Q2 2023 Manhattan Associates Inc Earnings Call
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Ladies and gentlemen, thank you for standing by the conference will begin in a few moments once again the conference will begin in a few moments. Thank you for your patience and please continue to standby.
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Good afternoon, My name is Camilla and I will be your conference facilitator today.
At this time I would like to welcome everyone to the Manhattan Associates second quarter 2023 conference call.
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As a reminder, ladies and gentlemen, this call is being recorded today July 25th 2023.
I would now like to introduce your host Mr. Michael Bauer.
A lot of Investor Relations of Manhattan Associates. Mr. Bauer you may begin your conference.
Great. Thank you Camilla and good afternoon, everyone. Welcome to Manhattan Associates 2023 second quarter earnings call I will review, our cautionary language and then turn the call over to Eddie Capel our CEO .
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.
These forward looking statements involve risks and uncertainties.
Not guarantees of future performance and that actual results may differ materially from the projections contained in our forward looking statements.
I refer you to reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly our annual report on Form 10-K for fiscal year 2022, and the risk factor discussion in that report as well as well as any risk factor updates we provide in our subsequent form 10.
We know the turbulent global macro environment could impact outperformance and cause actual results to differ materially from our projections. We are under no obligation to update. These statements. In addition, our comments include certain non-GAAP financial measures 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 M. A N H dot com now ill turn the call over to Ed.
Very good thanks, Mike Good afternoon, everyone and thank you for joining us as we review our second quarter results and discuss our increased full year 2023 outlook.
Manhattan delivered record Q2, and first half results.
For the quarter total revenue increased 20% to $231 million and adjusted earnings per share increased 28% to 88.
Both exceeding our expectations.
Q2 was our ninth consecutive all time record revenue quarter.
Driving topline I performance and earnings leverage was 44% growth in cloud revenue and 23% growth in services revenue and this encompasses double digit topline growth across all our geographies is our global teams continue to execute very well for our customers.
While global macro volatility continues to be persistent Manhattan's business fundamentals are solid demand for our solutions are robust customer satisfaction is high and investment in research and development and our associates continues to widen that technological leadership across supply chain execution Omnichannel.
Retail point of sale markets.
Now our P O. The a leading indicator of that growth increased 38% to just over $1 $2 billion.
Demand for our mission critical cloud solutions remains strong and resilient across all of our product portfolio.
From a vertical perspective retail manufacturing and wholesale to continue to drive more than 80% about bookings for the quarter.
And across our solutions the sub verticals are pretty diverse for example in the quarter cloud deals. One include a beverage distributor a luxury brand and specialty retailer of food distribution services company and office supply retailer, a technology distributor and our home furnishing brands and manufacturers as well as the <unk>.
Number of others.
Our year to date competitive win rates continue to be pretty solid at about 75% with.
With 25% of our new cloud bookings being generated from net new logos.
Additionally, in Q2, we had a healthy mix of conversions Upsells and cross sells.
Well the timing of large deals and bookings mix will certainly vary on a quarterly basis, we believe the breadth across sales categories and products exemplifies our multiple opportunities for sustainable future growth.
Foundational to our growth is the combination of our ability to deliver industry, leading solution and service to our customers a best of breed cloud native platform and solutions provide unmatched access to innovation.
A key component to our customers' success.
Helping our clients strengthen their relationships with their end customers drive more revenue and improve efficiency.
These powerful benefits are translating into a robust solutions pipeline that has new potential customers representing about 35% of our demand.
As solid product activity is also driving our services growth and pipeline.
For example, our professional services team completed over 100 go lives in the quarter and continues to perform superbly for our customers.
And to support our growth, we're making pretty solid progress on our hiring goal of approximately 450, new associates for 2023.
In Q2, we added over 150, new team members, bringing our total new hires to over 330 for the first half of the year and over 900 over the past 18 months.
And while we remain appropriately cautious regarding the global economy, we continue to invest for growth. This includes strategic investments in industry innovation further enablement of that customer success and expanding our addressable market.
