- Public cloud ARR of $388 million, an increase of 86% as
reported and 89% in constant currency from the prior year
period(1)
- Total ARR of $1.506 billion, an increase of 6% as reported and
7% in constant currency from the prior year period(1)
- First quarter total revenue of $476 million, a decrease of 4%
as reported and flat in constant currency(1)
- First quarter recurring revenue of $389 million, an increase of
1% as reported and 4% in constant currency from the prior year
period(1)
- First quarter GAAP diluted earnings per share of $0.39
- First quarter Non-GAAP diluted earnings per share of
$0.61(2)
- First quarter cash from operations of $109 million and free
cash flow of $105 million(3)
Teradata (NYSE: TDC) today announced its first quarter 2023
financial results.
“Teradata is off to a strong start in 2023 with sequential
growth in total ARR, and we closed one of the largest deals in
Teradata’s history…tangible proof points of our cloud-first
strategy in action,” said Steve McMillan, President and CEO,
Teradata. “Customers are expanding their cloud environments,
underscoring the power of the Teradata platform, and driving demand
for our differentiated analytics. We are excited for the year ahead
and are on track to achieve all elements of our annual
outlook.”
First Quarter 2023 Financial Highlights Compared to First
Quarter 2022
- Public cloud ARR increased to $388 million from $209 million,
an increase of 86% as reported and 89% in constant currency(1)
- Total ARR increased to $1.506 billion from $1.427 billion, an
increase of 6% as reported and 7% in constant currency(1)
- Total revenue was $476 million versus $496 million, a decrease
of 4% as reported and flat in constant currency(1)
- Recurring revenue was $389 million versus $386 million, an
increase of 1% as reported and 4% in constant currency(1)
- Recurring revenue was 82% of total revenue in the first
quarter, up from 78% the prior year period
- GAAP gross margin was 63.4% versus 60.7%
- Non-GAAP gross margin was 64.3% versus 62.9%(2)
- GAAP operating income was $79 million versus $68 million
- Non-GAAP operating income was $108 million versus $115
million(2)
- GAAP diluted EPS was $0.39 versus $0.33 per share
- Non-GAAP diluted EPS was $0.61 versus $0.65(2)
- Cash flow from operations was $109 million compared to $151
million
- Free cash flow was $105 million compared to $150
million(3)
Outlook
For the second quarter of 2023:
- GAAP diluted EPS is expected to be in the range of $0.14 to
$0.18
- Non-GAAP diluted EPS is expected to be in the range of $0.43 to
$0.47(2)
For the full year 2023, Teradata re-affirms the following
outlook elements:
- Public cloud ARR is expected to increase in the range of 53% to
57% year-over-year
- Total ARR is expected to increase in the range of 6% to 8%
year-over-year
- Recurring revenue is expected to increase in the range of 4% to
7% year-over-year
- Total revenue is expected to increase in the range of 1% to 4%
year-over-year
- Free cash flow is expected to be in the range of $320 million
to $360 million(3)
Teradata updates the following outlook for full year 2023:
- GAAP diluted EPS is narrowed to be in the range of $0.65 to
$0.77 versus the range of $0.63 to $0.79 previously provided
- Non-GAAP diluted EPS is narrowed to be in the range of $1.92 to
$2.04 versus the range of $1.90 to $2.06 previously
provided(2)
- Cash flow from operations is now expected to be in the range
$340 million to $380 million versus the range of $345 million to
$385 million previously provided
Earnings Conference Call
A conference call is scheduled for today at 2:00 p.m. PT to
discuss the Company’s first quarter 2023 results and provide a
business and financial update. Access to the conference call, as
well as a replay of the conference call, is available on Teradata’s
website at investor.teradata.com.
Supplemental Financial Information
Additional information regarding Teradata’s operating results is
provided below as well as on Teradata’s website at
investor.teradata.com.
1.
The impact of currency is determined by calculating the
prior-period results using the current-year monthly average
currency rates. See the foreign currency fluctuation schedule,
which is used to determine revenue on a constant currency (“CC”)
basis, on the Investor Relations page of the Company’s website at
investor.teradata.com.
Revenue
(in millions)
For the Three Months ended
March 31
2023
2022
% Change as Reported
% Change in CC
Recurring revenue
$
389
$
386
1
%
4
%
Perpetual software licenses, hardware and
other
13
26
(50
%)
(43
%)
Consulting services
74
84
(12
%)
(5
%)
Total revenue
$
476
$
496
(4
%)
0
%
Americas
$
292
$
290
1
%
2
%
EMEA
117
129
(9
%)
(1
%)
APJ
67
77
(13
%)
(5
%)
Total revenue
$
476
$
496
(4
%)
0
%
As of March 31
2023
2022
% Change as Reported
% Change in CC
Annual recurring revenue*
$
1,506
$
1,427
6
%
7
%
Public cloud ARR**
$
388
$
209
86
%
89
%
*
Total annual recurring revenue (“ARR”) is
defined as the annual value at a point in time of all recurring
contracts, including subscription, cloud, software upgrade rights,
and maintenance. Total ARR does not include managed services and
third-party software. The Company believes this is a useful metric
to investors as it demonstrates progress toward achieving our
strategic objectives as outlined in the Form 10-K and Form
10-Q.
