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Bear of the Day: Teradata (TDC)

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Teradata Corporation TDC is a leading provider of hybrid cloud analytics software. It has evolved from an enterprise database company to an enterprise analytics platform provider.

Teradata's analytics platform helps customers integrate and simplify their analytics ecosystem, access and manage data, and use analytics to extract answers and derive business value from data. The company's target market includes companies which are the world's most demanding, large-scale users of data.

TDC delivered a respectable quarter of top and bottom beats in its Q1 report in early May, but guidance was cloudy and thus analysts had to take estimates down significantly.

Quarter Details

Teradata reported first-quarter 2022 non-GAAP earnings of 65 cents per share, which beat the Zacks Consensus Estimate by 1.6%. Further, the figure was within the company’s guidance of 63-67 cents.

However, the bottom line decreased 5.8% year over year.

Revenues of $496 million increased 1% and 4% year over year on a reported and constant-currency (cc) basis, respectively.

Top-line growth was driven by increasing recurring and perpetual revenues. Further, the strong performance delivered by the company in the Americas region was a positive.

Total annual recurring revenues (ARR) at the first-quarter end increased 2% year over year (up 3% at cc) to $1.43 billion. Public cloud ARR surged 69% year over year on a reported basis and 70% at cc to $209 million.

We note that the company ceased its operations in Russia as a result of the ongoing Russia-Ukraine war.

Guidance

For second-quarter 2022, non-GAAP earnings are expected between 26 cents per share and 30 cents. The Zacks Consensus Estimate was pegged at 52 cents before this report.

For 2022, non-GAAP earnings are expected between $1.55 per share and $1.65 (down from the aforementioned $1.82-$1.92). The Zacks Consensus Estimate for earnings sat at $1.92 per share, indicating a 16.7% decline.

Public cloud ARR is projected to increase 80% on a year-over-year basis.

Total ARR is expected to fall year over year in the low-single-digit range.

Teradata expects recurring revenues to decline in a low-single-digit to mid-single-digit range from 2021.

The company projects total revenues to fall year over year in the low to mid-single-digit range on a reported basis. Further, it is expected to grow in the low-single-digit range at CC from 2021.

The consensus mark for revenues was pegged at $1.93 billion before the guidance and is now $1.81 billion, representing a 5.4% annual decline.

Given this drop in estimates, it's best to wait until next quarter to see if TDC has better visibility on their growth. The Zacks Rank will let you know.


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