In late May and our global conference momentum, we showcased some of that industry leading innovation.
That customer attendance trends continued to be strong with both 2022 and 2023 conferences running above pre pandemic attendance levels.
A part of the explanation for our continued engagement growth that momentum is the expanded breadth of the customer personas that we serve.
And this includes significant participation level increases from both store systems leadership and technologists within that customer base.
And this will be the focus of my brief product update today.
Now as you'll recall from prior calls and as clearly noted in the recent Forrester wave for Omni channel order management with a definitive market leader when it comes to providing store capabilities around order fulfillment.
Fact, everyday nearly 100000 store associates, you use a cloud native technology to ship orders to customers homes getting them ready for pickup and curbside and perform other critical omnichannel retail functions.
Additionally, as our customers evolve their consumer experiences, we have cutting edge advancements waiting to help them.
For example, this year, we unveiled native support for RFID within that store applications and we're currently working with several leading retailers to deploy this technology.
Support for RFID delivers a dramatic improvement in store inventory accuracy metric, which has a direct impact on store fulfillment of online orders and the digital consumer experience.
RFID can also deliver significant reduction in store associate labor hours.
And we've also built RFID supporting that point to sit into at point of sale application. So checkout at some returns.
Oster and easier for the customer.
Speaking of point of sale, we recently closed a new point of sale deal with a leading north American outdoor apparel brand and this deal was notable for a few reasons, including that at point of sale is the very first application that they are subscribing to from Manhattan.
And what we believe more strongly than ever in the power of unification within Omnichannel and supply chain. It's also important to be able to compete successfully on an application by an application basis for a brand new business.
Next turning to another key.
Customer constituency constituent.
It was present at our momentum conference.
Acknowledges.
Ever since the first release of Manhattan active platform in 2017, we've made it a priority to deliver new capabilities each quarter focused on the Turkmen technologists within our customer base from unmatched library of API endpoints extension points and Thats full extensibility focused application.
The focus we have on service technology, serving technologist and developers has never been more apparent.
No it's easier than ever for our customers to tie our API is into the broader supply chain commerce system landscape.
Manhattan active platform technology sessions up momentum this year, where frankly standing room only.
But our customers weren't just there to hear about the tools for their technologists given the modern API first architecture of the Manhattan active platform. They also wanted to learn about the possibilities the open AI might afford us all.
We believe that the combination of best in class supply chain Commerce solutions, a modern technology architecture, and generative AI has strategic and game changing potential for all of us.
But what we wanted to do a momentum with features some real world working generative AI prototypes for our customers.
So that we could bring the abstract to life for them.
I thought I'd share a couple of those proof of concepts that we demonstrated momentum with you today.
Now one of the challenges of using best in class agile supply chain technology is their ran the almost infinite flexibility.
Figure ability that it offers.
Machine learning can help with system self tuning workflow adaptation and optimization through manual configuration.
And sometimes be pretty time consuming and sometimes even challenging and we believe the power of natural language models can help on both fronts.
By providing super fast and easy access to key documentation knowledge base is an explainer videos, but also by giving our customers the ability to configure our application directly from text based dialogue.
Once fully prototypes as powerful facility will allow us.
Ally for both faster initial implementation of that system and the ability to quickly adapt configuration to changing business conditions and new innovation.
And we've also had some initial.
Success, using large language models to write code.
During an implementation for example integration to our systems into the broader ecosystem can sometimes be one of the proverbial long poles in the tent.
But in our labs, we have seen these llm's successfully develop integration code across several key end points.
Progress in this area is very early it is meaningful and very encouraging nonetheless.
And my final example is we're also optimistic about this technology's ability to deliver strategic step change in chat bots and focused on the end consumer.
<unk> technologies of the past is certainly successfully automated simple questions and answers around things like order and delivery status.
By and large these capabilities have been confined to a pretty finite.
Fairly narrow set of capabilities using <unk>, we think the range of what chat bots can do can expand enormously and given our focus on all things customer service related.
A real opportunity to deliver next generation and consumer experiences around chatbot chatbot and customer engagement.
