The News: Teradata revenue totaled $438 million for the third quarter (Q3) of 2023 as the cloud analytics and data platform vendor announced its latest earnings on November 6. Teradata also reported that its public cloud annual recurring revenue (ARR) rose 63% to $454 million in Q3, up from $279 million year-over-year (YoY). Read the full Q3 earnings press release on the Teradata investors web page.
Teradata Revenue for Q3 2023 Reaches $438 Million, Up 5% YoY
Analyst Take: This was a very positive 3Q for Teradata with a 5% rise in revenue, but even more impressive is its latest public cloud ARR, which soared by 63% to $454 million in Q3, showing solid growth from $279 million YoY. We are impressed because taken together these figures and others indicate a continuing and positive trend line for Teradata as its cloud revenue is driving its performance.
Here are the Teradata Q3 earnings results by the numbers:
- Q3 2023 revenue of $438 million, up 5% from $417 million YoY. The $438 million in revenue beat analyst consensus estimates of $435.85 million from Investing.com.
- Q3 2023 non-generally accepted accounting principles (non-GAAP) gross profit of $264 million, up 1% from $261 million YoY.
- Q3 2023 non-GAAP gross margin of 60.3%, down from 62.6% YoY.
- Q3 2023 non-GAAP net income rose to $43 million, up 34% from $32 million YoY.
- Q3 2023 non-GAAP diluted earnings per share (EPS) of $0.42, up from $0.31 per share YoY and meeting the consensus estimates expected by analysts at Investing.com.
Overall, Teradata’s Q3 performance confirms our ongoing view that Teradata is well positioned for hybrid cloud scale growth and for helping customers who are using existing infrastructure instead of shifting all workload migrations to the public cloud. Teradata, we believe, helps customers that want more direct control over parts of their infrastructure instead of moving everything to the cloud. It is a smart move by Teradata to continue to serve these needs and fill those requirements.
Teradata Revenue by Region
Teradata’s revenue for Q3 by region included $264 million from the Americas, which was up 9% from $242 million YoY, and $113 million from EMEA, which was up 8% from $105 million YoY. The Asia, Pacific, Japan region brought in $61 million in revenue in Q3, which was down 13% from $70 million YoY.
Teradata’s recurring revenue for Q3 alone totaled $360 million for Q3, which was up 9% from $331 million one year ago. Meanwhile, Teradata listed ARR for the first 9 months of the year at $1.52 billion, which is up 11% from $1.37 billion for the first 9 months one year ago.
In our view, these healthy overall and public cloud ARR figures for Teradata help deliver predictable revenue, which we believe only bolsters its future sales and success in a crowded marketplace.
Teradata Revenue Guidance for Q4 and Full Year 2023
As part of its Q3 earnings report, Teradata also provided financial guidance for the fourth quarter (Q4) and full year of 2023. For Q4, Teradata expects non-GAAP diluted EPS between $0.50 and $0.54 per share.
For the full year of 2023, non-GAAP diluted EPS is expected to be between $2.01 and $2.05 per share, while cash flow from operations continues to be on pace between $340 million and $380 million per previous guidance.
Teradata’s free cash flow (FCF) for the full year of 2023 is also reaffirmed to be between $320 million and $360 million, while total revenue is reaffirmed to rise between 1% and 4% YoY.
The company also reaffirms that its public cloud ARR will rise in the full year of 2023 by 53% to 57% YoY, while its total ARR is expected to grow between 6% and 8% YoY.
What It All Means for Teradata Revenue
We see lots of positives here for Teradata as we approach 2024. Teradata has been refining and bolstering its Teradata VantageCloud cloud analytics and data platform with modern and valuable AI components and more bringing expanded services and capabilities to customers who require deep insights into their infrastructures and operations. Teradata’s integrated AI tools boost enterprise computing capabilities for customers, while the company continues to drive innovation and listen and respond to their technology and business needs. To us, that is the mark of a smart, wise, and customer-centric enterprise technology vendor.
All of this has been happening under the leadership of Steve McMillan, the president and CEO of Teradata, and his executive team as the company continues to grow its sales, ARR, and other economic indicators while showing solid performance in the marketplace.
In a marketplace where Teradata continues to successfully battle for business against huge technology vendors including IBM, Microsoft, Google, Amazon Web Services (AWS), Salesforce, and others, we are again impressed with this company’s pluck. It will be fascinating to watch Teradata’s strategy and performance as we head 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.
Other insights from The Futurum Group:
Teradata Revenue for Q3 2023 Reaches $462 Million, Up 7%
Teradata Launches ask.ai for VantageCloud Lake
Teradata Analyst Summit 2023: “Not Your Grandma’s Teradata”
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
