Manhattan Associates Q4 2025 Manhattan Associates Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Manhattan Associates Inc Earnings Call
Operator: Good afternoon. My name is Julian, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Manhattan Associates Q4 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. I would like to ask a question. If you'd like to ask a question during this question and answer period, simply press star, then one on your telephone keypad. If you'd like to withdraw your question, press star and then the number two. As a reminder, ladies and gentlemen, this call is being recorded today, 27 January 2026. I would now like to introduce you to our host, Mr. Michael Bauer, Head of Investor Relations of Manhattan Associates. Mr. Bauer, you may begin your conference.
Operator: Good afternoon. My name is Julian, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Manhattan Associates Q4 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. I would like to ask a question. If you'd like to ask a question during this question and answer period, simply press star, then one on your telephone keypad. If you'd like to withdraw your question, press star and then the number two. As a reminder, ladies and gentlemen, this call is being recorded today, 27 January 2026. I would now like to introduce you to our host, Mr. Michael Bauer, Head of Investor Relations of Manhattan Associates. Mr. Bauer, you may begin your conference.
Speaker #1: Good afternoon. My name is Julian, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates Q4 2025 earnings conference call.
Speaker #1: All lines have been placed on mute to prevent any background noise. After the speakers are marked, there will be a question-and-answer period. I would like to ask everyone—I would like to ask a question.
Speaker #1: If you'd like to ask a question during this question-and-answer period, simply press star, then one, on your telephone keypad. If you would like to withdraw your question, press star, and then the number two.
Speaker #1: As a reminder, ladies and gentlemen, this call is being recorded today, January 27th, 2026. I would now like to introduce you to our host, Mr. Michael Bauer.
Speaker #1: Head of Investor Relations of Manhattan Associates, Mr. Bauer, you may begin your remarks.
Speaker #2: Great, thanks, Julian, and good afternoon, everyone. Welcome to Manhattan Associates' 2025 fourth quarter earnings call. I will review our cautionary language and then, Executive Officer Eric, turn the call over to our President and Chief, Clark.
Michael Bauer: Great. Thanks, Julian, and good afternoon, everyone. Welcome to Manhattan Associates' 2025 Q4 Earnings Call. I will review our cautionary language and then turn the call over to our President and Chief Executive Officer, Eric Clark. During this call, including the Q&A session, we may make forward-looking statements regarding the future events or Manhattan Associates' future financial performance. We caution you that these forward-looking statements involve risk and uncertainties, are not guarantees of future performance, and actual results may differ materially from the projections contained in our forward-looking statements. I refer you to Manhattan Associates' SEC reports 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 2024, and the risk factor discussion in that report and any risk factor updates we provide in our subsequent Form 10-Qs.
Michael Bauer: Great. Thanks, Julian, and good afternoon, everyone. Welcome to Manhattan Associates' 2025 Q4 Earnings Call. I will review our cautionary language and then turn the call over to our President and Chief Executive Officer, Eric Clark. During this call, including the Q&A session, we may make forward-looking statements regarding the future events or Manhattan Associates' future financial performance. We caution you that these forward-looking statements involve risk and uncertainties, are not guarantees of future performance, and actual results may differ materially from the projections contained in our forward-looking statements. I refer you to Manhattan Associates' SEC reports 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 2024, and the risk factor discussion in that report and any risk factor updates we provide in our subsequent Form 10-Qs.
Speaker #2: During this call, including the Q&A session, we may make forward-looking statements regarding future events or Manhattan Associates. We caution you that these forward-looking statements involve Manhattan Associates' future financial performance.
Speaker #2: Risks and uncertainties are not guarantees of future performance. We and actual results may differ materially from the projections contained in our forward-looking statements. I refer you to Manhattan Associates' SEC reports 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 2024, and the risk factor discussion in that report, and any risk factor updates we provide in subsequent Form 10-Qs.
Speaker #2: Please note that the turbulent global macro environment could impact our 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 clarity.
Michael Bauer: Please note that the turbulent global macro environment could impact our performance 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 filed with the SEC earlier today and on our website at manh.com. Now, I'll turn the call over to Eric.
Please note that the turbulent global macro environment could impact our performance 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 filed with the SEC earlier today and on our website at manh.com. Now, I'll turn the call over to Eric.
Speaker #1: School 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 filed with the SEC earlier today and on our website at .
Speaker #1: Rules . You'll find reconciliation schedules in the form 8-K . We filed with the SEC earlier today . And on our website at a .
Eric Clark: Thank you, Mike. Good afternoon, everyone, and thank you for joining us as we review our better than expected Q4 and full year 2025 results, as well as provide our outlook for 2026. 2025 was a successful year for Manhattan, and we ended the year strong, achieving record cloud bookings in the Q4. . . . In a volatile environment, Manhattan achieved annual records across RPO, cloud bookings, total revenue, operating income, free cash flow, and earnings per share. Recall back in April, on my first earnings call, I highlighted how Manhattan's strengths are well established as our platform, our products, and our people are recognized as world-class. Through strategic investments, we've strengthened each of these areas in 2025, positioning us to accelerate our momentum in 2026 and beyond. So let me briefly touch on each.
Eric Clark: Thank you, Mike. Good afternoon, everyone, and thank you for joining us as we review our better than expected Q4 and full year 2025 results, as well as provide our outlook for 2026. 2025 was a successful year for Manhattan, and we ended the year strong, achieving record cloud bookings in the Q4. . . . In a volatile environment, Manhattan achieved annual records across RPO, cloud bookings, total revenue, operating income, free cash flow, and earnings per share. Recall back in April, on my first earnings call, I highlighted how Manhattan's strengths are well established as our platform, our products, and our people are recognized as world-class. Through strategic investments, we've strengthened each of these areas in 2025, positioning us to accelerate our momentum in 2026 and beyond. So let me briefly touch on each.
Speaker #1: I'll come. Now, I'll turn the call over to Eric.
Speaker #2: Good Thank you . Mike . afternoon , everyone , and thank you for joining us . As we review our better than fourth quarter and expected full year 2025 results , as well as provide our outlook for 2026 , 2025 , was a successful year Manhattan , for and we year strong , achieving record cloud bookings in the fourth quarter volatile in a environment , Manhattan achieved annual records across RPO cloud bookings .
Speaker #2: Total revenue , operating income , free cash flow and earnings per share . Recall back in April my first earnings call , I highlighted on how Manhattan strengths are well We've through people class platform .
Speaker #2: Investments recognized in these areas strengthened each in 2025, positioning us to accelerate our momentum in 2026 and beyond. So let me briefly touch on each.
Eric Clark: In 2025, we extended our position as the leading innovator within the supply chain commerce universe and enabled faster implementation of our industry-leading solutions. While I will provide a more detailed platform and product update in a few minutes, I'm excited to say that several weeks ago, on the heels of a successful early access program, we announced the commercial availability of our initial set of AI agents and our agent foundry, which is our offering that enables customers to build or customize new agents directly in the Active platform using natural language. Excitingly, results and feedback from our early adopters indicate that our AI agent workforce generates significant value, as increased automation and simplicity can drive higher productivity, ROI, and improve customer satisfaction.
In 2025, we extended our position as the leading innovator within the supply chain commerce universe and enabled faster implementation of our industry-leading solutions. While I will provide a more detailed platform and product update in a few minutes, I'm excited to say that several weeks ago, on the heels of a successful early access program, we announced the commercial availability of our initial set of AI agents and our agent foundry, which is our offering that enables customers to build or customize new agents directly in the Active platform using natural language. Excitingly, results and feedback from our early adopters indicate that our AI agent workforce generates significant value, as increased automation and simplicity can drive higher productivity, ROI, and improve customer satisfaction.
Speaker #2: In 2025, we extended our position as the innovator leading within the supply chain commerce and universe, enabled faster implementation of our industry-leading solutions.
Speaker #2: While I will provide a more detailed platform and update in product a few minutes , I'm excited to say that several weeks heels ago , on the of a successful Early Access program , we announced the commercial availability of our initial set of AI agents and agent our foundry , which is our offering that enables to build to customers build , or customize new agents directly in the active platform using natural language .
Speaker #2: Excitingly, results and feedback from our early adopters indicate that our AI agent generates significant workforce value, as increased automation and simplicity can drive higher productivity.
Eric Clark: In 2025, our R&D team launched additional new offerings, including Enterprise Promise and Fulfill, which is designed to optimize B2B order promising and fulfillment, as well as introduced numerous industry-leading features and functionality across our supply chain commerce solutions. On the people front, to improve our effectiveness and accelerate our selling velocity to both new and existing customers, in 2025, we made key hires and introduced several new programs within our sales and marketing organization. To briefly recap, we reorganized our entire global sales team under the leadership of our chief sales officer, Bob Howell, and added several new sales leaders and product specialists to the team. Additionally, we hired Greg Betts as our chief operating officer, and under his leadership, we have introduced several new programs to drive growth.
In 2025, our R&D team launched additional new offerings, including Enterprise Promise and Fulfill, which is designed to optimize B2B order promising and fulfillment, as well as introduced numerous industry-leading features and functionality across our supply chain commerce solutions. On the people front, to improve our effectiveness and accelerate our selling velocity to both new and existing customers, in 2025, we made key hires and introduced several new programs within our sales and marketing organization. To briefly recap, we reorganized our entire global sales team under the leadership of our chief sales officer, Bob Howell, and added several new sales leaders and product specialists to the team. Additionally, we hired Greg Betts as our chief operating officer, and under his leadership, we have introduced several new programs to drive growth.
Speaker #2: ROI , and improved customer satisfaction . In 2025 , our R&D team launched additional new offerings , including Enterprise Promise and Fulfill , which is designed to optimize B2B order , promising and fulfillment , as well as introduced numerous industry features and leading functionality our across supply chain .
Speaker #2: Commerce solutions . On the people front , to improve our effectiveness and accelerate our velocity to both selling existing new and customers . In 2025 , we key made hires and introduced programs several new within our sales and marketing to organization briefly recap , we reorganized our global sales team under the of our leadership Chief Sales Officer , Bob Howell , added several and new sales leaders and product specialists to the team .
Eric Clark: Last week, at our sales kickoff in Atlanta, we hosted a partner day that was attended by more than 100 people from across our partner community. Greg and his team introduced our updated partner program for global SIs, Manhattan specialists, as well as technology partners like Google and Shopify. A few weeks ago, we announced the hiring of Katie Foote as Chief Marketing Officer. Katie brings more than 20 years of marketing leadership for technology companies. Most recently, she was the CMO at CaptivateIQ, and prior to that, she held several leadership roles at Salesforce.com. I'm excited to say that Katie hit the ground running and spent her first week with Manhattan at NRF in New York. We're delighted to have her on the team. Now, pivoting to quarterly results. Q4 was a record quarter that exceeded expectations.
Last week, at our sales kickoff in Atlanta, we hosted a partner day that was attended by more than 100 people from across our partner community. Greg and his team introduced our updated partner program for global SIs, Manhattan specialists, as well as technology partners like Google and Shopify. A few weeks ago, we announced the hiring of Katie Foote as Chief Marketing Officer. Katie brings more than 20 years of marketing leadership for technology companies. Most recently, she was the CMO at CaptivateIQ, and prior to that, she held several leadership roles at Salesforce.com. I'm excited to say that Katie hit the ground running and spent her first week with Manhattan at NRF in New York. We're delighted to have her on the team. Now, pivoting to quarterly results. Q4 was a record quarter that exceeded expectations.
Speaker #2: Additionally, we have Gregg Betts as our Chief Operating Officer, hired, and under his leadership, we have several programs to drive new growth.
Speaker #2: Last week at our sales kickoff in Atlanta, we hosted a partner day that was attended by more than 100 people from across the community.
Speaker #2: CIS Global and Shopify our partner weeks ago , partners like well as Greg and his team program for updated we introduced . And a few partner specialists , as our of Katie announced the Foote as Chief Marketing officer .
Speaker #2: Katie brings more than 20 years of leadership in marketing technology companies. Most recently, she was the CMO at Captivate, and prior to that, she held leadership roles at Salesforce.com.
Speaker #2: I'm excited to say that Katie hit the ground running, spending her first week with Manhattan at NRF in New York. We're delighted to have her on the team now, as we pivot to quarterly results.
Eric Clark: Revenue increased 6% to $270 million, highlighted by 20% growth in cloud and a return to growth in services. This resulted in adjusted earnings per diluted share increasing to $1.21. RPO increased 25% to $2.2 billion. In Q4, competitive win rates remained over 70%, and more than 75% of our new cloud bookings were generated from net new logos. For the full year, our team did a fantastic job gaining market share, as new logos represented more than 55% of our 2025 new cloud bookings. With our growing opportunity for expansion from existing customers, we anticipate net new logos to revert to 1/3 of our new cloud bookings over time. Manhattan has always had strong cloud revenue visibility, and that gives us confidence in the durability of our growth.
Revenue increased 6% to $270 million, highlighted by 20% growth in cloud and a return to growth in services. This resulted in adjusted earnings per diluted share increasing to $1.21. RPO increased 25% to $2.2 billion. In Q4, competitive win rates remained over 70%, and more than 75% of our new cloud bookings were generated from net new logos. For the full year, our team did a fantastic job gaining market share, as new logos represented more than 55% of our 2025 new cloud bookings. With our growing opportunity for expansion from existing customers, we anticipate net new logos to revert to 1/3 of our new cloud bookings over time. Manhattan has always had strong cloud revenue visibility, and that gives us confidence in the durability of our growth.
Speaker #2: Quarter Q4 was a quarter that exceeded expectations. Revenue increased 6% to $270 million, highlighted by 20% growth in cloud and a return to growth in services.
Speaker #2: This resulted in adjusted earnings per diluted share increasing to $1.21. RPO increased 25% to $2.2 billion in Q4, competitive win rates remained over 70%, and more than 75% of our new cloud were from net new generated logos.
Speaker #2: The full team did a fantastic job gaining market share this year, as new logos represented more than 55% of our 2025 new cloud bookings.
Speaker #2: Growing with our opportunity for expansion from existing customers, we anticipate net new logos to be one third of our new revert to bookings over time, cloud.
Eric Clark: To better assist investors' assessment of our business, today, Dennis will provide additional color on renewals and annual recurring revenue. Many of our contracts will reach or approach full ramp pricing by the fourth year of subscription. So to better showcase this dynamic, we're introducing a four-year annualized value of recurring revenue or a ramped ARR. This ramped ARR, alongside RPO, will help investors quantify the pace of our cloud revenue growth over time. At the conclusion of 2025, our ramped ARR exceeded $600 million and was up 23% compared to the ramped ARR at the conclusion of 2024. From a vertical sales perspective, our end markets are diverse, and we have healthy, established footprints across numerous subsectors, which include retail, grocery, food distribution, life sciences, industrial, technology, airlines, third-party logistics, and more.
To better assist investors' assessment of our business, today, Dennis will provide additional color on renewals and annual recurring revenue. Many of our contracts will reach or approach full ramp pricing by the fourth year of subscription. So to better showcase this dynamic, we're introducing a four-year annualized value of recurring revenue or a ramped ARR. This ramped ARR, alongside RPO, will help investors quantify the pace of our cloud revenue growth over time. At the conclusion of 2025, our ramped ARR exceeded $600 million and was up 23% compared to the ramped ARR at the conclusion of 2024. From a vertical sales perspective, our end markets are diverse, and we have healthy, established footprints across numerous subsectors, which include retail, grocery, food distribution, life sciences, industrial, technology, airlines, third-party logistics, and more.
Speaker #2: We’ve always had strong revenue visibility, and that gives us confidence in the durability of our growth to better assist investors’ assessment of the business. Today, Dennis will provide additional color on renewals and on our annual recurring revenue.
Speaker #2: Many of our contracts will reach or approach full ramp pricing by the fourth year of subscription. So, to better showcase this dynamic, we're introducing a four-year annualized value of recurring revenue for a ramped ARR. This ramped ARR alongside RPO will help investors quantify the pace of our cloud revenue growth over time.
Speaker #2: At the conclusion of 2025, our ramped RR exceeded $600 million and was up 23% compared to the ramped RR at the conclusion of 2024.
Speaker #2: From a vertical sales perspective , our end markets are healthy , we have diverse and established footprints across numerous subsectors , which include retail , grocery , food distribution , life sciences , industrial technology , airlines , third party logistics and more .
