MANH 10-K & 10-Q changes, risk factors and insider trading
Manhattan Associates Inc. · Nasdaq · Services-Prepackaged Software · CIK 1056696 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
“Adverse litigation results could affect our business. From time to time, we may be involved in litigation relating to claims arising in the ordinary course of business, and occasionally legal proceeding not in the ordinary course. Litigation can be lengthy, expensive and disruptive to our operations, and can divert our management’s attention away from running our core business. The results of any litigation also cannot be predicted with certainty. In February and April 2025, two putative securities class action lawsuits were filed against us. …”see in full comparison
“We may therefore face challenges in obtaining U.S. copyright or other intellectual property rights worldwide on certain parts of our products that were developed using generative AI tools (for further information regarding this risk, see the risk factor entitled “Our failure to adequately protect our proprietary rights could adversely impact our business, results of operations, cash flow, and financial condition”).”see in full comparison
“Adverse litigation results could affect our business. From time to time, we may be involved in litigation relating to claims arising in the ordinary course of business, and occasionally legal proceeding not in the ordinary course. Litigation can be lengthy, expensive and disruptive to our operations, and can divert our management’s attention away from running our core business. The results of any litigation also cannot be predicted with certainty. An adverse decision could result in monetary damages or injunctive relief that could affect our business, operating results or financial condition. …”see in full comparison
Protection of our proprietary rights. Our developers may use, in limited instances, generative and agentic AI tools to support their computer code writing activities for our proprietary software products. According to recent decisions of governmental entities and courts (such as the U.S. Copyright Office and U.S. Court of Appeals for the Federal Circuit), U.S. copyright is limited to protecting works created by human authors. Many other jurisdictions around the world follow the same approach. We may therefore face challenges in obtaining U.S. copyright or other intellectual property rights worldwide on certain parts of our products that were developed using generative and agentic AI tools (for further information regarding this risk, see the risk factor entitled “Our failure to adequately protect our proprietary rights could adversely impact our business, results of operations, cash flow, and financial condition”).see in full comparison
Our use of generative and agentic artificial intelligence (“AI”) tools may expose us to operational, compliance or other risks, which could adversely impact our business, results of operations, cash flow and financial condition, and subject us to legal liability. We use generative and agentic AI tools in our business for external purposes (e.g., as additional features to our software products) and for internal purposes (e.g., to support our operations and improve the day-to-day performance of our employees), and these tools are mostly developed and marketed by third-party vendors. The use of generative and agentic AI within our business inherently carries a broad range of risks typical to emerging technologies, and requires an investment of resources in the development and integration of the technology. These investments may be costly and could impact our operating results as we continue to incorporate generative and agentic AI into our products and services.see in full comparison
Cybersecurity and Third-Party Rights. Generally, because we mainly use generative and agentic AI tools that are developed by third-party vendors, we have lesser control over the further use or distribution of any content we may share or create via these third-party tools. In addition, the vendors of these tools may fail to comply with their contractual obligations to us, or not provide warranties, indemnities or other remedies, regarding the confidentiality or security of this content. Further, our use of generative and agentic AI tools to generate computer code may present additional security risks because the generated source code may contain security vulnerabilities. As a result, our sensitive information or that of our employees or customers could be leaked or disclosed, or other IT security incidents may arise (for further information regarding this risk, see the risk factor entitled “If our data protection or other security measures are compromised and, as a result, our data, our customers’ data or our IT systems are accessed improperly, made unavailable, or improperly modified, our products and services may be perceived as vulnerable…”). In addition, we have little insight into, and no control over, the content used or provided by third-party vendors to train their generative and agentic AI tools. For example, there is ongoing litigation over whether the use of copyrighted materials to train AI models is lawful, however the impact of its outcome on our ability to use certain generative and agentic AI tools is unknown. Further, the AI generative and agentic tools used by third party vendors could also generate content that infringes upon or misappropriates other third-party intellectual property rights. This risk is intensified by the current trend of entities seeking patents and other intellectual property protections in AI to gain a competitive edge.see in full comparison
Full comparison: every changed paragraph (20)
Our future revenue is dependent on continuing sales from cloud subscriptions, which in turn drive sales of professional services. We are dependent on our new customers as well as our large installed customer base to purchase additional cloud subscriptions and professional services from us. Our ability to continue to grow revenues from our cloud solutions depends upon a number of factors, including the quality and functionality of our platform, our ability to design our cloud solutions to meet customer demand, our ability to attract new customers, and our ability to increase sales from existing customers. In future periods customers may discontinue the cloud subscriptions and in turn may not purchase additional professional services from us. If our customers decide to discontinue the cloud subscription, or if they reduce the scope of their professional services agreements, our revenue could decrease significantly, and that could have a material adverse effect on our business, results of operations, cash flow and financial condition.
Our liability to clients may be substantial if our systems fail, which could adversely impact our business, results of operations, cash flow, and financial condition. Our products are often critical to the operations of our customers’ businesses and provide benefits that may be difficult to quantify. If our products fail to function as required—which, as described in more detail in other risk factors, could be due to software bugs, cloud hosting service failures, security breaches, faulty implementationsimplementations, risks associated with our use of generative and agentic artificial intelligence, or other reasons—we may be subject to claims for substantial damages. Courts may not enforce provisions in our contracts that would limit our liability or otherwise protect us from liability for damages. Defending a lawsuit, regardless of its merit, could be costly and divert management’s time and attention. Although we maintain general liability insurance and error and omissions coverage, these coverages may not continue to be available on reasonable terms or in sufficient amounts to cover claims against us. In addition, our insurer may disclaim coverage as to any future claim. If claims exceeding the available insurance coverage are successfully asserted against us, or our insurer imposes premium increases or large deductibles or co-insurance requirements on us, then our business, results of operations, cash flow, and financial condition could be adversely affected.
Our use of generative and agentic artificial intelligence (“AI”) tools may expose us to operational, compliance or other risks, which could adversely impact our business, results of operations, cash flow and financial condition, and subject us to legal liability. We use generative and agentic AI tools in our business for external purposes (e.g., as additional features to our software products) and for internal purposes (e.g., to support our operations and improve the day-to-day performance of our employees), and these tools are mostly developed and marketed by third-party vendors. The use of generative and agentic AI within our business inherently carries a broad range of risks typical to emerging technologies, and requires an investment of resources in the development and integration of the technology. These investments may be costly and could impact our operating results as we continue to incorporate generative and agentic AI into our products and services.
However, because the use of generative and agentic AI tools in business environments is a relatively novel development, the extent of benefits, risks, and liabilities attached to it are still unknown. We have identified the following main risks related to our use of AI tools:
Protection of our proprietary rights. Our developers may use, in limited instances, generative and agentic AI tools to support their computer code writing activities for our proprietary software products. According to recent decisions of governmental entities and courts (such as the U.S. Copyright Office and U.S. Court of Appeals for the Federal Circuit), U.S. copyright is limited to protecting works created by human authors. Many other jurisdictions around the world follow the same approach. We may therefore face challenges in obtaining U.S. copyright or other intellectual property rights worldwide on certain parts of our products that were developed using generative and agentic AI tools (for further information regarding this risk, see the risk factor entitled “Our failure to adequately protect our proprietary rights could adversely impact our business, results of operations, cash flow, and financial condition”).
We may therefore face challenges in obtaining U.S. copyright or other intellectual property rights worldwide on certain parts of our products that were developed using generative AI tools (for further information regarding this risk, see the risk factor entitled “Our failure to adequately protect our proprietary rights could adversely impact our business, results of operations, cash flow, and financial condition”).
AI adoption-related risk. As we include generative and agentic AI features in our software products, some of our customers, especially those in highly regulated industries, may be reluctant or unwilling to use generative and agentic AI products. Accordingly, their reluctance to do so could reduce or delay customer adoption, and this may adversely affect our business, results of operations, and financial condition.
Operational risks. Our use of third-party generative and agentic AI tools exposes us to greater risks related to the quality of our products (for further information regarding this risk, see the risk factor entitled “Our ability to sell our cloud solutions is highly dependent on the quality of our services offerings, and our failure to offer high quality services could adversely impact our business, results of operations, cash flow, and financial condition”). For example:
Generative and agentic AI features embedded in our software products may create incompleteincomplete, inaccurate, unwanted or inaccurateoffensive outputs and may cause our software products not to operate as expected, and this could result in customer dissatisfaction or potential claims related to product performance (for further information regarding this risk, see the risk factor entitled “Our software may contain undetected errors or “bugs” causing harm to our reputation, which could adversely impact our business, results of operations, cash flow, and financial condition”);
Our use of third-party generative and agentic AI tools to power features of our software products may impair our ability to correct defects or cure unavailability in a timely manner because we have no control over our third-party vendors’ operations and infrastructure (for further information regarding this risk, see the risk factor entitled “We incorporate third-party software in our solutions, the failure or unavailability of which could adversely affect our ability to sell, support, and service our products”).
