Manhattan Associates says remaining ‘cautious on global economy’

On its earnings call, the company states: “We’re entering 2025 with strong business momentum and we’re optimistic about our growing market opportunity. We do remain cautious on the global economy, though, which has become more acute. Near-term headwinds for our services business have surfaced as about 10% of our customers with in-flight implementations reduced their plan services work for the upcoming calendar and fiscal year and we’ve adjusted our outlook accordingly. Now services continues to be very important to Manhattan . Firstly, because our team ensures our customer success. And secondly, it keeps us close to our customers. And these tight partnerships help us provide clarity on a customer’s needs, which in turn incorporates allows us to incorporate that in our future ways of innovation, helping us drive future subscription growth. Now, in 2025, we’ll have a record number of customer implementations, and those customers will continue to spend significantly on Manhattan services, albeit a little less than we had previously planned. So to summarize this shift in professional services work to future periods. Some deal pushes that we highlighted throughout 2024 and to a lesser extent, reduced customization and higher part utilization will cause services revenue to trough in the first quarter of 2025. With new service implementation projects steadily increasing throughout 2025, we anticipate solid sequential services revenue growth in the middle of the year before returning to year-over-year growth in Q4. Importantly, though, our business fundamentals are solid and we have a large opportunity in front of us.”