Teradata (TDC - Free Report) reported third-quarter 2021 non-GAAP earnings of 43 cents per share, which beat the Zacks Consensus Estimate by 34.4% but was unchanged on a year-over-year basis.
The figure comfortably beat Teradata’s guidance of 30-34 cents per share.
Revenues of $460 million increased 1% year over year. At constant currency (cc), revenues were up 1%.
Total annual recurring revenues (ARR), at the end of the third quarter, increased 7% year over year (up 6% at cc) to $1.437 billion. Public cloud ARR surged 83% on a reported basis and 82% at cc to $148 million. The growth rate was lower than management’s expectation of at least 90% year over year. Management cited that a few large deals slipped in to the fourth quarter, thereby affecting Public cloud ARR growth.
Shares of Teradata were down 7.8% in the pre-market trading on Nov 5, following the announcement of third-quarter 2021 results.
Top-Line Details
Recurring revenues (76.5% of revenues) increased 7% year over year (up 6% at cc) to $352 million.
Perpetual software license and hardware revenues (3.9% of revenues) were down 28% year over year (down 29% at cc) to $18 million.
Consulting services’ revenues (19.6% of revenues) declined 10% from the year-ago quarter’s levels (down 10% at cc) to $90 million.
Revenues in the Americas declined 5% year over year (down 5% at cc) to $249 million. Europe, the Middle East & Africa (EMEA) revenues rose 16% from the year-ago quarter’s figures (up 15% at cc) to $133 million. Revenues from APJ were unchanged from the year-ago quarter’s levels (down 2% at cc) to $78 million.
Operating Details
Gross margin on a non-GAAP basis was 61.3%, up from 61% reported in the year-ago quarter. The uptick was primarily driven by a higher mix of recurring revenues.
Americas gross margin came in at 63.1% in the third quarter form 63.2% reported in the year ago quarter. EMEA gross margin surged to 60.9% from 60% reported in the year-ago quarter. APJ gross margin soared to 56.4% from 55.1% reported in the year-ago quarter.
Recurring revenues’ gross margin expanded 220 bps on a year-over-year basis to 73%. The upside benefited from cost improvements in subscription and cloud business.
Perpetual software license and hardware margin contracted 910 bps to 38.9%.
Non-GAAP Consulting services’ gross margin expanded 320 bps year over year to 12.2%.
Selling, general & administrative (SG&A), as a percentage of revenues, expanded 20 bps to year over year to 36.1%.
Research & development (R&D) expenses, as a percentage of revenues, declined 260 bps on a year-over-year basis to 17.2%.
Non-GAAP operating margin was 15.4%, up 60 bps reported in the year-ago quarter mainly due to cost discipline.
Balance Sheet & Other Details
As of Sep 30, 2021, Teradata had cash and cash equivalents of $613 million compared with $683 million as of Jun 30, 2021.
Total debt (including current portion) as of Sep 30, 2021, was $424 million compared with $436 million as of Jun 30, 2021.
In the third quarter, Teradata generated $33 million of cash from operating activities compared with the previous quarter’s $225 million.
The company’s quarterly free cash flow was $23 million compared with $219 million in the previous quarter.
The company repurchased 1.1 million shares worth $58 million in the third quarter.
On Nov 1, 2021, the company announced a new $1-billion share repurchase authorization with the expiry set on Dec 31, 2025. The company had $1.3 billion shares under its existing repurchase authorization.
Guidance
For fourth-quarter 2021, non-GAAP earnings are expected between 25 cents and 29 cents per share.
For 2021, non-GAAP earnings are expected between $2.11 and $2.15 per share (up from the previous guidance of $1.92-$1.96 per share.)
Public cloud ARR is now projected to increase approximately 90%. Earlier, Public cloud ARR is projected to increase by at least 100% year over year. Total ARR is expected to grow at a mid- to high-single-digit percentage year over year.
Teradata expects recurring revenues to grow at a high-single-digit to low-double-digit range year over year.
The company projects total revenues to increase at a low-single-digit to mid-single-digit percentage on a year-over-year basis.
Cash flow from operations are now expected to be at least $440 million, while free cash flow is now projected to be at least $400 million.
Zacks Rank & Stocks to Consider
Currently, Teradata carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader technology sector include Advanced Micro Devices (AMD - Free Report) , Synaptics Incorporated (SYNA - Free Report) and Broadcom (AVGO - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Long-term earnings growth rate of AMD, Synaptics and Broadcom is pegged at 46.2%, 10% and 15%, respectively.
Highest Returns for Any Asset Class
It’s not even close. Despite ups and downs, Bitcoin has been more profitable for investors than any other decentralized, borderless form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.
Hurry, Download Special Report – It’s FREE >>
Teradata (TDC - Free Report) reported third-quarter 2021 non-GAAP earnings of 43 cents per share, which beat the Zacks Consensus Estimate by 34.4% but was unchanged on a year-over-year basis.
