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What changed in MANHATTAN ASSOCIATES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MANHATTAN ASSOCIATES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+355 added−337 removedSource: 10-K (2025-02-07) vs 10-K (2024-02-06)

Top changes in MANHATTAN ASSOCIATES INC's 2024 10-K

355 paragraphs added · 337 removed · 301 edited across 2 sections

Item 1. Business

Business — how the company describes what it does

67 edited+34 added−8 removed213 unchanged
Biggest changeThe negative effects of a global pandemic such as COVID-19 on the overall economy could cause our revenues and profitability to decline for numerous reasons, including: • Our customers could implement cost-saving measures, which may include reductions in information technology expense or requests for extended payment terms; • Some customers could file for bankruptcy; • Forced store closures could accelerate pre-existing disruption in the retail sector; and/or • The spending habits of our customers’ customers could change, reducing our customers’ own revenues and profitability, which in turn could affect our revenues and profitability.
Biggest changeA future pandemic or other public health crisis, and related remedial measures, could adversely impact our results from operations, financial condition, liquidity and cash flows in numerous ways, including but not limited to: • any such crisis could reduce the availability or productivity of our workforce impacting our day-to-day operations and ability to meet our customer obligations; • customer demand for our products could decline or they may request extended payment terms for products purchased due to their need to reduce their information technology expense or preserve cash, or as a result of reductions in their sales and profits; • customers could file for bankruptcy; • forced store closures could accelerate pre-existing disruption in the retail sector; and 22 • the spending habits of our customers’ customers could change, reducing our customers’ own revenues and profitability, which in turn could affect our revenues and profitability.
International sales are subject to many risks and difficulties, including those arising from complying with a variety of foreign laws, import and export restrictions and tariffs, reduced protection for intellectual property rights in some countries, potential adverse tax treatment, less stringent adherence to ethical and legal standards by prospective customers in some countries, language and cultural barriers and political and economic instability.
International sales are subject to many risks and difficulties, including those arising from complying with a variety of foreign laws, import and export restrictions and tariffs, reduced protection for intellectual property rights in some countries, 20 potential adverse tax treatment, less stringent adherence to ethical and legal standards by prospective customers in some countries, language and cultural barriers and political and economic instability.
Purpose-built for rapid development and a value-based total cost of ownership, it is targeted toward companies with execution-focused supply chain needs that require speed-to-value, resource-light system configuration and maintenance, and the ability to quickly scale their logistics operations up or down in response to market fluctuations or business requirement changes.
Purpose-built for rapid development and a value-based total cost of ownership, SCALE is targeted toward companies with execution-focused supply chain needs that require speed-to-value, resource-light system configuration and maintenance, and the ability to quickly scale their logistics operations up or down in response to market fluctuations or business requirement changes.
However, in order to be successful in the future, we must continue to respond promptly and effectively to technological change and competitors’ innovations, and consequently we cannot assure you that we will not be required to make substantial additional investments in connection with our research, development, marketing, sales, and customer service 14 efforts in order to meet any competitive threat, or that we will be able to compete successfully in the future.
However, in order to be successful in the future, we must continue to respond promptly and effectively to technological change and competitors’ innovations, and consequently we cannot assure you that we will not be required to make substantial additional investments in connection with our research, development, marketing, sales, and customer service efforts in order to meet any competitive threat, or that we will be able to compete successfully in the future.
This includes software to help them move freight via the most cost-effective means possible while also meeting service-level expectations, to model their transportation network, and to automate the procurement-to-pay process. • Omnichannel - Meeting ever-evolving consumer expectations of service, inventory availability, and delivery convenience is a challenge every merchant must meet head on.
This includes software to help them move freight via the most cost-effective means possible while also meeting service-level expectations, to model their transportation network, and to automate the procurement-to-pay process. • Omnichannel Commerce - Meeting ever-evolving consumer expectations of service, inventory availability, and delivery convenience is a challenge every merchant must meet head on.
Further, we may experience in the future periodic interruptions, delays, and outages in service and availability with our data center providers due to a variety of factors, including Internet connectivity failures, infrastructure changes, human or software errors, website hosting disruptions, and capacity constraints. Remediation of any service interruptions may take significant time.
Further, we may experience in the future periodic interruptions, delays, and outages in service and availability with our data center providers due to a variety of factors, including Internet connectivity failures, infrastructure changes, human or software errors, website hosting disruptions, and capacity constraints. 13 Remediation of any service interruptions may take significant time.
We do not maintain hardware inventory as we generally purchase hardware from vendors only after receiving related customer orders. Strategy Our objective is to extend our position as the leading global commerce solutions provider for organizations intent on creating and sustaining market advantages through technology-enabled commerce solutions.
We do not maintain hardware inventory as we generally purchase hardware from vendors only after receiving related customer orders. 8 Strategy Our objective is to extend our position as the leading global commerce solutions provider for organizations intent on creating and sustaining market advantages through technology-enabled commerce solutions.
In addition to new customer sales, we continue to leverage our existing customer base to drive revenue from expansions of their existing solutions as well as sales of new or add-on solutions. To efficiently penetrate emerging global markets, we leverage indirect sales channels, including sales through reseller agreements, marketing agreements, and agreements with third-party logistics 8 providers.
In addition to new customer sales, we continue to leverage our existing customer base to drive revenue from expansions of their existing solutions as well as sales of new or add-on solutions. To efficiently penetrate emerging global markets, we leverage indirect sales channels, including sales through reseller agreements, marketing agreements, and agreements with third-party logistics providers.
In addition, if our customers use our cloud arrangements in unanticipated ways, this could cause an interruption in service for other customers attempting to access their data. Our data center providers may experience events such as natural disasters, fires, power loss, telecommunications failures, or similar events.
In addition, if our customers use our cloud arrangements in unanticipated ways, this could cause an interruption in service for other customers attempting to access their data. Our data center providers may experience events such as natural disasters, weather events, fires, power loss, telecommunications failures, or similar events.
Further, such errors could subject us to customer claims for significant 15 damages, and we cannot guarantee courts would enforce the provisions in our customer agreements limiting our damage liability. In turn, this could materially affect our business, results of operations, cash flow, and financial condition.
Further, such errors could subject us to customer claims for significant damages, and we cannot guarantee courts would enforce the provisions in our customer agreements limiting our damage liability. In turn, this could materially affect our business, results of operations, cash flow, and financial condition.
If the developers of these computing platforms do not cooperate with us or we are unable to devote the necessary resources so that our applications interoperate with those computing platforms, our software development efforts may be delayed and our business and results of operations may be adversely affected.
If the developers of these computing platforms do not cooperate with us or we are unable to devote the necessary resources so that our applications interoperate with those computing platforms, our software development efforts may be 18 delayed and our business and results of operations may be adversely affected.
We may from time to time acquire companies with complementary products and services. These acquisitions will expose us to increased risks and costs, including those arising from the following: assimilating new operations and personnel; diverting financial and management resources from existing operations; and integrating acquired technologies.
We may from time to time acquire companies with complementary products and 17 services. These acquisitions will expose us to increased risks and costs, including those arising from the following: assimilating new operations and personnel; diverting financial and management resources from existing operations; and integrating acquired technologies.
As a result of these factors, we believe that period-to-period comparisons of our revenue levels and operating results are not necessarily meaningful. 18 Historical growth rates and historical quarterly revenue and operating results may not be a good indicator of future operating results and reliance on historical results should not be used to predict our future performance.
As a result of these factors, we believe that period-to-period comparisons of our revenue levels and operating results are not necessarily meaningful. Historical growth rates and historical quarterly revenue and operating results may not be a good indicator of future operating results and reliance on historical results should not be used to predict our future performance.
Manhattan Associates develops modern commerce solutions that help its customers in three distinct areas of their business: • Supply Chain - We provide companies the tools needed to manage distribution and optimize transportation costs throughout their entire commercial network.
Manhattan Associates develops modern commerce solutions that help its customers in three distinct areas of their business: • Supply Chain Execution - We provide companies the tools needed to manage distribution and optimize transportation costs throughout their entire commercial network.
While we do not anticipate that changes in the tax laws or rates in that Act will have a material, direct impact on the Company, 17 imposition of new excise taxes and minimum corporate tax rates such as these can have a material adverse impact on the Company in the future.
While we do not anticipate that changes in the tax laws or rates in that Act will have a material, direct impact on the Company, imposition of new excise taxes and minimum corporate tax rates such as these can have a material adverse impact on the Company in the future.
In addition, certain open source software licenses require the user of such software to make any derivative works of the open source code available to others on unfavorable terms or at no cost. This can subject previously proprietary software to open source license terms.
In addition, certain open 19 source software licenses require the user of such software to make any derivative works of the open source code available to others on unfavorable terms or at no cost. This can subject previously proprietary software to open source license terms.
We believe our solutions are uniquely positioned to holistically optimize the way companies bring together omnichannel, supply chain and inventory management: 7 Develop and Enhance Software Solutions. We continue to focus our research and development resources on enhancing our Supply Chain, Omnichannel Commerce and Inventory Solutions.
We believe our solutions are uniquely positioned to holistically optimize the way companies bring together omnichannel, supply chain and inventory management: Develop and Enhance Software Solutions. We continue to focus our research and development resources on enhancing our Supply Chain, Omnichannel Commerce and Inventory Solutions.
Policing unauthorized use of our products is difficult, and, while we are unable to determine the extent to which piracy of our software solutions exists, as is the case with any software company, piracy could become a problem.
Policing 11 unauthorized use of our products is difficult, and, while we are unable to determine the extent to which piracy of our software solutions exists, as is the case with any software company, piracy could become a problem.
Our current competitors come from many segments of the software industry and offer a variety of solutions directed at various aspects of the extended supply chain, as well as the enterprise as a whole.
Our current 16 competitors come from many segments of the software industry and offer a variety of solutions directed at various aspects of the extended supply chain, as well as the enterprise as a whole.
