Supply chain software provider Manhattan Associates (NASDAQ: MANH) announced better-than-expected revenue in Q4 CY2025, with sales up 5.7% year on year to $270.4 million. The company expects the full year’s revenue to be around $1.14 billion, close to analysts’ estimates. Its non-GAAP profit of $1.21 per share was 6.7% above analysts’ consensus estimates.
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Manhattan Associates (MANH) Q4 CY2025 Highlights:
- Revenue: $270.4 million vs analyst estimates of $264.7 million (5.7% year-on-year growth, 2.2% beat)
- Adjusted EPS: $1.21 vs analyst estimates of $1.13 (6.7% beat)
- Adjusted EBITDA: $99.13 million vs analyst estimates of $89.09 million (36.7% margin, 11.3% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $5.12 at the midpoint, missing analyst estimates by 3.6%
- Operating Margin: 24.8%, up from 23.7% in the same quarter last year
- Free Cash Flow Margin: 1.7%, down from 31.6% in the previous quarter
- Billings: $310.2 million at quarter end, up 8.8% year on year
- Market Capitalization: $10.68 billion
Company Overview
Built on a "versionless" cloud architecture that delivers quarterly updates to all customers, Manhattan Associates (NASDAQ: MANH) develops cloud-based software that helps retailers, wholesalers, and manufacturers manage their supply chains, inventory, and omnichannel operations.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Manhattan Associates grew its sales at a 13% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Manhattan Associates’s recent performance shows its demand has slowed as its annualized revenue growth of 7.9% over the last two years was below its five-year trend. 
This quarter, Manhattan Associates reported year-on-year revenue growth of 5.7%, and its $270.4 million of revenue exceeded Wall Street’s estimates by 2.2%.
Looking ahead, sell-side analysts expect revenue to grow 5.7% over the next 12 months, a slight deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Manhattan Associates’s billings came in at $310.2 million in Q4, and over the last four quarters, its growth was underwhelming as it averaged 4.1% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
Manhattan Associates is extremely efficient at acquiring new customers, and its CAC payback period checked in at 10 months this quarter. The company’s rapid recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments.
Key Takeaways from Manhattan Associates’s Q4 Results
We were impressed by how significantly Manhattan Associates blew past analysts’ EBITDA expectations this quarter. We were also glad next year’s revenue guidance was robust. On the other hand, its full-year EPS guidance missed and its full-year revenue guidance was in line with Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The stock traded up 5.7% to $179.50 immediately after reporting.
Should you buy the stock or not? 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).
