10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

[Mark One]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number:  0-23999

MANHATTAN ASSOCIATES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Georgia	58-2373424
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
2300 Windy Ridge Parkway, Tenth Floor
Atlanta, Georgia	30339
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (770) 955-7070

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	MANH	Nasdaq Global Select Market

Indicate by check mark whether the Registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒   No  ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes   ☒   No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐   No  ☒

The number of shares of the Registrant’s class of capital stock outstanding as of July 26, 2021, the latest practicable date, is as follows: 63,399,891 shares of common stock, $0.01 par value per share.

MANHATTAN ASSOCIATES, INC.

FORM 10-Q

Quarter Ended June 30, 2021

TABLE OF CONTENTS

PART I

	Financial Information
Item 1.	Financial Statements.
Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020		3
Condensed Consolidated Statements of Income for the three months and six months ended June 30, 2021 and 2020 (unaudited)		4
Condensed Consolidated Statements of Comprehensive Income for the three months and six months ended June 30, 2021 and 2020 (unaudited)		5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)		6
Condensed Consolidated Statements of Stockholders’ Equity for the three months and six months ended June 30, 2021 and 2020 (unaudited)		7
Notes to Condensed Consolidated Financial Statements (unaudited)		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	27
Item 4.	Controls and Procedures.	27
	PART II
	OTHER INFORMATION
Item 1.	Legal Proceedings.	29
Item 1A.	Risk Factors.	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	29
Item 3.	Defaults Upon Senior Securities.	29
Item 4.	Mine Safety Disclosures.	29
Item 5.	Other Information.	29
Item 6.	Exhibits.	30
Signatures.		31

2

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

	June 30, 2021			December 31, 2020
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	209,343		$	204,705
Accounts receivable, net of allowance of $4,178 and $3,497, at June 30, 2021 and December 31, 2020, respectively		113,955			109,202
Prepaid expenses and other current assets		23,934			20,134
Total current assets		347,232			334,041
Property and equipment, net		15,115			17,903
Operating lease right-of-use assets		28,744			31,470
Goodwill, net		62,246			62,252
Deferred income taxes		3,975			5,760
Other assets		17,685			13,986
Total assets	$	474,997		$	465,412
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	22,031		$	17,805
Accrued compensation and benefits		49,728			41,962
Accrued and other liabilities		18,915			21,181
Deferred revenue		125,993			114,164
Income taxes payable		194			1,874
Total current liabilities		216,861			196,986
Operating lease liabilities, long-term		24,959			27,843
Other non-current liabilities		20,727			21,686
Shareholders' equity:
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2021 and 2020		-			-
Common stock, $0.01 par value; 200,000,000 shares authorized; 63,397,603 and 63,527,186 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		634			635
Retained earnings		231,035			236,524
Accumulated other comprehensive loss		(19,219	)		(18,262	)
Total shareholders' equity		212,450			218,897
Total liabilities and shareholders' equity	$	474,997		$	465,412

See accompanying Notes to Condensed Consolidated Financial Statements.

3

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

	Three Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021		2020
	(unaudited)		(unaudited)			(unaudited)		(unaudited)
Revenue:
Cloud subscriptions	$	28,595	$	18,503		$	55,238	$	35,763
Software license		8,823		5,681			16,661		15,416
Maintenance		37,732		35,898			73,891		71,642
Services		84,703		71,778			165,062		159,184
Hardware		6,261		3,770			12,112		7,528
Total revenue		166,114		135,630			322,964		289,533
Costs and expenses:
Cost of software license		556		591			1,112		1,146
Cost of cloud subscriptions, maintenance and services		70,072		62,434			143,581		136,710
Research and development		23,213		19,931			47,473		43,259
Sales and marketing		13,750		9,709			27,146		22,797
General and administrative		17,082		14,016			34,651		30,130
Depreciation and amortization		2,084		2,257			4,219		4,603
Total costs and expenses		126,757		108,938			258,182		238,645
Operating income		39,357		26,692			64,782		50,888
Other income (loss), net		306		(158	)		13		1,262
Income before income taxes		39,663		26,534			64,795		52,150
Income tax provision		9,070		7,330			11,559		10,416
Net income	$	30,593	$	19,204		$	53,236	$	41,734
Basic earnings per share	$	0.48	$	0.30		$	0.84	$	0.66
Diluted earnings per share	$	0.48	$	0.30		$	0.83	$	0.65
Weighted average number of shares:
Basic		63,537		63,509			63,591		63,550
Diluted		64,276		64,126			64,371		64,234

See accompanying Notes to Condensed Consolidated Financial Statements.

4

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(in thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2021			2020		2021			2020
	(unaudited)			(unaudited)		(unaudited)			(unaudited)
Net income	$	30,593		$	19,204	$	53,236		$	41,734
Foreign currency translation adjustment		(428	)		336		(957	)		(3,135	)
Comprehensive income	$	30,165		$	19,540	$	52,279		$	38,599

See accompanying Notes to Condensed Consolidated Financial Statements.

5

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

	Six Months Ended June 30,
	2021			2020
	(unaudited)			(unaudited)
Operating activities:
Net income	$	53,236		$	41,734
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,219			4,603
Equity-based compensation		20,760			15,056
Loss on disposal of equipment		-			10
Deferred income taxes		1,768			4,234
Unrealized foreign currency gain		(1,029	)		(741	)
Changes in operating assets and liabilities:
Accounts receivable, net		(5,289	)		(7,469	)
Other assets		(7,912	)		(619	)
Accounts payable, accrued and other liabilities		9,592			(21,787	)
Income taxes		(1,952	)		568
Deferred revenue		12,002			24,799
Net cash provided by operating activities		85,395			60,388
Investing activities:
Purchase of property and equipment		(1,171	)		(1,752	)
Net cash used in investing activities		(1,171	)		(1,752	)
Financing activities:
Purchase of common stock		(79,486	)		(43,155	)
Net cash used in financing activities		(79,486	)		(43,155	)
Foreign currency impact on cash		(100	)		(2,521	)
Net change in cash and cash equivalents		4,638			12,960
Cash and cash equivalents at beginning of period		204,705			110,678
Cash and cash equivalents at end of period	$	209,343		$	123,638

See accompanying Notes to Condensed Consolidated Financial Statements.

6

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands, except share data)

													Accumulated
							Additional						Other			Total
	Common Stock						Paid-In			Retained			Comprehensive			Shareholders'
	Shares			Amount			Capital			Earnings			Loss			Equity
For the Three Months Ended June 30, 2021
Balance, March 31, 2021 (unaudited)		63,616,713		$	636		$	-		$	222,815		$	(18,791	)	$	204,660
Repurchase of common stock		(244,700	)		(2	)		(10,709	)		(22,373	)		-			(33,084	)
Restricted stock units issuance		25,590			-			-			-			-			-
Equity-based compensation		-			-			10,709			-			-			10,709
Foreign currency translation adjustment		-			-			-			-			(428	)		(428	)
Net income		-			-			-			30,593			-			30,593
Balance, June 30, 2021 (unaudited)		63,397,603		$	634		$	-		$	231,035		$	(19,219	)	$	212,450
For the Six Months Ended June 30, 2021
Balance, December 31, 2020 (audited)		63,527,186		$	635		$	-		$	236,524		$	(18,262	)	$	218,897
Repurchase of common stock		(631,014	)		(6	)		(20,755	)		(58,725	)		-			(79,486	)
Restricted stock units issuance		501,431			5			(5	)		-			-			-
Equity-based compensation		-			-			20,760			-			-			20,760
Foreign currency translation adjustment		-			-			-			-			(957	)		(957	)
Net income		-			-			-			53,236			-			53,236
Balance, June 30, 2021 (unaudited)		63,397,603		$	634		$	-		$	231,035		$	(19,219	)	$	212,450
For the Three Months Ended June 30, 2020
Balance, March 31, 2020 (unaudited)		63,495,687		$	635		$	-		$	146,552		$	(21,318	)	$	125,869
Repurchase of common stock		(1,829	)		-			(7,492	)		7,369			-			(123	)
Restricted stock units issuance		25,110			-			-			-			-			-
Equity-based compensation		-			-			7,492			-			-			7,492
Foreign currency translation adjustment		-			-			-			-			336			336
Net income		-			-			-			19,204			-			19,204
Balance, June 30, 2020 (unaudited)		63,518,968		$	635		$	-		$	173,125		$	(20,982	)	$	152,778
For the Six Months Ended June 30, 2020
Balance, December 31, 2019 (audited)		63,456,986		$	635		$	-		$	159,490		$	(17,847	)	$	142,278
Repurchase of common stock		(557,938	)		(6	)		(15,050	)		(28,099	)		-			(43,155	)
Restricted stock units issuance		619,920			6			(6	)		-			-			-
Equity-based compensation		-			-			15,056			-			-			15,056
Foreign currency translation adjustment		-			-			-			-			(3,135	)		(3,135	)
Net income		-			-			-			41,734			-			41,734
Balance, June 30, 2020 (unaudited)		63,518,968		$	635		$	-		$	173,125		$	(20,982	)	$	152,778

See accompanying Notes to Condensed Consolidated Financial Statements.

7

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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,” “we,” “us,” “our,” or “Manhattan”) 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 our financial position at June 30, 2021, the results of operations for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020. The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year or any other interim period. These statements should be read in conjunction with our audited consolidated financial statements and management’s discussion and analysis included in our annual report on Form 10-K for the year ended December 31, 2020.

Principles of Consolidation

The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

New Accounting Pronouncements Adopted in Fiscal Year 2021

Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the accounting for franchise taxes and changes in tax laws or rates, as well as clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. On January 1, 2021, we adopted this guidance, and the adoption did not have a material impact on our financial statements.

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, we generally consider the arrangement as an overall service, recognized over the initial hosting term. The software license fee typically due at the outset of the arrangement is not payable again if the customer renews the hosting services, so that the customer’s option to renew the hosting services is a material right, the revenue from which, if the option is exercised, we will recognize over the applicable renewal 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.

8

Our services revenue consists of fees generated from implementation, training, and application managed services, including reimbursements of out-pocket expenses in connection with our implementation services. Implementation services include system planning, design, configuration, testing, and other software implementation support, and are typically optional and distinct from our software. Following implementation, customers may purchase application managed services to support and maintain 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. In the three and six months ended June 30, 2021, we recognized $30.3 million and $82.5 million of revenue that was included in the deferred revenue balance as of December 31, 2020. In the three months ended June 30, 2021, we recognized $52.7 million of revenue that was included in the deferred revenue balance as of March 31, 2021.

No revenue was recognized during the three and six months ended June 30, 2021 from performance obligations that were satisfied in prior periods.

Remaining Performance Obligations

As of June 30, 2021, approximately $488.7 million of revenue is expected to be recognized from remaining performance obligations for cloud subscriptions, maintenance contracts, and application managed services 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 45% 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

9

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 historical experience of write-offs and a detailed assessment of accounts receivable. Additions to the allowance for credit losses 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 $1.3 million and $1.4 million for the three months ended June 30, 2021 and 2020, respectively, and $2.0 million and $2.7 million for the six months ended June 30, 2021 and 2020, respectively.

Our analysis involved utilizing a model of internal historical losses data. In estimating the allowance for credit losses, we considered the age of the accounts receivable, our historical write-offs, and the historical 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. We also analyzed future expected credit losses given ever present changes to future risks in projected economic conditions and future risks of customer collection.

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 $19.4 million as of June 30, 2021, of which $14.2 million is included in other assets and $5.2 million is included in prepaid expenses and other current assets. Sales commission expense is included in Sales and Marketing expense in the accompanying Consolidated Statements of Income. Amortization of sales commissions was $1.2 million and $0.7 million for the three months ended June 30, 2021 and 2020, respectively, and $2.3 million and $1.4 million for the six months ended June 30, 2021 and 2020, respectively. No impairment losses were recognized during the periods.

