Diluted earnings per share (EPS):

GAAP EPS

$3.37

$3.53

-6%

-2%

Equity-based compensation

1.69

Excess tax benefit on stock vesting (2)

(0.02)

Adjusted EPS (1)

$5.04

$5.20

(1) Adjusted operating margin and adjusted EPS are non-GAAP measures that exclude the impact of equity-based compensation and the related income tax effects, if applicable.

(2) Excess tax benefit on stock vesting expected to occur primarily in the first quarter of 2026.

Manhattan Associates currently intends to make public 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 a recording of the conference call referenced below 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 or the conference call, 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 fourth quarter and twelve months ended December 31, 2025 financial results will be held today, January 27, 2026, 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’ first quarter 2026 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 and twelve months ended December 31, 2025.

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, an expense – net of insurance recoveries, related to an unusual health insurance claim, and restructuring expense – net of income tax effects, collectively. 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 “2026 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 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; risks associated with our use of generative and agentic artificial intelligence; 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, 2024, 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 December 31,

Year Ended December 31,

2025

2024

2025

2024

(unaudited)

Revenue:

Cloud subscriptions

$108,558

$90,330

$408,138

$337,203

Software license

2,643

5,452

14,819

15,085

Maintenance

32,279

33,568

129,972

138,304

Services

120,011

119,482

503,044

525,517

Hardware

6,898

6,969

25,419

26,243

Total revenue

270,389

255,801

1,081,392

1,042,352

Costs and expenses:

Cost of cloud subscriptions, maintenance and services

121,522

112,739

471,405

469,659

Cost of software license

223

253

934

1,321

Research and development

38,533

32,996

145,062

137,689

Sales and marketing

22,078

20,307

81,175

75,976

General and administrative

19,489

27,187

93,762

89,810

Depreciation and amortization

1,532

1,631

6,317

6,301

Restructuring expense

2,937

Total costs and expenses

203,377

195,113

801,592

780,756

Operating income

67,012

60,688

279,800

261,596

Other income, net

1,438

1,996

6,094

5,218

Income before income taxes

68,450

62,684

285,894

266,814

Income tax provision

16,497

14,668

65,946

48,450

Net income

$51,953

$48,016

$219,948

$218,364

Basic earnings per share

$0.87

$0.79

$3.64

$3.56

Diluted earnings per share

$0.86

$0.77

$3.60

$3.51

Weighted average number of shares:

Basic

60,036

60,999

60,473

61,303

Diluted

60,642

62,009

61,054

62,183

Reconciliation of Selected GAAP to Non-GAAP Measures

(in thousands, except per share amounts)

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

Operating income

$67,012

60,688

$279,800

261,596

Equity-based compensation (a)

30,585

22,592

111,263

93,206

Unusual health insurance claim (c)

(6,224)

7,002

(6,882)

7,002

Restructuring expense (d)

2,937

Adjusted operating income (Non-GAAP)

$91,373

$90,282

$387,118

$361,804

Income tax provision

$16,497

14,668

65,946

48,450

Equity-based compensation (a)

4,498

3,160

15,247

14,127

Tax benefit of stock awards vested (b)

3,928

9,120

Unusual health insurance claim (c)

(1,501)

1,690

(1,660)

1,690

Restructuring expense (d)

708

Adjusted income tax provision (Non-GAAP)

$19,498

19,575

84,169

73,387

Net income

$51,953

48,016

219,948

218,364

Equity-based compensation (a)

26,087

19,432

96,016

79,079

Tax benefit of stock awards vested (b)

(4)

(57)

(3,928)

(9,120)

Unusual health insurance claim (c)

(4,723)

5,312

(5,222)

5,312

Restructuring expense (d)

2,229

Adjusted net income (Non-GAAP)

$73,313

72,703

309,043

293,635

Diluted EPS

$0.86

$0.77

$3.60

$3.51

Equity-based compensation (a)

0.43

0.31

1.57

1.27

Tax benefit of stock awards vested (b)

(0.06)

(0.15)

Unusual health insurance claim (c)

(0.08)

0.09

(0.09)

0.09

Restructuring expense (d)

0.04

Adjusted diluted EPS (Non-GAAP)

$1.21

$1.17

$5.06

$4.72

Fully diluted shares

60,642

62,009

61,054

62,183

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 December 31,

Year Ended December 31,

2025

2024

2025

2024

Cost of services

$12,275

$10,049

$45,630

$41,531

Research and development

6,744

4,948

24,592

20,760

Sales and marketing

3,400

2,149

9,094

8,444

General and administrative

8,166

5,446

31,947

22,471

Total equity-based compensation

$30,585

$22,592

$111,263

$93,206

(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.

