Manhattan Associates, Inc.

Good afternoon. My name is Cleo and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates Q2 2026 Manhattan's Associates Earnings Conference 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 number one on your telephone pad. If you would like to withdraw your question, please press star and then number two. As a reminder, ladies and gentlemen, this call is being recorded today, July 28th, 2026. I would like to now introduce you to host Mr. Michael Bauer, head of investor relations of Manhattan Associates. Mr. Bauer, you may begin your conference.

Thank you, Cleo, and good afternoon, everyone. Welcome to Manhattan Associates' 2026 second quarter earnings call. I will review our cautionary language and then turn the call over to our President and Chief Executive Officer, Eric Clark. During the call, including the Q&A session, we may make forward-looking statements regarding future events or our future financial performance. We caution you that these forward-looking statements involve risk and uncertainties are not guarantees of future performance and actual results may differ materially from the projections contained in our forward-looking statements. I refer you to Manhattan's SEC reports 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 2025 and the risk factor discussion in that report and any risk factor updates we provide in our subsequent Form 10-Qs. Please note that the turbulent global macro environment could impact our performance and cause the 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 to provide additional information to investors. We have reconciled all non-GAP measures that are related to GAP measures in accordance with SEC rules. You'll find reconciliation schedules in the Form 8K we filed with the SEC earlier today and on our website at manh.com.

