Teradata Reports 2017 Second Quarter Results
ATLANTA, July 27, 2017 /PRNewswire/ -- Teradata Corp. (NYSE: TDC) reported revenue of $513 million for the quarter ended June 30, 2017, versus $599 million in the second quarter of 2016. However, revenue in the second quarter of 2016 included $35 million of revenue from the Marketing Applications business that Teradata sold on July 1, 2016.
Teradata is seeing good momentum in its business transformation as more customers than anticipated chose to purchase Teradata's technology by utilizing the company's new subscription-based options in the quarter. The $58 million of perpetual equivalent contract value from these transactions will be recognized as revenue over time. Product Annual Recurring Revenue (ARR) continues to meaningfully increase as more of Teradata's customers adopt its new purchasing options.
As reported under U.S. Generally Accepted Accounting Principles (GAAP), Teradata recorded a net loss of $4 million in the second quarter, or $(0.03) per share, which compared to $64 million of net income, or $0.49 per diluted share, in the second quarter of 2016. Excluding stock-based compensation expense, and the special items described in footnote #2, non-GAAP net income in the second quarter of 2017 was $28 million, or $0.22 per diluted share. 2016 second quarter non-GAAP net income was $93 million, or $0.71 per diluted share, which excluded stock-based compensation expense, special items and the divested Marketing Applications business.((2))
"We are building the Teradata of the future to provide customers greater choice and make it easier for them to buy and to grow with Teradata," said Vic Lund, President and Chief Executive Officer, Teradata. "Our Teradata Everywhere strategy arms customers with new analytic capabilities built on flexible hybrid ecosystems that combine on-premises and cloud. I am encouraged that subscription licenses are being adopted faster than expected and customer demand is increasing our pipeline. I am more confident than ever about Teradata's future and am looking forward to significant upward momentum through 2017 and into 2018."
Segment Revenue Performance
(in millions)
For the Three Months Ended June 30
----------------------------------
Data and Analytics 2017 2016 % Change as % Change
Reported in Constant
Currency(3)
Americas $271 $325 (17%) (17%)
International 242 239 1% 4%
--- ---
Total Data and Analytics $513 $564 (9%) (8%)
Marketing Applications - 35 (100%) (100%)
--- ---
Total Revenue $513 $599 (14%) (13%)
==== ====
For the Six Months Ended June 30
--------------------------------
Data and Analytics 2017 2016 % Change as % Change
Reported in Constant
Currency(3)
Americas $538 $620 (13%) (13%)
International 466 455 2% 5%
--- ---
Total Data and Analytics $1,004 $1,075 (7%) (6%)
Marketing Applications - 69 (100%) (100%)
--- ---
Total Revenue $1,004 $1,144 (12%) (11%)
====== ======
Gross Margin
Gross margin was 47.2 percent, versus 51.8 percent reported in the second quarter of 2016. On a non-GAAP basis, excluding stock-based compensation expense, special items and the Marketing Applications business from the second quarter of 2016, gross margin was 51.7 percent in the second quarter of 2017, versus 55.9 percent in the second quarter of 2016.((2)) The decrease in the non-GAAP gross margin rate for the quarter resulted from a higher mix of services versus product revenue and lower services margin despite higher product margin.
Operating Income
Teradata incurred an operating loss of $1 million in the second quarter of 2017 compared to $87 million of operating income in the second quarter of 2016. On a non-GAAP basis, excluding stock-based compensation expense, special items and the Marketing Applications business from the second quarter of 2016, operating income was $47 million in the second quarter of 2017, versus $130 million in the second quarter of 2016.((2)) The year-over-year decrease in second quarter non-GAAP operating income was primarily due to lower revenue, lower gross margin rate, and incremental operating expenses to support Teradata's strategic initiatives.
Tax Rate
Teradata's tax rate for the second quarter was (33.3) percent versus 24.7 percent in the second quarter of 2016. The company's non-GAAP effective tax rate for the second quarter was 37.8 percent versus 27.3 percent in the same period in 2016.((2)) The increase in the non-GAAP effective tax rate period-over-period was largely driven by a favorable discrete item recognized in the second quarter of 2016 as well as the higher percentage rate impact of normal discrete items driven by the lower pre-tax earnings denominator period-over-period.
On an annualized basis, Teradata expects its full-year 2017 tax rate to be approximately 5 percent. On a non-GAAP basis, the company's full year 2017 effective tax rate is expected to be approximately 27.5 percent, compared to full year 2016 of 26 percent.
