10-K – 2026-02-04 – manh-20251231.htm

campaign expenses, a $0.9 million increase in performance-based compensation expense, and a $0.3 million increase in travel expense.
General and Administrative
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 expenses increased $4.0 million in 2025 due to a $3.0 million signing bonus, $0.8 million in recruiting fees, and $6.5 million of stock compensation expense related to the hiring of our new chief executive officer; a $5.4 million increase in compensation and other personnel-related expenses, a $1.5 million increase in professional expense, and a $0.8 million increase in office expense, partially offset by a $13.8 million decrease in expense related to an unusual health insurance claim as the final payment was much lower than the cost estimates previously provided by our health insurance provider.
Depreciation and Amortization
Depreciation and amortization of intangibles and software expense amounted to $6.3 million in 2025 and 2024, respectively. Amortization of intangibles was immaterial in 2025 and 2024. We have recorded acquisition-related intangible assets as part of the purchase accounting associated with various acquisitions.
Restructuring expense
In January 2025, the Company eliminated approximately 100 positions to align our services capacity with customer demand which has been impacted by short-term macro-economic uncertainty. The Company recorded restructuring expense of approximately $2.9 million for the year ended December 31, 2025 to the Americas segment. The expense primarily consists of employee severance and outplacement services. The expense is classified in “Restructuring expense” in the Company’s Consolidated Statements of Income for the year ended December 31, 2025.
Operating Income
Operating income in 2025 increased $18.2 million to $279.8 million, compared to $261.6 million for 2024. Operating margins were 25.9% for 2025 versus 25.1% for 2024. Operating income and margin increased primarily due to increased cloud subscriptions. In 2025, operating income increased by $0.2 million, $15.6 million, and $2.4 million in the Americas, EMEA and APAC segment, respectively.
Other Income and Income Taxes

 

 

Year Ended December 31,

 

 

2025

 

 

2024

 

 

% Change

 

 

(in thousands)

 

 

 

Other income, net

 

$

6,094

 

 

$

5,218

 

 

17%

Income tax provision

 

 

65,946

 

 

 

48,450

 

 

36%

Other (Loss) Income, net
Other (loss) income, net primarily includes interest income, foreign currency gains and losses, and other non-operating expenses. Interest income was $4.4 million and $6.0 million for 2025 and 2024, respectively. The weighted-average interest rate earned on cash and investments was approximately 1% in 2025 and approximately 2% in 2024. We recorded net foreign currency gains of $1.7 million in 2025 and losses of $1.0 million in 2024. The foreign currency gains and losses mainly resulted from gains or losses on intercompany transactions denominated in foreign currencies with subsidiaries due to the fluctuation of the U.S. dollar relative to other foreign currencies, primarily the British Pound Sterling, Euro, and Indian Rupee.
Income Tax Provision
Our effective income tax rates were 23.1% and 18.2% in 2025 and 2024, 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.
The effective tax rate in 2025 increased from 2024 mainly due to a decrease of excess tax benefits on restricted stock vesting in 2025, an increase in executive compensation limitations, and an increase in tax contingency reserves.
The income tax provision for 2025 and 2024 included excess tax benefits of $6.1 million and $13.1 million on vesting of restricted stock.

37

 

Liquidity and Capital Resources
During 2025 and 2024, we funded our business through cash generated from operations. Our cash and cash equivalents as of December 31, 2025 included $226.6 million held in the U.S. and $102.1 million held by our foreign subsidiaries. We believe that our cash balances in the U.S. are sufficient to fund our U.S. operations. In the future, if we elect to repatriate the unremitted earnings of our foreign subsidiaries, we would no longer be subject to additional U.S. income taxes on such earnings due to the enactment of the Tax Cuts and Jobs Act in December 2017, but we could be subject to additional local withholding taxes.
Cash flow from operating activities totaled $389.5 million and $295.0 million in 2025 and 2024, respectively. Typical factors affecting our cash provided by operating activities include our level of revenue and earnings for the period, the timing and amount of employee bonus and income tax payments, and the timing of cash collections from our customers which is our primary source of operating cash flow. Cash flow from operating activities for 2025 increased $94.5 million compared to 2024 due to the timing of cash collections from our customers and decrease in cash taxes owed from the acceleration of the deduction for domestic research and development expenditures. Days sales outstanding was 73 and 74 for quarter ending December 2025 and 2024, respectively, reflecting solid cash collections.
Investing activities used cash of $15.5 million and $8.7 million in 2025 and 2024, respectively. Our investing activities for 2025 and 2024 consisted of capital spending to support company growth and short-term investing.
Financing activities used cash of $315.2 million and $286.4 million in 2025 and 2024, respectively. The principal use of cash for financing activities in 2025 and 2024 was to purchase our common stock, including shares withheld for taxes due upon vesting of restricted stock and excise tax payments. Repurchases of our common stock for 2025 and 2024 totaled $315.2 million and $286.4 million, respectively, including shares withheld for taxes of $39.0 million and $43.6 million, respectively. Excise tax payments totaled $1.6 million and $1.1 million in 2025 and 2024, respectively. In January 2026, our Board of Directors replenished the Company’s share repurchase authority to an aggregate of $100.0 million of our common stock.
We believe that our existing cash will be sufficient to meet our working capital and capital expenditure needs at least for the next twelve months, although there can be no assurance that this will be the case. In 2026, we anticipate that our priorities for use of cash will be similar to prior years, with our first priority being continued investment in product development and in our business to extend our market leadership. We will also continue to weigh our share repurchase options against cash for acquisitions and investing in the business. At this time, we do not anticipate any borrowing requirements in 2026 for general corporate purposes.
Periodically, opportunities may arise to grow our business through the acquisition of complementary products and technologies. Any material acquisition could result in a decrease to our working capital depending on the amount, timing, and nature of the consideration to be paid. We expect to continue to evaluate acquisition opportunities that are complementary to our product footprint and technology direction.
Aggregate Contractual Obligations
Our principal commitments as of December 31, 2025 consist of multiple non-cancellable contracts for cloud infrastructure services and obligations under operating leases. As of December 31, 2025, our cloud infrastructure contractual obligations are approximately $202.7 million over the next 5 years. We also enter into non-cancellable subscriptions in the ordinary course of business for internal software to support our operations. Our contractual obligations, as of December 31, 2025, are approximately $37.0 million over the next 7 years. We expect to fulfill all of these commitments from our working capital.
Lease Commitments
We lease our facilities and some of our equipment under noncancelable operating lease arrangements that expire at various dates ranging from 2025 to 2036. Rent expense for these leases aggregated $10.1 million and $9.3 million during 2025 and 2024, respectively.
In the following table, we present a summary of our contractual commitments as of December 31, 2025 (in thousands):
 

 

 

Total

 

2026

 

2027

 

2028

 

2029

 

2030

 

Thereafter

Operating Lease Obligations

 

$85,010

 

$11,590

 

$11,296

 

$10,843

 

$7,498

 

$6,680

 

$37,103

Indemnities
Our customer contracts generally contain infringement indemnity provisions. Under those provisions, we generally agree, subject to certain exceptions, to indemnify, defend, and hold harmless the customer in connection with third party claims against the customer alleging that the customer’s use of our services and products infringe third party intellectual property rights. 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. Those provisions generally provide also that, if the customer is prevented from using our services or products because of

38

 

a third party infringement claim, our sole obligation (in addition to the indemnification, defense, and hold harmless obligation referred to above) is to, at our expense, (i) procure for the customer the right to continue to use the services or products, (ii) replace or modify the services or products so that the customer’s use does not infringe, or, if neither of these options is reasonably feasible, (iii) terminate that particular services or products and provide, as applicable, a refund of services fees paid for services not received or a refund of the unamortized portion of the license fees paid for the products (based on a five year amortization period). Our customer contracts sometimes also require us to indemnify, defend, and hold harmless the customer in connection with death, personal injury or property damage claims made by third parties with respect to actions of our personnel or contractors. The indemnity obligations contained in our customer contracts generally have no specified expiration date and no specified monetary limitation on liability, but they do not cover indirect or consequential damages, such as our customers’ lost revenues or profits. We have not previously incurred costs to settle claims or pay awards under these indemnification obligations. 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, 2025.
Warranties
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. Additionally, we may include other warranties such as “no-malware” warranties and warranties that we will perform our SaaS services consistent with generally accepted industry standards or similar standards. In our SaaS services agreements, we also include service level agreements (SLAs) under which we agree to provide service credits to our customers if our services availability drops below certain defined levels. If necessary, we would reserve for the estimated cost of product and service warranties based on specific warranty claims and claims history. However, we have not incurred significant recurring expense under our services or product warranties. As a result, we believe the estimated fair value of our warranty obligations is nominal, and we have no liabilities recorded for them as of December 31, 2025.
Application of Critical Accounting Policies and Estimates
The SEC defines “critical accounting policies” as those that require application of management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
Our Consolidated Financial Statements are prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related footnotes. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based on information available to us at the time that these estimates, judgments, and assumptions are made. To the extent there are material differences between those estimates, judgments, or assumptions and actual results, our financial statements will be affected. The accounting policy that reflect our more significant estimates, judgments, and assumptions is Revenue Recognition.
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. 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.
Nature of Products and Services
Cloud subscriptions include software as a service (“SaaS”) and hosting arrangements which provide customers with the right to use our software within a cloud environment that we provide and manage where the customer does not have the right to take possession of the software without significant penalty. SaaS and hosting revenues are recognized over the contract period as the service is provided.
Our services revenue consists of fees generated from implementation, training and application managed services, including reimbursements of out-of-pocket expenses in connection with our implementation services. Implementation services include system planning, design, configuration, testing, and other software implementation support, and are typically optional and distinct from our software. Following implementation, customers may purchase application managed services to support and maintain our software. Fees for our services are separately priced and are generally billed on an hourly basis, and revenue is recognized over time as the services are performed. In certain situations, we render professional services under agreements based upon a fixed fee for portions of or all of the engagement. Revenue related to fixed-fee-based services contracts is recognized over time based on the proportion performed.

39

 

Our cloud contracts with customers can include the sales of SaaS and services. 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 other observable inputs. The selling price of our cloud subscriptions are highly variable. Thus, we estimate SSP for our cloud subscriptions using the residual approach, determined based on total transaction price less the SSP of other goods and services promised in the contract.
 
