Business Wire | Aug 5, 2021 04:06PM EDT

Teradata Reports Second Quarter 2021 Financial Results

Aug. 05, 2021

SAN DIEGO--(BUSINESS WIRE)--Aug. 05, 2021--Teradata (NYSE: TDC) today announced its second-quarter 2021 financial results.

"Teradata delivered year-over-year growth in Q2 '21 across key metrics including public cloud ARR, recurring revenue, profitability and free cash flow. We are executing on our cloud-first plan, winning new customers and expanding existing customers as we build on our position as the connected multi-cloud data platform for enterprise analytics," said Steve McMillan, Teradata President and CEO. "Our unrivalled data management capabilities across multi-cloud and on-premises environments are what customers need today, and we are continuously innovating to address tomorrow's needs. Taken together, we are confident in our strategy for profitable growth as we continue to generate significant shareholder value."

Second-Quarter 2021 Financial Highlights compared to Second Quarter 2020

* Public cloud ARR increased 157% as reported (153% in constant currency(1)) to $139 million from $54 million * Total ARR increased 9% as reported (7% in constant currency(1)) to $1.426 billion from $1.304 billion * Total revenue was $491 million versus $457 million, an increase of 7% as reported and 4% in constant currency(1) * Recurring revenue was $376 million versus $323 million, an increase of 16% as reported and 13% in constant currency(1) * GAAP gross margin was 63.1% versus 56.0% * Non-GAAP gross margin was 64.8% versus 58.9%(3) * GAAP operating income was $70 million versus $8 million * Non-GAAP operating income was $117 million versus $64 million(3) * GAAP earnings per diluted share was $0.39 versus GAAP loss of $0.40 per share * Non-GAAP earnings per diluted share was $0.74 versus $0.24(3) * Cash flow from operations was $225 million compared to $130 million * Free cash flow was $219 million compared to $115 million(2)

Outlook

For the third quarter of 2021:

* Public cloud ARR is expected to increase by at least 90% year-over-year, or by at least $15 million sequentially * GAAP diluted EPS is expected to be in the range of $(0.01) to $0.03 * Non-GAAP diluted EPS, excluding stock-based compensation expense, reorganization-related expenses, and other special items, is expected to be in the range of $0.30 to $0.34(3)

Affirming the following outlook for the full year 2021:

* Public cloud ARR is expected to increase by at least 100% year-over-year * Total ARR is expected to grow at a mid-to-high-single-digit percentage year-over-year

Raising the following outlook for the full year 2021:

* Recurring revenue is now expected to grow at a high-single-digit to low-double-digit percentage year-over-year, up from a mid-to-high-single-digit percentage year-over-year * Total revenue is now expected to grow at a low-single-digit to mid-single-digit percentage year-over-year, up from a low-single-digit percentage year-over-year * GAAP earnings per diluted share is now expected to be in the range of $0.78 to $0.82, up from our prior outlook range of $0.58 to $0.64 * Non-GAAP earnings per diluted share, excluding stock-based compensation expense, reorganization-related expenses, and other special items, is now expected to be in the range of $1.92 to $1.96(3), up from our prior outlook of $1.61 to $1.67 * Cash flow from operations is now expected to be at least $440 million, up from our prior outlook range of at least $320 million * Free cash flow is now expected to be at least $400 million(2), up from our prior outlook range of at least $275 million

Earnings Conference Call

A conference call is scheduled today at 2:00 p.m. PT to discuss the Company's second-quarter 2021 results and provide a business and financial update. Access to the conference call, as well as a replay of the conference call, is available on the Investor Relations page of 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 at investor.teradata.com.

The impact of currency is determined by calculating the prior-period results using the current-year monthly average currency rates. See the 1. foreign currency fluctuation schedule, which is used to determine revenue on a constant currency ("CC") basis, on the Investor Relations page of the Company's website at investor.teradata.com

Revenue

(in millions)

For the Three Months ended June 30

2021

2020

% Change as Reported

% Change in CC

Recurring

$

376

$

323

16

%

13

%

Perpetual software licenses and hardware and other

17

25

(32

%)

(32

%)

Consulting services

98

109

(10

%)

(14

%)

Total revenue

$

491

$

457

7

%

4

%

Americas

$

274

$

259

6

%

6

%

EMEA

128

118

8

%

(1

%)

