Manhattan Associates Reports Record Fourth Quarter and Full Year Results

RPO Bookings Increase 36% over Prior Year on Strong Demand

Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $238.3 million for the fourth quarter ended December 31, 2023. GAAP diluted earnings per share for Q4 2023 was $0.78 compared to $0.60 in Q4 2022. Non-GAAP adjusted diluted earnings per share for Q4 2023 was $1.03 compared to $0.81 in Q4 2022.

“Manhattan’s business fundamentals and momentum are strong. Our fourth quarter results exceeded expectations, capping a very successful year for our company,” said Manhattan Associates president and CEO Eddie Capel.

“While appropriately cautious regarding the global economy, Manhattan enters 2024 from a position of strength, and we are optimistic about our growing market opportunity. We remain firmly committed to helping our customers succeed by delivering leading innovation across supply chain execution, omnichannel and retail point of sale markets,” Mr. Capel concluded.

FOURTH QUARTER 2023 FINANCIAL SUMMARY:

  • Consolidated total revenue was $238.3 million for Q4 2023, compared to $198.1 million for Q4 2022.
    • Cloud subscription revenue was $71.4 million for Q4 2023, compared to $51.7 million for Q4 2022.
    • License revenue was $5.2 million for Q4 2023, compared to $5.0 million for Q4 2022.
    • Services revenue was $119.1 million for Q4 2023, compared to $99.8 million for Q4 2022.
  • GAAP diluted earnings per share was $0.78 for Q4 2023, compared to $0.60 for Q4 2022.
  • Adjusted diluted earnings per share, a non-GAAP measure, was $1.03 for Q4 2023, compared to $0.81 for Q4 2022.
  • GAAP operating income was $58.9 million for Q4 2023, compared to $44.7 million for Q4 2022.
  • Adjusted operating income, a non-GAAP measure, was $76.8 million for Q4 2023, compared to $59.9 million for Q4 2022.
  • Cash flow from operations was $88.4 million for Q4 2023, compared to $55.2 million for Q4 2022. Days Sales Outstanding was 70 days at December 31, 2023, compared to 71 days at September 30, 2023.
  • Cash totaled $270.7 million at December 31, 2023, compared to $182.3 million at September 30, 2023.
  • During the three months ended December 31, 2023, the Company did not repurchase shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors. Our $75.0 million repurchase authority replenished by our Board of Directors in October 2023 remains in effect.

FULL YEAR 2023 FINANCIAL SUMMARY:

  • Consolidated total revenue for the twelve months ended December 31, 2023, was $928.7 million, compared to $767.1 million for the twelve months ended December 31, 2022.
    • Cloud subscription revenue was $254.6 million for the twelve months ended December 31, 2023, compared to $176.5 million for the twelve months ended December 31, 2022.
    • License revenue was $18.2 million for the twelve months ended December 31, 2023, compared to $24.8 million for the twelve months ended December 31, 2022.
    • Services revenue was $487.9 million for the twelve months ended December 31, 2023, compared to $394.1 million for the twelve months ended December 31, 2022.
  • GAAP diluted earnings per share for the twelve months ended December 31, 2023, was $2.82, compared to $2.03 for the twelve months ended December 31, 2022.
  • Adjusted diluted earnings per share, a non-GAAP measure, was $3.74 for the twelve months ended December 31, 2023, compared to $2.76 for the twelve months ended December 31, 2022.
  • GAAP operating income was $209.9 million for the twelve months ended December 31, 2023, compared to $152.7 million for the twelve months ended December 31, 2022.
  • Adjusted operating income, a non-GAAP measure, was $281.5 million for the twelve months ended December 31, 2023, compared to $212.1 million for the twelve months ended December 31, 2022.
  • Cash flow from operations was $246.2 million for the twelve months ended December 31, 2023, compared to $179.6 million for the twelve months ended December 31, 2022.
  • During the twelve months ended December 31, 2023, the Company repurchased 1,024,328 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $166.0 million.

