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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Teradata Corporation | NYSE:TDC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.04 | -0.12% | 33.53 | 33.60 | 33.25 | 33.53 | 601,980 | 01:00:00 |
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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75-3236470
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Description
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Page
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Item 1.
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Financial Statements
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Item 2.
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Item 3.
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Item 4.
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PART II—OTHER INFORMATION
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Description
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Page
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 1.
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Financial Statements.
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Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
In millions, except per share amounts
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Recurring
|
$
|
312
|
|
|
$
|
281
|
|
|
$
|
614
|
|
|
$
|
554
|
|
Perpetual software licenses and hardware
|
97
|
|
|
91
|
|
|
166
|
|
|
181
|
|
||||
Consulting services
|
135
|
|
|
141
|
|
|
270
|
|
|
269
|
|
||||
Total revenue
|
544
|
|
|
513
|
|
|
1,050
|
|
|
1,004
|
|
||||
Cost of revenue
|
|
|
|
|
|
|
|
||||||||
Cost of recurring
|
88
|
|
|
72
|
|
|
178
|
|
|
139
|
|
||||
Cost of perpetual software licenses and hardware
|
73
|
|
|
57
|
|
|
121
|
|
|
118
|
|
||||
Cost of consulting services
|
133
|
|
|
142
|
|
|
278
|
|
|
280
|
|
||||
Total cost of revenue
|
294
|
|
|
271
|
|
|
577
|
|
|
537
|
|
||||
Gross profit
|
250
|
|
|
242
|
|
|
473
|
|
|
467
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
163
|
|
|
165
|
|
|
315
|
|
|
320
|
|
||||
Research and development expenses
|
77
|
|
|
78
|
|
|
152
|
|
|
148
|
|
||||
Total operating expenses
|
240
|
|
|
243
|
|
|
467
|
|
|
468
|
|
||||
Income (loss) from operations
|
10
|
|
|
(1
|
)
|
|
6
|
|
|
(1
|
)
|
||||
Other expense, net
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(5
|
)
|
|
(4
|
)
|
|
(10
|
)
|
|
(7
|
)
|
||||
Interest income
|
4
|
|
|
3
|
|
|
7
|
|
|
5
|
|
||||
Other expense
|
(3
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(2
|
)
|
||||
Total other expense, net
|
(4
|
)
|
|
(2
|
)
|
|
(8
|
)
|
|
(4
|
)
|
||||
Income (loss) before income taxes
|
6
|
|
|
(3
|
)
|
|
(2
|
)
|
|
(5
|
)
|
||||
Income tax expense
|
2
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Net income (loss)
|
$
|
4
|
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
Net income (loss) per weighted average common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.03
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
Diluted
|
$
|
0.03
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
119.5
|
|
|
127.9
|
|
|
120.4
|
|
|
129.2
|
|
||||
Diluted
|
121.5
|
|
|
127.9
|
|
|
120.4
|
|
|
129.2
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
In millions
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
$
|
4
|
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(21
|
)
|
|
5
|
|
|
(17
|
)
|
|
10
|
|
||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Unrealized loss on derivatives, before tax
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Unrealized loss on derivatives, tax portion
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unrealized loss on derivatives, net of tax
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Defined benefit plans:
|
|
|
|
|
|
|
|
||||||||
Defined benefit plan adjustment, before tax
