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Manhattan Associates (NASDAQ announced a record third quarter of 2023, with a 20% increase in total revenue to $238 million and a 59% increase in adjusted earnings per share to $1.05. The company also reported substantial growth in its Cloud and Services revenues, which increased by 44% and 24% respectively. These figures align with InvestingPro data showing revenue growth of 19.21% and EBITDA growth of 25 .04% in the last 12 months until the second quarter of 2023.
Key takeaways from the call include:
- The company’s remaining performance obligations (RPO), a key indicator of growth, increased 37% to more than $1.3 billion. This reflects the company’s high return on invested capital, as noted in InvestingPro’s advice.
- Manhattan Associates has added more than 400 new team members so far this year, reflecting its continued investment in organic innovation.
- The company’s point-of-sale and customer engagement commerce solution, Manhattan Active, is showing positive momentum.
- Manhattan Associates recently launched Fulfilment Insights, a new feature that provides clients with live omnichannel fulfillment performance benchmarking data.
- The company raised its outlook for full-year 2023, expecting RPO to surpass the high end of the $1.3 billion to $1.4 billion range, and total revenue to rise 19% to $914 million.
Manhattan Associates’ earnings call revealed a healthy mix of sales across several categories, with notable strength from new logos. The company’s global services teams contributed to record revenue of $128 million, a 24% increase driven by strong cloud sales. Adjusted operating profit stood at $72 million, with an adjusted operating margin of 30.4%, an increase of 450 basis points year-over-year.
By 2024, the company expects total revenue to grow 16%, cloud revenue to grow 31%, and RPO to grow 25%. Operating margin is expected to exceed 28%. The company remains optimistic about its market position and product offering, even in the face of volatile macroeconomic conditions. This is consistent with InvestingPro’s advice that Manhattan Associates shares generally trade with low price volatility.
CEO Eddie Capel discussed the company’s growth objectives and optimistic outlook, expressing confidence in its market leadership, product range, technology and geographic reach. He also talked about the company’s new Fulfilment Insights feature and the potential for cross-selling within its platform. Capel highlighted RPO’s strong billing quarter and noted that the transition from RPO to revenue remains consistent but accelerates once the software is implemented. He also mentioned the balanced distribution of the new logo business across solutions and geographies.
Capel also touched on the company’s expansion into the contact center and emphasized how its solutions can handle a broad set of customer engagement activities. The call ended with Capel wishing everyone a happy holiday and expressing anticipation for the upcoming discussion in January.
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