Manhattan Associates (MANH) 10-Q 27 Apr 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 23, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Trading Symbol	MANH
Entity Registrant Name	MANHATTAN ASSOCIATES INC
Entity Central Index Key	1,056,696
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		66,820,321

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 106,668	$ 125,522
Short-term investments	12,341
Accounts receivable, net of allowance of $2,265 and $2,692, respectively	85,285	92,231
Prepaid expenses and other current assets	14,557	10,320
Total current assets	218,851	228,073
Property and equipment, net	15,758	15,493
Goodwill, net	62,252	62,248
Deferred income taxes	634	1,877
Other assets	9,687	7,304
Total assets	307,182	314,995
Current liabilities:
Accounts payable	14,869	14,028
Accrued compensation and benefits	20,894	15,826
Accrued and other liabilities	12,010	12,105
Deferred revenue	85,505	75,068
Income taxes payable	9,527	7,228
Total current liabilities	142,805	124,255
Other non-current liabilities	16,429	15,784
Shareholders' equity:
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2018 and 2017
Common stock, $0.01 par value; 200,000,000 shares authorized; 66,819,431 and 67,776,138 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	668	678
Retained earnings	159,288	186,117
Accumulated other comprehensive loss	(12,008)	(11,839)
Total shareholders' equity	147,948	174,956
Total liabilities and shareholders' equity	$ 307,182	$ 314,995

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Accounts receivable, allowance	$ 2,265	$ 2,692
Preferred stock, par value
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	66,819,431	67,776,138
Common stock, shares outstanding	66,819,431	67,776,138

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenue:
Software license	$ 7,555	$ 21,277
Cloud subscriptions	4,469	1,496
Maintenance	36,397	33,376
Services	78,757	79,781
Hardware	3,391	7,559
Total revenue	130,569	143,489
Costs and expenses:
Cost of license	1,308	1,352
Cost of cloud subscriptions, maintenance and services	56,486	54,899
Cost of hardware		5,370
Research and development	17,059	14,225
Sales and marketing	12,884	11,789
General and administrative	12,800	11,872
Depreciation and amortization	2,202	2,262
Total costs and expenses	102,739	101,769
Operating income	27,830	41,720
Other income (loss), net	721	(371)
Income before income taxes	28,551	41,349
Income tax provision	5,899	13,125
Net income	$ 22,652	$ 28,224
Basic earnings per share	$ 0.34	$ 0.40
Diluted earnings per share	$ 0.33	$ 0.40
Weighted average number of shares:
Basic	67,553	69,973
Diluted	67,736	70,247

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 22,652	$ 28,224
Foreign currency translation adjustment	(169)	1,893
Comprehensive income	$ 22,483	$ 30,117

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities:
Net income	$ 22,652	$ 28,224
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,202	2,262
Equity-based compensation	4,343	4,472
(Gain) loss on disposal of equipment	(3)	20
Deferred income taxes	1,587	2,531
Unrealized foreign currency (gain) loss	(333)	104
Changes in operating assets and liabilities:
Accounts receivable, net	7,502	16,553
Other assets	(4,223)	(3,939)
Accounts payable, accrued and other liabilities	5,435	(4,063)
Income taxes	2,286	8,172
Deferred revenue	9,853	6,940
Net cash provided by operating activities	51,301	61,276
Investing activities:
Purchase of property and equipment	(2,174)	(789)
Net purchases of investments	(12,598)	(11,630)
Net cash used in investing activities	(14,772)	(12,419)
Financing activities:
Purchase of common stock	(55,815)	(56,619)
Net cash used in financing activities	(55,815)	(56,619)
Foreign currency impact on cash	432	1,355
Net change in cash and cash equivalents	(18,854)	(6,407)
Cash and cash equivalents at beginning of period	125,522	95,615
Cash and cash equivalents at end of period	$ 106,668	$ 89,208

