Cloud and AI Innovations - Teradata's hybrid cloud platform, Teradata Vantage, is designed to support both cloud and on-premises environments, enabling organizations to leverage data at scale for AI applications[16]. - In 2024, Teradata introduced innovations such as Open Table Formats and Teradata VantageCloud Lake, enhancing capabilities for AI and analytics across multiple cloud platforms including Google Cloud, AWS, and Microsoft Azure[23]. - The company reported a commitment to integrating with partners like Nvidia and AWS to accelerate AI workloads and deliver generative AI use cases, enhancing the platform's capabilities[27]. - Teradata's ClearScape Analytics has been enhanced with features like AutoML and Spark integration, aimed at improving data science productivity and reducing complexity in model training[23]. - Teradata's AI Unlimited, integrated with Microsoft Fabric, allows customers to utilize over 150 ClearScape Analytics functions without the need for extensive data movement, optimizing operational efficiency[23]. - The company emphasizes the importance of managing uncontrolled data growth, providing a platform designed to harmonize data across organizations for effective AI implementation[28]. Business Strategy and Market Position - Teradata's business transformation strategy focuses on cloud modernization and seamless migration for customers transitioning from other vendors[22]. - The company is positioned to compete effectively in the rapidly changing IT industry, leveraging its patented workload management optimization technology[16]. - Teradata's market strategy targets large-scale data users, emphasizing the integration of multi-cloud and on-premises environments to derive significant business value[26]. - Total revenues for the calendar year ended December 31, 2024, were $1.750 billion[31]. - The data management and analytics market is expected to grow at a double-digit rate year-over-year for the next few years[33]. - The majority of customers utilize subscription-based purchasing options, leading to a substantial portion of recurring revenue[40]. Partnerships and Intellectual Property - The company has established partnerships with top global public cloud service providers: AWS, Microsoft Azure, and Google Cloud[44]. - Teradata owns 565 patents in the United States, reflecting its commitment to innovation[51]. - The company aims to deepen relationships with strategic public cloud service providers and systems integrators[39]. Workforce and Corporate Culture - As of December 31, 2024, Teradata had approximately 5,700 employees globally, with 30% in the United States and 70% in other countries[57]. - The company emphasizes a flexible work environment and competitive compensation to attract and retain talent[56]. - Teradata's workforce is critical to its business strategy, and the overall headcount decreased during fiscal 2024 to align with cloud and profitable growth strategies[57]. - The company supports local STEM education programs and provides employees with four paid volunteer days per year[63]. - Teradata emphasizes a culture of empowerment, accountability, and inclusivity, aiming to create a workplace free from discrimination[58]. Financial and Operational Challenges - The company faces challenges in accurately estimating Total Annual Recurring Revenue (ARR) and Public Cloud ARR due to variability in sales cycles and customer purchasing behavior[82]. - Customer cancellations and non-renewals of subscription agreements could adversely affect the company's business, especially as customers migrate to competitors' cloud offerings[97]. - The company has experienced significant fluctuations in quarterly operating results due to delays in sales and the long sales cycle for its products[83]. - The company's profit margins are adversely impacted by rising costs of components and cloud services, which are expected to continue until the cloud business is effectively scaled[103]. - The company has implemented programs to mitigate potential supply chain risks due to inflation and component shortages[54]. Regulatory and Compliance Risks - The evolving regulatory environment for AI/ML technologies presents risks, including compliance challenges and potential reputational harm[119]. - Increased scrutiny regarding environmental, social, and governance (ESG) practices may impose additional costs and affect the company's reputation if goals are not met[118]. - The company is subject to evolving privacy laws and regulations that may impact the adoption of its solutions, potentially increasing compliance costs and liabilities[122]. - The company is required to maintain certifications and standards established by third parties, such as ISO standards, to meet customer expectations[124]. Supply Chain and Economic Factors - The company has established preferred supplier relationships to ensure consistent quality and delivery of components[54]. - The company relies on single-source suppliers for key components, which poses risks if these suppliers terminate agreements or face operational issues[100]. - The company is exposed to economic conditions that could impact customer spending and purchasing decisions, particularly in sectors like retail and manufacturing[112]. - The company has operations in approximately 40 countries, exposing it to foreign currency exchange rate risks, which have impacted its revenue and net earnings[137]. Leadership and Governance - Teradata's Chief Financial Officer, Claire Bramley, announced her resignation effective March 31, 2025[66]. - The company has implemented internal controls over financial reporting, but weaknesses could lead to errors and affect investor confidence[116]. - The company's indebtedness could limit its financial flexibility and may require actions such as reducing capital expenditures or seeking additional equity capital to avoid default[136].