As you can probably tell we're pretty excited about the potential opportunities around <unk> and we will continue to work and collaborate with our technology partners to progress at <unk>.
Strategy into the future.
So that concludes my business update and this is going to provide you with an update on our financial performance and our outlook and then I'll close our prepared remarks with a very brief summary, before we move to Q&A. So Dennis Okay. Thanks, Eddie our Manhattan Global teams continue to execute.
Very well in a challenging macro environment for the quarter, we delivered a strong balanced financial performance across topline growth.
Operating margin and cash flow. This includes posting record results across revenue RP O adjusted operating margin and earnings per share.
On an as reported basis. Our Q2 results came in at the rule of 50, and if our revenue growth is normalized for our cloud transition, which excludes license and maintenance revenue our results exceeded the rule of 50.
FX really did not have a meaningful impact RPI or revenue in the quarter also in reviewing our strong financial performance growth rates are on a year over year basis, unless otherwise stated.
Okay.
Total revenue total revenue was $230 million up 20%, excluding license and maintenance revenue, which removes the compression driven by our cloud transition our total revenue was up 27%.
Cloud revenue totaled $61 million up 44% as Andy highlighted we ended the quarter with RP O of $1 $2 billion.
Up 38% compared to the prior year and up 7% sequentially.
<unk> performance was a healthy healthy mix of sales across our sales categories, including conversions, new logos and Upsells cross sells as well as solid results from our Manhattan active suite of products.
We also experienced some larger deals push on a timing combined with a few customers experiencing bankruptcies.
Ill immaterial as a percentage of <unk> without the bankruptcy contraction our sequential RPC, Inc.
The increase would have been roughly in line with Q1 or about $100 million.
Also as of June 30, 98% of our Rps represents cloud native subscriptions.
Global services smoked delivering record revenue totaling $125 million up 23% as cloud sales continue to fuel services revenue growth globally.
Adjusted operating profit, we like profit was $68 million with adjusted operating margin of 29, 6% up 210 basis points year over year.
Our performance was driven by strong cloud and services revenue growth combined with operating Leverages, our cloud business scales importantly, as Eddie discussed we continue to also invest for future growth.
This resulted in Q2 earnings per share of 88 up 28% and GAAP earnings per share of <unk> 63 up 29%.
We don't take GAAP for granted.
Turning to cash operating cash flow was a solid $41 million with timing of collections driving the year over year change.
This resulted in free cash flow margin of 17% for the quarter with year to date free cash flow margin totaling 22%.
Year to date operating cash flow increased 18% to $99 million and includes absorbing about $37 million in cash taxes paid in the first half of the year.
For the full year 2023, we are on pace to pay approximately $75 million to ankle Sam and cash taxes.
Moving to the balance sheet.
Deferred revenue increased 28% to $227 million, we ended the quarter with $153 million in cash and zero debt.
Accordingly, we leveraged our strong cash position and invested $67 million in share repurchases in the quarter.
Resulting in a $141 million in buybacks year to date.
Also our board has approved the replenishment of our $75 million share repurchase authority.
Onto our updated 2023 guidance.
As consistently mentioned our financial objective is to deliver sustainable double digit topline growth and top quartile operating margins.
Benchmarked against Enterprise SaaS comps this.
This includes a balanced investment approach to growth and profitability with.
With our strong first half performance and increasing visibility we are again, raising our 2023 revenue operating margin and EPS guidance.
We are also reiterating our 2023 RP O guidepost range and mid point of $135 billion consistent with our recent earnings releases, our guidepost in guidance ranges can be found in today's earnings release supplemental sketch.
<unk> all.
All guidance references made on today's call, we will be the mid point of.
Of their respective ranges as noted on prior earnings calls, we will be updating our outlook on an annual basis and lastly on RPM. As previously noted our bookings performance is impacted by the number and relative value of large deals we close in any quarter, which can potentially.
Italy cause lumpiness or non linear bookings throughout the year.
So for full year 2023, we expect total revenue of $890 million up $30 million or 3% from our prior midpoint of $860 million.