Cash Flow
Teradata generated $61 million of cash from operating activities in the second quarter of 2017, compared to $99 million in the same period in 2016. Free cash flow (cash from operating activities less capital expenditures and additions to capitalized software) in the second quarter was $45 million, compared to $72 million in 2016.((1))
Year to date, Teradata generated $309 million of cash from operating activities, compared to $349 million in the same period in 2016. Free cash flow in the first half of the year was $275 million, compared to $296 million in 2016.((1))
Balance Sheet
Teradata ended the second quarter 2017 with $1.085 billion in cash, which was substantially all held outside the United States. During the quarter, the company used $108 million of domestic cash to repurchase approximately 3.7 million shares of its common stock. During the first half of the year, the company used $151 million of domestic cash to repurchase approximately 5.1 million shares of its common stock.
Teradata intends to repurchase up to $300 million of additional shares of its stock in the second half of the year. Shares will be purchased with cash from U.S. operations as well as Teradata's revolving credit facility.
As of June 30, 2017, Teradata had total debt of $555 million, all of which was outstanding under a term loan. Teradata had no borrowings under its $400 million revolving credit facility as of June 30, 2017.
Guidance
As more of Teradata's customers shift to the company's new subscription-based pricing and cloud deployment options, it is difficult to estimate how much full-year 2017 reported revenue could be impacted by the ratable manner in which revenue is recognized for these new purchasing options.
Teradata is narrowing its range of expectations for 2017 full-year revenue to $2.095 - $2.140 billion, down 8-10 percent from 2016, or down 5-7 percent excluding the Marketing Applications business sold in 2016.((2)) This favorably compares to Teradata's previous expectation that 2017 full-year revenue could be down 5-10 percent excluding the divested Marketing Applications business.
Teradata expects its fourth quarter results to be much stronger than what is expected for the third quarter, even after being seasonally adjusted. However, such expectations are highly dependent upon the rate at which customers convert to subscription-based transactions as well as the factors described in the company's filings with the U.S. Securities and Exchange Commission.
Full-year GAAP earnings per share is projected to be approximately $0.26 to $0.31. On a non-GAAP basis, which excludes stock-based compensation expense, and other special items, earnings per share for the full year is expected to be $1.22 to $1.27, before the effect of additional share repurchases.((2))
Business Transformation Update
Teradata has moved from the strategy and implementation stage of its transformation to the execution stage, and has made a number of advancements towards its business transformation in the second quarter, including:
-- Aligning resources to its go-to-market approach of focusing on the
largest analytic opportunities.
-- Advancing its Teradata Everywhere strategy, including hybrid-cloud
deployment options, software license portability and flexible pricing
and purchasing options.
-- Maturing its business-led selling approach, based on new use cases that
qualify Teradata for expansion into new areas of customer business, and
-- Optimizing and streamlining services offers to a more customer-driven
view of what Teradata delivers to the market.
These, and other advancements across the company, are resonating with customers. The company is seeing strong customer interest in its Teradata Everywhere strategy as well as its new purchasing and deployment options.
Earnings Conference Call
A conference call is scheduled today at 8:30 a.m. (ET) to discuss the company's second quarter 2017 results. Access to the conference call, as well as a replay of the call, is available on Teradata's website at investor.teradata.com.
Supplemental Financial Information
Additional information regarding Teradata's operating results is provided below as well as on the Investor Relations page of Teradata's website.
1. As described below, the company believes that free cash flow is a useful non-GAAP measure for investors. Teradata defines free cash flow as cash provided/used by operating activities less capital expenditures for property and equipment, and additions to capitalized software. Free cash flow does not have a uniform definition under GAAP and therefore, Teradata's definition may differ from other companies' definitions of this measure. Teradata's management uses free cash flow to assess the financial performance of the company and believes it is useful for investors because it relates the operating cash flow of the company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures for, among other things, investment in the company's existing businesses, strategic acquisitions, strengthening the company's balance sheet, repurchase of the company's stock and repayment of the company's debt obligations, if any. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure. This non-GAAP measure is not meant to be considered in isolation, as a substitute for, or superior to, results determined in accordance with GAAP, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP.
Effective the first quarter of 2017, the company no longer capitalizes certain software development costs; rather, these costs are currently expensed as research and development costs and are included as a component of cash provided by operating activities; this change does not impact the methodology of the free cash flow calculation.
