Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 21, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | MANHATTAN ASSOCIATES, INC. | |
Trading Symbol | MANH | |
Entity Central Index Key | 0001056696 | |
Current Fiscal Year End Date | --12-31 | |
Entity Incorporation, State or Country Code | 2Q | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 63,496,588 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 0-23999 | |
Entity Tax Identification Number | 58-2373424 | |
Entity Address, Address Line One | 2300 Windy Ridge Parkway | |
Entity Address, Address Line Two | Tenth Floor | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30339 | |
City Area Code | 770 | |
Local Phone Number | 955-7070 | |
Title of each class | Common stock | |
Name of each exchange on which registered | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 75,279 | $ 110,678 |
Accounts receivable, net of allowance of $3,360 and $2,826, at March 31, 2020 and December 31, 2019, respectively | 112,467 | 100,937 |
Prepaid expenses and other current assets | 29,209 | 20,426 |
Total current assets | 216,955 | 232,041 |
Property and equipment, net | 21,189 | 22,725 |
Operating lease right-of-use assets | 33,713 | 35,896 |
Goodwill, net | 62,234 | 62,237 |
Deferred income taxes | 1,212 | 6,814 |
Other assets | 12,741 | 12,566 |
Total assets | 348,044 | 372,279 |
Current liabilities: | ||
Accounts payable | 22,517 | 20,561 |
Accrued compensation and benefits | 28,906 | 45,991 |
Accrued and other liabilities | 18,801 | 19,325 |
Deferred revenue | 105,475 | 94,371 |
Income taxes payable | 489 | 1,348 |
Total current liabilities | 176,188 | 181,596 |
Operating lease liabilities, long-term | 30,093 | 32,416 |
Other non-current liabilities | 15,894 | 15,989 |
Shareholders' equity: | ||
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2020 and 2019 | ||
Common stock, $0.01 par value; 200,000,000 shares authorized; 63,495,687 and 63,456,986 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 635 | 635 |
Retained earnings | 146,552 | 159,490 |
Accumulated other comprehensive loss | (21,318) | (17,847) |
Total shareholders' equity | 125,869 | 142,278 |
Total liabilities and shareholders' equity | $ 348,044 | $ 372,279 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 3,360 | $ 2,826 |
Preferred stock, par value | ||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 63,495,687 | 63,456,986 |
Common stock, shares outstanding | 63,495,687 | 63,456,986 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total revenue | $ 153,903 | $ 148,404 |
Total costs | 74,831 | 67,170 |
Research and development | 23,328 | 21,213 |
Sales and marketing | 13,088 | 14,781 |
General and administrative | 16,114 | 15,050 |
Depreciation and amortization | 2,346 | 1,914 |
Total costs and expenses | 129,707 | 120,128 |
Operating income | 24,196 | 28,276 |
Other income (loss), net | 1,420 | (371) |
Income before income taxes | 25,616 | 27,905 |
Income tax provision | 3,086 | 6,933 |
Net income | $ 22,530 | $ 20,972 |
Basic earnings per share | $ 0.35 | $ 0.32 |
Diluted earnings per share | $ 0.35 | $ 0.32 |
Weighted average number of shares: | ||
Basic | 63,592 | 64,909 |
Diluted | 64,342 | 65,204 |
Cloud Subscriptions | ||
Total revenue | $ 17,260 | $ 7,859 |
Software License | ||
Total revenue | 9,735 | 12,414 |
Total costs | 555 | 592 |
Maintenance | ||
Total revenue | 35,744 | 36,099 |
Services | ||
Total revenue | 87,406 | 88,631 |
Hardware | ||
Total revenue | 3,758 | 3,401 |
Cloud Subscriptions, Maintenance and Services | ||
Total costs | $ 74,276 | $ 66,578 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 22,530 | $ 20,972 |
Foreign currency translation adjustment | (3,471) | 259 |
Comprehensive income | $ 19,059 | $ 21,231 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net income | $ 22,530 | $ 20,972 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,346 | 1,914 |
Equity-based compensation | 7,564 | 7,182 |
Loss on disposal of equipment | 7 | 6 |
Deferred income taxes | 5,511 | 1,782 |
Unrealized foreign currency (gain) loss | (1,130) | 381 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (12,217) | (7,478) |
Other assets | (4,889) | (3,021) |
Accounts payable, accrued and other liabilities | (14,794) | (809) |
Income taxes | (5,385) | 1,831 |
Deferred revenue | 12,045 | 12,427 |
Net cash provided by operating activities | 11,588 | 35,187 |
Investing activities: | ||
Purchase of property and equipment | (1,245) | (616) |
Net maturities of investments | 1,439 | |
Net cash (used in) provided by investing activities | (1,245) | 823 |
Financing activities: | ||
Purchase of common stock | (43,032) | (30,160) |
Net cash used in financing activities | (43,032) | (30,160) |
Foreign currency impact on cash | (2,710) | (97) |
Net change in cash and cash equivalents | (35,399) | 5,753 |
Cash and cash equivalents at beginning of period | 110,678 | 99,126 |
Cash and cash equivalents at end of period | $ 75,279 | $ 104,879 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance at Dec. 31, 2018 | $ 147,147 | $ 649 | $ 163,359 | $ (16,861) | |
