Skip to content
    MANH
    Earnings call· Mar 2026(Q1 FY26)

    MANHATTAN ASSOCIATES Q1 FY26 earnings call MANH

    Apr 21, 2026 Source

    Executive summary

    Manhattan Associates Q1 FY26 — Strong RPO Growth and AI Agent Adoption

    Manhattan Associates delivered a strong start to FY26, exceeding top and bottom-line expectations driven by robust RPO growth and successful AI agent pilot programs. The company's strategic go-to-market investments are yielding increased deal volume and new logo acquisition. Despite a volatile macro environment, management raised its full-year outlook for revenue, operating margin, and EPS, while maintaining a conservative stance for the remainder of the year.

    Highlights

    5

    • Total revenue increased 7% to $282 million, with cloud revenue up 24% to $117 million.

    • Remaining Performance Obligation (RPO) grew 24% year-over-year to $2.35 billion.

    • New customer bookings were strong, with over 55% of new cloud bookings generated from net new logos.

    • Adjusted operating profit reached $91 million, achieving a 32.4% operating margin.

    • Adjusted earnings per share (EPS) increased 4% to $1.24.

    Concerns

    3

    • GAAP EPS decreased 4% to $0.82, adversely impacted by higher-than-expected tax expense due to decreased stock-based compensation benefits.

    • FX volatility resulted in an approximate $5 million headwind to sequential RPO growth.

    • The macro environment remains volatile, leading to a conservative outlook for Q2-Q4 despite strong Q1 performance.

    Guidance & targets

    31
    CategoryTargetConfidence
    Full-year RPO
    $2.62B-$2.68B
    high materiality
    High
    Full-year Total Revenue
    $1.147B-$1.157B
    high materiality
    High
    Full-year Adjusted Operating Margin
    35%
    high materiality
    High
    Full-year Adjusted EPS
    $5.29-$5.37
    high materiality
    High
    Full-year GAAP EPS
    $3.59
    medium materiality
    High
    Full-year Cloud Revenue
    $495M
    high materiality
    High
    Full-year Services Revenue
    $518M
    medium materiality
    High
    Full-year Maintenance Revenue Decline
    17% decline to $108M
    medium materiality
    High
    Full-year License Revenue
    about $1M per quarter
    low materiality
    High
    Full-year Hardware Revenue
    $6M-$6.5M per quarter
    low materiality
    High
    Full-year Tax Rate
    about 22%
    low materiality
    High
    Full-year Diluted Share Count
    about 60M shares
    low materiality
    High
    Q2 Total Revenue
    $285M-$289M
    medium materiality
    High
    Q2 Adjusted Operating Margin
    about 34.7%
    medium materiality
    High
    Q2 Adjusted EPS
    $1.30
    medium materiality
    High
    Q2 GAAP EPS
    $0.86
    low materiality
    High
    Q2 Cloud Revenue
    $121.5M
    medium materiality
    High
    Q2 Services Revenue
    $131.5M
    medium materiality
    High
    Q2 Maintenance Revenue
    $27M
    medium materiality
    High
    Q3 Total Revenue
    about $296M
    medium materiality
    High
    Q3 Adjusted Operating Margin
    36.9%
    medium materiality
    High
    Q3 Adjusted EPS
    $1.43
    medium materiality
    High
    Q3 Cloud Revenue
    $126M
    medium materiality
    High
    Q3 Services Revenue
    $137M
    medium materiality
    High
    Q3 Maintenance Revenue
    $25.5M
    medium materiality
    High
    Q4 Total Revenue
    $287M
    medium materiality
    High
    Q4 Adjusted Operating Margin
    36.1%
    medium materiality
    High
    Q4 Adjusted EPS
    $1.36
    medium materiality
    High
    Q4 Cloud Revenue
    $13.5M
    medium materiality
    High
    Q4 Services Revenue
    $124M
    medium materiality
    High
    Q4 Maintenance Revenue
    $25M
    medium materiality
    High

    Operational metrics

    21
    Non-GAAP operating margin
    32.4%
    Q1 FY26

    Adjusted operating profit was $91 million with an operating margin of 32.4%.

    Free cash flow margin
    28.3%
    Q1 FY26

    Q1 operating cash flow increased 12% to $84 million, resulting in a 28.3% free cash flow margin.

    Adjusted EBITDA margin
    33.1%
    Q1 FY26

    Q1 operating cash flow resulted in a 33.1% and adjusted EBITDA margin.

    Cash and investments balance
    $226M
    Q1 FY26 end

    Ended the quarter with $226 million in cash and 0 debt.

