Q4 2021 Manhattan Associates Inc Earnings Call

Ladies and gentlemen, this is the operator todays conference will begin momentarily until that time your lines will again be placed on music hold thank you for your patience.

Speaker 1: Ladies and gentlemen, this is the operator. Today's conference will begin momentarily. Until that time, your lines will again be placed on music hold. Thank you for your patience.

Speaker 2: The.

[music].

Speaker 1: Good afternoon, my name is Angie and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associate Q4 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

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

At this time I would like to welcome everyone to the Manhattan Associates Q4 earnings Conference call. All lines have been placed on mute to prevent any background noise.

Speaker 1: After the speaker's 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 like to withdraw your question, press the pound key. As a reminder, ladies and gentlemen, this call is being recorded today, Tuesday, February 1st, 2022.

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 like to withdraw your question press the pound key.

As a reminder, ladies and gentlemen, this call is being recorded today Tuesday February 1st 2022.

Speaker 1: I would now like to introduce Dennis Storey, CFO of Manhattan Associates. Mr. Storey, you may begin your conference.

I would now like to introduce Dennis story CFO of Manhattan Associates. Mr. Story, you May begin your conference.

Speaker 3: Thank you, Angie, and good afternoon, everyone. Welcome to Manhattan Associates 2021 fourth quarter earnings call. I will review our cautionary language and then turn the call over to Eddie Capel, our CEO .

Thank you Angie and good afternoon, everyone welcome to Manhattan Associates, 2021 fourth quarter earnings call.

We will review our cautionary language and then turn the call over to Eddie Capel our CEO .

Speaker 3: During this call, including the question and answer session, we may make forward-looking statements regarding future events or the future financial performance of Manhattan Associates.

During this call, including the question and answer session. We may make forward looking statements regarding future events or the future financial performance of Manhattan Associates.

Speaker 3: You are cautioned that these forward-looking statements involve risk and uncertainties, are not guarantees of future performance, and that actual results may differ materially from the projections contained in our forward-looking statement.

You are cautioned that these forward looking statements involve risks and uncertainties are not guarantees of future performance and that actual results may differ materially from the projections contained in our forward looking statements.

Speaker 3: I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly on our annual report on Form 10-K for fiscal year 2020 and the risk factor discussion in that report, as well as any risk factor updates we provide in our subsequent Form 10-Q .

I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly on our annual report on Form 10-K for fiscal year 2020, and the risk factor discussion in that report.

As well as any risk factor updates we provide in our subsequent form 10 Qs.

Speaker 3: 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 projections. We are under no obligation to.

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 projections. We are under no obligation to update these statements.

Speaker 3: In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules. You'll find reconciliation schedules in the Form 8K we submitted to the SEC earlier today and on our website at manh.com. Now I'll turn the

In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules, you'll find reconciliation schedules in the form 8-K, we submitted to the SEC.

Earlier today and on our website at <unk> Dot com.

Now I'll turn the call over to Eddie.

Speaker 4: Well, thanks, Dennis. Good afternoon, everyone, and thank you for joining us as we review our fourth quarter and full year 2021 results, as well as our outlook for 2022.

Well, thanks, Dennis Good afternoon, everyone and thank you for joining us as we review <unk> fourth quarter and full year 2021 results as well as our outlook for 2022.

Speaker 4: Well, 2021 was a very successful year for Manhattan Associates, setting all time records in total revenue, RPO, cash flow and earnings per share.

For 2021 was a very successful year for Manhattan Associates setting all time records in total revenue.

Cash flow and earnings per share.

Speaker 4: In February of 2018, we announced our goal to become a cloud-first company within five years.

In February of 2018, we announced that goal to become a cloud first company within five years.

Speaker 4: And four years into this transition, we've exceeded our own expectations and are well ahead of our initial timing and economic projections, with cloud solutions representing 90% of our pipeline operations.

And four years into this transition we've exceeded our own expectations and well ahead of our initial timing and economic projections with cloud solutions, representing 90% of our pipeline opportunities.

Speaker 4: And despite the pandemic in the midst of this cloud transition, we delivered record revenue in two of the four years and a guiding to a third in 2022.

And despite the pandemic and in the midst of this cloud transition we delivered record revenue in two of the four years and are guiding to a third in 2022.

Proudly our associates continue to execute extremely well, serving both customers and our end markets demand for our unified commerce and supply chain cloud solutions.

Speaker 4: Proudly, our associates continue to execute extremely well, serving both customers and our end market.

Speaker 4: Demand for a unified commerce and supply chain cloud solutions is very strong, creating great visibility for us as we enter 2020.

Very strong, creating great visibility for us as we enter 2022.

Speaker 4: And to help drive growth and serve our customers, we plan to add about 500 net new employees globally. And we remain committed to significantly investing in innovation to meet the future needs of our customers, grow our market share, and extend our adjustable market.

And to help drive growth and serve our customers. We plan to add about 500, net new employees globally, and we remain committed to significantly investing in innovation to meet the future needs of our customers grab market share and extend our addressable market.

Speaker 4: And while global ebbs and flows certainly persist, we remain very encouraged by our near-term and long-term growth opportunities.

While global ebbs and flows certainly persist we remain very encouraged by our near term and long term growth opportunities.

So pivoting to results.

Speaker 4: Q4 was a record quarter that, again, exceeded our expectations.

Q4 was a record quarter that again exceeded our expectations.

Speaker 4: Total revenue increased 17% to $171 million. And adjusted earnings per diluted share of $0.48 was up 7% as we invested significantly in employee compensation.

Total revenue increased 17% to $171 million and adjusted earnings per diluted share of 48.

Was up 7% as we invested significantly in employee compensation.

Speaker 4: Regarding RPO, the leading indicator of that growth, in Q4, we added a record 126 million of RPO bookings, setting new highs in Americas, in EMEA.

Regarding our Po, the leading indicator of that growth in Q4, we added a record $126 million of <unk> bookings setting new highs in Americas and.

In EMEA and in APAC.

Speaker 4: Our global sales team continue to execute well on robust demand for our client offerings across products, industry verticals, and geographic locations.

Our global sales team continued to execute well on robust demand for X sight offerings across products industry verticals and geographic locations.

Speaker 4: Demand also remains solid from both new and existing customers, with 20% of 2021 contracted bookings coming from net new customers.

Demand also remains solid from both new and existing customers with 20% of 2021 contracted bookings coming from net new customers.

Speaker 4: In the quarter, our win rates continue to be very strong at 75% as our innovation is recognized as differentiating and industry leading.

In the quarter our win rates continue to be very strong at 75% is our innovation is recognized as differentiating and industry leading.

Speaker 4: And from a vertical perspective, retail, manufacturing, and wholesale drove more than 80% of our bookings in the quarter. And drilling into the subverticals, they're pretty diverse. And they include apparel, department stores, grocery, consumer goods, industrial, transportation, as well as durable, and non-girable.

From a vertical perspective retail manufacturing and wholesale drove more than 80% of our bookings in the quarter and drilling into the sub verticals theyre pretty diverse and they include apparel department stores grocery consumer goods industrial transportation as well as durable and non durable goods.

Speaker 4: On the professional services front, our global team continues to set the bar for the industry. Our cloud portfolio implementations have gone very well in 2021, as our industry-leading team successfully conducted over 100 go-lies just in Q4 alone.

On the professional services front, our global team continues to set the bar for the industry at client portfolio implementations have gone very well in 2021 is our industry leading team successfully conducted over 100 go lives just in Q4 alone.

Speaker 4: In line with our outlook and prior commentary, we remain focused on adding and retaining our exceptional talent in 2022. And speaking of 2022, our pipelines are strong, with net new potential customers representing about 35% of demand. As I mentioned earlier, we're increasing our investment in research and development to nearly $100 million this year.

In line with our outlook in prior commentary, we remain focused on adding and retaining our exceptional talent in 2022 and speaking of 2022 pipelines are strong with net new potential customers, representing about 35% of demand as I mentioned earlier, we're increasing our investment in.

Research and development to nearly $100 million this year.

Speaker 4: Now let me provide a few additional details on that product portfolio.

Now let me provide a few additional details on our product portfolio.

Speaker 4: I'll start off by providing another positive update on the progress we're making with Manhattan Active Warehouse Management.

I'll start off by providing another positive update on the progress, we're making with Manhattan active warehouse management, the industry's first and only true cloud native AWS, serving the tier one market.

Speaker 4: the industry's first and only true cloud-native WMS serving the Tier 1 model.

Speaker 4: In May of 2020, we announced Manhattan Active WM as the natural successor to our industry leading on premise where has management for open systems.

In May of 2020, we announced Manhattan active Wm is the natural successor to our industry, leading on premise warehouse management for open systems solution.

Speaker 4: So we've been in market for about 20 months with Manhattan Active WM and we continue to see strong market demand and great enthusiasm.

So we've been in market for about 20 months with Manhattan active Wm, and we continue to see strong demand.

Demand and great enthusiasm.

Speaker 4: Customer deployments have been very successful and we now have nearly 60 customers who are committed to deploying Manhattan ActiveWM around the world.

Customer deployments have been very successful and we now have nearly 60 customers who are committed to deploying Manhattan active wm around the world.

Speaker 4: While Manhattan WMS has been known historically for the way it excels in large-scale, complex, direct-to-consumer and retail distribution centers, our initial Manhattan ActiveWM deployments have really been highly diverse.

And one Manhattan WNS has been known historically for the way in <unk> sales in large scale complex direct to consumer and retail distribution centers. Our initial Manhattan active wm deployments have really been highly diverse.

Speaker 4: Today, Manhattan Act of WM subscribers are located in 12 different countries and represent 21 distinct industries subverted.

Today in Manhattan that gives WNS subscribers are located in 12 different countries and represent 21 distinct industries sub verticals and this diversity in our customer base really reinforces that belief that supply chains are all kind of looking to embrace cloud native always current fully.

Speaker 4: And this diversity in our customer base really reinforces our belief that supply chains of all kinds are looking to embrace cloud-native, always current, fully extensible technology for their distribution centers, regardless of their industry.

Extensible technology for their distribution centers, regardless of their industry.

Speaker 4: And recent events have certainly shown us the critical importance of technology that allows businesses to respond quickly and effectively to supply chain disruptions.

And recent events have certainly shown as the critical importance of technology that allows businesses to respond quickly and effectively to supply chain disruptions.

Speaker 4: Because of the cloud native nature of Manhattan Active WM, we empower our customers to deploy new sites, new capabilities, new users very, very swiftly. And that close relationship with Google Cloud allows us to deploy our WM, Manhattan Active WM, excuse me, nearly anywhere, anytime with high levels of reliability and extremely low levels of latency.

Because of the cloud native nature of Manhattan active Wm, we empower our customers to deploy new sites new capabilities, new users very very swiftly in a close relationship with Google Cloud allows us to deploy at Wm Manhattan active Wm excuse me nearly anywhere.

Anytime with high levels of reliability and extremely low levels of latency.

Speaker 4: The robustness of the underlying active platform, it's best in class user experience and functional capability, and the strength of our team on the ground are combining to produce exceptional customer activity.

The robustness of the underlying.

Active platform is best in class user experience and functional capability and the strength of our team on the ground are combining to produce exceptional customer outcomes.

Speaker 4: So now I'll provide you with just a quick update on Manhattan Active Transportation Management. As you recall, our customers can deploy Manhattan Active Transportation alongside Manhattan Active Warehouse Management to form Manhattan Active Supply Chain.

So now I'll provide you with just a quick update on Manhattan active transportation management as you recall that customers can deploy Manhattan active transportation alongside Manhattan active warehouse management to form Manhattan active supply chain, the industry's first and only cloud native fully.

Speaker 4: the industry's first and only cloud-native, fully unified supply chain execution platform. And since its launch in May of 2021, Manhattan Active Transportation Management has enjoyed outstanding market interest and uptake, with strong international traction as well. In fact, half of our initial Manhattan Active Transportation subscribers are outside of North America.

Unified supply chain execution platform and since its launch in May of 2021, Manhattan active transportation management has enjoyed a standing market interest and uptake with strong international traction as well in fact half of our initial Manhattan active transportation subscribers outside of North America.

Speaker 4: And Aramia and Latin America teams are doing very well with Manhattan Active TM thus far. Actually with the product's very first go-live that was in Brazil.

EMEA and Latin America teams are doing very well with Manhattan active team, thus far actually with our products very first go live that was in Brazil.

Speaker 4: And we've communicated in the past, building a global customer base for a TMS application has been one of our strategic goals. And the hard work of our international TMS teams is really starting to play off.

And we've communicated in the past building a global customer base for our Tms application as being one of our strategic goals and the hard work of our international Tms teams is really starting to play off.

Speaker 4: And we're encouraged that the results of Manhattan Active Transportation Management show that our supply chain unification message is really resonating in the market. Almost half of our Manhattan Active Transportation Management customers are also Manhattan Active WMC.

We're encouraged that the results of Manhattan active transportation management, so that showed that our supply chain unification message is really resonating in the market almost half of.

Our Manhattan active transportation management customers are also Manhattan active wm customers and that teams are reporting that customers are placing a really high value in our ability to offer a single user interface to manage all aspects of supply chain execution to orchestrate end to end processes both across <unk>.

Speaker 4: And our teams are reporting that customers are placing a really high value on our ability to offer a single user interface to manage all aspects of supply chain execution, to orchestrate end-to-end processes both across WMS and TMS, and keep all of their supply chain applications fully integrated and current.

Yes, and Tms and keep all of their supply chain applications fully integrated and current.

Speaker 4: And finally on the product front, maybe a quick update on our omnichannel commerce solution, Manhattan Active Omni, including a point of sale application.

And finally on the product front, maybe a quick update on our omni channel Commerce solution Manhattan active omni, including at point of sale application at <unk>.

Speaker 4: At point-of-sale project teams, they remain busy with a number of new deployments and roll-outs. And throughout the year, we're slated to light up a large number of additional stores running our point-of-sale application. And many of those customers also run enterprise order management. And similar to the benefit I mentioned earlier, many of our Manhattan Active Omni customers certainly see the advantage of a unified solution across both their digital and bricks-and-mortar channels.

Point of sale project teams they remain busy with a number of new deployments and rollouts and throughout the year with slated to light up a large number of additional stores running at point of sale application and many of those customers also run enterprise order management and similar similar to the benefit I mentioned earlier, many of our Manhattan active omni.

The customers certainly see the advantage of a unified solution across both digital and bricks and mortar channels.

Speaker 4: And this quarter, we'll kick off our first Manhattan Active Allocation project with one of our strategic customers in EMEA. Manhattan Active Allocation is a next-generation inventory optimization solution designed for fashion retail.

And this quarter, we will kick off our first Manhattan active allocation project with one of our strategic customers in EMEA Manhattan active allocation as a next generation inventory optimization solution designed for fashion retailers. It's built on our industry, leading Manhattan active architecture, and we believe that it brings us.

Speaker 4: It's built on an industry-leading Manhattan active architecture, and we believe that it brings a fresh approach to a software category that's been mired in decades of old technology.