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income
Balance at Dec. 31, 2016	$ 169,366	$ 702		$ 184,558	$ (15,894)
Balance (in shares) at Dec. 31, 2016		70,233,955
Repurchase of common stock	(131,707)	$ (28)	$ (18,050)	(113,629)
Repurchase of common stock (in shares)		(2,829,850)
Restricted stock units issuance		$ 4	(4)
Restricted stock units issuance (in shares)		372,033
Equity-based compensation	16,229		16,229
Adjustment due to adoption of ASU | ASU 2016-09	532		1,825	(1,293)
Foreign currency translation adjustment	4,055				4,055
Net income	116,481			116,481
Balance at Dec. 31, 2017	174,956	$ 678		186,117	(11,839)
Balance (in shares) at Dec. 31, 2017		67,776,138
Repurchase of common stock	(55,815)	$ (13)	(4,340)	(51,462)
Repurchase of common stock (in shares)		(1,269,109)
Restricted stock units issuance		$ 3	(3)
Restricted stock units issuance (in shares)		312,402
Equity-based compensation	4,343		$ 4,343
Adjustment due to adoption of ASU | ASC 2014-09	1,981			1,981
Foreign currency translation adjustment	(169)				(169)
Net income	22,652			22,652
Balance at Mar. 31, 2018	$ 147,948	$ 668		$ 159,288	$ (12,008)
Balance (in shares) at Mar. 31, 2018		66,819,431