It em 7A. Quantitative and Qualitative Disclosures About Market Risk
Foreign Business
Our international business is subject to risks typical of an international business, including, but not limited to differing economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility. Our international operations currently include business activity out of offices in the Australia, Chile, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Spain, and the United Kingdom. When the U.S. dollar strengthens against a foreign currency, the value of our sales and expenses in that currency converted to U.S. dollars decreases. 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 $1.7 million in 2025, compared to losses of $1.0 million in 2024, and losses of $1.5 million in 2023. Foreign exchange rate transaction gains and losses are classified in “Other (loss) income, net” in our Consolidated Statements of Income. A fluctuation of 10% in the period end exchange rates at December 31, 2025 relative to the U.S. dollar would have resulted in a change of approximately $5.9 million in the reported foreign currency loss.
Interest Rates
We currently invest our cash and cash equivalents in a variety of financial instruments, including taxable floating rate obligations in money market funds and certificate of deposits with original maturities of less than three months when purchased. These investments are mainly denominated in U.S. dollars. Cash balances in foreign currencies overseas, except for India, are derived from business operations. Our operations in India are funded by the U.S. operations. At December 31, 2025, our cash and cash equivalents balances totaled $328.7 million, of which all is highly liquid.
Investments in both fixed rate and floating rate interest-earning instruments carry interest rate risks. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates, or we may suffer losses in principal if forced to sell securities that have seen a decline in market value due to changes in interest rates. The weighted-average interest rate of return on cash equivalents and short-term investments was approximately 1% and 2% for the years ended December 31, 2025 and 2024, respectively. The fair value of cash equivalents held at December 31, 2025 and 2024 was $72.6 million and $93.8 million, respectively. Based on the average cash equivalents and short-term investments outstanding during 2025 and 2024, increases or decreases in the rates of return of 25 basis points would result in increases or decreases to interest income of approximately $0.7 million and $0.7 million from the reported interest income for 2025 and 2024, respectively.
 

40

 

It em 8. 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. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
The Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.
As of the end of the Company’s 2025 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). Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2025 was effective.
Ernst & Young LLP, the independent registered public accounting firm that audited the Company’s financial statements for the year ended December 31, 2025, has audited the Company’s internal control over financial reporting as of December 31, 2025 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, 2025.

/s/ Eric A. Clark

Eric A. Clark

President and Chief Executive Officer

 

February 4, 2026

 

/s/ Dennis B. Story

Dennis B. Story

Executive Vice President, Chief Financial Officer, and Treasurer

 

February 4, 2026

 

42

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Shareholders and the Board of Directors of Manhattan Associates, Inc.
 
Opinion on Internal Control Over Financial Reporting
We have audited Manhattan Associates, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2025, 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). 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, 2025, 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 consolidated balance sheets of the Company as of December 31, 2025 and 2024, 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, 2025, and the related notes and our report dated February 4, 2026 expressed an unqualified opinion thereon.
 
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
 
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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 4, 2026

43

 

REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM
 
To the Shareholders and the Board of Directors of Manhattan Associates, Inc.
 
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, 2025 and 2024, 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, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

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, 2025, 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 4, 2026 expressed an unqualified opinion thereon.

 
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
 
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter on the account or disclosure to which it relates.
 

 

Revenue Recognition - Identification of Performance Obligations

Description of the Matter

As described in Note 1 to the consolidated financial statements, the Company recognizes revenue upon transfer of control of promised products and services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services.

The Company enters into contracts with its customers that may include promises to transfer software as a service offering and professional services. The correct identification of performance obligations for customer contracts which include multiple performance obligations has a significant impact upon the timing and pattern of revenue recognition.

Auditing management’s identification of the performance obligations for these customer contracts was challenging due to the extent of effort required.

 

 

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's identification of the performance obligations in a customer contract.

44

 

 

Our audit procedures included, among others, reading a sample of executed contracts to assess management’s evaluation of significant terms including the identification of the performance obligations.

 
 
/s/ Ernst & Young LLP
 
We have served as the Company’s auditor since 2002.
 
Atlanta, Georgia
 
February 4, 2026

45

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Cons olidated Statements of Income
(in thousands, except per share amounts)

 

Year Ended December 31,

 

 

2025

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

Cloud subscriptions

$

408,138

 

 

$

337,203

 

 

$

254,612

 

Software license

 

14,819

 

 

 

15,085

 

 

 

18,206

 

Maintenance

 

129,972

 

 

 

138,304

 

 

 

143,936

 

Services

 

503,044

 

 

 

525,517

 

 

 

487,869

 

Hardware

 

25,419

 

 

 

26,243

 

 

 

24,102

 

Total revenue

 

1,081,392

 

 

 

1,042,352

 

 

 

928,725

 

Costs and expenses:

 

 

 

 

 

 

 

 

Cost of cloud subscriptions, maintenance and services

 

471,405

 

 

 

469,659

 

 

 

429,263

 

Cost of software license

 

934

 

 

 

1,321

 

 

 

1,351

 

Research and development

 

145,062

 

 

 

137,689

 

 

 

126,814

 

Sales and marketing

 

81,175

 

 

 

75,976

 

 

 

74,490

 

General and administrative

 

93,762

 

 

 

89,810

 

 

 

81,174

 

Depreciation and amortization

 

6,317

 

 

 

6,301

 

 

 

5,752

 

Restructuring expense

 

2,937

 

 

 

-

 

 

 

-

 

Total costs and expenses

 

801,592

 

 

 

780,756

 

 

 

718,844

 

Operating income

 

279,800

 

 

 

261,596

 

 

 

209,881

 

Interest income

 

4,389

 

 

 

6,029

 

 

 

5,304

 

Other income (loss), net

 

1,705

 

 

 

( 811

)

 

 

( 1,514

)

Income before income taxes

 

285,894

 

 

 

266,814

 

 

 

213,671

 

Income tax provision

 

65,946

 

 

 

48,450

 

 

 

37,103

 

Net income

$

219,948

 

 

$

218,364

 

 

$

176,568

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

3.64

 

 

$

3.56

 

 

$

2.86

 

Diluted earnings per share

$

3.60

 

 

$

3.51

 

 

$

2.82

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

Basic

 

60,473

 

 

 

61,303

 

 

 

61,817

 

Diluted

 

61,054

 

 

 

62,183

 

 

 

62,608

 

 
The accompanying notes are an integral part of these Consolidated Statements of Income.

46

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Consolidated Statements o f Comprehensive Income
(in thousands)

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

219,948

 

 

$

218,364

 

 

$

176,568

 

Foreign currency translation adjustment, net of tax

 

 

( 8

)

 

 

( 3,884

)

 

 

494

 

Comprehensive income

 

$

219,940

 

 

$

214,480

 

 

$

177,062

 

 
The accompanying notes are an integral part of these Consolidated Statements of Comprehensive Income.

47

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Consol idated Balance Sheets
(in thousands, except share and per share data)

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

328,747

 

 

$

266,230

 

Accounts receivable, net

 

 

214,679

 

 

 

205,475

 

Income taxes receivable

 

 

6,723

 

 

 

5,194

 

Prepaid expenses

 

 

27,036

 

 

 

22,224

 

Other current assets

 

 

6,153

 

 

 

4,141

 

Total current assets

 

 

583,338

 

 

 

503,264

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

23,120

 

 

 

13,971

 

Operating lease right-of-use assets

 

 

50,443

 

 

 

47,923

 

Goodwill

 

 

62,244

 

 

 

62,226

 

Deferred income taxes

 

 

75,900

 

 

 

94,505

 

Other assets

 

 

44,343

 

 

 

35,662

 

Total assets

 

$

839,388

 

 

$

757,551

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

22,182

 

 

$

26,615

 

Accrued compensation and benefits

 

 

69,309

 

 

 

72,180

 

Accrued and other liabilities

 

 

26,570

 

 

 

22,275

 

Deferred revenue

 

 

337,049

 

 

 

277,970

 

Income taxes payable

 

 

803

 

 

 

1,264

 

Total current liabilities

 

 

455,913

 

 

 

400,304

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

56,180

 

 

 

47,794

 

Other non-current liabilities

 

 

12,530

 

 

 

10,327

 

 

 

 

 

 

 

 

Commitments and contingencies  (Note 5)

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Preferred stock, no  par value; 20,000,000  shares authorized, no  shares issued or outstanding at December 31, 2025 and December 31, 2024

 

 

-

 

 

 

-

 

Common stock, $ .01  par value; 200,000,000  shares authorized; 59,845,291  and 60,921,191  shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively

 

 

598

 

 

 

609

 

Retained earnings

 

 

345,097

 

 

 

329,439

 

Accumulated other comprehensive loss

 

 

( 30,930

)

 

 

( 30,922

)

Total shareholders' equity

 

 

314,765

 

 

 

299,126

 

Total liabilities and shareholders' equity

 

$

839,388

 

 

$

757,551

 

 
The accompanying notes are an integral part of these Consolidated Balance Sheets.

48

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Consol idated Statements of Cash Flows
(in thousands)

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

219,948

 

 

$

218,364

 

 

$

176,568

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,317

 

 

 

6,301

 

 

 

5,752

 

Equity-based compensation

 

 

111,263

 

 

 

93,206

 

 

 

71,571

 

(Gain) loss on disposal of equipment

 

 

( 21

)

 

 

( 133

)

 

 

57

 

Deferred income taxes

 

 

18,342

 

 

 

( 28,689

)

 

 

( 28,844

)

Unrealized foreign currency (gain) loss

 

 

( 253

)

 

 

( 380

)

 

 

1,280

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

( 3,583

)

 

 

( 26,702

)

 

 

( 13,084

)

Other assets

 

 

( 14,729

)

 

 

( 4,157

)

 

 

( 10,925

)

Accounts payable, accrued and other liabilities

 

 

( 229

)

 

 

1,248

 

 

 

18,123

 

Income taxes

 

 

319

 

 

 

( 6,242

)

 

 

( 1,416

)

Deferred revenue

 

 

52,096

 

 

 

42,187

 

 

 

27,136

 

Net cash provided by operating activities

 

 

389,470

 

 

 

295,003

 

 

 

246,218

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

( 15,457

)

 

 

( 8,675

)

 

 

( 4,730

)

Net cash used in investing activities

 

 

( 15,457

)

 

 

( 8,675

)

 

 

( 4,730

)

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

Purchase of common stock

 

 

( 315,162

)

 

 

( 286,366

)

 

 

( 196,047

)

Net cash used in financing activities

 

 

( 315,162

)

 

 

( 286,366

)

 

 

( 196,047

)

 

 

 

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

3,666

 

 

 

( 4,473

)

 

 

( 163

)

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

62,517

 

 

 

( 4,511

)

 

 

45,278

 

Cash and cash equivalents at beginning of period

 

 

266,230

 

 

 

270,741

 

 

 

225,463

 

Cash and cash equivalents at end of period

 

$

328,747

 

 

$

266,230

 

 

$

270,741

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

 

Cash paid for taxes

 

$

47,271

 

 

$

83,403

 

 

$

67,376

 

 
The accompanying notes are an integral part of these Consolidated Statements of Cash Flows.
 