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 June 30, 2021, our cash and cash equivalents were $196.5 million and $12.8 million, respectively. We had neither short-term investments nor long-term investments at June 30, 2021. Cash equivalents consist of highly liquid money market funds. For money market funds, we use quoted prices from active markets that are classified at Level 1, the highest level of observable input in the disclosure hierarchy framework. We had no investments classified at Level 2 or Level 3 at June 30, 2021.

4. Leases

We lease our facilities and some of our equipment under noncancelable operating lease arrangements that expire at various dates through 2029. For a few of our facility leases, we have certain options to extend the lease term for up to 10 years, at our sole discretion. We have no finance leases.

We present below the operating lease right-of-use assets and lease liabilities as of June 30, 2021 (in thousands):

10

	June 30, 2021
ASSETS
Operating lease right-of-use assets	$	28,744
LIABILITIES
Operating lease liabilities, current (included in accrued and other liabilities)	$	6,433
Operating lease liabilities, long-term		24,959
Total operating lease liabilities	$	31,392

Aggregate future minimum lease payments under noncancelable operating leases as of June 30, 2021 are as follows (in thousands):

Year Ending December 31,
2021 (excluding the six months ended June 30, 2021)	$	3,383
2022		6,821
2023		6,762
2024		6,405
2025		5,604
Thereafter		7,717
Total minimum payments required		36,692
Less short-term leases		-
Less imputed interest		(5,300	)
Total operating lease liabilities	$	31,392

The total lease cost for the three and six months ended June 30, 2021 was $2.0 million and $4.0 million, respectively. Total lease cost for the three months ended June 30, 2021 consisted of $1.9 million of operating lease costs, and $0.1 million of short-term lease costs. For the six months ended June 30, 2021, total lease cost consisted of $3.8 million of operating lease costs, and $0.2 of short-term lease costs.

Total lease cost for the three and six months ended June 30, 2020 was $2.0 million and $4.0 million, respectively. Total lease cost for the three months ended June 30, 2020 consisted of $1.9 million of operating lease costs, and $0.1 million of short-term lease costs. For the six months ended June 30, 2020, total lease cost consisted of $3.8 million of operating lease cost, and $0.2 million of short-term lease costs.  

Our variable lease costs for the three and six months ended June 30, 2021 and 2020 were immaterial.

Other information related to operating leases are as follows:

Weighted average remaining lease term	5.6 years
Weighted average discount rate		3	%
Supplemental cash flow information - operating cash flows (in thousands):
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	3,824

5. Equity-Based Compensation

We granted 52,237 and 20,834 restricted stock units (RSUs) during the three months ended June 30, 2021 and 2020, respectively, and granted 376,828 and 532,467 RSUs during the six months ended June 30, 2021 and 2020, respectively. Equity-based compensation expense related to RSUs was $10.7 million and $7.5 million during the three months ended June 30, 2021 and 2020, respectively, and $20.8 million and $15.1 million during the six months ended June 30, 2021 and 2020, respectively.

11

We present below a summary of changes during the six months ended June 30, 2021 in our unvested units of restricted stock:

	Number of shares/units
Outstanding at December 31, 2020		1,462,864
Granted		376,828
Vested		(501,431	)
Forfeited		(26,716	)
Outstanding at June 30, 2021		1,311,545

6. Income Taxes

Our effective tax rate was 22.9% and 27.6% for the three months ended June 30, 2021 and 2020, respectively, and 17.8% and 20.0% for the six months ended June 30, 2021 and 2020, respectively. The decrease in the effective tax rate for three and six months ended June 30, 2021 and 2020 is due to foreign jurisdiction business incentives, income earned in lower tax jurisdictions, and an increase in domestic deductions.

We apply the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements in accordance with Accounting Standards Classification (ASC) 740, Income Taxes. For the three months ended June 30, 2021, 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 the U.S. federal, substantially all state and local income tax examinations and substantially all non-U.S. income tax examinations for years before 2012.

7. Basic and Diluted Net Income Per Share

Basic net income per share is computed using net income divided by the weighted average number of shares of common stock outstanding (“Weighted Shares”) for the period presented.

Diluted net income per share is computed using net income divided by Weighted Shares and the treasury stock method effect of common equivalent shares (CESs) outstanding for each period presented.

In the following table, we present a reconciliation of earnings per share and the shares used in the computation of earnings per share for the three and six months ended June 30, 2021 and 2020 (in thousands, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021			2020
	(in thousands, except per share data)				(in thousands, except per share data)
Net income	$	30,593	$	19,204	$	53,236		$	41,734
Earnings per share:
Basic	$	0.48	$	0.30	$	0.84		$	0.66
Effect of CESs		-		-		(0.01	)		(0.01	)
Diluted	$	0.48	$	0.30	$	0.83		$	0.65
Weighted average number of shares:
Basic		63,537		63,509		63,591			63,550
Effect of CESs		739		617		780			684
Diluted		64,276		64,126		64,371			64,234

The number of anti-dilutive CESs during the three and six months ended June 30, 2021 and 2020 was immaterial.

8. Contingencies

From time to time, we may be involved in litigation relating to claims arising out of the 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’s 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

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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 in the ordinary course of business or other legal proceedings the result of which we believe is likely to have a material adverse impact on our business, financial position, results of operations, or cash flows. We expense legal costs associated with loss contingencies as such legal costs are incurred.

9. Operating Segments

We manage our business by geographic region and have three geographic reportable segments: North and Latin America (the “Americas”); Europe, the 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 and cloud subscriptions sold by those reportable segments. The royalties, which totaled approximately $1.3 million and $0.8 million for the three months ended June 30, 2021 and 2020, respectively, and $2.9 million and $1.5 million for the six months ended June 30, 2021, respectively, are included in costs 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 geography-based costs consist of costs for professional services personnel, direct sales and marketing expenses, infrastructure costs to support the employee and customer base, billing and financial systems, management and general and administrative support.  Certain corporate expenses included in the Americas segment are not charged to the other segments.  Such expenses include research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Costs in the Americas segment include all research and development costs, including the costs associated with our operations in India.

In accordance with the segment reporting topic of the FASB Accounting Standards Codification, we present below certain financial information by reportable segment for the three and six months ended June 30, 2021 and 2020 (in thousands):

	Three Months Ended June 30,
	2021								2020
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	24,654	$	3,187	$	754	$	28,595	$	16,345	$	1,811	$	347	$	18,503
Software license		7,421		842		560		8,823		3,853		415		1,413		5,681
Maintenance		29,213		6,208		2,311		37,732		28,211		5,591		2,096		35,898
Services		64,790		16,922		2,991		84,703		55,189		13,741		2,848		71,778
Hardware		6,230		31		-		6,261		3,770		-		-		3,770
Total revenue		132,308		27,190		6,616		166,114		107,368		21,558		6,704		135,630
Costs and Expenses:
Cost of revenue		53,105		14,252		3,271		70,628		46,749		12,746		3,530		63,025
Operating expenses		48,763		4,104		1,178		54,045		39,625		3,095		936		43,656
Depreciation and amortization		1,850		191		43		2,084		2,010		202		45		2,257
Total costs and expenses		103,718		18,547		4,492		126,757		88,384		16,043		4,511		108,938
Operating income	$	28,590	$	8,643	$	2,124	$	39,357	$	18,984	$	5,515	$	2,193	$	26,692

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	Six Months Ended June 30,
	2021								2020
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	47,143	$	6,765	$	1,330	$	55,238	$	31,588	$	3,299	$	876	$	35,763
Software license		11,581		3,994		1,086		16,661		12,303		1,439		1,674		15,416
Maintenance		57,449		11,770		4,672		73,891		56,671		10,762		4,209		71,642
Services		126,970		32,961		5,131		165,062		122,438		30,360		6,386		159,184
Hardware		11,978		134		-		12,112		7,514		11		3		7,528
Total revenue		255,121		55,624		12,219		322,964		230,514		45,871		13,148		289,533
Costs and Expenses:
Cost of revenue		108,412		29,676		6,605		144,693		104,096		26,770		6,990		137,856
Operating expenses		98,268		8,538		2,464		109,270		87,053		6,865		2,268		96,186
Depreciation and amortization		3,735		393		91		4,219		4,099		408		96		4,603
Total costs and expenses		210,415		38,607		9,160		258,182		195,248		34,043		9,354		238,645
Operating income	$	44,706	$	17,017	$	3,059	$	64,782	$	35,266	$	11,828	$	3,794	$	50,888

The majority of our software license revenue relates to our warehouse management product group (over 80%) for the three and six months ended June 30, 2021. Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel, warehouse management solutions, and transportation management solutions for the six months ended June 30, 2021.

At June 30, 2021, total assets for the Americas, EMEA and APAC segments were $409.2 million, $52.6 million and $13.1 million, respectively.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the condensed consolidated financial statements for the three and six months ended June 30, 2021 and 2020, 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, 2020. 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.

References in this filing to the “Company,” “Manhattan,” “Manhattan Associates,” “we,” “our,” and “us” refer to Manhattan Associates, Inc., our predecessors, and our wholly owned and consolidated subsidiaries.

Business Overview

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 most premier and profitable brands.

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.

We have five principal sources of revenue:

● cloud subscriptions, including software as a service (SaaS) and hosting of software;

● licenses of our software;

● customer support services and software enhancements (collectively, “maintenance”);

● professional services, including solutions planning and implementation, related consulting, customer training, and reimbursements from customers for out-of-pocket expenses (collectively, “services”); and

● hardware sales.

In the three and six months ended June 30, 2021, we generated $166.1 million and $323.0 million in total revenue, respectively. The revenue mixes for both the three and six months ended June 30, 2021 was: cloud subscriptions 17%; software license 5%; maintenance 23%; services 51%; and hardware 4%.

We have three geographic reportable segments: North and Latin 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 $49.8 million and $97.7 million for the three and six months ended June 30, 2021, respectively, which represents approximately 30% our total revenue for both the three and six months ended June 30, 2021. International revenue includes all revenue derived from sales to customers outside the United States. At June 30, 2021, we employed approximately 3,500 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.

Future Expectations

Regarding the impact of the novel coronavirus disease (“COVID-19”) pandemic, we remain cautious about the global recovery, which we expect to be slow and protracted. Our results for the first six months of 2021 exceeded our expectations due to solid demand for our cloud solutions. Our solutions are mission critical, supporting complex global supply chains. 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. 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. As previously announced, we have reversed the temporary actions that we had previously taken to manage operating expenses and cash flow due to the COVID-19 pandemic, and our Board of Directors has reinstated our share repurchase program.

We have taken steps to best ensure the health and safety of our employees globally.  Our daily execution has evolved into a largely virtual model, and we continue to find innovative ways to engage with employees, customers and prospects, ensuring that they are supported as they navigate their way through this period.

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We continue to monitor and aggressively manage operating expenses globally. We also will continue to actively monitor the COVID-19 pandemic and will take further actions to modify our business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees, customers, and partners.

Going forward, we are investing significantly in our transition to a cloud business, including enterprise investments in innovation, and strategic operating expenses to support growth objectives. Our pace of investment and timing combined with global macroeconomic conditions and disruptions related to COVID-19 as a whole, have impacted and may continue to impact revenue and earnings growth, based on timing of recovery. The pace at which the market for our products transitions from perpetual license to cloud subscriptions, resulting in revenue recognition spread out over the subscription period rather than up front, combined with extended lead times for developing new business, can cause uncertainty for our future expectations, impacting our ability to accurately forecast bookings and revenues from quarter to quarter and over the longer term.

