Manhattan Associates, Inc. (NASDAQ:MANH) Q3 2023 Earnings Call Transcript

Terry Tillman: All right, great. Thanks.

Eddie Capel: Thank you, Terry.

Operator: Our next question comes from Brian Peterson with Raymond James. Please proceed with your question.

Brian Peterson: Hi, gentlemen. Thanks for taking the question. So maybe just a follow-up to Terry, I’d love to understand, Eddie, what you’ve seen from a linearity perspective so far this year. I know it’s been kind of a choppy macro. But how has that net new business kind of come in over the course of the year up relative to your expectations?

Eddie Capel: Honestly, I think it’s been a bad spot on, Brian. Again, kind of back to – we generally think about net new being about a third of our business. Again, we benched around a little bit between the high 20s, up to 50 now, pipeline continues to be strong. If you think about and look at net new opportunities in the pipeline, again, it’s about a third or a little higher. So I think – honestly, I think we’re going to see a profile or the same profile going forward. We’ll see a little bit of bouncing around quarter-by-quarter. I think it will normalize on an annualized basis that somewhere around about a third net new logos.

Brian Peterson: Got it. And maybe a follow-up, and I appreciate that you guys have given ‘24 way before some other folks. But I’d love to understand what sort of service hiring assumptions you guys have in the 2024 targets that you guys did? Thank you.

Eddie Capel: Yeah. We haven’t got all the way there yet, Brian, and we’ll certainly provide some of that specific commentary in the Q4 call in January. But I think we probably see a little less aggressive hiring than this year but still certainly quite solid. In the 100s, let’s put it that way.

Brian Peterson: I see.

Operator: Our next question comes from Joe Vruwink with Baird. Please proceed with your question.

Joe Vruwink: Great. Hi, everyone. I maybe wanted to start with the Fulfillment Insights’ product – and just wondering, does that typically be the full suite of active products in order to generate its most value. I’m just wondering if that’s maybe one incremental reason customers would pursue cross-sells across the platform. And then that kind of relates to my ultimate question of whether you are seeing more cross-selling interest given the nature of just all the applications being on the same platform, but also maybe some of the go-to-market changes you’ve made.

Eddie Capel: Yeah. So let’s see I’ll maybe take it a little bit in reverse order. We saw some very nice cross-sell in the quarter, and we have done for the year, frankly. Cross-sell has been running, I think, in the 25% to 27% range. So we still like to see it there. In terms of the Insights’ capability, it’s not a product, it’s frankly just a feature today of Manhattan Active omni. And it’s very focused on commerce performance for our customers. So benchmarking, again, things like click-to-ship, click-to-deliver, BOPUS pickup rate percentage, the store order rejection, all of those kinds of things that are right on the front end. And look, at the end of the day, it’s the ability to be able to aggregate all that data inside of our native cloud solutions that gives us the ability to offer this really very valuable real-time or almost real-time benchmark data to our customers.

We have begun the journey of providing Insights just within Manhattan Active omni for the moment, Joe, and we’ll be looking to expand that across the portfolio as it makes sense.