- Public cloud ARR of $139 million, an increase of 157% as
reported from the prior year period(1)
- Recurring revenue of $376 million, an increase of 16% as
reported from the prior year period
- Cash from operations of $225 million, an increase of $95
million from the prior year period
- Free cash flow of $219 million, an increase of $104 million
from the prior year period(2)
- GAAP earnings per diluted share of $0.39 above the previously
provided outlook range of $0.17 to $0.19
- Non-GAAP earnings per diluted share of $0.74 above the
previously provided outlook range of $0.47 to $0.49(3)
Teradata (NYSE: TDC) today announced its second-quarter 2021
financial results.
“Teradata delivered year-over-year growth in Q2 ‘21 across key
metrics including public cloud ARR, recurring revenue,
profitability and free cash flow. We are executing on our
cloud-first plan, winning new customers and expanding existing
customers as we build on our position as the connected multi-cloud
data platform for enterprise analytics,” said Steve McMillan,
Teradata President and CEO. “Our unrivalled data management
capabilities across multi-cloud and on-premises environments are
what customers need today, and we are continuously innovating to
address tomorrow’s needs. Taken together, we are confident in our
strategy for profitable growth as we continue to generate
significant shareholder value.”
Second-Quarter 2021 Financial Highlights compared to Second
Quarter 2020
- Public cloud ARR increased 157% as reported (153% in constant
currency(1)) to $139 million from $54 million
- Total ARR increased 9% as reported (7% in constant currency(1))
to $1.426 billion from $1.304 billion
- Total revenue was $491 million versus $457 million, an increase
of 7% as reported and 4% in constant currency(1)
- Recurring revenue was $376 million versus $323 million, an
increase of 16% as reported and 13% in constant currency(1)
- GAAP gross margin was 63.1% versus 56.0%
- Non-GAAP gross margin was 64.8% versus 58.9%(3)
- GAAP operating income was $70 million versus $8 million
- Non-GAAP operating income was $117 million versus $64
million(3)
- GAAP earnings per diluted share was $0.39 versus GAAP loss of
$0.40 per share
- Non-GAAP earnings per diluted share was $0.74 versus
$0.24(3)
- Cash flow from operations was $225 million compared to $130
million
- Free cash flow was $219 million compared to $115
million(2)
Outlook
For the third quarter of 2021:
- Public cloud ARR is expected to increase by at least 90%
year-over-year, or by at least $15 million sequentially
- GAAP diluted EPS is expected to be in the range of $(0.01) to
$0.03
- Non-GAAP diluted EPS, excluding stock-based compensation
expense, reorganization-related expenses, and other special items,
is expected to be in the range of $0.30 to $0.34(3)
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
Raising the following outlook for the full
year 2021:
- Recurring revenue is now expected to grow at a
high-single-digit to low-double-digit percentage year-over-year, up
from a mid-to-high-single-digit percentage year-over-year
- Total revenue is now expected to grow at a low-single-digit to
mid-single-digit percentage year-over-year, up from a
low-single-digit percentage year-over-year
- GAAP earnings per diluted share is now expected to be in the
range of $0.78 to $0.82, up from our prior outlook range of $0.58
to $0.64
- 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 $1.92 to
$1.96(3), up from our prior outlook of $1.61 to $1.67
- Cash flow from operations is now expected to be at least $440
million, up from our prior outlook range of at least $320
million
- Free cash flow is now expected to be at least $400 million(2),
up from our prior outlook range of at least $275 million
Earnings Conference Call
A conference call is scheduled today at 2:00 p.m. PT to discuss
the Company’s second-quarter 2021 results and provide a business
and financial update. Access to the conference call, as well as a
replay of the conference call, is available on the Investor
Relations page of Teradata’s website at investor.teradata.com.
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.
1.
