Manhattan Associates Inc (NASDAQ: MANH) This autumn 2025 Earnings Name dated Jan. 27, 2026
Company Members:
Michael Bauer — Head of Investor Relations
Eric Clark — President & Chief Govt Officer
Dennis Story — Govt Vice President and Chief Monetary Officer
Analysts:
Terrell Tillman — Analyst
Brian Peterson — Analyst
George Kurosawa — Analyst
Joseph Vruwink — Analyst
Dylan Becker — Analyst
Parker Lane — Analyst
Christopher Quintero — Analyst
Man Hardwick — Analyst
Mark Schappel — Analyst
Clark Wright — Analyst
Presentation:
operator
Good afternoon. My identify is Julian and I shall be your convention facilitator at present. Presently, I wish to welcome everybody to Manhattan Associates This autumn 2025 earnings convention name. All strains have been positioned on mute to forestall any background noise. After the speaker’s remarks, there shall be a query and reply interval. I wish to ask everybody. I wish to ask a query. In case you’d wish to ask a query throughout this query and reply interval. So we press star, then one in your phone keypad. In case you’d wish to withdraw your query, press star after which the quantity two.
As a reminder, girls and gents, this name is being recorded at present, January 27, 2026. I’d now wish to introduce you to our host, Mr. Michael Bauer, head of investor relations of Manhattan Associates. Mr. Bauer, it’s possible you’ll start your convention.
Michael Bauer — Head of Investor Relations
Nice. Thanks, Julian. And good afternoon everybody. Welcome to Manhattan Associates 2025 fourth quarter earnings name. I’ll assessment our cautionary language after which flip the decision over to our President and Chief Govt Officer Eric Clark. Throughout this name, together with the Q and A session, we might make ahead wanting statements concerning the longer term occasions or Manhattan Associates future monetary efficiency.
We warning you that these ahead wanting statements contain danger and uncertainties will not be ensures of future efficiency and precise outcomes might differ materially from the projections contained in our ahead wanting statements. I refer you to Manhattan Associates SEC reviews for essential elements that might trigger precise outcomes to vary materially from these in our projections, notably our annual report on Kind 10K for fiscal yr 2024 and the danger issue dialogue in that report and any danger issue updates we offer in our subsequent Kind 10Qs. Please observe that the turbulent international macro atmosphere might impression our efficiency and trigger precise outcomes to vary materially from our projections.
We’re beneath no obligation to replace these statements. As well as, our feedback embody sure non GAAP monetary measures. To supply further data to buyers, now we have reconciled all non GAAP measures to the associated GAAP measures in accordance with SEC guidelines. You’ll discover reconciliation schedules within the Kind 8K we filed with the SEC earlier at present and on our web site@manh.com now. I’ll flip the decision over to Eric.
Eric Clark — President & Chief Govt Officer
Thanks, Mike. Good afternoon everybody and thanks for becoming a member of us as we assessment our higher than anticipated fourth quarter and full yr 2020 outcomes in addition to present our outlook for 2026. 2025 was a profitable yr for Manhattan and we ended the yr robust, attaining file cloud bookings within the fourth quarter. In a risky atmosphere, Manhattan achieved annual information throughout RPO cloud bookings, complete income, working revenue, free money move and earnings per share. Recall Again in April on my first earnings name, I highlighted how Manhattan’s strengths are effectively established as our our merchandise and our persons are acknowledged as world class by strategic investments. We’ve strengthened every of those areas in 2025, positioning us to speed up our momentum in 2026 and past. So let me briefly contact on every in 2025 we prolonged our place because the main innovator throughout the provide chain commerce universe and enabled quicker implementation of our business main options.
Whereas I’ll present a extra detailed platform and product replace in a couple of minutes, I’m excited to say that a number of weeks in the past on the heels of a profitable early entry program, we introduced the industrial availability of our preliminary set of AI brokers and our Agent Foundry, which is our providing that permits clients to construct or customise new brokers instantly within the energetic platform utilizing pure language. Excitingly, outcomes and suggestions from our early adopters point out that our AI agent workforce generates vital worth as elevated automation and ease can drive larger productiveness, ROI and enhance buyer satisfaction.
In 2025 our R& D crew launched further new choices together with Enterprise Promise and Fulfill which is designed to optimize B2B order promising and success in addition to launched quite a few business main options and performance throughout our provide chain commerce options on the individuals entrance to enhance our effectiveness and speed up our promoting velocity to each new and current clients. In 2025 we made key hires and launched a number of new applications inside our gross sales and advertising group. To briefly recap, we reorganized our whole international gross sales crew beneath the management of our Chief Gross sales Officer Bob Howells, and added a number of new gross sales leaders and product specialists to the crew.
Moreover, we employed Greg Betts as our Chief Working Officer and beneath his management now we have launched a number of new applications to drive progress. Final week at our gross sales kickoff in Atlanta, we hosted a Associate Day that was attended by greater than 100 individuals from throughout our accomplice neighborhood. Greg and his crew launched our up to date accomplice program for international SIS Manhattan specialists in addition to expertise companions like Google and Shopify. And some weeks in the past we introduced the hiring of Katie Foots as Chief Advertising Officer. Katie brings greater than 20 years of promoting management for expertise firms.
Most just lately, she was the CMO at Captivate IQ and previous to that she held a number of management roles@salesforce.com I’m excited to say that Katie hit the bottom working and spent her first week with Manhattan at NRF in New York. We’re delighted to have her on the crew. Now pivoting to quarterly outcomes, This autumn was a file quarter that exceeded expectations. Income elevated 6% to $270 million, highlighted by 20% progress in cloud and a return to progress in providers. This resulted in adjusted earnings per diluted share rising to $1.21. RPO elevated 25% to $2.2 billion in This autumn. Aggressive win charges remained over 70% and greater than 75% of our new cloud bookings have been generated from web new logos.
