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Manhattan Associates Reports Record Quarterly Revenue and


RPO Bookings Increase 123% over Prior Year on Strong Demand

Company Raises 2021 Full-Year Revenue and EPS Guidance

ATLANTA, Oct. 26, 2021 (GLOBE NEWSWIRE) — Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $169.2 million for the third quarter ended September 30, 2021. GAAP diluted earnings per share for Q3 2021 was $0.57 compared to $0.39 for Q3 2020. Non-GAAP adjusted diluted earnings per share for Q3 2021 was $0.71 compared to $0.51 in Q3 2020.

“With robust demand across all of our solutions, Manhattan Associates posted strong growth in the quarter, resulting in all-time record revenue and earnings. Cloud and services revenue momentum exceeded our expectations and drove exceptional operating results,” said Manhattan Associates president and CEO Eddie Capel. “Our cloud-native suite of Manhattan Active® solutions continue to drive solid pipeline and revenue momentum. Based on our outlook for the remainder of the year, we are again raising our 2021 full-year revenue and earnings guidance.”

“While appropriately cautious regarding global geopolitical and economic volatility, we continue to be optimistic on the market opportunity ahead. Supply chain complexity and the rapid rate of change in digital commerce have heightened the need for our flexible and agile solutions. Importantly, with positive customer feedback and strong competitive win rates, combined with continued market-leading innovation, we expect to reach an RPO milestone of $1 billion in 2022, about a year earlier than our original expectations,” added Mr. Capel.

THIRD QUARTER 2021 FINANCIAL SUMMARY:

  • Consolidated total revenue was $169.2 million for Q3 2021, compared to $149.8 million for Q3 2020.
    • Cloud subscription revenue was $32.2 million for Q3 2021, compared to $21.1 million for Q3 2020.
    • License revenue was $8.5 million for Q3 2021, compared to $13.2 million for Q3 2020.
    • Services revenue was $88.2 million for Q3 2021, compared to $73.5 million for Q3 2020.
  • GAAP diluted earnings per share was $0.57 for Q3 2021, compared to $0.39 for Q3 2020.
  • Adjusted diluted earnings per share, a non-GAAP measure, was $0.71 for Q3 2021, compared to $0.51 for Q3 2020.
  • GAAP operating income was $42.4 million for Q3 2021, compared to $35.0 million for Q3 2020.
  • Adjusted operating income, a non-GAAP measure, was $53.0 million for Q3 2021, compared to $44.1 million for Q3 2020.
  • Cash flow from operations was $59.7 million for Q3 2021, compared to $42.5 million for Q3 2020. Days Sales Outstanding was 63 days at September 30, 2021, compared to 62 days at June 30, 2021.
  • Cash totaled $246.4 million at September 30, 2021, compared to $209.3 million at June 30, 2021.
  • During the three months ended September 30, 2021, the Company repurchased 123,131 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors for a total investment of $20.0 million. In October 2021, our Board authorized the Company to repurchase up to an aggregate of $50 million of the Company’s common stock.

NINE MONTH 2021 FINANCIAL SUMMARY:

  • Consolidated total revenue for the nine months ended September 30, 2021, was $492.1 million, compared to $439.3 million for the nine months ended September 30, 2020.
    • Cloud subscription revenue was $87.4 million for the nine months ended September 30, 2021, compared to $56.8 million for the nine months ended September 30, 2020.
    • License revenue was $25.1 million for the nine months ended September 30, 2021, compared to $28.6 million for the nine months ended September 30, 2020. 
    • Services revenue was $253.2 million for the nine months ended September 30, 2021, compared to $232.7 million for the nine months ended September 30, 2020.
  • GAAP diluted earnings per share for the nine months ended September 30, 2021, was $1.40, compared to $1.04 for the nine months ended September 30, 2020.  
  • Adjusted diluted earnings per share, a non-GAAP measure, was $1.75 for the nine months ended September 30, 2021, compared to $1.32 for the nine months ended September 30, 2020.
  • GAAP operating income was $107.2 million for the nine months ended September 30, 2021, compared to $85.9 million for the nine months ended September 30, 2020.
  • Adjusted operating income, a non-GAAP measure, was $138.8 million for the nine months ended September 30, 2021, compared to $110.3 million for the nine months ended September 30, 2020. 
  • Cash flow from operations was $145.1 million for the nine months ended September 30, 2021, compared to $102.9 million for the nine months ended September 30, 2020.
  • During the nine months ended September 30, 2021, the Company repurchased 580,826 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $79.9 million.

