Teradata (TDC - Free Report) reported fourth-quarter 2023 non-GAAP earnings of 56 cents per share, which beat the Zacks Consensus Estimate by 9.8%. The bottom line jumped 60% year over year.
Revenues of $457 million surpassed the Zacks Consensus Estimate by 2.01%. The figure increased 1.1% year over year on a reported basis and 1% on a constant-currency (cc) basis.
Total annual recurring revenues (“ARR”) at the fourth-quarter end increased 6% year over year to $1.57 billion. The figure increased 5% at cc.
Public cloud ARR surged 48% on a reported basis and 46% at cc year over year to $528 million.
Solid customer demand for Teradata Vantage Cloud was a positive. The cloud net expansion rate was 124%.
Top Line in Detail
Recurring revenues (contributing 81.4% to revenues) increased 4.2% year over year on a reported basis (increased 4% at cc) to $372 million, surpassing the Zacks Consensus Estimate by 6.29%.
Perpetual software license and hardware revenues (2.6% of revenues) were down 29.4% year over year (down 34% at cc) to $12 million, beating the Zacks Consensus Estimate by 21.75%.
Consulting services’ revenues (16% of revenues) dropped 6.4% year over year (down 4% at cc) to $73 million, beating the Zacks Consensus Estimate by 1.13%.
Revenues from the Americas increased 3.1% year over year on a reported basis (increased 5% at cc) to $372 million. EMEA revenues fell 0.8% year over year (down 4% at cc) to $127 million.
Revenues from the APJ region were down 3% year over year (down 2% at cc) to $65 million.
Operating Details
The gross margin on a non-GAAP basis was 61.9%, expanding 240 basis points (bps) year over year.
Selling, general & administrative (SG&A) expenses decreased 9.1% year over year to $159 million. Research & development (R&D) expenses were $72 million, declining 6.5% year over year.
As a percentage of revenues, SG&A contracted 390 bps year over year to 34.8%, whereas R&D contracted 130 bps to 15.8%.
The non-GAAP operating margin was 19.5%, up 580 bps year over year.
Balance Sheet
As of Dec 31, 2023, Teradata had cash and cash equivalents of $486 million compared with $348 million as of Sep 30, 2023.
Long-term debt Dec 31, 2023, was $499 million compared with $486 million as of Sep 30, 2023.
In the fourth quarter, Teradata generated $176 million in cash from operating activities compared with the previous quarter’s $41 million.
The company generated a free cash flow of $168 million in the reported quarter.
Share repurchases in 2023 amounted to $308 million.
Guidance
For first-quarter 2024, non-GAAP earnings are expected to be between 53 and 57 cents per share. The Zacks Consensus Estimate for earnings is pegged at 47 cents.
For 2024, TDC expects non-GAAP earnings between $2.15 and $2.31 per share. The Zacks Consensus Estimate for earnings is pegged at $1.96.
Public cloud ARR growth is projected between 35% and 41% on a year-over-year basis.
Total ARR is expected to exhibit growth of 4-8% from the 2023 level.
Teradata expects recurring revenues to increase 1-3% year over year.
Teradata expects total revenues to be up 0-2% from the year-ago reported figure. The consensus mark for 2023 revenues is pegged at $1.83 billion.
Moreover, cash flow from operations is expected to be between $360 million and $400 million. Free cash flow is anticipated to be in the $340-$380 million range.
Zacks Rank & Stocks to Consider
Currently, Teradata carries a Zacks Rank #4 (Sell).
Shares of Teradata have returned 12.1% on a year-to-date basis, outperforming the Zacks Computer and Technology sector’s return of 10.5%.
Shopify (SHOP - Free Report) , BlackLine (BL - Free Report) and CrowdStrike (CRWD - Free Report) are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify shares have gained 14.4% year to date. SHOP is set to report its fourth-quarter 2023 results on Feb 13.
BlackLine shares have declined 2.6% year to date. BL is set to report its fourth-quarter 2023 results on Feb 13.
CrowdStrike shares have jumped 25.8% year to date. CRWD is set to report its fourth-quarter fiscal 2024 results on Mar 5.
