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Teradata (TDC) Q2 Earnings & Revenues Beat Estimates, Up Y/Y
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Teradata (TDC - Free Report) reported second-quarter 2021 non-GAAP earnings of 74 cents per share, which beat the Zacks Consensus Estimate by 72.1% and were significantly up from 24 cents reported in the year-ago quarter.
The figure comfortably beat Teradata’s guidance of 47-49 cents per share.
Revenues of $491 million beat the consensus mark by 3.2%. The top line increased 7% year over year. At constant currency (cc), revenues were up 4%.
Teradata Corporation Price, Consensus and EPS Surprise
Recurring revenues (76.6% of revenues) increased 16% year over year (up 13% at cc) to $376 million.
Perpetual software license and hardware revenues (3.4% of revenues) were down 32% year over year (down 32% at cc) to $17 million.
Consulting services’ revenues (20% of revenues) dropped 10% from the year-ago quarter’s levels (down 14% at cc) to $98 million.
Revenues in the Americas increased 6% year over year (up 6% at cc) to $274 million. Europe, the Middle East & Africa (EMEA) revenues jumped 8% from the year-ago quarter’s figures (down 1% at cc) to $128 million. Revenues from APJ were up 11% from the year-ago quarter’s levels (up 4% at cc) to $89 million.
Total annual recurring revenues (ARR) at the end of the second quarter increased 9% year over year (up 7% at cc) to $1.426 billion. Public cloud ARR surged 157% on a reported basis and 153% at cc to $139 million. The growth rate was higher than management’s expectation of 155% year over year.
Operating Details
Gross margin on a non-GAAP basis was 64.8%, significantly up from 58.9% reported in the year-ago quarter, primarily driven by a higher mix of recurring revenues.
Americas gross margin surged from the year-ago quarter’s reported figure of 67.5% to 62.2% in the second quarter. EMEA gross margin surged to 62.5% from 56.8% reported in the year-ago quarter. APJ gross margin soared to 59.6% from 51.3% reported in the year-ago quarter.
Recurring revenues’ gross margin expanded 330 bps on a year-over-year basis to 78.2%. The growth benefited from cost improvements in subscription and cloud business.
Perpetual software license and hardware margin expanded 330 bps to 35.3% driven by deal mix.
Non-GAAP Consulting services’ gross margin expanded 100 bps year over year to 18.4% due to better resource mix utilization as well as improved revenue realization as well as focus on higher-value projects.
Selling, general & administrative (SG&A), as a percentage of revenues decreased 330 bps to year over year to 32.8%.
Research & development (R&D) expenses, as a percentage of revenues, declined 210 bps on a year-over-year basis to 16.1%.
Non-GAAP operating margin was 23.8%, significantly up from 14% reported in the year-ago quarter.
Balance Sheet & Other Details
As of Jun 30, 2021, Teradata had cash and cash equivalents of $684 million compared with $538 million as of Mar 31, 2021.
Total debt (including current portion) as of Jun 30, 2021, was $436 million compared with $449 million as of Mar 31, 2021.
In the second quarter, Teradata generated $225 million of cash from operating activities compared with the previous quarter’s $110 million.
The company’s quarterly free cash flow was $219 million compared with $105 million in the previous quarter.
The company repurchased 0.8 million shares worth $36 million in the second quarter. As of Jun 30, 2021, the company had $321 million shares under its existing repurchase authorization.
Guidance
For third-quarter 2021, non-GAAP earnings are expected between 30 cents and 34 cents per share. Public cloud ARR is projected to increase by at least 90% year over year.
For 2021, non-GAAP earnings are now expected between $1.92 and $1.96 per share (up from the previous guidance of $1.61-$1.67 per share).
Public cloud ARR is projected 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.
Teradata expects recurring revenues to now grow at a high-single-digit to low-double-digit range compared with earlier guided range of mid- to high-single digit percentage year over year.
The company projects total revenues to increase at a low-single-digit to mid-single-digit percentage compared with earlier guidance of low-single-digit percentage year over year.
Cash flow from operations are now expected to be at least $440 million up from the previous guidance of at least $320 million. Free cash flow is now projected to be at least $400 million, compared with the previous guidance of at least $275 million.
Zacks Rank & Stocks to Consider
Currently, Teradata carries a Zacks Rank #3 (Hold).
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Teradata (TDC) Q2 Earnings & Revenues Beat Estimates, Up Y/Y
Teradata (TDC - Free Report) reported second-quarter 2021 non-GAAP earnings of 74 cents per share, which beat the Zacks Consensus Estimate by 72.1% and were significantly up from 24 cents reported in the year-ago quarter.