For the total yr, our crew did a unbelievable job gaining market share as new logos represented greater than 55% of our 2025 new cloud bookings. With our rising alternative for growth from current clients, we anticipate web new logos to revert to 1 third of our new cloud bookings over time. Manhattan has all the time had robust cloud income visibility and that offers us confidence within the sturdiness of our progress. To raised help buyers evaluation of our enterprise at present, Dennis will present further shade on renewals and annual recurring income. Lots of our contracts will attain or strategy full ramp pricing by the fourth yr of subscription.
So to higher showcase this dynamic, we’re introducing a 4 yr annualized worth of recurring income or a ramped ARR. This ramped ARR alongside RPO will assist buyers quantify the tempo of our cloud income progress over time. On the conclusion of 2025, our ramped ARR exceeded $600 million and was up 23% in comparison with the ramped ARR on the conclusion of 2024. From a vertical gross sales perspective, our finish markets are various and now we have wholesome established footprints throughout quite a few subsectors which embody retail, grocery, meals distribution, life sciences, industrial expertise, airways, third social gathering logistics and extra. For instance, This autumn offers included the next a Fortune 100 house enchancment firm turned a brand new emblem Lively Warehouse Buyer, an upscale division retailer chain turned a brand new emblem Lively Omni and Lively Warehouse Buyer, the biggest international supplier of medical surgical merchandise turned a brand new emblem Lively Warehouse Buyer, a way of life model and omnichannel retailer of premium house furnishings that was an current warehouse buyer expanded to incorporate Lively Omni, a medical provides gear and providers firm, turned a brand new emblem Lively Provide Chain Planning Buyer, a house furnishing wholesaler turned a brand new emblem Lively Transportation and Lively Warehouse Buyer and plenty of extra as effectively.
So searching to the brand new yr, our pipeline stays robust throughout our product suite and now we have quite a few alternatives to drive progress together with including new clients, cross promoting our rising unified product portfolio and changing our on premise clients to the cloud and renewing our preliminary sizable cohort of energetic warehouse clients. So now let me briefly present some updates on our business main merchandise. As I said earlier, we just lately made our agenti AI product set commercially out there to our whole energetic buyer neighborhood. Our Lively Agent providing consists of two major parts, a set of base brokers which might be able to be activated instantly and our Agent Foundry providing which permits our clients to shortly construct and deploy their very own brokers throughout the energetic platform.
We designed our base AI brokers in collaboration with a set of key clients to supply rapid worth to our clients by fixing essential daily issues in areas like warehouse, transportation, contact heart and shops. As a result of we constructed our energetic brokers instantly into the platform, our clients don’t have to implement expensive and complicated exterior knowledge lakes to make them work. Our API first structure permits us to resolve a rising checklist of excessive impression issues with nearly no configuration or further upfront effort. And whereas our energetic brokers are extremely succesful, at present now we have an aggressive product roadmap which can each improve our current brokers with new options and ship totally new brokers.
Our agile software program supply course of permits us to ship these further agentic options on an incremental foundation all through 2026. Along with these base brokers, this month we additionally launched our Agent Foundry. This intuitive device permits our clients clients to construct their very own AI brokers. Foundry gives a visible editor to permit clients to both begin with an current base agent and improve it or to create an agent totally from scratch. To realize this, Foundry gives our clients with a complete set of each base API and agentic tooling and through our early entry program this fall, our ahead deployed engineers use Foundry to allow our clients to create highly effective new brokers goal constructed to deal with particular operational challenges when it comes to commercialization.
Our aim is to make it straightforward for our clients to begin their agentic journey with us and we’re going to do this by providing a low danger Lively Agent pilot to get began. We’re assured that the mixture of our highly effective base brokers, the pliability supplied by Foundry and the deep technical and area experience of our Manhattan Ahead deployed engineers will present a compelling motive for our clients so as to add an Lively Agent subscription after they full their pilot. Our Lively Brokers made their public debut a number of weeks in the past at NRF the place there was curiosity robust curiosity for these new AI capabilities and our Lively Retailer providing which is centered round our Lively Level of Sale utility.
Designed from the outset to be cellular first and cloud native, Lively Level of Sale now additionally embeds agentic AI to assist retailer associates change into more practical sellers with actual time insights into gross sales efficiency and the flexibility to know what’s promoting effectively throughout the community, our Retailer Affiliate Agent gives prescriptive suggestions throughout the Level of Sale utility. As a result of a lot of our Lively Retailer clients additionally use our energetic oms. These promoting insights and proposals are by a really view of our clients Commerce Exercise Talking of order administration, this quarter we’re additionally releasing a strong new success optimization simulation functionality.
Our clients can now experiment with a wide range of optimization settings to make sure they’re assembly the general wants of their enterprise at any given time. Lots of our clients change their view of what optimum success means all through the course of the yr. In the course of the vacation season, pace of supply might predominate, whereas on the finish of the spring season there’s seemingly extra emphasis on transport distressed stock to keep away from markdowns. Our new simulation function permits our clients to check quite a few these methods, evaluate the outcomes, and make sure the system is able to pivot success methods when the enterprise requires it.
Like interactive stock, we venture success simulation to have robust cross promote potential for our energetic Omni clients. And at last, we proceed to expertise robust gross sales and implementation outcomes throughout our provide chain Execution Functions Our energetic warehouse utility continues to distinguish itself each its purposeful and technical superiority throughout choice processes. The overwhelming majority of prospects attain the conclusion that solely Manhattan’s energetic warehouse utility will meet their wants. And 2025 was additionally a robust yr for our energetic transportation utility with respect to each strategic wins and key go lives across the globe, our unification message continues to resonate.
Clients not wish to choose separate stacks for warehouse and transportation. They see the actual energy of a single platform optimizing inbound and outbound move all through their provide chain. In order that concludes my enterprise replace. I’ll now flip it over to Dennis to report on our monetary efficiency and outlook after which we’ll transfer on to Q and A. So Dennis, thanks.