Core Viewpoint - Teradata (TDC) reported mixed financial results for the fourth quarter of 2024, with non-GAAP earnings exceeding estimates but revenues declining significantly year over year, leading to a sharp drop in share price [1][3]. Financial Performance - Non-GAAP earnings for Q4 2024 were 53 cents per share, beating the Zacks Consensus Estimate by 26.19%, but down 5.4% year over year [1]. - Revenues totaled $409 million, missing the Zacks Consensus Estimate by 0.43%, and declined 11% year over year on a reported basis and 9% on a constant-currency basis [2]. - Total annual recurring revenues (ARR) at the end of Q4 decreased 6% year over year to $1.474 billion, with a 4% decline at constant currency [2]. Revenue Breakdown - Recurring revenues, which account for 85.8% of total revenues, fell 6% year over year to $351 million [4]. - Perpetual software license and hardware revenues plummeted 75% year over year to $3 million [4]. - Consulting services revenues decreased 24.7% year over year to $55 million [4]. - Product sales revenues decreased 8% year over year to $354 million [5]. Operating Metrics - Non-GAAP gross margin was 60.9%, down 100 basis points year over year [6]. - Selling, general and administrative (SG&A) expenses decreased 10.7% year over year to $117 million, while research and development (R&D) expenses were $60 million, down 4.8% year over year [6]. - Non-GAAP operating margin was 17.6%, a decline of 190 basis points year over year [6]. Balance Sheet and Cash Flow - As of December 31, 2024, cash and cash equivalents were $420 million, up from $348 million as of September 30, 2024 [7]. - Long-term debt remained stable at $455 million as of September 30, 2024 [7]. - Cash generated from operating activities was $156 million in Q4, compared to $77 million in the previous quarter [7]. - Free cash flow for the quarter was $148 million [7]. Guidance - For Q1 2025, non-GAAP earnings are expected to be between 55 and 59 cents per share, with total revenues projected to decline 6-8% year over year [8]. - For the full year 2025, non-GAAP earnings are anticipated to be between $2.15 and $2.25 per share [8]. - Public cloud ARR growth is projected between 14% and 18% year over year, while total ARR is expected to be flat to 2% growth [8]. - Recurring revenues are anticipated to decline 3-5% year over year [8]. Market Reaction - Following the earnings report, TDC shares fell 26.88% in pre-market trading to $22.65, reflecting concerns over revenue decline [3].

Financial Data and Key Metrics Changes - In 2024, the company delivered $609 million in Cloud ARR and $1.474 billion in total ARR, with Cloud ARR growing 18% year-over-year and total ARR declining 4% year-over-year in constant currency [8][30] - The cloud net expansion rate was 117% in Q4 2024, while total recurring revenue for Q4 was $351 million, down 6% year-over-year [30][35] - Fiscal year 2024 free cash flow was $277 million, representing a 16% margin, with 78% of free cash flow returned to investors through share repurchases [32][38] Business Line Data and Key Metrics Changes - Recurring revenue as a percentage of total revenue increased to 86%, up from 81% in the prior-year period [35] - Fourth quarter total revenue was $409 million, down 11% year-over-year as reported, and down 9% in constant currency [35] - For the full year, recurring revenue was $1.479 billion, a decrease of 1% as reported and an increase of 1% in constant currency [36] Market Data and Key Metrics Changes - The company anticipates Cloud ARR growth of 14% to 18% and flat to 2% growth in total ARR for 2025 [29][44] - The company expects a negative currency impact year-over-year of 150 to 200 basis points on 2025 revenue outlook [40] - The company is seeing increasing interest in its Hybrid AI differentiation, which should lead to higher on-prem expansion [34] Company Strategy and Development Direction - The company is focused on returning to total ARR growth in 2025, with a disciplined approach to managing its financial plan while investing in technology strengths [12][17] - The company has restructured its go-to-market organization and introduced innovations to strengthen its hybrid trusted AI platform [11][12] - The company is emphasizing the importance of operating effectively across both cloud and on-prem environments to meet diverse business needs [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted that despite a challenging year, significant actions were taken in 2024 to position the company for growth in 2025 [11][28] - Management expressed confidence in returning to total ARR growth, citing improved retention rates and the impact of go-to-market changes [33][50] - The company is optimistic about the potential of its AI and GenAI solutions, which are expected to open new market opportunities [67][78] Other Important Information - Claire Bramley, the Chief Financial Officer, is transitioning to a new role outside the industry, with Charles Smotherman assuming the interim CFO position [9][10] - The company has launched new partnerships, including with Nvidia, to enhance its AI capabilities [12][18] Q&A Session Summary Question: Customer perspectives on cloud migrations - Management noted that customers are balancing their on-prem and cloud footprints, with around 30 different GenAI proof-of-concepts currently in execution [55][56] Question: Confidence in ARR guidance - Management explained that the guidance was set with a different approach, limiting reliance on large deals and factoring in deal timing and stage migrations [59][60] Question: Dynamics of the pipeline for 2025 - Management anticipates a 50-50 mix of migrations and expansions, with new logos contributing less to overall growth [65][66] Question: Need for more decisive actions for growth - Management emphasized the importance of continuing the transformation journey and leveraging new AI capabilities to capture market opportunities [78][79] Question: Factors affecting EPS and free cash flow - Management highlighted FX impacts and the decline in revenue due to negative ARR as key factors affecting EPS and free cash flow guidance [82][84] Question: Expectations for ARR and cloud ARR improvement - Management expects improvements in retention rates and visibility into sales productivity to drive ARR growth in 2025 [91][92] Question: Open table format and its relationship with structured data - Management sees open table format as an opportunity to enhance performance and integrate AI capabilities across various data types [116][118]

