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Teradata (TDC) Q1 Earnings Miss Estimates, Revenues Fall Y/Y
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Teradata (TDC - Free Report) reported first-quarter 2023 non-GAAP earnings of 61 cents per share, missing the Zacks Consensus Estimate by 1.6%. Further, the bottom line decreased by 6.1% from the year-ago quarter’s figure.
Revenues of $476 million surpassed the Zacks Consensus Estimate of $464.6 million. The figure decreased 4% year over year on a reported basis while remaining flat on a constant-currency (cc) basis.
The decline in the top line was attributed to decreasing perpetual and consulting revenues. Also, weak momentum across Europe, the Middle East & Africa (EMEA) and Asia Pacific and Japan (APJ) regions was a concern.
Total annual recurring revenues (ARR) at the first quarter’s end increased 6% year over year to $1.51 billion. The figure increased by 7% on a cc basis.
Public cloud ARR surged 86% on a reported basis and 89% at cc year over year to $388 million. Growth was driven by solid customer demand for the company’s differentiated platform.
Teradata Corporation Price, Consensus and EPS Surprise
Recurring revenues (accounting for 81.7% of revenues) increased 1% year over year on a reported basis (increased 4% at cc) to $389 million.
Perpetual software license and hardware revenues (2.7% of revenues) were down 50% year over year (down 43% at cc) to $13 million.
Consulting services’ revenues (15.5% of revenues) declined 12% from the year-ago level (down 5% at cc) to $74 million.
Revenues from the Americas increased by 1% year over year on a reported basis (increased 2% at cc) to $292 million. EMEA revenues fell 9% from the year-ago figure (down 1% at cc) to $117 million. Revenues from the APJ region were down 13% from the year-ago level (down 5% at cc) to $67 million.
Operating Details
The gross margin on a non-GAAP basis was 64.3%, expanding 140 basis points (bps) year over year.
Selling, general & administrative (SG&A) expenses decreased 2.5% year over year to $153 million. Research & development (R&D) expenses were $70 million, decreasing 7.9% from the year-ago quarter. As a percentage of revenues, SG&A expanded 40 bps year over year to 32.1%, whereas R&D contracted 60 bps to 14.7%.
The non-GAAP operating margin was 22.7%, down 50 bps from the year-ago quarter’s level.
Balance Sheet
As of Mar 31, 2023, Teradata had cash and cash equivalents of $551 million compared with $569 million as of Dec 31, 2022.
Long-term debt at the end of the reported quarter was $498 million, the same as that at the end of the previous quarter.
In the first quarter, Teradata generated $109 million in cash from operating activities compared with the previous quarter’s $129 million.
Further, the company generated free cash flow of $105 million in the reported quarter.
Guidance
For second-quarter 2023, non-GAAP earnings are expected to be between 43 and 47 cents per share. The Zacks Consensus Estimate for earnings is pegged at 39 cents per share.
For 2023, the company updated its guidance for non-GAAP earnings from $1.90-$2.06 per share to $1.92-$2.04 per share. The Zacks Consensus Estimate for earnings is pegged at $1.96 per share.
Public cloud ARR is projected to increase by 53-57% on a year-over-year basis.
Total ARR is expected to exhibit growth of 6-8% from that reported in 2022.
Teradata expects recurring revenues to increase by 4-7% year over year.
TDC projects total revenues to be up 1-4% from the year-ago reported figure. The consensus mark for 2023 revenues stands at $1.83 billion.
Zacks Rank & Stocks to Consider
Currently, Teradata carries a Zacks Rank #3 (Hold).
Agilent Technologies is set to report second-quarter fiscal 2023 results on May 23. The Zacks Consensus Estimate for A’s earnings is pegged at $1.27 per share, implying growth of 12.4% from the year-ago quarter’s reported figure. A has lost 11.6% in the year-to-date period.
DigitalOcean is scheduled to release first-quarter 2023 results on May 9. The Zacks Consensus Estimate for DOCN’s earnings is pegged at 29 cents per share, suggesting a significant jump from 7 cents per share reported in the prior-year quarter. DOCN has gained 25.5% in the year-to-date period.
Paycor HCM is scheduled to report third-quarter fiscal 2023 results on May 10. The Zacks Consensus Estimate for PYCR’s earnings is pegged at 15 cents per share, suggesting an increase of 36.4% from the prior-year quarter’s reported figure. PYCR has gained 26% in the year-to-date period.