The impact of currency is
determined by calculating the prior-period results using the
current-year monthly average currency rates. See the foreign
currency fluctuation schedule, which is used to determine revenue
on a constant currency (“CC”) basis, on the Investor Relations page
of the Company’s website at investor.teradata.com
Revenue
(in millions)
For the Three Months ended
June 30
2021
2020
% Change as Reported
% Change in CC
Recurring
$
376
$
323
16
%
13
%
Perpetual software licenses and hardware
and other
17
25
(32
%)
(32
%)
Consulting services
98
109
(10
%)
(14
%)
Total revenue
$
491
$
457
7
%
4
%
Americas
$
274
$
259
6
%
6
%
EMEA
128
118
8
%
(1
%)
APJ
89
80
11
%
4
%
Total revenue
$
491
$
457
7
%
4
%
Revenue
(in millions)
For the Six Months ended June
30
2021
2020
% Change as Reported
% Change in CC
Recurring
$
748
$
634
18
%
15
%
Perpetual software licenses, hardware and
other
40
48
(17
%)
(17
%)
Consulting services
194
209
(7
%)
(11
%)
Total revenue
$
982
$
891
10
%
7
%
Americas
$
537
$
503
7
%
7
%
EMEA
275
236
17
%
10
%
APJ
170
152
12
%
4
%
Total revenue
$
982
$
891
10
%
7
%
As of June 30
2021
2020
% Change as Reported
% Change in CC
Annual recurring revenue*
$
1,426
$
1,304
9
%
7
%
Public cloud ARR**
$
139
$
54
157
%
153
%
* 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.
2.
As described below, the Company believes that free cash flow is
a useful non-GAAP measure for investors. Teradata defines free cash
flow as cash provided by / used in operating activities, less
capital expenditures for property and equipment, and additions to
capitalized software. Free cash flow does not have a uniform
definition under GAAP and, therefore, Teradata’s definition may
differ from other companies’ definitions of this measure.
Teradata’s management uses free cash flow to assess the financial
performance of the Company and believes it is useful for investors
because it relates the operating cash flow of the Company to the
capital that is spent to continue and improve business operations.
In particular, free cash flow indicates the amount of cash
generated after capital expenditures for, among other things,
investment in the Company’s existing businesses, strategic
acquisitions, strengthening the Company’s balance sheet, repurchase
of the Company’s stock and repayment of the Company’s debt
obligations, if any. Free cash flow does not represent the residual
cash flow available for discretionary expenditures since there may
be other nondiscretionary expenditures that are not deducted from
the measure. This non-GAAP measure is not meant to be considered in
isolation to, as a substitute for, or superior to, results
determined in accordance with GAAP, and should be read only in
conjunction with our condensed consolidated financial statements
prepared in accordance with GAAP.
(in millions)
For the Three Months
For the Six Months
ended June 30
ended June 30
Outlook
2021
2020
2021
2020
2021
Cash provided by operating activities
(GAAP)
$
225
$
130
$
335
$
140
≥$440
Less capital
expenditures for:
Expenditures for property and
equipment
(5
)
(13
)
(9
)
(23
)
(≥35)
Additions to capitalized software
(1
)
(2
)
(2
)
(4
)
(≥5)
Total capital expenditures
(6
)
(15
)
(11
)
(27
)
(≥40)
Free Cash Flow (non-GAAP measure)
$
219
$
115
$
324
$
113
≥$400
In addition, GAAP to non-GAAP reconciliation of prior 2021 FY
outlook free cash flow is included in the Company’s Q1 2021
Earnings Release dated May 6, 2021, which is available on the
Investor Relations page of Teradata’s website at
investor.teradata.com.
3.
Teradata reports its results in
accordance with GAAP. However, as described below, the Company
believes that certain non-GAAP measures such as non-GAAP gross
profit, non-GAAP operating income, non-GAAP net income, and
non-GAAP earnings per diluted share, or EPS, all of which exclude
certain items (as well as free cash flow) are useful for investors.
Our non-GAAP measures are not meant to be considered in isolation
to, as substitutes for, or superior to, results determined in
accordance with GAAP, and should be read only in conjunction with
our condensed consolidated financial statements prepared in
accordance with GAAP. Each of our non-GAAP measures do not
have a uniform definition under GAAP and therefore, Teradata’s
definition may differ from other companies’ definitions of these
measures.