2021 GUIDANCE

Manhattan Associates provides the following revenue, operating margin and diluted earnings per share guidance for the full year 2021:

    Guidance Range – 2021 Full Year
  ($’s in millions, except operating margin and EPS) $ Range   % Growth Range  
                   
  Total revenue – current guidance $ 653     $ 655     11 %   12 %  
                   
  Total revenue – previous guidance $ 643     $ 650            
                   
  Operating Margin:                
  GAAP operating margin – current guidance   19.1 %     19.4 %          
  Equity-based compensation   6.7 %     6.6 %          
  Adjusted operating margin(1) – current guidance   25.8 %     26.0 %          
                   
  GAAP operating margin – previous guidance   18.8 %     19.4 %          
  Equity-based compensation   6.7 %     6.6 %          
  Adjusted operating margin(1) – previous guidance   25.5 %     26.0 %          
                   
  Diluted earnings per share (EPS):                
  GAAP EPS – current guidance $ 1.61     $ 1.63     18 %   20 %  
  Equity-based compensation, net of tax   0.58       0.58            
  Excess tax benefit on stock vesting   (0.07 )     (0.07 )          
  Adjusted EPS(1) – current guidance $ 2.12     $ 2.14     20 %   22 %  
                   
  GAAP EPS – previous guidance $ 1.50     $ 1.56            
  Equity-based compensation, net of tax   0.57       0.57            
  Excess tax benefit on stock vesting   (0.07 )     (0.07 )          
  Adjusted EPS(1) – previous guidance $ 2.00     $ 2.06            
                   
                   
  (1) Adjusted operating margin and adjusted EPS are non-GAAP measures that exclude the impact of equity-based  
  compensation and acquisition-related costs, and the related income tax effects of these items if applicable.  
     

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 and guideposts in the supplemental information below, are forward looking. Actual results may differ materially. See our cautionary note regarding “forward-looking statements” below. We note in particular that the severity, duration and ultimate impact of the COVID-19 pandemic are difficult to predict at this time. In addition, those statements do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of the release.

Manhattan Associates will make its 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 and guideposts, should be considered historical only, and Manhattan Associates disclaims any obligation to update them.

CONFERENCE CALL

Manhattan Associates’ conference call regarding its third quarter, financial results will be held today, October 26, 2021, 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.

Those who cannot listen to the live broadcast may access a replay shortly after the call by dialing +1.855.859.2056 in the U.S. and Canada, or +1.404.537.3406 outside the U.S., and entering the conference identification number 6277541 or via the web at ir.manh.com. The phone replay will be available for two weeks after the call, and the Internet webcast will be available until Manhattan Associates’ fourth quarter 2021 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 nine months ended September 30, 2021.

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, acquisition-related costs and the amortization of these costs, and (from time to time) restructuring charges – all net of income tax effects. 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 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 and on-premise 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 “2021 Guidance” and “Guideposts,” any statements about the future effect of the COVID-19 pandemic on our business, customers or the global economy, our business prospects following the pandemic, statements we make about market adoption of our cloud-based solution and other 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: the risk that the duration and severity of the COVID-19 pandemic, and its ultimate effects on the global economy, our customers and our business, may be worse than expected; risks related to transitioning our business from a traditional perpetual license software company (generally hosted by our customers on their own premises and equipment) to a subscription/cloud-based software-as-a service model; disruption in the retail sector; the possible effect of new U.S. tariffs on imports from other countries (and possible responsive tariffs on U.S. exports by other countries) on international commerce; 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; 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, 2020, 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 September 30,     Nine Months Ended September 30,  
    2021     2020     2021     2020  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Revenue:                                
Cloud subscriptions   $ 32,196     $ 21,064     $ 87,434     $ 56,827  
Software license     8,461       13,233       25,122       28,649  
Maintenance     34,479       37,305       108,370       108,947  
Services     88,172       73,470       253,234       232,654  
Hardware     5,877       4,685       17,989       12,213  
Total revenue     169,185       149,757       492,149       439,290  
Costs and expenses:                                
Cost of software license     690       527       1,802       1,673  
Cost of cloud subscriptions, maintenance and services     70,813       64,672       214,394       201,382  
Research and development     23,372       20,454       70,845       63,713  
Sales and marketing     14,057       11,399       41,203       34,196  
General and administrative     15,928       15,536       50,579       45,666  
Depreciation and amortization     1,917       2,193       6,136       6,796  
Total costs and expenses     126,777       114,781       384,959       353,426  
Operating income     42,408       34,976       107,190       85,864  
Other (loss) income, net     (42 )     (891 )     (29 )     371  
Income before income taxes     42,366       34,085       107,161       86,235  
Income tax provision     5,712       9,119       17,271       19,535  
Net income   $ 36,654     $ 24,966     $ 89,890     $ 66,700  
                                 
