Slide 1: Q3'23 Earnings Results
November 2023 Q3’23 Earnings Results Teradata Investor Relations © 2023 Teradata. All rights reserved. Internal use only
Slide 2: Forward-looking statements and Non-GAAP Financial Measures
Forward-looking statements Non-GAAP Financial Measures This presentation and the accompanying discussion initiatives; risks inherent in operating in foreign This presentation and the accompanying discussion contain forward-looking statements within the meaning countries, including sanctions, foreign
Slide 3: Teradata – at a glance
Teradata – at a glance Corporate purpose What we do How we do it We believe people thrive when We are the most complete cloud We deliver harmonized data, empowered with better information analytics and data platform for AI trusted AI/ML, and faster innovation for better decision-making Industry reco
Slide 4: We have a significant opportunity to increase shareholder value
We have a significant opportunity to increase shareholder value Capture Accelerate growth in larger Scalable the future market opportunity financial model Best-of-breed technology Investing in growth Recurring revenue growth Differentiated Opportunities to lead in large Efficient operating models ma
Slide 5: Teradata named a leader in cloud data warehouses!
The Forrester Wave™: Cloud Data Warehouses, Q2 2023 Teradata named a leader in cloud data warehouses! “Teradata has exceptional analytics at scale and a strong vision…Teradata’s strong vision focuses on a strategy that includes AI/ML at scale, integrated data plane, data fabric, data mesh, semantic
Slide 6: Teradata is recognized for:
Teradata Named a Leader in The Forrester Wave™: Data Management For Analytics, Q1 2023 Teradata is recognized for: • “Advanced DMA capabilities, including in-database analytics, distributed query processing, self-service, data integration, automation and workload management.” • “Resources to deliver
Slide 7: Teradata – by the numbers Q3'23
Teradata – by the numbers Q3’23 Public Cloud ARR Total ARR Recurring Revenue Total Revenue $454M $1.524B $360M $438M + 63% YoY + 11% YoY + 9% YoY + 5% YoY + 61% YoY in CC + 9% YoY in CC + 10% YoY in CC + 6% YoY in CC Notes: Total annual recurring revenue (ARR) is defined as the annual value at a poi
Slide 8: Teradata – by the numbers Q3'23
Teradata – by the numbers Q3’23 Non-GAAP Diluted GAAP Earnings per Share Earnings per Share(1) Cash Flow from Operations Free Cash Flow(1) $0.12 $0.42 $41M $36M + from $0.08 in Q3’22 + from $0.31 in Q3’22 + from $34M in Q3’23 + from $31M in Q3’22 NOTES: (1) Non-GAAP diluted earnings per share and fr
Slide 9: ARR by product
ARR by product 1,523 1,524 1,492 1,482 1,506 1,427 1,390 1,374 198 $1.524B 259 233 392 281 343 323 293 876 872 844 859 + 11% YoY 802 898 876 833 + 9% YoY in CC 30% Cloud ARR as a % of Total ARR 202 209 234 279 357 388 414 454 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Cloud Subscription Maint &
Slide 10: Revenue by type
Revenue by type 496 475 476 462 $438M 452 438 84 430 74 92 417 78 26 78 71 77 72 13 19 17 13 7 8 14 + 5% YoY in Q3’23 364 386 389 371 360 + 6% CC in Q3’23 345 331 357 82% Recurring Revenue as a % of Total Revenue Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Recurring Perpetual Consulting Q4'21 Q1
Slide 11: Q3'23 revenue by region
Q3’23 revenue by region AMS EMEA APJ Total Total Total $264M $113M $61M + 9% YoY + 8% YoY - 13% YoY + 11% YoY in CC + 3% YoY in CC - 8% CC 87% Recurring Revenue as a % of Total Revenue 77% Recurring Revenue as a % of Total Revenue 69% Recurring Revenue as a % of Total Revenue Notes: Amounts in U.S.
Slide 12: YTD'23 revenue by region
YTD’23 revenue by region AMS EMEA APJ Total Total Total $824M $348M $204M + 6% YoY + 3% YoY - 9% YoY + 7% YoY in CC + 5% YoY in CC - 4% CC 87% Recurring Revenue as a % of Total Revenue 76% Recurring Revenue as a % of Total Revenue 69% Recurring Revenue as a % of Total Revenue Notes: Amounts in U.S.
