Manhattan Associates, Inc.

Ladies and gentlemen, today's conference is scheduled to begin shortly. Thank you. Thank you. Thank you. Thank you. Good afternoon. My name is Laia, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates Quarter One 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 and then the number one 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, April 26th. I would now like to introduce Mr. Michael Bauer, Head of Investor Relations of Manhattan Associates. Mr. Bauer, you may begin your conference.

Thank you, Laia, and good afternoon, everyone. Welcome to Manhattan Associates' 2022 First 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. You will caution that these forward-looking statements involve risk and uncertainties and are not guaranteed of future performance and that actual results may differ materially from the projections contained in our forward-looking statements. I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections. particularly our annual report on Form 10-K for the fiscal year 2021 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 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 a reconciliation schedule in the Form 8-K we submitted to the SEC earlier today and on our website at manh.com. Now, I'll turn the call over to Eddie.

Good. Thanks, Mike. Well, good afternoon, everyone, and thank you for joining us as we review our first quarter results and discuss our increased full-year 2022 outlook. Manhattan Associates is off to a strong start in 2022. We're reporting record results. Our Q1 total revenue increased 14% to $179 million, and adjusted earnings per diluted share increased 40% to $0.60 million. And both of these metrics exceeded our expectations. Our global teams are busy and are executing very well for our customers, resulting in very strong customer satisfaction, broad revenue outperformance, and earnings leverage. And furthermore, our investment in innovation and our people continues to pay off as product differentiation between Manhattan and other supply chain software vendors is widening. And this differentiation contributed to our 75% win rates in the quarter and the growing demand for our industry-leading, mission-critical cloud solutions. In Q1, RPO, which tends to be the leading indicator for growth, increased 92% to 810 million, and we're tracking well towards achieving the 1 billion RPO milestone later this year. Demand for our cloud offerings remains strong across products, industry verticals, and geographic locations. Demand also remains robust from both new and existing customers. And while the mix of bookings will certainly vary on a quarterly basis, in Q1, over half of our contracted bookings came from net new customers, showcasing the unique value that we bring to the market and the runway that's in front of us. Now, from a vertical perspective, retail, manufacturing, and wholesales to have more than 80% of our bookings in the quarter. But drilling in, the sub-verticals are pretty diverse and include apparel, department stores, home furnishings, grocery, consumer goods, manufacturing, as well as durable and non-durable goods. Our pipeline also remains robust with solid demand across all of our product suites. Over 90% of our pipeline consists of cloud opportunities, probably as you would expect, with net new potential customers representing about 35% of that demand. And with strong business momentum and that forward revenue visibility improving, we're going to be increasing our 2022 revenue and earnings guidance. And Dennis will cover those details in a moment. On the services front, our team continues to execute very well, conducting about 100 go-lives in the quarter. And our global teams are also making really good progress against that goal of adding about 500 net new employees this year. In Q1, we added about 120 talented individuals to our Manhattan family and have a large new class scheduled to begin in Q2 as well. Across our organization, these hires will contribute to our ability to meet the future needs of our customers, grow our market share, and extend our adjustable market. Let's move on to a short update on some of our products. I'd like to start with an update on our store fulfillment application, part of our Manhattan Active Omni suite. A wide range of retail brands use store fulfillment to power their ship-from-store, pick-up-in-store, curbside, and same-day delivery customer experiences. The solution is flexible enough to scale down to support individual order picking in the boutiques of some of the world's best known luxury retailers. But it also can scale up to power team picking, allowing dozens of associates to pick orders in department stores and other large footprint retail formats. And beyond its industry-leading functionality, the platform-independent nature of the application allows it to be used across a variety of form factors and operating systems, with our customers mixing and matching Windows in either iOS or Android. And that solution stands apart in the market for its functional depth, its platform flexibility, and, of course, the fact that it can be deployed in conjunction with our point-of-sale application, delivering a mobile-first, cloud-native, and omnichannel-enabled experience for all store associates. And we're happy to report that each and every day, more than 18,000 stores across the globe use our store fulfillment application to deliver best-in-class delivery experiences for consumers worldwide. Now, speaking of stores and our point-of-sale application specifically, we continue to activate more stores across more retailers in 2022. Point-of-sale remains a key strategic initiative for us, and we're making solid progress on our journey to being the world's leading retail point-of-sale provider. Now, I provided a more exhaustive update on Manhattan Active Warehouse Management in the last quarter's update, so I'll keep my remarks on this flagship application a little more concise this quarter. Suffice to say, though, we continue to see very strong interest and adoption for Manhattan Active WM. the cloud-native WMS that we launched in May of 2020. This quarter saw a number of additional go-lives, including several high-volume, highly complex distribution centers. And the application's feature richness, intuitive mobile application, and ability to automatically scale in periods of peak workload set it apart in the market. And these factors have combined to deliver a competitive win rate with Manhattan Active WM, unlike anything we've seen in our 32-year history. And turning now to the other foundational element of Manhattan Active's supply chain, that's Manhattan Active Transportation Management. In Q1, we were once again named to the leaders quadrant in the Gartner Magic Quadrant for TMS, and this result marks the fourth consecutive year we've been named a leader in the transportation industry's most respective landscape report. And in addition to recognition from the industry analysts, Q1 was another strong quarter from an execution perspective for Manhattan Active TM. We continue to add new cloud customers across a diverse industry base, and some of our early subscribing customers are now coming live with the solution. And as a testament to our geographic diversity of our TMS customer base, our first go-live for Manhattan Active TM was actually the largest drugstore retail chain in Latin America. And the power of our unified supply chain offering is resonating around the globe, helping drive TMS pipeline and customer acquisition, both in the Americas and in Europe. Speaking of the Americas, kind of interesting, we recently signed a strategic SaaS agreement with a large home improvement retailer. And as part of the project, this customer will migrate their existing on-premise deployments of WMS, TMS, OMS, and our demand forecasting inventory optimization solutions to the cloud. And one of the unique benefits of our completely rewritten, truly cloud-native applications is how easy it is for our customers to use adjacent solutions, because the solutions are now evergreen, and it's relatively easy for us to design and maintain flows connecting the Manhattan active applications. Now, I'll close out my product remarks by mentioning Momentum, our annual customer conference. And thankfully, for the first time since 2019, we plan to be back together in person. This year we'll be in Hollywood, Florida, one of our favorite venues. And the theme for this year's conference is Assemble, Agents of Change. And we'll bring that theme to life in several ways, aside from the obvious advantage of being able to assemble in person again this year. We'll also be demonstrating the unique advantages that we deliver when we assemble multiple Manhattan Active applications together. That flexible and powerful Manhattan Active architecture empowers our customers and partners to easily unify solutions, to take out market-leading applications and extend them to do even more and drive positive change for their business and their customers. And before I hand it off to Dennis, I'm also excited to share that we recently launched our ESG website and published metrics for years 2020 and 2021. Manhattan is committed to providing clear communication to all of our stakeholders, and we encourage you to view these materials to better understand our commitment to the environment, how we support a diverse and inclusive workplace, and our efforts to strengthen the communities in which we live and work. So that concludes my business update. Dennis is going to provide you with an update of a financial performance and outlook, and then I'll close our prepared remarks with a very brief summary before we move on to Q&A. Dennis?