For the remainder of 2021, our five strategic goals remain:

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

• Invest in innovation to expand our products and total addressable market;

• Expand our Manhattan Active Suite of Cloud Solutions;

• Develop and grow our cloud business and cloud subscription revenue; and

• Expand our global sales and marketing teams.

Cloud Subscription

Historically, our software licenses were sold as perpetual licenses, under which customers own the software license and revenue is recognized at the time of sale. In 2017, we released Manhattan Active™ Solutions, accelerating our business transition to cloud subscriptions. Under a cloud subscription, customers pay a periodic fee for the right to use our software within a cloud-based environment that we provide and manage over a specified period of time. As part of our subscription program, we allow our existing customers to convert their maintenance contracts to cloud subscription contracts. Some customers have converted their maintenance contracts to cloud subscriptions, and we expect there will be continued opportunities to convert existing maintenance contracts to cloud subscription contracts in the future.

In year 4 of our cloud transition, demand for our cloud solutions is the dominant preference of customers. Our perpetual license solutions are rapidly attritting due to market demand for our cloud solutions with 90% of our pipeline representing cloud solutions. Cloud solutions are our fastest growing revenue line and represents 77% of total software revenue in the first half of 2021. We believe the growth reduction in license and maintenance revenue in favor of our cloud-based offerings is positive for our customers and Manhattan Associates.

Global Economic Trends and Industry Factors

Global macro-economic trends, technology spending, and supply chain management market growth are important barometers for our business. In the three and six months ended June 30, 2021, approximately 70% of our total revenue was generated in the United States in both periods, 16% and 17% in EMEA, respectively, and the remaining balance in APAC, Canada, and Latin America. In addition, Gartner Inc. (“Gartner”), an information technology research and advisory company, estimates that nearly 75% 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.

We sell technology-based solutions with total pricing, including software and services, in many cases exceeding $1.0 million. Our software is often a part of our customers’ and prospects’ much larger capital commitment associated with facilities expansion and business improvement. We believe that given the mission critical nature of our software, combined with a challenging global macro environment including the COVID-19 pandemic and geopolitical uncertainty, the current sales cycles for large cloud subscriptions and, to a lesser degree, license sales of $1.0 million or greater in our target markets could be extended. While cloud demand for our solutions is solid, the current business climate within the United States and geographic regions in which we operate may affect customers’ and prospects’ decisions regarding timing of strategic capital expenditures. Delays with respect to such decisions can have a material adverse impact on our business and may further intensify competition in our already highly competitive markets.

While we are encouraged by our results, we, along with many of our customers, still remain cautious regarding the pace of global economic growth. We believe global geopolitical and economic volatility associated with the pandemic likely will continue to shape customers’ and prospects’ enterprise software buying decisions.

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Revenue

Cloud Subscriptions and Software License Revenue.  Cloud subscriptions revenue and remaining performance obligation growth are the leading indicators of our business performance, primarily derived from cloud subscription fees that customers pay for supply chain solutions. Since we announced our transition to becoming a cloud-first company in 2017 with our launch of Manhattan Active Solutions, we have continued to see a significant shift in demand for cloud solutions versus software license. By comparison, in 2016, cloud subscriptions and software license revenue represented 7% and 93%, respectively, of our total cloud and software license revenue mix. In the full year ended 2021, we estimate revenue mix for cloud subscriptions and software license revenue to be approximately 80% and 20%, respectively. In the six months ended June 30, 2021, cloud subscriptions revenue was 77% of total cloud and software license revenue. Going forward, we expect cloud revenue to increase as a percentage of total software and cloud revenue as market demand for cloud solutions is supplanting legacy perpetual license demand.

In the three months ended June 30, 2021, cloud subscriptions revenue totaled $28.6 million or 17% of total revenues. In the six months ended June 30, 2021, cloud subscriptions revenue totaled $55.2 million or 17% of total revenues.

The Americas, EMEA and APAC segments recognized $24.7 million, $3.2 million and $0.7 million in cloud subscriptions revenue, respectively, in the three months ended June 30, 2021. The Americas, EMEA and APAC segments recognized $47.1 million, $6.8 million and $1.3 million in cloud subscriptions revenue, respectively, in the six months ended June 30, 2021. Cloud subscriptions revenue is recognized ratably over the term of the agreement, typically 36 to 60 months. In the three and six months ended June 30, 2021, the percentage mix of new to existing customers for the combination of software license and cloud subscriptions sales was approximately 15/85 and 20/80, respectively.

In the three months ended June 30, 2021, software license revenue totaled $8.8 million, or 5% of total revenue. In the six months ended June 30, 2021, software license revenue totaled $16.7 million or 5% of total revenue. Software license revenue recognized by the Americas, EMEA, and APAC segments totaled $7.4 million, $0.8 million, and $0.6 million, respectively, in the three months ended June 30, 2021. Software license revenue recognized by the Americas, EMEA, and APAC segments totaled $11.6 million, $4.0 million, and $1.1 million, respectively, in the six months ended June 30, 2021.

Cloud subscriptions and software license revenue growth are 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. In addition, the timing of the closing of a few large software license transactions can have a material impact on our software license revenues, operating profit, operating margins and earnings per share. For example, $0.8 million of either pre-tax profit or expense in the second quarter of 2021 equates to approximately one cent of diluted earnings per share impact.

Our software solutions are focused on core supply chain commerce operations (Warehouse Management, Transportation Management and Labor Management), Inventory optimization and Omnichannel operations (e-commerce, retail store operations and point of sale), 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. We expect to continue to face increased competition from Enterprise Resource Planning (ERP) and Supply Chain Management applications vendors and business application software vendors that may broaden their solutions offerings by internally developing, or by acquiring or partnering with independent developers of supply chain planning and execution software. Increased competition could result in price reductions, fewer customer orders, reduced gross margins, and loss of market share.

Maintenance Revenue. Our maintenance revenue for the three months ended June 30, 2021 totaled $37.7 million, or 23% of total revenue. For the six months ended June 30, 2021, maintenance revenue totaled $73.9 million or 23% of total revenue. The Americas, EMEA and APAC segments recognized $29.3 million, $6.2 million and $2.3 million in maintenance revenue, respectively, in the three months ended June 30, 2021. For the six months ended June 30, 2021, maintenance revenue recognized by the Americas, EMEA, and APAC segments totaled $57.4 million, $11.8 million and $4.7 million, respectively.  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. Maintenance revenue is influenced by: (1) new software license revenue growth; (2) annual renewal of support contracts; (3) increase in customers through acquisitions; (4) fluctuations in currency rates, and (5) conversion of maintenance contracts to cloud subscription contracts. Substantially all of our customers renew their annual support contracts. Over the last three years, our annual revenue renewal rate of customers subscribing to comprehensive support and enhancements has been greater than 90%. Maintenance revenue is generally paid in advance and recognized ratably 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.

Services Revenue.  In the three months ended June 30, 2021, our services revenue totaled $84.7 million, or 51% of total revenue. The Americas, EMEA and APAC segments recognized $64.8 million, $16.9 million and $3.0 million in services revenue, respectively, in the three months ended June 30, 2021. In the six months ended June 30, 2021, our services revenue totaled $165.1

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million, or 51% of total revenue. The Americas, EMEA and APAC segments recognized $127.0 million, $33.0 million and $5.1 million in services revenue, respectively, in the six months ended June 30, 2021. Due to our large services revenue mix as a percentage of total revenue, our consolidated operating margin profile may be lower than those of our competitors, and while we believe our services margins are strong, they may impact our operating margin profile.

Our professional services organization provides our customers with expertise and assistance in planning and implementing our solutions. To ensure a successful product implementation, consultants assist customers with the initial installation of a system, the conversion and transfer of the customer’s historical data onto our system, and ongoing training, education, and system upgrades.  We believe our professional services enable customers to implement our software rapidly, ensure the customer’s success with our solutions, strengthen our customer relationships, and add to our industry-specific knowledge base for use in future implementations and product innovations.

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.

Services revenue growth is contingent upon our cloud subscriptions, software license revenue and customer upgrade cycles, which are influenced by the strength of general economic and business conditions and the competitive position of our software products.  In addition, our professional services business has competitive exposure to offshore providers and other consulting companies.  All of these factors potentially create the risk of pricing pressure, fewer customer orders, reduced gross margins, and loss of market share.

Hardware Revenue. Our hardware revenue, which we recognize net of related costs, totaled $6.3 million in the three months ended June 30, 2021 representing 4% of total revenue. For the six months ended June 30, 2021, hardware revenue totaled $12.1 million, or 4% of total revenue. In conjunction with the licensing of our software, and as a convenience for our 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 generally purchase hardware from our vendors only after receiving an order from a customer.  As a result, we do not maintain hardware inventory.

Product Development

We continue to invest significantly in research and development (R&D) to provide leading solutions that help global retailers, manufacturers, wholesalers, distributors, and logistics providers 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 point of sale. Our R&D expenses were $23.2 million and $47.5 million for the three and six months ended June 30, 2021, respectively.

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, to address 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.

We also plan to continue to enhance our existing solutions and to introduce new solutions to address evolving industry standards and market needs.  We identify opportunities to further enhance our solutions and to develop and provide new solutions through our customer support organization, as well as through ongoing customer consulting engagements and implementations, interactions with our user groups, association with leading industry analysts and market research firms, and participation in industry standards and research committees.  Our solutions address the needs of customers in various vertical markets, including retail, consumer goods, food and grocery, logistics service providers, industrial and wholesale, high technology and electronics, life sciences, and government.

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Cash Flow and Financial Condition

For the three and six months ended June 30, 2021, we generated cash flow from operating activities of $45.5 million and $85.4 million, respectively. Our cash and cash equivalents at June 30, 2021 totaled $209.3 million, with no debt on our balance sheet. We currently have no credit facilities. Our primary uses of cash have been for funding investments in R&D and across our enterprise in transition to becoming a cloud-first company to drive revenue and earnings growth.

During the six months ended June 30, 2021, we repurchased 457,695 shares of Manhattan Associates’ outstanding common stock for approximately $59.9 million under the share repurchase program approved by our Board of Directors. In July 2021, our Board of Directors confirmed our existing authority to repurchase up to an aggregate of $50.0 million of our common stock under the share repurchase program.

For the remainder of 2021, our priorities for use of cash will continue to be investments in product development and in our business supporting the transition to cloud. We expect to continue to evaluate acquisition opportunities that are complementary to our product footprint and technology direction. We also expect to continue to weigh our share repurchase options against cash for acquisitions and investing in the business. We do not anticipate any borrowing requirements for the remainder of 2021 for general corporate purposes.

Results of Operations

In the following table, we present a summary of our consolidated results for the three and six months ended June 30, 2021 and 2020.