Fresh approach to the new sort to a software category that's been mired in decades of old technology.

Speaker 4: And finally, just this past quarter, we released an exciting new capability within Manhattan Active Omni, our interactive inventory capability, and it's getting a powerful boost from an all-new machine learning capability that really further optimizes order promise.

And finally.

This is just this past quarter, we released an exciting new capability within Manhattan active omni.

Interactive inventory capability and its getting a powerful boost from an all new machine learning capability.

Really further optimizes order promising many of our Manhattan active omni customers are shipping orders from hundreds of stores each and in addition to their distribution centers and this new solution analyzes multiple static and dynamic market factors to make a much more accurate shipping and delivery predictions in.

Speaker 4: Many of our Manhattan Active Omni customers are shipping orders from hundreds of stores each in addition to their distribution centers. And this new solution analyzes multiple static and dynamic market factors to make a much more accurate shipping and delivery prediction in real time as customers are shopping and checking in.

Real time as customers are shopping and checking out.

Speaker 4: And the initial results we're seeing indicate over a 50% reduction in late delivery, thanks to this sophisticated machine learning algorithm.

And the initial results, we're seeing indicate over a 50% reduction in late deliveries. Thanks to this sophisticated machine learning algorithm.

Speaker 4: And for our Manhattan Active Army customers, it's really another great example of the advantage of an ever-evolving operational platform with new game-changing capabilities like this one being delivered to them on a very regular basis.

And for our Manhattan active omni customers. It's really another great example of the advantage of an ever evolving operational platform with new game changing capabilities like this one being delivered to them on a very regular basis.

Speaker 4: And we continue to be really very excited about our long-term growth potential. Secular tailwinds are numerous, and the benefits of resilient modernist supply chains, I think, are pretty clear.

And we continue to be really very excited about our long term growth potential secular tailwind in numerous and the benefits of resilient modern supply chains I think are pretty clear.

Speaker 4: Now, why are we confident that Manhattan Associates is well-positioned to gain market share and outgrow the market in 2022 and beyond? Well, we're the industry leader and our technology is world class.

Now why are we confident that Manhattan associates is well positioned to gain market share and outgrow the market in 2022 and beyond.

Well, we're the industry leader and that technology is world class.

Speaker 4: the competitive environment is favorable, then our win rates are strengthened.

The competitive environment is favorable and our win rates are strengthening.

Speaker 4: the pipelines for our market-leading solutions continue to progress very well.

The pipelines for our market, leading solutions continued to progress very well.

Speaker 4: Our cross-sell opportunity is large and growing. And in fact, we've dedicated more resources to cross-selling in 2022, and see the opportunity to expand this over time as well. And then finally, we have a significant pipeline of existing on-premise customers who want to shift to our cloud native applications that are scalable, versionless, and accessible.

I cross sell opportunity is large and growing and in fact, we've dedicated more resources to cross selling in 2022 and see the opportunity to expand this overtime as well and then finally, we have a significant pipeline of existing on premise customers, who want to shift to a cloud native applications that are scalable.

Version was an extensible.

Speaker 4: So that concludes my business update. Dennis is gonna provide you with an update on our financial performance and discuss our outlook for 2022 and beyond. And then I'll close our prepared remarks for the brief summary before moving to Q&A. So Dennis, take it away. Thanks, Eddie.

So that concludes my business update Dennis is going to provide you with an update on our financial performance and discuss our outlook.

For 2022, and beyond and then I'll close our prepared remarks with a brief summary, before moving to Q&A. So Dennis take it away. Thanks.

Eddie.

Speaker 3: Our Manhattan Global teams continue to execute at a high level, as Eddie highlighted. In 2021, we set all-time records in RPO, total revenue, cash flow, and earnings per share. Hats off to our Global Associates for the outstanding performance.

Hatton global teams continue to execute at a high level as Eddie highlighted in 2021, we set all time records in RP.

Total revenue cash flow and earnings per share hats off to our global associates for that.

For the outstanding performance I'll start with recapping, our financial performance for the quarter and year all growth rates are year over year, unless otherwise stated.

Speaker 3: I'll start with recapping our financial performance for the quarter and year.

Speaker 3: All growth rates are year-over-year unless otherwise stated.

Speaker 3: Q4 total revenue was $171 million, up 17%. Full year revenue totaled $664 million, up 13%.

Q4, total revenue was $171 million up 17% full year revenue totaled $664 million up 13%.

Speaker 3: Excluding license and maintenance revenue, which removes the revenue compression by our cloud transition, Q4 revenue growth was 24% and full year

Excluding license and maintenance revenue, which removes the revenue compression by our cloud transition Q4 revenue growth was 24% and full year was 20%.

Q4 cloud revenue totaled $35 million up 51% with full year revenue totaling $122 million up 53%.

Speaker 3: Q4 cloud revenue totaled $35 million up 51% with full year revenue totaling $122 million up 53%.

Speaker 3: We closed out 2021 with RPO of $699 million, growing 126% and up 22% sequentially as demand continues to be robust.

We closed out 2021, with RP O of $699 million growing 126% and up 22% sequentially as demand continues to be robust.

Speaker 3: Our global services team delivered Q4 revenue of $82 million, up 15%, and on the year, $335 million, up 10%. Importantly, cloud sales continues to fuel services growth globally.

Our global services team delivered Q4 revenue of $82 million up 15% and on the year of $335 million up 10% and importantly, cloud sales continues to fuel services growth globally.

Speaker 3: Our Q4 operating profit totaled $39 million with adjusted operating margin of 22.8%.

Our Q4 operating profit totaled $39 million with adjusted operating margin of 22, 8%.

Speaker 3: And our full year operating margin was 26.8%, up 160 basis points over 2020.

And our full year operating margin was 26, 8% up 160 basis points over 2020.

Speaker 3: Factoring in Q4 retail peak seasonality, we exceeded margin expectation.

Factoring in Q4 retail peak seasonality, we exceeded margin expectations as discussed in our Q3 call. We also invested an additional $10 million in performance based compensation and employee retention investments.

Speaker 3: As discussed in our Q3 call, we also invested an additional $10 million in performance-based compensation and employee retention investment.

Speaker 3: Our Q4 earnings per share of $0.48 exceeded our prior guidance, with full year totaling $2.23 on 27% growth.

Our Q4 earnings per share of <unk> 48.

Exceeded our prior guidance with full year totaling $2 23 on 27% growth.

Speaker 3: Q4 operating cash flow was $40 million, and our full year operating cash flow increased 31% to $185 million, generating a 27% free cash flow margin and a 28% EBITDA margin.

Q4, operating cash flow was $40 million.

And our full year operating cash flow increased 31% to $185 million generating a 27% free cash flow margin and a 28% EBITDA margin.

Speaker 3: Cash never lies. We ended the year with $264 million in cash and zero debt.

Cash never lies we ended the year with $264 million in cash and zero debt.

Speaker 3: For the year, we invested $100 million in share buybacks, including $20 million in Q4. And last week, our board approved replenishing our repurchase authority to $50 million.

For the year, we invested $100 million in share buybacks, including $20 million in Q4.

And last week, our board approved replenishing, our repurchase authority to $50 million.

Moving to guidance.

Speaker 3: As consistently mentioned, our overarching financial objective is to deliver sustainable double-digit top-line growth.

As consistently mentioned our overarching financial objective is to deliver sustainable double digit topline growth.

Speaker 3: and top portal operating margins, benchmarked against enterprise SAS COMP.

And top quartile operating margins Benchmarked against enterprise SaaS comps.

Speaker 3: With increased visibility, we are conservatively raising the midpoint of the preliminary 2022 revenue, operating margin, and EPS guidance that we provided last quarter.

With increased visibility, we are conservatively raising the midpoint of the preliminary 2022 revenue operating margin and EPS guidance that we provided last quarter.

Speaker 3: We are also reiterating our 2022 RPO Guidepost Midpoint of $1 billion.

We are also reiterating our 2022, RVO guidepost midpoint of $1 billion.

Speaker 3: and all our guideposts for 2023 and 2024.

And all our guideposts for 2023.

In 2024.

Speaker 3: Our cloud revenue and RPO guideposts from 2021 to 2024 can be found in today's earnings release supplemental schedule.

Our cloud revenue and RP O guidepost from 2021 to 2024 can be found in today's earnings release supplemental schedules.

Speaker 3: So for full year 2022, we expect total revenue of $700 to $715 million, with a $708 million midpoint.

So for full year 2022, we expect total revenue of $700 million to $715 million with a 708 million mid point.

Speaker 3: up from our previous midpoint estimate of $705 million.

Up from our previous midpoint estimate of $705 million.

Speaker 3: Excluding license and maintenance attrition, this represents 16% growth and all in our target is 7%.

Excluding license and maintenance attrition. This represents 16, 16% growth in all in our target is 7%.

Speaker 3: First half, second half total revenue splits are 49% and 51% respectively.

First half second half total revenue splits are 49% and 51% respectively.

For Q1, we expect total revenue of $168 million to $170 million.

Speaker 3: For Q1, we expect total revenue of $168 to $170 million.

Speaker 3: Our full year adjusted EPS range is $1.98 to $2.10.

Our full year adjusted EPS range is $1 98 to $2 10.

Speaker 3: The $2.04 midpoint is up from our previous $2.00 estimate.

The $2 <unk> midpoint is up from our previous two dollar estimate.

Speaker 3: For GAP EPS, our guidance range is $1.31 to $1.43.

For GAAP EPS, our guidance range is $1 31 to $1 43.

Speaker 3: For Q1, we expect adjusted EPS of $0.44 to $0.46 and gap EPS of $0.33 to $0.35.

For Q1, we expect adjusted EPS of <unk> 44 cents to <unk> 46, and GAAP EPS of <unk> 33 to 35 cents.

Speaker 3: For Q2 through Q4, we expect GAAP EPS to be about 19 cents lower than adjusted EPS quarterly, which accounts for our investment in equity-based compensation.

For Q2 through Q4, we expect GAAP EPS to be about 19 cents lower than adjusted EPS quarterly, which accounts for our investment and equity based compensation.

For full year 2022.

Speaker 3: For full year 2022, we are increasing our cloud revenue range to $161 to $167 million, representing 34% growth at the midpoint.

We're increasing our cloud revenue range to $161 million to $167 million, representing 34% growth at the midpoint.

Speaker 3: 34% growth, I'm sorry. And at the midpoint for Q1, we estimate cloud revenue will be roughly $36.5 million.

30, 34% growth I'm, sorry, and at the midpoint for Q1, we estimate cloud revenue will be roughly 36, and a half million dollars.

Speaker 3: and that it will increase to $39 million in Q2, $42 million in Q3, and $46.5 million in Q4.

And then it will increase to $39 million in Q2 $42 million in Q3, and $46 5 million in Q4.

For services revenue.

Speaker 3: For services revenue, we are increasing our revenue forecast to $365 to $373 million, representing 10% growth at the midpoint.

We are increasing our revenue forecast to $365 million to $373 million, representing 10% growth at the midpoint.

Speaker 3: On a quarterly basis, we expect Q1 services revenue of roughly $86 million at the midpoint and $94.5 million in Q2.

On a quarterly basis, we expect Q1 services revenue of roughly $86 million at the midpoint.

And 94, and a half million dollars in Q2.

Speaker 3: $98 million in Q3 and accounting for retail peak seasonality, $90.5 million in Q4.

$98 million in Q3, and accounting for retail peak seasonality 90, and a $5 million in Q4.

Speaker 3: For maintenance, we are refining our revenue range lower to $135 million to $138 million as more customers convert to cloud.

For maintenance, we are refining our revenue range lower to $135 million to $138 million as more customers convert to cloud.

Speaker 3: For Q1, we anticipate maintenance revenue of about $35.5 million.

For Q1, we anticipate maintenance revenue of about $35 $5 million.

Speaker 3: at the midpoint, and $34 million in Q2. For Q3 and Q4, we expect approximately $33.5 million of maintenance revenue per quarter.

At the midpoint and $34 million in Q2 for.

For Q3, and Q4, we expect approximately $33 $5 million of maintenance revenue per quarter.

Speaker 3: With license revenue attriting in favor of cloud, we expect $13 to $15 million for the full year, representing approximately 2% of total 2022 revenue.

With license revenue of trading in favor of cloud, we expect $13 million to $15 million for the full year, representing approximately 2% of total 2022 revenue.

I think we're a cloud company.

Speaker 3: For Q1, we expect roughly $5 million of license revenue and $3 million in Q2, Q3, and Q4 respectively.

For Q1, we expect roughly $5 million of license revenue and $3 million in Q2, Q3 and Q4, respectively.

Speaker 3: For hardware, we anticipate $6 million in revenue per quarter.

For hardware, we anticipate $6 million in revenue per quarter.

Speaker 3: And for consolidated subscription maintenance and services margin, we are targeting about 53.7%.

And for consolidated subscription maintenance and services margin, we are targeting about 53, 7% Q.

Speaker 3: Q1 will be about 52.7%.

Q1 will be about 52, 7%.

Speaker 3: Q2 and Q3 is expected to increase to between 54 and 54 and a half percent. While accounting for seasonality, Q4 is expected to be about 53 and a half percent.

Q2, and Q3 is expected to increase.

To between 54 and 54, 5%.

Accounting for seasonality Q4 is expected to be about 53, 5%.

Speaker 3: And our 2022 Adjusted Operating Margin Range will be 23% to 24%, with a midpoint of 23.5%.

And our 2022 adjusted operating margin range will be 23% to 24% with a midpoint of 23, 5%.

Speaker 3: up from our prior midpoint of 23 and a quarter percent.

Up from our prior midpoint of 23.25%.

Speaker 3: Our full-year operating margin objectives incorporates three significant variables as we anticipate the following. First.

Our full year operating margin objectives incorporates three significant variables as we anticipate the following first.

Speaker 3: License and maintenance attrition of 300 basis points on customer demand for cloud.

License and maintenance attrition of 300 basis points on customer demand for cloud.

Speaker 3: Second, 250 basis points of investment for talent hiring and retention, including wage increases. And third, 200 basis points of additional investment in our business, including the return of pandemic-impacted expenses.

Second 250 basis points of investment for talent hiring and retention, including wage increases and third 200 basis points of additional investment in our business, including the return of pandemic impacted expenses.

Speaker 3: For Q1, we expect operating margin of approximately 21.7 percent and for sequential improvement of about 175 basis points in both Q2 and Q3.

For Q1, we expect operating margin of approximately 21, 7% and for sequential improvement of about 175 basis points in both Q2 and Q3.

Speaker 3: Accounting for seasonality, we expect Q4 operating margin to be approximately 23.5%.

Accounting for seasonality, we expect Q4 operating margin to be approximately 23, 5%.

Speaker 3: And beginning in 2023, we continue to target 75 to 125 basis points of operating margin expansion going forward. Finally, we expect our tax rate to be 21.5% and diluted share count to be approximately 64.5 million shares, which assumes no buyback activity.

And beginning in 2023, we continue to target 75 to 125 basis points of operating margin expansion going forward. Finally, we expect our tax rate to be 21, 5% and diluted share count to be approximately $64 5 million shares.

