Teradata Corp 10-K for FY2023

Teradata Corp /De/ (TDC)

10-K 2024-02-23 For: 2023-12-31

Added on April 10, 2026

About this 10-K

Teradata Corp filed this 10-K on February 23, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.83B; up 2.1% from $1.8B a year earlier
Net income: $62M; up 87.9% from net income of $33M a year earlier
Diluted EPS: $0.61; up 96.8% from $0.31 a year earlier

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



Item	Description	Page
	PART I

1.	Business	5
1A.	Risk Factors	14
1B.	Unresolved Staff Comments	27
1C.	Cybersecurity	27
2.	Properties	30
3.	Legal Proceedings	30
4.	Mine Safety Disclosures	30

	PART II

5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	31
6.	[Reserved]	32
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
7A.	Quantitative and Qualitative Disclosures About Market Risk	44
8.	Financial Statements and Supplementary Data	44
9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	81
9A.	Controls and Procedures	81
9B.	Other Information	82
9C.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	82

	PART III

10.	Directors, Executive Officers and Corporate Governance	83
11.	Executive Compensation	83
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	83
13.	Certain Relationships and Related Transactions, and Director Independence	83
14.	Principal Accounting Fees and Services	83

	PART IV

15.	Exhibits, Financial Statement Schedules	84
16.	Form 10-K Summary	91
	Signatures	92


Name	Age	Position(s)
Stephen McMillan	53	President and Chief Executive Officer
Hillary Ashton	52	Chief Product Officer
Claire Bramley	46	Chief Financial Officer
Todd Cione	54	Chief Revenue Officer
Kathleen Cullen-Cote	59	Chief People Officer
Michael Hutchinson	58	Chief Customer Officer
Margaret Treese	57	Chief Legal Officer
Jacqueline Woods	62	Chief Marketing Officer


	As of December 31,
Company/Index	2018		2019		2020		2021		2022		2023
Teradata Corporation	$	100	$	70	$	59	$	111	$	88	$	113
S&P 500 Index	$	100	$	129	$	150	$	190	$	153	$	190
S&P Information Technology Index	$	100	$	148	$	211	$	281	$	200	$	312


	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Dilution Offset Program (1)	Total Number of Shares Purchased as Part of Publicly Announced General Share Repurchase Program (2)	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
Period
First quarter total	2,322,106	$	37.69	137,380	2,184,726	$	1,072,676	$	758,232,193
Second quarter total	1,610,383	$	44.93	56,144	1,554,239	$	5,553,859	$	688,873,071
Third quarter total	2,938,181	$	48.02	253,402	2,684,779	$	409,123	$	560,227,734
October 2023	123,583	$	43.23	7,800	115,783	$	122,386	$	555,227,916
November 2023	27,848	$	43.00	—	27,848	$	1,536,392	$	554,030,560
December 2023	—	$	—	—	—	$	2,200,413	$	554,030,560
Fourth quarter total	151,431	$	43.19	7,800	143,631	$	2,200,413	$	554,030,560
2023 Full year total	7,022,101	$	43.79	454,726	6,567,375	$	2,200,413	$	554,030,560


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


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


Part III:			Portions of the registrant’s Notice of Annual Meeting of Stockholders and Proxy Statement, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after registrant’s fiscal year end of December 31, 2023 are incorporated herein by reference.


Item 5.			MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


Item 7.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ("MD&A")


			% of				% of
In millions	2023		Revenue		2022		Revenue
Recurring	$	1,492	81.4	%	$	1,419	79.1	%
Perpetual software license, hardware and other	45		2.5	%	65		3.6	%
Consulting services	296		16.1	%	311		17.3	%
Total revenue	$	1,833	100.0	%	$	1,795	100.0	%


	Total				2025-		2027-		2029 and
In millions	Amounts		2024		2026		2028		Thereafter
Transition tax	$	52	$	23	$	29	$	—	$	—
Purchase obligations	848		255		412		181		—
Total transition tax and purchase obligations	$	900	$	278	$	441	$	181	$	—