Balance (in shares) at Dec. 31, 2018 | 64,860,419 | ||||
Repurchase of common stock | (30,160) | $ (6) | $ (7,179) | (22,975) | |
Repurchase of common stock (in shares) | (569,906) | ||||
Restricted stock units issuance | $ 3 | (3) | |||
Restricted stock units issuance (in shares) | 303,396 | ||||
Equity-based compensation | 7,182 | 7,182 | |||
Foreign currency translation adjustment | 259 | 259 | |||
Net income | 20,972 | 20,972 | |||
Balance at Mar. 31, 2019 | 145,400 | $ 646 | 161,356 | (16,602) | |
Balance (in shares) at Mar. 31, 2019 | 64,593,909 | ||||
Balance at Dec. 31, 2019 | 142,278 | $ 635 | 159,490 | (17,847) | |
Balance (in shares) at Dec. 31, 2019 | 63,456,986 | ||||
Repurchase of common stock | (43,032) | $ (6) | (7,558) | (35,468) | |
Repurchase of common stock (in shares) | (556,109) | ||||
Restricted stock units issuance | $ 6 | (6) | |||
Restricted stock units issuance (in shares) | 594,810 | ||||
Equity-based compensation | 7,564 | $ 7,564 | |||
Foreign currency translation adjustment | (3,471) | (3,471) | |||
Net income | 22,530 | 22,530 | |||
Balance at Mar. 31, 2020 | $ 125,869 | $ 635 | $ 146,552 | $ (21,318) | |
Balance (in shares) at Mar. 31, 2020 | 63,495,687 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | 1. Basis of Presentation and Principles of Consolidation Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Manhattan Associates, Inc. and its subsidiaries (the “Company,” “we,” “us,” “our,” or “Manhattan”) have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information, with the instructions to Form 10-Q and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal recurring adjustments considered necessary for a fair presentation of our financial position at March 31, 2020, the results of operations for the three months ended March 31, 2020 and 2019, and cash flows for the three months ended March 31, 2020 and 2019. The results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full year or any other interim period. These statements should be read in conjunction with our audited consolidated financial statements and management’s discussion and analysis included in our annual report on Form 10-K for the year ended December 31, 2019. Principles of Consolidation The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. New Accounting Pronouncements Adopted in Fiscal Year 2020 Credit Impairment In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including trade receivables. ASU No. 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. This guidance is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. On January 1, 2020, we adopted ASU 2016-13 using the modified retrospective method applied for all financial assets measured at amortized cost. Our analysis involved utilizing a model of internal historical losses data. In estimating the allowance for credit losses, we considered the age of the accounts receivable, our historical write-offs, and the historical creditworthiness of the customer, among other factors. Should any of these factors change, the estimates made by us will also change accordingly, which could affect the level of our future allowances. We also analyzed future expected credit losses given ever present changes to future risks in projected economic conditions and future risks of customer collection. The net impact of the adoption of ASU 2016-13 was immaterial on our consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 2. Revenue Recognition We recognize revenue when we transfer control of the promised products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. We derive our revenue from software licenses, cloud subscriptions, customer support services and software enhancements (“maintenance”), implementation and training services, and sales of hardware. We exclude sales and usage-based taxes from revenue. Nature of Products and Services Our perpetual software licenses provide the customer with a right to use the software as it exists at the time of purchase. We recognize revenue for distinct software licenses once the license period has begun and we have made the software available to the customer. Cloud subscriptions includes software as a service (SaaS) and arrangements which provide customers with the right to use our software within a cloud-based environment that we provide and manage where the customer does not have the right to take possession of the software without significant penalty. SaaS and hosting revenues are recognized ratably over the contract period. For contracts that include a perpetual license and hosting services, we generally consider the arrangement as an overall service, recognized over the initial hosting term. The software license fee typically due at the outset of the arrangement is not payable again if the customer renews the hosting services, so that the customer’s option to renew the hosting services is a material right, the revenue from which, if the option is exercised, we will recognize over the applicable renewal period. Our