<unk>, which assumes no buyback activity.

Speaker 4: So that covers a fantastic financial update. Thank you very much. And back to Eddie for some closing remarks. Terrific. Thanks, Dennis. Well, as you can tell, we're very pleased with our strong fourth quarter and record setting 2021 results.

So that covers a fantastic financial update thank you very much and back to Eddie for some closing remarks terrific. Thanks, Dennis as you can tell we're very pleased with our strong fourth quarter and record setting 2021 results well there certainly is some turbulence in the global macro environment, but we are entering 2000.

Speaker 4: Well, there certainly is some turbulence in the global macro environment, but we're entering 2022 very well positioned.

22, very well positioned our business momentum is strong and we continue to deliver market, leading innovation that drives our customers' digital transformation and as a result, we anticipate long term sustainable profitable growth for Manhattan Associates.

Speaker 4: Our business momentum is strong, and we continue to deliver market-leading innovation that drives our customers' digital transformation. And as a result, we anticipate long-term, sustainable, and profitable growth for Manhattan Associates.

So to wrap up.

Speaker 4: I wanna thank all of our employees globally for a fantastic year in 2021. Your relentless dedication and commitment to our customers is one of Manhattan's key differentiators. So thank you. Thank all of you.

I want to thank all of our employees globally for a fantastic year in 2021, Youll relentless dedication and commitment to our customers is one of Manhattans key differentiators.

So thank you.

Thank all of you.

And Angie.

Now we're ready to take questions.

Speaker 1: If you would like to ask a question, please press star one on your telephone keypad. Again, that's star one to ask an audio question.

If you would like to ask a question. Please press star one on your telephone keypad.

One to ask an audio question.

Speaker 1: Your first question comes from the line of Terry Tillman with Truist Securities. Please state your question.

Your first question comes from the line of Terry Tillman with choice Securities. Please state your question.

Speaker 5: Yeah, thanks, and congrats on the RPO in the fourth quarter of the record. Hi, Eddie, Dennis, and Mike. Sure. I guess, and also, by the way, Dennis, thanks for all that extremely fine-grained guidance every quarter. It makes it pretty simple to model. First question is for you, Eddie, in terms of, you know, being able to have this kind of unified technology stack.

Yeah, Thanks, and congrats on the <unk> in the fourth quarter the record.

Hi, Eddie Dennis and Micah.

Yes.

Also by the way Dennis Thanks for all that extremely fine grained guidance every quarter. It makes it pretty simple to model.

First question is for you Eddie in terms of being able to have this kind of unified technology stock. How much is are the conversations and the pipeline activity involving customers wanting to buy both the W mouse and the Tms.

In that conversation and does it create a potential kind of vendor consolidation play. Thank you.

Speaker 4: Well, certainly vendor consolidation, no question about that, Terry, and that's our objective.

Certainly vendor consolidation and no question about that Terry and that's our that's our objective.

Speaker 4: You know, in terms of buying both together, certainly those conversations are happening. Certainly the conversations about the road map of, you know, frankly, which system to implement first and so forth are happening. Honestly, the answer to the question really comes down to the capacity of the customer's organization to be able to implement both solutions simultaneously.

In terms of buying both together.

Certainly those conversations are happening.

Certainly the conversations about the roadmap of frankly, which system to implement first and so forth are happening honestly.

The answer to the question really comes down to the capacity of the customers organization to be able to implement both solutions simultaneously because that is quite a that is quite a plateful. So we work with them to figure out, which one first which one second which pieces first which pizza second to.

Speaker 3: Because that is quite a, that is quite a plateful. So we work with them to figure out, you know, which one first, which one second, you know, which pieces first, which pieces second, to deliver the best, best results for them. But it's a pretty exciting time for us and for the market for sure. And it's a nice cross sell up sell up.

To deliver the best our best results for them, but it's a pretty exciting time for us and for the market for sure.

And it's a nice cross sell upsell opportunity Terry.

Speaker 5: Sure, thanks. So Eddie had a comment, I think it was great visibility. So I'm gonna put you on the spot Dennis in terms of Eddie's comment about great visibility and the prepared remark.

Sure. Thanks.

Eddie you had a comment I think it was great visibility, it's hard to put you on the spot Dennis in terms of Eddie's comment about great visibility in the prepared remarks.

Speaker 5: you know, as we think about RPO activity throughout the year, you know, as part of the visibility just coming from, you've got 60 plus customers, you've got more go lives and you're starting to see this kind of waterfall effect of just the installed base. Now, you know, more comfortable, hey, you've been in market for a while. And that's kind of the key crux on the strengthening visibility is the installed base saying, Hey, we're ready. And then I had a followup on the seasonality of RPO.

Think about our activity throughout the year.

As part of the visibility just coming from you've got 60, plus customers got more go lives and you're starting to see this kind of waterfall effect of just the installed base now more comfortable how you've been in market for a while and that's kind of the key crops on the strengthening visibility as the installed base, saying, Hey, we're ready and then I had a follow up on the seasonality of RPM.

Speaker 3: Was there a question there, Terry? What I'd tell you is absolutely. Visibility's fantastic, forward-looking. You know, yeah, we're doing.

Yeah was there a question there Terry.

I would tell you is absolutely visibility fantastic forward looking.

No.

<unk>.

We're doing quite well there.

Yeah.

Speaker 3: And I think that's represented really in the guideposts that we've put out and reaffirmed.

And I think Thats really really in the guidepost that we put out and reaffirmed.

Speaker 5: Okay this will definitely be a question on seasonality. How do we think about RPO because you know you have been at it for a while now and so are you seeing any market changes in seasonality and how we should be thinking and forecasting our appeal across the quarters?

Okay. This will definitely be a question on seasonality.

How do we think about our P L because.

You have been added for a while now and so are you seeing any market changes in seasonality and how we should be thinking in forecasting our appeal across the quarters. Thank you.

Speaker 4: I think demand blew through seasonality in Q4, so we'll update you next Q4 as well. Yeah, there tends to be...I don't think there'll be any real difference in buying patterns in the cloud world versus licensed world, Terry. There's not a ton of seasonality, but we do tend to see a little more buying.

I think demand balloon through seasonality in Q4, So we will update you next.

Next Q4 as well yeah, there tends to be.

I don't think there'll be any real difference in buying patterns in the cloud world wishes license World Terry.

There is there's not a ton of seasonality, but we do tend to see a little more buying.

Speaker 4: you know, at the end of Q4 and in Q1, getting ready because, you know, customers want systems implemented prior to the busy season, you know, in the following year.

At the end of Q4 and in Q1 getting ready.

Customers want systems implemented prior to the busy season.

You know in the following year.

Speaker 4: You know that it's not huge, but if there is some seasonality that tends to be what it looks like

It's not huge but if there is some seasonality that tends to be what it looks like and it tends to impact services more than it does the clock.

Speaker 3: And it tends to impact services more than it does the cloud sales.

Cloud sales.

Speaker 5: But just to finalize here on the commentary, so Eddie, the reality is maybe there's a little bit of lumpiness in a positive way in 4Q, but also you could see some activity earlier in the year just as they've got budget and they're ready to commit, and then obviously they need to get it going before the season, the holiday season.

But just to finalize here on kind of the commentary. So how do you like the reality is maybe theres a little bit of Lumpiness in a positive way and <unk>, but also you could see some activity earlier in the year, just as they've got budgets and they are ready to commit and then obviously they need to get it going before the season holiday season, that's right.

Speaker 4: That's right. That's right. Again, it's not a huge swing, but we see a little bit of that. And then, and then, of course, you tend to see a little bit of a

That's right. It again, it's not a huge swing, but we see a little bit of that and then and then of course, you tend to see a little bit of a slowdown in the summer Ah that's more probably more in Europe than here and a little bit of a slowdown going into peak, well IQ organizations, and so forth or phone.

Speaker 4: a slowdown in the summer, that's probably more in Europe than here, and a little bit of a slowdown going into peak while IT organizations and so forth are focused on getting ready and a little distracted from the buy-in process.

<unk> on getting ready and a little distracted from the buying process.

Speaker 6: But I'll reiterate, no major swings here, but those are the cycles. Nice job.

Reiterate no major swings here, but those are the those are the cycles.

Nice job guys. Thanks, Thank you Terry.

Speaker 1: Your next question comes from the line of Brian Peterson with Raymond James. Please state your question.

Your next.

Question comes from the line of Brian Peterson with Raymond James Please state your question.

Hello, Brian Your line is open. Please state your question Oh, sorry, guys. The mute button got me well congrats on the IPO numbers because those are fantastic.

Speaker 7: Hey, sorry guys, the mute button got me. Well, congrats on the RPO numbers, those are fantastic. But just kind of following up on Terry's question on the RPO.

Just kind of following up on <unk> question on the RPE Oh I'm curious are your customers willing to commit to more products now that you have kind of a broader cloud portfolio. So we were talking about seasonality, but I'm curious are people willing to buy more products at the same time now just given that youre more integral.

Speaker 7: I'm curious, are your customers willing to commit to more products now that you have kind of a broader cloud portfolio? So, you know, we were talking about seasonality, but I'm curious.

Speaker 6: Are people willing to buy more products at the same time now, just given that they're more integrated? And I'd be curious to get your thoughts on that. Yeah. I mean, again, it's really the same answer, Brian . There is great opportunity for cross-sell and up-sell, obviously, because of the integrated and unified nature.

David I'd be curious to get your thoughts on that.

I mean again, it's really same answer Brian there is great opportunity for cross sell and up sell obviously because of the integrated <unk>.

Unified.

Unified nature.

Speaker 4: You know, about 15% of the 2021 bookings were, you know, kind of that cross sell and upsell.

15% of the 2021 bookings were kind of that cross sell and up sell now.

Speaker 4: Now, you know, the specific simultaneous purchase.

<unk> simultaneous purchase.

Speaker 4: you know, again, comes down to, hey, how much can we, you know, how much can we knock down all at the same time?

Again, it comes down to hey, how much can we how much can we knocked down all at the same time.

Speaker 4: you know, versus kind of that road map conversation and the follow on sequential business that, you know, that comes one behind one behind the other.

You know versus kind of that road map conversation and the follow on sequential business that that comes one behind one behind the other.

Speaker 7: Makes sense. And Eddie, just maybe a follow up. You know, we've gotten a question a lot from investors on on what the supply chain disruption kind of does for demand. Obviously, we're seeing active income, active WM coming in really strong. Yeah, I'm curious from your perspective.

Eddie just maybe a follow up we've gotten the question a lot from investors on what the supply chain disruption kind of does for demand, obviously, we're seeing academics academia and government and really strong.

I'm curious from your perspective, what does that do for the demand environment and are there other parts of the portfolio, where we could see improving demand in 2022 and 2023.

Speaker 4: of the portfolio where we could see improving demand in 2022 and 2023. Thank you. I don't know that there's going to be major shifts in 2022, Brian . I think that the general geo supply chain disruptions are going to continue. I don't think you're going to see a ton of near-shoring being able to be pulled off in 2022 because it just takes time to build that strategy out. But demand

No that was going to be major shifts in 2022, Brian I think that the general Geo supply chain disruptions are going to continue I don't think youre going to see a ton of near shoring being able to be pulled off in 2022, because it just takes time to build that to build.

That strategy build that strategy.

Speaker 4: but demand is certainly high for capacity.

But demand is certainly certainly high for capacity on.

Speaker 4: You know, on the digital transformation side, e-commerce continues to continues to grow. There is obviously some slowness and.

On the digital transformation side as E. Commerce continues to continues to grow there is obviously some slowness in some shortages of product coming into the country. So as a consequence of that as soon as it hits its short here or hits land Theres, a real immediacy and an urgency to get product distributed out to to win.

Speaker 4: some shortages of product coming into the country, so as a consequence of that, as soon as it hits shore here or hits land, there's a real immediacy and an urgency to get product distributed out to end consumers, and the optimization of the deployment of inventory around the country becomes particularly important.

Consumers and the optimization of the deployment of inventory around the around the country becomes bigger it becomes particularly important.

Speaker 4: I know it's a little bit of a coy expression, but supply chain flexibility and agility is just super important across the globe.

Just really I know, it's a little bit of a coy expression, but.

Hi chain flexibility and agility is just super important across the across the globe.

Thanks Eddie.

Pleasure Brian .

Speaker 1: Your next question comes from the line of Joe Roehrig with Baird. Please.

Your next question comes from the line of Joe <unk>.

With Baird. Please state your question.

Yeah.

Speaker 8: Great. Hi, everyone. Maybe I'll start. Eddie, in your prepared remarks, you mentioned how you saw a growing addressable market opportunity. Can you maybe just expand on where some of the biggest new opportunities lie? And maybe related to that, you know, it definitely seems to be coming up more often, Manhattan, ActiveWM moving outside of that.

Great Hi, everyone.

Maybe I'll start Eddie in your prepared remarks, you mentioned.

Growing our addressable market opportunity can you, maybe just expand on where some of the biggest new opportunities lie and maybe related to that.

It definitely seems to be coming up more often manhattan active W. I'm moving outside of that.

Speaker 4: most automated level four, level five warehouse environment. How much is the persona of your customer starting to change? And so there's consequently just more, you know, potential users of a cloud product and that contributes to the TAM expansion. Yeah, I mean, it's the modernization, really, of the supply chain versus.

Most automated level four level five warehouse environment, how much is the persona of your customers starting to change and so theres consequentially just more potential users of a cloud product and that contributes to the Tam expansion yes.

I mean, it's the modernisation really of the supply chain versus.

Speaker 4: going down market a ton, Joe, to be perfectly honest with you, that's driving a lot of the demand.

Going down market a ton Joe to be perfectly honest with you that's driving that's driving a lot of the demand.

Speaker 4: As we've talked about, you know, a number of times distribution centers today look quite different to the way they look.

We've talked about a number of times distribution centers today look quite different to the way they look.

Five years ago, but certainly 10, and 15 years ago with the levels of automation and robotics and so forth. So the need to have sophisticated software to be able to drive that inside the four walls transformation is important obviously the digital transformation of the way consumers are ordering in.

Speaker 4: Obviously, the digital transformation of the way consumers are ordering and consuming goods requires a whole different strategy for distribution, whether it be the number of distribution centers, the size of the distribution centers, the hours of operation of those distribution centers. All of those things contribute to the modernization of a sophisticated distribution network. In terms of growing at addressable...

Consuming goods requires a whole different strategy for for distribution, whether it be the number of distribution centers the size of the distribution centers the hours of operation of those distribution centers all of those things contribute to the modernization of our sophisticated distribution distribute.

So network in terms of growing at addressable addressable markets certainly, we're continuing to expand our product portfolio, particularly on the front end into the retail store portfolio and we feel like we're doing pretty well from a AR.

A market share perspective.

You know the we again, we've talked about this before with manufacturers and wholesalers, becoming much more direct to consumer that drives greater demand for sophisticated fulfillment.

Speaker 4: greater demand for sophisticated fulfillment and distribution. I was talking to one of our customers the other day and just sort of mentioning, hey, we really consider ourselves a cloud-first company now. And this was a company that had been a traditional wholesaler for 30 years. And they said, funny you should say that. We now consider ourselves a direct consumer company.

