Slide 1: Q2'23 Earnings Results
Q2’23 Earnings Results Teradata Investor Relations August 2023
Slide 2: Forward-Looking Statements Non-GAAP Financial Measures
Forward-Looking Statements Non-GAAP Financial Measures This presentation and the accompanying discussion foreign countries, including sanctions, foreign This presentation and the accompanying discussion contain forward-looking statements within the currency fluctuations, and/or acts of war; risks in
Slide 3: Teradata – At a Glance
Teradata – At a Glance Corporate Purpose We transform how businesses work and people live through the power of data We Are Industry Financial ESG The connected multi-cloud data Recognition Highlights Recognition platform for enterprise analytics (4) $414M Public Cloud ARR 1 The leading multi-cloud d
Slide 4: Long-Term Value Creation
We Have a Significant Opportunity to Increase Shareholder Value Capture Accelerate Growth in Scalable the Future Larger Market Opportunity Financial Model Best-of-breed technology Recurring Investing in growth revenue growth Differentiated Opportunities to Efficient lead in large markets operating m
Slide 5: The Forrester Wave: Cloud Data Warehouses, Q2 2023
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, seman
Slide 6: Teradata Named a Leader in The Forrester Wave: Data Management For Analytics
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: 20th time Teradata has been named a Leader
Teradata Named a Leader in the Gartner© Magic Quadrant™ for Cloud Database Management Systems Magic Quadrant 20th time Teradata has been named a Leader Price predictability and financial governance are key strengths. Teradata Vantage offers a high degree of robustness, workload management, and scala
Slide 8: Teradata Ranked Highest in 4 of 4 Use Cases
Teradata Ranked Highest in 4 of 4 Use Cases Gartner Critical Capabilities for Cloud Database Management Systems for Analytical Use Cases* *Gartner, Critical Capabilities for Cloud Database Management Systems, Rick Greenwald, Merv Adrian, Adam Ronthal, Philip Russom, Henry Cook, Xingyu Gu 15 December
Slide 9: Teradata Ranked Highest in 4 of 4 Use Cases (cont'd.)
Teradata Ranked Highest in 4 of 4 Use Cases (cont’d.) Gartner Critical Capabilities for Cloud Database Management Systems for Analytical Use Cases* *Gartner, Critical Capabilities for Cloud Database Management Systems, Rick Greenwald, Merv Adrian, Adam Ronthal, Philip Russom, Henry Cook, Xingyu Gu 1
Slide 10: Teradata – By the Numbers Q2'23
Teradata – By the Numbers Q2’23 Public Cloud ARR Total ARR Recurring Revenue Total Revenue $414M $1.523B $371M $462M 77% YoY 10% YoY 8% YoY 7% YoY 76% YoY in CC 9% YoY in CC 10% YoY in CC 10% YoY in CC NOTES: Total annual recurring revenue (ARR) is defined as the annual value at a point in time of a
Slide 11: Teradata – By the Numbers Q2'23 (Earnings and Cash Flow)
Teradata – By the Numbers Q2’23 GAAP Earnings Non-GAAP Diluted Cash Flow per Share Earnings per Share(1) from Operations Free Cash Flow(1) $0.17 $0.48 $49M $46M from ($0.04) in Q2’22 from $0.33 in Q2’22 from $105M in Q2’22 from $102M in Q2’22 NOTES: (1) Non-GAAP diluted earnings per share and free c
Slide 12: ARR by Product
ARR by Product 1,523 1,492 1,482 1,506 1,437 1,427 1,390 1,374 233 281 259 392 $1.523B 409 343 323 293 859 876 844 898 876 833 802 880 10% YoY 9% YoY CC 357 388 414 209 234 279 148 202 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Cloud Subscription Maint & SW Upgrade Rights NOTES: Amounts in U.S.
