Teradata Corporation (TDC) Bundle
A Brief History of Teradata Corporation
Company Overview
Teradata Corporation, founded in 1979, specializes in data analytics and data warehousing solutions. The company is headquartered in San Diego, California, and operates globally, serving numerous industries including finance, healthcare, and retail.
Recent Financial Performance
As of the third quarter of 2024, Teradata reported significant financial metrics:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $440 million | $438 million |
| Recurring Revenue | $372 million | $360 million |
| Net Income | $32 million | $12 million |
| Operating Income | $56 million | $27 million |
| Gross Margin | 60.5% | 59.1% |
Annual Recurring Revenue (ARR)
As of September 30, 2024, Teradata's ARR was reported at $1.482 billion, a decrease from $1.524 billion in the previous year. The Public Cloud ARR rose significantly to $570 million, up 26% from $454 million in Q3 2023.
Segment Performance
Teradata operates under two main segments: Product Sales and Consulting Services. The revenue breakdown for Q3 2024 is as follows:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue |
|---|---|---|
| Product Sales | $379 million | $367 million |
| Consulting Services | $61 million | $71 million |
Stock Performance and Repurchase Programs
In the first nine months of 2024, Teradata repurchased approximately 4.9 million shares at an average price of $38.07. The stock repurchase activity is influenced by various factors including cash requirements and market conditions.
Debt and Financial Obligations
As of September 30, 2024, Teradata's long-term debt stood at $487 million, with a revolving credit facility of $400 million available. The company has a five-year unsecured term loan amounting to $500 million established in June 2022, which is subject to interest rate fluctuations based on market conditions.
Cash Flow and Assets
Teradata reported total cash and cash equivalents of $348 million as of September 30, 2024, a decrease from $486 million at the end of 2023. The company holds significant inventories, totaling $16 million, with deferred revenue at $495 million as of the same date.
Future Outlook
Teradata has initiated global restructuring efforts aimed at optimizing its operations and reducing non-revenue generating expenses. This restructuring is expected to incur charges in the range of $20 to $25 million.
A Who Owns Teradata Corporation (TDC)
Ownership Structure
As of 2024, Teradata Corporation (TDC) has a diverse ownership structure, comprising institutional investors, individual insiders, and retail shareholders. The largest shareholders include various investment management firms and mutual funds, reflecting a strong institutional presence in its ownership.
| Owner Type | Percentage Ownership | Number of Shares Owned | Notable Shareholders |
|---|---|---|---|
| Institutional Investors | 85% | 81 million | Vanguard Group, BlackRock, State Street Corp |
| Insiders | 5% | 4.8 million | Teradata Executives and Board Members |
| Retail Investors | 10% | 9.5 million | N/A |
Major Institutional Shareholders
The following table outlines the top institutional shareholders and their respective ownership stakes as of early 2024:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| Vanguard Group | 18 million | 18.4% |
| BlackRock | 15 million | 15.3% |
| State Street Corp | 10 million | 10.2% |
| Wellington Management | 7 million | 7.1% |
| Invesco Ltd. | 5 million | 5.1% |
Insider Ownership
Insider ownership of Teradata is modest, with key executives and board members holding approximately 5% of the total shares. This aligns with industry norms, where insider ownership is often encouraged to align management interests with those of shareholders.
| Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Claire Bramley | Chief Financial Officer | 1 million | 1.0% |
| Hilary C. Schneider | CEO | 1.2 million | 1.2% |
| Board Members | Various | 2.6 million | 2.6% |
Stock Performance and Market Capitalization
As of September 30, 2024, Teradata's stock is trading at approximately $30 per share, leading to a market capitalization of around $2.88 billion.
| Metric | Value |
|---|---|
| Current Stock Price | $30 |
| Market Capitalization | $2.88 billion |
| 52-week High | $45.98 |
| 52-week Low | $27.79 |
Recent Share Repurchase Activity
In the first nine months of 2024, Teradata has engaged in significant share repurchase activity, reflecting its commitment to returning value to shareholders.
