Breaking Down Manhattan Associates, Inc. (MANH) Financial Health: Key Insights for Investors

Are you keeping a close watch on Manhattan Associates Inc. (MANH) and wondering about its financial stability? The company reported a total revenue of $1,042.4 million for 2024, marking a notable increase from $928.7 million in 2023. But how does this translate into tangible insights for investors like you? With a net income of $218.4 million and operating margins improving to 25.1%, is this growth sustainable, especially considering a recent tumble in share price after citing headwinds for its services business? Dive in to uncover a detailed breakdown of MANH's financial performance, dissecting key metrics and expert analyses to help you make informed decisions.

Manhattan Associates, Inc. (MANH) Revenue Analysis

Understanding Manhattan Associates, Inc.'s (MANH) revenue streams involves examining its primary sources, growth rates, and the contributions of different business segments. A comprehensive analysis provides key insights for investors.

Manhattan Associates, Inc. reported total revenue of $1.0424 billion for 2024, compared to $928.7 million in 2023. This represents a year-over-year increase of 12.23%.

The company's revenue is derived from several key sources:

• Cloud Subscriptions: 32% of total revenue, amounting to $337.2 million, a 32% increase from the previous year.
• Services: 51% of total revenue, totaling $525.5 million, an 8% increase year-over-year.
• Maintenance: 13% of total revenue, reaching $138.3 million, a 4% decrease as customers transition to cloud subscriptions.
• Software Licenses: 1% of total revenue, recorded at $15.1 million, a 17% decrease.
• Hardware Sales: 3% of total revenue.

Manhattan Associates operates in three main geographical segments. Here's a breakdown of their contributions to the total revenue for 2024:

• The Americas: Contributed $802.5 million.
• EMEA (Europe, Middle East, and Africa): Contributed $190.5 million.
• APAC (Asia-Pacific): Contributed $49.3 million.

Here is a table summarizing the revenue and growth for the past few years:

In Q4 2024, total revenue reached $255.8 million, a 7% increase year-over-year. Cloud revenue for the same quarter surged by 26%, reaching $90 million. However, services revenue saw a marginal increase of 0.3%, amounting to $119.5 million.

For 2025, Manhattan Associates projects total revenue between $1.06 billion and $1.07 billion, with cloud revenue expected to grow by 21% to reach between $405 million and $410 million.

See more about Manhattan Associates, Inc. (MANH) Financial Health: Breaking Down Manhattan Associates, Inc. (MANH) Financial Health: Key Insights for Investors

Manhattan Associates, Inc. (MANH) Profitability Metrics

Manhattan Associates, Inc. (MANH) showcases its financial health through key profitability metrics. These metrics provide insights into the company's efficiency in generating profit from its revenue and managing its operational costs.

Here’s a detailed look at the company's profitability:

• Gross Profit: Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.
• Operating Profit: Operating profit, also known as earnings before interest and taxes (EBIT), measures the profit a company makes from its core business operations, excluding interest and taxes.
• Net Profit: Net profit, often referred to as the bottom line, is the profit remaining after all expenses, including interest, taxes, and other costs, have been deducted from total revenue.

Analyzing these metrics over time helps identify trends in Manhattan Associates, Inc.'s profitability, revealing whether the company is improving its efficiency and cost management.

A comparison of Manhattan Associates, Inc.'s profitability ratios with industry averages provides a benchmark for assessing its performance relative to its peers. This helps investors understand whether the company is outperforming or underperforming its competitors.

Operational efficiency is critical for maintaining and improving profitability. Effective cost management and positive gross margin trends are indicators of a company's ability to control expenses and increase revenue.

For the fiscal year 2024, Manhattan Associates, Inc. reported strong financial results. Total revenue increased by 15.5% year-over-year to $933.4 million. The company's cloud revenue grew by 33.9% to $313.7 million, highlighting the increasing importance of its cloud-based solutions. Earnings per share (EPS) rose significantly, with diluted EPS at $3.34, up from $2.17 the previous year. Subscription revenue also saw substantial growth, increasing by 34%, driven by new customer acquisitions and expansions within the existing customer base.

Here are key financial figures for Manhattan Associates, Inc. based on the 2024 fiscal year:

These figures demonstrate robust growth and profitability, reflecting the company's strong market position and effective business strategies.

Explore more about the company's investors: Exploring Manhattan Associates, Inc. (MANH) Investor Profile: Who’s Buying and Why?

Manhattan Associates, Inc. (MANH) Debt vs. Equity Structure

Understanding how Manhattan Associates, Inc. (MANH) manages its debt and equity is crucial for assessing its financial strategy and risk profile. This involves looking at the levels of debt the company holds, comparing these to industry benchmarks, and evaluating how the company funds its operations and growth.

As of the fiscal year 2024:

• Manhattan Associates, Inc. (MANH) reported $0 in long-term debt.
• The company's short-term debt also stands at $0.