|
4
|
|
|
1
|
|
|
4
|
|
|
2
|
|
||||
Defined benefit plan adjustment, tax portion
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Defined benefit plan adjustment, net of tax
|
3
|
|
|
1
|
|
|
3
|
|
|
2
|
|
||||
Other comprehensive (loss) income
|
(21
|
)
|
|
6
|
|
|
(17
|
)
|
|
12
|
|
||||
Comprehensive (loss) income
|
$
|
(17
|
)
|
|
$
|
2
|
|
|
$
|
(20
|
)
|
|
$
|
6
|
|
In millions, except per share amounts
|
June 30,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
882
|
|
|
$
|
1,089
|
|
Accounts receivable, net
|
369
|
|
|
554
|
|
||
Inventories
|
28
|
|
|
30
|
|
||
Other current assets
|
104
|
|
|
77
|
|
||
Total current assets
|
1,383
|
|
|
1,750
|
|
||
Property and equipment, net
|
187
|
|
|
162
|
|
||
Capitalized software, net
|
95
|
|
|
121
|
|
||
Goodwill
|
397
|
|
|
399
|
|
||
Acquired intangible assets, net
|
19
|
|
|
23
|
|
||
Deferred income taxes
|
54
|
|
|
57
|
|
||
Other assets
|
68
|
|
|
44
|
|
||
Total assets
|
$
|
2,203
|
|
|
$
|
2,556
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
6
|
|
|
$
|
60
|
|
Short-term borrowings
|
—
|
|
|
240
|
|
||
Accounts payable
|
83
|
|
|
74
|
|
||
Payroll and benefits liabilities
|
136
|
|
|
173
|
|
||
Deferred revenue
|
461
|
|
|
414
|
|
||
Other current liabilities
|
88
|
|
|
102
|
|
||
Total current liabilities
|
774
|
|
|
1,063
|
|
||
Long-term debt
|
491
|
|
|
478
|
|
||
Pension and other postemployment plan liabilities
|
109
|
|
|
109
|
|
||
Long-term deferred revenue
|
109
|
|
|
85
|
|
||
Deferred tax liabilities
|
8
|
|
|
4
|
|
||
Other liabilities
|
140
|
|
|
149
|
|
||
Total liabilities
|
1,631
|
|
|
1,888
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
|
—
|
|
|
—
|
|
||
Common stock: par value $0.01 per share, 500.0 shares authorized, 119.0 and 121.9 shares issued at June 30, 2018 and December 31, 2017, respectively
|
1
|
|
|
1
|
|
||
Paid-in capital
|
1,376
|
|
|
1,320
|
|
||
Accumulated deficit
|
(714
|
)
|
|
(579
|
)
|
||
Accumulated other comprehensive loss
|
(91
|
)
|
|
(74
|
)
|
||
Total stockholders’ equity
|
572
|
|
|
668
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,203
|
|
|
$
|
2,556
|
|
|
Six Months Ended
June 30, |
||||||
In millions
|
2018
|
|
2017
|
||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
64
|
|
|
70
|
|
||
Stock-based compensation expense
|
35
|
|
|
35
|
|
||
Deferred income taxes
|
(6
|
)
|
|
(20
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Receivables
|
185
|
|
|
192
|
|
||
Inventories
|
2
|
|
|
(8
|
)
|
||
Current payables and accrued expenses
|
(31
|
)
|
|
(13
|
)
|
||
Deferred revenue
|
90
|
|
|
58
|
|
||
Other assets and liabilities
|
(46
|
)
|
|
1
|
|
||
Net cash provided by operating activities
|
290
|
|
|
309
|
|
||
Investing activities
|
|
|
|
||||
Expenditures for property and equipment
|
(58
|
)
|
|
(30
|
)
|
||
Additions to capitalized software
|
(4
|
)
|
|
(4
|
)
|
||
Business acquisitions and other investing activities, net
|
—
|
|
|
(18
|
)
|
||
Net cash used in investing activities
|
(62
|
)
|
|
(52
|
)
|
||
Financing activities
|
|
|
|
||||
Repurchases of common stock
|
(157
|
)
|
|
(151
|
)
|
||
Repayments of long-term borrowings
|
(40
|
)
|
|
(15
|
)
|
||
Repayments of credit facility borrowings
|
(240
|
)
|
|
—
|
|
||
Other financing activities, net
|
18
|
|
|
12
|
|
||
Net cash used in financing activities
|
(419
|
)
|
|
(154
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(15
|
)
|
|
8
|
|
||
(Decrease) increase in cash, cash equivalents and restricted cash
|
(206
|
)
|
|
111
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
1,089
|
|
|
974
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
883
|
|
|
$
|
1,085
|
|
|
June 30, 2018
|
|
Dec 31, 2017
|
||||
Cash and cash equivalents
|
$
|
882
|
|
|
$
|
1,089
|
|
Restricted cash
|
1
|
|
|
—
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
883
|
|
|
$
|
1,089
|
|
1.
