Executive Summary

Manhattan Associates delivered a solid Q3: revenue $275.8M (+3% YoY), adjusted EPS $1.36 (+1% YoY), and adjusted operating margin 37.5%, with 21% cloud revenue growth and better‑than‑expected services timing; GAAP EPS was $0.96 as a higher tax rate weighed on GAAP results .
Remaining Performance Obligations (RPO) reached $2.08B (+23% YoY) with strong win rates (~70%); management expects to finish 2025 at the high end of the RPO outlook and continues to target ~20% cloud growth in 2026 .
FY25 guidance was raised across revenue ($1.073–$1.077B), adjusted operating margin (35.5%–35.7%), adjusted EPS ($4.95–$4.97), and GAAP EPS ($3.43–$3.45); Q4 revenue midpoint trimmed by ~$3M on hardware/services timing .
Results beat S&P Global consensus: revenue $275.8M vs. $271.6M* and EPS $1.36 vs. $1.19*; upside drivers included cloud strength and ~$2M services pulled forward from Q4, partly offset by tax headwinds on GAAP EPS .
Strategic updates: Agentic AI entered early access across products (GA early 2026), a fixed‑fee/time conversion program accelerated on‑prem to cloud migrations, and a new COO (ex‑Microsoft FastTrack) was appointed to scale conversions/renewals/partners; FedRAMP authorization with FEMA strengthens public sector positioning .

What Went Well and What Went Wrong

What Went Well
- Cloud momentum: “Solid demand drove cloud revenue growth of 21%” with total revenue $275.8M and adjusted EPS $1.36; adjusted operating income rose to $103.4M .
- RPO/bookings and pipeline quality: RPO up 23% YoY to ~$2.08B; win rates ~70%; conversions and cross‑sell strengthened bookings breadth across industries .
- Strategic execution: Agentic AI early access now live across warehouse, transportation, store, and contact center; initial agents deploy “in minutes, not months,” with GA targeted for early 2026 .
- Public sector credibility: FedRAMP authorization with FEMA enhances secure cloud offering differentiation for U.S. government agencies .
- Leadership capacity: Appointment of Greg Betz as COO to scale conversions, renewals and partner model (global SIs, specialists, technology partners) .
What Went Wrong
- Services softness YoY: Services revenue declined to $133.0M from $137.0M YoY as budget constraints shifted work, although ~$2M pulled into Q3 from Q4 aided the quarter .
- GAAP EPS pressure: GAAP diluted EPS fell to $0.96 (from $1.03) due to a higher tax rate driven by U.S. R&D tax law changes, even as adjusted metrics improved; management cited ~$20M OCF benefit in Q3 and ~$15M expected in Q4 from lower cash taxes .
- New logo seasonality: Net new logos were ~17% of new cloud bookings in Q3 given seasonality and large‑deal lumpiness, though year‑to‑date new logos are ~50% of new cloud bookings and pipeline remains healthy .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Total Revenue ($M)	$266.7	$272.4	$275.8
GAAP Diluted EPS ($)	$1.03	$0.93	$0.96
Adjusted Diluted EPS ($)	$1.35	$1.31	$1.36
GAAP Operating Income ($M)	$75.1	$73.8	$75.8
Adjusted Operating Income ($M)	$98.9	$101.1	$103.4
Adjusted Operating Margin (%)	—	—	37.5%

Estimates vs. Actuals (S&P Global):

Revenue: $271.6M* estimate vs. $275.8M actual — beat .
EPS (Adjusted/Primary): $1.19* estimate vs. $1.36 actual — beat.
Values retrieved from S&P Global.*

Segment Revenue by Geography ($M)

Region	Q3 2024	Q2 2025	Q3 2025
Americas	$205.9	$206.6	$206.7
EMEA	$48.1	$52.3	$54.0
APAC	$12.7	$13.5	$15.2
Total	$266.7	$272.4	$275.8

KPIs and Cash Metrics

KPI	Q3 2024	Q2 2025	Q3 2025
Cloud Subscriptions Revenue ($M)	$86.5	$100.4	$104.9
License Revenue ($M)	$3.8	$1.5	$1.4
Services Revenue ($M)	$137.0	$128.9	$133.0
RPO ($M)	$1,686.4 (9/30/24)	$2,013.8 (6/30/25)	$2,076.6 (9/30/25)
Operating Cash Flow ($M)	$62.3	$74.0	$93.1
DSO (days)	—	70	73
Cash & Equivalents ($M)	—	$230.6	$263.6
Share Repurchases (Shares/$M)	—	262,341 / $49.6	233,425 / $49.9

Notes: CFO highlighted free cash flow margin of 32% and adjusted EBITDA margin of 38% in Q3 .

