Q3 2020 Manhattan Associates Inc Earnings Call

October 22, 2020

[music].

Good afternoon. My name is Mike and I will be your conference facilitator today at this time I would like to welcome everyone to the Q3 2020 earnings call.

All lines have been placed on mute to prevent any background noise.

After the speakers remarks, there will be a question and answer period.

If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad, if you would.

If you would like to withdraw your question press the pound key as a reminder, ladies and gentlemen. This conference is being recorded today October 20 seconds 2020.

I would like to introduce Eddie Capel CEO, Dennis story, CFO, and Matt Humphreys Senior director of Investor Relations Mr. Humphries you may begin your conference.

Thank you, Mike and good afternoon, everyone welcome to Manhattan Associates third quarter 2020 earnings call.

I will review, our cautionary language and then turn the call over to keeping our CEO.

During this call, including the question and answer session. We may make forward looking statements regarding future events.

In the future financial performance of Manhattan Associates.

I caution you that these forward looking statements involve risks and uncertainties and are not guarantees of future performance and <unk>.

And that actual results may differ materially from the projections contained in our forward looking statements.

Or for each of the reports Manhattan Associates files with the FTC for important factors that could cause actual results to differ materially from those.

From those in our projections, particularly our annual report on form 10-K for fiscal year 2019, and the risk factor discussion in that report as well as any risk factor updates we provide in our subsequent form 10-Q.

We note in particular that uncertainty regarding the impact of the COVID-19 pandemic underperformance could cause actual results to differ materially from our projection.

Under no obligation to update these statements.

In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. We've reconciled all non-GAAP measures to the related GAAP measures in accordance with FCC rules, you'll find reconciliation schedules in the form 8-K, we submitted the FCC earlier today and on our website at <unk> Dot com.

Now I'll turn the call over to Eddie.

Terrific. Thanks, Matt well good afternoon, everybody and thank you for joining us as we review our third quarter Twentytwenty results discuss alright look for the remainder of the year and provide at least some initial thinking around 2021.

So for the quarter Manhattan reported total revenue of $150 million, an adjusted earnings per diluted share of 51 cents. Both of these exceeded our expectations.

Expectations broad.

Broad revenue outperformance across really all about business lines combined with a continued focus on expense management also drove strong earnings leverage in the quarter.

Now using a markets and our customer bases reference points, we're starting to see some modest improvement in the global macro economic situation well clearly there is still a very long way to go in terms of reaching back to a normal operating environment. We are encouraged by the level of activity.

We're seeing in our pipeline, specifically without a new Manhattan active warehouse management solution.

We closed a record multimillion dollar Manhattan active W.M. deal in Q3 with a large national beverage distributor and while early we are off to a solid start in Q4 as well.

And as such we are raising our full year total revenue and adjusted EPS guidance to reflect our views for the balance of the year.

Additionally, despite the turmoil globally, we remain committed to organic growth. We're on track to invest nearly $80 million into research and development. This year furthering our competitive positioning through new innovation, while growing our addressable market.

That's through our ongoing engagement with customers and prospects, we continue to see business fundamentally rethinking the future stage of their supply chains distribution footprint and omni channel Commerce strategies. Some of this re thinking is being driven by consumer demand with nine out.

Of 10 consumers wanting a omni channel experience with seamless service levels between sales channels.

Other reasons, a more growth oriented.

Average omnichannel customers spend 4% more in store and 10% more online than single channel consumers.

These changes will know that require a thoughtful approach to implementing modern agile and scalable software solutions.

The growing demands placed on legacy systems, and software and no longer to be suited to a multi channel digital world and we.

When we feel the long term opportunity set in front of US based on these favorable demand trends is robust and will continue to provide meaningful opportunity for us to grow and scale our business.

And as a result of these.

Symmetrical tailwind headwinds coupled with that market, leading solutions and applications, we see at global pipeline opportunities trending favorably.

I recently released Manhattan active warehouse management solution is driving very positive market interest validation for the countless man days in the many millions of dollars in R&D that we've invested in developing the product over the past several years and at the end of the third quarter over 80.

Percent of our global bookings pipeline is comprised of cloud opportunities and about 45% of ideal opportunities continue to be represented by net new logos globally.

And this certainly should provide ample opportunity to land new business for us while we also focus on expanding our relationships with existing customers speaking.

Speaking of customers you may recall, a few weeks ago, we announced that part of a very rigorous selection process l'oreal, the world's leading UK beauty company chose to implement at Manhattan active W.N. solution across its distribution footprint globally.

Oreo was looking for an agile cloud native solution that could provide the necessary adaptability and scalability to that business demands as it continues to grow with a positive trajectory.

We're obviously honored and humbled by the choice and that professional services team certainly is looking forward to implementing the solution into this into their distribution network over the next several years.

And regarding services. Despite the challenges that have been closed by the global pandemic, we're delivering on our promises to our customers around the world in the.

In the third quarter, we conducted 161 go lives globally, once again, showcasing our flexibility and expertise of delivering technical implementation work through really any delivery channel.

Now it is worth maybe reminding you that build travel which is margin neutral but contributes to the overall services revenue was about 5% of a headwind a year over year to our services revenue growth.

Now turning to sales and marketing I teams remain very active and engaged pursuing opportunities across our installed base, while Tim simultaneously moving brand new business opportunities forward across all of our product portfolio of.

Of note, we recently hosted a AMEA exchange connective it as virtual customer conference for that particular region.

And feedback from that conference participants was overwhelmingly positive and participation from our partners and customers was very well received.

[noise] a competitive win rates remained very strong at 70 plus percent against head to head competition with about 25% of that license and cloud deals representing net new customers in the quarter.

Verticals that collectively drove more than 50% of our cloud and license revenues in the quarter were retail consumer goods government food and beverage and grocery.

Now if I can tell us just turn the discussion a little towards our product pipeline.

Last quarter I updated you on the launch of arguably the most important product in Manhattan's history Manhattan active warehouse management. The next generation of warehouse management software. We announce these new cloud native version of WMS and our virtual user conference in May of this year.

Today I'd like to provide an update on Manhattan active W.M., along really three key dimensions customer success, new customer acquisition and ongoing product development. So let's start with firstly with customer success. So you'll recall at the time of launch pet supplies plus was already live on manner.

Hatton active W. M and since then they've reported some really exciting accomplishments their shipping record volumes using our application the Onboarding times for new associates, who have been cut in half using that all new mobile app for the distribution center associates and they've actually already taken the second site live and in the process of.

Planning to turn on a third side as well.

And I'm happy to report that Q3 was a strong quarter for customer acquisition. We now have several additional projects in flight across a variety of industries and regions and we're seeing strong activity in the grocery food and beverage health and beauty sectors with men.

Manhattan active warehouse management.

And messaging next generation version list cloud native WMS, certainly seems to be resonating well with the market.

And finally I happened to happy to report that per our plan. We shipped our first quarterly follow on releases Manhattan active W.M. on time, Eric Twentytwenty Dot three released hit that customers' environments in August delivering additional innovation and functional capability and we're on track to deliver at.

$20 for release next month in November as well so in short we're off to a great start executing on our vision of providing the industrys only cloud native fully extensible version lists warehouse management system.

And we continue to compete pretty effectively in the Tms spaces, well evidenced by assigning among other deals a large tms us contract in the quarter with a global distributor the combination of our best in class optimization technology international capabilities and strong sales and delivery.

The teams were really the keys to this win.

We continue to make progress outside of supply chain execution as well.

We introduced Manhattan active allocation as part of our suite of inventory optimization solutions built on our Manhattan active application architecture. This new asset allocation solution is purpose design and build for the fashion and apparel businesses because.

Because historically speaking at inventory solutions have been very strong for hardline replenishment based businesses were sophisticated demand forecasts and mathematically optimize replenishment plans are key.

But the world of fast fashion is quite different it requires a different set of technology for calculating how much inventory to forward position in each store in any given season in Manhattan active allocation sold this inventory positioning problem and its crucially it solves it.

With Omnichannel in mind, ensuring both digital and standard footfall demand are particularly well served.

Finally, I'd like to close that my product related marks with a quick update on Manhattan active Army a collection of cloud Native order management customer engagement and store technologies.

This quarter, we announced interactive inventory is really significant in the advancement for our order management customers interactive inventory provides.

Ultra high speed delivery date projections for digital customers, regardless of where they are in the buying journey.

Unlike other solutions, which rely really on historical averages for projected delivery time interacted inventory factors the customer's delivery location other items in that current the current position of every unit inventory into the network and the merchants optimize fulfillment plan for.

That eventual order.

The interactive inventory combined really everything that set us apart historically, a curated view of enterprise inventory the industrys best fulfillment optimization algorithm cutting edge cloud based technology and access to real time operational data, all while making that delivery promise.

As to the consumer.

And speaking of delivery I am proud to report that in the quarter. We also took a leading footwear brand lives in six weeks on our order management and store fulfillment applications. This particular customers looking to enable both standard pick up in store and curbside pickup with time to spare before the holiday season.

And into our professional services organization really delivered for them and that alive with pick up and curbside across the us and Canada and they're beginning to roll these capabilities are internationally as well.

So that concludes my business update Dennis is going to provide you with an update on our financial performance discuss our updated 2020 full year guidance and provide you with our initial view of Twentytwenty, one and then I'll close our prepared remarks today with a brief summary, before we move into Q in Asia. So Dennis.