We believe we compete favorably with respect to each of these factors. 9 Our competitors are diverse and offer a variety of solutions directed at various aspects of enterprise commerce.
We believe we compete favorably with respect to each of these factors. Our competitors are diverse and offer a variety of solutions directed at various aspects of enterprise commerce.
Comprising Order Management, Store Inventory Fulfillment, Call Center, Point of Sale (POS), and Customer Engagement as their core applications, Manhattan Omnichannel solutions provide CRM capabilities for contact center agents; end-to-end process enablement for store associates, and enterprise-wide inventory availability determination, order fulfillment optimization, and POS capabilities. • Inventory – Manhattan’s solutions provide distributors of finished goods (apparel, food, auto parts, pharmaceuticals, etc.) the ability to forecast demand, determine when, where and how much inventory is needed, and translate this into profitable inventory buying plans.
Comprising Order Management, Store Inventory Fulfillment, Call Center, Point of Sale (POS), and Customer Engagement as their core applications, Manhattan Omnichannel solutions provide CRM capabilities for contact center agents; end-to-end process enablement for store associates, and enterprise-wide inventory availability determination, order fulfillment optimization, and POS capabilities. • Supply Chain Planning – Manhattan’s solutions provide distributors of finished goods (apparel, food, auto parts, pharmaceuticals, etc.) the ability to forecast demand, determine when, where and how much inventory is needed, and translate this into profitable inventory buying plans.
Finally, Manhattan offers a unique Customer Engagement solution that enables contact center associates to see a holistic view of the customer, including a complete customer sales and interaction history, to better satisfy shopper needs while optimizing potential revenue 5 and profit opportunities through new orders, exchanges or a returns.
Finally, Manhattan offers a unique Customer Engagement solution that enables contact center associates to see a holistic view of the customer, including a complete customer sales and interaction history, to better satisfy shopper needs while optimizing potential revenue 6 and profit opportunities through new orders, exchanges or a returns.
Customers To date, our customers have been suppliers, manufacturers, distributors, retailers, and logistics providers in a variety of industries. Our top five customers (new or pre-existing) in the aggregate accounted for 11%, 11%, and 12% of total revenue for the year ended December 31, 2023, the year ended December 31, 2022, and the year ended December 31, 2021, respectively.
Customers To date, our customers have been suppliers, manufacturers, distributors, retailers, and logistics providers in a variety of industries. Our top five customers (new or pre-existing) in the aggregate accounted for 12%, 11%, and 11% of total revenue for the year ended December 31, 2024, the year ended December 31, 2023, and the year ended December 31, 2022, respectively.
No single customer accounted for more than 10% of our total revenue in 2023, 2022 and 2021. Product Development We focus our development efforts on new product innovation and on adding new functionality to existing solutions; integrating our various solution offerings; and enhancing the operability of our solutions across our platforms.
No single customer accounted for more than 10% of our total revenue in 2024, 2023 and 2022. Product Development We focus our development efforts on new product innovation and on adding new functionality to existing solutions; integrating our various solution offerings; and enhancing the operability of our solutions across our platforms.
Manhattan’s PRISM TM embodies our long-standing global diversity and inclusion strategy and is driven by team members with a passion for creating an innovative and inclusive environment. It brings our diverse cultures together to form a collective brilliance in an environment where individuals from all backgrounds and experiences can feel comfortable as themselves.
Manhattan’s PRISM TM embodies our long-standing global inclusion strategy and is driven by team members with a passion for creating an innovative and inclusive environment. It brings our many cultures together to form a collective brilliance in an environment where individuals from all backgrounds and experiences can feel comfortable as themselves.
Additional information regarding legal matters in which we are involved, if any, can be found in Note 5 to our Consolidated Financial Statements. The effects of a pandemic or major public health concern such as the COVID-19 pandemic could materially adversely affect our business, results of operations and financial condition.
Additional information regarding legal matters in which we are involved, if any, can be found in Note 5 to our Consolidated Financial Statements. The effects of a pandemic, such as the COVID-19 pandemic, or other major public health crisis could materially adversely affect our business, results of operations and financial condition.
A decrease in revenues could also negatively affect our liquidity, as we primarily rely on cash generated from operating activities for our liquidity needs. Compounding this issue, a pandemic may make outside capital less available or more expensive. Fires or other catastrophic events at our principal facilities could disrupt our business.
A decrease in revenues could also negatively affect our liquidity, as we primarily rely on cash generated from operating activities for our liquidity needs. Compounding this issue, a pandemic or other public health crisis may make outside capital less available or more expensive. Fires or other catastrophic events at our principal facilities could disrupt our business.
As omnichannel and supply chain solutions necessarily interact with other business operation systems, our solutions are designed to interoperate with software from other providers as well as with a company’s existing legacy systems.
As omnichannel and supply chain solutions necessarily interact with other business operation systems, our solutions are designed to interoperate with software from other providers as well as with a customer's existing legacy systems.
We are regularly under audit by tax authorities with respect to these non-income taxes and may have exposure to additional non-income tax liabilities, which could have an adverse effect on our results of operations, financial condition and cash flows. Other laws and regulations .
We are regularly under audit by tax authorities with respect to these non-income taxes and may have exposure to additional non-income tax liabilities, which could have an adverse effect on our results of operations, financial condition and cash flows.
We have offices in Australia, Chile, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Spain, the United Kingdom, and the United States, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia. As of December 31, 2023, we employed approximately 4,580 employees worldwide.
We have offices in Australia, Chile, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Spain, the United Kingdom, and the United States, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia. As of December 31, 2024, we employed approximately 4,690 employees worldwide.
At December 31, 2023, we employed approximately 2,700 employees in our international operations. Proprietary Rights We rely on a combination of copyright, patent, trade secret, trademark and trade dress laws, confidentiality procedures and contractual provisions to protect our proprietary rights in our products, processes and technology.
At December 31, 2024, we employed approximately 2,750 employees in our international operations. Proprietary Rights We rely on a combination of copyright, patent, trade secret, trademark and trade dress laws, confidentiality procedures and contractual provisions to protect our proprietary rights in our products, processes and technology.
There are three main components of Manhattan’s Supply Chain Solutions: 4 • Distribution Management - These applications comprise Manhattan’s Warehouse Management Solutions (WMS) commonly used to manage the complexity of the modern distribution center. WMS manages the flow of goods and information across the distribution center.
There are two main components of Manhattan’s Supply Chain Solutions: 5 • Distribution Management - These applications comprise Manhattan’s Warehouse Management Solutions (WMS) commonly used to manage the complexity of the modern distribution center. WMS manages the flow of goods and information across the distribution center.
Diversity & Inclusion: Our workforce is highly educated and diverse, which we believe is important for our continued success as a leading innovator in supply chain and omnichannel commerce software and services. Our employees comprise software developers, engineers, and other technical workers and professionals in business operations and administration.
Equal Employment Opportunity: Our workforce is highly educated and diverse, which we believe is important for our continued success as a leading innovator in supply chain and omnichannel commerce software and services. Our employees comprise software developers, engineers, and other technical workers and professionals in business operations and administration.
The market for our products is characterized by rapid technological change, frequent new product introductions and enhancements, changes in customer demands, and evolving industry standards. Our existing products could be rendered obsolete if we fail to continue to advance our technology.
Our technology must be advanced if we are to remain competitive . The market for our products is characterized by rapid technological change, frequent new product introductions and enhancements, changes in customer demands, and evolving industry standards. Our existing products could be rendered obsolete if we fail to continue to advance our technology.
Manhattan brings these solutions together on a single mobile platform to enable retailers to offer unparalleled service and convenience for the shopper. • Another important part of the Manhattan Active store offering is Store Inventory and Fulfillment . Most retailers are now looking to leverage store inventory to fulfill e-commerce demand (driving greater sales revenue with less inventory).
Manhattan brings these solutions together on a single mobile platform to enable retailers to offer unparalleled service and convenience for the shopper. • Store Inventory and Fulfillment - Most retailers are now looking to leverage store inventory to fulfill e-commerce demand (driving greater sales revenue with less inventory).
Our research and development activities may not generate significant returns. We anticipate continuing to make significant investments in software research and development and related product opportunities because we believe that we must continue to allocate a significant amount of resources to our research and development activities in order to compete successfully.
Our research and development activities may not generate significant returns. We anticipate continuing to make significant investments in software research and development (R&D) and related product opportunities because we believe that we must continue to allocate significant resources to our research and development activities to compete successfully.
Well-being: We support the mental, emotional, physical, and financial well-being of our employees around the world with various company-provided programs and self-service tools, including free virtual mental health counseling, free gym access in certain 11 locations, and free educational webinars, speakers, and other resources for personal financial and benefit plan management.
We prioritize continuous learning for our employees, offering diverse learning opportunities for skill enhancement and growth. 12 Well-being: We support the mental, emotional, physical, and financial well-being of our employees around the world with various company-provided programs and self-service tools, including free virtual mental health counseling, free gym access in certain locations, and free educational webinars, speakers, and other resources for personal financial and benefit plan management.
We believe that our future growth also will depend on further developing and maintaining a successful direct sales force and strategic relationships with systems integrators and other technology companies. We invest significant resources to maintain and develop our sales channels.
Our growth is dependent upon the successful development of our direct and indirect sales channel mix . We believe that our future growth also will depend on further developing and maintaining a successful direct sales force and strategic relationships with systems integrators and other technology companies. We invest significant resources to maintain and develop our sales channels.
Third parties may assert infringement or misappropriation claims against us relating to our products, processes or technology. Such claims, whether or not they have merit, generally are time-consuming and may result in costly litigation, divert management’s attention or cause product shipment delays or require us to enter into royalty or licensing arrangements.
Such claims, whether or not they have merit, generally are time-consuming and may result in costly litigation, divert management’s attention or cause product shipment delays or require us to enter into royalty or licensing arrangements.
