Manhattan Associates Posts Revenue Gains For Three Quarters

October 22, 2012 Dan Burger

An increase in licensing revenue is a pretty good indicator of how well a software company is performing. So when you see that Manhattan Associates has jumped that number from $37.7 million in the first nine months of 2011 to $47.1 million in the same period here in 2012, the supply chain management experts in Atlanta, Georgia, should be pretty happy with the veritable economic feast. A 20 percent bump is a worthy achievement, especially in an era where it is not uncommon to see software companies relying on services to be the sole bread winner.

In the third quarter ended in September, license revenue was $16.2 million compared to $13.6 million in the year-ago period, which computes to a 19.2 percent rise. The Q2 2012 license revenue totaled $15.3 million and the Q1 2012 license revenue was $15.6 million.

Services did contribute a sizable portion to the revenue stream. At $71.9 million for Q3, that’s about 4.5 times greater than licensing revenue. And services revenue grew 13 percent compared to a year ago. In year-to-year measurements for the first nine months, service revenues were $211.6 million. That’s a 15.3 percent jump compared to 2011. The company resells various hardware, including Power Systems iron running the IBM i platform, and that business shrank by 7.7 percent to $7.8 million.

Net income for the first three quarters of 2012 totaled $39.4 million, which was a 14.5 percent increase over the same timeframe in 2011. However, the net income in Q3 slipped 7.2 percent and was reported at $13.8 million.

Total revenue at Manhattan Associates was $95.8 million in the third quarter, an 11 percent gain, and for the nine months was $280.9 million, up just under 13 percent.

Manhattan Associates claims more than 1,200 customers worldwide. We estimate there are more than 500 running warehouse management systems on the IBM i Power Systems platform. The company calls the modern version of that software WMi, but many still refer to it by its original name, which was PkMS. Many of the largest retailers in the U.S. use WMi. The company has also done well in the food service arena.

New contracts signed with several retailers and manufacturers during the third quarter were cited as being important to the revenue gains. Among the new contracts were well-known companies such as Nike, American Eagle Outfitters, Cabela’s, Bulova, and Chanel.

Also of note, the company so far in 2012 has re-purchased 1,418,205 shares of its own common stock under a share repurchase program, for a total investment of $68.5 million.