Thanks, Eddie as mentioned third quarter total revenue was $150 million down 8% over prior year due pretty much solely to Carbonite team. Our total revenue estimate for the fourth quarter is a range of 135 million to $140 million Ajay.

Adjusted earnings per share was 51 cents in the quarter GAAP earnings per share was 39 cents with stock based compensation accounting for the difference between adjusted and GAAP EPS, our adjusted earnings per share target for the fourth quarter is 32 cents within a range of 30 to 34 cents.

Starting with cloud revenue for the quarter was $21.1 million up 14% sequentially and up 48% year over year. Despite a tough comp due to our Q3 2019 FEMA cloud deal, we signed two new Manhattan active warehouse management deals in the third quarter both global.

Tier one customers and continue to see strong pipeline demand for our cloud solutions with notable strength in Manhattan active WFM Manhattan active omni and Tms solutions about 50% of our deals in the quarter came from active them products and over 20 per.

One of our bookings were from new customers.

For Q4, we estimate our cloud revenue will be about $22 million, which represents about 40% growth year over year for the full year, we estimate our cloud revenue will be $78 million to $79 million up 68% year over year from the midpoint.

License revenue was solid in the quarter at $13.2 million well above our expectations as several Q4 pipeline opportunities accelerated into Q3.

Overall license is down 28% year to date and continues to attrit as strong demand for our solutions continues to shift to cloud we saw.

We signed three 1 billion plus dollar deals in the quarter with roughly 30% of all license deals coming from new customers.

For the fourth quarter, we expect between four and $5 million in license revenue.

And for the full year, we now estimate license revenue will be approximately 33 to 34 million.

Of course, as we've pointed out in our release and earlier in the call uncertainty about the Cove at 19 pandemic could affect our performance against our estimates.

Cloud and license software mix will be approximately 70% cloud to 30% license for the full year with total software revenue of 111 million to $113 million up 17% year over year at the midpoint.

A record number despite a 31% or $15 million decline in license revenue versus 2019.

Turning to bookings as we've discussed remaining performance obligation or ARPU is.

The leading proxy for our cloud bookings performance and represents the value of contractual obligations required to be performed otherwise referred to as unearned revenue or bookings are.

Our PEO for the quarter totaled $257 million up 69% over prior year and up 14% sequentially.

We now expect that our year end ARPU will fall within a range of $275 million to $290 million driven by bookings strength in cloud, particularly with Manhattan active WFM.

For Manhattan. This disclose value represents our cloud bookings value of unearned revenue under noncancelable contracts greater than one year contracts with a non cancelable term of one year or less are excluded from the reported amount.

One last point on license and cloud our performance continues to depend on the number and relative value of large deals we close in any quarter.

Further some customers have longer implementation cycles associated with large projects, requiring a multi year annual subscription rap built into the contract term as an example for a five year contract the ramp results in year five of contracted revenue being significantly larger than year.

For one in the near term as Manhattan scales large ramp deals will impact sequential and year over year revenue growth percentages now.

Now shifting to maintenance right.

Revenue for the quarter totaled $37.3 million down 1% versus the prior year, our customer retention rate rates remained strong at greater than 95 plus percent and for the fourth quarter, we estimate our maintenance revenue will be between $36 million and $37 million.

And for full year 2020, our estimate is $145.5 million.

Turning to services.

Our professional services revenue for the quarter totaled 73, and a half million dollars down 20% year over year as expected.

Again, I would like to point out that excluding billed travel were down about 15% year over year we.

We expect near term services revenue trends will be tied to the pace and degree of global economic improvement and we.

We estimate our Q our services revenue for Q4 will be approximately $71 million and our full year 2020 services revenue will be in the range of 303 million to $305 million.

At the midpoint this.

This is really difficult math, but $304 million services will be down about 16% versus 2019.

Excluding billed travel services revenue was down 12%.

These estimates include our expected seasonal fourth quarter sequential decline over Q3 due to retail peak season.

Regarding consolidated subscription maintenance and services margins for the quarter, we generated 53% margins driven by continued operating leverage and cloud.

Our fourth quarter estimate is approximately 51.9%.

About a 100 basis points higher than 2019, our full year estimate is approximately 51.4%.

Turning to operating income and margin Q3, adjusted operating income totaled $44.1 million with an adjusted operating margin of 29.4% driven by higher license revenue performance combined with very strong expense management.

For the fourth quarter, we estimate our adjusted operating margin to be within a range of 19.2% to 20.2%.

Our Q3 adjusted effective income tax rate was 23.5%, we estimate our fourth quarter rate to be 24% and full year tax rate will be approximately 23.6%.

Regarding our capital structure, our share repurchase program remain suspended and our repurchase authority limit remains at $50 million, we continue to assess the appropriate timing for a resumption of buyback activities dictated primarily by broader macroeconomic improvement.

For the fourth quarter and full year, we estimate our diluted shares outstanding will be approximately 64.4 million shares.

Turning to cash we closed the quarter with cash and investments of $166 million and zero debt.

That's right a $166 million and zero debt, our current deferred revenue balance totaled $113 million down 5% sequentially on just timing of revenue recognition.

Q3 cash flow from operations totaled $42 million up 6% over prior year.

Year to date operating cash flow totaled $130 million down just 8% and.

And finally capital expenditures totaled $200000 in Q3, we estimate full year capital expenditures to be between three and $5 million.

Now turning to our updated annual guidance, we continue to model a review multiple scenarios in order to provide investors with our best estimate of financial performance for the remainder of the year of note. There are certain external factors that are out of our control and may produce results that are different from expect.

Once.

So specifically for 2020 annual guidance, our full year total revenue range is now expected to be between $574 million to $579 million our team.

Our target objective is 576, and a half million dollars and total revenue versus prior guidance of 562 million.

Our full year adjusted earnings per diluted share range is expected to be between a $1.62 to $1.66. Our target objective midpoint is $1.64 compared to our previous guidance midpoint of $1.56.

Our full year GAAP earnings per diluted share range is expected to be $1.23 to $1.27 with a midpoint of $1.25.

And we expect our full year adjusted operating margin to be in the range.

23.5% to 24%.

That covers the 2020 guidance.

Before discussing our preliminary 2021 targets, we want to remind you that the views we have today.

Our subject to a variety of factors that may manifest themselves over the upcoming months and hence are subject to change so appropriately conservative for the environment in which we are operating.

We expect to provide formal 2021 guidance on our four Q2 thousand 20 call next.

Next year one five.

One final note before going further our preliminary 2021 targets reflect year over year growth rates that are based on the midpoint of our updated 2020 guidance for their respective metrics.

So at a high level, we view 2021 currently as a tale of two halves, specifically, we expect H two will be stronger than H, one provided an economic recovery picks up steam in the back half of the year.

Our continued business transition is masking, our underlying growth and value creation due to both license trading to cloud and global tier one customers ramping up their global footprints over multiple periods.

We continue to believe RPM, though is the best go forward metric and tracking the progress of our transition.

Our 2021 full year total revenue range is now expected to be between $585 million to $625 million, representing a 1% to 8% year over year growth range.

Our target objective is to achieve 605 million reps.

Representing 5% growth.

Excluding our declining license impact year over year total revenue growth is 8%.

As you know Q1 2020 was an all time record Q1 revenue performance pre Cove, and creating a tough comp for Q1 2021, we.

We expect Q1 2021 total revenue to be down 7% to 9% over Q1 2020.

We expect our H, one total revenue split to be about $292 million with 1% year over year growth given the Q1 coven comp.

And H to split to be about $313 million. This is the revenue split with a 9% growth rate.

[noise] for software revenue, we are estimating a 123 million to $130 million with a midpoint growth of 13% we.

We are targeting $108 million to $110 million in cloud growth with midpoint growth of about 40%.

Importantly, we expect license revenue to decline almost 50% in 2021 as customers and prospects choose our cloud solutions license revenue will be in the $15 million to $20 million range with a midpoint of 17 and a half million dollars.

Regarding 2021, RPL, our preliminary estimate is between $385 million to $390 million up about 40% over 2020 and as Eddie mentioned, we're off to a very good start in Q4 on strong cloud demand.

With the backdrop of go Covance government elections in retail peak season in play and a second full set selling quarter of Manhattan active W.M. under our belt. This will certainly help us calibrate the camshafts on our PEO entering 2021.

For consulting services, we are targeting 306 to 334 million with a $320 million midpoint, representing about 5% year over year growth.

We expect H, one revenue to be down about 3% to 5% year over year with Q1 being down 15% against 2000 Twentys record services comp.

The rate of year over year growth in services will be dictated by the pace and cadence of economic recovery for the balance of 2021.

And for maintenance, we are estimating $140 million to $145 million or a 4% decline to flat growth year over year, as we expect more existing customers to convert to cloud subscriptions.

That covers the critical revenue targets, our full year 2021 adjusted earnings per share range is $1.37 to $1.54 with a midpoint of $1.46 eight.

H one to H two percentage splits will be 45% H, one and 55% H. too for the annual EPS splits Q1 will be our lowest EPS quarter totaling about 21% of full year EPS or 31 cents.

The primary drivers of lower year over year earnings per share is related to three major components first the continued decline of license revenue.

Second the reversal of prior cost actions, we took in April of this year and third continued strategic investments in innovation and tooling for cloud ops to execute on the cloud growth, we see in front of us.

Adjusted operating margin is expected to decline year over year to 20% to 21%, reflecting the operating it operating imperatives covered in our outlook for ABS you may recall in our Q4 2019 call we guided to an adjusted operating margin range of 20.

