Manhattan Associates, Inc. Price & Performance (MANH)

Please note that the turbulent global macro environment could impact our performance, cause actual results to differ materially from our projections. Are under no obligation to update these statements. In addition, our comments include certain non GAAP financial measures to provide additional information to investors. We have reconciled all non GAAP measures related to GAAP measures in accordance with SEC rules. Will find reconciliation schedules in Form eight ks we filed with the SEC earlier today and on our website at manh.com. Now, I'll turn the call over to Eddie.

Thanks, Mike.

Good afternoon, everybody and thanks again for joining us this afternoon. Well, certainly is an interesting time to be delivering at quarterly earnings report and maybe an even more interesting time to be providing forward looking guidance. I think the words uncertainty and changeable don't really seem to appropriately describe the world we're living in today, do they? That said, in a moment, I'll have the pleasure of formally introducing you to Eric, our new CEO, who will cover our quarterly results. And given the timing of our transition, we shared the CEO duties during Q1. But since mid February, we've both been working double time the transition process. And I have to say, it really couldn't be going any smoother. Eric's getting up to speed very quickly and we've had the opportunity to spend some time with our global teams, our partners and some of our customers. And in a few weeks, I'm excited to be able to introduce Eric to a large gathering of our customer community at momentum. In my new role as Executive Vice Chairman, I look forward to supporting Eric and our global teams in any way that I can. Today, I'll be available to answer any product or industry questions as well as provide any historical context.

That may be helpful. So with that, over to Eric. Great. Thank you, Eddie for the warm introduction. Good afternoon everyone and thank you for joining us as we review our first quarter results and full year 2025 outlook. Manhattan is off to a solid start to 2025 posting better than expected top and bottom line results. But before we review the specifics on the quarter, I'd like to share a few perspectives on our business and the market. Manhattan's strengths are well established. Our platform, our products and our people are world class. Our unified cloud product portfolio is superior offering best in class functionality Manhattan is the only vendor named by industry analysts as a leader across the supply chain commerce ecosystem.

Organic innovation is in Manhattan's DNA and our focus and capital allocation strategy will remain intact.

Our growth opportunity continues to expand. Our addressable market is forecasted to grow at double digit CAGR for the next several years. In addition to the market growth, we continue to invest in our products to expand the addressable market that we serve. Our sales team is driving growth through adding new customers, cross selling our unified product portfolio and converting our on premise customers to our cloud offerings. All of these sales channels contributed to strong Q1 bookings and a 25% year over year increase in RPO. As our customers navigate the current macro environment, we believe Manhattan is best positioned to help. As tariffs impact the cost of inventory precise inventory management and handling of inventory to optimally satisfy end customers is more important than ever. The unified capabilities in our products will allow our customers to react faster and with more precision. Over the past several years, we've seen many supply chains disruptions including the global COVID pandemic In all of these cases we've seen the companies with the most agile supply chains excel. And we've also seen these disruptions create long term demand for Manhattan products. Less than two weeks ago, Google named Manhattan its cloud business applications Partner of the Year for Supply Chain and Logistics.

This award highlights Manhattan's role as an innovator within the Google Cloud ecosystem, its commitment to driving customer [indiscernible] and its pioneering application of agentic AI and generative AI within the Manhattan Active Suite. This is a great honor and demonstrates demonstrates two leading engineering companies partnering to deliver innovation for their customers. We will continue to put our customers first as we deliver industry leading innovation and simplification.

Supply chains are inherently sophisticated, but our R and D teams are investing in simplifying deployments to reduce the time to value and accelerate the adoption of Manhattan products across DCs and stores.