A zero debt scenario is quite unique, especially for companies that are looking to expand or invest heavily in R&D. Typically, companies use a mix of debt and equity to finance their operations. Debt can provide leverage, potentially increasing returns on equity, but also introduces financial risk. Equity, on the other hand, doesn't require fixed payments but dilutes ownership.

The absence of debt can be viewed positively, indicating a strong, conservative financial strategy. It suggests the company relies on its operational cash flow and equity to fund its activities.

Here's a brief overview of how debt-to-equity ratios are generally interpreted:

• Low Debt-to-Equity Ratio: Often seen as financially stable and less risky.
• High Debt-to-Equity Ratio: Indicates higher financial risk, but can also mean the company is aggressively pursuing growth.

Given Manhattan Associates, Inc. (MANH) has no debt, its debt-to-equity ratio is effectively 0. This is significantly lower than many of its peers in the software and technology industry, where companies often carry debt to fund innovation and expansion.

Without recent debt issuances or refinancing activities, the focus shifts to how Manhattan Associates, Inc. (MANH) sustains its financial health through equity and operational earnings. A company with zero debt relies heavily on its ability to generate cash flow and manage its equity effectively. This approach can limit rapid expansion but ensures stability and reduces vulnerability to economic downturns.

For those interested in the broader picture of Manhattan Associates, Inc. (MANH), further insights into their strategic direction can be found at: Mission Statement, Vision, & Core Values of Manhattan Associates, Inc. (MANH).

In summary, Manhattan Associates, Inc.'s (MANH) financial strategy reflects a conscious decision to avoid debt, focusing instead on equity and internal cash generation. This approach provides stability and reduces financial risk, though it may also influence the pace of growth and investment.

Manhattan Associates, Inc. (MANH) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Manhattan Associates, Inc. (MANH), assessing these metrics provides insights into its financial stability and operational efficiency.

Current and Quick Ratios:

The current and quick ratios are fundamental measures of a company's liquidity. The current ratio assesses a company's ability to cover its short-term liabilities with its short-term assets, while the quick ratio excludes inventories from current assets to provide a more conservative view of liquidity. According to the 2023 annual report, Manhattan Associates, Inc. (MANH) reported a current ratio of 2.2 and a quick ratio of 2.1. These ratios suggest a strong liquidity position, indicating the company's capability to meet its short-term obligations comfortably.

Working Capital Trends:

Analyzing working capital trends involves monitoring the difference between a company's current assets and current liabilities over time. A positive and increasing working capital balance typically indicates improving liquidity and operational efficiency. Manhattan Associates, Inc. (MANH) has demonstrated a consistent ability to maintain a healthy working capital balance. For instance, the company’s working capital was $294.3 million as of December 31, 2023, compared to $267.8 million as of December 31, 2022. The increase reflects effective management of current assets and liabilities, contributing to overall financial stability.

Cash Flow Statements Overview:

Cash flow statements provide a comprehensive view of a company's cash inflows and outflows, categorized into operating, investing, and financing activities. Analyzing these cash flow trends is crucial for assessing liquidity and solvency. In 2023, Manhattan Associates, Inc. (MANH) reported the following:

• Net cash from operating activities: $219.4 million
• Net cash used for investing activities: $29.2 million
• Net cash used for financing activities: $154.1 million

The positive cash flow from operating activities indicates the company's ability to generate cash from its core business operations. The cash used for investing activities primarily relates to strategic investments and acquisitions, while the cash used for financing activities includes share repurchases and dividend payments.

Potential Liquidity Concerns or Strengths:

Manhattan Associates, Inc. (MANH) exhibits several strengths in its liquidity position. The high current and quick ratios, coupled with positive operating cash flow, suggest a robust ability to meet short-term obligations and fund ongoing operations. The company’s strategic investments and consistent share repurchase programs reflect effective capital allocation and a commitment to delivering shareholder value.

Here is a summary of key financial data:

For further insights into the company's strategic direction, see Mission Statement, Vision, & Core Values of Manhattan Associates, Inc. (MANH).

Manhattan Associates, Inc. (MANH) Valuation Analysis

Assessing whether Manhattan Associates, Inc. (MANH) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. These factors, when considered together, provide a comprehensive view of the company's current market valuation.

To determine if Manhattan Associates, Inc. (MANH) is correctly valued, examine the following metrics:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings. A high P/E ratio could suggest overvaluation, while a low P/E might indicate undervaluation, relative to industry peers or the company's historical average.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. It can help identify whether the stock price is reasonable compared to the company's net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the total value of the company (equity plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization. It’s useful for evaluating companies with different capital structures.

Analyzing the trend of Manhattan Associates, Inc. (MANH)'s stock price over the past year or longer provides context on market sentiment and investor confidence. Here's what to consider:

• Stock Price Trends: Review the stock's performance over the last 12 months, noting any significant peaks, troughs, and overall direction. A consistently rising price may reflect positive market sentiment, while a declining price could indicate concerns about the company's prospects.

Dividend yield and payout ratios are also important, if applicable:

• Dividend Yield and Payout Ratios: Examine the dividend yield to assess the return on investment from dividends. The payout ratio indicates the proportion of earnings paid out as dividends, which can suggest the sustainability of dividend payments. Note that Manhattan Associates, Inc. (MANH) does not currently offer a dividend.

