The company's growth has stagnated in recent years due to competition from players like Dynatrace and Datadog, and its customer count is down. The Company believes such non-GAAP financial measures (1) provide useful information to investors regarding the underlying business trends and performance of the Companys ongoing operations, (2) are useful for period-over-period comparisons of such operations and results, that may be more easily compared to peer companies and allow investors a view of the Companys operating results excluding stock-based compensation expense and special items, (3) provide useful information to management and investors regarding present and future business trends, and (4) provide consistency and comparability with past reports and projections of future results. Jennifer Donahue Why it's an acquisition target: Smartsheet is operating in a competitive space, as the number of collaborative work-management tools has skyrocketed in recent years. A person who asked to remain anonymous pointed out that while systems architects were trying to convince businesses to make the shift to the cloud, users of Teradata systems business analysts who use data to inform important company decisions were less keen. Public cloud ARR increased to $202 million from $106 million, an increase of 91% as reported and 92% in constant currency . However, RBC analysts note that an acquisition would be difficult given some of the company's bylaws and shareholder agreements. Our management internally uses supplemental non-GAAP financial measures, such as gross profit, operating income, net income, and EPS, excluding certain items, to understand, manage and evaluate our business and support operating decisions on a regular basis. Why it's an acquisition target: RBC and other analysts have seen Dropbox as a potential acquisition target for a while. Why it's an acquisition target: N-Able has a large market opportunity in the managed-service provider space for small- to medium-sized businesses, RBC analysts wrote. Each of our non-GAAP measures do not have a uniform definition under GAAP and therefore, Teradatas definition may differ from other companies definitions of these measures. Large companies look to score tools at a discount while private-equity firms also eye takeovers. Recurring revenue is expected to grow at a low-to-mid-single-digit percentage year-over-year. 858-485-3029 office The software industry is expecting more M&A as software valuations continue to drop. "In other words, we believe larger scale debt-financed private-equity takeouts could be unlikely in the near-term," RBC analysts wrote. All of which positions us to achieve over $1 billion in Cloud ARR(1) and approximately $550 million in free cash flow(2) in fiscal 2025 and deliver significant long-term value to our shareholders.. year 2021 financial results. The firm also acquired Anaplan, a business-planning-software company, for $10.7 billion in June. Christopher T. Lee Why it's an acquisition target: Jana Partners, a group of activist investors, is targeting New Relic and preparing to explore a potential sale to private equity, Reuters reported in July. 2023 Phase one of GMH, in Gulf of Guinea's Punta Europa, started delivering gas in February 2021. However, as described below, the Company believes that certain non-GAAP measures such as non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per diluted share, or EPS, all of which exclude certain items (as well as free cash flow), and which may be reported on a constant currency basis, are useful for investors. In the UK alone, companies including Sainsbury's, Lloyds Bank, Iceland, Barclays, Unilever, Vodafone, and other big brands still rely on Teradata's on-prem systems for business decision-making as cloud-based systems are yet to meet their performance requirements, sources told The Register. "This is the entire on-premises estate for Teradata," said a senior source close to the company. Moving to the cloud would be a "massive disruption.". In 2018, TDC removed $66 million (42% of non-GAAP net income) in stock-based compensation. Free cash flow is a non-GAAP measure. Who could acquire it: Private equity. This release contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934. Aug 23, 2021 4 min read IBM Takes Over Teradata Updated: Sep 16, 2022 The Teradata announcement of outsourcing maintenance agreements to IBM shocked the Teradata community. The Company believes this is a useful metric to investors as it demonstrates progress toward achieving our strategic objectives as outlined in the Form 10-K and Form 10-Q. Total ARR is expected to grow at a mid-to-high-single-digit percentage year-over-year. What it does: New Relic makes cloud-based software to help websites and applications track how their servers are performing and make sure they're running without interruptions. They said Rapid7 and Varonis Systems could potentially acquire Qualys. The impact of currency is determined by calculating the prior period results using the current-year monthly average currency rates. The company started as a file-sharing service and has since added capabilities like document collaboration and e-signatures. Join SI Premium - FREE. INVESTOR CONTACT Per Figure 2 TDC's TTM non-GAAP net income of $154 million is well above GAAP net income of $14 million.. 