For the Three For the Six
Months Months
Ended June 30 Ended June 30
(in millions) (in millions)
------------ ------------
2017 2016 2017 2016
---- ---- ---- ----
Cash provided by operating activities (GAAP) $61 $99 $309 $349
Less capital expenditures for:
------------------------------
Expenditures for property and equipment (14) (9) (30) (17)
Additions to capitalized software (2) (18) (4) (36)
--- --- --- ---
Total capital expenditures (16) (27) (34) (53)
--- --- --- ---
Free Cash Flow (non-GAAP measure) $45 $72 $275 $296
=== === ==== ====
2. Teradata reports its results in accordance with GAAP. However, as described below, the company believes that certain non-GAAP measures (such as non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per diluted share, or EPS, all of which exclude certain items, sold businesses, as well as free cash flow) are useful for investors. Teradata's non-GAAP measures are not meant to be considered in isolation or as substitutes for, or superior to, results determined in accordance with GAAP, and should be read only in conjunction with the condensed consolidated financial statements prepared in accordance with GAAP.
The following tables reconcile Teradata's actual and projected results and EPS under GAAP to the company's actual and projected non-GAAP results and EPS for the periods presented, which exclude certain specified items. Teradata's management internally uses supplemental non-GAAP financial measures, such as gross profit, operating income, net income and EPS, excluding certain items, to understand, manage and evaluate its business and support operating decisions on a regular basis. The company believes such non-GAAP financial measures (1) provide useful information to investors regarding the underlying business trends and performance of the company's ongoing operations, (2) are useful for period-over-period comparisons of such operations and results, that may be more easily compared to peer companies and allow investors a view of the company's operating results excluding stock-based compensation expense, special items and transactions such as sold businesses, including the Marketing Applications business which was sold on July 1, 2016, (3) provide useful information to management and investors regarding present and future business trends, and (4) provide consistency and comparability with past reports and projections of future results.
Teradata's reconciliation of GAAP to non-GAAP results included in this release.
(in millions, except per share data)
For the Three Months For the Six Months
Ended June 30 Ended June 30
------------- -------------
Gross Profit: 2017 2016 %Chg %Chg
as as
Rpt'd Rpt'd
2017 2016
---- ----
GAAP Gross Profit $242 $310 (22%) $466 $579 (20%)
% of Revenue 47.2% 51.8% 46.4% 50.6%
Excluding:
Stock-based compensation expense 3 4 7 8
Amortization of acquisition-related intangible - - - 2
assets
Acquisition, integration, reorganization and 2 2 4 5
transformation related costs
Capitalized Software ASC 985-20 18 16 39 32
Marketing Applications gross profit* - (17) - (34)
--- --- --- ---
Non-GAAP Gross Profit $265 $315 (16%) $516 $592 (13%)
==== ==== ==== ====
% of Revenue 51.7% 55.9% 51.4% 55.1%
Operating (Loss)/Income:
GAAP Operating (Loss)/Income: $(1) $87 $(2) $45
% of Revenue (0.2%) 14.5% (0.2%) 3.9%
Excluding:
Stock-based compensation expense 18 12 34 33
Amortization of acquisition-related intangible 2 2 3 7
assets
Acquisition, integration, reorganization and 10 20 31 40
transformation related costs
Impairment of goodwill and other assets - - - 80
Capitalized Software ASC 985-20 18 (1) 39 (1)
Marketing Applications operating loss* - 10 - 18
--- --- --- ---
Non-GAAP Operating Income $47 $130 (64%) $105 $222 (53%)
=== ==== ==== ====
% of Revenue 9.2% 23.0% 10.5% 20.7%
Net (Loss)/Income:
GAAP Net (Loss)/Income $(4) $64 $(6) $18
% of Revenue (0.8%) 10.7% (0.6%) 1.6%
Excluding:
Stock-based compensation expense 18 12 34 33
Amortization of acquisition-related intangible 2 2 3 7
assets
Acquisition, integration, reorganization 10 20 31 40
and transformation related costs
Impairment of goodwill and other assets - - - 80
Capitalized Software ASC 985-20 18 (1) 39 (1)
Marketing Applications net loss* - 10 - 18
Income tax adjustments** (16) (14) (36) (40)
--- ---
Non-GAAP Net Income $28 $93 (70%) $65 $155 (58%)
=== === === ====
% of Revenue 5.5% 16.5% 6.5% 14.4%
Three Months Six Months
Ended June 30 Ended June 30
------------- -------------
Earnings Per Share: 2017 2016 2016 Full Year 2017
2017 Guidance
----
GAAP (Loss)/Earnings Per Share $(0.03) $0.49 $(0.05) $0.14 $0.26- $0.31
Excluding:
Stock-based compensation expense 0.14 0.09 0.26 0.25 0.54
Amortization of acquisition-related 0.02 0.02 0.02 0.05 0.05
intangible assets
Acquisition, integration, reorganization 0.08 0.15 0.24 0.30 0.33
and transformation related costs
Impairment of goodwill and other assets - - - 0.61 -
Marketing Applications loss per share* - 0.08 - 0.14 -
Capitalized Software ASC 985-20 0.14 (0.01) 0.30 (0.01) 0.53
Income tax adjustments** (0.13) (0.11) (0.27) (0.30) (0.49)
-----
Non-GAAP Diluted Earnings Per Share $0.22 $0.71 $0.50 $1.18 $1.22-$1.27
===== ===== ===== ===== ===========
Revenue Guidance
2016 2017 % Change
Actual Guidance
------ --------
Reported Revenue $2,322 $2,095 - $2,140 (8%) - (10%)
Less: Revenue from Marketing Applications
business sold in 2016
69 -
--- ---
Revenue excluding Marketing Applications $2,253 $2,095 - $2,140 (5%) - (7%)
*Represents the results of
operations of Teradata's Marketing
Applications business, which is an
adjustment to arrive at non-GAAP
results due to sale of this
business on July 1, 2016.