**
Public cloud ARR is defined as the annual
value at a point in time of all contracts related to public cloud
implementations of Teradata VantageCloud and does not include ARR
related to private or managed cloud implementations. The Company
believes this is a useful metric to investors as it demonstrates
progress toward achieving our strategic objectives as outlined in
the Form 10-K and Form 10-Q.
2.
Teradata reports its results in accordance with GAAP. However,
as described below, the Company believes that certain non-GAAP
measures such as free cash flow, non-GAAP gross profit, non-GAAP
operating income, non-GAAP net income, and non-GAAP diluted
earnings per share, all of which exclude certain items, and which
may be reported on a constant currency basis, are useful for
investors. Our non-GAAP measures are not meant to be considered in
isolation to, as substitutes for, or superior to, results
determined in accordance with GAAP, and should be read only in
conjunction with our condensed consolidated financial statements
prepared in accordance with GAAP. Each of our non-GAAP measures do
not have a uniform definition under GAAP and therefore, Teradata’s
definition may differ from other companies’ definitions of these
measures.
The following tables reconcile Teradata’s
actual and projected results and EPS under GAAP to the Company’s
actual and projected non-GAAP results and EPS for the periods
presented, which exclude certain specified items. Our management
internally uses supplemental non-GAAP financial measures, such as
gross profit, operating income, net income, and EPS, excluding
certain items, to understand, manage and evaluate our business and
support operating decisions on a regular basis. The Company
believes such non-GAAP financial measures (1) provide useful
information to investors regarding the underlying business trends
and performance of the Company’s ongoing operations, (2) are useful
for period-over-period comparisons of such operations and results,
that may be more easily compared to peer companies and allow
investors a view of the Company’s operating results excluding
stock-based compensation expense and special items, (3) provide
useful information to management and investors regarding present
and future business trends, and (4) provide consistency and
comparability with past reports and projections of future
results.
For the
Three Months
(in millions, except per share data)
ended March 31
Gross Profit:
2023
2022
% Chg.
GAAP Gross Profit
$
302
$
301
% of Revenue
63.4
%
60.7
%
Excluding:
Stock-based compensation expense
4
5
Reorganization and transformation cost
-
6
Non-GAAP Gross Profit
$
306
$
312
-2
%
% of Revenue
64.3
%
62.9
%
Operating Income
GAAP Operating Income
$
79
$
68
% of Revenue
16.6
%
13.7
%
Excluding:
Stock-based compensation expense
28
31
Reorganization and transformation cost
1
16
Non-GAAP Operating Income
$
108
$
115
-6
%
% of Revenue
22.7
%
23.2
%
Net Income
GAAP Net Income
$
40
$
36
% of Revenue
8.4
%
7.3
%
Excluding:
Stock-based compensation expense
28
31
Reorganization and transformation cost
1
16
Income tax adjustments(i)
(6
)
(12
)
Non-GAAP Net Income
$
63
$
71
-11
%
% of Revenue
13.2
%
14.3
%
For the Three Months
ended March 31
2023 Outlook
Earnings Per Share:
2023
2022
Q2
FY
GAAP Earnings Per Share
$0.39
$0.33
$0.14 - $0.18
$0.65 - $0.77
Excluding:
Stock-based compensation expense
0.27
0.28
0.33
1.30
Reorganization and transformation cost
0.01
0.15
0.01
0.20
Income tax adjustments(i)
(0.06)
(0.11)
(0.05)
(0.23)
Non-GAAP Diluted Earnings Per Share
$0.61
$0.65
$0.43 - $0.47
$1.92 - $2.04
i.
Represents the income tax effect of the pre-tax adjustments to
reconcile GAAP to Non-GAAP income based on the applicable
jurisdictional statutory tax rate of the underlying item. Including
the income tax effect assists investors in understanding the tax
provision associated with those adjustments and the effective tax
rate related to the underlying business and performance of the
Company’s ongoing operations. As a result of these adjustments, the
Company’s non-GAAP effective tax rate for the three months ended
March 31, 2023 was 27.6% and March 31, 2022 was 30.4%.
3.