49

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Consolidated Statements o f Shareholders’ Equity
(in thousands, except share data)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Total

 

 

 

Common Stock

 

 

Paid-In

 

 

Retained

 

 

Comprehensive

 

 

Shareholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Income (Loss)

 

 

Equity

 

Balance, December 31, 2022

 

 

62,191,570

 

 

$

621

 

 

$

-

 

 

$

253,711

 

 

$

( 27,532

)

 

$

226,800

 

Repurchase of common stock

 

 

( 1,246,231

)

 

 

( 12

)

 

 

( 70,457

)

 

 

( 125,578

)

 

 

-

 

 

 

( 196,047

)

Restricted stock units issuance

 

 

620,698

 

 

 

6

 

 

 

( 6

)

 

 

-

 

 

 

-

 

 

 

-

 

Excise tax accrued

 

 

-

 

 

 

-

 

 

 

( 1,108

)

 

 

-

 

 

 

-

 

 

 

( 1,108

)

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

71,571

 

 

 

-

 

 

 

-

 

 

 

71,571

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

494

 

 

 

494

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

176,568

 

 

 

-

 

 

 

176,568

 

Balance, December 31, 2023

 

 

61,566,037

 

 

 

615

 

 

 

-

 

 

 

304,701

 

 

 

( 27,038

)

 

 

278,278

 

Repurchase of common stock

 

 

( 1,164,563

)

 

 

( 11

)

 

 

( 91,620

)

 

 

( 193,626

)

 

 

-

 

 

 

( 285,257

)

Restricted stock units issuance

 

 

519,717

 

 

 

5

 

 

 

( 5

)

 

 

-

 

 

 

-

 

 

 

-

 

Excise tax accrued

 

 

-

 

 

 

-

 

 

 

( 1,581

)

 

 

-

 

 

 

-

 

 

 

( 1,581

)

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

93,206

 

 

 

-

 

 

 

-

 

 

 

93,206

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

( 3,884

)

 

 

( 3,884

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

218,364

 

 

 

-

 

 

 

218,364

 

Balance, December 31, 2024

 

 

60,921,191

 

 

 

609

 

 

 

-

 

 

 

329,439

 

 

 

( 30,922

)

 

 

299,126

 

Repurchase of common stock

 

 

( 1,642,760

)

 

 

( 16

)

 

 

( 109,273

)

 

 

( 204,290

)

 

 

-

 

 

 

( 313,579

)

Restricted stock units issuance

 

 

566,860

 

 

 

5

 

 

 

( 5

)

 

 

-

 

 

 

-

 

 

 

-

 

Excise tax accrued

 

 

-

 

 

 

-

 

 

 

( 1,985

)

 

 

-

 

 

 

-

 

 

 

( 1,985

)

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

111,263

 

 

 

-

 

 

 

-

 

 

 

111,263

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

( 8

)

 

 

( 8

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

219,948

 

 

 

-

 

 

 

219,948

 

Balance, December 31, 2025

 

 

59,845,291

 

 

 

598

 

 

 

-

 

 

 

345,097

 

 

 

( 30,930

)

 

 

314,765

 

 
The accompanying notes are an integral part of these Consolidated Statements of Shareholders’ Equity.
 

50

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
NOTE S TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025, 2024 and 2023
 
 
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. Our solutions consist of software, services, and hardware, which coordinate people, workflows, assets, events, and tasks holistically across the functions linked in a supply chain from planning through execution. These solutions also help coordinate the actions, data exchange, and communication of participants in supply chain ecosystems, such as manufacturers, suppliers, distributors, trading partners, transportation providers, channels (such as catalogers, store retailers, and Web outlets), and consumers.
Our operations are in North and South America (the “Americas"), Europe (EMEA), and the Asia Pacific (APAC) region. The Americas operation are conducted through the Parent Company, Manhattan Associates, Inc., and its wholly-owned subsidiary, Manhattan Associates Chile Spa. Our European and Asia Pacific operations are conducted through wholly owned subsidiaries within their respective geographies. We occasionally sell our products and services in other countries, such as countries in Latin America, Eastern Europe, Middle East, and Asia, through our direct sales channel as well as various reseller channels.
Risks Associated with Single Business Line, Technological Advances, and Foreign Operations
We currently derive a substantial portion of our revenues from sales of cloud solutions and related services. The markets for supply chain commerce solutions are highly competitive, subject to rapid technological change, changing customer needs, frequent new product introductions, and evolving industry standards that may render existing products and services obsolete. As a result, our position in these markets could be eroded rapidly by unforeseen changes in customer requirements for application features, functions, and technologies.
Our international business is subject to risks typical of an international business, including, but not limited to, differing economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility. We recognized foreign exchange gains of $ 1.7 million in 2025 , compared to losses of $ 1.0 million in 2024 , and gains of $ 1.5 million in 2023. Foreign exchange rate transaction gains and losses are classified in “Other (loss) income, net” on the Consolidated Statements of 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.

Principles of Consolidation and Foreign Currency Translation
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The financial statements of foreign subsidiaries have been translated into United States dollars in accordance with the foreign currency matters topic in the Financial Accounting Standards Board's (FASB) Accounting Standards Codification (the “Codification”). Revenues and expenses from international operations were denominated in the respective local currencies and translated using the average monthly exchange rates for the year. All balance sheet accounts have been translated using the exchange rates in effect at the balance sheet date and the effect of changes in exchange rates from year to year are disclosed as a separate component of shareholders’ equity and comprehensive income.

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.

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 maintain cash and cash equivalents with various financial institutions. Amounts held are above the federally insured limit.

51

 

Our sales are primarily to companies located in the United States, Europe and Asia. We perform periodic credit evaluations of our customers’ financial condition and do not require collateral. Accounts receivable are due principally from large U.S., European and Asia Pacific companies under stated contract terms. Accounts receivable, net as of December 31, 2025 for the Americas, EMEA, and APAC segments were $ 152.8 million, $ 52.9 million, and $ 9.0 million, respectively. Accounts receivable, net as of December 31, 2024 for the Americas, EMEA, and APAC segments were $ 144.8 million, $ 50.6 million, and $ 10.1 million, respectively. Our top five customers in aggregate accounted for 10 %, 12 %, and 11 % of total revenue recognized for the year ended December 31, 2025 (“2025”), the year ended December 31, 2024 (“2024”), and the year ended December 31, 2023 (“2023 ”), respectively. No single customer accounted for more than 10% of revenue in 2025, 2024, and 2023, or more than 10% of accounts receivable as of December 31, 2025 and 2024 .

Fair Value Measurement
We measure our investments based on a fair value hierarchy disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is affected by a number of factors, including the type of asset or liability and their characteristics. This hierarchy prioritizes the inputs into three broad levels as follows:
• Level 1–Quoted prices in active markets for identical instruments.

• Level 2–Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

• Level 3–Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents; investments with maturities of greater than 90 days from the date of purchase but less than one year are generally classified as short-term investments; and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments. Unrealized holding gains and losses are reflected as a net amount in a separate component of shareholders’ equity until realized. For the purposes of computing realized gains and losses, cost is determined on a specific identification basis.
At December 31, 2025, the Company’s cash and cash equivalents were $ 256.1 million and $ 72.6 million, respectively. Cash equivalents consist of highly liquid money market funds of $ 51.3 million and certificates of deposit of $ 21.3 million. For money market funds, we use quoted prices from active markets that are classified as Level 1, the highest level of observable input in the disclosure hierarchy framework. The Company had no investments at December 31, 2025.
The carrying values of cash and cash equivalents, short-term investments, accounts receivable, and accounts payable included in the accompanying Consolidated Balance Sheets approximate their fair values principally due to the short-term maturities of these instruments.

Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. 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. Actual results will differ from these estimates.

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. 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.
Nature of Products and Services
Cloud subscriptions include software as a service (“SaaS”) and hosting arrangements which provide customers with the right to use our software within a cloud environment that we provide and manage where the customer does not have the right to take possession of the software without significant penalty. SaaS and hosting revenues are recognized over the contract period as the service is provided.

52

 

Our services revenue consists of fees generated from implementation, training and application managed services, including reimbursements of out-of-pocket expenses in connection with our implementation services. Implementation services include system planning, design, configuration, testing, and other software implementation support, and are typically optional and distinct from our software. Following implementation, customers may purchase application managed services to support and maintain our software. Fees for our services are separately priced and are generally billed on an hourly basis, and revenue is recognized over time as the services are performed. In certain situations, we render professional services under agreements based upon a fixed fee for portions of or all of the engagement. Revenue related to fixed-fee-based services contracts is recognized over time based on the proportion performed.
Our cloud contracts with customers can include the sales of SaaS and services. We allocate the transaction price to the distinct
performance obligations based on relative 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. Thus, we
estimate SSP for our cloud subscriptions using the residual approach, determined based on total transaction price less the SSP of
other goods and services promised in the contract.
We provide maintenance services to customers who have previously purchased a perpetual license, including a comprehensive 24 hours per day, 365 days per year program that provides 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 contracts typically only have one performance obligation. Revenue related to maintenance is generally paid in advance and recognized over the term of the agreement, typically twelve months.
Our perpetual software licenses provide the customer with a right to use the software as it exists at the time of purchase. We recognize revenue for distinct software licenses once the license period has begun and we have made the software available to the customer. The selling prices of our software licenses are highly variable. Thus, we estimate SSP for software licenses using the residual approach, determined based on total transaction price less the SSP of other goods and services promised in the contract.
Our customers periodically purchase hardware products developed and manufactured by third parties from us for use with the software licenses purchased from us. These products include computer hardware, radio frequency terminal networks, radio frequency identification (RFID) chip readers, bar code printers and scanners, and other peripherals. As we do not physically control the hardware that we sell, we are acting as an agent in the transaction and recognize our hardware revenue net of related cost. We recognize hardware revenue when control is transferred to the customer upon shipment.
Contract Balances
Cloud subscriptions and maintenance for perpetual software licenses are typically billed annually in advance. Timing of invoicing to customers may differ from timing of revenue recognition. Payment terms for our software licenses vary. We have an established history of collecting under the terms of our software license contracts without providing refunds or concessions to our customers. Services are typically billed monthly as performed. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with predictable ways to purchase our software and services, not to provide or receive financing. Additionally, we are applying the practical expedient to exclude from consideration any contracts with payment terms of one year or less. We rarely offer terms extending beyond one year.
Deferred revenue mainly represents amounts collected prior to having fully satisfied cloud subscriptions, maintenance and professional services performance obligations. $ 277.0 million of revenue that was included in the deferred revenue balance as of December 31, 2024 was recognized in 2025.
No revenue was recognized in 2025 from performance obligations that were satisfied in prior periods.
Remaining Performance Obligations
As of December 31, 2025 , approximately $ 2.2 billion of revenue is expected to be recognized from remaining performance obligations. 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). Maintenance contracts for perpetual software licenses are typically one year in duration and are not included in the remaining performance obligations. We expect to recognize revenue on approximately 38 % of these remaining performance obligations over the next 24 months with the majority of the remaining balance recognized over the following 36 months. We have elected not to provide disclosures regarding remaining performance obligations for contracts with a term of 1 year or less.
Returns and Allowances
We have not experienced significant returns or warranty claims to date and, as a result, have not recorded a provision for the cost of returns and product warranty claims.

