Good afternoon. My name is Kyle, and I'll be your conference facilitator today. At this time, I'd like to welcome everyone to the Manhattan Associates Third Quarter 2013 Earnings Conference Call. [Operator Instructions] As a reminder, ladies and gentlemen, this call is being recorded today, October 22, 2013. I'd now like to introduce Dennis Story of Manhattan Associates. Mr. Story, you may begin your conference.

Thank you, Kyle, and good afternoon, everyone. Welcome to Manhattan Associates 2013 third quarter earnings call. I'll review our cautionary language and then turn the call over to Eddie Capel, our Chief Executive Officer. During this call, including the question-and-answer session, we may make forward-looking statements regarding future events or future financial performance of Manhattan Associates. You are cautioned that these forward-looking statements involve risk and uncertainties, are not guarantees of future performance and that actual results may differ materially from 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 fiscal 2012 and the risk factor discussion in that report. 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. All non-GAAP measures have been reconciled to the related GAAP measures in accordance with SEC rules. You'll find reconciliation schedules on our Form 8-K we submitted to the SEC earlier today and on our website at manh.com. Now I'll turn the call over to Eddie.

Good afternoon, everyone. Our third quarter performance was solid in the Americas and in our international theaters. We posted strong results across essentially all financial metrics, and as we reported previously, our competitive position continues to strengthen, and customer satisfaction remains strong across the globe. We set a new all-time revenue record and earnings per share record this quarter. Q3 total revenue of $107.8 million increased 12%, and adjusted earnings per share of $1.05 increased 40% over Q3 2012. The combination of strong revenue growth and sensible expense discipline led to the best quarter in our company's history. As we had in the first half of 2013, we continue to execute well, and I'm very pleased with our operational and financial performance in a macroeconomic environment where subdued global growth continues to create some headwind for enterprise software buying cycles. License revenue for the quarter was $14.8 million, down against a pretty solid comp of $16.2 million in Q3 2012. Compounding the fact Q3 traditionally is a seasonally lower license revenue quarter, especially in Europe, we saw a number of software license deals we expected to close in the quarter push into the fourth quarter and possibly later. We recognized 2 $1 million-plus deals in the quarter, both of which were in the Americas and led by our Warehouse Management product. In both deals, we were successful head-to-head against very strong competition, continuing to validate our distribution management and omni-channel market leadership. Our sales teams across the globe executed well and our competitive win rates remained strong. In the quarter, and for all of 2013, in head-to-head sales cycles against our major competitors, we're winning about 75% of the time. For the quarter, about 50% of our license revenue was from net new customers and year-to-date, that number is tracking…

Thanks, Eddie. I will review our Q3 2013 non-GAAP results and GAAP EPS performance, provide a review of our 2013 full year guidance and finish with some initial comments on 2014. For the company, total revenue for Q3 2013 was $107.8 million, up 12% from last year. Against tough Q3 comps last year, Americas grew total revenue to 10%, EMEA grew 20% and APAC grew 28%. Adjusted earnings per share for the quarter was $1.05, up 40% over the prior year, fueled by strong services revenue growth, expense management and our buyback program. Our earnings per share performance does include $0.07 of benefit from revenue timing and currency. $0.04 was timing on maintenance revenue collections originally forecast for Q4, and the remaining $0.03 was currency benefit from Indian rupee depreciation. License revenue for the quarter totaled $14.8 million. From a regional perspective, Americas posted license revenue of $11.7 million; EMEA, $1.8 million; and APAC, $1.3 million. In the backdrop of ongoing global macro sluggishness, our license performance continues to depend heavily on the number and relative value of large deals we closed in a given quarter. Shifting to Services, demand remained solid. Q3 Services revenue totaled $85 million, increasing 18% year-over-year. Our Services revenue is comprised of 2 revenue streams: consulting and maintenance. Our consulting revenue for the quarter totaled $57.7 million, growing 23% over Q3 last year. With solid demand, we hired another 50 associates across the globe in the quarter. Year-over-year, we've grown our Services practice by about 100 associates, up 9%, and currently are looking to add about 100 additional new associates to support growth and focus on customer satisfaction. Maintenance revenue for the quarter totaled $27.3 million, increasing 10% over last year. While fairly consistent license revenue performance and retention rates of 90-plus percent accounted for…

Thanks, Dennis. Well, first, let me provide a little more detail on the deals that we closed in Q3. As I discussed at the beginning of the call, we recognized 2 large deals in the quarter, one in retail and one with a new large 3PL customer. Both deals were driven by strategic technology modernization programs and the desire to be able to capitalize on the growing demand in e-commerce. The new large retailer needed to augment their ERP strategy with a sophisticated supply chain solution, and the 3PL customer required a strategic growth platform for the future. For Q3, about 70% of our license fees were associated with the warehouse management solutions and 30% representing our other solutions. And as is customary for us, retail, consumer goods and logistics service provider verticals were our strongest license fee contributors and made up more than half of our license revenue for Q3. As I mentioned on our last call, we continue to see solid momentum in our core verticals, led by the retail industry being fueled by the digital commerce revolution and the way in which consumers are engaging with retailers, wholesalers and manufacturers. Consumers have been empowered with tremendous access to information on hand anytime via smartphones and tablets. The cost of retaining their loyalty is a significant challenge for our clients and prospects' ability to offer flexible shopping choices and timely service. We believe supply chain commerce is the emerging model for growth and profit in today's omni-channel customer-centered landscape. For companies to deliver this balance, they need a wealth of new capabilities. Leading companies see our solutions, such as Enterprise Order Management, store order fulfillment, inventory management and distributed selling as key to their supply chain commerce infrastructures of the future, the critical elements in enabling seamless customer…