Basis of Presentation and Princ

Basis of Presentation and Principles of Consolidation	3 Months Ended
	Mar. 31, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Basis of Presentation and Principles of Consolidation	1 . Basis of Presentation and Principles of Consolidation Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Manhattan Associates, Inc. and its subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, with the instructions to Form 10-Q and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position at March 31, 2018, the results of operations for the three months ended March 31, 2018 and 2017, and cash flows for the three months ended March 31, 2018 and 2017. The results for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Company’s audited consolidated financial statements and management’s discussion and analysis included in the Company’s annual report on Form 10-K for the year ended December 31, 2017. Principles of Consolidation The accompanying condensed consolidated financial statements include the Company’s accounts and the accounts of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Reclassifications Certain line items in prior period financial statements have been reclassified to conform to the current period presentation in the condensed consolidated statements of income due to our business transition to cloud subscriptions. We believe separate disclosures of our software license, cloud subscriptions, maintenance and service revenue is meaningful to investors and provide an important measure of our business performance. Certain line items in prior period financial statements have been reclassified to conform to the current period presentation in the condensed consolidated statements of income, including: all revenue line items; cost of license; cost of cloud subscriptions, maintenance and services; and cost of hardware. Such reclassifications did not affect total revenues, operating income or net income. New Accounting Pronouncements Adopted in Fiscal Year 2018 Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue Recognition – Revenue from Contracts with Customers (Topic 606), which, along with its subsequent amendments, replaced substantially all revenue recognition guidance. The new standard provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers unless the contracts are in the scope of other standards. On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results of reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under Topic 605. Historical hardware sales prior to the adoption of ASC 606 were recorded on a gross basis, as we were the principal in the transaction in accordance with ASC 605-45. Under the new standard, we are an agent in the transaction as we do not physically control the hardware which we sell; accordingly, we recognize our hardware revenue net of related cost which reduces both hardware revenue and cost of sales as compared to our accounting prior to 2018. Otherwise, the adoption of ASC 606 does not have a material impact on the measurement or recognition of revenue in any prior or current reporting periods. However, based on expected renewals of maintenance and multi-year cloud subscriptions, we must defer a portion of our sales commission expense and amortize it over time as the corresponding services are transferred to the customer under the new standard. As a result, we recorded a net increase to opening retained earnings of $2.0 million, net of tax, as of January 1, 2018 for commissions expense required to be deferred on contracts not completed as of that date. Had we presented the results for the three months ended March 31, 2018 under Topic 605, we would have presented hardware revenue gross which would have increased hardware revenue and cost of hardware each by $7.8 million. We would have also expensed all sales commissions upon contract completion which would have increased sales and marketing expense by $0.2 million for the three months ended March 31, 2018. New Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet—the new ASU will require both types of leases to be recognized on the balance sheet. The ASU also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. Our leasing activity is primarily related to office space. For public companies, this guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods, but may be adopted earlier. We expect to adopt the standard in the first quarter of 2019 on a modified prospective basis and are currently evaluating the impact that the adoption of this standard will have on our Consolidated Financial Statements. The adoption will increase our total assets and liabilities.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2018
Revenue Recognition [Abstract]
Revenue Recognition	2. Revenue Recognition We recognize revenue when we transfer control of the promised products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. We derive our revenue from software licenses, cloud subscriptions, customer support services and software enhancements (“maintenance”), implementation and training services, and sales of hardware. We exclude sales and usage-based taxes from revenue. Nature of Products and Services Our perpetual software licenses provide the customer with a right to use the software as it exists at the time of purchase. We recognize revenue for distinct software licenses once the license period has begun and we have made the software available to the customer. Cloud subscriptions includes software as a service (“SaaS”) and arrangements which provide customers with the right to use our software within a cloud-based environment that we provide and manage where the customer does not have the right to take possession of the software without significant penalty. SaaS and hosting revenues are recognized ratably over the contract period. For contracts that include a perpetual license and hosting services, the initial non-cancellable hosting period generally results in the arrangement being considered an overall service. The license fee which is typically due at the outset of the arrangement provides the customer with a material right upon renewal of the service and thus is recognized over the customer relationship period. Our perpetual software licenses are typically sold with maintenance under which we provide a comprehensive 24 hours per day, 365 days per year program that provides customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives. Revenue related to maintenance is generally paid in advance and recognized ratably over the term of the agreement, typically twelve months. Our services revenue consists of fees generated from implementation and training services, including reimbursements of out-pocket expenses in connection with our services. Services include system planning, design, configuration, testing, and other software implementation support, and are typically optional and distinct from our software. Fees for our services are separately priced and are generally billed on an hourly basis, and revenue is recognized over time as the services are performed. In certain situations, we render professional services under agreements based upon a fixed fee for portions of or all of the engagement. Revenue related to fixed-fee-based services contracts is recognized over time based on the proportion performed. As part of a complete solution, our customers periodically purchase hardware products developed and manufactured by third parties from us for use with the software licenses purchased from us. These products include computer hardware, radio frequency terminal networks, radio frequency identification (RFID) chip readers, bar code printers and scanners, and other peripherals. As we do not physically control the hardware that we sell, we are acting as an agent in the transaction and recognize our hardware revenue net of related cost. We recognize hardware revenue when control is transferred to the customer upon shipment. Significant Judgements Our contracts with customers typically contain promises to transfer multiple products and services to a customer. Judgement is required to determine whether each product and service is considered to be a distinct performance obligation that should be accounted for separately under the contract. We allocate the transaction price to the distinct performance obligations based on relative standalone selling price (“SSP”). We estimate SSP based on the prices charged to customers, or by using information such as market conditions and other observable inputs. However, the selling price of our software licenses is highly variable. Thus, we estimate SSP for software licenses using the residual approach, determined based on total transaction price less the SSP of other goods and services promised in the contract. Contract Balances Timing of invoicing to customers may differ from timing of revenue recognition. Payment terms for our software licenses vary. We have an established history of collecting under the terms of our software license contracts without providing refunds or concessions to our customers. Cloud subscriptions and maintenance are typically billed annually in advance. Services are typically billed monthly as performed. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with predictable ways to purchase our software and services, not to provide or receive financing. Additionally, we are applying the practical expedient to exclude from consideration any contracts with payment terms of one year or less as we rarely offer terms extending beyond one year. Deferred revenue mainly represents amounts collected prior to having completed performance of maintenance, cloud subscriptions and professional services. $31.7 million of revenue that was included in the deferred revenue balance as of December 31, 2017 was recognized during the three months ended March 31, 2018. There was no revenue recognized during the three months ended March 31, 2018 from performance obligations that were satisfied in prior periods. Remaining Performance Obligations As of March 31, 2018, approximately $34.0 million of revenue is expected to be recognized from remaining performance obligations for cloud subscriptions and maintenance contracts with a non-cancelable term greater than 1 year (including deferred revenue as well as amounts that will be invoiced and recognized as revenue in future periods). We expect to recognize revenue on approximately two thirds of these remaining performance obligations over the next 24 months with the balance recognized thereafter. We have elected not to provide disclosures regarding remaining performance obligations for contracts with a term of 1 year or less. Returns and Allowances We have not experienced significant returns or warranty claims to date and, as a result, have not recorded a provision for the cost of returns and product warranty claims. We record an allowance for doubtful accounts based on the historical experience of write-offs and a detailed assessment of accounts receivable. Additions to the allowance for doubtful accounts generally represent a sales allowance on services revenue, which are recorded to operations as a reduction to services revenue. The total amount charged to operations was $0.2 million for the three months ended March 31, 2018. In estimating the allowance for doubtful accounts, we consider the age of the accounts receivable, our historical write-offs, and the creditworthiness of the customer, among other factors. Should any of these factors change, the estimates made by us will also change accordingly, which could affect the level of our future allowances. Uncollectible accounts are written off when it is determined that the specific balance is not collectible. Deferred Commissions We consider sales commissions to be incremental costs of obtaining a contract with a customer. We defer and recognize an asset for sales commissions related to performance obligations with an expected period of benefit of more than one year. We apply the practical expedient to expense sales commissions when the amortization period would have been one year or less. Deferred commissions were $2.1 million as of March 31, 2018. Sales commission expense is included in Sales and Marketing expense in the accompanying consolidated statement of operations. Amortization of sales commissions was $0.2 million for the three months ended March 31, 2018. No impairment losses were recognized during the periods.