53

 

We record an allowance for credit losses utilizing a model of internal historical losses data. In estimating the allowance for credit losses, we considered our historical write-offs, the historical creditworthiness of the customer, and other factors. We also analyzed expected credit losses given future risks in projected economic conditions and future risks of customer collection. Should any of these factors change, the estimates made by us will also change accordingly, which could affect the level of our future allowances. Additions to the allowance for credit losses are recorded in general and administrative expense and were immaterial in all periods presented. Our credit loss reserve was $ 0.9 million and $ 0.9 million as of December 31, 2025 and 2024, 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. The total amount recorded to services revenue was $ 0.6 million, $ 1.6 million, and $ 4.9 million for the years ended December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025 and 2024 , we have reduced our accounts receivable balance by $ 1.9 million and $ 2.8 million, respectively, for these potential adjustments.

Deferred Commissions
We consider sales commissions to be incremental costs of obtaining a contract with a customer. We defer and recognize an asset for sales commissions related to performance obligations with an expected period of benefit of more than one year. We amortize these amounts over the expected benefit period which we estimate by considering several factors, including the rate of technological change and duration of our customer contracts. Sales commissions for renewal contracts are amortized over the related contractual renewal period. We apply the practical expedient to expense sales commissions when the amortization period would have been one year or less. Deferred commissions were $ 51.2 million as of December 31, 2025 , of which $ 39.5 million is included in other assets and $ 11.7 million is included in prepaid expenses. Deferred commissions were $ 42.4 million as of December 31, 2024 , of which $ 31.8 million is included in other assets and $ 10.6 million is included in prepaid expenses. Sales commission expense is included in Sales and Marketing expense in the accompanying consolidated statement of operations. Amortization of sales commissions in 2025, 2024, and 2023 was $ 12.0 million, $ 10.6 million, and $ 9.8 million respectively. No impairment losses were recognized during 2025, 2024, and 2023 .

Property and Equipment
Property and equipment is recorded at cost and consists of furniture, computers, other office equipment, and leasehold improvements. We depreciate the cost of furniture, computers, and other office equipment on a straight-line basis over their estimated useful lives ( three to five years for office equipment, seven years for furniture and fixtures). Leasehold improvements are depreciated over the lesser of their useful lives or the term of the lease. Depreciation and amortization expense for 2025, 2024, and 2023 was approximately $ 6.3 million, $ 6.3 million, and $ 5.8 million, respectively, and was included in “Depreciation and amortization” in the Consolidated Statements of Income. Amortization expense on intangible assets in 2025, 2024, and 2023 was immaterial.
Property and equipment, at cost, consist of the following (in thousands):

 

 

December 31,

 

 

 

2025

 

 

2024

 

Office equipment

 

$

38,479

 

 

$

41,208

 

Furniture and fixtures

 

 

7,567

 

 

 

5,596

 

Leasehold improvement

 

 

31,761

 

 

 

26,396

 

Property and equipment, gross

 

 

77,807

 

 

 

73,200

 

Less accumulated depreciation

 

 

( 54,687

)

 

 

( 59,229

)

Property and equipment, net

 

$

23,120

 

 

$

13,971

 

Software Development Costs
Software may be for internal use or for resale. Costs related to certain software, which is for resale, are capitalized in accordance with Accounting Standards Codification (“ASC”) 985-20, Costs of Software to be Sold, Leased, or Marketed. Under this guidance, computer software development costs are charged to research and development (R&D) expense until technological feasibility is established, after which remaining software production costs are capitalized. We have defined technological feasibility as the point in time at which we have a detailed program design or a working model of the related product, depending on the type of development efforts, and high-risk development issues have been resolved through end-to-end system testing. We do not typically capitalize costs related to software for resale as technological feasibility generally coincides with general availability of the software.
We account for internal use software in accordance with ASC 350-40, Internal Use Software. We expense all costs incurred during the preliminary project stage of our development. We capitalize the costs incurred during the application development stage once it is probable that development will be completed and the software will be used to perform the function intended. These costs are typically insignificant. All other costs, primarily related to maintenance and minor software fixes as well as research and development, are expensed as incurred.

54

 

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. If such events and circumstances exist, undiscounted cash flows associated with these assets are compared with their carrying value to determine if a write-down to fair value is required. During 2025, 2024, and 2023 , we did no t recognize any impairment expense associated with our long-lived or intangible assets.
The evaluation of asset impairment requires management to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment, and actual results may differ from assumed and estimated amounts.

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 2025 and 2024 , we did no t recognize any impairment expense associated with our goodwill. We do no t have any accumulated impairment loses as of 2025. Goodwill was $ 62.2 million at the end of both years ended December 31, 2025 and 2024.
Impairment of Goodwill
We evaluate the carrying value of goodwill annually as of December 31 and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to, (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator.
We applied the simplified goodwill impairment test for 2025, 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. Based on the results of the qualitative assessment, companies are only required to perform Step 1 of the annual impairment test for a reporting unit if the company concludes that it is not more likely than not that the unit’s fair value is less than its 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 respective carrying amount. 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, 2025, 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 circumstances change or events occur to indicate that it is more likely than not that the fair value of any reporting units have fallen below their carrying amount, we would record an impairment expense based on that difference. We performed our periodic goodwill impairment review as of December 31, 2025 and 2024 , 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. Under those provisions, we generally agree, subject to certain exceptions, to indemnify, defend, and hold harmless the customer in connection with third party claims against the customer alleging that the customer’s use of our services and products in compliance with their license infringe the third party’s patent, copyright, or other intellectual property rights. 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. Those provisions generally provide also that, if the customer is prevented from using our services or products because of a third party infringement claim, our sole obligation (in addition to the indemnification, defense, and hold harmless obligation referred to above) is to, at our expense, (i) procure for the customer the right to continue to use the services or products, (ii) replace or modify the services or products so that the customer’s use does not infringe, or, if neither of these options is reasonably feasible, (iii) terminate that particular services or products and provide, as applicable, a refund of services fees paid for services not received or a refund of the unamortized portion of the license fees paid for the products (based on a five year amortization period). Our customer contracts sometimes also require us to indemnify, defend, and hold harmless the customer in connection with death, personal injury or property damage claims made by third parties with respect to actions of our personnel or contractors. The indemnity obligations contained in our customer contracts generally have no specified expiration date and no specified monetary limitation on liability, but they do not cover indirect or consequential damages, such as our customers’ lost revenues or profits. We have not previously incurred costs to settle claims or pay awards under these indemnification obligations. 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, 2025, or 2024.
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. Additionally,

55

 

we may include other warranties such as “no-malware” warranties and warranties that we will perform our SaaS services consistent with generally accepted industry standards or similar standards. In our SaaS services agreements, we also include service level agreements (SLAs) under which we agree to provide service credits to our customers if our services availability drops below certain defined levels. We also warrant to our customers that services will be performed consistent with generally accepted industry standards or specific service levels through completion of the agreed upon services. If necessary, we will provide for the estimated cost of product and service warranties based on specific warranty claims history. However, we have not incurred significant recurring expenses under product or service warranties. As a result, we believe the estimated fair value of these agreements is nominal. Accordingly, we have no liabilities recorded for these agreements as of December 31, 2025 and 2024 .

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.

Basic and Diluted Net Income Per Share
Basic net income per share is computed using net income divided by the weighted average number of shares of common stock outstanding (“Weighted Shares”) for the period presented.
Diluted net income per share is computed using net income divided by Weighted Shares and the treasury stock method effect of common equivalent shares (CES) outstanding for each period presented. In the following table, we present a reconciliation of earnings per share and the shares used in the computation of earnings per share for the years ended December 31, 2025, 2024 and 2023 (in thousands, except per share data):

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

(in thousands, except per share data)

 

Net income

 

$

219,948

 

 

$

218,364

 

 

$

176,568

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

3.64

 

 

$

3.56

 

 

$

2.86

 

Effect of CESs

 

 

( 0.04

)

 

 

( 0.05

)

 

 

( 0.04

)

Diluted

 

$

3.60

 

 

$

3.51

 

 

$

2.82

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

Basic

 

 

60,473

 

 

 

61,303

 

 

 

61,817

 

Effect of CESs

 

 

581

 

 

 

880

 

 

 

791

 

Diluted

 

 

61,054

 

 

 

62,183

 

 

 

62,608

 

The number of anti-dilutive CESs in 2025, 2024, and 2023 was immaterial.

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, 2025 and 2024 represents foreign currency translation adjustments.

Accounting for Income Taxes
We provide for the effect of income taxes on our financial position and results of operations in accordance with the Income Taxes Topic of the Codification. Under this accounting pronouncement, income tax expense is recognized for the amount of income taxes payable or refundable for the current year and for the change in net deferred tax assets or liabilities resulting from events that are recorded for financial reporting purposes in a different reporting period than recorded in the tax return. Management must make significant assumptions, judgments, and estimates to determine our current provision for income taxes and also our deferred tax assets and liabilities and any valuation allowance to be recorded against our net deferred tax asset.
Our judgments, assumptions, and estimates relative to the current provision for income tax take into account current tax laws, our interpretation of current tax laws, allowable deductions, projected tax credits, and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. We recognize tax benefits only when it is more likely than not that they will be sustained on audit, and measure them at the largest amount greater than 50% likely to be realized. Changes in tax law or our interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amounts provided for

56

 

income taxes in our statement of financial position and our statements of income. Our assumptions, judgments, and estimates relative to the value of our net deferred tax asset take into account predictions of the amount and category of future taxable income. Actual operating results and the underlying amount and category of income in future years could render our current assumptions, judgments, and estimates of recoverable net deferred taxes inaccurate, thus materially impacting our financial position and results of operations.

Equity-Based Compensation
We account for equity-based compensation in accordance with ASC 718, Compensation – Stock Compensation. See Note 2 for further information.

Advertising Costs
We expense advertising costs as incurred. Advertising expense was $ 2.0 million in 2025 , $ 1.8 million in 2024 , and $ 2.4 million in 2023 .

R etire ment of Repurchased Shares
We immediately retire shares repurchased pursuant to any share repurchase program. We allocate the share purchase price in excess of par value between additional paid-in capital and retained earnings.

Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The updated accounting guidance, among other things, requires additional disclosure primarily related to the income tax rate reconciliation and income taxes paid. We have adopted the new accounting guidance within our income tax disclosures in Note 3.
In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), and in January 2025, the FASB issued Accounting Standards Update No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. We expect to adopt the updated accounting guidance in our Annual Report on Form 10-K for the year ended December 31, 2028 and for interim period reporting beginning in 2029, as required in ASU 2024-03 and further clarified by ASU 2025-01. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.
In September 2025, the FASB issued Accounting Standards Update No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 amends certain aspects of the accounting for and disclosure for internal-use software costs, which removes references to software development project stages and considers different software development methods, including methods that entities may use to develop software in the future. ASU 2025-06 requires an entity to capitalize software costs when: (1) Management has authorized and committed to funding the software project and (2) It is probable that the project will be completed, and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold"). In evaluating the probable-to-complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the new guidance but does not expect material changes to results of operations, cash flows, or financial condition.

2. Equity-Based Compensation
Equity Based Compensation Plans
In May 2020, the Manhattan Associates, Inc. 2020 Equity Incentive Plan (the “2020 Plan”) was approved by our shareholders. The 2020 Plan provides for the grant of stock options, restricted stock, restricted stock units, and stock appreciation rights. Vesting conditions can be service-based or performance-based, or a combination of both.
A maximum of 4,500,000 shares are available for grant under the amended 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, 2025 , there were 1,763,469 shares available for issuance under the 2020 Plan. The 2020 Plan is administered by the Compensation Committee of the Board of Directors. The committee has the authority to interpret the provisions thereof.
The restricted stock unit awards contain vesting provisions that are 50 % service based and 50 % performance based for employee awards and 100 % service based for non-employee members of the Board of Directors (“Outside Directors”). The employee awards

57

 

have a four year vesting period, with the performance portion tied to annual revenue and operating income targets. The awards to Outside Directors have a one year vesting period. We recognize compensation cost for service-based restricted awards with graded vesting on a straight-line basis over the entire vesting period, with the amount of compensation cost recognized at any date at least equal to the portion of the grant-date value of the award that is vested at that date. For our performance-based restricted stock awards with graded vesting, we recognize compensation cost on an accelerated basis applying straight-line expensing for each separately vesting portion of each award. We utilize the price of our publicly traded shares to determine the fair value of restricted stock units on the grant date.
Restricted Stock Unit Awards
We present below a summary of changes in unvested units of restricted stock during 2025:

 

 

Number of Units

Grant Date Fair Value

Outstanding at January 1, 2025

 

1,390,238

$ 155.61

Granted

 

612,631

246.49

Vested

 

( 566,860 )

150.65

Forfeited

 

( 39,068 )

177.84

Outstanding at December 31, 2025

 

1,396,941

 

The Company recorded equity-based compensation expense related to restricted stock and RSUs (collectively “restricted stock awards”) of $ 111.3 million, $ 93.2 million, and $ 71.6 million in 2025, 2024, and 2023, respectively. The total fair value of restricted stock awards vested in 2025, 2024, and 2023 , based on market value at the vesting dates was $ 115.2 million, $ 127.1 million, $ 85.2 million, respectively. The weighted average grant-date fair value of RSUs granted during fiscal year 2025, 2024, and 2023 was $ 246.49 , $ 201.54 , and $ 127.51 , respectively. As of December 31, 2025 , unrecognized compensation cost related to unvested RSU totaled $ 144.4 million and is expected to be recognized over a weighted average period of approximately 2.3 years. We recognize forfeitures of equity-based payments as they occur.
During the year ended December 31, 2025 , the Company granted 364,411 RSUs that have performance-based vesting criteria, which are tied to our financial performance. The performance-based RSUs granted in 2025 related to 2025 employee awards and 2024 above-target employee awards. As of December 31, 2025, the associated equity-based compensation expense has been recognized for the portion of the award attributable to the 2025 performance criteria.

58

 

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, 2025 and 2024 . Deferred tax assets and liabilities are determined based on the difference between the financial accounting and tax bases of assets and liabilities. We present below significant components of our deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows (in thousands):

 

 

December 31,

 

 

2025

 

 

2024

 

Deferred tax assets:

 

 

 

 

 

 

Accounts receivable

 

$

646

 

 

$

835

 

Accrued liabilities

 

 

10,808

 

 

 

13,373

 

Equity-based compensation

 

 

18,687

 

 

 

16,568

 

Capitalized R&D costs

 

 

59,550

 

 

 

73,364

 

Accrued sales taxes

 

 

274

 

 

 

265

 

Operating lease liabilities

 

 

13,910

 

 

 

10,206

 

State tax credits

 

 

2,958

 

 

 

3,222

 

Foreign subsidiary net operating losses

 

 

61

 

 

 

-

 

Tax credit - foreign

 

 

5,564

 

 

 

6,112

 

Valuation allowance

 

 

( 3,442

)

 

 

( 2,853

)

 

 

 

109,016

 

 

 

121,092

 

Deferred tax liabilities:

 

 

 

 

 

 

Intangible Assets

 

 

7,440

 

 

 

7,395

 

Depreciation

 

 

2,836

 

 

 

150

 

Deferred commissions

 

 

10,705

 

 

 

9,032

 

Operating lease right-of-use assets

 

 

11,880

 

 

 

9,992

 

Other

 

 

255

 

 

 

18

 

 

 

 

33,116

 

 

 

26,587

 

Net deferred tax assets

 

$

75,900

 

 

$

94,505

 

We present below income from domestic and foreign operations before income tax expense for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands):

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Domestic

 

$

263,439

 

 

$

240,871

 

 

$

193,727

 

Foreign

 

 

22,455

 

 

 

25,943

 

 

 

19,944

 

Total

 

$

285,894

 

 

$

266,814

 

 

$

213,671

 

We present below cash paid for taxes for U.S. federal, U.S. state, and foreign operations for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands):

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Federal

 

$

31,155

 

 

$

64,759

 

 

$

49,725

 

State

 

 

12,170

 

 

 

12,370

 

 

 

12,473

 

Foreign

 

 

 

 

 

 

 

 

 

India

 

 

2,549

 

 

 

3,319

 

 

 

3,210

 

Other

 

 

1,397

 

 

 

2,955

 

 

 

1,968

 

 

 

$

47,271

 

 

$

83,403

 

 

$

67,376

 

 

59

 

The components of our income tax provision for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands):

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

28,729

 

 

$

54,761

 

 

$

46,497

 

State

 

 

11,322

 

 

 

12,627

 

 

 

10,911

 

Foreign

 

 

7,553

 

 

 

9,751

 

 

 

8,539

 

 

 

$

47,604

 

 

$

77,139

 

 

$

65,947

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

16,566

 

 

 

( 23,777

)

 

 

( 23,116

)

State

 

 

2,883

 

 

 

( 3,796

)

 

 

( 3,132

)

Foreign

 

 

( 1,107

)

 

 

( 1,116

)

 

 

( 2,596

)

 

 

 

18,342

 

 

 

( 28,689

)

 

 

( 28,844

)

Total

 

$

65,946

 

 

$

48,450

 

 

$

37,103

 

 

We currently have a tax holiday in India under the Special Economic Zone Act through March 2029. As a result of this holiday, we had pre-tax income of approximately $ 18.3 million, for the year ended December 31, 2025, $ 9.1 million of which was not subject to tax. The impact on diluted earnings per share if the income had been fully taxable would have been a decrease of $ 0.05 per share in 2025.
We have tax credit carry-forwards of approximately $ 3.7 million available to offset future state tax. These tax credit carry-forwards expire in 2028 to 2036 . These credits represent a deferred tax asset of $ 3.0 million after consideration of the federal benefit of state tax deductions. We have foreign operating loss carry-forwards of approximately $ 0.1 million available to offset future foreign tax, which expire in 2030 . A valuation allowance of $ 2.0 million has been established for these credits because the ability to use them is not more likely than not. We also have a tax credit carry-forward of approximately $ 5.6 million available to offset future foreign tax. This tax credit carryforward begins expiring in 2037 .
The Company asserts permanent reinvestment on undistributed foreign earnings. The undistributed earnings and profits are considered previously taxed income and would not be subject to U.S. income taxes upon repatriation of those earnings, in the form of dividends. As the undistributed earnings and profits are considered to be permanently reinvested, no provision for local withholdings taxes have been provided, however, upon repatriation of those earnings, in the form of dividends, we could be subject to additional local withholding taxes.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes significant changes to U.S. corporate tax provisions of the Tax Cuts and Jobs Act. Notably, it allows an immediate deduction for domestic research and development expenditures, reinstates 100% bonus depreciation, and modifies international tax provisions. The acceleration of the deduction for domestic research and development expenditures reduces our cash taxes owed for 2025 and 2026.

60

 

We present below a summary of the items that cause recorded income taxes to differ from taxes computed using the statutory federal income tax rate for the years ended December 31, 2025, 2024 and 2023:

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

Amount

 

Percent

 

 

Amount

 

Percent

 

 

Amount

 

Percent

 

U.S. Statutory federal income tax rate:

 

$

60,038

 

 

21.0

%

 

$

56,031

 

 

21.0

%

 

$

44,871

 

 

21.0

%

State and Local Income Taxes, Net of Federal Income Tax Effect*

 

 

11,351

 

 

4.0

 

 

 

8,354

 

 

3.1

 

 

 

7,722

 

 

3.7

 

Other State

 

 

710

 

 

0.2

 

 

 

544

 

 

0.2

 

 

 

81

 

 

-

 

Foreign Tax Effects

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

India

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income subject to tax holiday

 

 

( 4,244

)

 

( 1.5

)

 

 

( 3,917

)

 

( 1.5

)

 

 

( 4,185

)

 

( 2.0

)

Other

 

 

2,544

 

 

0.9

 

 

 

2,930

 

 

1.1

 

 

 

1,345

 

 

0.6

 

Other foreign jurisdictions

 

 

476

 

 

0.2

 

 

 

238

 

 

0.1

 

 

 

360

 

 

0.2

 

Effect of Changes in Tax Rates or Laws Enacted in Current Period

 

 

( 165

)

 

( 0.1

)

 

 

( 52

)

 

-

 

 

 

( 3,782

)

 

( 1.8

)

Effect of Cross Border-Tax Laws

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Derived Intangible Income

 

 

( 10,255

)

 

( 3.6

)

 

 

( 9,380

)

 

( 3.5

)

 

 

( 7,743

)

 

( 3.6

)

Other

 

 

1,016

 

 

0.4

 

 

 

934

 

 

0.3

 

 

 

800

 

 

0.4

 

 Tax Credits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development tax credits

 

 

( 5,729

)

 

( 2.0

)

 

 

( 4,846

)

 

( 1.8

)

