Manhattan Associates, Inc. (MANH) Q1 2022 Earnings Report, Transcript and Summary

Good afternoon. My name is Leah and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates Quarter One Earnings Call. [Operator Instructions] As a reminder, ladies and gentlemen, this call is being recorded today, April 26. I would now like to introduce Mr. Michael Bauer, Head of Investor Relations of Manhattan Associates. Mr. Bauer, you may begin your conference.

Thank you, Leah and good afternoon everyone. Welcome to Manhattan Associates 2022 first quarter earnings call. I will review our cautionary language and then turn the call over to Eddie Capel, our CEO. During this call, including the question-and-answer session, we may make forward-looking statements regarding future events or the future financial performance of Manhattan Associates. You are cautioned that these forward-looking statements involve risks and uncertainties and are not guarantees of future performance and that actual results may differ materially from the projections contained in our forward-looking statements. I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly our annual report on Form 10-K for the fiscal year 2021 and the risk factor discussion in that report as well as any risk factor updates we provide in our subsequent Form 10-Qs. We note in particular that uncertainty regarding the impact of COVID-19 pandemic on our performance could cause actual results to differ materially from our projections. We are under no obligation to update these statements. In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules. You will find a reconciliation schedule in the Form 8-K we submitted to the SEC earlier today and on our website at manh.com. Now, I will turn the call over to Eddie.