Eric Clark: For example, Q4 deals included the following: A Fortune 100 home improvement company became a new logo Active Warehouse customer. An upscale department store chain became a new logo Active Omni and Active Warehouse customer. The largest global provider of medical surgical products became a new logo Active Warehouse customer. A lifestyle brand and omnichannel retailer of premium home furnishings that was an existing warehouse customer expanded to include Active Omni. A medical supplies, equipment, and services company became a new logo Active Supply Chain Planning customer. A home furnishing wholesaler became a new logo Active Transportation and Active Warehouse customer, and many more as well. So looking out to the new year, our pipeline remains strong across our product suite, and we have numerous opportunities to drive growth, including adding new customers, cross-selling our growing unified product portfolio, and converting our on-premise customers to the cloud....
For example, Q4 deals included the following: A Fortune 100 home improvement company became a new logo Active Warehouse customer. An upscale department store chain became a new logo Active Omni and Active Warehouse customer. The largest global provider of medical surgical products became a new logo Active Warehouse customer. A lifestyle brand and omnichannel retailer of premium home furnishings that was an existing warehouse customer expanded to include Active Omni. A medical supplies, equipment, and services company became a new logo Active Supply Chain Planning customer. A home furnishing wholesaler became a new logo Active Transportation and Active Warehouse customer, and many more as well. So looking out to the new year, our pipeline remains strong across our product suite, and we have numerous opportunities to drive growth, including adding new customers, cross-selling our growing unified product portfolio, and converting our on-premise customers to the cloud....
Speaker #2: For example, Q4 deals included the following: a Fortune 100 home improvement company became a new logo, active warehouse customer; an upscale department store became a chain new logo.
Speaker #2: Active Omni and Active Warehouse customer . The largest global provider of medical surgical became a new logo . Active Warehouse customer a lifestyle brand and omnichannel retailer of premium home furnishings that was an existing warehouse customer expanded to include active Omni , a medical supplies , equipment and services company , became a new logo .
Speaker #2: Active supply chain planning , customer , a furnishing wholesaler , became a new logo , active transportation and active warehouse customer , and many as more well .
Speaker #2: So looking out to the new year , our pipeline remains strong across our product suite and we have numerous opportunities to drive growth , including adding new customers our , cross-selling growing unified product portfolio , and converting our on premise customers to the cloud , and renewing our initial sizable cohort of active warehouse customers .
Eric Clark: and renewing our initial sizable cohort of Active Warehouse customers. So now let me briefly provide some updates on our industry-leading products. As I stated early, earlier, we recently made our Agentic AI product set commercially available to our entire Active customer community. Our Active offering consists of two primary elements, a set of base agents that are ready to be activated immediately, and our agent foundry offering, which enables our customers to quickly build and deploy their own agents within the Active platform. We designed our base AI agents in collaboration with a set of key customers to provide immediate valuable value to our customers by solving important day-to-day problems in areas like warehouse, transportation, contact center, and stores. Because we built our Active Agents directly into the platform, our customers don't need to implement costly and complex external data lakes to make them work.
and renewing our initial sizable cohort of Active Warehouse customers. So now let me briefly provide some updates on our industry-leading products. As I stated early, earlier, we recently made our Agentic AI product set commercially available to our entire Active customer community. Our Active offering consists of two primary elements, a set of base agents that are ready to be activated immediately, and our agent foundry offering, which enables our customers to quickly build and deploy their own agents within the Active platform. We designed our base AI agents in collaboration with a set of key customers to provide immediate valuable value to our customers by solving important day-to-day problems in areas like warehouse, transportation, contact center, and stores. Because we built our Active Agents directly into the platform, our customers don't need to implement costly and complex external data lakes to make them work.
Speaker #2: So now , let me briefly provide some updates on our industry leading products . As I stated early , earlier , we recently made our Agentic AI product set commercially available to our entire active customer community active .
Speaker #2: A set of agents ready to be agented, our set consists of two primary elements that are activated immediately: our base and Agent Foundry offering, which enables our customers to quickly build and deploy their own agents within the active platform.
Speaker #2: We our designed AI agents in collaboration with a set of key customers to provide immediate , valuable value to our customers by solving important day to day problems in areas like warehouse transportation center , contact and stores .
Speaker #2: Because we built our active agents directly into the platform, our customers don't need to implement costly and complex external data lakes to make them work.
Eric Clark: Our API-first architecture enables us to solve a growing list of high-impact problems with almost no configuration or additional upfront effort. While our Active Agents are highly capable today, we have an aggressive product roadmap, which will both enhance our existing agents with new features and deliver entirely new agents. Our agile software delivery process enables us to deliver these additional agentic features on an incremental basis throughout 2026. In addition to these base agents, this month, we also released our Agent Foundry. This intuitive tool enables our customers to build their own AI agents. Foundry provides a visual editor to allow customers to either start with an existing base agent and enhance it, or to create an agent entirely from scratch. To achieve this, Foundry provides our customers with a comprehensive set of both base API and agentic tooling.
Our API-first architecture enables us to solve a growing list of high-impact problems with almost no configuration or additional upfront effort. While our Active Agents are highly capable today, we have an aggressive product roadmap, which will both enhance our existing agents with new features and deliver entirely new agents. Our agile software delivery process enables us to deliver these additional agentic features on an incremental basis throughout 2026. In addition to these base agents, this month, we also released our Agent Foundry. This intuitive tool enables our customers to build their own AI agents. Foundry provides a visual editor to allow customers to either start with an existing base agent and enhance it, or to create an agent entirely from scratch. To achieve this, Foundry provides our customers with a comprehensive set of both base API and agentic tooling.
Speaker #2: Our API enables first architecture us to solve a list of growing, high-impact problems, with almost no configuration or additional upfront effort.
Speaker #2: And while our active agents are highly capable, today, we have an aggressive product roadmap which will both enhance our existing agents with new features and deliver entirely new agents.
Speaker #2: Agile, our software delivery process enables us to deliver these additional agentic features on an incremental basis throughout 2026. In addition to these base features this month, we also released our Agent Foundry.
Speaker #2: This intuitive tool enables our customers to build their own AI agents. Foundry provides a visual editor to allow customers to either start with an existing agent and enhance it, or to create an entirely new agent from scratch.
Speaker #2: To achieve this , foundry provides our customers with a comprehensive set of both base API and Agentic tooling , and during our Early Access program this fall , our forward deployed engineers use foundry to enable our customers to create powerful new agents purpose built to tackle specific operational challenges in terms of commercialization , to make it easy for our our goal is customers to start their journey with us , and we're going to do that by offering a low risk active agent pilot to get started .
Eric Clark: And during our early access program this fall, our forward-deployed engineers used Foundry to enable our customers to create powerful new agents, purpose-built to tackle specific operational challenges. In terms of commercialization, our goal is to make it easy for our customers to start their agentic journey with us, and we're going to do that by offering a low-risk Active Agent pilot to get started. We're confident that the combination of our powerful base agents, the flexibility provided by Foundry, and the deep technical and domain expertise of our Manhattan forward-deployed engineers will provide a compelling reason for our customers to add an Active Agent subscription after they complete their pilot. Our Active Agents made their public debut a few weeks ago at NRF, where there was interest, strong interest for these new AI capabilities and our Active Store offering, which is centered around our Active point-of-sale application.
And during our early access program this fall, our forward-deployed engineers used Foundry to enable our customers to create powerful new agents, purpose-built to tackle specific operational challenges. In terms of commercialization, our goal is to make it easy for our customers to start their agentic journey with us, and we're going to do that by offering a low-risk Active Agent pilot to get started. We're confident that the combination of our powerful base agents, the flexibility provided by Foundry, and the deep technical and domain expertise of our Manhattan forward-deployed engineers will provide a compelling reason for our customers to add an Active Agent subscription after they complete their pilot. Our Active Agents made their public debut a few weeks ago at NRF, where there was interest, strong interest for these new AI capabilities and our Active Store offering, which is centered around our Active point-of-sale application.
Speaker #2: We're confident that the combination of our powerful base agents, the flexibility provided by Foundry, and the deep and technical domain expertise of our Manhattan forward deployed engineers will provide a compelling reason for our customers to add an active agent subscription after they complete their pilot.
Speaker #2: Our active made their agents public debut a few weeks ago at NRF , where there was interest , strong interest for these new AI capabilities and our active store offering , which is centered around our active point of sale application designed from the outset to be mobile first and cloud native , active point of sale now also embeds a genetic AI to help store associates become more effective sellers with real time insights into sales performance ability to and the understand what selling well across the our network , store associate agent provides prescriptive recommendations within the point of sale application .
Eric Clark: Designed from the outset to be mobile-first and cloud-native, Active Point-of-Sale now also embeds agentic AI to help store associates become more effective sellers. With real-time insights into sales performance and the ability to understand what's selling well across the network, our store associate agent provides prescriptive recommendations within the point-of-sale application. Because many of our Active Store customers also use our Active OMS, these selling insights and recommendations are informed by a truly unified view of our customers' commerce activity. Speaking of order management, this quarter, we are also releasing a powerful new fulfillment optimization simulation capability. Our customers can now experiment with a variety of optimization settings to ensure they're meeting the overall needs of their business at any given time. Many of our customers change their view of what optimal fulfillment means throughout the course of the year.
Designed from the outset to be mobile-first and cloud-native, Active Point-of-Sale now also embeds agentic AI to help store associates become more effective sellers. With real-time insights into sales performance and the ability to understand what's selling well across the network, our store associate agent provides prescriptive recommendations within the point-of-sale application. Because many of our Active Store customers also use our Active OMS, these selling insights and recommendations are informed by a truly unified view of our customers' commerce activity. Speaking of order management, this quarter, we are also releasing a powerful new fulfillment optimization simulation capability. Our customers can now experiment with a variety of optimization settings to ensure they're meeting the overall needs of their business at any given time. Many of our customers change their view of what optimal fulfillment means throughout the course of the year.
Speaker #2: many of Because our active store customers also use our active OMS for selling insights and recommendations are in by a this quarter . Speaking , we truly are commerce of order , our view of activity also releasing a customers powerful new fulfillment optimization simulation capability .
Speaker #2: Our customers can now experiment with a variety of optimization settings to ensure they're meeting the overall needs of their business at any given time.
Eric Clark: During the holiday season, speed of delivery may predominate, while at the end of the spring season, there's likely more emphasis on shipping distressed inventory to avoid markdowns. Our new simulation feature enables our customers to test a number of these strategies, compare the outcomes, and ensure the system is ready to pivot fulfillment strategies when the business calls for it. Like interactive inventory, we project fulfillment simulation to have strong cross-sell potential for our Active Omni customers. And finally, we continue to experience strong sales and implementation results across our supply chain execution applications. Our Active Warehouse application continues to differentiate itself, both its functional and technical superiority. During selection processes, the vast majority of prospects reach the conclusion that only Manhattan's Active Warehouse application will meet their needs.
During the holiday season, speed of delivery may predominate, while at the end of the spring season, there's likely more emphasis on shipping distressed inventory to avoid markdowns. Our new simulation feature enables our customers to test a number of these strategies, compare the outcomes, and ensure the system is ready to pivot fulfillment strategies when the business calls for it. Like interactive inventory, we project fulfillment simulation to have strong cross-sell potential for our Active Omni customers. And finally, we continue to experience strong sales and implementation results across our supply chain execution applications. Our Active Warehouse application continues to differentiate itself, both its functional and technical superiority. During selection processes, the vast majority of prospects reach the conclusion that only Manhattan's Active Warehouse application will meet their needs.
Speaker #2: Many of our customers change their view of what optimal fulfillment means throughout the course of the year . During the holiday season , speed of delivery may predominate , while at the end of the spring season , there's likely more emphasis on shipping distressed inventory to avoid markdowns .
Speaker #2: Our new simulation feature enables our customers to test a number of these strategies, compare the outcomes, and ensure the system is ready to pivot.
Speaker #2: Fulfillment strategies when the business calls for it. Like interactive inventory, we project fulfillment simulation to have strong cross-sell potential for our active omni customers.
Speaker #2: finally , we And continue to experience strong sales and implementation results across our supply chain . Execution applications . Our active warehouse application continues to differentiate itself .
Speaker #2: Both its functional and technical superiority during selection processes—the vast majority of prospects reach the conclusion that only Manhattan's Active Warehouse application will meet their needs. In 2025, it was also a strong year for our Active Transportation application.
Eric Clark: 2025 was also a strong year for our Active Transportation application with respect to both strategic wins and key go-lives around the globe. Our unification message continues to resonate. Customers no longer want to select separate stacks for warehouse and transportation. They see the real power of a single platform optimizing inbound and outbound flow throughout their supply chain. So that concludes my business update. I'll now turn it over to Dennis to report on our financial performance and outlook, and then we'll move on to Q&A. So, Dennis?
2025 was also a strong year for our Active Transportation application with respect to both strategic wins and key go-lives around the globe. Our unification message continues to resonate. Customers no longer want to select separate stacks for warehouse and transportation. They see the real power of a single platform optimizing inbound and outbound flow throughout their supply chain. So that concludes my business update. I'll now turn it over to Dennis to report on our financial performance and outlook, and then we'll move on to Q&A. So, Dennis?
Speaker #2: respect to both With strategic wins and key go lives around the globe , our unification message continues to resonate . Customers no longer want to select separate stacks for warehouse and transportation .
Speaker #2: They see the real power of a single platform, optimizing inbound and outbound flow throughout their supply chain. So that concludes my business update.
Dennis Story: Thanks. Thank you, Eric. As Eric highlighted, in 2025, we set records across bookings, our P&L, and cash flow. Congratulations to our team members around the globe for great execution in a volatile macro environment. I'll start by recapping our better-than-expected financial performance for the quarter and year. All growth rates are on an as-reported, year-over-year basis, unless otherwise stated. Regarding FX, it was a 1-point tailwind to our Q4 revenue growth rate and did not have a material impact on our full-year revenue growth rate. For RPO, FX was less than a $1 million tailwind to sequential RPO growth and a $41 million tailwind to year-over-year RPO growth.... As Eric highlighted, to better assist investors' assessment of our business today, we are providing additional color on renewals and annual recurring revenue, ARR.
Dennis Story: Thanks. Thank you, Eric. As Eric highlighted, in 2025, we set records across bookings, our P&L, and cash flow. Congratulations to our team members around the globe for great execution in a volatile macro environment. I'll start by recapping our better-than-expected financial performance for the quarter and year. All growth rates are on an as-reported, year-over-year basis, unless otherwise stated. Regarding FX, it was a 1-point tailwind to our Q4 revenue growth rate and did not have a material impact on our full-year revenue growth rate. For RPO, FX was less than a $1 million tailwind to sequential RPO growth and a $41 million tailwind to year-over-year RPO growth.... As Eric highlighted, to better assist investors' assessment of our business today, we are providing additional color on renewals and annual recurring revenue, ARR.
Speaker #2: I'll now turn it over to Dennis to report on our financial performance and outlook, and then we'll move on to Q&A. So Dennis, thanks.
Speaker #2: Thank you Eric . As Eric highlighted in 2025 , we set records across bookings . Our PNL and cash flow . Congratulations to our team members globe for around the great execution and a volatile macro environment .
Speaker #2: I'll start by recapping our better than expected financial performance for the quarter and year growth rates all are on an as reported . Year over year basis unless otherwise stated .
Speaker #2: Regarding FX, it was a one-point tailwind to our Q4 revenue growth rate and did not have a material impact on our full-year revenue growth rate for RPO.
Speaker #2: FX was less than a $1 million tailwind to sequential RPO growth and a $41 million tailwind to year over year RPO growth . As Eric highlighted , to better assist investors assessment of our business today , we providing additional are color on renewals and annual recurring revenue .
Dennis Story: Many of our contracts reach or approach full ramp pricing in the full year of the subscription agreement, and so to provide additional insight on our cloud revenue visibility, we are introducing a 4-year annualized value of recurring revenue or ramped ARR. Our assumptions for ramped ARR are as follows: If a renewal is set to occur during this 4-year period, it renews at current pricing with no churn or price increases assumed. Also, if a pricing ramp schedule extends beyond the 4-year window, which today that would be any ramps beyond 2029, that future uplift is not included. At the conclusion of 2025, our ramped ARR exceeded $600 million and was up 23% compared to the ramp period at the end of 2024.
