Teradata's (TDC) stock tumbles after mixed Q4 report; analyst lowers numbers

Teradata Corp.’s (NYSE: TDC) shares fell 13% in premarket trading Tuesday after the company unveiled a mixed Q4 report, including disappointing public cloud Annual Recurring Revenue (ARR).

For the fiscal fourth quarter of 2023, the cloud database and analytics software provider reported earnings per share (EPS) of $0.56, surpassing the analyst prediction of $0.51. Revenue came in at $457 million, while analysts projected $456.34 million.

Public cloud ARR stood at $528 million, missing the $547 million consensus estimate.

Looking ahead, Teradata expects its non-GAAP diluted EPS for the coming quarter to be between $0.53 and $0.57, missing the consensus estimate of $0.74.

For the entire year of 2024, Teradata has outlined the following projections:

The company anticipates total revenue growth to be between 0% and 2% year-over-year when adjusted for constant currency.

Public cloud ARR is expected to increase by 35% to 41% YoY, on a constant currency basis.

Overall ARR is projected to grow by 4% to 8% year-over-year, also in constant currency.

Recurring revenue growth is forecasted to be between 1% and 3% YoY.

“Teradata ended 2023 with $528 million of Cloud ARR, delivering ten-fold growth in less than four years,” said Steve McMillan, President and CEO of Teradata.

“Companies everywhere are experimenting with AI to innovate their business and we are excited to be at the center of the AI era. Trusted data is required for this type of breakthrough innovation, and data and analytics are what we believe Teradata does best.”

JMP Securities analysts led by Patrick Walravens maintained an Outperform rating and price target on TDC while lowering estimates.

"We reduce our 2024 non-GAAP EPS estimate from $2.40 to $2.19 (consensus $2.40) on revenue growth of 1% and public cloud ARR growth of 38%, reduce our 2025 non-GAAP EPS estimate from $2.93 to $2.78 (consensus $2.94) on revenue growth of 1% and public cloud ARR growth of 35%, and introduce our 2026 non-GAAP EPS estimate of $3.20 on revenue growth of 4% and public cloud ARR growth of 30%"

By Vahid Karaahmetovic

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