Basic earnings per share   $ 0.58     $ 0.39     $ 1.42     $ 1.05  
Diluted earnings per share   $ 0.57     $ 0.39     $ 1.40     $ 1.04  
                                 
Weighted average number of shares:                                
Basic     63,363       63,524       63,514       63,541  
Diluted     64,238       64,427       64,339       64,298  

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Reconciliation of Selected GAAP to Non-GAAP Measures
(in thousands, except per share amounts)

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2021     2020     2021     2020  
                                 
Operating income   $ 42,408     $ 34,976     $ 107,190     $ 85,864  
Equity-based compensation (a)     10,573       9,012       31,333       24,068  
Purchase amortization (c)     50       107       264       324  
Adjusted operating income (Non-GAAP)   $ 53,031     $ 44,095     $ 138,787     $ 110,256  
                                 
                                 
Income tax provision   $ 5,712     $ 9,119     $ 17,271     $ 19,535  
Equity-based compensation (a)     1,503       898       4,399       2,547  
Tax benefit of stock awards vested (b)     312       119       4,369       3,861  
Purchase amortization (c)     12       27       65       81  
Adjusted income tax provision (Non-GAAP)   $ 7,539     $ 10,163     $ 26,104     $ 26,024  
                                 
                                 
Net income   $ 36,654     $ 24,966     $ 89,890     $ 66,700  
Equity-based compensation (a)     9,070       8,114       26,934       21,521  
Tax benefit of stock awards vested (b)     (312 )     (119 )     (4,369 )     (3,861 )
Purchase amortization (c)     38       80       199       243  
Adjusted net income (Non-GAAP)   $ 45,450     $ 33,041     $ 112,654     $ 84,603  
                                 
                                 
Diluted EPS   $ 0.57     $ 0.39     $ 1.40     $ 1.04  
Equity-based compensation (a)     0.14       0.13       0.42       0.33  
Tax benefit of stock awards vested (b)               (0.07 )     (0.06 )
Purchase amortization (c)                    
Adjusted diluted EPS (Non-GAAP)   $ 0.71     $ 0.51     $ 1.75     $ 1.32  
                                 
Fully diluted shares     64,238       64,427       64,339       64,298  

(a)   Adjusted results exclude all equity-based compensation to facilitate comparison with our peers and because it typically does not require cash settlement. As explained in our Current Report on Form 8-K filed today with the SEC, we do not include this expense when assessing our operating performance. We do not receive a GAAP tax benefit for a portion of our equity-based compensation, mainly due to Section 162(m) of the Internal Revenue Code, which limits tax deductions for compensation granted to certain executives. The Tax Cuts and Jobs Act further increased those limitations.

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2021     2020     2021     2020  
                                 
Cost of services   $ 3,977     $ 2,695     $ 10,769     $ 7,306  
Research and development     2,139       1,863       6,247       4,926  
Sales and marketing     1,073       919       3,198       2,478  
General and administrative     3,384       3,535       11,119       9,358  
Total equity-based compensation   $ 10,573     $ 9,012     $ 31,333     $ 24,068  

(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 excluded 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 excluded the related tax benefit (expense) generated upon their vesting.

(c)  Adjustments represent purchased intangibles amortization from a prior acquisition. We exclude that amortization from adjusted results to facilitate comparison with our peers, to facilitate comparisons of the results of our core operations from period to period and for the other reasons explained in our Current Report on Form 8-K filed with the SEC.