These simplification initiatives are already improving customer experiences while enabling Manhattan and its customers to move and grow faster. While the current macro environment brings uncertainty to all businesses, I'm excited about our position in the market and our opportunity for growth. So now let's dive into Q1. The quarter exceeded expectations as 21% cloud revenue growth drove our top line outperformance in earnings leverage. Services revenue performed slightly better than expected, to date we have not experienced any adverse impacts from a the macro environment beyond what we shared on our Q4 call. However, given the inherent flexibility of time and materials contracts, and the status of the ever changing tariff environment, we remain cautious on our near term services revenue growth. Dennis will share more details on our guidance in just a few moments. RPO ended the quarter up 25% through roughly $1,900,000,000 as demand for our mission critical solutions remained solid. From a vertical perspective, our end markets are diverse, and we have healthy established footprints across numerous subsectors. Those sectors include retail, grocery, food distribution, life sciences, industrial, technology, airlines, third party logistics and others. For example, Q1 deals included a global cosmetics company, a grocery and drug retailer, a life sciences manufacturer, a global pharmaceutical and medical device company, a department store chain, and a global designer, developer and marketer of footwear, apparel and accessories well as a number of others.

Our Q1 competitive win rates remain consistent at about 70% we experienced strength from new customers with approximately 50% of new cloud bookings generated from net new logos. In addition to the healthy new logo activity, we continue to experience a good mix of conversions, upsells and cross sells. As always, while the timing of large deals and the mix of bookings will vary on a quarterly basis, we believe our bookings breadth from both new and existing customers across a broad set of industries and across our full product portfolio exemplifies our multiple opportunities for sustainable growth. And while the macro environment is uncertain, our pipeline remains solid with net new potential customers representing approximately 35% of the demand. This demand also continues to fuel opportunities for our services organization In Q1, our services team completed over 100 go lives for our customers. So now let's turn to some product updates. This quarter we launched a new product offering called Enterprise Promise and Fulfill, designed to optimize B2B order promising and fulfillment EPF delivers higher order conversion, lower fulfillment costs and enhanced B2B customer experiences. In recent years, it's been clear that the trend in B2B order fulfillment is around creating more direct to consumer like experiences.

B2B customer expectations now include the need for capabilities like real time inventory availability and order promising, real time visibility into the order fulfillment process and the ability to change orders after they've been submitted. Meanwhile, our customers are challenged to fulfill from increasingly complex supply chains oftentimes the result of acquisitions and geographic expansion. Modern ERPs simply aren't capable of providing this order fulfillment agility. Manhattan Active Enterprise Promise and Fulfill works seamlessly with customers' existing ERP to provide these capabilities without requiring expensive and risky ERP customization.

As many customers are now moving their ERP workloads to the cloud, they're also reevaluating which function should remain in the ERP which are better served by alternative cloud solutions. Enterprise Promise and Fulfill, along with our broader set of Manhattan Active Supply Chain planning and execution capabilities is designed to capitalize on this big opportunity. Now turning to our omni channel commerce applications. In Q1, we closed an important deal with a luxury department store. What's particularly notable about this win is the wide breadth of Manhattan Active Omni solutions they plan to implement. Once the rollout is complete, MAO will have replaced their legacy order management point of sale, CRM and chatbot. No other cloud solution provider can deliver these four vital systems on a unified cloud native architecture all with industry leading functional depth. As retailers look to rationalize the complexity complexity and cost of their existing commerce systems, we believe Manhattan Act of Bond Omni puts us in a great position to benefit from the next wave of commerce technology modernization. And speaking of chatbots, we now have multiple customers under contract for Manhattan Active Maven our AgenTik AI customer service bot. Because of its deep pre built connectivity into the Manhattan Active Omni API, customers can be live and deflecting 40% or more of their chat sessions in a manner of a few weeks.

And as of this quarter, Manhattan Active Maven can also answer email. After voice, email is still the most prevalent form of inbound inquiry coming into our customers contact centers. Between email and chat, we're now able to significantly reduce the amount of activity performed by customer service agents. More broadly on generative AI, we continue to make progress developing and deploying Manhattan Assist features across all Manhattan active platform applications. In addition to pre existing features like providing application configure it configuration advice and a natural language readout of existing configuration, customers can now add their own documentation to the knowledge base that Manhattan Assist draws from. These new capabilities allow contact center agents ask questions about return policies. They also allow warehouse associates to ask questions about they're supposed to induct a full tote and allow transportation planners to ask questions about their company's routing guide.

