Teradata soars as Q4 recurring revenue exceeds company’s outlook driven by cloud

Teradata said its cloud focus was helping to boost its rate of recurring revenue.

Data analytics software vendor Teradata this afternoon reported Q4 revenue and profit that topped analysts' expectations, and forecast profit this quarter above consensus, and said its total recurring revenue came in higher than it had expected.

The report sent the shares up as much as 15% in late trading

CEO Steve McMillan lauded the company's "cloud-first focus," noting it was responsible for driving the company's annualized recurring revenue for cloud computing rising by 165%, year over year, to $106 million.

Total recurring revenue in the quarter reached $383 million, up 9%, and more than the forecast range of $371 million to $373 million. 

"Our cloud momentum has contributed to another strong quarter of performance, as we exceeded quarterly expectations for recurring revenue, profitability and free cash flow," said McMillan.

Added McMillan, "We are accelerating our cloud roadmap and bringing cloud-native integrations at a record pace, and we anticipate driving annual growth of at least 100% in cloud ARR, as well as year-over-year growth in total company revenue, profitability and free cash flow for Teradata in 2021."

Revenue in the three months ended in December declined slightly to $491 million, yielding EPS of 38 cents, excluding some costs.

Analysts had been modeling $475 million in revenue and 25 cents EPS.

For the current quarter, the company expects profit per share in a range of 38 cents to 40 cents. That compares to consensus for 32 cents. 

The company expects its public cloud computing revenue to again rise by 165% this quarter. 

For the full year 2021, Teradata expects its revenue to rise by "a low-single-digit percentage year-over-year." 

Analysts have been modeling sales growth this year of 1.4%

Recurring revenue in total is expected to increase "at a mid- to high-single digit percentage year-over-year."

Analysts have been modeling recurring revenue growth of 6.4%.