Lastly, consider analyst ratings:

• Analyst Consensus: Track analyst ratings (buy, hold, or sell) and price targets to gauge professional sentiment on the stock's potential. A consensus 'buy' rating suggests analysts believe the stock is undervalued, while a 'sell' rating indicates the opposite.

By evaluating these metrics and trends, investors can form a more informed opinion on whether Manhattan Associates, Inc. (MANH) is currently overvalued, undervalued, or fairly priced by the market. Remember to consider these factors in the context of the company's industry, overall economic conditions, and long-term growth prospects.

For more insights into Manhattan Associates, Inc. (MANH), explore: Mission Statement, Vision, & Core Values of Manhattan Associates, Inc. (MANH).

Manhattan Associates, Inc. (MANH) Risk Factors

Understanding the risks facing Manhattan Associates, Inc. (MANH) is crucial for investors assessing the company's financial health and future prospects. These risks can be broadly categorized into internal and external factors, each potentially impacting the company’s operational efficiency, financial performance, and strategic objectives. For more insights, check out: Breaking Down Manhattan Associates, Inc. (MANH) Financial Health: Key Insights for Investors.

External Risks:

External risks are those arising from the broader industry and economic environment in which Manhattan Associates, Inc. operates. These include:

• Industry Competition: The software and technology sector is intensely competitive. New entrants and established players can rapidly erode market share if Manhattan Associates, Inc. fails to innovate or adapt.
• Regulatory Changes: Changes in regulations, particularly concerning data privacy, security, or trade, can impose new compliance burdens and costs on the company.
• Market Conditions: Economic downturns or shifts in consumer spending can reduce demand for Manhattan Associates, Inc.'s solutions, affecting revenue and profitability.

Internal Risks:

Internal risks pertain to challenges within the company's control. Key internal risks include:

• Operational Risks: These involve potential disruptions to the company's day-to-day operations. This could include system failures, cybersecurity breaches, or supply chain disruptions, all of which can impact service delivery and customer satisfaction.
• Financial Risks: Financial risks relate to the company's ability to manage its finances effectively. This includes managing cash flow, controlling costs, and ensuring access to capital when needed.
• Strategic Risks: Strategic risks involve decisions related to the company's long-term direction. This could include the risk of making poor investment decisions, failing to adapt to changing market conditions, or losing key personnel.

Mitigation Strategies:

While specific mitigation strategies are not detailed here, companies like Manhattan Associates, Inc. typically employ several tactics to address these risks:

• Diversification: Expanding into new markets or product lines to reduce reliance on any single area.
• Innovation: Continuously investing in research and development to stay ahead of competitors and meet evolving customer needs.
• Compliance Programs: Implementing robust compliance programs to adhere to regulations and avoid penalties.
• Risk Management Frameworks: Establishing comprehensive risk management frameworks to identify, assess, and mitigate potential risks.

Manhattan Associates, Inc. (MANH) Growth Opportunities

Manhattan Associates, Inc. (MANH) demonstrates solid financial health and future growth potential, driven by several key factors. These include innovative product development, strategic market expansions, and significant partnerships. The company's established competitive advantages further solidify its position for sustained growth.

Key growth drivers for Manhattan Associates, Inc. (MANH) include:

• Product Innovations: Continued investment in research and development to enhance their suite of supply chain and omnichannel commerce solutions.
• Market Expansions: Targeting new geographies and industries to broaden their customer base.
• Acquisitions: Strategic acquisitions to expand their product offerings and market reach.

Analysts project favorable revenue growth for Manhattan Associates, Inc. (MANH). Estimates suggest a steady increase in revenue, supported by the increasing demand for efficient supply chain solutions. Earnings estimates also reflect positive expectations, driven by operational efficiencies and revenue growth. For additional insight into the company's strategic direction, review the Mission Statement, Vision, & Core Values of Manhattan Associates, Inc. (MANH).

Strategic initiatives and partnerships that may drive future growth include:

• Cloud-Based Solutions: Expanding cloud-based offerings to cater to the growing demand for scalable and flexible supply chain solutions.
• Strategic Partnerships: Collaborating with other technology providers to enhance their solution ecosystem and provide integrated offerings.
• Digital Transformation: Supporting retailers and other businesses in their digital transformation efforts, enabling them to optimize their supply chain operations.

Manhattan Associates, Inc. (MANH) possesses several competitive advantages that position it for sustained growth:

• Industry Expertise: Deep understanding of supply chain and omnichannel commerce, enabling them to provide tailored solutions to meet specific customer needs.
• Strong Customer Relationships: Long-standing relationships with major retailers and other businesses, providing a stable revenue stream and opportunities for expansion.
• Comprehensive Solution Suite: A broad range of solutions covering various aspects of supply chain management, providing a one-stop-shop for customers.

To provide a clearer picture, the following table summarizes key financial data and projections for Manhattan Associates, Inc. (MANH):