To build a steady and diverse pipeline of talent, we have a robust in-house recruiting program, which includes campus recruiting focused on universities with leading supply chain, engineering, and computer science programs. Further, we employ recruiting processes that mitigate unconscious biases and promote diverse candidate pools.
To build a steady and diverse pipeline of talent, we have a robust in-house recruiting program, which includes campus recruiting focused on colleges and universities with leading supply chain, engineering, and computer science programs.
To ensure successful long-term customer relationships, consultants assist customers with the initial deployment of our systems, the conversion and transfer of the customer’s historical data onto our systems, and ongoing training, education and system upgrades.
Professional Services We advise and assist our customers in planning and implementing our solutions through our global Professional Services Organization. To ensure successful long-term customer relationships, consultants assist customers with the initial deployment of our systems, the conversion and transfer of the customer’s historical data onto our systems, and ongoing training, education and system upgrades.
If any defects, delays or interruption in our cloud solutions occur, customers could elect to cancel their service, delay or withhold payment to us, not purchase from us in the future or make claims against us, which could adversely affect our business reputation, results of operations, cash flow, and financial condition. 12 Furthermore, our data center providers have no obligation to renew their agreements with us on commercially reasonable terms, or at all.
If any defects, delays or interruption in our cloud solutions occur, customers could elect to cancel their service, delay or withhold payment to us, not purchase from us in the future or make claims against us, which could adversely affect our business reputation, results of operations, cash flow, and financial condition.
The principal competitive factors affecting the markets for our solutions include: industry expertise; company and solution reputation; company viability; compliance with industry standards; solution architecture; solution functionality and features; integration experience, particularly with enterprise resource planning (ERP) providers and material handling equipment providers; ease and speed of implementation; proven return on investment; historical and current solution quality and performance; total cost of ownership; solution price; and ongoing solution support structure.
Our solutions help global distributors, wholesalers, retailers, logistics providers and manufacturers successfully manage accelerating and fluctuating market demands, as well as master the increasing complexity and volatility of their local and global supply chains. 10 The principal competitive factors affecting the markets for our solutions include: industry expertise; company and solution reputation; company viability; compliance with industry standards; solution architecture; solution functionality and features; integration experience, particularly with enterprise resource planning (ERP) providers and material handling equipment providers; ease and speed of implementation; proven return on investment; historical and current solution quality and performance; total cost of ownership; solution price; and ongoing solution support structure.
We also offer certain solutions in either on-premise software or cloud computing models so that customers can select the option that best meets their requirements for control, flexibility, cost of ownership and time-to-deployment.
We also offer certain solutions in either on-premise software or cloud computing models so that customers can select the option that best meets their requirements for control, flexibility, cost of ownership and time-to-deployment. We continually invest in artificial intelligence (AI) technology to enhance our functional offerings, with a recent emphasis on generative AI (GenAI) advancements.
Any impairment in our relationship with these third parties or our ability to license or otherwise use their software could have a material adverse effect on our business, results of operations, cash flow, and financial condition. 16 Liability for intellectual property claims can be costly and result in the loss of significant rights, which could adversely impact our business, results of operations, cash flow, and financial condition .
Any impairment in our relationship with these third parties or our ability to license or otherwise use their software could have a material adverse effect on our business, results of operations, cash flow, and financial condition.
The length of our sales cycle makes us susceptible to having pending transactions delayed or terminated by our customers if they decide to delay or withdraw funding for IT projects.
The length of our sales cycle makes us susceptible to having pending transactions delayed or terminated by our customers if they decide to delay or withdraw funding for IT projects. Our customers may decide to delay or withdraw funding for IT projects for various reasons, including, but not limited to, global economic cycles and capital market fluctuations.
In March 2020, the World Health Organization declared the 19 outbreak of the novel coronavirus, and the disease it causes, COVID-19, a pandemic. The pandemic spread throughout the U.S. and the world and resulted in authorities implementing numerous measures from time to time to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns.
In March 2020, the World Health Organization declared the outbreak of the COVID-19 pandemic. The disease spread throughout the world, prompting governmental and private authorities to implement measures to contain the pandemic, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns.
Fires, natural disasters or other catastrophic events, particularly those affecting our Atlanta headquarters or India research and development center, may cause damage or disruption to our operations, and thus could have a strong negative effect on us. Our business operations are subject to interruption by natural disasters, fire, power shortages, pandemics and other events beyond our control.
Fires, natural disasters, weather events, political unrest, disruptions in critical infrastructure or other catastrophic events, particularly those affecting our Atlanta headquarters or India research and development center, may cause damage or disruption to our operations, and thus could have a strong negative effect on us.
Potential and existing customers, particularly larger enterprise customers, often commit significant resources to an evaluation of available solutions and services and require us to expend substantial time and resources in connection with our sales efforts.
Our products have lengthy sales cycles, which typically extend from nine to twelve months and may take up to several years. Potential and existing customers, particularly larger enterprise customers, often commit significant resources to an evaluation of available solutions and services and require us to expend substantial time and resources in connection with our sales efforts.
Whether we seek to enforce our proprietary rights in the U.S. or abroad, our efforts, including litigation to enforce our rights, can result in substantial costs and diversion of resources, and such efforts, or our failure to succeed in such efforts, could have a material adverse effect on our business, financial condition, results of operations or cash flows, regardless of the final outcome. 10 As the number of supply chain management solutions available in the marketplace increases and solution functionality continues to overlap, supply chain software may increasingly become subject to claims of infringement or other misappropriation of intellectual property.
Whether we seek to enforce our proprietary rights in the U.S. or abroad, our efforts, including litigation to enforce our rights, can result in substantial costs and diversion of resources, and such efforts, or our failure to succeed in such efforts, could have a material adverse effect on our business, financial condition, results of operations or cash flows, regardless of the final outcome.
These include: • general economic and business conditions; • interest rate and inflation rate trends and fluctuations; • overall demand for enterprise software and services; • governmental policy, budgetary constraints or shifts in government spending priorities; • general geo-political developments, such as the wars in Ukraine and the Middle East; and • currency exchange rate fluctuations.
These include: • general economic and business conditions; 21 • interest and inflation rates, trends and fluctuations of each, and efforts to control them; • financial and credit market fluctuations and bank failures; • overall demand for enterprise software and services; • governmental policy, budgetary constraints, potential U.S. federal government shutdowns or shifts in government spending priorities; • general geo-political developments, including political instability, economic sanctions, terrorist activities or international conflicts, such as the wars in Ukraine and the Middle East; and • currency exchange rate fluctuations.
We may encounter long sales cycles, particularly with our larger customers, which could have an adverse effect on the amount, timing, and predictability of our revenue, adversely affecting our business, results of operations, cash flow, and financial condition. Our products have lengthy sales cycles, which typically extend from nine to twelve months and may take up to several years.
Any such price modifications would likely reduce margins and could adversely affect our business, results of operations, cash flow, and financial condition. 15 We may encounter long sales cycles, particularly with our larger customers, which could have an adverse effect on the amount, timing, and predictability of our revenue, adversely affecting our business, results of operations, cash flow, and financial condition.
If we are unable to develop software applications that interoperate with computing platforms developed by others, our business, results of operations, cash flow, and financial condition may be adversely affected. We develop software applications that interoperate with operating systems, database platforms, and hardware devices developed by others, which we refer to collectively as computing platforms.
We develop software applications that interoperate with operating systems, database platforms, and hardware devices developed by others, which we refer to collectively as computing platforms.
We offer 24-hour customer support 365 days a year plus software upgrades for a pre-paid annual fee based on the specific solutions the customer has and the service level required. We provide software upgrades on a when-and-if-available basis. 6 Professional Services We advise and assist our customers in planning and implementing our solutions through our global Professional Services Organization.
We are able to remotely access customer systems to perform diagnostics, provide online assistance, and facilitate software upgrades. We offer 24-hour customer support 365 days a year plus software upgrades for a pre-paid annual fee based on the specific solutions the customer has and the service level required. We provide software upgrades on a when-and-if-available basis.
It is possible that third parties will claim that we have infringed their current or future products, inventions, or other intellectual property. We expect that supply chain software developers like us will increasingly be subject to infringement claims as the number of products grows.
We expect that supply chain software developers like us will increasingly be subject to infringement claims as the number of products grows.
Our sales cycle typically begins with the generation of a sales lead — through in-house marketing efforts, advertising, targeted promotions, web inquiries, trade show presence, speaking engagements, hosted seminars, or other means of referral — or the receipt of a request for proposal from a prospective customer.
We also host our annual Momentum and Exchange user conferences, webinars, and regional user groups where the Manhattan community comes together to connect on important topics and each other, get inspired to drive their digital transformation, and get educated on Manhattan solutions and offerings. 9 Our sales cycle typically begins with the generation of a sales lead — through in-house marketing efforts, advertising, targeted promotions, web inquiries, trade show presence, speaking engagements, hosted seminars, or other means of referral — or the receipt of a request for proposal from a prospective customer.
Our pricing models may need to be modified due to price competition. The competitive markets in which we operate may oblige us to reduce our prices in order to contend with the pricing models of our competitors.
The competitive markets in which we operate may oblige us to reduce our prices in order to contend with the pricing models of our competitors. If our competitors discount certain products or services, we may have to lower prices on certain products or services in order to attract or retain customers.
Further, as a federal contractor, we comply with federal contractor affirmative action requirements to employ and advance women, minorities, individuals with disabilities, and protected veterans. To attract and retain employees, we provide competitive compensation and benefits programs, employee recognition, career development opportunities, and access to continual growth through online learning platforms, external training, and in-house live training.
To attract and retain employees, we provide competitive compensation and benefits programs, employee recognition, career development opportunities, and access to continual growth through online learning platforms, external training, and in-house live training. To further employee enrichment and engagement, we periodically survey our employees regarding their engagement levels.