2024 GUIDANCE

Manhattan Associates provides the following revenue, operating margin and diluted earnings per share guidance for the full year 2024:

 

 

 

 

 

Guidance Range - 2024 Full Year

 

 

($'s in millions, except operating margin and EPS)

$ Range

 

% Growth Range

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$1,015

 

$1,025

 

9%

 

10%

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin:

 

 

 

 

 

 

 

 

 

GAAP operating margin

21.2%

 

21.8%

 

 

 

 

 

 

Equity-based compensation

7.5%

 

7.5%

 

 

 

 

 

 

Adjusted operating margin(1)

28.7%

 

29.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (EPS):

 

 

 

 

 

 

 

 

 

GAAP EPS

$2.81

 

$2.91

 

0%

 

3%

 

 

Equity-based compensation

1.02

 

1.02

 

 

 

 

 

 

Excess tax benefit on stock vesting(2)

(0.13)

 

(0.13)

 

 

 

 

 

 

Adjusted EPS(1)

$3.69

 

$3.79

 

-1%

 

1%

 

 

 

 

 

 

 

 

 

 

 

 

(1) Adjusted operating margin and adjusted EPS are non-GAAP measures that exclude the impact of equity-based compensation and the related income tax effects, if applicable.

 

 

(2) Excess tax benefit on stock vesting expected to occur primarily in the first quarter of 2024.

 

 

 

 

 

 

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, are forward looking. Actual results may differ materially. See our cautionary note regarding “forward-looking statements” below.

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, 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, 2023 financial results will be held today, January 30, 2024, 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. The Internet webcast will be available until Manhattan Associates’ first quarter 2024 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, 2023.

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 – net of income tax effects. They also exclude the tax benefits or deficiencies of vested stock awards caused by differences in the amount deductible for tax purposes from the compensation expense recorded for financial reporting purposes. 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 global 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 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 “2024 Guidance” and 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: economic conditions, including inflation; disruption in the retail sector; 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; global instability, including the wars in Ukraine and the Middle East; 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, 2022, 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. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2023

 

2022

 

2023

 

2022

 

(unaudited)

 

(unaudited)

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Cloud subscriptions

$71,416

 

$51,691

 

$254,612

 

$176,458

Software license

5,239

 

4,979

 

18,206

 

24,848

Maintenance

37,164

 

35,083

 

143,936

 

142,198

Services

119,125

 

99,812

 

487,869

 

394,096

Hardware

5,311

 

6,538

 

24,102

 

29,484

Total revenue

238,255

 

198,103

 

928,725

 

767,084

Costs and expenses:

 

 

 

 

 

 

 

Cost of cloud subscriptions, maintenance and services

106,349

 

89,629

 

429,263

 

356,111

Cost of software license

384

 

377

 

1,351

 

2,126

Research and development

31,327

 

27,123

 

126,814

 

111,877

Sales and marketing

20,212

 

16,656

 

74,490

 

64,537

General and administrative

19,613

 

18,107

 

81,174

 

73,070

Depreciation and amortization

1,505

 

1,506

 

5,752

 

6,663

Total costs and expenses

179,390

 

153,398

 

718,844

 

614,384

Operating income

58,865

 

44,705

 

209,881

 

152,700

Other income, net

867

 

828

 

3,790

 

5,421

Income before income taxes

59,732

 

45,533

 

213,671

 

158,121

Income tax provision

10,996

 

7,665

 

37,103

 

29,162

Net income

$48,736

 

$37,868

 

$176,568

 

$128,959

 

 

 

 

 

 

 

 

Basic earnings per share

$0.79

 

$0.61

 

$2.86

 

$2.05

Diluted earnings per share

$0.78

 

$0.60

 

$2.82

 

$2.03

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

Basic

61,566

 

62,327

 

61,817

 

62,768

Diluted

62,555

 

63,028

 

62,608

 

63,408

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Reconciliation of Selected GAAP to Non-GAAP Measures

(in thousands, except per share amounts)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Operating income

 

$58,865

 

44,705

 

$209,881

 

152,700

Equity-based compensation (a)

 

17,973

 

15,152

 

71,571

 

59,361

Adjusted operating income (Non-GAAP)

 

$76,838

 

$59,857

 

$281,452

 

$212,061

 

 

 

 

 

 

 

 

 

Income tax provision

 

$10,996

 

7,665

 

$37,103

 

29,162

Equity-based compensation (a)

 

2,496

 

2,045

 

10,563

 

9,058

Tax benefit of stock awards vested (b)

 

26

 

(3)

 

3,480

 

4,383

Adjusted income tax provision (Non-GAAP)

 

$13,518

 

$9,707

 

$51,146

 

$42,603

 

 

 

 

 

 

 

 

 

Net income

 

$48,736

 

$37,868

 

$176,568

 

$128,959

Equity-based compensation (a)

 

15,477

 

13,107

 

61,008

 

50,303

Tax benefit of stock awards vested (b)

 

(26)

 

3

 

(3,480)

 

(4,383)

Adjusted net income (Non-GAAP)

 

$64,187

 

$50,978

 

$234,096

 

$174,879

 

 

 

 

 

 

 

 

 