Item 7A.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



/s/			PricewaterhouseCoopers LLP
Atlanta, Georgia
February 23, 2024


	For the Years Ended December 31
	2023		2022		2021
Revenue
Subscription software licenses	$	310	$	289	$	303
Services and other	1,182		1,130		1,161
Total recurring	1,492		1,419		1,464
Perpetual software licenses, hardware and other	45		65		77
Consulting services	296		311		376
Total revenue	1,833		1,795		1,917
Cost of revenue
Subscription software licenses	20		22		12
Services and other	398		375		353
Total recurring	418		397		365
Perpetual software licenses, hardware and other	38		47		43
Consulting services	262		270		323
Total cost of revenue	718		714		731
Gross profit	1,115		1,081		1,186
Operating expenses
Selling, general and administrative expenses	635		650		646
Research and development expenses	294		313		309
Total operating expenses	929		963		955
Income from operations	186		118		231
Other expense, net
Interest expense	(30)		(24)		(26)
Interest income	25		15		6
Other expense	(64)		(42)		(19)
Total other expense, net	(69)		(51)		(39)
Income before income taxes	117		67		192
Income tax expense	55		34		45
Net income	$	62	$	33	$	147
Net income per weighted average common share
Basic	$	0.62	$	0.32	$	1.35
Diluted	$	0.61	$	0.31	$	1.30
Weighted average common shares outstanding
Basic	99.8		103.2		108.6
Diluted	102.4		105.8		112.9


Item 1B.			UNRESOLVED STAFF COMMENTS


Item 2.			PROPERTIES


Item 3.			LEGAL PROCEEDINGS


Item 4.			MINE SAFETY DISCLOSURES


	At December 31
	2023		2022
Assets
Current assets
Cash and cash equivalents	$	486	$	569
Accounts receivable, net	286		364
Inventories	13		8
Other current assets	84		87
Total current assets	869		1,028
Property and equipment, net	239		244
Right of use assets - operating lease, net	9		13
Goodwill	398		390
Capitalized contract costs, net	68		92
Deferred income taxes	221		213
Other assets	69		42
Total assets	$	1,873	$	2,022
Liabilities and stockholders’ equity
Current liabilities
Current portion of long-term debt	$	19	$	—

Current portion of finance lease liability	66		67
Current portion of operating lease liability	6		8
Accounts payable	100		94
Payroll and benefits liabilities	130		137
Deferred revenue	570		589
Other current liabilities	105		112
Total current liabilities	996		1,007
Long-term debt	480		498
Finance lease liability	63		54
Operating lease liability	6		10
Pension and other postemployment plan liabilities	102		101
Long-term deferred revenue	22		8
Deferred tax liabilities	8		7
Other liabilities	61		79
Total liabilities	1,738		1,764
Commitments and contingencies (Note 10)
Stockholders’ equity
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at December 31, 2023 and 2022, respectively	—		—
Common stock: par value $0.01 per share, 500.0 shares authorized, 97.9 and 101.1 shares issued and outstanding at December 31, 2023 and 2022, respectively	1		1
Paid-in capital	2,074		1,941
Accumulated deficit	(1,811)		(1,565)
Accumulated other comprehensive loss	(129)		(119)
Total stockholders’ equity	135		258
Total liabilities and stockholders’ equity	$	1,873	$	2,022