Social Responsibility: At Manhattan, we provide opportunities for our employees to take a full day each year to give back to their communities. We call this our Manhattan Purpose TM day. We also give our employees multiple opportunities to serve through community partnerships that we cultivate through our Manhattan Connect TM program.
Globally, we have experienced no work stoppages, and we believe our relations with our employees are strong. Social Responsibility: At Manhattan, we provide opportunities for our employees to take a full day each year to give back to their communities. We call this our Manhattan Purpose TM day.
Maintenance We offer a comprehensive program that provides our on-premises software licensees with software upgrades for additional or improved functionality and technological advances incorporating emerging supply chain and industry advances. We are able to remotely access customer systems to perform diagnostics, provide online assistance, and facilitate software upgrades.
We expect our continuing focus on innovation to generate ongoing productivity gains, enhanced user experiences, and increased operational efficiencies. 7 Maintenance We offer a comprehensive program that provides our on-premises software licensees with software upgrades for additional or improved functionality and technological advances incorporating emerging supply chain and industry advances.
None of our U.S. employees are subject to a collective bargaining agreement; our employees in both France (approximately 180 employees) and the Netherlands (approximately 100 employees) are represented by employee works councils. Globally, we have experienced no work stoppages, and we believe our relations with our employees are strong.
We use these survey results to determine how we can continue to create work environments that enable and energize our employees and to develop a positive culture. None of our U.S. employees are subject to a collective bargaining agreement; our employees in both France (approximately 190 employees) and the Netherlands (approximately 100 employees) are represented by employee works councils.
Career Development : Through MPOWERTM, our performance management program, each employee is empowered to drive their career and gain meaningful experiences. Through automated feedback tools and one-on-one meetings with leaders, employees receive guidance and support to enhance their performance and professional development. We prioritize continuous learning for our employees, offering diverse learning opportunities for skill enhancement and growth.
Through automated feedback tools and one-on-one meetings with leaders, employees receive guidance and support to enhance their performance and professional development.
We also have a dedicated learning path for all employees regarding diversity, equity and inclusion (DEI), and encourage our employees to take DEI training. Talent Acquisition, Retaining, and Engagement: We employ several strategies for attracting, retaining, and engaging our talented workforce.
Through PRISM, we support employee resource groups (ERGs), such as our Multicultural Network (MCN TM ). We also have a dedicated learning path for all employees regarding the importance of equal employment opportunity and career development. Talent Acquisition, Retention, and Engagement: We employ several strategies for attracting, retaining, and engaging our talented workforce.
Although we maintain crisis management and disaster response plans, such events could make it difficult or impossible for us to deliver our services to our customers. It em 1B. Unresolved Staff Comments None.
Our business operations are subject to interruption by natural disasters, weather events, political unrest, fire, power shortages and other disruptions of critical infrastructure, health crises or pandemics and other events beyond our control. Although we maintain crisis management and disaster response plans, such events could make it difficult or impossible for us to deliver our services to our customers.
Further, as regulatory focus on privacy issues continues to increase and become more complex, these potential risks to our business will intensify. Changes in laws or regulations associated with the enhanced protection of certain types of sensitive data could significantly increase our cost of providing our products and services.
We are subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, policies, and other requirements relating to privacy and data security. Further, as regulatory focus on privacy issues continues to increase and become more complex, these potential risks to our business will intensify.
Additionally, we cultivate partnerships with organizations focused on hiring women, minorities, individuals with disabilities, and veterans, including Circa, Technologists of Color, and Society of Women Engineers. Our campus programs include recruitment at historically black colleges and universities (HBCUs) and other schools with a high percentage of women and minorities enrolled in engineering and computer science programs.
Further, promote diverse candidate pools, including individuals with disabilities and veterans, and through recruiting efforts at HBCUs and schools with a high percentage of women and minorities enrolled in engineering and computer science programs.
We cannot estimate with any certainty when we will, if ever, receive significant revenues from these investments. Our growth is dependent upon the successful development of our direct and indirect sales channel mix .
There is no assurance that our research and development will successfully anticipate market needs and result in significant new marketable solutions or enhancements to our solutions. Accordingly, we cannot estimate with any certainty when we will, if ever, receive significant revenues from these investments.
Removed
We also host our annual Momentum and Exchange user conferences, webinars, and regional user groups where the Manhattan community comes together to connect on important topics and each other, get inspired to drive their digital transformation, and get educated on Manhattan solutions and offerings.
Added
Our AI capabilities are seamlessly embedded across all supply chain execution, planning, and commerce applications, aimed at delivering real-time optimization and value creation. Historically, our AI initiatives have focused on traditional mathematical optimization and machine learning. However, we are now leveraging third-party large language models to unlock value in a broader range of use cases.
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Competition Our solutions are solely focused on enterprise commerce capabilities. Our solutions help global distributors, wholesalers, retailers, logistics providers and manufacturers successfully manage accelerating and fluctuating market demands, as well as master the increasing complexity and volatility of their local and global supply chains.
Added
Looking ahead, we plan to further expand our investments in generative AI, introducing new product capabilities in the coming quarters and years. These efforts are designed to empower supply chain operators, retailers, and end consumers with GenAI-driven assistance.
Removed
Through PRISM, we support employee resource groups (ERGs), including our Women’s Initiative Network (WIN TM ), our Multicultural Network (MCN TM ) and Pride Alliance, which serves our LGBTQ+ community and its allies and focuses on the important of education, authenticity and belonging at work.
Added
Competition Our solutions are solely focused on enterprise commerce capabilities.
Removed
To further employee enrichment and engagement, we periodically survey our employees regarding their engagement levels. We use these survey results to determine how we can continue to create work environments that enable and energize our employees and to develop a positive culture.
Added
As the number of supply chain management solutions available in the marketplace increases and solution functionality continues to overlap, supply chain software may increasingly become subject to claims of infringement or other misappropriation of intellectual property. Third parties may assert infringement or misappropriation claims against us relating to our products, processes or technology.
Removed
If our competitors discount certain products or services, we may have to lower prices on certain products or services in order to attract or retain customers. Any such price modifications would likely reduce margins and could adversely affect our business, results of operations, cash flow, and financial condition.
Added
We also give our employees multiple opportunities to serve through community partnerships that we cultivate through our Manhattan Connect TM program. Career Development : Through MPOWERTM, our performance management program, each employee is empowered to drive their career and gain meaningful experiences.
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Our customers may decide to delay or withdraw funding for IT projects for various reasons, including, but not limited to, global economic cycles and capital market fluctuations. 13 Our technology must be advanced if we are to remain competitive .
Added
Furthermore, our data center providers have no obligation to renew their agreements with us on commercially reasonable terms, or at all.
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While we are unable to completely predict the full impact that a future pandemic and related remedial measures will have on our results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and containment measures, our compliance with these measures could impact our day-to-day operations and could disrupt our business and operations, as well as that of our customers, suppliers and other counterparties, for an indefinite period of time.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

234 edited+20 added−28 removed146 unchanged
Biggest changeIn accordance with the segment reporting topic of the FASB Codification, we present below financial information by reportable segment for 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 2022 Americas EMEA APAC Consolidated Americas EMEA APAC Consolidated Revenue: Cloud subscriptions $ 205,611 $ 42,243 $ 6,758 $ 254,612 $ 148,943 $ 22,988 $ 4,527 $ 176,458 Software license 12,040 2,925 3,241 18,206 16,364 6,380 2,104 24,848 Maintenance 114,963 19,721 9,252 143,936 113,258 19,784 9,156 142,198 Services 362,979 101,254 23,636 487,869 295,998 79,628 18,470 394,096 Hardware 23,602 495 5 24,102 29,321 158 5 29,484 Total revenue 719,195 166,638 42,892 928,725 603,884 128,938 34,262 767,084 Costs and Expenses: Cost of revenue 321,701 89,523 19,390 430,614 271,222 71,108 15,907 358,237 Operating expenses 257,172 19,889 5,417 282,478 227,409 17,187 4,888 249,484 Depreciation and amortization 5,164 503 85 5,752 5,964 613 86 6,663 Total costs and expenses 584,037 109,915 24,892 718,844 504,595 88,908 20,881 614,384 Operating income $ 135,158 $ 56,723 $ 18,000 $ 209,881 $ 99,289 $ 40,030 $ 13,381 $ 152,700 Year Ended December 31, 2021 Americas EMEA APAC Consolidated Revenue: Cloud subscriptions $ 103,863 $ 15,380 $ 2,952 $ 122,195 Software license 29,300 5,729 2,041 37,070 Maintenance 113,169 23,091 9,581 145,841 Services 256,392 66,131 12,276 334,799 Hardware 23,491 243 4 23,738 Total revenue 526,215 110,574 26,854 663,643 Costs and Expenses: Cost of revenue 225,799 58,593 13,435 297,827 Operating expenses 202,217 16,496 4,856 223,569 Depreciation and amortization 7,020 738 156 7,914 Total costs and expenses 435,036 75,827 18,447 529,310 Operating income $ 91,179 $ 34,747 $ 8,407 $ 134,333 In the following table, we present goodwill, long-lived assets, and total assets by reportable segment as of December 31, 2023 and 2022 (in thousands): As of December 31, 2023 As of December 31, 2022 Americas EMEA APAC Consolidated Americas EMEA APAC Consolidated Goodwill, net $ 54,766 $ 5,506 $ 1,963 $ 62,235 $ 54,766 $ 5,501 $ 1,963 $ 62,230 Long lived assets 53,061 10,129 2,696 65,886 47,591 6,640 1,136 55,367 Total assets 566,826 85,709 20,819 673,353 488,064 65,491 16,623 570,178 For the years ended December 31, 2023, 2022 and 2021 , we derived revenue from sales to customers outside the United States of approximately $ 301.4 million, $ 238.4 million, and $ 196.4 million, respectively.
