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Supply chain solutions technology provider Manhattan Associates Inc. (NASDAQ: MANH) reported adjusted fourth-quarter earnings per share (EPS) of 40 cents, well ahead of the consensus estimate of 31 cents.
"Q4 was another strong quarter for Manhattan Associates, wrapping up a record revenue year and positioning us well for 2020 and beyond," said Manhattan Associates President and CEO Eddie Capel.
The company reported a 6% year-over-year increase in total revenue to $153 million. Manhattan Associates continues to convert from a traditional license software company to a subscription-based software-as-a service cloud model. In the fourth quarter, cloud subscription revenue, up 131% year-over-year, eclipsed software license revenue, down 31%, for the first time.
Cloud subscriptions revenue is generated mostly from the company's omnichannel and transportation management systems offerings.
Manhattan Associates' Key Performance Indicators
On the company's earnings conference call, management said they expect cloud subscriptions revenue to increase 68% year-over-year at the midpoint of their guidance, with a cloud-to-license revenue mix in the 75%-25% range versus the near 50%-50% range reported in 2019.
Revenue from remaining performance obligations – unearned revenue or future bookings for its cloud services with a non-cancelable contract term of greater than one year – stood at $171.7 million, nearly $100 million higher year-over-year and 13% higher than the third quarter. Management expects remaining performance obligations to reach $265 million to $275 million by year-end 2020.
The company also reported a 15% year-over-year increase in deferred revenue, mostly from maintenance contracts, to $94 million.
The company issued full-year 2020 guidance of 4-6% revenue growth, or $644 million to $656 million, and adjusted EPS of $1.53 to $1.60. This forecast brackets current consensus estimates of $650 million in revenue and EPS of $1.54.
"We remain bullish on the market opportunity that lies ahead, despite continued global macro volatility, as demand for innovative solutions in the retail and supply chain markets has never been greater," Capel stated.
Cash Flow And Balance Sheet
Manhattan Associates generated $34.6 million in cash flow from operations in the period and ended 2019 with $110.7 million in cash and investments with no debt. Manhattan Associates spent $81 million in research and development in 2019 and plans to spend $88 million in 2020. Capital expenditures were forecast in a range of $10 million to $12 million for 2020.
The company repurchased 445,000 shares or $35 million in common stock in fourth-quarter 2019, with total repurchases of $116 million in 2019. In January, Manhattan Associates' board replenished the share repurchase agreement to an aggregate of $50 million in total share repurchases.
Manhattan Associates is a supply chain and omnichannel commerce technology provider. The company's technology offering enables retailers, wholesalers, manufacturers and logistics providers to manage their supply chains, inventory and omnichannel operations. Manhattan Carrier helps motor carriers optimize loads and manage fuel costs and drivers' hours of service.
MANH Stock Price Chart – SONAR: STOCK.MANH
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