APJ

89

80

11

%

4

%

Total revenue

$

491

$

457

7

%

4

%

Revenue

(in millions)

For the Six Months ended June 30

2021

2020

% Change as Reported

% Change in CC

Recurring

$

748

$

634

18

%

15

%

Perpetual software licenses, hardware and other

40

48

(17

%)

(17

%)

Consulting services

194

209

(7

%)

(11

%)

Total revenue

$

982

$

891

10

%

7

%

Americas

$

537

$

503

7

%

7

%

EMEA

275

236

17

%

10

%

APJ

170

152

12

%

4

%

Total revenue

$

982

$

891

10

%

7

%

Revenue

(in millions)

For the Three Months ended June 30

2021 2020 % Change as % Change Reported in CC

Recurring $ 376 $ 323 16 % 13 %

Perpetual software licenses and hardware 17 25 (32 %) (32 %)and other

Consulting services 98 109 (10 %) (14 %)

Total revenue $ 491 $ 457 7 % 4 %



Americas $ 274 $ 259 6 % 6 %

EMEA 128 118 8 % (1 %)

APJ 89 80 11 % 4 %

Total revenue $ 491 $ 457 7 % 4 %

Revenue

(in millions)

For the Six Months ended June 30

2021 2020 % Change as % Change Reported in CC

Recurring $ 748 $ 634 18 % 15 %

Perpetual software licenses, hardware and 40 48 (17 %) (17 %)other

Consulting services 194 209 (7 %) (11 %)

Total revenue $ 982 $ 891 10 % 7 %



Americas $ 537 $ 503 7 % 7 %

EMEA 275 236 17 % 10 %

APJ 170 152 12 % 4 %

Total revenue $ 982 $ 891 10 % 7 %

As of June 30

2021

2020

% Change as Reported

% Change in CC

Annual recurring revenue*

$

1,426

$

1,304

9

%

7

%

Public cloud ARR**

$

139

$

54

157

%

153

%

* Annual recurring revenue (ARR) is defined as the annual value at a point in time of all recurring contracts, including subscription, cloud, software upgrade rights, and maintenance. ARR does not include managed services and third-party software.

** Public cloud ARR is defined as the annual value at a point in time of all contracts related to public cloud implementations of Teradata Vantage and does not include ARR related to private or managed cloud implementations.



As of June 30

2021 2020 % Change as Reported % Change in CC

Annual recurring $ 1,426 $ 1,304 9 % 7 %revenue*

Public cloud ARR** $ 139 $ 54 157 % 153 %

* Annual recurring revenue (ARR) is defined as the annual value at a point in time of all recurring contracts, including subscription, cloud, software upgrade rights, and maintenance. ARR does not include managed services and third-party software.

** Public cloud ARR is defined as the annual value at a point in time of all contracts related to public cloud implementations of Teradata Vantage and does not include ARR related to private or managed cloud implementations.

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 by / used in 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 2. 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 to, 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.

(in millions)

For the Three Months

For the Six Months

ended June 30

ended June 30

Outlook

2021

2020

2021

2020

2021

Cash provided by operating activities (GAAP)

$

225

$

130

$

335

$

140

?$440

Less capital expenditures for:

Expenditures for property and equipment

(5

)

(13

)

(9

)

(23

)

(?35)

Additions to capitalized software

(1

)

(2

)

(2

)

(4

)

(?5)

Total capital expenditures

(6

)

(15

)

(11

)

(27

)

(?40)

Free Cash Flow (non-GAAP measure)

$

219

$

115

$

324

$

113

?$400

In addition, GAAP to non-GAAP reconciliation of prior 2021 FY outlook free cash flow is included in the Company's Q1 2021 Earnings Release dated May 6, 2021, which is available on the Investor Relations page of Teradata's website at investor.teradata.com.

(in millions) For the For the Three Months Six Months

ended June 30 ended June 30 Outlook

2021 2020 2021 2020 2021



Cash provided by operating activities $ 225 $ 130 $ 335 $ 140 ?$440(GAAP)

Less capital expenditures for:

Expenditures for property and (5 ) (13 ) (9 ) (23 ) (?35)equipment

Additions to capitalized software (1 ) (2 ) (2 ) (4 ) (?5)

Total capital expenditures (6 ) (15 ) (11 ) (27 ) (?40)

Free Cash Flow (non-GAAP measure) $ 219 $ 115 $ 324 $ 113 ?$400

In addition, GAAP to non-GAAP reconciliation of prior 2021 FY outlook free cash flow is included in the Company's Q1 2021 Earnings Release dated May 6, 2021, which is available on the Investor Relations page of Teradata's website at investor.teradata.com.