Speaker 8: And in distribution, I was talking to one of our customers the other day and just sort of mentioning, hey, we really consider ourselves a cloud-first company now. And this was a company that had been a traditional wholesaler for 30 years. And they said, funny you should say that. We now consider ourselves a direct-to-consumer company. And they had been traditionally wholesale for 30 years. And so a great marriage there and just a lot of great market expansion opportunities for us. OK, that's great. And then just in regards to being focused on cross-sales and dedicating more resources that way,

And distribution I was talking to us.

Yes.

One of our customers the other day and just sort of mentioned in Hey, we really consider ourselves a cloud first company and this was a.

A company that had been a traditional wholesaler for 30 years and they said funny you should say that we now consider ourselves a direct to consumer company.

Speaker 4: You know, and they had been traditionally wholesale for 30 years. And so a great, a great marriage there and just a lot of great market expansion opportunities for us.

And they had been traditionally wholesale for 30 years, and so a great a great marriage, there and just a lot of great.

Market expansion opportunities for us.

Speaker 8: Okay, that's great. And then just in regards to being focused on cross-sales and dedicating more resources that way, you know, talk a lot about what that might mean for WMS paired with TMS.

Okay, that's great and then.

Just in regards to <unk>.

Focused on cross sales dedicating more resources that way.

Yes.

Talked a lot about.

What that might mean for W. Mastercard with Tms.

Speaker 8: Does that also include, I guess, within kind of WMS functionality, thinking of things like, you know, execution, control, yard management, labor management? I mean, when you wrap all those capabilities into what Manhattan can provide, are you ultimately seeing your ACVs get bigger just within the WMS category?

Does that also include I guess within kind of WNS.

Thank you have things like Oh.

Execution any control yard management Labor management, I mean, when you wrap all of those capabilities into what Manhattan can provide are you ultimately see Yang your AC These get bigger just with N W mask category.

Speaker 6: Certainly, we're seeing a lot of synergy across those products. By the way, as you look at Manhattan Active Omni, point of sale, Manhattan Active Omni now integrated with WMS being much more sophisticated with late stage cancellation, order consolidation, order aggregation, and those kinds of things.

So certainly we're seeing a lot of synergy.

Across those products by the way.

As you look at Manhattan active omni point of sale Manhattan active omni Nab.

Integrated with Wm SBA much more sophisticated with late stage cancellation order consolidation order aggregation and those kinds of things in terms of HCV growth or CV growth. It still comes down to whether this is a kind of a roadmap purchase or.

Speaker 4: In terms of ACV growth, though, or NACV growth, it still comes down to whether this is a kind of a roadmap purchase or a multi-product buy up front, which again comes down to how much can our customers bite off in terms of project initiatives all at once.

Our multi product by upfront, which again comes down to how much.

Our customers buy it off in terms of project initiatives all at once so.

Speaker 4: So, you know, it hasn't, you know, we haven't seen it manifest itself in a significant ACV growth, you know, at an initial contract. But we're okay with that, right? We're in this for a long term. We want to make sure our customers are successful over the long term and make sure that they implemented a pace that is aggressive, but yet comfortable for them.

It Hasnt.

Haven't seen it manifest itself in a significant ACB growth.

An initial contract, but we're okay with that right. We're in this for a long term we want to make sure. Our customers are successful over the long term and make sure that they implemented a pace that is aggressive but yet comfortable for them.

Speaker 6: Okay, great. Thank you very much. My pleasure, Jill. Thank you.

Okay, great. Thank you very much a pleasure Joe Thank you.

Speaker 1: Your next question comes from the line of Mark Guttawitz with Rosenblatt Securities. Please state your question.

Your next question comes from the line of Mark <unk> with Rosenblatt Securities. Please state your question.

Speaker 9: Hey guys, I'll play my broken record here and again congratulate you on some great results. Eddie, I wanted to see if you might pull the curtain back a little bit on

Hey, guys I'll play my broken record here and again congratulate you on some great results.

Eddie.

I wanted to see if you might pull the curtain back a little bit on.

Speaker 9: the new CMO that you brought in, Ann, a few months ago. I think it's been, and I'm just curious if there are any tangibles you might be able to share in terms of what your marketing or branding looks like this year relative to last and, you know,

The new CMO that you brought in and a few months ago I think it has been.

So I'm just curious if.

Are there any tangible you might be able to share in terms of what.

Your marketing or branding looks like this year relative to last in <unk>.

Specifically across other product or geo or perhaps using different types of ad mediums.

Speaker 9: either product or geo or perhaps using different types of ad.

Speaker 4: mediums. That would be helpful. Thanks. Yeah. So, Anne is doing a fantastic job. We're thrilled to have her on the team. And not only does she do fantastic work, she's integrating the team wonderfully and really spreading her wings across product and across that geography. So, I'm not going to put her on the spot with very specific marketing initiatives.

Would be helpful. Thanks.

So we'll add is doing a fantastic job, we're thrilled to have her on the team and.

Not one issue do fantastic, where she is integrating into the team team wonderfully.

Really spreading her wings across products and across our across our geographies. So I'm not going to put her on the spot with very specific.

Marketing marketing initiatives in her first 90 days here or so or even in the near term, but I would tell you that she has got us in a company very focused on digital marketing.

Speaker 4: In her first, you know 90 days here or so or even in an interim, but I but I would tell you that she's got us

Speaker 4: and our company very focused on digital marketing. Number one. And number two, you know, we've said for a long time that, you know, we think we have some of the best kept secrets on the planet. Well, here comes Anne, you know, 90 days or so into the business. And she certainly concurs. Now she's, you know, got under the hood a little bit and is focused on making sure that we don't have a lot of secrets, that we are

Number one and number two we've said for a long time that we are.

We think we have some of the best kept secrets on the planet well here comes and 90 days or so into the into the business and she certainly concur is Nash.

Got under the Hood, a little bit in.

Is focused on making sure that we don't have a lot of secrets that we are.

Speaker 4: loud and proud with our marketing strategies going into 2022. So you certainly should expect us to see us again be a little more verbose, frankly, in communicating some of the very innovative solutions that we have in our portfolio.

Loud and proud with our marketing strategy going into into 2022. So you should certainly should expect us to see again see us again be a little more for both frankly.

Communicating some of the very innovative solutions that we have in our portfolio.

Speaker 9: Got it. I suppose we're not expecting a Super Bowl ad this year though.

Got it.

Those were not expecting a super Bowl AD this year, though.

Speaker 9: Well, you never know. Don't get up and go to the restroom, Mark. You know, you might... Okay. All right. That's good. I like that.

Well, yes.

You never know don't get the restroom Mark.

Hey.

Alright.

Good I like that.

Speaker 9: here. The last question, and I might have missed it, just the housekeeping on POS goal eyes. I know you've chatted about them in the past, but just curious how that had trended.

Anticipation here.

The last question I might have missed it just the housekeeping on POS go lives I know you've chatted about them in the past, but just curious how that has trended, yes, Marty well.

Speaker 4: Yeah, going pretty well, and what I said was that we've got a number that are underway, and we expect by the end of the year to light up a bunch more stores, both here in the U.S. and some internationally as well. The pipeline continues to grow. There clearly is demand out there for a really integrated, strategic suite of selling products.

What I said was that we we've got a number that are underway and we expect by the end of the year to light up a bunch more stores both both.

Here in the U S and internationally as well so.

The pipeline continues to grow the clearly is demand out there for.

<unk>.

Really integrated strategic suite of selling selling products across bricks and mortar and.

Speaker 4: bricks-and-mortar and you know in digital and you know As we get more established in this world in this world and in this market You're going to see us start talk about you know some really nice brands that are starting to you know starting to adopt the solution Got it

Digital.

As we get more established in this world in this world and in this market Youre going to see US start talk about some really nice brands that are starting to.

Starting to adopt the solution.

Got it alright, thanks, guys.

Our pleasure Mark.

Speaker 1: Your next question comes from the line of Mark Chappell with Sloop Capital.

Your next question comes from the line of Mark Chapell with loop capital.

Speaker 4: Hi, nice job on the quarter, and thanks for taking my question. Sure thing, Mark. Thank you.

Hi, nice job on the quarter and thanks for taking my question sure thing Mark. Thank you.

Speaker 5: Hey, Eddie, just starting with you, a question on your point of sale business, just building off the former question here, over the past year or so, the focus was basically just building up reference accounts with respect to that product. Now that you have many of those reference accounts in place, I'm wondering if you would expect point of sale to become a greater percentage of your business going forward.

Hey, Andy just starting with you a question on your point of sale business just building off the former question here over the past year or so the focus was basically just building up.

Accounts.

With respect to that product now that you have many of those reference accounts in place I'm wondering if you would expect point of sale to become a greater percentage of your business going forward.

Look it's a slow burn mark people don't wake up we don't wake up one morning, and say, hey, I'm going to.

The heart and soul of the retail operation right. They don't.

Certainly retailers do not replace their point of sale systems on a whim.

And they are very very strict strategic decisions, but I got to tell you we can feel the momentum building.

Throughout our organization everything from initial pipeline acceleration.

Deployments.

And go lives so.

I guess, you'll be the you'll be the judge of whether it's a significant part of the business as we.

We March through the next eight or 10 quarters, but certainly momentum is building nicely.

Speaker 10: Nice. Thanks. And then regarding just supply chain in general, you know, given the increasing attention that companies are placing on supply chain these days, how much are you seeing higher level executives involved in your sales processes than say, say, three or four years ago?

Alright, Thanks, and then.

Regarding just supply chain in general given the increasing attention that companies are placing on supply chain. These days.

Are you seeing higher level executives involved in your sales processes, let's say say three or four years ago.

Speaker 4: Yeah, much more so.

Much much more so.

Speaker 4: I think we've always been mission-critical solutions to our customers since day one of the company's existence.

I think.

We've always been mission critical solutions to our customers since day, one of the Companys existence.

Speaker 4: But never more than, you know, in the last year or two have we been participating in

But never more than in the last year or two.

We've been participating in.

Speaker 4: you know, board level and C-suite level conversations. I don't think there's barely a company on the planet that isn't very focused on supply chain issues, whether manufacturer, wholesaler, or retailer. And, you know, we really are becoming, you know, one of the most important IT systems in our customer's landscape, for sure.

Board level and C level C suite level conversations I don't think there is fairly a company on the on the planet that isn't very focused on supply chain supply chain issues weather manufacturer wholesaler or retailer.

We really are becoming one of the most important systems in that customer's landscape for sure.

Speaker 10: That's helpful. And then just finally here, I was wondering if you'd just comment a little bit on what you're seeing or whether you're seeing any changes with respect to your customers' budgeting cycles. Okay.

Okay. That's helpful. And then just finally here I was wondering if you just comment a little bit on.

What youre seeing or what are the whether youre seeing any changes with respect to your customers' budgeting cycles. So for the upcoming year no.

Speaker 4: No. It's a pretty simple answer to that, Mark. No real change in budget cycles that we've

It's a pretty pretty simple answer to that Mark no no real change in budget cycles that we've seen.

Speaker 4: We like simple answers. Yeah. Appreciate it. Thanks. That's all I have. Sure thing. Thank you.

We like simple answers right yeah sure. Thanks, that's all I have.

Sure thing thank you.

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Speaker 1: Your next question comes from the line of Matt Pfau with William Blair. Please state your question.

Your next question comes from the line of Matt Pfau with William Blair. Please state your question.

Speaker 11: Hey guys, I wanted to ask on the labor side of things, and obviously you ramped up some compensation to retain and presumably attract employees. On the services side, have you been able to hire a plan, and has labor been a bottleneck there at all? And then within your customers, has their ability to engage with you been any limiter to getting deals implemented?

Hey, guys I wanted to ask on the labor side of things and obviously, you ramped up some compensation to retain and presumably attract employees on the services side have you been able to hire to plan and is labor been a bottleneck there at all and then within your customers has.

Their ability to engage with <unk> bin bin any limiter to getting deals implemented.

Speaker 4: Um, yeah, I mean, we've we've hard to plan. So that's, you know, that's been good.

Yes.

Hard to plan.

That's been good I think so far this year, we've got a new we've got a bad.

Speaker 4: I think so far this year, we've got about somewhere in the 75 to 100 new associates with the company, so that's exciting to see for sure. In terms of the reticence of our customers to move forward because lack of resource on their side, haven't seen a ton of that.

Somewhere in the 75 to 100.

New associates with the company so thats exciting.

Getting to see for sure.

In terms of the reticence of our customers to move forward because lack of resources on their side haven't seen a ton of that now we have seen them ask us to take on maybe a little more work and of course we.

Speaker 4: Now, we have seen them ask us to take on maybe a little more work, and of course, we're seeing a very, very vibrant system integrator participation, and certainly we're being asked to introduce our system integration partners into the mix to augment our customer teams. But I wouldn't say we've seen any buying trepidation or buying slowness due to lack of resource on the customer side.

We're seeing a very very vibrant system integrator participation and certainly we're being asked to introduce our system integration partners into the into the mix to augment our customer our customer teams, but I wouldn't say, we've seen any buying trepidation or buying slowness.

Due to lack of resource on the customer side.

Great and then.

Speaker 11: In terms of existing WM customers moving from an on-prem deployment to the cloud, maybe just some update there and what the interest level is. And I think if I recall when you

In terms of existing Wm customers.

Moving from an on Prem deployment to the cloud maybe just some update there and what the interest level is and I think if I recall when you.

Speaker 11: released ActiveWM back in 2020, the original plan was to support the on-prem version for five years, so presumably we're a bit over three years out now from when that would end. How are discussions with customers sort of progressing around moving over to the cloud from existing deployments?

We released active Wm back in 2020, the original plan was to support the on Prem version for five years, so presumably we're a bit over three years out now from when they were at when that would end.

How our customer discussions with customers sort of progressing around moving over to the cloud deployments.

Deployment he had a lot of a lot of enthusiasm look we just said we got about 60.

Speaker 4: Yeah, a lot of, a lot of enthusiasm. Look, we, you know, we just said we got about 60, uh, different customers under contract now. Um, I may not be exactly correct percentage wise, but it's about 50, 50.

Customers under contract now.

I may not be exactly correct percentage wise, but it's about 50 50, 50% of those 60 of brand new customers that we've never done business with before and 50% are existing customers that are converting are transitioning from on prem into the into the cloud.

Speaker 4: You know, 50% of those 60 are brand new customers that we've never done business with before, and 50% are existing customers that are converting or transitioning from on-prem into the, you know, into the cloud. You know, so it's a pretty exciting time. You know, we're very pleased about where we are. Obviously, we were very pleased with our financial results, but at the end of the day, we've only transitioned 30 of our customers so far, existing customers that we've built up over the last, you know, 30 years so far. So we're encouraged by the, you know, the enthusiasm there, and, you know, their desire to move to...

So it's a pretty exciting time.

We're very pleased about where we are obviously, we were very pleased with their financial results, but at the end of the day, we've only transitioned 30 of our customers. So for existing customers that we've built up over the last 30 years. So far so we're encouraged by the enthusiasm there and.