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)

    September 30, 2021     December 31, 2020  
    (unaudited)          
ASSETS                
Current assets:                
Cash and cash equivalents   $ 246,445     $ 204,705  
Accounts receivable, net of allowance of $3,930 and $3,497, at September 30, 2021 and December 31, 2020, respectively     115,344       109,202  
Prepaid expenses and other current assets     23,878       20,134  
Total current assets     385,667       334,041  
                 
Property and equipment, net     14,272       17,903  
Operating lease right-of-use assets     27,602       31,470  
Goodwill, net     62,242       62,252  
Deferred income taxes     5,939       5,760  
Other assets     18,561       13,986  
Total assets   $ 514,283     $ 465,412  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 21,647     $ 17,805  
Accrued compensation and benefits     51,626       41,962  
Accrued and other liabilities     20,589       21,181  
Deferred revenue     136,452       114,164  
Income taxes payable     2,548       1,874  
Total current liabilities     232,862       196,986  
                 
Operating lease liabilities, long-term     23,881       27,843  
Other non-current liabilities     18,913       21,686  
                 
Shareholders’ equity:                
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2021 and 2020            
Common stock, $0.01 par value; 200,000,000 shares authorized; 63,281,757 and 63,527,186 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively     633       635  
Retained earnings     257,507       236,524  
Accumulated other comprehensive loss     (19,513 )     (18,262 )
Total shareholders’ equity     238,627       218,897  
Total liabilities and shareholders’ equity   $ 514,283     $ 465,412  

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)

    Nine Months Ended September 30,  
    2021     2020  
    (unaudited)     (unaudited)  
Operating activities:                
Net income   $ 89,890     $ 66,700  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation and amortization     6,136       6,796  
Equity-based compensation     31,333       24,068  
Loss on disposal of equipment     14       15  
Deferred income taxes     (213 )     2,409  
Unrealized foreign currency (gain) loss     (949 )     415  
Changes in operating assets and liabilities:                
Accounts receivable, net     (7,296 )     (3,799 )
Other assets     (8,328 )     2,331  
Accounts payable, accrued and other liabilities     13,429       (15,446 )
Income taxes     (2,965 )     547  
Deferred revenue     24,029       18,832  
Net cash provided by operating activities     145,080       102,868  
                 
Investing activities:                
Purchase of property and equipment     (2,158 )     (1,928 )
Net cash used in investing activities     (2,158 )     (1,928 )
                 
Financing activities:                
Purchase of common stock     (100,242 )     (43,523 )
Net cash used in financing activities     (100,242 )     (43,523 )
                 
Foreign currency impact on cash     (940 )     (1,841 )
                 
Net change in cash and cash equivalents     41,740       55,576  
Cash and cash equivalents at beginning of period     204,705       110,678  
Cash and cash equivalents at end of period   $ 246,445     $ 166,254  

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

1.   Continuing Impact of COVID-19:

Regarding the impact of the COVID-19 pandemic, we remain cautious about the global recovery, which we expect to be protracted.

Despite the COVID-19 pandemic, our results for the first nine months exceeded our expectations due to solid demand for our cloud solutions. Our solutions are mission critical, supporting complex global supply chains. Favorable secular tailwinds, such as the digital transformation of businesses in manufacturing, wholesale and retail, coupled with our commitment to investing in organic innovation to deliver leading cloud supply chain, inventory and omnichannel commerce solutions, are in synergistic alignment with current market demand. This alignment contributed to higher demand and strong win rates for our solutions for the period.

We remain committed to investing in our business to drive customer success and expand our total addressable market, which we believe will position us well to achieve long-term sustainable growth and earnings.

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

  2020     2021  
  1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr     2nd Qtr     3rd Qtr     YTD  
GAAP Diluted EPS $ 0.35     $ 0.30     $ 0.39     $ 0.32     $ 1.36     $ 0.35     $ 0.48     $ 0.57     $ 1.40  
Adjustments to GAAP:                                                                      
Equity-based compensation   0.10       0.10       0.13       0.13       0.46       0.13       0.14       0.14       0.42  
Tax benefit of stock awards vested   (0.06 )                       (0.06 )     (0.06 )     (0.01 )           (0.07 )
Purchase amortization                                                  
Adjusted Diluted EPS $ 0.40     $ 0.40     $ 0.51     $ 0.45     $ 1.76     $ 0.43     $ 0.61     $ 0.71     $ 1.75  
Fully Diluted Shares   64,342       64,126       64,427       64,484       64,333       64,466       64,276       64,238       64,339  