	Three Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021		2020
	(in thousands, except per share data)
Revenue	$	166,114	$	135,630		$	322,964	$	289,533
Costs and expenses		126,757		108,938			258,182		238,645
Operating income		39,357		26,692			64,782		50,888
Other income (loss), net		306		(158	)		13		1,262
Income before income taxes		39,663		26,534			64,795		52,150
Net income	$	30,593	$	19,204		$	53,236	$	41,734
Diluted earnings per share	$	0.48	$	0.30		$	0.83	$	0.65
Diluted weighted average number of shares		64,276		64,126			64,371		64,234

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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, 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 six months ended June 30, 2021 and 2020, 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:

	Three Months Ended June 30,							Six Months Ended June 30,
	2021		2020		% Change vs. Prior Year			2021		2020		% Change vs. Prior Year
Revenue:	(in thousands)							(in thousands)
Cloud subscriptions
Americas		24,654		16,345		51	%		47,143		31,588		49	%
EMEA		3,187		1,811		76	%		6,765		3,299		105	%
APAC		754		347		117	%		1,330		876		52	%
Total cloud subscriptions		28,595		18,503		55	%		55,238		35,763		54	%
Software license
Americas		7,421		3,853		93	%		11,581		12,303		-6	%
EMEA		842		415		103	%		3,994		1,439		178	%
APAC		560		1,413		-60	%		1,086		1,674		-35	%
Total software license		8,823		5,681		55	%		16,661		15,416		8	%
Maintenance
Americas		29,213		28,211		4	%		57,449		56,671		1	%
EMEA		6,208		5,591		11	%		11,770		10,762		9	%
APAC		2,311		2,096		10	%		4,672		4,209		11	%
Total maintenance		37,732		35,898		5	%		73,891		71,642		3	%
Services
Americas		64,790		55,189		17	%		126,970		122,438		4	%
EMEA		16,922		13,741		23	%		32,961		30,360		9	%
APAC		2,991		2,848		5	%		5,131		6,386		-20	%
Total services		84,703		71,778		18	%		165,062		159,184		4	%
Hardware
Americas		6,230		3,770		65	%		11,978		7,514		59	%
EMEA		31		-		N/A			134		11		1118	%
APAC		-		-		N/A			-		3		-100	%
Total hardware and other		6,261		3,770		66	%		12,112		7,528		61	%
Total Revenue
Americas		132,308		107,368		23	%		255,121		230,514		11	%
EMEA		27,190		21,558		26	%		55,624		45,871		21	%
APAC		6,616		6,704		-1	%		12,219		13,148		-7	%
Total revenue	$	166,114	$	135,630		22	%	$	322,964	$	289,533		12	%
Operating income:
Americas		28,590		18,984		51	%		44,706		35,266		27	%
EMEA		8,643		5,515		57	%		17,017		11,828		44	%
APAC		2,124		2,193		-3	%		3,059		3,794		-19	%
Total operating income	$	39,357	$	26,692		47	%	$	64,782	$	50,888		27	%

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Condensed Consolidated Financial Summary - Second Quarter 2021

• Consolidated total revenue: $166.1 million for the second quarter of 2021, compared to $135.6 million for the second quarter of 2020;

• Cloud subscription revenue: $28.6 million for the second quarter of 2021, compared to $18.5 million for the second quarter of 2020;

• Software license revenue: $8.8 million for the second quarter of 2021, compared to $5.7 million for the second quarter of 2020;

• Operating income: $39.4 million for the second quarter of 2021, compared to $26.7 million for the second quarter of 2020;

• Operating margins: 23.7% for the second quarter of 2021, compared to 19.7% for the second quarter of 2020;

• Diluted earnings per share: $0.48 for the second quarter of 2021 compared to $0.30 for the second quarter of 2020;

• Cash flow from operations: $45.5 million in the second quarter of 2021, compared to $48.8 million in the second quarter of 2020;

• Days sales outstanding: 62 days at June 30, 2021, compared to 61 days at March 31, 2021;

• Cash: $209.3 million at June 30, 2021, compared to $197.2 million at March 31, 2021;

• Share repurchases: In the three months ended June 30, 2021, we reduced our common shares outstanding by approximately 0.3%, primarily through the repurchase of approximately 0.3 million shares of our common stock, under the share repurchase program authorized by our board of directors for a total investment of $32.9 million. In July 2021, our Board of Directors confirmed our existing authority to repurchase up to an aggregate of $50.0 million of our outstanding common stock.

Below we discuss our consolidated results of operations for the second quarters of 2021 and 2020.

Revenue

	Three Months Ended June 30,
					% Change vs.			% of Total Revenue
	2021		2020		Prior Year			2021			2020
	(in thousands)
Cloud subscriptions	$	28,595	$	18,503		55	%		17	%		14	%
Software license		8,823		5,681		55	%		5	%		4	%
Maintenance		37,732		35,898		5	%		23	%		26	%
Services		84,703		71,778		18	%		51	%		53	%
Hardware		6,261		3,770		66	%		4	%		3	%
Total revenue	$	166,114	$	135,630		22	%		100	%		100	%

Cloud Subscriptions Revenue. In 2017, we released Manhattan Active™ Solutions accelerating our business transition to cloud subscriptions. In the second quarter of 2021, cloud subscriptions revenue increased $10.1 million compared to the same quarter in the prior year, as customer demand for our SaaS offerings is outpacing traditional perpetual license solutions. Our customers increasingly prefer 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 $8.3 million, $1.4 million and $0.4 million in the second quarter of 2021, respectively.

Software License Revenue.  Software license revenue increased $3.1 million in the second quarter of 2021 compared to the same quarter in the prior year. License revenue for the Americas and EMEA segments increased $3.6 million and $0.4 million in the second quarter of 2021, respectively, while license revenue for the APAC segment decreased $0.9 million.

The perpetual license sales percentage mix across our product suite in the second quarter ended June 30, 2021 was over 80% warehouse management solutions.

Maintenance Revenue. Maintenance revenue increased $1.8 million in the second quarter of 2021 compared to the same quarter in the prior year. Maintenance revenue for the Americas, EMEA and APAC segments increased $1.0 million, $0.6 million and $0.2 million in the second quarter of 2021, respectively, compared to the same quarter in the prior year.

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Services Revenue.  Services revenue increased $12.9 million in the second quarter of 2021 compared to the same quarter in the prior year. Services revenue for the Americas, EMEA and APAC segments increased $9.6 million, $3.2 million, and $0.1 million, respectively, compared to the same quarter in the prior year.

Hardware Revenue.  Hardware sales increased $2.5 million in the second quarter of 2021 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.

Cost of Revenue

	Three Months Ended June 30,
	2021		2020		% Change vs. Prior Year
Cost of software license	$	556	$	591		-6	%
Cost of cloud subscriptions, maintenance and services		70,072		62,434		12	%
Total cost of revenue	$	70,628	$	63,025		12	%

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 flat in the second quarter of 2021 compared with the same quarter in the prior year.

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 $7.6 million increase in the quarter ended June 30, 2021 compared to the same quarter in the prior year was principally due to a $5.7 million increase in performance-based compensation and a $2.3 million increase in compensation and other personnel-related expenses.

Operating Expenses

	Three Months Ended June 30,
	2021		2020		% Change vs. Prior Year
	(in thousands)
Research and development	$	23,213	$	19,931		16	%
Sales and marketing		13,750		9,709		42	%
General and administrative		17,082		14,016		22	%
Depreciation and amortization		2,084		2,257		-8	%
Operating expenses	$	56,129	$	45,913		22	%

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.

For each of the quarters ended June 30, 2021 and 2020, we did not capitalize any R&D costs because the costs incurred following the attainment of technological feasibility for the related software product through the date of general release were insignificant.

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 June 30, 2021 increased by $3.3 million, compared to the same quarter of 2020 principally due to a $2.0 million increase in performance-based compensation expense and a $1.1 million increase in compensation and other personnel-related expenses.

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 $4.0 million in the quarter ended June 30, 2021 compared to the same quarter in the prior year primarily due to a $2.3 million increase in performance-based compensation expense, a $1.0 million increase in compensation and other personnel-related expenses, and a $0.7 million increase in marketing and campaign programs.

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 $3.1 million, in the current year quarter compared to the same quarter in the prior year, primarily due to a $1.7 million increase in compensation and other personnel related expenses, and a $1.2 million increase performance-based compensation expense.

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Depreciation and Amortization.  Depreciation and amortization of intangibles and software expense for the second quarter of 2021 and 2020 was $2.1 million and $2.3 million, respectively. Amortization of acquisitions expense for the second quarter of 2021 and 2020 was immaterial.

Operating Income

Operating income in the second quarter of 2021 was $39.4 million compared to $26.7 million in the same quarter in the prior year. Operating margin was 23.7% for the second quarter of 2021 versus 19.7% for the same quarter in the prior year. Operating income and operating margin increased primarily due to increased cloud subscriptions, software license and services revenues.

Other Income and Income Taxes

	Three Months Ended June 30,
	2021		2020			% Change vs. Prior Year
Other income (loss), net	$	306	$	(158	)		-294	%
Income tax provision		9,070		7,330			24	%

Other income (loss), net.  Other income (loss), net primarily includes interest income, foreign currency gains and losses, and other non-operating expenses. Other income (loss) income, net increased $0.5 million in the second quarter of 2021 compared to the same quarter in the prior year primarily due to gains or losses on intercompany transactions denominated in foreign currencies with subsidiaries due to the fluctuation of the U.S. dollar relative to other foreign currencies, primarily the Indian Rupee. We recorded net foreign currency gains of $0.3 million in the second quarter of 2021, and net foreign currency losses of $0.2 million in the same quarter in the prior year.

Income tax provision.  Our effective income tax rate was 22.9% and 27.6% for the quarters ended June 30, 2021 and 2020, respectively. The decrease in the effective tax rate for the three months ended June 30, 2021 is due to foreign jurisdiction business incentives, income earned in lower tax jurisdictions, and an increase in domestic deductions.

Condensed Consolidated Financial Summary – First Six Months of 2021  

• Consolidated revenue: $323.0 million for the six months ended June 30, 2021 compared to $289.5 million for the six months ended June 30, 2020.

• Cloud subscription revenue: $55.2 million for the six months ended June 30, 2021 compared to $35.8 million for the six months ended June 30, 2020.

• Software license revenue: $16.7 million for the six months ended June 30, 2021, compared to $15.4 million for the six months ended June 30, 2020.

• Operating income: $64.8 million for the six months ended June 30, 2021, compared to $50.9 million for the six months ended June 30, 2020.

• Operating margins: 20.1% for the six months ended June 30, 2021, compared to 17.6% for the six months ended June 30, 2020.

• Diluted earnings per share: $0.83 for the six months ended June 30, 2021 compared to $0.65 for the six months ended June 30, 2020.

• Cash flow from operations: $85.4 million for the six months ended June 30, 2021, compared to $60.4 million for the six months ended June 30, 2020.

• Cash: $209.3 million at June 30, 2021, compared to $204.7 million at December 31, 2020.

• Share repurchases: During the six months ended June 30, 2021, we reduced our common shares outstanding by approximately 0.2% primarily through the repurchase of approximately 0.5 million shares of our common stock, under the share repurchase program authorized by our board of directors, for a total investment of $59.9 million.

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Below we discuss our consolidated results of operations for the six months ended June 30, 2021 and 2020.

	Six Months Ended June 30,
					% Change vs.			% of Total Revenue
	2021		2020		Prior Year			2021			2020
	(in thousands)
Cloud subscriptions	$	55,238	$	35,763		54	%		17	%		12	%
Software license		16,661		15,416		8	%		5	%		5	%
Maintenance		73,891		71,642		3	%		23	%		25	%
Services		165,062		159,184		4	%		51	%		55	%
Hardware		12,112		7,528		61	%		4	%		3	%
Total revenue	$	322,964	$	289,533		12	%		100	%		100	%

Cloud Subscription Revenue. Due to the release of Manhattan Active™ Solutions, cloud subscriptions revenue increased $19.5 million in the six months ended June 30, 2021 compared to the same period in the prior year, as customers began to purchase our SaaS offerings rather than a traditional perpetual license. Our customers increasingly prefer 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 $15.6 million, $3.5 million and $0.4 million, respectively, in the six months ended June 30, 2021.

Software License Revenue.  Software license revenue increased $1.3 million in the six months ended June 30, 2021 compared to the same period in the prior year. Our license revenue performance depends on the number and relative value of large deals we close in the period.  License revenue for the EMEA segment increased $2.6 million in the six months ended June 30, 2021, while license revenue for the Americas and APAC segments decreased $0.7 million and $0.6 million, respectively.

The license sales percentage mix across our product suite in the six months ended June 30, 2021 was approximately 80% warehouse management solutions.

