tdc-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-33458

TERADATA CORPORATION

(Exact name of registrant as specified in its charter)


Delaware						75-3236470
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)

17095 Via Del Campo

San Diego, California 92127

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (866) 548-8348

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol

Name of Each Exchange on which Registered:

Common Stock, $0.01 par value

TDC

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

At July 28, 2023, the registrant had approximately 99.9 million shares of common stock outstanding.

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION




	Description	Page

Item 1.	Financial Statements

	Condensed Consolidated Statements of Income (Unaudited) Three and Six Months Ended June 30 , 2023 and 2022	4

	Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three and Six Months Ended June 3 0 , 2023 and 2022	5

	Condensed Consolidated Balance Sheets (Unaudited) June 3 0 , 2023 and December 31, 2022	6

	Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 3 0 , 2023 and 2022	7

	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) Three and Six Months Ended June 3 0 , 2023 and 2022	8

	Notes to Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	32

PART II—OTHER INFORMATION

	Description	Page

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3.	Defaults Upon Senior Securities	33

Item 4.	Mine Safety Disclosures	33

Item 5.	Other Information	33

Item 6.	Exhibits	34

	Signatures	36

Table of Contents

Part 1—FINANCIAL INFORMATION


Item 1.			Financial Statements.

Teradata Corporation

Condensed Consolidated Statements of Income (Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
In millions, except per share amounts	2023		2022		2023		2022
Revenue
Subscription software licenses	$	70	$	65	$	174	$	158
Services and other	301		280		586		573
Total recurring	371		345		760		731
Perpetual software licenses, hardware and other	13		8		26		34
Consulting services	78		77		152		161
Total revenue	462		430		938		926
Cost of revenue
Subscription software licenses	5		5		11		12
Services and other	102		91		194		189
Total recurring	107		96		205		201
Perpetual software licenses, hardware and other	12		6		23		24
Consulting services	67		70		132		142
Total cost of revenue	186		172		360		367
Gross profit	276		258		578		559
Operating expenses
Selling, general and administrative expenses	167		163		320		320
Research and development expenses	76		81		146		157
Total operating expenses	243		244		466		477
Income from operations	33		14		112		82
Other expense, net
Interest expense	(7)		(5)		(14)		(11)
Interest income	8		3		15		5
Other expense	(10)		(12)		(31)		(21)
Total other expense, net	(9)		(14)		(30)		(27)
Income before income taxes	24		—		82		55
Income tax expense	7		4		25		23
Net income (loss)	$	17	$	(4)	$	57	$	32
Net income (loss) per common share
Basic	$	0.17	$	(0.04)	$	0.56	$	0.31
Diluted	$	0.17	$	(0.04)	$	0.55	$	0.30
Weighted average common shares outstanding
Basic	101.0		103.5		101.2		104.2
Diluted	102.9		103.5		103.3		107.1

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Teradata Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
In millions	2023		2022		2023		2022
Net income (loss)	$	17	$	(4)	$	57	$	32
Other comprehensive income (loss):
Foreign currency translation adjustments	(3)		(24)		—		(25)
Unrealized loss on cross-currency net investment hedge, before tax	(2)		(1)		(3)		(1)
Unrealized loss on cross-currency net investment hedge, tax portion	—		—		—		—
Total currency translation adjustments	(5)		(25)		(3)		(26)
Derivatives:
Unrealized gain (loss) on derivatives, before tax	9		(3)		3		5
Unrealized gain (loss) on derivatives, tax portion	(2)		1		(1)		(1)
Unrealized gain (loss) on derivatives, net of tax	7		(2)		2		4
Defined benefit plans:
Defined benefit plan adjustment, before tax	2		2		4		5
Defined benefit plan adjustment, tax portion	(1)		(1)		(1)		(2)
Defined benefit plan adjustment, net of tax	1		1		3		3
Other comprehensive income (loss)	3		(26)		2		(19)
Comprehensive income (loss)	$	20	$	(30)	$	59	$	13

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

Teradata Corporation

Condensed Consolidated Balance Sheets (Unaudited)


In millions, except per share amounts	June 30, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	504	$	569
Accounts receivable, net	265		364
Inventories	9		8
Other current assets	102		87
Total current assets	880		1,028
Property and equipment, net	250		244
Right of use assets - operating lease, net	11		13
Goodwill	390		390
Capitalized contract costs, net	76		92
Deferred income taxes	205		213
Other assets	57		42
Total assets	$	1,869	$	2,022
Liabilities and stockholders’ equity
Current liabilities
Current portion of long-term debt	$	6	$	—
Current portion of finance lease liability	70		67
Current portion of operating lease liability	7		8

Accounts payable	113		94
Payroll and benefits liabilities	100		137
Deferred revenue	526		589
Other current liabilities	88		112
Total current liabilities	910		1,007
Long-term debt	492		498
Finance lease liability	70		54
Operating lease liability	8		10
Pension and other postemployment plan liabilities	96		101
Long-term deferred revenue	7		8
Deferred tax liabilities	6		7
Other liabilities	62		79
Total liabilities	1,651		1,764
Commitments and contingencies (Note 8)
Stockholders’ equity
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	—		—
Common stock: par value $0.01 per share, 500.0 shares authorized, 100.6 and 101.1 shares issued at June 30, 2023 and December 31, 2022, respectively	1		1
Paid-in capital	2,002		1,941

Accumulated deficit	(1,668)		(1,565)
Accumulated other comprehensive loss	(117)		(119)
Total stockholders’ equity	218		258
Total liabilities and stockholders’ equity	$	1,869	$	2,022

See Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

Teradata Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)


	Six Months Ended June 30,
In millions	2023		2022
Operating activities
Net income	$	57	$	32
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	59		73
Stock-based compensation expense	63		63
Deferred income taxes	2		2
Changes in assets and liabilities:
Receivables	99		70
Inventories	(1)		9
Current payables and accrued expenses	(30)		(26)
Deferred revenue	(64)		(38)
Other assets and liabilities	(27)		71
Net cash provided by operating activities	158		256
Investing activities
Expenditures for property and equipment	(6)		(3)

Additions to capitalized software	(1)		(1)


Net cash used in investing activities	(7)		(4)
Financing activities
Repurchases of common stock	(154)		(317)
Proceeds from long-term borrowings	—		500
Repayments of long-term borrowings	—		(413)


Payments of finance leases	(41)		(45)
Other financing activities, net	(1)		1
Net cash used in financing activities	(196)		(274)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(20)		(25)
Decrease in cash, cash equivalents and restricted cash	(65)		(47)
Cash, cash equivalents and restricted cash at beginning of period

SEC Form 10-Q filed by Teradata Corporation