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

  2020     2021  
  1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr     2nd Qtr     3rd Qtr     YTD  
Revenue:  
Americas $ 123,146     $ 107,368     $ 121,168     $ 114,257     $ 465,939     $ 122,813     $ 132,308     $ 135,233     $ 390,354  
EMEA   24,313       21,558       21,721       25,990       93,582       28,434       27,190       27,402       83,026  
APAC   6,444       6,704       6,868       6,835       26,851       5,603       6,616       6,550       18,769  
  $ 153,903     $ 135,630     $ 149,757     $ 147,082     $ 586,372     $ 156,850     $ 166,114     $ 169,185     $ 492,149  
                                                                       
GAAP Operating Income:  
Americas $ 16,282     $ 18,984     $ 27,296     $ 18,547     $ 81,109     $ 16,116     $ 28,590     $ 29,727     $ 74,433  
EMEA   6,313       5,515       5,319       7,490       24,637       8,374       8,643       10,485       27,502  
APAC   1,601       2,193       2,361       2,160       8,315       935       2,124       2,196       5,255  
  $ 24,196     $ 26,692     $ 34,976     $ 28,197     $ 114,061     $ 25,425     $ 39,357     $ 42,408     $ 107,190  
                                                                       
Adjustments (pre-tax):  
Americas:                                                                      
Equity-based
  compensation
$ 7,564     $ 7,492     $ 9,012     $ 9,287     $ 33,355     $ 10,051     $ 10,709     $ 10,573     $ 31,333  
Purchase amortization   107       110       107       105       429       107       107       50       264  
  $ 7,671     $ 7,602     $ 9,119     $ 9,392     $ 33,784     $ 10,158     $ 10,816     $ 10,623     $ 31,597  
                                                                       
                                                                       
Adjusted non-GAAP Operating Income:  
Americas $ 23,953     $ 26,586     $ 36,415     $ 27,939     $ 114,893     $ 26,274     $ 39,406     $ 40,350     $ 106,030  
EMEA   6,313       5,515       5,319       7,490       24,637       8,374       8,643       10,485       27,502  
APAC   1,601       2,193       2,361       2,160       8,315       935       2,124       2,196       5,255  
  $ 31,867     $ 34,294     $ 44,095     $ 37,589     $ 147,845     $ 35,583     $ 50,173     $ 53,031     $ 138,787  
                                                                       

4.   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):

                                                                       
  2020     2021  
  1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr     2nd Qtr     3rd Qtr     YTD  
Revenue $ (988 )   $ (777 )   $ 1,165     $ 1,946     $ 1,346     $ 2,932     $ 3,209     $ 823     $ 6,964  
Costs and expenses   (996 )     (1,430 )     291       918       (1,217 )     2,000       2,442       551       4,993  
Operating income   8       653       874       1,028       2,563       932       767       272       1,971  
Foreign currency gains (losses)
  in other income
  1,348       (193 )     (913 )     (639 )     (397 )     (287 )     315       (30 )     (2 )
  $ 1,356     $ 460     $ (39 )   $ 389     $ 2,166     $ 645     $ 1,082     $ 242     $ 1,969  

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):

  2020     2021  
  1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr     2nd Qtr     3rd Qtr     YTD  
Operating income $ 308     $ 895     $ 601     $ 445     $ 2,249     $ 79     $ (294 )   $ (37 )   $ (252 )
Foreign currency gains
  (losses) in other income
  1,450       262       (1,165 )     (381 )     166       315       535       3       853  
Total impact of changes in the
  Indian Rupee
$ 1,758     $ 1,157     $ (564 )   $ 64     $ 2,415     $ 394     $ 241     $ (34 )   $ 601  

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

  2020     2021  
  1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr     2nd Qtr     3rd Qtr     YTD  
Interest income $ 68     $ 28     $ 8     $ (6 )   $ 98     $ (15 )   $ (10 )   $ (9 )   $ (34 )
Foreign currency gains (losses)   1,348       (193 )     (913 )     (639 )     (397 )     (287 )     315       (30 )     (2 )
Other non-operating
  income (expense)
  4       7       14       (11 )     14       9       1       (3 )     7  
Total other income (loss) $ 1,420     $ (158 )   $ (891 )   $ (656 )   $ (285 )   $ (293 )   $ 306     $ (42 )   $ (29 )

