Manhattan Associates’ third quarter saw sales growth driven by robust momentum in its cloud offerings and continued strength in services revenue. However, the market responded negatively to the results, with management citing seasonal weakness in net new customer wins and the timing of large deals as key challenges. CEO Eric Clark noted, “Q3 seasonality, coupled with general lumpiness of large deals, pressured net new logos, which were about 17% of our new cloud bookings in Q3, but still represent 50% of new cloud bookings year-to-date.” Despite these factors, the company’s core business fundamentals remained intact, and customer demand for cloud migration continued to support revenue.
Is now the time to buy MANH? Find out in our full research report (it’s free for active Edge members).
Manhattan Associates (MANH) Q3 CY2025 Highlights:
- Revenue: $275.8 million vs analyst estimates of $271.4 million (3.4% year-on-year growth, 1.6% beat)
- Adjusted EPS: $1.36 vs analyst estimates of $1.19 (14.6% beat)
- Adjusted Operating Income: $103.4 million vs analyst estimates of $94.82 million (37.5% margin, 9.1% beat)
- The company slightly lifted its revenue guidance for the full year to $1.08 billion at the midpoint from $1.07 billion
- Management raised its full-year Adjusted EPS guidance to $4.96 at the midpoint, a 3.3% increase
- Operating Margin: 27.5%, in line with the same quarter last year
- Billings: $273.2 million at quarter end, up 6.1% year on year
- Market Capitalization: $11.36 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Manhattan Associates’s Q3 Earnings Call
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Terrell Tillman (Truist Securities) asked about optimism for RPO levels going into 2026, to which CEO Eric Clark responded that major renewal cycles and pipeline visibility provided confidence in sustaining growth through larger contract renewals.
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Joseph Vruwink (Baird) inquired about risks associated with the fixed-fee conversion strategy. Clark explained that targeting similar customer cohorts and leveraging automation reduced implementation risk and allowed for margin retention.
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Christopher Quintero (Morgan Stanley) questioned the qualitative momentum in services as 2026 approaches. Clark replied that both pipeline and backlog are strengthening, with more proactive approaches in conversions and cross-sell opportunities starting to yield results.
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Lachlan Brown (Rothschild & Co.) sought feedback from the Agentic AI early access program and its impact on gross margins. Clark shared that rapid deployment and standardization were key differentiators and committed to preserving cloud margins as AI deployments scale.
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George Kurosawa (Citi) asked about drivers behind the services revenue upside in Q3. Clark attributed it to high execution levels from the services team and customers’ willingness to accelerate project timelines, contributing to a growing pipeline.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will closely monitor (1) the pace of customer conversions from on-premise to cloud and the resulting impact on subscription growth, (2) adoption rates and margin effects from the Agentic AI product suite as it moves toward general availability, and (3) the effectiveness of recently expanded sales and partner initiatives in broadening Manhattan’s market reach. The outcome of the major renewal cycle and its influence on remaining performance obligations will also be a key indicator of execution.
Manhattan Associates currently trades at $187.58, down from $205.32 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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