perpetual software licenses are typically sold with maintenance under which we provide a comprehensive 24 hours per day, 365 days per year program that provides customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives. Revenue related to maintenance is generally paid in advance and recognized ratably over the term of the agreement, typically twelve months. Our services revenue consists of fees generated from implementation, training, and application managed services, including reimbursements of out-pocket expenses in connection with our implementation services. Implementation services include system planning, design, configuration, testing, and other software implementation support, and are typically optional and distinct from our software. Following implementation, customers may purchase application managed services to support and maintain our software. Fees for our services are separately priced and are generally billed on an hourly basis, and revenue is recognized over time as the services are performed. In certain situations, we render professional services under agreements based upon a fixed fee for portions of or all of the engagement. Revenue related to fixed-fee-based services contracts is recognized over time based on the proportion performed. As part of a complete solution, our customers periodically purchase hardware products developed and manufactured by third parties from us for use with the software licenses purchased from us. These products include computer hardware, radio frequency terminal networks, radio frequency identification (RFID) chip readers, bar code printers and scanners, and other peripherals. As we do not physically control the hardware that we sell, we are acting as an agent in the transaction and recognize our hardware revenue net of related cost. We recognize hardware revenue when control is transferred to the customer upon shipment. Significant Judgements Our contracts with customers typically contain promises to transfer multiple products and services to a customer. Judgement is required to determine whether each product and service is considered to be a distinct performance obligation that should be accounted for separately under the contract. We allocate the transaction price to the distinct performance obligations based on relative standalone selling price (SSP). We estimate SSP based on the prices charged to customers, or by using information such as market conditions and other observable inputs. However, the selling price of our software licenses is highly variable. Thus, we estimate SSP for software licenses using the residual approach, determined based on total transaction price less the SSP of other goods and services promised in the contract. Contract Balances Timing of invoicing to customers may differ from timing of revenue recognition. Payment terms for our software licenses vary. We have an established history of collecting under the terms of our software license contracts without providing refunds or concessions to our customers. Cloud subscriptions and maintenance are typically billed annually in advance. Services are typically billed monthly as performed. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with predictable ways to purchase our software and services, not to provide or receive financing. Additionally, we are applying the practical expedient to exclude from consideration any contracts with payment terms of one year or less as we rarely offer terms extending beyond one year. Deferred revenue mainly represents amounts collected prior to having completed performance of maintenance, cloud subscriptions and professional services. In the three months ended March 31, 2020, we recognized $42.3 million of revenue that was included in the deferred revenue balance as of December 31, 2019. No revenue was recognized during the three months ended March 31, 2020 from performance obligations that were satisfied in prior periods. Remaining Performance Obligations As of March 31, 2020, approximately $202.8 million of revenue is expected to be recognized from remaining performance obligations for cloud subscriptions, maintenance contracts, and application managed services with a non-cancelable term greater than 1 year (including deferred revenue as well as amounts that will be invoiced and recognized as revenue in future periods). We expect to recognize revenue on approximately 50% of these remaining performance obligations over the next 24 months with the balance recognized thereafter. We have elected not to provide disclosures regarding remaining performance obligations for contracts with a term of 1 year or less. Returns and Allowances We have not experienced significant returns or warranty claims to date and, as a result, have not recorded a provision for the cost of returns and product warranty claims. We record an allowance for doubtful accounts based on historical experience of write-offs and a detailed assessment of accounts receivable. Additions to the allowance for credit losses generally represent a sales allowance