Management from Manhattan Associates (NASDAQ: MANH), a supply chain solutions technology provider, beat fourth-quarter forecasts and raised 2021 guidance on Tuesday.
The Atlanta-based company is currently projecting revenue from remaining performance obligations — unearned revenue or future bookings for its cloud services with a noncancelable contract term of more than one year — to exit 2023 at more than $1 billion. That figure was just north of $300 million at the 2020 close.
“Global demand and bookings momentum for our cloud solutions is robust, positioning us well for 2021 and beyond,” stated President and CEO Eddie Capel in a press release.
RPO is expected to grow approximately 60% year-over-year in 2021.
Manhattan Associates reported fourth-quarter adjusted earnings per share of 45 cents, well ahead of the 32-cent consensus estimate. 2021 adjusted EPS guidance is expected to be in a range of $1.44 to $1.59, up from the prior range of $1.37 to $1.54, but lower than the $1.76 achieved in 2020.
The company is transforming from a licensed software provider to a subscription-based software-as-a-service cloud model. The conversion of hardware to service has a revenue phase-in period with the future years of the contract carrying a greater percentage of the contract’s value.
Management also noted cost headwinds as expense reduction initiatives early on in the pandemic are reversed and the company increases R&D spend modestly. The company is also hiring 200 to 300 new associates to meet rising demand.
First-quarter guidance of 31 to 33 cents brackets the current consensus estimate.
On the call, Capel referred to 2020 as the “best year ever,” noting the current pipeline for cloud services was “never stronger.” He said that roughly 90% of the deal pipeline is slated for cloud-based solutions for its omnichannel, warehouse management and transportation management offerings.
Capel said there has been “strong market interest and adoption” of its warehouse management system and that the company recently signed a large contract for its cloud TMS offering in Europe. The company has a few other clients abroad in the TMS implementation phase, and its marketing department has the “pedal to the metal” to capture incremental TMS market share in Europe.
“The combination of favorable secular trends and the COVID-19 pandemic has helped emphasize the power of adaptable supply chain and omnichannel commerce solutions,” stated Capel in the news release. “This affirms our industry thought leadership and has accelerated the convergence of our cloud strategy with the needs of the market.”
Manhattan Associates is a supply chain and omnichannel commerce technology provider. The company’s technology offering enables retailers, wholesalers, manufacturers and logistics providers to manage their supply chains, inventory and omnichannel operations. Manhattan Carrier helps motor carriers optimize loads and manage fuel costs and drivers’ hours of service.