Cybersecurity and Third-Party Rights. Generally, because we mainly use generative and agentic AI tools that are developed by third-party vendors, we have lesser control over the further use or distribution of any content we may share or create via these third-party tools. In addition, the vendors of these tools may fail to comply with their contractual obligations to us, or not provide warranties, indemnities or other remedies, regarding the confidentiality or security of this content. Further, our use of generative and agentic AI tools to generate computer code may present additional security risks because the generated source code may contain security vulnerabilities. As a result, our sensitive information or that of our employees or customers could be leaked or disclosed, or other IT security incidents may arise (for further information regarding this risk, see the risk factor entitled “If our data protection or other security measures are compromised and, as a result, our data, our customers’ data or our IT systems are accessed improperly, made unavailable, or improperly modified, our products and services may be perceived as vulnerable…”). In addition, we have little insight into, and no control over, the content used or provided by third-party vendors to train their generative and agentic AI tools. For example, there is ongoing litigation over whether the use of copyrighted materials to train AI models is lawful, however the impact of its outcome on our ability to use certain generative and agentic AI tools is unknown. Further, the AI generative and agentic tools used by third party vendors could also generate content that infringes upon or misappropriates other third-party intellectual property rights. This risk is intensified by the current trend of entities seeking patents and other intellectual property protections in AI to gain a competitive edge.
Regulatory risks. Several jurisdictions around the globe, including in Europe and the U.S. (at state and federal level), have proposed or already enacted legislative frameworks governing the development, use and marketing of AI tools, including the European Union’s AI Act and the Colorado AI Act. We expect other jurisdictions will adopt similar regulations. Additionally, certain privacy laws may apply to our use of generative and agentic AI tools (such as a data subject’s right to have a precise view of how their personal data are processed). These legal requirements may make it harder for us to conduct our business using AI (especially third-party AI tools), lead to regulatory fines or penalties, require us to change our business practices, or prevent or limit our use of AI tools, which in turn, may lead our business to be less efficient, or us to be at a competitive disadvantage (for further information regarding this risk, see the risk factor entitled “Our technology must be advanced if we are to remain competitive”).
Supply chain execution and planning vendors, including Blue Yonder/Panasonic (formerly JDA), E2Open, Korber (formerly HighJump), SAS Institute, the Sterling Commerce division of IBM, Relex, and others;
POS vendors, including Aptos, Oracle, and others; and
POS vendors, including Aptos, Oracle, Jumpmind, Salesforce and others; and Smaller independent companies that have developed or are attempting to develop supply chain execution solutions or planning solutions that apply either globally or in specific countries.
Adverse litigation results could affect our business. From time to time, we may be involved in litigation relating to claims arising in the ordinary course of business, and occasionally legal proceeding not in the ordinary course. Litigation can be lengthy, expensive and disruptive to our operations, and can divert our management’s attention away from running our core business. The results of any litigation also cannot be predicted with certainty. In February and April 2025, two putative securities class action lawsuits were filed against us. Then, on September 22, 2025, a shareholder derivative lawsuit was filed against us. Additional information regarding these legal matters can be found in Note 5 to our Consolidated Financial Statements. We are unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from, these proceedings.
Adverse litigation results could affect our business. From time to time, we may be involved in litigation relating to claims arising in the ordinary course of business, and occasionally legal proceeding not in the ordinary course. Litigation can be lengthy, expensive and disruptive to our operations, and can divert our management’s attention away from running our core business. The results of any litigation also cannot be predicted with certainty. An adverse decision could result in monetary damages or injunctive relief that could affect our business, operating results or financial condition. Additional information regarding legal matters in which we are involved, if any, can be found in Note 5 to our Consolidated Financial Statements.
The effects of a pandemic,disease such as the COVID-19outbreak, pandemic, or other major public health crisis could materially adversely affect our business, results of operations and financial condition. InFor example, in March 2020, the World Health Organization declared the outbreak of the COVID-19 pandemic. The disease spread throughout the world, prompting governmental and private authorities to implement measures to contain the pandemic, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns. A future pandemicdisease outbreak, pandemic, or other public health crisis, and related remedial measures, could adversely impact our results from operations, financial condition, liquidity and cash flows in numerous ways, including but not limited to:
A decrease in revenues could also negatively affect our liquidity, as we primarily rely on cash generated from operating activities for our liquidity needs. Compounding this issue, a pandemicdisease outbreak, pandemic, or other public health crisis may make outside capital less available or more expensive.
Fires or other catastrophic events at our principal facilities could disrupt our business. Fires, natural disasters, weather events, political or civil unrest, terrorist acts, disruptions in critical infrastructure or other catastrophic events, particularly those affecting our Atlanta headquarters or India research and development center, may cause damage or disruption to our operations, and thus could have a strong negative effect on us. Our business operations are subject to interruption by natural disasters, weather events, political unrest, fire, power shortages and other disruptions of critical infrastructure, health crises or pandemics and other events beyond our control. Although we maintain crisis management and disaster response plans, such events could make it difficult or impossible for us to deliver our services to our customers.
Management's Discussion & Analysis (MD&A)
Removed heading “Significant Judgments”
Largest changes
“This section of our Annual Report on Form 10-K discusses our financial condition, results of operations, and liquidity and capital resources for the fiscal years ended December 31, 2025 and 2024, and year-to-year comparisons between fiscal 2025 and fiscal 2024 in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). …”see in full comparison
“Services revenue increased $93.8 million in 2023 compared to 2022. The Americas, EMEA, and APAC segments increased $67.0 million, $21.7 million and $5.1 million, respectively, compared to 2022. Services revenue was driven by adoption and implementation of our cloud solutions. The percentage of professional services revenue that relates to cloud subscriptions in 2023 and 2022 was approximately 70% and 55%, respectively. …”see in full comparison
“In January 2025, the Company eliminated approximately 100 positions to align our services capacity with customer demand which has been impacted by short-term macro-economic uncertainty. The Company recorded restructuring expense of approximately $2.9 million for the year ended December 31, 2025 to the Americas segment. The expense primarily consists of employee severance and outplacement services. The expense is classified in “Restructuring expense” in the Company’s Consolidated Statements of Income for the year ended December 31, 2025.”see in full comparison
“Cloud subscriptions revenue increased $78.2 million to $254.6 million in 2023 compared to 2022. Cloud subscriptions revenue for the Americas, EMEA and APAC segments increased $56.7 million, $19.2 million and $2.3 million, respectively. Revenue recognized from first time cloud customers (defined as customers with no prior cloud subscriptions) during the year in which their initial cloud subscription began was 3% and 7% of total cloud revenue in 2023 and 2022, respectively.”see in full comparison
In Januarysee in full comparison2025,2026, the International Monetary Fund (IMF) provided a World Economic Outlook (WEO) update. The WEO update noted, “Global growth is projected at 3.3 percentbothin 2026 and 3.2 percent in20252027:andrates2026,similarbelowto thehistoricalestimated(2000–19)3.3averagepercentofoutturn3.7inpercent.2025. Global headline inflation is expected to declinetofrom4.2an estimated 4.1 percent in 2025andto3.53.8 percent in2026,2026convergingandbackfurther to 3.4 percent in 2027. The inflation projections are also broadly unchanged from those in October and envisage inflation returning to targetearliermore gradually inadvancedtheeconomiesUnited States than inemergingothermarket and developinglarge economies.”
Full comparison: every changed paragraph (63)
This section of our Annual Report on Form 10-K discusses our financial condition, results of operations, and liquidity and capital resources for the fiscal years ended December 31, 2025 and 2024, and year-to-year comparisons between fiscal 2025 and fiscal 2024 in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). A discussion of our financial condition, results of operations, and liquidity and capital resources for the fiscal year ended December 31, 2024 and 2023 and year-to-year comparisons between fiscal 2024 and fiscal 2023 that is not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on February 7, 2025.
We have three geographic reportable segments: the Americas, EMEA, and APAC. Geographic revenue is based on the location of the sale. Our international revenue was approximately $346.2$373.5 million, $301.4 million,million and $238.4$346.2 million for the years ended December 31, 2024, 20232025 and 2022,2024, respectively, which represents approximately 33%, 32%,35%, and 31%33% of our total revenue for the years ended December 31,2025 and 2024, 2023 and 2022,respectively, respectively. International revenue includes all revenue derived from sales to customers outside the United States. At December 31, 2024,2025, we employed approximately 4,6904,370 employees worldwide. We have offices in Australia, Chile, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Spain, and the United Kingdom, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia.