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 (as well as free cash flow) are useful for 3. investors. Our non-GAAP measures are not meant to be considered in isolation to, as substitutes 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. Each of our non-GAAP measures do not have a uniform definition under GAAP and therefore, Teradata's definition may differ from other companies' definitions of these measures.



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. Our 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 our 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 and special items, (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.

For the Three Months

For the Six Months

(in millions, except per share data)

ended June 30

ended June 30

Gross Profit:

2021

2020

% Chg.

2021

2020

% Chg.

GAAP Gross Profit

$

310

$

256

21

%

$

617

$

481

28

%

% of Revenue

63.1

%

56.0

%

62.8

%

54.0

%

Excluding:

Stock-based compensation expense

5

4

8

8

Acquisition, integration, reorganization related, and other costs

3

4

8

4

Amortization of capitalized software

-

5

-

11

Non-GAAP Gross Profit

$

318

$

269

18

%

$

633

$

504

26

%

% of Revenue

64.8

%

58.9

%

64.5

%

56.6

%

Operating Income

GAAP Operating Income

$

70

$

8

775

%

$

151

$

2

7,450

%

% of Revenue

14.3

%

1.8

%

15.4

%

0.2

%

Excluding:

Stock-based compensation expense

31

31

52

52

Amortization of acquisition-related intangible assets

1

1

2

2

Acquisition, integration, reorganization related, and other costs

15

19

27

29

Amortization of capitalized software

-

5

-

11

Non-GAAP Operating Income

$

117

$

64

83

%

$

232

$

96

142

%

% of Revenue

23.8

%

14.0

%

23.6

%

10.8

%

Net Income

GAAP Net Income / (Loss)

$

44

$

(43

)

202

%

$

97

$

125

(22

%)

% of Revenue

9

%

(9.4

%)

9.9

%

14.0

%

Excluding:

Stock-based compensation expense

31

31

52

52

Amortization of acquisition-related intangible assets

1

1

2

2

Acquisition, integration, reorganization related, and other costs

15

19

27

29

Amortization of capitalized software

-

5

-

11

IP restructuring tax expense (benefit)(1)

-

1

-

(156

)

Tax contingency adjustment(2)

-

20

-

2

Income tax adjustments(3)

(8

)

(8

)

(17

)

(9

)

Non-GAAP Net Income

$

83

$

26

219

%

$

161

$

56

188

%

% of Revenue

16.9

%

5.7

%

16.4

%

6.3

%

For the For the Three Months Six Months

(in millions,except per share ended June 30 ended June 30 data)

Gross Profit: 2021 2020 % 2021 2020 % Chg. Chg.

GAAP Gross Profit $ 310 $ 256 21 % $ 617 $ 481 28 %

% of Revenue 63.1 % 56.0 % 62.8 % 54.0 %



Excluding:

Stock-basedcompensation 5 4 8 8 expense

Acquisition,integration,reorganization 3 4 8 4 related, and othercosts

Amortization ofcapitalized - 5 - 11 software

Non-GAAP Gross $ 318 $ 269 18 % $ 633 $ 504 26 %Profit

% of Revenue 64.8 % 58.9 % 64.5 % 56.6 %

Operating Income

GAAP Operating $ 70 $ 8 775 % $ 151 $ 2 7,450 %Income

% of Revenue 14.3 % 1.8 % 15.4 % 0.2 %



Excluding:

Stock-basedcompensation 31 31 52 52 expense

Amortization ofacquisition-related 1 1 2 2 intangible assets

Acquisition,integration,reorganization 15 19 27 29 related, and othercosts

Amortization ofcapitalized - 5 - 11 software

Non-GAAP Operating $ 117 $ 64 83 % $ 232 $ 96 142 %Income

% of Revenue 23.8 % 14.0 % 23.6 % 10.8 %



Net Income

GAAP Net Income / $ 44 $ (43 ) 202 % $ 97 $ 125 (22 %)(Loss)

% of Revenue 9 % (9.4 %) 9.9 % 14.0 %



Excluding:

