MANH - Manhattan Associates Reports Record Fourth Quarter and Full Year Results

RPO Increased 126% over Prior Year on Strong Demand

ATLANTA, Feb. 01, 2022 (GLOBE NEWSWIRE) -- Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $171.5 million for the fourth quarter ended December 31, 2021. GAAP diluted earnings per share for both Q4 2021 and Q4 2020 was $0.32. Non-GAAP adjusted diluted earnings per share for Q4 2021 was $0.48 compared to $0.45 in Q4 2020.

“We ended the year with strong momentum, posting our third consecutive all-time record revenue quarter, which again exceeded our expectations,” said Manhattan Associates president and CEO Eddie Capel. “Our Manhattan Active® solutions continue to elevate our leadership position, and market demand for our unified supply chain commerce platform is increasing across the globe, leading to RPO growth of 126%.”

“We enter 2022 very excited about our opportunity to help our customers digitally transform their supply chains and enable success. While a turbulent global macro environment persists, our business momentum continues to accelerate,” Mr. Capel concluded.

FOURTH QUARTER 2021 FINANCIAL SUMMARY:

• Consolidated total revenue was $171.5 million for Q4 2021, compared to $147.1 million for Q4 2020.
  
  
  • Cloud subscription revenue was $34.8 million for Q4 2021, compared to $23.0 million for Q4 2020.
    
    
  • License revenue was $11.9 million for Q4 2021, compared to $9.6 million for Q4 2020.
    
    
  • Services revenue was $81.6 million for Q4 2021, compared to $70.9 million for Q4 2020.
    
    
• GAAP diluted earnings per share was $0.32 for both Q4 2021 and Q4 2020.
  
  
• Adjusted diluted earnings per share, a non-GAAP measure, was $0.48 for Q4 2021, compared to $0.45 for Q4 2020.
  
  
• GAAP operating income was $27.1 million for Q4 2021, compared to $28.2 million for Q4 2020.
  
  
• Adjusted operating income, a non-GAAP measure, was $39.1 million for Q4 2021, compared to $37.6 million for Q4 2020.
  
  
• Cash flow from operations was $40.1 million for Q4 2021, compared to $38.0 million for Q4 2020. Days Sales Outstanding was 67 days at December 31, 2021, compared to 63 days at September 30, 2021.
  
  
• Cash totaled $263.7 million at December 31, 2021, compared to $246.4 million at September 30, 2021.
  
  
• During the three months ended December 31, 2021, the Company repurchased 128,374 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors for a total investment of $20.1 million. In January 2022, our Board of Directors approved raising the Company’s remaining share repurchase authority to an aggregate of $50.0 million of our common stock.
  

FULL YEAR 2021 FINANCIAL SUMMARY:

• Consolidated total revenue for the twelve months ended December 31, 2021, was $663.6 million, compared to $586.4 million for the twelve months ended December 31, 2020.
  
  
  • Cloud subscription revenue was $122.2 million for the twelve months ended December 31, 2021, compared to $79.8 million for the twelve months ended December 31, 2020.
    
    
  • License revenue was $37.1 million for the twelve months ended December 31, 2021, compared to $38.3 million for the twelve months ended December 31, 2020.
    
    
  • Services revenue was $334.8 million for the twelve months ended December 31, 2021, compared to $303.6 million for the twelve months ended December 31, 2020.
    
    
• GAAP diluted earnings per share for the twelve months ended December 31, 2021, was $1.72, compared to $1.36 for the twelve months ended December 31, 2020.
  
  
• Adjusted diluted earnings per share, a non-GAAP measure, was $2.23 for the twelve months ended December 31, 2021, compared to $1.76 for the twelve months ended December 31, 2020.
  
  
• GAAP operating income was $134.3 million for the twelve months ended December 31, 2021, compared to $114.1 million for the twelve months ended December 31, 2020.
  
  
• Adjusted operating income, a non-GAAP measure, was $177.9 million for the twelve months ended December 31, 2021, compared to $147.8 million for the twelve months ended December 31, 2020.
  
  
• Cash flow from operations was $185.2 million for the twelve months ended December 31, 2021, compared to $140.9 million for the twelve months ended December 31, 2020.
  