Many of our contracts reach or approach full ramp pricing in the full year of the subscription agreement, and so to provide additional insight on our cloud revenue visibility, we are introducing a 4-year annualized value of recurring revenue or ramped ARR. Our assumptions for ramped ARR are as follows: If a renewal is set to occur during this 4-year period, it renews at current pricing with no churn or price increases assumed. Also, if a pricing ramp schedule extends beyond the 4-year window, which today that would be any ramps beyond 2029, that future uplift is not included. At the conclusion of 2025, our ramped ARR exceeded $600 million and was up 23% compared to the ramp period at the end of 2024.
Speaker #2: RR, many of our contracts reach or approach full rent pricing in the full year of the subscription agreement. And so, to additionally provide insight on our cloud revenue visibility, we are introducing a four-year annualized value of recurring revenue, or ramped RR. Our assumptions for ramped RR are as follows.
Speaker #2: If a renewal is set to occur during this four-year period, it renews at pricing with no churn current or price increases assumed.
Speaker #2: if a Also , pricing ramp schedule extends beyond the four year window , which today that would be ramps any beyond 2029 , that future uplift is not included at the conclusion of ramped our R exceeded $600 million and was up 23% compared to the ramp period at the end of 2024 .
Dennis Story: Please recall, deals that include ramp pricing are only time-based, which supports our strong cloud revenue visibility. So moving to Q4, total revenue was $270 million, up 6%, and full-year revenue totaled $1.08 billion, up 4%. Excluding license and maintenance revenue, which removes the revenue compression by our cloud transition, Q4 revenue growth was 9% and full year, 5%. Q4 cloud revenue totaled $109 million, up 20%, and includes a customer liquidation headwind of $1.3 million that was not embedded in our guidance. This resulted in full-year cloud revenue increasing 21% to $408 million.
Please recall, deals that include ramp pricing are only time-based, which supports our strong cloud revenue visibility. So moving to Q4, total revenue was $270 million, up 6%, and full-year revenue totaled $1.08 billion, up 4%. Excluding license and maintenance revenue, which removes the revenue compression by our cloud transition, Q4 revenue growth was 9% and full year, 5%. Q4 cloud revenue totaled $109 million, up 20%, and includes a customer liquidation headwind of $1.3 million that was not embedded in our guidance. This resulted in full-year cloud revenue increasing 21% to $408 million.
Speaker #2: Please recall deals that include ramp pricing are only time based , which supports our strong cloud revenue visibility . So moving to Q4 , total revenue was $270 million , up 6% , and full year revenue totaled 1.08 billion , up 4% .
Speaker #2: Excluding license and maintenance revenue, which removes the revenue compression from our cloud transition, Q4 revenue growth was 9%, and full-year growth was 5%.
Speaker #2: Q4 cloud revenue totaled $109 million , up 20% , and includes a customer headwind liquidation of That was not $1.3 million . our embedded in guidance .
Speaker #2: This resulted in full year cloud revenue increasing 21% to $408 million . As Eric stated , we achieved record cloud bookings in Q4 as we closed out 2025 with RPO of $2.2 billion growing 25% year over year , and 7% sequentially .
Dennis Story: As Eric stated, we achieved record cloud bookings in Q4 as we closed out 2025, with RPO of $2.2 billion, growing 25% year over year and 7% sequentially. Our RPO strength was driven by continued new logo momentum, which was a significant contributor to our approximately 20% growth in new cloud bookings for the year. Renewals, which does not include cross-sells, were about 18% of total bookings in 2025. Contract duration remains at 5.5 to 6 years, resulting in 38% of RPO to be recognized as revenue over the next 24 months. Q4 services revenue of $120 million was better than expected, as solid execution returned this line item back to growth earlier than our original plan.
As Eric stated, we achieved record cloud bookings in Q4 as we closed out 2025, with RPO of $2.2 billion, growing 25% year over year and 7% sequentially. Our RPO strength was driven by continued new logo momentum, which was a significant contributor to our approximately 20% growth in new cloud bookings for the year. Renewals, which does not include cross-sells, were about 18% of total bookings in 2025. Contract duration remains at 5.5 to 6 years, resulting in 38% of RPO to be recognized as revenue over the next 24 months. Q4 services revenue of $120 million was better than expected, as solid execution returned this line item back to growth earlier than our original plan.
Speaker #2: Our RPO strength was driven by continued new logo momentum, which was a significant contributor to our approximately 20% growth in new cloud bookings for the year.
Speaker #2: which Renewals , does not include cross sales , were about 18% of total bookings in 2025 . Contract duration remains at 5.5 to 6 years , resulting in 38% of RPO to be recognized as revenue over the next 24 months .
Speaker #2: Q4 services revenue of $120 million was better than expected, as solid execution returned this line item back to growth earlier than our original plan.
Dennis Story: For the full year, services revenue declined 4% to $503 million. Q4 adjusted operating profit was $91 million, with an operating margin of 33.8%. Full-year adjusted operating profit totaled $387 million, with 35.8% operating margin, and represents over 100 basis points of improvement over 2024. The better-than-the-expected Q4 and 2025 results were driven by strong cloud revenue, combined with operating leverage as our cloud business scales. Q4 earnings per share increased 3% to $1.21, and GAAP earnings per share increased 12% to $0.86. Big whopper there. This resulted in full-year adjusted earnings per share, increasing 7% to $5.06, and GAAP earnings per share to increase 3% to $3.60.
For the full year, services revenue declined 4% to $503 million. Q4 adjusted operating profit was $91 million, with an operating margin of 33.8%. Full-year adjusted operating profit totaled $387 million, with 35.8% operating margin, and represents over 100 basis points of improvement over 2024. The better-than-the-expected Q4 and 2025 results were driven by strong cloud revenue, combined with operating leverage as our cloud business scales. Q4 earnings per share increased 3% to $1.21, and GAAP earnings per share increased 12% to $0.86. Big whopper there. This resulted in full-year adjusted earnings per share, increasing 7% to $5.06, and GAAP earnings per share to increase 3% to $3.60.
Speaker #2: For the full year, services revenue declined 4% to $503 million. Q4 adjusted operating profit was $91 million, with an operating margin of 33.8%.
Speaker #2: Full year adjusted operating profit totaled $387 million , with 35.8% operating margin and represents over 100 basis points of improvement over 2024 . The better than the expected Q4 and 2025 were results by strong cloud driven revenue , combined with operating leverage .
Speaker #2: As our cloud business scales, Q4 earnings per share increased 3% to $1.21, and GAAP earnings per share increased 12% to $0.86. Big whopper there.
Speaker #2: resulted in This full year adjusted earnings per share , increasing 7% to $5.06 , and GAAP earnings per share to increase 3% to $3.60 .
Dennis Story: As discussed in Q2 and Q3, our higher tax rate is due to an increase in tax reserves caused by the acceleration of our domestic R&D cost deductions under the July fourth US tax law change. As such, this change was the predominant driver to the $15 million reduction in Q4 cash taxes and $36 million reduction in our annual cash taxes. So moving to cash. Q4 operating cash flow increased 40% to $147 million, with a 52.7% free cash flow margin and 34.4% adjusted EBITDA margin. Our full-year operating cash flow increased 32% to $389 million, with a 34.6% free cash flow margin and 36.4% adjusted EBITDA margin. Turning to the balance sheet....
As discussed in Q2 and Q3, our higher tax rate is due to an increase in tax reserves caused by the acceleration of our domestic R&D cost deductions under the July fourth US tax law change. As such, this change was the predominant driver to the $15 million reduction in Q4 cash taxes and $36 million reduction in our annual cash taxes. So moving to cash. Q4 operating cash flow increased 40% to $147 million, with a 52.7% free cash flow margin and 34.4% adjusted EBITDA margin. Our full-year operating cash flow increased 32% to $389 million, with a 34.6% free cash flow margin and 36.4% adjusted EBITDA margin. Turning to the balance sheet....
Speaker #2: As discussed in Q2 and Q3, our higher tax rate is due to an increase in tax reserves caused by the acceleration of our domestic R&D costs.
Speaker #2: under Deductions the July 4th US tax law change . As such , this change was the predominant driver to the $15 million reduction in Q4 cash taxes and $36 million reduction in our annual cash taxes .
Speaker #2: So, moving to cash—Q2 operating cash flow increased 40% to $147 million, with a 52.7% free cash flow margin and a 34.4% adjusted EBITDA margin.
Speaker #2: Full year, our operating cash flow increased 32% to $389 million, with a 34.6% free cash flow margin and a 36.4% adjusted EBITDA margin. Turning to the balance sheet.
Dennis Story: Deferred revenue increased 21% year-over-year to $337 million. We ended the year with $329 million in cash and zero debt. Accordingly, we leveraged our strong cash position and invested $75 million in share repurchases in the quarter, resulting in $275 million in buybacks in 2025. Additionally, our board has approved the replenishment of our $100 million share repurchase authority. So moving on to our 2026 guidance. Our long-term and long-standing financial objective is to deliver sustainable double-digit top-line growth and top-quartile operating margins, benchmarked against enterprise software comps. Software comps, these are drivers to our best-in-class return on invested capital as we maintain a balanced investment approach to growth and profitability. As noted on prior earnings calls, our goal is to update our RPO outlook on an annual basis.
Deferred revenue increased 21% year-over-year to $337 million. We ended the year with $329 million in cash and zero debt. Accordingly, we leveraged our strong cash position and invested $75 million in share repurchases in the quarter, resulting in $275 million in buybacks in 2025. Additionally, our board has approved the replenishment of our $100 million share repurchase authority. So moving on to our 2026 guidance. Our long-term and long-standing financial objective is to deliver sustainable double-digit top-line growth and top-quartile operating margins, benchmarked against enterprise software comps. Software comps, these are drivers to our best-in-class return on invested capital as we maintain a balanced investment approach to growth and profitability. As noted on prior earnings calls, our goal is to update our RPO outlook on an annual basis.
Speaker #2: Deferred revenue increased 21% year over year to $337 million . We ended the year with $329 million in cash and zero debt . Accordingly , we leveraged our strong cash position and invested $75 million in share repurchases in the quarter , resulting in $275 million in buybacks in 2025 .
Speaker #2: Additionally , our board has approved the replenishment of our $100 million share repurchase authority . So moving on to our 2026 guidance , long our term and long standing financial objective is to deliver sustainable double digit top line growth and top quartile operating margins benchmarked against enterprise software comps , software comps .
Speaker #2: These are drivers to in-class return on invested capital, as we maintain a balanced investment growth and approach to profitability noted on.
Dennis Story: Additionally, as previously discussed, our bookings performance is impacted by the number and relative value of large deals we close in any quarter, which can potentially cause lumpiness or nonlinear bookings throughout the year. All guidance references made on today's call will be at the midpoint of their respective ranges. So with that, for RPO, we are targeting $2.62 to 2.68 billion RPO, representing a range of 18 to 20% growth. Included in our target is an 18 to 20% contribution from renewals, which implies double-digit growth in both new bookings and renewals when normalizing for FX movements. For full year 2026, we expect total revenue of $1.133 to 1.153 billion.
Additionally, as previously discussed, our bookings performance is impacted by the number and relative value of large deals we close in any quarter, which can potentially cause lumpiness or nonlinear bookings throughout the year. All guidance references made on today's call will be at the midpoint of their respective ranges. So with that, for RPO, we are targeting $2.62 to 2.68 billion RPO, representing a range of 18 to 20% growth. Included in our target is an 18 to 20% contribution from renewals, which implies double-digit growth in both new bookings and renewals when normalizing for FX movements. For full year 2026, we expect total revenue of $1.133 to 1.153 billion.
Speaker #2: Prior, as our earnings goal update is to calls, our RPO outlook is on an annual basis. Additionally, as previously discussed, our bookings performance is impacted by the number and relative value of large deals.
Speaker #2: Closed within a quarter, any of which can potentially cause lumpiness or non-linear bookings throughout the year guidance. All references made on today's call will be at the midpoint of their respective ranges.
Speaker #2: So with that, for RPO, we are targeting $2.62 billion to $2.68 billion. RPO, representing a range of 18% to 20% growth.
Speaker #2: Included in our target is an 18 to 20% contribution from renewals , which implies double digit growth both for renewals . new FX normalizing in and When for full year 2026 , we expect total revenue of 1.133 billion to 0 .21.15 3 billion .
Dennis Story: The $1.143 billion midpoint represents 10% growth, excluding license and maintenance attrition, and 6% all in. For Q1, we are targeting $272 million to 274 million, which at the midpoint represents 10% growth, excluding license and maintenance attrition, and 4% all in. For the rest of the year, at the midpoint, we are targeting total revenue of about $287 million in Q2, $296 million in Q3, and accounting for retail peak seasonality, $287 million in Q4. For 2026 Adjusted operating margin, we expect a range of 34.5% to 35%.
The $1.143 billion midpoint represents 10% growth, excluding license and maintenance attrition, and 6% all in. For Q1, we are targeting $272 million to 274 million, which at the midpoint represents 10% growth, excluding license and maintenance attrition, and 4% all in. For the rest of the year, at the midpoint, we are targeting total revenue of about $287 million in Q2, $296 million in Q3, and accounting for retail peak seasonality, $287 million in Q4. For 2026 Adjusted operating margin, we expect a range of 34.5% to 35%.
Speaker #2: The 1.143 billion midpoint represents 10% growth excluding license and maintenance attrition , and 6% all in for Q1 . We are targeting $272 million to 274 million , which at the midpoint represents 10% growth excluding license and maintenance attrition and 4% all in for rest of the year .
Speaker #2: At the midpoint , we are targeting total revenue of about 287 million . In Q2 , 296 million in Q3 , and accounting for retail peak seasonality 287 million in Q4 .
Speaker #2: For 2026 , adjusted operating margin , we expect range of 34.5% to 35% , removing the impacts of license and maintenance attrition . The 34.75% midpoint represents about 75 Bips of margin expansion , compared to 2025 , and includes increased investment in our business , particularly in sales and marketing and expanding our services teams .
Dennis Story: Removing the impacts of license and maintenance attrition, the 34.75% midpoint represents about 75 bps of margin expansion compared to 2025, and includes increased investment in our business, particularly in sales and marketing and expanding our services teams. On a quarterly basis, at the midpoint, adjusted operating margin is expected to be about 31%. In Q1, 34.7%, in Q2, 36.9%, in Q3, and accounting for retail peak seasonality, 36.1% in Q4. This results in a full year adjusted EPS guidance range of $5.04 to 5.20, and a GAAP EPS range of $3.37 to 3.53.
Removing the impacts of license and maintenance attrition, the 34.75% midpoint represents about 75 bps of margin expansion compared to 2025, and includes increased investment in our business, particularly in sales and marketing and expanding our services teams. On a quarterly basis, at the midpoint, adjusted operating margin is expected to be about 31%. In Q1, 34.7%, in Q2, 36.9%, in Q3, and accounting for retail peak seasonality, 36.1% in Q4. This results in a full year adjusted EPS guidance range of $5.04 to 5.20, and a GAAP EPS range of $3.37 to 3.53.
Speaker #2: On a quarterly basis , at the midpoint , adjusted margin is operating expected to be about 31% in Q1 , 34.7% in Q2 , Q3 , and accounting retail peak 36.9% in for seasonality , Q4 .
Speaker #2: This 36.1% results in a full-year adjusted EPS guidance range of $5.04 to $5.20, and a GAAP EPS range of $3.37 to $3.53 for Q1.
Dennis Story: For Q1, we are targeting adjusted earnings per share of $1.08 to $1.10, and GAAP earnings per share of $0.64 to $0.66. For Q2 through Q4, we expect GAAP earnings per share to be about $0.40 lower than adjusted EPS per quarter, with the vast majority of accounting for our investment in equity-based compensation. So here are some more additional details on our 2026 outlook. We expect cloud revenue to increase 21% to $4,492 million, which assumes $114 million in Q1, $121.5 million in Q2, $126 million in Q3, and $130.5 million in Q4.
For Q1, we are targeting adjusted earnings per share of $1.08 to $1.10, and GAAP earnings per share of $0.64 to $0.66. For Q2 through Q4, we expect GAAP earnings per share to be about $0.40 lower than adjusted EPS per quarter, with the vast majority of accounting for our investment in equity-based compensation. So here are some more additional details on our 2026 outlook. We expect cloud revenue to increase 21% to $4,492 million, which assumes $114 million in Q1, $121.5 million in Q2, $126 million in Q3, and $130.5 million in Q4.
Speaker #2: We are targeting adjusted earnings per share of $1.08 to $1.10, and GAAP earnings per share of $0.64 to $0.66 for Q2 through Q4.