Dennis Story — Govt Vice President and Chief Monetary Officer
Thanks Eric. As Eric highlighted, In 2025 we set information throughout e-book our P and L and money move. Congratulations to our crew members across the globe for excellent execution in a risky macro atmosphere. I’ll begin by recapping our higher than anticipated monetary efficiency for the quarter and yr. All progress charges are on an as reported yr over yr foundation except in any other case said. Relating to FX, it was a 1 level tailwind to our This autumn income progress charge and didn’t have a fabric impression on our full yr income progress charge for RPO, FX was lower than a $1 million tailwind to sequential RPO progress and a $41 million tailwind to yr over yr RPO progress As Eric highlighted.
To raised help buyers evaluation of our enterprise at present, we’re offering further shade on renewals and annual recurring income ARR. Lots of our contracts attain or strategy full ramp pricing within the full yr of the subscription settlement and so to supply further perception on our cloud income visibility, we’re introducing a 4 yr annualized worth of recurring Income or ramped ARR. Our assumptions for ramped ARR are as follows. If a renewal is about to happen throughout this 4 yr interval, it renews at present pricing with no churn or value will increase assumed. Additionally, if a pricing ramp schedule extends past the 4 yr window, which at present that will be any ramps past 2029, that future uplift isn’t included.
On the conclusion of 2025, our ramped ARR exceeded $600 million and was up 23% in comparison with the ramp interval on the finish of 2024. Please recall offers that embody ramp pricing are solely time primarily based which helps our robust cloud income visibility. So transferring to This autumn complete income was $270 million up 6% and full yr income totaled 1.08 billion, up 4%. Excluding license and upkeep income which removes the income compression by our cloud transition, This autumn income progress was 9% and full yr 5%. This autumn cloud income totaled $109 million, up 20% and features a buyer liquidation headwind of $1.3 million that was not embedded in in our steerage.
This resulted in full yr cloud income rising 21% to $408 million. As Eric said, we achieved file cloud bookings in This autumn as we closed out 2025 with RPO of $2.2 billion, rising 25% yr over yr and seven% sequentially. Our RPO power was pushed by continued new emblem momentum which was a major contributor to our roughly 20% progress in new cloud bookings for the yr. Renewals, which doesn’t embody cross gross sales, have been about 18% of complete bookings in 2025. Contract period stays at 5.5 to six years, leading to 38% of RPO to be acknowledged as income over the subsequent 24 months.
This autumn providers income of $120 million was higher than anticipated as stable execution returned this line merchandise again to progress sooner than our unique plan. For the total yr providers income declined 4% to $503 million. This autumn adjusted working revenue was $91 million with an working margin of 33.8%. Full yr adjusted working revenue totaled $387 million with 35.8% working margin and represents over 100 foundation factors of enchancment over 2024. The higher than the anticipated This autumn and 2025 outcomes have been pushed by robust cloud income mixed with working leverage. As our cloud enterprise scales, This autumn earnings per share elevated 3% to $1.21 and GAAP earnings per share elevated 12% to 86 cents.
Massive whopper there. This resulted in full yr adjusted earnings per share rising 7% to $5.06 and GAAP earnings per share to extend 3% to $3.60. As mentioned in Q2 and Q3, our larger tax charge is because of tax reserves brought on by the acceleration of our home R and D value deductions beneath the July 4th US tax legislation change. As such, this alteration was the predominant driver to the $15 million discount in This autumn money taxes and $36 million discount in our annual money taxes. So Transferring to money This autumn working money move elevated 40% to $147 million with a 52.7% free money move margin and 34.4% adjusted EBITDA margin.
Our full yr working money move elevated 32% to $389 million with a 34.6% free money move margin and 36.4% adjusted EBITDA margin. Turning to the stability sheet, Deferred income elevated 21% yr over yr to $337 million. We ended the yr with 329 million in money and nil debt. Accordingly, we leveraged our robust money place and invested $75 million in share repurchases within the quarter leading to $275 million in buybacks in 2025. Moreover, our board has accepted the replenishment of our $100 million share repurchase authority. So transferring on to our 2026 steerage, our long run and lengthy standing monetary goal is to ship sustainable double digit high line progress and high quartile working margins benchmarked towards enterprise software program comps.
Software program Comps these are drivers to our greatest at school return on invested capital as we keep a balanced funding strategy to progress and profitability. As famous on prior earnings calls, our aim is to replace our RPO outlook on an annual foundation. Moreover, as beforehand mentioned, our bookings efficiency is impacted by the quantity and relative worth of enormous offers we shut in any quarter which may doubtlessly trigger lumpiness or nonlinear bookings all year long. All steerage references made on at present’s name shall be on the midpoint of their respective ranges. So with that for RPO we’re focusing on 2.62 billion to 2.68 billion RPO representing a spread of 18 to twenty% progress.
Included in our goal is an 18 to twenty% contribution from renewals which suggests double digit progress in each new bookings and renewals. When normalizing for FX actions for full yr 2026, we count on complete income of 1.133 billion to 1.153 billion. The 1.143 billion midpoint represents 10% progress excluding license and upkeep attrition and 6% all in. For Q1 we’re focusing on $272 million to 274 million, which on the midpoint represents 10% progress excluding License and Upkeep attrition and 4% all in for remainder of the yr. On the midpoint we’re focusing on complete income of about 287 million in Q2, 296 million in Q3 and accounting for retail peak seasonality, 287 million in This autumn.
For 2026 adjusted working margin, we count on a spread of 34.5% to 35%, eradicating the impacts of license and upkeep attrition. The 34.75% midpoint represents about 75bps of margin growth in comparison with 2025 and contains elevated funding in our enterprise, notably in gross sales and advertising, and increasing our providers crew on a quarterly foundation. On the midpoint, adjusted working margin is anticipated to be about 31% in Q1, 34.7% in Q2, 36.9% in Q3 and accounting for retail peak seasonality, 36.1% in This autumn. This ends in a full yr adjusted EPS steerage vary of $5.04 to $5.20 and a GAAP EPS vary of $3.37 to $3.53.