**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 associated with those
adjustments and the effective tax
rate related to the underlying
business and performance of the
company's ongoing operations. As a
result of these adjustments, the
Company's Non-GAAP effective tax
rate for the second quarter of
2017 was 37.8% and 27.3% in the
second quarter of 2016.
3. The impact of currency is determined by calculating the prior-period results using the current-year monthly average currency rates as indicated in the "segment revenue performance" section of this release. See the foreign currency fluctuation schedule on the Investor Relations page of the company's web site at investor.teradata.com, which is used to determine revenue on a constant currency ("CC") basis.
Note to Investors
This news release contains forward-looking statements, including statements as to anticipated or expected results, beliefs, opinions and future financial performance, within the meaning of Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements include projections of revenue, profit growth and other financial items, future economic performance and statements concerning analysts' earnings estimates, among other things. These forward-looking statements are based upon current expectations and assumptions and involve risks and uncertainties that could cause Teradata's actual results to differ materially. In addition to the factors discussed in this release, other risks and uncertainties could affect our future results, and could cause actual results to differ materially from those expressed in such forward-looking statements. Such factors include those relating to: the global economic environment in general or on the ability of our suppliers to meet their commitments to us, or the timing of purchases by our current and potential customers, and other general economic and business conditions; the rapidly changing and intensely competitive nature of the information technology industry and the data analytics business, including the increased pressure on price/performance for data analytics solutions and changes in customers' buying patterns; fluctuations in our operating results, unanticipated delays or accelerations in our sales cycles and the difficulty of accurately estimating revenues; failure to realize the anticipated benefits of our business transformation program, divestitures, senior management changes, or other restructuring and cost saving initiatives; risks inherent in operating in foreign countries, including the impact of economic, political, legal, regulatory, compliance, cultural, foreign currency fluctuations and other conditions abroad (including Brexit); the timely and successful development, production or acquisition and market acceptance of new and existing products and services, including our ability to accelerate market acceptance of new products and services as well as the reliability, quality, security and operability of new products because of the difficulty and complexity associated with their testing and production; tax rates; turnover of workforce and the ability to attract and retain skilled employees; availability and successful exploitation of new acquisition and alliance opportunities; our ability to execute integration plans for newly acquired entities, including the possibility that expected synergies and operating efficiencies may not be achieved, that such integration efforts may be more difficult, time-consuming or costly than expected, and that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction; recurring revenue may decline or fail to be renewed; changes in Generally Accepted Accounting Principles (GAAP) and the resulting impact, if any, on the company's accounting policies; continued efforts to establish and maintain best-in-class and secure internal information technology and control systems; and other factors described from time-to-time in the company's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K and subsequent quarterly reports on Forms 10-Q, as well as the company's annual reports to stockholders. The company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Teradata
Teradata empowers companies to achieve high-impact business outcomes. Our focus on business solutions for analytics, coupled with our industry leading technology and architecture expertise, can unleash the potential of great companies. Visit teradata.com.
Get to know Teradata:
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Teradata and the Teradata logo are trademarks or registered trademarks of Teradata Corporation and/or its affiliates in the U.S. and worldwide.