Excluding license and maintenance attrition this represents 24% growth.
All in our target is 16%.
For Q3, we expect total revenue of $226 million with 24% year over year growth ex license and maintenance all in our target is 14%.
And for operating margin, we are increasing our midpoint to 27, 5% up from our prior midpoint of 26, 5%.
Included in this outlook is 150 plus basis points headwind from the reduction in license and maintenance revenue.
As Andy highlighted given the combination of our demand and size of our opportunity we are continuing to invest in our business.
At the midpoint, we are targeting Q3 operating margin of 27% and 24, 3% in Q4, which accounts for retail peak seasonality.
Our full year adjusted earnings per share outlook is increasing by 21 cents to.
$3 nine.
Up 7% from our prior midpoint of $2 88.
On a quarterly basis, we are targeting Q3 to be 77 and.
65, <unk> in Q4, which again accounts for Q4 retail peak seasonality.
For GAAP earnings per share our midpoint increases by 17 cents to $2 20 up 8% from our prior $2 <unk> midpoint.
And for Q3, we are targeting GAAP earnings per share of <unk> 53.
Here are some additional details on our 2023 outlook.
We are increasing our cloud revenue mid point to $247 million, representing 40% growth and is up 3% from our prior midpoint of $240 million.
On a quarterly basis, we are targeting $63 million in Q3 and about $66 million in Q4.
For services.
We are increasing our forecast of $473 million to $479 million the.
$476 million midpoint represents 21% growth and is up $17 million or 4% from our prior $459 million midpoint.
On a quarterly basis, we are targeting Q3 services revenue of $125 million and $110 million in Q4, which accounts for retail peak seasonality.
For maintenance, we're targeting $131 $5 million or an 8% decline on a quarterly basis, we are targeting Q3 at $31 million in Q4 at $29 million.
We expect hardware revenue of about 5% and a $5 million per quarter, and expect license of $1 $5 million per quarter.
For consolidation subscription maintenance and services margin, we continue to target about 54% for the full year on a quarterly basis. We are targeting approximately 54, 5% in Q3 and 53, 5% in Q4 on retail peak seasonality.
And finally, we expect our tax rate to be 21, 5% and our diluted share count to be $62 6 million shares which assumes no buyback activity.
So in summary, solid execution by the Manhattan Global team and a great Q2, and first half performance. Thank you and back to Eddie.
Very good thank you Dennis but we're pleased we're pleased with our second quarter and first half results and while we certainly continue to be appropriately cautious on the volatile macro conditions Manhattan's business momentum remains positive and we're we're just very optimistic about our long term market.
<unk>.
So thank you everybody for joining the call and thank you to our global team for all of the really terrific work that youre doing for our customers out there.
Well that concludes our prepared remarks, and Camilla, we'd be happy to take any questions.
Thank you we will now be conducting a question and answer session.
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One moment, please while we poll for questions.
Thank you and our first question comes from Terry Tillman with <unk> Securities. Please proceed with your question.
Hey, good afternoon, Eddie Denison, Mike Gregg.
<unk> GAAP earnings performance by the way in the quarter.
Maybe Andy I got a question for you and then Dennis had a two parter for you.
I guess first question for you Eddie I mean, it's a really important event every year youll put a lot of effort into it in terms of momentum.
The theme around unified Commerce, I think is intriguing.
How does that resonate with some of the interactions and maybe even some of the prospects there at the conference.
Because what I'm getting at is they're using a lot of tools, probably just didn't buy online pickup in store, but it's a lot of point solutions do you all see an opportunity whether its like that Pos win or with your Oems or your other store level technologies to almost start to be able to create a vendor consolidation play and actually we're net new business that way versus just like AWS deal.
Yes.
That's certainly part of the strategy here and the good news is that across our.
Mass store systems customer base.
We're leading with different capabilities, frankly, and then gradually rolling out more and more capabilities as those as those customers need them and certainly.
You can feel some of the <unk>.
<unk> consolidation play as you call it coming coming into coming into play certainly.
