MANHATTAN ASSOCIATES INC

Previous wording

The following discussion should be read in conjunction with the condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024, including the notes to those statements, included elsewhere in this quarterly report. We also recommend the following discussion be read in conjunction with management’s discussion and analysis and consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2024. Statements in the following discussion that are not statements of historical fact are “forward-looking statements.” Actual results may differ materially from the results predicted in such forward-looking statements, for a variety of factors. See “Forward-Looking Statements” below.

Current wording

The following discussion should be read in conjunction with the condensed consolidated financial statements for the three months ended March 31, 2026 and 2025, including the notes to those statements, included elsewhere in this quarterly report. We also recommend the following discussion be read in conjunction with management’s discussion and analysis and consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2025. Statements in the following discussion that are not statements of historical fact are “forward-looking statements.” Actual results may differ materially from the results predicted in such forward-looking statements, for a variety of factors. See “Forward-Looking Statements” below.

Previous wording

We develop, sell, deploy, service and maintain software solutions designed to manage supply chains, inventory and omnichannel operations for retailers, wholesalers, manufacturers, logistics providers and other organizations. Our customers include many of the world’s premier and most profitable brands.

Current wording

We develop, sell, deploy, service and maintain software solutions designed to manage supply chains, inventory, and omnichannel operations for retailers, wholesalers, manufacturers, logistics providers, government agencies, and other organizations. Our customers include many of the world’s premier and most profitable brands. Our proprietary applications architecture is highly differentiated among enterprise application providers, particularly within the Omni Channel and Supply Chain categories, through which we deliver a versionless yet highly extensible experience for our customers. With AI-driven insights and zero downtime updates, we deliver innovation seamlessly into customer environments without the need for planned maintenance windows.

Previous wording

Our business model is singularly focused on the development and implementation of complex commerce enablement software solutions that are designed to optimize supply chains, and retail store operations including point-of-sale effectiveness and efficiency for our customers.

Current wording

Our business model is singularly focused on the development and implementation of complex commerce enablement software solutions that are designed to optimize supply chains, and retail store operations including point-of-sale (POS) effectiveness and efficiency for our customers.

Previous wording

In the three and nine months ended September 30, 2025, we generated $275.8 million and $811.0 million in total revenue, respectively. The revenue mix for the three months ended September 30, 2025 was: cloud subscriptions 38%; software license 1%; maintenance 11%; services 48%; and hardware 2%. The revenue mix for the nine months ended September 30, 2025 was: cloud subscriptions 37%; software license 2%; maintenance 12%; services 47%; and hardware 2%.

Current wording

In the three months ended March 31, 2026, we generated $282.2 million in total revenue. The revenue mix for the three months ended March 31, 2026 was: cloud subscriptions 41%; software license 1%; maintenance 11%; services 45%; and hardware 2%.

Previous wording

We have three geographic reportable segments: North, Latin and South America (the “Americas”), Europe, the Middle East and Africa (EMEA), and Asia-Pacific (APAC). Geographic revenue is based on the location of the sale. Our international revenue was approximately $96.6 million and $279.6 million for the three and nine months ended September 30, 2025, which represents approximately 35% and 34% of our total revenue for the three and nine months ended September 30, 2025, respectively. International revenue includes all revenue derived from sales to customers outside the United States. At September 30, 2025, we employed approximately 4,400 employees worldwide. We have offices in Australia, Chile, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Spain, the United Kingdom, and the United States, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia.

Current wording

We have three geographic reportable segments: North, Latin, and South America (the “Americas”), Europe, the Middle East, and Africa (EMEA), and Asia-Pacific (APAC). Geographic revenue is based on the location of the sale. Our international revenue was approximately $96.8 million for the three months ended March 31, 2026, which represents approximately 34% of our total revenue for the three months ended March 31, 2026. International revenue includes all revenue derived from sales to customers outside the United States. At March 31, 2026, we employed approximately 4,390 employees worldwide. We have offices in Australia, Chile, China, France, Germany, India, Italy, Japan, the Netherlands, Singapore, Spain, the United Kingdom, and the United States, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia.