Stock-basedcompensation 31 31 52 52 expense

Amortization ofacquisition-related 1 1 2 2 intangible assets

Acquisition,integration,reorganization 15 19 27 29 related, and othercosts

Amortization ofcapitalized - 5 - 11 software

IP restructuringtax expense - 1 - (156 ) (benefit)^(1)

Tax contingency - 20 - 2 adjustment^(2)

Income tax (8 ) (8 ) (17 ) (9 ) adjustments^(3)

Non-GAAP Net Income $ 83 $ 26 219 % $ 161 $ 56 188 %

% of Revenue 16.9 % 5.7 % 16.4 % 6.3 %

For the Three Months

ended June 30

For the Six Months

ended June 30

Earnings Per Share:

2021

2020

2021

2020

2021 Q3 Guidance

2021 FY Guidance

GAAP Earnings / (Loss)

$

0.39

$

(0.40

)

$

0.86

$

1.13

$(0.01) - $0.03

$0.78 - $0.82

Excluding:

Stock-based compensation expense

0.28

0.29

0.46

0.47

0.25

0.95

Amortization of acquisition-related intangible assets

0.01

0.01

0.02

0.02

0.01

0.03

Acquisition, integration, reorganization related, and other costs

0.13

0.18

0.24

0.26

0.11

0.42

Amortization of capitalized software

-

0.05

-

0.10

-

-

IP restructuring tax expense (benefit)(i)

-

0.01

-

(1.41

)

-

-

Tax contingency adjustment(ii)

-

0.18

-

0.02

-

-

Income tax adjustments(iii)

(0.07

)

(0.08

)

(0.15

)

(0.08

)

(0.06

)

(0.26

)

Non-GAAP Diluted Earnings Per Share

$

0.74

$

0.24

$

1.43

$

0.51

$0.30 - $0.34

$1.92 - $1.96

For the Three Months For the Six Months ended June 30 ended June 30

Earnings Per Share: 2021 2020 2021 2020 2021 Q3 2021 FY Guidance Guidance

GAAP Earnings / $ 0.39 $ (0.40 ) $ 0.86 $ 1.13 $(0.01) $0.78 -(Loss) - $0.03 $0.82

Excluding:

Stock-basedcompensation 0.28 0.29 0.46 0.47 0.25 0.95 expense

Amortization ofacquisition-related 0.01 0.01 0.02 0.02 0.01 0.03 intangible assets

Acquisition,integration,reorganization 0.13 0.18 0.24 0.26 0.11 0.42 related, and othercosts

Amortization ofcapitalized - 0.05 - 0.10 - - software

IP restructuringtax expense - 0.01 - (1.41 ) - - (benefit)^(i)

Tax contingency - 0.18 - 0.02 - - adjustment^(ii)

Income tax (0.07 ) (0.08 ) (0.15 ) (0.08 ) (0.06 ) (0.26 )adjustments^(iii)

$1.92 -Non-GAAP Diluted $ 0.74 $ 0.24 $ 1.43 $ 0.51 $0.30 - $1.96Earnings Per Share $0.34

i.

The Company's GAAP effective tax rate for the three and six months ended June 30, 2020 includes $156 million of discrete tax benefit related to an intra-entity asset transfer of certain of its intellectual property to one of its Irish subsidiaries, which occurred on January 1, 2020. The one-time tax benefit for this intra-entity asset transfer of $157 million was recorded as a deferred tax asset for GAAP reporting purposes in the first quarter of 2020 but was excluded from Non-GAAP results. This was offset by $1 million of tax expense related to withholding taxes associated with the same intra-entity transfer recorded in the second quarter of 2020.

ii.

The Company's forecasted full-year 2020 GAAP marginal effective tax rate included $3 million of tax expense related to tax contingencies pursuant to FIN 48. For GAAP purposes, this is a component of the marginal rate and is recognized as tax benefit or expense based on the Company's reported GAAP pre-tax income or loss for the quarter. To more accurately reflect the impact of the expense on a quarterly basis for non-GAAP purposes, the $3 million of tax expense was recognized ratably each quarter in 2020 instead of being included in the marginal effective rate.

iii.

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 three months ended June 30, 2021 was 21.7% and June 30, 2020 was 50.9%. For the six months ended June 30, the Company's non-GAAP effective tax rate was 24.1% for 2021 and 27.3% for 2020.