While we remain cautious about the global economy, our results for the full year ended 2024December 31, 2025 exceeded our expectations due to solid demand for our cloud solutions. Our solutions are mission critical, supporting complex global supply chains. We believe that favorable secular tailwinds, such as the digital transformation of businesses in manufacturing, wholesale and retail, coupled with our commitment to investing in organic innovation to deliver leading cloud supply chain, inventory and omnichannel commerce solutions is in synergistic alignment with current market demand. We believe this alignment is contributing to our strong financial results, higher demand and strong win rates for our solutions for the period. We remain committed to investing in our business to drive customer success and expand our total addressable market, which we believe will position us well to achieve long-term sustainable growth and earnings.
In January 2025,2026, the International Monetary Fund (IMF) provided a World Economic Outlook (WEO) update. The WEO update noted, “Global growth is projected at 3.3 percent bothin 2026 and 3.2 percent in 20252027: andrates 2026,similar belowto the historicalestimated (2000–19)3.3 averagepercent ofoutturn 3.7in percent.2025. Global headline inflation is expected to decline tofrom 4.2an estimated 4.1 percent in 2025 and to 3.53.8 percent in 2026,2026 convergingand backfurther to 3.4 percent in 2027. The inflation projections are also broadly unchanged from those in October and envisage inflation returning to target earliermore gradually in advancedthe economiesUnited States than in emergingother market and developinglarge economies.”
Our cloud revenue growth provides insight into our ability to maintain and grow our cloud customer base. Total cloud revenue increased from $254.6 million in 2023 to $337.2 million in 2024,2024 to $408.1 million in 2025, representing a 32% year-over-year increase. Total cloud revenue increased from $176.5 million in 2022 to $254.6 million in 2023, representing a 44%21% year-over-year increase. Cloud revenue growth is being driven by strong demand for our cloud offerings.
Cloud Subscriptions and Software License revenue: In the full year ended 2024,December 31, 2025, cloud subscriptions revenue was 96% of total cloud and software license revenue. In 2024,2025, cloud subscriptions revenue totaled $337.2$408.1 million, or 32%38% of total revenue. The Americas, EMEA, and APAC segments recognized $264.3$313.0 million, $62.8$80.1 million and $10.1$15.0 million in cloud subscriptions revenue, respectively, in 2024.2025. Cloud subscriptions revenue is recognized over the term of the agreement, typically five years or more. Cloud subscription revenue growth is influenced by the strength of general economic and business conditions and the competitive position of our software products. These revenues generally have long sales cycles. Approximately 22%56% of the total value of new non-cancelable cloud subscriptions (excluding renewals) signed during 20242025 was with new customers and 78%44% was with existing customers. We define new customers as entities from which we either have never earned revenue or have not recognized revenue in the last five years.
Hardware Revenue: Our hardware revenue, which we recognize net of related costs, totaled $26.3$25.4 million in 20242025 representing 3%2% of total revenue. As a convenience for our cloud and perpetual license customers, we resell a variety of hardware products developed and manufactured by third parties. These products include computer hardware, radio frequency terminal networks, RFID chip readers, bar code printers and scanners, and other peripherals. We resell all third-party hardware products and related maintenance pursuant to agreements with manufacturers or through distributor-authorized reseller agreements pursuant to which we are entitled to purchase hardware products and services at discount prices. We generally purchase hardware from our vendors only after receiving an order from a customer. As a result, we do not maintain hardware inventory.
We continue to invest significantly in research and development (R&D) to provide leading Unified Omnichannel Commerce and Digital Supply Chain solutions to enable global retailers, manufacturers, wholesalers, distributors and logistics providers to successfully manage accelerating and fluctuating demands as well as the increasing complexity and volatility of their local and global supply chains, retail store operations and POS. Our R&D expenses for the years ended December 31, 2024, 20232025 and 20222024 were $145.1 million and $137.7 million, $126.8 million, and $111.9 million, respectively.
For 2024,2025, we generated cash flow from operating activities of $295.0$389.5 million and have generated a cumulative total of $720.9$930.7 million for the three years ended December 31, 2024.2025. Our cash at December 31, 20242025 totaled $266.2$328.7 million, with no debt. We currently have no credit facilities. During the past three years, our primary uses of cash have been for funding investments in R&D in our Unified Omnichannel Commerce and Digital Supply Chain solutions to drive revenue and earnings growth. In addition,addition for 2025, we repurchased $241.6$274.5 million of Manhattan Associates’ outstanding common stock under the share repurchase program approved by our Board of Directors. In January 2025,2026, our Board of Directors raisedreplenished the Company’s share repurchase authority to an aggregate of $100.0 million of our common stock.
DilutedConsolidated earnings per sharerevenue: $3.51$1,081.4 million for 20242025 compared to $2.82$1,042.4 million for 20232024;
Consolidated revenue: $1,042.4 million for 2024 compared to $928.7 million for 2023;
Cloud subscription revenue: $337.2 million for 2024 compared to $254.6 million for 2023;
LicenseCloud subscription revenue: $15.1$408.1 million for 2025 compared to $337.2 million for 2024 compared to $18.2 million for 2023;
Operating income: $261.6 million for 2024 compared to $209.9 million for 2023;
OperatingLicense marginsrevenue: 25.1%$14.8 million for 20242025 compared to operating$15.1 margins of 22.6%million for 20232024;
CashServices flow from operationsrevenue: $295.0$503.0 million for 2025 compared to $525.5 million for 2024 compared to $246.2 million for 2023;
CashDiluted paidearnings per share: $3.60 for income taxes: $83.4 million for 20242025 compared to $67.4 million$3.51 for 20232024;
Operating income: $279.8 million for 2025 compared to $261.6 million for 2024;
Operating margins: 25.9% for 2025 compared to operating margins of 25.1% for 2024;
Cash flow from operations: $389.5 million for 2025 compared to $295.0 million for 2024;
Cash paid for income taxes: $47.3 million for 2025 compared to $83.4 million for 2024;
Cash and investments: $328.7 million at December 31, 2025 compared to $266.2 million at December 31, 2024 compared to $270.7 million at December 31, 2023; and Share repurchases: In 2024,2025, we repurchased 986,5551,451,019 shares of Manhattan Associates’ outstanding common stock for $241.6$274.5 million under the share repurchase program approved by our Board of Directors. In January 2025,2026, our Board of Directors raisedreplenished the Company’s share repurchase authority to an aggregate of $100.0 million of our common stock.
In the following table, we present a selection of certain Statement of Income data for 2024, 20232025 and 2022.2024.
We have three reportable segments: the Americas, EMEA, and APAC. Revenue information is based on the location of sale. The revenues represented below are from external customers only. The geography-based expenses include costs of personnel, direct sales, marketing expenses, and general and administrative costs to support the business. There are certain corporate expenses included in the Americas segment that we do not charge to the other segments including research and development, stock compensation, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas costs are all research and development costs, including the costs associated with our operations in India. During 2025 and 2024, 2023, or 2022, we derived the majority of our revenues from sales to customers within our Americas segment. In the following table, we present a summary of revenue and operating profit by segment:
The consolidated results of our operations for the years ended December 31, 2024, 20232025 and 20222024 are discussed below.
Cloud subscriptions revenue increased $82.6$70.9 million to $337.2$408.1 million in 20242025 compared to 2023.2024. Our customers have demonstrated a clear preference for cloud-based solutions, including existing customers that are migrating from on-premise to cloud-based offerings. Cloud subscriptions revenue increased $58.7$48.7 million, $20.6$17.3 million and $3.3$4.9 million for the Americas, EMEA, and APAC segments, respectively. Cloud subscriptions revenue recognized from first time cloud customers (defined as customers with no prior cloud subscriptions) during the year in which their initial cloud subscription began was approximately 2%8% and 3%2% of total cloud revenue in 20242025 and 2023,2024, respectively. Our contracts with first time cloud customers contract for multi-year subscriptions which typically increase in scope and price over the term, and thus revenue recognized during the year when the contract is signed tends to be small relative to the total contract value. Revenue recognized in the initial year excludes revenue from additional solutions sold to the customer in future years and could be impacted by the timing of the start date of the subscription during the year.
Cloud subscriptions revenue increased $78.2 million to $254.6 million in 2023 compared to 2022. Cloud subscriptions revenue for the Americas, EMEA and APAC segments increased $56.7 million, $19.2 million and $2.3 million, respectively. Revenue recognized from first time cloud customers (defined as customers with no prior cloud subscriptions) during the year in which their initial cloud subscription began was 3% and 7% of total cloud revenue in 2023 and 2022, respectively.
Software license revenue decreased $3.1 million to $15.1 million in 2024 compared to 2023 on strong market preference for our cloud-native solutions. License revenue for the Americas segment increased $0.2 million, while license revenue for the EMEA and APAC segments decreased $1.5 million and $1.8 million, respectively, in 2024 over 2023. The majority of our software license revenue relates to our warehouse management product group (approximately 85%) for the year ended December 31, 2024.