|
identify the contract with a customer,
|
2.
|
identify the performance obligations in the contract,
|
3.
|
determine the transaction price,
|
4.
|
allocate the transaction price to the performance obligations in the contract, and
|
5.
|
recognize revenue when (or as) the Company satisfies a performance obligation.
|
•
|
Subscriptions
- The Company sells on and off-premises subscriptions to our customers through our subscription licenses, cloud, service model, and rental offerings. Teradata’s subscription licenses include a right-to-use license and revenue is recognized upfront at a point in time unless the customer has a contractual right to cancel, where revenue is recognized on a month-to-month basis. Cloud and service model arrangements include a right-to-access software license on Teradata owned or third party owned hardware such as the public cloud. Revenue is recognized ratably over the contract term. Service models typically include a minimum fixed amount that is recognized ratably over the contract term and may include an elastic amount for usage above the minimum, which is recognized monthly based on actual utilization. For our rental offering, the Company owns the hardware and may or may not provide managed services. The revenue for these arrangements is generally recognized straight-line over the term of the contract and is generally accounted for as an operating lease and considered outside the scope of Topic 606.
|
•
|
Maintenance and software upgrade rights
- Revenue for maintenance and unspecified software upgrade rights on a when-an-if-available basis are recognized straight-line over the term of the contract.
|
•
|
Perpetual software licenses and hardware
- Revenue for software is generally recognized when the customer has the ability to use and benefit from its right to use the license. Hardware is typically recognized upon delivery once title and risk of loss have been transferred (when control has passed).
|
•
|
Consulting services
- Revenue for consulting, implementation and installation services is recognized as services are provided. The Company accounts for individual services as separate performance obligations if a service is separately identifiable from other items in a combined arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(in millions)
|
2018
|
|
2017*
|
|
2018
|
|
2017*
|
||||||||
Americas
|
|
|
|
|
|
|
|
||||||||
Recurring
|
$
|
197
|
|
|
$
|
182
|
|
|
$
|
391
|
|
|
$
|
361
|
|
Perpetual software licenses and hardware
|
41
|
|
|
35
|
|
|
63
|
|
|
68
|
|
||||
Consulting services
|
49
|
|
|
54
|
|
|
97
|
|
|
109
|
|
||||
Total Americas
|
287
|
|
|
271
|
|
|
551
|
|
|
538
|
|
||||
International
|
|
|
|
|
|
|
|
||||||||
Recurring
|
113
|
|
|
99
|
|
|
222
|
|
|
193
|
|
||||
Perpetual software licenses and hardware
|
57
|
|
|
56
|
|
|
104
|
|
|
113
|
|
||||
Consulting services
|
87
|
|
|
87
|
|
|
173
|
|
|
160
|
|
||||
Total International
|
257
|
|
|
242
|
|
|
499
|
|
|
466
|
|
||||
Total Revenue
|
$
|
544
|
|
|
$
|
513
|
|
|
$
|
1,050
|
|
|
$
|
1,004
|
|
|
|
|
|
|
|
|
|
(in millions)
|
June 30, 2018
|
|
January 1, 2018
(as adjusted)
|
||||
Accounts receivable, net
|
$
|
369
|
|
|
$
|
534
|
|
Contract assets
|
10
|
|
|
20
|
|
||
Current deferred revenue
|
461
|
|
|
395
|
|
||
Long-term deferred revenue
|
109
|
|
|
85
|
|
(in millions)
|
|
Total at June 30, 2018
|
|
Year 1
|
|
Year 2 and Thereafter
|
||||||
Remaining unsatisfied obligations
|
|
$
|
1,820
|
|
|
$
|
950
|
|
|
$
|
870
|
|
•
|
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.