Previous wording

We remain cautious regarding the current turbulent global macro environment, which could impact our performance. Our results for the first nine months of 2025 exceeded our expectations due to solid demand for our cloud solutions. Our solutions are mission critical, supporting complex global supply chains. We believe that favorable secular tailwinds, such as the digital transformation of businesses in manufacturing, wholesale and retail, coupled with our commitment to investing in organic innovation to deliver leading cloud supply chain, inventory and omnichannel commerce solutions is in alignment with current market demand. We believe this contributes to our strong financial results, higher demand and strong win rates for our solutions for the period. While we are encouraged by our results, we remain cautious regarding the pace of global economic growth. We believe global geopolitical and economic volatility likely will continue to shape customers’ and prospects’ enterprise software buying decisions.

Current wording

While we remain cautious about the global economy, including with respect to macroeconomic uncertainty and global instability resulting from the military conflict involving the United States, Israel, and Iran and the ongoing war between Russia and Ukraine, our results for the first three months of 2026 exceeded our expectations due to solid demand for our cloud solutions. Our solutions are mission critical, supporting complex global supply chains. We believe that favorable secular tailwinds, such as the digital transformation of businesses in manufacturing, wholesale, and retail, coupled with our commitment to investing in organic innovation to deliver leading cloud supply chain, inventory, and omnichannel commerce solutions is in synergistic alignment with current market demand. We believe this alignment is contributing to our strong financial results, higher demand, and strong win rates for our solutions for the period. We remain committed to investing in our business to drive customer success and expand our total addressable market, which we believe will position us well to achieve long-term sustainable growth and earnings.

Previous wording

Focus on employees, customer success and drive sustainable long-term growth;

Current wording

Focus on customer success and drive sustainable long-term growth;

Previous wording

Under our Manhattan Active® Solutions cloud subscription offering, customers pay a periodic fee for the right to use our software within a cloud environment that we provide and manage over a specified period of time. Adoption of our Manhattan Active® cloud solutions continues to increase nicely, with cloud revenue up 21% over the same quarter in the prior year. Cloud revenue represents about 96% of our total software revenue. Customers on our legacy perpetual license program can convert their maintenance contracts to cloud subscription contracts.

Current wording

Under our Manhattan Active® Solutions cloud subscription offering, customers pay a periodic fee for the right to use our software within a cloud environment that we provide and manage over a specified period of time. Adoption of our Manhattan Active® cloud solutions continues to increase nicely, with cloud revenue up 24% over the same quarter in the prior year. Cloud revenue represents about 98% of our total software revenue.

Previous wording

Global macro-economic trends, technology spending, and supply chain management market growth are important barometers for our business. In the three and nine months ended September 30, 2025, approximately 65% and 66% of our total revenue was generated in the United States, respectively; 20% in EMEA in both periods; and the remaining balance in APAC, Canada, and Latin America. In addition, Gartner Inc. (“Gartner”), an information technology research and advisory company, estimates that approximately 80% of every supply chain software solutions dollar invested is spent in North America and Western Europe; consequently, the health of the U.S. and the Western European economies have a meaningful impact on our financial results.

Current wording

Global macro-economic trends, technology spending, and supply chain management market growth are important barometers for our business. In the three months ended March 31, 2026, approximately 66% of our total revenue was generated in the United States, 19% in EMEA, and the remaining balance in APAC, Canada, and Latin America. In addition, Gartner Inc. (“Gartner”), an information technology research and advisory company, estimates that approximately 80% of every supply chain software solutions dollar invested is spent in North America and Europe; consequently, the health of the U.S. and the European economies have a meaningful impact on our financial results.

Previous wording

Our cloud revenue growth provides insight into our ability to maintain and grow our cloud customer base. Total cloud revenue increased to $299.6 million in the nine months ended September 30, 2025 from $246.9 million for the same period in the prior year, representing a 21% year-over-year increase. Cloud revenue growth is being driven by strong demand for our cloud offerings.

Current wording

Our cloud revenue growth provides insight into our ability to maintain and grow our cloud customer base. Total cloud revenue increased to $117.1 million in the three months ended March 31, 2026 from $94.3 million for the same period in the prior year, representing a 24% year-over-year increase. Cloud revenue growth is being driven by strong demand for our cloud offerings.