We continue to see strong use of Manhattan Assist across our omnichannel commerce and supply chain execution customers. We'll be providing a preview of more AgenTika AI capabilities next month at Momentum.

So that concludes my business update. Next, Dennis will provide you with an update on our financial performance and outlook, and then I'll close our prepared remarks with a brief summary before we move on to Q and A. So Dennis, over to you. Thanks, Eric. Hats off to our Manhattan global teams that continue to execute well in a very challenging macro environment. For the quarter, we delivered a better than expected financial performance on the top and bottom lines. This includes solid results across RPO bookings, cloud revenue growth, operating margin expansion and free cash flow generation.

FX volatility persist was roughly a $2,000,000 headwind to Q1 total revenue. However, it was $14,000,000 tailwind to sequential RPO growth and did not have a meaningful impact on the year over year. RPO growth. Now turning to our Q1 results. Our growth rates are reported on a year over year basis unless otherwise stated.

For the quarter, total revenue was $23,000,000 up 3% Cloud revenue increased 21% to $94,000,000 and services revenue declined 8% to 121,000,000 which was a bit better than expected. As previously discussed, the year over year decline in services revenue reflects customer budgetary constraints that shifted services work to future periods. As Eric highlighted, given the uncertain macro environment and inherent flexibility of time and material contracts, we remain cautious on our near term services revenue growth. We ended Q1 with RPO of $1,900,000,000 up 25% compared to the prior year and 6% sequentially. The solid Q1 performance was driven by a healthy mix of of sales from both new and existing customers. Our average contract duration remains at five point five to six years. However, some customers are electing longer ramp timelines. While the full contract is non cancelable, we believe the current environment has resulted in several customers to take a more conservative approach to the first half implementation timeline of their contracts.

Accordingly, we expect 38% of RPO to be recognized as revenue over the next twenty four months. As Eric stated, our teams are focused on accelerating the adoption of our products and our contracts always allow customers to amend their timeline for quicker deployments but not slower ones. Adjusted operating profit was $91,000,000 with an adjusted operating margin of 34.7%. This is up over three forty basis points year over year Our performance was driven by strong cloud revenue growth combined with operating leverage as our cloud business continues to scale. Turning to EPS, we delivered Q1 adjusted earnings per share of $1.19 up 16% and GAAP earnings per share of $0.85 down 1%.

Moving to cash.

Operating cash flow increased 37% to a solid $75,000,000 This resulted in a 28% free cash flow margin and 35% adjusted EBITDA margin. Regarding the balance sheet, deferred revenue increased 12% to $298,000,000 We ended the quarter with $2.00 $6,000,000 in cash and zero debt. In the quarter, we leveraged our strong cash position and invested $100,000,000 in share repurchases Additionally, Board has approved the replenishment of our $100,000,000 share repurchase authority. Now on to our 2025 guidance. Our long term and long standing financial objective is to deliver sustainable double digit top line growth and top quartile operating margins benchmarked against enterprise software comps.

These are drivers to our best in class return on invested capital as we maintain a balanced investment approach to growth and profitability. As noted on prior earnings calls, our goal is to update our RPO outlook on an annual basis. Additionally, as previously discussed, our bookings performance is impacted by the number and relative value of large deals we close in any quarter which can potentially cause lumpiness or non linear bookings throughout the year. As discussed earlier on this call, macro environment clearly remains very uncertain which has increased our caution While clarity on external variables is limited, after numerous conversations with customers and prospects, and an analysis of our business, we are reiterating our full year RPO, total revenue and operating margin outlooks. To account for our share buyback activity, we are increasing our EPS outlook And finally, we stated in our safe harbor introduction the turbulent global macro environment could materially impact our performance and cause actual results to differ materially from our projections. And with that, for RPO, we continue to target $2,110,000,000 to 2,150,000,000.00 For total revenue, we continue to target $1,060,000,000 to 1,070,000,000.00 For Q2, we expect total revenue of $263,000,000 to $265,000,000 For the rest of the year at the midpoint, we are targeting total revenue of about $271,000,000 in Q3 and accounting for retail peak seasonality of $267,000,000 in Q4.