Biggest changeCosts in the Americas’ segment include all research and development costs including the costs associated with our operations in India. 63 In accordance with the segment reporting topic of the FASB Codification, we present below financial information by reportable segment for 2024, 2023 and 2022 (in thousands): Year Ended December 31, 2024 2023 Americas EMEA APAC Consolidated Americas EMEA APAC Consolidated Revenue: Cloud subscriptions $ 264,331 $ 62,779 $ 10,093 $ 337,203 $ 205,611 $ 42,243 $ 6,758 $ 254,612 Software license 12,251 1,376 1,458 15,085 12,040 2,925 3,241 18,206 Maintenance 110,751 18,349 9,204 138,304 114,963 19,721 9,252 143,936 Services 389,550 107,384 28,583 525,517 362,979 101,254 23,636 487,869 Hardware 25,603 635 5 26,243 23,602 495 5 24,102 Total revenue 802,486 190,523 49,343 1,042,352 719,195 166,638 42,892 928,725 Costs and Expenses: Cost of revenue $ 351,112 $ 98,051 $ 21,817 470,980 321,701 89,523 19,390 430,614 Operating expenses 278,803 19,062 5,610 303,475 257,172 19,889 5,417 282,478 Depreciation and amortization 5,228 914 159 6,301 5,164 503 85 5,752 Total costs and expenses 635,143 118,027 27,586 780,756 584,037 109,915 24,892 718,844 Operating income $ 167,343 $ 72,496 $ 21,757 $ 261,596 $ 135,158 $ 56,723 $ 18,000 $ 209,881 Interest income 6,029 5,304 Other (loss) income, net ( 811 ) ( 1,514 ) Income before income taxes $ 266,814 $ 213,671 Year Ended December 31, 2022 Americas EMEA APAC Consolidated Revenue: Cloud subscriptions $ 148,943 $ 22,988 $ 4,527 $ 176,458 Software license 16,364 6,380 2,104 24,848 Maintenance 113,258 19,784 9,156 142,198 Services 295,998 79,628 18,470 394,096 Hardware 29,321 158 5 29,484 Total revenue 603,884 128,938 34,262 767,084 Costs and Expenses: Cost of revenue 271,222 71,108 15,907 358,237 Operating expenses 227,409 17,187 4,888 249,484 Depreciation and amortization 5,964 613 86 6,663 Total costs and expenses 504,595 88,908 20,881 614,384 Operating income $ 99,289 $ 40,030 $ 13,381 $ 152,700 Interest income 596 Other (loss) income, net 4,825 Income before income taxes $ 158,121 In the following table, we present goodwill, long-lived assets, and total assets by reportable segment as of December 31, 2024 and 2023 (in thousands): As of December 31, 2024 As of December 31, 2023 Americas EMEA APAC Consolidated Americas EMEA APAC Consolidated Goodwill, net $ 54,766 $ 5,497 $ 1,963 $ 62,226 $ 54,766 $ 5,506 $ 1,963 $ 62,235 Long lived assets 83,517 11,501 2,538 97,556 53,061 10,129 2,696 65,886 Total assets 633,157 102,222 22,172 757,551 566,826 85,709 20,819 673,353 For the years ended December 31, 2024, 2023 and 2022 , we derived revenue from sales to customers outside the United States of approximately $ 346.2 million, $ 301.4 million, and $ 238.4 million, respectively.
Product Development We continue to invest significantly in research and development (R&D) to provide leading Unified Omnichannel Commerce and Digital Supply Chain solutions to enable global retailers, manufacturers, wholesalers, distributors and logistics providers successfully manage accelerating and fluctuating demands as well as the increasing complexity and volatility of their local and global supply chains, retail store operations and POS.
Product Development We continue to invest significantly in research and development (R&D) to provide leading Unified Omnichannel Commerce and Digital Supply Chain solutions to enable global retailers, manufacturers, wholesalers, distributors and logistics providers to successfully manage accelerating and fluctuating demands as well as the increasing complexity and volatility of their local and global supply chains, retail store operations and POS.
Conditions to our obligations generally include that we are provided the right to control the defense of the claims and, in general, to control settlement negotiations.
Conditions to our obligations generally include that we are provided the right to control the defense of the claims and, in general, to control settlement negotiations.
The Cybersecurity Committee’s purpose is to review cybersecurity risks, discuss emerging threats, prioritize cybersecurity efforts, and make recommendations to leadership. • Crisis Response Team – Pursuant to our Crisis Response Program, our Crisis Response Team, which comprises the CLO, CFO, Chief People Officer and Chief Marketing Officer, and an expanded team from our material business lines and administrative departments, as well as outside advisors/experts (cyber forensics, external legal counsel, law enforcement, public relations), is charged with managing the Company through a cybersecurity incident (or other event or series of events) that rise to the level of a Company “crisis.” The Program includes protocols by which the CLO, on behalf of the Team, will report to or engage the CEO and the Chairman of the Board if and when an incident becomes a crisis or potential crisis. • Other Roles – The Cyber Program includes engagement of other Company management employees and outside service providers to oversee or perform specific roles in connection with cybersecurity risk assessment and management, and incident management.
The Cybersecurity Committee’s purpose is 23 to review cybersecurity risks, discuss emerging threats, prioritize cybersecurity efforts, and make recommendations to leadership. • Crisis Response Team – Pursuant to our Crisis Response Program, our Crisis Response Team, which comprises the CLO, CFO, Chief People Officer and Chief Marketing Officer, and an expanded team from our material business lines and administrative departments, as well as outside advisors/experts (cyber forensics, external legal counsel, law enforcement, public relations), is charged with managing the Company through a cybersecurity incident (or other event or series of events) that rise to the level of a Company “crisis.” The Program includes protocols by which the CLO, on behalf of the Team, will report to or engage the CEO and the Chairman of the Board if and when an incident becomes a crisis or potential crisis. • Other Roles – The Cyber Program includes engagement of other Company management employees and outside service providers to oversee or perform specific roles in connection with cybersecurity risk assessment and management, and incident management.
Significant estimates include the allowance for credit losses, which is based upon an evaluation of historical amounts written-off, the customers’ ability to pay, and general economic conditions; self-insurance accruals; impairment testing of goodwill; and our effective income tax rate (including the impact of unrecognized tax benefits) and deferred tax assets, which are based upon our expectations of future taxable income, allowable deductions, and projected tax credits.
Estimates include the allowance for credit losses, which is based upon an evaluation of historical amounts written-off, the customers’ ability to pay, and general economic conditions; self-insurance accruals; impairment testing of goodwill; and our effective income tax rate (including the impact of unrecognized tax benefits) and deferred tax assets, which are based upon our expectations of future taxable income, allowable deductions, and projected tax credits.
Manhattan utilizes the foregoing systems and processes to best ensure effective management of our risks and associated cybersecurity threats. The CFO or their designee reports to the full Board at least quarterly on the status of our Cyber Program. Engagement of Third Parties . As part of its Cyber Program, Manhattan engages outside independent auditors, consultants, and professional advisors.
Manhattan utilizes the foregoing systems and processes to best ensure effective management of our risks and associated cybersecurity threats. The CFO or their designee reports to the full Board at least quarterly on the status of our Cyber Program. 24 Engagement of Third Parties . As part of its Cyber Program, Manhattan engages outside independent auditors, consultants, and professional advisors.
We are a market leader in the supply chain management and omnichannel software solutions market as defined by industry analysts such as ARC Advisory Group and Gartner. Our goal is to extend our position as a leading global supply chain solutions provider by growing our cloud subscriptions and software license revenues faster than our competitors through investment in innovation.
We are a market leader in the supply chain management and omnichannel software solutions market as defined by industry analysts such as ARC Advisory Group and Gartner. Our goal is to extend our position as a leading global supply chain solutions provider by growing our cloud subscriptions revenues faster than our competitors through investment in innovation.
(“Gartner”), an information technology research and advisory company, estimates that over 75% of every supply chain software solutions dollar invested is spent in North America and Western Europe; consequently, the health of the U.S. and the Western European economies have a meaningful impact on our financial results.
(“Gartner”), an information technology research and advisory company, estimates that over 75% of every supply chain software solutions dollar invested is spent in North America and Europe; consequently, the health of the U.S. and European economies have a meaningful impact on our financial results.
Cloud subscriptions revenue increased $56.7 million, $19.2 million and $2.3 million for the Americas, EMEA, and APAC segments, respectively. Cloud subscriptions revenue recognized from first time cloud customers (defined as customers with no prior cloud subscriptions) during the year in which their initial cloud subscription began was approximately 3% and 7% of total cloud revenue in 2023 and 2022, respectively.
Cloud subscriptions revenue for the Americas, EMEA and APAC segments increased $56.7 million, $19.2 million and $2.3 million, respectively. Revenue recognized from first time cloud customers (defined as customers with no prior cloud subscriptions) during the year in which their initial cloud subscription began was 3% and 7% of total cloud revenue in 2023 and 2022, respectively.
Members of Manhattan’s executive management team, along with others from Company senior management, and others with varying areas of expertise, are engaged as part of our Cyber Program: 20 • Chief Financial Officer and Chief Information Officer – Direct management of our Cyber Program falls within our Information Technology department, which reports up through our CIO, who reports to our CFO.
Members of Manhattan’s executive management team, along with others from Company senior management, and others with varying areas of expertise, are engaged as part of our Cyber Program: • Chief Financial Officer and Chief Information Officer – Direct management of our Cyber Program falls within our Information Technology department, which reports up through our CIO, who reports to our CFO.
In addition, we have a large development center in Bangalore, India, that does not have a natural in-market revenue hedge to mitigate currency risk to our operating expenses in India. Fluctuations in the value of other currencies, particularly the Indian Rupee, could significantly affect our revenues, expenses, operating profit and net income.
In addition, we have a large development center in Bangalore, India, that does not have a natural in-market revenue hedge to mitigate currency risk to our operating expenses in India. Fluctuations in the value of other currencies, particularly the Indian Rupee, could significantly affect our expenses, operating profit and net income.