Maintenance Revenue. Maintenance revenue increased $2.3 million in the six months ended June 30, 2021 compared to the same period in the prior year. Maintenance revenue for the Americas, EMEA and APAC segments increased $0.8 million, $1.0 million and $0.5 million, respectively, in the six months ended June 30, 2021 compared to the same period in the prior year.

Services Revenue.  Services revenue increased $5.9 million in the six months ended June 30, 2021 compared to the same period in the prior year. Services revenue for the Americas and EMEA segments increased $4.5 million and $2.6 million, respectively, in the six months ended June 30, 2021 compared with the same period in the prior year, while service revenue for the APAC segment decreased $1.2 million.

Hardware Revenue.  Hardware sales increased $4.6 million in the six months ended June 30, 2021 compared to the same period 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.

Cost of Revenue

	Six Months Ended June 30,
	2021		2020		% Change vs. Prior Year
Cost of software license	$	1,112	$	1,146		-3	%
Cost of cloud subscriptions, maintenance and services		143,581		136,710		5	%
Total cost of revenue	$	144,693	$	137,856		5	%

Cost of Software License.  Cost of software license remained flat in the six months ended June 30, 2021 compared with the same period in the prior year.

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 operations; maintenance services; and professional and technical services as well as hosting fees. The $6.9 million increase in the six months ended June 30, 2021 compared to the same period in the prior year was principally due to a $9.7 million increase in performance-based compensation expense and a

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$3.1 million increase in compensation and other personnel-related expenses, offset by a $3.8 million decrease in travel expense, and a $1.6 million decrease in computer infrastructure costs.

Operating Expenses

	Six Months Ended June 30,
	2021		2020		% Change vs. Prior Year
	(in thousands)
Research and development	$	47,473	$	43,259		10	%
Sales and marketing		27,146		22,797		19	%
General and administrative		34,651		30,130		15	%
Depreciation and amortization		4,219		4,603		-8	%
Operating expenses	$	113,489	$	100,789		13	%

Research and Development.  R&D expenses for the six months ended June 30, 2021 increased $4.2 million compared to the same period in the prior year principally due to a $3.4 million increase in performance-based compensation expense and a $1.0 million increase in computer infrastructure costs. For the same reasons included in the quarterly R&D discussion above, no R&D costs were capitalized during the six months ended June 30, 2021 and 2020.

Sales and Marketing.  Sales and marketing expenses increased $4.3 million in the six months ended June 30, 2021 compared to the same period in the prior year primarily due to a $4.1 million increase in performance-based compensation expense and a $1.4 million increase in compensation and other personnel related expenses, offset by a $0.6 million decrease in marketing and campaign programs and a $0.4 million decrease in travel expense.

General and Administrative.  General and administrative expenses increased $4.5 million in the six months ended June 30, 2021 compared to the same period in the prior year, primarily due to a $2.6 million increase in compensation and other personnel related expenses, and a $2.0 million increase performance-based compensation expense.  

Depreciation and Amortization.  Depreciation and amortization of intangibles and software expense for the six months ended June 30, 2021 and 2020 was $4.2 million and $4.6 million, respectively.  Amortization of acquisitions expense for the six months ended June 30, 2021 and 2020 was immaterial.

Operating Income

Operating income for the six months ended June 30, 2021 was $64.8 million compared to $50.9 million for the same period in the prior year. Operating margin was 20.1% the first six months of 2021 versus 17.6% for the same period in the prior year. Operating income and operating margin increased primarily due to increased cloud subscriptions, services and hardware revenues.

Other Income and Income Taxes

	Six Months Ended June 30,
	2021		2020		% Change vs. Prior Year
Other income, net	$	13	$	1,262		-99	%
Income tax provision		11,559		10,416		11	%

Other income, net.  Other income, net decreased $1.2 million in the six months ended June 30, 2021 compared to the same period in the prior year primarily due to gains or losses on intercompany transactions denominated in foreign currencies with subsidiaries due to the fluctuation of the U.S. dollar relative to other foreign currencies, primarily the Indian Rupee. We recorded an immaterial amount of net foreign currency gains in the first six months of 2021, and net foreign currency gains of $1.2 million in the first six months of 2020.

Income tax provision.  Our effective income tax rate was 17.8% and 20.0% for the six months ended June 30, 2021 and 2020, respectively. The decrease in the effective tax rate for the six months ended June 30, 2021 is due to foreign jurisdiction business incentives, income earned in lower tax jurisdictions, and an increase in domestic deductions.

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Liquidity and Capital Resources

During the first six months of 2021, we funded our business exclusively through cash generated from operations. Our cash and cash equivalents as of June 30, 2021 included $170.1 million held in the U.S. and $39.2 million held by our foreign subsidiaries. We believe that our cash balances in the U.S. are sufficient to fund our U.S. operations.  In the future, if we elect to repatriate the unremitted earnings of our foreign subsidiaries, we would no longer be subject to additional U.S. income taxes on such earnings due to the enactment of the Tax Cuts and Jobs Act in December 2017, but we could be subject to additional local withholding taxes.

Cash flow from operating activities totaled $85.4 million and $60.4 million in the six months ended June 30, 2021 and 2020, respectively. Typical factors affecting our cash provided by operating activities include our level of revenue and earnings for the period, the timing and amount of employee bonus and income tax payments, and the timing of cash collections from our customers which is our primary source of operating cash flow. Cash flow from operating activities for the six months ended June 30, 2021 increased $25.0 million compared to the same period in the prior year, which is mainly due to an increase in net income.

Cash flow used in investing activities totaled $1.2 million and $1.8 million in the six months ended June 30, 2021 and 2020, respectively. Our investing activities for both the six months ended June 30, 2021 and 2020 consisted of capital spending to support company growth.

Financing activities used cash of $79.5 million and $43.2 million for the six months ended June 30, 2021 and 2020, respectively. The principal use of cash for financing activities in both periods was to purchase our common stock, including shares withheld for taxes due upon vesting of restricted stock. Repurchases of our common stock for the six months ended June 30, 2021 and 2020 totaled $79.5 million and $43.2 million, respectively, including shares withheld for taxes of $19.6 million and $18.2 million, respectively.

As disclosed in our Annual Report on Form 10-K, our principal commitments consist of obligations under operating leases. As we continue our business transition to a cloud subscription model, we have entered into multiple non-cancellable contracts for cloud infrastructure services. As of June 30, 2021, our cloud infrastructure obligations are approximately $72 million over the next 5 years.  We also enter into non-cancellable subscriptions in the ordinary course of business for internal software to support our operations.  Our obligations, as of June 30, 2021, are approximately $12 million over the next 3 years. We expect to fulfill all these commitments from our working capital.

Periodically, opportunities may arise to grow our business through the acquisition of complementary products, and technologies. Any material acquisition could result in a decrease to our working capital depending on the amount, timing, and nature of the consideration to be paid. We believe that our existing cash will be sufficient to meet our working capital and capital expenditure needs at least for the next twelve months, although there can be no assurance that this will be the case. With the continuing COVID-19 impact, we continue to focus on managing liquidity, while investing in and growing our headcount capacity to support our customers and grow our business. For the remainder of 2021, we anticipate that our priorities for use of cash will be similar to prior years, with our first priority being continued investment in product development and profitably and investing in our business to extend our market leadership. We will continue to evaluate acquisition opportunities that are complementary to our product footprint and technology direction. We will also continue to weigh our share repurchase options against cash for acquisitions and investing in the business. At this time, we do not anticipate any borrowing requirements for the remainder of 2021 for general corporate purposes.

Critical Accounting Policies and Estimates

In the first six months of 2021, there were no significant changes to our critical accounting policies and estimates from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2020 other than the adoption of the ASU 2019-12, Income Taxes (Topic 740).

Forward-Looking Statements

Certain statements contained in this filing are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements related to expectations about global macroeconomic trends and industry developments, plans for future business development activities, anticipated costs of revenues, product mix and service revenues, research and development, selling, general and administrative activities, and liquidity and capital needs and resources. When used in this quarterly report, the words “may,” “expect,” “forecast,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “project,” “estimate,” and similar expressions are generally intended to identify forward-looking statements. Undue reliance should not be placed on these forward-looking statements, which reflect opinions only as of the date of this quarterly report. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Some of the factors that could cause actual results to differ materially from the results discussed in forward-looking statements include:

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• the duration and severity of the coronavirus disease (COVID-19) pandemic and of measures taken to combat its spread, and the effects of both on our employees, customers, partners and the global economy;

• ongoing disruption and transformation in our vertical markets, including the aggravating effects of the COVID-19 pandemic on the sector;

• the operational and financial effects of our business transition to cloud subscription-based solutions;

• economic, political and market conditions;

• our ability to attract and retain highly skilled employees;

• competition;

• our dependence on a single line of business;

• our dependence on generating revenue from software licenses and cloud subscriptions to drive business;

• undetected errors or “bugs” in our software;

• the risk of defects, delays or interruptions in our cloud subscription services;

• possible compromises of our data protection and IT security measures;

• risks associated with large system implementations;

• possible liability to customers if our products fail;

• the requirement to maintain high quality professional service capabilities;

• the risks of international operations, including foreign currency exchange risk;

• the possibility that research and development investments may not yield sufficient returns;

• the long sales cycle associated with our products;

• the difficulty of predicting operating results;

• the need to continually improve our technology;

• risks associated with managing growth;

• reliance on third party and open source software;

• the need for our products to interoperate with other systems;

• the need to protect our intellectual property, and our exposure to intellectual property claims of others;

• economic conditions and regulatory changes caused by the United Kingdom’s exit from the European Union;

• the possible effects on international commerce of new or increased tariffs, or a “trade war”; and

• other risks described under the heading “Risk Factors” in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2020, as these may be updated from time to time in subsequent quarterly reports.

We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There were no material changes to the Quantitative and Qualitative Disclosures about Market Risk previously disclosed in our annual report on Form 10-K for the year ended December 31, 2020.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

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No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that the system of controls has operated effectively in all cases. Our disclosure controls and procedures however are designed to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

As of the end of the period covered by this report, our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

Changes in Internal Control over Financial Reporting

During the three months ended June 30, 2021, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, including any corrective actions with regard to material weaknesses.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may be a party to legal proceedings arising in the ordinary course of business, and we could be a party to legal proceedings not in the ordinary course of business. We are not currently a party to any legal proceeding the result of which we believe could have a material adverse impact upon our business, financial position, results of operations, or cash flows.

Many of our product installations involve software products that are critical to the operations of our customers’ businesses. Any failure in our products could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to contractually limit 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.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A, “Risk Factors,” of our annual report on Form 10-K for the year ended December 31, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table provides information regarding common stock purchases under our publicly announced repurchase program for the quarter ended June 30, 2021.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 - April 30, 2021		-	$	-		-		50,000,000
May 1 - May 31, 2021		129,077		132.19		129,077		32,937,501
June 1 - June 30, 2021		114,196		138.63		114,196		17,106,178
Total		243,273				243,273

Item 3. Defaults Upon Senior Securities.

No events occurred during the quarter covered by this report that would require a response to this item.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None

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Item 6.Exhibits.

Exhibit 31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Exhibit 101.SCH	Inline XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
Exhibit 104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, has been formatted in Inline XBRL.

* In accordance with Item 601(b)(32)(ii) of the SEC’s Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.

30

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MANHATTAN ASSOCIATES, INC.