Speaker #2: We expect GAAP earnings per share to be about $0.40 lower than adjusted EPS per quarter, with the vast majority of that difference accounting for our investment in equity-based compensation.
Speaker #2: are So here some more additional details on our 2026 outlook . We cloud revenue to expect increase 21% to $4,492 million , which assumes $114 million in Q1 , 121.5 million in Q2 , 126 million in Q3 , and 130.5 million in Q4 .
Dennis Story: We expect services revenue to increase 3% to $517 million, which assumes $124 million in Q1, $131.5 million in Q2, $137 million in Q3, and, accounting for retail peak seasonality, $124 million in Q4. On attrition to cloud, we expect maintenance and license to represent about 4-point headwind to total revenue growth in 2026. As such, we expect maintenance to decline 19% to $105.5 million, which assumes $28 million in Q1, $27 million in Q2, $25.5 million in Q3, and $25 million in Q4. We expect license to be about $1 million per quarter and hardware to be between $6 million and $6.5 million per quarter.
We expect services revenue to increase 3% to $517 million, which assumes $124 million in Q1, $131.5 million in Q2, $137 million in Q3, and, accounting for retail peak seasonality, $124 million in Q4. On attrition to cloud, we expect maintenance and license to represent about 4-point headwind to total revenue growth in 2026. As such, we expect maintenance to decline 19% to $105.5 million, which assumes $28 million in Q1, $27 million in Q2, $25.5 million in Q3, and $25 million in Q4. We expect license to be about $1 million per quarter and hardware to be between $6 million and $6.5 million per quarter.
Speaker #2: We expect services revenue to increase 3% to $517 million , which assumes $124 million in Q1 , 131.5 million in Q2 , Q3 137 million in , and accounting for retail peak seasonality 124 million in Q4 .
Speaker #2: On attrition to cloud , we expect maintenance and license to represent about 4.4% headwind to total revenue growth in 2026 . As such , we expect maintenance to decline 19% to 105.5 million , which assumes 28 million in Q1 , 27 million in Q2 , 25.5 million in Q3 , and 25 million in Q4 .
Speaker #2: We expect license to be about $1 million per quarter, and hardware to be between $600,000 and a half million per quarter.
Dennis Story: To support our strong bookings growth and the significant Agentic AI opportunity, we have already onboarded about 100 new services associates in January, and we anticipate these new hires, coupled with license and maintenance attrition, will result in consolidated subscription, maintenance, and services margin to be flat as reported compared to 2025. On a quarterly basis, we expect consolidated subscription, maintenance, and services margin to be about 57% in Q1, 59% in Q2, 60% in Q3, and, accounting for retail peak seasonality, 60% in Q4. Removing the impacts of license and maintenance attrition, our target implies 50 basis points of year-over-year improvement, and we expect our effective tax rate to be 22% and our diluted share count to be 61 million shares, which assumes no buyback activity.
To support our strong bookings growth and the significant Agentic AI opportunity, we have already onboarded about 100 new services associates in January, and we anticipate these new hires, coupled with license and maintenance attrition, will result in consolidated subscription, maintenance, and services margin to be flat as reported compared to 2025. On a quarterly basis, we expect consolidated subscription, maintenance, and services margin to be about 57% in Q1, 59% in Q2, 60% in Q3, and, accounting for retail peak seasonality, 60% in Q4. Removing the impacts of license and maintenance attrition, our target implies 50 basis points of year-over-year improvement, and we expect our effective tax rate to be 22% and our diluted share count to be 61 million shares, which assumes no buyback activity.
Speaker #2: support our To strong bookings growth . And the significant Agentic AI opportunity we have already onboarded about 100 new services associates in January , and we anticipate these new hires , coupled with license and maintenance attrition , will result in consolidated subscription maintenance and services margin to be flat .
Speaker #2: As reported compared to 2025 on a quarterly basis . We expect consolidated subscription maintenance and services margin to be about 57% in Q1 , 59% in Q2 , 60% in Q3 , and accounting for retail peak seasonality , 60% in Q4 .
Speaker #2: Removing the impacts of license and maintenance attrition . Our target implies 50 basis points of year over year improvement , and we effective tax expect our rate to be 22% .
Dennis Story: In summary, 2025 was a great year of progress and execution. Thank you, and back to Eric for some closing remarks.
In summary, 2025 was a great year of progress and execution. Thank you, and back to Eric for some closing remarks.
Speaker #2: And our diluted share count to be 61 million shares , which assumes buyback no activity . So , summary , 2025 was a in great year of progress .
Eric Clark: Great. Thank you, Dennis. To recap, 2025 was a successful year for Manhattan, and we ended the year on a strong note. Business fundamentals are solid, and we enter 2026 with accelerating momentum across the organization. So, a big thank you for joining the call, and thank you to our global team for all the great work they do for our customers. And that concludes our prepared remarks, and we'd be happy to take questions.
Eric Clark: Great. Thank you, Dennis. To recap, 2025 was a successful year for Manhattan, and we ended the year on a strong note. Business fundamentals are solid, and we enter 2026 with accelerating momentum across the organization. So, a big thank you for joining the call, and thank you to our global team for all the great work they do for our customers. And that concludes our prepared remarks, and we'd be happy to take questions.
Speaker #2: And execution. Thank you. And back to Eric for some remarks.
Speaker #2: closing
Speaker #2: closing
Speaker #2: Great. To Dennis,
Speaker #3: Thank you. 2025 was a successful year for Manhattan, and we ended the year on a strong note. Business fundamentals are now solid, and we enter 2026 with accelerating momentum across the organization.
Speaker #3: So, a big thank you for joining the call. And thank you to our global team for all the great work they do for our customers.
Operator: Thank you. And with that, we will be conducting a question-and-answer session. If you'd like to ask a question, please press star one on the telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we pull the questions. And our first question comes from the line of Terry Tillman with Truist Securities. Please proceed with your question.
Operator: Thank you. And with that, we will be conducting a question-and-answer session. If you'd like to ask a question, please press star one on the telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we pull the questions. And our first question comes from the line of Terry Tillman with Truist Securities. Please proceed with your question.
Speaker #3: And that concludes our prepared remarks. We'd be happy to take questions.
Speaker #4: you . Thank And with that , we will be conducting a question and answer session . If you'd like to ask a question , please press star one on the telephone keypad .
Speaker #4: A confirmation tone will indicate that your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys.
Speaker #4: One moment while we poll for questions. And our first question comes from the line of Tillman with Truist Securities. Please proceed with your question.
Terry Tillman: Yeah. Hey, good afternoon, Eric, Dennis, and Mike. Appreciate the time here. And first, congrats on the Q4 bookings. It's impressive, and also just the Q4 cash flow finish. I have a question, maybe for you, Eric, first, in terms of both cloud migrations for WMS and starting to drive that kind of muscle tissue around fast renewals. I think those were some focus areas going into the year. Just, or really throughout 2025 and into 2026. Can you share any progress reports on both of those areas, and potentially the impact in the model in 2026 from a couple of those major initiatives? And then I had a follow-up for Dennis.
Terry Tillman: Yeah. Hey, good afternoon, Eric, Dennis, and Mike. Appreciate the time here. And first, congrats on the Q4 bookings. It's impressive, and also just the Q4 cash flow finish. I have a question, maybe for you, Eric, first, in terms of both cloud migrations for WMS and starting to drive that kind of muscle tissue around fast renewals. I think those were some focus areas going into the year. Just, or really throughout 2025 and into 2026. Can you share any progress reports on both of those areas, and potentially the impact in the model in 2026 from a couple of those major initiatives? And then I had a follow-up for Dennis.
Speaker #3: afternoon , Yeah . Eric Hey , good , Dennis and Mike .
Speaker #5: the time here . Appreciate And first , congrats on bookings . It's impressive . And also just the the four Q cash finish flow .
Speaker #5: I have a question . Maybe for you , Eric . First , in terms of both cloud migrations for WMS and starting to drive that kind of muscle tissue around fast I think renewals , those were some focus areas going into the year really 25 and throughout into 26 .
Speaker #5: Can you share progress or any reports on both of those, and areas of potential impact in the model in '26 from a couple of those major initiatives?
Eric Clark: Great. Yeah, thanks, thanks, Terry. So I'll, I'll start with kind of that conversion and, and driving some of our on-prem customers onto Active Warehouse. You recall that we started that effort kind of midyear in 2025, and we saw some early success. We're now seeing, I would say, the fruits of that effort, and we're, we're seeing the pipeline really start to build. We've already closed some of these deals in Q1, so that helped us get off to a quick start in Q1. And that's a part of, you know, Dennis just talked about; we've added 100 services headcount already in January. And, you know, that's a big difference from where we were a year ago in January.
Eric Clark: Great. Yeah, thanks, thanks, Terry. So I'll, I'll start with kind of that conversion and, and driving some of our on-prem customers onto Active Warehouse. You recall that we started that effort kind of midyear in 2025, and we saw some early success. We're now seeing, I would say, the fruits of that effort, and we're, we're seeing the pipeline really start to build. We've already closed some of these deals in Q1, so that helped us get off to a quick start in Q1. And that's a part of, you know, Dennis just talked about; we've added 100 services headcount already in January. And, you know, that's a big difference from where we were a year ago in January.
Speaker #5: And then I had a follow-up for Dennis.
Speaker #3: Great . Yeah , thanks . Thanks , Terry . So I'll start with kind of that conversion . And driving some of our on prem customers onto active warehouse .
Speaker #3: If you recall that we started that effort of kind midyear in 2025 , and we saw some early success . We're now seeing , I would say , the fruits of that effort .
Speaker #3: And we're seeing the pipeline really start to build. We've already closed some of these deals in Q1, so that helped us get off to a quick start in Q1, and that's a part of what Dennis just talked about.
Speaker #3: We've added 100 services headcount already in January. And you know, the difference from where we were a year ago—it's a big January.
Eric Clark: I think that says a lot about the confidence level we have in the book of business that we've built around services. So you combine the conversion opportunity with the new logo that we've brought in and what we see in terms of opportunity around forward-deployed engineers to help drive our AI efforts, and we're very bullish in that area. Yeah, did I hit everything there, Terry?
I think that says a lot about the confidence level we have in the book of business that we've built around services. So you combine the conversion opportunity with the new logo that we've brought in and what we see in terms of opportunity around forward-deployed engineers to help drive our AI efforts, and we're very bullish in that area. Yeah, did I hit everything there, Terry?
Speaker #3: I think that says a lot about the confidence level we have in the book of business that we've built around services. So you combine the conversion opportunity with the new logo that we've brought in and what we see in terms of opportunity around forward-deployed engineers to help drive our AI efforts.
Terry Tillman: Yeah, yeah, you did. I mean, I said that was... Maybe just, another part of this first question, so I may accidentally do two and a half here. I apologize to everybody.
Speaker #3: we're very And bullish in that area . Yeah . Did I , did I hit everything there ? Terry .
Terry Tillman: Yeah, yeah, you did. I mean, I said that was... Maybe just, another part of this first question, so I may accidentally do two and a half here. I apologize to everybody.
Speaker #5: Yeah, yeah, you did. I mean, that was maybe just another part of this first question, so I may accidentally do two and a half here.
Eric Clark: Okay.
Eric Clark: Okay.
Terry Tillman: It's not one of those things that gets a lot of attention because we just care about the numbers. It's always about the numbers and spreadsheets. But you talked about faster implementation times and faster time to value, I think, last year. Again, that's not going to get a lot of the accolades, but where are you in some of those progress efforts?
Terry Tillman: It's not one of those things that gets a lot of attention because we just care about the numbers. It's always about the numbers and spreadsheets. But you talked about faster implementation times and faster time to value, I think, last year. Again, that's not going to get a lot of the accolades, but where are you in some of those progress efforts?
Speaker #5: I apologize to everybody, okay? It's not a lot of attention, care about that, because we're just numbers. It's always about the numbers.
Speaker #5: And spreadsheets. But you talked about faster implementation times and faster time to last value. I think you're going to, again, that's not going to get a lot of the accolades.
Eric Clark: Yeah, great question, and thanks for asking. So we're making really good progress in those efforts, and that's coming into play in some of our deployments, even some of the deployments that maybe were multiyear deployments that started years ago, and we're able to start accelerating those now. It's also coming into play in many of these conversions that we're actually closing them as fixed fee, fixed timeline deals, because we've got the confidence in that pace. So the other thing where it comes into play, Terry, you know, we shared for the first time today the Ramped ARR, and it grew 23% year-over-year. Part of what's driving that is, we're able to sell more deals at a faster pace.
Eric Clark: Yeah, great question, and thanks for asking. So we're making really good progress in those efforts, and that's coming into play in some of our deployments, even some of the deployments that maybe were multiyear deployments that started years ago, and we're able to start accelerating those now. It's also coming into play in many of these conversions that we're actually closing them as fixed fee, fixed timeline deals, because we've got the confidence in that pace. So the other thing where it comes into play, Terry, you know, we shared for the first time today the Ramped ARR, and it grew 23% year-over-year. Part of what's driving that is, we're able to sell more deals at a faster pace.
Speaker #5: But where are you in some of those progress efforts?
Speaker #3: Yeah , great question and thanks for asking . So making really good progress in efforts . those And that's coming into play in some of our deployments .
Speaker #3: Even some of the deployments that maybe were multi-year deployments that started years ago . And we're able to start accelerating now . those coming It's also play into in in these many of conversions that we're actually closing them as fixed fee , fixed timeline deals , because we've got the confidence in that pace .
Speaker #3: So so the other thing that where it comes into play , Terry , you know , we shared for the first time today the ramped RR and it grew 23% year over year .
Eric Clark: You know, we're driving a faster ramp of that revenue, and you're seeing that confidence come through in that area as well.
You know, we're driving a faster ramp of that revenue, and you're seeing that confidence come through in that area as well.
Speaker #3: Part of what's driving that is we're able to sell more deals at a faster pace. You know, we're driving a faster ramp of that revenue, and you're seeing that confidence come through in that area as well.
Terry Tillman: ... That's great. I appreciate that, Eric, and I guess, Dennis, the Q4 free cash flow strength. I'm curious, though, looking in 2026, is there any way you can share any commentary on cash taxes or anything that we need to think about, and just maybe the relationship of free cash flow to, EBIT or EBITDA in 2026, just for some kind of parameters? Thanks.
Terry Tillman: ... That's great. I appreciate that, Eric, and I guess, Dennis, the Q4 free cash flow strength. I'm curious, though, looking in 2026, is there any way you can share any commentary on cash taxes or anything that we need to think about, and just maybe the relationship of free cash flow to, EBIT or EBITDA in 2026, just for some kind of parameters? Thanks.
Speaker #5: Dennis free
Speaker #5: cash flow appreciate that , guess Eric . And I . That's great . I I'm curious though , looking in 26 , is there any way you strength , can share any commentary on cash anything that , taxes or we need to think about ?
Speaker #5: Just maybe the 'and' relationship of free cash to flow, EBIT, or EBITDA in '26, just for some kind of parameters. Thanks.
Dennis Story: Yeah, Terry, I think that's just, it's similar-
Dennis Story: Yeah, Terry, I think that's just, it's similar-
Terry Tillman: Okay, thank you.
Terry Tillman: Okay, thank you.
Dennis Story: From cash taxes.
Dennis Story: From cash taxes.
Speaker #2: Terry , Yeah . I think that's just it's similar . From cash taxes .
Terry Tillman: Yep, got it. Thanks.
Terry Tillman: Yep, got it. Thanks.
Operator: Thank you. Our next question comes from the line of Brian Peterson with Raymond James. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Brian Peterson with Raymond James. Please proceed with your question.
Speaker #5: Yep. Got it, thanks.
Speaker #4: Thank you. And our next question comes from the line of Brian Peterson with Raymond James. Please proceed with your question.
Brian Peterson: Thanks, gentlemen, and congrats on the quarter. So Eric, I wanted to dive into the RPO number. That looks like a very strong number versus what we had expected, particularly on the net new side. So I'd love to understand, you know, maybe in terms of deal timing, you know, what products are out there, geos, is there anything that you can share about what really drove that fourth quarter strength?
Brian Peterson: Thanks, gentlemen, and congrats on the quarter. So Eric, I wanted to dive into the RPO number. That looks like a very strong number versus what we had expected, particularly on the net new side. So I'd love to understand, you know, maybe in terms of deal timing, you know, what products are out there, geos, is there anything that you can share about what really drove that fourth quarter strength?