Core Insights - Teradata reported $409 million in revenue for Q4 2024, a year-over-year decline of 10.5% and an EPS of $0.53, down from $0.56 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $410.76 million by 0.43%, while the EPS exceeded the consensus estimate of $0.42 by 26.19% [1] Financial Performance Metrics - Annual recurring revenue (ARR) totaled $1.47 billion, below the average estimate of $1.52 billion [4] - Public Cloud ARR was $609 million, compared to the average estimate of $633.39 million [4] - Revenue from perpetual software licenses and hardware was $3 million, significantly lower than the average estimate of $7.51 million, representing a 75% year-over-year decline [4] - Recurring revenue was $351 million, slightly above the estimated $343.30 million, but down 5.7% from the previous year [4] - Consulting services revenue was $55 million, below the average estimate of $60.30 million [4] - Gross profit from recurring revenue was $243 million, slightly below the average estimate of $244.72 million [4] - Gross profit from consulting services was $2 million, compared to the average estimate of $6.85 million [4] - Gross profit from perpetual software licenses and hardware was -$2 million, better than the estimated -$6.19 million [4] Stock Performance - Teradata shares returned +2% over the past month, while the Zacks S&P 500 composite increased by +4.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Viewpoint - Teradata reported quarterly earnings of $0.53 per share, exceeding the Zacks Consensus Estimate of $0.42 per share, but down from $0.56 per share a year ago, indicating a 26.19% earnings surprise [1][2] Financial Performance - Teradata's revenues for the quarter ended December 2024 were $409 million, missing the Zacks Consensus Estimate by 0.43% and down from $457 million year-over-year [2] - The company has surpassed consensus EPS estimates four times over the last four quarters [2] Stock Performance - Teradata shares have decreased by approximately 0.7% since the beginning of the year, while the S&P 500 has gained 3.1% [3] - The current Zacks Rank for Teradata is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.55 on revenues of $426.01 million, and for the current fiscal year, it is $2.35 on revenues of $1.65 billion [7] - The trend of estimate revisions for Teradata is mixed, which could change following the recent earnings report [6] Industry Context - The Computer-Storage Devices industry, to which Teradata belongs, is currently in the top 16% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

February 2025 Q4'24 and 2024 Earnings Results Teradata Investor Relations © 2025 Teradata. All rights reserved. Forward-looking statements This release contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements generally relate to opinions, beliefs, and projections of expected future financial and operating performance, business trends, liquidity, and market conditions, among other things. These forward-looking statements are ...