  
• During the twelve months ended December 31, 2021, the Company repurchased 709,200 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $100.0 million.

2022 GUIDANCE

Manhattan Associates provides the following revenue, operating margin and diluted earnings per share guidance for the full year 2022:

Manhattan Associates currently intends to publish in each quarterly earnings release certain expectations with respect to future financial performance. Those statements, including the guidance provided above and guideposts in the supplemental information below, are forward looking. Actual results may differ materially. See our cautionary note regarding “forward-looking statements” below. We note in particular that the severity, duration and ultimate impact of the COVID-19 pandemic are difficult to predict at this time. In addition, those statements do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of the release.

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

CONFERENCE CALL

Manhattan Associates’ conference call regarding its fourth quarter and twelve months ended December 31, 2021, financial results will be held today, February 1, 2022, at 4:30 p.m. Eastern Time. The Company will also discuss its business and expectations for the year and next quarter in additional detail during the call. We invite investors to a live webcast of the conference call through the Investor Relations section of the Manhattan Associates website at ir.manh.com . To listen to the live webcast, please go to the website at least 15 minutes before the call to download and install any necessary audio software.

Those who cannot listen to the live broadcast may access a replay shortly after the call by dialing +1.855.859.2056 in the U.S. and Canada, or +1.404.537.3406 outside the U.S., and entering the conference identification number 3361948 or via the web at ir.manh.com . The phone replay will be available for two weeks after the call, and the Internet webcast will be available until Manhattan Associates’ first quarter 2022 earnings release.

GAAP VERSUS NON-GAAP PRESENTATION

Manhattan Associates provides adjusted operating income and margin, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share in this press release as additional information regarding the Company’s historical and projected operating results. These measures are not in accordance with, or alternatives to, GAAP, and may be different from similarly titled non-GAAP measures used by other companies. The Company believes the presentation of these non-GAAP financial measures facilitates investors’ ability to understand and compare the Company’s results and guidance, because the measures provide supplemental information in evaluating the operating results of its business, as distinct from results that include items not indicative of ongoing operating results, and because the Company believes its peers typically publish similar non-GAAP measures. This release should be read in conjunction with the Company’s Form 8-K earnings release filing for the three and twelve months ended December 31, 2021.

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

ABOUT MANHATTAN ASSOCIATES

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

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

This press release contains “forward-looking statements” relating to Manhattan Associates, Inc. Forward-looking statements in this press release include, without limitation, the information set forth under “2022 Guidance” and “Guideposts,” any statements about the future effect of the COVID-19 pandemic on our business, customers or the global economy, our business prospects following the pandemic, statements we make about market adoption of our cloud-based solution and other statements identified by words such as “may,” “expect,” “forecast,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “project,” “estimate,” and similar expressions. Prospective investors are cautioned that any of those forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by those forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by those forward-looking statements are: the risk that the duration and severity of the COVID-19 pandemic, and its ultimate effects on the global economy, our customers and our business, may be worse than expected; risks related to transitioning our business from a traditional perpetual license software company (generally hosted by our customers on their own premises and equipment) to a subscription/cloud-based software-as-a service model; disruption in the retail sector; the possible effect of new U.S. tariffs on imports from other countries (and possible responsive tariffs on U.S. exports by other countries) on international commerce; delays in product development; competitive and pricing pressures; software errors and information technology failures, disruption and security breaches; risks related to our products’ technology and customer implementations; and the other risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, and in Item 1A of Part II in subsequent Quarterly Reports on Form 10-Q. Manhattan Associates undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

1. Continuing Impact of COVID-19:

Regarding the impact of the COVID-19 pandemic, we remain cautious about the global recovery, which we expect to be protracted.

Despite the COVID-19 pandemic, our 2021 results exceeded our expectations due to solid demand for our cloud solutions. Our solutions are mission critical, supporting complex global supply chains. 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, are in synergistic alignment with current market demand. That 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.

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

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

4. Impact of Currency Fluctuation

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

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

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

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

7. Stock Repurchase Activity (in thousands):

8. Remaining Performance Obligations

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

9. Guideposts

The following table shows (i) actual 2021 results for cloud revenue and remaining performance obligations (“RPO”) and (ii) current guideposts for cloud revenue and RPO for each year 2022 through 2024.