Supply chain optimization software maker Manhattan Associates (NASDAQ: MANH) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 2.7% year on year to $272.4 million. The company’s full-year revenue guidance of $1.07 billion at the midpoint came in 0.9% above analysts’ estimates. Its non-GAAP profit of $1.31 per share was 16.2% above analysts’ consensus estimates.

Is now the time to buy Manhattan Associates? Find out by accessing our full research report, it’s free.

Company Overview

Boasting major consumer staples and pharmaceutical companies as clients, Manhattan Associates (NASDAQ: MANH) offers a software-as-service platform that helps customers manage their supply chains.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last three years, Manhattan Associates grew its sales at a 14.1% annual 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.

This quarter, Manhattan Associates reported modest year-on-year revenue growth of 2.7% but beat Wall Street’s estimates by 3.3%.

Looking ahead, sell-side analysts expect revenue to grow 3.1% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products and services will face some demand challenges.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

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 $270.2 million in Q2, and over the last four quarters, its growth was underwhelming as it averaged 5.7% 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 very efficient at acquiring new customers, and its CAC payback period checked in at 23.7 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 Q2 Results

This was a 'beat and raise' quarter. The company beat on revenue and EPS in the quarter, and raised full-year revenue and EPS guidance. Zooming out, we think this was a great print with some key areas of upside. The stock traded up 7.8% to $219.25 immediately following the results.

Manhattan Associates had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. 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.