[Operator Instructions] Your first question comes from the line of Terry Tillman from Raymond James. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: Just a couple of questions. I guess the first one is on the Services revenue or the total Services line. I understand a part of it. Dennis, you talked about the maintenance, the timing on maintenance there and collections. But still, the pro services side was strong and well above my number. And we've just seen this trend now for a number of quarters where the Services is strong, even as the license has been somewhat sluggish, at least compared to my numbers. Is there anything though to be said about Services where maybe it's starting to represent the leading indicator on future license or lagging or incidental or anything at all to glean from the Services' strength in terms of maybe what it portends in the next year on the license side?

Terry, this is Eddie here. Thanks for your comments. I don't think so, frankly. We certainly are seeing strong Services demand, as you can see. We're seeing some particularly strong demand with our global clients, rolling out our solutions internationally. We are seeing the deployment of our solutions across the enterprise, inside of our existing customers. And frankly, demand is just strong across the board. But I don't think that you should necessarily correlate the Services business directly with future license opportunity.

Yes. Terry, we're also just saying while license has been a challenge in the -- from 2009 coming forward, we've been signing some very nice global brands on the platform. So you're starting -- we're seeing some of that compounding effect globally, as Eddie mentioned, some of the global brands that we have, which is nice to see. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: And some of those, Dennis, some of those logos, the bigger wins, the transformative deals over the last couple of years, I mean, is some of that services work go on a couple of years?

Absolutely. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: Okay. And I guess on -- Dennis, on the maintenance. So should we think about 4Q? I know you don't really break out guidance by each line item. But is there the potential where we shouldn't be surprised of maybe maintenance is down Q-over-Q? Did you address that in your prepared remarks? How do we think about that in 4Q given what happened in 3Q?

Yes. I didn't address them in my prepared remarks, but I would expect it to be down sequentially with that pull-through. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: Okay. And just my last question and I'll turn it over, relates to -- just curious in terms of -- for Eddie or Dennis, in terms of 4Q, what you're thinking at a high level and/or what you've heard from your field sales force in terms of the psyche of the customer from a budget flush standpoint. How do you think about budget flush for new license deals? And on the range, the updated revenue range, is that delta just basically a license assumption there?

Yes. So it's still a bit early in the quarter, frankly, Terry, to think about and to have any great feel on a Q4 budget flush. We're encouraged by our pipeline and the activity in the field for sure. But frankly, it will be a little bit later in the quarter, I believe, before we start to see any enthusiasm around budgets being consumed in the latter part of 2013.

Yes. And Terry, to answer your question on the delta with respect to the revenue guidance, I talked about it in the script. I think the profile is going to look very similar to Q2, right now, from my -- through my eyes, so it's a combination of license, services and maintenance, just because of the pull-through -- on the maintenance side, the pull-through that we talked about, so...

Your next question comes from the line of Mark Schappel from The Benchmark Company.

Dennis, starting with you, on the R&D line, I just wonder if you can help us think about the modeling purposes there. It looks like it's been trending down over the last several quarters and was wondering if you could just give us your thoughts on what you're thinking R&D-wise going into next year.

Yes. Well, we're going to continue to invest substantially in R&D, Mark, too early to make a call on next years, we're starting the budget cycle. But as long as we can continue to outpace the market, what you're seeing is leverage. On the platform, you're also -- that line is also being impacted by FX with respect to the rupee. As you know, we have a substantial R&D operation, so we got to see what FX rates do, et cetera. But we have about 650 employees across the globe that are in R&D, and we continue to focus on bringing new innovation to the market.

Okay, great. And then, Eddie, for a few quarters now, you've been talking about the macro headwinds you're seeing in your end markets. I was wondering if you could just put a little bit more detail about how these headwinds are manifesting themselves in your sales processes?

Yes, sure, Mark. There's really one way that we're seeing these headwinds, and that's the duration of the sales cycles, and then -- and the final decision-making process. So you can see, from our win rates, they continue to be very strong, arguably getting stronger. So we're not losing many deals, we feel very good about our competitive position. But I think you are still seeing a lot of companies out there holding on to relatively substantial amounts of cash and are spending or investing in capital and so forth, only at the very large -- at the very last moment. So that's really the impact that we're seeing, and that's why we feel like we're seeing deals move out, but not go away. And it's just becoming just a little bit more tricky quarter-over-quarter, to, forecast exactly when those particularly bigger deals are going to close.

