Summary
Manhattan Associates posted second quarter revenue of $272.4 million, up 2.7% from $265.3 million a year earlier. The mix keeps shifting toward the cloud. Cloud subscription revenue reached $100.4 million, up 22% from $82.4 million, and management noted cloud revenue now represents about 95% of total software revenue. Services revenue fell 6% to $128.9 million from $136.8 million, which the company tied to customer budgetary constraints that pushed services work into future periods. License revenue dropped 50% to $1.5 million from $3.1 million, maintenance slipped 1% to $35.1 million, and hardware declined 16% to $6.5 million. Cloud subscriptions were 37% of total revenue in the quarter, services 47%, maintenance 13%, hardware 2% and software license 1%.
Profitability improved alongside the revenue mix. GAAP operating income was $73.8 million, up 8.2% from $68.2 million, and operating margin rose to 27.1% from 25.7%. Net income came in at $56.8 million, up 7.6% from $52.8 million, and diluted EPS was $0.93, up 9.4% from $0.85. On a non-GAAP basis, adjusted operating income was $101.1 million versus $92.9 million, and adjusted diluted EPS was $1.31 versus $1.18. Two items weighed on the GAAP results. General and administrative expense rose $4.9 million, driven by $3.0 million of expense for an unusual health insurance claim and $1.8 million of compensation costs. The company also recorded $2.9 million of pretax restructuring expense in the first quarter of 2025 after eliminating about 100 positions in January to align services capacity with demand. The effective tax rate was 23.8% for the quarter versus 23.6% a year earlier.
Cash generation was steady. Operating cash flow was $74.0 million for the quarter, up 1.1% from $73.3 million, and $149.3 million for the six months, up 16.6% from $128.0 million. Capital expenditures were $3.98 million in the quarter, up 79.5% from $2.22 million. Deferred revenue was $299.8 million, up 15.8% from $258.99 million a year earlier, and remaining performance obligations reached $2.0 billion, up 25% from $1.6 billion. Cash and cash equivalents totaled $230.6 million at June 30, 2025, compared with $205.9 million at March 31, 2025, and the company carries no debt. Days sales outstanding was 70 days at June 30, 2025 versus 72 days at March 31, 2025. Manhattan repurchased 262,341 shares for $49.6 million during the quarter, and 801,669 shares for $149.6 million over six months. In July 2025 the board replenished remaining repurchase authority to $100.0 million.
First half revenue was $535.2 million, up 3.0% from $519.9 million, with operating income of $137.0 million, up 8.9% from $125.8 million, and an operating margin of 25.6% versus 24.2%. Six month net income was $109.4 million, up 2.6% from $106.6 million, and diluted EPS was $1.78, up 4.1% from $1.71. For the full year 2025, management guides adjusted operating margin of 34.8% to 35.3% and adjusted EPS of $4.76 to $4.84, up 1% to 3%. The company also issued GAAP guidance for the full year. The adjusted targets strip out equity-based compensation, expense tied to the unusual health insurance claim and restructuring expense.
Management stayed cautious on the macro backdrop. The MD&A cites a turbulent global environment, extended sales cycles for large cloud subscriptions, and customer budgetary constraints that already pushed services work to future periods. International revenue was about $91.5 million, roughly 34% of the quarter's total, which leaves results exposed to foreign currency swings; the company employs about 4,480 people worldwide. Other named risks include tariffs and trade tensions, competition, generative and agentic AI, cloud service defects or interruptions, security breaches, and geopolitical conflicts such as the wars in Ukraine and the Middle East. Commitments include roughly $219.2 million of cloud infrastructure obligations over the next five years and about $28.7 million of other subscriptions over seven years.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $272.4M | $262.8M | +3.7% | $265.3M | +2.7% |
| Gross profit | $156.2M | $148.2M | +5.4% | $145.3M | +7.5% |
| Gross margin | 57.3% | 56.4% | +0.9 pp | 54.8% | +2.6 pp |
| Research & development | $34.9M | $35.3M | -1.2% | $35.3M | -1.3% |
| Sales & marketing | $20.0M | $21.1M | -5.1% | $19.2M | +4.3% |
| General & administrative | $26.0M | $24.2M | +7.3% | $21.1M | +23.0% |
| Total operating expenses | $198.6M | $199.6M | -0.5% | $197.1M | +0.8% |
| Operating income (loss) | $73.8M | $63.2M | +16.8% | $68.2M | +8.2% |
| Operating margin | 27.1% | 24.0% | +3.1 pp | 25.7% | +1.4 pp |
| Net income (loss) | $56.8M | $52.6M | +8.0% | $52.8M | +7.6% |
| Net margin | 20.8% | 20.0% | +0.8 pp | 19.9% | +0.9 pp |
| Diluted EPS | $0.93 | $0.85 | +$0.08 | $0.85 | +$0.08 |
Risks
MD&A states the company remains cautious regarding the current turbulent global macro environment and that global geopolitical and economic volatility likely will continue to shape customers' and prospects' enterprise software buying decisions.
MD&A says that, given the mission critical nature of its software and a challenging global macro environment, current sales cycles for large cloud subscriptions in its target markets could be extended, and that the business climate may affect customers' and prospects' decisions regarding timing of strategic capital expenditures.
Services revenue decreased $7.9 million in the second quarter of 2025 compared to the same quarter in the prior year and decreased $19.0 million in the six months ended June 30, 2025, primarily driven by customer budgetary constraints that shifted services work to future periods and negatively impacted professional services revenue related to cloud subscriptions.
In January 2025 the company eliminated approximately 100 positions to align services capacity with customer demand impacted by short-term macro-economic uncertainty, recording approximately $2.9 million pretax restructuring expense in the six months ended June 30, 2025.
The filing lists risks associated with the company's use of generative and agentic artificial intelligence among factors that could cause actual results to differ materially.
Forward-looking factors include the possible effects on international commerce of new or increased tariffs, or a trade war, and the impact of changes in federal government priorities and spending, including on the company's or its customers' federal government contracts.
The company cites competition and its dependence on a single line of business, as well as dependence on generating revenue from cloud subscriptions and software licenses to drive business, among risk factors.
Maintenance revenue decreased 1% in the second quarter of 2025 and 4% in the six months ended June 30, 2025 compared to prior-year periods, and the company expects maintenance revenues to decline as it continues to develop cloud offerings.
Software license revenue decreased 50% in the second quarter of 2025 compared to the prior-year quarter, while increasing 84% in the six months ended June 30, 2025 predominantly driven by one large contract with an existing customer, highlighting revenue lumpiness.
International revenue was approximately $91.5 million and $183.0 million for the three and six months ended June 30, 2025, representing approximately 34% of total revenue, and the filing cites risks of international operations, including foreign currency exchange risk.
SaaS KPIs
All quarters →Remaining Performance Obligations
Cloud Subscription Revenue Growth
Summary, forecast, risks and KPIs are extracted from MANHATTAN ASSOCIATES INC's SEC filings for Q2 FY2025 (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 1, 2026.