Summary
Manhattan Associates posted third quarter revenue of $266.7 million, up 11.8% from $238.4 million in the prior-year quarter. Cloud subscriptions did the heavy lifting at $86.5 million, up from $65.0 million a year earlier, and cloud revenue now represents about 96% of total software revenue. Services revenue rose to $137.0 million from $128.0 million. The legacy pieces kept shrinking. Software license revenue slipped to $3.8 million from $3.9 million, maintenance fell to $34.5 million from $35.3 million, and hardware dropped to $4.9 million from $6.3 million. Management attributes the license decline to customer preference for cloud-native deployments, and it expects maintenance to keep eroding as customers convert to cloud subscriptions.
For the nine months ended September 30, 2024, revenue reached $786.6 million, up 13.9% from $690.5 million in the same period of 2023. Cloud subscription revenue for that stretch was $246.9 million, a 35% year-over-year increase according to the MD&A.
Profitability improved faster than the top line. Third quarter GAAP operating income was $75.1 million, up 40.5% from $53.4 million, and operating margin expanded to 28.2% from 22.4%. Net income came in at $63.8 million, up 29.1% from $49.4 million, and GAAP diluted EPS was $1.03, up 30.4% from $0.79. Non-GAAP adjusted diluted EPS was $1.35 versus $1.05, and adjusted operating income was $98.9 million versus $72.5 million. The nine-month picture looks similar: operating income of $200.9 million, up 33.0%; net income of $170.3 million, up 33.3%; diluted EPS of $2.74, up 33.7%; and operating margin of 25.5% versus 21.9%. The company credits cloud and services growth plus operating leverage as the cloud business scales. One drag: the effective tax rate for the quarter rose to 16.5% from 10.4%, mostly from smaller return-to-provision benefits.
Cash generation was solid but slower than earnings. Operating cash flow was $62.3 million for the quarter, up 6.4% from $58.6 million, and $190.3 million for the nine months, up 20.5% from $157.9 million. Capital expenditures were $1.01 million in the quarter, down 7.1% from $1.09 million, and $5.55 million year to date, up 100.9% from $2.76 million. Deferred revenue, current portion only, stood at $252.5 million, up 18.3% from $213.4 million a year earlier. Remaining performance obligations were $1.70 billion, up 30.8% from $1.30 billion. Cash totaled $215.0 million at September 30, 2024, up from $202.7 million at June 30, 2024, with no debt outstanding. Days sales outstanding moved to 69 days from 66 days at June 30, 2024. The company repurchased 194,712 shares for $49.7 million in the quarter and 831,111 shares for $198.1 million over the nine months, and in October the board replenished remaining authority to $75.0 million.
Guidance for the full year 2024 calls for total revenue growth of 12%, adjusted operating margin of 34.0% to 34.1%, and adjusted EPS of $4.60 to $4.62. The CEO said the fourth quarter is off to a solid start and that the company is providing 2025 parameters, while staying appropriately cautious on the global economy.
Risks are mostly macro and execution related. Management flags extended sales cycles for large cloud deals, geopolitical and economic volatility, inflation, competition, and foreign currency swings. The company recorded net foreign currency losses of $0.3 million in the quarter. It also carries roughly $248.8 million of cloud infrastructure obligations over the next six years. International revenue was about $88.0 million, or 33% of the quarter's total, which keeps currency and regional demand in play.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $266.7M | $265.3M | +0.5% | $238.4M | +11.8% |
| Gross profit | $148.0M | $145.3M | +1.9% | $127.0M | +16.6% |
| Gross margin | 55.5% | 54.8% | +0.7 pp | 53.3% | +2.2 pp |
| Research & development | $34.3M | $35.3M | -2.8% | $33.1M | +3.8% |
| Sales & marketing | $16.6M | $19.2M | -13.4% | $17.6M | -6.0% |
| General & administrative | $20.3M | $21.1M | -3.8% | $21.4M | -5.0% |
| Total operating expenses | $191.6M | $197.1M | -2.8% | $185.0M | +3.6% |
| Operating income (loss) | $75.1M | $68.2M | +10.1% | $53.4M | +40.5% |
| Operating margin | 28.2% | 25.7% | +2.5 pp | 22.4% | +5.7 pp |
| Net income (loss) | $63.8M | $52.8M | +20.9% | $49.4M | +29.1% |
| Net margin | 23.9% | 19.9% | +4.0 pp | 20.7% | +3.2 pp |
| Diluted EPS | $1.03 | $0.85 | +$0.18 | $0.79 | +$0.24 |
Risks
MD&A states the company remains cautious about the global economy and that global geopolitical and economic volatility likely will continue to shape customers' and prospects' enterprise software buying decisions. It also notes that approximately 67% of total revenue was generated in the United States and 18% in EMEA for both the three and nine months ended September 30, 2024, concentrating exposure to those economies.
MD&A warns that current sales cycles for large cloud subscriptions in target markets could be extended, given the mission critical nature of the software and a challenging global macro environment. It notes total pricing, including software and services, in many cases exceeds $1.0 million, making timing of customer capital expenditures a meaningful risk.
MD&A highlights that cloud subscriptions revenue now represents about 96% of total software revenue and that cloud revenue was up 33% over the same quarter in the prior year. This increasing reliance on cloud subscriptions means any slowdown in cloud demand or cloud customer conversions could materially affect results.
MD&A describes the company's core markets as intensely competitive and characterized by rapid technological change. It states the goal is to grow cloud subscriptions revenue faster than competitors through investment in innovation, indicating competitive pressure as a key risk.
MD&A reports that international revenue was approximately $88.0 million and $260.6 million for the three and nine months ended September 30, 2024, representing about 33% of total revenue. It also notes net foreign currency losses of $1.5 million in the first nine months of 2024, compared with $0.9 million in the first nine months of 2023, and cites risks from wars, tariffs, and trade tensions.
MD&A lists focusing on employees as a strategic goal and the forward-looking factors include the ability to attract and retain highly skilled employees. The company employed approximately 4,700 employees worldwide at September 30, 2024, making retention and hiring execution important to sustaining growth.
SaaS KPIs
All quarters →RPO Growth (YoY)
Adjusted Operating Income
Cloud Subscription Revenue
Remaining Performance Obligations (RPO)
Cloud Subscription Revenue Growth
Summary, forecast, risks and KPIs are extracted from MANHATTAN ASSOCIATES INC's SEC filings for Q3 FY2024 (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.