Okay. And then, I haven't heard too much lately on the transportation side of your business. I was wondering if you can just give a quick update on your TMS business, such as any new exciting product introductions there?

Yes. So we continue to invest heavily in transportation. Actually, just in -- since you've brought it up, in Q3, we did -- as we do in each Q3, we had a major upgrade of our client-based transportation solution and our customers were very -- existing customers were very happy with that upgrade, bringing some new innovation to that particular implementation, but continue to innovate -- a healthy amount of innovation that we're doing is around international transportation. We continue to see more and more requirements coming from both the international markets and the import requirements. There are those ever-changing compliance requirements, hours of service and so forth that we have to keep up with. It's frankly hard to describe those as real strong components of innovation because they are dictated to us. But still very, very solid investment in that space. And particularly, as we see deployments of WMS and TMS integrated together to provide that 1 plus 1 equals greater than 2 benefit for our customers.

[Operator Instructions] Your next question comes from the line of Yun Kim from Janney Capital Market.

So with omni-channel, e-commerce has been basically a key competitive driver in your target market. I am assuming some large system integrators are involved in many of these larger-scale omni-channel initiatives. Are you beginning to see large system innovators beginning to approach you guys? If yes, is this kind of making you somewhat rethink about your current professional services strategy? Maybe this is the right time to start creating a bigger ecosystem.

Yes. So we have a pretty big Services ecosystem as it stands today, Yun. In almost every implementation we do, there is a component of Services other than Manhattan is involved. Now when it comes to actually, as I say, screwing in our software, we think we're pretty good at it, right? We don't think there's anybody that can really surpass our capabilities when it comes to actually screwing in our software. But all of the business change components around the implementation, a lot of work on the customer side, we have a very nice ecosystem of partners that are focused on providing those capabilities. And as we move into this -- more deeply into this omni-channel space and into this retail revolution, certainly, we're seeing both large and specialized third-party integrators coming into the space and we certainly welcome them. We've got an authorized and certified set of partners and they're doing a terrific job, both -- on their own behalf to some extent, but mostly for their customers and our joint customers.

Okay, great. And then obviously, we heard a lot about omni-channel driving retailers and what-not. But can you just kind of talk about how CPG, consumer packaged goods companies are thinking about omni-channel, and what are you seeing there?

Yes. I mean, so I think you've heard me use this expression before. But how it is -- when the wings of the retail butterfly flap, everybody kind of feels that wind. You see a couple of different impacts down the line. One is we ultimately -- but retailers are driven to provide orders in smaller quantities, package base deliveries and so forth. That trickles down the supply chain, and there's suppliers, wholesalers, manufacturers alike need to be able to meet the agile needs the retailer is projecting to the consumer. But secondarily, I think we're all -- we're starting to see the branded guys want to get little closer to the consumer as well to make sure that they protect their brand. And oftentimes, we're seeing those branded guys wanting to sell direct to us, the consumer. And historically, they haven't had systems that have enabled them to interact with the consumer terribly well or fulfill orders directly for the consumers. So we're certainly seeing a little bit of that forward momentum as well.

Okay, great. And then, Dennis, Services margin came in a lot better than expected, even if you account for, I think you said 50 basis points positive impact from the early maintenance renewals. Can you just talk about what drove that incremental margin improvement there on the Services side? And is this -- obviously, you've got it for the year, but is there something other than what happened within the quarter that could potentially play out again sometime again in the next year or so?

Well, what I hope and is playing out is the continued strong momentum. The reality is we've got great domain leadership in the organization. There's no quality of earnings issues, it's just the organization performed at a very high level. We added about 50 resources close to the end of the quarter. So we haven't yet gotten them up to a level billability rate, and we're looking to add 100 additional resources here in the near future. So there's no greater indicator of health of a organization in demand than when you're hiring people. So and the concern, we're a little bit back into that stage of pretty strong demand and just making sure that we don't burn people out and sacrifice customer referenceability and satisfaction. So just a great performance from the organization, Yun.

Okay, that's great. And then lastly, Dennis, very strong cash flow in the quarter. I think that was mostly driven by strong collection. I am assuming a lot of that was driven by early maintenance renewals. So should we expect the DSO to spike back up next quarter and maybe even have somewhat of a below cash flow quarter than your typical Q4s?

Yes, it's possible. We're paying a lot of taxes to the U.S. and foreign governments these days that in the past, we haven't paid as much, so that could -- taxes, income taxes will probably put a little bit more of a drag with our estimated payments in Q4 on our result. But look, I don't lay awake at night, Yun, on DSO to be quite frankly. We've got a pretty damn good track record as a company over the 33 quarters I have been here. So we're going to continue to -- the leading indicator of quality of earnings is great cash flow and customer satisfaction as well. So we're going to continue to serve our customers, invest our cash wisely and hopefully continue to take great market share.

There are no further questions at this time.

Okay. Thank you, Kyle. Well, thanks, everybody, for joining us on our Q3 2013 earnings call. We appreciate your taking the time. We appreciate your support. And I suppose I'll close by saying that we look forward to seeing -- speaking with you again early next year. Thank you.

This concludes today's conference call. You may now disconnect.