Fair Value Measurement

Fair Value Measurement	3 Months Ended
	Mar. 31, 2018
Fair Value Disclosures [Abstract]
Fair Value Measurement	3. Fair Value Measurement We measure our investments based on a fair value hierarchy disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is affected by a number of factors, including the type of asset or liability and its characteristics. This hierarchy prioritizes the inputs into three broad levels as follows: • Level 1–Quoted prices in active markets for identical instruments. • Level 2–Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3–Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents; investments with maturities of greater than 90 days from the date of purchase but less than one year are generally classified as short-term investments; and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments. Unrealized holding gains and losses are reflected as a net amount in a separate component of shareholders’ equity until realized. For the purposes of computing realized gains and losses, cost is determined on a specific identification basis. At March 31, 2018, our cash, cash equivalents, and short-term investments balances were $93.0 million, $13.7 million, and $12.3 million, respectively. We currently have no long-term investments. Cash equivalents consist of highly liquid money market funds and certificates of deposit. Short-term investments consist of certificates of deposit. For money market funds, we use quoted prices from active markets that are classified at Level 1 as a highest level observable input in the disclosure hierarchy framework. At March 31, 2018 and December 31, 2017, we had $9.5 million and $10.5 million, respectively, in money market funds, which are classified as Level 1 and are included in cash and cash equivalents on the Condensed Consolidated Balance Sheets. We have no investments classified as Level 2 or Level 3.

Equity-Based Compensation

Equity-Based Compensation	3 Months Ended
	Mar. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Equity-Based Compensation	4. Equity-Based Compensation We granted 467,526 and 337,684 restricted stock units (“RSUs”) during the three months ended March 31, 2018 and 2017, respectively. We recorded equity-based compensation expense related to RSUs of $4.3 million and $4.5 million during the three months ended March 31, 2018 and 2017, respectively. A summary of changes in unvested shares/units for the three months ended March 31, 2018 is as follows: Number of shares/units Outstanding at December 31, 2017 1,036,635 Granted 467,526 Vested (345,257 ) Forfeited (127,915 ) Outstanding at March 31, 2018 1,030,989