(c)

In the fourth quarter of 2024, we recorded $7.0 million of expense for an unusual health insurance claim. During the first quarter of 2025, we received an insurance recovery of $4.7 million for this claim, partially offset by $1.0 million of ongoing expense for the claim. During the second quarter of 2025, we recorded an additional $3.0 million of expense for this unusual health insurance claim. During the fourth quarter of 2025, we settled the remaining balance of the claim and recorded $6.2 million of benefit as the final payment was much lower than the cost estimates previously provided by our health insurance provider. Based on the uncommonly large magnitude and nature of the claim and timing of related insurance recoveries, we do not believe that this expense reflects our normal operating activities, and we have excluded the amount from adjusted non-GAAP results.

(d)

In January 2025, the Company eliminated about 100 positions to align our services capacity with customer demand, which has been impacted by macro-economic uncertainty. We recorded pre-tax restructuring expense in the first quarter of 2025 of approximately $2.9 million. The expense primarily consists of employee severance and outplacement services. We do not believe that the expense is a common cost that resulted from normal operating activities, and thus we have excluded the amount from adjusted non-GAAP results.

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

December 31, 2025

December 31, 2024

ASSETS

Current Assets:

Cash and cash equivalents

328,747

266,230

Accounts receivable, net

214,679

205,475

Prepaid expenses and other current assets

39,912

31,559

Total current assets

583,338

503,264

Property and equipment, net

23,120

13,971

Operating lease right-of-use assets

50,443

47,923

Goodwill

62,244

62,226

Deferred income taxes

75,900

94,505

Other assets

44,343

35,662

Total assets

839,388

757,551

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

22,182

26,615

Accrued compensation and benefits

69,309

72,180

Accrued and other liabilities

26,570

22,275

Deferred revenue

337,049

277,970

Income taxes payable

803

1,264

Total current liabilities

455,913

400,304

Operating lease liabilities, long-term

56,180

47,794

Other non-current liabilities

12,530

10,327

Shareholders' equity:

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding at December 31, 2025 and December 31, 2024

Common stock, $.01 par value; 200,000,000 shares authorized; 59,845,291 and 60,921,191 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively

598

609

Retained earnings

345,097

329,439

Accumulated other comprehensive loss

(30,930

)

(30,922

)

Total shareholders' equity

314,765

299,126

Total liabilities and shareholders' equity

839,388

757,551

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

Year Ended December 31,

2025

2024

Operating activities:

Net income

219,948

218,364

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

Depreciation and amortization

6,317

6,301

Equity-based compensation

111,263

93,206

(Gain) Loss on disposal of equipment

(21

)

(133

)

Deferred income taxes

18,342

(28,689

)

Unrealized foreign currency loss (gain)

(253

)

(380

)

Changes in operating assets and liabilities:

Accounts receivable, net

(3,583

)

(26,702

)

Other assets

(14,729

)

(4,157

)

Accounts payable, accrued and other liabilities

(229

)

1,248

Income taxes

319

(6,242

)

Deferred revenue

52,096

42,187

Net cash provided by operating activities

389,470

295,003

Investing activities:

Purchases of property and equipment

(15,457

)

(8,675

)

Net cash used in investing activities

(15,457

)

(8,675

)

Financing activities:

Purchase of common stock

(315,162

)

(286,366

)

Net cash used in financing activities

(315,162

)

(286,366

)

Foreign currency impact on cash

3,666

(4,473

)

Net change in cash and cash equivalents

62,517

(4,511

)

Cash and cash equivalents at beginning of period

266,230

270,741

Cash and cash equivalents at end of period

328,747

266,230

MANHATTAN ASSOCIATES, INC.

SUPPLEMENTAL INFORMATION

1. GAAP and adjusted earnings per share by quarter are as follows:

2024

2025

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

GAAP Diluted EPS

$0.86

$0.85

$1.03

$0.77

$3.51

$0.85

$0.93

$0.96

$0.86

$3.60

Adjustments to GAAP:

Equity-based compensation

0.30

0.34

0.33

0.31

1.27

0.40

0.35

0.40

0.43

1.57

Tax benefit of stock awards vested

(0.13)

(0.01)

(0.15)

(0.06)

(0.01)

(0.06)

Unusual health insurance claim

0.09

(0.05)

0.04

(0.08)

(0.09)

Restructuring expense

0.04

Adjusted Diluted EPS

$1.03

$1.18

$1.35

$1.17

$4.72

$1.19

$1.31

$1.36

$1.21

$5.06

Fully Diluted Shares

62,493

62,118

61,948

62,009

62,183

61,527

61,074

60,954

60,642

61,054

2. Revenues and operating income by reportable segment are as follows (in thousands):

2024

2025

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

Revenue:

Americas

$196,312

$205,955

$205,852

$194,367

$802,486

$194,615

$206,606

$206,659

$202,546

$810,426

EMEA

46,620

46,918

48,082

48,903

190,523

55,542

52,301

53,975

53,978

215,796

APAC

11,620

12,445

12,747

12,531

49,343

12,630

13,514

15,161

13,865

55,170

$254,552

$265,318

$266,681

$255,801

$1,042,352

$262,787

$272,421

$275,795

$270,389

$1,081,392

GAAP Operating Income:

Americas

$36,687

$45,300

$49,033

$36,323

$167,343

$33,862

$48,051

$45,783

$39,875

$167,571

EMEA

15,884

17,195

20,521

18,896

72,496

23,703

19,807

22,877

21,686

88,073

APAC

5,059

5,693

5,536

5,469

21,757

5,607

5,930

7,168

5,451

24,156

$57,630

$68,188

$75,090

$60,688

$261,596

$63,172

$73,788

$75,828

$67,012

$279,800

Adjustments (pre-tax):

Americas:

Equity-based compensation

$22,095

$24,666

$23,853

$22,592

$93,206

$28,826

$24,275

$27,577

$30,585

$111,263

Unusual health insurance claim

7,002

(3,658)

3,000

(6,224)

(6,882)

Restructuring expense

2,929

2,937

$22,095

$24,666

$23,853

$29,594

$100,208

$28,097

$27,283

$27,577

$24,361

$107,318

Adjusted non-GAAP Operating Income:

Americas

$58,782

$69,966

$72,886

$65,917

$267,551

$61,959

$75,334

$73,360

$64,236

$274,889

EMEA

15,884

17,195

20,521

18,896

72,496

23,703

19,807

22,877

21,686

88,073

APAC

5,059

5,693

5,536

5,469

21,757

5,607

5,930

7,168

5,451

24,156

$79,725

$92,854

$98,943

$90,282

$361,804

$91,269

$101,071

$103,405

$91,373

$387,118

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):

2024

2025

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

Revenue

$648

$(531)

$936

$316

$1,369

$(1,591)

$2,724

$2,652

$3,833

$7,618

Costs and expenses

176

(673)

211

(227)

(513)

(1,966)

1,180

738

906

858

Operating income

472

142

725

543

1,882

375

1,544

1,914

2,927

6,760

Foreign currency gains (losses) in other income

(564)

(577)

(331)

519

(953)

131

(65)

1,596

1,671

$(92)

$(435)

$394

$1,062

$929

$506

$1,479

$3,510

$2,936

$8,431

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):

2024

2025

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

Operating income

$185

$307

$261

$302

$1,055

$785

$514

$832

$1,409

$3,540

Foreign currency gains (losses) in other income

164

284

1,283

1,772

140

1,978

742

2,875

Total impact of changes in the Indian Rupee

$349

$348

$545

$1,585

$2,827

$800

$654

$2,810

$2,151

$6,415

4. Other income includes the following components (in thousands):

2024

2025

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

Interest income

$1,414

$1,503

$1,636

$1,476

$6,029

$1,101

$852

$1,007

$1,429

$4,389

Foreign currency gains (losses)

(564)

(577)

(331)

519

(953)

130

(65)

1,597

1,671

Other non-operating income (expense)

146

(12)

142

106

(72)

(1)

Total other income

$996

$914

$1,312

$1,996

$5,218

$1,337

$715

$2,604

$1,438

$6,094

5. Capital expenditures are as follows (in thousands):

2024

2025

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

Capital expenditures

$2,321

$2,217

$1,009

$3,128

$8,675

$891

$3,980

$5,928

$4,658

$15,457

6. Stock Repurchase Activity (in thousands):

2024

2025

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

Shares purchased under publicly-announced buy-back program

294

343

194

156

987

539

263

233

416

1,451

Shares withheld for taxes due upon vesting of restricted stock

165

178

179

192

Total shares purchased

459

346

202

158

1,165

718

266

241

418

1,643

Total cash paid for shares purchased under publicly-announced buy-back program

$73,411

$74,999

$49,687

$43,539

$241,636

$100,000

$49,596

$49,947

$74,996

$274,539

Total cash paid for shares withheld for taxes due upon vesting of restricted stock

40,423

713

1,917

569

43,622

36,447

595

1,602

398

39,042

Total cash paid for excise tax

1,108

1,581

Total cash paid for shares repurchased

$113,834

$75,712

$51,604

$45,216

$286,366

$136,447

$50,191

$51,549

$76,975

$315,162

7. Remaining Performance Obligations

We disclose revenue that we expect to recognize from our remaining performance obligations ("RPO"). Over 98% of our RPO represents cloud native subscriptions with non-cancelable terms greater than one year (including cloud-deferred revenue as well as amounts we will invoice and recognize as revenue from our performance of cloud services in future periods). Maintenance contracts are typically one year and not included in the RPO. Our RPO as of the end of each period appears below (in thousands):

March 31, 2024

June 30, 2024

September 30, 2024

December 31, 2024

March 31, 2025

June 30, 2025

September 30, 2025

December 31, 2025

Remaining Performance Obligations

$1,516,430

$1,601,531

$1,686,421

$1,780,400

$1,891,384

$2,013,495

$2,076,628

$2,232,234