For adjusted operating margin, while in ordinary times, we would have passed through our Q1 outperformance given the macro uncertainty, we are reiterating our midpoint of 33.25% At the midpoint, we expect adjusted operating margin on a quarterly basis to be about 33% for Q2 33% in Q3 and a accounting for retail peak seasonality about 32.5% in Q4. To account for our share buyback, our full year adjusted earnings per share range increased increases to $4.54 to $4.64 up from our prior range of $4.45 to $4.55 On a quarterly basis, we are targeting Q2 earnings per share of 1.13 Q3 of $1.16 and accounting for REIT retail peak seasonality of $1.12 in Q4. For GAAP, earnings per share are range is increasing to $3.00 $6 to $3.16 for Q2 we are targeting GAAP earnings per share of $0.75 Here are some additional details on our 2025 outlook. For full year 2025, we continue to expect cloud revenue of $4.00 5,000,000 to $410,000,000 On a quarterly basis, this assumes $99,500,000 in Q2, 104,500,000.0 in Q3 and $109,000,000 in Q4. For services, we continue to expect a range of $494,000,000 to $500,000,000 On a quarterly basis, this assumes 126,000,000 in Q2 dollars 129,000,000 in Q3, accounting for retail peak seasonality, 121,000,000 in Q4.

For maintenance, we expect a range of $108,000,000 to $120,000,000 or a a 14% decline at the midpoint on attrition to cloud. On a quarterly basis, we expect Q2 dollars 30,000,000 Q3, 29,000,000 and Q4, $27,500,000 And finally, we expect our tax rate to be about 21% and our diluted share count to be 61,500,000.0 shares which assumes no buyback activity.

In summary, a solid Q1 performance by the Manhattan team. Thank you and back to Eric for some closing remarks. Great. Thank you, Dennis. We are pleased with the better than expected results and strong selling momentum in the quarter And as we stated several times, we're cautious on the macro environment and we'll continue to manage the business in a prudent manner. However, Manhattan's business fundamentals are solid. Our products are considered mission critical by our customers we're excited for the long term opportunity. Thank you to everyone for joining the call and thank you to the Manhattan team for their dedication and execution. That concludes our prepared remarks and we'd be happy to take questions.

Thank you. We will now be conducting a question and answer session. Our first question is from Terry Tillman with Truist Securities. Please proceed with your question.

Yes, good afternoon. First, I want to say nice job on the 1Q performance.

Hi, Eddie. Welcome aboard, Eric. And hi, Dennis and Mike. First question is, I want to kind of probe on cloud bookings and RPO. And I know it's a tough question, but I mean, clearly do have a new wrinkle here with tariffs and just the uncertainty there. I'm curious about like the the sales pipeline and how you see the year unfolding. I know you're all maintaining kind of the RPO dynamics but is the assumption that maybe near term there's a little bit of reconstitution with some of the sales pipeline because folks have to kind of pivot now to focus on cost versus service level and supply chain velocity, and we should kind of assume that maybe the way this flows is 2Q and 3Q sales activity could be somewhat impacted and it's more of a kind of a seasonal strong finish in 4Q. So would love help with what is arguably a hard question, but and then I had a follow-up. Thank you. [indiscernible] So this is Eric. I'll jump in. I think from an RPO perspective, clearly, had a very solid Q1 that we're happy with. And as I mentioned, we continue to see strong pipeline in Q2.

I think when you look at the RPO and converting that RPO to revenue, we feel confident in our our guidance.

If we see challenges in Q2 and Q3, as we've mentioned before, we think we would see it first in in services. However, we're not seeing that at this point. We continue to see strong bookings performance and we continue to see strong demand on our services. And that's why again, with caution from the macro and we understand that with time and materials contracts things can change quickly in services. But right now we're feeling comfortable with the guidance.

