Manhattan 2025 Q2 Earnings Surpassing Expectations with 7.6% Net Income Growth

Manhattan Associates (MANH) reported its fiscal 2025 Q2 earnings on July 22nd, 2025. The company's results exceeded market expectations, with a notable increase in both revenue and net income, reflecting strong operational performance. Manhattan also raised its full-year guidance, projecting total revenue between $1.071 billion and $1.075 billion, with a midpoint EPS of $4.80, up by $0.21 from previous estimates. The company cited robust cloud revenue growth as a key driver of these positive results.

Revenue

Manhattan Associates reported total revenue of $272.42 million for Q2 2025, marking a 2.7% increase from $265.32 million in Q2 2024. Cloud subscriptions contributed significantly, bringing in $100.42 million, while software license revenue was $1.53 million. The maintenance segment accounted for $35.06 million. Services generated $128.90 million, and hardware sales amounted to $6.51 million, leading to the total revenue figure.

Earnings/Net Income

Manhattan's earnings per share rose 9.3% to $0.94 in Q2 2025 from $0.86 in Q2 2024, demonstrating continued earnings growth. The company's net income increased by 7.6% to $56.78 million, compared to $52.77 million in the previous year. This performance highlights the company's ongoing profitability and strong financial health, with EPS reflecting positively on its fiscal strategies.

Post-Earnings Price Action Review

The strategy of acquiring Manhattan (MANH) shares after a revenue increase quarter-over-quarter on the financial report release date and holding for 30 days has consistently yielded substantial returns over the past three years. This approach generated a remarkable return of 126.03%, significantly outperforming the benchmark return of 88.65%. The excess return of 37.37% underscores the strategy's effectiveness in leveraging positive earnings news. With a compound annual growth rate (CAGR) of 17.79% and a maximum drawdown of 0.00%, the strategy demonstrates robust risk-adjusted returns and minimal downside risk, emphasizing its potential for investors.

CEO Commentary

Eric A. Clark, President and CEO, stated that Manhattan's Q2 results exceeded expectations, driven by a 22% growth in cloud revenue. He highlighted strong business fundamentals and a solid pipeline, emphasizing numerous opportunities for growth through new customer acquisitions and cross-selling. Clark noted ongoing caution regarding services revenue growth due to macroeconomic uncertainties but expressed optimism about their long-term potential. He acknowledged the strategic importance of increasing investments in sales and marketing and the successful integration of AI capabilities, which are expected to enhance operational efficiency and drive customer value.

Guidance

Manhattan Associates expects total revenue for 2025 to range between $1.071 billion and $1.075 billion, with a midpoint of $1.073 billion. The adjusted earnings per share (EPS) guidance is raised to a midpoint of $4.80, reflecting an increase of $0.21 from prior estimates. For Q3, the company targets total revenue of $270 million to $272 million and anticipates an adjusted operating margin of 35%. The RPO is projected to reach between $2.11 billion and $2.15 billion, excluding FX impacts.

Additional News

In recent developments, Manhattan Associates expanded its partnership with Google Cloud by launching its Manhattan Active® solutions on Google Cloud Marketplace, enhancing accessibility and digital transformation capabilities for customers. The company has also made strategic changes to its Board of Directors, with the retirements of John J. Huntz Jr. and Deepak Raghavan. Furthermore, Manhattan Associates announced a new share repurchase program, replenishing the authority to buy back $100 million of shares, following the repurchase of 262,341 shares for $49.6 million in Q2. These moves reflect Manhattan's strategic focus on growth and shareholder value.