To 20.5% with a trough of 20%.

Unfortunately in our Q1 2020 call the pandemic required us to downshift, a few gears to protect liquidity customers and our employees without sacrificing investment in R&D.

With business conditions, improving we are refocused on the same objective with 2021 now representing our margin trough overall, our objective is to achieve long term sustainable double digit topline growth with top quartile operating margins.

Manhattan's effective tax rate is expected to run at approximately 24.5% subject to any changes to federal state or foreign tax legislation and.

And finally, we expect that our share count will be approximately $65 million, which assumes no buyback activity and either Q4 20 or fiscal year 2021.

That covers the financial update back to Eddie for some closing comments alright, thanks, Dennis well look.

Well look we're overall, we're very pleased with our performance this quarter and while clearly we are operating in challenging times, we continue to focus on driving operational and financial results as we progress further on our cloud journey with a strong business Foundation, we expect to further extend our market leading position with the supply chain and.

Many channel Commerce solutions and the reduced so we'll be continuing to innovate to advance in.

In advance of market demand, leveraging our technical and domain expertise in order to provide our customers solutions, which position them for success in a dynamically in a rapidly changing world. We certainly see no shortage of opportunities to expand our addressable market will further strengthening our.

Competitive position.

So in closing todays cool I did want to take a brief moment to thank all of our customers. Thank our employees and our shareholders around the world for all of your patience focus and engagement over the past seven months or so it's been nothing short of remarkable and for one.

I'm grateful for it.

So again I expect Manhattan will continue to push possible expanding our industry, leading product portfolio, while driving revenue growth and profitable execution for years to come as we benefit from the growing tailwinds within supply chain and omni channel Commerce.

So Mike over to you and were now ready to take questions.

As a reminder to ask a question you will need to press star one on your telephone withdraw your question press the pound or hash key.

Stand by what we compile bikini roster.

Our first question comes from Terry Tillman from true Securities.

Yes, hi, good afternoon, and thanks for taking my questions Congrats on the quarter and the strength of the called WMS heading maybe the first question. Just for you is as we go back and look at historical kind of cycles around WMS upgrade.

And and we look at you know currently the E Commerce Mega trend maybe could you talk about are we starting to see a WMS upgrade cycle and if so how does that compare to prior upgrade cycles. This would look a little learn a little bit more about that potential and the relationship the E Commerce, yes.

Yeah, well I mean, it's a couple of dynamics Terry you pointed out the E. Commerce Anaemic note no question that we will see that accelerate it's been accelerating for the last.

Several years, but over the last.

Seven months or so a real acceleration there I I think we would all agree we don't see it turning back.

You look at there but.

Distribution center construction, it's still very.

Very very vibrant for sure the need for a modern facilities to the highly automated.

Driven with a balance of robotics and human capital certainly drives the need for a modern flexible agile warehouse management system, and that's where we've where weve positioned ourselves. So we've got kind of two dynamics going here the growth of the growth of E Commerce, but also.

As you pointed out that replacement cycle and frankly, some of the industries that have not seen strong replacement cycles, historically, particularly grocery food and beverage that have been in a pretty static from a technology distribution technology perspective over over a number of years now.

Starting to see the need.

Driven by consumer demand to drive.

Through modern warehouse management systems and.

We feel like we're on the on the forefront of that the fact that.

We're now delivering our warehouse management system version less and in the cloud is is really an added advantage right its access to.

Okay near immediate innovation and speed of deployment and a world. The certainly requires that anda as we pointed out certainly the.

Market enthusiasm certainly seems to be strong.

Understood and I guess, Dennis just a follow up question as it relates to the guidance. When we're looking at the 21, I guess I'd like to hear a little bit more perspective, one of the prepared remarks, you made with a with some of these transactions and the cloud side. Your five of the relationship could be much larger than year. One so what I'm curious about you launched cloud WMS the need.

WMS cob product in May.

If you're signing large deals whether it was in twoq or Threeq you are even for Q is it safe to say, there's actually just not a lot of subscription revenue impact and the 21 and its really starts to ramp more in the 22, just trying to understand kind of how that went up phase then thank you.

Yeah, that's correct Terry it will phase in at all actually phase in to the.

First second and third year of the Concha contract as a general rule, but short term you know short term drag on cloud revenue, but long term values created for Manhattan on the go forward and you see that in Europe Yep.

Yep Yep.

Yeah, One and then just last question is on the RPL has there been any duration change just how is the consumption coming along from a contracting standpoint, what is the duration like compared to prior quarters. So we can kind of look at that on the RPL. Thank you.

Yes.

Sales in the very early days, we should see a little bit shorter contract the contract values, but seems to be stabilizing kind of around about five year Mark on Ami average Terry.

But.

Your next question comes from Matt Pfau from William Blair.

Hey, guys. Thanks for taking my questions.

First wanted to ask on I think a lot of retailers are getting geared up for the holiday season.

Earlier than normal this year, just wondering if that diners.

Dynamic had any impact on either your third quarter results or how you're sort of thinking about the fourth quarter.

No not not not really Matt frankly, I agree with you and we're certainly seeing folks get geared up a little earlier I think we as consumers we can expect to see.

Some promotions and so forth earlier in the earlier in the season.

Indications are that black Friday will be not quite and cyber Monday, we will not be quite the quite the peaks that we've seen in prior years yet.

This season will start.

10 days to 14 days earlier, so I agree with all of that but frankly, we we've really not seen much impact from that retailer start preparing really in March and April.

For for peak season.

So that couple of week variability hasn't really had much effect on us.

Got it and then with the accelerated shift to E. Commerce. I think you are most likely going to see a lot of fulfillment and last mile challenges here in the upcoming holiday season, and one way to relieve that right is through BOPUS and curbside pickup, but I didn't really hear you.

Talk too much about those in your prepared remarks, but just sort of wondering if if that dynamics, having any impact on your business either yeah.

No. It is there's no question. The you know those capabilities are going to associated with their omnichannel suite of solutions.

They're extensions there all I did point out those one particular customer that you know.

Saw exactly the dynamic we are talking about and said Hey, we have got to have particularly curbside in this case up and running before well before the holiday season, and we were able to implement in order management and that capability in six weeks, which we were which we were pleased about is not the only circumstance, but six weeks from.

Start to finish is pretty impressive we were pleased with that but certainly BOPUS incur.

BOPUS and curbside or our big parts of what.

All retailers are looking for given the capacity constraints that everybody expects to see in parcel unit porcelain home delivery.

Got it and last one for me.

You guys are guiding for life license to be down significantly next year, but I guess the question would be why would anybody buy a license for for WMS now that you have the the cloud.

Version, just sort of wondering what the what the rationale on the customer side degree there yeah, well, let's see so so first of all.

You know you've got existing customers that certainly have an on premise solution. The frankly want to roll that out to additional facility is they need to buy more users because of capacity. Those those types of scenarios look and there are not many but there are a few.

Customers that.

I still have a propensity for on premise solutions. They are again few and far between now but there are a few.

There are some of our other solutions, whilst we offer amend the you know in the cloud that demand forecasting and inventory optimization solutions that.

I still have a balance of cloud and on premise demand to them. So you know that.

There's a number of reasons and the kind of the final one I would say that geographically around the world. There are still some sportswear on premise currently makes sense.

Great Ah things like I appreciate it.

You Matt.

Your next question comes from Joe Vruwink from Baird.

Great Hi, everyone I wanted to go back to the go live activity, because I think I heard <unk> hundred 60, and my corridor. So that's the second straight quarter, where its size and above normal level at imagine that you're seeing a lot of activity to get side quote unquote easy.

Extend can adding biopesticide and curbside on order management things like that the question is are you seeing follow on activity come from these engage mads.

And now that everything is on the cloud if lets say these engagements are starting out more short term in nature can you use this as an opportunity to circle back and maybe get customers thinking about an upgrade cycle and going back to things like warehouse management.

You know, it's a great question, Joe It [laughter]. It does depend certainly certainly to kind of the first part of your question.

There is there is and there is opportunity for ongoing deployments. So just to use the examples that you talked about there with BOPUS and curbside. There is certainly some enthusiasm around those two strategies for the regions that we you know that we've already discussed and particularly prior to.

The peak and so forth.

You know there are a follow on activities and capabilities around BOPUS and curbside with digital sales service that is a that tip.

Typically it's kind of a fast follower to those capabilities.

Customer engagement strategies around those those delivery mechanisms tend to be tend to be fast followers. So there is you know this quite a bit of ongoing activity and ongoing.

Cross sell up sell capability associated with those now.

As it relates to sort of if you want to call. This going back you know back.

For its down the supply chain to whether it be transportation management solutions and warehouse management solutions, they're not it it's not so much I wouldn't characterize it as a natural kind of extension of BOPUS and and curbside to tool but.

Noted in some of the previous conversations the modernization of distribution centers.

Is it frankly, becoming imperative a combination of the need to be able to execute on smaller smaller orders E commerce orders and the level of automation and robotics is being driven into you know two warehouses to to drive both throughput and accommodate.

For the challenging labor market in that.

In that particular segment.

Okay, Great and just on the last point I'd in terms of some of the early adopter is where are you seeing interest and active warehouse management.

It strikes me as a segment that have probably been comparatively resilient this year thinking about food and beverage grocery and CPG.

And say, you're launching new technology into a pretty healthy demand environment. These are also applications, where there is a lot of variety and skews very high volume and <unk> I suppose the question as when you launch stack that warehouse management did you feel like there were certain customer segments, where.