Guidance Changes

Metric	Period	Previous Guidance (Q2 2025)	Current Guidance (Q3 2025)	Change
Total Revenue ($M)	FY 2025	$1,071–$1,075	$1,073–$1,077	Raised
GAAP Operating Margin (%)	FY 2025	24.1%–24.6%	25.0%–25.2%	Raised
Adjusted Operating Margin (%)	FY 2025	34.8%–35.3%	35.5%–35.7%	Raised
GAAP EPS ($)	FY 2025	$3.23–$3.31	$3.43–$3.45	Raised
Adjusted EPS ($)	FY 2025	$4.76–$4.84	$4.95–$4.97	Raised

Management also signaled Q4 revenue of ~$264M, ~33% adjusted operating margin, and ~$1.11 adjusted EPS based on the revised FY targets and intra‑quarter timing shifts (hardware/services) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Cloud growth	Q1: Cloud +21% YoY; Q2: Cloud +22% YoY	Cloud +21% YoY; visibility to 20% growth in 2026	Sustained, consistent
RPO/bookings	Q2 RPO surpassed $2B milestone	RPO $2.08B (+23% YoY); high‑end of FY outlook; win rates ~70%	Strengthening
Services	Q1/Q2 services down YoY due to budget shifts	Stabilizing; ~$2M pulled into Q3; backlog/pipeline building for 2026 growth	Improving trajectory
Conversions (on‑prem→cloud)	Emphasis building through 2025	Fixed‑fee/time cohorts driving pipeline and wins; expanding to TMS and DC rollouts	Accelerating
Agentic AI	Momentum (May) preview; product announcements in May press cycle [43/49 titles]	Early access live across products; GA in early 2026; native deployment, no data lakes	Commercializing
Partners/Renewals	N/A	Dedicated renewals team launched; COO to scale SI ecosystem, training/certification	Scaling go‑to‑market
Public sector	N/A	FEMA FedRAMP authorization for WMS expands secure cloud reach	Enhancing vertical reach

Management Commentary

“Manhattan delivered record third quarter and year‑to‑date results. Solid demand drove cloud revenue growth of 21% and better than expected services revenue generation in the quarter.” — Eric Clark, President & CEO .
“RPO increased 23% year over year to $2.1 billion. Win rates remained very strong at 70%... Q4 is off to a solid start… we expect to achieve toward the high end of our full‑year 2025 RPO outlook.” — Eric Clark .
“Adjusted operating profit was $103 million with an adjusted operating margin of 37.5%… higher tax rate is due to an increase in tax reserves caused by the acceleration of our domestic R&D cost deductions… benefited Q3 operating cash flow by approximately $20 million and will likely benefit Q4 by about $15 million.” — CFO Dennis Story .
“We launched a dedicated renewal team… and a conversion program… offering fixed‑fee, fixed‑timeline conversion to Active Warehouse… very quickly turned into about 30 new pipeline deals.” — Eric Clark .
“We are investing in Agentic AI across all of our Manhattan Active solutions… early access program… we will move to general availability… in early 2026.” — Eric Clark .

Q&A Highlights

RPO outlook and renewals: Management is confident in RPO trajectory into 2026, citing a major renewal cycle over the next 18 months that will “re‑up” current RPO as contracts renew at larger scale .
Conversions strategy: Fixed‑fee/time offers to targeted cohorts (initially ~100 warehouse customers) are converting into pipeline and wins; similar playbook expanding to TMS and to accelerate DC rollouts, with automation and AI supporting repeatability and margin discipline .
Services recovery: Services upside partly reflected execution and ~$2M timing pull‑in from Q4; backlog and pipeline are building, supporting a return to growth in 2026 .
Agentic AI monetization and margins: Early access feedback strong; agents deploy rapidly within native platform; pricing details to come on Q4 call; management intends to preserve cloud margins with no dilution .
2026 guardrails: Management expects 20% cloud revenue growth, services to grow, and 50–75 bps adjusted operating margin expansion in 2026 (ex‑license/maintenance attrition), with consensus viewed as generally appropriate .

Estimates Context

Consensus (S&P Global) vs. Actual (Q3 2025): Revenue $271.6M* vs. $275.8M (beat); EPS $1.19* vs. $1.36 (beat). Values retrieved from S&P Global.
Implications: Modest top‑line beat driven by 21% cloud growth and services timing; GAAP tax headwind explains gap between GAAP and adjusted EPS trends, while cash tax deferral boosted OCF .

Key Takeaways for Investors

Cloud engine intact: Sustained >20% cloud growth and a deepening conversion program underpin multi‑year subscription compounding; management reiterated 20% cloud growth for 2026 .
Bookings durability: RPO up 23% YoY to ~$2.08B with high win rates and a large renewal cycle ahead; management aims for the high end of 2025 RPO guidance (ex‑FX) .
Profitability discipline: Adjusted operating margin reached 37.5% in Q3; FY25 adjusted margin raised to 35.5%–35.7%, with 2026 margin expansion of 50–75 bps expected despite growth investments .
AI as a conversion and cross‑sell catalyst: Agentic AI early access is live across multiple workflows with GA in early 2026; embedded agents and Foundry position MANH to monetize productivity gains without margin dilution .
Services inflection in sight: Near‑term variability remains, but backlog/pipeline and conversion/DC rollout programs support a return to services growth in 2026 .
Public sector vector: FedRAMP authorization with FEMA expands the TAM in government and reinforces MANH’s security credentials across verticals .
Near‑term trading: Raised FY25 guide and beats on revenue/adjusted EPS are positives; watch Q4 revenue mix (hardware/services timing) and GAAP tax effects vs. favorable cash tax dynamics supporting cash flow .

Footnote on estimates: Items marked with * are consensus values. Values retrieved from S&P Global.

MANHATTAN ASSOCIATES INC (MANH)·Q3 2025 Earnings Summary