Manhattan Associates, Inc.

Good afternoon. My name is Leah, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates Third Quarter 2021 earnings 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. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, press the pound key. As a reminder, ladies and gentlemen, this call is being recorded today, October 27th. I would now like to introduce Mr. Michael Bauer, Head of Investor Relations of Manhattan Associates. Mr. Bauer, sir, you may begin your conference.

Thank you, Leah, and good afternoon, everyone. Welcome to Manhattan Associates 2021 Third Quarter Earnings Call. I will review our cautionary language and then turn the call over to Eddie Capel, our CEO. During this call, including the question and answer session, we may make forward-looking statements regarding future events or the future financial performance of Manhattan Associates. We will caution that these forward-looking statements involve risk and uncertainties, are not guarantees of future performance, and that actual results may differ materially from projections contained in our forward-looking statements. I refer you to the reports Manhattan Associates filed with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly our annual report on Form 10-K for fiscal year 2020 and the risk factor discussion in that report, as well as any risk factor updates we provide in our subsequent Form 10-Qs. We note in particular that uncertainty regarding the impact of the COVID-19 pandemic on our performance could cause actual results to differ materially from our projections. We are under no obligation to update these statements. In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules. You'll find reconciliation schedules in the Form 8K we submitted to the SEC earlier today and on our website at manh.com. Now, I'll turn the call over to Eddie. Thanks, Mike.

Well, good afternoon, everybody, and thank you for joining us as we review our third quarter results. discuss our updated full-year 2021 outlook, and provide some very preliminary color on 2022 and beyond. Q3 and year-to-date results were an all-time record for Manhattan Associates. Total revenue increased 13% to $169 million, and adjusted earnings per diluted share of 71 cents increased 39%. Both of these metrics exceeded their expectations. Strong cloud and services demand continues to drive revenue outperformance, fueling double-digit top-line growth and strong earnings leverage. Above all, our investments in innovation are paying off. Product differentiation between Manhattan and other supply chain software vendors continues to increase. And moreover, our global teams are performing exceptionally well with a laser focus on customer success. We delivered record third quarter bookings with RPO increasing 123% year over year and 17% sequentially to $574 million, providing us with excellent future revenue visibility. Additionally, 40% of our Q3 contracted bookings were generated from net new customers. And our pipeline continues to be robust with solid demand across our product suites. Over 90% of the pipeline consists of cloud opportunities, with net new potential customers representing about 35% of that demand. And with strong business momentum and increased visibility, we're providing refreshed guideposts for RPO and cloud revenue through 2024. Dentists will provide more color later in the call, but this includes moving up our milestone of reaching $1 billion in RPO to 2022 from our original target of 2023. On the sales front, competitive win rates remain strong at about 75% as our innovation is recognized as industry-leading. From a vertical perspective, Retail, manufacturing, and wholesale drove more than 80% of our bookings for the quarter, but drilling into the sub-verticals, they're pretty diverse, including apparel, department stores, grocery, food and beverage, industrial, health services, as well as durable and non-durable goods. Our global services team continues to execute amazingly well, conducting over 100 go-lives in Q3. And for the quarter, services revenue was up 20% compared with the prior year period. As we mentioned in our Q2 call, the market is extremely competitive for services and technical talent. And while we're well positioned for significant growth, we do expect demand for talent to continue to be strong. With new and existing customers wanting to accomplish more with our solutions and at a faster pace, We're very mindful of the workload that we put on our teams, and we're focused on attracting and retaining talent, which we continue to factor into our operational planning and guidance. On the innovation front, with our R&D spend approaching $90 million annually, we're focused on providing modern cloud-native applications that are architected to unify commerce and supply chain experiences. Manhattan is on the leading edge of removing numerous unnatural silos or artificial boundaries that really don't align with business workflows. Our technology is differentiating and industry-leading. And the Manhattan active SaaS solutions are scalable, versionless, and extensible. And this enables our customers to quickly adapt to market changes. They can improve efficiency and leverage their data in more robust ways, including solving challenges that legacy and silo systems simply cannot. And we believe that we're still very early in that cloud journey, but we couldn't be more pleased with the market's enthusiastic response to our Manhattan active solutions. So let's spend just a few minutes on specific updates on products and customers. We're actually off to a great start with Manhattan Active Transportation Management, the industry's fastest and smartest multimodal transportation optimization engine. Manhattan Active TM is the industry's first self-configuring and self-tuning system. Built on our industry-leading Manhattan application architecture, Manhattan Active TM is joined with Manhattan Active Warehouse Management to perform Manhattan Active Supply Chain, the industry's first unified cloud-native supply chain execution platform. And since launch, we've been heartened by the accolades we've received from Manhattan Active Transportation Management, from analysts, partners, and customers, to perhaps most encouragingly, several of our Manhattan Active Transportation Management customers are also deploying Manhattan Active WM. In other words, our supply chain unification message and strategy is really resonating with these joint solution customers, realizing the clear benefits of unifying distribution, transportation, labor, and automation within a single application. Manhattan Active WM, the other half of Manhattan Active Supply Chain, continues to experience pretty explosive growth. Consistent with prior quarters, we're seeing a very nice balance between net new customers and existing Manhattan WMS customers choosing to migrate to our next generation of WM platform. In just 16 short months, Manhattan Active WM is live or in the process of being implemented in 11 countries across 16 different industries. A pretty good testament to its cross-vertical and international applicability. A small sampling of either live or currently implementing Manhattan Active WM customers include a luxury retail department store, a national beverage distributor, a tier zero national grocer outside of the U.S., and several industrial distributors across the globe. Our competitive win rate with WMS has always been pretty high, and Manhattan Active WM has helped us raise that already high bar. Turning now to our omni-channel applications, We continue to make strides with our Manhattan Active Point of Sale application. This past quarter, a global apparel and football brand activated our Manhattan Active Point of Sale application in two new flagship stores in New York and Las Vegas. This particular customer also runs Manhattan Active Order Management. and they saw a clear advantage of deploying a unified omni-channel operating platform across their digital and bricks and mortar operations. And from a geographical point of view, their plans call for deploying Manhattan Active Point of Sale and order management across the Americas, Asia Pacific, and Europe. And we believe that Manhattan Active Omni is unique in its ability to provide full-featured order management, contact center, and store systems as part of a unified platform across the globe. And to close that, our product and customer updates this quarter, I'm happy to report that a couple of weeks ago, we were able to host several small customer events in person for the first time in quite some time. And we were pleased to host customers in the UK, in the Netherlands, and finally in France for some pretty intimate events to discuss their commerce and supply chain strategies and how Manhattan Active Solutions can help them progress their digital transformations. I got to tell you, it was such a pleasure to connect in person with a group of strategic customers after such a long break. Well, that concludes my brief business update. Dennis is going to provide you with an update on our financial performance and outlook, and then I'll close our prepared remarks with a brief summary before we move to Q&A. So, Dennis?