| Month | Shares Repurchased | Average Price Paid |
|---|---|---|
| January 2024 | 685,038 | $45.98 |
| February 2024 | 1,149,985 | $40.04 |
| March 2024 | 1,334,239 | $38.26 |
| April 2024 | 586,586 | $37.50 |
| May 2024 | 450,457 | $34.19 |
Conclusion on Ownership Dynamics
Teradata's ownership structure is characterized by substantial institutional investment, modest insider ownership, and active share repurchase programs, indicating a strategic focus on enhancing shareholder value.
Teradata Corporation (TDC) Mission Statement
Mission Statement Overview
Teradata Corporation's mission statement emphasizes providing a comprehensive data analytics platform that empowers organizations to leverage data for actionable insights. The company aims to deliver the best analytics solutions to help organizations achieve their business objectives effectively.
Key Financial Metrics
As of the third quarter of 2024, Teradata's financial performance reflects its mission-driven approach to data analytics and cloud solutions. The following table summarizes key financial metrics relevant to Teradata's operational success:
| Metric | 2024 Q3 | 2023 Q3 | Change (%) |
|---|---|---|---|
| Annual Recurring Revenue (ARR) | $1.482 billion | $1.524 billion | -3% |
| Public Cloud ARR | $570 million | $454 million | +26% |
| Total Revenue | $440 million | $438 million | +0.5% |
| Recurring Revenue | $372 million | $360 million | +3% |
| Gross Margin | 60.5% | 59.1% | +1.4% |
| Operating Income | $56 million | $27 million | +107.4% |
| Net Income | $32 million | $12 million | +166.7% |
| Cloud Net Expansion Rate | 120% | 123% | -2.4% |
Strategic Focus Areas
Teradata's strategic focus includes enhancing its cloud offerings, particularly with its VantageCloud platform. The increase in Public Cloud ARR indicates a strong market demand for cloud-based analytics solutions.
Operational Adjustments
In 2024, Teradata has realigned its operational structure to optimize both product sales and consulting services, reflecting a commitment to efficiency and customer satisfaction. The company has also focused on reducing operating expenses, achieving a 9% decrease year-over-year in operating expenses as of Q3 2024.
Market Position and Future Outlook
Despite a slight decline in Total ARR, the company is strategically positioned to capitalize on the growing demand for data analytics and cloud services. The decrease in subscription ARR is attributed to customer migrations to Public Cloud offerings, showcasing a shift in market preference.
Conclusion on Financial Performance
Teradata's financial performance as of Q3 2024 illustrates its resilience and adaptability in the competitive data analytics landscape. The company's focus on cloud solutions and operational efficiency aligns with its mission to empower organizations through data-driven insights.
How Teradata Corporation (TDC) Works
Business Model
Teradata Corporation operates primarily in the data analytics and cloud computing sectors. The company focuses on providing solutions that facilitate data-driven decision-making for businesses across various industries. Teradata's offerings include:
- Data Analytics Solutions: Teradata Vantage, a cloud-based analytics platform.
- Cloud Services: Public cloud offerings through VantageCloud.
- Consulting Services: Professional services to help clients optimize their data strategies.
Financial Performance Overview
As of the third quarter of 2024, Teradata's financial metrics reflect a mixed performance:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Annual Recurring Revenue (ARR) | $1.482 billion | $1.524 billion | -3% |
| Public Cloud ARR | $570 million | $454 million | +26% |
| Total Revenue | $440 million | $438 million | +0.5% |
| Net Income | $32 million | $12 million | +166.7% |
| Operating Income | $56 million | $27 million | +107.4% |
| Gross Margin | 60.5% | 59.1% | +2.4% |
Revenue Composition
Teradata's revenue is derived from several key segments:
- Recurring Revenue: $372 million (84.6% of total revenue) in Q3 2024.
- Perpetual Software Licenses: $7 million (1.6% of total revenue) in Q3 2024.
