Manhattan Associates (NASDAQ:MANH) reported first-quarter financial results on Tuesday. The transcript from the company’s first-quarter earnings call has been provided below.
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Summary
Manhattan Associates reported a strong start to 2026 with 24% growth in cloud revenue and a notable increase in services revenue.
Strategic initiatives focusing on go-to-market effectiveness have started to pay off, contributing to a 24% increase in RPO to $2.35 billion.
The company experienced a strong performance in new customer bookings, with over 55% generated from net new logos, and significant contributions from products beyond Active Warehouse.
The Active Agent pilot program is off to a promising start, with customers reporting improved operational efficiencies and ROI.
Financial performance exceeded expectations with total revenue of $282 million and an adjusted operating margin of 32.4%.
The company raised its full-year 2026 guidance, expecting total revenue growth of 11% excluding license and maintenance attrition.
Manhattan Associates continues to see opportunities for growth across its diverse product suite and industries, supported by strong pipeline and customer interest in AI capabilities.
Full Transcript
OPERATOR
Good afternoon, My name is Joe and I will be your conference facilitator today. At this time I would like to welcome everyone to The Manhattan Associates first quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press Star and then the number one on your telephone keypad. If you would like to withdraw your question, press Star and then the number two. And as a reminder, ladies and gentlemen, this call is being recorded today, April 21, 2026. I would now like to introduce you to our host, Mr. Michael Bauer, head of investor relations of Manhattan Associates. Mr. Bauer, please go ahead.
Michael Bauer (Head of Investor Relations)
Great. Thanks Joe. And good afternoon everyone. Welcome to Manhattan Associates 2026 first quarter earnings call. I’ll I will review our cautionary language and then turn the call over to our President and Chief Executive Officer Eric Clark. During this call, including the Q and A session, we may make forward looking statements regarding future events or Manhattan Associates future financial performance. We caution you that these forward looking statements involve risks and uncertainties are not guarantees of future performance and actual results may differ materially from the projections contained in our forward looking statements. I refer you to Manhattan Associates SEC reports for important factors that could cause actual results to differ materially from those in our projections, particularly our annual report on Form 10K for fiscal year 2025 and the risk factor discussion in that report and any risk factor updates we provide in our subsequent Form 10Qs. Please note that the turbulent global macro environment could impact our performance and cause actual results to differ materially from our projections. We are under no obligation to update these statements. In addition, our comments include certain non GAAP financial measures to provide additional information to investors. We have reconciled all non GAAP measures to the related GAAP measures in accordance with SEC rules. You’ll find reconciliation schedules in the Form 8K we filed with the SEC earlier today and on our website@manh.com now. I’ll turn the call over to Eric.
Eric Clark (President and Chief Executive Officer)
Great. Great. Thank you, Mike. Good afternoon everyone and thank you for joining us as we review our first quarter results and discuss our increased full year 2026 outlook. Manhattan is off to a strong start to 2026, navigating a volatile global macro reporting record better than expected results on solid demand. Our Q1 revenue growth accelerated highlighted by 24% growth in cloud revenue and our services Revenue growth also continues to steadily improve throughout 2025. We spoke about the strategic investments that we’re making to improve our go to market effectiveness and accelerate our selling velocity. And while results from these initiatives will certainly not be linear, these investments have started to pay off in the first quarter and contributed to RPO increasing 24% to 2.35 billion. New customer bookings remain strong as over 55% of new cloud bookings were generated from net new logos, with the largest Q1 deal influenced Google Cloud Marketplace. We also experienced notable deal volume improvements across all deal types as well as a larger contribution from products beyond Active Warehouse, including Active Omni, Active Transportation and Active Planning, and we had strong bookings from all regions. Our win rate metric continues to be consistently above 70% and our renewal performance was solid and supportive of the plan that we highlighted last quarter. All of this provides a glimpse into the large opportunity that we have across all of our industry leading solutions. In summary, bookings Momentum continued in Q1, aligning with our goal of accelerating both ramped ARR and cloud revenue growth. From a vertical sales perspective, our end markets are diverse and we have healthy established