Is there a desire to move to.

Speaker 4: you know, scalable, extensible version of software in the cloud.

Scalable extensible version of software in the cloud.

Okay, Great I appreciate it guys.

Speaker 11: Okay. Great. Appreciate it, guys. Sure thing. Sure thing, Matt.

Sure thing sort of thing that.

Speaker 4: At this time, there are no further questions. I will now turn the floor back to management for any additional or closing remarks. Yeah, good. Thank you, Angie. No real closing remarks. Just would like to thank everybody for all of their support during 2021. We're thrilled to be started with 2022 and look forward to giving you our first 2022 update in about 90 days or so. In the meantime, have a great evening. Thank you. Bye bye.

At this time there are no further questions I will now turn the floor back to management for any additional or closing remarks, yes. Thank you Andrew no real closing remarks, just we'd like to thank everybody for all of their support during 2021.

We are thrilled to be started with 2022 and look forward to giving you have first.

22 update in about 90 days or so in the meantime.

Have a great evening. Thank you bye bye.

Speaker 1: Thank you for participating in today's conference call. You may now disconnect your lines at this time.

Thank you for participating in today's conference call. You May now disconnect your lines at this time.

Speaker 2: ???

Okay.

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Speaker 1: Good afternoon. My name is Angie, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associate Q4 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Good afternoon. My name is Angie and I will be your conference facilitator today at this time I would like to welcome everyone to the Manhattan Associates Q4 earnings Conference call. All lines have been placed on mute to prevent any background noise.

Speaker 1: After the speaker's 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 like to withdraw your question, press the pound key. As a reminder, ladies and gentlemen, this call is being recorded today, Tuesday, February 1st, 2022.

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 like to withdraw your question press the pound key.

As a reminder, ladies and gentlemen, this call is being recorded today Tuesday February 1st 2022.

Speaker 1: I would now like to introduce Dennis Storey, CFO of Manhattan Associates. Mr. Storey, you may begin your conference.

I would now like to introduce Dennis story CFO of Manhattan Associates. Mr. Story, you May begin your conference.

Speaker 3: Thank you, Angie, and good afternoon, everyone. Welcome to Manhattan Associates 2021 fourth quarter earnings call. I will review our cautionary language and then turn the call over to Eddie Capel, our CEO .

Thank you Angie and good afternoon, everyone welcome to Manhattan Associates 2021 fourth quarter earnings call I will review, our cautionary language and then turn the call over to Eddie Capel our CEO .

Speaker 3: During this call, including the question and answer session, we may make forward-looking statements regarding future events or the future financial performance of Manhattan Associates.

During this call, including the question and answer session. We may make forward looking statements regarding future events or the future financial performance of Manhattan Associates.

Speaker 3: You are cautioned that these forward-looking statements involve risk and uncertainties, are not guarantees of future performance, and that actual results may differ materially from the projections contained in our forward-looking statement.

You are cautioned that these forward looking statements involve risks and uncertainties are not guarantees of future performance and that actual results may differ materially from the projections contained in our forward looking statements.

Speaker 3: I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly on our annual report on Form 10-K for fiscal year 2020 and the risk factor discussion in that report, as well as any risk factor updates we provide in our subsequent Form 10-Q .

I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly on our annual report on Form 10-K for fiscal year 2020, and the risk factor discussion in that report.

As well as any risk factor updates we provide in our subsequent form 10 Qs.

Speaker 3: 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 projections. We are under no obligation to

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 projections. We are under no obligation to update these statements.

Speaker 3: In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules. You'll find reconciliation schedules in the Form 8K we submitted to the SEC earlier today and on our website at manh.com. Now I'll turn the

In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules, you'll find reconciliation schedules in the form 8-K, we submitted to the SEC.

Earlier today and on our website at <unk> Dot com.

Now I'll turn the call over to Eddie.

Speaker 6: Well, thanks, Dennis. Good afternoon, everyone, and thank you for joining us as we review our fourth quarter and full year 2021 results, as well as our outlook for 2022.

Well, thanks, Dennis Good afternoon, everyone and thank you for joining us as we review <unk> fourth quarter and full year 2021 results as well as our outlook for 2022.

Speaker 4: Well, 2021 was a very successful year for Manhattan Associates, setting all time records in total revenue, RPO, cash flow and earnings per share.

For 2021 was a very successful year for Manhattan Associates setting all time records in total revenue cash flow and earnings per share.

Speaker 4: In February of 2018, we announced our goal to become a cloud-first company within five years.

In February of 2018, we announced that goal to become a cloud first company within five years.

Speaker 4: And four years into this transition, we've exceeded our own expectations and are well ahead of our initial timing and economic projections, with cloud solutions representing 90 percent of our pipeline operations.

And four years into this transition we've exceeded our own expectations and well ahead of our initial timing and economic projections with client solutions, representing 90% of our pipeline opportunities.

And despite the pandemic in the midst of this cloud transition we delivered record revenue in two of the four years and are guiding to a third in 2022.

Proudly our associates continue to execute extremely well, serving both customers and our end markets demand for our unified commerce and supply chain client solutions.

Speaker 4: Demand for a unified commerce and supply chain cloud solutions is very strong, creating great visibility for us as we enter 2020.

Very strong, creating great visibility for us as we enter 2022.

Speaker 4: And to help drive growth and serve our customers, we plan to add about 500 net new employees globally. And we remain committed to significantly investing in innovation to meet the future needs of our customers, grow our market share, and extend our addressable market.

And to help drive growth and serve our customers. We plan to add about 500, net new employees globally, and we remain committed to significantly investing in innovation to meet the future needs of our customers grab market share and extend our addressable market.

Speaker 4: And while global ebbs and flows certainly persist, we remain very encouraged by our near-term and long-term growth opportunities.

And while global ebbs and flows certainly persist we remain very encouraged by our near term and long term growth opportunities.

So pivoting to results.

Speaker 4: Q4 was a record quarter that, again, exceeded our expectations.

Q4 was a record quarter that again exceeded our expectations.

Speaker 4: Total revenue increased 17% to $171 million. And adjusted earnings per diluted share of $0.48 was up 7%, as we invested significantly in employee compensation.

Total revenue increased 17% to $171 million and adjusted earnings per diluted share a 48 cents.

It was up 7% as we invested significantly in employee compensation.

Speaker 4: Regarding RPO, the leading indicator of that growth, in Q4, we added a record 126 million of RPO bookings, setting new highs in Americas, in EMEA.

Regarding our PEO, the leading indicator of that growth in Q4, we added a record $126 million of our appeal bookings setting new highs in Americas and.

In EMEA and in APAC.

Speaker 4: Our global sales team continue to execute well on robust demand for our cloud offerings across products, industry verticals, and geographic locations.

Our global sales team continued to execute well on robust demand for X sight offerings across products industry verticals and geographic locations.

Speaker 4: Demand also remains solid from both new and existing customers, with 20% of 2021 contracted bookings coming from net new customers.

Demand also remains solid from both new and existing customers with 20% of 2021 contracted bookings coming from net new customers.

Speaker 4: In the quarter, our win rates continue to be very strong at 75% as our innovation is recognized as differentiating and industry leading.

In the quarter our win rates continue to be very strong at 75% is our innovation is recognized as differentiating and industry leading.

Speaker 4: And from a vertical perspective, retail, manufacturing, and wholesale drove more than 80% of our bookings in the quarter. And drilling into the sub-verticals, they're pretty diverse. And they include apparel, department stores, grocery, consumer goods, industrial, transportation, as well as durable and non-durable.

And from a vertical perspective retail manufacturing and wholesale drove more than 80% of our bookings in the quarter and drilling into the sub verticals. They are pretty diverse and they include apparel department stores grocery consumer goods industrial transportation as well as durable and non durable goods.

Speaker 4: On the professional services front, our global team continues to set the bar for the industry. Our cloud portfolio implementations have gone very well in 2021. As our industry-leading team successfully conducted over 100 go-lies just in Q4 alone.

On the professional services front, our global team continues to set the bar for the industry.

Portfolio implementation has gone very well in 2021 is our industry leading team successfully conducted over 100 go lives just in Q4 alone.

Speaker 4: In line with our outlook and prior commentary, we remain focused on adding and retaining our exceptional talent in 2022. And speaking of 2022, our pipelines are strong, with net new potential customers representing about 35% of demand. As I mentioned earlier, we're increasing our investment in research and development to nearly $100 million this year.

In line with our outlook in prior commentary, we remain focused on adding and retaining our exceptional talent in 2022 and speaking of 2022 at pipelines are strong with net new potential customers, representing about 35% of demand as I mentioned earlier, we're increasing our investment in.

Research and development to nearly $100 million this year.

Speaker 4: Now let me provide a few additional details on our product portfolio.

Now let me provide a few additional details on our product portfolio.

Speaker 4: I'll start off by providing another positive update on the progress we are making with Manhattan Active Warehouse Management.

I'll start off by providing another positive update on the progress, we're making with Manhattan active warehouse management, the industry's first and only true cloud native WNS, serving the tier one market.

Speaker 4: the industry's first and only true cloud-native WMS serving the Tier 1 market.

Speaker 4: In May of 2020, we announced Manhattan ActiveWM as the natural successor to our industry-leading on-premise warehouse management for open systems solution.

In May of 2020, we announced Manhattan active Wm is the natural successor to our industry, leading on premise warehouse management for open systems solution.

Speaker 4: So we've been in market for about 20 months with Manhattan Active WM and we continue to see strong market demand and a great enthusiasm.

So we've been in market for about 20 months with Manhattan active Wm, and we continue to see strong.

Demand and great enthusiasm.

Speaker 4: Customer deployments have been very successful, and we now have nearly 60 customers who are committed to deploying Manhattan ActiveWM around the world.

Customer deployments have been very successful and we now have nearly 60 customers who are committed to deploying Manhattan active wm around the world.

Speaker 4: While Manhattan WMS has been known historically for the way it excels in large-scale, complex, direct-to-consumer and retail distribution centers, our initial Manhattan ActiveWM deployments have really been highly diverse.

And while Manhattan WNS has been known historically for the way in <unk> sales in large scale complex direct to consumer and retail distribution centers. Our initial Manhattan active wm deployments have really been highly diverse.

Speaker 4: Today, Manhattan Active WM subscribers are located in 12 different countries and represent 21 distinct industry subverters.

Today in Manhattan active WAM subscribers are located in 12 different countries and represent 21 distinct industries sub verticals and this diversity in our customer base really reinforces that belief that supply chains of all kind of looking to embrace cloud native always current full.

Speaker 4: And this diversity in our customer base really reinforces our belief that supply chains of all kinds are looking to embrace cloud-native, always current, fully extensible technology for their distribution centers, regardless of their industry.

Extensible technology for their distribution centers, regardless of their industry.

Speaker 4: And recent events have certainly shown us the critical importance of technology that allows businesses to respond quickly and effectively to supply chain disruptions.

And recent events have certainly shown as the critical importance of technology that allows businesses to respond quickly and effectively to supply chain disruptions.

Speaker 4: Because of the cloud native nature of Manhattan Active WM, we empower our customers to deploy new sites, new capabilities, new users very, very swiftly. And that close relationship with Google Cloud allows us to deploy our WM, Manhattan Active WM, excuse me, nearly anywhere, anytime, with high levels of reliability and extremely low levels of latency.

Because of the cloud native nature of Manhattan active Wm, we empower our customers to deploy new sites new capabilities, new users very very swiftly and <unk> relationship with Google Cloud and allows us to deploy at Wm.

Manhattan active Wm excuse me nearly anywhere anytime with high levels of reliability and extremely low levels of latency.

Speaker 4: the robustness of the underlying active platform, it's best in class user experience and functional capability, and the strength of our team on the ground are combining to produce exceptional customer activity.

The robustness of the underlying active platform is best in class user experience and functional capability and the strength of our team on the ground are combining to produce exceptional customer outcomes.

Speaker 4: So now I'll provide you with just a quick update on Manhattan Active Transportation Management. As you recall, our customers can deploy Manhattan Active Transportation alongside Manhattan Active Warehouse Management to form Manhattan Active Supply Chain.

So now I'll provide you with just a quick update on Manhattan active transportation management as you recall that customers can deploy.

Hatton active transportation alongside Manhattan active warehouse management to form Manhattan active supply chain, the industry's first and only cloud native fully unified supply chain execution platform and since its launch in May of 2021, Manhattan active transportation management.

Speaker 4: the industry's first and only cloud-native, fully unified supply chain execution platform. And since its launch in May of 2021, Manhattan Active Transportation Management has enjoyed outstanding market interest and uptake with strong international traction as well. In fact, half of our initial Manhattan Active Transportation subscribers are outside of North America.

Enjoyed outstanding market interest and uptake with strong international traction as well in fact half of our initial Manhattan active transportation subscribers outside of North America.

Speaker 4: And Aramia and Latin America teams are doing very well with Manhattan Active TM thus far. Actually with the product's very first go-live that was in Brazil.

In our EMEA and Latin America teams are doing very well with Manhattan active team, thus far actually with the product very first go live that was in Brazil.

Speaker 4: And we've communicated in the past, building a global customer base for a TMS application has been one of our strategic goals. And the hard work of our international TMS teams is really starting to play out.

And we've communicated in the past building a global customer base for our Tms application as being one of our strategic goals and the hard work of our international Tms teams is really starting to play off.

Speaker 4: And we're encouraged that the results of Manhattan Active Transportation Management show that our supply chain unification message is really resonating in the market. Almost half of our Manhattan Active Transportation Management customers are also Manhattan Active WMC.

And we're encouraged that the results of Manhattan active transportation management, so that shows that our supply chain unification message is really resonating in the market almost half of.

Our Manhattan active transportation management customers are also Manhattan active wm customers and that teams are reporting that customers are placing a really high value on our ability to offer a single user interface to manage all aspects of supply chain execution to orchestrate end to end processes both across <unk>.

Speaker 4: And our teams are reporting that customers are placing a really high value on our ability to offer a single user interface to manage all aspects of supply chain execution, to orchestrate end-to-end processes both across WMS and TMS and keep all of their supply chain applications fully integrated and current.

Yes, and Tms and keep all of their supply chain applications fully integrated and current.

Speaker 4: And finally on the product front, maybe a quick update on our omni-channel commerce solution, Manhattan Active Omni, including our point-of-sale application.

And finally on the product flat, maybe a quick update on our omni channel Commerce solution Manhattan active omni, including at point of sale application at.

Speaker 4: At point-of-sale project teams, they remain busy with a number of new deployments and rollouts. And throughout the year, we're slated to light up a large number of additional stores running our point-of-sale application. And many of those customers also run enterprise order management. And similar to the benefit I mentioned earlier, many of our Manhattan Active Omni customers certainly see the advantage of a unified solution across both the digital and bricks-and-mortar

At point of sale project teams they remain busy with a number of new deployments and rollouts and throughout the year with slated to light up a large number of additional stores running at point of sale application and many of those customers also run enterprise order management and similar similar to the benefit I mentioned earlier many of our Manhattan active.