Date:	July 29, 2021	/s/ Eddie Capel
		Eddie Capel
		President and Chief Executive Officer
		(Principal Executive Officer)
Date:	July 29, 2021	/s/ Dennis B. Story
		Dennis B. Story
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial Officer)

31

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eddie Capel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the registrant;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 29^th day of July, 2021

/s/ Eddie Capel

Eddie Capel

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis B. Story, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the registrant;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 29^th day of July, 2021

/s/ Dennis B. Story

Dennis B. Story

Executive Vice President, Chief Financial Officer and Treasurer

EX-32

Exhibit 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This Certificate is being delivered pursuant to the requirements of Section 1350 of Chapter 63 (Mail Fraud) of Title 18 (Crimes and Criminal Procedures) of the United States Code and shall not be relied on by any person for any other purpose.

The undersigned, who are the Chief Executive Officer and Chief Financial Officer, respectively, of Manhattan Associates, Inc. (the “Company”), hereby each certify that, to the undersigned’s knowledge:

The Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2021 (the “Report”), which accompanies this Certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and all information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 29^th day of July, 2021

/s/ Eddie Capel

Eddie Capel

President and Chief Executive Officer

/s/ Dennis B. Story

Dennis B. Story

Executive Vice President, Chief Financial Officer and Treasurer

In accordance with SEC Release No. 34-47986, this Exhibit is furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Jul. 26, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Registrant Name	MANHATTAN ASSOCIATES, INC.
Trading Symbol	MANH
Entity Central Index Key	0001056696
Current Fiscal Year End Date	--12-31
Entity Incorporation, State or Country Code	2Q
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		63,399,891
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-23999
Entity Tax Identification Number	58-2373424
Entity Address, Address Line One	2300 Windy Ridge Parkway
Entity Address, Address Line Two	Tenth Floor
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30339
City Area Code	770
Local Phone Number	955-7070
Title of each class	Common stock
Name of each exchange on which registered	NASDAQ

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 209,343	$ 204,705
Accounts receivable, net of allowance of $4,178 and $3,497, at June 30, 2021 and December 31, 2020, respectively	113,955	109,202
Prepaid expenses and other current assets	23,934	20,134
Total current assets	347,232	334,041
Property and equipment, net	15,115	17,903
Operating lease right-of-use assets	28,744	31,470
Goodwill, net	62,246	62,252
Deferred income taxes	3,975	5,760
Other assets	17,685	13,986
Total assets	474,997	465,412
Current liabilities:
Accounts payable	22,031	17,805
Accrued compensation and benefits	49,728	41,962
Accrued and other liabilities	18,915	21,181
Deferred revenue	125,993	114,164
Income taxes payable	194	1,874
Total current liabilities	216,861	196,986
Operating lease liabilities, long-term	24,959	27,843
Other non-current liabilities	20,727	21,686
Shareholders' equity:
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2021 and 2020
Common stock, $0.01 par value; 200,000,000 shares authorized; 63,397,603 and 63,527,186 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	634	635
Retained earnings	231,035	236,524
Accumulated other comprehensive loss	(19,219)	(18,262)
Total shareholders' equity	212,450	218,897
Total liabilities and shareholders' equity	$ 474,997	$ 465,412

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Statement Of Financial Position [Abstract]
Accounts receivable, allowance	$ 4,178	$ 3,497
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	63,397,603	63,527,186
Common stock, shares outstanding	63,397,603	63,527,186

XML

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Total revenue	$ 166,114	$ 135,630	$ 322,964	$ 289,533
Total costs	70,628	63,025	144,693	137,856
Research and development	23,213	19,931	47,473	43,259
Sales and marketing	13,750	9,709	27,146	22,797
General and administrative	17,082	14,016	34,651	30,130
Depreciation and amortization	2,084	2,257	4,219	4,603
Total costs and expenses	126,757	108,938	258,182	238,645
Operating income	39,357	26,692	64,782	50,888
Other income (loss), net	306	(158)	13	1,262
Income before income taxes	39,663	26,534	64,795	52,150
Income tax provision	9,070	7,330	11,559	10,416
Net income	$ 30,593	$ 19,204	$ 53,236	$ 41,734
Basic earnings per share	$ 0.48	$ 0.30	$ 0.84	$ 0.66
Diluted earnings per share	$ 0.48	$ 0.30	$ 0.83	$ 0.65
Weighted average number of shares:
Basic	63,537	63,509	63,591	63,550
Diluted	64,276	64,126	64,371	64,234
Cloud Subscriptions
Total revenue	$ 28,595	$ 18,503	$ 55,238	$ 35,763
Software License
Total revenue	8,823	5,681	16,661	15,416
Total costs	556	591	1,112	1,146
Maintenance
Total revenue	37,732	35,898	73,891	71,642
Services
Total revenue	84,703	71,778	165,062	159,184
Hardware
Total revenue	6,261	3,770	12,112	7,528
Cloud Subscriptions, Maintenance and Services
Total costs	$ 70,072	$ 62,434	$ 143,581	$ 136,710

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 30,593	$ 19,204	$ 53,236	$ 41,734
Foreign currency translation adjustment	(428)	336	(957)	(3,135)
Comprehensive income	$ 30,165	$ 19,540	$ 52,279	$ 38,599

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Operating activities:
Net income	$ 53,236	$ 41,734
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,219	4,603
Equity-based compensation	20,760	15,056
Loss on disposal of equipment		10
Deferred income taxes	1,768	4,234
Unrealized foreign currency gain	(1,029)	(741)
Changes in operating assets and liabilities:
Accounts receivable, net	(5,289)	(7,469)
Other assets	(7,912)	(619)
Accounts payable, accrued and other liabilities	9,592	(21,787)
Income taxes	(1,952)	568
Deferred revenue	12,002	24,799
Net cash provided by operating activities	85,395	60,388
Investing activities:
Purchase of property and equipment	(1,171)	(1,752)
Net cash used in investing activities	(1,171)	(1,752)
Financing activities:
Purchase of common stock	(79,486)	(43,155)
Net cash used in financing activities	(79,486)	(43,155)
Foreign currency impact on cash	(100)	(2,521)
Net change in cash and cash equivalents	4,638	12,960
Cash and cash equivalents at beginning of period	204,705	110,678
Cash and cash equivalents at end of period	$ 209,343	$ 123,638

XML

Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2019	$ 142,278	$ 635		$ 159,490	$ (17,847)
Balance (in shares) at Dec. 31, 2019		63,456,986
Repurchase of common stock	(43,155)	$ (6)	$ (15,050)	(28,099)
Repurchase of common stock (in shares)		(557,938)
Restricted stock units issuance		$ 6	(6)
Restricted stock units issuance (in shares)		619,920
Equity-based compensation	15,056		15,056
Foreign currency translation adjustment	(3,135)				(3,135)
Net income	41,734			41,734
Balance at Jun. 30, 2020	152,778	$ 635		173,125	(20,982)
Balance (in shares) at Jun. 30, 2020		63,518,968
Balance at Mar. 31, 2020	125,869	$ 635		146,552	(21,318)
Balance (in shares) at Mar. 31, 2020		63,495,687
Repurchase of common stock	(123)		(7,492)	7,369
Repurchase of common stock (in shares)		(1,829)
Restricted stock units issuance (in shares)		25,110
Equity-based compensation	7,492		7,492
Foreign currency translation adjustment	336				336
Net income	19,204			19,204
Balance at Jun. 30, 2020	152,778	$ 635		173,125	(20,982)
Balance (in shares) at Jun. 30, 2020		63,518,968
Balance at Dec. 31, 2020	218,897	$ 635		236,524	(18,262)
Balance (in shares) at Dec. 31, 2020		63,527,186
Repurchase of common stock	(79,486)	$ (6)	(20,755)	(58,725)
Repurchase of common stock (in shares)		(631,014)
Restricted stock units issuance		$ 5	(5)
Restricted stock units issuance (in shares)		501,431
Equity-based compensation	20,760		20,760
Foreign currency translation adjustment	(957)				(957)
Net income	53,236			53,236
Balance at Jun. 30, 2021	212,450	$ 634		231,035	(19,219)
Balance (in shares) at Jun. 30, 2021		63,397,603
Balance at Mar. 31, 2021	204,660	$ 636		222,815	(18,791)
Balance (in shares) at Mar. 31, 2021		63,616,713
Repurchase of common stock	(33,084)	$ (2)	(10,709)	(22,373)
Repurchase of common stock (in shares)		(244,700)
Restricted stock units issuance (in shares)		25,590
Equity-based compensation	10,709		$ 10,709
Foreign currency translation adjustment	(428)				(428)
Net income	30,593			30,593
Balance at Jun. 30, 2021	$ 212,450	$ 634		$ 231,035	$ (19,219)
Balance (in shares) at Jun. 30, 2021		63,397,603

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Basis of Presentation and Principles of Consolidation

6 Months Ended

Jun. 30, 2021

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,” “we,” “us,” “our,” or “Manhattan”) 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 our financial position at June 30, 2021, the results of operations for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020. The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year or any other interim period. These statements should be read in conjunction with our audited consolidated financial statements and management’s discussion and analysis included in our annual report on Form 10-K for the year ended December 31, 2020.

Principles of Consolidation

The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

New Accounting Pronouncements Adopted in Fiscal Year 2021

Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the accounting for franchise taxes and changes in tax laws or rates, as well as clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. On January 1, 2021, we adopted this guidance, and the adoption did not have a material impact on our financial statements.

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Revenue Recognition

6 Months Ended

Jun. 30, 2021

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, we generally consider the arrangement as an overall service, recognized over the initial hosting term. The software license fee typically due at the outset of the arrangement is not payable again if the customer renews the hosting services, so that the customer’s option to renew the hosting services is a material right, the revenue from which, if the option is exercised, we will recognize over the applicable renewal 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, training, and application managed services, including reimbursements of out-pocket expenses in connection with our implementation services. Implementation services include system planning, design, configuration, testing, and other software implementation support, and are typically optional and distinct from our software. Following implementation, customers may purchase application managed services to support and maintain 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. In the three and six months ended June 30, 2021, we recognized $30.3 million and $82.5 million of revenue that was included in the deferred revenue balance as of December 31, 2020. In the three months ended June 30, 2021, we recognized $52.7 million of revenue that was included in the deferred revenue balance as of March 31, 2021.

No revenue was recognized during the three and six months ended June 30, 2021 from performance obligations that were satisfied in prior periods.

Remaining Performance Obligations

As of June 30, 2021, approximately $488.7 million of revenue is expected to be recognized from remaining performance obligations for cloud subscriptions, maintenance contracts, and application managed services 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 45% 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 historical experience of write-offs and a detailed assessment of accounts receivable. Additions to the allowance for credit losses 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 $1.3 million and $1.4 million for the three months ended June 30, 2021 and 2020, respectively, and $2.0 million and $2.7 million for the six months ended June 30, 2021 and 2020, respectively.

Our analysis involved utilizing a model of internal historical losses data. In estimating the allowance for credit losses, we considered the age of the accounts receivable, our historical write-offs, and the historical 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. We also analyzed future expected credit losses given ever present changes to future risks in projected economic conditions and future risks of customer collection.

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 $19.4 million as of June 30, 2021, of which $14.2 million is included in other assets and $5.2 million is included in prepaid expenses and other current assets. Sales commission expense is included in Sales and Marketing expense in the accompanying Consolidated Statements of Income. Amortization of sales commissions was $1.2 million and $0.7 million for the three months ended June 30, 2021 and 2020, respectively, and $2.3 million and $1.4 million for the six months ended June 30, 2021 and 2020, respectively. No impairment losses were recognized during the periods.

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Fair Value Measurement

6 Months Ended

Jun. 30, 2021

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 June 30, 2021, our cash and cash equivalents were $196.5 million and $12.8 million, respectively. We had neither short-term investments nor long-term investments at June 30, 2021. Cash equivalents consist of highly liquid money market funds. For money market funds, we use quoted prices from active markets that are classified at Level 1, the highest level of observable input in the disclosure hierarchy framework. We had no investments classified at Level 2 or Level 3 at June 30, 2021.