Got it. That's an interesting data point, Eric, around the services quarter to date. Just a follow-up question and I'll get back in the queue is, I'm just curious in terms of this multiyear cloud innovation cycle and investments you've made, I think we'd to hear about growth investments. So you've delivered on all these products. Now time to monetize the heck out of these products. Could you maybe share a couple of interesting opportunistic areas where there's some interesting growth investments you're putting to work this year that could pay dividends over the next couple of years? Thank you.

Yes, sure. So clearly, we're very proud of the fact that our products are market leading and job one is to continue that and make sure they continue to be market leading. However, with the product portfolio that we have in place today, we think it's the right time to invest in sales marketing and really drive the growth and at an even faster pace than we already have been driving it.

So I do expect that we will continue to invest in sales specialists around many of our new products and make sure that we talked about our high win rates against our competitors. We want to continue those high win rates, but we want to be competing for more and more deals. Thank you.

Our next question is from Brian Peterson with Raymond James.

Thanks, and congrats on the strong quarter. So maybe following up Terry's question, you guys mentioned last quarter that you had a strong start to the first quarter in terms of bookings and RPO. It sounds like you had a solid close. This quarter as well. I'd love to understand anything you can share on linearity as we went through quarter and any perspective that you can share on how the second quarter started?

Well, I'll take a little bit of Q1 there, Brian. This is Eddie. Really it was a pretty strong there was wasn't no particular lumps and bumps in quarter. When you look at product portfolio that was procured by our customers and prospects, when you look at the vertical industries that we spanned in Q1, and the geo spread was all pretty balanced. So that's one of the beauties of our customer portfolio, our vertical [indiscernible] and our product portfolio that we don't with Easter just passed as they say put all we don't have all of our eggs in in one basket. So not a ton of lumps and bumps as I say in the quarter. With regard to Q1, maybe Eric has got a comment or two to make about the forward looking pipeline, but we feel good about where the pipeline is. It's a bit early the quarter, but activity is strong and certainly have high expectations for the quarter. Yes. I think that said it well. And the only thing I would add to that is, as I mentioned in the prepared remarks, 50% of the new cloud bookings in Q1 were from net new low and that shows a strong demand for our products.

And typically we think conversions and cross sells selling to existing customers can be quicker and easier.

To start the year with 50% new logo in Q1, I think is a really good statement for us.

Great. Appreciate all the color. And Dennis, maybe a follow-up for you. Appreciate that you're guiding quarterly in this kind of environment. But just your thought process on keeping the op margin the same. Just to be clear, are there any incremental investments that you're making in terms of product or go to market? Or is that maybe a little bit just conservatism from your end?

Thanks, guys. [indiscernible] brought that up, really focused on sales and investing in sales and marketing, Brian, would be my primary call out.

Got it. Thanks guys.

Thank you, Brian. Our next question is from Joe Bruin with Baird.

Great. Thanks for taking my questions. When you think about the theaters of cloud bookings between migrations, cross sell, new logos, you think one of those is more resilient in the current environment I mean, wouldn't have thought new logos would be the thing that relates stands out, but it did in the quarter. So that's kind of the heart of my question. I guess you're dealing with big enterprise customers and so they're probably thinking about what their fulfillment needs to look like. Years from now. But is there a certain resiliency and one driver of your bookings where you would say, yes, the macro is turbulent, but these decisions still likely get made in 2025?

This is Eddie, Joe. I don't think there's any any particular segment that is stronger than the other or more resilient than the other. Mean, as Eric pointed out, we did have a terrific quarter from a new logo perspective. But as you know and I think most of our community knows, that does bounce around on a quarter to quarter basis. We've seen it as high as I think 55% in the quarter. We've seen it as low as high teens in a quarter. When you average and look at all that smooth all that stuff out, it tends to be a third, a third, a third. Sort of across the board. So I don't think there's one versus the other. Again, as Eric pointed out, whilst certainly there is acute focus on spending across every company on the on the planet at the moment. Inventory levels are likely to drop a little bit making inventory more precious than ever. Customer expectations don't lower, So you need really precise to find it. Let's flight chain execution kind of across the board. So I don't think we expect to see any particular shifts. In priorities and resiliency across our channels.