The figure comfortably beat Teradata’s guidance of 47-49 cents per share.
Revenues of $491 million beat the consensus mark by 3.2%. The top line increased 7% year over year. At constant currency (cc), revenues were up 4%.
Teradata Corporation Price, Consensus and EPS Surprise
Teradata Corporation price-consensus-eps-surprise-chart | Teradata Corporation Quote
Top-Line Details
Recurring revenues (76.6% of revenues) increased 16% year over year (up 13% at cc) to $376 million.
Perpetual software license and hardware revenues (3.4% of revenues) were down 32% year over year (down 32% at cc) to $17 million.
Consulting services’ revenues (20% of revenues) dropped 10% from the year-ago quarter’s levels (down 14% at cc) to $98 million.
Revenues in the Americas increased 6% year over year (up 6% at cc) to $274 million. Europe, the Middle East & Africa (EMEA) revenues jumped 8% from the year-ago quarter’s figures (down 1% at cc) to $128 million. Revenues from APJ were up 11% from the year-ago quarter’s levels (up 4% at cc) to $89 million.
Total annual recurring revenues (ARR) at the end of the second quarter increased 9% year over year (up 7% at cc) to $1.426 billion. Public cloud ARR surged 157% on a reported basis and 153% at cc to $139 million. The growth rate was higher than management’s expectation of 155% year over year.
Operating Details
Gross margin on a non-GAAP basis was 64.8%, significantly up from 58.9% reported in the year-ago quarter, primarily driven by a higher mix of recurring revenues.
Americas gross margin surged from the year-ago quarter’s reported figure of 67.5% to 62.2% in the second quarter. EMEA gross margin surged to 62.5% from 56.8% reported in the year-ago quarter. APJ gross margin soared to 59.6% from 51.3% reported in the year-ago quarter.
Recurring revenues’ gross margin expanded 330 bps on a year-over-year basis to 78.2%. The growth benefited from cost improvements in subscription and cloud business.
Perpetual software license and hardware margin expanded 330 bps to 35.3% driven by deal mix.
Non-GAAP Consulting services’ gross margin expanded 100 bps year over year to 18.4% due to better resource mix utilization as well as improved revenue realization as well as focus on higher-value projects.
Selling, general & administrative (SG&A), as a percentage of revenues decreased 330 bps to year over year to 32.8%.
Research & development (R&D) expenses, as a percentage of revenues, declined 210 bps on a year-over-year basis to 16.1%.
Non-GAAP operating margin was 23.8%, significantly up from 14% reported in the year-ago quarter.
Balance Sheet & Other Details
As of Jun 30, 2021, Teradata had cash and cash equivalents of $684 million compared with $538 million as of Mar 31, 2021.
Total debt (including current portion) as of Jun 30, 2021, was $436 million compared with $449 million as of Mar 31, 2021.
In the second quarter, Teradata generated $225 million of cash from operating activities compared with the previous quarter’s $110 million.
The company’s quarterly free cash flow was $219 million compared with $105 million in the previous quarter.
The company repurchased 0.8 million shares worth $36 million in the second quarter. As of Jun 30, 2021, the company had $321 million shares under its existing repurchase authorization.
Guidance
For third-quarter 2021, non-GAAP earnings are expected between 30 cents and 34 cents per share. Public cloud ARR is projected to increase by at least 90% year over year.
For 2021, non-GAAP earnings are now expected between $1.92 and $1.96 per share (up from the previous guidance of $1.61-$1.67 per share).
Public cloud ARR is projected 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.
Teradata expects recurring revenues to now grow at a high-single-digit to low-double-digit range compared with earlier guided range of mid- to high-single digit percentage year over year.
The company projects total revenues to increase at a low-single-digit to mid-single-digit percentage compared with earlier guidance of low-single-digit percentage year over year.
Cash flow from operations are now expected to be at least $440 million up from the previous guidance of at least $320 million. Free cash flow is now projected to be at least $400 million, compared with the previous guidance of at least $275 million.
Zacks Rank & Stocks to Consider
Currently, Teradata carries a Zacks Rank #3 (Hold).
Some other top-ranked stocks in the broader technology sector are Avnet (AVT - Free Report) , CyberArk Software (CYBR - Free Report) and CACI International (CACI - Free Report) . Avnet sports a Zacks Rank #1 (Strong Buy), while CACI and CyberArk carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Avnet and CACI are scheduled to report their quarterly results on Aug 11, while CyberArk is slated to announce results on Aug 12.
Long-term earnings growth rate of Avnet, CyberArk and CACI is pegged at 22.7%, 12.2% and 13.1%, respectively.