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Teradata (TDC - Free Report) reported fourth-quarter 2023 non-GAAP earnings of 56 cents per share, which beat the Zacks Consensus Estimate by 9.8%. The bottom line jumped 60% year over year.
Revenues of $457 million surpassed the Zacks Consensus Estimate by 2.01%. The figure increased 1.1% year over year on a reported basis and 1% on a constant-currency (cc) basis.
Total annual recurring revenues (“ARR”) at the fourth-quarter end increased 6% year over year to $1.57 billion. The figure increased 5% at cc.
Public cloud ARR surged 48% on a reported basis and 46% at cc year over year to $528 million.
Solid customer demand for Teradata Vantage Cloud was a positive. The cloud net expansion rate was 124%.
Top Line in Detail
Recurring revenues (contributing 81.4% to revenues) increased 4.2% year over year on a reported basis (increased 4% at cc) to $372 million, surpassing the Zacks Consensus Estimate by 6.29%.
Perpetual software license and hardware revenues (2.6% of revenues) were down 29.4% year over year (down 34% at cc) to $12 million, beating the Zacks Consensus Estimate by 21.75%.
Consulting services’ revenues (16% of revenues) dropped 6.4% year over year (down 4% at cc) to $73 million, beating the Zacks Consensus Estimate by 1.13%.
Revenues from the Americas increased 3.1% year over year on a reported basis (increased 5% at cc) to $372 million. EMEA revenues fell 0.8% year over year (down 4% at cc) to $127 million.
Revenues from the APJ region were down 3% year over year (down 2% at cc) to $65 million.
Operating Details
The gross margin on a non-GAAP basis was 61.9%, expanding 240 basis points (bps) year over year.
Selling, general & administrative (SG&A) expenses decreased 9.1% year over year to $159 million. Research & development (R&D) expenses were $72 million, declining 6.5% year over year.
As a percentage of revenues, SG&A contracted 390 bps year over year to 34.8%, whereas R&D contracted 130 bps to 15.8%.
The non-GAAP operating margin was 19.5%, up 580 bps year over year.
Balance Sheet
As of Dec 31, 2023, Teradata had cash and cash equivalents of $486 million compared with $348 million as of Sep 30, 2023.
Long-term debt Dec 31, 2023, was $499 million compared with $486 million as of Sep 30, 2023.
In the fourth quarter, Teradata generated $176 million in cash from operating activities compared with the previous quarter’s $41 million.
The company generated a free cash flow of $168 million in the reported quarter.
Share repurchases in 2023 amounted to $308 million.
Guidance
For first-quarter 2024, non-GAAP earnings are expected to be between 53 and 57 cents per share. The Zacks Consensus Estimate for earnings is pegged at 47 cents.
For 2024, TDC expects non-GAAP earnings between $2.15 and $2.31 per share. The Zacks Consensus Estimate for earnings is pegged at $1.96.
Public cloud ARR growth is projected between 35% and 41% on a year-over-year basis.
Total ARR is expected to exhibit growth of 4-8% from the 2023 level.
Teradata expects recurring revenues to increase 1-3% year over year.
Teradata expects total revenues to be up 0-2% from the year-ago reported figure. The consensus mark for 2023 revenues is pegged at $1.83 billion.
Moreover, cash flow from operations is expected to be between $360 million and $400 million. Free cash flow is anticipated to be in the $340-$380 million range.
Zacks Rank & Stocks to Consider
Currently, Teradata carries a Zacks Rank #4 (Sell).
Shares of Teradata have returned 12.1% on a year-to-date basis, outperforming the Zacks Computer and Technology sector’s return of 10.5%.
Shopify (SHOP - Free Report) , BlackLine (BL - Free Report) and CrowdStrike (CRWD - Free Report) are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify shares have gained 14.4% year to date. SHOP is set to report its fourth-quarter 2023 results on Feb 13.
BlackLine shares have declined 2.6% year to date. BL is set to report its fourth-quarter 2023 results on Feb 13.
CrowdStrike shares have jumped 25.8% year to date. CRWD is set to report its fourth-quarter fiscal 2024 results on Mar 5.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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