Okay. Great.

And then I wanted to ask that 38% share of RPO converting to revenue in the next twenty four months. That's a tick down from, I think, the 40% you normally see [indiscernible] on RPO. I guess just based on that activity and maybe that is a bit of a new normal here in the near term. Do you think the 20% growth in cloud subs that you spoke about last quarter, is that the right number to think about for this year and next year? And I'll turn it back over. Thank you.

Well, I'll kick that off, Joe. Yes is the answer to the 20%. I don't think there's any change there. Obviously, not a radical change in terms of 40% to 38%. Just as we see some of these bigger global deals come into the family, bigger logo big Tier one logo come into the family. There is just the ramp of some of those rollouts across the globe is just a little slower. Now it doesn't change obviously the terminal RPO of the company. Just shifts around a little bit. When we recognize that revenue. That's all.

Thank you.

Our next question is from Dylan Becker with William Blair.

Hey, gentlemen. Congrats on the results here. Maybe for Eric, or Eddie to start. Can you help us kind of think through how customers are navigating kind of some of the puts and takes, obviously, the current macro? You could argue real time visibility playing and execution is incrementally more important, but it is a large transformational project. Like how that kind of force ranks in their investment kind of cycle relative to kind of putting out maybe some more immediate term types of fires, if that makes sense?

Yes. I mean, it's very hard to predict Bill. Crystal ball, no question, I think is a little little cloudier than it's been for just about every company on the planet at the moment. But as we look at the execution of the supply chain, certainly visibility and so forth is always important. But I think precise execution is going to be top of mind in terms of inventory management, and getting that precious inventory into the right place at the right time and into the hands of the consumer when they expect it because I don't think that regardless of everything else that's going on around the world, frankly, don't think the expectations of the consumer going to change. It just doesn't change which means that any manufacturer wholesaler, distributor retailer is still going to have to focus on executing at really, really high level and obviously we can help them do that.

Got it. Okay. That's helpful. Thanks Eddie. And then maybe for Dennis too going back to the ramped kind of contract component, right? Slight elongation, slower components there. But how do you think about the incremental visibility? And maybe how we should think through some of these multiyear ramps that are already in place or in process and how that kind of gives you a visibility and confidence in kind of that 20% sustainable kind of growth trajectory, if that makes Thanks.

Well, before Dennis kicks in or maybe Eric has got a comment here. We have essentially the ultimate visibility We know exactly what the contract duration is. And we have essentially a documented ramp process built in or ramp built into that contract. So the visibility is very, very clear. Now again, as Eric pointed out, we've got some things that we've got in in the hopper to try to help accelerate deployments and help time to value for our customers and generally they're pretty open to that. So there's an opportunity for for us to maybe speed up a little bit that that revenue process during contract duration. But we've got really, really good visibility into that. No. We have great as Eddie said, great visibility We have an internal metric we call bank revenue.

And basically, the free cash flow component is pretty strong as you can imagine. But as Eddie said, just great, great visibility [indiscernible] Perfect. Thanks guys. Really appreciate it.

Our next question is from George Carusallo with Citi.

Hey, thanks for taking the questions here.

Called out some work you did talking to customers or doing some independent analysis that ultimately led you to reiterate the guide. If you could just double click on what you learned there, qualitative insights Well, I'll let Eric pick this one up.

But it wasn't so much we did any primary research with customers. We're in contact with our customers on a constant basis. So I think it a process of looking across that pipeline, talking to customers, talking to our prospects that led us to believe that we were comfortable reiterating our annual RPO number. Yes. And in addition to the constant communication with our customers and we have that particularly the customers where we're deploying and we've got services projects going on. It's in addition to quarterly and monthly reviews, our team is very actively gauging the demand from a service services perspective from those clients and all of those factors were taken into consideration.