Impairment of Long-Lived Assets We review the values assigned to long-lived assets, including property and certain intangible assets, to determine whether events and circumstances have occurred which indicate that the remaining estimated useful lives may warrant revision or that the remaining balances may not be recoverable.
Impairment of Long-Lived Assets We review the values assigned to long-lived assets, including property and equipment and certain intangible assets, to determine whether events and circumstances have occurred which indicate that the remaining estimated useful lives may warrant revision or that the remaining balances may not be recoverable.
We expect to adopt the updated accounting guidance in our Annual Report on Form 10-K for the year ended December 31, 2025. We are currently evaluating the impact the adoption of the new accounting guidance will have on our income tax disclosures in Note 3. 2.
We expect to adopt the updated accounting guidance in our Annual Report on Form 10-K for the year ended December 31, 2025. We are currently evaluating the impact the adoption of the new accounting guidance will have on our income tax disclosures in Note 3.
Geographic revenue information is based on the location of sale. The revenues represented below are from external customers only. The geography-based expenses include costs of personnel, direct sales, marketing expenses, and general and administrative costs to support the business.
Revenue information is based on the location of sale. The revenues represented below are from external customers only. The geography-based expenses include costs of personnel, direct sales, marketing expenses, and general and administrative costs to support the business.
AND SUBSIDIARIES NOTE S TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023, 2022 and 2021 1. Organization, Consolidation and Summary of Significant Accounting Policies Organization and Business Manhattan Associates, Inc. (“Manhattan”, the “Company”, “we”, “our”, or “us”) is a developer and provider of supply chain commerce solutions that help organizations optimize the effectiveness, efficiency, and strategic advantages of their supply chains.
AND SUBSIDIARIES NOTE S TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024, 2023 and 2022 1. Organization, Consolidation and Summary of Significant Accounting Policies Organization and Business Manhattan Associates, Inc. (“Manhattan”, the “Company”, “we”, “our”, or “us”) is a developer and provider of supply chain commerce solutions that help organizations optimize the effectiveness, efficiency, and strategic advantages of their supply chains.
While demand for our solutions is solid, the current business climate within the United States and geographic regions in which we operate may affect customers’ and prospects’ decisions regarding timing of strategic capital expenditures. In January 2024, the International Monetary Fund (IMF) provided a World Economic Outlook (WEO) update.
While demand for our solutions is solid, the current business climate within the United States and geographic regions in which we operate may affect customers’ and prospects’ decisions regarding timing of strategic capital expenditures. In January 2025, the International Monetary Fund (IMF) provided a World Economic Outlook (WEO) update.
For maintenance, we offer a comprehensive 24 hours per day, 365 days per year program that provides our customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives. Maintenance relates to our traditional perpetual license sales.
For maintenance, we offer a comprehensive 24 hours per day, 365 days per year program that provides our customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives. Maintenance relates to our legacy perpetual license sales.
Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Manhattan Associates, Inc. and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).
Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Manhattan Associates, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
If the carrying amount exceeds the fair value, a second step is performed to measure the amount of impairment loss, if any. We did not identify any macroeconomic or industry conditions as of December 31, 2023, that would indicate that the fair value of the reporting units were more likely than not to be less than their respective carrying values.
If the carrying amount exceeds the fair value, a second step is performed to measure the amount of impairment loss, if any. We did not identify any macroeconomic or industry conditions as of December 31, 2024, that would indicate that the fair value of the reporting units were more likely than not to be less than their respective carrying values.
As of December 31, 2023 , the associated equity-based compensation expense has been recognized for the portion of the award attributable to the 2023 performance criteria. 3. Income Taxes We are subject to future federal, state, and foreign income taxes and have recorded net deferred tax assets on the Consolidated Balance Sheets at December 31, 2023 and 2022 .
As of December 31, 2024, the associated equity-based compensation expense has been recognized for the portion of the award attributable to the 2024 performance criteria. 3. Income Taxes We are subject to future federal, state, and foreign income taxes and have recorded net deferred tax assets on the Consolidated Balance Sheets at December 31, 2024 and 2023 .
Cloud revenue now represents about 93% of our total software revenue. Customers on our legacy perpetual license program can convert their maintenance contracts to cloud subscription contracts. Global Economic Trends and Industry Factors Global macro-economic trends, technology spending, and supply chain management market growth are important barometers for our business.
Cloud revenue now represents about 96% of our total software revenue. Customers on our legacy perpetual license program can convert their maintenance contracts to cloud subscription contracts. Global Economic Trends and Industry Factors Global macro-economic trends, technology spending, and supply chain management market growth are important barometers for our business.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
Goodwill and Impairment of Goodwill Goodwill Goodwill represents the excess of the consideration transferred over the fair value of net identified tangible and intangible assets and liabilities acquired. We evaluate goodwill for impairment on at least an annual basis. During 2023 and 2022, we did no t recognize any impairment charges associated with our goodwill.
Goodwill and Impairment of Goodwill Goodwill Goodwill represents the excess of the consideration transferred over the fair value of net identified tangible and intangible assets and liabilities acquired. We evaluate goodwill for impairment on at least an annual basis. During 2024 and 2023 , we did no t recognize any impairment charges associated with our goodwill.
We performed our periodic review of goodwill for impairment as of December 31, 2023 and 2022 , and did not identify any impairment as a result of the review. Guarantees and Indemnities We account for guarantees in accordance with the guarantee accounting topic in the FASB Codification . Our customer contracts generally contain infringement indemnity provisions.
We performed our periodic review of goodwill for impairment as of December 31, 2024 and 2023 , and did not identify any impairment as a result of the review. Guarantees and Indemnities We account for guarantees in accordance with the guarantee accounting topic in the FASB Codification . Our customer contracts generally contain infringement indemnity provisions.
For 2023, 2022 and 2021, we did not capitalize any R&D costs as the period between determining technological feasibility was established or that it is probable the software product would be used to perform the function intended were insignificant.
For 2024, 2023 and 2022, we did not capitalize any R&D costs as the period between determining technological feasibility was established or that it is probable the software product would be used to perform the function intended were insignificant.
We account for these indemnity obligations in accordance with the Financial Accounting Standards Board's guidance on accounting for contingencies and record a liability for these obligations when a loss is probable and reasonably estimable. We have not recorded any liabilities for these indemnification obligations as of December 31, 2023.
We account for these indemnity obligations in accordance with the Financial Accounting Standards Board's guidance on accounting for contingencies and record a liability for these obligations when a loss is probable and reasonably estimable. We have not recorded any liabilities for these indemnification obligations as of December 31, 2024.
Summary of Significant Accounting Policies Cash and Cash Equivalents We consider all highly liquid investments purchased with original maturities of three months or less to be cash or cash equivalents. 49 Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable.
Summary of Significant Accounting Policies Cash and Cash Equivalents We consider all highly liquid investments purchased with original maturities of three months or less to be cash or cash equivalents. 51 Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable.
We have not recorded any liabilities for these contracts as of December 31, 2023, or 2022. In general, in our customer contracts for purchase of our cloud SaaS services or license of our on-premises software products, we warrant that our services or software will perform in accordance with our published services or product specifications.
We have not recorded any liabilities for these contracts as of December 31, 2024, or 2023. In general, in our customer contracts for purchase of our cloud SaaS services or license of our on-premises software products, we warrant that our services or software will perform in accordance with our published services or product specifications.
See Note 2 for further information on those securities. Accumulated Other Comprehensive Income Comprehensive income includes net income and foreign currency translation adjustments that are excluded from net income and reflected in shareholders’ equity. The entire accumulated other comprehensive income balance as of December 31, 2023 and 2022 represents foreign currency translation adjustments.
See Note 2 for further information on those securities. Accumulated Other Comprehensive Income Comprehensive income includes net income and foreign currency translation adjustments that are excluded from net income and reflected in shareholders’ equity. The entire accumulated other comprehensive income balance as of December 31, 2024 and 2023 represents foreign currency translation adjustments.
Our CLO also is member of the Disclosure Committee and the Core Response Team. • Senior Director, Global Security – Our Senior Director, Global Security, has managed our Cyber Program for seven years. He manages its day-to-day operations, oversees our security analysts and engineers, and leads our Cybersecurity Committee meetings.
Our CLO also is member of the Disclosure Committee and the Core Response Team. • Senior Director, Global Security – Our Senior Director, Global Security, has managed our Cyber Program for eight years. He manages its day-to-day operations, oversees our security analysts and engineers, and leads our Cybersecurity Committee meetings.
The $73.2 million increase in 2023 compared to 2022 was principally due to a $52.0 million increase in compensation and other personnel-related expenses, a $6.3 million increase in travel expense, a $8.3 million increase in performance-based compensation expense, a $4.4 million increase in computer infrastructure cost and a $1.1 million increase in facilities expense.
Year 2023 compared with year 2022 The $73.2 million increase in 2023 compared to 2022 was principally due to a $52.0 million increase in compensation and other personnel-related expenses, a $6.3 million increase in travel expense, a $8.3 million increase in performance-based compensation expense, a $4.4 million increase in computer infrastructure cost and a $1.1 million increase in facilities expense.
Opinion on Internal Control Over Financial Reporting We have audited Manhattan Associates, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
Opinion on Internal Control Over Financial Reporting We have audited Manhattan Associates, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
Actual results will differ from these estimates. 50 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.
Actual results will differ from these estimates. 52 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.
Over 98 % of our reported performance obligations represent cloud native subscriptions with a non-cancelable term greater than one year (including cloud-deferred revenue as well as amounts we will invoice and recognize as revenue from our performance of cloud services in future periods).
Over 98 % of our remaining performance obligations represent cloud native subscriptions with a non-cancelable term greater than one year (including cloud-deferred revenue as well as amounts we will invoice and recognize as revenue from our performance of cloud services in future periods).