    Net cash/(debt)
    $226M cash
    Q1 FY26 end

    Ended the quarter with $226 million in cash and 0 debt.

    Share buyback executed
    $150M
    Q1 FY26

    Leveraged strong cash position and invested $150 million in share repurchases in the quarter.

    Share repurchase authorization remaining
    $350M
    Q1 FY26 end

    Have $350 million remaining in the share repurchase authority announced in March.

    Total revenue growth (excluding license and maintenance)
    13%YoY
    Q1 FY26

    Excluding license and maintenance revenue, which removes the compression driven by a cloud transition, our total revenue was up 13%.

    Cloud revenue growth
    24%YoY
    Q1 FY26

    Cloud revenue increased 24% to $117 million.

    Services revenue growth
    4%YoY
    Q1 FY26

    Services revenue was also better than expected and increased 4% to $126 million.

    Deferred revenue
    $356Mincreased 20% YoY
    Q1 FY26 end

    Deferred revenue increased 20% year-over-year to $356 million.

    FX impact on total revenue growth
    2-point tailwind
    Q1 FY26

    In Q1, FX was a 2-point tailwind to year-over-year total revenue growth.

    FX impact on total revenue growth (full year guide)
    1-point tailwind
    FY26

    Full year guidance continues to include a 1-point tailwind from FX.

    FX impact on sequential RPO growth
    $5M headwind
    Q1 FY26

    FX was an approximate $5 million headwind to sequential RPO growth.

    FX impact on YoY RPO growth
    $25M tailwind
    Q1 FY26

    FX was about a $25 million tailwind to year-over-year RPO growth.

    Cloud revenue FX tailwind
    a little bit over 1%
    Q1 FY26

    For the quarter, it was a little bit over 1% tailwind on the cloud revenue.

    Cloud revenue FX tailwind (full year guide)
    about 1%
    FY26

    For the full year, we're also expecting about a 1% overall tailwind on our revenue.

    Win rate
    above 70%continues to be consistently
    Q1 FY26

    Our win rate metric continues to be consistently above 70%.

    On-prem customer base converted to cloud
    about 23%
    Q1 FY26

    We've moved up now to about 23% of our on-prem customer base has converted or started the conversion to the cloud.

    Services headcount added
    about 120
    Q1 FY26

    To date, we've added about 120 head count into our services team.

    Services headcount pending start or open
    roughly 70
    Q1 FY26

    We've got another roughly 70 either pending start or open.

    Industry KPIs

    10
    MetricValueDetails
    Revenue growth$282MUSD
    Rpo current rpo$2.35BUSD
    Bookings billingsstrong
    Pricing model mix—
    Customer account count—
    Large deal new logo metrics—
    Gross retention renewal ratesolid
    Multi product platform attach—
    Operating FCF margin rule of 4032.4%%
    Ai product adoption monetizationbetter-than-expected start

    Orderbook & backlog

    1
    RPO$2.35BQ1 FY26 end

    up 24% YoY, up 5% sequentially

    Contract duration remains at about 5.5 to 6 years, with 38% of RPO to be recognized as revenue over the next 24 months.

    Product announcements

    2
    ProductTypeDetails
    Active Agent Pilot Programlaunch
    Momentum User Conferencemilestone

    Deals & partnerships

    8
    Global retailerNew logo adoption of Active Warehouse and Active Transportation

    A global retailer became a new logo customer for Active Warehouse and Active Transportation.

    One of the world's largest retailersNew logo adoption of Active Omni (Order Management System)

    This deal represents Manhattan's largest ever OMS bookings deal. The customer, historically building in-house, chose Manhattan's OMS due to the scale and complexity of their e-commerce business.

    Large auto parts distributorNew logo adoption of Active Warehouse and Active Omni

    A large auto parts distributor became a new logo customer for Active Warehouse and Active Omni.

    HVAC-focused distributorNew logo adoption of Active Warehouse and Active Transportation

    An HVAC-focused distributor became a new logo customer for Active Warehouse and Active Transportation.

    Global wellness retailerConversion from on-premise to Active Warehouse

    A global wellness retailer converted their on-premise solution to Active Warehouse.

    Multinational food distributorExpansion from Active Transportation to Active Warehouse

    An existing Active Transportation customer expanded their relationship to include Active Warehouse.

    Major retailerLarge unified warehouse and transportation deal

    Closed a large unified warehouse and transportation deal with a major retailer, leveraging the power and simplicity of a single application for distribution and logistics.

    Google Cloud MarketplaceFacilitation of large deals by leveraging committed spend

    The Google Cloud Marketplace influenced the largest Q1 deal (APAC) and the largest ever OMS deal. It serves as an opportunity to help close deals and act as a differentiator, rather than primarily creating new pipeline.

