Teradata revenue declines over 13% to $468 million in Q1 2019

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The American enterprise software maker for and database, , reported a decline of over 13% in its revenue in the first quarter of 2019. The company total first-quarter revenue was $468 million compared to $506 million in the same quarter last year.

The technology firm attributed this decline to currency volatility and its shifts towards recurring revenue model which is negatively impacting its perpetual revenue.

Overall, Teradata reported 2019 first-quarter net loss of $10 million under U.S. Generally Accepted Accounting Principles compared to a net loss of $7 million in the first quarter of 2018.

The company said that its subscription-based transactions comprise almost 72% of its total bookings mix in the first quarter. Recurring revenue increased by 10% from the first quarter of 2018.

The company said that as it shifts to a recurring revenue model and focuses on consulting business on higher-margin engagements within targeted “megadata” customer base, perpetual revenue and consulting revenue declined versus prior year as expected.

Teradata ended the first quarter of 2019 with $723 million in cash. During the first quarter of 2019, Teradata repurchased 1.2 million shares of the Company’s common stock for approximately $58 million.

As of March 31, 2019, the Company had total debt of $559 million, including $59 million of outstanding finance lease obligations. There were no funds drawn on the company’s $400 million revolving credit facility as of March 31, 2019.

For the full-year 2019, Teradata continues to expect 70% or more of its bookings mix to be subscription-based, ARR to increase in the range of 11% to 12%, and recurring revenue to increase approximately 10% to 11%.

2019 perpetual revenue is expected to decline at the high end of its prior guidance range of $150 million to $200 million versus 2018 due to transition to subscription-based transactions.

The realignment of the company’s consulting business to focus on higher-margin consulting services within its target market of “megadata” customers is progressing. Teradata now expects 2019 consulting revenue to decline at the high end of its prior guidance range of 15% to 20% versus 2018.

Recurring revenue in the second quarter of 2019 is expected to be in the $336 million to $340 million range.

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