As described below, the Company believes that free cash flow is
a useful non-GAAP measure for investors. Free cash flow does not
have a uniform definition under GAAP in the United States and
therefore, Teradata's definition may differ from other companies'
definitions of this measure. Teradata defines free cash flow as
cash provided by/used in operating activities, less capital
expenditures for property and equipment and additions to
capitalized software. Teradata’s management uses free cash flow to
assess the financial performance of the Company and believes it is
useful for investors because it relates the operating cash flow of
the Company to the capital that is spent to continue and improve
business operations. In particular, free cash flow indicates the
amount of cash generated after capital expenditures which can be
used for among other things, investments in the Company's existing
businesses, strategic acquisitions, strengthening the Company’s
balance sheet, repurchase of Company stock and repay the Company’s
debt obligations. Free cash flow does not represent the residual
cash flow available for discretionary expenditures since there may
be other non-discretionary expenditures that are not deducted from
the measure. This non-GAAP measure should not be considered as a
substitute for, or superior to, cash flows from operating
activities under GAAP.
(in millions)
For the Three Months
ended March 31
Outlook
2023
2022
2023
Cash provided by operating activities
(GAAP)
$
109
$
151
$340 to $380
Less total capital expenditures
(4
)
(1
)
(~20)
Free Cash Flow (non-GAAP measure)
$
105
$
150
$320 to $360
Note to Investors
This release contains forward-looking statements within the
meaning of Section 21E of the Securities and Exchange Act of 1934.
Forward-looking statements generally relate to opinions, beliefs,
and projections of expected future financial and operating
performance, business trends, liquidity, and market conditions,
among other things. These forward-looking statements are based upon
current expectations and assumptions and often can be identified by
words such as “expect,” “strive,” “looking ahead,” “outlook,”
“guidance,” “forecast,” “anticipate,” “continue,” “plan,”
“estimate,” “believe,” “will,” “would,” “likely,” “intend,”
“potential,” or similar expressions. Forward-looking statements in
this release include our 2023 second quarter and full year
financial guidance. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially,
including those relating to: the global economic environment and
business conditions in general, including inflation and/or
recessionary conditions, the ability of our suppliers to meet their
commitments to us, or the timing of purchases by our current and
potential customers; the rapidly changing and intensely competitive
nature of the information technology industry and the data
analytics business; fluctuations in our operating, capital
allocation, and cash flow results; our ability to execute and
realize the anticipated benefits of our business transformation
program or other restructuring and cost saving initiatives; risks
inherent in operating in foreign countries, including sanctions,
foreign currency fluctuations, and/or acts of war; risks associated
with the ongoing and uncertain impact of the COVID-19 pandemic on
our business, financial condition and operating results and on our
customers and suppliers; risks associated with data privacy,
cyberattacks and maintaining secure and effective products for our
customers, as well as, internal information technology and control
systems; the timely and successful development, production or
acquisition, availability and/or market acceptance of new and
existing products, product features and services; tax rates;
turnover of our workforce and the ability to attract and retain
skilled employees; protecting our intellectual property;
availability and successful execution of new alliance and
acquisition opportunities; subscription arrangements that may be
cancelled or fail to be renewed; the impact on our business and
financial reporting from changes in accounting rules; and other
factors described from time to time in Teradata’s filings with the
U.S. Securities and Exchange Commission, including its most recent
annual report on Form 10-K, and subsequent quarterly reports on
Forms 10-Q or current reports on Forms 8-K, as well as Teradata’s
annual report to stockholders. Teradata does not undertake any
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
About Teradata
Teradata is the connected multi-cloud data platform for
enterprise analytics company. Our enterprise analytics solve
business challenges from start to scale. Only Teradata gives you
the flexibility to handle the massive and mixed data workloads of
the future, today. Learn more at Teradata.com.
The Teradata logo is a trademark, and Teradata
is a registered trademark of Teradata Corporation and/or its
affiliates in the U.S. and worldwide.
