Supply chain software provider Manhattan Associates (NASDAQ: MANH) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 3.4% year on year to $275.8 million. The company expects the full year’s revenue to be around $1.08 billion, close to analysts’ estimates. Its non-GAAP profit of $1.36 per share was 14.6% above analysts’ consensus estimates.
Is now the time to buy Manhattan Associates? Find out by accessing 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 EBITDA: $105.1 million vs analyst estimates of $96.32 million (38.1% 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
- Free Cash Flow Margin: 31.6%, up from 25.7% in the previous quarter
- RPO Bookings: 23% year-on-year growth
- Billings: $273.2 million at quarter end, up 6.1% year on year
- Market Capitalization: $12.09 billion
Company Overview
Built on a "versionless" cloud architecture that delivers quarterly updates to all customers, Manhattan Associates (NASDAQ: MANH) develops cloud-based software that helps retailers, wholesalers, and manufacturers manage their supply chains, inventory, and omnichannel operations.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Manhattan Associates grew its sales at a 12.5% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Manhattan Associates’s recent performance shows its demand has slowed as its annualized revenue growth of 9.6% over the last two years was below its five-year trend. 
This quarter, Manhattan Associates reported modest year-on-year revenue growth of 3.4% but beat Wall Street’s estimates by 1.6%.
Looking ahead, sell-side analysts expect revenue to grow 5.2% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will see some demand headwinds.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.
Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Manhattan Associates’s billings came in at $273.2 million in Q3, and over the last four quarters, its growth was underwhelming as it averaged 5% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
Manhattan Associates is extremely efficient at acquiring new customers, and its CAC payback period checked in at 12.5 months this quarter. The company’s rapid recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments.
Key Takeaways from Manhattan Associates’s Q3 Results
We liked that Manhattan Associates beat revenue, operating income, and EPS expectations. RPO bookings growth was 23% year-on-year, which was a slowdown from last quarter's 26% growth. Investors were hoping for even more, and shares traded down 11.2% to $182.36 immediately following the results.
Big picture, is Manhattan Associates a buy here and now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