Speaker #6: Thanks , gentlemen . And the So quarter . congrats on I wanted to dive into the RPO number that looks like a very strong number versus what we had expected , particularly on the net new side .
Speaker #6: So I'd love to understand . You know , maybe in terms of deal timing , products are you know , what out there .
Eric Clark: Yeah, thank you. And the great thing about that fourth quarter strength is it really comes across a variety of products and a variety of deal types, and I shared several examples there. You know, we always talk about the big deals can be lumpy, and you don't know when they're gonna come. But I think, you know, Q4, we rounded out the year in a very, you know, complementary way with a lot of those deal types across a lot of across our entire product suite. So that gives us confidence in the pipeline that we've got going into next year as well. But the other thing, I'll kinda, you know...
Eric Clark: Yeah, thank you. And the great thing about that fourth quarter strength is it really comes across a variety of products and a variety of deal types, and I shared several examples there. You know, we always talk about the big deals can be lumpy, and you don't know when they're gonna come. But I think, you know, Q4, we rounded out the year in a very, you know, complementary way with a lot of those deal types across a lot of across our entire product suite. So that gives us confidence in the pipeline that we've got going into next year as well. But the other thing, I'll kinda, you know...
Speaker #6: GEOs. Is there anything that you can share about what really drove that fourth quarter strength?
Speaker #3: Thank Yeah . you . The great thing fourth quarter that it strength is about that comes across a variety of really products and a deal types , and I shared several examples .
Speaker #3: There we always . You know , about the big deals can be lumpy and you don't know when they're going to come . , Q4 think , you know , we rounded out the year in a in a very , you know , complimentary way with a lot of those deal types across a lot of across our entire product suite .
Speaker #3: So that gives us pipeline got that we've in the going into next year as well . But but the other thing I'll kind of , you know , great RPO and , you know , we're really proud of , you know , what we did in terms of sequential RPO growth .
Eric Clark: Great RPO, and, you know, we're really proud of, you know, what we did in terms of RPO sequential growth, you know, quarter-over-quarter and year-over-year. But we also recognize that as we come into 2026, where we know it's a year where we've got kind of an uptick in renewals, we wanna give you that ramped ARR, so that we don't have to go focus on renewing every deal at 5 years. If we can, if we can renew some of these deals at 3 years, that gives us another opportunity to increase price sooner. But when, when the only metric we give you for you to measure growth is RPO, that might give you concerns if we're only giving you RPO.
Great RPO, and, you know, we're really proud of, you know, what we did in terms of RPO sequential growth, you know, quarter-over-quarter and year-over-year. But we also recognize that as we come into 2026, where we know it's a year where we've got kind of an uptick in renewals, we wanna give you that ramped ARR, so that we don't have to go focus on renewing every deal at 5 years. If we can, if we can renew some of these deals at 3 years, that gives us another opportunity to increase price sooner. But when, when the only metric we give you for you to measure growth is RPO, that might give you concerns if we're only giving you RPO.
Speaker #3: You know , quarter over and year over quarter year . But we also recognize we that as come into 2026 where we know it's a year where we've got kind of an uptick in renewals , we want to that give you ramped RR so don't have to go focus on that we every renewing deal at five years .
Speaker #3: If we can, if we renew some of these deals at three years, that gives us another opportunity to increase price sooner.
Speaker #3: But when the only metric we give you to for you to measure growth is RPO , that might give you we're only giving you RPO .
Eric Clark: So that's why we're now gonna give you this combination of RPO and ramped ARR, so you can have confidence in the growth that we're projecting.
So that's why we're now gonna give you this combination of RPO and ramped ARR, so you can have confidence in the growth that we're projecting.
Speaker #3: So that's why we're now going to give you this concerns . combination If of RPO and ramped IRR . So you can have confidence in in growth that we're the projecting .
Brian Peterson: Got it. And I appreciate the new disclosures, guys. Dennis, I did have one clarification. You said 18 to 20% is coming for renewals in 2026. Is that the mix of the RPO target? I just wanna make sure I understand the disclosure around that 18 to 20%.
Brian Peterson: Got it. And I appreciate the new disclosures, guys. Dennis, I did have one clarification. You said 18 to 20% is coming for renewals in 2026. Is that the mix of the RPO target? I just wanna make sure I understand the disclosure around that 18 to 20%.
Speaker #6: And I got it. Appreciate the new disclosures, guys. Dennis, I did have one clarification. You said 18 to 20% is coming for Newell's 2026.
Speaker #6: Is that the mix of the RPO target? I just want to make sure I understand the disclosure around that 18 to 20%.
Dennis Story: Yes. Yes, that is the mix.
Dennis Story: Yes. Yes, that is the mix.
Eric Clark: Yeah.
Eric Clark: Yeah.
Brian Peterson: Okay.
Brian Peterson: Okay.
Eric Clark: So, and again, if you know, if we held ourselves to make sure we renewed every deal at five years, it could be a higher number, but we don't think that's in the best interest of the business. So that's why we wanna give ourselves the ability to renew some deals at three years as well.
Eric Clark: So, and again, if you know, if we held ourselves to make sure we renewed every deal at five years, it could be a higher number, but we don't think that's in the best interest of the business. So that's why we wanna give ourselves the ability to renew some deals at three years as well.
Speaker #2: Yes, it is. Yes, that mix.
Speaker #3: Yeah . So so and again , if you know , if we if we held ourselves to make sure we renewed every deal at five years , it could be a higher number .
Speaker #3: But we don't think that's in the best interest of the best business. So that's why we give ourselves the want to ability to renew at three years as well—some deals.
Brian Peterson: Got it. Thanks, guys.
Brian Peterson: Got it. Thanks, guys.
Dennis Story: Thanks, Brian.
Dennis Story: Thanks, Brian.
Operator: Thank you. And our next question comes from the line of George Kurosawa with Citi. Please proceed with your question.
Operator: Thank you. And our next question comes from the line of George Kurosawa with Citi. Please proceed with your question.
Speaker #6: Got it. Thanks, guys.
Speaker #2: Thanks , Brian .
Speaker #4: Thank you. And our next question comes from the line of George Kurosawa. Please proceed with your question.
Speaker #4: Thank you. And our next question comes from the line of George Kurosawa with Citi. Please proceed with your question.
George Kurosawa: Great. Thanks for taking the questions. Maybe just to stay on this topic of renewals, you know, I think if I got the numbers right, 18% of RPO bookings from renewals in 2025 and now expecting 18% to 20%, you know, I think we were maybe estimating that might be a bit of a bigger uplift. Am I right in thinking here that maybe there's some level of conservatism baked into that, or maybe there's these duration dynamics that you were just discussing, or anything else we should keep in mind there?
George Kurosawa: Great. Thanks for taking the questions. Maybe just to stay on this topic of renewals, you know, I think if I got the numbers right, 18% of RPO bookings from renewals in 2025 and now expecting 18% to 20%, you know, I think we were maybe estimating that might be a bit of a bigger uplift. Am I right in thinking here that maybe there's some level of conservatism baked into that, or maybe there's these duration dynamics that you were just discussing, or anything else we should keep in mind there?
Speaker #7: questions . Maybe just to stay on this topic of renewals . I think if I if I got the numbers right , 18% RPO bookings from of in 25 and now expecting 18 to 20% , I think we were maybe estimating that might be a bit of a bigger uplift .
Speaker #7: Am I right in thinking here that maybe there's some level of conservatism baked into that? Or maybe there are these dynamics of duration that you were just discussing, or anything else we should mind?
Eric Clark: I think those are the key things. You know, maybe those two things go together, conservatism on duration. Again, if we really held ourselves to make sure that we renew every deal at 5 years, that 18 to 20% could be higher, and the total RPO growth year-over-year could be higher. But we think we've got a very sticky product, and our customers are not leaving us. All of our customers are renewing. So having the opportunity to have another conversation about price increase in 3 years versus 5 years is an advantage to us.
Eric Clark: I think those are the key things. You know, maybe those two things go together, conservatism on duration. Again, if we really held ourselves to make sure that we renew every deal at 5 years, that 18 to 20% could be higher, and the total RPO growth year-over-year could be higher. But we think we've got a very sticky product, and our customers are not leaving us. All of our customers are renewing. So having the opportunity to have another conversation about price increase in 3 years versus 5 years is an advantage to us.
Speaker #7: keep in There ?
Speaker #3: I think those are the key things , you know , and maybe those two things go together . Conservatism on duration to make five years , we renew sure that really held .
Speaker #3: I think those are the key things , you know , and maybe those two things go together . Conservatism on duration to make five years , we renew sure that really held we ourselves every deal at Again , if that that 18 to 20% could be higher and the total RPO growth year could year over be higher but we .
Speaker #3: I think we've got a very sticky product, and our customers are not leaving us. All of our customers are renewing. So, having the opportunity to have another conversation about a price increase in three years versus five years is an advantage to us.
George Kurosawa: Okay. Okay, very helpful. And then I wanted to touch on the services business. You know, I think you mentioned you're looking to hire into that group. You're guiding to 3% growth for the year. You know, historically, that's been a line item that's maybe a little bit lower visibility relative to the rest of the business. What's kind of underpinning your confidence there?
George Kurosawa: Okay. Okay, very helpful. And then I wanted to touch on the services business. You know, I think you mentioned you're looking to hire into that group. You're guiding to 3% growth for the year. You know, historically, that's been a line item that's maybe a little bit lower visibility relative to the rest of the business. What's kind of underpinning your confidence there?
Speaker #7: Okay , okay . Very helpful . And then I wanted to touch on the services business . I think you mentioned you're looking to hire into that group .
Speaker #7: You're guiding to 3% growth for the year. Historically, that's been a line item. That's maybe lower visibility relative to the rest of the business.
Eric Clark: Yeah, so it's a few things. You know, number one, that strong bookings growth in Q4 and really strong, you know, in total for all of last year, is gonna continue to drive services well into 2026. But then, you know, again, we put these, you know, conversion programs in place in the middle of last year. They're really starting to bear fruit. We're seeing the pipeline, we're seeing the deal volume pick up. That's creating services opportunity. And then I think the big one is agentic AI. You know, you look at a lot of SaaS companies that are out there trying to sell agentic AI, and they don't have the army of services people that we have.
Eric Clark: Yeah, so it's a few things. You know, number one, that strong bookings growth in Q4 and really strong, you know, in total for all of last year, is gonna continue to drive services well into 2026. But then, you know, again, we put these, you know, conversion programs in place in the middle of last year. They're really starting to bear fruit. We're seeing the pipeline, we're seeing the deal volume pick up. That's creating services opportunity. And then I think the big one is agentic AI. You know, you look at a lot of SaaS companies that are out there trying to sell agentic AI, and they don't have the army of services people that we have.
Speaker #7: What's kind of underpinning your confidence there?
Speaker #3: Yeah . So it's a few things . You know , number one , that bookings strong growth in Q4 and strong . really You know , in total for all of last is going year continue to to drive services .
Speaker #3: Well into then , you know , 2026 . we we put these , you know , conversion programs in place in the middle of last year .
Speaker #3: They're really starting to bear fruit . We're seeing the pipeline . We're seeing the deal volume pick up . That's creating services , opportunity .
Speaker #3: the And then I think big one is is agentic . I you at a lot of SaaS companies that are out there trying to to sell Agentic AI , and they don't have the , the Army of people Services that we have .
Eric Clark: And we see this as an opportunity to use that army of services people as a big advantage, because we have the domain expertise. We can go in with forward-deployed engineers and help our customers realize value very, very quickly. You know, this is the first time since Manhattan launched the cloud products, where we've got an opportunity to go out to every cloud customer all at one time and have an immediate upsell opportunity that can add value from day one. So, you know, this is, this is new for us, and we wanna make sure that we get that message to all of our customers as quickly as possible.
And we see this as an opportunity to use that army of services people as a big advantage, because we have the domain expertise. We can go in with forward-deployed engineers and help our customers realize value very, very quickly. You know, this is the first time since Manhattan launched the cloud products, where we've got an opportunity to go out to every cloud customer all at one time and have an immediate upsell opportunity that can add value from day one. So, you know, this is, this is new for us, and we wanna make sure that we get that message to all of our customers as quickly as possible.
Speaker #3: And we can see this as an opportunity too, that army of U.S. services people as a big advantage because we have the domain expertise.
Speaker #3: We can go in with forward deployed engineers and help our customers realize value very , very quickly . You know , this is first time since the Manhattan launched the cloud products where we've got an opportunity to go out to every cloud customer , one all at time and have an immediate upsell opportunity that can add value So , you one .
Speaker #3: Now, this is new for This is Us, and we want to make sure that we get that message to customers — all of our customers — as quickly as possible.
Dylan Becker: ... Great. Thanks for taking the questions.
George Kurosawa: ... Great. Thanks for taking the questions.
Eric Clark: Yeah, thank you.
Eric Clark: Yeah, thank you.
Operator: Thank you. And our next question comes from the line of Joe Vruwink with Baird. Please proceed with your question.
Operator: Thank you. And our next question comes from the line of Joe Vruwink with Baird. Please proceed with your question.
Speaker #7: Great. Thanks for taking the questions.
Speaker #3: Thank you .
Speaker #3: Thank you .
Speaker #4: Thank you. And our next question comes from the line of Joe Brueck with Baird. Please proceed with your question.
Joe Vruwink: Hi, great. Thanks for taking my questions. A lot of questions on the renewal component to RPO next year. I wanted to ask about the remainder, the new bookings component. What's kind of interesting is, so new, new logos, you know, so heavy and what you were able to achieve in 2025, you said your expectation is that balances back towards normal, and yet there's still a pretty healthy bookings component for 2026. So that would seem to be kind of the pace of migration or maybe cross-sell to existing customers kind of picking up the slack. Are you seeing kinda some early evidence?
Joe Vruwink: Hi, great. Thanks for taking my questions. A lot of questions on the renewal component to RPO next year. I wanted to ask about the remainder, the new bookings component. What's kind of interesting is, so new, new logos, you know, so heavy and what you were able to achieve in 2025, you said your expectation is that balances back towards normal, and yet there's still a pretty healthy bookings component for 2026. So that would seem to be kind of the pace of migration or maybe cross-sell to existing customers kind of picking up the slack. Are you seeing kinda some early evidence?
Speaker #8: Greg, thanks. Hi, and thank you for taking my questions. There are a lot of questions on the renewal component to RPO next year. I wanted to ask about the remainder.
Speaker #8: The new bookings component and what's kind of interesting is so new , new logos , you know , so heavy . And what you were able to achieve in 2025 .
Speaker #8: You said your expectation is that balances back towards normal. And yet there's still a pretty healthy bookings component for '26. So that would seem to be kind of the pace of migration or maybe cross-sell to existing—of picking up the, you seeing kind of customers, kind.
Joe Vruwink: I know you talked about deals closing already here in Q1 around the more consultative approach to conversions, but what are some of the other things you're doing to accelerate the pace of migration? 'Cause that new bookings number looks pretty good relative to where our expectations were.
I know you talked about deals closing already here in Q1 around the more consultative approach to conversions, but what are some of the other things you're doing to accelerate the pace of migration? 'Cause that new bookings number looks pretty good relative to where our expectations were.
Speaker #8: Are there some early signs of evidence? I know you talked about deals closing already here in one Q around the more approach conversions, but what are some of the other things you’re doing to accelerate the pace of migration?
Eric Clark: Yeah. So, you know, when you think about new bookings, for us, that includes new logo, it includes expansion within existing accounts, and of course, converting from on-prem to the cloud. We've talked about conversions quite a bit, as you mentioned, but that expansion is a big opportunity for us. You know, we've done really well in acquiring new logos, and we've got this renewal cycle of warehouse, you know, Active Warehouse. So the opportunity to cross-sell and expand is really ripe for us as well, and that's a big focus area for us. We also consider that taking market share, because when we cross-sell new products, we're taking that from someone else. So that's kind of continued focus on taking market share. So we'll do that in 2026 with new logos and cross-selling new products to existing customers.
Eric Clark: Yeah. So, you know, when you think about new bookings, for us, that includes new logo, it includes expansion within existing accounts, and of course, converting from on-prem to the cloud. We've talked about conversions quite a bit, as you mentioned, but that expansion is a big opportunity for us. You know, we've done really well in acquiring new logos, and we've got this renewal cycle of warehouse, you know, Active Warehouse. So the opportunity to cross-sell and expand is really ripe for us as well, and that's a big focus area for us. We also consider that taking market share, because when we cross-sell new products, we're taking that from someone else. So that's kind of continued focus on taking market share. So we'll do that in 2026 with new logos and cross-selling new products to existing customers.