Previous wording

Transaction price allocated to RPO represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that we expect to invoice and recognize as revenue in future periods. Over 98% of our RPO represent cloud native subscriptions with a non-cancelable term greater than one year. Maintenance contracts typically are for one year and not included in RPO. RPO provides insight into our contracted backlog of future business. As of September 30, 2025, our RPO was approximately $2.1 billion, an increase of 23% over September 30, 2024 on strong demand.

Current wording

Transaction price allocated to RPO represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that we expect to invoice and recognize as revenue in future periods. Over 98% of our RPO represent cloud native subscriptions with a non-cancelable term greater than one year. Maintenance contracts typically are for one year and not included in RPO. RPO provides insight into our contracted backlog of future business. As of March 31, 2026, our RPO was approximately $2.3 billion, an increase of 24% over March 31, 2025 on strong demand.

Previous wording

Cloud Subscriptions and Software License Revenue. In the three months ended September 30, 2025, cloud subscriptions revenue totaled $104.9 million or 38% of total revenues. The Americas, EMEA, and APAC segments recognized $79.3 million, $21.3 million, and $4.3 million in cloud subscriptions revenue, respectively, in the three months ended September 30, 2025. In the nine months ended September 30, 2025, cloud subscriptions revenue totaled $299.6 million or 37% of total revenues. The Americas, EMEA, and APAC segments recognized $230.7 million, $58.2 million, and $10.7 million in cloud subscriptions revenue, respectively, in the nine months ended September 30, 2025. Cloud subscriptions revenue is recognized over the term of the agreement, typically five years or more. Cloud subscription revenue growth is influenced by the strength of general economic and business conditions and the competitive position of our software products. These revenues generally have long sales cycles.

Current wording

Cloud Subscriptions and Software License Revenue. In the three months ended March 31, 2026, cloud subscriptions revenue totaled $117.1 million or 41% of total revenues. The Americas, EMEA, and APAC segments recognized $89.5 million, $23.0 million, and $4.6 million in cloud subscriptions revenue, respectively, in the three months ended March 31, 2026. Cloud subscriptions revenue is recognized over the term of the agreement, typically five years or more. Cloud subscription revenue growth is influenced by the strength of general economic and business conditions and the competitive position of our software products. These revenues generally have long sales cycles. During the three months ended March 31, 2026, approximately 58% of the total value of new non-cancelable cloud subscriptions (excluding renewals) signed was with new customers, and 42% was with existing customers. We define new customers as entities from which we either have never earned revenue or have not recognized revenue in the last five years.

Previous wording

In the three months ended September 30, 2025, license revenue totaled $1.4 million, or 1% of total revenue. The Americas, EMEA, and APAC segments totaled $0.9 million, $0.4 million, and $0.1 million in license revenue, respectively, in the three months ended September 30, 2025. In the nine months ended September 30, 2025, license revenue totaled $12.2 million, or 2% of total revenue. The Americas, EMEA, and APAC segments totaled $3.2 million, $8.3 million, and $0.7 million in license revenue, respectively, in the nine months ended September 30, 2025.

Current wording

In the three months ended March 31, 2026, license revenue totaled $2.2 million, or 1% of total revenue. The Americas, EMEA, and APAC segments totaled $1.8 million, $0.2 million, and $0.2 million in license revenue, respectively, in the three months ended March 31, 2026.

Previous wording

Our Unified Omnichannel Commerce and Digital Supply Chain solutions are focused on core omnichannel operation (e-commerce, retail store operations and POS), supply chain commerce operations (Warehouse Management, Transportation Management and Labor Management), and Inventory Optimization, which are intensely competitive markets characterized by rapid technological change. We are a market leader in the supply chain management and omnichannel software solutions market as defined by industry analysts such as ARC Advisory Group and Gartner. Our goal is to extend our position as a leading global supply chain solutions provider by growing our cloud subscriptions and software license revenues faster than our competitors through investment in innovation.

Current wording

Our Unified Omnichannel Commerce and Digital Supply Chain solutions are focused on core omnichannel operation (e-commerce, retail store operations and POS), supply chain commerce operations (Warehouse Management, Transportation Management and Labor Management), and demand forecasting and replenishment, which are intensely competitive markets characterized by rapid technological change. We are a market leader in the supply chain management and omnichannel software solutions market as defined by industry analysts such as ARC Advisory Group and Gartner. Our goal is to extend our position as a leading global supply chain solutions provider by growing our cloud subscriptions revenues faster than our competitors through investment in innovation.