The following tables reconcile
Teradata’s actual and projected results and EPS under GAAP to the
Company’s actual and projected non-GAAP results and EPS for the
periods presented, which exclude certain specified items. Our
management internally uses supplemental non-GAAP financial
measures, such as gross profit, operating income, net income, and
EPS, excluding certain items, to understand, manage and evaluate
our business and support operating decisions on a regular basis.
The Company believes such non-GAAP financial measures (1) provide
useful information to investors regarding the underlying business
trends and performance of the Company’s ongoing operations, (2) are
useful for period-over-period comparisons of such operations and
results, that may be more easily compared to peer companies and
allow investors a view of the Company’s operating results excluding
stock-based compensation expense and special items, (3) provide
useful information to management and investors regarding present
and future business trends, and (4) provide consistency and
comparability with past reports and projections of future
results.
For the Three Months
For the Six Months
(in millions, except per share data)
ended June 30
ended June 30
Gross Profit:
2021
2020
% Chg.
2021
2020
% Chg.
GAAP Gross Profit
$
310
$
256
21
%
$
617
$
481
28
%
% of Revenue
63.1
%
56.0
%
62.8
%
54.0
%
Excluding:
Stock-based compensation expense
5
4
8
8
Acquisition, integration, reorganization
related, and other costs
3
4
8
4
Amortization of capitalized software
-
5
-
11
Non-GAAP Gross Profit
$
318
$
269
18
%
$
633
$
504
26
%
% of Revenue
64.8
%
58.9
%
64.5
%
56.6
%
Operating Income
GAAP Operating Income
$
70
$
8
775
%
$
151
$
2
7,450
%
% of Revenue
14.3
%
1.8
%
15.4
%
0.2
%
Excluding:
Stock-based compensation expense
31
31
52
52
Amortization of acquisition-related
intangible assets
1
1
2
2
Acquisition, integration, reorganization
related, and other costs
15
19
27
29
Amortization of capitalized software
-
5
-
11
Non-GAAP Operating Income
$
117
$
64
83
%
$
232
$
96
142
%
% of Revenue
23.8
%
14.0
%
23.6
%
10.8
%
Net Income
GAAP Net Income / (Loss)
$
44
$
(43
)
202
%
$
97
$
125
(22
%)
% of Revenue
9
%
(9.4
%)
9.9
%
14.0
%
Excluding:
Stock-based compensation expense
31
31
52
52
Amortization of acquisition-related
intangible assets
1
1
2
2
Acquisition, integration, reorganization
related, and other costs
15
19
27
29
Amortization of capitalized software
-
5
-
11
IP restructuring tax expense
(benefit)(1)
-
1
-
(156
)
Tax contingency adjustment(2)
-
20
-
2
Income tax adjustments(3)
(8
)
(8
)
(17
)
(9
)
Non-GAAP Net Income
$
83
$
26
219
%
$
161
$
56
188
%
% of Revenue
16.9
%
5.7
%
16.4
%
6.3
%
For the Three Months
ended June 30
For the Six Months
ended June 30
Earnings Per Share:
2021
2020
2021
2020
2021 Q3 Guidance
2021 FY Guidance
GAAP Earnings / (Loss)
$
0.39
$
(0.40
)
$
0.86
$
1.13
$(0.01) - $0.03
$0.78 - $0.82
Excluding:
Stock-based compensation expense
0.28
0.29
0.46
0.47
0.25
0.95
Amortization of acquisition-related
intangible assets
0.01
0.01
0.02
0.02
0.01
0.03
Acquisition, integration, reorganization
related, and other costs
0.13
0.18
0.24
0.26
0.11
0.42
Amortization of capitalized software
-
0.05
-
0.10
-
-
IP restructuring tax expense
(benefit)(i)
-
0.01
-
(1.41
)
-
-
Tax contingency adjustment(ii)
-
0.18
-
0.02
-
-
Income tax adjustments(iii)
(0.07
)
(0.08
)
(0.15
)
(0.08
)
(0.06
)
(0.26
)
Non-GAAP Diluted Earnings Per Share
$
0.74
$
0.24
$
1.43
$
0.51
$0.30 - $0.34
$1.92 - $1.96
i.
