News

Teradata TDC reported first-quarter 2024 non-GAAP earnings of 57 cents per share, which beat the Zacks Consensus Estimate by 1.79%. The bottom line fell 6.6% year over year.

Revenues of $465 million surpassed the Zacks Consensus Estimate by 2.07%. The figure decreased 2.3% year over year on a reported basis and 1% on a constant-currency (cc) basis.

Total annual recurring revenues (“ARR”) at the first-quarter end decreased 2% year over year to $1.48 billion. The figure decreased 1% at cc.

Public cloud ARR surged 35% on a reported basis and 36% at cc year over year to $525 million. The cloud net expansion rate was 123%.

Top Line in Detail

Recurring revenues (contributing 83% to revenues) decreased 0.3% year over year on a reported basis (increased 4% at cc) to $388 million, surpassing the Zacks Consensus Estimate by 6.29%.

Perpetual software license and hardware revenues (1.7% of revenues) were down 38.5% year over year (down 2% at cc) to $8 million, beating the Zacks Consensus Estimate by 21.75%.

Consulting services’ revenues (15% of revenues) dropped 6.8% year over year (down 4% at cc) to $69 million, beating the Zacks Consensus Estimate by 1.13%.

Revenues from the Americas decreased 5.1% year over year on a reported basis (increased 5% at cc) to $372 million. EMEA revenues increased 6.8% year over year (down 4% at cc) to $125 million.

Revenues from the APJ region were down 6% year over year (down 2% at cc) to $63 million.

Operating Details

The gross margin on a non-GAAP basis was 62.2%, contracting 210 basis points (bps) year over year.

Selling, general & administrative (SG&A) expenses increased 5.2% year over year to $161 million. Research & development (R&D) expenses were $75 million, up 7.1% year over year.

As a percentage of revenues, SG&A contracted 250 bps year over year to 34.6%, whereas R&D contracted 140 bps to 16.1%.

The non-GAAP operating margin was 19.1%, down 350 bps year over year.

Balance Sheet

As of Mar 31, 2024, Teradata had cash and cash equivalents of $337 million compared with $486 million as of Dec 31, 2023.

Long-term debt as of Mar 31, 2024, was $474 million compared with $499 million as of Dec 31, 2023.

In the first quarter, Teradata generated $27 million in cash from operating activities compared with the previous quarter’s $176 million.

The company generated a free cash flow of $21 million in the reported quarter.

Guidance

For second-quarter 2024, non-GAAP earnings are expected to be between 46 and 50 cents per share. The Zacks Consensus Estimate for earnings is pegged at 49 cents per share, indicating 2.08% year-over-year growth.

For 2024, TDC expects non-GAAP earnings between $2.15 and $2.31 per share. The Zacks Consensus Estimate for earnings is pegged at $2.22, suggesting 7.25% year-over-year growth.

Public cloud ARR growth is projected between 35% and 41% on a year-over-year basis.

Total ARR is expected to exhibit growth of 4-8% from the 2023 level.

Teradata expects recurring revenues to increase 1-3% year over year.

Teradata expects total revenues to be up 0-2% from the year-ago reported figure. The consensus mark for 2023 revenues is pegged at $1.83 billion.

Moreover, cash flow from operations is expected to be between $360 million and $400 million. Free cash flow is anticipated to be in the $340-$380 million range.

Zacks Rank & Stocks to Consider

Currently, Teradata carries a Zacks Rank #2 (Buy).

Shares of Teradata have lost 24.7% on a year-to-date basis, underperforming the Zacks Computer and Technology sector’s return of 12.2%.

Bumble BMBL, Airbnb ABNB and NVIDIA NVDA are some other top-ranked stocks that investors can consider in the broader sector, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bumble shares have declined 28.9% in the year-to-date period. BMBL is set to report its first-quarter 2024 results on May 8.

Airbnb shares have gained 19.1% year to date. ABNB is set to report its first-quarter 2024 results on May 8.

NVIDIA shares have gained 85.6% year to date. NVDA is set to report its first-quarter fiscal 2025 results on May 22.

Where Will Stocks Go…

If Biden Wins? If Trump Wins?

The answers may surprise you.

Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!

Now is the time to download Zacks' free Special Report with 5 stocks that offer extreme upside for both Democrats and Republicans…

1. Medical manufacturer has gained +11,000% in the last 15 years.

2. Rental company is absolutely crushing its sector.

3. Energy powerhouse plans to grow its already large dividend by 25%.

4. Aerospace and defense standout just landed a potentially $80 billion contract.

5. Giant Chipmaker is building huge plants in the U.S.

Hurry, Download Special Report FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.