Schedule A
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts - unaudited)
For the Period Ended June 30
----------------------------
Three Months Six Months
------------ ----------
2017 2016 % Chg 2017 2016 % Chg
---- ---- ----- ---- ---- -----
Revenue
Product and cloud $166 $243 (32%) $332 $451 (26%)
Services 347 356 (3%) 672 693 (3%)
--- --- --- ---
Total revenue 513 599 (14%) 1,004 1,144 (12%)
Product and cloud gross profit 94 142 184 261
% of Revenue 56.6% 58.4% 55.4% 57.9%
Services gross profit 148 168 282 318
% of Revenue 42.7% 47.2% 42.0% 45.9%
---- ---- ---- ----
Total gross profit 242 310 466 579
% of Revenue 47.2% 51.8% 46.4% 50.6%
Selling, general and administrative expenses 165 172 320 346
Research and development expenses 78 51 148 108
Impairment of goodwill, acquired intangibles and other assets - - - 80
--- --- --- ---
(Loss) income from operations (1) 87 (2) 45
% of Revenue (0.2%) 14.5% (0.2%) 3.9%
Other expense, net (2) (2) (3) (5)
--- --- --- ---
(Loss) income before income taxes (3) 85 (5) 40
% of Revenue (0.6%) 14.2% (0.5%) 3.5%
Income tax expense 1 21 1 22
--- --- --- ---
% Tax rate (33.3%) 24.7% (20.0%) 55.0%
Net (loss) income $(4) $64 $(6) $18
=== === === ===
% of Revenue (0.8%) 10.7% (0.6%) 1.6%
Net (loss) income per common share
Basic $(0.03) $0.49 $(0.05) $0.14
Diluted $(0.03) $0.49 $(0.05) $0.14
Weighted average common shares outstanding
Basic 127.9 129.8 129.2 129.6
Diluted 127.9 131.5 129.2 131.2
Schedule B
TERADATA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions - unaudited)
June 30, March 31, December 31,
2017 2017 2016
---- ---- ----
Assets
------
Current assets
Cash and cash equivalents $1,085 $1,164 $974
Accounts receivable, net 356 442 548
Inventories 42 40 34
Other current assets 65 58 65
--- --- ---
Total current assets 1,548 1,704 1,621
Property and equipment, net 143 142 138
Capitalized software, net 150 167 187
Goodwill 401 392 390
Acquired intangible assets 21 10 11
Deferred income taxes 51 50 49
Other assets 24 18 17
--- --- ---
Total assets $2,338 $2,483 $2,413
====== ====== ======
Liabilities and stockholders' equity
------------------------------------
Current liabilities
Current portion of long-term debt $45 $38 $30
Accounts payable 97 89 103
Payroll and benefits liabilities 129 109 139
Deferred revenue 431 514 369
Other current liabilities 90 85 88
--- --- ---
Total current liabilities 792 835 729
Long-term debt 508 523 538
Pension and other postemployment plan liabilities 107 101 96
Long-term deferred revenue 10 14 14
Deferred tax liabilities 14 25 33
Other liabilities 35 31 32
--- --- ---
Total liabilities 1,466 1,529 1,442
----- ----- -----
Stockholders' equity
Common stock 1 1 1
Paid-in capital 1,266 1,243 1,220
Accumulated deficit (318) (207) (161)
Accumulated other comprehensive loss (77) (83) (89)
--- --- ---
Total stockholders' equity 872 954 971
--- --- ---
Total liabilities and stockholders' equity $2,338 $2,483 $2,413
====== ====== ======
Schedule C
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions - unaudited)
For the Period Ended June 30
Three Months Six Months
------------ ----------
2017 2016 2017 2016
---- ---- ---- ----
Operating activities
Net (loss) income $(4) $64 $(6) $18
Adjustments to reconcile net (loss) income to net cash provided
by operating activities:
Depreciation and amortization 34 31 70 65
Stock-based compensation expense 19 12 35 33
Deferred income taxes (12) (5) (20) (15)
Impairment of goodwill, acquired intangibles and other assets - - - 80
Changes in assets and liabilities:
Receivables 86 56 192 122
Inventories (2) 16 (8) 11
Current payables and accrued expenses 31 6 (13) (10)
Deferred revenue (87) (76) 58 64
Other assets and liabilities (4) (5) 1 (19)
--- --- --- ---
Net cash provided by operating activities 61 99 309 349
Investing activities
Expenditures for property and equipment (14) (9) (30) (17)
Proceeds from sales of property and equipment - 5 - 5
