Manhattan Associates, Inc. (NASDAQ:MANH) Q4 2022 Earnings Call Transcript

Similar things are happening in the OMS space as well. As you see companies that traditionally were not selling direct-to-consumer now either selling direct to consumer or at least being direct-to-consumer ready as they ship into retail channels. So those would be a couple of spots where we’ve seen some nice growth, which really speaks to not just total addressable market growth, but certainly, verticals that we’ve not typically been as strong in, which is very nice.

Matthew Pfau: Great. And then just to follow up on the margin €“ operating margin guidance and commentary. Dennis, so it seems like ex the impact of the cloud transition, which is accelerating in 2023, you would actually show year-over-year margin improvement in 2023. Is that correct? And then, what else should we think about, from an expense perspective in terms of wage inflation and then other investment areas that you’re making, particularly with the hundreds of people that you plan to add next year or this year? Thanks.

Dennis Story: Yes, definitely. Look, we guided across all key metrics above this year’s €“ the 2022 performance. From that perspective, we would expect operating margin to increase through the year, et cetera. And €“ having a little brain cramp here.

Eddie Capel: In terms of where the people generally €“ where the investments in people will be, for the most part, Matt, those will be customer-facing folks, so largely in our professional services organization and in our customer organization. Now we do plan to and are actively investing more in research and development this year. So you’ll see some heads move into there. Sales and marketing is also another area that will continue to add heads as we’ve talked about before. It’s important for us to keep driving awareness the solutions for which we are not quite as well known. That’s important to us because we think we’ve got a great opportunity there. And as always, we’ll be selective about adding team members to our sales organization.

We’ve got a very effective and a very efficient sales organization. But as our customer base grows, coverage and overall coverage is important to us. So again, back to summarize on those people, principally customer-facing, but sales and marketing and R&D as well.

Matthew Pfau: Got it. Thanks for taking my questions. Appreciate it.

Eddie Capel: Okay. Thank you, Matt. See you.

Operator: Our next question is from Mark Schappel with Loop Capital Markets. Please proceed with your question.

Mark Schappel: Hi, thank you for taking my questions and nice job on the quarter.

Eddie Capel: Thank you, Mark.

Mark Schappel: You are welcome. Eddie, with respect to the macro environment, there was a little €“ very little way in commentary in your prepared remarks on that front. Obviously, based on the strong results and guide, it appears you’re encountering very few headwinds. But I was wondering if you could just provide some additional commentary on what you’re seeing from a macro perspective?

Eddie Capel: Look, there’s definitely chop out there. There’s no question about that, Mark. Each of us wake up every morning can see, feel and see the chop. But I mean, when we look at the demand for our solutions, when we look at our pipeline, we believe driven by the investments in innovation that we’re making, the critical nature of our solutions to both the resilience and the growth of our target markets, we obviously feel pretty good about where we are. We’ve got pretty good visibility. And so that is how it feels to us, that forward motion feels pretty good. But it is not without its headwinds, for sure. Not without its headwinds.

Mark Schappel: Okay. Great. And then just shifting gears to your point-of-sale solution. I think it was last year’s user conference, you expressed that achieving like 10 to 12 go-lives would be a pretty significant milestone €“ you felt it would be a pretty significant milestone for the company just because it would make it very easy for the next sale. Just wondering if you can give us a little bit of an update on where you stand on that front?