Summary
Manhattan Associates opened fiscal 2022 with strong revenue and earnings growth. Total revenue was $179.0 million, up 14.1% from $156.9 million in the prior-year quarter. GAAP operating income increased 33.6% to $34.0 million from $25.4 million. Net income rose 35.1% to $30.6 million from $22.6 million. Diluted earnings per share was $0.48, up from $0.35. Operating margin expanded to 19.0% from 16.2%, a gain of 2.8 percentage points. On a non-GAAP basis, adjusted operating income was $48.1 million compared with $35.6 million. Adjusted diluted earnings per share was $0.60 compared with $0.43. Management said cloud subscriptions and services revenue drove the quarter.
The bookings metrics pointed to durable demand. Remaining performance obligations were $809.5 million at March 31, 2022, up 92.2% from $421.2 million a year earlier. Deferred revenue, current portion, was $161.6 million, up 31.5% from $122.9 million. Management said over 97% of reported performance obligations represent cloud native subscriptions with a non-cancelable term greater than one year. That mix supports future revenue visibility. Cloud subscriptions revenue was 82% of total cloud and software license revenue in the first quarter, and 90% of the pipeline represented cloud solutions. The company continues to convert maintenance contracts to cloud subscriptions, which pressures near-term maintenance revenue but should deepen customer relationships over time. Management expects cloud revenue to increase as a percentage of total software and cloud revenue.
Cash generation slowed even as earnings grew. Operating cash flow was $31.8 million, down 20.3% from $39.9 million in the prior-year quarter. Management attributed the decline mainly to higher employee bonus payments and the timing of cash collections. Capital expenditures were $1.2 million, up 103.7% from $0.6 million. Days sales outstanding was 66 days at March 31, 2022, compared with 67 days at December 31, 2021. Manhattan repurchased 383,358 shares for $50.0 million during the quarter. In April 2022, the board raised the remaining share repurchase authority to an aggregate of $75.0 million. The company had no debt and does not expect borrowing needs in 2022. The buyback reduced shares outstanding, and the raised authorization gives the company flexibility for further repurchases.
Management raised its full-year 2022 outlook. The guidance is for the full fiscal year, not the next quarter. The company guided full-year 2022 revenue growth to 8% to 9%. It guided adjusted operating margin to 24.2% to 24.8% and adjusted diluted earnings per share to $2.14 to $2.22, which represents a change of negative 4% to 0% for the full year. Management said it remains appropriately cautious regarding macro volatility but confident in the business trajectory. Risks remain. Management flagged macro volatility, inflation, the war in Ukraine, and global instability. The company also cited COVID-19 pandemic uncertainty, extended sales cycles for large cloud deals, competition, foreign currency exchange risk, and the possibility that research and development investments may not yield sufficient returns. The 2017 U.S. Tax Cuts and Jobs Act is expected to increase 2022 cash tax payments by approximately $30 million to $35 million, though management said this does not affect earnings per share.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $179.0M | $171.5M | +4.4% | $156.8M | +14.1% |
| Gross profit | $95.5M | $89.9M | +6.3% | $82.8M | +15.4% |
| Gross margin | 53.4% | 52.4% | +1.0 pp | 52.8% | +0.6 pp |
| Research & development | $27.5M | $26.8M | +2.5% | $24.3M | +13.2% |
| Sales & marketing | $14.4M | $16.7M | -13.6% | $13.4M | +7.4% |
| General & administrative | $18.0M | $17.5M | +2.6% | $17.6M | +2.3% |
| Total operating expenses | $145.0M | $144.4M | +0.4% | $131.4M | +10.3% |
| Operating income (loss) | $34.0M | $27.1M | +25.2% | $25.4M | +33.6% |
| Operating margin | 19.0% | 15.8% | +3.2 pp | 16.2% | +2.8 pp |
| Net income (loss) | $30.6M | $20.6M | +48.6% | $22.6M | +35.1% |
| Net margin | 17.1% | 12.0% | +5.1 pp | 14.4% | +2.7 pp |
| Diluted EPS | $0.48 | $0.32 | +$0.16 | $0.35 | +$0.13 |
Risks
MD&A states that global geopolitical and economic volatility, including inflation and the war in Ukraine, likely will continue to shape customers' and prospects' enterprise software buying decisions, and management remains cautious about the pace of global economic growth and a protracted COVID-19 recovery.
The shift to cloud subscriptions means revenue is recognized ratably over the subscription term rather than up front, and management says this combined with extended lead times for new business can cause uncertainty and impact its ability to accurately forecast bookings and revenues from quarter to quarter and over the longer term. Perpetual license solutions are described as rapidly attriting, with 90% of pipeline now cloud.
MD&A notes that total pricing for software and services often exceeds $1.0 million and that, given the mission critical nature of the software and a challenging global macro environment, current sales cycles for large cloud subscriptions could be extended as customers weigh the timing of strategic capital expenditures.
Maintenance revenue decreased $0.9 million in the first quarter of 2022 compared to the same quarter in the prior year, with Americas down $0.3 million and EMEA down $0.7 million, as existing customers convert maintenance contracts to cloud subscription contracts.
In the three months ended March 31, 2022, approximately 68% of total revenue was generated in the United States and 18% in EMEA, and management cites Gartner's estimate that nearly 75% of supply chain software spend occurs in North America and Western Europe, making the health of those economies a meaningful driver of results.
The company lists its ability to attract and retain highly skilled employees among the factors that could cause actual results to differ, and compensation and other personnel-related expenses rose $8.8 million in cost of cloud subscriptions, maintenance and services and $3.4 million in R&D in the first quarter of 2022.
MD&A describes the omnichannel commerce and digital supply chain markets as intensely competitive and characterized by rapid technological change, and notes that the professional services business has competitive exposure to offshore providers and other consulting companies.
Cash flow from operating activities decreased $8.1 million in the three months ended March 31, 2022 compared to the same period in the prior year, mainly due to an increase in employee bonus payments and the timing of cash collections from customers.
Other income (loss), net increased $1.0 million in the first quarter of 2022 compared to the same quarter in the prior year primarily due to gains or losses on intercompany transactions denominated in foreign currencies, mainly the Indian Rupee, with net foreign currency gains of $0.7 million in the first quarter of 2022 versus net losses of $0.3 million in the first quarter of 2021.
SaaS KPIs
All quarters →Remaining Performance Obligations
RPO Growth (YoY)
Summary, forecast, risks and KPIs are extracted from MANHATTAN ASSOCIATES INC's SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.