Manhattan Associates Says AI Agent Pilots Are Converting to Paid Subscriptions at a 100% Clip, While New Pricing Tiers Open Up Smaller Deals
Fireside chat at Citi's 2026 Global TMT Conference, September 9, 2026
Manhattan Associates executives used a fireside chat at Citi's Global TMT Conference to lay out a business inflecting on two fronts simultaneously: artificial intelligence monetization and a pricing overhaul designed to widen the company's addressable market. CEO Eric Clark, president Sanjeev Siotia, and CFO Linda Pinne detailed a supply chain software vendor that is converting AI pilots into paying subscriptions without exception, while its new Editions pricing structure is starting to unlock deals the company previously couldn't compete for.
AI Pilots Convert at 100%, and Usage Is Scaling Fast
The most striking data point from the session was Manhattan's perfect conversion rate on AI agent pilots. Clark said the company has had "100% conversion from pilot to subscription," adding, "we haven't had a single customer that's gone through a pilot and said, hey, it's interesting, thank you, but I'm going to go in a different direction." That statistic, first disclosed at the Q2 earnings call, remains intact months later, according to Clark.
The scale of agent usage is also accelerating faster than the company anticipated. At Manhattan's Momentum Conference in May, leading-edge customers were running a single-digit number of agents in production. Just a few months later, Clark said the average customer using agents is now in "the double-digit range and some of them in starting to get in the 20s and 30s of agents." Siotia added that expansion is coming from both agent count and site count, as customers that started with a handful of agents in one warehouse are now rolling deployments out chain-wide.
The base agent library itself has roughly tripled since launch, growing from about 17 agents in Q1 to roughly 50 today, as Manhattan converts successful custom builds into standardized offerings. The mix between first-party base agents and customer-built custom agents is currently roughly 50-50. Pricing is structured as a percentage uplift over a customer's base subscription across four usage-based tiers, and Manhattan does not differentiate pricing based on whether an agent is a base or custom build. CFO Pinne confirmed that AI subscription revenue carries the same gross margin profile as the rest of the company's cloud business, meaning the AI attach does not dilute overall cloud economics as it scales.
Editions Pricing Marks a Strategic Pivot Toward the Middle Market
Perhaps the more consequential structural change is Manhattan's new Editions pricing model, which Clark called "one of the biggest strategic changes that we've made since we went to the cloud." Historically, Manhattan's software was built and priced to solve the largest, most complex supply chain problems, which left the company poorly positioned to compete for smaller or less complex deployments. Editions creates a tiered ladder, from Essentials up through Enterprise and Enterprise Premier, using the same underlying product but gating functionality by tier, allowing customers to enter at a lower price point and move up without a re-platforming event as complexity grows.
The change has two distinct commercial implications. On new logos, it allows Manhattan to compete in segments of the market it previously conceded on cost or complexity grounds. On the existing base, it opens a meaningful expansion opportunity inside large accounts, particularly big third-party logistics providers that run hundreds of complex sites on Manhattan's Active Warehouse platform but also operate simpler sites still running legacy on-premise software because the economics never justified an Active Warehouse deployment there. Those simpler sites can now move to Essentials or Enterprise tiers, adoptable on a site-by-site basis, extending Manhattan's cloud and AI footprint across a customer's entire network rather than just its flagship locations.
On-Premise Conversion Economics Have Improved Materially
Manhattan disclosed that roughly 25% of its maintenance-paying on-premise customer base has now either converted to the cloud or begun the conversion process, following the establishment of a dedicated conversion team announced in July of last year. Clark argued that the historical friction around conversion, rooted in customers' memories of on-premise upgrade cycles he described as "open heart surgery," is being addressed through automation. The company's Solution Design Studio can now take natural language design documents and turn them into a configured cloud system, enabling Manhattan to offer fixed-price, fixed-timeline conversions, a materially different commercial proposition than the multi-year, cost-uncertain upgrades customers previously associated with the vendor.
Editions also plugs a gap in that conversion strategy: some long-tenured on-premise customers had no intention of moving to Active Warehouse because Enterprise Premier was more product than they needed. Every on-premise customer now has an entry point somewhere on the Editions ladder, which management believes will accelerate conversion timelines going forward.
Bookings Mix Is Diversifying Away from Pure New-Logo Dependence
Manhattan's competitive win rate against its top competitors has held above 70% for several years, and new logos represented roughly 50% of new cloud bookings over the past six quarters. But management flagged a notable shift in Q2, when conversions alone accounted for 40% of bookings in a quarter the company described as a record. Clark said he expects the historical split of roughly one-third new logo, one-third conversion, and one-third cross-sell and upsell to reassert itself over time, not because new logo activity weakens, but because the conversion and upsell channels are catching up in productivity following dedicated investment.
That investment extends to a dedicated renewals team, also stood up last July, which Clark said is now driving improved price uplift and cross-sell attachment at renewal by pooling experience across a higher volume of deals than individual account managers previously handled. Separately, the partner ecosystem is scaling quickly: partner-sourced deal volume was up 4x in the first half of 2026 versus the first half of 2025, following a reset in how Manhattan engages global systems integrators and boutique partners, including a commitment not to compete with partners for services revenue on deals they originate.
Cloud Revenue Set to Overtake Services in the Second Half
Pinne reiterated Manhattan's medium-term framework of double-digit top-line growth and top-quartile operating margins relative to SaaS peers, noting that 20% cloud growth guidance, which drew skepticism a year ago, has been exceeded in the first half of 2026. Services revenue growth is expected to remain low single digits. Clark noted that cloud revenue will surpass services revenue for the first time in the second half of this year, a mix shift that should support both faster growth and continued margin expansion given cloud's structurally higher margin profile. On the AI infrastructure side, Siotia said Manhattan is not currently using open-weight models in production, relying instead on a mix of models available through its Google Cloud Platform infrastructure, though the company is evaluating open-weight options as the cost and capability trade-offs evolve.