Teradata stock dips on soft Q4 outlook despite Q3 earnings beat

SAN DIEGO – Teradata Corporation (NYSE:TDC) reported third-quarter earnings that surpassed analyst expectations, but its stock fell 2% in after-hours trading due to a weaker-than-anticipated fourth-quarter outlook.

The data analytics company posted adjusted earnings per share (EPS) of $0.69, beating the analyst consensus of $0.56 by $0.13. Revenue for the quarter came in at $440 million, surpassing the estimated $417.71 million. Compared to the same quarter last year, revenue remained flat as reported but increased 2% in constant currency.

Teradata’s public cloud annual recurring revenue (ARR) grew 26% YoY to $570 million, or 24% in constant currency. However, total ARR decreased 3% to $1.482 billion.

For the fourth quarter, Teradata expects adjusted EPS between $0.40 and $0.44, below the analyst consensus of $0.48. This softer outlook appears to be driving the stock’s decline despite the Q3 beat.

Steve McMillan, President and CEO of Teradata, commented on the results: “In the third quarter, we grew our cloud business, delivered innovations that strengthen our market position, and added new customers and partners. We are seeing customers increasingly leverage our hybrid capabilities as they transform and commit to Teradata for the long term.”

The company raised its full-year 2024 adjusted EPS guidance to a range of $2.30 to $2.34, up from the previous forecast and above the analyst consensus of $2.25.

Teradata also reported strong cash flow performance, with cash flow from operations up 88% YoY to $77 million and free cash flow increasing 92% YoY to $69 million.

The company reaffirmed its expectations for total ARR to be in the range of -2% to -4% YoY in constant currency for the full year 2024.

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