3. Annual recurring revenue (ARR) is defined as the annual value at a point in time of all recurring contracts, including subscription, cloud, software upgrade rights, and maintenance. For the year, Teradata grew its sales 4% to $1.9 billion (but with 12% growth in recurring revenue), added 640 basis points to its gross margin (now 61.9%), and reported $1.30 per share -- GAAP -- on the bottom line. Teradata does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. "Additionally, we do believe a large back-office vendor could get interested, though we see this as less likely given SAP, Workday, and Oracle all have competing solutions.". They said it could be acquired by a private-equity firm or another cloud vendor. This was offset by $1 million of tax expense related to withholding taxes associated with the same intra-entity transfer recorded in the second quarter of 2020. They named 16 companies, including pandemic darlings like Zoom and the IT management software firm SolarWinds, which is still reeling from a devastating 2020 hack. And just last month, Adobe executives announced the company is acquiring the beloved design startup Figma for $20 billion. Learn more at Teradata.com. GAAP diluted EPS is expected to be in the range of $0.75 to $0.85. "We wonder if Dropbox would be better off as part of a larger technology platform, given we believe content management could be more valuable once integrated and cross-sold with other collaboration solutions," RBC analysts wrote. analysts and experts expect to see more consolidation, Adobe executives announced the company is acquiring the beloved design startup Figma, its stock has fallen back to pre-2020 levels, were rumors it was pursuing a sale amid the pressure, investment from the private-equity firm KKR. https://www.businesswire.com/news/home/20220204005518/en/, INVESTOR CONTACT "We think the company has made good progress on its cloud transition, and as such, it could represent an interesting acquisition candidate for a large vendor or PE shop that wants to get deeper into cloud analytics," RBC analysts wrote. In particular, free cash flow indicates the amount of cash generated after capital expenditures for, among other things, investment in the Companys existing businesses, strategic acquisitions, strengthening the Companys balance sheet, repurchase of the Companys stock and repayment of the Companys debt obligations, if any. The following tables reconcile Teradatas projected EPS under GAAP to the Companys projected non-GAAP EPS for fiscal 2021, which exclude certain specified items. Total revenue is expected to be flat-to-low-single-digit percentage growth year-over-year. Teradata is outsourcing field-based support on both sides of the pond to IBM, much to the alarm of some customers who fear a loss of knowledge in keeping its trusted on-prem systems up and running. endstream endobj startxref However, as described below, the Company believes that certain non-GAAP measures such as non-GAAP earnings per diluted share, or EPS, and non-GAAP operating margin, which exclude certain items (as well as free cash flow) are useful for investors. Heading into a new fiscal year, Teradata says revenue will again grow in the "flat-to-low-single-digit percentage" range in 2022, with public cloud revenue growing 80% and recurring revenue growing in the "low-to-mid-single" digits. Continuing the good news, CEO Steve McMillan predicted that "the strength of our performance in 2021 is matched by our conviction to continue accelerating in 2022." We continue to demonstrate our commitment to deliver shareholder value through disciplined capital allocation, including our intention to enter into a $250 million accelerated share repurchase program in the first quarter, enabled by our strong balance sheet and projections of cash flow generation., Fourth-Quarter 2021 Financial Highlights Compared to Fourth-Quarter 2020, Full-Year 2021 Financial Highlights Compared to Full Year 2020. The space is "crowded," RBC analysts wrote in a note, and "over time, could benefit from consolidation with adjacent collaboration solutions.". Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including those relating to: the global economic environment and business conditions in general or on the ability of our suppliers to meet their commitments to us, or the timing of purchases by our current and potential customers; the rapidly changing and intensely competitive nature of the information technology industry and the data analytics business; fluctuations in our operating results; our ability to execute and realize the anticipated benefits of our business transformation program or other restructuring and cost saving initiatives; risks inherent in operating in foreign countries, including foreign currency fluctuations; risks associated with the ongoing and uncertain impact of the COVID-19 pandemic on our business, financial condition and operating results and on our customers and suppliers; risks associated with data privacy, cyberattacks and maintaining secure and effective products for our customers, as well as, internal information technology and control systems; the timely and successful development, production or acquisition, availability and/or market acceptance of new and existing products, product features and services; tax rates; turnover of our workforce and the ability to attract and retain skilled employees; protecting our intellectual property; availability and successful execution of new alliance and acquisition opportunities; subscription arrangements that may be cancelled or fail to be renewed; the impact on our business and financial reporting from changes in accounting rules; and other factors described from time to time in Teradatas filings with the U.S. Securities and Exchange Commission, including its most recent annual report on Form 10-K, and subsequent quarterly reports on Forms 10-Q or current reports on Forms 8-K, as well as Teradatas annual report to stockholders. christopher.lee@teradata.com View source version on businesswire.com: Our management internally uses supplemental non-GAAP financial