Financial Performance - Fourth quarter public cloud ARR reached $609 million, an increase of 15% as reported and 18% in constant currency compared to the prior year[5] - Full-year GAAP diluted EPS was $1.16, up 90% year-over-year, while non-GAAP diluted EPS was $2.42, up 17% year-over-year[5] - Total ARR decreased to $1.474 billion from $1.570 billion, a decrease of 6% as reported and 4% in constant currency[6] - Total revenue for the full year was $1.750 billion, a decrease of 5% as reported and 3% in constant currency[8] - Total revenue guidance for 2025 is projected to decline between 6% to 8% year-over-year in constant currency[8] - Total revenue for Q4 2024 was $409 million, a decrease of 11% compared to $457 million in Q4 2023[26] - Recurring revenue for the fourth quarter was $351 million, down 6% as reported and 4% in constant currency[6] - Recurring revenue decreased by 6% to $351 million in Q4 2024 from $372 million in Q4 2023[26] - For the full year 2024, total segment revenue was $1.75 billion, down 5% from $1.83 billion in 2023[32] Cash Flow and Assets - Cash flow from operations for the full year was $303 million, with free cash flow of $277 million[5] - Free Cash Flow for the twelve months ended December 31, 2024, was $277 million, compared to $355 million in 2023, with a guidance of $250 to $280 million for 2025[20] - Cash provided by operating activities for Q4 2024 was $156 million, down from $176 million in Q4 2023[20] - Cash and cash equivalents increased to $420 million as of December 31, 2024, from $348 million at September 30, 2024[28] - Total assets decreased to $1,704 million as of December 31, 2024, from $1,873 million a year earlier[28] - Total liabilities were $1,571 million as of December 31, 2024, compared to $1,738 million a year earlier[28] Profitability Metrics - GAAP Gross Profit for Q4 2024 was $243 million, a decrease of 13% from $278 million in Q4 2023, representing 59.4% of revenue[16] - Non-GAAP Net Income for the twelve months ended December 31, 2024, was $238 million, up 12% from $212 million in 2023, with a margin of 13.6%[16] - GAAP Operating Income for Q4 2024 was $39 million, down 17% from $47 million in Q4 2023, accounting for 9.5% of revenue[16] - Net income for Q4 2024 was $25 million, compared to a net loss of $7 million in Q4 2023, representing a significant turnaround[26] - Total gross profit for Q4 2024 was $243 million, a decline from $278 million in Q4 2023, representing a gross margin of 59.4%[32] - Total gross profit for the full year 2024 was $1.06 billion, compared to $1.11 billion in 2023[32] Earnings Per Share - GAAP Earnings Per Share for Q4 2024 was $0.26, compared to a loss of $0.07 in Q4 2023, with guidance for Q1 2025 set between $0.33 and $0.37[17] - Non-GAAP Diluted Earnings Per Share for the twelve months ended December 31, 2024, was $2.42, up from $2.07 in 2023, with guidance for 2025 set between $2.15 and $2.25[17] Strategic Initiatives - The company announced a CFO transition plan, with Charles Smotherman appointed as Interim CFO[3] - Significant AI technology advancements were made in 2024, including support for OTFs and BYO-LLM[2] - The company is focused on enhancing its cloud analytics and data platform for AI to drive business results[22] Revenue Breakdown - Product sales revenue decreased by 8% to $354 million in Q4 2024 from $384 million in Q4 2023[32] - Consulting services revenue fell by 25% to $55 million in Q4 2024, down from $73 million in Q4 2023[32] - Full year product sales revenue was $1.50 billion, a decrease of 2% compared to $1.54 billion in 2023[32] - Consulting services revenue for the full year 2024 was $248 million, down 16% from $296 million in 2023[32] Tax Rates - The non-GAAP effective tax rate for Q4 2024 was 17.5%, compared to 26.9% in Q4 2023[17] - The effective tax rate for Q4 2024 was 16.7%, significantly lower than 131.8% in Q4 2023[26] Stock Repurchase - The company repurchased $29 million of common stock in Q4 2024, compared to $7 million in Q4 2023[30]

Core Insights - The article discusses the investment landscape and highlights the importance of understanding market extremes for trading and investing strategies [3]. Group 1: Analyst Background - The analyst has been involved in financial markets since 2000, experiencing various market cycles including the dot-com bubble, financial crisis, and the COVID-19 pandemic [3]. - The analyst's blog, "One-Twenty Two," provides unique perspectives on financial markets, challenging conventional wisdom and covering a range of topics including stocks, options, currencies, and Bitcoin [3]. - The analyst holds a B.S. in Mechanical Engineering and a Ph.D. in Engineering-Economic Systems, with experience in operations research, management consulting, and data analytics [3]. Group 2: Investment Philosophy - The analyst emphasizes the value of trading and investing around market extremes, suggesting that understanding these dynamics can lead to better investment decisions [3]. - The approach combines both technical and fundamental analysis for short-term and long-term trading strategies [3].

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.Zacks Premium includes access to the Zacks Style Scores as well. What are the Zacks Style Scores? The ...

A month has gone by since the last earnings report for Teradata (TDC) . Shares have added about 11.3% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Teradata due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Teradata Q3 Earnings Beat Estimates, Revenues Flat Y/YTer ...