In addition, GAAP to non-GAAP reconciliation of second quarter 2021 outlook non-GAAP diluted earnings per share and prior 2021 FY outlook non-GAAP diluted earnings per share is included in the Company's Q1 2021 Earnings Release dated May 6, 2021, which is available on the Investor Relations page of Teradata's website at investor.teradata.com.

Note to Investors

This release contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements generally relate to opinions, beliefs, and projections of expected future financial and operating performance, business trends, and market conditions, among other things. These forward-looking statements are based upon current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially, including the factors discussed in this release and those relating to: the global economic environment and business conditions 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; the rapidly changing and intensely competitive nature of the information technology industry and the data analytics business; fluctuations in our operating results; our ability to realize the anticipated benefits of our business transformation program or other restructuring and cost saving initiatives; risks inherent in operating in foreign countries, including foreign currency fluctuations; risks associated with the ongoing and uncertain impact of the COVID-19 pandemic on our business, financial condition and operating results, including the impact of the COVID-19 pandemic on our customers and suppliers; risks associated with data privacy, cyberattacks and maintaining secure and effective internal information technology and control systems; the timely and successful development, production or acquisition, availability and/or market acceptance of new and existing products, product features and services; tax rates; turnover of workforce and the ability to attract and retain skilled employees; protecting our intellectual property; the availability and successful exploitation of new alliance and acquisition opportunities; subscription arrangements may be cancelled or fail to be renewed; the impact on our business and financial reporting from changes in accounting rules; and other factors described from time to time in Teradata's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2020 and subsequent quarterly reports on Forms 10-Q, as well as the Company's annual report to stockholders. Teradata 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, except as required by law.

About Teradata

Teradata is the connected multi-cloud data platform for enterprise analytics company. Our enterprise analytics solve business challenges from start to scale. Only Teradata gives you the flexibility to handle the massive and mixed data workloads of the future, today. Learn more at Teradata.com.

The Teradata logo is a trademark, and Teradata is a registered trademark of Teradata Corporation and/or its affiliates in the U.S. and worldwide.

The Company's GAAP effective tax rate for the three and six months ended June 30, 2020 includes $156 million of discrete tax benefit related to an intra-entity asset transfer of certain of its intellectual property to one of its Irish subsidiaries, which occurred i. on January 1, 2020. The one-time tax benefit for this intra-entity asset transfer of $157 million was recorded as a deferred tax asset for GAAP reporting purposes in the first quarter of 2020 but was excluded from Non-GAAP results. This was offset by $1 million of tax expense related to withholding taxes associated with the same intra-entity transfer recorded in the second quarter of 2020.



The Company's forecasted full-year 2020 GAAP marginal effective tax rate included $3 million of tax expense related to tax contingencies pursuant to FIN 48. For GAAP purposes, this is a component of the marginal rate and is recognized as tax benefit or expense based on the ii. Company's reported GAAP pre-tax income or loss for the quarter. To more accurately reflect the impact of the expense on a quarterly basis for non-GAAP purposes, the $3 million of tax expense was recognized ratably each quarter in 2020 instead of being included in the marginal effective rate.



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 iii. 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 three months ended June 30, 2021 was 21.7% and June 30, 2020 was 50.9%. For the six months ended June 30, the Company's non-GAAP effective tax rate was 24.1% for 2021 and 27.3% for 2020.

In addition, GAAP to non-GAAP reconciliation of second quarter 2021 outlook non-GAAP diluted earnings per share and prior 2021 FY outlook non-GAAP diluted earnings per share is included in the Company's Q1 2021 Earnings Release dated May 6, 2021, which is available on the Investor Relations page of Teradata's website at investor.teradata.com.

Note to Investors

This release contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements generally relate to opinions, beliefs, and projections of expected future financial and operating performance, business trends, and market conditions, among other things. These forward-looking statements are based upon current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially, including the factors discussed in this release and those relating to: the global economic environment and business conditions 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; the rapidly changing and intensely competitive nature of the information technology industry and the data analytics business; fluctuations in our operating results; our ability to realize the anticipated benefits of our business transformation program or other restructuring and cost saving initiatives; risks inherent in operating in foreign countries, including foreign currency fluctuations; risks associated with the ongoing and uncertain impact of the COVID-19 pandemic on our business, financial condition and operating results, including the impact of the COVID-19 pandemic on our customers and suppliers; risks associated with data privacy, cyberattacks and maintaining secure and effective internal information technology and control systems; the timely and successful development, production or acquisition, availability and/or market acceptance of new and existing products, product features and services; tax rates; turnover of workforce and the ability to attract and retain skilled employees; protecting our intellectual property; the availability and successful exploitation of new alliance and acquisition opportunities; subscription arrangements may be cancelled or fail to be renewed; the impact on our business and financial reporting from changes in accounting rules; and other factors described from time to time in Teradata's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2020 and subsequent quarterly reports on Forms 10-Q, as well as the Company's annual report to stockholders. Teradata 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, except as required by law.