footprints across numerous subsectors which include retail, grocery, food distribution, life sciences, industrial technology, airlines, third party logistics and more. For example, Q1 deals included a global retailer that became a new logo, Active Warehouse and Active Transportation Customer. One of the world’s largest retailers became a new logo. Active Omni Customer, a large auto parts distributor, became a new logo, Active Warehouse and Active Omni Customer, an H Vac focused distributor, became a new logo, Active Warehouse and Active Transportation Customer. A global wellness retailer converted from On Prem to Active Warehouse and a multinational food distributor that was an existing Active Transportation customer expanded to become an Active Warehouse customer. In addition to Several other impressive Q1 deals, our active Agent pilot program is off to a better than expected start. As I mentioned last quarter, our Active Agent offering consists of two primary elements, a set of base agents ready to be activated immediately and our Agent Foundry offering, which enables our customers to quickly build and deploy their own agents within the Active platform. And because we build all these agents directly into the Active platform, our customers don’t need to implement costly and complex external data lakes to make them work. Our Unified Cloud Native API first architecture enables us to deploy agents with almost no configuration or additional upfront effort, embedding AI agents directly into the workflow. No data lakes, no latency, deployed in minutes, not months, creating value for our customers in real time. And although our AI product set has only been in the market for one full quarter, we have an impressive list of pilot and paying customers that stretches across our diverse end markets and include some of the world’s most distinguished and identifiable organizations. For perspective, these customers include a global manufacturer and distributor of engineered components, a global 3 PL, a global energy management and industrial automation company, a global manufacturer and distributor of beauty products, a global healthcare services company, as well as several more tier 1 retail brands, grocery chains and others. We’re very excited that these existing active customers are interested in beginning their agentic journey with Manhattan, and we’re focused on helping them drive higher productivity, ROI and improve levels of customer satisfaction as we expand active agents across our customer basis. For this quarter’s product update, I’d like to go a bit deeper on our active agent Foundry and some of the strong deployment results which provide a bit more insight into why we believe AI is a significant opportunity for Manhattan and and why we are uniquely positioned to win. Core to our agentic AI philosophy is the concept of embedding both interactive and autonomous agents directly within the workflows of our key users. Rather than wave planners and shipping supervisors trying to incorporate standalone disconnected AI platforms, our active agents meet them where they live all day within our waving screens, within fulfillment progress monitors, and within Labor Planning UIs. By making AI ever present and highly available, our AI capabilities feel natural. They’re steeped in both domain expertise and real time operational data, always making suggestions and ready to take action autonomously. Our teams of forward deployed engineers assist our customers to activate our base agents and to build their own agents using our agent Foundry. As we look across the early success stories, we see an even balance in the value created by base and custom agents and we believe believe that trend will persist. One of the real advantages of building with Foundry is the ability to quickly target specific pockets of opportunity within a particular customer operation. For example, one of our retail customers here in the US saw a 5% improvement in order cycle times and reduced labor requirements in their largest distribution center via the use of a foundry developed custom agent. In this case, the agent dynamically reallocates resources to ensure replenishments are completed in time for orders to be fully picked and shipped. The continual matching of work to be completed within the requisite resources available is one of the most challenging issues a DC operator deals with nonstop each day. Unlike a manufacturing facility with a steady and predictable flow of work, DCs experience continuous peaks and valleys of different types of activity. This variability is driven by the inherent unpredictability of customer ordering and the high variability of what actually makes up those orders. In this case, the active agent looks both upstream and downstream, dynamically determining the work that needs to be done in each zone and continuously optimizes the assignments to ensure orders are complete and to maximize order shipment volume. The next example of a foundry created agent comes from one of our healthcare customers. From an operational standpoint, it’s often just a few unfilled units which stand in the way of large orders being ready to ship. This customer worked with our forward