Summary
Manhattan Associates reported third quarter revenue of $275.8 million, up 3.4% from $266.7 million in the prior-year quarter. Cloud subscriptions carried the top line, growing 21% to $104.9 million from $86.5 million, and now make up 38% of total revenue. The legacy pieces moved the other way. Software license revenue dropped to $1.4 million from $3.8 million. Services revenue fell to $133.0 million from $137.0 million, and maintenance revenue declined to $30.5 million from $34.5 million. Management pointed to customer budgetary constraints that shifted services work into future periods, plus the steady migration of maintenance customers onto cloud contracts.
Geography told a similar story. EMEA revenue rose 12% and APAC rose 19%, while the Americas was roughly flat. The Americas segment still generates the bulk of the business and carried the services decline.
Profitability was uneven. Operating income rose 1.0% to $75.8 million from $75.1 million, but operating margin slipped to 27.5% from 28.2%, a 0.7 percentage point decline. The company blamed higher equity-based compensation expense. Net income fell 8.1% to $58.6 million from $63.8 million, and diluted EPS was $0.96, down 6.8% from $1.03. Taxes explain most of that gap. The effective income tax rate jumped to 25.2% from 16.5%, driven by higher uncertain tax position liabilities and fewer statute of limitation benefits. On a non-GAAP basis, adjusted diluted EPS was $1.36 versus $1.35, and adjusted operating income was $103.4 million versus $98.9 million.
The nine-month picture is steadier. Revenue for the nine months ended September 30, 2025 was $811.0 million, up 3.1% from $786.6 million. Operating income rose 5.9% to $212.8 million, and operating margin expanded 0.7 percentage points to 26.2% from 25.5%. Net income was $168.0 million, down 1.4% from $170.3 million. Diluted EPS of $2.75 was flat against $2.74.
Cash generation was the standout. Operating cash flow was $93.1 million in the quarter, up 49.5% from $62.3 million, and $242.4 million for the nine months, up 27.4% from $190.3 million. Capital expenditures rose to $5.9 million in the quarter from $1.0 million, and to $10.8 million year to date from $5.5 million. Deferred revenue reached $295.9 million, up 17.2% from $252.5 million a year earlier. RPO was $2.10 billion, up 23.5% from $1.70 billion, with over 98% of it tied to cloud native subscriptions with non-cancelable terms longer than one year. Cash stood at $263.6 million at September 30, 2025, up from $230.6 million at June 30, 2025, and the company carries no debt. Days sales outstanding was 73 days, up from 70 days at June 30, 2025.
For the full year 2025, management guides adjusted operating margin to 35.5% to 35.7% and adjusted diluted EPS to $4.95 to $4.97, up 5%. The company repurchased 233,425 shares in the quarter for $49.9 million and replenished its remaining buyback authority to $100.0 million in October 2025. In January 2025 it eliminated about 100 positions, recording a $2.9 million pretax restructuring charge.
Management stayed cautious. It flagged that global geopolitical and economic volatility will likely shape enterprise software buying decisions and that sales cycles for large cloud subscriptions could extend. Named risks include tariffs and trade war effects, competition, the long sales cycle on its products, and the ongoing shift of revenue toward cloud subscriptions.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $275.8M | $272.4M | +1.2% | $266.7M | +3.4% |
| Gross profit | $156.0M | $156.2M | -0.1% | $148.0M | +5.4% |
| Gross margin | 56.6% | 57.3% | -0.8 pp | 55.5% | +1.1 pp |
| Research & development | $36.4M | $34.9M | +4.3% | $34.3M | +5.9% |
| Sales & marketing | $18.1M | $20.0M | -9.6% | $16.6M | +8.9% |
| General & administrative | $24.1M | $26.0M | -7.3% | $20.3M | +18.6% |
| Total operating expenses | $200.0M | $198.6M | +0.7% | $191.6M | +4.4% |
| Operating income (loss) | $75.8M | $73.8M | +2.8% | $75.1M | +1.0% |
| Operating margin | 27.5% | 27.1% | +0.4 pp | 28.2% | -0.7 pp |
| Net income (loss) | $58.6M | $56.8M | +3.3% | $63.8M | -8.1% |
| Net margin | 21.3% | 20.8% | +0.4 pp | 23.9% | -2.7 pp |
| Diluted EPS | $0.96 | $0.93 | +$0.03 | $1.03 | -$0.07 |
Risks
The filing discloses two putative securities class action lawsuits filed in February and April 2025 and a shareholder derivative lawsuit filed on September 22, 2025. Management states it cannot predict the ultimate timing or outcome or reasonably estimate possible losses or a range of losses from these proceedings.
MD&A says the company remains cautious regarding the current turbulent global macro environment and the pace of global economic growth, and believes global geopolitical and economic volatility likely will continue to shape customers' and prospects' enterprise software buying decisions.
MD&A states 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, which may affect customers' and prospects' decisions regarding timing of strategic capital expenditures.
Services revenue decreased $4.0 million in Q3 2025 versus the prior-year quarter, with Americas services revenue down $5.8 million, primarily due to 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 affected by short-term macro-economic uncertainty, recording $2.9 million pretax restructuring expense in the first nine months of 2025.
The effective income tax rate increased to 25.2% for Q3 2025 and 22.7% for the first nine months of 2025 from 16.5% in both prior-year periods, driven by increases in uncertain tax position liabilities and decreases in statute of limitation expiration benefits.
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 Q3 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.