Summary
Manhattan Associates reported revenue of $297.8 million for the quarter ended June 30, 2026, up 9.3% from $272.4 million in the same quarter a year earlier. Six-month revenue reached $580.0 million, up 8.4% from $535.2 million. Cloud subscriptions carried the mix: that line produced $126.7 million, up 26% year over year, and accounted for 42% of total revenue. Services revenue of $133.0 million grew 3%. Maintenance revenue fell 13% to $30.5 million as customers kept converting perpetual licenses to cloud contracts. Chief Executive Eric Clark called it the third consecutive record bookings quarter.
Profit did not follow the top line. Operating income fell 10.2% to $66.2 million from $73.8 million, and operating margin dropped to 22.2% from 27.1%, a decline of 4.8 percentage points. Net income of $50.4 million was down 11.3% from $56.8 million, and diluted earnings per share slipped to $0.85 from $0.93. Over six months, operating income of $131.2 million was down 4.2%, net income of $99.6 million was down 8.9%, diluted earnings per share of $1.67 compared with $1.78, and operating margin fell to 22.6% from 25.6%.
Two items explain most of the pressure. Manhattan reduced its global headcount by roughly 6% on June 1, 2026 and recorded $8.3 million of pretax restructuring expense in the quarter, equal to $6.2 million after tax, or $0.11 per diluted share. Sales and marketing expense jumped 54% to $30.7 million from $20.0 million as the company expanded its sales force and increased marketing spending. Non-GAAP measures, which exclude equity-based compensation, the restructuring charge and other items, held up better: adjusted operating income was $103.9 million against $101.1 million, and adjusted diluted earnings per share was $1.39 against $1.31. The GAAP effective tax rate rose to 25.1% from 23.8% for the quarter, which the company attributed to lower stock-based compensation benefits.
Demand signals stayed firm. Remaining performance obligations were $2.50 billion, up 25% from $2.00 billion a year earlier, and deferred revenue rose 14.5% to $343.2 million. Operating cash flow was $90.7 million for the quarter, up 22.5% from $74.0 million, and $174.7 million for the six months, up 17.0%. Capital expenditures were $1.0 million in the quarter, down 74.7% from $3.98 million, and $5.1 million over six months, up 4.9%. Days sales outstanding improved to 67 days at June 30, 2026 from 72 days at March 31, 2026. Cash and cash equivalents were $186.1 million at June 30, 2026, down from $328.7 million at December 31, 2025.
Full-year 2026 guidance calls for total revenue growth of 7% to 8%. GAAP operating margin is guided to 24.2% to 24.4% and adjusted operating margin to 35.0% to 35.2%. GAAP diluted earnings per share is guided to $3.59 to $3.65, growth of 0% to 1%, while adjusted diluted earnings per share is guided to $5.44 to $5.50, growth of 8% to 9%. Equity-based compensation of $1.71 per share is the largest single bridge between the GAAP and adjusted figures.
Capital return stayed heavy. Manhattan repurchased 874,029 shares for $125.0 million during the quarter and 1,917,341 shares for $275.0 million over the six months, leaving about $225.0 million under the March 2026 authorization that the board raised from $100 million to $500 million. The company carries no debt. Risks are familiar but real. Management pointed to continued global macro volatility and geopolitical instability, including the military conflict involving the United States, Israel and Iran and the war between Russia and Ukraine. Long sales cycles on large cloud deals, competition and pricing pressure, software errors and technology failures, risks tied to generative and agentic artificial intelligence, tariffs and trade war effects, and the company's reliance on cloud subscriptions for growth all appear in the disclosures. Headcount stood at roughly 4,100 employees after the restructuring.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $297.8M | $282.2M | +5.5% | $272.4M | +9.3% |
| Gross profit | $168.3M | $155.6M | +8.2% | $156.2M | +7.8% |
| Gross margin | 56.5% | 55.1% | +1.4 pp | 57.3% | -0.8 pp |
| Research & development | $34.8M | $37.3M | -6.9% | $34.9M | -0.3% |
| Sales & marketing | $30.7M | $27.8M | +10.6% | $20.0M | +53.7% |
| General & administrative | $26.7M | $23.7M | +12.8% | $26.0M | +2.9% |
| Total operating expenses | $231.6M | $217.3M | +6.6% | $198.6M | +16.6% |
| Operating income (loss) | $66.2M | $64.9M | +2.0% | $73.8M | -10.2% |
| Operating margin | 22.2% | 23.0% | -0.8 pp | 27.1% | -4.9 pp |
| Net income (loss) | $50.4M | $49.3M | +2.1% | $56.8M | -11.3% |
| Net margin | 16.9% | 17.5% | -0.6 pp | 20.8% | -3.9 pp |
| Diluted EPS | $0.85 | $0.82 | +$0.03 | $0.93 | -$0.08 |
Risks
Management remains cautious about the global economy, citing macroeconomic uncertainty and global instability from the military conflict involving the United States, Israel, and Iran and the ongoing Russia-Ukraine war. These conditions may affect customers' and prospects' enterprise software buying decisions.
The company states that current sales cycles for large cloud subscriptions in its target markets could be extended given the challenging global macro environment, and that customers may delay strategic capital expenditures. This risk is material because total revenue rose 9.3% in Q2 2026 while operating income fell 10.2%.
On June 1, 2026, the company reduced global headcount by approximately 6% and recorded $8.3 million pretax restructuring expense in Q2 2026. This contributed to operating income down 10.2% and operating margin down 4.8 pp for the quarter.
Operating income fell 10.2% and operating margin fell 4.8 pp in Q2 2026, driven by restructuring expense and a 54% increase in sales and marketing expenses as the company expanded its sales force and marketing efforts. Net income also fell 11.3% and diluted EPS fell 8.6% in the quarter.
Cloud subscriptions represented 42% of total revenue in Q2 2026 and about 98% of total software revenue, with cloud revenue up 26% over the prior-year quarter. The company's growth depends on continued demand for cloud solutions and customer migration from on-premise offerings.
Maintenance revenue decreased 13% in Q2 2026 and 9% for the six months ended June 30, 2026, and management expects maintenance revenues to decline as customers convert to cloud subscriptions. The Americas maintenance segment decreased 14% in Q2 2026.
The company operates in intensely competitive markets characterized by rapid technological change, and its professional services business has competitive exposure to offshore providers and other consulting companies. It aims to grow cloud subscription revenues faster than competitors through innovation investment.
The company plans to expand investments in generative AI and agentic AI, including leveraging third-party large language models, and lists risks associated with its use of generative and agentic artificial intelligence among forward-looking factors.
The company lists its ability to attract and retain highly skilled employees as a forward-looking risk, and the June 2026 reduction of approximately 6% of global headcount may affect execution and retention.
The company cites the possible effects on international commerce of new or increased tariffs, or a trade war, as a factor that could cause actual results to differ materially.
The company cites the impact of changes in federal government priorities and spending, including on its or its customers' federal government contracts, as a forward-looking risk.
International revenue was approximately 34% of total revenue in Q2 2026, and the company notes foreign currency exchange risk and risks of international operations. Foreign currency gains increased in the quarter primarily due to fluctuations of the U.S. dollar relative to the Indian Rupee.
SaaS KPIs
All quarters →RPO Growth (YoY)
Adjusted Operating Income
Cloud Subscription Revenue
Remaining Performance Obligations (RPO)
Summary, forecast, risks and KPIs are extracted from MANHATTAN ASSOCIATES INC's SEC filings for Q2 FY2026 (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.