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	5. Income Taxes Our effective tax rate was 20.7% and 31.7% for the three months ended March 31, 2018 and 2017, respectively. The decrease in our effective tax rate for the three months ended March 31, 2018 was primarily due to the reduction of the US statutory tax rate from 35% to 21%, partially offset by a decrease of $1.2 million in excess tax benefits on restricted stock vestings. We also reduced our provisional one-time estimate for the impact of the U.S. tax reform discussed below by $0.3 million. U.S. Tax Reform On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (“the Act”). The Act reduces the US federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. We are applying the guidance in SAB 118 when accounting for the enactment-date effects of the Act. We have made a reasonable estimate of the effects of the Act as of March 31, 2018. We will continue to make and refine our calculations as we complete additional analysis. Our estimates may also be affected as we gain a more thorough understanding of the tax law and more guidance/technical corrections are released by the IRS and/or Congress. These changes could be material to income tax expense. In December 2017, we recorded a provisional estimate of $3.3 million for the one-time deemed repatriation transition tax on unrepatriated foreign earnings. The one-time transition tax is based on our total earnings and profits (E&P) which we deferred from US income taxes under previous US law. As we continue to refine our E&P analysis, we will refine our calculations of the one-time transition tax, which could affect the measurement of this liability. We have not provided additional income taxes for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in its foreign subsidiaries, as these amounts continue to be indefinitely reinvested in foreign operations. In December 2017, we also recorded a provisional write-down to deferred tax assets of $0.7 million related to changes in section 162(m), Internal Revenue Code of 1986, regarding deductions for excessive employee compensation. We continue to gather and analyze information, including the definition of an employee contract for stock grants not vested as of the enactment date of the Act. We reduced this estimate by $0.3 million during the three months ended March 31, 2018. The Act also subjects a US shareholder to tax on global intangible low taxed income (GILTI) earned by certain foreign subsidiaries. The FASB Staff provided additional guidance to address the accounting for the effects of the provisions related to the taxation of GILTI, noting that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period cost only. Given the complexity of the GILTI provisions, we are still evaluating the effects of the GILTI provisions and have not yet determined our accounting policy. At March 31, 2018, because we are still evaluating the GILTI provisions and our analysis of future taxable income that is subject to GILTI, we have included GILTI related to current-year operations only in our annual effective tax rate and have not provided additional GILTI on deferred items. We apply the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements in accordance with the Income Taxes Topic of the FASB Accounting Standards Codification (ASC 740). For the three months ended March 31, 2018, there were no material changes to our uncertain tax positions. There has been no change to our policy that recognizes potential interest and penalties related to uncertain tax positions within our global operations in income tax expense. We conduct business globally and, as a result, file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business Manhattan is subject to examination by taxing authorities throughout the world. We are no longer subject to U.S. federal, substantially all state and local income tax examinations and substantially all non-US income tax examinations for years before 2012.

Net Earnings Per Share

Net Earnings Per Share	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Net Earnings Per Share	6. Net Earnings Per Share Basic net earnings per share is computed using net income divided by the weighted average number of shares of common stock outstanding (“Weighted Shares”) for each period presented. Diluted net earnings per share is computed using net income divided by the sum of Weighted Shares and common equivalent shares (CESs) outstanding for each period presented using the treasury stock method. The following is a reconciliation of the net income and share amounts used in the computation of basic and diluted net earnings per common share for the three months ended March 31, 2018 and 2017 (in thousands, except per share data): Three Months Ended March 31, 2018 2017 (in thousands, except per share data) Net income $ 22,652 $ 28,224 Earnings per share: Basic $ 0.34 $ 0.40 Effect of CESs (0.01 ) - Diluted $ 0.33 $ 0.40 Weighted average number of shares: Basic 67,553 69,973 Effect of CESs 183 274 Diluted 67,736 70,247 The number of anti-dilutive CESs during 2018 and 2017 was immaterial.

Contingencies

Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments And Contingencies Disclosure [Abstract]
Contingencies	7. Contingencies From time to time, we may be involved in litigation relating to claims arising out of its ordinary course of business, and occasionally legal proceedings not in the ordinary course. Many of our installations involve products that are critical to the operations of our clients’ businesses. Any failure in a Company product could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to limit contractually our liability for damages arising from product failures or negligent acts or omissions, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable in all instances. We are not currently a party to any legal proceedings the result of which we believe likely to have a material adverse impact upon our business, financial position, results of operations, or cash flows. We expense legal costs associated with loss contingencies as such legal costs are incurred.