Slide 13: Revenue by Type
Revenue by Type 496 475 476 $462M 460 452 462 84 430 417 92 74 90 78 78 26 77 13 19 72 13 18 17 8 14 7% YoY in Q2’23 352 364 386 345 331 357 389 371 10% CC in Q2’23 1- 80% Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Recurring Revenue as Recurring Consulting Perpetual/Other a % of Total Revenue Q
Slide 14: Q2'23 Revenue by Region
Q2’23 Revenue by Region AMS EMEA APJ Total Total Total $268M $118M $76M 8% YoY 15% YoY 3% YoY 10% CC 15% CC 2% CC 86% Recurring Revenue as a % of Total Revenue 75% Recurring Revenue as a % of Total Revenue 68% Recurring Revenue as a % of Total Revenue NOTES: Amounts in U.S. Dollars in Millions. The
Slide 15: 1H'23 Revenue by Region
1H’22 Revenue by Region AMS EMEA APJ Total Total Total $560M $235M $143M 4% YoY 1% YoY 8% YoY 6% CC 7% CC 1% CC 87% Recurring Revenue as a % of Total Revenue 75% Recurring Revenue as a % of Total Revenue 69% Recurring Revenue as a % of Total Revenue NOTES: Amounts in U.S. Dollars in Millions. The im
Slide 16: Non-GAAP Gross Margin
$300 76% 77% Non-GAAP Gross Margin 75% 75% Gross Margin ($M) 76% 74% 75% $200 73% 73% 74% 72% 73% 71% Recurring 72% $100 71% 70% 69% $0 68% Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Total Gross Margin % of Revenue $325 $20 64% 60% Gross Margin ($M) 47% 63% 63% 63% 39% 63% $15 35% 61% 61% 61% 2
Slide 17: Non-GAAP Operating Expenses
Non-GAAP Operating Expenses SG&A R&D 75 160 73 71 150 32% 32% 32% 31% 35% 30% 30% 69 17% 17% 28% 140 26% 67 16% 25% 65 130 15% 63 61 14% 14% 120 14% 15% 59 13% 110 57 139 144 129 136 135 145 134 141 72 66 68 72 72 62 64 67 100 5% 55 12% Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'21 Q4'21 Q1'
Slide 18: Non-GAAP Operating Margin & Earnings Per Share
Non-GAAP Operating Margin & Earnings Per Share Non-GAAP Operating Margin Earnings Per Share 140 23% 23% $2.75 120 19% $2.25 1.99 100 16% 15% 1.73 14% $1.75 80 13% 13% $1.25 60 0.75 $0.75 0.56 40 0.48 0.33 0.17 20 $0.25 0 -$0.25 -0.04 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 LTM'22 LTM'23 Q2'2
Slide 19: Free Cash Flow & Capital Allocation
Free Cash Flow & Capital Allocation Q2’23 YTD’23 Capital Allocation Capital Allocation 419 403 Stock repurchase Stock repurchase $72M $160M 158 151 Approximately 1.6 million shares Approximately 3.9 million shares 105 102 49 46 Return of YTD’23 FCF = 106% FY'22 YTD'23 Q2'22 Q2'23 Target = At least 7
Slide 20: Select Cash and Debt Balances
Select Cash and Debt Balances Net Cash (Debt) $700 $ Millions Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Cash and cash $ 545 $ 506 $ 569 $ 551 $ 504 equivalents $ Millions $0 Total debt $ (497) $ (498) $ (498) $ (498) $ (498) Finance lease $ (118) $ (111) $ (121) $ (132) $ (140) liabilities ($700) Q2'22 Q3'22 Q4
Slide 21: FY23 Financial Outlook
FY23 Financial Outlook FY23 Outlook Public cloud ARR Total ARR Recurring revenue Total revenue Non-GAAP EPS Free cash flow growth of 53% to growth of 6% to growth of 4% to growth of 1% to in the range of of $320 to 57% YoY 8% YoY 7% YoY 4% YoY $1.92 to $2.04 $360 million Q3’23 Outlook GAAP Diluted E
Slide 22: Teradata's Long-Standing Commitment to ESG is Clear and Unwavering
Teradata’s Long-Standing Commitment to ESG is Clear and Unwavering Accolades Recognitions Affiliations 22 ©2023 Teradata
Slide 23: The Connected Multi-cloud Data Platform for Enterprise Analytics
