Teradata (TDC) Q4 2023 earnings summary

Executive summary

• FY23 revenue was $1.833B, up 2% reported and 4% in constant currency; recurring revenue was $1.492B, up 5% reported and 7% in constant currency.

• Public cloud ARR reached $528M, up 48% reported and 46% in constant currency; cloud accounted for 34% of total ARR.

• FY23 non-GAAP diluted EPS was $2.07 and FCF was $355M; $308M of repurchases returned 87% of FCF to shareholders.

Financial highlights

• Q4 revenue was $457M, up 1% reported; recurring revenue was $372M, up 1% reported and 81% of revenue versus 79% a year earlier.

• Q4 GAAP diluted EPS was $(0.07), versus $(0.07) a year earlier; non-GAAP diluted EPS was $0.56, versus $0.35.

• FY23 GAAP diluted EPS was $0.61, versus $0.31; non-GAAP diluted EPS was $2.07, versus $1.64.

• FY23 GAAP operating income was $186M versus $118M; non-GAAP operating income was $332M versus $286M.

• Q4 cash from operations was $176M and FCF was $168M; FY23 cash from operations was $375M and FCF was $355M.

Outlook and guidance

• FY24 constant-currency growth guidance: public cloud ARR 35%–41%, total ARR 4%–8%, recurring revenue 1%–3%, and total revenue 0%–2%.

• FY24 GAAP diluted EPS guidance is $1.08–$1.24; non-GAAP diluted EPS guidance is $2.15–$2.31.

• FY24 operating cash flow guidance is $360M–$400M; FCF guidance is $340M–$380M.

• Q1'24 diluted EPS guidance: GAAP $0.23–$0.27 and non-GAAP $0.53–$0.57.

• FY24 modeling assumptions include a 24.2% non-GAAP tax rate, 99.5M weighted-average shares, ~$45M other expense, and a target to return at least 75% of FCF.