	Common Stock			Paid-in		Retained Earnings (Accumulated		Accumulated Other Comprehensive
	Shares	Amount		Capital		Deficit)		(Loss) income		Total
December 31, 2020	108	$	1	$	1,656	$	(1,114)	$	(143)	$	400
Net income	—	—		—		147		—		147
Employee stock compensation, employee stock purchase programs and option exercises, net of tax	5	—		152		—		—		152
Repurchases of common stock, retired	(6)	—		—		(244)		—		(244)
Pension and postemployment benefit plans, net of tax	—	—		—		—		6		6
Unrealized gain on derivatives, net of tax	—	—		—		—		11		11
Currency translation adjustment	—	—		—		—		(12)		(12)
December 31, 2021	107	$	1	$	1,808	$	(1,211)	$	(138)	$	460
Net income	—	—		—		33		—		33
Employee stock compensation, employee stock purchase programs and option exercises, net of tax	3	—		133		—		—		133
Repurchases of common stock, retired	(9)	—		—		(387)		—		(387)
Pension and postemployment benefit plans, net of tax	—	—		—		—		31		31
Unrealized gain on derivatives, net of tax	—	—		—		—		19		19
Currency translation adjustment	—	—		—		—		(31)		(31)
December 31, 2022	101	$	1	$	1,941	$	(1,565)	$	(119)	$	258
Net income	—	—		—		62		—		62
Employee stock compensation, employee stock purchase programs and option exercises, net of tax	4	—		133		—		—		133
Repurchases of common stock, retired	(7)	—		—		(308)		—		(308)
Pension and postemployment benefit plans, net of tax	—	—		—		—		(7)		(7)
Unrealized loss on derivatives, net of tax	—	—		—		—		(4)		(4)
Currency translation adjustment	—	—		—		—		1		1
December 31, 2023	98	$	1	$	2,074	$	(1,811)	$	(129)	$	135


	Internal-use Software
In millions	2023		2022		2021
Beginning balance at January 1	$	8	$	10	$	13
Capitalized	2		3		3
Amortization	(5)		(5)		(6)
Ending balance at December 31	$	5	$	8	$	10


	Actual		For the years ended (estimated)
In millions	2023		2024		2025		2026		2027		2028
Internal-use software amortization expense	$	5	$	4	$	2	$	2	$	2	$	2



In millions, except earnings per share	2023		2022		2021
Net income attributable to common stockholders	$	62	$	33	$	147
Weighted average outstanding shares of common stock	99.8		103.2		108.6
Dilutive effect of employee stock options, restricted shares and other stock awards	2.6		2.6		4.3
Common stock and common stock equivalents	102.4		105.8		112.9
Earnings per share:
Basic	$	0.62	$	0.32	$	1.35
Diluted	$	0.61	$	0.31	$	1.30


	Twelve Months Ended December 31,
In millions	2023		2022		2021
Other expense
Foreign currency losses	$	38	$	30	$	8
Blue chip swap losses	13		—		—
Other	13		12		11
Total Other expense	$	64	$	42	$	19


In millions	December 31, 2023		Year 1		Year 2 and Thereafter



Remaining unsatisfied obligations	$	2,681	$	1,606	$	1,075


In millions	Balance December 31, 2022		Additions		Currency Translation Adjustments		Balance December 31, 2023
Goodwill
Americas	$	252	$	5	$	—	$	257
EMEA	87		1		2		90
APJ	51		1		(1)		51
Total goodwill	$	390	$	7	$	1	$	398


		December 31, 2023
In millions	Amortization Life (in Years)	Gross Carrying Amount		Accumulated Amortization Amount
Acquired intangible assets
Intellectual property/developed technology	5	$	14	$	(2)


Shares in thousands	Number of Shares	Weighted- Average Grant Date Fair Value per Share
Unvested shares at January 1, 2023	6,996	$	39.40
Granted	3,926	$	39.98
Vested	(3,542)	$	32.77
Forfeited/canceled	(560)	$	43.38
Unvested shares at December 31, 2023	6,820	$	42.84


Shares in thousands	Number of Shares	Weighted- Average Grant Date Fair Value
Service-based restricted share units	3,065	$	40.90
Performance-based restricted share units	861	$	36.69
Total restricted share unit grants	3,926	$	39.98


	Pension				Postemployment
In millions	2023		2022		2023		2022
Change in benefit obligation
Benefit obligation at January 1	$	105	$	143	$	58	$	68
Service cost	4		6		12		13
Interest cost	3		2		2		1
Plan participant contributions	1		1		—		—
Actuarial loss (gain)	5		(28)		13		(12)
Benefits paid	(3)		(2)		(29)		(15)