The figure comfortably beat Teradata’s guidance of 30-34 cents per share.
Revenues of $460 million increased 1% year over year. At constant currency (cc), revenues were up 1%.
Total annual recurring revenues (ARR), at the end of the third quarter, increased 7% year over year (up 6% at cc) to $1.437 billion. Public cloud ARR surged 83% on a reported basis and 82% at cc to $148 million. The growth rate was lower than management’s expectation of at least 90% year over year. Management cited that a few large deals slipped in to the fourth quarter, thereby affecting Public cloud ARR growth.
Shares of Teradata were down 7.8% in the pre-market trading on Nov 5, following the announcement of third-quarter 2021 results.
Top-Line Details
Recurring revenues (76.5% of revenues) increased 7% year over year (up 6% at cc) to $352 million.
Perpetual software license and hardware revenues (3.9% of revenues) were down 28% year over year (down 29% at cc) to $18 million.
Consulting services’ revenues (19.6% of revenues) declined 10% from the year-ago quarter’s levels (down 10% at cc) to $90 million.
Revenues in the Americas declined 5% year over year (down 5% at cc) to $249 million. Europe, the Middle East & Africa (EMEA) revenues rose 16% from the year-ago quarter’s figures (up 15% at cc) to $133 million. Revenues from APJ were unchanged from the year-ago quarter’s levels (down 2% at cc) to $78 million.
Operating Details
Gross margin on a non-GAAP basis was 61.3%, up from 61% reported in the year-ago quarter. The uptick was primarily driven by a higher mix of recurring revenues.
Americas gross margin came in at 63.1% in the third quarter form 63.2% reported in the year ago quarter. EMEA gross margin surged to 60.9% from 60% reported in the year-ago quarter. APJ gross margin soared to 56.4% from 55.1% reported in the year-ago quarter.
Recurring revenues’ gross margin expanded 220 bps on a year-over-year basis to 73%. The upside benefited from cost improvements in subscription and cloud business.
Perpetual software license and hardware margin contracted 910 bps to 38.9%.
Non-GAAP Consulting services’ gross margin expanded 320 bps year over year to 12.2%.
Selling, general & administrative (SG&A), as a percentage of revenues, expanded 20 bps to year over year to 36.1%.
Research & development (R&D) expenses, as a percentage of revenues, declined 260 bps on a year-over-year basis to 17.2%.
Non-GAAP operating margin was 15.4%, up 60 bps reported in the year-ago quarter mainly due to cost discipline.
Balance Sheet & Other Details
As of Sep 30, 2021, Teradata had cash and cash equivalents of $613 million compared with $683 million as of Jun 30, 2021.
Total debt (including current portion) as of Sep 30, 2021, was $424 million compared with $436 million as of Jun 30, 2021.
In the third quarter, Teradata generated $33 million of cash from operating activities compared with the previous quarter’s $225 million.
The company’s quarterly free cash flow was $23 million compared with $219 million in the previous quarter.
The company repurchased 1.1 million shares worth $58 million in the third quarter.
On Nov 1, 2021, the company announced a new $1-billion share repurchase authorization with the expiry set on Dec 31, 2025. The company had $1.3 billion shares under its existing repurchase authorization.
Guidance
For fourth-quarter 2021, non-GAAP earnings are expected between 25 cents and 29 cents per share.
For 2021, non-GAAP earnings are expected between $2.11 and $2.15 per share (up from the previous guidance of $1.92-$1.96 per share.)
Public cloud ARR is now projected to increase approximately 90%. Earlier, Public cloud ARR is projected to increase by at least 100% year over year. Total ARR is expected to grow at a mid- to high-single-digit percentage year over year.
Teradata expects recurring revenues to grow at a high-single-digit to low-double-digit range year over year.
The company projects total revenues to increase at a low-single-digit to mid-single-digit percentage on a year-over-year basis.
Cash flow from operations are now expected to be at least $440 million, while free cash flow is now projected to be at least $400 million.
Zacks Rank & Stocks to Consider
Currently, Teradata carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader technology sector include Advanced Micro Devices (AMD - Free Report) , Synaptics Incorporated (SYNA - Free Report) and Broadcom (AVGO - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Long-term earnings growth rate of AMD, Synaptics and Broadcom is pegged at 46.2%, 10% and 15%, respectively.
Highest Returns for Any Asset Class
It’s not even close. Despite ups and downs, Bitcoin has been more profitable for investors than any other decentralized, borderless form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.
Hurry, Download Special Report – It’s FREE >>
Get the latest research report on AMD - FREE
Get the latest research report on TDC - FREE
Get the latest research report on AVGO - FREE
Get the latest research report on SYNA - FREE