measures, such as gross profit, operating income, net income, and EPS, excluding certain items, to understand, manage and evaluate our business and support operating decisions on a regular basis. Why it's an acquisition target: The industry has long thought of Box as an acquisition target. Amortization of acquisition-related - intangible assets 0.01 0.01 Acquisition, integration, reorganization-related, and other costs To more accurately reflect the impact of the expense on a quarterly basis for non-GAAP purposes, the $3 million of tax expense was recognized ratably each quarter in 2020 instead of being included in the marginal effective rate. christopher.lee@teradata.com About Teradata "As large IT vendors need a view into both public and on-premise spending, Nutanix could help solve that given its large scale, salesforce, and market opportunity," RBC analysts wrote. Free cash flow is expected to be approximately $400 million. SAN DIEGO-- (BUSINESS WIRE)-- Teradata (NYSE: TDC) today announced its fourth-quarter and full-year 2021 financial results. Actually it helps in avoiding nasty cloud costs, says CEO, IBM settles 36m Direct Line insurance platform project lawsuit, after claiming Teradata tried to usurp its spot, IBM insiders say CEO Arvind Krishna downplayed impact of email troubles, asked for a week to sort things out, Age discrimination case against IBM leaks emails, docs via bad redaction. Only Teradata gives you the flexibility to handle the massive and mixed data workloads of the future, today. -- Teradata (NYSE: TDC ) today announced its fourth-quarter and full- year 2021 financial results. This is an increase from at least 70% growth year-over-year, which was previously communicated at Teradatas Investor Day in September 2021. For GAAP purposes, this is a component of the marginal rate and is recognized as tax benefit or expense based on the Companys reported GAAP pre-tax income or loss for the quarter. We delivered strong results, driving more than 90% growth in public cloud ARR and significantly growing new cloud customers. The Company's most targeted sectors include information technology (40%) and software (34%). But Oracle would also make sense, especially given that Larry Ellison, the founder and CTO of Oracle, was very vocal about supporting Zoom during its pandemic boom and privacy-and-security issues, the analysts wrote. Teradata (TDC 0.36%) stock surged in morning trading today, up 24.2% as of 10:50 a.m. To receive notifications via email, enter your email address and select at least one subscription below. The analyst . Teradata is the connected multi-cloud data platform for enterprise analytics company. Why it's an acquisition target: Zoom saw huge growth during the early days of the pandemic due to the sudden shift to remote work, but since the beginning of this year, its stock has fallen back to pre-2020 levels. Our enterprise analytics solve business challenges from start to scale. We look forward to delivering ongoing innovation for our customers, maintaining our ethos of strong corporate citizenship, and driving profitable growth and long-term value creation for our shareholders., Teradata is raising its 2022 outlook for public cloud ARR and EPS, as well as increasing the return of capital to shareholders, said Claire Bramley, Chief Financial Officer, Teradata. Now He's Its CEO Alex Woodie When Steve McMillan worked in IBM Global Services, he oversaw the outsourcing of nearly every major piece of a large global financial services firm's IT stack with Big Blue products. Jana Partners is also the activist firm that pushed Zendesk to be acquired by a group of private equity firms led by Hellman & Friedman and Permira. Over the course of the last year, we have embarked on a journey to cloud-first and today, we are a new, reimagined Teradata a profitable growth company with the right strategy, technology and team to win in a large and growing market, said Steve McMillan, Teradata President and CEO. Overview of Teradata's Acquisitions All Acquisitions : 12 [View Details] Latest Acquisitions : 2. Teradata is the connected multi-cloud data platform for enterprise analytics, solving data challenges from start to scale. Teradata declined the opportunity to deny hardware support was being transferred to IBM. This non-GAAP measure is not meant to be considered in isolation to, as a substitute for, or superior to, results determined in accordance with GAAP, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure. Only Teradata gives you the flexibility to handle the massive and mixed data workloads of the future, today making your data easier to consume everywhere, with no added risk. Note to Investors Public cloud ARR increased by $79 million, or 176% from the prior year period, exceeding the outlook of at least 165% year-over-year (1) First-quarter recurring revenue of $372 million, an increase of 20% from the prior year period. Teradata defines free cash flow as cash provided by / used in operating activities, less capital expenditures for property and equipment, and additions to capitalized software. Why The Valuation Gap Could Narrow Let . Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including those relating to: the global economic environment and business conditions in general or on the ability of our suppliers to meet their commitments to us, or the timing of purchases by our current and potential customers; the rapidly changing and intensely competitive nature of the information technology industry and the data analytics business; fluctuations in our operating results; our ability to execute and realize the anticipated benefits of our business transformation program or other restructuring and cost saving initiatives; risks inherent in operating in foreign countries, including foreign currency fluctuations; risks associated with the ongoing and uncertain impact of the COVID-19 pandemic on our business, financial condition and operating results and on our customers and suppliers; risks associated with data privacy, cyberattacks and maintaining secure and effective products for our customers, as well as, internal information technology and control systems; the timely and successful development, production or acquisition, availability and/or market acceptance of new and existing products, product features and services; tax rates; turnover of our workforce and the ability to attract and retain skilled employees; protecting our intellectual property; availability and successful execution of new alliance and acquisition opportunities; subscription arrangements that may be cancelled or fail to be renewed; the impact on our business and financial reporting from changes in accounting rules; and other factors described from time to time in Teradatas filings with the U.S. Securities and Exchange Commission, including its most recent annual report on Form 10-K, and subsequent quarterly reports on Forms 10-Q or current reports on Forms 8-K, as well as Teradatas annual report to stockholders. If the company is not able to execute its new strategy, it might make sense for the board to explore a sale to a larger firm, the analysts wrote. Adjustments to reconcile net income to net cash provided by operating activities: Effect of exchange rate changes on cash and cash equivalents, Public cloud ARR of $202 million, an increase of 91% as reported from the prior year period, Fourth quarter recurring revenue of $364 million, an increase of 5% as reported from the prior year period, Recurring revenue was 77% of total revenue in the fourth quarter, up from 70% the prior year period, Fourth quarter GAAP earnings per diluted share of $0.29, above the previously provided outlook range of $(0.05) to $(0.01), Fourth quarter Non-GAAP earnings per diluted share of $0.57, above the previously provided outlook range of $0.25 to $0.29, Fourth quarter cash from operations of $95 million and free cash flow of $85 million, Intends to enter into a $250 million accelerated share repurchase program in the first quarter, Public cloud ARR increased to $202 million from $106 million, an increase of 91% as reported and 92% in constant currency, ARR increased to $1.492 billion from $1.425 billion, an increase of 5% as reported and 7% in constant currency, Recurring revenue was $364 million versus $346 million, an increase of 5% as reported and 6% in constant currency, Total revenue was $475 million versus $491 million, a decrease of 3% as reported and 2% in constant currency, Non-GAAP gross margin was 63.2% versus 59.3%, GAAP operating income was $50 million versus $13 million, Non-GAAP operating income was $90 million versus $67 million, GAAP diluted EPS was $0.29 versus $0.04 per share, Non-GAAP diluted EPS was $0.57 versus $0.38, Cash flow from operations was $95 million compared to $56 million, Free cash flow was $85 million compared to $45 million, Recurring revenue was $1.464 billion from $1.309 billion, an increase of 12% as reported and 11% in constant currency, Total revenue was $1.917 billion from $1.836 billion, an increase of 4% as reported and 3% in constant currency, Non-GAAP gross margin was 63.4% versus 58.4%, GAAP operating income was $231 million versus $16 million, Non-GAAP operating income was $393 million versus $230 million, Non-GAAP diluted EPS was $2.43 versus $1.31, Cash flow from operations was $463 million versus $267 million, Free cash flow was $432 million versus $216 million. Teradata filed a carry back of its 2020 NOL to claim a refund for taxes it paid in 2015, which created a one-time income tax benefit for GAAP reporting purposes for the difference between the 2015 federal statutory tax rate of 35% and the current federal statutory rate of 21%. We delivered strong results, driving more than 90% growth in public cloud ARR and significantly growing new cloud customers. Public cloud ARR is defined as the annual value at a point in time of all contracts related to public cloud implementations of Teradata Vantage and does not include ARR related to private or managed cloud implementations. Also, when calculated according to generally accepted accounting principles (GAAP), Teradata's profits weren't quite as strong as the headline pro forma profit number. Teradata reports its results in accordance with GAAP. The Companys GAAP effective tax rate for the twelve months ended December 31, 2020, includes $156 million of discrete tax benefit related to an intra-entity asset transfer of certain of its intellectual property to one of its Irish subsidiaries, which occurred on January 1, 2020. Fourth-Quarter 2021 Financial Highlights Compared to Fourth-Quarter 2020. Speaking to The Register earlier this year, Teradata CEO Steve McMillan argued the company's heritage in on-prem systems offers users the ability to optimise workloads in the cloud for cost. MEDIA CONTACT Invest better with The Motley Fool. Why it's an acquisition target: Nutanix operates in the hybrid-cloud space and is making its own transition from a licensing model to a software-subscription model. Teradata defines free cash flow as cash provided by / used in operating activities, less capital expenditures for property and equipment, and additions to capitalized software. As for the outsourcing agreement, the contract will likely reside within IBM Global Services, the part of the organisation that is being spun out into a separately listed public entity known as Kyndryl.
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