The News: Teradata revenue for the second quarter of 2023 totaled $462 million, handily beating analyst estimates of $445 million, as the multi-cloud enterprise data analytics vendor announced its latest earnings on August 7 for the period ending June 30, 2023. Teradata also reported Q2 2023 non-GAAP diluted earnings per share (EPS) of $0.48 per share, beating analyst estimates of $0.45 per share. Read the full Q2 earnings Press Release on the Teradata investors web page.

Teradata Revenue for Q2 2023 Reaches $462 Million, Up 7%

Analyst Take: It was a solid second quarter as Teradata revenue and EPS beat analyst estimates while the company also boosted its annual recurring revenue (ARR) and public cloud ARR by 10% and 77% respectively. The numbers were particularly rewarding as the company, like so many others in the tech and consumer sectors, continues to return to a new normal as the pandemic and difficult macroeconomic conditions lessen across world markets.

Here are the Teradata Q2 earnings results by the numbers:

Q2 2023 revenue of $462 million, up 7% from $430 million YoY. The $452 million in revenue beat analyst consensus estimates of $445 million from Investing.com.
Q2 2023 non-GAAP gross profit of $280 million, up 6% from $263 million YoY.
Q2 2023 non-GAAP net income jumped to $49 million, up 40% from $35 million YoY.
Q2 2023 non-GAAP diluted EPS of $0.48, up from $0.33 per share YoY and beating the consensus estimates of $0.45 per share expected from analysts at Investing.com.

Overall, I believe that Teradata’s Q2 performance was a big positive for the company and proves our earlier take that Teradata is well positioned for hybrid cloud scale growth and for helping customers that are using their existing infrastructure while slowing some workload migrations to the public cloud.

Teradata Revenue by Region

Teradata’s Q2 revenue by region included $268 million from the Americas, which was up 8% from $249 million YoY, and $118 million from EMEA, which was up 15% from $103 million YoY. The Asia, Pacific, Japan region brought in $76 million in revenue in Q2, which was down 3% from $78 million YoY.

Teradata’s recurring revenue for Q2 totaled $357 million for Q2, which was down 2% from $364 million one year ago.

In Q2, the company highlighted quarterly ARR of $371 million, which was up 8% from $345 million YoY. Meanwhile, Teradata listed ARR for the full year at $1.52 billion, which is up 10% from $1.39 billion YoY.

Public cloud ARR for Teradata for the last full year boomed, with revenue totaling $414 million, up 77% from $234 million YoY. As we have said in the recent past when Teradata’s public cloud ARR has shown similar spikes, we like the high amount of predictable revenue that this brings to the company, which we believe only bolsters it future sales and success in a crowded marketplace.

Teradata Revenue Guidance for Q3 and FY2023

As part of its Q2 earnings report, Teradata also provided financial guidance for the third quarter and full year of 2023.

For Q3, Teradata expects non-GAAP diluted EPS between $0.10 and $0.14 per share.

For the full year of 2023, non-GAAP diluted EPS is expected to be between $1.92 and $2.04 per share, while cash flow from operations is expected to be between $340 million and $380 million.

Teradata’s free cash flow (FCF) for the full year of 2023 is expected to be between $320 million and $360 million, while total revenue is expected to rise between 1% and 4% YoY.

The company also said that it expects its public cloud ARR to rise in the full year of 2023 by 53% to 57% YoY, while its total ARR is expected to increase between 6% and 8% YoY.

What It All Means for Teradata Revenue

In my view, Teradata’s market position as a successful multi-cloud enterprise data analytics vendor shows it is a well-managed company that takes its role seriously by serving its customers well and by listening and responding to their technology and business needs.

Steve McMillan, Teradata’s president and CEO, provides smart and effective leadership with the help of his executive team as the company continues to grow its sales, ARR, and other economic indicators while showing solid performance in the marketplace.

I believe that Teradata is well positioned for continuing growth as we watch for our near-term economy to rise again following the pandemic.

As we have said before, Teradata continues to display positive enterprise chops in a crowded and competitive marketplace, where it stubbornly continues to successfully battle for business against huge vendors including IBM, Microsoft, Google, Amazon Web Services, Salesforce, and others.

And Teradata is not sitting on its laurels, either, as the company continues to unveil and deploy its own AI features and capabilities within its services and products to better serve its customers in the expanding world of using AI tools to boost enterprise computing.

I believe it will be intriguing to see how this innovative multi-cloud enterprise data analytics vendor continues its growth through the rest of 2023 and into 2024.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.