|
•
|
Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment cost and are included in cost of revenues.
|
•
|
The Company does not adjust for the effects of a significant financing component if the period between performance and customer payment is one year or less.
|
•
|
The Company expenses the costs to obtain a contract as incurred when the expected amortization period is one year or less.
|
•
|
The Company reduced current deferred revenue and accumulated deficit by
$19 million
for contracts that were not complete as of the date of adoption and would have been recognized in a prior period under Topic 606. The revenue adjustment primarily relates to term licenses that are recognized upfront under Topic 606 but were recognized ratably under the previous guidance.
|
•
|
Prior to the adoption of Topic 606, the Company expensed sales commissions on long-term contracts. Under Topic 606, the Company capitalizes these incremental costs of obtaining customer contracts. The impact of this change resulted in an increase of other assets and a reduction in accumulated deficit of
$17 million
on January 1, 2018.
|
•
|
The tax impact of these items was
$10 million
, which was recorded as a deferred tax liability, resulting in a net
$26 million
reduction in accumulated deficit on January 1, 2018.
|
•
|
In addition, the Company reclassified
$20 million
of contract assets from accounts receivable to other current assets on January 1, 2018.
|
•
|
The impact to revenues was a net increase of
$19 million
and
$20 million
for the three and six months ended June 30, 2018 under Topic 606.
|
•
|
Topic 606 resulted in the amortization of capitalized contract costs that were recorded as part of the cumulative effect adjustment upon adoption. The amortization of these capitalized costs was offset by new capitalized costs in the period resulting in
$3 million
and
$8 million
less selling, general and administrative expenses for the three and six months ended June 30, 2018 under Topic 606.
|
•
|
As a result of the higher revenue and capitalization of contract costs under Topic 606, net income reported under Topic 606 was higher by
$4 million
or
$0.03
per share for the three months ended June 30, 2018 and higher by
$8 million
or
$0.07
for the six months ended June 30, 2018.
|
•
|
Total reported assets at June 30, 2018 were
$8 million
higher under Topic 606, which includes $
24 million
of capitalized contract costs that were expensed as incurred under the previous guidance, partially offset by
$16 million
of deferred costs related to the timing of revenue that would have been deferred under the previous guidance but recognized under Topic 606.
|
•
|
Total reported liabilities were
$36 million
less under Topic 606 primarily due to revenue that would have been deferred and recognized over time under the previous guidance, but is recognized upfront under Topic 606.
|
•
|
The adoption of Topic 606 had no impact on the Company’s total cash flows from operations.