 

 

( 5,332

)

 

( 2.5

)

Nontaxable or Nondeductible Items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-deductible equity compensation

 

 

3,836

 

 

1.3

 

 

 

3,671

 

 

1.4

 

 

 

2,380

 

 

1.1

 

Tax benefit of equity compensation

 

 

( 6,080

)

 

( 2.1

)

 

 

( 13,104

)

 

( 4.9

)

 

 

( 6,800

)

 

( 3.2

)

Employee compensation limitation

 

 

9,698

 

 

3.4

 

 

 

7,449

 

 

2.8

 

 

 

7,210

 

 

3.4

 

Other

 

 

204

 

 

0.1

 

 

 

199

 

 

0.1

 

 

 

160

 

 

0.1

 

Changes in Unrecognized Tax Benefits

 

 

2,379

 

 

0.8

 

 

 

( 533

)

 

( 0.2

)

 

 

( 688

)

 

( 0.3

)

Other Adjustments

 

 

167

 

 

0.1

 

 

 

( 68

)

 

-

 

 

 

704

 

 

0.3

 

Effective Tax

 

$

65,946

 

 

23.1

%

 

$

48,450

 

 

18.2

%

 

$

37,103

 

 

17.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* State taxes in the following jurisdictions made up the majority (greater than 50 percent) of the tax effect in this category:

 

California, Pennsylvania, New Jersey, Massachusetts

 

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended December 31, 2025, 2024 and 2023 (in thousands):

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

Unrecognized tax benefits at January 1,

 

$

( 9,149

)

 

$

( 9,688

)

 

$

( 10,532

)

Gross amount of increases in unrecognized tax benefits as a
   result of tax positions taken during a prior period

 

 

( 376

)

 

 

( 147

)

 

 

( 425

)

Gross amount of decreases in unrecognized tax benefits as a
    result of tax positions taken during a prior period

 

 

1,456

 

 

 

32

 

 

 

908

 

Gross amount of increases in unrecognized tax benefits as a
   result of tax positions taken during the current period

 

 

( 6,559

)

 

 

( 1,996

)

 

 

( 2,182

)

Reductions to unrecognized tax benefits relating to
   settlements with taxing authorities

 

 

-

 

 

 

16

 

 

 

-

 

Reductions to unrecognized tax benefits as a result of a lapse of
   the applicable statute of limitations

 

 

2,509

 

 

 

2,634

 

 

 

2,543

 

Unrecognized tax benefits at December 31,

 

$

( 12,119

)

 

$

( 9,149

)

 

$

( 9,688

)

Our unrecognized tax benefits totaled $ 12.1 million and $ 9.1 million as of December 31, 2025 and 2024 , respectively. Included in these amounts are unrecognized tax benefits totaling $ 11.2 million and $ 8.5 million as of December 31, 2025 and 2024, respectively, which, if recognized, would affect the effective tax rate.

61

 

We recognize potential accrued interest and penalties related to unrecognized tax benefits within our global operations in income tax expense. For the years ended December 31, 2025, 2024 and 2023 , the Company recognized the following income tax expense: $ 0.5 million, $ 0.6 million, and $ 0.1 million, respectively, for the potential payment of interest and penalties. Accrued interest and penalties were $ 0.8 million and $ 1.3 million for the years ended December 31, 2025 and 2024 . We conduct business globally and, as a result, file income tax returns in the United State federal jurisdiction and in many state and foreign jurisdictions. We are generally no longer subject to U.S. federal, state, and local, or non-US income tax examinations for the years before 2015. Due to the expiration of statutes of limitations in multiple jurisdictions globally during 2027, the Company anticipates it is reasonably possible that unrecognized tax benefits may decrease by $ 1.6 million.

4. Shareholders’ Equity
During 2025, 2024, and 2023, we purchased 1,451,019 , 986,555 , and 1,204,328 shares of the Company’s common stock for $ 274.5 million, $ 241.6 milli on, and $ 166.0 million, respectively, through open market transactions as part of a publicly-announced share repurchase program. In January 2026, our Board of Directors replenished the Company’s share repurchase authority to an aggregate of $ 100.0 million of our common stock.
We are subject to a 1 % excise tax on stock repurchases as enacted by the United States Inflation Reduction Act which we include in the cost of stock repurchases as a reduction of shareholders’ equity. In 2025, we paid $ 1.6 million in excise tax related to 2024 repurchase and vesting activity.

 
5. Contingencies
From time to time, we are involved in litigation relating to claims arising out of the ordinary course of business, and occasionally legal proceedings not in the ordinary course.
Many of our software products and services are critical to our customers’ business operations. Failures could result in claims against us for substantial damages, regardless of our level of responsibility for those failures. We attempt to limit contractually our liability for damages arising from product or service failures or our negligent acts or omissions, but there can be no absolute assurance that those limitations will be enforceable.
Although litigation and other legal proceeding outcomes are difficult to predict, we do not believe we are a party to any legal proceeding the result of which is likely to have a material adverse impact on our business, financial position, results of operations, or cash flows. We expense legal costs associated with loss contingencies as we incur them. We record insurance recoveries when received.
Among other proceedings, we are currently party to the lawsuits described below.
Securities Litigation
On February 25, 2025, an alleged Company shareholder filed a putative class action lawsuit, Prime v. Manhattan Associates, Inc., et al., No. 1:25-cv-00992-TRJ (N.D. Ga.), in the United States District Court for the Northern District of Georgia against the Company and certain of our current and former officers (the “Prime Action”). The complaint in the Prime Action alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated under that act, based on purported materially false and misleading statements and omissions allegedly made by the defendants (the Company and named current and former officers) between October 22, 2024, and January 28, 2025. The complaint in the Prime Action sought class certification, unspecified monetary damages, and costs and attorneys’ fees. On April 15, 2025, another alleged Company shareholder filed a putative class action lawsuit, City of Orlando Police Officers’ Pension Fund v. Manhattan Associates, Inc., et al., No. 1:25-cv-02089-TRJ (N.D. Ga.), in the United States District Court for the Northern District of Georgia against the Company and certain of our current and former officers (the “City of Orlando Action”). The complaint in the City of Orlando Action alleged violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 based on purported materially false and misleading statements and omissions allegedly made by the defendants between July 24, 2024, and February 7, 2025. The factual allegations underlying the claims in the City of Orlando Action were similar to the factual allegations made in the Prime Action. The complaint in the City of Orlando Action sought class certification, unspecified monetary damages, and costs and attorneys’ fees. On May 2, 2025, the Court consolidated the two actions (the “Consolidated Action”), and on May 23, 2025, the Court appointed the plaintiffs in the City of Orlando Action as the lead plaintiffs in the Consolidated Action. On July 22, 2025, the lead plaintiffs filed their Amended Complaint, in which the securities law violations alleged are the same as those alleged in the original actions and the proposed class period is the same as in the City of Orlando action. The defendants deny the material allegations in the Consolidated Action, which is still in the early stages and has not yet been certified as a class action, and intend to defend themselves vigorously. The defendants filed a motion to dismiss the Consolidated Action on September 22, 2025, following which the plaintiffs filed their opposition on November 24, 2025, and the defendants filed their reply on December 22, 2025. The Court has set a hearing date on the motion for March 11, 2026. The Company maintains insurance that may cover defendants’ liability arising out of this litigation up to the policy limits and subject to meeting certain deductibles and to other terms and conditions. We are unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from, these proceedings.

62

 

Derivative Litigation
On September 22, 2025, a purported Company shareholder, Patrick Ayers, filed a shareholder derivative lawsuit, Ayers v. Capel, et al., No. 1:25-cv-05416-TRJ, in the United States District Court for the Northern District of Georgia (the “Ayers Action”). The Ayers Action names certain of the Company’s current and former officers and directors as defendants. The allegations in the Ayers Action overlap substantially with the allegations in the above-referenced Consolidated Action. The Ayers Action assert claims for alleged violations of the federal securities laws, breach of fiduciary duty, waste, and unjust enrichment. On October 14, 2025, the court entered an order staying the Ayers Action pending resolution of the motion to dismiss in the Consolidated Action. We are unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from, these proceedings.

 
6. Employee Benefit Plan
We sponsor the Manhattan Associates 401(k) Plan and Trust (the “401(k) Plan”), a qualified profit sharing plan with a 401(k) feature covering substantially all our employees. Since 2012, we have provided a 50 % matching contribution up to 6 % of eligible compensation being contributed after the participant’s first year of employment. During the years ended December 31, 2025, 2024 and 2023 , the Company expensed matching contributions to the 401(k) Plan of $ 8.9 million, $ 8.5 million, and $ 7.8 million, respectively.

 
7. Leases
We lease our facilities and some of our equipment under noncancelable operating lease arrangements that expire at various dates through 2036. The total operating lease liabilities for these leases at December 31, 2025 was approximately $ 61.1 million. For a few of our facility leases, we have certain options to extend the lease term for up to 10 years, at our sole discretion. We have no finance leases.
We present below the operating lease right-of-use assets and lease liabilities as of December 31, 2025 (in thousands):

 

 

December 31, 2025

ASSETS

 

 

Operating lease right-of-use assets

 

$ 50,443

 

 

 

LIABILITIES

 

 

Operating lease liabilities, current (included in accrued and other liabilities )

 

$ 4,883

Operating lease liabilities, long-term

 

56,180

Total operating lease liabilities

 

$ 61,063

 

63

 

Aggregate future minimum lease payments under noncancelable operating leases as of December 31, 2025 are as follows (in thousands):

Year Ending December 31,

 

 

 

2026

 

$

11,590

 

2027

 

 

11,296

 

2028

 

 

10,843

 

2029

 

 

7,498

 

2030

 

 

6,680

 

Thereafter

 

 

37,103

 

Total minimum payments required

 

 

85,010

 

Less short-term leases

 

 

( 257

)

Less imputed interest

 

 

( 23,690

)

Total operating lease liabilities

 

$

61,063

 

We are applying the practical expedient to not separate lease and non-lease components, which allows us to account for lease and non-lease components as a single lease component. The total lease cost in 2025 was $ 10.1 million, consisting of $ 9.8 million of operating lease costs and $ 0.3 million of short-term lease costs. The total lease cost in 2024 was $ 9.3 million, consisting of $ 9.0 million of operating lease costs, and $ 0.3 million of short-term lease costs. Total lease costs in 2023 were $ 8.1 million, consisting of $ 7.8 million of operating lease costs, and $ 0.3 million of short-term lease costs. Our variable lease cost during 2025, 2024 and 2023 were immaterial.
 