deployed engineers to create an agent which actively seeks out these aging units, ensuring that tasks are created and prioritized to get shipments completed faster. The use of this agent resulted in a double digit percentage reduction in loading times and improvement in on time shipment departures. On the base agent front, a number of our customers are using our wave coordinator agent to make sure orders are effectively turning into executable tasks. This agent finds and repairs any data conditions within items, orders, tasks or users which prevent the optimal flow of work to the floor, ensuring every unit on every line on every order has a path to clean execution. Specifically, this agent resulted in improved on time shipments for one of our food distribution customers as exceptions requiring triage were reduced by up to 75%. And for one of our industrial distribution customers, this very same agent increased line shipped by over 30% and improved order cycle times by over 25%. Now these are meaningful improvements that drive revenue and ROI for our customers. By leveraging case studies like this in Q1, we saw strong demand for active agents. We now have dozens of customers in various stages of AI maturity, exploring and realizing benefits as we leverage our FDE teams to continue to build additional agents for these customers and introduce the Active Agent Foundry to more of our active customers. As you’d imagine, Active agents will feature prominently at our Momentum User conference next month. Each of our product tracks will feature the latest in our agentic AI capabilities and we’ll have a number of customers giving testimonials to the power of our embedded Active agents. One of the important additions to this year’s conference will be an Active Agent boot camp. The day before the conference begins, we’ll host an interactive session where customers can get hands on experience with Foundry. They’ll choose a relevant issue from their own operations and work in a live sandbox guided by our FDE team to build and test their agents. This hands on experience is key to moving quickly from interest to production use cases. We’re happy to give as many customers as we can an opportunity to experience the ease and power of our Active Agent foundry and we can’t wait to see what they come up with in Las Vegas next month. I’ll close out my product updates by providing a bit more detail on two important wins that I highlighted earlier. First, we closed a substantial new logo order management deal with one of the world’s largest retailers. This deal represents our largest ever OMS bookings deal and speaks to the ongoing power of having the most capable and scalable OMS product in the industry. While historically this customer chose to build their E commerce tech stack in house, their E commerce business grew in scale and complexity to the point where they no longer believed it made sense to build the back end intelligence layer on their own. So we’re proud to welcome them into the Manhattan family. And finally, the power of solution unification continues to deliver for us both during the sales process and in our implementation results. We’re bringing solutions to life only possible when Warehouse and Transportation are truly unified we closed a large unified warehouse and transportation deal at a major retailer in Q1 in large part due to the power and simplicity of running a single application that for distribution and logistics. That unified approach lowers integration complexity and accelerates time to value. This win adds to the growing list of customers recognizing the value of the unified Active platform. Next month at Momentum, our customers and prospects will hear directly from one of our large retail customers as they share the valuable benefits they’re already achieving from having warehouse and transportation live together on the active platform. So with a strong pipeline across our product suite, numerous opportunities to drive growth, and our unique ability to consistently deliver leading innovation to the supply chain commerce universe, we’re very optimistic about our long term growth opportunity. So that concludes my business update and as you all know, we have a new cfo. So before I introduce Linda, I’d like to thank Dennis Storey for all of his contributions over the past 20 years. And now I’d like to introduce you to our new cfo, Linda Penny. As many of you know, Linda previously served as our Global Corporate Controller and Chief Accounting Officer and with her 20 plus years of experience right here at Manhattan, she brings a wealth of company specific industry and financial expertise that I’m sure all of you will appreciate. So with that, I’ll hand it over to Linda to report on her financial performance and outlook and then I will close out our prepared remarks before we open it up to Q and A. So Linda, over to you.
Linda Penny (Chief Financial Officer)
All right, great. Thanks Eric. Before I jump into the numbers, I’d like to thank Eric and the board for the opportunity to lead our talented finance team. I look forward to helping Eric and the rest of the team execute on the enormous …
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