|
(in millions)
|
|
January 1, 2018
|
|
Capitalized
|
|
Amortization
|
|
June 30, 2018
|
||||
Capitalized contract costs
|
|
17
|
|
|
10
|
|
|
(3
|
)
|
|
24
|
|
|
As of
|
||||||
In millions
|
June 30,
2018 |
|
December 31,
2017 |
||||
Inventories
|
|
|
|
||||
Finished goods
|
$
|
17
|
|
|
$
|
18
|
|
Service parts
|
11
|
|
|
12
|
|
||
Total inventories
|
$
|
28
|
|
|
$
|
30
|
|
|
|
|
|
||||
Deferred revenue
|
|
|
|
||||
Deferred revenue, current
|
$
|
461
|
|
|
$
|
414
|
|
Long-term deferred revenue
|
109
|
|
|
85
|
|
||
Total deferred revenue
|
$
|
570
|
|
|
$
|
499
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
In millions
|
Amortization
Life (in Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
and Currency
Translation
Adjustments
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
and Currency
Translation
Adjustments
|
||||||||
Acquired intangible assets
|
|
|
|
|
|
|
|
|
|
||||||||
Intellectual property/developed technology
|
3 to 5
|
|
$
|
35
|
|
|
$
|
(16
|
)
|
|
$
|
43
|
|
|
$
|
(20
|
)
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30,
|
||||||||||||
In millions
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Amortization expense
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
|
Actual
|
|
For the years ended (estimated)
|
|||||||||||||||||||||
In millions
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
||||||||||||
Amortization expense
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
In millions
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Effective tax rate
|
|
33.3
|
%
|
|
(33.3
|
)%
|
|
(50.0
|
)%
|
|
(20.0
|
)%
|
|
As of
|
||||||
In millions
|
June 30,
2018 |
|
December 31,
2017 |
||||
Contract notional amount of foreign exchange forward contracts
|
$
|
92
|
|
|
$
|
147
|
|
Net contract notional amount of foreign exchange forward contracts
|
$
|
34
|
|
|
$
|
23
|
|
Interest rate swap
|
$
|
500
|
|
|
$
|
—
|
|
In millions
|
2018
|
|
2017
|
||||
Warranty reserve liability
|
|
|
|
||||
Beginning balance at January 1
|
$
|
4
|
|
|
$
|
5
|
|
Provisions for warranties issued
|
2
|
|
|
3
|
|
||
Settlements (in cash or in kind)
|
(3
|
)
|
|
(4
|
)
|
||
Balance at June 30
|
$
|
3
|
|
|
$
|
4
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
In millions
|
June 30, 2018
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
364
|
|
|
$
|
364
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
In millions
|
December 31, 2017
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
501
|
|
|
$
|
501
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
In millions, except per share amounts
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss) attributable to common stockholders
|
$
|
4
|
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
Weighted average outstanding shares of common stock
|
119.5
|
|
|
127.9
|
|
|
120.4
|
|
|
129.2
|
|
||||
Dilutive effect of employee stock options, restricted stock and other stock awards
|
2.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Common stock and common stock equivalents
|
121.5
|
|
|
127.9
|
|
|
120.4
|
|
|
129.2
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.03
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
Diluted
|
$
|
0.03
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
In millions
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment revenue
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
287
|
|
|
$
|
271
|
|
|
$
|
551
|
|
|
$
|
538
|
|
International
|
257
|
|
|
242
|
|
|
499
|
|
|
466
|
|
||||
Total revenue
|
544
|
|
|
513
|
|
|
1,050
|
|
|
1,004
|
|
||||
Segment gross profit
|
|
|
|
|
|
|
|
||||||||
Americas
|
154
|
|
|
158
|
|
|
301
|
|
|
309
|
|
||||
International
|
112
|
|
|
108
|
|
|
210
|
|
|
208
|
|
||||
Total segment gross profit
|
266
|
|
|
266
|
|
|
511
|
|
|
517
|
|
||||
Stock-based compensation costs
|
4
|
|
|
4
|
|
|
8
|
|
|
7
|
|
||||
Acquisition, integration, reorganization and transformation-related costs
|
—
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
Amortization of capitalized software costs
|
12
|
|
|
19
|
|
|
27
|
|
|
40
|
|
||||
Total gross profit
|
250
|
|
|
242
|
|
|
473
|
|
|
467
|
|
||||
Selling, general and administrative expenses
|
163
|
|
|
165
|
|
|
315
|
|
|
320
|
|
||||
Research and development expenses
|
77
|
|
|
78
|
|
|
152
|
|
|
148
|
|
||||
Income (loss) from operations
|
$
|
10
|
|
|
$
|
(1
|
)
|
|
$
|
6
|
|
|
$
|
(1
|
)
|
•
|
$21
to
$26 million
for employee severance and other employee-related costs,
|
•
|
$6
to
$8 million
charge for facilities lease related costs, and
|
•
|
$8
to
$11 million
for outside service, legal and other associated costs.