    Risks & headwinds

    3
    Volatile global macro environmentOngoing

    Better-than-expected Q1 results achieved despite navigating a volatile global macro.

    Mitigation: Maintaining a conservative outlook for Q2-Q4, despite strong Q1 performance, due to limited clarity from external variables.

    FX volatilityQ1 FY26

    Approximate $5 million headwind to sequential RPO growth in Q1.

    Mitigation: Management monitors and provides FX impact figures; full-year guidance includes a 1-point FX tailwind for total revenue.

    Higher-than-expected tax expenseQ1 FY26

    Adversely impacted GAAP EPS, which was down 4% to $0.82.

    Mitigation: Due to a decrease of stock-based compensation benefits; full-year GAAP EPS midpoint was still raised.

    What to watch in Q2 FY26

    5

    AI Agent Monetization

    next quarter and throughout FY26
    CurrentDozens of customers in pilot programs, strong ROI demonstrated.
    TargetConversion of Q1 pilots to subscriptions, scaling of revenue.

    Why it matters

    Verifying the conversion rate from paid pilots to subscriptions will indicate the commercial viability and future revenue contribution of the AI agent offerings, which is expected to have a meaningful impact in FY27.

    So in while we continue to sign up additional pilot customers, we'll also be having conversations with the Q1 customers about conversion to subscriptions. And in fact, those conversations have already begun with many of them.

    Q&A highlights

    6

    How will AI agent pilots progress to scaled revenue through the year, and how many early adopters are allowing agents to operate autonomously?

    Eric Clark explained that the 90-day paid pilots are designed to convert to subscriptions, with conversations already underway. He expects scaling to continue throughout the year, with a more meaningful revenue impact in 2027. Most agents are designed for autonomous operation once users are comfortable, leveraging Manhattan's microservices and API-driven architecture for 'headless' functionality.

    “Most of our agents are designed to be autonomous if they so choose. So they can be working alongside a user and providing suggestions to a user. And then when the user feels comfortable, they can allow the agent to work autonomously.”

    asked by Terrell Tillman · answered by Eric Clark

    2 min read5 chapters

    Detailed Narrative

    01

    AI Agent Pilot Program Success and Monetization

    Manhattan's Active Agent pilot program has exceeded expectations, with dozens of customers exploring and realizing benefits from both base agents and the Agent Foundry offering. Early case studies demonstrate significant ROI, including a 5% improvement in order cycle times, double-digit percentage reduction in loading times, and up to 75% reduction in exceptions for customers. The company is focused on converting paid pilots to subscriptions, with initial conversations indicating strong ROI justification from customers, particularly in reducing overtime. While monetization is conservative for FY26, a meaningful impact is expected in FY27.

    02

    Go-to-Market Investments Driving Deal Volume

    Strategic investments made in 2025 to enhance go-to-market effectiveness are paying off, contributing to a 24% increase in RPO. The company observed notable deal volume improvements across all deal types and a larger contribution from products beyond Active Warehouse, such as Active Omni, Active Transportation, and Active Planning. New customer bookings remained strong, with over 55% of new cloud bookings originating from net new logos, and the win rate consistently above 70%.

    03

    Unified Platform Value and Large Deal Wins

    The power of solution unification continues to be a key differentiator, leading to significant wins like a large unified warehouse and transportation deal with a major retailer. This unified approach lowers integration complexity and accelerates time to value for customers. Additionally, the company closed its largest-ever OMS bookings deal with one of the world's largest retailers, who previously built their e-commerce tech stack in-house but now recognize the value of Manhattan's capable and scalable OMS product.

    04

    Cloud Transition and Competitive Advantage

    Manhattan Associates continues to drive its cloud transition, with approximately 23% of its on-premise customer base having converted or started the conversion to the cloud. The availability of fixed-fee, fixed-timeframe deployments and immediate access to base AI agents upon cloud migration are accelerating customer interest. The company views its unified cloud-native platform as a significant competitive advantage against rivals who have not made similar investments, leading to high win rates against incumbents.

    05

    CFO Transition and Financial Outlook

    Linda Pinne, previously Global Corporate Controller and Chief Accounting Officer, has been appointed as the new CFO, succeeding Dennis Story. The company delivered better-than-expected Q1 financial results, driven by strong execution, one-time📎 cloud overage fees, and lower-than-modeled churn rates. Despite raising full-year guidance for total revenue, adjusted operating margin, and EPS, management maintains a conservative stance for the remaining quarters due to ongoing macro volatility🌐.

    AI-generated summary of the company’s earnings call. Not investment advice.