Omni customers certainly see the advantage of a unified solution across both digital and bricks and mortar channels.

Speaker 4: And this quarter, we'll kick off our first Manhattan Active Allocation project with one of our strategic customers in EMEA. Manhattan Active Allocation is a next-generation inventory optimization solution designed for fashion retail.

And this quarter, we will kick off at first Manhattan active allocation project with one of our strategic customers in EMEA Manhattan active allocation as a next generation inventory optimization solution designed for fashion retailers. It's built on our industry, leading Manhattan active architecture, and we believe that it brings a fresh.

Speaker 4: It's built on an industry-leading Manhattan active architecture, and we believe that it brings a fresh approach to a software category that's been mired in decades of old technology.

Approach to the new sort to a software category thats been mired in decades of old technology.

Speaker 4: And finally, just this past quarter, we released an exciting new capability within Manhattan Active Omni, our interactive inventory capability, and it's getting a powerful boost from an all-new machine learning capability that really further optimizes order promise.

And finally.

This is just this past quarter, we released an exciting new capability within Manhattan active omni.

Interactive inventory capability and its getting a powerful boost from an all new machine learning capability.

Really further optimizes order promising many of our Manhattan active omni customers are shipping orders from hundreds of stores. Each in in addition to their distribution centers and this new solution analyzes multiple static and dynamic market factors to make a much more accurate shipping and delivery prediction in.

Speaker 4: Many of our Manhattan Active Omni customers are shipping orders from hundreds of stores each in addition to their distribution centers. And this new solution analyzes multiple static and dynamic market factors to make a much more accurate shipping and delivery prediction in real time as customers are shopping and checking in.

Real time as customers are shopping and checking.

Speaker 4: And the initial results we're seeing indicate over a 50% reduction in late delivery, thanks to this sophisticated machine learning algorithm.

And the initial results, we're seeing indicate over a 50% reduction in late deliveries. Thanks to this sophisticated machine learning algorithm.

Speaker 4: And for our Manhattan Active Omni customers, it's really another great example of the advantage of an ever-evolving operational platform with new game-changing capabilities like this one being delivered to them on a very regular basis.

And for our Manhattan active omni customers. It's really another great example of the advantage of an ever evolving operational platform with new game changing capabilities like this one being delivered to them on a very regular basis.

Speaker 4: And we continue to be really very excited about our long-term growth potential. Secular tailwinds are numerous, and the benefits of resilient modern supply chains, I think, are pretty clear.

And we continue to be really very excited about our long term growth potential secular tailwind and numerous and the benefits of resilient modern supply chains I think are pretty clear.

Speaker 4: Now, why are we confident that Manhattan Associates is well-positioned to gain market share and outgrow the market in 2022 and beyond? Well, we're the industry leader and our technology is world class.

Now why are we confident that Manhattan associates is well positioned to gain market share and outgrow the market in 2022 and beyond.

We are the industry leader and our technology is world class the.

Speaker 4: the competitive environment is favorable, then our win rates are.

The competitive environment is favorable and our win rates are strengthening.

Speaker 4: the pipelines for our market-leading solutions continue to progress very well.

The pipelines for our market, leading solutions continued to progress very well.

At cross sell opportunity is large and growing and in fact, we've dedicated more resources to cross selling in 2022 and see the opportunity to expand this overtime as well and then finally, we have a significant pipeline of existing on premise customers, who want to shift to a cloud native applications that are scalable.

<unk> version list and extensible.

Speaker 4: So that concludes my business update. Dennis is going to provide you with an update on our financial performance and discuss our outlook for 2022 and beyond. And then I'll close our prepared remarks for the brief summary before moving to Q&A. So Dennis, take it away.

So that concludes my business update Dennis is going to provide you with an update on our financial performance and discuss our outlook for 2022 and beyond and then I'll close our prepared remarks with a brief summary, before moving to Q&A. So Dennis take it away. Thanks, Eddy our Manhattan Global teams continue.

Speaker 3: Our Manhattan Global teams continue to execute at a high level, as Eddie highlighted. In 2021, we set all-time records in RPO, total revenue, cash flow, and earnings per share. Hats off to our global associates for the outstanding performance.

To execute at a high level as Andy highlighted in 2021, we set all time records in.

Total revenue cash flow and earnings per share hats off to our global associates for that for.

For the outstanding performance I'll start with recapping, our financial performance for the quarter and year.

Speaker 3: I'll start with recapping our financial performance for the quarter and year.

Speaker 3: All growth rates are year-over-year unless otherwise stated.

All growth rates are year over year, unless otherwise stated.

Speaker 3: Q4 total revenue was $171 million, up 17%. Full year revenue totaled $664 million, up 13%.

Q4, total revenue was $171 million up 17% full year revenue totaled $664 million up 13%.

Speaker 3: Excluding license and maintenance revenue, which removes the revenue compression by our cloud transition, Q4 revenue growth was 24% and full year Q4 revenue growth was $3.5 million.

Excluding license and maintenance revenue, which removes the revenue compression by our cloud transition Q4 revenue growth was 24% and full year was 20%.

Speaker 3: Q4 cloud revenue totaled $35 million up 51% with full year revenue totaling $122 million up 53%.

Q4 cloud revenue totaled $35 million up 51% with full year revenue totaling $122 million up 53%.

Speaker 3: We closed out 2021 with RPO of $699 million, growing 126% and up 22% sequentially as demand continues to be robust.

We closed out 2021, with RVO of $699 million growing 126% and up 22% sequentially as demand continues to be robust.

Speaker 3: Our global services team delivered Q4 revenue of $82 million, up 15%, and on the year, $335 million, up 10%. Importantly, cloud sales continues to fuel services growth globally.

Our global services team delivered Q4 revenue of $82 million up 15% and on the year $335 million up 10% and importantly <unk>.

Cloud sales continues to fuel services growth globally.

Speaker 3: Our Q4 operating profit totaled $39 million with adjusted operating margin of 22.8%.

Our Q4 operating profit totaled $39 million with adjusted operating margin of 22, 8%.

Speaker 3: and our full year operating margin was 26.8%, up 160 basis points over 2020.

And our full year operating margin was 26, 8% up 160 basis points over 2020.

Speaker 3: Factoring in Q4 retail peak seasonality, we exceeded margin expectation.

Factoring in Q4 retail peak seasonality, we exceeded margin expectations as discussed in our Q3 call. We also invested an additional $10 million in.

Speaker 3: As discussed in our Q3 call, we also invested an additional $10 million in performance-based compensation and employee retention investment.

<unk> based compensation and employee retention investments.

Speaker 3: Our Q4 earnings per share of $0.48 exceeded our prior guidance, with full year totaling $2.23 on 27% growth.

Our Q4 earnings per share of <unk> 48 exceed.

<unk> exceeded our prior guidance with full year totaling $2 23 on 27% growth.

Speaker 3: Q4 operating cash flow was $40 million, and our full year operating cash flow increased 31% to $185 million, generating a 27% free cash flow margin and a 28% EBITDA margin.

Q4, operating cash flow was $40 million and our full year operating cash flow increased 31% to $185 million.

Adding a 27% free cash flow margin and a 28% EBITDA margin.

Speaker 3: Cash never lies. We ended the year with $264 million in cash and zero debt.

Cash never lies we ended the year with $264 million in cash and zero debt.

Speaker 3: For the year, we invested $100 million in share buybacks, including $20 million in Q4. And last week, our board approved replenishing our repurchase authority to $50 million.

For the year, we invested $100 million in share buybacks, including $20 million in Q4 and.

And last week, our board approved replenishing, our repurchase authority to $50 million.

Moving to guidance.

Speaker 3: As consistently mentioned, our overarching financial objective is to deliver sustainable double-digit top-line growth.

As consistently mentioned our overarching financial objective is to deliver sustainable double digit top line growth.

Speaker 3: and top quartile operating margins benchmarked against Enterprise SAS Con.

And top quartile operating margins Benchmarked against enterprise SaaS cops.

Speaker 3: With increased visibility, we are conservatively raising the midpoint of the preliminary 2022 revenue, operating margin, and EPS guidance that we provided last quarter.

With increased visibility, we are conservatively raising the midpoint of the preliminary 2022 revenue operating margin and EPS guidance that we provided last quarter.

Speaker 3: We are also reiterating our 2022 RPO Guidepost Midpoint of $1 billion.

We are also reiterating our 2022, Rps guideposts midpoint of $1 billion.

Speaker 3: and all our guideposts for 2023 and 2024.

And all our guidepost for 2023.

In 2024.

Speaker 3: Our cloud revenue and RPO guideposts from 2021 to 2024 can be found in today's earnings release supplemental schedule.

Our cloud revenue and RPI guidepost from 2021 to 2024 can be found in today's earnings release supplemental schedules.

Speaker 3: So for full year 2022, we expect total revenue of $700 to $715 million, with a $708 million midpoint.

So for full year 2022, we expect total revenue of $700 million to $715 million with a 708 million midpoint.

Speaker 3: up from our previous midpoint estimate of $705 million.

Up from our previous midpoint estimate of $705 million.

Speaker 3: Excluding license and maintenance attrition, this represents 16% growth and all in, our target is 7%.

Excluding license and maintenance attrition. This represents 16, 16% growth in all in our target is 7%.

Speaker 3: First half, second half total revenue splits are 49% and 51% respectively.

First half second half total revenue splits are 49%, 51% respectively.

Yes.

Speaker 3: For Q1, we expect total revenue of $168 to $170 million.

For Q1, we expect total revenue of $168 million to $170 million.

Speaker 3: Our full year adjusted EPS range is $1.98 to $2.10.

Our full year adjusted EPS range is $1 98 to $2 10.

Speaker 3: The $2.04 midpoint is up from our previous $2.00 S&P.

The $2 <unk> midpoint is up from our previous $2 estimate.

Speaker 3: For GAP EPS, our guidance range is $1.31 to $1.43.

For GAAP EPS, our guidance range is $1 31 to $1 43.

Speaker 3: For Q1, we expect adjusted EPS of $0.44 to $0.46 and gap EPS of $0.33 to $0.35.

For Q1, we expect adjusted EPS of <unk> 44 to 46.

And GAAP EPS of <unk> 33 to 35.

Speaker 3: For Q2 through Q4, we expect GAAP EPS to be about 19 cents lower than adjusted EPS quarterly, which accounts for our investment in equity-based compensation.

For Q2 through Q4, we expect GAAP EPS to be about 19 cents lower than adjusted EPS quarterly which accounts for our investment in equity based compensation.

Speaker 3: For full year 2022, we are increasing our cloud revenue range to $161 to $167 million, representing 34% growth at the midpoint.

For full year 2022.

We are increasing our cloud revenue range to $161 million to $167 million, representing 34% growth at the midpoint.

Speaker 3: to 34% growth, I'm sorry. And at the midpoint for Q1, we estimate cloud revenue will be roughly $36.5 million.

Our 30, 34% growth I'm, sorry, and at the midpoint for Q1, we estimate cloud revenue will be roughly 36, and a half million dollars.

Speaker 3: And that it will increase to $39 million in Q2, $42 million in Q3, and $46.5 million in Q4.

And then it will increase to $39 million in Q2 $42 million in Q3, and $46 5 million in Q4.

Speaker 3: For services revenue, we are increasing our revenue forecast to $365 to $373 million, representing 10% growth at the midpoint.

For services revenue, we are increasing our revenue forecast to $365 million to $373 million, representing 10% growth at the midpoint.

Speaker 3: On a quarterly basis, we expect Q1 services revenue of roughly $86 million at the midpoint and $94.5 million in Q2.

On a quarterly basis, we expect Q1 services revenue of roughly $86 million at the midpoint and $94 $5 million in Q2.

Speaker 3: $98 million in Q3 and accounting for retail peak seasonality, $90.5 million in Q4.

$98 million in Q3.

And accounting for retail peak seasonality 90, and a $5 million in Q4.

Speaker 3: For maintenance, we are refining our revenue range lower to $135 million to $138 million as more customers convert to cloud.

For maintenance, we are refining our revenue range lower to $135 million to a $138 million as more customers convert to cloud.

Speaker 3: For Q1, we anticipate maintenance revenue of about $35.5 million.

For Q1, we anticipate maintenance revenue of about $35 $5 million.

Speaker 3: at the midpoint, and $34 million in Q2. For Q3 and Q4, we expect approximately $33.5 million of maintenance revenue per quarter.

At the midpoint and $34 million in Q2 for.

For Q3, and Q4, we expect approximately $33 $5 million of maintenance revenue per quarter.

Speaker 3: With license revenue attriting in favor of cloud, we expect $13 to $15 million for the full year, representing approximately 2% of total 2022 revenue.

With license revenue of trading in favor of cloud, we expect $13 million to $15 million for the full year, representing approximately 2% of total 2022 revenue.

I think we're a cloud company.

Speaker 3: For Q1, we expect roughly $5 million of license revenue and $3 million in Q2, Q3, and Q4 respectively.

For Q1, we expect roughly $5 million of license revenue and $3 million in Q2, Q3 and Q4, respectively.

Speaker 3: For hardware, we anticipate $6 million in revenue per quarter.

For hardware, we anticipate $6 million in revenue per quarter.

Speaker 3: And for Consolidated Subscription Maintenance and Services Margin, we are targeting about 53.7%.

And for consolidated subscription maintenance and services margin, we are targeting about 53, 7% Q.

Speaker 3: Q1 will be about 52.7%.

Q1 will be about 52, 7%.

Speaker 3: Q2 and Q3 is expected to increase to between 54 and 54 and a half percent. While accounting for seasonality, Q4 is expected to be about 53 and a half percent.

Q2, and Q3 is expected to increase.

To between 54% and 54, 5%.

Accounting for seasonality Q4 is expected to be about 53, 5%.

Speaker 3: And our 2022 Adjusted Operating Margin Range will be 23% to 24%, with a midpoint of 23.5%.

And our 2022 adjusted operating margin range will be 23% to 24% with a midpoint of 23, 5% up from our prior midpoint of 23.25% are.

Speaker 3: up from our prior midpoint of 23 and a quarter percent.

Speaker 3: Our full-year Operating Margin Objectives incorporates three significant variables as we anticipate the following. First.

Our full year operating margin objectives incorporates three significant variables as we anticipate the following first.

Speaker 3: License and maintenance attrition of 300 basis points on customer demand for cloud.

License and maintenance attrition of 300 basis points on customer demand for cloud.

Speaker 3: Second, 250 basis points of investment for talent hiring and retention, including wage increases. And third, 200 basis points of additional investment in our business, including the return of pandemic impacted.

Second 250 basis points of investment for talent hiring and retention, including wage increases and third 200 basis points of additional investment in our business, including the return of pandemic impacted expenses.

Speaker 3: For Q1, we expect operating margin of approximately 21.7 percent and for sequential improvement of about 175 basis points in both Q2 and Q3.

For Q1, we expect operating margin of approximately 21, 7% and for sequential improvement of about 175 basis points in both Q2 and Q3.

Speaker 3: Accounting for seasonality, we expect Q4 operating margin to be approximately 23.5%.