The Company’s GAAP effective tax rate for the three and six
months ended June 30, 2020 includes $156 million of discrete tax
benefit related to an intra-entity asset transfer of certain of its
intellectual property to one of its Irish subsidiaries, which
occurred on January 1, 2020. The one-time tax benefit for this
intra-entity asset transfer of $157 million was recorded as a
deferred tax asset for GAAP reporting purposes in the first quarter
of 2020 but was excluded from Non-GAAP results. This was
offset by $1 million of tax expense related to withholding taxes
associated with the same intra-entity transfer recorded in the
second quarter of 2020.
ii.
The Company’s forecasted full-year 2020 GAAP marginal effective
tax rate included $3 million of tax expense related to tax
contingencies pursuant to FIN 48. For GAAP purposes, this is a
component of the marginal rate and is recognized as tax benefit or
expense based on the Company’s reported GAAP pre-tax income or loss
for the quarter. To more accurately reflect the impact of the
expense on a quarterly basis for non-GAAP purposes, the $3 million
of tax expense was recognized ratably each quarter in 2020 instead
of being included in the marginal effective rate.
iii.
Represents the income tax effect of the pre-tax adjustments to
reconcile GAAP to Non-GAAP income based on the applicable
jurisdictional statutory tax rate of the underlying item. Including
the income tax effect assists investors in understanding the tax
provision associated with those adjustments and the effective tax
rate related to the underlying business and performance of the
Company’s ongoing operations. As a result of these adjustments, the
Company’s non-GAAP effective tax rate for the three months ended
June 30, 2021 was 21.7% and June 30, 2020 was 50.9%. For the
six months ended June 30, the Company’s non-GAAP effective tax rate
was 24.1% for 2021 and 27.3% for 2020.
In addition, GAAP to non-GAAP reconciliation of second quarter
2021 outlook non-GAAP diluted earnings per share and prior 2021 FY
outlook non-GAAP diluted earnings per share is included in the
Company’s Q1 2021 Earnings Release dated May 6, 2021, which is
available on the Investor Relations page of Teradata’s website at
investor.teradata.com.
Note to Investors
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, and market conditions, among other
things. These forward-looking statements are based upon current
expectations and assumptions and involve risks and uncertainties
that could cause actual results to differ materially, including the
factors discussed in this release and those relating to: the global
economic environment and business conditions in general or on the
ability of our suppliers to meet their commitments to us, or the
timing of purchases by our current and potential customers; the
rapidly changing and intensely competitive nature of the
information technology industry and the data analytics business;
fluctuations in our operating results; our ability to realize the
anticipated benefits of our business transformation program or
other restructuring and cost saving initiatives; risks inherent in
operating in foreign countries, including foreign currency
fluctuations; risks associated with the ongoing and uncertain
impact of the COVID-19 pandemic on our business, financial
condition and operating results, including the impact of the
COVID-19 pandemic on our customers and suppliers; risks associated
with data privacy, cyberattacks and maintaining secure and
effective internal information technology and control systems; the
timely and successful development, production or acquisition,
availability and/or market acceptance of new and existing products,
product features and services; tax rates; turnover of workforce and
the ability to attract and retain skilled employees; protecting our
intellectual property; the availability and successful exploitation
of new alliance and acquisition opportunities; subscription
arrangements may be cancelled or fail to be renewed; the impact on
our business and financial reporting from changes in accounting
rules; and other factors described from time to time in Teradata’s
filings with the U.S. Securities and Exchange Commission, including
its annual report on Form 10-K for the year ended December 31, 2020
and subsequent quarterly reports on Forms 10-Q, as well as the
Company’s annual report to stockholders. Teradata does not
undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
About Teradata
Teradata is the connected multi-cloud data platform for
enterprise analytics company. Our enterprise analytics solve
business challenges from start to scale. Only Teradata gives you
the flexibility to handle the massive and mixed data workloads of
the future, today. Learn more at Teradata.com.