Diluted EPS

 

$0.78

 

$0.60

 

$2.82

 

$2.03

Equity-based compensation (a)

 

0.25

 

0.21

 

0.97

 

0.79

Tax benefit of stock awards vested (b)

 

-

 

-

 

(0.06)

 

(0.07)

Adjusted diluted EPS (Non-GAAP)

 

$1.03

 

$0.81

 

$3.74

 

$2.76

 

 

 

 

 

 

 

 

 

Fully diluted shares

 

62,555

 

63,028

 

62,608

 

63,408

(a)

Adjusted results exclude all equity-based compensation to facilitate comparison with our peers and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. We do not receive a GAAP tax benefit for a portion of our equity-based compensation, mainly because of Section 162(m) of the Internal Revenue Code, which limits tax deductions for compensation granted to certain executives.

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Cost of services

 

$7,234

 

$5,609

 

$28,571

 

$21,876

Research and development

 

3,963

 

3,341

 

15,674

 

13,081

Sales and marketing

 

1,760

 

1,543

 

7,093

 

6,003

General and administrative

 

5,016

 

4,659

 

20,233

 

18,401

Total equity-based compensation

 

$17,973

 

$15,152

 

$71,571

 

$59,361

(b)

Adjustments represent the excess tax benefits and tax deficiencies of the equity awards vested during the period. Excess tax benefits (deficiencies) occur when the amount deductible on our tax return for an equity award is more (less) than the cumulative compensation cost recognized for financial reporting purposes. As discussed above, we exclude equity-based compensation from adjusted non-GAAP results to be consistent with other companies in the software industry and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. Therefore, we also exclude the related tax benefit (expense) generated upon their vesting.

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

December 31,

2023

 

 

December 31,

2022

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

270,741

 

 

$

225,463

 

Accounts receivable, net

 

 

181,173

 

 

 

166,767

 

Prepaid expenses and other current assets

 

 

27,276

 

 

 

23,145

 

Total current assets

 

 

479,190

 

 

 

415,375

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

11,795

 

 

 

12,803

 

Operating lease right-of-use assets

 

 

21,645

 

 

 

17,794

 

Goodwill, net

 

 

62,235

 

 

 

62,230

 

Deferred income taxes

 

 

66,043

 

 

 

37,206

 

Other assets

 

 

32,445

 

 

 

24,770

 

Total assets

 

$

673,353

 

 

$

570,178

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

24,508

 

 

$

25,701

 

Accrued compensation and benefits

 

 

73,210

 

 

 

54,469

 

Accrued and other liabilities

 

 

27,374

 

 

 

24,569

 

Deferred revenue

 

 

237,793

 

 

 

208,807

 

Income taxes payable

 

 

3,030

 

 

 

2,049

 

Total current liabilities

 

 

365,915

 

 

 

315,595

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

17,694

 

 

 

14,065

 

Other non-current liabilities

 

 

11,466

 

 

 

13,718

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding at December 31, 2023 and December 31, 2022

 

 

-

 

 

 

-

 

Common stock, $.01 par value; 200,000,000 shares authorized; 61,566,037 and 62,191,570 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

 

 

615

 

 

 

621

 

Retained earnings

 

 

304,701

 

 

 

253,711

 

Accumulated other comprehensive loss

 

 

(27,038

)

 

 

(27,532

)

Total shareholders' equity

 

 

278,278

 

 

 

226,800

 

Total liabilities and shareholders' equity

 

$

673,353

 

 

$

570,178

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

Year Ended December 31,

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

Net income

 

$

176,568

 

 

$

128,959

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

5,752

 

 

 

6,663

 

Equity-based compensation

 

 

71,571

 

 

 

59,361

 

Loss (Gain) on disposal of equipment

 

 

57

 

 

 

(89

)

Deferred income taxes

 

 

(28,844

)

 

 

(29,711

)

Unrealized foreign currency loss (gain)

 

 

1,280

 

 

 

(1,515

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(13,084

)

 

 

(44,056

)

Other assets

 

 

(10,925

)

 

 

(10,247

)

Accounts payable, accrued and other liabilities

 

 

18,123

 

 

 

11,794

 

Income taxes

 

 

(1,416

)

 

 

765

 

Deferred revenue

 

 

27,136

 

 

 

57,706

 

Net cash provided by operating activities

 

 

246,218

 

 

 

179,630

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(4,730

)

 

 

(6,587

)

Net cash used in investing activities

 

 

(4,730

)

 

 

(6,587

)

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

Purchase of common stock

 

 

(196,047

)

 

 

(204,460

)

Net cash used in financing activities

 

 

(196,047

)

 

 

(204,460

)

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

(163

)

 

 

(6,826

)

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

45,278

 

 

 

(38,243

)

Cash and cash equivalents at beginning of period

 

 

225,463

 

 

 

263,706

 

Cash and cash equivalents at end of period

 

$

270,741

 

 

$

225,463

 

MANHATTAN ASSOCIATES, INC.