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Leases

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Leases

4. Leases

We lease our facilities and some of our equipment under noncancelable operating lease arrangements that expire at various dates through 2029. For a few of our facility leases, we have certain options to extend the lease term for up to 10 years, at our sole discretion. We have no finance leases.

We present below the operating lease right-of-use assets and lease liabilities as of June 30, 2021 (in thousands):

	June 30, 2021
ASSETS
Operating lease right-of-use assets	$	28,744
LIABILITIES
Operating lease liabilities, current (included in accrued and other liabilities)	$	6,433
Operating lease liabilities, long-term		24,959
Total operating lease liabilities	$	31,392

Aggregate future minimum lease payments under noncancelable operating leases as of June 30, 2021 are as follows (in thousands):

Year Ending December 31,
2021 (excluding the six months ended June 30, 2021)	$	3,383
2022		6,821
2023		6,762
2024		6,405
2025		5,604
Thereafter		7,717
Total minimum payments required		36,692
Less short-term leases		-
Less imputed interest		(5,300	)
Total operating lease liabilities	$	31,392

The total lease cost for the three and six months ended June 30, 2021 was $2.0 million and $4.0 million, respectively. Total lease cost for the three months ended June 30, 2021 consisted of $1.9 million of operating lease costs, and $0.1 million of short-term lease costs. For the six months ended June 30, 2021, total lease cost consisted of $3.8 million of operating lease costs, and $0.2 of short-term lease costs.

Total lease cost for the three and six months ended June 30, 2020 was $2.0 million and $4.0 million, respectively. Total lease cost for the three months ended June 30, 2020 consisted of $1.9 million of operating lease costs, and $0.1 million of short-term lease costs. For the six months ended June 30, 2020, total lease cost consisted of $3.8 million of operating lease cost, and $0.2 million of short-term lease costs.  

Our variable lease costs for the three and six months ended June 30, 2021 and 2020 were immaterial.

Other information related to operating leases are as follows:

Weighted average remaining lease term	5.6 years
Weighted average discount rate		3	%
Supplemental cash flow information - operating cash flows (in thousands):
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	3,824

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Equity-Based Compensation

6 Months Ended

Jun. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Equity-Based Compensation

5. Equity-Based Compensation

We granted 52,237 and 20,834 restricted stock units (RSUs) during the three months ended June 30, 2021 and 2020, respectively, and granted 376,828 and 532,467 RSUs during the six months ended June 30, 2021 and 2020, respectively. Equity-based compensation expense related to RSUs was $10.7 million and $7.5 million during the three months ended June 30, 2021 and 2020, respectively, and $20.8 million and $15.1 million during the six months ended June 30, 2021 and 2020, respectively.

We present below a summary of changes during the six months ended June 30, 2021 in our unvested units of restricted stock:

	Number of shares/units
Outstanding at December 31, 2020		1,462,864
Granted		376,828
Vested		(501,431	)
Forfeited		(26,716	)
Outstanding at June 30, 2021		1,311,545

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Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

6. Income Taxes

Our effective tax rate was 22.9% and 27.6% for the three months ended June 30, 2021 and 2020, respectively, and 17.8% and 20.0% for the six months ended June 30, 2021 and 2020, respectively. The decrease in the effective tax rate for three and six months ended June 30, 2021 and 2020 is due to foreign jurisdiction business incentives, income earned in lower tax jurisdictions, and an increase in domestic deductions.

We apply the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements in accordance with Accounting Standards Classification (ASC) 740, Income Taxes. For the three months ended June 30, 2021, 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 the U.S. federal, substantially all state and local income tax examinations and substantially all non-U.S. income tax examinations for years before 2012.

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Basic and Diluted Net Income Per Share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Basic and Diluted Net Income Per Share

7. Basic and Diluted Net Income Per Share

Basic net income per share is computed using net income divided by the weighted average number of shares of common stock outstanding (“Weighted Shares”) for the period presented.

Diluted net income per share is computed using net income divided by Weighted Shares and the treasury stock method effect of common equivalent shares (CESs) outstanding for each period presented.

In the following table, we present a reconciliation of earnings per share and the shares used in the computation of earnings per share for the three and six months ended June 30, 2021 and 2020 (in thousands, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021			2020
	(in thousands, except per share data)				(in thousands, except per share data)
Net income	$	30,593	$	19,204	$	53,236		$	41,734
Earnings per share:
Basic	$	0.48	$	0.30	$	0.84		$	0.66
Effect of CESs		-		-		(0.01	)		(0.01	)
Diluted	$	0.48	$	0.30	$	0.83		$	0.65
Weighted average number of shares:
Basic		63,537		63,509		63,591			63,550
Effect of CESs		739		617		780			684
Diluted		64,276		64,126		64,371			64,234

The number of anti-dilutive CESs during the three and six months ended June 30, 2021 and 2020 was immaterial.

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Contingencies

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Contingencies

8. Contingencies

From time to time, we may be involved in litigation relating to claims arising out of the 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’s 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 in the ordinary course of business or other legal proceedings the result of which we believe is likely to have a material adverse impact on our business, financial position, results of operations, or cash flows. We expense legal costs associated with loss contingencies as such legal costs are incurred.

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Operating Segments

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Operating Segments

9. Operating Segments

We manage our business by geographic region and have three geographic reportable segments: North and Latin America (the “Americas”); Europe, the 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 and cloud subscriptions sold by those reportable segments. The royalties, which totaled approximately $1.3 million and $0.8 million for the three months ended June 30, 2021 and 2020, respectively, and $2.9 million and $1.5 million for the six months ended June 30, 2021, respectively, are included in costs 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 geography-based costs consist of costs for professional services personnel, direct sales and marketing expenses, infrastructure costs to support the employee and customer base, billing and financial systems, management and general and administrative support.  Certain corporate expenses included in the Americas segment are not charged to the other segments.  Such expenses include research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Costs in the Americas segment include all research and development costs, including the costs associated with our operations in India.

In accordance with the segment reporting topic of the FASB Accounting Standards Codification, we present below certain financial information by reportable segment for the three and six months ended June 30, 2021 and 2020 (in thousands):

	Three Months Ended June 30,
	2021								2020
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	24,654	$	3,187	$	754	$	28,595	$	16,345	$	1,811	$	347	$	18,503
Software license		7,421		842		560		8,823		3,853		415		1,413		5,681
Maintenance		29,213		6,208		2,311		37,732		28,211		5,591		2,096		35,898
Services		64,790		16,922		2,991		84,703		55,189		13,741		2,848		71,778
Hardware		6,230		31		-		6,261		3,770		-		-		3,770
Total revenue		132,308		27,190		6,616		166,114		107,368		21,558		6,704		135,630
Costs and Expenses:
Cost of revenue		53,105		14,252		3,271		70,628		46,749		12,746		3,530		63,025
Operating expenses		48,763		4,104		1,178		54,045		39,625		3,095		936		43,656
Depreciation and amortization		1,850		191		43		2,084		2,010		202		45		2,257
Total costs and expenses		103,718		18,547		4,492		126,757		88,384		16,043		4,511		108,938
Operating income	$	28,590	$	8,643	$	2,124	$	39,357	$	18,984	$	5,515	$	2,193	$	26,692

	Six Months Ended June 30,
	2021								2020
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	47,143	$	6,765	$	1,330	$	55,238	$	31,588	$	3,299	$	876	$	35,763
Software license		11,581		3,994		1,086		16,661		12,303		1,439		1,674		15,416
Maintenance		57,449		11,770		4,672		73,891		56,671		10,762		4,209		71,642
Services		126,970		32,961		5,131		165,062		122,438		30,360		6,386		159,184
Hardware		11,978		134		-		12,112		7,514		11		3		7,528
Total revenue		255,121		55,624		12,219		322,964		230,514		45,871		13,148		289,533
Costs and Expenses:
Cost of revenue		108,412		29,676		6,605		144,693		104,096		26,770		6,990		137,856
Operating expenses		98,268		8,538		2,464		109,270		87,053		6,865		2,268		96,186
Depreciation and amortization		3,735		393		91		4,219		4,099		408		96		4,603
Total costs and expenses		210,415		38,607		9,160		258,182		195,248		34,043		9,354		238,645
Operating income	$	44,706	$	17,017	$	3,059	$	64,782	$	35,266	$	11,828	$	3,794	$	50,888

The majority of our software license revenue relates to our warehouse management product group (over 80%) for the three and six months ended June 30, 2021. Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel, warehouse management solutions, and transportation management solutions for the six months ended June 30, 2021.

At June 30, 2021, total assets for the Americas, EMEA and APAC segments were $409.2 million, $52.6 million and $13.1 million, respectively.

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Basis of Presentation and Principles of Consolidation (Policies)

6 Months Ended

Jun. 30, 2021

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,” “we,” “us,” “our,” or “Manhattan”) 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 our financial position at June 30, 2021, the results of operations for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020. The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year or any other interim period. These statements should be read in conjunction with our audited consolidated financial statements and management’s discussion and analysis included in our annual report on Form 10-K for the year ended December 31, 2020.

Principles of Consolidation

Principles of Consolidation

The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

New Accounting Pronouncements Adopted in Fiscal Year 2021

New Accounting Pronouncements Adopted in Fiscal Year 2021

Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the accounting for franchise taxes and changes in tax laws or rates, as well as clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. On January 1, 2021, we adopted this guidance, and the adoption did not have a material impact on our financial statements.

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Leases (Tables)

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Summary of Operating Lease Right-of-Use Assets and Lease Liabilities

We present below the operating lease right-of-use assets and lease liabilities as of June 30, 2021 (in thousands):

	June 30, 2021
ASSETS
Operating lease right-of-use assets	$	28,744
LIABILITIES
Operating lease liabilities, current (included in accrued and other liabilities)	$	6,433
Operating lease liabilities, long-term		24,959
Total operating lease liabilities	$	31,392

Aggregate Future Minimum Lease Payments Under Noncancelable Operating Leases

Aggregate future minimum lease payments under noncancelable operating leases as of June 30, 2021 are as follows (in thousands):

Year Ending December 31,
2021 (excluding the six months ended June 30, 2021)	$	3,383
2022		6,821
2023		6,762
2024		6,405
2025		5,604
Thereafter		7,717
Total minimum payments required		36,692
Less short-term leases		-
Less imputed interest		(5,300	)
Total operating lease liabilities	$	31,392

Schedule of Other Information Related to Leases

Other information related to operating leases are as follows:

Weighted average remaining lease term	5.6 years
Weighted average discount rate		3	%
Supplemental cash flow information - operating cash flows (in thousands):
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	3,824

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Equity-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Changes in Unvested Units of Restricted Stock

We present below a summary of changes during the six months ended June 30, 2021 in our unvested units of restricted stock:

	Number of shares/units
Outstanding at December 31, 2020		1,462,864
Granted		376,828
Vested		(501,431	)
Forfeited		(26,716	)
Outstanding at June 30, 2021		1,311,545

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Basic and Diluted Net Income Per Share (Tables)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Reconciliation of Earnings Per Share and Shares Used in Computation of Earnings Per Share

In the following table, we present a reconciliation of earnings per share and the shares used in the computation of earnings per share for the three and six months ended June 30, 2021 and 2020 (in thousands, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021			2020
	(in thousands, except per share data)				(in thousands, except per share data)
Net income	$	30,593	$	19,204	$	53,236		$	41,734
Earnings per share:
Basic	$	0.48	$	0.30	$	0.84		$	0.66
Effect of CESs		-		-		(0.01	)		(0.01	)
Diluted	$	0.48	$	0.30	$	0.83		$	0.65
Weighted average number of shares:
Basic		63,537		63,509		63,591			63,550
Effect of CESs		739		617		780			684
Diluted		64,276		64,126		64,371			64,234

