Teradata has beaten its own and the market’s expectations for the fourth quarter of 2020, more than doubling its cloud revenue.
Recurring revenue for subscriptions on the public cloud for the quarter ended 31 October 2020 hit $106m, up 165 per cent from $40m a year earlier.
The data warehouse company, which boasts customers including Lloyds Banking Group, HSBC, and Unilever, has been under the cosh over the last year as it struggled to shift from hardware-optimised appliance systems to the public cloud.
On an earnings call, president and CEO Steve McMillan said: “We’ve effectively configured our transition to a subscription model that generates recurring revenue and are vigorously executing our transformation to a cloud-first company. Cloud-first is overarchingly important to our strategic focus.”
McMillan, who replaced Oliver Ratzesberger last June, said a global ecommerce customer had selected its Vantage analytics and data warehouse platform in the cloud. “After it tested the cloud native offering… technical challenges and extended migration delays brought the customer to the realization that it would not achieve the business value they expected from its intended move to Snowflake.”
However, other sources in data management consulting have told The Register that customers are predominantly looking for cloud-native solutions, either from Snowflake or the cloud hyperscalers, when considering migration away from on-prem data warehouses.
Beyond recurring cloud revenue, Teradata’s results are more of a mixed picture. Total revenue for Q4 was $491m, down 1 per cent from $494m a year earlier. By comparison, Snowflake’s total revenue for Q3, its most recently reported figures, was $160m, roughly a third of Teradata’s.
Teradata’s total revenue for the full year was $1.836bn, down 3 per cent from $1.899bn in 2019. The company, founded in 1979, issued guidance that total revenue is expected to grow at a low-single-digit percentage year-over-year.
Meanwhile, gross profit for the quarter reached $284m, up 15 per cent from $248m a year earlier. Operating income was $13m from a $0.5m loss in Q4 2019.
Perhaps most worrying for Teradata will be consulting revenue, which fell by more than £119m from the full year 2019 (£431m) to 2020 (£312m).
Teradata may have weathered the Snowflake storm for now, but it is not yet home and dry. ®