Good. Thanks Mike. Well, good afternoon, everyone and thank you for joining us as we review our first quarter results and discuss our increased full year 2022 outlook. Manhattan Associates is off to a strong start in 2022. We are reporting record results. Our Q1 total revenue increased 14% to $179 million and adjusted earnings per diluted share increased 40% to $0.60 and both of these metrics exceeded our expectations. Our global teams are busy and are executing very well for our customers, resulting in very strong customer satisfaction, broad revenue outperformance and earnings leverage. And furthermore, our investment in innovation and our people continues to payoff as product differentiation between Manhattan and other supply chain software vendors is widening. And this differentiation contributed to our 75% win rates in the quarter and the growing demand for our industry leading mission-critical cloud solutions. In Q1, RPO, which tends to be the leading indicator for growth, increased 92% to $810 million and we are tracking well towards achieving the $1 billion RPO milestone later this year. Demand for our cloud offerings remains strong across products, industry verticals and geographic locations. Demand also remains robust from both new and existing customers. And while the mix of bookings will certainly vary on a quarterly basis, in Q1, over half of our contracted bookings came from net new customers, showcasing the unique value that we bring to the market and the runway that’s in front of us. And from a vertical perspective, retail, manufacturing and wholesale drove more than 80% of our bookings in the quarter, but drilling in the sub-verticals are pretty diverse and include apparel, department stores, home furnishings, grocery, consumer goods, manufacturing as well as durable and non-durable goods. Our pipeline also remains robust with solid demand across all of our product suites. Over 90% of our pipeline consists of cloud opportunities, probably you would expect with net new potential customers representing about 35% of that demand. And with strong business momentum and our forward revenue visibility improving, we are going to be increasing our 2022 revenue and earnings guidance and Dennis will cover those details in a moment. On the services front, our team continues to execute very well, conducting about 100 go-lives in the quarter. And our global teams are also making really good progress against our goal of adding about 500 net new employees this year. In Q1, we added about 120 talented individuals from Manhattan family and have a large new plant scheduled to begin in Q2 as well. Across our organization, these hires will contribute to our ability to meet the future needs of our customers, grow our market share and extend our addressable market. So now, let’s move on to a short update on some of our products. And I’d like to start with an update on our store fulfillment application part of our Manhattan Active Omni suite. A wide range of retail brands use store fulfillment to power their ship from store, pick up in store, curbside and same-day delivery customer experiences. The solution is flexible enough to scale down to support individual order picking in the boutiques of some of the world’s best-known luxury retailers. But it also can scale up to power team picking, allowing dozens of associates to pick orders in department stores and other large footprint retail formats. And beyond its industry leading functionality, the platform independent nature of the application allows it to be used across a variety of form factors and operating systems with our customers mixing and matching windows in either iOS or Android. And that solution stands apart in the market for its functional depth, its platform flexibility, and of course, the fact that it can be deployed in conjunction with our point-of-sale application, delivering a mobile-first cloud-native and omnichannel-enabled experience for all store associates. And we are happy to report that each and everyday, more than 18,000 stores across the globe use our store fulfillment application to deliver best-in-class delivery experiences for consumers worldwide. And speaking of stores and our point-of-sale application specifically, we continue to activate more stores across more retailers in 2022. Point-of-sale remains a key strategic initiative for us and we are making solid progress on our journey to being the world’s leading retail point-of-sale provider. Now, I provided a more exhaustive update on Manhattan Active Warehouse Management in the last quarter’s update. So I will keep my remarks on this flagship application, a little more concise this quarter. Suffice to say though we continue to see very strong interest and adoption for Manhattan Active WM, the cloud-native WMS that we launched in May of 2020. This quarter saw a number of additional go-lives, including several high-volume, highly complex distribution centers, and the applications feature-richness, intuitive mobile application and ability to automatically scale in periods of peak workload set it apart in the market. And these factors have combined to deliver a competitive win rate with Manhattan Active WM, unlike anything we have seen in our 32-year history. And turning now to the other foundational element of Manhattan Active supply chain, that’s Manhattan Active Transportation Management. In Q1, we were once again named to the Leaders quadrant in the Gartner Magic Quadrant for TMS. And this results – this result marks the fourth consecutive year to be named a leader in the transportation industry’s most respective landscape report. And in addition to recognition from the industry analysts, Q1 was another strong quarter from an execution perspective for Manhattan Active TM. We continue to add new cloud customers across a diverse industry base and some of our early subscribing customers are now coming live with the solution. And as a testament to our geographic diversity of our TMS customer base, our first go-live for Manhattan Active TM was actually the largest drugstore retail chain in Latin America. And the power of our unified supply chain offering is resonating around the globe, helping drive TMS pipeline and customer acquisition both in the Americas and in Europe. Speaking in the Americas, kind of interesting, we have recently signed a strategic SaaS agreement with a large home improvement retailer. And as part of the project, this customer will migrate their existing on-premise deployments of WMS, TMS, OMS and our demand forecasting inventory optimization solutions to the cloud. And one of the unique benefits of our completely rewritten truly cloud-native applications is how easy it is for our customers to use adjacent solutions, because the solutions are now evergreen and it’s relatively easy for us to design and maintain flows connecting the Manhattan Active applications. And I will close out my product remarks by mentioning Momentum, our annual customer conference. And thankfully, for the first time since 2019, we plan to be back together in-person. This year we will be in Hollywood, Florida, one of our favorite venues and the theme for this year’s conference is Assemble, Agents of Change. And we will bring that theme to life in several ways, aside from the obvious advantage of being able to assemble in-person again this year, we’ll also be demonstrating the unique advantages that we deliver when we assemble multiple applications at Manhattan Active applications together, a flexible and powerful Manhattan Active architecture empowers our customers and partners to easily unify solutions to take our market leading applications and extend them to do even more and drive positive change for their business and their customers. And before I hand it off to Dennis, I am also excited to share that we have recently launched our ESG website and published metrics for years 2020 and 2021. Manhattan is committed to providing clear communication to all of our stakeholders and we encourage you to view these materials to better understand our commitment to the environment, how we support a diverse and inclusive workplace, and our efforts to strengthen the communities in which we live and work. So that concludes my business update. Dennis is going to provide you with an update of our financial performance and outlook, and then I’ll close our prepared remarks with a very brief summary before we move on to Q&A. So, Dennis?

