• Public cloud ARR of $279 million, an increase of 89% as reported and 99% in constant currency from the prior year period⁽¹⁾
• Third quarter recurring revenue of $331 million, a decrease of 6% as reported and 2% in constant currency from the prior year period⁽¹⁾
• Recurring revenue was 79% of total revenue in the third quarter, up from 77% in the prior year period
• Third quarter GAAP earnings per diluted share of $0.08
• Third quarter Non-GAAP earnings per diluted share of $0.31⁽²⁾
• Third quarter cash from operations of $34 million and free cash flow of $31 million ⁽³⁾

Teradata (NYSE: TDC) today announced its third quarter 2022 financial results.

“Teradata delivered our second largest cloud growth quarter,” said Steve McMillan, President and CEO, Teradata. “We believe Teradata can deliver the most powerful cloud analytics data platform, data warehouse, data lake, or lake house in the world, bringing mission-critical workloads to customers across their full spectrum of needs. Our business model is profitable and resilient, providing crucial insights that our customers need in any macro-economic environment.

“We also took a significant step forward on our cloud-first transformation with the delivery of Teradata VantageCloud Lake, our cloud-native product, and ClearScape Analytics™, which has the most in-database analytic functions in the market. These new, game-changing offerings and expanded capabilities will help open even more market opportunities. High customer interest and market recognition of our differentiated offerings give us confidence that our strategy to be a profitable multi-cloud analytics and data platform leader is taking hold.”

Third Quarter 2022 Financial Highlights Compared to Third Quarter 2021

• Public cloud ARR increased to $279 million from $148 million, an increase of 89% as reported and 99% in constant currency⁽¹⁾
• Total ARR decreased to $1.374 billion from $1.437 billion, a decrease of 4% as reported and flat in constant currency⁽¹⁾
• Total revenue was $417 million versus $460 million, a decrease of 9% as reported and 4% in constant currency⁽¹⁾
• Recurring revenue was $331 million versus $352 million, a decrease of 6% as reported and 2% in constant currency⁽¹⁾
• Recurring revenue was 79% of total revenue in the third quarter, up from 77% in the prior year period
• GAAP gross margin improved to 62.1% versus 59.8%
• Non-GAAP gross margin improved to 62.6% versus 61.3%⁽²⁾
• GAAP operating income was $25 million versus $30 million
• Non-GAAP operating income was $54 million versus $71 million⁽²⁾
• GAAP EPS was $0.08 versus $0.15 per diluted share
• Non-GAAP diluted EPS was $0.31 versus $0.43⁽²⁾
• Cash flow from operations was $34 million versus $33 million
• Free cash flow was $31 million versus $23 million⁽³⁾

Outlook

For the fourth quarter of 2022:

• GAAP diluted EPS is expected to be in the range of $0.03 to $0.07.
• Non-GAAP diluted EPS is expected to be in the range of $0.28 to $0.32.⁽²⁾

Teradata re-affirms the following outlook for the full year 2022:

• Public cloud ARR is expected to increase by approximately 80% year-over-year, as reported and in constant currency.⁽¹⁾
• Total ARR to decline in the low-to-mid-single-digit percentage range year-over-year. On a constant currency basis, Total ARR to grow in the low-single-digit percentage to decline in the low-single-digit percentage range.⁽¹⁾
• Total recurring revenue to decline in the low-to-mid-single-digit percentage range year-over-year as reported. On a constant currency basis, total recurring revenue is projected to be flat to grow in the low-single-digit percentage range.⁽¹⁾
• Total revenue to decline in the mid-to-high-single-digit percentage range year-over-year as reported. On a constant currency basis, total revenue is anticipated to decline in the low-single-digit percentage range.⁽¹⁾
• Free cash flow is expected to be approximately $400 million.⁽³⁾

Teradata updates the following outlook for full year 2022:

• GAAP diluted EPS is narrowed to be in the range of $0.41 to $0.45.
• Non-GAAP diluted EPS is narrowed to be in the range of $1.58 to $1.62.⁽²⁾
• Cash flow from operations is expected to be approximately $420 million.

Earnings Conference Call

A conference call is scheduled for today at 2:00 p.m. PT to discuss the Company’s third quarter 2022 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 Teradata’s website at investor.teradata.com.

Supplemental Financial Information

Additional information regarding Teradata’s operating results is provided below as well as on 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, liquidity, and market conditions, among other things. These forward-looking statements are based upon current expectations and assumptions and often can be identified by words such as “expect,” “strive,” “looking ahead,” “outlook,” “guidance,” “forecast,” “anticipate,” “continue,” “plan,” “estimate,” “believe,” “will,” “would,” “likely,” “intend,” “potential,” or similar expressions. Forward-looking statements in this release include our 2022 fourth quarter and full year financial guidance. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including 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 execute and realize the anticipated benefits of our business transformation program or other restructuring and cost saving initiatives; risks inherent in operating in foreign countries, including sanctions, foreign currency fluctuations, and/or acts of war; risks associated with the ongoing and uncertain impact of the COVID-19 pandemic on our business, financial condition and operating results and on our customers and suppliers; risks associated with data privacy, cyberattacks and maintaining secure and effective products for our customers, as well as, 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 our workforce and the ability to attract and retain skilled employees; protecting our intellectual property; availability and successful execution of new alliance and acquisition opportunities; subscription arrangements that 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 most recent annual report on Form 10-K, and subsequent quarterly reports on Forms 10-Q or current reports on Forms 8-K, as well as Teradata’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.

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