SUPPLEMENTAL INFORMATION

 

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

 

 

 

 

 

2022

 

2023

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

GAAP Diluted EPS

$0.48

 

$0.49

 

$0.47

 

$0.60

 

$2.03

 

$0.62

 

$0.63

 

$0.79

 

$0.78

 

$2.82

Adjustments to GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity-based compensation

0.19

 

0.20

 

0.19

 

0.21

 

0.79

 

0.23

 

0.25

 

0.26

 

0.25

 

0.97

Tax benefit of stock awards vested

(0.07)

 

-

 

-

 

-

 

(0.07)

 

(0.05)

 

-

 

-

 

-

 

(0.06)

Adjusted Diluted EPS

$0.60

 

$0.69

 

$0.66

 

$0.81

 

$2.76

 

$0.80

 

$0.88

 

$1.05

 

$1.03

 

$3.74

Fully Diluted Shares

63,871

 

63,419

 

63,165

 

63,028

 

63,408

 

62,767

 

62,432

 

62,310

 

62,555

 

62,608

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

 

 

 

 

 

2022

 

2023

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

Revenue:

Americas

$139,540

 

$151,996

 

$156,674

 

$155,674

 

$603,884

 

$170,759

 

$179,208

 

$186,564

 

$182,664

 

$719,195

EMEA

32,151

 

31,614

 

31,843

 

33,330

 

128,938

 

39,658

 

40,902

 

41,204

 

44,874

 

166,638

APAC

7,265

 

8,314

 

9,584

 

9,099

 

34,262

 

10,596

 

10,906

 

10,673

 

10,717

 

42,892

 

$178,956

 

$191,924

 

$198,101

 

$198,103

 

$767,084

 

$221,013

 

$231,016

 

$238,441

 

$238,255

 

$928,725

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating Income:

Americas

$21,393

 

$24,507

 

$22,914

 

$30,475

 

$99,289

 

$29,647

 

$32,326

 

$34,655

 

$38,530

 

$135,158

EMEA

10,517

 

9,423

 

9,851

 

10,239

 

40,030

 

12,793

 

13,556

 

14,415

 

15,959

 

56,723

APAC

2,062

 

3,323

 

4,005

 

3,991

 

13,381

 

4,645

 

4,601

 

4,378

 

4,376

 

18,000

 

$33,972

 

$37,253

 

$36,770

 

$44,705

 

$152,700

 

$47,085

 

$50,483

 

$53,448

 

$58,865

 

$209,881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (pre-tax):

Americas:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity-based

compensation

$14,138

 

$15,538

 

$14,533

 

$15,152

 

$59,361

 

$16,640

 

$17,928

 

$19,030

 

$17,973

 

$71,571

 

$14,138

 

$15,538

 

$14,533

 

$15,152

 

$59,361

 

$16,640

 

$17,928

 

$19,030

 

$17,973

 

$71,571

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-GAAP Operating Income:

Americas

$35,531

 

$40,045

 

$37,447

 

$45,627

 

$158,650

 

$46,287

 

$50,254

 

$53,685

 

$56,503

 

$206,729

EMEA

10,517

 

9,423

 

9,851

 

10,239

 

40,030

 

12,793

 

13,556

 

14,415

 

15,959

 

56,723

APAC

2,062

 

3,323

 

4,005

 

3,991

 

13,381

 

4,645

 

4,601

 

4,378

 

4,376

 

18,000

 

$48,110

 

$52,791

 

$51,303

 

$59,857

 

$212,061

 

$63,725

 

$68,411

 

$72,478

 

$76,838

 

$281,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. 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):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

2023

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

Revenue

($2,268)

 

($4,568)

 

($6,152)

 

($5,124)

 

($18,112)

 

($3,084)

 

$104

 

$2,755

 

$2,341

 

$2,116

Costs and expenses

(2,043)

 

(3,862)

 

(5,412)

 

(5,354)

 

(16,671)

 

(3,616)

 

(1,133)

 

1,033

 

1,212

 

(2,504)

Operating income

(225)

 

(706)

 

(740)

 

230

 

(1,441)

 

532

 

1,237

 

1,722

 

1,129

 