Part of the strategy and it seems to be taking hold.
That's good to hear and I guess, maybe Dennis a follow up question. The two part of the first part is.
You definitely handily beat <unk> addition, estimate but I think you did call out a couple of things some puts and takes I'm curious around a couple of maybe larger deals slipping in the quarter.
Is that something that you think timing wise can be made up in the second half of the year or just how do you think about that going forward and then the second part and I can repeat all of this because I'm a long winded. The second part is just we're getting further and further along through this transformation both on the business model and the financial model I'm curious about the visibility as you look into 'twenty two.
Five and just how it's shaping up both on subscription revenue and services. Thank you.
Yes.
I'll take the front end piece of the Lumpiness kind of deals move in Iraq.
That hasnt changed.
Frankly in the 'twenty three years or so that I've that I've been here to use the expression puts and takes and thats what it is.
But it's always going to be lumpy, we feel like we had a pretty solid Q2 actually.
Hey, there's always it always seems like there's a couple that got away, but we will pick those up we will pick those up with them then.
And then the down the river a little bit.
Yes, just to just to.
As a final point Terry is as visibility is great. We've got a super pipeline in front of US we've got to execute obviously, but.
Real happy with the visibility.
Okay. Thank you.
Very good thank you Terry.
Okay.
Thank you and our next question is from Brian Peterson with Raymond James. Please proceed with your question.
Hi, guys. Thanks for taking the questions maybe just starting with you.
Tom on generic <unk> in the prepared remarks.
I'm curious if you think about the magnitude of what that could do for you guys internally I know thats early and as you guys kind of built this micro services cloud architecture.
What is that due to the monetization potential of the business longer term.
Well certainly we think it's got a ton of potential for sure.
There is just a little aside I think all of US are wondering exactly how much. This is going to cost. So we've got a big as we move forward with the practicalities of implementing generative AI, we've got to make sure that we keep our eye on the return on investment both for internal usage and for our customers, but there is no question that.
We are what can only be described as fortunate when we when.
When we designed and Architected API first.
Micro services architecture, a number of years ago, we did know that generative AI was on sort of the horizon, but the fact of the matter is that in order to be able to really benefit from the implementation of generative AI you need API first architecture, it's pretty hard to banks generative AI up again.
Just a monolithic architecture, because it really doesn't have very good years and doesn't have a math to speak back. So we feel we feel very fortunate about that as I mentioned, we've we're in the early stages, but whether it be from a knowledge based perspective, and navigation perspective, a configuration perspective and a cogeneration.
Respective.
I sort of highlighting all of those just a little bit today, we are doing a real work and creating real proof of concepts. So that as the technology hardens and becomes more regularly available we are right on the forefront of being able to.
A user capability.
Increase our internal efficiency, but also be able to offer a differentiated capability to our customers.
Great. Thanks for that perspective, and maybe just one on hiring very good progress. This quarter I'm. Just curious is the hiring environment eased at all and given what you've seen in our Apio was there a temptation to kind of raise that hiring target for the year. Thanks guys.
No.
Look we've got a pretty healthy target, we did five $5 50, or so last year and a $4 50 is the target for this year. We're on we're on track for that and no hiring hasn't got any easier as they.
Bear in mind, we're after the top technical talent on the planet.
And nothing has waned in terms of that demand profile, but.
But we're still at it and we think that if there are folks out there that are looking for a place to invest their career than a market leading company using forward and modern technology like ours is.
Is it a really terrific place.
Pretty solid operating margin, adding that head count Bryan Yeah, yeah.
Yes. It is good nice job guys. Thanks.
Brian .
Yeah.
Thank you. Our next question is from Joe <unk> with Baird. Please proceed with your question.
Hi, Greg Hi, everyone.
Maybe just a discussion on point of sale and how big that business could become over time, and maybe one way to tackle the question sorry.
If I just think about the size of the order management business and appreciating how long active omni has been end market.
Do you think that's maybe a relevant starting point for how big point of sale could be and could point of sale approach.
That size over a similar point in its lifecycle I guess what are kind of the.