Okay. That's helpful. And then I also wanted to clarify the FX component in the full year revenue guide. I think you called out $20,000,000 headwind last quarter. Based off the FX moves, what's baked into the full year guide now? At this point? [indiscernible] Less than 1%, George. It's a tailwind. It's moving around obviously quite a bit quite a bit, George, but again, it's a less than 1% tailwind for And we keep our eye on it. Obviously, every quarter, we'll report what the real time situation looks like.

Okay.

Thanks for the help.

Sure thing.

Our next question is from Mark Schappel with Loop. Capital Markets.

Hi, thank you for taking my call and nice job on the quarter. Eddie, with respect to your deal pipeline, was wondering if you could just comment on the strength of the large deals in the pipeline and maybe how that compares with say a year ago? And then also if you could just comment on maybe the confidence in your closure rates with respect to last year as well.

Yes. Good question, Mark. I mean, it's favorable. For sure. Pipeline continues to grow. [indiscernible] underbelly of your question there, what does the large deal pipeline look proportionally similar this year than it did last year given the pipeline is growing? And the answer to that is yes. For all of the reasons frankly that we've that we've talked about before. So, I would say yes and yes. In answer to your question there.

That's fair. Thanks. And then as a follow-up, it was nice to hear about the large omni channel deal that was called out in the quarter.

I was wondering if you just provide some additional details around that deal such as maybe who you competed with, the length of the sales cycle?

Yes. This one goes back. So I'll take take those back a bit. So I can certainly take this one. Listen, I can't remember the exact sales cycle duration, but a little over a year. For sure. It's more of this detail will come out. We just don't have authorization to use names and stuff at the moment. But we will, I'm sure, going forward. But it's a department store for omni channel and point of sale. So we're really excited about this. It's a frankly our first real luxury department store for point of sale. So we're very excited about that. And as I say, details coming, but a little over a year in terms of the cycle. Competed with everybody. It's deal that everybody was chasing frankly. And glad to come out on top.

Great. Thanks. That's all for me. Thanks.

Our next question is from Lachlan Brown with Redburn Atlantic.

Hi, Eddie, Eric, Dennis, Mike.

Congrats on the strong quarter. Looks like there was strong delivery on EMEA relative to The Americas. How should we think about the FX benefit in there? And notwithstanding that, would it be fair to say that there's more supply chain certainty and willingness to invest from your European customer base?

Well, as Dennis pointed out, the FX swings represent less than 1%. So not really a big impact there. We always call them out. We always want to provide full transparency there for sure.

Lakan. In terms of the enthusiasm, spending enthusiasm across the theaters. I would say it's a bad equal. Across the three theaters that we operate in. Q1 was a little lower for EMEA for sure. But those things bounce around again quarter by quarter. And when we look at the annual pipeline across all those theaters, we're certainly encouraged by all of them.

Thanks for the detail. And in this uncertain tariff environment, could you maybe talk to some of the capabilities that your active cloud solution can provide that perhaps on premise solution cannot. And maybe do you see this as enough to be a trigger of the cloud migration for some of your customers in the near term.

Yes, I don't think it's going to trigger any particular activity in the near term moving from on prem to the cloud, Lachlan. One never knows exactly, but I don't think so.

Because our projects are mission critical And as volatile as the environment is today, generally those are not going push our customers into making near term and short decisions. But in answer to the first part of your question, the flexibility and the agility of our cloud solutions the ability to be able to update them in real time with zero zero downtime is really helpful in this environment where again inventory is can be and will likely be a highly valued commodity and will be important to make sure it's in the right position at the right time and our customers will need the ability to be able to as the expression goes turn on a dime when things when things change.

That's very clear, Eddie. Thanks for the questions.

Pleasure, Lachlan. Thank you.

Thank you. There are no further questions at this time. I would like to hand the floor back over to CEO, Eric Clark.

Great. Thank you all for joining. Appreciate your time and look forward to speaking to you again next quarter.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.