|
|
Six months Ended June 30,
|
||||||
In millions
|
2018
|
|
2017
|
||||
Employee severance and other employee related cost
|
$
|
—
|
|
|
$
|
2
|
|
Asset write-downs
|
—
|
|
|
6
|
|
||
Professional services, legal and other transformation costs
|
—
|
|
|
18
|
|
||
Employee separation benefits costs related to headquarter transition and business transformation
|
2
|
|
|
—
|
|
||
Transition support and other exit related costs for the headquarter transition and business transformation
|
3
|
|
|
—
|
|
||
Total reorganization and business transformation cost
|
$
|
5
|
|
|
$
|
26
|
|
•
|
Total revenue was
$544 million
for the
second
quarter of
2018
, up 6% from the
second
quarter of
2017
, with an underlying 11% increase in recurring revenue as the Company's business shifts to subscription-based transactions and a 7% increase in perpetual software licenses and hardware revenue, which was partially offset by a 4% decrease in consulting services revenue.
|
•
|
Gross margin decreased to
46.0%
in the
second
quarter of
2018
from
47.2%
in the
second
quarter of
2017
, due to higher mix of lower margin hardware revenue recognized in the quarter. The increased mix shift to hardware is due to more of the Company’s software license revenue being recognized over time in subscription-based transactions.
|
•
|
Operating expenses for the
second
quarter of
2018
decreased by 1% compared to the
second
quarter of
2017
.
|
•
|
Operating income was
$10 million
in the
second
quarter of
2018
, compared to operating loss of $1 million in the
second
quarter of
2017
, primarily due to higher revenue.
|
•
|
Net income in the
second
quarter of
2018
was
$4 million
, compared to a $4 million net loss in the
second
quarter of
2017
.
|
•
|
Annual Recurring Revenue ("ARR")
- is annual contract value for all active and contractually binding term-based contracts at the end of a period. It includes maintenance, software upgrade rights, cloud, subscription, rental and managed services.
|
•
|
Bookings Mix
- subscription bookings divided by the sum of subscription bookings plus perpetual bookings.
|
•
|
TCore
- is a metric that tracks a consistent unit of consumption across all of Teradata’s products over the wide variety of configuration and deployment options, both on-premises and in the cloud. It is determined from the number of physical central processing unit ("CPU") cores in a system and adjusted/reduced by the underlying hardware platform's input/output ("I/O") throughput performance capabilities.
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Recurring
|
$
|
312
|
|
|
57.4
|
%
|
|
$
|
281
|
|
|
54.8
|
%
|
Perpetual software licenses and hardware
|
97
|
|
|
17.8
|
%
|
|
91
|
|
|
17.7
|
%
|
||
Consulting services
|
135
|
|
|
24.8
|
%
|
|
141
|
|
|
27.5
|
%
|
||
Total revenue
|
$
|
544
|
|
|
100
|
%
|
|
$
|
513
|
|
|
100
|
%
|
•
|
Total ARR at the end of the second quarter of 2018 was $1.2 billion, an increase of 7% from the end of the second quarter of 2017. Beginning in the first quarter of 2018, recurring revenue and ARR now includes recurring revenue from our managed services business. The prior-period amounts have been updated to reflect the current period presentation.
|
•
|
Approximately 66% of our bookings in the second quarter of 2018 were subscription-based. We now expect subscription-based transactions to comprise 65 to 70 percent of our bookings mix for the full year.
|
•
|
We expect TCore growth in the mid to high teens in 2018.