About Teradata

Teradata is the connected multi-cloud data platform for enterprise analytics company. Our enterprise analytics solve business challenges from start to scale. Only Teradata gives you the flexibility to handle the massive and mixed data workloads of the future, today. Learn more at Teradata.com.

The Teradata logo is a trademark, and Teradata is a registered trademark of Teradata Corporation and/or its affiliates in the U.S. and worldwide.

Schedule A TERADATA CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF INCOME(in millions, except per share amounts - unaudited) For the Period Ended June 30

Three Months Six Months

2021 2020 % Chg 2021 2020 % Chg

Revenue Recurring $ 376 $ 323 16 % $ 748 $ 634 18 %

Perpetualsoftware (32 %) (17 %)licenses, 17 25 40 48 hardware andotherConsulting 109 (10 %) 209 (7 %)services 98 194

491 457 7 % 891 10 %Total revenue 982

Gross profit 289 234 452 Recurring 571

% of Revenue 76.9 % 72.4 % 76.3 % 71.3 %

Perpetualsoftware licenses, 6 7 18 15 hardware andother% of Revenue 35.3 % 28.0 % 45.0 % 31.3 %

Consulting services 15 15 28 14

% of Revenue 15.3 % 13.8 % 14.4 % 6.7 %

Total gross 310 256 481 profit 617

% of Revenue 63.1 % 56.0 % 62.8 % 54.0 %

Selling, general and 161 165 310 323 administrativeexpensesResearch and 156 development 79 83 156 expenses Income from operations 70 8 151 2

% of Revenue 14.3 % 1.8 % 15.4 % 0.2 %

Other expense, ) ) ) )net (11 (11 (20 (19

Income (loss) ) )before income 59 (3 131 (17 taxes% of Revenue 12.0 % (0.7 %) 13.3 % (1.9 %)

Income tax (142 )expense 15 40 34 (benefit)% Tax rate 25.4 % (1,333.3 %) 26.0 % 835.3 %

Net income $ 44 $ (43 ) $ 97 $ 125 (loss)% of Revenue 9.0 % (9.4 %) 9.9 % 14.0 %

Net income(loss) per common shareBasic $ 0.40 $ (0.40 ) $ 0.89 $ 1.14

Diluted $ 0.39 $ (0.40 ) $ 0.86 $ 1.13

Weighted averagecommon shares outstanding 109.0 108.5 109.4 Basic 108.9

112.7 108.5 110.6 Diluted 112.7

Schedule BTERADATA CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(in millions - unaudited)June 30,

December 31,

June 30,

2021

2020

2020

AssetsCurrent assetsCash and cash equivalents$

684

$

529

$

494

Accounts receivable, net299

331

339

Inventories20

29

26

Other current assets143

155

89

Total current assets1,146

1,044

948

Property and equipment, net325

339

337

Right of use assets - operating lease, net27

38

46

Goodwill399

401

395

Capitalized contract costs, net97

98

88

Deferred income taxes208

222

236

Other assets43

51

52

Total assets$

2,245

$

2,193

$

2,102

Liabilities and stockholders' equityCurrent liabilitiesCurrent portion of long-term debt$

62

$

44

$

31

Current portion of finance lease liability87

75

69

Current portion of operating lease liability13

15

18

Accounts payable91

50

62

Payroll and benefits liabilities119

170

119

Deferred revenue544

499

518

Other current liabilities82

99

76

Total current liabilities998

952

893

Long-term debt374

411

436

Finance lease liability73

70

75

Operating lease liability20

28

33

Pension and other postemployment plan liabilities143

152

135

Long-term deferred revenue41

38

41

Deferred tax liabilities6

6

6

Other liabilities119

136

137

Total liabilities1,774

1,793

1,756

Stockholders' equityCommon stock1

1

1

Paid-in capital1,743

1,656

1,603

Accumulated deficit(1,138

)