For Q1, we’re focusing on adjusted earnings per share of $1.08 to $1.10 and GAAP earnings per share of $0.64 to $0.66. For Q2 by This autumn, we count on GAAP earnings per share to be about $0.40 decrease than adjusted EPS per quarter, with the overwhelming majority of accounting for our funding in fairness primarily based compensation. So listed below are some extra further particulars on our 2026 outlook. We count on cloud income to extend 21% to $4,492 million, which assumes $114 million in Q1, $121.5 million in Q2, $126 million in Q3 and 130.5 million in This autumn. We count on providers income to extend 3% to $517 million, which assumes $124 million in Q1, $131.5 million in Q2,$137 million in Q3 and accounting for retail peak seasonality, 124 million in This autumn.
On attrition to Cloud, we count on upkeep and license to characterize a couple of 4 level headwind to complete income progress in 2026. As such, we count on upkeep to say no 19% to 105.5 million, which assumes 28 million in Q1, 27 million in Q2, 25.5 million in Q3 and 25 million in This autumn. We count on license to be about $1 million per quarter and {hardware} to be between 6 million and 6.5 million per quarter. To assist our robust bookings progress and the numerous agentic AI alternative, now we have already onboarded about 100 new providers associates in January, and we anticipate these new hires coupled with license and upkeep attrition will lead to consolidated subscription upkeep and providers margin to be flat as reported in comparison with 2025.
On a quarterly foundation, we count on consolidated subscription upkeep and providers margin to be about 57% in Q1, 59% in Q2, 60% in Q3, and accounting for retail peak seasonality, 60% in This autumn. Eradicating the impacts of license and upkeep attrition, Our goal implies 50 foundation factors of yr over yr enchancment. And we count on our efficient tax charge to be 22% and our diluted share rely to be 61 million shares, which assumes no buyback exercise. So in abstract, 2025 was an amazing yr of progress and execution. Thanks. And again to Eric for some closing remarks.
Eric Clark — President & Chief Govt Officer
Nice. Thanks, Dennis. To recap, 2025 was a profitable yr for Manhattan and we ended the yr on a robust observe. Enterprise fundamentals are stable and we enter 2026 with accelerating momentum throughout the group. So a giant thanks for becoming a member of the decision and thanks to our international crew for all the nice work they do for our clients. And that concludes our ready remarks and we’d be completely happy to take questions. Thanks.
Questions and Solutions:
operator
And with that, we shall be conducting a query and reply session. In case you’d wish to ask a query, please press Star one on the phone okay eypad. Affirmation tone will point out that your line is within the query queue. It’s possible you’ll press star two to take away your self from the queue. For members utilizing speaker gear, it could be needed to select up the handset earlier than urgent the star keys. One second whereas we ballot for questions. And our first query comes from the road of Terry Tillman with Truist Securities. Please proceed along with your query.
Terrell Tillman
Yeah. Hey, good afternoon, Eric, Dennis and Mike. Recognize the time right here. And first, congrats on the 4Q bookings. It’s spectacular and in addition simply 4Q money move end. I’ve a query perhaps for you, Eric. First, when it comes to each cloud migrations. For wms and beginning to drive that form of muscle tissue round quick Renewals. I believe these have been some focus areas going into the yr, simply actually all through 25 and into 26. Are you able to present any progress reviews on. Each of these areas and doubtlessly the i mpact within the mannequin in 26 from a few these main initiatives? After which I had a comply with up for Dennis.
Eric Clark
Nice. Yeah, thanks, Terry. So I’ll begin with form of that conversion and driving a few of our on prem clients onto activewarehouse. You recall that we began that effort form of mid yr in 2025 and we noticed some early success. We’re now seeing, I’d say, the fruits of that effort and we’re seeing the pipeline actually begin to construct. We’ve already closed a few of these offers in Q1, in order that helped us get off to a fast begin in Q1.
And that’s part of, , Dennis simply talked about we’ve added 100 providers headcount already in January. And , that’s a giant distinction from the place we have been a yr in the past in January. I believe that claims lots concerning the confidence degree now we have within the e-book of enterprise that we’ve constructed round providers. So that you mix the conversion alternative with the brand new emblem that we’ve introduced in and what we see when it comes to alternative round ahead deployed engineering to assist drive our AI efforts and we’re very bullish in that space. Yeah. Did I hit all the things there, Terry?
Terrell Tillman
Yeah, yeah, you probably did. I imply that was perhaps simply one other p artwork of this primary query. So I’ll unintentionally do two and a half right here. I apologize to all people. Okay. It’s not a type of issues that will get loads of consideration as a result of we simply care concerning the numbers. It’s all the time concerning the numbers and spreadsheets. However you talked about quicker implementation occasions and quicker time to worth. I believe final yr, once more, that’s not going to get loads of the accolades. However the place are you in a few of these progress efforts?
Eric Clark
Yeah, nice query. Thanks for asking. So we’re making actually good progress in these efforts and that’s coming into play in a few of our deployments, even a number of the deployments that perhaps have been multi yr deployments that began years in the past and we’re capable of begin accelerating these now. It’s additionally coming into play in lots of of those conversions that we’re really closing them as mounted price, mounted timeline offers as a result of we’ve acquired the fee confidence in that tempo. So the opposite factor that’ll the place it comes into play, Terry, , we shared for the primary time at present the ramped ARR and it grew 23% yr over yr. A part of what’s driving, that’s, we’re capable of promote extra offers at a quicker tempo. You realize, we’re driving a quicker ramp of that income. And also you’re seeing that confidence come by in that space as effectively.
Terrell Tillman
That’s nice. I recognize that Eric. And I assume Dennis earlier than Q Free money move power. I’m curious although, wanting in 26, is there any manner you possibly can share any commentary on money taxes or something that we want to consider and simply perhaps the connection of free money move to EBIT or EBITDA on 26, only for some form of parameters. Thanks.
