Manhattan Associates (NASDAQ:MANH) reported better-than-expected fourth-quarter and full-year 2025 results, pointing to record cloud bookings in the fourth quarter and annual records across remaining performance obligations (RPO), cloud bookings, total revenue, operating income, free cash flow, and earnings per share. Management also introduced a new “ramped ARR” metric intended to help investors assess cloud revenue growth as subscription contracts ramp to full pricing.
Fourth-quarter results and record RPO
For the fourth quarter, Manhattan reported revenue of $270 million, up 6% year over year. Cloud revenue increased 20% to $109 million, while services revenue totaled $120 million and returned to growth earlier than management’s original plan. Adjusted earnings per diluted share were $1.21, while GAAP EPS was $0.86.
Full-year 2025 performance and cash flow
For the full year, revenue totaled $1.08 billion, up 4% on an as-reported basis. CFO Dennis Story noted that excluding license and maintenance revenue—removing the “revenue compression” associated with the company’s cloud transition—full-year revenue growth was 5%. Full-year cloud revenue rose 21% to $408 million, while services revenue declined 4% to $503 million.
Adjusted operating profit was $91 million in Q4 (a 33.8% margin). Full-year adjusted operating profit was $387 million, with a 35.8% margin, representing more than 100 basis points of improvement over 2024. Story attributed outperformance to strong cloud revenue and operating leverage as the cloud business scales.
Cash flow was a highlight. Fourth-quarter operating cash flow increased 40% to $147 million, and Story cited a 52.7% free cash flow margin in the quarter. Full-year operating cash flow rose 32% to $389 million, with a 34.6% free cash flow margin.
Manhattan ended 2025 with $329 million in cash and zero debt. The company repurchased $75 million of stock in the quarter and $275 million during 2025, and the board approved replenishment of a $100 million share repurchase authorization.
New disclosure: “ramped ARR” and renewal dynamics
Management introduced a “four-year annualized value of recurring revenue,” or ramped ARR, to reflect how many cloud contracts ramp toward full subscription pricing over time. Story said the metric assumes renewals occurring within the four-year window renew at current pricing, with no churn or price increases assumed, and excludes pricing ramps beyond the four-year horizon.
At the conclusion of 2025, ramped ARR exceeded $600 million, up 23% compared to the end of 2024. Clark and Story emphasized that many contracts reach or approach full ramp pricing by the fourth year of the subscription.
On renewals, Story said renewals (excluding cross-sells) represented about 18% of total bookings in 2025. Contract duration remains approximately 5.5 to 6 years, and Story said 38% of RPO is expected to be recognized as revenue over the next 24 months. Management also discussed the possibility of renewing some deals at three years rather than five years in order to create earlier pricing discussions, noting that relying on RPO alone could make shorter renewals appear unfavorable without the added context of ramped ARR.
Product and go-to-market updates: AI agents, Active platform, and services hiring
Clark said Manhattan achieved “record cloud bookings” in Q4 and highlighted investments made during 2025 across platform, product, and people. Several weeks before the call, Manhattan announced commercial availability of its initial set of AI agents and the Agent Foundry, which allows customers to build or customize agents within the Active platform using natural language. Management said early adopters reported “significant value” through automation and simplicity, supporting productivity, ROI, and customer satisfaction.
Clark described the AI agents as embedded directly into the Active platform, aiming to avoid costly external data lake implementations. He said the company plans an “aggressive product roadmap” and expects incremental agentic features throughout 2026. In Q&A, Clark outlined a monetization approach starting with a 90-day, low-cost pilot supported by forward-deployed engineers, with monetization occurring after the proof of concept through a “standard uplift” structure similar to other product add-ons.
Manhattan also highlighted product initiatives including:
- Enterprise Promise & Fulfill, designed to optimize B2B order promising and fulfillment.
- A new fulfillment optimization simulation capability for order management customers.
- Continued momentum in Active Warehouse and Active Transportation, supported by a “unification” message that customers increasingly want a single platform for warehouse and transportation optimization.
On operations, Clark said the company reorganized its global sales team under Chief Sales Officer Bob Howell and hired Greg Betts as Chief Operating Officer to introduce new growth programs, including an updated partner program for global system integrators and technology partners. Manhattan also hired Katie Foote as Chief Marketing Officer.
Story said the company has already onboarded about 100 new services associates in January to support bookings growth and the “significant Agentic AI opportunity.”
2026 outlook: revenue, RPO, margins, and cloud growth
For 2026, Manhattan guided to RPO of $2.62 billion to $2.68 billion, implying 18% to 20% growth. Story said the target includes an 18% to 20% contribution from renewals as a mix of the RPO target, and reiterated that bookings can be “lumpy” depending on large deal timing.
Total revenue guidance for 2026 is $1.133 billion to $1.153 billion. The midpoint implies 10% growth excluding license and maintenance attrition and 6% all-in. First-quarter revenue guidance is $272 million to $274 million.
Story guided to 2026 adjusted operating margin of 34.5% to 35%, which includes increased investment in sales and marketing and expanded services teams. Full-year adjusted EPS guidance is $5.04 to $5.20, with GAAP EPS of $3.37 to $3.53. The company expects an effective tax rate of 22% and a diluted share count of 61 million, assuming no buybacks.
On segment expectations, Story said the company expects:
- Cloud revenue to increase 21% to $492 million in 2026.
- Services revenue to increase 3% to $517 million.
- Maintenance and license attrition to be a roughly 4-point headwind to total revenue growth, with maintenance expected to decline 19% to $105.5 million.
Management also addressed a cloud revenue headwind from customer liquidation: Story said Q4 cloud revenue included a $1.3 million headwind not embedded in guidance, equating to $2.5 million annualized, and added that the impact is now baked into the company’s outlook.
About Manhattan Associates (NASDAQ:MANH)
Manhattan Associates, Inc (NASDAQ: MANH) is a provider of supply chain and omnichannel commerce software solutions designed to optimize the flow of goods, information and funds across enterprise operations. Its flagship offerings include warehouse management, transportation management, order management and omnichannel fulfillment applications. These solutions are delivered through a cloud-native platform called Manhattan Active, which enables retailers, manufacturers, carriers and third-party logistics providers to orchestrate inventory, manage distribution and improve customer service in real time.
Key product areas include Manhattan Active Warehouse Management, which automates and optimizes warehouse operations from receiving through shipping; Manhattan Active Transportation Management, supporting carrier selection, routing and freight payment; and Manhattan Active Omni, which unifies order capture, inventory visibility and fulfillment across stores, distribution centers and e-commerce channels.
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