4,620

Foreign currency gains (losses) in other income

711

 

2,056

 

1,569

 

353

 

4,689

 

(810)

 

(516)

 

387

 

(527)

 

(1,466)

 

$486

 

$1,350

 

$829

 

$583

 

$3,248

 

($278)

 

$721

 

$2,109

 

$602

 

3,154

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):

 

2022

 

2023

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

Operating income

$470

 

$710

 

$1,166

 

$1,900

 

$4,246

 

$1,632

 

$1,222

 

$728

 

$267

 

$3,849

Foreign currency gains (losses) in other income

809

 

2,085

 

1,713

 

738

 

5,345

 

(283)

 

(31)

 

812

 

(105)

 

393

Total impact of changes in the Indian Rupee

$1,279

 

$2,795

 

$2,879

 

$2,638

 

$9,591

 

$1,349

 

$1,191

 

$1,540

 

$162

 

$4,242

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

 

 

2022

 

2023

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

Interest income

$19

 

$92

 

$112

 

$373

 

$596

 

$969

 

$1,555

 

$1,371

 

$1,409

 

5,304

Foreign currency gains (losses)

711

 

2,056

 

1,569

 

353

 

4,689

 

(810)

 

(516)

 

387

 

(527)

 

(1,466)

Other non-operating income (expense)

8

 

95

 

(69)

 

102

 

136

 

(16)

 

2

 

(19)

 

(15)

 

(48)

Total other income

$738

 

$2,243

 

$1,612

 

$828

 

$5,421

 

$143

 

$1,041

 

$1,739

 

$867

 

$3,790

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

 

2022

 

2023

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

Capital expenditures

$1,159

 

$1,084

 

$1,909

 

$2,435

 

$6,587

 

$666

 

$1,009

 

$1,086

 

$1,969

 

$4,730

6. Stock Repurchase Activity (in thousands):

 

 

2022

 

2023

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Full Year

Shares purchased under publicly-announced buy-back program

383

 

417

 

347

 

206

 

1,353

 

515

 

381

 

128

 

-

 

1,024

Shares withheld for taxes due upon vesting of restricted stock

203

 

4

 

8

 

2

 

217

 

208

 

4

 

8

 

2

 

222

Total shares purchased

586

 

421

 

355

 

208

 

1,570

 

723

 

385

 

136

 

2

 

1,246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash paid for shares purchased under publicly-announced buy-back program

$49,965

 

$50,151

 

$50,000

 

$25,234

 

$175,350

 

$74,177

 

$66,769

 

$25,072

 

$0

 

$166,018

Total cash paid for shares withheld for taxes due upon vesting of restricted stock

27,143

 

528

 

1,242

 

197

 

29,110

 

27,511

 

658

 

1,529

 

331

 

30,029

Total cash paid for shares repurchased

$77,108

 

$50,679

 

$51,242

 

$25,431

 

$204,460

 

$101,688

 

$67,427

 

$26,601

 

$331

 

$196,047

7. Remaining Performance Obligations

We disclose revenue we expect to recognize from our remaining performance obligations ("RPO"). Over 98% of our RPO represent cloud native 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 and not included in the RPO. Our RPO as of the end of each period appears below (in thousands):

 

 

March 31, 2022

 

June 30, 2022

 

September 30, 2022

 

December 31, 2022

 

March 31, 2023

 

June 30, 2023

 

September 30, 2023

 

December 31, 2023

Remaining Performance Obligations

$

809,540

 

$

897,680

 

$

969,603

 

$

1,051,544

 

$

1,153,404

 

$

1,238,672

 

$

1,324,861

 

$

1,427,854

 

8. The 2017 U.S. Tax Cuts and Jobs Act eliminated the expensing of research and development costs as incurred for tax purposes beginning in 2022.

This law changes the timing of cash tax payments, increasing near-term taxable income and payments, but normalizing over time as these expenses are amortized. Our income tax payments increased by approximately $24 million and $26 million in 2023 and 2022, respectively, due to this law change. While there is still a possibility that legislation may be enacted that defers or eliminates the requirement to capitalize these costs, our current outlook factors in higher cash taxes as we will be required to make these payments unless the existing law is amended. This legislation does not impact earnings per share, does not create any incremental expense obligation and does not impact our ability to operationally grow cash flow.

 

Contacts

Michael Bauer

Senior Director,

Investor Relations

Manhattan Associates, Inc.

678-597-7538

mbauer@manh.com

Rick Fernandez

Director,

Corporate Communications

Manhattan Associates, Inc.

678-597-6988

rfernandez@manh.com

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