Teradata (TDC) Q2 2021 earnings summary

Executive summary

• Q2 revenue rose 7% YoY to $491M; recurring revenue increased 16% and public cloud ARR rose 157% to $139M. GAAP and non-GAAP EPS exceeded prior outlook.

• Management cited cloud-first execution, new customer wins and expansion of existing customers; full-year revenue, recurring revenue, EPS and cash flow outlooks were raised.

Financial highlights

• Total revenue was $491M vs. $457M, up 7% reported and 4% in constant currency; recurring revenue was $376M vs. $323M, up 16% and 13%, respectively.

• GAAP operating income increased to $70M from $8M; non-GAAP operating income rose to $117M from $64M.

• GAAP net income was $44M vs. a $43M loss; non-GAAP net income was $83M vs. $26M.

• Cash from operations was $225M vs. $130M; free cash flow was $219M vs. $115M.

Outlook and guidance

• Q3 public cloud ARR growth expected at least 90% YoY, or at least $15M sequentially; GAAP diluted EPS of $(0.01)–$0.03 and adjusted non-GAAP EPS of $0.30–$0.34.

• FY21 public cloud ARR growth of at least 100% YoY and total ARR growth at a mid-to-high-single-digit rate were reaffirmed.

• FY21 recurring revenue growth raised to high-single-digit to low-double-digit; total revenue growth raised to low- to mid-single-digit.

• FY21 GAAP EPS raised to $0.78–$0.82 and adjusted non-GAAP EPS to $1.92–$1.96.

• FY21 cash from operations raised to at least $440M and free cash flow to at least $400M.