Slide 13: Non-GAAP gross margin
$300 78% 76% Gross Margin ($M) Non-GAAP gross margin 75% 75% $200 73% 73% 72% 72% Recurring 73% 71% $100 $0 68% Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Total Gross Margin % of Revenue $325 64% $20 47% 60% 63% 63% 63% Gross Margin ($M) Gross Margin ($M) $15 35% 63% $225 61% 60% 61% 60% Perpet
Slide 14: Non-GAAP operating expenses
Non-GAAP operating expenses SG&A R&D 160 40% 75 20% 73 150 32% 32% 32% 71 30% 31% 30% 17% 17% 140 28% 30% 69 16% 26% 67 15% 130 65 14% 14% 14% 63 13% 120 20% 61 110 59 144 129 136 135 145 134 141 133 57 66 68 72 72 62 64 67 68 100 10% 55 10% Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'21 Q1'2
Slide 15: Non-GAAP operating margin & earnings per share
Non-GAAP operating margin & earnings per share Non-GAAP Operating Margin Earnings per Share 140 23% 23% 0.25 $2.00 1.86 1.85 120 19% 0.2 100 16% $1.50 14% 14% 80 13% 13% 0.15 60 $1.00 0.1 0.66 0.60 40 $0.50 0.42 0.05 0.31 20 0.08 0.12 0 0 $0.00 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 LTM'22
Slide 16: Free cash flow & capital allocation
Free cash flow & capital allocation 419 403 Q3’23 Capital Allocation YTD’23 Capital Allocation Stock repurchase Stock repurchase 199 187 $141M $301M 41 36 Approximately 2.9 million shares Approximately 6.9 million shares 34 31 Return of YTD’23 FCF=161% FY'22 YTD'23 Q3'22 Q3'23 Target = at least 75%
Slide 17: Select cash and debt balances
Select cash and debt balances Net Cash (Debt) $ Millions Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Cash and cash $ 506 $ 569 $ 551 $ 504 $ 348 equivalents $ Millions Total debt $ (498) $ (498) $ (498) $ (498) $ (498) Finance lease $ (111) $ (121) $ (132) $ (140) $ (139) liabilities Q3'22 Q4'22 Q1'23 Q2'23 Q3'23
Slide 18: FY23 financial outlook
FY23 financial outlook FY23 Outlook Q4’23 Outlook Public cloud ARR Total revenue GAAP diluted EPS growth of 53% to 57% YoY growth of 1% to 4% YoY ($0.10) to ($0.06) Total ARR Non-GAAP EPS Non-GAAP diluted EPS growth of 6% to 8% YoY in the range of $2.01 to $2.05 $0.50 to $0.54 Recurring revenue Free
Slide 19: Teradata is strongly committed to ESG
Teradata is strongly committed to ESG Accolades 100 Most America’s Most Sustainable Companies Responsible Companies Recognition Affiliations © 2023 Teradata. All rights reserved. 19
Slide 20: The connected multi-cloud data platform for enterprise analytics
The connected multi-cloud data platform for enterprise analytics Profitable growth Unique connected Strong competitive cloud company data platform position in a large market Over $1B cloud ARR Delivering value in FY25 to customers and shareholders * Teradata forecasts for fiscal 2025. Cloud ARR repr
Slide 21: Appendix
Appendix © 2023 Teradata. All rights reserved. Internal use only 21
Slide 22: Impacts to ARR and Revenue
Impacts to ARR and Revenue ARR Q1 Q2 Q3 Q4 FY21 Q1 Q2 Q3 Q4 FY22 Q1 Q2 Q3 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 Reported YoY Growth Rate 12% 9% 7% 5% 5% 2% -3% -4% -1% -1% 6% 10% 11% Positive/(Negative) on Reported YoY Growth Rate: FX 3% 2% 1% -2% -2% -1% -4% -4% -3% -3% -1% 1% 2% R
Slide 23: GAAP to Non-GAAP Reconciliations and Additional Information
GAAP to Non-GAAP Reconciliations and Additional Information Use of Non-GAAP Measures Teradata reports its results in accordance with GAAP. However, as described below, the Company believes that certain non- GAAP measures such as free cash flow, non-GAAP gross profit, non-GAAP operating income, non-G