Dennis Story
Yeah, Terry, I believe that’s simply. It’s related from money taxes.
Terrell Tillman
Sure, acquired it. Thanks.
operator
Thanks. And our subsequent query comes from the road of Brian Peterson with Raymond James. Please proceed along with your query.
Brian Peterson
Thanks, gents, and congrats on the quarter. So, Eric, I wished to dive into the RPO quantity that appears like a really robust quantity versus what we had anticipated, notably on the web new facet. So I’d love to know, , perhaps when it comes to deal timing, , what merchandise are on the market, geos. Is there something that you may share about what actually drove that fourth quarter power? Thanks.
Eric Clark
The beauty of that fourth quarter power is it actually comes throughout a wide range of merchandise and a wide range of deal sorts. And I shared a number of examples there. You realize, we all the time discuss concerning the massive offers will be lumpy and also you don’t know once they’re going to come back. However I believe, , This autumn, we rounded out the yr in a really complementary manner with loads of these deal sorts throughout loads of deal throughout our whole product suite. So that offers us confidence within the pipeline that we’ve acquired going into subsequent yr as effectively.
However the different factor I’ll form of, , nice rpo, , we’re actually pleased with what we did when it comes to RPO sequential progress, , quarter over quarter and yr over yr. However we additionally acknowledge that as we come into 2026, the place we all know it’s a yr the place we’ve acquired form of an uptick in renewals, we wish to provide you with that ramped ARR in order that we don’t need to go deal with renewing each deal at 5 years. If we will renew a few of these offers at three years, that offers us one other alternative to extend value sooner. However when the one metric we provide you with so that you can measure progress is rpo, which may provide you with considerations if we’re solely supplying you with rpo. In order that’s why we’re now going to present you this mix of RPO and ramped ARR so you possibly can believe within the progress that we’re projecting.
Brian Peterson
Received it. And I recognize the brand new disclosures, guys. Dennis, I did have one clarification. You mentioned 18 to twenty% is coming for renewals in 2026. Is that the combo of the RPO goal? I simply wish to ensure I perceive the disclosure round that 18 to twenty%.
Dennis Story
Sure, sure. That’s the combine.
Eric Clark
Yeah. So, and once more, if, , if, if we, if we held ourselves to ensure we renewed each deal at 5 years, it may very well be a better quantity, however we don’t assume that’s the perfect. In the perfect curiosity of the enterprise. In order that’s why we wish to give ourselves the flexibility to resume some offers at three years as effectively.
Brian Peterson
Received it. Thanks, guys.
Eric Clark
Thanks, Brian.
operator
Thanks. And our subsequent query comes from the road of George Kurosawa with Citi. Please proceed along with your query.
George Kurosawa
Nice. Thanks for taking the questions. Perhaps simply to remain on this matter of renewals, , I believe if I, if I acquired the numbers proper, 18% of RPO bookings from renewals in 25 and now anticipating 18 to twenty%, , I believe we have been perhaps estimating that is likely to be a little bit of a much bigger uplift. Am I proper in considering right here that perhaps there’s some degree of conservatism baked into that or perhaps there’s these period dynamics that you just have been simply discussing a nything else we should always remember there?
Eric Clark
I believe these are the important thing issues, , and perhaps these two issues go collectively. Conservatism on period. Once more, if we actually held ourselves to ensure that we renew each deal at 5 years, that that 18 to twenty% may very well be larger and the whole RPO progress yr over yr may very well be larger. However we predict we’ve acquired a really sticky product and our clients will not be leaving us. All of our clients are renewing. So having the chance to have one other dialog about value improve in three years versus 5 years is a bonus to us.
George Kurosawa
Okay. Okay. Very useful. After which I wished to the touch on the providers enterprise. I believe you talked about you’re seeking to rent into that group. You’re guiding to three% progress for the yr. Traditionally, that’s been a line merchandise that’s perhaps a bit of bit decrease visibility relative to the remainder of the enterprise. What’s form of underpinning your confidence there?
Eric Clark
Yeah, so it’s a number of issues. Primary, that robust bookings, progress in This autumn and actually robust in complete for all of final yr goes to proceed to drive providers effectively into 2026. However then once more, we put these conversion applications in place in the course of final yr. They’re actually beginning to bear fruit. We’re seeing the pipeline, we’re seeing the deal quantity choose up, that’s creating providers alternative. After which I believe the large One is Agentic AI. You take a look at loads of SaaS firms which might be on the market attempting to promote Agentic AI they usually don’t have the the military of providers those that now we have. And we see this as a possibility to make use of that military of providers individuals as a giant benefit as a result of now we have the area experience. We are able to go in with ahead deployed engineers and assist our clients understand worth very, in a short time.
That is the primary time since Manhattan launched the cloud merchandise the place we’ve acquired a possibility to exit to each cloud buyer all at one time and have an instantaneous upsell alternative that may add worth from day one. So that is new for us and we wish to ensure that we get that message to all of our clients as shortly as doable.
George Kurosawa
Nice, thanks for taking the questions.
Eric Clark
Thanks.
operator
Thanks. And our subsequent query comes from the road of Joe Vruwink with Baird. Please proceed along with your query.
Joseph Vruwink
Nice, thanks for taking the query. A variety of questions on the renewal part to RPO subsequent yr. I wished to ask concerning the the rest, the brand new bookings part. And what’s form of attention-grabbing is so new logos, , so heavy and what you have been capable of obtain in 2025, you mentioned your expectation is that balances again in the direction of regular and but there’s nonetheless a fairly wholesome bookings componen for 26. So that will appear to be form of the tempo of migration or perhaps cross promote to current clients form of choosing up the slack. Are you seeing form of some early proof? I do know you talked about offers closing already right here in a single Q across the extra consultative strategy to conversions, however what are a number of the different stuff you’re doing to speed up the tempo of migration? As a result of that new bookings quantity appears to be like fairly good relative to the place our expectations have been.