Operating Segments

Operating Segments	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Operating Segments	8. Operating Segments We manage our business by geographic segment. We have three geographic reportable segments: North America and Latin America (the “Americas”); Europe, Middle East and Africa (EMEA); and Asia Pacific (APAC). All segments derive revenue from the sale and implementation of our supply chain commerce solutions. The individual products sold by the segments are similar in nature and are all designed to help companies manage the effectiveness and efficiency of their supply chain commerce. We use the same accounting policies for each reportable segment. The chief executive officer and chief financial officer evaluate performance based on revenue and operating results for each reportable segment. The Americas segment charges royalty fees to the other segments based on software licenses sold by those reportable segments. The royalties, which totaled approximately $1.0 million and $2.7 million for the three months ended March 31, 2018 and 2017, respectively, are included in cost of revenue for each segment with a corresponding reduction in the Americas segment’s cost of revenue. The revenues represented below are from external customers only. The geographical-based costs consist of costs of professional services personnel, direct sales and marketing expenses, cost of infrastructure to support the employees and customer base, billing and financial systems, management and general and administrative support. There are certain corporate expenses included in the Americas segment that are not charged to the other segments, including research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas segment’s costs are all research and development costs, including the costs associated with our India operations. The following table presents the revenues, expenses and operating income by reportable segment for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Americas EMEA APAC Consolidated Americas EMEA APAC Consolidated Revenue: Software license $ 3,491 $ 1,800 $ 2,264 $ 7,555 $ 10,625 $ 9,373 $ 1,279 $ 21,277 Cloud subscriptions 4,103 366 - 4,469 1,496 - - 1,496 Maintenance 29,442 5,016 1,939 36,397 27,629 4,024 1,723 33,376 Services 64,188 11,982 2,587 78,757 65,806 9,963 4,012 79,781 Hardware 3,391 - - 3,391 7,559 - - 7,559 Total revenue 104,615 19,164 6,790 130,569 113,115 23,360 7,014 143,489 Costs and Expenses: Cost of revenue 44,147 10,013 3,634 57,794 48,588 9,391 3,642 61,621 Operating expenses 38,193 3,489 1,061 42,743 33,736 3,086 1,064 37,886 Depreciation and amortization 1,957 187 58 2,202 2,078 129 55 2,262 Total costs and expenses 84,297 13,689 4,753 102,739 84,402 12,606 4,761 101,769 Operating income $ 20,318 $ 5,475 $ 2,037 $ 27,830 $ 28,713 $ 10,754 $ 2,253 $ 41,720 The majority of our software license revenue (70-80%) relates to our warehouse management product group. Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel and transportation management solutions.

Basis of Presentation and Pri16

Basis of Presentation and Principles of Consolidation (Policies)	3 Months Ended
	Mar. 31, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Manhattan Associates, Inc. and its subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, with the instructions to Form 10-Q and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position at March 31, 2018, the results of operations for the three months ended March 31, 2018 and 2017, and cash flows for the three months ended March 31, 2018 and 2017. The results for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Company’s audited consolidated financial statements and management’s discussion and analysis included in the Company’s annual report on Form 10-K for the year ended December 31, 2017.
Principles of Consolidation	Principles of Consolidation The accompanying condensed consolidated financial statements include the Company’s accounts and the accounts of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Reclassifications	Reclassifications Certain line items in prior period financial statements have been reclassified to conform to the current period presentation in the condensed consolidated statements of income due to our business transition to cloud subscriptions. We believe separate disclosures of our software license, cloud subscriptions, maintenance and service revenue is meaningful to investors and provide an important measure of our business performance. Certain line items in prior period financial statements have been reclassified to conform to the current period presentation in the condensed consolidated statements of income, including: all revenue line items; cost of license; cost of cloud subscriptions, maintenance and services; and cost of hardware. Such reclassifications did not affect total revenues, operating income or net income.
New Accounting Pronouncements Adopted in Fiscal Year 2018 and Not Yet Adopted	New Accounting Pronouncements Adopted in Fiscal Year 2018 Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue Recognition – Revenue from Contracts with Customers (Topic 606), which, along with its subsequent amendments, replaced substantially all revenue recognition guidance. The new standard provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers unless the contracts are in the scope of other standards. On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results of reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under Topic 605. Historical hardware sales prior to the adoption of ASC 606 were recorded on a gross basis, as we were the principal in the transaction in accordance with ASC 605-45. Under the new standard, we are an agent in the transaction as we do not physically control the hardware which we sell; accordingly, we recognize our hardware revenue net of related cost which reduces both hardware revenue and cost of sales as compared to our accounting prior to 2018. Otherwise, the adoption of ASC 606 does not have a material impact on the measurement or recognition of revenue in any prior or current reporting periods. However, based on expected renewals of maintenance and multi-year cloud subscriptions, we must defer a portion of our sales commission expense and amortize it over time as the corresponding services are transferred to the customer under the new standard. As a result, we recorded a net increase to opening retained earnings of $2.0 million, net of tax, as of January 1, 2018 for commissions expense required to be deferred on contracts not completed as of that date. Had we presented the results for the three months ended March 31, 2018 under Topic 605, we would have presented hardware revenue gross which would have increased hardware revenue and cost of hardware each by $7.8 million. We would have also expensed all sales commissions upon contract completion which would have increased sales and marketing expense by $0.2 million for the three months ended March 31, 2018. New Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet—the new ASU will require both types of leases to be recognized on the balance sheet. The ASU also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. Our leasing activity is primarily related to office space. For public companies, this guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods, but may be adopted earlier. We expect to adopt the standard in the first quarter of 2019 on a modified prospective basis and are currently evaluating the impact that the adoption of this standard will have on our Consolidated Financial Statements. The adoption will increase our total assets and liabilities.