Puts and takes as you think about forecasting that business because it's obviously a much larger tam, but also a comparably newer offering from Manhattan.
Yeah. Good question, Joe I think the opportunity for point of sale is for US is at least as big as our warehouse management system business Matt.
That is sort of on a go forward basis right, we're not going to pick up 30 years of.
<unk> revenue and everything that goes along with that.
In a short period of time, but if you were to damn that up start.
<unk>.
Start the clock over.
Over time, I think the opportunity for US is point of sale can be as big as.
WNS.
So in other words bigger than elements.
Okay.
Very good.
And then just.
Following up on RPI.
So good bookings quarter.
Some big deals slip, but good bookings nonetheless is kind of the read here that.
If big deals slipped a bit then this quarter just had a standout volume of deals in the volume of transactions made up the difference.
If that's true and we are looking at.
A higher volume of transactions does that suggest anything about maybe underlying market house or just how you think about a hand.
Handicapping pipeline conversion.
Because it sounds like the pipeline is also in a good spot.
No I don't think Theres really anything to read Joe to be perfectly honest into into one quarter and I know we.
We frankly getting a little boring with high frequently we repeat that there is opportunity for lumpiness in all kinds of different ways, whether it be big deals new logo acquisition.
Customer migrations all of those kinds of things.
And they do they bounce around every every quarter and there was nothing really particularly different when you look at when you look across multiple quarters, there was nothing particularly different about this quarter than any other.
It was a little different to last quarter, but next quarter, we get a little bit different to the one that we've just concluded.
I really don't think there's anything to read into 190 day period in that regard.
Okay. Thank you very much.
Our pleasure Joe Thank you.
Thank you. Our next question is from Matt Pfau with William Blair. Please proceed with your question.
Hey, great. Thanks for taking my question I wanted to first ask on the commentary around bankruptcies I think you said it would've been closer to $100 million and.
Sequential arpaio added if it werent for those so basically implying a 15 million dollar impact was that all driven by one customer or were there multiple customers in that in that number.
A small handful of customers.
Okay got it.
And then wanted to follow up on the commentary around the point of sale customers that you added.
And that was the first product that they elected to go with with Manhattan, maybe just.
A little bit more detail on how that came about and do they have a roadmap to add additional products from you.
Yes, I think look it's there is no guarantee there we've got to execute well on the work in front of us to be able to garner more business from this customer bus.
This was a.
A full on.
RFP driven multi vendor selection process for a standalone point of sale system nothing else that nothing else alongside it.
And really nothing else being considered and that's really why we why we called it out as you know.
We're very high on the opportunity around whether it be commerce or supply chain unification.
Our ability to be able to.
Frankly beat the best of the best in the point of sale industry.
On the on the merits of that particular product alone was was encouraging.
Okay.
Great. Thanks, I appreciate it guys.
Okay pleasure, Matt Thank you.
Yeah.
Thank you and our next question is from Mark Chapell with loop capital markets. Please proceed with your question.
Hi, Thank you for taking my question.
Nice job on the quarter.
Just starting with you with respect to the new active yard management solution to introduced at the user conference I was wondering if I know it's still early but was wondering if you could just add some additional insight.
Maybe some of the interest you are seeing around the solution.
What type of customers are giving you the most interest.
Yes.
We're excited about it mark and look it's not the biggest product that we've ever released of course, but it's sort of an important one yard management is as you know the physical intersection and unification to physical unification of WNS, and Tms, where those things kind of come together.
And so we're excited to get to that and add in the field with <unk>.
Good early interest.
And currently the plan is to have the first live customer in the fall of this year, so pretty pretty good early adoption frankly.
Okay, Great and then.
Kind of building on that question product wise with user conference you mentioned that.
The company is kind of focused on filling in the white space between our solutions and I think yard management is one of those white spaces. I was wondering if you just give us some insights.
With some of the other white spaces might look like.
Yeah.
Obviously without getting into the specifics, which I'd get Mike risks slat by all kinds of people if I get into the specific smartphone.