Settlement	(2)		(8)		—		—
Plan Amendment	—		—		—		3
Currency translation adjustments	3		(9)		—		—
Benefit obligation at December 31	$	116	$	105	$	56	$	58
Change in plan assets
Fair value of plan assets at January 1	$	56	$	67	$	—	$	—
Actual return on plan assets	3		(3)		—		—
Company contributions	5		5		—		—
Benefits paid	(4)		(1)		—		—
Currency translation adjustments	1		(5)		—		—
Plan participant contribution	1		1		—		—
Settlements	(2)		(8)		—		—

Fair value of plan assets at December 31	60		56		—		—
Funded status (underfunded)	$	(56)	$	(49)	$	(56)	$	(58)
Amounts Recognized in the Consolidated Balance Sheet
Non-current assets	$	8	$	7	$	—	$	—
Current liabilities	(2)		(2)		(16)		(11)
Non-current liabilities	(62)		(54)		(40)		(47)
Net amounts recognized	$	(56)	$	(49)	$	(56)	$	(58)
Amounts Recognized in Accumulated Other Comprehensive Income (Loss)
Unrecognized Net actuarial (gain) loss	$	(4)	$	(8)	$	57	$	50
Unrecognized Prior service cost	—		—		4		5
Total	$	(4)	$	(8)	$	61	$	55


	Pension Benefit Obligations		Pension Benefit Cost
	2023	2022	2023	2022	2021
Discount rate	3.0%	3.3%	3.1%	1.3%	0.9%
Rate of compensation increase	3.2%	3.1%	3.1%	3.0%	2.9%
Expected return on plan assets	N/A	N/A	3.9%	3.1%	3.4%
Interest crediting rate assumption	1.6%	1.5%	1.5%	0.9%	0.9%
	Postemployment Benefit Obligations		Postemployment Benefit Cost
	2023	2022	2023	2022	2021
Discount rate	4.6%	3.8%	3.8%	2.0%	1.6%
Rate of compensation increase	3.0%	3.0%	3.0%	3.0%	3.0%
Involuntary turnover rate	4.5%	4.0%	4.0%	4.0%	3.5%


	Actual Asset Allocation as of December 31		Target Asset
	2023	2022	Allocation
Equity securities	33%	31%	32%
Debt securities	47%	51%	49%
Insurance (annuity) contracts	13%	16%	13%
Real estate	6%	2%	4%
Other	1%	—%	2%
Total	100%	100%	100%


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
In millions	December 31, 2023		(Level 1)		(Level 2)		(Level 3)
Money market funds	$	1	$	—	$	1	$	—
Equity funds	20		—		20		—
Bond/fixed-income funds	28		—		28		—
Real estate indirect investments	3		—		3		—
Insurance contracts	8		—		—		8
Total assets at fair value	$	60	$	—	$	52	$	8


In millions	Insurance Contracts
Balance as of January 1, 2023	$	7
Purchases, sales and settlements, net	1
Balance as of December 31, 2023	$	8


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
In millions	December 31, 2022		(Level 1)		(Level 2)		(Level 3)
Money market funds	$	2	$	—	$	2	$	—
Equity funds	17		—		17		—
Bond/fixed-income funds	27		—		27		—
Real estate indirect investments	3		—		3		—

Insurance contracts	7		—		—		7
Total assets at fair value	$	56	$	—	$	49	$	7


In millions	Insurance Contracts
Balance as of January 1, 2022	$	7
Purchases, sales and settlements, net	—
Balance as of December 31, 2022	$	7


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
In millions	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Money Market Funds at December 31, 2023	$	152	$	152	$	—	$	—

Money Market Funds at December 31, 2022	$	211	$	211	$	—	$	—



Interest Rate Swap at December 31, 2023	$	8	$	—	$	8	$	—
Interest Rate Swap at December 31, 2022	$	13	$	—	$	13	$	—

Liabilities
Foreign Currency Swap at December 31, 2023	$	8	$	—	$	8	$	—
Foreign Currency Swap at December 31, 2022	$	1	$	—	$	1	$	—


In millions	Principal payments

2024	19
2025	25
2026	25
2027	431
Total	$	500