• Public cloud ARR of $148 million, an increase of 83% as reported from the prior year period⁽¹⁾
• Recurring revenue of $352 million, an increase of 7% as reported from the prior year period
• Recurring revenue was 77% of total revenue in the third quarter, up from 72% in the prior year period
• GAAP earnings per diluted share of $0.15, above the previously provided outlook range of ($0.01) to $0.03
• Non-GAAP earnings per diluted share of $0.43, above the previously provided outlook range of $0.30 to $0.34⁽³⁾
• Cash from operations of $33 million and free cash flow of $23 million ⁽²⁾
• Incremental $1 billion share repurchase authorization for open market share repurchases until the end of 2025

SAN DIEGO–(BUSINESS WIRE)–Teradata (NYSE: TDC) today announced its third-quarter 2021 financial results.

“In the third quarter, we met or exceeded revenue and profitability expectations while advancing our transformation,” said Steve McMillan, President and CEO, Teradata. “We have a substantial cloud business and a very healthy annualized growth rate. We saw a handful of transactions slip out of the last day of the quarter, slightly impacting Q3 Public Cloud ARR growth; however, I am pleased that we have now closed the gap in October.”

“The world relies on connected data, and our connected data platform uniquely delivers insights to help the leading companies win with all their data. We are continuing to innovate, we are beating the competition, and delivering exceptional value to our customers. With our robust pipeline, we are confident in delivering a solid close to 2021, and ever greater value to our shareholders.”

Third-Quarter 2021 Financial Highlights compared to Third Quarter 2020

• Total ARR increased 7% as reported (6% in constant currency⁽¹⁾) to $1.437 billion from $1.348 billion.
• Public cloud ARR increased 83% as reported (82% in constant currency⁽¹⁾) to $148 million from $81 million.
• Total revenue was $460 million versus $454 million, an increase of 1% as reported and in constant currency⁽¹⁾
• Recurring revenue was $352 million versus $329 million, an increase of 7% as reported and 6% in constant currency⁽¹⁾
• GAAP gross margin was 59.8% versus 55.9%
• Non-GAAP gross margin was 61.3% versus 61.0%⁽³⁾
• GAAP operating income was $30 million versus $1 million
• Non-GAAP operating income was $71 million versus $67 million⁽³⁾
• GAAP earnings per diluted share was $0.15 versus GAAP loss of $0.01 per share
• Non-GAAP earnings per diluted share was $0.43 versus $0.43⁽³⁾
• Cash flow from operations was $33 million compared to $71 million
• Free cash flow was $23 million compared to $58 million⁽²⁾

“We remain on track to achieve or beat our fiscal 2021 outlook on the majority of our key financial targets as we continue on our transformation journey,” said Claire Bramley, Teradata’s Chief Financial Officer. “We have a large and rapidly scaling cloud business; it is possible that we continue to see timing volatility around the close dates of some of our very large pipeline enterprise deals. We are confident and steadfast in supporting our customers’ digital transformations with the best price-performance and scale across multi-cloud environments.”

$1 billion share repurchase authorization

On November 1, 2021, Teradata’s Board of Directors authorized an additional $1 billion to be utilized to repurchase Teradata common stock under its open market share repurchase program. Teradata now has a total of approximately $1.3 billion authorized for share repurchases under this program. The stock may be repurchased periodically on an ongoing basis in open market transactions, through 10b5-1 programs, through accelerated share repurchase programs, in privately negotiated transactions, or through the use of derivative instruments, in accordance with applicable securities rules regarding issuer repurchases. The increased share repurchase authorization is effective immediately and the program expires on December 31, 2025.

Outlook

Affirming the following outlook for the full year 2021:

• Total ARR is expected to grow at a mid-to-high-single-digit percentage year-over-year
• Recurring revenue is expected to grow at a high-single-digit to low-double-digit percentage year-over-year
• Total revenue is expected to grow at a low-single-digit to mid-single-digit percentage year-over-year
• Cash flow from operations is expected to be approximately $440 million
• Free cash flow is expected to be at least $400 million⁽²⁾

Updating the following outlook for the full year 2021:

• GAAP earnings per diluted share is now expected to be in the range of $0.96 to $1.00, up from our prior outlook range of $0.78 to $0.82
• 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 $2.11 to $2.15⁽³⁾, up from our prior outlook of $1.92 to $1.96
• Public cloud ARR is now expected to be approximately 90% year-over-year, or approximately $200 million, down from at least 100% growth year-over-year

For the fourth quarter of 2021:

• GAAP diluted EPS is expected to be in the range of $(0.05) to $(0.01)
• Non-GAAP diluted EPS, excluding stock-based compensation expense, reorganization-related expenses, and other special items, is expected to be in the range of $0.25 to $0.29⁽³⁾

Earnings Conference Call

A conference call is scheduled today at 2:00 p.m. PT to discuss the Company’s third-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.

Author Information

Sherril Hanson

As a detail-oriented researcher, Sherril is expert at discovering, gathering and compiling industry and market data to create clear, actionable market and competitive intelligence. With deep experience in market analysis and segmentation she is a consummate collaborator with strong communication skills adept at supporting and forming relationships with cross-functional teams in all levels of organizations.

Sherril holds a Master of Business Administration in Marketing from University of Colorado, Boulder and a Bachelor of Arts in Psychology from Rutgers University.