MANHATTAN ASSOCIATES INC. delivered a strong performance in fiscal year 2025, driven by its successful cloud-first strategy. This summary provides a comprehensive review of the company's annual results and strategic direction, offering key insights for investors.

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MANHATTAN ASSOCIATES INC Annual Report: Fiscal Year 2025 Performance Review

Business Overview

Manhattan Associates, established in 1990 and incorporated in Georgia in 1998, stands as a leading global provider of supply chain and omnichannel commerce solutions. The company develops, sells, and maintains software, services, and hardware for a diverse client base, including retailers, wholesalers, manufacturers, and logistics providers. Its flagship offering, "Manhattan Active®," is a cloud-native platform delivered as Software as a Service (SaaS).

This unique architecture allows for continuous, quarterly updates without downtime, ensuring all customers benefit from the latest features and AI-driven insights, including its industry-recognized Warehouse Management solutions. This approach significantly reduces total cost of ownership and accelerates innovation for clients, helping them optimize distribution networks, manage inventory, and streamline fulfillment across various channels. The company generates revenue primarily from SaaS subscriptions, software licenses, professional services, and customer support and maintenance.

Financial Performance

Manhattan Associates achieved robust financial results in fiscal year 2025, showcasing strong execution of its cloud-first strategy:

• Total Revenue: The company reported total revenue of $850 million, a 15% increase from the previous fiscal year. This growth primarily stemmed from a successful shift to a recurring revenue model.
• SaaS Revenue Growth: SaaS subscription revenue drove significant growth, surging 25% year-over-year to $450 million. This now represents over 50% of total revenue, highlighting a successful transition to a recurring revenue model and increased revenue predictability.
• Profitability: Net income reached $180 million, resulting in diluted earnings per share (EPS) of $3.00. This demonstrates healthy operating margins and effective cost management, even with substantial investments in research and development.
• Cloud Transition Momentum: New software bookings for SaaS subscriptions accounted for approximately 70% during the year, underscoring strong customer adoption of the company's cloud offerings.
• Customer Expansion: The company added 75 new customers to its Manhattan Active® platform and expanded relationships with over 200 existing clients. This demonstrates strong market demand, customer loyalty, and contributed to overall revenue growth.

Risk Factors

While Manhattan Associates maintains a strong market position, investors should consider potential risks that could impact its business, financial condition, and operational results:

• Intense Competition: The supply chain software market is highly competitive, demanding continuous innovation to maintain market share against both established enterprise software providers and emerging specialized solutions.
• Economic Sensitivity: General economic downturns, inflation, or geopolitical instability could reduce customer spending on enterprise software, potentially slowing sales cycles, delaying new projects, and affecting renewal rates.
• SaaS Transition Challenges: Despite its success, the ongoing shift to a SaaS model involves managing customer migrations, ensuring high renewal rates, adapting sales and service models, and effectively managing complex revenue recognition.
• Cybersecurity & Data Privacy: As a cloud provider, the company faces inherent risks from data breaches, service interruptions, and compliance with evolving global data privacy regulations (e.g., GDPR, CCPA, CCPA). These issues could lead to reputational harm, financial penalties, and loss of customer trust.
• Talent Management: Attracting and retaining highly skilled software engineers, data scientists, and sales professionals is crucial for sustained innovation and growth in a competitive labor market. Failure to do so could adversely affect product development and sales.
• Technological Obsolescence: Rapid technological advancements, particularly in AI, machine learning, and automation, necessitate continuous research and development (R&D) to keep solutions cutting-edge and relevant. Failing to keep pace could erode competitive advantage.
• Reliance on Third-Party Technologies: The company relies on third-party software, hardware, and cloud infrastructure providers. Issues with these dependencies could impact service delivery and product functionality.

Management's Discussion and Analysis (MD&A) Highlights

Management's discussion emphasizes the successful execution of the company's cloud-first strategy and its positive impact on financial performance and position.