on services revenue, which are recorded to operations as a reduction to services revenue. The total amount charged to operations was $1.4 million and $0.9 million for the three months ended March 31, 2020 and 2019, respectively. Deferred Commissions We consider sales commissions to be incremental costs of obtaining a contract with a customer. We defer and recognize an asset for sales commissions related to performance obligations with an expected period of benefit of more than one year. We apply the practical expedient to expense sales commissions when the amortization period would have been one year or less. Deferred commissions were $10.3 million as of March 31, 2020, of which $7.5 million is included in other assets and $2.8 million is included in prepaid expenses and other current assets. Sales commission expense is included in Sales and Marketing expense in the accompanying Consolidated Statements of Income. Amortization of sales commissions was $0.7 million and $0.4 million for the three months ended March 31, 2020 and 2019, respectively. No impairment losses were recognized during the periods. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 3. Fair Value Measurement We measure our investments based on a fair value hierarchy disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is affected by a number of factors, including the type of asset or liability and its characteristics. This hierarchy prioritizes the inputs into three broad levels as follows: • Level 1–Quoted prices in active markets for identical instruments. • Level 2–Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3–Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents; investments with maturities of greater than 90 days from the date of purchase but less than one year are generally classified as short-term investments; and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments. Unrealized holding gains and losses are reflected as a net amount in a separate component of shareholders’ equity until realized. For the purposes of computing realized gains and losses, cost is determined on a specific identification basis. At March 31, 2020, our cash and cash equivalents were $65.4 million and $9.9 million, respectively. We had no short-term investments at March 31, 2020, and, currently, have no long-term investments. Cash equivalents consist of highly liquid money market funds. For money market funds, we use quoted prices from active markets that are classified at Level 1, the highest level of observable input in the disclosure hierarchy framework. We had no investments classified at Level 2 or Level 3 at March 31, 2020. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 4. Leases We lease our facilities and some of our equipment under noncancelable operating lease arrangements that expire at various dates through 2029. For a few of our facility leases, we have certain options to extend the lease term for up to 10 years, at our sole discretion. We have no finance leases. We present below the operating lease right-of-use assets and lease liabilities as of March 31, 2020 (in thousands): March 31, 2020 ASSETS Operating lease right-of-use assets $ 33,713 LIABILITIES Operating lease liabilities, current (included in accrued and other liabilities) $ 6,598 Operating lease liabilities, long-term 30,093 Total operating lease liabilities $ 36,691 Aggregate future minimum lease payments under noncancelable operating leases as of March 31, 2020 are as follows (in thousands): Year Ending December 31, 2020 (excluding the three months ended March 31, 2020) $ 5,180 2021 6,760 2022 6,287 2023 6,440 2024 6,250 Thereafter 13,099 Total minimum payments required 44,016 Less short-term leases (6 ) Less imputed interest (7,319 ) Total operating lease liabilities $ 36,691 The total lease cost for the three months ended March 31, 2020 and 2019 were $2.0 million, consisting of $1.9 million of operating lease costs, and $0.1 million of short-term lease costs for both periods. Our variable lease costs for the three months ended March 31, 2020 and 2019 were immaterial. Other information related to operating leases are as follows: Weighted average remaining lease term 6.6 years Weighted average discount rate 4 % Supplemental cash flow information - operating cash flows (in thousands): Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases for the three months ended March 31, 2020 $ 1,827 |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity-Based Compensation | 5. Equity-Based Compensation We granted 511,633 and 912,219 restricted stock units (RSUs) during the three months ended March 31, 2020 and 2019, respectively. Equity-based compensation expense related to RSUs was $7.6 million and $7.2 million during the three months ended March 31, 2020 and 2019, respectively. We present below a summary of changes during the three months ended March 31, 2020 in our unvested units of restricted stock: Number of shares/units Outstanding at December 31, 2019 1,496,693 Granted 511,633 Vested (480,876 ) Forfeited (18,556 ) Outstanding at March 31, 2020 1,508,894 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes Our effective tax rate was 12.0% and 24.8% for the three months ended March 31, 2020 and 2019. The decrease in the effective tax rate for the three months ended March 31, 2020 is the result of an increase of $3.8 million in excess tax benefits on restricted stock vestings. We apply the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements in accordance with Accounting Standards Classification (ASC) 740, Income Taxes. For the three months ended March 31, 2020, there were no material changes to our uncertain tax positions. There has been no change to our policy that recognizes potential interest and penalties related to uncertain tax positions within our global operations in income tax expense. We conduct business globally and, as a result, file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, Manhattan is subject to examination by taxing authorities throughout the world. We are no longer subject to the U.S. federal, substantially all state and local income tax examinations and substantially all non-U.S. income tax examinations for years before 2012. |
Basic and Diluted Net Income Pe
Basic and Diluted Net Income Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income Per Share | 7. Basic and Diluted Net Income Per Share Basic net income per share is computed using net income divided by the weighted average number of shares of common stock outstanding (“Weighted Shares”) for the period presented. Diluted net income per share is computed using net income divided by Weighted Shares and the treasury stock method effect of common equivalent shares (CESs) outstanding for each period presented. In the following table, we present a reconciliation of earnings per share and the shares used in the computation of earnings per share for the three months ended March 31, 2020 and 2019 Three Months Ended March 31, 2020 2019 (in thousands, except per share data) Net income $ 22,530 $ 20,972 Earnings per share: Basic $ 0.35 $ 0.32 Effect of CESs - - Diluted $ 0.35 $ 0.32 Weighted average number of shares: Basic 63,592 64,909 Effect of CESs 750 295 Diluted 64,342 65,204 The number of anti-dilutive CESs during the three months ended March 31, 2020 and 2019 was immaterial. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 8. Contingencies From time to time, we may be involved in litigation relating to claims arising out of the ordinary course of business, and occasionally legal proceedings not in the ordinary course. Many of our installations involve products that are critical to the operations of our clients’ businesses. Any failure in a company’s product could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to limit contractually our liability for damages arising from product failures or negligent acts or omissions, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable in all instances. We are not currently a party to any legal proceedings in the ordinary course of business or other legal proceedings the result of which we believe is likely to have a material adverse impact on our business, financial position, results of operations, or cash flows. We expense legal costs associated with loss contingencies as such legal costs are incurred. |
Operating Segments
Operating Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Operating Segments | 9. Operating Segments We manage our business by geographic region and have three geographic reportable segments: North and Latin America (the “Americas”); Europe, the Middle East and Africa (EMEA); and Asia Pacific (APAC). All segments derive revenue from the sale and implementation of our supply chain commerce solutions. The individual products sold by the segments are similar in nature and are all designed to help companies manage the effectiveness and efficiency of their supply chain commerce. We use the same accounting policies for each reportable segment. The chief executive officer and chief financial officer evaluate performance based on revenue and operating results for each reportable segment. The Americas segment charges royalty fees to the other segments based on software licenses and cloud subscriptions sold by those reportable segments. The royalties, which totaled approximately $0.7 million and $1.7 million for the three months ended March 31, 2020 and 2019, respectively, In accordance with the segment reporting topic of the FASB Accounting Standards Codification, we present below certain financial information by reportable segment Three Months Ended March 31, 2020 2019 Americas EMEA APAC Consolidated Americas EMEA APAC Consolidated Revenue: Cloud subscriptions $ 15,243 $ 1,488 $ 529 $ 17,260 $ 6,920 $ 744 $ 195 $ 7,859 Software license 8,450 1,024 261 9,735 6,128 6,045 241 12,414 Maintenance 28,460 5,171 2,113 35,744 29,101 4,891 2,107 36,099 Services 67,249 16,619 3,538 87,406 69,323 14,608 4,700 88,631 Hardware 3,744 11 3 3,758 3,401 - - 3,401 Total revenue 123,146 24,313 6,444 153,903 114,873 26,288 7,243 148,404 Costs and Expenses: Cost of revenue 57,347 14,024 3,460 74,831 50,755 12,872 3,543 67,170 Operating expenses 47,428 3,770 1,332 52,530 44,400 5,499 1,145 51,044 Depreciation and amortization 2,089 206 51 2,346 1,667 183 64 1,914 Total costs and expenses 106,864 18,000 4,843 129,707 96,822 18,554 4,752 120,128 Operating income $ 16,282 $ 6,313 $ 1,601 $ 24,196 $ 18,051 $ 7,734 $ 2,491 $ 28,276 The majority of our software license revenue relates to our warehouse management product group (over 80%) for the three months ended March 31, 2020. Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel and transportation management solutions for the three months ended March 31, 2020. At March 31, 2020, total assets for the Americas, EMEA and APAC segments were $280.2 million, $53.3 million and $14.5 million, respectively. |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Manhattan Associates, Inc. and its subsidiaries (the “Company,” “we,” “us,” “our,” or “Manhattan”) have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information, with the instructions to Form 10-Q and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal recurring adjustments considered necessary for a fair presentation of our financial position at March 31, 2020, the results of operations for the three months ended March 31, 2020 and 2019, and cash flows for the three months ended March 31, 2020 and 2019. The results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full year or any other interim period. These statements should be read in conjunction with our audited consolidated financial statements and management’s discussion and analysis included in our annual report on Form 10-K for the year ended December 31, 2019. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
New Accounting Pronouncements Adopted in Fiscal Year 2020 | New Accounting Pronouncements Adopted in Fiscal Year 2020 Credit Impairment In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including trade receivables. ASU No. 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. This guidance is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. On January 1, 2020, we adopted ASU 2016-13 using the modified retrospective method applied for all financial assets measured at amortized cost. Our analysis involved utilizing a model of internal historical losses data. In estimating the allowance for credit losses, we considered the age of the accounts receivable, our historical write-offs, and the historical creditworthiness of the customer, among other factors. Should any of these factors change, the estimates made by us will also change accordingly, which could affect the level of our future allowances. We also analyzed future expected credit losses given ever present changes to future risks in projected economic conditions and future risks of customer collection. The net impact of the adoption of ASU 2016-13 was immaterial on our consolidated financial statements. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Summary of Operating Lease Right-of-Use Assets and Lease Liabilities | We present below the operating lease right-of-use assets and lease liabilities as of March 31, 2020 (in thousands): March 31, 2020 ASSETS Operating lease right-of-use assets $ 33,713 LIABILITIES Operating lease liabilities, current (included in accrued and other liabilities) $ 6,598 Operating lease liabilities, long-term 30,093 Total operating lease liabilities $ 36,691 |
Aggregate Future Minimum Lease Payments Under Noncancelable Operating Leases | Aggregate future minimum lease payments under noncancelable operating leases as of March 31, 2020 are as follows (in thousands): Year Ending December 31, 2020 (excluding the three months ended March 31, 2020) $ 5,180 2021 6,760 2022 6,287 2023 6,440 2024 6,250 Thereafter 13,099 Total minimum payments required 44,016 Less short-term leases (6 ) Less imputed interest (7,319 ) Total operating lease liabilities $ 36,691 |
Schedule of Other Information Related to Leases | Other information related to operating leases are as follows: Weighted average remaining lease term 6.6 years Weighted average discount rate 4 % Supplemental cash flow information - operating cash flows (in thousands): Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases for the three months ended March 31, 2020 $ 1,827 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Changes in Unvested Units of Restricted Stock | We present below a summary of changes during the three months ended March 31, 2020 in our unvested units of restricted stock: Number of shares/units Outstanding at December 31, 2019 1,496,693 Granted 511,633 Vested (480,876 ) Forfeited (18,556 ) Outstanding at March 31, 2020 1,508,894 |
Basic and Diluted Net Income _2
Basic and Diluted Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of Earnings Per Share and Shares Used in Computation of Earnings Per Share | In the following table, we present a reconciliation of earnings per share and the shares used in the computation of earnings per share for the three months ended March 31, 2020 and 2019 Three Months Ended March 31, 2020 2019 (in thousands, except per share data) Net income $ 22,530 $ 20,972 Earnings per share: Basic $ 0.35 $ 0.32 Effect of CESs - - Diluted $ 0.35 $ 0.32 Weighted average number of shares: Basic 63,592 64,909 Effect of CESs 750 295 Diluted 64,342 65,204 |