Thanks, Eddie and hats off to our Manhattan strong global teams who continue to execute exceptionally well. We delivered strong financial results across the board, while significantly investing in the business. All 3 major geos were in the money, Americas, EMEA and APAC delivered double-digit top line growth and double-digit operating profit growth. Our growth, profitability and cash flow metrics continue to be solid. I will start with a quick recap of the quarter with growth rates on a year-over-year basis unless otherwise stated. Total revenue was a record $179 million, up 14%. This included 2 points of FX headwind excluding license and maintenance revenue, which removes the compression driven by our cloud transition, our total revenue was up 20%. Q1 cloud revenue totaled $37 million, up 40%. We ended the quarter with RPO of $810 million, growing 92% year-over-year and 16% sequentially. As an FYI, as of March 31, 2022, over 97% of our RPO is cloud-native subscriptions. As Eddie highlighted, demand continues to be broad and robust, well positioning us to achieve the $1 billion RPO milestone this year. Services set a new Q1 revenue record of $90 million, up 12%. How about them apples? As cloud sales continue to fuel services revenue growth globally. Cloud and services revenue combined represented 71% of our total revenue in the quarter. Our Q1 operating profit totaled $48 million, with adjusted operating margin of 26.9%, up 420 basis points year-over-year. Our performance was driven by strong cloud and services revenue growth, combined with operating leverage as our cloud business scales. This resulted in record Q1 earnings per share of $0.60, up 40% and GAAP EPS was $0.48, up 37%. Turning to cash, Q1 operating cash flow was a solid $32 million. We absorbed $25 million related to 2021 bonus compensation payout and 2022 merit compensation increases. Overall, this resulted in a 28% adjusted EBITDA margin and 17% free cash flow margin. Our balance sheet is rock solid with $216 million in cash and zero debt. Accordingly, we leveraged our strong cash position, investing our full $50 million share repurchase authority in the quarter. Given the strength of our balance sheet, solid cash collections and increasing visibility, our Board has increased our share repurchase authority to $75 million. So on to 2022 guidance. As consistently mentioned, our financial objective is to deliver sustainable double-digit top line growth and top quartile operating margins benchmarked against enterprise SaaS comps. With our strong start to the year and increasing visibility, we are raising our 2022 outlook. As a reminder, it is our intention to only update our multiyear guidepost on an annual basis. In today’s earnings release showcases the guidepost we originally published in conjunction with our Q4 call. For 2022 total revenue, we now expect a range of $720 million to $727 million, with a $723.5 million midpoint representing 9% year-over-year growth, up from our prior midpoint guidance of $708 million. For Q2, we expect total revenue of $178 million to $182 million. Excluding license and maintenance revenue, we estimate 19% growth for full year and Q2 representing sound underlying growth fundamentals. For operating margin, we are increasing our range to 24.2% to 24.8% up from our prior range of 23% to 24%, and we continue to target 75 to 125 basis points of operating margin expansion per year beginning in 2023. As highlighted on our Q4 call, 2022 operating margin guidance incorporates the following: an impact of 300 basis points from license and maintenance attrition on customer demand for our cloud solutions; 250 basis points of investment for talent hiring and retention; and 200 basis points of additional investment in our business, including the return of pandemic-impacted expenses. Yes, we are investing in the business. Regarding full year adjusted EPS, we are raising the range to $2.14 to $2.22, with a $2.18 midpoint, which is up from our prior $2.04 estimate. For GAAP EPS, our guidance range is moving up to $1.45 to $1.53. For Q2, we expect adjusted EPS of $0.52 to $0.54 and GAAP EPS of $0.33 to $0.35 with the difference between adjusted EPS and GAAP EPS solely representing investment in equity-based compensation. I’ll now provide some additional color for full year 2022. This is good stuff. We are increasing our cloud revenue range to $167 million to $170 million, representing 38% growth at the $168.5 million midpoint. We estimate cloud revenue will be approximately $40.5 million in Q2 and that it will increase to $43.5 million in Q3 and $47 million in Q4. That’s precision target volume there. For services revenue, we are increasing our forecast of $375 million to $379 million, representing 13% growth at the $377 million midpoint. We estimate Q2 services revenue of $96 million, $98.5 million in Q3 and to account for retail peak seasonality, $92 million in Q4. For maintenance revenue, we are slightly refining our revenue range lower to $134 million to $135 million as customers convert to cloud. For Q2, we estimate maintenance revenue of $34 million for Q3 $33 million and about $32 million in Q4. Overall, by end of year 2022, we expect license revenue to be about 2% of total revenue averaging about $3 million in license revenue per quarter for the remainder of the year. And for hardware, we expect about $6 million in revenue per quarter. Yes, I said $3 million in license per quarter versus $6 million from our hardware team. Clearly, demand has shifted to cloud. Moving to profitability. For consolidated subscription, maintenance and services, we expect margin to be about 54% for the remaining quarters of 2022. For operating margin, we are estimating about 24% for Q2 and Q3 and 23% in Q4, as timing of investments in hiring, marketing and pandemic-related expenses will push to the second half of the year. All said, though, we expect to achieve full year operating margin of 24.5%. Turning to operating cash flow. Starting January 1, 2022, as most of you are aware, the U.S. Tax Cuts and Jobs Act requires the capitalization of R&D for tax purposes. I refer you to item nine in our supplemental schedules. We anticipate the newly enacted tax legislation to increase this year’s cash income taxes paid by approximately $30 million to $35 million compared to 2021 of which about $15 million will be paid in Q2 with the remainder paid evenly over Q3 and Q4. While there is still a possibility that legislation will be enacted that defers or eliminates the requirement to capitalize these costs, our current outlook factors in higher cash taxes as we will be required to make these payments unless the existing law is amended. To be clear, this legislation does not impact earnings per share and it does not create any incremental expense obligation and, importantly, does not impact our ability to operationally grow cash flow. Finally, we expect our tax rate to be 21.7% and diluted share count to be approximately 64 million shares, which assumes no buyback activity. So that covers a super fantastic Q1 performance. Thanks to all Manhattan Associates, and thank you. And back to Eddie for some closing remarks.

