MANH Q2 Deep Dive: Cloud Momentum and Product Innovation Drive Guidance Increase

Supply chain optimization software maker Manhattan Associates (NASDAQ:MANH) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 2.7% year on year to $272.4 million. The company’s full-year revenue guidance of $1.07 billion at the midpoint came in 0.9% above analysts’ estimates. Its non-GAAP profit of $1.31 per share was 16.2% above analysts’ consensus estimates.

Is now the time to buy MANH? Find out in our full research report (it’s free).

StockStory’s Take

Manhattan Associates delivered a positive Q2, with the market responding strongly to the company's better-than-expected results. Management attributed the quarter’s outperformance to robust growth in cloud revenue, effective cross-selling of its unified platform, and solid execution in sales. CEO Eric Clark pointed to “22% cloud revenue growth” and highlighted strength from new customer wins. The company’s consistent win rates against major competitors and healthy pipeline supported its recent performance.

Looking ahead, Manhattan Associates’ updated guidance reflects expectations of continued cloud growth, a ramp-up in renewal cycles, and incremental contributions from new sales and marketing investments. Management cited upcoming product enhancements, especially in AI-driven automation, as key to expanding its addressable market. Clark emphasized, “We believe our industry-leading unified cloud platform positions Manhattan as the clear choice for modern supply chain commerce solutions,” while also expressing caution about ongoing macroeconomic uncertainty and variability in services demand.

Key Insights from Management’s Remarks

Manhattan Associates’ second quarter benefited from strong cloud adoption, expanded partnerships, and focused go-to-market investments, while management remained measured about services revenue due to ongoing customer deployment flexibility.

• Cloud revenue growth: The quarter saw robust adoption of Manhattan’s cloud solutions, with management noting that over 70% of new cloud bookings came from net new customers, and cloud revenue growth outpaced expectations.
• Unified platform cross-sell: The company’s strategy of offering a unified product suite continued to gain traction, with management noting that over the past five quarters, roughly 80% of customers that bought Manhattan Active Transportation Management (MATM) also bought or had previously purchased Manhattan Active Warehouse Management (MAWM), demonstrating the growing value of unification among these product buyers.
• Expanded sales capabilities: Manhattan made significant investments in sales hiring and leadership, promoting Bob Howell to Chief Sales Officer and adding specialized sales leaders for key product areas, aiming to accelerate pipeline growth and market penetration.
• Strategic partnerships: New and expanded alliances with Google Cloud and Shopify were highlighted, enabling easier customer access to Manhattan’s solutions and contributing to the largest deal of the quarter through the Google Cloud Marketplace.
• AI-driven product advancements: Management detailed enhancements to Manhattan Assist and the upcoming Agentic AI platform, which are expected to automate supply chain processes and further differentiate the company’s offerings.

Drivers of Future Performance

Management expects future performance to be shaped by sustained cloud momentum, execution on renewal cycles, and the impact of increased sales and product innovation investments.

• Cloud renewal cycle acceleration: The upcoming renewal cycle, especially for Manhattan Active Warehouse Management, is expected to drive higher subscription revenue through upsell, cross-sell, and price adjustments as contracts refresh at higher run rates.
• Go-to-market expansion: Recent hires and organizational changes in sales and marketing are designed to broaden Manhattan’s reach in key markets such as point-of-sale and transportation management, with partnerships and new sales talent set to boost pipeline growth.
• Macro and services caution: While management remains optimistic about demand, they continue to monitor macroeconomic headwinds and customer flexibility in services deployments, maintaining a conservative outlook for services revenue and acknowledging variability in customer implementation timelines.

Catalysts in Upcoming Quarters

In the coming quarters, our analyst team will closely watch (1) the uptake and customer engagement with new AI-powered Agentic capabilities, (2) the effectiveness of expanded sales and marketing initiatives in driving new logo wins and cross-sell opportunities, and (3) the progression of on-premise customer migrations to cloud solutions. Developments in strategic partnerships and the impact of macroeconomic factors on services demand will also be important to monitor.

Manhattan Associates currently trades at $220.28, up from $203.44 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).

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