Operating Segments (Tables)
Operating Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information by Reportable Segment | In accordance with the segment reporting topic of the FASB Accounting Standards Codification, we present below certain financial information by reportable segment Three Months Ended March 31, 2020 2019 Americas EMEA APAC Consolidated Americas EMEA APAC Consolidated Revenue: Cloud subscriptions $ 15,243 $ 1,488 $ 529 $ 17,260 $ 6,920 $ 744 $ 195 $ 7,859 Software license 8,450 1,024 261 9,735 6,128 6,045 241 12,414 Maintenance 28,460 5,171 2,113 35,744 29,101 4,891 2,107 36,099 Services 67,249 16,619 3,538 87,406 69,323 14,608 4,700 88,631 Hardware 3,744 11 3 3,758 3,401 - - 3,401 Total revenue 123,146 24,313 6,444 153,903 114,873 26,288 7,243 148,404 Costs and Expenses: Cost of revenue 57,347 14,024 3,460 74,831 50,755 12,872 3,543 67,170 Operating expenses 47,428 3,770 1,332 52,530 44,400 5,499 1,145 51,044 Depreciation and amortization 2,089 206 51 2,346 1,667 183 64 1,914 Total costs and expenses 106,864 18,000 4,843 129,707 96,822 18,554 4,752 120,128 Operating income $ 16,282 $ 6,313 $ 1,601 $ 24,196 $ 18,051 $ 7,734 $ 2,491 $ 28,276 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Provision for cost of return and product warranty claims recorded | $ 0 | |
Revenue recognized in the reporting period from performance obligations satisfied in prior periods | 0 | |
Revenue expected to be recognized from remaining performance obligations | $ 202,800,000 | |
Remaining performance obligation, explanation | We expect to recognize revenue on approximately 50% of these remaining performance obligations over the next 24 months with the balance recognized thereafter. | |
Percentage of expected revenue recognition | 50.00% | |
Allowance for credit losses recorded to operations | $ 1,400,000 | $ 900,000 |
Revenue, practical expedient, remaining performance obligation, description | We apply the practical expedient to expense sales commissions when the amortization period would have been one year or less. | |
Amortization of sales commissions | $ 700,000 | 400,000 |
Impairment losses | 0 | $ 0 |
Balance as of December 31,2019 | ||
Disaggregation Of Revenue [Line Items] | ||
Deferred revenue recognized | 42,300,000 | |
Sales Commission | ||
Disaggregation Of Revenue [Line Items] | ||
Deferred commissions | 10,300,000 | |
Sales Commission | Other Assets | ||
Disaggregation Of Revenue [Line Items] | ||
Deferred commissions | 7,500,000 | |
Sales Commission | Prepaid Expenses and Other Current Assets | ||
Disaggregation Of Revenue [Line Items] | ||
Deferred commissions | $ 2,800,000 |
Revenue Recognition - Additio_2
Revenue Recognition - Additional Information (Detail 1) | Mar. 31, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-10-01 | |
Disaggregation Of Revenue [Line Items] | |
Revenue recognized on remaining performance obligations period | 24 months |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Detail) | Mar. 31, 2020USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Cash balance | $ 65,400,000 |
Cash equivalents | 9,900,000 |
Short-term investments | 0 |
Long-term investments | 0 |
Level 2 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Investments | 0 |
Level 3 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Investments | $ 0 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Option to extend, lease term | 10 years | |
Total lease cost | $ 2 | $ 2 |
Operating lease costs | 1.9 | 1.9 |
Short-term lease costs | $ 0.1 | $ 0.1 |
Leases -Summary of Operating Le
Leases -Summary of Operating Lease Right-of-Use Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Operating lease right-of-use assets | $ 33,713 | $ 35,896 |
LIABILITIES | ||
Operating lease liabilities, current (included in accrued and other liabilities) | $ 6,598 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | manh:AccruedAndOtherLiabilitiesCurrent | |
Operating lease liabilities, long-term | $ 30,093 | $ 32,416 |
Total operating lease liabilities | $ 36,691 |
Leases - Aggregate Future Minim
Leases - Aggregate Future Minimum Lease Payments Under Noncancelable Operating Leases (Detail) $ in Thousands | Mar. 31, 2020USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2020 (excluding the three months ended March 31, 2020) | $ 5,180 |
2021 | 6,760 |
2022 | 6,287 |
2023 | 6,440 |
2024 | 6,250 |
Thereafter | 13,099 |
Total minimum payments required | 44,016 |
Less short-term leases | (6) |
Less imputed interest | (7,319) |
Total operating lease liabilities | $ 36,691 |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Leases [Abstract] | |
Weighted average remaining lease term | 6 years 7 months 6 days |
Weighted average discount rate | 4.00% |