Terrific. Thanks, Dennis. Well, we are very pleased with our strong start to 2022, and our record Q1 results. A more turbulent global macro environment persists, we continue to perform very well and feel like we’re very well positioned for future growth. So in summary, Manhattan is the industry leader offering world-class technology. Demand is strong, the competitive environment is favorable and that pipeline has continued to progress very well as new and existing customers want to shift to our industry-leading cloud-native applications that are scalable, versionless and extensible. So, thank you to everyone joining the call and thank you to our employees for all the great work that you are doing around the planet. Leah, we are now ready to take questions.

[Operator Instructions] And our first question comes from the line of Terry Tillman of Truist. Sir, your line is open.

Good afternoon, Eddie, Dennison, Mike. Basically 2.5 questions, Eddie, it’s great to hear about the WMS win rate. I think best in 32 years, that’s not bad statement. Dennis, the precision modeling, you’ve effectively done our models for us for each quarter, so thank you for that. Yes, first question is after that preamble is in terms of the RPO mix and the strength in RPO in the quarter, I guess, Eddie, it reminds me of coming out of the global financial crisis, we saw a WMS replacement cycle. Maybe an update on – is that what we’re seeing again a WS replacement cycle or is this just more kind of company-specific around the cloud innovation theme you have?

I think it’s a bit of both, Terry. I mean look, we have a product that’s been anchored for, if you will, by the industry for a long, long time, specifically being able to get access to new innovation much faster. You combine that with the continued transition to digital supply chains, the need for speed agility, faster delivery times, a great deal of flexibility inside of the four walls of the distribution center blending man and machine, meaning automation and robotics. And it calls to be – those facilities calls to be operated by today’s modern flexible warehouse management systems. And so there is a combination of both of those things going on, I think.

Okay. Got it. And I guess maybe, Dennis, a follow-up questions is just it is notable to hear about the new logo activity, 50% of, I guess, contracted bookings. Do those have a different profile in terms of deal sizes as they come in, new customers for the first time? Do they tend to be smaller and then it’s expanding over time or do those deal sizes compare to existing customers just doing more? And then I wanted to follow-up on free cash flow for the year given the cash taxes.

Well, I’ll take the new customer logo and Dennis, you’ll take the free cash flow. No, the deal sizes for the new logo customers, there is no discernible difference between new customers and deals with existing customers. To state the obvious, the – it’s fantastic to get new logos into the family. As you know, historically, two-thirds of our new software business each quarter comes from the existing customer base where we cross sell and upsell. So being able to get new logos into the family that we believe that will provide future revenue opportunity for us is really fantastic and very exciting.

That’s great. Dennis, I was just going to ask about you gave us the good color on cash taxes, it’s going to be larger in 2Q, and then I guess it’s evened out at a small level in 3Q, 4Q, is there any kind of guidepost you could give us on how we think about free cash flow margin for the year? Does it build from the first quarter level? Just any more color on how to think about cash flow? Thank you and congrats.

I think it will build through the back end of the year and start to normalize and track pretty close to the operating margin profile. Second half operating margin.

Thank you.

Yes, thank you, Terry.

And your next question comes from the line of Joe Vruwink of Baird. Sir, your line is open.

Great. Hi, everyone. I wanted to go back to the strategic SaaS deal where you’re migrating a full on-prem suite to the new active platform. What sort of opportunity does that represent within your existing installed base or maybe not even share of customers that are using every offering, but any sense of maybe customers that use more than one on-prem product today and what this could represent?

Not metric, frankly, Joe, but the point we were making, of course, now we have these as their known evergreen applications, they are versionless, which makes the seamless integration and the cross-sell and upsell and the integration of one application with another, frankly, a good bit easier than it’s done in decades past. And so frankly, the purpose of highlighting that was just to make it clear that, that really is an exciting avenue for us with both existing customers and new customers that procure more than one solution originally.