Previous wording

Maintenance Revenue. Our maintenance revenue for the three months ended September 30, 2025 totaled $30.5 million, or 11% of total revenue. The Americas, EMEA and APAC segments recognized $23.7 million, $4.6 million, and $2.2 million, respectively, in maintenance revenue in the three months ended September 30, 2025. In the nine months ended September 30, 2025, maintenance revenue totaled $97.7 million, or 12% of total revenue. The Americas, EMEA, and APAC segments totaled $77.4 million, $13.8 million, and $6.5 million in maintenance revenue, respectively, in the nine months ended September 30, 2025. For maintenance, we offer a comprehensive 24 hours per day, 365 days per year program that provides our customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives.

Current wording

Maintenance Revenue. Our maintenance revenue for the three months ended March 31, 2026 totaled $30.6 million, or 11% of total revenue. The Americas, EMEA and APAC segments recognized $23.8 million, $4.6 million, and $2.2 million, respectively, in maintenance revenue in the three months ended March 31, 2026. For maintenance, we offer a comprehensive 24 hours per day, 365 days per year program that provides our customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives.

Previous wording

Maintenance relates to our legacy perpetual license sales. We expect maintenance revenues to decline as we continue to develop our cloud offerings, and be offset by additional cloud revenue, including from customers converting their maintenance contracts to cloud subscriptions. The growth of maintenance revenues is influenced by: (1) new software license revenue growth; (2) annual renewal of support contracts; and (3) fluctuations in currency rates. Substantially all of our customers renew their annual support contracts or convert their maintenance contracts to cloud subscriptions. Maintenance revenue is generally paid in advance and recognized over the term of the agreement, typically twelve months. Maintenance renewal revenue is recognized over the renewal period once we have a contract upon payment from the customer.

Current wording

Maintenance relates to our legacy perpetual license sales. We expect maintenance revenues to decline as we continue to develop our cloud offerings, and be offset by additional cloud revenue, including from customers converting their maintenance contracts to cloud subscriptions. The growth of maintenance revenues is influenced by: (1) new software license contracts; (2) annual renewal of support contracts; and (3) fluctuations in currency rates. Substantially all of our customers renew their annual support contracts or convert their maintenance contracts to cloud subscriptions. Maintenance revenue is generally paid in advance and recognized over the term of the agreement, typically twelve months. Maintenance renewal revenue is recognized over the renewal period once we have a contract upon payment from the customer.

Previous wording

Services Revenue. In the three months ended September 30, 2025, our services revenue totaled $133.0 million, or 48% of total revenue. The Americas, EMEA, and APAC segments recognized $96.7 million, $27.8 million, and $8.5 million, respectively, in services revenue in the three months ended September 30, 2025. In the nine months ended September 30, 2025, services revenue totaled $383.0 million, or 47% of total revenue. The Americas, EMEA, and APAC segments totaled $278.4 million, $81.3 million, and $23.3 million in services revenue, respectively, in the nine months ended September 30, 2025.

Current wording

Services Revenue. In the three months ended March 31, 2026, our services revenue totaled $125.7 million, or 45% of total revenue. The Americas, EMEA, and APAC segments recognized $93.3 million, $25.4 million, and $7.0 million, respectively, in services revenue in the three months ended March 31, 2026.

Previous wording

Although our professional services are optional, the majority of our customers use at least some portion of these services for their planning, implementation, or related needs. Professional services are typically rendered under time and materials-based contracts with services typically billed on an hourly basis. Professional services are sometimes rendered under fixed-fee based contracts with payments due on specific dates or milestones.

Current wording

Although our professional services are optional, the majority of our customers use at least some portion of these services for their planning, implementation, ongoing support, training, system upgrades or related needs. Professional services are typically rendered under time and materials-based contracts with services typically billed on an hourly basis. Professional services are sometimes rendered under fixed-fee based contracts with payments due on specific dates or milestones.

