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May 7, 2021

Teradata Reports First Quarter 2021 Financial Results

SAN DIEGO, May 7, 2021 — Teradata (NYSE: TDC) announced its first-quarter 2021 financial results.

  • Public cloud ARR increased by $79 million, or 176% from the prior year period, exceeding the outlook of at least 165% year-over-year
  • First-quarter recurring revenue of $372 million, an increase of 20% from the prior year period
  • Cash from operations of $110 million, an increase of $100 million from the prior year period
  • Free cash flow of $105 million, an increase of $107 million from the prior year period
  • First-quarter GAAP earnings per diluted share of $0.47 above the previously provided outlook range of $0.11 to $0.13
  • First-quarter non-GAAP earnings per diluted share of $0.69 above the previously provided outlook range of $0.38 to $0.40

“Teradata had a strong start to the year exceeding expectations across key metrics with significant growth in public cloud ARR, profitability, and free cash flow. Our relentless focus on profitable growth, coupled with the strength of Vantage, is driving our performance and positioning Teradata to win over the long-term,” said Steve McMillan, President and CEO, Teradata. “The momentum for our connected, multi-cloud data platform for enterprise analytics continues to grow, demonstrating that our pivot to the cloud is the right strategy for Teradata.”

Realignment of ARR and revenue starting at the beginning of fiscal 2021

As disclosed in Q4 2020, Teradata realigned its ARR and recurring revenue disclosures at the beginning of fiscal 2021. The realignment removes managed services and third-party software from subscription-based ARR and recurring revenue. Managed services revenue is included in “consulting services revenue” and third-party software is included in “perpetual software licenses, hardware and other revenue.” This realignment does not change previously reported total revenue or total gross profit.

Tables that show the impact of this realignment to ARR, total revenue and gross profits for each quarter of 2020 and the full year are included in the Q4/FY 2020 Earnings Discussion document, which is available on the Investor Relations page of Teradata’s website at investor.teradata.com. Please also see the Q1 2021 supplemental financial schedules for a trended view of realigned revenue, which is also available on the Investor Relations page of Teradata’s website.

First-Quarter 2021 Financial Highlights compared to First Quarter 2020

  • Public cloud ARR increased 176% as reported (170% in constant currency(1)) to $124 million from $45 million. On a sequential basis, public cloud ARR increased by $18 million, or 17% as reported and 18% in constant currency(1)
  • Total ARR increased 12% as reported (9% in constant currency(1)) to $1.404 billion from $1.254 billion. On a sequential basis, total ARR decreased by $21 million, or 1% and was flat in constant currency(1) due to very strong FX headwinds
  • Total revenue was $491 million versus $434 million, an increase of 13% as reported and 10% in constant currency(1)
  • Recurring revenue was $372 million versus $311 million, an increase of 20% as reported and 17% in constant currency(1)
  • GAAP gross margin was 62.5% versus 51.8%
  • Non-GAAP gross margin was 64.2% versus 54.1%(3)
  • GAAP operating income was $81 million versus an operating loss of $6 million
  • Non-GAAP operating income was $115 million versus $32 million(3)
  • GAAP earnings per diluted share was $0.47 versus $1.51 per share
  • Non-GAAP earnings per diluted share was $0.69 versus $0.27(3)
  • Cash flow from operations was $110 million compared to $10 million
  • Free cash flow was $105 million compared to negative $2 million(2)

Outlook

Affirming the following outlook for the full year 2021:

  • Public cloud ARR is expected 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
  • Recurring revenue is expected to grow at a mid- to high-single digit percentage year-over-year
  • Total revenue is expected to grow at a low-single-digit percentage year-over-year

Raising the following outlook for the full year 2021:

  • GAAP earnings per diluted share is now expected to be in the range of $0.58 to $0.64, up from our prior outlook range of $0.43 to $0.51
  • Non-GAAP earnings per diluted share, excluding stock-based compensation expense, reorganization-related expenses, and other special items, is now expected to be in the range of $1.61 to $1.67(3), up from our prior outlook of $1.50 to $1.58
  • Cash flow from operations is now expected to be in the range of $320 million to $350 million, up from our prior outlook of at least $295 million
  • Free cash flow is now expected to be in the range of $275 million to $300 million(2), up from our prior outlook of at least $250 million

For the second quarter of 2021:

  • Public cloud ARR is expected to increase by at least 155% year-over-year, or by $15 million to $20 million sequentially
  • GAAP diluted EPS is expected to be in the range of $0.17 to $0.19
  • Non-GAAP diluted EPS, excluding stock-based compensation expense, reorganization-related expenses, and other special items, is expected to be in the range of $0.47 to $0.49(3)

Supplemental Financial Information

Additional information regarding Teradata’s operating results is provided below as well as on the Investor Relations page of Teradata’s website at investor.teradata.com.

Revenue
(in millions)
For the Three Months ended March 31
2021 2020 % Change as
Reported
% Change in CC
Recurring revenue $372 $311 20% 17%
Perpetual software licenses, hardware and other 23 23 0% -2%
Consulting services 96 100 -4% -8%
Total revenue $491 $434 13% 10%
Americas $263 $244 8% 8%
EMEA 147 118 25% 17%
APJ 81 72 13% 4%
Total revenue $491 $434 13% 10%
As of March 31
2021 2020 % Change as
Reported
% Change in CC
Annual recurring revenue* $1,404 $1,254 12% 9%
Public cloud ARR** $124 $45 176% 170%
* 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. ARR does not include managed services and third-party software.
** Public cloud ARR is defined as the annual value at a point in time of all contracts related to public cloud implementations of Teradata Vantage and does not include ARR related to private or managed cloud implementations.
 
(in millions) For the
Three Months
ended March 31
2021 2020 2021 FY Outlook
Cash provided by operating activities (GAAP) $110 $10 $320 – $350
Less capital expenditures for:
Expenditures for property and equipment (4) (10) (40) – (45)
Additions to capitalized software (1) (2) (5)
Total capital expenditures (5) (12) (45) – (50)
Free Cash Flow (non-GAAP measure) $105 $(2) $275 – $300

 

Click here for the full announcement.


Source: Teradata

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