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Recurring
|
$
|
224
|
|
|
71.8
|
%
|
|
$
|
209
|
|
|
74.4
|
%
|
Perpetual software licenses and hardware
|
24
|
|
|
24.7
|
%
|
|
34
|
|
|
37.4
|
%
|
||
Consulting services
|
2
|
|
|
1.5
|
%
|
|
(1
|
)
|
|
(0.7
|
)%
|
||
Total gross profit
|
$
|
250
|
|
|
46.0
|
%
|
|
$
|
242
|
|
|
47.2
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Selling, general and administrative expenses
|
$
|
163
|
|
|
30.0
|
%
|
|
$
|
165
|
|
|
32.2
|
%
|
Research and development expenses
|
77
|
|
|
14.2
|
%
|
|
78
|
|
|
15.2
|
%
|
||
Total operating expenses
|
$
|
240
|
|
|
44.1
|
%
|
|
$
|
243
|
|
|
47.4
|
%
|
In millions
|
2018
|
|
2017
|
||||
Interest income
|
$
|
4
|
|
|
$
|
3
|
|
Interest expense
|
(5
|
)
|
|
(4
|
)
|
||
Other
|
(3
|
)
|
|
(1
|
)
|
||
Other expense, net
|
$
|
(4
|
)
|
|
$
|
(2
|
)
|
|
2018
|
|
2017
|
||
Effective tax rate
|
33.3
|
%
|
|
(33.3
|
)%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Segment revenue
|
|
|
|
|
|
|
|
||||||
Americas
|
$
|
287
|
|
|
52.8
|
%
|
|
$
|
271
|
|
|
52.8
|
%
|
International
|
257
|
|
|
47.2
|
%
|
|
242
|
|
|
47.2
|
%
|
||
Total segment revenue
|
$
|
544
|
|
|
100
|
%
|
|
$
|
513
|
|
|
100
|
%
|
Segment gross profit
|
|
|
|
|
|
|
|
||||||
Americas
|
$
|
154
|
|
|
53.7
|
%
|
|
$
|
158
|
|
|
58.3
|
%
|
International
|
112
|
|
|
43.6
|
%
|
|
108
|
|
|
44.6
|
%
|
||
Total segment gross profit
|
$
|
266
|
|
|
48.9
|
%
|
|
$
|
266
|
|
|
51.9
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Recurring
|
$
|
614
|
|
|
58.5
|
%
|
|
$
|
554
|
|
|
55.2
|
%
|
Perpetual software licenses and hardware
|
166
|
|
|
15.8
|
%
|
|
181
|
|
|
18.0
|
%
|
||
Consulting services
|
270
|
|
|
25.7
|
%
|
|
269
|
|
|
26.8
|
%
|
||
Total revenue
|
$
|
1,050
|
|
|
100
|
%
|
|
$
|
1,004
|
|
|
100
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Recurring
|
$
|
436
|
|
|
71.0
|
%
|
|
$
|
415
|
|
|
74.9
|
%
|
Perpetual software licenses and hardware
|
45
|
|
|
27.1
|
%
|
|
63
|
|
|
34.8
|
%
|
||
Consulting services
|
(8
|
)
|
|
(3.0
|
)%
|
|
(11
|
)
|
|
(4.1
|
)%
|
||
Total gross profit
|
$
|
473
|
|
|
45.0
|
%
|
|
$
|
467
|
|
|
46.5
|
%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Selling, general and administrative expenses
|
$
|
315
|
|
|
30.0
|
%
|
|
$
|
320
|
|
|
31.9
|
%
|
Research and development expenses
|
152
|
|
|
14.5
|
%
|
|
148
|
|
|
14.7
|
%
|
||
Total operating expenses
|
$
|
467
|
|
|
44.5
|
%
|
|
$
|
468
|
|
|
46.6
|
%
|
In millions
|
2018
|
|
2017
|
||||
Interest income
|
$
|
7
|
|
|
$
|
5
|
|
Interest expense
|
(10
|
)
|
|
(7
|
)
|
||
Other
|
(5
|
)
|
|
(2
|
)
|
||
Other expense, net
|
$
|
(8
|
)
|
|
$
|
(4
|
)
|
|
2018
|
|
2017
|
||
Effective tax rate
|
(50.0
|
)%
|
|
(20.0
|
)%
|
|
|
|
% of
|
|
|
|
% of
|
||||||
In millions
|
2018
|
|
Revenue
|
|
2017
|
|