Previous wording

Hardware Revenue. Our hardware revenue, which we recognize net of related costs, totaled $6.1 million in the three months ended September 30, 2025 representing 2% of total revenue. For the nine months ended September 30, 2025, hardware revenue totaled $18.5 million, or 2% of total revenue. As a convenience for our cloud and software customers, we resell a variety of hardware products developed and manufactured by third parties. These products include computer hardware, radio frequency terminal networks, RFID chip readers, bar code printers and scanners, and other peripherals. We resell all third-party hardware products and related maintenance pursuant to agreements with manufacturers or through distributor-authorized reseller agreements, pursuant to which we are entitled to purchase hardware products and services at discount prices. We purchase hardware from our vendors only after receiving an order from a customer. As a result, we do not maintain hardware inventory.

Current wording

Hardware Revenue. Our hardware revenue, which we recognize net of related costs, totaled $6.5 million in the three months ended March 31, 2026 representing 2% of total revenue. As a convenience for our cloud and perpetual license customers, we resell a variety of hardware products developed and manufactured by third parties. These products include computer hardware, radio frequency terminal networks, RFID chip readers, bar code printers and scanners, and other peripherals. We resell all third-party hardware products and related maintenance pursuant to agreements with manufacturers or through distributor-authorized reseller agreements pursuant to which we are entitled to purchase hardware products and services at discount prices. We purchase hardware from our vendors only after receiving an order from a customer. As a result, we do not maintain hardware inventory.

Previous wording

We continue to invest significantly in research and development (R&D) to provide leading Unified Omnichannel Commerce and Digital Supply Chain solutions to enable global retailers, manufacturers, wholesalers, distributors, and logistics providers to successfully manage accelerating and fluctuating demands as well as the increasing complexity and volatility of their local and global supply chains, retail store operations and points of sale. Our R&D expenses were $36.4 million and $106.5 million for the three and nine months ended September 30, 2025, respectively.

Current wording

We continue to invest significantly in research and development (R&D) to provide leading Unified Omnichannel Commerce and Digital Supply Chain solutions to enable global retailers, manufacturers, wholesalers, distributors, and logistics providers to successfully manage accelerating and fluctuating demands as well as the increasing complexity and volatility of their local and global supply chains, retail store operations, and POS. Our R&D expenses were $37.3 million for the three months ended March 31, 2026.

Previous wording

We expect to continue to focus our R&D resources on the development and enhancement of our core supply chain, inventory optimization, omnichannel and point-of-sale software solutions. We offer what we believe to be the broadest solutions portfolio in the supply chain solutions marketplace, addressing all aspects of inventory optimization, transportation management, distribution management, planning, and omnichannel operations including order management, store inventory & fulfillment, call center and point-of-sale.

Current wording

We expect to continue to focus our R&D resources on the development and enhancement of our core supply chain planning, supply chain execution, order management and store software solutions. We offer what we believe to be the broadest solutions portfolio in the supply chain solutions marketplace, addressing all aspects of demand forecasting and replenishment, transportation management, distribution management, and omnichannel operations including order management, store inventory & fulfillment, call center, and POS.

Previous wording

For the three and nine months ended September 30, 2025, we generated cash flow from operating activities of $93.1 million and $242.4 million, respectively. Our cash and cash equivalents at September 30, 2025 totaled $263.6 million, with no debt. We currently have no credit facilities. Our primary uses of cash have been for funding investments in R&D in our Unified Omnichannel Commerce and Digital Supply Chain solutions to drive revenue and earnings growth. In addition, during the nine months ended September 30, 2025, we repurchased approximately $199.5 million of Manhattan Associates’ outstanding common stock under the share repurchase program approved by our Board of Directors. In October 2025, our Board of Directors approved replenishing the Company’s remaining share repurchase authority to an aggregate of $100.0 million of our common stock.

Current wording

For the three months ended March 31, 2026, we generated cash flow from operating activities of $84.0 million. Our cash and cash equivalents at March 31, 2026 totaled $226.1 million, with no debt. We currently have no credit facilities. Our primary uses of cash have been for funding investments in R&D in our Unified Omnichannel Commerce and Digital Supply Chain solutions to drive revenue and earnings growth. In addition, during the three months ended March 31, 2026, we repurchased approximately $150.0 million of Manhattan Associates’ outstanding common stock under the share repurchase program approved by our Board of Directors. In March 2026, our Board of Directors approved an increase to the Company’s share repurchase authority from $100 million to $500 million. As of the end of the quarter, approximately $350.0 million remained under the existing March 2026 repurchase authority.