Software license revenue decreased $6.6$0.3 million to $18.2$14.8 million in 20232025 compared to 2022.2024 on strong market preference for our cloud-native solutions. License revenue for the Americas and EMEAAPAC segments decreased $4.3$6.6 million and $3.5$0.7 million, respectively, while license revenue fromfor the APACEMEA segment increased $1.1$7.0 million in 20232025 over 2022.2024. The majority of our software license revenue relates to our warehouse management product group (approximately 85%80%) for the year ended December 31, 2023.2025.
Maintenance revenue decreased by $5.6$8.3 million in 20242025 compared to 2023.2024. The Americas and EMEAAPAC segments decreased $4.2$8.3 million and $1.4$0.6 million, respectively, compared to 2023,2024, while the APACEMEA segment remainedincreased relatively$0.6 flat.million. Maintenance relates to our perpetual software licenses. The decrease in maintenance revenue for the Americas segment is primarily driven by customer demand for cloud-based solutions over perpetual software licenses.
Maintenance revenue increased $1.7 million in 2023 compared to 2022. Maintenance revenue for the Americas segment increased $1.7 million, while EMEA and APAC segments remained relatively flat in 2023 compared to 2022.
Services revenue increaseddecreased $37.6$22.5 million in 20242025 compared to 2023.2024. Service revenue for the Americas,Americas segment decreased $24.8 million, while services revenue for the EMEA and APAC segments increased 26.6$2.2 million, $6.1 million,million and $4.9$0.1 million, respectively, compared to 2023.2024. ServicesThe decrease in services revenue wasfor the Americas segment is primarily driven by adoptioncustomer andbudgetary implementationconstraints ofthat shifted services work to future periods which negatively impacted our professional services revenue related to cloud solutions.subscriptions. The percentage of professional services revenue that relates to cloud subscriptions in 20242025 and 20232024 was approximately 75% and 70%,75%, respectively. Our customers experienced budgetary constraints during the second half of 2024 which negatively impacted our professional services revenue related to cloud subscriptions. The remainder of our professional services revenue relates to implementations, ongoing support, and upgrades of licensed software. Professional services revenue recognized from first time cloud customers (defined as customers with no prior cloud subscriptions) during the year in which their initial cloud subscription began was approximately 7% and 8% of total services revenue in 20242025 and 2023,2024, respectively. As with our cloud subscriptions, customers often continue to purchase our professional services beyond their initial implementation to roll out additional locations, implement additional features and functionality, and implement additional products, as well as for general support. Professional services revenue recognized from first time cloud customers excludes those services we provided after the year in which the initial cloud subscription began. Further, the professional services revenue attributable to first time cloud customers could be affected by the timing of the start date of the subscription during the year.
Services revenue increased $93.8 million in 2023 compared to 2022. The Americas, EMEA, and APAC segments increased $67.0 million, $21.7 million and $5.1 million, respectively, compared to 2022. Services revenue was driven by adoption and implementation of our cloud solutions. The percentage of professional services revenue that relates to cloud subscriptions in 2023 and 2022 was approximately 70% and 55%, respectively. Professional services revenue recognized from first time cloud customers (defined as customers with no prior cloud subscriptions) during the year in which their initial cloud subscription began was approximately 8% and 12% of total services revenue in 2023 and 2022, respectively.
Hardware revenue, net increased $2.1 million in 2024 compared to 2023. Hardware revenue, net decreased $5.4$0.8 million in 20232025 compared to 2022.2024. The majority of hardware sales are derived from our Americas segment. Sales of hardware are largely dependent upon customer-specific desires, which fluctuate.
Cost of cloud subscriptions, maintenance and services consists primarily of salaries and other personnel-related expenses of employees dedicated to cloud subscriptions; maintenance services related to perpetual software licenses; and professional and technical services as well as hosting fees. The $40.4$1.7 million increase in 20242025 compared to 20232024 was principally due to a $40.3$10.6 million increase in computer infrastructure cost, partially offset by a $5.5 million decrease in compensation and other personnel-related expenses, a $5.0 million increase in computer infrastructure cost, and a $1.2 million increase in facilities expense, partially offset by a $6.3$2.5 million decrease in performance-based compensation expense, and a $0.8 million decrease in travel expense.
The $73.2 million increase in 2023 compared to 2022 was principally due to a $52.0 million increase in compensation and other personnel-related expenses, a $6.3 million increase in travel expense, a $8.3 million increase in performance-based compensation expense, a $4.4 million increase in computer infrastructure cost and a $1.1 million increase in facilities expense.
Cost of software license consists of the costs associated with software reproduction; media, packaging and delivery; documentation, and other related costs; and royalties on third-party software sold with or as part of our products. In 2024,2025, cost of license remaineddecreased relatively$0.4 flat,million, compared to 2023. In 2023, cost of software license decreased by $0.7 million compared to 2022.2024.
Our principal research and development (R&D) activities during 2024, 20232025 and 20222024 focused on the expansion and integration of new products and releases, including cloud solutions, while expanding the product footprint of our Unified Omnichannel Commerce and Digital Supply Chain solutions, including Inventory Optimization and point-of-sale.
For 2024, 20232025 and 2022,2024, we did not capitalize any R&D costs as the period between determining technological feasibility was established or that it is probable the software product would be used to perform the function intended were insignificant.
R&D expenses primarily consist of salaries and other personnel-related costs for personnel involved in our research and development activities. Research and development expenses in 20242025 increased by $10.9$7.4 million compared to 2023.2024. This increase is principally due to a $13.3$7.4 million increase in compensation and other personnel-related expenses, partially offset by a $2.2 million decrease in performance-based compensation expense.expenses.
Research and development expenses in 2023 increased by $14.9 million compared to 2022. This increase is principally due to a $10.9 million increase in compensation and other personnel-related expenses, a $3.1 million increase in performance-based compensation expense, and a $0.6 million increase in computer infrastructure costs.
Sales and marketing expenses include salaries, commissions, travel and other personnel-related costs and the costs of our marketing and alliance programs and related activities. Sales and marketing expenses increased by $1.5$5.2 million in 20242025 compared to 2023,2024, primarily due to a $2.7$2.6 million increase in compensation and other personnel-related expense, and a $0.6$1.1 million increase in marketing and campaign expenses, partially offset by a $2.1$0.9 million decreaseincrease in performance-based compensation expense, and a $0.3 million increase in travel expense.
Sales and marketing expenses increased $10.0 million in 2023 compared to 2022, primarily due to a $4.3 million increase in compensation and other personnel-related expenses, a $3.7 million increase in marketing and campaign programs, a $1.0 million increase in performance-based compensation expense, and a $0.8 million increase in travel expense.
General and administrative expenses consist primarily of salaries and other personnel-related costs of executive, financial, human resources, information technology, and administrative personnel, as well as facilities, legal, insurance, accounting, and other administrative expenses. General and administrative expenses increased $8.6$4.0 million in 2024 primarily2025 due to $7.0a $3.0 million signing bonus, $0.8 million in recruiting fees, and $6.5 million of stock compensation expense related to the hiring of our new chief executive officer; a $5.4 million increase in compensation and other personnel-related expenses, a $1.5 million increase in professional expense, and a $0.8 million increase in office expense, partially offset by a $13.8 million decrease in expense related to an unusual health insurance claim andas athe $4.3final millionpayment increasewas inmuch compensationlower andthan otherthe personnel-relatedcost expenses,estimates partiallypreviously offsetprovided by aour $0.9health millioninsurance decrease in performance-based compensation expense, a $1.2 million decrease in other taxes, and a $0.6 million decrease in computer infrastructure costs.provider.
General and administrative expenses increased $8.1 million in 2023 primarily due to a $5.3 million increase in compensation and other personnel-related expenses, a $1.3 million increase in performance-based compensation expense, a $0.6 million increase in professional expenses, and a $0.6 million increase in computer infrastructure costs.
Depreciation and amortization of intangibles and software expense amounted to $6.3 million, $5.8 million, and $6.7 million in 2024, 20232025 and 2022,2024, respectively. Amortization of intangibles was immaterial in 2024, 20232025 and 2022.2024. We have recorded acquisition-related intangible assets as part of the purchase accounting associated with various acquisitions.
In January 2025, the Company eliminated approximately 100 positions to align our services capacity with customer demand which has been impacted by short-term macro-economic uncertainty. The Company recorded restructuring expense of approximately $2.9 million for the year ended December 31, 2025 to the Americas segment. The expense primarily consists of employee severance and outplacement services. The expense is classified in “Restructuring expense” in the Company’s Consolidated Statements of Income for the year ended December 31, 2025.