Equity-Based Compensation (Tabl

Equity-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Changes in Unvested Shares/Units of Restricted Stock	A summary of changes in unvested shares/units for the three months ended March 31, 2018 is as follows: Number of shares/units Outstanding at December 31, 2017 1,036,635 Granted 467,526 Vested (345,257 ) Forfeited (127,915 ) Outstanding at March 31, 2018 1,030,989

Net Earnings Per Share (Tables)

Net Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Reconciliation of Net Income and Share Amounts in Computation of Basic and Diluted Net Earnings Per Common Share	The following is a reconciliation of the net income and share amounts used in the computation of basic and diluted net earnings per common share for the three months ended March 31, 2018 and 2017 (in thousands, except per share data): Three Months Ended March 31, 2018 2017 (in thousands, except per share data) Net income $ 22,652 $ 28,224 Earnings per share: Basic $ 0.34 $ 0.40 Effect of CESs (0.01 ) - Diluted $ 0.33 $ 0.40 Weighted average number of shares: Basic 67,553 69,973 Effect of CESs 183 274 Diluted 67,736 70,247

Operating Segments (Tables)

Operating Segments (Tables)	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Revenues, Expenses and Operating Income by Reporting Segment	The following table presents the revenues, expenses and operating income by reportable segment for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Americas EMEA APAC Consolidated Americas EMEA APAC Consolidated Revenue: Software license $ 3,491 $ 1,800 $ 2,264 $ 7,555 $ 10,625 $ 9,373 $ 1,279 $ 21,277 Cloud subscriptions 4,103 366 - 4,469 1,496 - - 1,496 Maintenance 29,442 5,016 1,939 36,397 27,629 4,024 1,723 33,376 Services 64,188 11,982 2,587 78,757 65,806 9,963 4,012 79,781 Hardware 3,391 - - 3,391 7,559 - - 7,559 Total revenue 104,615 19,164 6,790 130,569 113,115 23,360 7,014 143,489 Costs and Expenses: Cost of revenue 44,147 10,013 3,634 57,794 48,588 9,391 3,642 61,621 Operating expenses 38,193 3,489 1,061 42,743 33,736 3,086 1,064 37,886 Depreciation and amortization 1,957 187 58 2,202 2,078 129 55 2,262 Total costs and expenses 84,297 13,689 4,753 102,739 84,402 12,606 4,761 101,769 Operating income $ 20,318 $ 5,475 $ 2,037 $ 27,830 $ 28,713 $ 10,754 $ 2,253 $ 41,720

Basis of Presentation and Pri20

Basis of Presentation and Principles of Consolidation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Jan. 01, 2018
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Hardware	$ 3,391	$ 7,559
Cost of hardware		5,370
Sales and marketing	12,884	$ 11,789
Topic 605
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Hardware	7,800
Cost of hardware	7,800
Sales and marketing	$ 200
Retained Earnings [Member] | ASU 2016-09
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Net cumulative-effect of election from adoption of accounting guidance			$ 2,000

Revenue Recognition - Additiona

Revenue Recognition - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenue Recognition [Abstract]
Expense reimbursement included in services revenue	$ 3,500,000	$ 4,300,000
Deferred revenue recognized	31,700,000
Revenue recognized in the reporting period from performance obligations satisfied in prior periods	0
Revenue expected to be recognized from remaining performance obligations	$ 34,000,000
Remaining performance obligation, explanation	We expect to recognize revenue on approximately two thirds of these remaining performance obligations over the next 24 months with the balance recognized thereafter.
Percentage of expected revenue recognition	66.67%
Revenue recognized on remaining performance obligations period	24 months
Provision for cost of return and product warranty claims recorded	$ 0
Allowance for doubtful accounts recorded to operations	$ 200,000
Revenue, practical expedient, remaining performance obligation, description	We apply the practical expedient to expense sales commissions when the amortization period would have been one year or less.
Deferred commissions	$ 2,100,000
Amortization of sales commissions	200,000
Impairment losses	$ 0