Eric Clark
Yeah. So , when you concentrate on new bookings for us, that features new emblem, it contains growth inside current accounts and naturally changing from on prem to the cloud. We’ve talked about conversions fairly a bit as you talked about, however that growth is a giant alternative for us. You realize, we’ve executed very well in buying new logos and we’ve acquired this renewal cycle of warehouse, , energetic warehouse. So the chance to cross promote and develop is absolutely ripe for us as effectively. And that’s a giant focus space for us. We additionally think about that taking market Share as a result of after we cross promote new merchandise, we’re taking that from another person. In order that’s form of continued deal with taking market share. So we’ll try this in 2026 with new logos and cross promoting new merchandise to current clients.
Joseph Vruwink
Okay, that’s nice. After which on the providers outlook, so I assume it’s good that form of the replace, perhaps as arduous as that was a yr in the past, you actually haven’t missed on a service communication since then and now you’re bringing individuals again. Are there points of the providers pipeline the place you’ll perhaps say it’s a decrease danger issue? I do know George simply requested about this query, however I take into consideration these 6v6 timeline propositions that would appear to really present a excessive diploma of confidence in a providers outlook. Are there issues round, , perhaps a unique go to market strategy the place you’re attempting to de danger what you’re speaking tonight?
Eric Clark
Yeah, so I believe primary, we all the time attempt to de danger what we’re speaking and take a conservative, conservative strategy of all the income. You realize, providers is the robust one to foretell a yr from now. It’s simpler to foretell, , nearer to now. However we’ve acquired, , the arrogance that now we have in what we’ve, , shared is predicated on, , the issues that I discussed. You realize these, all of that pipeline and new emblem that we bought final yr and in This autumn offers a complete lot of readability. These ramp timelines are mounted. So that offers lots, entire, entire lot of readability to what we’re doing. And the issues that we’re doing round conversions and creating mounted price. Yeah, these as that quantity picks up, that offers us a possibility to doubtlessly see upside in providers as effectively.
Joseph Vruwink
Nice, thanks very a lot.
Eric Clark
Thanks.
operator
Thanks. And our subsequent query comes from the road of Dylan Becker with William Blair. Please proceed along with your query.
Dylan Becker
Hey gents, recognize the query right here. Perhaps Eric, beginning with you, I believe it’s very clear that the RPO power is kind of distinctive. I assume perhaps when you’re to reconcile form of that outperformance relative to perhaps the contribution from a few of these newer initiatives that we’ve onboarded during the last perhaps a number of quarters right here. If we take into consideration a devoted migration crew accomplice emphasis, clearly like extra of an growth movement as effectively too. Is that one thing that you just’re beginning to already see form of a number of the fruits of the labor from and perhaps how we take into consideration that layering in over time as effectively too and contributing to power all through the stability of the yr Perhaps as these begin to Ramp and change into extra materials contributors over time.
Eric Clark
Yeah. So I believe a number of the issues that a number of the applications that we put in place in 2025 did have a optimistic impression. However realistically, , many of the pipeline we shut is a bit of bit long run gross sales cycle. So I believe you’ve acquired to credit score what the crew had in place earlier than we went into 2025. Perhaps we influenced a few of that within the second half and acquired a bit of bit higher outcome. However largely the outcome that we acquired was primarily based on the preparation that occurred earlier than 25. Now, that being mentioned, I believe we did a complete lot of nice preparation in 25 for 26. And that’s after I assume we’ll actually begin to see the fruits from our labor round these applications that we put in place in 2H25.
Dylan Becker
Good. Okay, nice. Thanks. After which perhaps for Dennis or Erica, you may have a remark as effectively too on the totally ramped metric as effectively too. Clearly some good room for incremental form of contribution and step ups relative to what we’re doing at present. From a cloud income perspective, I assume how you concentrate on the in yr contribution of these ramps of successfully form of like what’s dedicated, what you may have visibility into. I do know, Dennis, you known as name that prime ranges of visibility right here, however perhaps form of parsing by what’s rolling off of form of that ramped backlog and supplying you with conviction in that 20% progress versus form of what’s an incremental web new that you just form of need to go and get in a selected yr?
Dennis Story
Thanks. So perhaps I’ll begin with that simply to ensure I perceive the query very clearly. You realize, after we discuss that ramped ARR, what we’re doing is, , on the finish of 2025, all the things that’s bought, we’re wanting on the ramps over the subsequent 4 years after which evaluating that to the identical factor a yr in the past. So in that ramped ARR, it doesn’t assume any new gross sales. That’s all dedicated income. After which all the things new that we promote provides to that dedicated income. Is that form of the query you’re asking or am I lacking one thing there?
Dylan Becker
It was extra within the context of how that flows by to reported cloud revenues. Proper. Of what’s the form of step up in that ARR that you just really understand in a selected yr? Simply supplying you with form of conviction within the sturdiness of the 20% progress algorithm, if that is sensible.
Dennis Story
Yeah. And the ramps differ. And in any given yr, we’ve acquired, as , a few of our Merchandise like POS and order administration ramp faster. However a number of the lengthy advanced warehouse do typically take 4 years to totally ramp. And in any given yr, we’ve acquired some which might be 4 years in, some which might be three years in and two years in and one yr in. However you’ve seen the amount over the previous a number of years of our gross sales progress. So every a type of classes is form of stepping up annually, which is compounding that progress annually.
Dylan Becker
Very useful. Thanks, Eric. Yep, thanks.
Eric Clark
After which perhaps one factor I’ll add to that, sorry, is, , our grr, , gross retention charges are world class and that actually offers us confidence. So Dennis talked concerning the assumptions round this new ramped ARR quantity is that we’re assuming no CHURN and no value improve. Nicely, that additionally creates upside as a result of we’re, , there’s extra alternative for value improve than there’s for churn.
operator
Thanks. And our subsequent query comes from the road of Parker Lane with Stifel. Please proceed along with your query.