Operating income in 20242025 increased $51.7$18.2 million to $261.6$279.8 million, compared to $209.9$261.6 million for 2023.2024. Operating margins were 25.9% for 2025 versus 25.1% for 2024 versus 22.6% for 2023.2024. Operating income and margin increased primarily due to increased cloud subscriptions and services revenues.subscriptions. In 2024,2025, operating income increased by $32.2$0.2 million, $15.8$15.6 million, and $3.7$2.4 million in the Americas, EMEA and APAC segment, respectively.
Operating income in 2023 increased $57.2 million to $209.9 million, compared to $152.7 million for 2022. Operating margins were 22.6% for 2023 versus 19.9% for 2022. Operating income increased primarily due to increased cloud subscriptions and services revenues. In 2023, operating income increased by $35.9 million, $16.7 million, and $4.6 million in the Americas, EMEA and APAC segments.
Other (loss) income, net primarily includes interest income, foreign currency gains and losses, and other non-operating expenses. Interest income was $6.0 million, $5.3$4.4 million and $0.6$6.0 million for 2024, 20232025 and 2022,2024, respectively. The weighted-average interest rate earned on cash and investments was approximately 2%1% in 2024,2025 and approximately 2% in 2023, and immaterial in 2022.2024. We recorded net foreign currency gains of $1.7 million in 2025 and losses of $1.0 million in 2024, losses of $1.5 million in 2023, and gains of $4.7 million in 2022.2024. The foreign currency gains and losses mainly resulted from gains or losses on intercompany transactions denominated in foreign currencies with subsidiaries due to the fluctuation of the U.S. dollar relative to other foreign currencies, primarily the British Pound Sterling, Euro, and Indian Rupee.
Our effective income tax rates were 18.2%, 17.4%,23.1% and 18.4%18.2% in 2024, 20232025 and 2022,2024, respectively. Our effective income tax rate takes into account the source of taxable income, domestically by state and internationally by country, and available income tax credits.
The effective tax rate in 2024 increased from 2023 mainly due to a decrease of benefit from a 2023 favorable tax law change allowing creditability of foreign tax, partially offset by an increase of net excess tax benefits on restricted stock vesting in 2024.
The effective income tax rate in 20232025 increased from 20222024 mainly due to a decrease of expense from a favorable tax law change allowing creditability of foreign tax offset by a decrease of net excess tax benefits on restricted stock vesting in 2025, an increase in executive compensation limitations, and adjustmentsan forincrease in tax contingencies.contingency reserves.
The income tax provision for 2024, 20232025 and 20222024 included excess tax benefits of $13.1$6.1 million, $6.8 million,million and $7.6$13.1 million on vesting of restricted stock.
During 2024, 20232025 and 2022,2024, we funded our business through cash generated from operations. Our cash and cash equivalents as of December 31, 20242025 included $194.8$226.6 million held in the U.S. and $71.4$102.1 million held by our foreign subsidiaries. We believe that our cash balances in the U.S. are sufficient to fund our U.S. operations. In the future, if we elect to repatriate the unremitted earnings of our foreign subsidiaries, we would no longer be subject to additional U.S. income taxes on such earnings due to the enactment of the Tax Cuts and Jobs Act in December 2017, but we could be subject to additional local withholding taxes.
Cash flow from operating activities totaled $295.0$389.5 million, $246.2 million,million and $179.6$295.0 million in 2024, 20232025 and 2022,2024, respectively. Typical factors affecting our cash provided by operating activities include our level of revenue and earnings for the period, the timing and amount of employee bonus and income tax payments, and the timing of cash collections from our customers which is our primary source of operating cash flow. Cash flow from operating activities for 20242025 increased $48.8$94.5 million compared to 20232024 ondue higherto earnings.the Cashtiming flowof cash collections from operatingour activitiescustomers and decrease in cash taxes owed from the acceleration of the deduction for 2023domestic increasedresearch $66.6and milliondevelopment compared to 2022 on higher earnings.expenditures. Days sales outstanding was 74, 70,73 and 7774 for quarter ending December 31, 2024, 20232025 and 2022,2024, respectively, reflecting solid cash collections.
Investing activities used cash of $8.7$15.5 million, $4.7 million,million and $6.6$8.7 million in 2024, 20232025 and 2022,2024, respectively. Our investing activities for 2024, 20232025 and 20222024 consisted of capital spending to support company growth and short-term investing. For 2024, 2023 and 2022, capital expenditure was $8.7 million, $4.7 million, and $6.6 million, respectively.
Financing activities used cash of $286.4$315.2 million, $196.0 million,million and $204.5$286.4 million in 2024, 20232025 and 2022,2024, respectively. The principal use of cash for financing activities in 2024, 20232025 and 20222024 was to purchase our common stock, including shares withheld for taxes due upon vesting of restricted stock and excise tax payments. Repurchases of our common stock for 2024, 20232025 and 20222024 totaled $286.4$315.2 million, $196.0 million,million and $204.5$286.4 million, respectively, including shares withheld for taxes of $43.6$39.0 million, $30.0 million,million and $29.1$43.6 million, respectively. Excise tax payments intotaled 2024$1.6 totaledmillion and $1.1 million.million in 2025 and 2024, respectively. In January 2025,2026, our Board of Directors raisedreplenished the Company’s share repurchase authority to an aggregate of $100.0 million of our common stock.
We lease our facilities and some of our equipment under noncancelable operating lease arrangements that expire at various dates ranging from 2025 to 2036. Rent expense for these leases aggregated $9.3$10.1 million, $8.1 million,million and $7.7$9.3 million during 2024, 20232025 and 2022,2024, respectively.
Our customer contracts generally contain infringement indemnity provisions. Under those provisions, we generally agree, subject to certain exceptions, to indemnify, defend, and hold harmless the customer in connection with third party claims against the customer alleging that the customer’s use of our software services and products infringe third party intellectual property rights. Conditions to our obligations generally include that we are provided the right to control the defense of the claims and, in general, to control settlement negotiations. Those provisions generally provide also that, if the customer is prevented from using our services or products because of a third party infringement claim, our sole obligation (in addition to the indemnification, defense, and hold harmless obligation referred to above) is to, at our expense, (i) procure for the customer the right to continue to use the services or products, (ii) replace or modify the services or products so that the customer’s use does not infringe, or, if neither of thosethese options is reasonably feasible, (iii) terminate that particular services or products and provide, as applicable, a refund of services fees paid for services not received or a refund of the unamortized portion of the license fees paid for the products (based on a five year amortization period). Our customer contracts sometimes also require us to indemnify, defend, and hold harmless the customer in connection with death, personal injury or property damage claims made by third parties with respect to actions of our personnel or contractors. The indemnity obligations contained in our customer contracts generally have no specified expiration date and no specified monetary limitation on liability, but they do not cover indirect or consequential damages, such as our customers’ lost revenues or profits. We have not previously incurred costs to settle claims or pay awards under these indemnification obligations. We account for these indemnity obligations in accordance with the Financial Accounting Standards Board's guidance on accounting for contingencies and record a liability for these obligations when a loss is probable and reasonably estimable. We have not recorded any liabilities for these indemnification obligations as of December 31, 2024.2025.
What changed in the latest 10-Q
Risk Factors
In addition to the information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A, “Risk Factors,” of our annual report on Form 10-K for the year ended December 31, 2025, as supplemented by the risk factors disclosed in 1A, “Risk Factors,” of our quarterly report on Form 10-Q for the quarter ended March 31, 2026.
Largest changes
“The conflict involving the United States, Israel, and Iran and related geopolitical instability may adversely affect our business. A military conflict involving the United States, Israel, and Iran commenced in February 2026, which has led to disruptions in shipping through the Strait of Hormuz. …”see in full comparison
In addition to thesee in full comparisoninformation set forth below and the otherinformation set forth in this report, you should carefully consider the risk factors disclosed in Item 1A, “Risk Factors,” of our annual report on Form 10-K for the year ended December 31,2025.2025, as supplemented by the risk factors disclosed in 1A, “Risk Factors,” of our quarterly report on Form 10-Q for the quarter ended March 31, 2026.
Full comparison: every changed paragraph (2)
In addition to the information set forth below and the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A, “Risk Factors,” of our annual report on Form 10-K for the year ended December 31, 2025.2025, as supplemented by the risk factors disclosed in 1A, “Risk Factors,” of our quarterly report on Form 10-Q for the quarter ended March 31, 2026.
The conflict involving the United States, Israel, and Iran and related geopolitical instability may adversely affect our business. A military conflict involving the United States, Israel, and Iran commenced in February 2026, which has led to disruptions in shipping through the Strait of Hormuz. The conflict and any further escalation, including additional military actions, retaliatory measures, sanctions, disruptions to trade or transportation routes, cyberattacks, or other governmental or market responses, has and could continue to lead to significant disruption of global energy supplies and increases in global energy prices, heighten inflationary pressures, adversely affect global supply chains, energy markets, commodity prices, currency exchange rates, financial markets and overall macroeconomic conditions. In addition, the conflict may adversely impact current or potential customer spending patterns in the markets in which we operate.
