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Teradata shares fall 3% on soft second-quarter earnings outlook by Investing.com

SAN DIEGO – Teradata Corp. (NYSE: NYSE:) reported a slight improvement over first-quarter adjusted earnings per share (EPS), but saw its shares fall 3.3% on softer-than-expected second-quarter earnings guidance.

The data analytics company reported first-quarter adjusted earnings per share of $0.57, slightly higher than the analyst consensus of $0.55. However, the company’s revenue met expectations at $465 million, in line with the consensus estimate of $465.49 million.

The company’s public cloud annual recurring revenue (ARR) showed remarkable growth, increasing 36% in constant currency to $525 million compared to the same period last year. Despite this, Teradata’s total ARR saw a slight decline of 2% to $1.480 billion.

Recurring revenue was flat at $388 million, while total revenue decreased 2% from last year’s $476 million. The company attributed the overall flat performance to a continued strong cloud net expansion rate of 123%, even though quarter-over-quarter ARR growth was slightly below expectations.

Looking ahead, Teradata provided guidance for the second quarter of adjusted earnings per share of $0.46 to $0.50, which is at the lower end of the analyst consensus of $0.50. For full-year 2024, the company forecasts adjusted earnings per share of $2.15 to $2.31, with the midpoint slightly above the $2.20 consensus.

President and CEO Steve McMillan expressed confidence in the company’s technology and its role in powering complex analytics at scale, especially as companies explore the use of AI. CFO Claire Bramley highlighted the company’s commitment to improving growth trajectories and investing in long-term objectives, while also focusing on profitability and shareholder value.

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The stock’s negative reaction reflects investor concerns about the soft earnings outlook for the coming quarter, which overshadows first-quarter earnings numbers and robust ARR growth in public cloud.

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