• Results of Operations: A 15% increase in total revenue to $850 million primarily stemmed from a significant 25% surge in SaaS subscription revenue, reflecting strong customer adoption of the Manhattan Active® platform. This shift to a recurring revenue model has improved revenue predictability and long-term growth prospects. Net income of $180 million and EPS of $3.00 demonstrate effective cost management and operational leverage, even with substantial research and development investments. The company maintained healthy gross margins, supported by the scalability of its cloud offerings and efficient service delivery.
• Liquidity and Capital Resources: The company maintained a strong liquidity position with $250 million in cash and cash equivalents. This robust, debt-free cash balance provides significant financial flexibility for strategic investments, potential acquisitions, and shareholder returns. Strong operating cash flow generation enabled the company to fund its R&D initiatives, support working capital needs, and execute its share repurchase program without external financing. Capital expenditures focused primarily on enhancing internal IT infrastructure and supporting cloud operations.
• Strategic Investments: A significant investment of $120 million (14% of revenue) in R&D underscores the company's commitment to innovation, particularly in AI/machine learning and cloud-native capabilities. These investments are crucial for maintaining technological leadership and expanding market opportunities.
• Shareholder Returns: The company repurchased $50 million of common stock during the year, reflecting management's confidence in the company's intrinsic value and its commitment to returning capital to shareholders.

Financial Health

As of December 31, 2025, Manhattan Associates demonstrates strong financial health, marked by robust liquidity and a conservative capital structure:

• Liquidity: The company held a robust cash and cash equivalents balance of $250 million, providing significant financial flexibility for operational needs, strategic initiatives, and potential market opportunities.
• Debt-Free: Manhattan Associates operates without significant long-term debt, reflecting a conservative and healthy balance sheet that minimizes financial risk and provides substantial borrowing capacity if needed.
• Cash Flow: Strong operating cash flow generation supported R&D investments and share repurchase programs, demonstrating the company's ability to self-fund growth and return value to shareholders.
• Shareholder Returns: The company repurchased approximately $50 million of its common stock during the fiscal year, demonstrating confidence in its future prospects and commitment to shareholder value.
• Working Capital: The company maintained a healthy working capital position, indicating its ability to meet short-term obligations.

Future Outlook

Looking ahead to fiscal year 2026, Manhattan Associates anticipates continued strong performance, fueled by sustained demand for its cloud solutions and strategic investments:

• Revenue Guidance: The company projects continued double-digit revenue growth, with SaaS revenue expected to grow by 20-22% and total revenue by 12-14%. This guidance reflects confidence in the ongoing cloud transition and market expansion efforts.
• Strategic Focus: The company will continue significant investment in research and development to enhance the Manhattan Active® platform. This focus includes advanced AI/machine learning capabilities for predictive analytics, automation, and optimization across warehouse, transportation, and order management.
• Market Expansion: The company will continue to expand its presence in key international markets, particularly in Europe and Asia-Pacific, by tailoring solutions to regional compliance and operational needs.
• Ecosystem Development: Fostering a robust partner ecosystem remains a priority to extend its reach and offer integrated solutions, including partnerships with leading automation providers and system integrators.
• Talent Acquisition & Retention: The company prioritizes recruiting and developing highly skilled technical and sales talent, which is critical to support ongoing innovation and customer success.

Competitive Position

Manhattan Associates maintains a leading competitive position in the global supply chain and omnichannel commerce software market.

• Market Leadership: The company stands out as a leader in its core markets, especially for its Warehouse Management System. This system consistently earns top industry accolades for its depth, scalability, and advanced functionality. Its comprehensive suite of solutions addresses complex supply chain challenges across various industries.
• Differentiation: Key differentiators include its cloud-native Manhattan Active® platform, which offers continuous, frictionless updates and leverages AI/machine learning for advanced optimization. This architecture provides a significant advantage by reducing total cost of ownership and accelerating innovation for customers.
• Innovation: Sustained investment in research and development, totaling 14% of revenue in FY2025, ensures the company remains at the forefront of technological advancements, particularly in areas like AI, automation, and predictive analytics.
• Customer Base: A strong and expanding global customer base, including new customer additions and significant expansions with existing clients, underscores the value and effectiveness of its solutions.
• Competitive Landscape: While the market is highly competitive, featuring both large enterprise software vendors and specialized niche players, Manhattan Associates differentiates itself through deep domain expertise, an integrated platform approach, and a commitment to cloud-native innovation.

Company Snapshot

• Headquarters: Atlanta, Georgia
• Stock Exchange: Traded on The Nasdaq Stock Market LLC (Ticker: MANH)
• Market Value (as of December 31, 2025): Approximately $12.5 billion (based on a share price of $208.80)
• Shares Outstanding (as of January 30, 2026): 59,847,548 shares of Common Stock
• Company Status: The SEC designates Manhattan Associates as a "well-known seasoned issuer" and a "large accelerated filer." This status indicates a history of timely and comprehensive financial reporting, typically associated with larger, more established public companies.