Yahoo Finance Manhattan Associates's (NASDAQ:MANH) Q2: Beats On Revenue, Stock Soars
Supply chain optimization software maker Manhattan Associates (NASDAQ:MANH) reported Q2 CY2024 results topping analysts' expectations , with revenue up 14.8% year on year to $265.3 million. The company expects the full year's revenue to be around $1.04 billion, in line with analysts' estimates. It made a non-GAAP profit of $1.18 per share, improving from its profit of $0.88 per share in the same quarter last year.
Is now the time to buy Manhattan Associates? Find out in our full research report.
Manhattan Associates (MANH) Q2 CY2024 Highlights:
Revenue: $265.3 million vs analyst estimates of $256.4 million (3.5% beat)
EPS (non-GAAP): $1.18 vs analyst estimates of $0.96 (22.6% beat)
The company lifted its revenue guidance for the full year from $1.03 billion to $1.04 billion at the midpoint, a 1% increase
Gross Margin (GAAP): 54.8%, up from 52.9% in the same quarter last year
Free Cash Flow of $80.12 million, up 52.9% from the previous quarter
Billings: $260.4 million at quarter end, up 7.9% year on year
Market Capitalization: $13.86 billion
Boasting major consumer staples and pharmaceutical companies as clients, Manhattan Associates (NASDAQ:MANH) offers a software-as-service platform that helps customers manage their supply chains.
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Sales Growth
As you can see below, Manhattan Associates's revenue growth has been mediocre over the last three years, growing from $166.1 million in Q2 2021 to $265.3 million this quarter.
This quarter, Manhattan Associates's quarterly revenue was once again up 14.8% year on year. However, its growth did slow down compared to last quarter as the company's revenue increased by just $10.77 million in Q2 compared to $16.3 million in Q1 CY2024. While we'd like to see revenue increase by a greater amount each quarter, a one-off fluctuation is usually not concerning.
Looking ahead, analysts covering the company were expecting sales to grow 8.9% over the next 12 months before the earnings results announcement.
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Cash Is King
If you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Manhattan Associates's free cash flow came in at $80.12 million in Q2, up 103% year on year.
Manhattan Associates has generated $276.4 million in free cash flow over the last 12 months, an eye-popping 27.7% of revenue. This robust FCF margin stems from its asset-lite business model, scale advantages, and strong competitive positioning, giving it the option to return capital to shareholders or reinvest in its business while maintaining a healthy cash balance.
Key Takeaways from Manhattan Associates's Q2 Results
We enjoyed seeing Manhattan Associates materially improve its gross margin this quarter. We were also glad its revenue and EPS outperformed Wall Street's estimates. Overall, this quarter seemed fairly positive and shareholders should feel optimistic. The stock traded up 5.6% to $238.65 immediately after reporting.
Manhattan Associates may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