Fair Value Measurement - Additi

Fair Value Measurement - Additional Information (Detail) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Fair Value Inputs Assets Quantitative Information [Line Items]
Cash balance	$ 93,000,000
Cash equivalents	13,700,000
Short-term investments	12,341,000
Long-term investments	0
Money market funds	9,500,000	$ 10,500,000
Level 2
Fair Value Inputs Assets Quantitative Information [Line Items]
Investments	0
Level 3
Fair Value Inputs Assets Quantitative Information [Line Items]
Investments	$ 0

Equity-Based Compensation - Add

Equity-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock expense	$ 4.3	$ 4.5
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of restricted units granted in the period	467,526	337,684

Summary of Changes in Unvested

Summary of Changes in Unvested Shares/Units of Restricted Stock (Detail) - Restricted Stock Units - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares/units, Outstanding at December 31, 2016	1,036,635
Number of shares/units, Granted	467,526	337,684
Number of shares/units, Vested	(345,257)
Number of shares/units, Forfeited	(127,915)
Number of shares/units, Outstanding at September 30, 2017	1,030,989

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Dec. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Effective tax rate		20.70%	31.70%
Effective statutory tax rate		21.00%	35.00%
Decrease in excess tax benefits on restricted stock vestings		$ 1.2
Reduced to provisional amounts		$ 0.3
Provisional estimate of one-time deemed repatriation transition tax	$ 3.3
Deferred tax asset provisional write-down income tax expense benefit	$ 0.7

Reconciliation of Net Income an

Reconciliation of Net Income and Share Amounts in Computation of Basic and Diluted Net Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Earnings Per Share [Abstract]
Net income	$ 22,652	$ 28,224	$ 116,481
Earnings per share:
Basic	$ 0.34	$ 0.40
Effect of CESs	(0.01)
Diluted	$ 0.33	$ 0.40
Weighted average number of shares:
Basic	67,553	69,973
Effect of CESs	183	274
Diluted	67,736	70,247

Operating Segments - Additional

Operating Segments - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)Segment	Mar. 31, 2017USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | Segment	3
Warehouse Management Product Group | Product Concentration Risk | Sales Revenue Net | Minimum
Segment Reporting Information [Line Items]
Percentage of software license revenue	70.00%
Warehouse Management Product Group | Product Concentration Risk | Sales Revenue Net | Maximum
Segment Reporting Information [Line Items]
Percentage of software license revenue	80.00%
Americas
Segment Reporting Information [Line Items]
Americas royalty fees | $	$ 1	$ 2.7

Revenues, Expenses and Operatin

Revenues, Expenses and Operating Income by Reporting Segment (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Segment Reporting Information [Line Items]
Software license	$ 7,555	$ 21,277
Cloud subscriptions	4,469	1,496
Maintenance	36,397	33,376
Services	78,757	79,781
Hardware	3,391	7,559
Total revenue	130,569	143,489
Cost of revenue	57,794	61,621
Operating expenses	42,743	37,886
Depreciation and amortization	2,202	2,262
Total costs and expenses	102,739	101,769
Operating income	27,830	41,720
Americas
Segment Reporting Information [Line Items]
Software license	3,491	10,625
Cloud subscriptions	4,103	1,496
Maintenance	29,442	27,629
Services	64,188	65,806
Hardware	3,391	7,559
Total revenue	104,615	113,115
Cost of revenue	44,147	48,588
Operating expenses	38,193	33,736
Depreciation and amortization	1,957	2,078
Total costs and expenses	84,297	84,402
Operating income	20,318	28,713
EMEA
Segment Reporting Information [Line Items]
Software license	1,800	9,373
Cloud subscriptions	366
Maintenance	5,016	4,024
Services	11,982	9,963
Total revenue	19,164	23,360
Cost of revenue	10,013	9,391
Operating expenses	3,489	3,086
Depreciation and amortization	187	129
Total costs and expenses	13,689	12,606
Operating income	5,475	10,754
APAC
Segment Reporting Information [Line Items]
Software license	2,264	1,279
Maintenance	1,939	1,723
Services	2,587	4,012
Total revenue	6,790	7,014
Cost of revenue	3,634	3,642
Operating expenses	1,061	1,064
Depreciation and amortization	58	55
Total costs and expenses	4,753	4,761
Operating income	$ 2,037	$ 2,253