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Manhattan Associates Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 6, 2012 05:27PM

Manhattan Associates Inc. (MANH) filed Quarterly Report for the period ended 2012-06-30. Manhattan Associates, Inc. has a market cap of $953.2 million; its shares were traded at around $47.53 with a P/E ratio of 20.1 and P/S ratio of 2.9. Manhattan Associates, Inc. had an annual average earning growth of 9% over the past 10 years. GuruFocus rated Manhattan Associates, Inc. the business predictability rank of 3.5-star.



Highlight of Business Operations:

In the three and six months ended June 30, 2012, we generated $93.6 million and $185.0 million in total revenue, respectively, with a revenue mix of: license revenue 16%; services revenue 74%; and hardware and other revenue 10% for the three months ended June 30, 2012, and license revenue 17%; services revenue 75%; and hardware and other revenue 8% for the six months ended June 30, 2012.

License revenue. License revenue, a leading indicator of our business, is primarily derived from software license fees that customers pay for supply chain solutions. License revenue totaled $15.3 million, or 16% of total revenue, with gross margins of 90.3% for the three months ended June 30, 2012, and $30.9 million, or 17% of total revenue, with gross margins of 89.4% for the six months ended June 30, 2012. Our typical license revenue percentage mix of new to existing customers historically has approximated 50/50. However, for the three and six months ended June 30, 2012, the percentage mix was approximately 55/45 and 45/55 of new to existing customers, respectively. We believe our current mix of new customer to existing customer license sales will fluctuate with continuing global macro economic uncertainty and should return to historical norm levels if and as the economic recovery strengthens.

Services revenue. Our services business consists of professional services (consulting and customer training) and customer support services and software enhancements. Services revenue totaled $69.3 million, or 74% of total revenue, with gross margins of 56.3%, and $139.7 million, or 75% of total revenue, with gross margins of 55.6%, for the three and six months ended June 30, 2012, respectively. Professional services accounted for approximately 65% of total services revenue and approximately 50% of total revenue in the three and six months ended June 30, 2012. Our operating margin profile may be lower than those of various other technology companies due to our large services revenue mix as a percentage of total revenue. While we believe our services margins are very strong, they do lower our overall operating margin as services margins are lower than license revenue margins.

Services revenue. Services revenue increased $5.5 million, or 9%, in the second quarter of 2012 compared to the same quarter in the prior year due to a $3.3 million increase in professional services revenue and a $2.2 million increase in customer support and software enhancements. The increase in services revenue was primarily due to customer-specific initiatives in conjunction with customer upgrade activity and large license deals signed. Services revenue for the Americas, EMEA, and APAC segments increased $4.1 million, $0.9 million, and $0.5 million, respectively, in the second quarter of 2012 compared to the second quarter of 2011.

Services revenue. Services revenue increased $19.8 million, or 17%, in the six months ended June 30, 2012 compared to the same period in the prior year due to a $14.8 million increase in professional services revenue and a $5.0 million increase in customer support and software enhancements. The increase in services revenue was primarily due to customer-specific initiatives in conjunction with customer upgrade activity and large license deals signed. Services revenue for the Americas, EMEA and APAC segments increased $15.4 million, $1.3 million and $3.1 million, respectively, in the six months ended June 30, 2012 compared to the same period in the prior year.

Read the The complete Report



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