Accounting for seasonality, we expect Q4 operating margin to be approximately 23, 5%.

Speaker 3: And beginning in 2023, we continue to target 75 to 125 basis points of operating margin expansion going forward. Finally, we expect our tax rate to be 21.5% and diluted share count to be approximately 64.5 million shares, which assumes no buyback activity.

And beginning in 2023, we continue to target 75 to 125 basis points of operating margin expansion going forward. Finally, we expect our tax rate to be 21, 5% and diluted share count to be approximately $64 5 million shares.

Which assumes no buyback activity.

Speaker 4: So that covers a fantastic financial update. Thank you very much. And back to Eddie for some closing remarks. Terrific. Thanks, Dennis. Well, as you can tell, we're very pleased with our strong fourth quarter and record setting 2021 results.

So that covers a fantastic financial update thank you very much and back to Eddie for some closing remarks terrific. Thanks Dennis.

You can tell we're very pleased with our strong fourth quarter and record setting 2021 results.

Speaker 4: Well, there certainly is some turbulence in the global macro environment, but we're entering 2022 very well positioned.

There certainly is some turbulence in the global macro environment, but we are entering 2022, very well positioned our business momentum is strong and we continue to deliver market, leading innovation that drives our customers' digital transformation and as a result, we anticipate long term sustained.

Speaker 4: Our business momentum is strong, and we continue to deliver market-leading innovation that drives our customers' digital transformation. And as a result, we anticipate long-term, sustainable, and profitable growth for Manhattan Associates.

<unk> of profitable growth for Manhattan Associates.

So to wrap up.

Speaker 4: I want to thank all of our employees globally for a fantastic year in 2021. Your relentless dedication and commitment to our customers is one of Manhattan's key differentiators, so thank you. Thank all of you.

I want to thank all of our employees globally for a fantastic year in 2021, Youll relentless dedication and commitment to our customers is one of Manhattans key differentiators.

So thank you.

All of you.

And Angie, we're now ready to take questions.

Speaker 1: If you would like to ask a question, please press star 1 on your telephone keypad. Again, that's star 1 to ask an audio question.

If you would like to ask a question. Please press star one on your telephone keypad.

Thats Star one to ask an audio question.

Speaker 1: Your first question comes from the line of Terry Tillman with Truist Securities. Please state your question.

Your first question comes from the line of Terry Tillman with tourists Securities. Please state your question.

Speaker 5: Yeah, thanks. And congrats on the RPO in the fourth quarter of the record. Hi, Eddie, Dennis, and Mike. And also, by the way, Dennis, thanks for all that extremely fine-grained guidance every quarter. It makes it pretty simple to model. First question is for you, Eddie, in terms of being able to have this kind of unified technology stack.

Yes, Thanks <unk>.

<unk> on the <unk> in the fourth quarter the record.

Hi, Eddie Dennis and Micah.

Yes.

And also by the way Dennis Thanks for all that extremely fine grained guidance every quarter. It makes it pretty simple model.

First question is for you Eddie in terms of being able to have this kind of unified technology stock. How much is are the conversations and the pipeline activity involving customers wanting to buy both the <unk> and the Tms.

Speaker 5: How much are the conversations in the pipeline activity involving customers wanting to buy both the WMS and the TMS in that conversation, and does it create a potential kind of vendor consolidation play?

In that conversation and does it create a potential kind of vendor consolidation play. Thank you.

Speaker 4: Well, certainly vendor consolidation, no question about that, Terry, and that's our objective.

Well certainly vendor consolidation no question about that Terry and Thats, our Thats our objective.

Speaker 4: You know, in terms of buying both together, certainly those conversations are happening. Certainly the conversations about the road map of, you know, frankly, which system to implement first and so forth are happening. Honestly, the answer to the question really comes down to the capacity of the customer's organization to be able to implement both solutions simultaneously.

In terms of buying both together.

Certainly those conversations are happening.

Certainly the conversations about the roadmap of frankly, which system to implement first and so forth are happening.

Honestly.

The answer to the question really comes down to the capacity of the customers organization to be able to implement both solutions simultaneously because that is quite a that is quite a plateful. So we work with them to figure out, which one first which one second which pieces first which pieces second to.

Speaker 4: Because that is quite a, that is quite a plateful. So we work with them to figure out, you know, which one first, which one second, you know, which pieces first, which pieces second to the to deliver the best, best results for them. But it's a pretty exciting time for us and, and for the market for sure. And it's a nice cross sell up sell up.

To deliver the best best results for them, but it's a pretty exciting time for us and for the market for sure.

And it's a nice cross sell upsell opportunity Terry.

Speaker 5: Sure, thanks. So Eddie had a comment, I think it was great visibility. So I wanna put you on the spot Dennis in terms of Eddie's comment about great visibility in the prepared remark.

Sure. Thanks.

So Eddie had commented.

I think it was great visibility sorry to put you on the spot Dennis in terms of Eddie's comment about great visibility in our prepared remarks.

Speaker 5: You know, as we think about RPO activity throughout the year, you know, as part of the visibility just coming from, you've got 60 plus customers, you've got more go lives, and you're starting to see this kind of waterfall effect of just the installed base now, you know, more comfortable, hey, you've been in market for a while. And that's kind of the key crux on the strengthening visibility is the installed base saying, hey, we're ready. And then I had a follow up on the seasonality of RPO.

Think about our Po activity throughout the year.

As part of the visibility just coming from you've got 60, plus customers got more go lives and Youre starting to see this kind of waterfall effect of just the installed base now more comfortable how you've been in market for a while and thats kind of the key crops on the strengthening visibility as the installed base, saying, Hey, we're ready and then I had a follow up on the seasonality of RPM.

Speaker 3: Is there a question there, Terry? What I'd tell you is absolutely. Visibility is fantastic. Forward-looking. You know, we're doing.

Was there a question there Terry.

I'd tell you is absolutely visibility fantastic forward looking.

No.

<unk>.

We're doing quite well there.

Speaker 3: And I think that's represented really in the guidepost that we've put out and reaffirmed.

And I think Thats right.

<unk> really in the guidepost that we've put out and reaffirmed.

Speaker 5: Okay, this will definitely be a question on seasonality. How do we think about RPO? Because you know, you have been at it for a while now. And so are you seeing any market changes in seasonality and how we should be thinking and forecasting RPO across the quarters? Thank you.

Okay. This will definitely be a question on seasonality.

How do we think about RPM because.

You have been added for a while now and so are you seeing any market changes in seasonality and how we should be thinking in forecasting our appeal across the quarters. Thank you.

Speaker 4: I think demand blew through seasonality in Q4, so, you know, we'll update you next Q4 as well. Yeah, there tends to be, you know, I don't think there'll be any real difference in buying patterns in the cloud world versus licensed world, Terry. You know, there's not a ton of seasonality, but we do tend to see a little more buying.

I think demand blew through seasonality in Q4, So we will update you next.

<unk> Q4, as well that tends to be.

I don't think there'll be any real difference in buying patterns in the side work versus license World Terry.

There is there's not a ton of seasonality, but we do tend to see a little more buying.

Speaker 11: you know, at the end of Q4 and in Q1, getting ready because, you know, customers want systems implemented prior to the busy season, you know, in the following year.

At the end of Q4 and in Q1 getting ready.

Customers want systems implemented prior to the busy season.

The following year.

Speaker 4: You know that it's not huge, but if there is some seasonality that tends to be what it looks like

It's not huge but if there is some seasonality that tends to be what it looks like and it tends to impact services more than it does the <unk>.

Speaker 3: And it tends to impact services more than it does the cloud cells.

Cloud sales.

Speaker 5: But just to finalize here on the commentary, so Eddie, the reality is maybe there's a little bit of lumpiness in a positive way in 4Q, but also you could see some activity earlier in the year just as they've got budget and they're ready to commit, and then obviously they need to get it going before the season, the holiday season.

But just to finalize here on kind of the commentary so like the <unk>.

Reality is maybe theres, a little bit of Lumpiness in a positive way and <unk>, but also you could see some activity earlier in the year, just as they've got budget and Theyre ready to commit and then obviously they need to get it going before the season holiday season, that's right that's right and again, it's not a huge swing, but we see a little bit of that and then.

Speaker 4: That's right. That's right. Again, it's not a huge swing, but we see a little bit of that. And then, of course, you tend to see a little bit of a

And then of course, you tend to see a little bit of a slowdown in the summer that's more probably more in Europe than here and a little bit of a slowdown going into peak well IQ organizations and so forth are focused on getting ready and a little distracted from the buying process, but I'll reiterate.

Speaker 4: a slowdown in the summer, that's probably more in Europe than here, and a little bit of a slowdown going into peak while IT organizations and so forth are focused on getting ready and a little distracted from the buy-in process.

Speaker 4: But I'll reiterate, no major swings here, but those are the cycles. Nice job.

No major swings here, but those are the those are the cycles.

Nice job guys. Thanks, Thank you Terry.

Speaker 1: Your next question comes from the line of Brian Peterson with Raymond James. Please state your question.

Your next question comes from the line of Brian Peterson with Raymond James Please state your question.

Hello, Brian Your line is open please state your question.

Speaker 7: Hey, sorry guys, the mute button got me. Well, congrats on the RPO numbers, those are fantastic. But just kind of following up on Terry's question on the RPO.

Sorry, guys the mute button got me.

Congrats on the IPO numbers those are fantastic.

Just kind of following up on <unk> question on the <unk>.

Speaker 7: I'm curious, are your customers willing to commit to more products now that you have kind of a broader cloud portfolio? So, you know, we were talking about seasonality, but I'm curious.

Curious are your customers willing to commit to more products now that you have kind of a broader cloud portfolio. So we were talking about seasonality, but I'm curious are people willing to buy more products at the same time now just given that you are more integrated I'd be curious to get your thoughts on that yes, I mean again it's.

Speaker 11: Are people willing to buy more products at the same time now, just given that they're more integrated? I'd be curious to get your thoughts on that. Yeah. I mean, again, it's really the same answer, Brian . There is great opportunity for cross-sell and up-sell, obviously, because of the integrated and unified nature.

Really same answer Brian there is great opportunity for cross sell and up sell obviously because of the integrated and unified.

Speaker 4: You know, about 15% of the 2021 bookings were, you know, kind of that cross sell and upsell.

Unified nature.

15% of the 2021 bookings were kind of that cross sell and upsell now.

Speaker 4: Now, you know, the specific simultaneous purchase.

The specific simultaneous purchase.

Speaker 12: you know, again, comes down to, hey, how much can we, you know, how much can we knock down all at the same time?

Again, it comes down to hey, how much can we how much can we knocked down all at the same time.

Speaker 12: You know, versus kind of that roadmap conversation and the follow on sequential business that, you know, that comes one behind one behind the other.

Versus kind of that road map conversation and the follow on sequential business that comes one behind one behind the other.

Speaker 7: Makes sense. And Eddie, just maybe a follow up. You know, we've gotten a question a lot from investors on what the supply chain disruption kind of does for demand. Obviously, we're seeing active income, active WM coming in really strong. Yeah, I'm curious from your perspective.

Eddie just maybe a follow up we've gotten the question a lot from investors on what the supply chain disruption kind of does for demand. Obviously, we're seeing an active an active wm coming in really strong.

I'm curious from your perspective, what does that do for the demand environment and are there other parts of the portfolio, where we could see improving demand in 2022 and 2023. Thanks, Ken I don't know that theres going to be major shifts in 2022, Brian .

Speaker 11: of the portfolio where we could see improving demand in 2022 and 2023. Thanks, Ken. I don't know that there's going to be major shifts in 2022, Brian . I think that the general geo supply chain disruptions are going to continue. I don't think you're going to see a ton of near-shoring being able to be pulled off in 2022 because it just takes time to build that strategy out.

The general.

<unk> supply chain disruptions are going to continue I don't think youre going to see a ton of near shoring being able to be pulled off in 2022, because it just takes time to get to.

Build that to build that strategy build out strategy.

Speaker 4: But, you know, demand is certainly certainly high for capacity.

But demand is certainly certainly high for capacity.

Speaker 4: You know, on the digital transformation side, e-commerce continues to grow. There is obviously some slowness and...

On the digital transformation side E. Commerce continues to continues to grow there is obviously some slowness in some shortages of product coming into the country. So as a consequence of that as soon as hits sure hero hits land Theres, a real immediacy and an urgency to get product distribute it out to two and <unk>.

Speaker 12: some shortages of product coming into the country. So as a consequence of that, as soon as it hits shore here or hits land, there's a real immediacy and an urgency to get product distributed out to end consumers. And the optimization of the deployment of inventory around the country becomes particularly important.

Consumers and the optimization of the deployment of inventory around around the country becomes becomes particularly important.

Speaker 4: I know it's a little bit of a coy expression, but supply chain flexibility and agility is just super important across the globe.

Just really quickly I know, it's a little bit of a coy expression, but.

Hi chain flexibility and agility is just super important across the across the globe.

Thanks Eddie.

Pleasure Brian .

Speaker 1: Your next question comes from the line of Joe Roehrig with Baird. Please.

Your next question comes from the line of Joe ROE, Inc.

Baird. Please state your question.

Yes.

Speaker 8: Great. Hi, everyone. Maybe I'll start, Eddie. In your prepared remarks, you mentioned how you saw a growing addressable market opportunity. Can you maybe just expand on where some of the biggest new opportunities lie? And maybe related to that, you know, it definitely seems to be coming up more often, Manhattan, ActiveWM moving outside of that.

Great Hi, everyone.

Maybe I'll start Eddie in your prepared remarks, you mentioned how are you.

Growing our addressable market opportunity can you, maybe just expand on where some of the biggest new opportunities lie and maybe related to that.

It definitely seems to be coming up more often Manhattan active W. I am moving outside of that.

Speaker 4: most automated level four, level five warehouse environment. How much is the persona of your customer starting to change? And so there's consequently just more, you know, potential users of a cloud product and that contributes to the TAM expansion. Yeah, I mean, it's the modernization, really, of the supply chain versus.

Most automated level four level five warehouse environment, how much is the persona of your customers starting to change and so there is consequentially just more potential users of our cloud product and that contributes to the Tam expansion yes.

I mean, it's the modernisation really of the supply chain versus.

Speaker 12: You know going down market a ton Joe to be perfectly honest with you that's driving, you know, that's driving a lot of the demand

Going down market a ton Joe to be perfectly honest with you that's driving that's driving a lot of the demand.

Speaker 4: As we've talked about, you know, a number of times distribution centers today look quite different to the way they look.

We've talked about a number of times distribution centers today look quite different.

The way they look.

Five years ago, but certainly 10, and 15 years ago with the levels of automation and robotics and so forth. So the need to have sophisticated software to be able to drive that inside the four walls transformation is important obviously the digital transformation of the way.

Speaker 12: Obviously, the digital transformation of the way consumers are ordering and consuming goods requires a whole different strategy for distribution, whether it be the number of distribution centers, the size of the distribution centers, the hours of operation of those distribution centers. All of those things contribute to the modernization of a sophisticated distribution network. In terms of growing at addressable...