Parker Lane
Hey guys, thanks for taking the questions right here. Eric, nice to see the industrial availability of the AI brokers and the agent foundry. I used to be simply questioning when you might go a bit of bit deeper on the monetization technique round these brokers when you count on that to be pretty static throughout the various kinds of brokers you’re offering, together with these which might be extra personalized. And if you look out the 2026. I do know we’re actually early right here, however what kind of momentum do you anticipate seeing inside your base from an adoption standpoint and maybe any ideas on how a lot that might contribute to progress right here within the close to time period?
Eric Clark
Yeah. Thanks for that. So, primary, we’re actually enthusiastic about what we’ve launched and we predict that is really completely different available in the market. We’re in a novel place the place we actually have caught to our mannequin on creating a real API pushed microservices platform that’s really built-in. So we don’t have to begin the dialog with a venture of knowledge indexing and transferring to an information lake. We begin the venture by turning it on. And also you’ve acquired reside brokers working in your system which might be natively working in your exercise platform. In order that’s one thing that’s actually distinctive.
And I believe we’ve acquired loads of clients which might be searching for methods to determine how you can benefit from AI and this provides them a very simple alternative to show it on, play with it, take a look at it, and see what worth they will create. So our strategy is we’re beginning with proof of ideas or pilots with our clients. And we’re providing this at a really low value, low danger situation. It’s a 90 day proof of idea and it’ll include ahead deployed engineers that can ensure that they learn to use all the customary brokers that they will activate day one.
And people ahead deployed engineers may even assist them construct a minimum of one or two customized brokers utilizing our agent foundry and practice them how you can construct their very own customized brokers. Clearly, all of that is in order that after we get to the top of that 90 day proof of idea, we’ve acquired clients that say, there’s no manner we will flip this off. It’s including a lot worth we’ve acquired to make use of it and that’s after we monetize it. So we’re pricing this. We wish to hold it quite simple for our clients. So it’s an uplift, form of like we do with labor and slotting and a number of the different issues that now we have inside our product. It’s an ordinary uplift and that makes it straightforward for our salespeople to have the dialog and straightforward for our clients to purchase.
Parker Lane
Thanks, Eric and Dennis, one for you. Only a clarification on the shopper liquidation headwind you confronted. Was that 1.3 million in for the fourth quarter that wasn’t contemplated within the information. And if that’s the case, what’s the annualized headwind you anticipate there in 26?
Dennis Story
Yeah. Was within the quarter 1.3 million or 2.5?
Eric Clark
1.3 within the quarter 2.5 annualized.
Parker Lane
Received it. Okay.
Eric Clark
Yeah. In order that, in order that, that, that wasn’t, , that wasn’t in our numbers 1 / 4 in the past. That occurred shortly and surprisingly, nevertheless it’s now baked into all of our numbers.
Parker Lane
Okay, thanks for clarification.
operator
Thanks. And subsequent is Chris Quintero with Morgan Stanley. Please proceed along with your query.
Christopher Quintero
Hey, Eric. Hey, Dennis. Actually recognize the AR disclosure right here. That’s tremendous useful, particularly with all of the completely different dynamics hitting the RPO metric. So thanks. Thanks for that further shade. I’ve acquired two questions on providers. It’s often the primary query I get from buyers is how will we take into consideration the providers enterprise over the medium and long run? Clearly, it’s actually nice to see that get again to progress. You will have some Straightforward comps from 25, however you even have loads of renewals developing. Is there any shade you can provide us round? What does that medium normalized progress charge for the providers enterprise doubtlessly seem like right here?
Eric Clark
Yeah, so it doesn’t shock me that you just get that query lots as a result of I Assume within the providers IT providers world, that query goes round lots. I believe what’s distinctive about our providers enterprise is that it’s so area particular and that offers us a novel benefit throughout our merchandise. But in addition after we’re speaking about issues like agentic AI, , the actual worth in agentic AI is having the ability to tie it to that, , area information and area experience.
And that’s what we’re doing with our ahead deployed engineers. All that being mentioned, and , primarily based on a number of the feedback I made earlier, these are all of the issues that give us confidence for that mid single digit progress charge in providers. You realize, we don’t count on this to be a double digit progress charge and we don’t essentially need it to be. We wish to, , our focus is on rising the cloud enterprise double digit, , 20 plus p.c.
Christopher Quintero
Received it. That’s tremendous useful, Eric. After which if we return to this name final yr, you all talked about a few of these implementation in flight implementations that acquired pushed out. Any replace on that? Like how did all These shut in 25? Are you continue to form of working by a few of these? Any further shade there can be useful.
Eric Clark
Yeah, I believe there’s a bit of little bit of everywhere in the board on a few of these. However the actuality is, I believe in a big half none of them stopped. As , as we mentioned a yr in the past, none of them are stopping.
They have been simply slowing down. They’re all again deploying once more to some extent. A few of them at the moment are forward of the place they have been forward of schedule. And we proceed to have these conversations, when you bear in mind, we talked about, not solely are we providing mounted price conversions, however in some instances we’re going out to a few of these clients and providing mounted price, hey, allow us to do the subsequent 10 DCs that we’ve already acquired the recipe for. Allow us to go roll these out shortly. So there’s a giant effort to ensure all of these catch up or get forward of their scheduled plan.
Christopher Quintero
Superior. Thanks a lot, Eric.
Eric Clark
Yep, thanks.
operator
Thanks. And our subsequent query comes from the road of Man Hardwick with Barclays. Please proceed along with your query.
Man Hardwick
Hello, good night. Hello Eric. I additionally NRF and I used to be ready lucky sufficient to talk to some Manhattan associates reps and clearly you’re homed in on the energetic agent subscriptions which you talked about within the, in your ready remarks. So I do know I used to be requested a bit of bit earlier, however asking another way. Are you assuming any incremental subscription bookings from energetic agent subscription in that 2.6 to 2.68 billion RPO steerage for the yr or is it throughout the SaaS income steerage or would something be incremental if it’s not?
