ATLANTA, Feb. 02, 2023 (GLOBE NEWSWIRE) -- Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $198.1 million for the fourth quarter ended December 31, 2022. GAAP diluted earnings per share for Q4 2022 was $0.60 compared to $0.32 in Q4 2021. Non-GAAP adjusted diluted earnings per share for Q4 2022 was $0.81 compared to $0.48 in Q4 2021.

“Manhattan's business momentum is strong, and our fourth quarter results exceeded expectations. This contributed to the company achieving record top- and bottom-line results in 2022," said Manhattan Associates president and CEO Eddie Capel.

“We enter 2023 optimistic about our market opportunity and remain committed to investing in market leading innovation. We are confident these investments will contribute to our high levels of customer satisfaction and extend our positioning as the leading innovator in core Supply Chain Execution, Omni-channel and retail Point of Sale solutions," Capel concluded. 

FOURTH QUARTER 2022 FINANCIAL SUMMARY:

• Consolidated total revenue was $198.1 million for Q4 2022, compared to $171.5 million for Q4 2021.
  • Cloud subscription revenue was $51.7 million for Q4 2022, compared to $34.8 million for Q4 2021.
  • License revenue was $5.0 million for Q4 2022, compared to $11.9 million for Q4 2021.
  • Services revenue was $99.8 million for Q4 2022, compared to $81.6 million for Q4 2021.
• GAAP diluted earnings per share was $0.60 for Q4 2022, compared to $0.32 for Q4 2021.
• Adjusted diluted earnings per share, a non-GAAP measure, was $0.81 for Q4 2022, compared to $0.48 for Q4 2021.
• GAAP operating income was $44.7 million for Q4 2022, compared to $27.1 million for Q4 2021.
• Adjusted operating income, a non-GAAP measure, was $59.9 million for Q4 2022, compared to $39.1 million for Q4 2021.
• Cash flow from operations was $55.2 million for Q4 2022, compared to $40.1 million for Q4 2021. Days Sales Outstanding was 77 days at December 31, 2022, compared to 67 days at September 30, 2022.
• Cash totaled $225.5 million at December 31, 2022, compared to $197.1 million at September 30, 2022.
• During the three months ended December 31, 2022, the Company repurchased 206,418 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors for a total investment of $25.2 million. In January 2023, our Board of Directors approved replenishing the Company’s remaining share repurchase authority to an aggregate of $75.0 million of our common stock.
  

FULL YEAR 2022 FINANCIAL SUMMARY:

• Consolidated total revenue for the twelve months ended December 31, 2022, was $767.1 million, compared to $663.6 million for the twelve months ended December 31, 2021.
  • Cloud subscription revenue was $176.5 million for the twelve months ended December 31, 2022, compared to $122.2 million for the twelve months ended December 31, 2021.
  • License revenue was $24.8 million for the twelve months ended December 31, 2022, compared to $37.1 million for the twelve months ended December 31, 2021.
  • Services revenue was $394.1 million for the twelve months ended December 31, 2022, compared to $334.8 million for the twelve months ended December 31, 2021.
• GAAP diluted earnings per share for the twelve months ended December 31, 2022, was $2.03, compared to $1.72 for the twelve months ended December 31, 2021. 
• Adjusted diluted earnings per share, a non-GAAP measure, was $2.76 for the twelve months ended December 31, 2022, compared to $2.23 for the twelve months ended December 31, 2021.
• GAAP operating income was $152.7 million for the twelve months ended December 31, 2022, compared to $134.3 million for the twelve months ended December 31, 2021.
• Adjusted operating income, a non-GAAP measure, was $212.1 million for the twelve months ended December 31, 2022, compared to $177.9 million for the twelve months ended December 31, 2021.
• Cash flow from operations was $179.6 million for the twelve months ended December 31, 2022, compared to $185.2 million for the twelve months ended December 31, 2021.
• During the twelve months ended December 31, 2022, the Company repurchased 1,352,954 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $175.4 million.

2023 GUIDANCE

Manhattan Associates provides the following revenue, operating margin and diluted earnings per share guidance for the full year 2023:

Manhattan Associates currently intends to publish in each quarterly earnings release certain expectations with respect to future financial performance. Those statements, including the guidance provided above and guideposts in the supplemental information below, are forward looking. Actual results may differ materially. See our cautionary note regarding “forward-looking statements” below. Those statements do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of the release.

Manhattan Associates will make this earnings release and published expectations available on the investor relations section of the Manhattan Associates website at ir.manh.com. Following publication of this earnings release, any expectations with respect to future financial performance contained in this release, including the guidance and guideposts, should be considered historical only, and Manhattan Associates disclaims any obligation to update them.

CONFERENCE CALL

Manhattan Associates’ conference call regarding its fourth quarter and twelve months ended December 31, 2022, financial results will be held today, February 2, 2023, at 4:30 p.m. Eastern Time. The Company will also discuss its business and expectations for the year and next quarter in additional detail during the call. We invite investors to a live webcast of the conference call through the Investor Relations section of the Manhattan Associates website at ir.manh.com. To listen to the live webcast, please go to the website at least 15 minutes before the call to download and install any necessary audio software. The Internet webcast will be available until Manhattan Associates’ first quarter 2023 earnings release.