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

  2020     2021                          
  1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr     2nd Qtr     3rd Qtr     YTD  
Capital expenditures $ 1,245     $ 507     $ 176     $ 802     $ 2,730     $ 569     $ 602     $ 987     $ 2,158  

7.   Stock Repurchase Activity (in thousands):

  2020     2021  
  1st Qtr     2nd Qtr     3rd Qtr     4th Qtr   Full Year     1st Qtr     2nd Qtr     3rd Qtr     YTD  
Shares purchased under publicly announced buy-back program   337                    –       337       214       244       123       581  
Shares withheld for taxes due upon vesting of restricted stock units   219       2       4             225       172       1       5       178  
Total shares purchased   556       2       4             562       386       245       128       759  
                                                                       
Total cash paid for shares purchased under publicly announced buy-back program $ 25,000     $     $     $     $ 25,000     $ 26,988     $ 32,894     $ 19,994     $ 79,876  
Total cash paid for shares withheld for taxes due upon vesting of restricted stock units   18,032       123       368       38       18,561       19,414       190       762       20,366  
Total cash paid for shares repurchased $ 43,032     $ 123     $ 368     $ 38     $ 43,561     $ 46,402     $ 33,084     $ 20,756     $ 100,242  

8.   Remaining Performance Obligations

We disclose revenue we expect to recognize from our remaining performance obligations. Our reported performance obligations primarily represent cloud 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). Our deferred revenue on the balance sheet primarily relates to our maintenance contracts, which are typically one year in duration and are not included in the remaining performance obligations. Below are our remaining performance obligations as of the end of each period (in thousands):

  March 31,
2020
    June 30,
2020
    September 30,
2020
    December 31,
2020
    March 31,
2021
    June 30,
2021
    September 30,
2021
 
Remaining Performance Obligations $ 202,793     $ 225,470     $ 257,287     $ 308,761     $ 421,196     $ 488,718     $ 573,712  

9.   Guideposts

The following table shows (i) our guideposts provided on February 2, 2021, for cloud revenue and remaining performance obligations (“RPO”) for each year 2021 through 2023, and (ii) our current guideposts for each year 2021 through 2024.

  Feb 2, 2021 Guideposts     Current Guideposts    
  ($’s in millions)     ($’s in millions)    
                                                                         
  Cloud Revenue     Cloud Revenue    
  Year   Low     Mid     High     %
Growth
(1)
    Year   Low     Mid     High     %
Growth
(1)
   
  2021   $ 108     $ 109     $ 110       37 %   2021   $ 120     $ 121     $ 121       51 %  
  2022   $ 135     $ 143     $ 150       31 %   2022   $ 160     $ 163     $ 165       35 %  
  2023   $ 190     $ 203     $ 215       42 %   2023   $ 220     $ 230     $ 240       42 %  
  2024   n/a     n/a     n/a     n/a     2024   $ 310     $ 328     $ 345       42 %  
                                                                         
  Remaining Performance Obligations     Remaining Performance Obligations    
  Year   Low     Mid     High     %
Growth
(1)
    Year   Low     Mid     High     %
Growth
(1)
   
  2021   $ 450     $ 500     $ 550       62 %   2021   $ 675     $ 688     $ 700       123 %  
  2022   $ 625     $ 700     $ 775       40 %   2022   $ 950     $ 1,000     $ 1,050       45 %  
  2023   $ 850     $ 950     $ 1,050       36 %   2023   $ 1,250     $ 1,325     $ 1,400       33 %  
  2024   n/a     n/a     n/a     n/a     2024   $ 1,600     $ 1,700     $ 1,800       28 %  
                                                                         
  (1) Year-over-year percentage growth is calculated based on the forecasted mid-points.    
                                                                         
Contact: Michael Bauer Rick Fernandez
  Senior Director,
Investor Relations
Director, 
Corporate Communications
  Manhattan Associates, Inc. Manhattan Associates, Inc.
  678-597-7538 678-597-6988
  mbauer@manh.com rfernandez@manh.com

Manhattan Associates Inc



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