Eric Clark
Yeah, so we’ve taken a really conservative strategy. Something we do in AI is incremental to what we’ve talked about at present.
Man Hardwick
Okay, acquired it. And simply as a comply with up, I assume that given you when it comes to the This autumn bookings, how a lot of {that a} catch up from maybe the bookings being a bit of bit disappointing? Q3. So how a lot was it of bookings which ought to have fallen in Q3, falling in This autumn after which how a lot was right down to your gross sales guys over delivering or maybe delivering higher than anticipated?
Eric Clark
Yeah, I believe after we talked about Q3 bookings, it was a bit of beneath what we wished it to be. However on the time I mentioned we’re nonetheless on observe to hit our full yr quantity. And that could be a little bit simply the lumpiness. However , we beat our full yr steerage by 40 million. So it completely was extra than simply, , timing. By quarter it was over efficiency by the crew.
Man Hardwick
Thanks.
Eric Clark
thanks,
operator
Thanks. And our subsequent query comes from the road of Mark Schappel with Loop Capital Markets. Please proceed along with your query.
Mark Schappel
Thanks for taking my query. Good job on the quarter, particularly on the RPO print. Eric, a query for you right here. May you simply touch upon the CIO sentiment you’re seeing with respect to inexperienced lighting, giant WMS and TMS conversion tasks and perhaps how that sentiment has developed over say the previous six to 9 months? Yeah, I’d say the sentiment actually hasn’t modified drastically over the previous six to 9 months.
Eric Clark
I’d say that, , our clients which might be in applications are actually like all the things we’re doing about dashing them up, , pace and ease. How do they, how can they get to their ROI quicker? You realize, the rationale, the rationale firms embark on it is because it really does create effectivity and it does create value financial savings and it does create ROI for them.
So the quicker they will obtain that, the higher. However , you possibly can. I gave you many examples of, , This autumn firms and the kinds of firms that we bought to and what they purchased, a lot of them being new logos. We nonetheless see a really wholesome pipeline of firms which might be recognizing in the event that they wish to obtain the issues that they should do to fulfill their enterprise methods. They want software program that helps that. And there’s not one other supplier available in the market that may present what we will in these areas. And that’s why we proceed to see these very, very robust win Charges towards the competitors.
Mark Schappel
Nice, thanks. After which as a comply with up right here, when it comes to your gross sales movement, clearly a really robust quarter for brand spanking new Locos once more this quarter. May you additionally discuss a bit of bit concerning the combine this quarter with conversions and cross sells and in addition how we should always count on that to. Or how we should always count on that blend to evolve within the coming yr?
Eric Clark
Positive. You realize, we all the time say that, , over time that it’s form of the rule of thirds. You realize, one third shall be new emblem, 1/3 shall be growth, and 1/3 shall be conversion. However clearly what we noticed in 25 is we had 20, we had 55% come from New logos. In order that was a fairly exceptional efficiency. Now, if any a type of three classes goes to be larger than the others, I’d completely need it to be new emblem as a result of meaning we’re going out and we’re taking market share. That being mentioned, I believe simply being realistically, and the extra new emblem we win, the extra alternative now we have for growth.
And we all know now we have a ripe set of shoppers which might be preparing for conversion. So we’re simply form of weighing that. As , in all probability the rule of thirds over an extended time period will come again into play, however we see massive alternative in all of these classes.
Mark Schappel
Thanks.
Eric Clark
Thanks.
operator
Thanks. And our final query comes from the road of Clark Wright with DA Davidson. Please proceed along with your query.
Clark Wright
Hello there. Thanks. Most of my questions have been requested right here already. However simply wished to know once more, going again to the providers, income and the chance that you’ve got there. As soon as a buyer is transformed to the cloud, what’s driving actually the upsell from there on out and the way do you proceed to drive worth by providers and your area experience transferring ahead?
Eric Clark
Yeah. So as soon as a buyer converts to the cloud, remember each quarter they get quarterly updates. So new options and performance that come to them by launch notes. After which our groups will assist them decide which of those options and capabilities can add worth to you straight away, which you wish to take into consideration later, et cetera. So the purchasers which might be having essentially the most success and getting essentially the most worth out of this software program platform that we’ve constructed are those which might be actually that quarterly. So then it is available in. The providers which might be associated to that are available in very small doses every quarter as in comparison with again within the outdated on prem days, perhaps it was an improve each 5 or 10 years, , with no providers in between. So now it’s, , extra of a gradual dose of providers all through the lifetime of the partnership.
Clark Wright
Superior. That’s useful. After which simply when it comes to. Go forward.
Eric Clark
No, please go forward.
Clark Wright
By way of the power of the brand new enterprise that you just’re speaking about, has there been any particular verticals the place you’ve seen extra traction than others?
Eric Clark
Nicely, I believe what’s been thrilling for us is it’s been very various. Individuals actually know us as we’re actually robust in retail, and lots of people take into consideration us as that retail power. However after I form of listed out the wins and talked concerning the wins that we had in This autumn, it goes to far past retail. And, , it’s nice to see we’re getting increasingly power and extra dominance outdoors of retail.
Clark Wright
Thanks.
Eric Clark
Thanks.
operator
Thanks. And girls and gents, with that, this does conclude at present’s query and reply session. I’d now like to show the ground again to Eric Clark for any closing remarks.
Eric Clark
I do know we ran a couple of minutes lengthy, however thanks all for sticking with us. Actually recognize your time. We’re happy of the place we’re as right here in Q1 and excited concerning the yr forward.
operator
Thanks. And with that, girls and gents, this does conclude at present’s teleconference. We thanks in your participation, and it’s possible you’ll disconnect your strains presently and have an exquisite day.
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