Revenue
|
||||||
Segment revenue
|
|
|
|
|
|
|
|
||||||
Americas
|
$
|
551
|
|
|
52.5
|
%
|
|
$
|
538
|
|
|
53.6
|
%
|
International
|
499
|
|
|
47.5
|
%
|
|
466
|
|
|
46.4
|
%
|
||
Total segment revenue
|
$
|
1,050
|
|
|
100
|
%
|
|
$
|
1,004
|
|
|
100
|
%
|
Segment gross profit
|
|
|
|
|
|
|
|
||||||
Americas
|
$
|
301
|
|
|
54.6
|
%
|
|
$
|
309
|
|
|
57.4
|
%
|
International
|
210
|
|
|
42.1
|
%
|
|
208
|
|
|
44.6
|
%
|
||
Total segment gross profit
|
$
|
511
|
|
|
48.7
|
%
|
|
$
|
517
|
|
|
51.5
|
%
|
|
Six Months Ended June 30,
|
||||||
In millions
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
290
|
|
|
$
|
309
|
|
Less:
|
|
|
|
||||
Expenditures for property and equipment
|
(58
|
)
|
|
(30
|
)
|
||
Additions to capitalized software
|
(4
|
)
|
|
(4
|
)
|
||
Free cash flow
|
$
|
228
|
|
|
$
|
275
|
|
|
|
Total
Number
of Shares Purchased
|
|
Average
Price
Paid
per Share
|
|
Total
Number
of Shares
Purchased
as Part of
Publicly
Announced
Dilution
Offset Program
|
|
Total
Number
of Shares
Purchased
as Part of
Publicly
Announced
General Share
Repurchase Program
|
|
Maximum
Dollar
Value
that May
Yet Be
Purchased
Under the
Dilution
Offset Program
|
|
Maximum
Dollar
Value
that May
Yet Be
Purchased
Under the
General Share
Repurchase Program
|
|||||||||
Month
|
|
|
|
|
|
|
|||||||||||||||
First Quarter Total
|
|
2,052,137
|
|
|
$
|
37.09
|
|
|
591,708
|
|
|
1,460,429
|
|
|
$
|
8,696,662
|
|
|
$
|
446,329,050
|
|
April 2018
|
|
737,315
|
|
|
$
|
39.65
|
|
|
217,100
|
|
|
520,215
|
|
|
$
|
2,778,696
|
|
|
$
|
425,673,533
|
|
May 2018
|
|
1,096,867
|
|
|
$
|
38.47
|
|
|
84,139
|
|
|
1,012,728
|
|
|
$
|
105,776
|
|
|
$
|
386,706,885
|
|
June 2018
|
|
232,499
|
|
|
$
|
41.12
|
|
|
46,007
|
|
|
186,492
|
|
|
$
|
4,521,075
|
|
|
$
|
379,010,024
|
|
Second Quarter Total
|
|
2,066,681
|
|
|
$
|
39.19
|
|
|
347,246
|
|
|
1,719,435
|
|
|
$
|
4,521,075
|
|
|
$
|
379,010,024
|
|
|
|
|
|
Reference Number
per Item 601 of
Regulation S-K
|
|
Description
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
101
|
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Consolidated Statements of Income (Loss) for the three and six month period ended June 30, 2018 and 2017, (ii) the Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and six month period ended June 30, 2018 and 2017, (iii) the Condensed Consolidated Balance Sheets at June 30, 2018 and December 31, 2017, (iv) the Condensed Consolidated Statements of Cash Flows for the six month period ended June 30, 2018 and 2017 and (v) the notes to the Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
|
TERADATA CORPORATION
|
||
|
|
|
|
|
Date: August 6, 2018
|
|
By:
|
|
/s/ Mark A. Culhane
|
|
|
|
|
Mark A.Culhane
Executive Vice President and Chief Financial Officer
|
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