Manhattan Associates, a supply chain software provider, experienced a significant drop in stock price following a positive earnings report and management call with analysts. This decline was attributed to slower deal closures for Manhattan’s software offerings in warehouse management, transportation management, and inventory, with some third-quarter business being pushed into the current period.
This issue is not unique to Manhattan Associates, as e2open, another supply chain software provider, reported similar challenges on their recent earnings call.
Despite setting revenue and earnings records, Manhattan Associates saw a decrease in stock price. Non-GAAP earnings per share were up from the previous year, and cloud subscription revenue and services revenue showed growth as well. However, the company fell short in its Remaining Performance Obligation (RPO) growth, which led to investor concern.
While Manhattan Associates remains confident in achieving its RPO goals by year-end, analysts have noted a slowdown in some key metrics. The company’s strong operating margin was overshadowed by slipped deals impacting RPO growth, signaling potential cyclical pressure in future quarters.
Guidance for 2025 includes positive expectations for revenue growth and operating margin, but Wall Street consensus remains slightly lower than the company’s projections. Overall, Manhattan Associates faces challenges in deal closures and RPO growth, despite an otherwise strong performance in the supply chain software industry.