Slide 24: Three months ended September 30, 2023 and 2022
GAAP to Non-GAAP Reconciliation Three months ended 2023 2022 Stock-based Other Stock-based Other % Change Compensation Special Compensation Special Non-GAAP GAAP Expense Items 2 Non-GAAP 1 GAAP Expense Items 3 Non-GAAP 1 Yr/Yr September 30, Revenue Recurring Perpetual software licenses, hardware and
Slide 25: Three months ended June 30, 2023 and 2022
GAAP to Non-GAAP Reconciliation Three months ended Stock-based Compensation 2023 Other Special Stock-based Compensation 2022 Other Special % Change Non-GAAP June 30, 2023 2 1 3 GAAP Expense Items Non-GAAP GAAP Expense Items Non-GAAP 1 Yr/Yr Revenue Recurring $ 371 $ - $ - $ 371 $ 345 $ - $ - $ 345 8
Slide 26: Three months ended March 31, 2023 and 2022
GAAP to Non-GAAP Reconciliation Three months ended Stock-based Compensation 2023 Other Special Stock-based Compensation 2022 Other Special % Change Non-GAAP March 31, 2023 2 1 3 1 GAAP Expense Items Non-GAAP GAAP Expense Items Non-GAAP Yr/Yr Revenue Recurring $ 389 $ - $ - $ 389 $ 386 $ - $ - $ 386
Slide 27: Three months ended December 31, 2022 and 2021
GAAP to Non-GAAP Reconciliation Three months ended 2022 2021 Stock-based Other Stock-based Other % Change Compensation Special Compensation Special Non-GAAP 2 1 3 1 GAAP Expense Items Non-GAAP GAAP Expense Items Non-GAAP Yr/Yr December 31, 2022 Revenue Recurring Perpetual software licenses, hardware
Slide 28: Three months ended September 30, 2022 and 2021
GAAP to Non-GAAP Reconciliation Three months ended 2022 2021 Stock-based Other Stock-based Other % Change Compensation Special Compensation Special Non-GAAP 2 1 3 1 GAAP Expense Items Non-GAAP GAAP Expense Items Non-GAAP Yr/Yr September 30, 2022 Revenue Recurring Perpetual software licenses, hardwar
Slide 29: Three months ended June 30, 2022 and 2021
GAAP to Non-GAAP Reconciliation Three months ended 2022 2021 Equity Other Equity Other % Change Compensation Special Compensation Special Non-GAAP 2 1 Items 3 1 GAAP Expense Items Non-GAAP GAAP Expense Non-GAAP Yr/Yr June 30, 2022 Revenue Recurring Perpetual software licenses, hardware and other $ 3
Slide 30: Nine months ended September 30, 2023 and 2022
GAAP to Non-GAAP Reconciliation Nine months ended 2023 2022 Stock-based Other Stock-based Other % Change Compensation Special Compensation Special Non-GAAP 2 Non-GAAP 1 3 1 GAAP Expense Items GAAP Expense Items Non-GAAP Yr/Yr September 30, Revenue Recurring Perpetual software licenses, hardware and
Slide 31: Earnings per share
GAAP to Non-GAAP Reconciliation Earnings per share NOTES: Represents the income tax effect of the pre-tax adjustments to reconcile GAAP to Non-GAAP income based on the applicable jurisdictional statutory tax rate of the underlying item. Including the income tax effect assists investors in understand
Slide 32: Free cash flow reconciliation – September 30, 2023 and 2022
GAAP to Non-GAAP Reconciliation Free cash flow reconciliation – September 30, 2023 and 2022 NOTES: The Company believes that free cash flow is a useful non-GAAP measure for investors. Free cash flow does not have a uniform definition under generally accepted accounting principles in the United State
Slide 33: Thank you
Thank you © 2023 Teradata. All rights reserved.
Slide 34: Teradata
teradata.