(1,114

)

(1,093

)

Accumulated other comprehensive loss(135

)

(143

)

(165

)

Total stockholders' equity471

400

346

Total liabilities and stockholders' equity$

2,245

$

2,193

$

2,102

Schedule B TERADATA CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(in millions - unaudited) June 30, December 31, June 30,

2021 2020 2020

Assets Current assets Cash and cash $ 684 $ 529 $ 494 equivalentsAccounts 339 receivable, 299 331 net Inventories 20 29 26

Other current assets 143 155 89

Total current 1,146 1,044 948 assets Property and 337 equipment, net 325 339

Right of use assets - 27 38 46 operatinglease, net 395 Goodwill 399 401

Capitalized contract 97 98 88costs, netDeferred 236 income taxes 208 222

Other assets 43 51 52

Total assets $ 2,245 $ 2,193 $ 2,102

Liabilitiesand stockholders'equity Current liabilitiesCurrent $ 62 $ 44 $ 31 portion of long-term debtCurrent portion of 87 75 69 finance leaseliabilityCurrentportion of operating 13 15 18leaseliabilityAccounts payable 91 50 62

Payroll and 119 benefits 119 170 liabilitiesDeferred 518 revenue 544 499

Other current liabilities 82 99 76

Total current 893 liabilities 998 952

436 Long-term debt 374 411

Finance lease liability 73 70 75

Operating lease 20 28 33liabilityPension andother 135 postemployment 143 152 planliabilitiesLong-term deferred 41 38 41revenueDeferred tax liabilities 6 6 6

Other 137 liabilities 119 136

Total 1,774 1,793 1,756 liabilities Stockholders' equity Common stock 1 1 1

Paid-in 1,743 1,656 1,603 capitalAccumulated (1,138 ) (1,114 ) (1,093 )deficitAccumulatedother (135 ) (143 ) (165 )comprehensiveloss Total 346 stockholders' 471 400 equity Totalliabilities $ 2,245 $ 2,193 $ 2,102 and stockholders'equity Schedule CTERADATA CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in millions - unaudited)For the Period Ended June 30Three Months

Six Months

2021

2020

2021

2020

Operating activitiesNet income $

44

$

(43

)

$

97

$

125

Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization37

43

76

85

Stock-based compensation expense31

31

52

52

Deferred income taxes(1

)

-

9

(149

)

Changes in assets and liabilities:Receivables68

109

32

59

Inventories(4

)

2

9

5

Current payables and accrued expenses59

11

15

(32

)

Deferred revenue(15

)

(40

)

48

26

Other assets and liabilities6

17

(3

)

(31

)

Net cash provided by operating activities225

130

335

140

Investing activitiesExpenditures for property and equipment(5

)

(13

)

(9

)

(23

)

Additions to capitalized software(1

)

(2

)

(2

)

(4

)

Net cash used in investing activities(6

)

(15

)

(11

)

(27

)

Financing activitiesRepurchases of common stock(38

)

(2

)

(121

)

(75

)

Repayments of long-term borrowings(13

)

(7

)

(19

)

(13

)

Payments of finance leases(29

)

(16

)

(44

)

(25

)

Other financing activities, net5

6

18

6

Net cash used in financing activities(75

)

(19

)

(166

)

(107

)

Effect of exchange rate changes on cash and cash equivalents1

3

(4

)

(7

)

Increase (decrease) in cash, cash equivalents and restricted cash145

99

154

(1

)

Cash, cash equivalents and restricted cash at beginning of period542

396

533

496

Cash, cash equivalents and restricted cash at end of period$

687

$

495

$

687

$

495

Supplemental cash flow disclosure:Non-cash investing and financing activities:Assets acquired by finance leases$

13

$

24

$

58

$

39

Assets acquired by operating leases$

1

$

2

$

3

$

5

Schedule C TERADATA CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in millions - unaudited) For the Period Ended June 30 Three Months Six Months

2021 2020 2021 2020

Operating activitiesNet income $ 44 $ (43 ) $ 97 $ 125

Adjustmentsto reconcilenet income to net cashprovided byoperating activities:Depreciation and 37 43 76 85amortizationStock-based compensation 31 31 52 52expenseDeferred ) (149 )income taxes (1 - 9