Have you got traction early it would drive maybe better Referenceability later on that and are you seeing that so far west sale early awards.

Uh huh.

No not particularly in terms of.

Focused on early Referenceability, and you know and those kinds of things.

You know, we're seeing solid traction and deals frankly, both for Mac customer base, who want to get onto Clyde strap plan.

Clive strategy in a cloud platform and new customer logos, but you know as a must start obviously the published this as and when we are as as and when we're able but you'll see.

You know a nice blend of customers across both verticals and.

And geographies.

Hey, Joe This is Dennis just to piggyback on what Eddie saying you know I would tell you based on the demand and the pace of growth for Manhattan active WSM in our pipeline.

I'd say, we're in the early stages of a pretty significant replacement cycle.

And keep in mind that a large part of that is our install base, but also about 45% not all MSW, but 45%.

Of our cloud pipeline is.

Net new opportunities net new customers as well.

Okay, great. Thanks satisfying today I'll leave it there okay. Thank you Joe CEA.

Your next question comes from Mark Schappel from benchmark.

Hi, Thank you for taking my question and nice work on the quarter.

And he's starting with you one of the benefits of your active WMS solution as a kitchen opportunity to to really move into verticals, where or maybe you just weren't all that penetrated before industrial manufacturing or two that come to mind.

If you could just address or just give an example, or so or maybe some.

Maybe some of the early customer interest you are seeing an act of W.M. from some of these non traditional Manhattan verticals yeah.

Yeah, I mean, we're certainly beginning to see some interest there mark I'm not going to have to see drop names and so forth that this particular at this particular juncture, but as you see customers of ours and the industries that have typically been kind of heavy wholesale heavy manufacturing and not.

Had a any kind of consumer contact or direct direct to consumer strategy, but frankly not war.

Right. So this is starting to starting to sell sell direct to consumer and and require a good bit more sophistication in that distribution distribution strategy.

There's a lot of early interest from you know from those front from those opportunities. The other dynamic though is that what we've now introduced here is a cloud based solution.

It always has immediate access to innovation and is extensible and that's a new phenomenon regardless of.

Regardless of vertical so some of those old verticals that are running old solutions that have been highly customized over the years have been difficult to get access to.

Whether it be a modern innovation or more than modern underlying technology that they now have easy access to that with Manhattan active whereas management system and you know were again starting to see a good bit of enthusiasm there.

Great. Thank you and then you mentioned your Manhattan active allocation solution, which I guess is there with this quarter sounds intriguing sounds interesting whether it be just to provide a few more details on on the solution itself and in some of the opportunities you see there yes sure.

So I'll keep it brief and because of that a bit of an overly simplified description mark given the given the time, we have but you know in the particularly in the fast fashion and apparel world.

You see companies buy for a season.

And then push that push product out to the stores and you don't.

You don't see a lot of replenishment and inventory optimization activities, when you're pushing that product type to the store, there's still a healthy amount of sophistication, where do I pushed that product to whether it be.

Climate based.

You know consumer demand base size of store all those kinds of things and that's been that's been the sort of the traditional way.

That one would push and allocate product pack, but in the new World, where we've got five online pickup in store curbside pickup buy online return from store. It requires another another level of sophistication and calculating how you push that product back to the store so Manhattan active.

Allocation is or is a brand new rethink of how to go bad in a soft lines and fast fashion distribution and allocation of inventory and of course, we built it on that.

Our cloud platform, which offers speed of implementation and access to.

Immediate innovation.

Great. Thank you.

Pleasure Mark Thank you.

[music].

Your next question comes from Brian Peterson from Raymond James.

Good evening, gentlemen, hey, thanks for taking the question. So any it's come up a couple of times just the idea of a WMS refresher I'm curious to what extent does the multi tenant cloud portfolio, you think change that it I'm a little bit more interested not on the existing installed base versus the opportunity for some of these legacy competitors I'm curious.

How would you think about a piece of this refresh opportunity relative to what we've seen in past years well.

The WMS systems don't slip in a matter of days are a matter matter of weeks, Brian as you know as you know but.

You know look we've all seen this acceleration of customer demand ecommerce demand delivery.

Expectations, and so forth even over the last seven eight months or so.

And it's real and it's real we do think that companies with you know certainly with customer facing requirement. So forth are under an awful lot of pressure to be able to deliver the consumer expectations consumer demand.

And it requires modern technology old tired.

Warehouse management systems that haven't been modernized for you know for years are not going to really be able to get the get the job done. So we are that we are no. No question, we're seeing a refresh cycle happening I don't know that it's going to be much much much faster than cycles that.

We've seen before but you know, but it's there and the good news is as we've moved to cloud based technology. There is a speed component in terms of being able to get these solutions rolled out too.

To customers and prospects.

Got it thanks, and maybe one for guidance and I appreciate all the all the components of the guidance, but just in terms of the investments I know, they're picking up a little bit next year is there anything that you call out in terms of products or go to market that we should be paying attention to our margins next year. Thanks guys.

No not really not really.

You know as we expect to be able to benefit from scale of course, but.

But but no no major product by product margin impact, we see a lot of opportunity clearly in front of us.

And our appetite.

Appetite to be able to invest in innovation is not been quenched a tool that's for sure. So we expect to continue to invest in innovation.

It has a near term impact on on margin.

Brian just to piggyback on that there is also you know as as the cloud business continues to scale. We are investing in just tooling tooling with our business to drive the margins up future margins up so requiring investment as the business scales over the next year to two.

Understood. Thanks, guys.

Thank you Brett.

Your next question comes from Kim from Loop capital markets.

Thanks, Hey, Eddie and Dennis Congrats on a strong quarter, especially in a tough environment for you guys. I'm just following up on Terry's question early early on Dennis I, just want to make sure I understand that so how does the ramp cloud deal affect ARCC. Our appeal does that does the whole value of the contract shopping the IPO upfront.

Or does it get out added when the next wrapped stocks just like the revenue no shows up when we closed the deal the bookings a show up in our IPO are reported in our PEO got it okay.

Okay.

So that I could potentially be choppy it to close on larger deals like down the road.

I don't know if it would be choppy in I think just the the reason we put that out there is.

On the year, one ramp the revenue can you know be much smaller and the exiting.

The exiting annual subscription value can be significantly larger so that impact in terms of cloud revenue can squeeze your sequential decline so it could be a little bit more lumpy on the revenue side not as much on the booking side.

Okay, great. Thanks for that and then.

Dennis a very basic question can you just.

Can you just give us an update on your business around the brick and motor or the big box retailers, you know I am assuming that.

That particular part of the business for you guys is still being pressured on any update any update there on when a when we can start to see that it's coming back and then also how much of your professional services business.

It's still kind of tied to data, we tell vertical slowed down I am assuming some of that weakness in professional services or at least a year over year decline is driven by the some of the projects dollar more last outposts bold telephone going prior to call that.

Yeah.

Yes, certainly yoon the some of the services most of the services declined it is associated with some of the kind of retail slowdown and I'm kind of retail hunkering down and frankly, we've got a combination of some sub verticals in retail being very very busy as an FFO.

Focused on meeting customer expectations others.

Being impacted by their stores being closed and so forth and putting projects on hold posing them and so forth. We're beginning to see those like backup and so forth. So thats. So that's encouraging in terms of the first part of your question, which was or we see.

Seeing activity around.

Big box retail inherent big box retail customers doing.

The answer is up.

Well, but generally in the E Commerce channel.

Right you see a big box.

E Commerce retail channels growing 200% year over year, putting all kinds of stress on the distribution network. So you know for us.

For Us we're still you know quite busy in that big Bucks in that big box space, Yeah, and we Havent had.

From a retail perspective, it's a strategic vertical for us in a great growth opportunity.

A lot of demand when you go across sub verticals within retail itself. In addition to that.

We've had very minimal bankruptcy events, no liquidations chapter 11, and customers or restrict taking that opportunity to restructure their business and really the challenge for retailers has been the mandated government shutdowns of their retail businesses. So we've seen a lot of pause.

As of activity not just in closing deals.

With retail, but we've we were also seeing a lot of positive activity from the retail sector in the pipeline as well okay. Great. Just on lots of me I'm. The last one is just a high level question for you guys got the omni.

No. The omni channel Commerce has been a hot secular trend for the past several years and obviously.

He has evolved very quickly onto me most strategic sales to call. Then now that you guys have a cloud based WMS solution in the market what should we do see overall complexity of the pump pump the implementation and should be less of a customer a customization into deployment are you at all.

Kind of maybe open to adopting a larger partner ecosystem that includes.

That includes large global system integrators, and perhaps even giving them access to some of your professional services work to help them rap.

Well look that's a it's a probably a reasonably long answer at the end of the day, we have a we have a large partner ecosystem around the world that ranges from.

Big Global companies like Deloitte, all the way down to you know the smaller supply chain focus boutique companies and of course, you have been in that customer conference and there's no shortage of implementation partners at our customer conference.

In terms of.

Customization and so forth there is still going to be customization required regardless of whether it's on prem or in the class two unique.

Features or capabilities of our cloud solution is it is extensible right. It is extensible. So we'll we'll still alive that customization to happen will honor roll of the contracts of the.

Customization npis and so forth so that as we do these updates every quarter.

You know there's no there's no kind of regression issues or implications have to re implement customization and so forth. So it's a it's a it's a certainly a valuable capability to be able to customize the solution and have access to immediate innovation.

Okay, great. Thank you so much guidance.