Previous wording

For the remainder of 2025, we expect our first priority for use of cash will continue to be investments in our Unified Omnichannel Commerce and Digital Supply Chain solutions. We also expect to prioritize capital allocation in our global teams to fund growth and share repurchases. We do not anticipate any borrowing requirements in 2025 for general corporate purposes.

Current wording

For the remainder of 2026, we expect our first priority for use of cash will continue to be investments in our Unified Omnichannel Commerce, Digital Supply Chain, and Manhattan Active® Agents solutions. We also expect to prioritize capital allocation in our global teams to fund growth and share repurchases. We do not anticipate any borrowing requirements in 2026 for general corporate purposes.

Previous wording

In the following table, we present a summary of our consolidated results for the three and nine months ended September 30, 2025 and 2024.

Current wording

In the following table, we present a summary of our consolidated results for the three months ended March 31, 2026 and 2025.

Previous wording

We have three geographic reportable segments: the Americas, EMEA, and APAC. Geographic revenue information is based on the location of sale. The revenues represented below are from external customers only. The geography-based expenses include costs of personnel, direct sales, marketing expenses, and general and administrative costs to support the business. There are certain corporate expenses included in the Americas segment that we do not charge to the other segments, including R&D, stock compensation, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas costs are all R&D costs, including the costs associated with our operations in India. During the three and nine months ended September 30, 2025 and 2024, we derived the majority of our revenues from sales to customers within our Americas segment. In the following table, we present a summary of revenue and operating income by segment:

Current wording

We have three geographic reportable segments: the Americas, EMEA, and APAC. Geographic revenue information is based on the location of sale. The revenues represented below are from external customers only. The geography-based expenses include costs of personnel, direct sales, marketing expenses, and general and administrative costs to support the business. There are certain corporate expenses included in the Americas segment that we do not charge to the other segments, including R&D, stock compensation, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas costs are all R&D costs, including the costs associated with our operations in India. During the three months ended March 31, 2026 and 2025, we derived the majority of our revenues from sales to customers within our Americas segment. In the following table, we present a summary of revenue and operating income by segment:

Previous wording

Condensed Consolidated Financial Summary – First Nine Months of 2025

Current wording

Condensed Consolidated Financial Summary - First Quarter 2026

Previous wording

Diluted earnings per share: $0.96 for the third quarter of 2025 compared to $1.03 for the third quarter of 2024;

Current wording

Diluted earnings per share: $0.82 for the first quarter of 2026 compared to $0.85 for the first quarter of 2025;

Previous wording

Days sales outstanding: 73 days at September 30, 2025, compared to 70 days at June 30, 2025;

Current wording

Days sales outstanding: 72 days at March 31, 2026, compared to 73 days at December 31, 2025;

Previous wording

Share repurchases: In the three months ended September 30, 2025, we reduced our shares of common stock outstanding through the repurchase of approximately 0.2 million shares of our common stock, under the share repurchase program authorized by our Board of Directors for a total investment of $49.9 million. In October 2025, our Board of Directors approved replenishing the Company’s remaining share repurchase authority to an aggregate of $100.0 million of our common stock.

Current wording

Share repurchases: In the three months ended March 31, 2026, we reduced our shares of common stock outstanding through the repurchase of approximately 1.0 million shares of our common stock, under the share repurchase program authorized by our Board of Directors for a total investment of $150.0 million. In March 2026, our Board of Directors approved an increase to the Company’s share repurchase authority from $100 million to $500 million. As of the end of the quarter, approximately $350.0 million remained under the existing March 2026 repurchase authority.

Previous wording

Below we discuss our consolidated results of operations for the third quarters of 2025 and 2024.

Current wording

Below we discuss our consolidated results of operations for the first quarters of 2026 and 2025.

Previous wording

Cloud Subscriptions Revenue. In the third quarter of 2025, cloud subscriptions revenue increased $18.4 million compared to the same quarter in the prior year. Our customers have demonstrated a clear preference for cloud-based solutions, including existing customers that are migrating from on-premise to cloud-based offerings. Cloud subscriptions revenue for the Americas, EMEA and APAC segments increased $11.7 million, $5.1 million and $1.6 million in the third quarter of 2025, respectively.