Schedule A
TERADATA CORPORATION CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (in millions, except per share amounts
- unaudited) For the Period Ended March 31
Three Months
2023
2022
% Chg
Revenue Recurring
$
389
$
386
1
%
Perpetual software licenses, hardware and other
13
26
(50
%)
Consulting services
74
84
(12
%)
Total revenue
476
496
(4
%)
Gross profit Recurring
291
281
% of Revenue
74.8
%
72.8
%
Perpetual software licenses, hardware and other
2
8
% of Revenue
15.4
%
30.8
%
Consulting services
9
12
% of Revenue
12.2
%
14.3
%
Total gross profit
302
301
% of Revenue
63.4
%
60.7
%
Selling, general and administrative expenses
153
157
Research and development expenses
70
76
Income from operations
79
68
% of Revenue
16.6
%
13.7
%
Other expense, net
(21
)
(13
)
Income before income taxes
58
55
% of Revenue
12.2
%
11.1
%
Income tax expense
18
19
% Tax rate
31.0
%
34.5
%
Net income
$
40
$
36
% of Revenue
8.4
%
7.3
%
Net income per common share Basic
$
0.39
$
0.34
Diluted
$
0.39
$
0.33
Weighted average common shares outstanding Basic
101.4
105.0
Diluted
103.8
108.6
Schedule B
TERADATA CORPORATION CONDENSED CONSOLIDATED
BALANCE SHEETS (in millions - unaudited)
March 31, December 31, March 31,
2023
2022
2022
Assets Current assets
Cash and cash equivalents
$
551
$
569
$
404
Accounts receivable, net
341
364
330
Inventories
7
8
16
Other current assets
107
87
113
Total current assets
1,006
1,028
863
Property and equipment, net
252
244
274
Right of use assets - operating lease, net
11
13
22
Goodwill
391
390
395
Capitalized contract costs, net
84
92
109
Deferred income taxes
204
213
200
Other assets
38
42
32
Total assets
$
1,986
$
2,022
$
1,895
Liabilities and stockholders'
equity Current liabilities Current portion of
long-term debt
$
-
$
-
$
75
Current portion of finance lease liability
70
67
76
Current portion of operating lease liability
8
8
11
Accounts payable
92
94
78
Payroll and benefits liabilities
95
137
91
Deferred revenue
634
589
580
Other current liabilities
100
112
82
Total current liabilities
999
1,007
993
Long-term debt
498
498
324
Finance lease liability
62
54
56
Operating lease liability
8
10
15
Pension and other postemployment plan liabilities
96
101
133
Long-term deferred revenue
4
8
19
Deferred tax liabilities
7
7
16
Other liabilities
82
79
102
Total liabilities
1,756
1,764
1,658
Stockholders' equity Common stock
1
1
1
Paid-in capital
1,962
1,941
1,792
Accumulated deficit
(1,613
)
(1,565
)
(1,425
)
Accumulated other comprehensive loss
(120
)
(119
)
(131
)
Total stockholders' equity
230
258
237
Total liabilities and stockholders' equity
$
1,986
$
2,022
$
1,895
Schedule C
TERADATA CORPORATION CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in millions - unaudited)
For the Period Ended March 31 Three Months
2023
2022
Operating activities Net (loss) income
$
40
$
36
Adjustments to reconcile net (loss) income to net cash
provided by operating activities: Depreciation and amortization
28
40
Stock-based compensation expense
28
31
Deferred income taxes
7
8
Changes in assets and liabilities: Receivables
23
6
Inventories
1
10
Current payables and accrued expenses
(41
)
(49
)
Deferred revenue
41
20
Other assets and liabilities
(18
)
49
Net cash provided by operating activities
109
151
Investing activities Expenditures for property and
equipment
(4
)
(1
)
Additions to capitalized software
-
-
Other investing activities
-
-
Net cash used in investing activities
(4
)
(1
)
Financing activities Repurchases of common stock
(84
)
(300
)
Proceeds from long-term borrowings
-
-
Repayments of long-term borrowings
-
(13
)
Payments of finance leases
(20
)
(22
)
Other financing activities, net
(7
)
4
Net cash used in financing activities
(111
)
(331
)
Effect of exchange rate changes on cash and cash equivalents
(10
)
(6
)
Increase (decrease) in cash, cash equivalents and
restricted cash
(16
)
(187
)
Cash, cash equivalents and restricted cash at beginning of
period
571
595
Cash, cash equivalents and restricted cash at end of
period
$
555
$
408
Supplemental cash flow disclosure: Non-cash
investing and financing activities: Assets acquired by finance
leases
$
30
$
24
Assets acquired by operating leases
$
1
$
1
Schedule D
TERADATA CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in millions -
unaudited)
For the Three Months Ended March 31
2023
2022
% Change As Reported % Change Constant Currency(2)
Segment Revenue Americas
$
292
$
290
1
%
2
%
EMEA
117
129
(9
%)
(1
%)
APJ
67
77
(13
%)
(5
%)
Total segment revenue
476
496
(4
%)
0
%
Segment gross profit Americas
193
189
% of Revenue
66.1
%
65.2
%
EMEA
74
78
% of Revenue
63.2
%
60.5
%
APJ
39
45
% of Revenue
58.2
%
58.4
%
Total segment gross profit
306
312
% of Revenue
64.3
%
62.9
%
Reconciling items(1)
(4
)
(11
)
Total gross profit
$
302
$
301
% of Revenue
63.4
%
60.7
%
(1) Reconciling items include stock-based
compensation, amortization of acquisition-related intangible assets
and acquisition, integration and reorganization-related items. (2)
The impact of currency is determined by calculating the prior
period results using the current-year monthly average currency
rates.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230502006266/en/
INVESTOR CONTACT Christopher T. Lee 858-485-2523 office
christopher.lee@teradata.com
MEDIA CONTACT Jennifer Donahue 858-485-3029 office
jennifer.donahue@teradata.com
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