I pledge to you and thank you.

Your next question comes from Mark cigarettes from Rosenblatt.

Good evening.

Just hoping to get a perspective on that.

I'm, calling them downstream benefits of of your accelerate Pos and curbside pickup.

Pickup adoption I'm not sure you'd care to characterize it but I'm just trying to get a sense of where you see that.

Sort of following into pipeline.

And whether that might be.

If we think about just beyond orders maybe retain business maybe.

Maybe additional adoption.

Active omni solutions and then.

And then maybe just a stretch here, but if it's perhaps giving.

Getting a slight push to accelerate adoption of high.

Your active warehouse management solutions. Thanks.

Thank you Mark.

I wouldn't say it would be up it will be a pusher a nudge to go in reverse order nudge to the adoption of active warehouse management.

Those two things are reasonably reasonably different but I think it is safe to say frankly as a consumer.

You know, we're all beginning to expect BOPUS in Curbside is table Stakes and a unit price of admission frankly in the in the retail space.

Now advanced BOPUS and.

Curbside is starting to you know to really come to the surface.

Where retailers are looking to offer a cross sell and upsell opportunities even in a BOPUS and curbside environment that that requires real sophisticated customer engagement and sophisticated technique.

Technology systems to be able to make that to be able to make that happen. So.

So.

Whilst we we have seen an acceleration of ecommerce I think customer expectations.

We will continue to grow and that's why it's so important that we continue to innovate in that space and maintain our market leading position.

Got it thank you any project.

Our pleasure Mark Thank you.

That was our last question at this time I will turn the call back over to you any capex for closing comments, okay very good mark well. Thank you everybody for taking the time to participate in this earnings call I would look forward to a crystallizing at Twentytwenty, one view and a in about 90 days or so and.

Of course, it's very premature, but they will have a very happy and safe holiday season, and we'll speak to you again in about 90 days. Thanks.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

[music].

Good afternoon, My name is Mike and I will be your conference facilitator today.

At this time I would like to welcome everyone to the Q3 2020 earnings call.

All lines have been placed on mute to prevent any background noise.

After the speakers remarks, there will be a question and answer period if.

If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad if you.

If you would like to withdraw your question press the pound key as a reminder, ladies and gentlemen. This conference is being recorded today October 20 seconds 2020.

I would like to introduce Eddie Capel CEO, Dennis story, CFO, and Matt outreach senior director of Investor Relations Mr. Humphrey you May begin your conference.

Thank you, Mike and good afternoon, everyone welcome to Manhattan Associates.

Third quarter 2020 earnings call.

I will review, our cautionary language and then turn the call over to educating our CEO.

During this call, including the question and answer session. We may make forward looking statements regarding future events.

The future financial performance of Manhattan Associates, we caution you that these forward looking statements involve risks and uncertainties and are not guarantees of future performance.

Actual results may differ materially from the projections contained in our forward looking statements.

For each airports Manhattan Associates files with the FTC for important factors that could cause actual results to differ materially.

From those in our projections, particularly our annual report on form 10-K for fiscal year 2019, and the risk factor discussion in that report as well as any risk Dr. Updates we provide in our subsequent form 10-Q.

We note in particular that uncertainty regarding the impact of the COVID-19 pandemic on our performance could cause actual results to differ materially from our projection.

Under no obligation to update these statements.

In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors.

All non-GAAP measures to the related GAAP measures in accordance with FCC rules, you'll find reconciliation schedules in the form 8-K, we submitted to the FTC earlier today and on our website at <unk> Dot com.

Now I'll turn the call over to Eddie.

So for the quarter Manhattan reported total revenue of $150 million, an adjusted earnings per diluted share of 51 cents both of these exceeded expectations.

Expectation broad.

Broad revenue outperformance across really all of that business lines combined with a continued focus on expense management also drove strong earnings leverage in the quarter.

Now using a markets and our customer bases reference points, we're starting to see some modest improvement in the global macro economic situation well true there's still a very long way to go in terms of reaching back to a normal operating environment. We are encouraged by the level of activity.

We're seeing in our pipeline, specifically without new Manhattan active warehouse management solution.

We closed a record multimillion dollar Manhattan active W.M. deal in Q3 with a large national beverage distributor and while early we are off to a solid start in Q4 as well.

And as such we are raising our full year total revenue and adjusted EPS guidance to reflect our views for the balance of the year.

And through our ongoing engagement with customers and prospects, we continue to see business fundamentally rethinking the future stage of their supply chains distribution footprint and omni channel Commerce strategies. Some of this re thinking is being driven by consumer demand with nine out.

Of 10 consumers wanting a omni channel experience with seamless service levels between sales channels.

Other reasons, a more growth oriented.

Average omnichannel customers spend 4% more in store and 10% more online than single channel consumers.

These changes will know that require a thoughtful approach to implementing modern agile scalable software solutions.

The growing demands placed on legacy systems and software no longer going to be suited to a multi channel digital world and we.

We feel the long term opportunity set in front of US based on these favorable demand trends is robust and will continue to provide meaningful opportunity for us to grow and scale our business.

And as a result of these.

Symmetrical tail and headwinds coupled with that market, leading solutions and applications, we see at global pipeline opportunities trending favorably.

Our recently released Manhattan active warehouse management solution is driving very positive market interest validation for the countless man days in the many millions of dollars in R&D that we've invested in developing the product over the past several years and at the end of the third quarter over 80.

Percent of our global bookings pipeline is comprised of cloud opportunities and about 45% of our deal opportunities continue to be represented by net new logos globally.

And this certainly should provide ample opportunity to land new business for us while we also focus on expanding our relationships with existing customers and speaking of customers. You may recall, a few weeks ago, we announced that part of a very rigorous selection process l'oreal.

The world's leading UK beauty company chose to implement at Manhattan active W. end solution across its distribution footprint globally L'oreal was looking for and agile cloud native solution that can provide the necessary adaptability and scalability to that business demands as it continues to.

Grow with a positive trajectory.

Now regarding services. Despite the challenges that have been caused by the global pandemic, we're delivering on our promises to add customers around the world.

The third quarter, we conducted 161 go lives globally, once again, showcasing our flexibility and expertise that delivering technical implementation work through really any delivery channel.

Now it is worth maybe reminding you that build travel which is margin neutral but contributes to the overall services revenue was about 5% of a headwind year over year to our services revenue growth.

Now turning to sales and marketing teams remain very active and engaged pursuing opportunities across our installed base, while simultaneously move in brand new business opportunities forward across all of our product portfolio of no.

Of note. We recently hosted a AMEA exchange connective then as virtual customer conference for that particular region and feedback from the conference participants was overwhelmingly positive and participation from our partners and customers was very well received.

Our competitive win rates remain very strong at 70 plus percent against head to head competition with about 25% of that license and cloud deals representing net new customers in the quarter.

Verticals that collectively drove more than 50% of our cloud and license revenues in the quarter, where retail consumer goods government food and beverage and grocery.

And if I can I'll ask just turn the discussion a little towards our product pipeline.

Last quarter I updated you on the launch of arguably the most important product in Manhattan's history Manhattan active warehouse management. The next generation of warehouse management software, we announced this new cloud native version of WMS and our virtual user conference in May of this year.

Today I'd like to provide an update on Manhattan active W.F., along really three key dimensions customer success, new customer acquisition and ongoing product development. So let's start with firstly with customer success. So you'll recall at the time of launch pet supplies plus was already live on Monday.

Hatton active W. App and since then they've reported some really exciting accomplishments that shipping record volumes using our application the Onboarding times for new associates, who have been cut in half using that all new mobile app for the distribution center associates and they've actually already taken the second site live and in the process of.

Planning to turn on a third side as well.

I'm happy to report that Q3 was a strong quarter for customer acquisition. We now have several additional projects in flight across a variety of industries and regions and we're seeing strong activity in the grocery food and beverage health and beauty sectors with.

Hatton active warehouse management.

And messaging next generation version list cloud native WMS, certainly seems to be resonating well with the market.

And finally I have to happy to report that per our plan. We shipped our first quarterly follow on release of Manhattan active W.M. on time, Eric 2020, Dollarsthree released hit that customers' environments in August delivering additional innovation and functional capability and we're on track to deliver at twin.

NT dollar for release next month in November as well so in short we're off to a great start executing on our vision of providing the industrys only cloud native fully extensible version lists warehouse management system.

And we continue to compete pretty effectively in the Tms spaces, well evidenced by assigning among other deals.

Large Tms us contract in the quarter with a global distributor the combination of our best in class optimization technology international capabilities and strong sales and delivery teams were really the keys to this win.

We continue to make progress outside of supply chain execution as well.

This quarter Q3, we introduced Manhattan active allocation as part of our suite of inventory optimization solutions built on them and had an active application architecture. This new asset allocation solution is purpose design and build for the fashion and apparel businesses because.

Historically speaking at inventory solutions have been very strong for Hardlines replenishment based businesses were sophisticated demand forecasts and mathematically optimize replenishment plans are key but the world of fast fashion is quite different.

Requires a different set of technology for calculating how much inventory to forward position in each store.

In any given season in Manhattan active allocations solves this inventory positioning problem and its crucially it solves it with omni channel in mind, ensuring both digital and standard footfall demand are particularly well served.

And finally I'd like to close that my product related marks with a quick update on Manhattan active on the collection of cloud Native order management customer engagement and store technologies.

This quarter, we announced interactive inventory is really significant advancement for order management customers interactive inventory provides ultra.