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Operating Segments (Tables)

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Schedule of Financial Information by Reportable Segment

In accordance with the segment reporting topic of the FASB Accounting Standards Codification, we present below certain financial information by reportable segment for the three and six months ended June 30, 2021 and 2020 (in thousands):

	Three Months Ended June 30,
	2021								2020
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	24,654	$	3,187	$	754	$	28,595	$	16,345	$	1,811	$	347	$	18,503
Software license		7,421		842		560		8,823		3,853		415		1,413		5,681
Maintenance		29,213		6,208		2,311		37,732		28,211		5,591		2,096		35,898
Services		64,790		16,922		2,991		84,703		55,189		13,741		2,848		71,778
Hardware		6,230		31		-		6,261		3,770		-		-		3,770
Total revenue		132,308		27,190		6,616		166,114		107,368		21,558		6,704		135,630
Costs and Expenses:
Cost of revenue		53,105		14,252		3,271		70,628		46,749		12,746		3,530		63,025
Operating expenses		48,763		4,104		1,178		54,045		39,625		3,095		936		43,656
Depreciation and amortization		1,850		191		43		2,084		2,010		202		45		2,257
Total costs and expenses		103,718		18,547		4,492		126,757		88,384		16,043		4,511		108,938
Operating income	$	28,590	$	8,643	$	2,124	$	39,357	$	18,984	$	5,515	$	2,193	$	26,692

	Six Months Ended June 30,
	2021								2020
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	47,143	$	6,765	$	1,330	$	55,238	$	31,588	$	3,299	$	876	$	35,763
Software license		11,581		3,994		1,086		16,661		12,303		1,439		1,674		15,416
Maintenance		57,449		11,770		4,672		73,891		56,671		10,762		4,209		71,642
Services		126,970		32,961		5,131		165,062		122,438		30,360		6,386		159,184
Hardware		11,978		134		-		12,112		7,514		11		3		7,528
Total revenue		255,121		55,624		12,219		322,964		230,514		45,871		13,148		289,533
Costs and Expenses:
Cost of revenue		108,412		29,676		6,605		144,693		104,096		26,770		6,990		137,856
Operating expenses		98,268		8,538		2,464		109,270		87,053		6,865		2,268		96,186
Depreciation and amortization		3,735		393		91		4,219		4,099		408		96		4,603
Total costs and expenses		210,415		38,607		9,160		258,182		195,248		34,043		9,354		238,645
Operating income	$	44,706	$	17,017	$	3,059	$	64,782	$	35,266	$	11,828	$	3,794	$	50,888

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Basis of Presentation and Principles of Consolidation - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2021
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2021
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]	true
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201912Member

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Revenue Recognition - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation Of Revenue [Line Items]
Revenue recognized in the reporting period from performance obligations satisfied in prior periods	$ 0		$ 0
Revenue expected to be recognized from remaining performance obligations	488,700,000		$ 488,700,000
Remaining performance obligation, explanation			We expect to recognize revenue on approximately 45% of these remaining performance obligations over the next 24 months with the balance recognized thereafter.
Percentage of expected revenue recognition			45.00%
Provision for cost of return and product warranty claims recorded	0		$ 0
Allowance for credit losses recorded to operations	1,300,000	$ 1,400,000	$ 2,000,000.0	$ 2,700,000
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.
Amortization of sales commissions	1,200,000	700,000	$ 2,300,000	1,400,000
Impairment losses	0	$ 0	0	$ 0
Balance as of December 31,2020
Disaggregation Of Revenue [Line Items]
Deferred revenue recognized	30,300,000		82,500,000
Balance as of March 31, 2021
Disaggregation Of Revenue [Line Items]
Deferred revenue recognized	52,700,000
Sales Commission
Disaggregation Of Revenue [Line Items]
Deferred commissions	19,400,000		19,400,000
Sales Commission | Other Assets
Disaggregation Of Revenue [Line Items]
Deferred commissions	14,200,000		14,200,000
Sales Commission | Prepaid Expenses and Other Current Assets
Disaggregation Of Revenue [Line Items]
Deferred commissions	$ 5,200,000		$ 5,200,000

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Revenue Recognition - Additional Information (Detail 1)	Jun. 30, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-07-01
Disaggregation Of Revenue [Line Items]
Revenue recognized on remaining performance obligations period	24 months

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Fair Value Measurement - Additional Information (Detail)	Jun. 30, 2021 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Cash balance	$ 196,500,000
Cash equivalents	12,800,000
Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Investments	0
Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Investments	$ 0

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Leases - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Leases [Abstract]
Option to extend, lease term			10 years
Total lease cost	$ 2.0	$ 2.0	$ 4.0	$ 4.0
Operating lease costs	1.9	1.9	3.8	3.8
Short-term lease costs	$ 0.1	$ 0.1	$ 0.2	$ 0.2

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Leases - Summary of Operating Lease Right-of-Use Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
ASSETS
Operating lease right-of-use assets	$ 28,744	$ 31,470
LIABILITIES
Operating lease liabilities, current (included in accrued and other liabilities)	$ 6,433
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued and other liabilities
Operating lease liabilities, long-term	$ 24,959	$ 27,843
Total operating lease liabilities	$ 31,392

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Leases - Aggregate Future Minimum Lease Payments Under Noncancelable Operating Leases (Detail) $ in Thousands	Jun. 30, 2021 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2021 (excluding the six months ended June 30, 2021)	$ 3,383
2022	6,821
2023	6,762
2024	6,405
2025	5,604
Thereafter	7,717
Total minimum payments required	36,692
Less imputed interest	(5,300)
Total operating lease liabilities	$ 31,392

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Leases - Other Information Related to Leases (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($)
Leases [Abstract]
Weighted average remaining lease term	5 years 7 months 6 days
Weighted average discount rate	3.00%
Supplemental cash flow information - operating cash flows (in thousands):
Operating cash flows for operating leases	$ 3,824

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Equity-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock expense	$ 10.7	$ 7.5	$ 20.8	$ 15.1
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of restricted units granted in the period	52,237	20,834	376,828	532,467

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Summary of Changes in Unvested Units of Restricted Stock (Detail) - Restricted Stock Units - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of units, Outstanding at December 31, 2020			1,462,864
Number of units, Granted	52,237	20,834	376,828	532,467
Number of units, Vested			(501,431)
Number of units, Forfeited			(26,716)
Number of units, Outstanding at June 30, 2021	1,311,545		1,311,545

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Income Taxes - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Effective tax rate	22.90%	27.60%	17.80%	20.00%

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Reconciliation of Earnings Per Share and Shares Used in Computation of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Earnings Per Share [Abstract]
Net income	$ 30,593	$ 19,204	$ 53,236	$ 41,734
Earnings per share:
Basic	$ 0.48	$ 0.30	$ 0.84	$ 0.66
Effect of CESs			(0.01)	(0.01)
Diluted	$ 0.48	$ 0.30	$ 0.83	$ 0.65
Weighted average number of shares:
Basic	63,537	63,509	63,591	63,550
Effect of CESs	739	617	780	684
Diluted	64,276	64,126	64,371	64,234

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Operating Segments - Additional Information (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) Segment	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | Segment			3
Total assets	$ 474,997		$ 474,997		$ 465,412
Warehouse Management Product Group | Product Concentration Risk | Sales Revenue, Net
Segment Reporting Information [Line Items]
Percentage of software license revenue	80.00%		80.00%
Americas
Segment Reporting Information [Line Items]
Americas royalty fees	$ 1,300	$ 800	$ 2,900	$ 1,500
Total assets	409,200		409,200
EMEA
Segment Reporting Information [Line Items]
Total assets	52,600		52,600
APAC
Segment Reporting Information [Line Items]
Total assets	$ 13,100		$ 13,100

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Operating Segments - Schedule of Financial Information by Reportable Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment Reporting Information [Line Items]
Total revenue	$ 166,114	$ 135,630	$ 322,964	$ 289,533
Cost of revenue	70,628	63,025	144,693	137,856
Operating expenses	54,045	43,656	109,270	96,186
Depreciation and amortization	2,084	2,257	4,219	4,603
Total costs and expenses	126,757	108,938	258,182	238,645
Operating income	39,357	26,692	64,782	50,888
Americas
Segment Reporting Information [Line Items]
Total revenue	132,308	107,368	255,121	230,514
Cost of revenue	53,105	46,749	108,412	104,096
Operating expenses	48,763	39,625	98,268	87,053
Depreciation and amortization	1,850	2,010	3,735	4,099
Total costs and expenses	103,718	88,384	210,415	195,248
Operating income	28,590	18,984	44,706	35,266
EMEA
Segment Reporting Information [Line Items]
Total revenue	27,190	21,558	55,624	45,871
Cost of revenue	14,252	12,746	29,676	26,770
Operating expenses	4,104	3,095	8,538	6,865
Depreciation and amortization	191	202	393	408
Total costs and expenses	18,547	16,043	38,607	34,043
Operating income	8,643	5,515	17,017	11,828
APAC
Segment Reporting Information [Line Items]
Total revenue	6,616	6,704	12,219	13,148
Cost of revenue	3,271	3,530	6,605	6,990
Operating expenses	1,178	936	2,464	2,268
Depreciation and amortization	43	45	91	96
Total costs and expenses	4,492	4,511	9,160	9,354
Operating income	2,124	2,193	3,059	3,794
Cloud Subscriptions
Segment Reporting Information [Line Items]
Total revenue	28,595	18,503	55,238	35,763
Cloud Subscriptions | Americas
Segment Reporting Information [Line Items]
Total revenue	24,654	16,345	47,143	31,588
Cloud Subscriptions | EMEA
Segment Reporting Information [Line Items]
Total revenue	3,187	1,811	6,765	3,299
Cloud Subscriptions | APAC
Segment Reporting Information [Line Items]
Total revenue	754	347	1,330	876
Software License
Segment Reporting Information [Line Items]
Total revenue	8,823	5,681	16,661	15,416
Cost of revenue	556	591	1,112	1,146
Software License | Americas
Segment Reporting Information [Line Items]
Total revenue	7,421	3,853	11,581	12,303
Software License | EMEA
Segment Reporting Information [Line Items]
Total revenue	842	415	3,994	1,439
Software License | APAC
Segment Reporting Information [Line Items]
Total revenue	560	1,413	1,086	1,674
Maintenance
Segment Reporting Information [Line Items]
Total revenue	37,732	35,898	73,891	71,642
Maintenance | Americas
Segment Reporting Information [Line Items]
Total revenue	29,213	28,211	57,449	56,671
Maintenance | EMEA
Segment Reporting Information [Line Items]
Total revenue	6,208	5,591	11,770	10,762
Maintenance | APAC
Segment Reporting Information [Line Items]
Total revenue	2,311	2,096	4,672	4,209
Services
Segment Reporting Information [Line Items]
Total revenue	84,703	71,778	165,062	159,184
Services | Americas
Segment Reporting Information [Line Items]
Total revenue	64,790	55,189	126,970	122,438
Services | EMEA
Segment Reporting Information [Line Items]
Total revenue	16,922	13,741	32,961	30,360
Services | APAC
Segment Reporting Information [Line Items]
Total revenue	2,991	2,848	5,131	6,386
Hardware
Segment Reporting Information [Line Items]
Total revenue	6,261	3,770	12,112	7,528
Hardware | Americas
Segment Reporting Information [Line Items]
Total revenue	6,230	$ 3,770	11,978	7,514
Hardware | EMEA
Segment Reporting Information [Line Items]
Total revenue	$ 31		$ 134	11
Hardware | APAC
Segment Reporting Information [Line Items]
Total revenue				$ 3