A healthy amount of white space still in the supply chain execution area. So in you know still inside the four walls in the distribution center certainly the extended execution portfolio and also around the commerce space. There is frankly still a lot to be done and there is a.
Lot of change is shaping up in the in the commerce space, whereas they used to be.
Very strong powerful e-commerce platforms, such names as Websphere, Commerce, and hybris Atg and the like.
We're certainly seeing those those channels truly starting to collapse from a technology perspective, now certainly more more headless approaches to how to bringing those.
Physical physical the physical stores and e-commerce stores.
Together.
Of course, where we are right in the middle of all of that so a lot of opportunities still in front of us and a lot of places for us deploy our 1000 plus.
Research and development engineers.
Great. Thanks, that's all for me.
Our pleasure Mark Thank you very much for your time.
Okay.
Thank you and our final question is from Blair Abernethy with Rosenblatt Securities. Please proceed with your question.
Thanks, Great quarter gentlemen.
Yes.
Wanted to ask.
We're actually starting to see more of a macro question.
I noticed.
The EMEA region grew 29% this quarter seems to be doing fairly well and what I perceive as a slightly more difficult macro environment. There I'm. Just wondering if you can give us your sense of how the geographies are looking comparably and maybe maybe back to sort of at the beginning of this year. When you set your guide.
For 2023.
We are we are we trending about the same general you from your perspective or things getting worse or better.
About the same from a geographic performance perspective, there are a couple of spots I don't want to overstate them because.
Yes.
But they have moved on.
It'll be the U K is frankly pretty flat, we had thought that might be a little more supply chain expansion as a function of Brexit.
The movement of goods across borders not being quite so quite so straightforward. So that's a little flatter than maybe than we than we expected, we thought China might might bounce back a little faster.
Particularly on the luxury side of the world.
They didn't have so there are a couple of spots that deviated from our original plan, but as part of the reason we have.
Our multi geography business here. So we can absorb those ups and downs and again I don't want to make a big deal of either of those I'm just giving you a couple of examples sure. There's a few things that are moving moved around on us a little bit we put what we thought was a perfect plan together and guess what it changed its changed along the way I guess is it.
Will change just a little bit even between now and the end of the year probably.
Okay, great. Thanks, Eddie and then just back on the product side for a moment.
Your.
Commentary and some of the things you were talking about at the momentum.
What would you say sitting back here.
With a crystal ball, what do you think are going to be the most impactful areas for Manhattan associates with led.
Leveraging some of this new technology.
Well look.
Obviously, we've got a market leading position with next generation warehouse management.
And I think that the continued need for distribution.
Advanced distribution capability is going to continue for as far as we can as far as we can see.
Our order management suite of solutions as market leading as.
As well.
Certainly this the continued evolution of the commerce side of the world, bringing together transportation management warehouse management inventory management Commerce solutions and a unified suite of solutions has a great deal of promise and upside for US. If you were to ask me what.
Scott.
The greatest CAGR opportunity it would be at point of sale solution simply because we are so early to the game.
In a market that is being disrupted so maybe.
If the question is where do we maybe get the most the single most.
Leverage it may be there because the potential for CAGR is greatest.
Great great. Thanks, very much guys.
Our pleasure Blair. Thank you.
Okay.
Thank you.
And with that this concludes our question and answer session I would like to turn the floor back over to CEO and President Eddie Capel for closing comments.
Terrific. Thank you Camilo.
Just say thank you very much for your time your support and your diligence.
We would appreciate getting on these calls and sharing our results and listening to the feedback and we look forward to doing the same again about 90 days from Mac. Thanks, a lot bye bye.
Thank you. This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.
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Okay.
Yeah.
Hum.
Uh-huh.
Okay.
[music].
Uh-huh.
Okay.
[music].
Okay.
Okay.
Okay.
Hum.
Okay.
Okay.
Yeah.
Okay.
Okay.
Hum.
Yeah.
Uh-huh.
Hmm.
Mhm.
Hum.
Oh.
Hum.
Hmm.
Okay.
Hum.
Hum.
[music].