Management's Discussion & Analysis (MD&A)
New heading “Condensed Consolidated Financial Summary – First Six Months of 2026”
New heading “Cost of Revenue”
New heading “Operating Expenses”
New heading “Operating Income”
New heading “Other Income and Income Taxes”
Largest changes
“Condensed Consolidated Financial Summary – First Six Months of 2026”see in full comparison
“Restructuring Expense. Restructuring expense increased by $5.4 million in the six months ended June 30, 2026 compared to the same period in the prior year. On June 1, 2026, the Company reduced its global headcount by approximately 6%, leveraging increased operational efficiencies and allowing the Company to focus investments on key strategic priorities. …”see in full comparison
“Restructuring Expense. Restructuring expenses consist primarily of employee severance and outplacement services. On June 1, 2026, the Company reduced its global headcount by approximately 6%, leveraging increased operational efficiencies and allowing the Company to focus investments on key strategic priorities. The Company recorded a restructuring expense of approximately $8.3 million pretax ($6.2 million after-tax or $0.11 per fully diluted share) in the second quarter of 2026. The expense is classified in “Restructuring expense” in the Company’s Consolidated Statements of Income.”see in full comparison
“Operating income for the six months ended June 30, 2026 was $131.2 million compared to $137.0 million for the same period in the prior year. Operating margin was 22.6% the first six months of 2026 versus 25.6% for the same period in the prior year. Operating income and margin decreased primarily due to the restructuring expense as well as an increase in sales and marketing expenses.”see in full comparison
Full comparison: every changed paragraph (83)
The following discussion should be read in conjunction with the condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 and 2025, including the notes to those statements, included elsewhere in this quarterly report. We also recommend the following discussion be read in conjunction with management’s discussion and analysis and consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2025. Statements in the following discussion that are not statements of historical fact are “forward-looking statements.” Actual results may differ materially from the results predicted in such forward-looking statements, for a variety of factors. See “Forward-Looking Statements” below.
In the three and six months ended MarchJune 31,30, 2026, we generated $282.2$297.8 million and $580.0 million in total revenue. The revenue mix for the three and six months ended MarchJune 31,30, 2026 was: cloud subscriptions 41%42%; software license 1%; maintenance 11%10%; services 45%; and hardware 2%.
We have three geographic reportable segments: North, Latin, and South America (the “Americas”), Europe, the Middle East, and Africa (EMEA), and Asia-Pacific (APAC). Geographic revenue is based on the location of the sale. Our international revenue was approximately $96.8$102.1 million and $198.9 million for the three and six months ended MarchJune 31,30, 2026, which represents approximately 34% of our total revenue for both the three and six months ended MarchJune 31,30, 2026. International revenue includes all revenue derived from sales to customers outside the United States. At MarchJune 31,30, 2026, we employed approximately 4,3904,100 employees worldwide. We have offices in Australia, Chile, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Spain, the United Kingdom, and the United States, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia.
While we remain cautious about the global economy, including with respect to macroeconomic uncertainty and global instability resulting from the military conflict involving the United States, Israel, and Iran and the ongoing war between Russia and Ukraine, our results for the first threesix months of 2026 exceeded our expectations due to solid demand for our cloud solutions. Our solutions are mission critical, supporting complex global supply chains. We believe that favorable secular tailwinds, such as the digital transformation of businesses in manufacturing, wholesale, and retail, coupled with our commitment to investing in organic innovation to deliver leading cloud supply chain, inventory, and omnichannel commerce solutions is in synergistic alignment with current market demand. We believe this alignment is contributing to our strong financial results, higher demand, and strong win rates for our solutions for the period. We remain committed to investing in our business to drive customer success and expand our total addressable market, which we believe will position us well to achieve long-term sustainable growth and earnings.
Under our Manhattan Active® Solutions cloud subscription offering, customers pay a periodic fee for the right to use our software within a cloud environment that we provide and manage over a specified period of time. AdoptionDemand offor our Manhattan Active® cloud solutions continues to increasegrow nicely, with cloud revenue up 24%26% over the same quarter in the prior year. Cloud revenue represents about 98% of our total software revenue.
Global macro-economic trends, technology spending, and supply chain management market growth are important barometers for our business. In the three and six months ended MarchJune 31,30, 2026, approximately 66% of our total revenue was generated in the United States, 19% in EMEA, and the remaining balance in APAC, Canada, and Latin America. In addition, Gartner Inc. (“Gartner”), an information technology research and advisory company, estimates that approximately 80% of every supply chain software solutions dollar invested is spent in North America and Europe; consequently, the health of the U.S. and the European economies have a meaningful impact on our financial results.
Our cloud revenue growth provides insight into our ability to maintain and grow our cloud customer base. Total cloud revenue increased to $117.1$243.8 million in the threesix months ended MarchJune 31,30, 2026 from $94.3$194.7 million for the same period in the prior year, representing a 24%25% year-over-year increase. Cloud revenue growth is being driven by strong demand for our cloud offerings.
Transaction price allocated to RPO represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that we expect to invoice and recognize as revenue in future periods. Over 98%99% of our RPO represent cloud native subscriptions with a non-cancelable term greater than one year. Maintenance contracts typically are for one year and are not included in RPO. RPO provides insight into our contracted backlog of future business. As of MarchJune 31,30, 2026, our RPO was approximately $2.3$2.5 billion, an increase of 24%23% over MarchJune 31,30, 2025 on strong demand.
Revenue
Cloud Subscriptions and Software License Revenue. In the three months ended MarchJune 31,30, 2026, cloud subscriptions revenue totaled $117.1$126.7 million or 41%42% of total revenues. The Americas, EMEA, and APAC segments recognized $89.5$97.6 million, $23.0$24.3 million, and $4.6$4.8 million in cloud subscriptions revenue, respectively, in the three months ended MarchJune 31,30, 2026. In the six months ended June 30, 2026, cloud subscriptions revenue totaled $243.8 million or 42% of total revenues. The Americas, EMEA, and APAC segments recognized $187.1 million, $47.3 million, and $9.4 million in cloud subscriptions revenue, respectively, in the six months ended June 30, 2026. Cloud subscriptions revenue is recognized over the term of the agreement, typically five years or more. Cloud subscription revenue growth is influenced by the strength of general economic and business conditions and the competitive position of our software products. These revenues generally have long sales cycles. During the three and six months ended MarchJune 31,30, 2026, approximately 58%25% and 40%, respectively, of the total value of new non-cancelable cloud subscriptions (excluding renewals) signed was with new customers, and 42%75% and 60%, respectively, was with existing customers. We define new customers as entities from which we either have never earned revenue or have not recognized revenue in the last five years.
In the three months ended MarchJune 31,30, 2026, license revenue totaled $2.2$2.0 million, or 1% of total revenue. The Americas, EMEA, and APAC segments totaled $1.8$1.2 million, $0.2$0.6 million, and $0.2 million in license revenue, respectively, in the three months ended MarchJune 31,30, 2026. In the six months ended June 30, 2026, license revenue totaled $4.2 million, or 1% of total revenue. The Americas, EMEA, and APAC segments totaled $3.0 million, $0.8 million, and $0.4 million in license revenue, respectively, in the six months ended June 30, 2026.
Our Unified Omnichannel Commerce and Digital Supply Chain solutions are focused on core omnichannel operation (e-commerce, retail store operations and POS), supply chain commerce operations (Warehouse Management, Transportation ManagementManagement, and Labor Management), and demand forecasting and replenishment, which are intensely competitive markets characterized by rapid technological change. We are a market leader in the supply chain management and omnichannel software solutions market as defined by industry analysts such as ARC Advisory Group and Gartner. Our goal is to extend our position as a leading global supply chain solutions provider by growing our cloud subscriptions revenues faster than our competitors through investment in innovation.
Maintenance Revenue. Our maintenance revenue for the three months ended MarchJune 31,30, 2026 totaled $30.6$30.5 million, or 11%10% of total revenue. The Americas, EMEA and APAC segments recognized $23.8 million, $4.6$4.7 million, and $2.2$2.0 million, respectively, in maintenance revenue in the three months ended MarchJune 31,30, 2026. In the six months ended June 30, 2026, maintenance revenue totaled $61.1 million, or 10% of total revenue. The Americas, EMEA, and APAC segments totaled $47.6 million, $9.3 million, and $4.2 million in maintenance revenue, respectively, in the six months ended June 30, 2026. For maintenance, we offer a comprehensive 24 hours per day, 365 days per year program that provides our customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives.