Okay. There was a big supply chain trade event in your backyard about a month ago down in Atlanta. And two big takeaways it seemed to me, one was just the emphasis on TMS, really, it seemed like across the industry. And then the second was achieving a better integration between your online storefront activity or shopping cart and actually having that in for – you’re picking operations on the floor. I’d imagine how your cloud product is architected, you’re well suited to address both opportunities. Are you starting to see some of the TMS as a category, but maybe some of these more advanced use cases actually attract customers your way? And is maybe some of this filtering into why the new logo participation is stepping up for you?

Most definitely on question number one. Honestly, not so much on the new logo acquisition, that’s kind of spread across individual products and various different initiatives. So, I couldn’t say that it would be wrong for me to say there is a concentration on – around modern unification in the new logos. But that obviously is a great opportunity for us to reach into in the future. But back to the original question, most certainly, integrated WMS and fully integrated seamless WMS and TMS has been the holy grail for a long, long time. And the seamless integration of OMS and WMS is also, as you pointed out, very important in today’s world to provide the responsiveness to the consumer, both on the forward part of the fulfillment cycle, but also when adjustments need to be made. How late in the cycle can consumers still make adjustments to orders, whether it would be quantities, items, shipping destinations and so forth. And when you have got an order management system that is very tightly integrated with the warehouse management system and the capability to be able to make all these late order changes and so forth, you have really got a differentiating offer for the consumer.

Alright. Great. Thank you very much.

Thank you, Joe.

And your next question comes from the line of Brian Peterson of Raymond James. Please go ahead.

Thanks gentlemen and congrats on the RPO number. So first one, Eddie, I just wanted to hear on the big win with the large home improvement retailer. Obviously, they bought a lot of products from you at once. I am just curious, is that a common theme that you see in the later-stage pipeline now that you have kind of the multi-tenant cloud portfolio or would you still expect maybe one or two? I am just kind of curious where the appetite is from customers there?

Yes. So, it’s an interesting one. So, that’s an existing customer that they have all those products from our portfolio in their landscape. But they didn’t buy them all at once, right. They had acquired those on-prem solutions. I forget the exact sequence, but they acquired them along the way. They build up that portfolio and now they are transitioning or migrating them all to the cloud. In terms of multiproduct purchases, honestly, there aren’t that many of them. And we have talked about this a little bit before. And the primary reason for that is most of our systems take quite a bit of implementation. And usually, to take on two or two product implementations all at one time is a pretty heavy lift. Now, what happens in the way the conversation goes as we are selling frankly, pick your product, whether it would be WMS, TMS, OMS, or whatever it is, we are setting out a roadmap. It may not be for purchase today, but we are setting out a roadmap to get to those products and those complementary products in the future.

Got it. Eddie, and maybe a follow-up just on Europe. I am curious what you guys are seeing in bookings or maybe the late-stage pipeline. Not trying to get too granular, but obviously, there is a lot of turmoil in the region. Just anything that you can share in terms of deal activity or pipeline?

That is – yes, pretty strong. pretty strong, Brian. EMEA had a very nice quarter. Pipeline looks frankly, even stronger for the balance of the year and obviously, there is very difficult times going on in Eastern Europe and Europe overall. But to be honest with you, it’s not impacting our business at all.

Good to hear. Thanks.

Thank you, Brian.

And your next question comes from the line of Matt Pfau of William Blair. Please go ahead.

Hi guys. Nice quarter. Thanks for taking my questions. I wanted to first just ask is we have seen perhaps the mix of retail between e-commerce and bricks and mortar perhaps normalize a bit as we have come out of the pandemic. Has that impacted which products you are seeing more demand for within your customer base?

It really hasn’t, Matt. The one thing and we have sort of talked about this a little bit over the last 12 months or so. We have seen omni and order management pick back up, but that’s obvious because it was super quiet in 2020 when those stores were closed and so forth. So, that’s really been the only change. But it’s a back to normal phenomenon versus a shift, I would say.

Got it. Okay. And then how should we think about the strong performance you are having in your professional services business relative to the commentary about cloud applications being easier to implement and evergreen that sort of commentary would almost make you think that you would need less professional services, but obviously, that segment is performing quite well.

Well, we are showing quite a bit of software, Matt. That’s really what it comes down to. And regardless of whether it is implemented in the cloud, which almost all of our software is now or on-premise, those solutions still have to be designed. They still have to be integrated. They still have to be tested. The change management still has to be performed, certainly the technical aspects of how you deploy or nuanced a little different. But still plenty of work to be done there and demand is strong for both us and our partners, frankly.