Additions to capitalized software (2) (18) (4) (36)
Business acquisitions and other investing activities (18) (1) (18) (4)
--- --- --- ---
Net cash used in investing activities (34) (23) (52) (52)
Financing activities
Repurchases of common stock (108) (4) (151) (51)
Repayments of long-term borrowings (7) (8) (15) (15)
Repayments of credit facility borrowings - (80) - (180)
Other financing activities, net 5 10 12 19
--- --- --- ---
Net cash used in financing activities (110) (82) (154) (227)
Effect of exchange rate changes on cash and cash equivalents 4 (2) 8 -
--- --- --- ---
(Decrease) increase in cash and cash equivalents (79) (8) 111 70
Cash and cash equivalents at beginning of period 1,164 917 974 839
----- --- --- ---
Cash and cash equivalents at end of period $1,085 $909 $1,085 $909
====== ==== ====== ====
Schedule D
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions - unaudited)
For the Three Months Ended June 30
For the Six Months Ended June 30
--------------------------------
2017 2016 % Change % Change 2017 2016 % Change % Change
As Constant As Constant
Reported Currency (2) Reported Currency (2)
-------- ----------- -------- -----------
Segment Revenue
Americas Data and Analytics $271 $325 (17%) (17%) $538 $620 (13%) (13%)
International Data and Analytics 242 239 1% 4% 466 455 2% 5%
--- --- --- ---
Total Data and Analytics 513 564 (9%) (8%) 1,004 1,075 (7%) (6%)
Marketing Applications - 35 (100%) (100%) - 69 (100%) (100%)
--- --- --- ---
Total segment revenue 513 599 (14%) (13%) 1,004 1,144 (12%) (11%)
Segment gross profit
Americas Data and Analytics 158 194 309 369
% of Revenue 58.3% 59.7% 57.4% 59.5%
International Data and Analytics 107 121 207 223
% of Revenue 44.2% 50.6% 44.4% 49.0%
---- ---- ---- ----
Total Data and Analytics gross profit 265 315 516 592
% of Revenue 51.7% 55.9% 51.4% 55.1%
Marketing Applications - 17 - 34
% of Revenue - 48.6% - 49.3%
--- ---- --- ----
Total segment gross profit 265 332 516 626
% of Revenue 51.7% 55.4% 51.4% 54.7%
Reconciling items(1) (23) (22) (50) (47)
--- --- --- ---
Total gross profit $242 $310 $466 $579
% of Revenue 47.2% 51.8% 46.4% 50.6%
(1) Reconciling items include stock-based compensation, capitalized software, amortization of acquisition-related intangible assets and
acquisition, integration and reorganization-related items.
(2) The impact of currency is determined by calculating the prior period results using the current-year monthly
average currency rates.
Schedule E
TERADATA CORPORATION
REVENUE COMPARISON AS REPORTED AND CONSTANT CURRENCY
(in millions - unaudited)
For the three months ended June 30 For the six months ended June 30
---------------------------------- --------------------------------
2017 2016 % Change % Change 2017 2016 % Change % Change
As Constant As Constant
Reported Currency* Reported Currency*
-------- -------- -------- --------
Revenue
Recurring revenue
Product - rights to upgrades, subscription and $75 $69 9% 10% $151 $139 9% 10%
cloud
Maintenance - software and hardware 182 174 5% 5% 358 342 5% 5%
--- --- --- ---
Total recurring revenue 257 243 6% 7% 509 481 6% 7%
% of total revenue 50% 41% 51% 42%
Product - perpetual licenses and hardware 91 154 (41%) (41%) 181 274 (34%) (33%)
Consulting services 165 167 (1%) 1% 314 320 (2%) (1%)
Marketing Applications - 35 (100%) (100%) - 69 (100%) (100%)
Total revenue $513 $599 (14%) (13%) $1,004 $1,144 (12%) (11%)
==== ==== ====== ======
Revenue
Product and cloud $166 $223 (26%) (25%) $332 $412 (19%) (19%)
Services 347 341 2% 3% 672 663 1% 2%
--- --- --- ---
Total Data and Analytics 513 564 (9%) (8%) 1,004 1,075 (7%) (6%)
Marketing Applications - 35 (100%) (100%) - 69 (100%) (100%)
Total revenue $513 $599 (14%) (13%) $1,004 $1,144 (12%) (11%)
==== ==== ====== ======
*The impact of currency is determined by calculating the prior period results using the current-year monthly average currency rates.
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SOURCE Teradata Corp.