Current wording

Cloud Subscriptions Revenue. In the first quarter of 2026, cloud subscriptions revenue increased $22.8 million compared to the same quarter in the prior year. Our customers have demonstrated a clear preference for cloud-based solutions, including existing customers that are migrating from on-premise to cloud-based offerings. Cloud subscriptions revenue for the Americas, EMEA and APAC segments increased $15.4 million, $5.8 million and $1.6 million in the first quarter of 2026, respectively.

Previous wording

Software License Revenue. Software license revenue decreased $2.4 million in the third quarter of 2025 compared to the same quarter in the prior year. The perpetual license sales percentage mix across our product suite in the third quarter ended September 30, 2025 was over 85% warehouse management solutions.

Current wording

Software License Revenue. Software license revenue decreased $7.1 million in the first quarter of 2026 compared to the same quarter in the prior year predominately driven by one large contract with an existing customer in the prior year period. The perpetual license sales percentage mix across our product suite in the first quarter ended March 31, 2026 was over 95% warehouse management solutions.

Previous wording

Maintenance Revenue. Maintenance revenue decreased $4.0 million in the third quarter of 2025 compared to the same quarter in the prior year. Maintenance revenue decreased by $3.9 million for the Americas segment and $0.2 million for the EMEA segment, partially offset by a $0.1 million increase for the APAC segment. Maintenance relates to our perpetual software licenses. The decrease in maintenance revenue for the Americas segment is primarily driven by customer demand for cloud-based solutions over perpetual software licenses.

Current wording

Maintenance Revenue. Maintenance revenue decreased $1.6 million in the first quarter of 2026 compared to the same quarter in the prior year. Maintenance revenue decreased by $2.1 million for the Americas segment, partially offset by a $0.4 million increase for the EMEA segment and a $0.1 million increase for the APAC segment. Maintenance relates to our perpetual software licenses. The decrease in maintenance revenue for the Americas segment is primarily driven by customer demand for cloud-based solutions over perpetual software licenses.

Previous wording

Services Revenue. Services revenue decreased $4.0 million in the third quarter of 2025 compared to the same quarter in the prior year. Services revenue for the Americas segment decreased $5.8 million, partially offset by $1.0 million and $0.8 million increases for the APAC and EMEA segments, respectively, compared to the same quarter in the prior year. The decrease in services revenue for the Americas segment is primarily driven by customer budgetary constraints that shifted services work to future periods which negatively impacted our professional services revenue related to cloud subscriptions. The percentage of professional services revenue that relates to cloud subscriptions in the third quarter of 2025 and 2024 was approximately 77% and 74%, respectively. The remainder of our professional services revenue relates to implementations, ongoing support, and upgrades of licensed software.

Current wording

Services Revenue. Services revenue increased $4.6 million in the first quarter of 2026 compared to the same quarter in the prior year. Services revenue for the Americas segment increased $5.8 million, partially offset by $0.9 million and $0.3 million decreases for the EMEA and APAC segments, respectively, compared to the same quarter in the prior year. The increase in services revenue for the Americas segment is primarily driven by demand for cloud based solutions. The percentage of professional services revenue that relates to cloud subscriptions in the first quarter of 2026 and 2025 was approximately 80% and 74%, respectively. The remainder of our professional services revenue relates to implementations, ongoing support, and upgrades of licensed software.

Previous wording

Hardware Revenue. Hardware sales decreased $1.2 million in the third quarter of 2025 compared to the same quarter in the prior year. The majority of our hardware revenue is derived from our Americas segment. Sales of hardware is largely dependent upon customer-specific desires, which fluctuate.

Current wording

Hardware Revenue. Hardware revenue, net decreased $0.6 million in the first quarter of 2026 compared to the same quarter in the prior year. The majority of our hardware revenue is derived from our Americas segment. Sales of hardware are largely dependent upon customer-specific desires, which fluctuate.

Previous wording

Cost of Cloud Subscriptions, Maintenance and Services. Costs of cloud subscriptions, maintenance and services consist primarily of salaries and other personnel-related expenses of employees dedicated to cloud subscriptions; maintenance services; and professional and technical services as well as hosting fees. The $1.3 million increase in the quarter ended September 30, 2025 compared to the same quarter in the prior year was due to a $3.0 million increase in computer infrastructure cost and $0.5 million increase in travel costs, partially offset by a $1.5 million decrease in performance-based compensation expense and a $0.8 million decrease in compensation and other personnel-related expenses. The decrease in compensation cost is due to our reduction in headcount to align our services capacity with customer demand.