Yes. And we are guiding to about 13% growth year-over-year. So, very strong demand.

Great. Just last one for me on the win rates with Active WM being at record levels. Is that the same competitive set that you would see with your on-prem product? Are you seeing different competitors there? Just anything that is different from a competition perspective?

No. Pretty much the same competitive landscape, Matt. Things shift around us just a little bit here and there and they adjust modestly geo-by-geo, but really no change.

Okay. Great. Thanks guys. Appreciate it.

Thank you, Matt.

[Operator Instructions] And your next question comes from the line of Mark Schappel of Loop Capital. Your line is open.

Hi. Thanks for taking my question. Also congrats on the RPO number, the RPO front.

Thank you.

Just Eddie, building on an earlier question with respect to your new customer additions. Are these new customers typically coming from your core verticals such as like retail and apparel, or are you starting to see more and more customers come from different industries?

Yes. It’s a pretty good balance, Mark. But there is no question that we are seeing more business come from manufacturing and wholesale. And look, at the end of the day, whilst a lot of those companies are still categorized rightly as manufacturers and wholesalers. They are selling direct to consumers today. And they haven’t done for in the previous slide. So, as soon as any one of those companies start selling direct-to-consumer. To us, they look at awful lot like a retailer, right. They have got a – obviously, the order size is way different. The number of destinations they are shipping to is way different. They have got to deal with payments direct. And frankly, for them, goodness for bid, they have got to deal with all those dirty things like returns and so forth, they didn’t have to deal with before. And they just look like a lot like a retailer, which obviously our strength, we have got a pretty good strength in that vertical and it’s very helpful.

Okay. Thanks. That’s helpful. And then Eddie, based on your prepared remarks, it appears that you are on plan or the company is on plan with respect to the aggressive hiring plans you had set for the year. Many companies that we talked to are having some difficulty on that front. And I was just wondering if you could just talk a little bit about that and maybe what you are doing differently to…?

Yes, sure. I don’t know what we might be doing differently, frankly, but we are certainly putting a lot of effort into hiring and recruiting. And we feel like that people – individuals like to work for winners. So, that’s a real arrow in a quiver, I know I do, frankly. And we have exciting customers to work alongside. We have the most modern technology that is available in the – certainly in the supply chain space. We have global opportunities and our compensation levels are pretty competitive. So, with all those things combined, we think we have a pretty attractive proposition here. We got an incredible team. We have got an incredible culture, incredible diversity. And it’s – I am probably a little biased here, Mark, but I think it’s a pretty fun environment to work in.

With that RPO front, I think you have a right to be biased. Well, thanks. That’s helpful.

Thank you, Mark.

And our last question comes from the line of Blair Abernethy of Rosenblatt Securities. Your line is open.

Thanks very much and nice quarter, gentlemen. I just want to ask a little bit more – dig a little more into the new logos, the mix. I just want to understand, are these coming from primarily North America, or are you seeing now that you have got a predominantly cloud offering, are you getting more international interest in the platform? And are you reaching out to these new customers directly or are partners stepping up and helping you there?

Yes. Let’s see a few questions there. Look, we have a great partner community and their influence is terrific. We get some introductions through partners. Certainly, nothing is handed to us on a plate. We have got to win under any circumstances on our own merits. But the partner community is fantastic and has been serving – helping us and serving our customers really, really, really well. With regard to geographic reach, honestly, it hasn’t changed a great deal. About 80% of our businesses in the Americas and about 20% is international. It does bounce around a little bit, but holds reasonably steady around those metrics. And as I mentioned before, the verticals, we are seeing more reach into manufacturing and wholesale than maybe we have seen in prior years. But the summary of all of that is a pretty good balance player across the geographies, across the product portfolios, across the tiers and across vertical industries.

Great. Thank you very much.

My pleasure, Blair. Thank you.

And there are no further questions at this time. I would now like to turn the call back to Mr. Eddie Capel, President and CEO of Manhattan Associates.

Okay. Terrific. Thank you, Leah, and thank you, everybody, for joining us to listen to the Q1 earnings call. We look forward to continuing to focus on our customers, focus on our people and focus on innovation and reporting out on those things about 90 days from now. Thanks a lot.

And this concludes today’s conference call. Thank you for participating. You may now disconnect.