Speaker #8: Because that new bookings number looks pretty good where—relative to expectations—were?
Speaker #3: Yeah . So , you know , when you think about new bookings for us , that includes new logo . It includes expansion within existing accounts .
Speaker #3: And of course converting from from on prem to the cloud . We've talked about conversions quite a bit . As you mentioned , that but expansion is a big opportunity for us .
Speaker #3: You know , we've we've done really well in acquiring new logos and and we've got this renewal cycle of know , active warehouse , you warehouse .
Speaker #3: So the opportunity to cross-sell and expand is really ripe for us as well . And that's a big area for us . also We consider taking market that share , because when we cross-sell we're products , new taking that from someone else .
Speaker #3: That's kind of continued focus on taking market share. So we'll do that in 2026 with new cross-selling, new products, logos, and to existing customers.
Joe Vruwink: Okay, that's, that's great. And then on the services outlook, so I guess it's good that kind of the update, maybe as hard as that was a year ago, you really haven't missed on a service communication since then, and now you're bringing people back. Are there aspects of the services pipeline where you would maybe say it's a lower risk factor? I know Jerry just asked about this question, but I think about these 66 timeline propositions that would seem to actually provide a high degree of confidence in a services outlook. Are there things around, you know, maybe a different go-to-market approach where you're trying to de-risk what you're communicating tonight?
Joe Vruwink: Okay, that's, that's great. And then on the services outlook, so I guess it's good that kind of the update, maybe as hard as that was a year ago, you really haven't missed on a service communication since then, and now you're bringing people back. Are there aspects of the services pipeline where you would maybe say it's a lower risk factor? I know Jerry just asked about this question, but I think about these 66 timeline propositions that would seem to actually provide a high degree of confidence in a services outlook. Are there things around, you know, maybe a different go-to-market approach where you're trying to de-risk what you're communicating tonight?
Speaker #8: Okay , that's great . And then on the services outlook . So I guess that's good . That kind of the update , maybe as hard as that was a year ago , you really haven't missed on a service communication since then .
Speaker #8: And now you're bringing people back. Are there aspects of the services pipeline where you would maybe say it's a lower risk factor, just?
Speaker #8: You asked about this—I know your question, but I think about these 66 timeline propositions, and it seems that they would actually provide a high degree of confidence in the service's outlook.
Speaker #8: Are there things around , you know , maybe a different go to market where you're approach to to de-risk what you're communicating tonight ?
Eric Clark: Yeah, so I think, number one, we always try to de-risk what we're communicating and take a conservative approach. Of all of the revenue, you know, services is the tough one to predict a year from now. It's easier to predict, you know, closer to now. But we've got, you know, the confidence that we have in what we've shared is based on the things that I mentioned. You know, those, all of that pipeline and new logo that we sold last year and in Q4 gives a whole lot of clarity. Those ramp timelines are fixed, so that gives a whole lot of clarity to what we're doing.
Eric Clark: Yeah, so I think, number one, we always try to de-risk what we're communicating and take a conservative approach. Of all of the revenue, you know, services is the tough one to predict a year from now. It's easier to predict, you know, closer to now. But we've got, you know, the confidence that we have in what we've shared is based on the things that I mentioned. You know, those, all of that pipeline and new logo that we sold last year and in Q4 gives a whole lot of clarity. Those ramp timelines are fixed, so that gives a whole lot of clarity to what we're doing.
Speaker #3: So yeah, I think, one, we always try to de-risk what we're communicating and take a conservative, conservative approach with all of the revenue.
Speaker #3: You know, services is the tough one to predict a year from now compared to, or easier to predict, you know, closer to now.
Speaker #3: But we've got , you know , the confidence that we have in in what we've , you know , shared is based on , you know , the things that I mentioned , you know , those all of that pipeline and new logo that we sold last Q4 year and in gives a whole lot of clarity .
Eric Clark: And the things that we're doing around conversions and creating fixed fee, yeah, those, as that volume picks up, that gives us an opportunity to potentially see upside in services as well.
And the things that we're doing around conversions and creating fixed fee, yeah, those, as that volume picks up, that gives us an opportunity to potentially see upside in services as well.
Speaker #3: Those ramp timelines are fixed, so that gives a whole lot of clarity to what we're doing and the things that we're doing around conversions and creating fixed fee.
Speaker #3: Yeah, as that volume picks up, that gives us an opportunity to potentially see upside in services as well.
Joe Vruwink: Great. Thank you very much.
Joe Vruwink: Great. Thank you very much.
Eric Clark: Thank you.
Eric Clark: Thank you.
Operator: Thank you. Our next question comes from the line of Dylan Becker with William Blair. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Dylan Becker with William Blair. Please proceed with your question.
Speaker #8: Great. Thank you very much.
Speaker #3: you Thank .
Speaker #4: Thank you. And our next question comes from the line of Dylan Becker with William Blair. Please proceed with your question.
Dylan Becker: Hey, gentlemen, appreciate the question here. Maybe, Eric, starting with you, I think it's very clear that the RPO strength is quite exceptional. I guess maybe if you're to reconcile kind of that outperformance relative to maybe the contribution from some of these newer initiatives that we've onboarded over the last maybe few quarters here, if we think about a dedicated migration team, partner emphasis, obviously like more of an expansion motion as well, too. Is that something that you're starting to already see kind of some of the fruits of the labor from? And maybe how we think about that layering in over time as well, too, and contributing to strength throughout the balance of the year, maybe as those start to ramp and become more material contributors over time.
Dylan Becker: Hey, gentlemen, appreciate the question here. Maybe, Eric, starting with you, I think it's very clear that the RPO strength is quite exceptional. I guess maybe if you're to reconcile kind of that outperformance relative to maybe the contribution from some of these newer initiatives that we've onboarded over the last maybe few quarters here, if we think about a dedicated migration team, partner emphasis, obviously like more of an expansion motion as well, too. Is that something that you're starting to already see kind of some of the fruits of the labor from? And maybe how we think about that layering in over time as well, too, and contributing to strength throughout the balance of the year, maybe as those start to ramp and become more material contributors over time.
Speaker #9: gentlemen , Hey , I appreciate the question here . Maybe , Eric , starting with you , I think it's very clear that the RPO strength is quite exceptional .
Speaker #9: I guess maybe if you're to reconcile kind of that outperformance relative to, maybe, the contribution from some of these newer initiatives that we've onboarded over the last few quarters here.
Speaker #9: think If we about a dedicated migration team partner or emphasis , obviously , like more of an expansion motion as well to is that something that you're starting to already see some of the fruits of the labor from , and maybe how we think about that layering in over time as well , too .
Speaker #9: And contributing to strength throughout the year, balance of maybe as those start to ramp and become more material contributors over time.
Eric Clark: Yeah. So, I think some of the programs that we put in place in 2025 did have a positive impact. But realistically, you know, most of the pipeline we close is a little bit longer term sales cycle. So I think you've got to credit what the team had in place before we went into 2025. You know, maybe we influenced some of that in the second half and got a little bit better result, but largely the result that we got was based on the preparation that happened before 2025.
Eric Clark: Yeah. So, I think some of the programs that we put in place in 2025 did have a positive impact. But realistically, you know, most of the pipeline we close is a little bit longer term sales cycle. So I think you've got to credit what the team had in place before we went into 2025. You know, maybe we influenced some of that in the second half and got a little bit better result, but largely the result that we got was based on the preparation that happened before 2025.
Speaker #2: Yeah .
Speaker #2: So so . that we
Speaker #3: I think some of the things
Speaker #3: that some of the programs.
Speaker #3: Put in place in 2025 did have a positive impact. But realistically, you know, most of the pipeline we close is a little bit longer sales cycle.
Speaker #3: term think you've got a So I credit . What the team had in place before we went into 2025 . You know , influence some maybe we of that in the second half and got a little bit better result , but largely the result that we got was based on the the preparation that happened before 25 .
Eric Clark: Now, that being said, I think we did a whole lot of great preparation in 2025 for 2026, and that's when I think we will really start to see, you know, the fruits from our labor around these programs that we put in place in the second half of 2025.
Now, that being said, I think we did a whole lot of great preparation in 2025 for 2026, and that's when I think we will really start to see, you know, the fruits from our labor around these programs that we put in place in the second half of 2025.
Speaker #3: Now, that being said, I think we did a whole lot of great preparation in '25 for '26. And that's when I think we will really see, you know, the fruits of programs that we put in place in the second half of '25.
Dylan Becker: Perfect. Okay, great. Thank you. And then maybe for Dennis, or Eric, if you have a comment as well, too, on the fully ramped metric as well, too. Obviously, some nice room for incremental kind of contribution and step-ups relative to what we're doing today from a cloud revenue perspective. I guess, how you think about the N-year contribution of those ramps effectively, kind of like what's committed, what you have visibility into? I know, Dennis, you called out high levels of visibility here, but maybe kind of parsing through what's rolling off of kind of that ramped backlog and giving you conviction in that 20% growth versus kind of what's an incremental net new that you kind of have to go and get in a particular year? Thank you.
Dylan Becker: Perfect. Okay, great. Thank you. And then maybe for Dennis, or Eric, if you have a comment as well, too, on the fully ramped metric as well, too. Obviously, some nice room for incremental kind of contribution and step-ups relative to what we're doing today from a cloud revenue perspective. I guess, how you think about the N-year contribution of those ramps effectively, kind of like what's committed, what you have visibility into? I know, Dennis, you called out high levels of visibility here, but maybe kind of parsing through what's rolling off of kind of that ramped backlog and giving you conviction in that 20% growth versus kind of what's an incremental net new that you kind of have to go and get in a particular year? Thank you.
Speaker #9: Perfect . Okay , great . Thank you . And then maybe for Dennis or do you have a comment as well too , the fully on ramped metric as well too obviously some some nice room for incremental kind of contribution and step ups relative to what we're doing today .
Speaker #9: From a revenue cloud perspective . I guess how you think about the end year contribution of those ramps effectively kind of like what's committed , what you have visibility know , Dennis , you into .
Speaker #9: You called out high levels of visibility here, but maybe kind of parsing conviction in what's giving you that through backlog and that 20% growth, versus what's kind of an incremental net new that you kind of have to go and get in a particular year?
Eric Clark: ... So, so maybe I'll start with that, just to make sure I understand the question very clearly. You know, when we talk about that ramped ARR, what we're doing is, you know, at the end of 2025, everything that is sold, we're looking at the ramps over the next four years, and then comparing that to the same thing a year ago. So, in that ramped ARR, it doesn't assume any new sales. That is all committed revenue, and then everything new that we sell adds to that committed revenue. Is, is that, is that kind of the question you're asking, or am I, am I missing something there?
Eric Clark: ... So, so maybe I'll start with that, just to make sure I understand the question very clearly. You know, when we talk about that ramped ARR, what we're doing is, you know, at the end of 2025, everything that is sold, we're looking at the ramps over the next four years, and then comparing that to the same thing a year ago. So, in that ramped ARR, it doesn't assume any new sales. That is all committed revenue, and then everything new that we sell adds to that committed revenue. Is, is that, is that kind of the question you're asking, or am I, am I missing something there?
Speaker #9: Thank you .
Speaker #3: maybe I'll So start with that just I to make sure understand the question very clearly . You know , when we talk about that ramped IRR , what we're doing is , you know , at the end everything that of 2025 , is sold , we're looking at the ramps over the next four years .
Speaker #3: And comparing that to the same thing a year ago. So in that ramped IRR, it doesn't assume any new sales.
Speaker #3: That is all committed revenue . And then everything new that we sell adds to that committed revenue . It is that is that kind of the question you're asking , or missing something ?
Dylan Becker: It was more in the, in the context of how that flows through to reported cloud revenues, right? Of what's the kind of step up in that ARR that you actually realize in a particular year, just giving you kind of conviction in the durability of the 20% growth algorithm, if that makes sense.
Dylan Becker: It was more in the, in the context of how that flows through to reported cloud revenues, right? Of what's the kind of step up in that ARR that you actually realize in a particular year, just giving you kind of conviction in the durability of the 20% growth algorithm, if that makes sense.
Speaker #3: There am I ?
Speaker #9: It was more in the in the context of how flows through to that reported cloud revenues , right , of what's the kind of the step up in that RR that you actually realize in a particular year , just giving you kind of conviction in the durability of that 20% growth algorithm , if that makes
Eric Clark: Yeah, and the ramps vary. And, you know, in any given year, we've got, you know, look—as you know, some of our products, like, you know, POS and order management, ramp quicker, but some of the long, complex warehouse do, you know, often take four years to fully ramp. And in even—in any given year, we've got some that are four years in, some that are three years in, and two years in, and one year in. But you've seen the volume over the past several years of our sales growth. So we're—it's, you know, each one of those categories is kind of stepping up each year, which is compounding that growth each year.
Eric Clark: Yeah, and the ramps vary. And, you know, in any given year, we've got, you know, look—as you know, some of our products, like, you know, POS and order management, ramp quicker, but some of the long, complex warehouse do, you know, often take four years to fully ramp. And in even—in any given year, we've got some that are four years in, some that are three years in, and two years in, and one year in. But you've seen the volume over the past several years of our sales growth. So we're—it's, you know, each one of those categories is kind of stepping up each year, which is compounding that growth each year.
Speaker #9: sense .
Speaker #3: Yeah . And the ramps
Speaker #3: vary . And , you know , given year in any we've got , you know , as you know , some of our products , you know , like , you know , and order management ramp POS quicker .
Speaker #3: But the long complex warehouse , do know , you often take four years to fully ramp and even in , in any given year we've got some that are four years in , some that are three years in and two years in and one year in .
Speaker #3: But you've seen the volume over the past several years of our sales growth . So we're , know , you each one of those categories is kind of stepping up each year , which is compounding that growth each year .
Dylan Becker: Very helpful. Thanks, Eric.
Dylan Becker: Very helpful. Thanks, Eric.
Eric Clark: Yep, thank you. And then maybe one thing I'll add to that, sorry, is, you know, our, our GRR, you know, gross retention rates, are, are world-class, and, and that really gives us confidence. So Dennis talked about the assumptions around this new ramped AR num- ARR number, is that we're assuming no churn and no price increase. Well, that also creates upside because we're, you know, there's more opportunity for price increase than there is for churn.
Eric Clark: Yep, thank you. And then maybe one thing I'll add to that, sorry, is, you know, our, our GRR, you know, gross retention rates, are, are world-class, and, and that really gives us confidence. So Dennis talked about the assumptions around this new ramped AR num- ARR number, is that we're assuming no churn and no price increase. Well, that also creates upside because we're, you know, there's more opportunity for price increase than there is for churn.
Speaker #9: Very helpful. Eric, thanks.
Speaker #3: Yeah , thank you . And then maybe one thing I'll add to that sorry is , you know , our our G or , you know , gross rates retention are world class .
Speaker #3: And that really gives us confidence. Dennis Story talked about the assumptions—new ARR, ramped RR—around this number is that we're assuming no churn and no price increase.
Speaker #3: Well, that also creates upside because we're, you know, there's more opportunity for price increase than there is for churn.
Operator: Thank you. And our next question comes from the line of Parker Lane with Stifel. Please proceed with your question.
Operator: Thank you. And our next question comes from the line of Parker Lane with Stifel. Please proceed with your question.
Speaker #4: Thank you. And our next question comes from the line of Parker Lane with Stifel. Please proceed with your question.
Parker Lane: Hey, guys. Thanks for taking the questions here. Eric, great to see the commercial availability of the AI agents and the agent foundry. I was just wondering if you could go a little bit deeper on the monetization strategy around these agents, if you expect that to be fairly static across the different types of agents you're providing, including those that are more customized. And when you look out to 2026, I know we're really early here, but what sort of momentum do you anticipate seeing within your base from an adoption standpoint, and perhaps any thoughts on how much that could contribute to growth here in the near term?
Parker Lane: Hey, guys. Thanks for taking the questions here. Eric, great to see the commercial availability of the AI agents and the agent foundry. I was just wondering if you could go a little bit deeper on the monetization strategy around these agents, if you expect that to be fairly static across the different types of agents you're providing, including those that are more customized. And when you look out to 2026, I know we're really early here, but what sort of momentum do you anticipate seeing within your base from an adoption standpoint, and perhaps any thoughts on how much that could contribute to growth here in the near term?