The Connected Multi-cloud Data Platform for Enterprise Analytics Profitable growth Unique connected Strong competitive Over $1B cloud Delivering value cloud company data platform position in a ARR in FY25* to customers large market and shareholders * Teradata forecasts for fiscal 2025. Cloud ARR rep
Slide 24: Appendix
Appendix 24 ©2023 Teradata
Slide 25: Impacts to ARR and Revenue
Impacts to ARR and Revenue ARR Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY21 Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY22 Reported YoY Growth Rate 12% 9% 7% 5% 5% 2% -3% -4% -1% -1% Positive/(Negative) on Reported YoY Growth Rate: FX 3% 2% 1% -2% -2% -1% -4% -4% -3% -3% Russia 0% 0% 0% 0% 0% -4% -4% -4% -4% -4% Tota
Slide 26: 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-GA
Slide 27: GAAP to Non-GAAP Reconciliation for the three months ended June 30, 2023 and 2022
GAAP to Non-GAAP Reconciliation for the three months ended June 30, 2023 and 2022 2023 2022 Stock-based Other Stock-based Other % Change Compensation Special Compensation Special Non-GAAP Amounts in U.S. Dollars in Millions, except per share amounts. Amounts are unaudited. Items 2 1 3 1 GAAP Expense
Slide 28: GAAP to Non-GAAP Reconciliation for the three months ended March 31, 2023 and 2022
GAAP to Non-GAAP Reconciliation for the three months ended March 31, 2023 and 2022 2023 2022 Stock-based Other Stock-based Other % Change Amounts in U.S. Dollars in Millions, except per share amounts. Compensation Special Compensation Special Non-GAAP 2 Amounts are unaudited. GAAP Expense Items Non-
Slide 29: GAAP to Non-GAAP Reconciliation for the three months ended December 31, 2022 and 2021
GAAP to Non-GAAP Reconciliation for the three months ended December 31, 2022 and 2021 2022 2021 Stock-based Other Stock-based Other % Change Compensation Special Compensation Special Non-GAAP Amounts in U.S. Dollars in Millions, except per share amounts. 2 1 3 GAAP Expense Items Non-GAAP GAAP Expens
Slide 30: GAAP to Non-GAAP Reconciliation for the three months ended September 30, 2022 and 2021
GAAP to Non-GAAP Reconciliation for the three months ended September 30, 2022 and 2021 2022 2021 Stock-based Other Stock-based Other % Change Compensation Special Compensation Special Non-GAAP Amounts in U.S. Dollars in Millions, except per share amounts. 2 1 3 1 GAAP Expense Items Non-GAAP GAAP Exp
Slide 31: GAAP to Non-GAAP Reconciliation for the three months ended June 30, 2022 and 2021
GAAP to Non-GAAP Reconciliation for the three months ended June 30, 2022 and 2021 2022 2021 Equity Other Equity Other % Change Compensation Special Compensation Special Non-GAAP Amounts in U.S. Dollars in Millions, except per share amounts. 2 1 3 GAAP Expense Items Non-GAAP GAAP Expense Items Non-GA
Slide 32: GAAP to Non-GAAP Reconciliation for the six months ended June 30, 2023 and 2022
GAAP to Non-GAAP Reconciliation for the six months ended June 30, 2023 and 2022 2023 2022 Stock-based Other Stock-based Other % Change Compensation Special Compensation Special Non-GAAP Amounts in U.S. Dollars in Millions, except per share amounts. 2 1 Amounts are unaudited. GAAP Expense Items Non-G
Slide 33: Earnings Per Share
Earnings Per Share NOTES: i. 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 understanding the tax provision associa
Slide 34: Free cash flow reconciliation – June 30, 2023 and 2022
Free cash flow reconciliation – June 30, 2023 and 2022 NOTES: i. 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 States (GAAP) and therefore, Teradata's
Slide 35: Thank you.
Thank you. ©2023 Teradata