Services Revenue. In the three months ended MarchJune 31,30, 2026, our services revenue totaled $125.7$133.1 million, or 45% of total revenue. The Americas, EMEA, and APAC segments recognized $93.3$99.1 million, $25.4$25.7 million, and $7.0$8.3 million, respectively, in services revenue in the three months ended MarchJune 31,30, 2026. In the six months ended June 30, 2026, services revenue totaled $258.8 million, or 45% of total revenue. The Americas, EMEA, and APAC segments totaled $192.4 million, $51.1 million, and $15.3 million in services revenue, respectively, in the six months ended June 30, 2026.
Hardware Revenue. Our hardware revenue, which we recognize net of related costs, totaled $6.5$5.6 million in the three months ended MarchJune 31,30, 2026 representing 2% of total revenue. For the six months ended June 30, 2026, hardware revenue totaled $12.1 million, or 2% of total revenue. As a convenience for our cloud and perpetual license customers, we resell a variety of hardware products developed and manufactured by third parties. These products include computer hardware, radio frequency terminal networks, RFID chip readers, bar code printers and scanners, and other peripherals. We resell all third-party hardware products and related maintenance pursuant to agreements with manufacturers or through distributor-authorized reseller agreements pursuant to which we are entitled to purchase hardware products and services at discount prices. We purchase hardware from our vendors only after receiving an order from a customer. As a result, we do not maintain hardware inventory.
We continue to invest significantly in research and development (R&D) to provide leading Unified Omnichannel Commerce and Digital Supply Chain solutions to enable global retailers, manufacturers, wholesalers, distributors, and logistics providers to successfully manage accelerating and fluctuating demands as well as the increasing complexity and volatility of their local and global supply chains, retail store operations, and POS. Our R&D expenses were $37.3$34.8 million and $72.1 million for the three and six months ended MarchJune 31,30, 2026.2026, respectively.
For the three and six months ended MarchJune 31,30, 2026, we generated cash flow from operating activities of $84.0$90.7 million and $174.7 million. Our cash and cash equivalents at MarchJune 31,30, 2026 totaled $226.1$186.1 million, with no debt. We currently have no credit facilities. Our primary uses of cash have been for funding investments in R&D as well as sales and marketing in our Unified Omnichannel Commerce and Digital Supply Chain solutions to drive revenue and earnings growth. In addition, during the threesix months ended MarchJune 31,30, 2026, we repurchased approximately $150.0$275.0 million of Manhattan Associates’ outstanding common stock under the share repurchase program approved by our Board of Directors. In March 2026, our Board of Directors approved an increase to the Company’s share repurchase authority from $100 million to $500 million. As of the end of the quarter, approximately $350.0$225.0 million remained under the existing March 2026 repurchase authority.
In the following table, we present a summary of our consolidated results for the three and six months ended MarchJune 31,30, 2026 and 2025.
We have three geographic reportable segments: the Americas, EMEA, and APAC. Geographic revenue information is based on the location of sale. The revenues represented below are from external customers only. The geography-based expenses include costs of personnel, direct sales, marketing expenses, and general and administrative costs to support the business. There are certain corporate expenses included in the Americas segment that we do not charge to the other segments, including R&D, stock compensation, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas costs are all R&D costs, including the costs associated with our operations in India. During the three and six months ended MarchJune 31,30, 2026 and 2025, we derived the majority of our revenues from sales to customers within our Americas segment. In the following table, we present a summary of revenue and operating income by segment:
Condensed Consolidated Financial Summary - FirstSecond Quarter 2026
Consolidated total revenue: $282.2$297.8 million for the firstsecond quarter of 2026, compared to $262.8$272.4 million for the firstsecond quarter of 2025;
Cloud subscription revenue: $117.1$126.7 million for the firstsecond quarter of 2026, compared to $94.3$100.4 million for the firstsecond quarter of 2025;
Software license revenue: $2.2 million for the first quarter of 2026, compared to $9.3 million for the first quarter of 2025;
Services revenue: $125.7$133.0 million for the firstsecond quarter of 2026, compared to $121.1$128.9 million for the firstsecond quarter of 2025;
Operating income: $64.9$66.2 million for the firstsecond quarter of 2026, compared to $63.2$73.8 million for the firstsecond quarter of 2025;
Operating margins: 23.0%22.2% for the firstsecond quarter of 2026, compared to 24.0%27.1% for the firstsecond quarter of 2025;
Diluted earnings per share: $0.82$0.85 for the firstsecond quarter of 2026 compared to $0.85$0.93 for the firstsecond quarter of 2025;
Cash flow from operations: $84.0$90.7 million in the firstsecond quarter of 2026, compared to $75.3$74.0 million in the firstsecond quarter of 2025;
Days sales outstanding: 67 days at June 30, 2026, compared to 72 days at March 31, 2026, compared to 73 days at December 31, 20252026;
Cash: $186.1 million at June 30, 2026, compared to $226.1 million at March 31, 2026, compared to $328.7 million at December 31, 20252026; and Share repurchases: In the three months ended MarchJune 31,30, 2026, we reduced our shares of common stock outstanding through the repurchase of approximately 1.00.9 million shares of our common stock, under the share repurchase program authorized by our Board of Directors for a total investment of $150.0$125.0 million. In March 2026, our Board of Directors approved an increase to the Company’s share repurchase authority from $100 million to $500 million. As of the end of the quarter, approximately $350.0$225.0 million remained under the existing March 2026 repurchase authority.
Below we discuss our consolidated results of operations for the firstsecond quarters of 2026 and 2025.
Revenue
Cloud Subscriptions Revenue. In the firstsecond quarter of 2026, cloud subscriptions revenue increased $22.8$26.3 million compared to the same quarter in the prior year. Our customers have demonstrated a clear preference for cloud-based solutions, including existing customers that are migrating from on-premise to cloud-based offerings. Cloud subscriptions revenue for the Americas, EMEA and APAC segments increased $15.4$20.2 million, $5.8$4.7 million and $1.6$1.4 million in the firstsecond quarter of 2026, respectively.
Software License Revenue. Software license revenue decreasedincreased $7.1$0.4 million in the firstsecond quarter of 2026 compared to the same quarter in the prior year predominately driven by one large contract with an existing customer in the prior year period.year. The perpetual license sales percentage mix across our product suite in the firstsecond quarter ended MarchJune 31,30, 2026 was over 95%70% warehouse management solutions.
Maintenance Revenue. Maintenance revenue decreased $1.6$4.5 million in the firstsecond quarter of 2026 compared to the same quarter in the prior year. Maintenance revenue decreased by $2.1 million for the Americas segment, partially offset by a $0.4 million increase for the EMEA segment and a $0.1 million increase for the APAC segment. Maintenance relates to our perpetual software licenses. The decrease in maintenance revenue for the Americas segment is primarily driven by customer demand for cloud-based solutions over perpetual software licenses. Maintenance revenue for the Americas, EMEA, and APAC segments decreased by $4.0 million, $0.4 million, and $0.1 million, respectively.
Services Revenue. Services revenue increased $4.6$4.1 million in the firstsecond quarter of 2026 compared to the same quarter in the prior year. Services revenue increased $4.9 million and $0.8 million for the Americas segment increased $5.8 million, partially offset by $0.9 million and $0.3 million decreases for the EMEA and APAC segments, respectively, partially offset by a decrease of $1.5 million for the EMEA segment compared to the same quarter in the prior year. The increase in services revenue for the Americas segment is primarily driven by demand for cloud basedcloud-based solutions. The percentage of professional services revenue that relates to cloud subscriptions in the firstsecond quarter of 2026 and 2025 was approximately 80%81% and 74%,76%, respectively. The remainder of our professional services revenue relates to implementations, ongoing support, and upgrades of licensed software.
Hardware Revenue. Hardware revenue, net decreased $0.6$0.9 million in the firstsecond quarter of 2026 compared to the same quarter in the prior year. The majority of our hardware revenue is derived from our Americas segment. Sales of hardware are largely dependent upon customer-specific desires, which fluctuate.
Cost of Cloud Subscriptions, Maintenance and Services. Costs of cloud subscriptions, maintenance and services consist primarily of salaries and other personnel-related expenses of employees dedicated to cloud subscriptions; maintenance services; and professional and technical services as well as hosting fees. The $11.7$13.0 million increase in the quarter ended MarchJune 31,30, 2026 compared to the same quarter in the prior year was due to a $5.9$4.7 million increase in performance-based compensation expense, a $4.6 million increase in compensation and other personnel-related expenses, a $1.6 million increase in performance-based compensation expense, a $3.6$2.6 million increase in computer infrastructure cost, and a $0.4$1.1 million increase in travel costs.
Cost of Software License. Cost of software license consists of the costs associated with software reproduction; media, packaging and delivery; documentation, and other related costs; and royalties on third-party software sold with or as part of our products. Cost of software license increased $0.4$0.3 million in the firstsecond quarter of 2026 compared withto the same quarter in the prior year.