Accordingly, we have no liabilities recorded for these agreements as of December 31, 2023 and 2022 . Segment Information We have three reportable segments as defined by the FASB Codification topic for segment reporting: Americas, EMEA, and APAC. See Note 8 for discussion of our reportable segments.
Accordingly, we have no liabilities recorded for these agreements as of December 31, 2024 and 2023 . Segment Information We have three reportable segments as defined by the FASB Codification topic for segment reporting: Americas, EMEA, and APAC. See Note 8 for discussion of our reportable segments.
We applied the simplified goodwill impairment test for 2023, that permits companies to perform a qualitative assessment based on economic, industry and company-specific factors as the initial step in the annual goodwill impairment test for all or selected reporting units.
We applied the simplified goodwill impairment test for 2024, that permits companies to perform a qualitative assessment based on economic, industry and company-specific factors as the initial step in the annual goodwill impairment test for all or selected reporting units.
To the extent we conclude that it is more likely than not that a reporting unit’s estimated fair value is less than its carrying amount, the two-step approach is applied. The first step would require a comparison of each reporting unit’s fair value to the 53 respective carrying amount.
To the extent we conclude that it is more likely than not that a reporting unit’s estimated fair value is less than its carrying amount, the two-step approach is applied. The first step would require a comparison of each reporting unit’s fair value to the 55 respective carrying amount.
Included in the Americas costs are all research and development costs, including the costs associated with our operations in India. During 2023, 2022, or 2021, we derived the majority of our revenues from sales to customers within our Americas segment.
Included in the Americas costs are all research and development costs, including the costs associated with our operations in India. During 2024, 2023, or 2022, we derived the majority of our revenues from sales to customers within our Americas segment.
As of the end of the Company’s 2023 fiscal year, management conducted an assessment of the Company’s internal control over financial reporting based on the framework established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (COSO).
As of the end of the Company’s 2024 fiscal year, management conducted an assessment of the Company’s internal control over financial reporting based on the framework established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (COSO).
Future Expectations While we remain cautious about the global economy, our results for the full year ended 2023 exceeded our expectations due to solid demand for our cloud solutions. Our solutions are mission critical, supporting complex global supply chains.
Future Expectations While we remain cautious about the global economy, our results for the full year ended 2024 exceeded our expectations due to solid demand for our cloud solutions. Our solutions are mission critical, supporting complex global supply chains.
Although we attempt to contractually limit our liability for damages arising from services or product downtime or failures or negligent acts or omissions, there can be no assurance that the limitations of liability in our contracts will be enforceable. 22 It em 4. Mine Safety Disclosures Not applicable. 23 PART II It em 5.
Although we attempt to contractually limit our liability for damages arising from services or product downtime or failures or negligent acts or omissions, there can be no assurance that the limitations of liability in our contracts will be enforceable. It em 4. Mine Safety Disclosures Not applicable. 25 PART II It em 5.
General and Administrative Year 2023 compared with year 2022 General and administrative expenses consist primarily of salaries and other personnel-related costs of executive, financial, human resources, information technology, and administrative personnel, as well as facilities, legal, insurance, accounting, and other administrative expenses.
General and Administrative Year 2024 compared with year 2023 General and administrative expenses consist primarily of salaries and other personnel-related costs of executive, financial, human resources, information technology, and administrative personnel, as well as facilities, legal, insurance, accounting, and other administrative expenses.
In our opinion, Manhattan Associates, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.
In our opinion, Manhattan Associates, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 5, 2024 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 7, 2025 expressed an unqualified opinion thereon.
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 cloud subscriptions and software licenses are highly variable.
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. The selling price of our cloud subscriptions are highly variable.
Our credit loss reserve was $ 0.9 million and $ 0.6 million as of December 31, 2023 and 2022, respectively. We also reduce accounts receivable with a corresponding reduction in services revenue for the most likely amount of potential service revenue adjustments based on a detailed assessment of accounts receivable.
Our credit loss reserve was $ 0.9 million and $ 0.9 million as of December 31, 2024 and 2023, respectively. We also reduce accounts receivable with a corresponding reduction in services revenue for the most likely amount of potential service revenue adjustments based on a detailed assessment of accounts receivable.
We do no t have any accumulated impairment loses as of 2023. Goodwill was $ 62.2 million at the end of both years ended December 31, 2023 and 2022.
We do no t have any accumulated impairment loses as of 2024. Goodwill was $ 62.2 million at the end of both years ended December 31, 2024 and 2023.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 5, 2024 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 7, 2025 expressed an unqualified opinion thereon.
Risks from Cybersecurity Threats—Likely Material Impact . See Item 1A, ”Risk Factors—Risks Related to Our Intellectual Property and Cybersecurity.” We do not believe any risks from previous cybersecurity threats have materially affected or are reasonably likely to materially affect Manhattan. It em 2.
Risks from Cybersecurity Threats—Likely Material Impact . See Item 1A, "Risk Factors—Risks Related to Our Intellectual Property and Cybersecurity." We do not believe any risks from previous cybersecurity threats have materially affected or are reasonably likely to materially affect Manhattan. It em 2.
The effective tax rate in 2023 decreased from 2022 mainly due to a decrease of expense from a favorable tax law change allowing creditability of foreign tax offset by a decrease of net excess tax benefits on restricted stock vesting and adjustments for tax contingencies.
The effective income tax rate in 2023 increased from 2022 mainly due to a decrease of expense from a favorable tax law change allowing creditability of foreign tax offset by a decrease of net excess tax benefits on restricted stock vesting and adjustments for tax contingencies.
When the U.S. dollar weakens, the value of our sales and expenses in that currency converted to U.S. dollars increases. We recognized foreign exchange losses of $1.5 million in 2023, compared to gains of $4.7 million in 2022, and losses of $0.2 million in and 2021.
When the U.S. dollar weakens, the value of our sales and expenses in that currency converted to U.S. dollars increases. We recognized foreign exchange losses of $1.0 million in 2024, compared to losses of $1.5 million in 2023, and gains of $4.7 million in 2022.
At December 31, 2023, we employed approximately 4,580 employees worldwide. We have offices in Australia, Chile, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Spain, and the United Kingdom, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia.
At December 31, 2024, we employed approximately 4,690 employees worldwide. We have offices in Australia, Chile, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Spain, and the United Kingdom, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia.
Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2023 was effective.
Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2024 was effective.
While we are encouraged by our results, we remain cautious regarding the pace of global economic growth. We believe global geopolitical and economic volatility associated with the pandemic likely will continue to shape customers’ and prospects’ enterprise software buying decisions.
While we are encouraged by our results, we remain cautious regarding the pace of global economic growth. We believe global geopolitical and economic volatility likely will continue to shape customers’ and prospects’ enterprise software buying decisions.
We recognized foreign exchange losses of $ 1.5 million in 2023 , compared to gains of $ 4.7 million in 2022 , and losses of $ 0.2 million in 2021. Foreign exchange rate transaction gains and losses are classified in “Other (loss) income, net” on the Consolidated Statements of Income.
We recognized foreign exchange losses of $ 1.0 million in 2024 , compared to losses of $ 1.5 million in 2023 , and gains of $ 4.7 million in 2022. Foreign exchange rate transaction gains and losses are classified in “Other (loss) income, net” on the Consolidated Statements of Income.
For 2024, our five strategic goals continue to be: • Focus on customer success and drive sustainable long-term growth; • Invest in innovation to expand our products and total addressable market; • Expand our Manhattan Active suite of cloud solutions; 25 • Develop and grow our cloud business and cloud subscription revenue; and • Expand our global sales and marketing teams.
For 2025, our five strategic goals continue to be: • Focus on customer success and drive sustainable long-term growth; • Invest in innovation to expand our products and total addressable market; • Expand our Manhattan Active suite of cloud solutions; 27 • Develop and grow our cloud business and cloud subscription revenue; and • Expand our global sales and marketing teams.
Included in these amounts are unrecognized tax benefits totaling $ 9.1 million and $ 9.9 million as of December 31, 2023 and 2022, respectively, which, if recognized, would affect the effective tax rate. We recognize potential accrued interest and penalties related to unrecognized tax benefits within our global operations in income tax expense.
Included in these amounts are unrecognized tax benefits totaling $ 8.5 million and $ 9.1 million as of December 31, 2024 and 2023, respectively, which, if recognized, would affect the effective tax rate. We recognize potential accrued interest and penalties related to unrecognized tax benefits within our global operations in income tax expense.
No single customer accounted for more than 10% of revenue in 2023, 2022 and 2021, or more than 10% of accounts receivable as of December 31, 2023 and 2022 .
No single customer accounted for more than 10% of revenue in 2024, 2023 and 2022, or more than 10% of accounts receivable as of December 31, 2024 and 2023 .
During the past three years, our primary uses of cash have been for funding investments in R&D in our Unified Omnichannel Commerce and Digital Supply Chain solutions to drive revenue and earnings growth. In addition, we repurchased approximately $166.0 million of Manhattan Associates’ outstanding common stock under the share repurchase program approved by our Board of Directors.
During the past three years, our primary uses of cash have been for funding investments in R&D in our Unified Omnichannel Commerce and Digital Supply Chain solutions to drive revenue and earnings growth. In addition, we repurchased $241.6 million of Manhattan Associates’ outstanding common stock under the share repurchase program approved by our Board of Directors.
Cloud Subscription Under our Manhattan Active® Solutions cloud subscription offering, customers pay a periodic fee for the right to use our software within a cloud environment that we provide and manage over a specified period of time. Adoption of our Manhattan Active® cloud solutions continues to increase nicely, with cloud revenue up 44% over 2022.
Cloud Subscription Under our Manhattan Active® Solutions cloud subscription offering, customers pay a periodic fee for the right to use our software within a cloud environment that we provide and manage over a specified period of time. Adoption of our Manhattan Active® cloud solutions continues to increase nicely, with cloud revenue up 32% over 2023.
Our remaining revenue was derived from domestic sales. 61 Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel, warehouse management solutions, and transportation management solutions for the year ended December 31, 2023. The majority of our software license revenue (approximately 85 %) relates to our warehouse management product group for the same period. 9.