Current wording

Cost of Cloud Subscriptions, Maintenance and Services. Costs of cloud subscriptions, maintenance and services consist primarily of salaries and other personnel-related expenses of employees dedicated to cloud subscriptions; maintenance services; and professional and technical services as well as hosting fees. The $11.7 million increase in the quarter ended March 31, 2026 compared to the same quarter in the prior year was due to a $5.9 million increase in compensation and other personnel-related expenses, a $1.6 million increase in performance-based compensation expense, a $3.6 million increase in computer infrastructure cost, and a $0.4 million increase in travel costs.

Previous wording

Cost of Software License. Cost of software license consists of the costs associated with software reproduction; media, packaging and delivery; documentation, and other related costs; and royalties on third-party software sold with or as part of our products. Cost of software license remained relatively flat in the third quarter of 2025 compared with the same quarter in the prior year.

Current wording

Cost of Software License. Cost of software license consists of the costs associated with software reproduction; media, packaging and delivery; documentation, and other related costs; and royalties on third-party software sold with or as part of our products. Cost of software license increased $0.4 million in the first quarter of 2026 compared with the same quarter in the prior year.

Previous wording

Research and Development. Our principal R&D activities have focused on the expansion and integration of new products and releases, including cloud-based solutions, while expanding the product footprint of our software solution suites in Supply Chain, Inventory Optimization, Omnichannel and point-of-sale. R&D expenses primarily consist of salaries and other personnel-related costs for personnel involved in our R&D activities. R&D expenses for the quarter ended September 30, 2025 increased by $2.0 million compared to the same quarter of 2024 principally due to a $1.6 million increase in compensation and other personnel-related expenses.

Current wording

Research and Development. Our principal R&D activities have focused on the expansion and integration of new products and releases, including cloud-based solutions, while expanding the product footprint of our software solution suites in Supply Chain, Demand Forecasting and Replenishment, Omnichannel, and POS. R&D expenses primarily consist of salaries and other personnel-related costs for personnel involved in our R&D activities. R&D expenses for the quarter ended March 31, 2026 increased by $2.0 million compared to the same quarter of 2025 principally due to a $1.3 million increase in compensation and other personnel-related expenses and a $0.4 million increase in performance-based compensation expense.

Previous wording

Sales and Marketing. Sales and marketing expenses include salaries, commissions, travel and other personnel-related costs and the costs of our marketing and alliance programs and related activities. Sales and marketing expenses increased $1.5 million in the quarter ended September 30, 2025 compared to the same quarter in the prior year primarily due to $0.7 million increase in compensation and other personnel-related expenses and a $0.5 million increase in performance-based compensation expense.

Current wording

Sales and Marketing. Sales and marketing expenses include salaries, commissions, travel and other personnel-related costs and the costs of our marketing and alliance programs and related activities. Sales and marketing expenses increased $6.7 million in the quarter ended March 31, 2026 compared to the same quarter in the prior year primarily due to $2.8 million increase in compensation and other personnel-related expenses, a $2.3 million increase in performance-based compensation expense, and a $1.2 million increase in marketing and campaign program expenses.

Previous wording

General and Administrative (G&A). G&A 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. G&A expenses increased $3.8 million in the current year quarter compared to the same quarter in the prior year primarily due to a $2.6 million increase in compensation and other personnel-related expenses, a $0.6 million increase in other taxes, and a $0.3 million increase in professional fees.

Current wording

General and Administrative (G&A). G&A 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. G&A expenses decreased $0.5 million in the current year quarter compared to the same quarter in the prior year primarily due to a $2.8 million decrease in stock compensation expense, a $3.0 million decrease in signing bonus expense, and a $0.8 million decrease in recruiting fees, all of which were related to the hiring of our chief executive officer in the prior year period. These decreases are partially offset by a $3.8 million increase in benefits expense for a prior period insurance recovery on an unusual health insurance claim, a $1.6 million increase in professional fees, and a $0.4 million increase in internal-use software costs.