Weighted average remaining lease term

 

8.9  years

 

Weighted average discount rate

 

 

5.46

%

Supplemental cash flow information - operating cash flows (in thousands):

 

 

 

Cash paid for amounts included in the measurement of lease liabilities

 

 

 

Operating cash flows for operating leases

 

$

9,709

 

 
8. Segment Reporting
We manage our business by geographic segment and have three geographic reportable segments: the Americas (North, Latin and South America); Europe, the Middle East and Africa (EMEA); and Asia Pacific (APAC). All segments derive revenue from the sale and implementation of our supply chain commerce solutions. We operate in one operating segment (the Americas) because most of the Company's service offerings operate on the Manhattan platform and are deployed and sold in a nearly identical manner. The individual products sold by the segments are similar in nature and are all designed to help companies manage the effectiveness and efficiency of their supply chain commerce. We use the same accounting policies for each reportable segment. The chief operating decision maker ( Chief Executive Officer ) reviews the variances in each reportable segment’s operating income compared to prior periods and to budget on a monthly basis to evaluate performance and allocate resources (including employees, financial or capital).
The Americas segment charges royalty fees to the other segments based on cloud subscriptions and software licenses sold by those reportable segments. The royalties, which totaled $ 26.0 million, $ 18.9 million, and $ 13.7 million in 2025, 2024, and 2023, 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 geography-based costs consist of costs for professional services personnel, direct sales and marketing expenses, infrastructure costs to support the employee and customer base, billing and financial systems, management and general and administrative support. There are certain corporate expenses included in the Americas segment that we do not charge to the other segments. Such expenses include research and development, stock compensation, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Costs in the Americas’ segment include all research and development costs including the costs associated with our operations in India. Expense related to an unusual health insurance claim is included within "Operating expenses" within the Americas segment.

64

 

In accordance with the segment reporting topic of the FASB Codification, we present below financial information by reportable segment for 2025, 2024, and 2023 (in thousands):

 

Year Ended December 31,

 

 

2025

 

 

2024

 

 

Americas

 

EMEA

 

APAC

 

Consolidated

 

 

Americas

 

EMEA

 

APAC

 

Consolidated

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions

$

312,992

 

$

80,161

 

$

14,985

 

$

408,138

 

 

$

264,331

 

$

62,779

 

$

10,093

 

$

337,203

 

Software license

 

5,641

 

 

8,407

 

 

771

 

 

14,819

 

 

 

12,251

 

 

1,376

 

 

1,458

 

 

15,085

 

Maintenance

 

102,415

 

 

18,935

 

 

8,622

 

 

129,972

 

 

 

110,751

 

 

18,349

 

 

9,204

 

 

138,304

 

Services

 

364,731

 

 

107,531

 

 

30,782

 

 

503,044

 

 

 

389,550

 

 

107,384

 

 

28,583

 

 

525,517

 

Hardware

 

24,647

 

 

762

 

 

10

 

 

25,419

 

 

 

25,603

 

 

635

 

 

5

 

 

26,243

 

Total revenue

 

810,426

 

 

215,796

 

 

55,170

 

 

1,081,392

 

 

 

802,486

 

 

190,523

 

 

49,343

 

 

1,042,352

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

342,652

 

$

104,360

 

$

25,327

 

 

472,339

 

 

$

351,112

 

$

98,051

 

$

21,817

 

 

470,980

 

Operating expenses

 

291,862

 

 

22,598

 

 

5,539

 

 

319,999

 

 

 

278,803

 

 

19,062

 

 

5,610

 

 

303,475

 

Depreciation and amortization

 

5,404

 

 

765

 

 

148

 

 

6,317

 

 

 

5,228

 

 

914

 

 

159

 

 

6,301

 

Restructuring expense

 

2,937

 

 

-

 

 

-

 

 

2,937

 

 

 

-

 

 

-

 

 

-

 

 

-

 

Total costs and expenses

 

642,855

 

 

127,723

 

 

31,014

 

 

801,592

 

 

 

635,143

 

 

118,027

 

 

27,586

 

 

780,756

 

Operating income

$

167,571

 

$

88,073

 

$

24,156

 

$

279,800

 

 

$

167,343

 

$

72,496

 

$

21,757

 

$

261,596

 

Interest income

 

 

 

 

 

 

 

4,389

 

 

 

 

 

 

 

 

 

6,029

 

Other (loss) income, net

 

 

 

 

 

 

 

1,705

 

 

 

 

 

 

 

 

 

( 811

)

Income before income taxes

 

 

 

 

 

 

$

285,894

 

 

 

 

 

 

 

 

$

266,814

 

 

 

Year Ended December 31, 2023

 

 

Americas

 

EMEA

 

APAC

 

Consolidated

 

Revenue:

 

 

 

 

 

 

 

 

Cloud subscriptions

$

205,611

 

$

42,243

 

$

6,758

 

$

254,612

 

Software license

 

12,040

 

 

2,925

 

 

3,241

 

 

18,206

 

Maintenance

 

114,963

 

 

19,721

 

 

9,252

 

 

143,936

 

Services

 

362,979

 

 

101,254

 

 

23,636

 

 

487,869

 

Hardware

 

23,602

 

 

495

 

 

5

 

 

24,102

 

Total revenue

 

719,195

 

 

166,638

 

 

42,892

 

 

928,725

 

 

 

 

 

 

 

 

 

 

Costs and Expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

321,701

 

 

89,523

 

 

19,390

 

 

430,614

 

Operating expenses

 

257,172

 

 

19,889

 

 

5,417

 

 

282,478

 

Depreciation and amortization

 

5,164

 

 

503

 

 

85

 

 

5,752

 

Restructuring expense

 

-

 

 

-

 

 

-

 

 

-

 

Total costs and expenses

 

584,037

 

 

109,915

 

 

24,892

 

 

718,844

 

Operating income

$

135,158

 

$

56,723

 

$

18,000

 

$

209,881

 

Interest income

 

 

 

 

 

 

 

5,304

 

Other (loss) income, net

 

 

 

 

 

 

 

( 1,514

)

Income before income taxes

 

 

 

 

 

 

$

213,671

 

In the following table, we present goodwill, long-lived assets, and total assets by reportable segment as of December 31, 2025 and 2024 (in thousands):

 

 

As of December 31, 2025

 

 

As of December 31, 2024

 

 

 

Americas

 

 

EMEA

 

 

APAC

 

 

Consolidated

 

 

Americas

 

 

EMEA

 

 

APAC

 

 

Consolidated

 

Goodwill

 

$

54,766

 

 

$

5,515

 

 

$

1,963

 

 

$

62,244

 

 

$

54,766

 

 

$

5,497

 

 

$

1,963

 

 

$

62,226

 

Long lived assets

 

 

104,217

 

 

 

11,320

 

 

 

2,369

 

 

 

117,906

 

 

 

83,517

 

 

 

11,501

 

 

 

2,538

 

 

 

97,556

 

Total assets

 

 

696,019

 

 

 

116,219

 

 

 

27,150

 

 

 

839,388

 

 

 

633,157

 

 

 

102,222

 

 

 

22,172

 

 

 

757,551

 

For the years ended December 31, 2025, 2024 and 2023 , we derived revenue from sales to customers outside the United States of approximately $ 373.5 million, $ 346.2 million, and $ 301.4 million, respectively. Our remaining revenue was derived from domestic sales.

65

 

Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel, warehouse management solutions, and transportation management solutions for the year ended December 31, 2025 . The majority of our software license revenue (approximately 80 %) relates to our warehouse management product group for the same period.

9. Restructuring Expense
In January 2025 , the Company eliminated approximately 100 positions to align our services capacity with customer demand which has been impacted by short-term macro-economic uncertainty. The Company recorded restructuring expense of approximately $ 2.9 million for the year ended December 31, 2025 to the Americas segment. The expense primarily consists of employee severance and outplacement services. The expense is classified in “Restructuring expense” in the Company’s Consolidated Statements of Income for the year ended December 31, 2025.
The following table summarizes the activity in the restructuring accrual for the year ended December 31, 2025 (in thousands), which was fully paid as of December 31, 2025:

 

 

 

 

Consolidated

 

 

(in thousands)

 

Restructuring expense

$

2,937

 

Cash payments

 

2,937

 

Restructuring accrual balance at December 31, 2025

$

-

 

 

 

 

 

66

 

It em 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
 
 
It em 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that the system of controls has operated effectively in all cases. Our disclosure controls and procedures, however, are designed to provide reasonable assurance that the objectives of disclosure controls and procedures are met.
As of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer evaluated, with the participation of management, the effectiveness of our disclosure controls and procedures. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that the objectives of disclosure controls and procedures are met.
Management’s Report on Internal Control over Financial Reporting
Management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025, and the report of Ernst & Young LLP on the effectiveness of our internal control over financial reporting are contained on pages 42 and 43 of this report.
Change in Internal Control over Financial Reporting
During the fourth quarter of 2025, 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
Rule 10b5-1 Trading Plans
During the quarter ended December 31, 2025, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading agreement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in item 408(a) of Regulation S-K.
 
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.

67

 

PART III
 
 
Ite m 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference from the relevant information contained in our Proxy Statement for the Annual Meeting of Shareholders expected to be filed with the SEC on or prior to April 3, 2026, including under the captions "Governance—Proposal 1 Election of Directors,” “Executive Compensation—Executive Officers Biographies,” "Governance—Board of Directors and Committees—Code of Ethics,” “Governance—Board of Directors and Committees—Board Committees,” “Governance—Insider Trading Policy,” and if applicable, "Security Ownership—Delinquent Section 16(a) Reports."
 
 
Ite m 11. Executive Compensation
The information required by this item is incorporated by reference from the relevant information contained in our Proxy Statement for the Annual Meeting of Shareholders expected to be filed with the SEC on or prior to April 3, 2026, including under the captions “Governance—Director Compensation” and “Executive Compensation.”
 
 
Ite m 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
The information required by this item is incorporated by reference from the relevant information contained in our Proxy Statement for the Annual Meeting of Shareholders expected to be filed with the SEC on or prior to April 3, 2026, including under the caption “Security Ownership—Security Ownership of Certain Beneficial Owners and Management.” The information required by this item with respect to the Company’s securities authorized for issuance under equity compensation plans is included in Part II, Item 5 of this Form 10-K and is incorporated by reference herein.
 
 
It em 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference from the relevant information contained in our Proxy Statement for the Annual Meeting of Shareholders expected to be filed with the SEC on or prior to April 3, 2026, including under the captions “Governance—Related Party Transactions” and “Election of Directors.”
 
 
It em 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference from the relevant information contained in our Proxy Statement for the Annual Meeting of Shareholders expected to be filed with the SEC on or prior to April 3, 2026, including under the caption “Audit Matters—Proposal 4—Ratification of Appointment of Independent Registered Public Accounting Firm.”
 