Ultra high speed delivery date projections for digital customers, regardless of where they are in the buying journey.

The eventual order.

The interactive inventory combines really everything that set us apart historically, a curated view of enterprise inventory the industrys best fulfillment optimization algorithm cutting edge cloud based technology and access to real time operational data, all while making that delivery promise.

To the consumer.

And speaking of delivery I am proud to report that in the quarter. We also took a leading footwear brand lives in six weeks on our order management and store fulfillment applications. This particular customers looking to enable both standard pickup in store and curbside pickup with time to spare before the holiday season.

Our professional services organization really delivered for them and that alive with pickup and curbside across the us and Canada and they're beginning to roll these capabilities internationally as well.

Thanks Eddie.

As mentioned third quarter total revenue was $150 million down 8% over prior year.

Pretty much solely to Carbonite team, our total revenue estimate for the fourth quarter is a range of 135 million to $140 million adjusts.

None of our bookings were from new customers.

For Q4, we estimate our cloud revenue will be about $22 million, which represents about 40% growth year over year.

For the full year, we estimate our cloud revenue will be $78 million to $79 million up 68% year over year from the midpoint.

Yes.

License revenue was solid in the quarter at $13.2 million well above our expectations as several Q4 pipeline opportunities accelerated into Q3.

Overall license is down 28% year to date and continues to attract a strong demand for our solutions continues to shift to cloud we saw.

We signed three 1 million plus dollar deals in the quarter with roughly 30% of all license deals coming from new customers.

For the fourth quarter, we expect between four and $5 million in license revenue.

And for the full year, we now estimate license revenue will be approximately 33 to 34 million.

Of course, as we've pointed out in our release and earlier in the call uncertainty about the Cove at 19 pandemic could affect our performance against our estimates.

Cloud and license software mix will be approximately 70% cloud to 30% license for the full year with total software revenue of 111 million to $113 million up 17% year over year at the midpoint.

A record number despite a 31% or $15 million decline in license revenue versus 2019.

Turning to bookings as we've discussed remaining performance obligation or Rps, though is.

The leading proxy for our cloud bookings performance and represents the value of contractual obligations required to be performed otherwise referred to as unearned revenue or bookings are.

Our PEO for the quarter totaled $257 million up 69% over prior year and up 14% sequentially.

We now expect that our year end Rps will fall within a range of $275 million to $290 million driven by bookings strength in cloud, particularly with Manhattan active Wm.

One last point on license and cloud our performance continues to depend on the number and relative value of large deals we close in any quarter.

Further some customers have longer implementation cycles associated with large projects, requiring a multi year annual subscription wrath of built into the contract term as an example for a five year contract the ramp results in year five of contracted revenue being significantly larger than year.

And one in the near term as Manhattan scales large ramp deals will impact sequential and year over year revenue growth percentages now.

Now shifting to maintenance right.

And for full year 2020, our estimate is $145.5 million.

Turning to services.

Our professional services revenue for the quarter totaled 73, and a half million dollars down 20% year over year as expected.

Again, I would like to point out that excluding billed travel were down about 15% year over year we.

We expect near term services revenue trends will be tied to the pace and degree of global economic improvement and we.

We estimate our Q our services revenue for Q4 will be approximately $71 million and our full year 2020 services revenue will be in the range of 303 million to $305 million.

At the midpoint. This is really difficult math, but $304 million services will be down about 16% versus 2019.

Excluding bill travel services revenue was down 12%.

These estimates include our expected seasonal fourth quarter sequential decline over Q3 due to retail peak season.

Regarding consolidated subscription maintenance and services margins for the quarter, we generated 53% margins driven by continued operating leverage and cloud.

Our fourth quarter estimate is approximately 51.9%.

About 100 basis points higher than 2019, our full year estimate is approximately 51.4%.

For the fourth quarter, we estimate our adjusted operating margin to be within a range of 19.2% to 28.2%.

Our Q3 adjusted effective income tax rate was 23.5%, we estimate our fourth quarter rate to be 24% and full year tax rate will be approximately 23.6%.

Regarding our capital structure, our share repurchase program remain suspended and our repurchase authority limit remains at $50 million, we continue to assess the appropriate timing for our resumption of buyback activities dictated primarily by broader macroeconomic improvement.

For the fourth quarter and full year, we estimate our diluted shares outstanding will be approximately 64.4 million shares.

Turning to cash we closed the quarter with cash and investments of $166 million and zero debt.

That's right $166 million and zero debt, our current deferred revenue balance totaled $113 million down 5% sequentially on just timing of revenue recognition.

Q3 cash flow from operations totaled $42 million up 6% over prior year.

Year to date operating cash flow totaled $130 million down just 8% and.

And finally capital expenditures totaled $200000 in Q3, we estimate full year capital expenditures to be between three and $5 million.

Now turning to our updated annual guidance, we continue to model and review multiple scenarios in order to provide investors with our best estimate of financial performance for the remainder of the year of note. There are certain external factors that are out of our control and may produce results that are different from expect.

Patients.

So specifically for 2020 annual guidance, our full year total revenue range is now expected to be between $574 million to $579 million our team.

Our target objective is 576, and a half million dollars and total revenue versus prior guidance of $562 million.

Our full year adjusted earnings per diluted share range is expected to be between a $1.62 to $1.66. Our target objective midpoint is $1.64 compared to our previous guidance midpoint of $1.56.

Our full year GAAP earnings per diluted share range is expected to be $1.23 to $1.27 with a midpoint of $1.25.

And we expect our full year adjusted operating margin to be in the range.

23.5% to 24%.

That covers the 2020 guidance.

Before discussing our preliminary 2021 targets, we want to remind you that the views we have today.

Our subject to a variety of factors that may manifest themselves over the upcoming months and heads are subject to change so appropriately conservative for the environment in which we are operating.

We expect to provide formal 2021 guidance on our four Q2 thousand 20 call next.

Next year.

One final note before going further our preliminary 2021 targets reflect year over year growth rates that are based on the midpoint of our updated 2020 guidance for their respective metrics.

So at a high level, we view 2021 currently as a tale of two halves.

Specifically, we expect H two will be stronger than H, one provided an economic recovery picks up steam in the back half of the year.

We continue to believe RP.

Is the best go forward metric and tracking the progress of our transition.

Our 2021 full year total revenue range is now expected to be between $585 million to $625 million.

Representing a 1% to 8% year over year growth range.

Our target objective is to achieve 605 million reps.

Representing 5% growth.

Excluding our declining license impact year over year total revenue growth is 8%.

As you know Q1 2020 was an all time record Q1 revenue performance pre cove at creating a tough comp for.

For Q1 2021, we expect.

We expect Q1 2021 total revenue to be down 7% to 9% over Q1 2020.

We expect our H, one total revenue split to be about $292 million with 1% year over year growth given the Q1 code would come up and.

And H to split to be about $313 million. This is the revenue split with a 9% growth rate.

For software revenue, we are estimating 123 million to $130 million with a midpoint growth of 13%.

We are targeting a $108 million to $110 million in cloud growth with midpoint growth of about 40%.

Regarding 2021, RPL, our preliminary estimate is between $385 million to $390 million up about 40% over 2020 and as Eddie mentioned, we're off to a very good start in Q4 on strong cloud demand.

With the backdrop of go co. The government elections in retail peak season, and play and a second full set selling quarter of Manhattan active DVM under our belt. This will certainly help us calibrate the camshafts on our PEO entering 2021.

For consulting services, we are targeting 306 to 334 million with a $320 million midpoint, representing about 5% year over year growth.

We expect H, one revenue to be down about 3% to 5% year over year with Q1 being down 15% against 2000 Twentys record services comp.

The rate of year over year growth and services will be dictated by the pace and cadence of economic recovery for the balance of 2021.

And for maintenance, we are estimating $140 million to $145 million or a 4% decline to flat growth year over year, as we expect more existing customers to convert to cloud subscriptions.

That covers the critical revenue targets, our full year 2021 adjusted earnings per share range.

Is $1.37 to $1.54 with a midpoint of $1.46 eight.

H one to age two percentage splits will be 45% H, one and 55% age too for the annual EPS splits Q1 will be our lowest EPS quarter totaling about 21% of full year EPS or 31 cents.

The primary drivers of lower year over year earnings per share is related to three major components first the continued decline of license revenue.

Second the reversal of prior cost actions, we took in April of this year and third continued strategic investments in innovation and tooling for cloud ops.

Execute on the cloud growth, we see in front of us.

Adjusted operating margin is expected to decline year over year to 20% to 21%, reflecting the operating operating imperatives covered in our outlook for ABS you may recall in our Q4 2019 call we guided to an adjusted operating margin range of 20.

20.5% with a trough of 20%.

Unfortunately in our Q1 2020 call the pandemic, regardless the downshift, a few gears to protect liquidity customers and our employees without sacrificing investment in R&D.

Manhattan's effective tax rate is expected to run at approximately 24.5% subject to any changes to federal state or foreign tax legislation and.

And finally, we expect that our share count will be approximately $65 million, which assumes no buyback activity in either Q4 20 or fiscal year 2021.

That covers the financial update back to Eddie for some closing comments alright, thanks, Dennis well look.

Well look we're overall, we're very pleased with our performance this quarter.

Clearly we are operating in challenging times, we continue to focus on driving operational and financial results as we progress further on X. I journey with a strong business Foundation, we expect to further extend our market leading position with the supply chain and omni channel Commerce solutions and has reduced so we'll be continuing.

To innovate to advance.

