Manhattan Associates Backs Wall Street's 2027 Numbers, Including 20% Cloud Growth, And Lifts Backlog Target To 21%
The CFO called consensus 2027 estimates "generally appropriate" and raised the 2026 backlog growth target from a range of 18% to 20%.
Manhattan Associates, which sells cloud supply chain software, endorsed Wall Street's 2027 estimates on its Tuesday earnings call. CFO Linda said the company now targets 21% growth in contracted backlog this year, up from a prior range of 18% to 20%.
Consensus gets a nod for 2027
Linda said that, with the macro environment still volatile and the 2027 budget cycle in its early stages, consensus estimates are "generally appropriate" for remaining performance obligations (RPO, the contracted revenue backlog) and the income statement. She said that includes 20% cloud revenue growth, low single-digit services growth and continued operating margin expansion.
Formal 2027 guidance, with the usual line-item detail, will come on the fourth-quarter call.
The third-quarter numbers behind it: revenue of $306 million, up 11%; cloud revenue up 28% to $134 million; RPO of $2.59 billion, up 25%. Adjusted earnings per share were $1.55, up 14%, and the adjusted operating margin was 37.6%.
A rare mid-year backlog update
A Truist analyst asked what underpins the implied fourth-quarter backlog additions. CEO Eric Clark said the company has a strong pipeline and tries to "under-promise and over-deliver." He said it typically does not update RPO during the year, but "it was pretty evident that we were going to exceed the range."
For 2026, Linda raised full-year revenue guidance to $1.176 billion to $1.178 billion. Fourth-quarter revenue is targeted at about $291 million, which includes retail peak seasonality. Full-year adjusted earnings per share are now $5.54 to $5.56, and the adjusted operating margin midpoint rises to 35.3% from 35.1%.
Upsells and AI drive the beat
Linda said about half of the third-quarter cloud beat came from upsells, as customers deploy faster and ramp subscriptions sooner. She said forecasts typically include few upsells because their timing and size vary.
Clark said the company's AI agents are drawing customers who skip the pilot stage and go straight to subscription. He said the new Editions packaging, launched in the third quarter, should have its material impact in the second half.
The company ended the quarter with $199 million in cash and no debt. It bought back $50 million of stock in the quarter and a record $325 million year to date, leaving $175 million on its authorization. Its market value was $13.8 billion in Tuesday's report.
The next marker is the fourth-quarter call, where Manhattan has said it will turn Tuesday's consensus endorsement into formal 2027 guidance.
Sources
- Vertical software stocks Q2 recap: benchmarking Manhattan Associates (NASDAQ:MANH) — Yahoo Finance
- Manhattan Associates Non-GAAP EPS of $1.55 beats by $0.09, revenue of $306.2M beats by $9.19M (MANH:NASDAQ) | Seeking Alpha — seekingalpha.com