Now, I'll turn the call over to Eric. Thank you, Mike. Good afternoon, everyone, and thank you for joining us as we review our second quarter results and discuss our increased full-year 2026 outlook. Manhattan delivered record Q2 and first half results against a volatile global macro backdrop. Our performance was highlighted by 26% cloud revenue growth, RPO increasing 23% to $2.5 billion, and Q2 was our third consecutive quarter of record bookings. This impressive business momentum is being powered by two primary drivers. First, Manhattan's continued commitment to innovation and driving speed and simplicity in our best-in-class solutions across the supply chain commerce universe. And second, the strategic investments in sales and marketing that we announced a year ago are unlocking untapped opportunities within our large addressable market. You will recall that these investments are focused on increasing deal volume and total bookings across our product portfolio. Some examples of these investments include Building out product-focused sales specialist teams across all of our products. Building dedicated conversion teams to focus on moving on-prem to the cloud. Building dedicated renewals teams to focus on expansion at the time of renewal. Maturing our partner ecosystem to create additional pipeline channels. And finally, building seamless agentic AI capabilities driven by Manhattan Forward deployed engineers. Three consecutive quarters of record bookings give us confidence that our go-to-market approach is working. So regarding some of the specifics of our Q2 bookings, sales to existing customers have accelerated. And in Q2, conversions from on-prem to Manhattan active represented over 40% of our new cloud bookings. Renewals continued to be in line with our full-year plan, and net new logos represented over 25% of new cloud bookings in Q2, while our win rate metric remained consistent above 70%. Additionally, in Q2, our AI offering started to become a meaningful differentiator in the field and contributed to both deal activity and pipeline growth. In summary, we experienced strong and diversified bookings momentum in Q2 and the first half of 2026. All of this contributed to the cloud revenue acceleration in the first half and supports our focus on accelerating ramped ARR. From a vertical sales perspective, our end markets are diverse and we have healthy established footprints across numerous subsectors, which include retail, grocery, food distribution, life sciences, industrial, technology, airlines, third-party logistics, and more. For example, Q2 deals included a global specialty retailer that is converting from on-prem to active warehouse and expanding to become an active transportation customer. A multinational conglomerate became a new logo active warehouse and active AI customer. One of America's largest distributors is converting from on-prem to active warehouse. A large equipment retailer that was an existing Active Omni customer expanded to become an active warehouse and active transportation customer. A large food distributor became a new logo active warehouse, active transportation, and active AI customer. And one of the world's largest international retailers began the conversion from on-prem to active warehouse. In addition to several other impressive deals in Q2, we made solid progress monetizing our AI opportunity. As a reminder, the active platform enables our customers to access the perfect blend of deterministic workflows with probabilistic AI execution, enabling simplicity, resiliency, while optimizing costs to drive optimal ROI for our customers. Our active agent offering consists of two primary elements, a set of base agents ready to be activated immediately, and our agent foundry offering which enables our customers to quickly build and deploy their own agents supported by our dedicated team of forward deployed engineers. And because we build all these agents directly into the active platform, our customers don't need to implement costly and complex external data lakes. Our unified cloud native API first architecture enables us to deploy agents with almost no configuration or additional upfront effort. embedding AI agents directly into the workflow. No data lakes, no latency, deployed in minutes, not months, and maximizing value and ROI in real time. As you might expect, active agents featured prominently at our Momentum User Conference in Las Vegas in May. We launched several new base agents, debuted some cutting-edge design and configuration capabilities, and had hundreds of our attendees get hands-on experience building agents for themselves at our very first agent boot camp. Our customers continue to tell us that both the power and ease of use provided by our agent foundry is a real differentiator for Manhattan. One of the conference's highlights was a panel featuring three of our earliest adopters of active agents. What came through loud and clear from these customers were the real operational benefits they're seeing in production every day with active agent technology. The good news is these three customers are not outliers. Since Momentum, we've had operational success with a number of additional customers. For example, at a very large healthcare products distributor, they're seeing an 87% reduction in short picks every day. And at a regional grocer, they're seeing a 49% reduction in late shipment departures and a 21% reduction in order cycle times. and the numbers that I just cited and what our Momentum attendees heard from our panel at Momentum represents an important stake in the ground for us. We're committed to delivering agentic technology that provides material operational value every day. We believe that many customers are already feeling burned out by the AI hype that's in the market. They're pressing their teams to make sure that any AI investment can show material value. With each new customer engagement, we feel increasingly confident that the combination of our base agents and agent foundry makes it a straightforward endeavor to demonstrate real value for each customer. Since our launch in Q1, active agents have progressed from an early adopter program to now touching over 10% of our active install base, either through a pilot or a subscription. and while it's still early, so far we have experienced 100% conversion success from AI pilot to AI subscription. So that brings us to the product update. I'm excited to announce a significant update that expands our addressable market. In order to better commercialize our growing opportunity and provide the benefits of the active platform to more of the market, we're introducing Editions for our Manhattan Active Solutions. Editions is a packaging motion, not a new product line. For years, Manhattan has powered the most complex, highest volume supply chains in the world. Additions allows us to bring that same platform to all customers. It takes the solutions we already sell and makes them available in three tiers. The same cloud native platform, the same native AI, same continuous innovation, unified, versionless, built for where you are. We're changing how it's packaged and priced, not what it is. So rather than our historical one-size-fits-all approach, we're now offering three editions of each of our major applications. Each edition packages a set of capabilities and pricing focused on serving a particular market segment. Historically, we've been highly effective at selling and implementing our applications to the most complex supply chain and commerce organizations worldwide. And until now, we haven't devoted much energy to making that same technology available to the wider market. We have a significant opportunity to bring the power of our best-in-class capabilities, market-leading architecture, and embedded AI agents to a much larger pool of customers. So allow me to spend just a moment describing each of these three editions and how we intend to use them to expand our addressable market. First, let's start with our Enterprise Premier Edition. Enterprise Premier offers our most advanced set of capabilities. focused on customers with complex supply chains and who differentiate their business in part through world-class supply chain execution. Premier is our vehicle for continuing to invest in the market-leading innovation which has received accolades from analysts and customers over the past several decades. Our largest and most sophisticated customers will choose Premier given the value they've historically ascribed to market-leading supply chain innovation. Next is our Enterprise Edition. which provides us with a couple of important new tools. Number one, Enterprise allows us to funnel all demand for WMS into a single application, Active Warehouse. Historically, we've driven demand from lower volume, lower complexity customers to our scale product. Using Enterprise Edition, we're confident we can now serve this market using the same application that we use for our largest and most complex customers. We believe a combination of prescribed feature set, more approachable subscription pricing, and our new rapid implementation methodology will make us more effective than ever at selling and implementing in this market segment. Enterprise Edition is also an important tool for those selling scenarios where customers really want to be on the industry's leading application platform but may not currently have the ability or willingness to invest in our full feature set. Enterprise Edition allows those customers to start their supply chain commerce journey on the right platform and potentially grow into a larger feature set over time. And finally, let me tell you about the Essentials Edition. The beauty of the Essentials is that it offers market-leading warehouse, transportation, order, and store capability that every business needs to operate, but at a fraction of the cost of our Premier Edition. Essentials will open new markets for Manhattan with respect to both size of the company and operating geography. Increasing the overall number of transactions we do each quarter, in part by increasing the number of new logos we acquire, helps in both the short and long term. While the short-term subscription and services revenue advantage is obvious, I think the real opportunity is over the longer term. Since launching our active platform, we've been highly effective at cross-selling our applications. Customers love the increased simplicity and added operational benefits of being on a unified platform. By increasing the number of new active platform customers using Essentials and Enterprise Editions, we give ourselves many more opportunities to land and expand our footprint with these customers over time. Another advantage of having all of our customers on active platform is that these customers have full access to our rapidly expanding set of AI capabilities built right into the platform. because active agents, including active foundry, can be added to any active edition. We now have a fast and easy way to provide embedded AI into the workflows of more customers. We also see Essentials Edition as a great partner activation vehicle. For Manhattan, it's an efficient way to add more feet on the street to source demand and expand the pool of Manhattan customers. In summary, the three editions are a ladder, not a menu of different products. Essentials is the real platform, right-sized for fast time-to-value. Enterprise adds depth with more configuration, more optimization, and broader workflows as operations scale. And Enterprise Premier is the full power that the most complex operations depend upon today. We now allow customers to start their journey where they are and grow into a larger feature set without ever replatforming. No longer will small and mid-sized companies or even smaller sites within larger enterprises be forced to settle for inferior products. Additions enables higher ROI, more productivity, and increased levels of customer satisfaction. The same benefits we have always offered the most complex supply chains now available to the broader market. Now I'll hand over to Linda to report on our financial performance and outlook, and then I'll close our prepared remarks before we open it up to Q&A. So Linda, over to you.