Speaker #10: guys . Thanks for taking the Yeah . Hey questions here , Eric . Great to see the commercial availability of the AI agents and the agent foundry .
Speaker #10: I was just wondering if you could go a little bit deeper on the monetization strategy around these agents. Do you expect that to be fairly static across the different types of agents you're providing, including those that are more customized?
Speaker #10: And when you look out to 2026, and we're here, but really early, what sort of momentum do you anticipate seeing within your base from an adoption standpoint?
Eric Clark: Yeah, thank you for that. So, you know, number one, we're really excited about what we've launched, and we think this is truly different in the market. We're in a unique position where we really have, you know, stuck to our model on creating a true API-driven microservices platform that is truly integrated. So we don't have to start the conversation with, you know, a project of data indexing and moving to a data lake. We start the project by turning it on, and you've got live agents working in your system that are natively working in your active platform.
Eric Clark: Yeah, thank you for that. So, you know, number one, we're really excited about what we've launched, and we think this is truly different in the market. We're in a unique position where we really have, you know, stuck to our model on creating a true API-driven microservices platform that is truly integrated. So we don't have to start the conversation with, you know, a project of data indexing and moving to a data lake. We start the project by turning it on, and you've got live agents working in your system that are natively working in your active platform.
Speaker #10: And perhaps any thoughts on how much that could contribute to growth here in
Speaker #10: Yeah, thank you.
Speaker #10: ? term
Speaker #3: for that
Speaker #3: . So number one , we're excited really about what we've launched . And we think this is truly different in the market . We're in a unique position where we really have , you know , stuck to our stuck to model on our a creating true API driven microservices platform that is truly integrated .
Speaker #3: So we don’t have to start the conversation with, you know, a project of data indexing and moving to a data lake.
Eric Clark: So that's something that's really unique, and I think we've got a lot of customers that are, you know, looking for ways to figure out how to take advantage of AI, and this gives them a very easy opportunity to turn it on, play with it, look at it, and see what value they can create. So our approach is, we're starting with proof of concepts, or, you know, pilots with our customers, and we're offering this at a, you know, a very low cost, low risk scenario. It's a 90-day proof of concept, and it will come with forward-deployed engineers that will make sure that they learn how to use all of the standard agents that they can turn on day one.
So that's something that's really unique, and I think we've got a lot of customers that are, you know, looking for ways to figure out how to take advantage of AI, and this gives them a very easy opportunity to turn it on, play with it, look at it, and see what value they can create. So our approach is, we're starting with proof of concepts, or, you know, pilots with our customers, and we're offering this at a, you know, a very low cost, low risk scenario. It's a 90-day proof of concept, and it will come with forward-deployed engineers that will make sure that they learn how to use all of the standard agents that they can turn on day one.
Speaker #3: We start the project by turning it on , and you've got live agents working system that in your are natively working in your in active your platform .
Speaker #3: So that's something that's really unique. And I think we've got a lot of customers that are, you know, looking for ways to figure out how to take advantage of AI.
Speaker #3: And this gives them a very easy opportunity to turn it on and play with it, look at it, and see what value they can create.
Speaker #3: So our approach is we're starting with proof of concepts or , you know , pilots with our customers . And we're offering this at a , you know , a very low risk scenario .
Speaker #3: a concept . it will And cost , low 90 day proof of come with forward deployed engineers that will make sure that they learn how to use all of the standard agents that they can turn on day one .
Eric Clark: And those forward-deployed engineers will also help them build at least one or two custom agents using our agent foundry and train them how to build their own custom agents. Clearly, all of this is so that when we get to the end of that 90-day proof of concept, we've got customers that say, "There's no way we can turn this off. It's adding so much value, we've got to use it." And that's, and that's when we monetize it. So, what-- we're, we're pricing this. We want to keep it very simple for our customers, so it's a, it's an uplift, you know, kind of like we do with labor, slotting, and some of the other things that we have within our product.
And those forward-deployed engineers will also help them build at least one or two custom agents using our agent foundry and train them how to build their own custom agents. Clearly, all of this is so that when we get to the end of that 90-day proof of concept, we've got customers that say, "There's no way we can turn this off. It's adding so much value, we've got to use it." And that's, and that's when we monetize it. So, what-- we're, we're pricing this. We want to keep it very simple for our customers, so it's a, it's an uplift, you know, kind of like we do with labor, slotting, and some of the other things that we have within our product.
Speaker #3: And those forward deployed engineers will also help them build at least one or two custom agents using our Agent Foundry and train them how to build their own custom agents.
Speaker #3: Clearly, all of this is so that when we get to the end of that 90-day proof of concept, we've got customers that there's no way they'd say we can turn this off.
Speaker #3: It's adding so much value . We've got to use it . And that's and that's when we monetize it . So we're we're pricing this .
Speaker #3: We want to keep it very simple for our customers . So it's a it's an uplift , you like we do with labor know , kind of and slotting and some of the other things that we have within our product .
Eric Clark: It's a standard uplift, and that makes it easy for our salespeople to have the conversation and easy for our customers to buy.
It's a standard uplift, and that makes it easy for our salespeople to have the conversation and easy for our customers to buy.
Parker Lane: Thanks, Eric. And Dennis, one for you. Just a clarification on the customer liquidation headwind you faced. Was that $1.3 million for Q4 that wasn't contemplated in the guide? And if so, what's the annualized headwind you anticipate there in 2026?
Parker Lane: Thanks, Eric. And Dennis, one for you. Just a clarification on the customer liquidation headwind you faced. Was that $1.3 million for Q4 that wasn't contemplated in the guide? And if so, what's the annualized headwind you anticipate there in 2026?
Speaker #3: It's a standard uplift, and that makes it easy for our salespeople to have the conversation and easy for our customers to buy.
Speaker #10: Thanks , and Dennis . Eric One for you . Just a clarification on the customer liquidation faced . Was 1.3 million for the fourth quarter that headwind you ?
Dennis Story: Yeah, it was in the quarter, $1.3 million or $2.5 million.
Dennis Story: Yeah, it was in the quarter, $1.3 million or $2.5 million.
Speaker #10: That wasn't contemplated in the guide. And if so, what's the annualized headwind you anticipate there in '26?
Eric Clark: 1.3 in the quarter, 2.5 annualized.
Eric Clark: 1.3 in the quarter, 2.5 annualized.
Speaker #2: Yeah, was it quarter 1.3 million or 2.5?
Dennis Story: Okay.
Dennis Story: Okay.
Eric Clark: Yeah.
Eric Clark: Yeah.
Dennis Story: Yep.
Dennis Story: Yep.
Parker Lane: Got it. Okay.
Parker Lane: Got it. Okay.
Eric Clark: Yeah.
Eric Clark: Yeah.
Parker Lane: Thank you.
Parker Lane: Thank you.
Eric Clark: So that wasn't, you know, that wasn't in our numbers a quarter ago. That happened quickly and surprisingly, but it's now baked into all of our numbers.
Eric Clark: So that wasn't, you know, that wasn't in our numbers a quarter ago. That happened quickly and surprisingly, but it's now baked into all of our numbers.
Speaker #3: 1.3 in 2.5 annualized. Yeah.
Speaker #2: Yeah .
Speaker #10: Got it .
Speaker #3: Okay . Yeah . So that so that that that wasn't you know that wasn't in our numbers a quarter ago that happened quickly .
Parker Lane: Okay, thanks for the clarification.
Parker Lane: Okay, thanks for the clarification.
Speaker #3: And, surprisingly. But it's now baked into all of our numbers.
Speaker #10: Okay. Thanks for the clarification.
Operator: Thank you. Next is Chris Quintero with Morgan Stanley. Please proceed with your question.
Operator: Thank you. Next is Chris Quintero with Morgan Stanley. Please proceed with your question.
Speaker #4: Thank you. And up next is Quintero with Chris Stanley. With your question, please proceed.
Chris Quintero: Hey, Eric. Hey, Dennis. Really appreciate the ARR disclosure here. That's, that's super helpful, especially with all the different dynamics hitting the RPO metrics. So thank you. Thank you for that additional color. I've got two questions on services. It's usually the number one question I get from investors is, how do we think about the services business over the medium and long term, you know, clearly, it's really great to see that get back to growth. You have some easy comps from 2025, but you also have a lot of renewals coming up. So, is there any color you can give us around, you know, what is that kind of medium, normalized kind of growth rate for the services business potentially look like here?
Chris Quintero: Hey, Eric. Hey, Dennis. Really appreciate the ARR disclosure here. That's, that's super helpful, especially with all the different dynamics hitting the RPO metrics. So thank you. Thank you for that additional color. I've got two questions on services. It's usually the number one question I get from investors is, how do we think about the services business over the medium and long term, you know, clearly, it's really great to see that get back to growth. You have some easy comps from 2025, but you also have a lot of renewals coming up. So, is there any color you can give us around, you know, what is that kind of medium, normalized kind of growth rate for the services business potentially look like here?
Speaker #11: Hey , Eric . Hey , Dennis . Really appreciate the disclosure here . That's that's super helpful , especially with all the different dynamics hitting the RPO metrics .
Speaker #11: So thank you . Thank you for that additional color . I've got two questions on services . It's usually the number one question I get from investors is how do we think about the services business over the medium and long term .
Speaker #11: You know, clearly, it's really great to see that. Get back to growth. You have some easy comps from '25, but you also have a lot of up.
Speaker #11: So, renewals coming— is there any color you can give us around that? You know, what does a medium services business potentially look like here?
Eric Clark: Yeah. So it doesn't surprise me that you get that question a lot because I think in the services, you know, in IT services world, that question is going around a lot. I think what's unique about our services business is that it is so domain-specific. And that gives us a unique advantage across our products, but also when we're talking about things like Agentic AI. You know, the real value in Agentic AI is being able to tie it to that, you know, domain knowledge and domain expertise, and that's what we're doing with our forward-deployed engineers. All that being said, and, you know, based on some of the comments I made earlier, these are all the things that give us confidence for that mid-single-digit growth rate in services.
Yeah. So it doesn't surprise me that you get that question a lot because I think in the services, you know, in IT services world, that question is going around a lot. I think what's unique about our services business is that it is so domain-specific. And that gives us a unique advantage across our products, but also when we're talking about things like Agentic AI. You know, the real value in Agentic AI is being able to tie it to that, you know, domain knowledge and domain expertise, and that's what we're doing with our forward-deployed engineers. All that being said, and, you know, based on some of the comments I made earlier, these are all the things that give us confidence for that mid-single-digit growth rate in services.
Speaker #3: Yeah . So it doesn't surprise me that you get that question a lot because I think in the services , you know , IT services that question is world , a lot .
Speaker #3: I think what's unique about our services business is that it is so domain specific and , and that gives us a unique advantage across our products , but also when we're talking about things like Agentic AI , you know , the real value in Agentic AI is being able to tie it to that .
Speaker #3: You know , domain knowledge and domain expertise . And that's what we're doing forward with our engineers . deployed All that being said you know , based on some of the , and comments I made earlier , these are all the things that give us confidence for that mid-single growth rate digit in services .
Eric Clark: You know, we don't expect this to be a double-digit growth rate, and we don't necessarily want it to be. We wanna... You know, our focus is on growing the cloud business double-digit, you know, 20%+.
You know, we don't expect this to be a double-digit growth rate, and we don't necessarily want it to be. We wanna... You know, our focus is on growing the cloud business double-digit, you know, 20%+.
Speaker #3: know , we You don't expect this to be a double digit growth rate . And we don't necessarily want it to be . We want to , you know , our focus is on growing the cloud business double digit , you 20 plus percent .
Chris Quintero: Got it. That's super helpful, Eric. And then if we go back to, you know, this call last year, you all talked about some of those implementations, in-flight implementations that got pushed out. Any update on that? Like, how, did all those close in 2025? Are you still kind of working through some of those? Any additional color there would be helpful.
Chris Quintero: Got it. That's super helpful, Eric. And then if we go back to, you know, this call last year, you all talked about some of those implementations, in-flight implementations that got pushed out. Any update on that? Like, how, did all those close in 2025? Are you still kind of working through some of those? Any additional color there would be helpful.
Speaker #11: Got it . That's super helpful Eric . And we go back then if to this call last year , you all talked about some of those implementation in-flight implementations that got pushed out .
Speaker #11: Any update on that? How did all those close in '25? Are you still kind of working through some of those?
Eric Clark: Yeah, I think there's, you know, a little bit of all over the board on some of those. But the reality is, I think in a large part, none of them stopped. As you know, as we said a year ago, none of them are stopping. They were just slowing down. They're all back deploying again, to some extent. Some of them are, you know, now ahead of where they were, you know, ahead of schedule, and we continue to have these conversations. If you remember, we talked about not only are we offering fixed-fee conversions, but in some cases, we're going out to some of these customers and offering fixed-fee, "Hey, let us do the next 10 DCs that, you know, we've already got the recipe for.
Eric Clark: Yeah, I think there's, you know, a little bit of all over the board on some of those. But the reality is, I think in a large part, none of them stopped. As you know, as we said a year ago, none of them are stopping. They were just slowing down. They're all back deploying again, to some extent. Some of them are, you know, now ahead of where they were, you know, ahead of schedule, and we continue to have these conversations. If you remember, we talked about not only are we offering fixed-fee conversions, but in some cases, we're going out to some of these customers and offering fixed-fee, "Hey, let us do the next 10 DCs that, you know, we've already got the recipe for.
Speaker #11: Any additional color would be helpful?
Speaker #11: there would Yeah ,
Speaker #3: I think there's , you know , a little bit of all over the board on some of those . But the reality is , I think in a large part , none of them stopped , as you know , as we said a year ago , none of them are stopping .
Speaker #3: They were just slowing down . They're all back Some of deploying are , know , where they extent . some them ahead of you again to ahead of were , you know , schedule .
Speaker #3: we And continue to have these conversations . If you remember , we talked about not only offering are we fixed fee conversions , but in some cases we're going out to some of these customers and offering fixed fee .
Eric Clark: Let us go roll these out quickly." So there's a big effort to make sure all of those catch up or get ahead of their scheduled plan.
Let us go roll these out quickly." So there's a big effort to make sure all of those catch up or get ahead of their scheduled plan.
Speaker #3: Hey, let us do the next ten DCS that you know. We've already got the recipe for us. Let's go. Let's roll these out quickly.
Chris Quintero: Awesome. Thanks so much, Eric.
Chris Quintero: Awesome. Thanks so much, Eric.
Speaker #3: So there's a big effort to make sure all of those catch up or get ahead of their scheduled plan.
Eric Clark: Yep, thank you.
Eric Clark: Yep, thank you.
Operator: Thank you. And our next question comes from the line of Guy Hardwick with Barclays. Please proceed with your question.
Operator: Thank you. And our next question comes from the line of Guy Hardwick with Barclays. Please proceed with your question.
Speaker #11: Awesome. Thanks, Eric, so much.
Speaker #3: Yep . Thank you .
Speaker #4: Thank you. And our next question comes from the line of Guy Hardwick with Barclays. Please proceed with your question.
Guy Hardwick: Hi, good evening.
Guy Hardwick: Hi, good evening.
Eric Clark: Hi.
Eric Clark: Hi.
Guy Hardwick: Hi, Eric. I also NRF, and I was fortunate enough to speak to some Manhattan Associates reps and, obviously, homed in on the Active Agent subscriptions, which you mentioned in your prepared remarks. So I know it was asked a little bit earlier, but asking in a different way, are you assuming any incremental subscription bookings from Active Agent subscription in that $2.6 to 2.68 billion RPO guidance for the year? Or is it within the SaaS revenue guidance, or would anything be incremental if it's not?
Guy Hardwick: Hi, Eric. I also NRF, and I was fortunate enough to speak to some Manhattan Associates reps and, obviously, homed in on the Active Agent subscriptions, which you mentioned in your prepared remarks. So I know it was asked a little bit earlier, but asking in a different way, are you assuming any incremental subscription bookings from Active Agent subscription in that $2.6 to 2.68 billion RPO guidance for the year? Or is it within the SaaS revenue guidance, or would anything be incremental if it's not?
Speaker #12: Hi . Good evening .
Speaker #3: Hi .
Speaker #12: Hi , Eric . I also nrf and I was able to fortunate enough to speak to some Manhattan associates reps and homed in on obviously a the agent subscriptions , which you active prepared mentioned in the So in your remarks .