In advance of market demand leveraging at technical and domain expertise in order to provide our customers solutions, which position them for success in a dynamically in a rapidly changing world. We certainly see no shortage of opportunities to expand our addressable market will further strengthening act.

Competitive position.

So in closing todays call I did want to take a brief moment to thank all of our customers. Thank our employees and our shareholders around the world for all of your patience focus and engagement over the past seven months or so it's been nothing short of remarkable.

And for one I'm grateful for it.

So again I expect Manhattan will continue to push possible expanding at industry, leading product portfolio, while driving revenue growth and profitable execution for years to come as we benefit from the growing tailwinds within supply chain.

And omni channel Commerce.

So Mike over to you and were now ready to take questions.

As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound or hash key please standby will be compiled the queue any roster.

First question comes from Terry Tillman from true Securities.

Yes, hi, good afternoon, and thanks for taking my questions Congrats on the quarter and the strength of the called WMS, having maybe the first question. Just for you is as we go back and look at historical kind of cycles around WMS upgrade.

And and we look at currently the ecommerce Mega trend maybe could you talk about are we starting to see a WMS upgrade cycle and if so how does that compare to prior upgrade cycles. This month, we'll learn a little bit more about that potential and their relationship to E commerce.

Yeah, well I mean, it's a couple of dynamics Terry you pointed out the E Commerce Anaemic no no no question that we've all seen that accelerate it's been accelerating for the last.

Several years, but over the last.

Seven months or so a real acceleration there I think we would all agree we don't see it turning back.

You look at there.

Distribution center construction, it's still very.

Very very vibrant for sure the need for modern facilities to the highly automated.

Driven with a balance of robotics and human capital certainly drive the need for a modern flexible agile warehouse management system, and that's where we've where weve positioned ourselves. So we've got kind of two dynamics going here the growth of the growth of E Commerce, but also.

As you pointed out that replacement cycle and frankly, some of the industries that have not seen strong replacement cycles, historically, particularly grocery food and beverage that have been pretty static from a technology distribution technology perspective over over a number of years.

Now starting to see the need.

Driven by consumer demand to drive.

Through modern warehouse management systems and.

We feel like we're on the on the forefront of that the fact that.

We're now delivering our warehouse management system version less and in the cloud is really an added advantage right its access to.

Okay near immediate innovation and speed of deployment and a world the certainly requires that and as.

As we pointed out it's certainly the most.

Market enthusiasm certainly seems to be strong.

Understood and I guess, Dennis just a follow up question as it relates to the guidance. We're looking into 21, I guess I'd like to hear a little bit more perspective, one of the prepared remarks, you made was.

With some of these transactions in the cloud side. Your five of the relationship can be much larger than year. One so what I'm curious about you launched cloud WMS the native WMS cloud product in May.

Yes, Thats correct, Terry it will phase in at all actually phase in to the.

First second and third year of the Concha contract as a general rule, but short term short term drag on cloud revenue, but long term values created for Manhattan on the go forward and you see that in Europe.

Yep Yep.

Yes, one and then just last question is on the RPL has there been any duration change just how is the consumption coming along from a contracting standpoint, what is the duration like compared to prior quarters. So we can kind of look at that on the RPL. Thank you.

Yes, I tried to say in the very early days with units in a little bit shorter contract the contract value, but seems to be stabilizing kind of around about five year Mark on on the average Terry.

But.

Your next question comes from Matt Pfau from William Blair.

Hey, guys. Thanks for taking my questions.

First wanted to ask on I think a lot of retailers are getting geared up for the holiday season.

Earlier than normal this year, just wondering if that diners.

Dynamic had any impact on either your third quarter results or how you're sort of thinking about the fourth quarter.

No no no not not really Matt frankly, I agree with you and we're certainly seeing folks get geared up a little earlier I think we as consumers we can expect to see.

Some promotions and so forth earlier in the earlier in the season.

Indications are that black Friday will be not quite and cyber Monday, we will not be quite the quite the peaks that we've seen in prior years, yes.

This season will start.

10 days to 14 days earlier, so I agree with all of that but frankly, we we've really not.

See much impact from that retailer start preparing really in March and April.

For for peak season.

So that couple of week variability hasn't really had much effect on us.

Got it and then with the accelerated shift the E. Commerce I think you are most likely going to see a lot of fulfillment and last mile challenges here in the upcoming holiday season, and one way to relieve that right is through BOPUS and curbside pickup, but I didn't really hear you.

Talk too much about though is in your prepared remarks, but just sort of wondering if if that dynamics, having any impact on your business either.

No. This is there's no question. The you know those capabilities are going to.

Associated with their Omnichannel suite of solutions.

They're extensions there all I did.

I did point out, though is one particular customer that.

Sure exactly the dynamic we are talking about and said Hey, we have got to have particularly curbside in this case up and running but well before.

Well before the holiday season, and we were able to implement order management and that capability in six weeks, which we were which we were pleased the bad it's not the only circumstance, but six weeks from start to finish is pretty impressive we were pleased with that but certainly a book.

Opus and curbside or our big parts of what or retail.

All retailers are looking for given the capacity constraints that everybody expects to see in parcel porcelain home delivery.

Got it and last one for me.

You guys are guiding per life licensed to be down.

Significantly next year, but I guess the question would be why.

Why would anybody buy a license for for WMS now that you have the the cloud.

Version, just sort of wondering what the what the rationale on the customer side degree there yeah, well, let's see so so first of all.

You've got existing customers that certainly have an on premise solution. The frankly want to roll that out to additional facility is they need to buy more users because of capacity.

Those types of scenarios look and there are not many but there are a few customers that.

I still have a propensity for on premise solutions. They are again few and far between that with our view.

There are some of our other solutions, whilst we offer amend the you know in the cloud at demand forecasting and inventory optimization solutions that.

I still have a balance of cloud and on premise demand to them. So.

There's a number of reasons and the kind of the final one I would say that.

Geographically around the world there are still some spots where on premise currently makes sense.

Okay.

Great. Thanks, a lot guys appreciate it.

Thank you Matt.

Your next question comes from Joe Vruwink from Baird.

Great Hi, everyone.

I wanted to go back to the go live activity 'cause.

Thank God I heard 160 at Macquarie there.

So that's the second straight quarter, where its size.

Normal level at imagine that you're seeing a lot of activity to get that quote unquote extension, adding oh bedside and curbside on order management things like that the question is are you seeing follow on activity come from the is engaged guidance.

And now that everything is on the cloud if lets say these engage in and are starting out more short term in nature can you use this as an opportunity to circle back and maybe get customers thinking about an upgrade cycle and going back to things like warehouse management.

You know, it's a great question Joe It it does depend certainly certainly to kind of the first part of your question.

There is there is and there is opportunity for ongoing deployments. So just to use the examples that you talked about there with BOPUS and curbside. There is certainly some enthusiasm around those two strategies for the reasons that we've you know that we've already discussed and particularly price.

To peak and so forth.

You know there are follow on activities and capabilities around BOPUS and curbside with digital self service that is a that typically is kind of a fast follower to those capabilities.

Customer engagement strategies around those those delivery mechanisms tend to be tend to be fast followers. So there is no there's quite a bit of ongoing activity and ongoing.

Cross sell up sell capability associated with those now.

As it relates to sort of if you want to call is going back backward stand the supply chain to whether it be transportation management solutions, and whereas management solutions, they're not it's it's not so much I wouldn't characterize it as a natural kind of extension of BOPUS and.

Curbside to tool, but as noted in some of the previous conversations the modernization of distribution centers.

Is it frankly, becoming imperative.

Combination of the need to be able to execute on smaller smaller orders E commerce orders and the level of automation and robotics is being driven into into warehouses to to drive both throughput and accommodate for the challenging labor market.

In that particular segment.

Okay, Great and just on the last point I'd and turns out some of the early adopter is where are you seeing interest and active warehouse management.

Yeah. It strikes me as a segment that have probably been comparatively resilient this year thinking about food and beverage grocery and CPG.

And say, you're launching new technology into a pretty healthy demand environment. These are also applications, where there is a lot of variety and skews very high volume and I suppose the question as when you launch stack that warehouse management did you feel like there were certain customer segments, where.

You got traction early it would drive maybe better Referenceability later on and are you seeing that so far west sale early awards.

No not particularly in terms of.

Focused on early Referenceability, and you know and those kinds of things.

You know, we're seeing solid traction and deals frankly, both for Mac customer base, who want to get onto Clive strap plan.

Cloud strategy, and a cloud platform and new customer logos, but.

We'll start obviously to publish this as and when we are as far as and when we're able but you'll see.

You know a nice blend of customers across both verticals and.

And geographies.

Hey, Joe This is Dennis just to piggyback on what Eddie saying you know I would tell you based on the demand and the pace of growth for Manhattan active WSM in our pipeline.

I would say we're in the early stages of a pretty significant replacement cycle.

And keep in mind that a large part of that is our install base, but also about 45% not all MSW, but 45%.

Of our cloud pipeline is.

Net new opportunities net new customers as well.

Okay, great. Thanks satisfying today I'll leave it there okay. Thanks.

Okay. Thank you Joe.

Your next question comes from Mark Schappel from benchmark.

Hi, Thank you for taking my question and nice work on the quarter.

And he's starting with you one of the benefits of your active WMS source. So it gives you an opportunity to really move into verticals, where or maybe you just weren't all that penetrated before industrial manufacturing or two that come to mind I was wondering if you could just address or just give an example, or so maybe some.