68

 

PART IV
 
 
It em 15. Exhibits
Exhibits.
See (b) below.
(b) The exhibits listed below under “Exhibit Index” are filed with or incorporated by reference in this Report. Where such filing is made by incorporation by reference to a previously filed registration statement or report, such registration statement or report is identified in parentheses.

(c) See Item 15(a)(2).

 
Item 16. Form 10-K Summary
None.
 

69

 

EXH IBIT INDEX
The following exhibits or incorporated by reference as part of this Report.

Exhibit
Number

 

Description

 

 

 

  3.1

 

Articles of Incorporation of the Registrant dated February 24, 1998 (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2014 (File No. 00023999), filed on July 29, 2014).

 

 

 

  3.2

 

Amended Bylaws of the Registrant (As Amended Effective July 18, 2019) (Incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K (File No. 000-23999), filed on March 9, 2023).

 

 

 

  4.1

 

Description of Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (Incorporated by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2020 (File No. 000-23999), filed on May 1, 2020).

 

 

 

10.1(a)

 

Lease Agreement by and between Wildwood Associates, a Georgia general partnership, and the Registrant, dated June 25, 2001 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report for the period ended June 30, 2001 (File No. 000-23999), filed August 14, 2001).

 

 

 

10.1(b)

 

First Amendment to Lease Agreement between Wildwood Associates, and the Registrant, dated June 10, 2002 (Incorporated by reference to Exhibit 10.6 to the Company’s Annual Report for the period ended December 31, 2006 (File No. 000-23999), filed on March 14, 2007).

 

 

 

10.1(c)

 

Second Amendment to Lease Agreement between 2300 Windy Ridge Parkway Investors LLC, and the Registrant, dated February 27, 2007 (Incorporated by reference to Exhibit 10.7 to the Company’s Annual Report for the period ended December 31, 2006 (File No. 000-23999), filed on March 14, 2007).

 

 

 

10.1(d)

 

Third Amendment to Lease Agreement between 2300 Windy Ridge Parkway Investors LLC, and the Registrant, dated June 14, 2007 (Incorporated by reference to Exhibit 10.2(d) to the Company’s Annual Report for the period ended December 31, 2014 (File No. 000-23999), filed on February 5, 2015).

 

 

 

10.1(e)

 

Fourth Amendment to Lease Agreement between SP4 2300 Windy Ridge LP, and the Registrant, dated August 14, 2012 (Incorporated by reference to Exhibit 10.2(e) to the Company’s Annual Report for the period ended December 31, 2014 (File No. 000-23999), filed on February 5, 2015).

 

 

 

10.1(f)

 

Fifth Amendment to Lease Agreement between 2300 Windy Ridge LLC, and the Registrant, dated May 19, 2014 (Incorporated by reference to Exhibit 10.2(f) to the Company’s Annual Report for the period ended December 31, 2014 (File No. 000-23999), filed on February 5, 2015).

 

 

 

10.1(g)

 

Sixth Amendment to Lease Agreement between 2300 Windy Ridge LLC, and the Registrant, dated August 13, 2014 (Incorporated by reference to Exhibit 10.2(g) to the Company’s Annual Report for the period ended December 31, 2014 (File No. 000-23999), filed on February 5, 2015).

 

 

 

10.1(h)

 

Seventh Amendment to Lease Agreement between 2300 Windy Ridge LLC and the Registrant, dated April 29, 2015 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2015 (File No. 000-23999), filed on July 28, 2015).

 

 

 

10.1(i)

 

Eighth Amendment to Lease Agreement between 2300 Windy Ridge LLC and the Registrant, dated January 31, 2024 (Incorporated by reference to Exhibit 10.1 to the Company’s Annual Report for the period ended December 31, 2023 (File No. 000-23999), filed on February 6, 2024).

 

 

 

10.2(a)

 

Lease Deed by and between Brookefields Real Estate and Projects Private Limited and Manhattan Associates India Development Centre Private Ltd dated March 18, 2019 – Unit 1 (Incorporated by reference to Exhibit 10.34 to the Company’s Form 10-Q for the period ended March 31, 2019 (File No. 000-23999), filed on April 25, 2019).

 

 

 

10.2(b)

 

Lease Deed by and between Brookefields Real Estate and Projects Private Limited and Manhattan Associates India Development Centre Private Ltd dated March 18, 2019 – Unit 2 (Incorporated by reference to Exhibit 10.35 to the Company’s Form 10-Q for the period ended March 31, 2019 (File No. 000-23999), filed on April 25, 2019).

 

 

 

10.2(c)

 

Lease Deed by and between Brookefields Real Estate and Projects Private Limited and Manhattan Associates India Development Centre Private Ltd dated May 1, 2019 – 5,318 sq. ft. (Incorporated by reference to Exhibit 10.36 to the Company’s Form 10-Q for the period ended June 30, 2019 (File No. 000-23999), filed on July 25, 2019).

 

 

 

70

 

Exhibit
Number

 

Description

 

 

 

10.2(d)

 

Lease Deed by and between Brookefields Real Estate and Projects Private Limited and Manhattan Associates India Development Centre Private Ltd dated May 1, 2019 – 10,001 sq. ft. (Incorporated by reference to Exhibit 10.37 to the Company’s Form 10-Q for the period ended June 30, 2019 (File No. 000-23999), filed on July 25, 2019).

 

 

 

10.20(a)*

 

2007 Stock Incentive Plan, as amended by the First Amendment thereto (Incorporated by reference to Annex A to the Company’s Definitive Proxy Statement related to its 2009 Annual Meeting of Shareholders (File No. 000-23999) filed on April 20, 2009).

 

 

 

10.20(b)*

 

Second amendment to 2007 Stock Incentive Plan (Incorporated by reference to Annex A to the Company’s Definitive Proxy Statement related to its 2011 Annual Meeting of Shareholders (File No. 000-23999) filed on April 15, 2011).

 

 

 

10.20(c)*

 

Third amendment to 2007 Stock Incentive Plan (Incorporated by reference to Annex A to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2017 (File No. 000-23999) filed on October 30, 2017).

 

 

 

10.21*

 

Form of Manhattan Associates, Inc. Restricted Stock Award Agreement for Non-Employee Directors (Incorporated by reference to Exhibit 10.49 to the Company’s Annual Report for the period ended December 31, 2009 (File No. 000-23999), filed on February 19, 2010).

 

 

 

10.22*

 

Form of Manhattan Associates, Inc. Restricted Stock Unit Award Agreement for Employees (Incorporated by reference to Exhibit 10.22 to the Company’s Annual Report for the period ended December 31, 2022 (File No. 000-23999), filed on February 6, 2023) .

 

 

 

10.23*

 

Form of Manhattan Associates, Inc. Restricted Stock Unit Award Agreement for Non-Employee Directors (Incorporated by reference to Exhibit 10.23 to the Company’s Annual Report for the period ended December 31, 2022 (File No. 000-23999), filed on February 6, 2023).

 

 

 

10.24*

 

Manhattan Associates, Inc. 2020 Equity Incentive Plan (incorporated by reference to Annex A to the Company’s Definitive Proxy Statement related to its 2020 Annual Meeting of Shareholders filed with the Securities and Exchange Commission on March 30, 2020 (Commission File No. 000-23999))

 

 

10.30*

 

2016 Annual Cash Bonus Plan (Incorporated by reference from Annex B to the Company’s Definitive Proxy Statement for its 2016 Annual Meeting of Shareholders filed with the SEC on April 8, 2016 (SEC File No. 000-23999)).

 

 

10.40*

 

Form of Executive Employment Agreement (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the period ended September 30, 2018 (File No. 000-23999), filed on October 25, 2018).

 

 

10.41*

 

Schedule to Form of Executive Employment Agreement of Initial Salaries and Target Bonus Opportunities for Named Executive Officers.

 

 

 

10.42

 

Form of Director and Officer Indemnification Agreement with all Directors and Executive Officers (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K (File No. 000-23999) filed on April 4, 2013).

 

 

10.43*

 

Executive Employment Letter Agreement, dated July 27, 2016, by and between the Registrant and Dennis Story (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 000-23999), filed on August 1, 2016).

 

 

 

10.44

 

First Amendment to Executive Employment Agreement (Eddie Capel) effective as of February 12, 2025 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 6, 2025)

 

 

 

19

 

Insider Trading Policy (Incorporated by reference to Exhibit 10.51 to the Company’s Annual Report on Form 10-K for the period ended December 31, 2023 (File No. 000-23999), filed on February 6, 2024).

 

 

 

21

 

List of Subsidiaries.

 

 

 

23.1

 

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

 

 

 

31.1

 

Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

 

31.2

 

Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

 

32**

 

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

71

 

Exhibit
Number

 

Description

 

 

 

97.1

 

Incentive Compensation Recoupment Policy (Incorporated by reference to Exhibit 97.1 to the Company’s Annual Report for the period ended December 31, 2023 (File No. 000-23999), filed on February 6, 2024).

 

 

 

101.INS

 

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

 

 

 

101.SCH

 

Inline XBRL taxonomy Extension Schema with embedded Linkbases document

 

 

 

104

 

The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, has been formatted in Inline XBRL.

* Management contract or compensatory plan or agreement.
** In accordance with Item 601(b)(32)(ii) of the SEC’s Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.
 

72

 

SI GNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MANHATTAN ASSOCIATES, INC.

 

 

By:

/s/ Eric A. Clark

Eric A. Clark

President, Chief Executive Officer, and Director

Date: February 4, 2026
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Signature

Title

Date

 

 

 

/s/ Eddie Capel

Chairman of the Board

February 4, 2026

Eddie Capel

 

 

 

/s/ Eric A. Clark

President, Chief Executive Officer, and Director
(Principal Executive Officer)

February 4, 2026

Eric A. Clark

 

 

 

/s/ Dennis B. Story

Executive Vice President, Chief Financial Officer, and Treasurer (Principal Financial Officer)

February 4, 2026

Dennis B. Story

 

 

 

 

 

/s/ Linda C. Pinne

 

Senior Vice President, Global Corporate Controller, and Chief
Accounting Officer (Principal Accounting Officer)

 

February 4, 2026

Linda C. Pinne

 

 

 

 

 

 

/s/ Edmond I. Eger III

Director

February 4, 2026

Edmond I. Eger III

 

 

 

/s/ Linda T. Hollembaek

Director

 

February 4, 2026

Linda T. Hollembaek

 

 

 

 

 

/s/ Kimberly A. Kuryea

 

Director

 

February 4, 2026

Kimberly A. Kuryea

 

 

 

 

 

 

 

 

 

/s/ Charles E. Moran

Director

February 4, 2026

Charles E. Moran

 

 

 

/s/ Thomas E. Noonan

Director

February 4, 2026

Thomas E. Noonan

 

 

 

/s/ Danielle Sheer

Director

February 4, 2026

Danielle Sheer

 

73