The Teradata logo is a trademark, and Teradata
is a registered trademark of Teradata Corporation and/or its
affiliates in the U.S. and worldwide.
Schedule A
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions,
except per share amounts - unaudited)
For the Period Ended June
30
Three Months
Six Months
2021
2020
% Chg
2021
2020
% Chg
Revenue
Recurring
$
376
$
323
16
%
$
748
$
634
18
%
Perpetual software licenses, hardware and other
17
25
(32
%)
40
48
(17
%)
Consulting services
98
109
(10
%)
194
209
(7
%)
Total revenue
491
457
7
%
982
891
10
%
Gross profit
Recurring
289
234
571
452
% of Revenue
76.9
%
72.4
%
76.3
%
71.3
%
Perpetual software licenses, hardware and other
6
7
18
15
% of Revenue
35.3
%
28.0
%
45.0
%
31.3
%
Consulting services
15
15
28
14
% of Revenue
15.3
%
13.8
%
14.4
%
6.7
%
Total gross profit
310
256
617
481
% of Revenue
63.1
%
56.0
%
62.8
%
54.0
%
Selling, general and administrative expenses
161
165
310
323
Research and development expenses
79
83
156
156
Income from operations
70
8
151
2
% of Revenue
14.3
%
1.8
%
15.4
%
0.2
%
Other expense, net
(11
)
(11
)
(20
)
(19
)
Income (loss) before income taxes
59
(3
)
131
(17
)
% of Revenue
12.0
%
(0.7
%)
13.3
%
(1.9
%)
Income tax expense (benefit)
15
40
34
(142
)
% Tax rate
25.4
%
(1,333.3
%)
26.0
%
835.3
%
Net income (loss)
$
44
$
(43
)
$
97
$
125
% of Revenue
9.0
%
(9.4
%)
9.9
%
14.0
%
Net income (loss) per common share
Basic
$
0.40
$
(0.40
)
$
0.89
$
1.14
Diluted
$
0.39
$
(0.40
)
$
0.86
$
1.13
Weighted average common shares outstanding
Basic
109.0
108.5
108.9
109.4
Diluted
112.7
108.5
112.7
110.6
Schedule B
TERADATA CORPORATION CONDENSED CONSOLIDATED BALANCE
SHEETS (in millions - unaudited)
June 30,
December 31,
June 30,
2021
2020
2020
Assets
Current assets
Cash and cash equivalents
$
684
$
529
$
494
Accounts receivable, net
299
331
339
Inventories
20
29
26
Other current assets
143
155
89
Total current assets
1,146
1,044
948
Property and equipment, net
325
339
337
Right of use assets - operating lease, net
27
38
46
Goodwill
399
401
395
Capitalized contract costs, net
97
98
88
Deferred income taxes
208
222
236
Other assets
43
51
52
Total assets
$
2,245
$
2,193
$
2,102
Liabilities
and stockholders' equity
Current liabilities
Current portion of long-term debt
$
62
$
44
$
31
Current portion of finance lease liability
87
75
69
Current portion of operating lease liability
13
15
18
Accounts payable
91
50
62
Payroll and benefits liabilities
119
170
119
Deferred revenue
544
499
518
Other current liabilities
82
99
76
Total current liabilities
998
952
893
Long-term debt
374
411
436
Finance lease liability
73
70
75
Operating lease liability
20
28
33
Pension and other postemployment plan liabilities
143
152
135
Long-term deferred revenue
41
38
41
Deferred tax liabilities
6
6
6
Other liabilities
119
136
137
Total liabilities
1,774
1,793
1,756
Stockholders' equity
Common stock
1
1
1
Paid-in capital
1,743
1,656
1,603
Accumulated deficit
(1,138
)
(1,114
)
(1,093
)
Accumulated other comprehensive loss
(135
)
(143
)
(165
)
Total stockholders' equity
471
400
346
Total liabilities and stockholders'
equity
$
2,245
$
2,193
$
2,102
Schedule C
TERADATA
CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (in millions - unaudited)
For the Period
Ended June 30
Three Months
Six Months
2021
2020
2021
2020
Operating activities Net
income
$
44
$
(43
)
$
97
$
125
Adjustments to
reconcile net income to net cash provided
by operating activities:
Depreciation and amortization
37
43
76
85
Stock-based compensation expense
31
31
52
52
Deferred income taxes
(1
)
-
9
(149
)
Changes in assets and liabilities:
Receivables
68
109
32
59
Inventories
(4
)
2
9
5
Current payables and accrued expenses
59
11
15
(32
)
Deferred revenue
(15
)
(40
)
48
26
Other assets and liabilities
6
17
(3
)
(31
)
Net cash
provided by operating activities
225
130
335
140
Investing
activities
Expenditures for property and equipment
(5
)
(13
)
(9
)
(23
)
Additions to capitalized software
(1
)
(2
)
(2
)
(4
)
Net cash
used in investing activities
(6
)
(15
)
(11
)
(27
)
Financing
activities
Repurchases of common stock
(38
)
(2
)
(121
)
(75
)
Repayments of long-term borrowings
(13
)
(7
)
(19
)
(13
)
Payments of finance leases
(29
)
(16
)
(44
)
(25
)
Other financing activities, net
5
6
18
6
Net cash used in financing activities
(75
)
(19
)
(166
)
(107
)
Effect of exchange
rate changes on cash and cash equivalents
1
3
(4
)
(7
)
Increase
(decrease) in cash, cash equivalents and restricted cash
145
99
154
(1
)
Cash, cash equivalents and restricted cash at beginning of
period
542
396
533
496
Cash,
cash equivalents and restricted cash at end of period
$
687
$
495
$
687
$
495
Supplemental cash flow disclosure:
Non-cash investing and financing
activities:
Assets acquired by finance leases
$
13
$
24
$
58
$
39
Assets acquired by operating leases
$
1
$
2
$
3
$
5
Schedule
D
TERADATA CORPORATION CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in millions - unaudited)
For the Three Months Ended
June 30
For the Six Months Ended June
30
2021
2020
% Change As Reported
% Change Constant Currency
(2)
2021
2020
% Change As Reported
% Change Constant Currency
(2)
Segment Revenue
Americas
$
274
$
259
6
%
6
%
$
537
$
503
7
%
7
%
EMEA
128
118
8
%
(1
%)
275
236
17
%
10
%
APJ
89
80
11
%
4
%
170
152
12
%
4
%
Total segment revenue
491
457
7
%
4
%
982
891
10
%
7
%
Segment gross profit
Americas
185
161
367
305
% of Revenue
67.5
%
62.2
%
68.3
%
60.6
%
EMEA
80
67
168
128
% of Revenue
62.5
%
56.8
%
61.1
%
54.2
%
APJ
53
41
98
71
% of Revenue
59.6
%
51.3
%
57.6
%
46.7
%
Total segment gross
profit
318
269
633
504
% of Revenue
64.8
%
58.9
%
64.5
%
56.6
%
Reconciling items(1)
(8
)
(13
)
(16
)
(23
)
Total gross profit
$
310
$
256
$
617
$
481
% of Revenue
63.1
%
56.0
%
62.8
%
54.0
%
(1)
Reconciling items include stock-based compensation,
capitalized software, amortization of acquisition-related
intangible assets and acquisition, integration and
reorganization-related items.
(2)
The impact of currency is determined by calculating the
prior period results using the current-year monthly average
currency rates.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805005992/en/
INVESTOR CONTACT Christopher T. Lee
858-485-2523 office christopher.lee@teradata.com
MEDIA CONTACT Jennifer Donahue
858-485-3029 office jennifer.donahue@teradata.com
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