Maybe some of the early customer interest you are seeing an act of W. M from some.

From some of these non traditional Manhattan verticals yeah.

Yeah, I mean, we're certainly beginning to see some interest there mark.

Mark I'm not going to have to see drop names and so forth that this particular at this particular juncture, but as you see customers of ours.

And the industries that have typically been.

Of heavy wholesale heavy manufacturing and not had.

Any kind of consumer contact or direct direct to consumer strategy, but frankly now or.

Right. So this is starting to starting to sell sell direct to consumer.

Yeah.

Require a good bit more sophistication in that distribution distribution strategy.

There's a lot of early interest from you know from those front from those opportunities. The other dynamic though is that what we've now introduced here is a cloud based solution that always has immediate access to innovation and is extensible and that's a new phenomenon regardless.

Regardless of vertical so some of those over the goals that are running old solutions that.

In highly customized over the years have been difficult to get access to.

Whether it be modern innovation or more than modern underlying technology. They now have easy access to that with Manhattan active whereas management system and we're again starting to see a good bit of enthusiasm there.

Great. Thank you and then.

You mentioned your Manhattan active allocation solution, which I guess is new this quarter sounds.

Frigging sounds interesting whether it be just to provide a few more details on on the solution sales and some of the opportunities you see there yes sure.

So I'll keep it brief and because of that a bit of an overly simplified description mark given the given the time, we have but.

Particularly in the fast fashion and apparel world.

You see companies buy for a season, and then push push product out to the stores and.

I don't see a lot of replenishment and inventory optimization activities, when you're pushing that product type to the store, there's still a healthy amount of sophistication, where do I push that product whether it be.

Climate based.

Consumer demand base size of store all those kinds of things and that's been that's been the sort of the traditional way that.

The one would push and allocate product pack, but in the new World, where we've got five online pickup in store curbside pickup buy online return from store. It requires another another level of sophistication and calculating how you push that product back to the store So Manhattan Act.

Of allocation is or is a brand new rethink of how to go bad Softlines and fast fashion distribution and allocation of inventory and of course, we built it on at an X. I have platform, which offers speed of implementation and access to a media innovation.

Great. Thank you.

Pleasure Mark Thank you.

Your next question comes from Brian can you can see from Raymond James.

Good evening, gentlemen, hey, thanks for taking the question. So any it's come up a couple of times just the idea of a WMS refresher I'm curious to what extent does the multi tenant cloud portfolio, you think change that and I'm, a little bit more interested not on the existing installed base versus the opportunity for some of these legacy competitors I'm curious.

How would you think about a piece of this refresh opportunity relative to what we've seen in past years well.

The WMS systems don't slip in a matter of days are a matter of matter of weeks, Brian as you know as you know but.

Look we've all seen this acceleration of customer demand ecommerce demand delivery.

Expectations, and so forth even over the last seven eight months or so.

And it's real.

We do think that companies with.

Certainly with customer facing requirement. So forth are under an awful lot of pressure to be able to deliver the consumer expectations consumer demand.

And it requires modern technology old tired.

Warehouse management systems that haven't been modernized for you know for years are not going to really be able to get the get the job done so.

We are.

We know no question, we're seeing a refresh cycle happening.

I don't know that it's going to be much much much faster than cycles that we've seen before but but it's.

But its there and the good news is that as we move to cloud based technology. There is a speed component in terms of being able to get these solutions rolled out too.

To customers and prospects.

Got it thanks, and maybe one for guidance and I appreciate all the all the components of the guidance, but just in terms of the investments I know, they're picking up a little bit next year is there anything that you'd call out in terms of products or go to market that we should be paying attention to our margins next year. Thanks guys.

No not really not not not really.

You know as we expect to be able to benefit from scale of course, but.

But no no major product by product margin impact, we see a lot of opportunity clearly in front of us.

And.

Our appetite.

Appetite to be able to invest in innovation is not been quenched a tool that's for sure. So we expect to continue to invest in innovation.

It has a near term impact on margin.

Brian just to piggyback on that there is also you know as as the cloud business continues to scale. We are investing in just tooling tooling with our business to drive the margins up future margins ups, requiring investment as the business scales over the next year to two.

Understood. Thanks, guys.

Thank you Brett.

Your next question comes from Kim from Loop capital markets.

So how does the ramp cloud deal that art Archeo does that does the whole value of the contract swapping the IPO upfront or does it get added when the next ramp stocks just like the revenue no shows up when we closed the deal the bookings show up in our video are reported in our PEO Kotick.

Okay.

[laughter].

Attention will be choppy as you close on larger deals like down the road.

I don't know if it would be choppy in I think just the reason we put that out there is.

On the year, one ramp the revenue can be much smaller and the exiting.

The exiting annual subscription value can be significantly larger so that impact in terms of cloud revenue.

And squeeze your sequential decline so it could be a little bit more lumpy on the revenue side not as much on the booking side.

Okay, great. Thanks for that and then on that.

Yes.

Very basic question can you just give.

Can you just give us an update on your business around the brick and motor or the big box retailers.

Assuming that.

It's still kind of tied to data we tell vertical slowdown.

I am assuming some of the weakness in professional services or at least a year over year decline is driven by the some other projects dollar more last post called those ongoing prior to closing.

Yes, yes.

Yes, certainly using the some of the services most of the services decline is associated with some of the kind of retail slowdown and and kind of retail hunkering down and frankly, we've got a combination of some sub verticals in retail being very very busy and folks.

Just on meeting customer expectations others.

Being impacted by their stores being closed and so forth and putting projects on hold posing them and so forth. We're beginning to see those like backup and so forth. So thats. So thats encouraging in terms of the first part of your question which was.

Are we seeing activity around.

Big box retail an era of big box retail customers doing.

The answer is up.

Well, but generally in the E Commerce channel.

Right you see big box.

E Commerce retail channels growing 200% year over year, putting all kinds of stress on the distribution network.

So you know.

For us we're still quite busy in that big Bucks in that big box space, Yeah, and we Havent had.

From a retail perspective, it's a strategic vertical for us in a great growth opportunity a lot of demand when you go across sub verticals within retail itself. In addition to that.

Sales of activity not just in closing deals.

With retail, but we've we're also seeing a lot of positive activity from the retail sector in the pipeline as well.

Great just a I'm assuming on the last one just a high level question for you guys.

No. The omni channel Commerce has been a hot secular trend for the past several years and obviously.

He has evolved very quickly onto the most strategic sales to call then.

Now that you guys have a cloud base.

Jim its solution in the market.

What should we do Steve overall complexity of the pump pump the implementation and should be less of a couple of companies.

Customization into deployment.

You at all on kind of a maybe open to adopting a larger partner ecosystem that income.

That includes large global.

Large global system integrators, and perhaps even giving them access to some of your professional services work to help them rap well.

Well look that's a it's a probably a reasonably long answer at the end of the day, we have a we have a large partner ecosystem around the world.

Range is from.

Big Global companies like Deloitte, all the way down to you know the smaller supply chain focus boutique company is of course, you've been in that customer conference and there is no shortage of implementation partners at our customer conference.

In terms of.

Customization and so forth there is still going to be customization required regardless of whether it's on prem or in the cloud one of the unique.

Features or capabilities of act Clyde solution is it is extensible right. It is extensible. So we'll we'll still alive that customization to happen will honor roll of the contraction of the.

Customization npis and so forth so that as we do these updates every quarter.

There's no there's no kind of regression issues or implications have to re implement customization and so forth. So it's a it's a.

It's certainly a valuable capability to be able to customize the solution and have access to immediate innovation.

Okay, great. Thank you so much guidance.

Our pleasure in thank you.

Your next question comes from Marc Silk limits from Rosenblatt.

Good evening just.

Hoping to get a perspective on that.

I'm, calling them downstream benefits of your accelerate Pos and curbside pickup.

Pickup adoption I'm not sure you'd care to characterize it but I'm just trying to get a sense of where you see that.

Sort of following into pipeline.

And whether that might be.

If we think about just beyond borders maybe retain business.

Maybe additional adoption.

Active omni solutions.

And then maybe just a stretch here, but if it's you know perhaps.

Giving a slight push to accelerate adoption of.

Oh, you're active warehouse management solutions. Thanks.

Yes, Thank you Mark.

I wouldn't say it would be it will be a push or a nudge.

Go in reverse order nudged to the adoption of active warehouse management.

Those two things are.

Reasonably reasonably different but I think it is safe to say frankly as a consumer.

We're all beginning to expect BOPUS in curbside is table Stakes.

And price of admission frankly in the in the retail space.

Now advanced BOPUS and curbside is starting to you know to really come to the surface where.

Where retailers are looking to offer cross sell and upsell opportunities even in a BOPUS and curbside environment, that's that requires real sophisticated customer engagement and sophisticated pick.

Technology systems to be able to make that to be able to make that happen. So.

So you know well.

Whilst we we have seen an acceleration of ecommerce I think customer expectations.

We will continue to grow and that's why it's so important that we continue to innovate in that space and maintain our market leading position.

Got it thank you any project.

Pleasure Mark Thank you.

That was our last question at this time I will turn the call back over to you any capex for closing comments, okay very good mark well. Thank you everybody for taking the time to participate in this earnings call I would look forward to crystallizing, our 2020, one view and in about 90 days or so and.

Of course, it's very premature, but they will have a very happy and safe holiday season, and we'll speak to you again in about 90 days. Thanks.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

Q3 2020 Manhattan Associates Inc Earnings Call

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