GAAP VERSUS NON-GAAP PRESENTATION

Manhattan Associates provides adjusted operating income and margin, adjusted income tax provision, adjusted net income, and adjusted diluted earnings per share in this press release as additional information regarding the Company’s historical and projected operating results. These measures are not in accordance with, or alternatives to, GAAP, and may be different from similarly titled non-GAAP measures used by other companies. The Company believes the presentation of these non-GAAP financial measures facilitates investors’ ability to understand and compare the Company’s results and guidance, because the measures provide supplemental information in evaluating the operating results of its business, as distinct from results that include items not indicative of ongoing operating results, and because the Company believes its peers typically publish similar non-GAAP measures. This release should be read in conjunction with the Company’s Form 8-K earnings release filing for the three and twelve months ended December 31, 2022.

Non-GAAP adjusted operating income and margin, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share exclude the impact of equity-based compensation, acquisition-related costs and the amortization of these costs, and (from time to time) restructuring charges – all net of income tax effects. We include reconciliations of the Company’s GAAP financial measures to non-GAAP adjustments in the supplemental information attached to this release.

ABOUT MANHATTAN ASSOCIATES

Manhattan Associates is a technology leader in supply chain and omnichannel commerce. We unite information across the enterprise, converging front-end sales with back-end supply chain execution. Our software, platform technology and unmatched experience help drive both top-line growth and bottom-line profitability for our customers. 

Manhattan Associates designs, builds and delivers leading edge cloud solutions so that across the store, through your network or from your fulfillment center, you are ready to reap the rewards of the omnichannel marketplace. For more information, please visit www.manh.com.

This press release contains “forward-looking statements” relating to Manhattan Associates, Inc.  Forward-looking statements in this press release include, without limitation, the information set forth under “2023 Guidance” and “Guideposts,” statements we make about market adoption of our cloud-based solution and other statements identified by words such as “may,” “expect,” “forecast,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “project,” “estimate” and similar expressions. Prospective investors are cautioned that any of those forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by those forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by those forward-looking statements are: economic conditions, including inflation; disruption in the retail sector; delays in product development; competitive and pricing pressures; software errors and information technology failures, disruption and security breaches; disruption in the retail sector; risks related to our products’ technology and customer implementations; global instability, including the war in Ukraine; and the other risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, and in Item 1A of Part II in subsequent Quarterly Reports on Form 10-Q. Manhattan Associates undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.

(a)     Adjusted results exclude all equity-based compensation to facilitate comparison with our peers and because it typically does not require cash settlement. As explained in our Current Report on Form 8-K filed today with the SEC, we do not include that expense when assessing our operating performance. We do not receive a GAAP tax benefit for a portion of our equity-based compensation, mainly due to Section 162(m) of the Internal Revenue Code, which limits tax deductions for compensation granted to certain executives. The Tax Cuts and Jobs Act further increased those limitations.

(b)     Adjustments represent the excess tax benefits and tax deficiencies of the equity awards vested during the period. Excess tax benefits (deficiencies) occur when the amount deductible on our tax return for an equity award is more (less) than the cumulative compensation cost recognized for financial reporting purposes. As discussed above, we exclude equity-based compensation from adjusted non-GAAP results to be consistent with other companies in the software industry and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. Therefore, we also exclude the related tax benefit (expense) generated upon their vesting.

(c)     Adjustments represent purchased intangibles amortization from a prior acquisition. We exclude that amortization from adjusted results to facilitate comparison with our peers, to facilitate comparisons of the results of our core operations from period to period and for the other reasons explained in our Current Report on Form 8-K filed with the SEC.

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

1.     GAAP and adjusted earnings per share by quarter are as follows:

2.        Revenues and operating income by reportable segment are as follows (in thousands):

3.     Impact of Currency Fluctuation

The following table reflects the increases (decreases) in the results of operations for each period attributable to the change in foreign currency exchange rates from the prior period as well as foreign currency gains (losses) included in other income, net for each period (in thousands):

Manhattan Associates has a large research and development center in Bangalore, India. The following table reflects the increases (decreases) in the financial results for each period attributable to changes in the Indian Rupee exchange rate (in thousands):

4.        Other income includes the following components (in thousands):

5.        Capital expenditures are as follows (in thousands):

6.        Stock Repurchase Activity (in thousands):

7.        Remaining Performance Obligations

We disclose revenue we expect to recognize from our remaining performance obligations. Over 97% of our reported performance obligations represent cloud native subscriptions with a non-cancelable term greater than one year (including cloud-deferred revenue as well as amounts we will invoice and recognize as revenue from our performance of cloud services in future periods). Maintenance contracts are typically one year and are not included in the remaining performance obligations. Below are our remaining performance obligations as of the end of each period (in thousands):

8.        The 2017 U.S. Tax Cuts and Jobs Act eliminated the expensing of research and development costs as incurred for tax purposes beginning in 2022.             

This law changes the timing of cash tax payments, increasing near-term taxable income and payments, but normalizing over time as these expenses are amortized.  As such, our cash was negatively impacted by approximately $26 million in additional income tax payments.  This legislation does not impact earnings per share, does not create any incremental expense obligation and does not impact our ability to operationally grow cash flow.

9.        Guideposts

The following table shows our (i) actual 2022 cloud revenue and remaining performance obligations (“RPO”) results, (ii) revised 2023 cloud revenue guidepost, (iii) 2023 RPO guidepost published as of October 25, 2022, and (iv) guideposts published as of February 1, 2022, for cloud revenue and RPO for 2024.

These guideposts are forward-looking statements and are subject to all the risks and uncertainties applicable to our shorter-term 2023 Guidance, as stated above. In addition, the further into the future we project our financial expectations, the greater the risk that actual results will differ materially; consequently, our longer-term guideposts may be inherently more uncertain than our shorter-term guidance.