Changes inassets and liabilities: 109 Receivables 68 32 59

) Inventories (4 2 9 5

Current payables and 59 11 15 (32 )accruedexpensesDeferred ) (40 ) revenue (15 48 26

Other assets ) )and 6 17 (3 (31liabilities Net cashprovided by 225 130 335 140 operatingactivities Investing activitiesExpenditures for property (5 ) (13 ) (9 ) (23 )andequipmentAdditions to ) ) ) )capitalized (1 (2 (2 (4software Net cash used in (6 ) (15 ) (11 ) (27 )investingactivities Financing activitiesRepurchases ) ) (121 ) )of common (38 (2 (75stockRepayments ) ) ) )of long-term (13 (7 (19 (13borrowingsPayments of ) (16 ) ) )finance (29 (44 (25leasesOther financing 5 6 18 6 activities,net Net cash used in (75 ) (19 ) (166 ) (107 )financingactivities Effect ofexchange rate changes 1 3 (4 ) (7 )on cash andcashequivalents Increase(decrease)in cash, cash 145 99 154 (1 )equivalentsandrestrictedcashCash, cashequivalentsand 542 396 533 496 restricted cash atbeginning ofperiod Cash, cashequivalentsand $ 687 $ 495 $ 687 $ 495 restrictedcash at endof period Supplementalcash flow disclosure:Non-cashinvestingand financingactivities:Assetsacquired by $ 13 $ 24 $ 58 $ 39 financeleasesAssetsacquired by $ 1 $ 2 $ 3 $ 5 operatingleases Schedule DTERADATA CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in millions - unaudited)For the Three Months Ended June 30

For the Six Months Ended June 30

2021

2020

% Change As Reported

% Change Constant Currency (2)

2021

2020

% Change As Reported

% Change Constant Currency (2)

Segment RevenueAmericas $

274

$

259

6

%

6

%

$

537

$

503

7

%

7

%

EMEA128

118

8

%

(1

%)

275

236

17

%

10

%

APJ89

80

11

%

4

%

170

152

12

%

4

%

Total segment revenue491

457

7

%

4

%

982

891

10

%

7

%

Segment gross profitAmericas 185

161

367

305

% of Revenue67.5

%

62.2

%

68.3

%

60.6

%

EMEA80

67

168

128

% of Revenue62.5

%

56.8

%

61.1

%

54.2

%

APJ53

41

98

71

% of Revenue59.6

%

51.3

%

57.6

%

46.7

%

Total segment gross profit318

269

633

504

% of Revenue64.8

%

58.9

%

64.5

%

56.6

%

Reconciling items(1)(8

)

(13

)

(16

)

(23

)

Total gross profit$

310

$

256

$

617

$

481

% of Revenue63.1

%

56.0

%

62.8

%

54.0

%

Schedule D TERADATA CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in millions - unaudited) For the Three Months Ended June 30 For the Six Months Ended June 30

% Change % Change % Change % Change 2021 2020 As Constant 2021 2020 As Constant Reported Currency Reported Currency ^(2) ^(2)

Segment Revenue Americas $ 274 $ 259 6 % 6 % $ 537 $ 503 7 % 7 %

8 % (1 %) 17 % 10 %EMEA 128 118 275 236

11 % 4 % 12 % 4 %APJ 89 80 170 152

Total 7 % 4 % 10 % 7 %segment 491 457 982 891 revenue Segmentgross profit Americas 185 161 367 305

% of 67.5 % 62.2 % 68.3 % 60.6 % Revenue EMEA 80 67 168 128

% of 62.5 % 56.8 % 61.1 % 54.2 % Revenue APJ 53 41 98 71

% of 59.6 % 51.3 % 57.6 % 46.7 % Revenue Total segment 318 269 633 504 grossprofit% of 64.8 % 58.9 % 64.5 % 56.6 % Revenue Reconciling ) ) ) )items^(1) (8 (13 (16 (23

Total gross $ 310 $ 256 $ 617 $ 481 profit% of 63.1 % 56.0 % 62.8 % 54.0 % Revenue (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. View source version on businesswire.com: https://www.businesswire.com/news/home/20210805005992/en/

CONTACT: INVESTOR CONTACT Christopher T. Lee 858-485-2523 office christopher.lee@teradata.com

CONTACT: MEDIA CONTACT Jennifer Donahue 858-485-3029 office jennifer.donahue@teradata.com