Supplemental cash flow information - operating cash flows (in thousands): | |
Operating cash flows for operating leases for the three months ended March 31, 2020 | $ 1,827 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Restricted stock expense | $ 7.6 | $ 7.2 |
Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of restricted units granted in the period | 511,633 | 912,219 |
Summary of Changes in Unvested
Summary of Changes in Unvested Units of Restricted Stock (Detail) - Restricted Stock Units - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of units, Outstanding at January 1, 2019 | 1,496,693 | |
Number of units, Granted | 511,633 | 912,219 |
Number of units, Vested | (480,876) | |
Number of units, Forfeited | (18,556) | |
Number of units, Outstanding at December 31, 2019 | 1,508,894 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 12.00% | 24.80% |
Increase in excess tax benefits on restricted stock vestings | $ 3.8 |
Reconciliation of Earnings Per
Reconciliation of Earnings Per Share and Shares Used in Computation of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income | $ 22,530 | $ 20,972 |
Earnings per share: | ||
Basic | $ 0.35 | $ 0.32 |
Diluted | $ 0.35 | $ 0.32 |
Weighted average number of shares: | ||
Basic | 63,592 | 64,909 |
Effect of CESs | 750 | 295 |
Diluted | 64,342 | 65,204 |
Operating Segments - Additional
Operating Segments - Additional Information (Detail) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)Segment | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | Segment | 3 | ||
Total assets | $ 348,044 | $ 372,279 | |
Warehouse Management Product Group | Product Concentration Risk | Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Percentage of software license revenue | 80.00% | ||
Americas | |||
Segment Reporting Information [Line Items] | |||
Americas royalty fees | $ 700 | $ 1,700 | |
Total assets | 280,200 | ||
EMEA | |||
Segment Reporting Information [Line Items] | |||
Total assets | 53,300 | ||
APAC | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 14,500 |
Operating Segments - Schedule o
Operating Segments - Schedule of Financial Information by Reportable Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 153,903 | $ 148,404 |
Cost of revenue | 74,831 | 67,170 |
Operating expenses | 52,530 | 51,044 |
Depreciation and amortization | 2,346 | 1,914 |
Total costs and expenses | 129,707 | 120,128 |
Operating income | 24,196 | 28,276 |
Americas | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 123,146 | 114,873 |
Cost of revenue | 57,347 | 50,755 |
Operating expenses | 47,428 | 44,400 |
Depreciation and amortization | 2,089 | 1,667 |
Total costs and expenses | 106,864 | 96,822 |
Operating income | 16,282 | 18,051 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 24,313 | 26,288 |
Cost of revenue | 14,024 | 12,872 |
Operating expenses | 3,770 | 5,499 |
Depreciation and amortization | 206 | 183 |
Total costs and expenses | 18,000 | 18,554 |
Operating income | 6,313 | 7,734 |
APAC | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 6,444 | 7,243 |
Cost of revenue | 3,460 | 3,543 |
Operating expenses | 1,332 | 1,145 |
Depreciation and amortization | 51 | 64 |
Total costs and expenses | 4,843 | 4,752 |
Operating income | 1,601 | 2,491 |
Cloud Subscriptions | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 17,260 | 7,859 |
Cloud Subscriptions | Americas | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 15,243 | 6,920 |
Cloud Subscriptions | EMEA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 1,488 | 744 |
Cloud Subscriptions | APAC | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 529 | 195 |
Software License | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 9,735 | 12,414 |
Cost of revenue | 555 | 592 |
Software License | Americas | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 8,450 | 6,128 |
Software License | EMEA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 1,024 | 6,045 |
Software License | APAC | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 261 | 241 |
Maintenance | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 35,744 | 36,099 |
Maintenance | Americas | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 28,460 | 29,101 |
Maintenance | EMEA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 5,171 | 4,891 |
Maintenance | APAC | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 2,113 | 2,107 |
Services | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 87,406 | 88,631 |
Services | Americas | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 67,249 | 69,323 |
Services | EMEA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 16,619 | 14,608 |
Services | APAC | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 3,538 | 4,700 |
Hardware | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 3,758 | 3,401 |
Hardware | Americas | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 3,744 | $ 3,401 |
Hardware | EMEA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 11 | |
Hardware | APAC | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 3 |