Our remaining revenue was derived from domestic sales. 64 Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel, warehouse management solutions, and transportation management solutions for the year ended December 31, 2024 . The majority of our software license revenue (approximately 85 %) relates to our warehouse management product group for the same period. 9.
Financial Statements and Supplementary Data Financial Statements INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Management’s Annual Report on Internal Control over Financial Reporting 40 Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting (PCAOB ID 42 ) 41 Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements 42 Consolidated Statements of Income 44 Consolidated Statements of Comprehensive Income 45 Consolidated Balance Sheets 46 Consolidated Statements of Cash Flows 47 Consolidated Statements of Shareholders’ Equity 48 Notes to Consolidated Financial Statements 49 39 MANAGE MENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of Manhattan Associates, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting.
Financial Statements and Supplementary Data Financial Statements INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Management’s Annual Report on Internal Control over Financial Reporting 42 Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting (PCAOB ID 42 ) 43 Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements 44 Consolidated Statements of Income 46 Consolidated Statements of Comprehensive Income 47 Consolidated Balance Sheets 48 Consolidated Statements of Cash Flows 49 Consolidated Statements of Shareholders’ Equity 50 Notes to Consolidated Financial Statements 51 41 MANAGE MENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of Manhattan Associates, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting.
Ernst & Young LLP, the independent registered public accounting firm that audited the Company’s financial statements for the year ended December 31, 2023, has audited the Company’s internal control over financial reporting as of December 31, 2023 and has issued a report regarding the Company’s internal control over financial reporting appearing on page 41 , which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. /s/ Eddie Capel Eddie Capel President and Chief Executive Officer February 5, 2024 /s/ Dennis B.
Ernst & Young LLP, the independent registered public accounting firm that audited the Company’s financial statements for the year ended December 31, 2024, has audited the Company’s internal control over financial reporting as of December 31, 2024 and has issued a report regarding the Company’s internal control over financial reporting appearing on page 43 , which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. /s/ Eddie Capel Eddie Capel President and Chief Executive Officer February 7, 2025 /s/ Dennis B.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Atlanta, Georgia February 5, 2024 41 REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Manhattan Associates, Inc.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Atlanta, Georgia February 7, 2025 43 REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Manhattan Associates, Inc.
The income tax provision for 2023, 2022 and 2021 included excess tax benefits of $6.8 million, $7.6 million, and $6.6 million on vesting of restricted stock. Liquidity and Capital Resources During 2023, 2022 and 2021, we funded our business through cash generated from operations.
The income tax provision for 2024, 2023 and 2022 included excess tax benefits of $13.1 million, $6.8 million, and $7.6 million on vesting of restricted stock. Liquidity and Capital Resources During 2024, 2023 and 2022, we funded our business through cash generated from operations.
Sales and marketing expenses increased by $10.0 million in 2023 compared to 2022, primarily due to a $4.3 million increase in compensation and other personnel-related expense, a $3.7 million increase in marketing and campaign expenses, a $1.0 million increase in performance-based compensation expense, and a $0.8 million in travel expense.
Year 2023 compared with year 2022 Sales and marketing expenses increased $10.0 million in 2023 compared to 2022, primarily due to a $4.3 million increase in compensation and other personnel-related expenses, a $3.7 million increase in marketing and campaign programs, a $1.0 million increase in performance-based compensation expense, and a $0.8 million increase in travel expense.
We derive our revenue from cloud subscriptions, software licenses, customer support services and software enhancements (“maintenance”) for software licenses, implementation and training services, and sales of hardware. We exclude sales and usage-based taxes from revenue.
We derive our revenue from cloud subscriptions, software licenses, customer support services and software enhancements (“maintenance”) for software licenses, professional services, and sales of hardware. We exclude sales and usage-based taxes from revenue.
Change in Internal Control over Financial Reporting During the fourth quarter of 2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, including any corrective actions with regard to material weaknesses. It em 9B. Other Information None.
Change in Internal Control over Financial Reporting During the fourth quarter of 2024, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, including any corrective actions with regard to material weaknesses. It em 9B.
General and administrative expenses increased $8.1 million in 2023 primarily due to a $5.3 million increase in compensation and other personnel-related expenses, a $1.3 million increase in performance-based compensation expense, a $0.6 million increase in professional expenses, and a $0.6 million increase in computer infrastructure costs.
Year 2023 compared with year 2022 General and administrative expenses increased $8.1 million in 2023 primarily due to a $5.3 million increase in compensation and other personnel-related expenses, a $1.3 million increase in performance-based compensation expense, a $0.6 million increase in professional expenses, and a $0.6 million increase in computer infrastructure costs.
Income Tax Provision Our effective income tax rates were 17.4%, 18.4%, and 17.6% in 2023, 2022 and 2021, respectively. Our effective income tax rate takes into account the source of taxable income, domestically by state and internationally by country, and available income tax credits.
Income Tax Provision Our effective income tax rates were 18.2%, 17.4%, and 18.4% in 2024, 2023 and 2022, respectively. Our effective income tax rate takes into account the source of taxable income, domestically by state and internationally by country, and available income tax credits.
Business Overview We develop, sell, deploy, service and maintain software solutions designed to manage Unified Omnichannel Commerce and Digital Supply Chain, inventory and omnichannel operations for retailers, wholesalers, manufacturers, logistics providers and other organizations. Our customers include many of the world’s most premier and profitable brands.
Business Overview We develop, sell, deploy, service and maintain software solutions designed to manage supply chains, inventory and omnichannel operations for retailers, wholesalers, manufacturers, logistics providers and other organizations. Our customers include many of the world’s premier and most profitable brands.
Although our professional services are optional, the majority of our customers use at least some portion of these services for their planning, implementation, or related needs. Professional services are typically rendered under time and materials-based contracts with services typically billed on an hourly basis.
Although our professional services are optional, the majority of our customers use at least some portion of these services for their planning, implementation, ongoing support, training, system upgrades or related needs. Professional services are typically rendered under time and materials-based contracts with services typically billed on an hourly basis.
Cloud subscription revenue growth is influenced by the strength of general economic and business conditions and the competitive position of our software products. These revenues generally have long sales cycles. Approximately 34% of the total value of new non-cancelable cloud subscriptions (excluding renewals) signed during 2023 was with new customers and 66% was with existing customers.
Cloud subscription revenue growth is influenced by the strength of general economic and business conditions and the competitive position of our software products. These revenues generally have long sales cycles. Approximately 22% of the total value of new non-cancelable cloud subscriptions (excluding renewals) signed during 2024 was with new customers and 78% was with existing customers.
Year 2023 compared with year 2022 R&D expenses primarily consist of salaries and other personnel-related costs for personnel involved in our research and development activities. Research and development expenses in 2023 increased by $14.9 million compared to 2022.
Year 2024 compared with year 2023 R&D expenses primarily consist of salaries and other personnel-related costs for personnel involved in our research and development activities. Research and development expenses in 2024 increased by $10.9 million compared to 2023.
The total amount recorded to services revenue was $ 4.9 million, $ 5.4 million, and $ 2.5 million for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023 and 2022, we have reduced our accounts receivable balance by $ 4.4 million and $ 5.4 million, respectively, for these potential adjustments.
The total amount recorded to services revenue was $ 1.6 million, $ 4.9 million, and $ 5.4 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024 and 2023 , we have reduced our accounts receivable balance by $ 2.8 million and $ 4.4 million, respectively, for these potential adjustments.
Due to the expiration of statutes of limitations in multiple jurisdictions globally during 2023, the Company anticipates it is reasonably possible that unrecognized tax benefits may decrease by $ 3.2 million. 4.
Due to the expiration of statutes of limitations in multiple jurisdictions globally during 2025, the Company anticipates it is reasonably possible that unrecognized tax benefits may decrease by $ 3.1 million. 4.
The royalties, which totaled $ 13.7 million, $ 8.9 million, and $ 6.1 million in 2023, 2022 and 2021, respectively, are included in costs of revenue for each segment with a corresponding reduction in the America’s cost of revenue. The revenues represented below are from external customers only.
The royalties, which totaled $ 18.9 million, $ 13.7 million, and $ 8.9 million in 2024, 2023 and 2022, respectively, are included in costs of revenue for each segment with a corresponding reduction in the America’s cost of revenue. The revenues represented below are from external customers only.
Each stock option, stock appreciation right, restricted stock, or restricted stock unit granted is counted against the maximum share limitation as one share. Options and stock appreciation rights cannot have a term exceeding seven years . As of December 31, 2023 , there were 2,870,924 shares available for issuance under the 2020 Plan.
Each stock option, stock appreciation right, restricted stock, or restricted stock unit granted is counted against the maximum share limitation as one share. Options and stock appreciation rights cannot have a term exceeding seven years . As of December 31, 2024 , there were 2,337,032 shares available for issuance under the 2020 Plan.
Amortization of sales commissions in 2023 , 2022 and 2021 was $ 9.8 million, $ 7.5 million, and $ 5.2 million respectively. No impairment losses were recognized during 2023 , 2022 and 2021. Property and Equipment Property and equipment is recorded at cost and consists of furniture, computers, other office equipment, and leasehold improvements.
Amortization of sales commissions in 2024, 2023 and 2022 was $ 10.6 million, $ 9.8 million, and $ 7.5 million respectively. No impairment losses were recognized during 2024, 2023 and 2022 . Property and Equipment Property and equipment is recorded at cost and consists of furniture, computers, other office equipment, and leasehold improvements.
We derive our revenue mainly from cloud subscriptions, software licenses, customer support services and software enhancements (“maintenance”), and implementation services. We exclude sales and usage-based taxes from revenue.
We derive our revenue mainly from cloud subscriptions, customer support services, and software enhancements (“maintenance”), and professional services. We exclude sales and usage-based taxes from revenue.

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