Tumors are ordering and consuming goods requires a whole different strategy for for distribution, whether it be the number of distribution centers.

Size of the distribution centers.

Hours of operation of those distribution centers all of those things contribute to the modernization of sophisticated distribution distribution network in terms of growing at addressable addressable markets certainly, we're continuing to expand our product portfolio, particularly on the <unk>.

And into the retail store portfolio, and we feel like we're doing pretty well from a.

A market share perspective.

The.

Again, we've talked about this before with manufacturers and wholesalers, becoming much more direct to consumer that drives greater demand for sophisticated fulfillment.

Speaker 12: greater demand for sophisticated fulfillment and distribution. I was talking to one of our customers the other day and just sort of mentioning, hey, we really consider ourselves a cloud-first company now. And this was a company that had been a traditional wholesaler for 30 years. And they said, funny you should say that. We now consider ourselves a direct consumer company.

Speaker 8: and distribution, I was talking to one of our customers the other day and just sort of mentioning, hey, we really consider ourselves a cloud-first company now and this was a company that had been a traditional wholesaler for 30 years. And they said, funny you should say that, we now consider ourselves a direct-to-consumer company. And they had been traditionally a wholesale for 30 years. And so a great marriage there and just a lot of great market expansion opportunities for us. Okay, that's great. And then just in regards to being focused on cross-sales and dedicating more resources that way,

Distribution I was talking to her.

One of our customers the other day and just sort of mentioned in Hey, we really consider ourselves a client first company and this was.

Company that had been a traditional wholesaler for 30 years and they said funny you should say that we now consider ourselves a direct to consumer company.

Speaker 12: You know, and they had been traditionally wholesale for 30 years. And so a great, a great marriage there and just a lot of great market expansion opportunities for.

They had been traditionally wholesale for 30 years, and so a great a great marriage, there and just a lot of great.

Market expansion opportunities for us.

Speaker 8: Okay, that's great. And then just in regards to being focused on cross-sales and dedicating more resources that way, you know, talk a lot about what that might mean for WMS paired with TMS.

Okay, that's great and then.

Just.

In regards to that.

Being focused on cross sales dedicating more resources that way.

Yes.

<unk> talked a lot about what that might mean for <unk> paired with Tms.

Speaker 8: Does that also include, I guess, within kind of WMS functionality, thinking of things like, you know, execution, control, yard management, labor management? I mean, when you wrap all those capabilities into what Manhattan can provide, are you ultimately seeing your ACVs get bigger just within the WMS category?

Does that also include I guess within kind of WNS functionality. Thank you have things like <unk>.

Execution any control yard management Labor management, I mean, when you wrap all of those capabilities into what Manhattan can provide are you ultimately see ang.

These get bigger just with him.

Mass category. It really so certainly we're seeing a lot of synergy.

Speaker 12: Certainly, we're seeing a lot of synergy across those products. By the way, as you look at Manhattan Active Omni, point of sale, Manhattan Active Omni now integrated with WMS being much more sophisticated with late stage cancellation, order consolidation, order aggregation, and those kinds of things.

Across those products by the way.

If you look at Manhattan active omni point of sale Manhattan active omni Nab.

Integrated with Wm SBA are much more sophisticated with late stage cancellation order consolidation order aggregation and those kinds of things in terms of HCV growth. So our CV growth. It still comes down to whether this is a kind of a roadmap purchase or.

Speaker 12: In terms of ACV growth, though, or NACV growth, it still comes down to whether this is a kind of a roadmap purchase or a multi-product buy up front, which again comes down to how much can our customers bite off in terms of project initiatives all at once.

Our multi product by upfront, which again comes down to how much our customers bite off in terms of project initiatives all at once so.

Speaker 12: So, you know, we haven't seen it manifest itself in a significant ACV growth, you know, an initial contract. But we're okay with that, right? We're in this for a long-term. We wanna make sure our customers are successful over the long-term and make sure that they implemented a pace that is aggressive, but yet comfortable for them.

It Hasnt.

Haven't seen it manifest itself in a.

<unk> ACB growth.

Got it.

An initial contract, but we're okay with that right. We're in this for a long term we want to make sure. Our customers are successful over the long term and make sure that they implemented a pace that is aggressive but yet comfortable for them.

Speaker 6: Okay, great, thank you very much. My pleasure, Joe, thank you.

Okay, great. Thank you very much.

Pleasure Joe Thank you.

Speaker 1: Your next question comes from the line of Mark Guttawitz with Rosenblatt Securities. Please state your question.

Your next question comes from the line of Mark <unk> with Rosenblatt Securities. Please state your question.

Speaker 9: Hey guys, I'll play my broken record here and again congratulate you on some great results. Eddie, I wanted to see if you might pull the curtain back a little bit on

Yes.

Hey, guys.

Clearly my broken record here and Ken congratulate you on some great results.

Eddie.

Wanted to see if you might pull the curtain back a little bit on.

Speaker 9: the new CMO that you brought in, Ann, a few months ago. I think it's been, and I'm just curious if there are any tangibles you might be able to share in terms of what your marketing or branding looks like this year relative to last and, you know,

The new CMO that you brought in an.

Few months ago, I think it has been.

I'm just curious if.

Are there any tangible you might be able to share in terms of what.

Your marketing or branding looks like this year relative to last.

Specifically across either product or geo or perhaps using different types of AD mediums that would be helpful. Thanks, Yeah. So we'll add is doing a fantastic job. We're thrilled to have her on the team and.

Speaker 9: either product or geo or perhaps using different types of ad.

Speaker 12: mediums. That would be helpful. Thanks. Yeah. So, Anne is doing a fantastic job. We're thrilled to have her on the team. Not only does she do fantastic work, she's integrating the team wonderfully and really spreading her wings across product and across that geography. So, I'm not going to put her on the spot with very specific marketing initiatives.

Not an issue do fantastic, where she is integrating into the team team wonderfully.

Really spreading her wings across products and across our across our geographies and I am not going to put her on the spot with very specific.

Marketing marketing initiatives.

Speaker 4: In her first, you know, 90 days here or so or even in an interim, but I but I would tell you that she's got us

Her first 90 days here or so or even in the near term, but I would tell you that she has got us in a company very focused on digital marketing.

Speaker 4: and our company very focused on digital marketing. Number one. And number two, you know, we've said for a long time that, you know, we think we have some of the best kept secrets on the planet. Well, here comes Anne, you know, 90 days or so into the business and she certainly concurs now she's, you know, got under the hood a little bit and is focused on making sure that we don't have a lot of secrets, that we are

Number one.

Two we've said for a long time that we.

We think we have some of the best kept secrets on the planet well here comes and 90 days or so into the into the business and she certainly concur is Nash.

Got under the Hood, a little bit and is focused on making sure that we don't have a lot of secrets that we are.

Speaker 12: loud and proud, you know, with our marketing strategies going into 2022. So you certainly should expect us to see us again be, you know, a little more verbose, frankly, in communicating some of the very innovative solutions that we have in our portfolio.

Loud and proud with our marketing strategies going into into 2022. So you should certainly should expect us to see again see us again be a little more for both frankly.

Communicating some of the very innovative solutions that we have in our portfolio.

Speaker 9: Got it. I suppose we're not expecting a Super Bowl ad this year, though.

Got it.

Those were not expecting a super Bowl AD this year, though.

Speaker 11: Well, you never know. Don't get up and go to the restroom, Mark. You know, you might... Okay. All right. That's good. I like that.

Well.

You never know don't get the restroom Mark.

Alright, thats good I like that.

Speaker 9: here. The last question, and I might have missed it, just the housekeeping on POS goal eyes. I know you've chatted about them in the past, but just curious how that had trended.

Anticipation here.

Last question I might have missed it just a housekeeping on POS go lives I know you've chatted about them in the past, but just curious how that has trended, yes, Marty well what I said was that we we've got a number that are underway and we expect by the end of the year to light up a bunch more stores both both.

Speaker 12: Yeah, going pretty well and what I said was that we've got a number that are underway and we expect by the end of the year to light up a bunch more stores, both here in the U.S. and some internationally as well. So the pipeline continues to grow. There clearly is demand out there for a really integrated strategic suite of selling products.

Here in the U S and internationally as well so.

The pipeline continues to grow that clearly is demand out there.

Four.

Really integrated strategic suite of selling selling products across bricks and mortar and in digital.

Speaker 12: bricks-and-mortar and digital. As we get more established in this world and in this market, you're going to see us start to talk about some really nice brands that are starting to adopt a solution. Got it. All right.

As we get more established in this world in this.

World and in this market Youre going to see US start talk about some really nice brands that are starting to.

Starting to adopt the solution.

Got it alright, thanks, guys our.

My pleasure Mark.

Speaker 1: Your next question comes from the line of Mark Chappell with Sloop Capital.

Your next question comes from the line of Mark Chapell with loop capital.

Speaker 10: Hi, nice job on the quarter, and thanks for taking my question. Sure thing, Mark. Thank you.

Hi, nice job on the quarter and thanks for taking my question sure thing Mark. Thank you.

Speaker 10: Hey Eddie, just starting with you, a question on your point of sale business, just building off the former question here, over the past year or so, the focus was basically just building up reference accounts with respect to that product. Now that you have many of those reference accounts in place, I'm wondering if you would expect point of sale to become a greater percentage of your business going forward.

Hey, Andy just starting with you a question on your point of sale business just building off the former question Harry over the past year or so the focus was basically just building up reference accounts.

With respect to that product now that you have many of those reference accounts in place I'm wondering if you would expect point of sale to become a greater percentage of your business going forward.

Speaker 12: Um, you know, look, it's a slow burn mark. People don't wake up, but we don't wake up one morning and say, hey, I'm going to it's it's, you know, it's the heart and soul of the retail operation, right? They don't.

Look it's a slow burn mark people don't wake up we don't wake up one morning, and say, hey, I'm going to.

Heart and soul of the retail operation right. They don't.

Speaker 4: Certainly retailers do not replace their point of sale systems on a whim and they're very, very strategic decisions. But I gotta tell you, we can feel the momentum building kind of throughout our organization, everything from initial pipeline, acceleration to deployments and go live.

Certainly retailers do not replace their point of sale systems on a whim.

And they are very very strict strategic decisions, but I got to tell you we can feel the momentum building.

Kind of throughout our organization everything from initial pipeline acceleration to deployments.

Speaker 4: So, you know, I guess you'll be the, you know, you'll be the judge of whether it's a significant part of the business as we march through the next, you know, eight or 10 quarters, but certainly momentum is building nicely.

And go lives so.

I guess, you'll be the you'll be the judge of of whether it's a significant part of the business as we as we March through the next eight or 10 quarters, but certainly momentum is building nicely.

Speaker 10: Nice, thanks. And then regarding just supply chain in general, given the increasing attention that companies are placing on supply chain these days, how much are you seeing higher level executives involved in your sales processes than say three or four years ago?

Okay, all right. Thanks, and then.

Regarding just supply chain in general given the increasing attention that companies are placing on supply chain. These days how much are you seeing higher level executives involved in your sales processes, let's say say three or four years ago, yes.

Speaker 4: Yeah, much, much more so.

Much much more so.

I think.

We've always been mission critical solutions to our customers since day, one of the companys existence, but never more than.

Speaker 12: But never more than, you know, in the last year or two have we been participating in

In the last year or two.

We've been participating in.

Speaker 4: you know, board-level and C-suite-level conversations. I don't think there's barely a company on the planet that isn't very focused on supply chain issues, whether manufacturer, wholesaler, or retailer. And, you know, we really are becoming, you know, one of the most important IT systems in our customers' landscape, for sure.

<unk> board level and C level C suite level conversations I don't think there is barely a company on the on the planet that isn't very focused on supply chain supply chain issues weather manufacturer wholesaler or retailer.

We really are becoming one of the most important systems and our customers landscape for sure.

Speaker 10: That's helpful. And then just finally here, I was wondering if you'd just comment a little bit on what you're seeing or whether you're seeing any changes with respect to your customers' budgeting cycles for the upcoming year.

Okay. That's helpful. And then just finally here I was wondering if you just comment a little bit on.

What youre seeing or what are the whether youre seeing any changes with respect to your customers' budgeting cycles for the upcoming year no.

Speaker 4: No, it's a pretty simple answer to that, Mark. No real change in budget cycles that we've seen.

It's a pretty pretty simple answer to that Mark no no real change in budget cycles that we've seen.

Speaker 10: We like simple answers. Yeah. Appreciate it. Thanks. That's all I have. Sure thing. Thank you.

Wed like simple answers I.

Okay. Thanks, that's all I have.

Sure thing thank you.

Speaker 1: To ask a question, please press star 1 on your telephone keypad.

To ask a question. Please press star one on your telephone keypad.

Speaker 1: Your next question comes from the line of Matt Pfau with William Blair. Please state your question.

Your next question comes from the line of Matt Pfau with William Blair. Please state your question.

Hey, guys I wanted to ask on the labor side of things and obviously, you ramped up some compensation to retain and presumably attract employees on the services side have you been able to hire to plan and is labor been a bottleneck there at all and then within your customers has.

Their ability to engage with <unk> bin bin any limiter to getting deals implemented.

Yes.

Hard to plan so that's been good.

Think so far this year, we've got a new we've got a bad.

Somewhere in the 75 to 100.

New associates with the company so that's exciting.

I think to see for sure.

In terms of the reticence of our customers to move forward because lack of resources on their side haven't seen a ton of that now we have seen them ask us to take on maybe a little more work and of course we.

We're seeing a very very vibrant system integrator participation and certainly we're being asked to introduce our system integration partners into the into the mix to augment our customer our customer teams, but I wouldn't say, we've seen any buying trepidation or buying slowness.

Due to lack of resource on the customer side.

Great and then.

In terms of existing Wm customers.

Moving from an on Prem deployment to the cloud maybe just some update there and what the interest level is and I think if I recall when you.

Released active Wm back in 2020, the original plan was to support the on Prem version for five years. So presumably you were a bit over three years out now from when they were at when that would end.

How our customer discussions with customers sort of progressing around moving over to the cloud deployments.

Deployment he had a lot of.

A lot of enthusiasm look we've just said we've got about 60 different customers under contract now.

I may not be exactly correct percentage wise, but it's about 50 50, 50% of those 60 brand new customers that we've never done business with before and 50% are existing customers that are converting are transitioning from on prem into the into the cloud.

So it's a pretty exciting time.

We're very pleased about where we are obviously, we were very pleased with their financial results, but at the end of the day, we've only transitioned 30 of our customers so far existing customers that we've built up over the last 30 years. So far so we're encouraged by the enthusiasm there and.

Where their desire to move to.

Scalable extensible version of software in the cloud.

Okay, Great I appreciate it guys.

Sure thing sort of thing that.

At this time there are no further questions I will now turn the floor back to management for any additional or closing remarks, yes. Thank you Andrew no real closing remarks, just we'd like to thank everybody for all of their support during 2021.

We are thrilled to be started with 2022 and look forward to giving you have first.

22 update in about 90 days or so in the meantime.

Have a great evening. Thank you bye bye.

Thank you for participating in today's conference call. You May now disconnect your lines at this time.