Research and Development. Our principal R&D activities have focused on the expansion and integration of new products and releases, including cloud-based solutions, while expanding the product footprint of our software solution suites in Supply Chain, Demand Forecasting and Replenishment, Omnichannel, and POS. R&D expenses primarily consist of salaries and other personnel-related costs for personnel involved in our R&D activities. R&D expenses for the quarter ended MarchJune 31,30, 2026 increasedremained byrelatively $2.0 millionflat compared to the same quarter of 2025 principally due to a $1.3 million increase in compensation and other personnel-related expenses and a $0.4 million increase in performance-based compensation expense.2025.
Sales and Marketing. Sales and marketing expenses include salaries, commissions, travel and other personnel-related costs and the costs of our marketing and alliance programs and related activities. Sales and marketing expenses increased $6.7$10.7 million in the quarter ended MarchJune 31,30, 2026 compared to the same quarter in the prior year as we have expanded our sales force and increased our marketing efforts to accelerate our revenue growth. The increase is primarily due to $2.8a $4.4 million increase in marketing and campaign program expenses, a $3.3 million increase in compensation and other personnel-related expenses, a $2.3$2.6 million increase in performance-based compensation expense, and a $1.2$0.3 million increase in marketingtravel and campaign program expenses.expense.
General and Administrative (G&A). G&A expenses consist primarily of salaries and other personnel-related costs of executive, financial, human resources, information technology, and administrative personnel, as well as facilities, legal, insurance, accounting, and other administrative expenses. G&A expenses decreasedincreased $0.5$0.8 million in the current year quarter compared to the same quarter in the prior year primarily due to a $2.8$2.1 million decreaseincrease in stockcompensation and other personnel-related expenses, a $0.8 million increase in in professional fees, a $0.7 million increase in performance-based compensation expense, partially offset by a $3.0 million decrease in signingbenefits bonusexpense expense,for andan aunusual $0.8health millioninsurance decrease in recruiting fees, all of which were related to the hiring of our chief executive officerclaim in the prior year period. These decreases are partially offset by a $3.8 million increase in benefits expense for a prior period insurance recovery on an unusual health insurance claim, a $1.6 million increase in professional fees, and a $0.4 million increase in internal-use software costs.
Depreciation and Amortization. Depreciation and amortization of intangibles and software expense for both the firstsecond quarter of 2026 and 2025 was $1.8$1.6 million and $1.5 million, respectively.million.
Restructuring Expense. Restructuring expenses consist primarily of employee severance and outplacement services. On June 1, 2026, the Company reduced its global headcount by approximately 6%, leveraging increased operational efficiencies and allowing the Company to focus investments on key strategic priorities. The Company recorded a restructuring expense of approximately $8.3 million pretax ($6.2 million after-tax or $0.11 per fully diluted share) in the second quarter of 2026. The expense is classified in “Restructuring expense” in the Company’s Consolidated Statements of Income.
Operating income in the firstsecond quarter of 2026 was $64.9$66.2 million compared to $63.2$73.8 million in the same quarter in the prior year. Operating margin was 23.0%22.2% for the firstsecond quarter of 2026 versus 24.0%27.1% for the same quarter in the prior year. Operating income increased primarily due to increased cloud subscriptions revenue, and operating margin decreased primarily due to increasedthe restructuring expense as well as an increase in sales and marketing expenses.
Other income, net. Other income, net primarily includes interest income, foreign currency gains and losses, and other non-operating expenses. Other income, net increased $3.0$0.3 million in the firstsecond quarter of 2026 compared to the same quarter in the prior year due to a $3.1$0.3 million increase in foreign currency gains. The increase of foreign currency gains is mainly due to gains or losses on intercompany transactions denominated in foreign currencies with subsidiaries due to the fluctuation of the U.S. dollar relative to other foreign currencies, primarily the Indian Rupee. We recorded net foreign currency gains of $3.2$0.2 million in the firstsecond quarter of 2026, and gainslosses of $0.1 million in the same quarter in the prior year.
Income tax provision. Our effective income tax rate was 28.8%25.1% and 18.5%23.8% for the quarters ended MarchJune 31,30, 2026 and 2025, respectively. The increase in the effective tax rate for the three months ended MarchJune 31,30, 2026 is due to a decrease of stock-based compensation benefits.
Condensed Consolidated Financial Summary – First Six Months of 2026
Consolidated revenue: $580.0 million for the six months ended June 30, 2026 compared to $535.2 million for the six months ended June 30, 2025.
Cloud subscription revenue: $243.8 million for the six months ended June 30, 2026 compared to $194.7 million for the six months ended June 30, 2025.
Services revenue: $258.8 million for the six months ended June 30, 2026, compared to $250.0 million for the six months ended June 30, 2025.
Operating income: $131.2 million for the six months ended June 30, 2026, compared to $137.0 million for the six months ended June 30, 2025.
Operating margins: 22.6% for the six months ended June 30, 2026, compared to 25.6% for the six months ended June 30, 2025.
Diluted earnings per share: $1.67 for the six months ended June 30, 2026 compared to $1.78 for the six months ended June 30, 2025.
Cash flow from operations: $174.7 million for the six months ended June 30, 2026, compared to $149.3 million for the six months ended June 30, 2025.
Cash: $186.1 million at June 30, 2026, compared to $328.7 million at December 31, 2025.
Share repurchases: During the six months ended June 30, 2026, we reduced our shares of common stock outstanding by approximately 3.2% primarily through the repurchase of approximately 1.9 million shares of our common stock, under the share repurchase program authorized by our Board of Directors, for a total investment of $275.0 million.
Below we discuss our consolidated results of operations for the six months ended June 30, 2026 and 2025.
Cloud Subscription Revenue. Cloud subscriptions revenue increased $49.1 million in the six months ended June 30, 2026 compared to the same period in the prior year. Customers have demonstrated a clear preference for cloud-based solutions, including existing customers that are migrating from on-premise to cloud-based offerings. Cloud subscriptions revenue for the Americas, EMEA and APAC segments increased $35.7 million, $10.4 million and $3.0 million, respectively, in the six months ended June 30, 2026 compared to the same period in the prior year.
Software License Revenue. Software license revenue decreased $6.6 million in the six months ended June 30, 2026 compared to the same period in the prior year, predominantly driven by one large contract with an existing customer in the prior year period. The license sales percentage mix across our product suite in the six months ended June 30, 2026 was over 80% warehouse management solutions.
MANH insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 5 filings (3 insiders, 5 trade dates, 18,018 shares, about $3.1M). Net open-market shares: -18,018 (purchases minus sales); net value about -$3.1M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-11 | Clark Eric Andrew |
Open-market sale | 3,000 | $197.76 | $593.3K |
| 2026-08-06 | Hollembaek Linda T. |
Open-market sale | 1,579 | $189.88 | $299.8K |
| 2026-07-30 | Gantt James Stewart |
Open-market sale | 5,139 | $195.53 | $1.0M |
| 2026-06-15 | Moran Charles E |
Gift | 1,330 | — | — |
| 2026-06-10 | Clark Eric Andrew |
Open-market sale | 1,000 | $146.77 | $146.8K |
| 2026-05-14 | Sheer Danielle |
Grant/award | 1,940 | — | — |
| 2026-05-14 | Kuryea Kimberly A |
Grant/award | 1,940 | — | — |
| 2026-05-14 | Hollembaek Linda T. |
Grant/award | 1,940 | — | — |
| 2026-05-14 | Noonan Thomas E |
Grant/award | 1,940 | — | — |
| 2026-05-14 | Eger Edmond |
Grant/award | 1,940 | — | — |
| 2026-05-14 | Moran Charles E |
Grant/award | 1,940 | — | — |
| 2026-05-14 | Capel Eddie |
Grant/award | 1,940 | — | — |
| 2026-04-24 | Gantt James Stewart |
Open-market sale | 7,300 | $139.25 | $1.0M |
Well-known investors holding MANH (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 3,328,418 | $458.0M | 0.16% | Added 5% |
| Renaissance Technologies | 2026-06-30 | 448,760 | $62.5M | 0.09% | Reduced 31% |
| Two Sigma Investments | 2026-06-30 | 213,102 | $29.7M | 0.02% | Reduced 7% |
| Fundsmith (Terry Smith) | 2026-06-30 | 172,977 | $24.1M | 0.18% | Added 43% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 168,200 | $23.4M | 0.05% | Added 159% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 162,154 | $22.6M | 0.03% | Added 114% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 161,909 | $21.6M | — | Sold out |
| D. E. Shaw & Co. | 2026-06-30 | 83,337 | $11.6M | 0.01% | Reduced 66% |
| Millennium Management (Israel Englander) | 2026-06-30 | 66,372 | $9.2M | 0.01% | Added 9% |
| Bridgewater Associates | 2026-06-30 | 19,575 | $2.7M | 0.01% | New position |