- Consulting Services: $61 million (13.8% of total revenue) in Q3 2024.
Cost Structure
In the third quarter of 2024, Teradata's cost of revenue and operating expenses were as follows:
| Category | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Cost of Revenue | $174 million | $179 million |
| Selling, General and Administrative Expenses | $137 million | $156 million |
| Research and Development Expenses | $73 million | $76 million |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Teradata reported the following cash flow metrics:
| Metric | 2024 | 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $147 million | $199 million |
| Free Cash Flow | $129 million | $187 million |
Debt and Financing
As of September 30, 2024, Teradata's long-term debt consisted of:
- Term Loan: $487 million.
- Revolving Credit Facility: $400 million available, with no borrowings outstanding.
Taxation
The effective tax rate for Teradata for the nine months ended September 30, 2024, was:
- Effective Tax Rate: 33.6%
Market Trends and Strategic Focus
Teradata is experiencing a shift towards cloud-based solutions, with significant growth in Public Cloud ARR driven by:
- Increased customer demand for VantageCloud.
- Migration of on-premises customers to cloud solutions.
Overall, Teradata's focus on enhancing its cloud offerings and optimizing operational efficiency is evident in its financial performance and strategic initiatives.
How Teradata Corporation (TDC) Makes Money
Revenue Streams
Teradata Corporation generates revenue through several key segments:
- Product Sales
- Consulting Services
Financial Overview for 2024
In the third quarter of 2024, Teradata reported total revenue of $440 million, a slight increase from $438 million in the same quarter of 2023. The breakdown of revenue is as follows:
| Revenue Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Recurring Revenue | $372 | $360 |
| Perpetual Software Licenses, Hardware, and Other | $7 | $7 |
| Consulting Services | $61 | $71 |
| Total Revenue | $440 | $438 |
Annual Recurring Revenue (ARR)
As of September 30, 2024, Teradata's total ARR was $1.482 billion, a decrease of 3% compared to $1.524 billion in 2023. The components of ARR include:
| ARR Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Public Cloud ARR | $570 | $454 |
| Subscription ARR | $793 | $872 |
| Maintenance and Software Upgrade Rights | $119 | $198 |
| Total ARR | $1,482 | $1,524 |
Operating Performance
Gross profit for the third quarter of 2024 was $266 million, compared to $259 million in 2023. The gross profit margin increased to 60.5% from 59.1% year-over-year. Key operating metrics are summarized below:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Operating Income | $56 million | $27 million |
| Net Income | $32 million | $12 million |
| Operating Expenses | $210 million | $232 million |
Consulting Services Revenue
Consulting services revenue decreased by 14% in Q3 2024, totaling $61 million compared to $71 million in Q3 2023. This decline is attributed to a strategic focus on higher-margin engagements and the cessation of direct operations in China.
Market Trends and Challenges
Teradata is experiencing shifts in customer behavior, with an increasing focus on cloud capabilities. However, elongated deal closing cycles and uncertain macroeconomic conditions have impacted overall revenue growth. The cloud net expansion rate for Q3 2024 was 120%, down from 123% in Q3 2023.
Cash Flow and Capital Expenditures
For the nine months ending September 30, 2024, Teradata reported net cash provided by operating activities of $147 million, a decrease from $199 million in 2023. Free cash flow for the same period was $129 million compared to $187 million in 2023.
Debt and Financial Position
As of September 30, 2024, Teradata had a long-term debt of $487 million and maintained a credit facility with $400 million available for borrowing. The company is managing its debt through interest rate swaps, with a notional amount of $444 million as of the same date.
Effective Tax Rate
The effective tax rate for the nine months ended September 30, 2024, was 33.6%, an increase from 27.4% in 2023. This rise reflects adjustments related to stock-based compensation and changes in international tax regulations.
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Resources:
- Teradata Corporation (TDC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Teradata Corporation (TDC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Teradata Corporation (TDC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.