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Teradata (TDC) Q1 Earnings Miss Estimates, Revenues Fall Y/Y
Teradata (TDC - Free Report) reported first-quarter 2023 non-GAAP earnings of 61 cents per share, missing the Zacks Consensus Estimate by 1.6%. Further, the bottom line decreased by 6.1% from the year-ago quarter’s figure.
Revenues of $476 million surpassed the Zacks Consensus Estimate of $464.6 million. The figure decreased 4% year over year on a reported basis while remaining flat on a constant-currency (cc) basis.
The decline in the top line was attributed to decreasing perpetual and consulting revenues. Also, weak momentum across Europe, the Middle East & Africa (EMEA) and Asia Pacific and Japan (APJ) regions was a concern.
Total annual recurring revenues (ARR) at the first quarter’s end increased 6% year over year to $1.51 billion. The figure increased by 7% on a cc basis.
Public cloud ARR surged 86% on a reported basis and 89% at cc year over year to $388 million. Growth was driven by solid customer demand for the company’s differentiated platform.
Teradata Corporation Price, Consensus and EPS Surprise
Teradata Corporation price-consensus-eps-surprise-chart | Teradata Corporation Quote
Top Line in Detail
Recurring revenues (accounting for 81.7% of revenues) increased 1% year over year on a reported basis (increased 4% at cc) to $389 million.
Perpetual software license and hardware revenues (2.7% of revenues) were down 50% year over year (down 43% at cc) to $13 million.
Consulting services’ revenues (15.5% of revenues) declined 12% from the year-ago level (down 5% at cc) to $74 million.
Revenues from the Americas increased by 1% year over year on a reported basis (increased 2% at cc) to $292 million. EMEA revenues fell 9% from the year-ago figure (down 1% at cc) to $117 million. Revenues from the APJ region were down 13% from the year-ago level (down 5% at cc) to $67 million.
Operating Details
The gross margin on a non-GAAP basis was 64.3%, expanding 140 basis points (bps) year over year.
Selling, general & administrative (SG&A) expenses decreased 2.5% year over year to $153 million. Research & development (R&D) expenses were $70 million, decreasing 7.9% from the year-ago quarter. As a percentage of revenues, SG&A expanded 40 bps year over year to 32.1%, whereas R&D contracted 60 bps to 14.7%.
The non-GAAP operating margin was 22.7%, down 50 bps from the year-ago quarter’s level.
Balance Sheet
As of Mar 31, 2023, Teradata had cash and cash equivalents of $551 million compared with $569 million as of Dec 31, 2022.
Long-term debt at the end of the reported quarter was $498 million, the same as that at the end of the previous quarter.
In the first quarter, Teradata generated $109 million in cash from operating activities compared with the previous quarter’s $129 million.
Further, the company generated free cash flow of $105 million in the reported quarter.
Guidance
For second-quarter 2023, non-GAAP earnings are expected to be between 43 and 47 cents per share. The Zacks Consensus Estimate for earnings is pegged at 39 cents per share.
For 2023, the company updated its guidance for non-GAAP earnings from $1.90-$2.06 per share to $1.92-$2.04 per share. The Zacks Consensus Estimate for earnings is pegged at $1.96 per share.
Public cloud ARR is projected to increase by 53-57% on a year-over-year basis.
Total ARR is expected to exhibit growth of 6-8% from that reported in 2022.
Teradata expects recurring revenues to increase by 4-7% year over year.
TDC projects total revenues to be up 1-4% from the year-ago reported figure. The consensus mark for 2023 revenues stands at $1.83 billion.
Zacks Rank & Stocks to Consider
Currently, Teradata carries a Zacks Rank #3 (Hold).
Investors interested in the broader technology sector can consider some better-ranked stocks like Agilent Technologies (A - Free Report) , DigitalOcean (DOCN - Free Report) and Paycor HCM (PYCR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Agilent Technologies is set to report second-quarter fiscal 2023 results on May 23. The Zacks Consensus Estimate for A’s earnings is pegged at $1.27 per share, implying growth of 12.4% from the year-ago quarter’s reported figure. A has lost 11.6% in the year-to-date period.
DigitalOcean is scheduled to release first-quarter 2023 results on May 9. The Zacks Consensus Estimate for DOCN’s earnings is pegged at 29 cents per share, suggesting a significant jump from 7 cents per share reported in the prior-year quarter. DOCN has gained 25.5% in the year-to-date period.
Paycor HCM is scheduled to report third-quarter fiscal 2023 results on May 10. The Zacks Consensus Estimate for PYCR’s earnings is pegged at 15 cents per share, suggesting an increase of 36.4% from the prior-year quarter’s reported figure. PYCR has gained 26% in the year-to-date period.