Manhattan Associates (MANH), a supply chain software provider, experienced a significant pre-market plunge of 23.42% on Wednesday, January 29th, 2025. The stock's sharp decline was primarily driven by the company's weaker outlook for 2025, particularly in its services revenue.

During its Q4 2024 earnings call on January 28th, Manhattan Associates provided an update on its financial performance and guidance for the upcoming year. The company reported record bookings and strong demand in Q4 2024. However, management warned that approximately 10% of its customers with ongoing implementations had reduced their planned services work for 2025, leading to lower expected services revenue.

According to the earnings call transcript, Manhattan Associates' Chief Financial Officer, Dennis Story, stated, "Service revenue of $119 million was up slightly compared to the year ago period and was $2 million below our prior expectations as budgetary constraints were more pronounced for several customers." The company adjusted its 2025 outlook accordingly, projecting a range of $494 million to $500 million in services revenue, down from previous expectations.

Following the earnings report and guidance, several analysts lowered their price targets for Manhattan Associates, citing concerns over the weaker services outlook. Analysts at Citigroup, D.A. Davidson, and Raymond James all reduced their price targets on the stock, reflecting the potential impact on the company's financial performance in 2025.