Manhattan Associates, Inc.

Good afternoon. My name is Rob and I'll be your conference facilitator today. At this time, I'd like to welcome everyone to the Manhattan Associates first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer period. If you'd like to ask a question during this time, simply press star and then the number 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 Tuesday, April 23, 2024. I will now introduce your host, Mr. Michael Bauer, Head of Investor Relations of Manhattan Associates. Mr. Bauer, you may begin your conference.

Thank you, Rob, and good afternoon, everyone. Welcome to Manhattan Associates' 2024 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 the future events or the future financial performance of Manhattan Associates. You 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 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 fiscal year 2023 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 that turbulent global macro environment could impact our performance and cause actual results to differ materially from our projections. We're 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 8K we submitted to the SEC earlier today and on our website at manh.com. Now, I'll turn the call over to Eddie. Terrific. Thanks, Mike. Well, good afternoon, everybody.

And thank you for joining us as we review our first quarter results and discuss our increased full-year 2024 outlook. Manhattan is off to a solid start in 2024, once again reporting record results. Q1 total revenue increased 15% to $255 million, and adjusted earnings per share increased 29% to $1.03. both exceeding expectations. Driving top line at performance and earnings leverage was 36% growth in cloud revenue and 14% growth in services revenue. Well, global macro uncertainty and volatility certainly persists. Manhattan's business fundamentals are solid. Our teams continue to execute well for our customers and our steady investment in research and development has firmly established Manhattan as the leading innovator in supply chain execution, omnichannel solutions, and retail point of sale. RPO, the leading indicator of our growth, increased 31% to just over $1.5 billion, as demand for our mission-critical cloud solutions remains strong and resilient across our product portfolio. From a vertical perspective, retail, manufacturing, and wholesale drove more than 80% of our bookings in the quarter. Across our solutions, the sub-verticals are pretty diverse. For example, in the quarter, cloud deals one include an omnichannel multi-brand retailer, a manufacturer and distributor of golf equipment, one of the world's largest airlines, a paint manufacturer, an apparel and accessories retailer, a tire distributor, as well as a number of others. For the quarter, competitive win rates were solid at about 75%, and we experienced strength from new customers with approximately one-third of our new bookings being generated from net new logos. That's in addition to healthy new logo activity, we continue to experience a good mix of conversions, upsells, and cross-sells. And while the timing of large deals and the mix of bookings is certainly going to vary on a quarterly basis, we believe our bookings breadth from both new and existing customers and also across our product portfolio exemplifies our multiple opportunities for sustainable growth. Now, to this point, our solutions pipeline remains robust, with new potential customers representing approximately 35% of the demand. An important driver to our growth is our ability to deliver industry-leading solutions to service our customers. At best of breed, cloud-native platform solutions provide unmatched access to innovation and are uniquely capable of unifying mission-critical commerce and supply chain functions. This is differentiating for us. and helps our clients improve customer service and loyalty, drive more revenue, and improve efficiency. Our product sales activity also drives our services growth and pipeline. In Q1, our professional services team completed over 100 go-lives and continues to execute very well for our customers. And while we remain appropriately cautious on the global economy, we continue to invest to drive growth. This includes strategic investments in industry-leading innovation, further enablement of our customer success, and the expansion of our addressable market. From a hiring perspective, in Q1, we welcomed over 100 highly talented individuals into the Manhattan family and are on track to meet our 2024 hiring goal of a few hundreds of associates. Now let's turn to some quick updates on our products. Last quarter, I focused on some key updates to our omnichannel commerce solutions. So for this quarter, I'll focus most of my time on updates to our supply chain execution products. One of Manhattan's guiding principles is a relentless focus on innovation. we've found the move to evergreen software to be a real game changer for both our teams and our customers. Our quarterly release process allows our customers to benefit from new features in record time. Each quarter, we deliver a combination of smaller, more tactical features focused on customer enablement, as well as larger, more strategic features which create an operational step change for our customers. Within Manhattan Active WM, we've released several of these larger, more strategic features in region quarters. You may recall that we announced yard management at last year's Momentum Conference, and we're seeing great reaction adoption for this best-in-class YMS. Manhattan Active Yard Management helps warehouse operators enjoy the same level of process discipline and optimization in the yard as they've had within the four walls of the distribution center. Yard management also serves to further reinforce process unification between warehouse management and transportation management, allowing for the seamless transition of a trailer moving from transportation management control to warehouse management control. A unified yard offering is an important step in helping our customers evolve toward managing an end-to-end flow of inventory. inbound from their suppliers to the distribution center and outbound from their distribution centers to their customers. But as I mentioned earlier, we released yard management just a little less than a year ago. So the question is, you know, what have we done for our Manhattan Active WM customers lately? Well, in January, we released Manhattan Active or we released dynamic load buildings. from an active WM, a feature that not only optimizes the way that cartons are palletized and optimized, but also the way that they're laid out in the trailer, considering temperature, axle load, vehicle stop sequence, and so on. Dynamic load building is a pretty critical process in industries like grocery, food service, industrial distribution, and a number of others. And many of our customers in those industries have historically used third-party tools or even manual processes. But now they're able to take advantage of load building right within Manhattan active supply chain execution as part of a unified outbound planning process. The release of new strategic capabilities like yard management, dynamic load building, along with our in-app analytics and embedded generative AI is one of our most important market differentiators. Given that strong track record of delivery, prospective customers understand that a subscription to Manhattan Active WM, for example, delivers more than what they saw in the initial product demonstration and RFP response. They're also subscribing to a continuous innovation pipeline built on design thinking principles and conducted in collaboration with some of the most forward-thinking supply chain practitioners. Customers rest assured that their investment in innovation will continue to deliver industry-leading features, all seamlessly woven into the Manhattan active WM environments and ready for them to activate. Now, further on the supply chain front, we continue to see great results from the activation of our Manhattan Active Transportation Management application, which recently was named a leader in the Gartner Magic Quadrant for TMS, six consecutive year, by the way. And as a reminder, this solution is now live on four continents, serving industries spanning grocery, food service, convenience stores, consumer products, apparel retail, and a number of others. And frankly, our supply chain unification message continues to resonate very well in the market. And to that end, one of our key deals from last year was with Schneider Electric, a multinational, multibillion-dollar corporation that specializes in digital automation and energy management. And we're currently working with Schneider to deploy a unified supply chain execution offering all the way across the globe. We're starting with a distribution center in the Netherlands, And Schneider shares our vision for unified inbound and outbound supply chain processes. In fact, they'll be sharing their vision in more detail at our customer conference Momentum next month. And finally, speaking of Momentum, we're planning a couple of major product announcements for an event in San Antonio, Texas. And we're looking forward to unveiling those major steps forward to both our Manhattan associates and our Manhattan customers. And I'll look forward to telling you more about them in next quarter's update. So that concludes my business update. Dennis is going to provide 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?