Total revenue for the quarter reached $282.2 million, up 7.4% from $262.8 million in Q1 2025. Cloud subscription revenue grew 24.2% to $117.1 million, while service revenue increased modestly to $125.7 million. The company’s remaining performance obligations rose 24% to $2.35 billion, reflecting a robust pipeline of future bookings.
GAAP diluted earnings per share were $0.82, missing the consensus estimate of $1.10. Adjusted diluted EPS, however, came in at $1.24, beating the estimate of $1.10 and representing a 4.2% year‑over‑year increase from $1.19 in Q1 2025. The adjusted EPS beat was driven by a higher mix of high‑margin cloud contracts and disciplined cost management, offsetting the sharp decline in legacy license revenue, which fell 76% YoY.
Management reiterated its full‑year 2026 outlook, guiding revenue to $1.147 billion–$1.157 billion and diluted EPS to $5.29–$5.37. The guidance range is slightly higher than the previous $1.145 billion–$1.155 billion estimate, signaling confidence in continued cloud adoption and the monetization of its Agentic AI initiatives.
Segment analysis shows that cloud subscription growth is the primary driver of revenue expansion, while license revenue declined sharply, underscoring the company’s transition from perpetual licenses to recurring cloud services. Service revenue grew modestly, supported by increased demand for implementation and support services tied to the cloud platform.
"Manhattan is off to a strong start to 2026. On solid and broad‑based demand, we accelerated our Q1 revenue growth and delivered better than expected bookings," said President and CEO Eric Clark. He added that macro volatility remains a headwind but that the company’s pipeline and AI initiatives provide a strong long‑term growth narrative.
The market reacted positively, with the stock surging about 9% in after‑hours trading. Investors cited the revenue beat, the robust cloud subscription growth, and the upward revision of the full‑year revenue forecast as key drivers of the rally.
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