Speaker #12: I know I was asked a little bit earlier, but asking in a different way. Are you assuming any incremental subscription from agent active subscription in that $2.6 to $2.68?
Speaker #12: Billion guidance RPO for the year, or is it within the revenue SaaS guidance, or would anything be incremental if it's not?
Eric Clark: Yeah, so, so we've taken a very conservative approach. Anything we do in AI is incremental to what we've talked about today.
Eric Clark: Yeah, so, so we've taken a very conservative approach. Anything we do in AI is incremental to what we've talked about today.
Speaker #3: Yeah, so we've taken a very conservative approach. Anything we do in AI is incremental to what we've talked about today.
Guy Hardwick: Okay, got it. And just as a follow-up, I guess that, given you... In terms of the Q4 bookings, how much of that a catch up from, perhaps the bookings being a little bit disappointing in Q3? So how much was it of bookings, which should have fallen in Q3, falling in Q4, and then how much was down to your sales guys over-delivering or perhaps delivering better than expected?
Guy Hardwick: Okay, got it. And just as a follow-up, I guess that, given you... In terms of the Q4 bookings, how much of that a catch up from, perhaps the bookings being a little bit disappointing in Q3? So how much was it of bookings, which should have fallen in Q3, falling in Q4, and then how much was down to your sales guys over-delivering or perhaps delivering better than expected?
Speaker #3: .
Speaker #12: it . And Okay . just as a up follow , I guess that you in terms of the Q4 bookings , how much was that a catch up from perhaps the bookings being a little bit disappointing in Q3 ?
Speaker #12: So, how much was it of bookings which should have fallen in Q3 falling in Q4, and then how much was down to sales, your guys?
Eric Clark: Yeah, I think, you know, when we talked about Q3 bookings, it was a little below what we wanted it to be, but at the time, I said we are still on track to hit our full-year number. That is a little bit just the lumpiness. But, you know, we beat our full-year guidance by $40 million, so it absolutely was more than just, you know, timing by quarter. It was over-performance by the team.
Eric Clark: Yeah, I think, you know, when we talked about Q3 bookings, it was a little below what we wanted it to be, but at the time, I said we are still on track to hit our full-year number. That is a little bit just the lumpiness. But, you know, we beat our full-year guidance by $40 million, so it absolutely was more than just, you know, timing by quarter. It was over-performance by the team.
Speaker #12: Overdelivering, or delivering better than perhaps expected?
Speaker #3: Yeah , I think , you know , when we talked about Q3 bookings , it was a little below what we wanted it to be .
Speaker #3: But at the time I said we are still on track to hit our full-year number, and that is a little bit just the lumpiness.
Speaker #3: But , you know , we beat our full year by 40 million . So it absolutely guidance was more than just , you know , timing by quarter .
Guy Hardwick: Got it. Thank you.
Guy Hardwick: Got it. Thank you.
Eric Clark: Thank you.
Eric Clark: Thank you.
Speaker #3: It was overperformance by the team.
Operator: Thank you. And our next question comes from the line of Mark Chappell with Loop Capital Markets. Please proceed with your question.
Operator: Thank you. And our next question comes from the line of Mark Chappell with Loop Capital Markets. Please proceed with your question.
Speaker #12: Thank you .
Speaker #3: Thank you .
Speaker #4: Thank you. And our next question comes from the line of Mark Chappell with Loop Capital Markets. Please proceed with your question.
Chris Quintero: Thank you for taking my question. Nice job on the quarter, especially on the RPO print. Eric, a question for you here: Could you just comment on the CIO sentiment you're seeing with respect to greenlighting large WMS and TMS conversion projects, and maybe how that sentiment has evolved over, say, the past 6 to 9 months?
Mark Schappel: Thank you for taking my question. Nice job on the quarter, especially on the RPO print. Eric, a question for you here: Could you just comment on the CIO sentiment you're seeing with respect to greenlighting large WMS and TMS conversion projects, and maybe how that sentiment has evolved over, say, the past 6 to 9 months?
Speaker #13: Thank you for taking my question . Nice job on the quarter , especially on the RPO print . Eric , a question for you here .
Speaker #13: Could you just comment on the CIO sentiment you're seeing with respect to green lighting , large HMS conversion how that and TMS evolved sentiment over , say , the past maybe has 6 to 9 months ?
Eric Clark: Yeah. I would say the sentiment really hasn't changed drastically over the past 6 to 9 months. I would say that, you know, our customers that are in programs are really like everything we're doing about speeding them up, you know, speed and simplicity. How can they get to their ROI faster? You know, the reason companies embark on this is because it truly does create efficiency, and it does create cost savings, and it does create ROI for them, so the faster they can achieve that, the better. But, you know, I gave you several examples of, you know, Q4 companies and the types of companies that we sold to and what they bought, many of them being new logos.
Eric Clark: Yeah. I would say the sentiment really hasn't changed drastically over the past 6 to 9 months. I would say that, you know, our customers that are in programs are really like everything we're doing about speeding them up, you know, speed and simplicity. How can they get to their ROI faster? You know, the reason companies embark on this is because it truly does create efficiency, and it does create cost savings, and it does create ROI for them, so the faster they can achieve that, the better. But, you know, I gave you several examples of, you know, Q4 companies and the types of companies that we sold to and what they bought, many of them being new logos.
Speaker #3: would
Speaker #3: say Yeah . I the sentiment really hasn't changed drastically over the past 6 to 9 months . I would say that , you know , our customers that are in programs are really like everything we're doing about speeding them up , you know , speed and simplicity .
Speaker #3: How do they—how can they get their ROI faster? The reason, you know, the reason the companies embark on this is because it truly does create efficiency.
Speaker #3: It does create cost and IT savings, and it does create ROI for them. So the faster they can achieve that, the better.
Speaker #3: But you know , you can . I gave you examples of , you know , several Q4 companies and the types of companies sold that that we to and what they bought , many of them being new logos .
Eric Clark: We still see a very healthy pipeline of companies that are recognizing if they want to achieve the things that they need to do to meet their business strategies, they need software that supports that. And there's not another provider in the market that can provide what we can in these spaces, and that's why we continue to see these very, very strong win rates against the competition.
We still see a very healthy pipeline of companies that are recognizing if they want to achieve the things that they need to do to meet their business strategies, they need software that supports that. And there's not another provider in the market that can provide what we can in these spaces, and that's why we continue to see these very, very strong win rates against the competition.
Speaker #3: We still see a very healthy pipeline of companies that are recognizing if they want to achieve, the things that they need to meet their business do to strategies.
Speaker #3: They need software that they—that there's not, supports another provider in the market—provide, that can, what we can in these, that's why we spaces.
Mark Schappel: ... Great. Thank you. And then, as a follow-up here, in terms of your sales motion, obviously a very strong quarter for new logos again this quarter. Could you also talk a little bit about the mix this quarter, with conversions and cross-sells, and also how we should expect that to, or how we should expect that mix to evolve in the coming year?
Mark Schappel: ... Great. Thank you. And then, as a follow-up here, in terms of your sales motion, obviously a very strong quarter for new logos again this quarter. Could you also talk a little bit about the mix this quarter, with conversions and cross-sells, and also how we should expect that to, or how we should expect that mix to evolve in the coming year?
Speaker #3: Continue to see these very, and very strong, win rates against the competition.
Speaker #13: Thank you . Great . And then as a follow up here , in terms of your sales motion , obviously a very strong quarter for new logos .
Speaker #13: Again, this quarter, could you also talk a little bit about the mix this quarter with conversions and cross-sells? And also, how we should expect that to, or how we should expect that mix to, evolve in the coming year?
Eric Clark: Sure. You know, we, we always say that, you know, over time, that it's, it's kind of the rule of thirds. You know, 1/3 will be new logo, 1/3 will be expansion, and 1/3 will be conversion. But clearly, what we saw in 25 is we had 55% come from new logos, so that was a pretty remarkable performance. Now, if any one of those three categories is gonna be higher than the others, I would absolutely want it to be new logo, because that means we're going out and we're taking market share.
Eric Clark: Sure. You know, we, we always say that, you know, over time, that it's, it's kind of the rule of thirds. You know, 1/3 will be new logo, 1/3 will be expansion, and 1/3 will be conversion. But clearly, what we saw in 25 is we had 55% come from new logos, so that was a pretty remarkable performance. Now, if any one of those three categories is gonna be higher than the others, I would absolutely want it to be new logo, because that means we're going out and we're taking market share.
Speaker #2: Sure .
Speaker #3: we You know , always say , you know , that over time that it's kind of the rule of thirds . You know , one third will be new logo , one third will be and one third will expansion , be conversion .
Speaker #3: But clearly, what we saw in '25 is we had 20—we had 55% come from new logos. So, that was a pretty remarkable performance.
Eric Clark: That being said, I think just being realistically, and the more new logo we win, the more opportunity we have for expansion, and we know we have a ripe set of customers that are getting ready for conversion. So we're just kind of weighing that as, you know, probably the rule of thirds over a longer period of time will come back into play, but we see big opportunity in all of those categories.
That being said, I think just being realistically, and the more new logo we win, the more opportunity we have for expansion, and we know we have a ripe set of customers that are getting ready for conversion. So we're just kind of weighing that as, you know, probably the rule of thirds over a longer period of time will come back into play, but we see big opportunity in all of those categories.
Speaker #3: if Now any one of those three categories be higher than is going to the others , I would absolutely want it to be new logo , because that means we're going out and we're taking market share .
Speaker #3: That being said, I think just being realistic, the more new logos we win, the more opportunity we have for expansion.
Speaker #3: And we know we have a ripe set of customers that are getting ready for conversion. So we're just kind of weighing that.
Speaker #3: As you know, probably the rule of thirds, over a longer period of time, will come back into play. But we see big opportunity in all of those categories.
Mark Schappel: Thank you.
Mark Schappel: Thank you.
Eric Clark: Thank you.
Eric Clark: Thank you.
Operator: Thank you. Our last question comes from the line of Clark Wright with D.A. Davidson. Please proceed with your question.
Operator: Thank you. Our last question comes from the line of Clark Wright with D.A. Davidson. Please proceed with your question.
Speaker #13: Thank you .
Speaker #3: Thank you .
Speaker #4: Thank you . And our last question comes line from the of Clark Wright with D.A. Davidson . Please proceed with your question .
Clark Wright: Hi there. Thank you. Most of my questions have been asked here already, but just wanted to understand, again, going back to the services revenue, and the opportunity that you have there once a customer is converted to the cloud. What's driving really the upsell from there on out, and how do you continue to drive value through services and your domain expertise moving forward?
Clark Wright: Hi there. Thank you. Most of my questions have been asked here already, but just wanted to understand, again, going back to the services revenue, and the opportunity that you have there once a customer is converted to the cloud. What's driving really the upsell from there on out, and how do you continue to drive value through services and your domain expertise moving forward?
Speaker #14: Hi there . Thank you . Most of my questions have been have been asked here already , but I just wanted to understand again , going back to the services revenue and the opportunity that you have there .
Speaker #14: Once the customer is converted to the cloud, what's really driving the upsell from there? And how do you continue to drive value through services and your domain expertise?
Eric Clark: Yeah. So once a customer converts to the cloud, keep in mind, every quarter they get quarterly updates, so new features and function that, you know, come to them through release notes, and then, you know, our teams will help them determine which of these features and functions can add value to you right away, which do you wanna think about later, et cetera. So the customers that are having the most success and getting the most value out of this software platform that we've built are the ones that are really looking at that quarterly. So then it comes in, the services that are related to that come in very small doses each quarter, as compared to back in the old on-prem days, maybe it was an upgrade every five or ten years, you know, with no services in between.
Eric Clark: Yeah. So once a customer converts to the cloud, keep in mind, every quarter they get quarterly updates, so new features and function that, you know, come to them through release notes, and then, you know, our teams will help them determine which of these features and functions can add value to you right away, which do you wanna think about later, et cetera. So the customers that are having the most success and getting the most value out of this software platform that we've built are the ones that are really looking at that quarterly. So then it comes in, the services that are related to that come in very small doses each quarter, as compared to back in the old on-prem days, maybe it was an upgrade every five or ten years, you know, with no services in between.
Speaker #14: Moving forward ?
Speaker #2: Yeah .
Speaker #3: So once a customer converts to the cloud, keep in mind that every quarter they get updates. So new features and functions come to them through release notes.
Speaker #3: And then, you know, our teams will help them determine which of these functions, features, and can add value to you right away.
Speaker #3: Which do you want to think about later, etc. So the customers that are having the most success and getting the most value out of this software platform that we've built are the ones that are really looking at that quarterly.
Speaker #3: Then it comes. So, the services that are related to that come in very small doses each quarter, as compared to back in the old on-prem days.
Eric Clark: So now it's, you know, more of a steady dose of services throughout the life of the partnership.
So now it's, you know, more of a steady dose of services throughout the life of the partnership.
Speaker #3: Maybe it was an upgrade every 5 or 10 years , you know , with no services in between . So now it's , you know , more of a steady dose of services throughout the life of the of of the the partnership .
Clark Wright: Awesome. That's helpful. And then just in terms of... Oh, go ahead.
Clark Wright: Awesome. That's helpful. And then just in terms of... Oh, go ahead.
Eric Clark: No, please go ahead.
Eric Clark: No, please go ahead.
Clark Wright: Oh, I was just wondering, in terms of the strength of the new business that you're talking about, has there been any specific verticals where you've seen more traction than others?
Clark Wright: Oh, I was just wondering, in terms of the strength of the new business that you're talking about, has there been any specific verticals where you've seen more traction than others?
Speaker #14: That's awesome, helpful. And then, just in terms of go ahead.
Speaker #3: No, please go ahead.
Speaker #14: In terms of the strength of the new business that you're talking about, has there been any specific verticals where you've seen more traction than others?
Speaker #14: In terms of the strength of the new business that you're talking about, has there been any specific verticals where you've seen traction more than others?
Eric Clark: Well, I think what's been exciting for us is it's been very diverse. You know, people really know us as we're really strong in retail, and a lot of people think about us, you know, as that retail strength. But, you know, when I kinda listed out the wins and talked about the wins that we had in Q4, it goes far beyond retail. And, you know, it's great to see we're getting more and more strength and more dominance outside of retail.
Eric Clark: Well, I think what's been exciting for us is it's been very diverse. You know, people really know us as we're really strong in retail, and a lot of people think about us, you know, as that retail strength. But, you know, when I kinda listed out the wins and talked about the wins that we had in Q4, it goes far beyond retail. And, you know, it's great to see we're getting more and more strength and more dominance outside of retail.
Speaker #3: Well , I think what's been exciting for us is it's a it's been very diverse . You really know , people know us as we're really strong in retail .
Speaker #3: And a lot of people think know , is that about us , you retail strength . But , you know , when I kind of listed the out the wins and the wins that we had talked about in Q4 , it goes far beyond retail .
Clark Wright: Thank you.
Clark Wright: Thank you.
Speaker #3: And , you know , it's great to see we're and more getting more strength and more dominance outside of retail .
Eric Clark: Thank you.
Eric Clark: Thank you.
Operator: Thank you. Ladies and gentlemen, with that, this does conclude today's question and answer session. I would now like to turn the floor back to Eric Clark for any closing remarks.
Operator: Thank you. Ladies and gentlemen, with that, this does conclude today's question and answer session. I would now like to turn the floor back to Eric Clark for any closing remarks.
Speaker #14: Thank you .
Speaker #3: Thank you .
Speaker #4: Thank ladies and gentlemen , with that , this does conclude today's question and answer session . I would now like to turn the floor back to Eric Clark for any closing remarks .
Eric Clark: Hey, I know we ran a few minutes long, but thank you all for sticking with us. Really appreciate your time. We're pleased of where we are as here in Q1, and excited about the year ahead.
Eric Clark: Hey, I know we ran a few minutes long, but thank you all for sticking with us. Really appreciate your time. We're pleased of where we are as here in Q1, and excited about the year ahead.
Speaker #3: Now, we ran a few minutes long, but thank you all for sticking with us. Really appreciate your time. We're pleased with where we are here in Q1 and excited for the year ahead.
Operator: Thank you. And with that, ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation, and you may disconnect your lines at this time, and have a wonderful day.
Operator: Thank you. And with that, ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation, and you may disconnect your lines at this time, and have a wonderful day.
Speaker #4: Thank you . with that , And ladies and gentlemen , this does conclude today's teleconference . We thank you for your participation . And you may disconnect your this time and have a wonderful day .
