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Winners And Losers Of Q2: Teradata (NYSE:TDC) Vs The Rest Of The Data Infrastructure Stocks

StockStory - Mon Oct 9, 2023

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The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the data infrastructure stocks have fared in Q2, starting with Teradata (NYSE:TDC).

Generating insights from system level data is an increasing priority for most businesses, but to do so requires connecting and analyzing piles of data stored and siloed in separate databases. This is the demand driver for cloud based data infrastructure software providers, who can more readily integrate, distribute and process information vs. legacy on-premise software providers.

The 4 data infrastructure stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 2.98%, while on average next quarter revenue guidance was 0.52% above consensus. Investors abandoned cash burning companies since high interest rates will make it harder to raise capital, but data infrastructure stocks held their ground better than others, with share prices down 3.78% since the previous earnings results, on average.

Teradata (NYSE:TDC)

Part of point-of-sale and ATM company NCR from 1991 to 2007, Teradata (NYSE:TDC) offers a software-as-service platform that helps organizations manage their data across multiple storages and analyze it.

Teradata reported revenues of $462 million, up 7.44% year on year, beating analyst expectations by 3.85%. It was a decent quarter for the company, with revenue and ARR (annual recurring revenue) surpassing Wall Street's expectations. Next quarter's non-GAAP EPS guidance was in line, and the company largely maintained its full year guidance.

“Our broad-based momentum across the business generated strong financial results, including 77% Cloud ARR growth, 10% increase in Total ARR growth and EPS that exceeded our guidance,” said Steve McMillan, President and CEO, Teradata.

Teradata Total Revenue

Teradata pulled off the strongest analyst estimates beat but had the slowest revenue growth of the whole group. The stock is down 16.7% since the results and currently trades at $46.21.

Is now the time to buy Teradata? Access our full analysis of the earnings results here, it's free.

Best Q2: Confluent (NASDAQ:CFLT)

Started in 2014 by the team of engineers at LinkedIn who originally built it as an internal tool, Confluent (NASDAQ:CFLT) provides infrastructure software for organizations that makes it easy and fast to collect and move large amounts of data between different systems.

Confluent reported revenues of $189.3 million, up 35.8% year on year, beating analyst expectations by 3.75%. It was a decent quarter for the company, with a beat on quarterly revenue as well as RPO (remaining performance obligations, a leading indicator of revenue). Forward guidance was also bullish, with next quarter and the full year non-GAAP operating profit guidance particularly impressive vs. Wall Street expectations.

Confluent Total Revenue

Confluent scored the fastest revenue growth and highest full year guidance raise among its peers. The company added 69 enterprise customers paying more than $100,000 annually to a total of 1,144. The stock is down 4.9% since the results and currently trades at $29.5.

Is now the time to buy Confluent? Access our full analysis of the earnings results here, it's free.

Weakest Q2: C3.ai (NYSE:AI)

Founded in 2009 by enterprise software veteran Tom Seibel, C3.ai (NYSE:AI) provides software that makes it easy for organizations to add artificial intelligence technology to their applications.

C3.ai reported revenues of $72.4 million, up 10.8% year on year, beating analyst expectations by 1.07%. It was a mixed quarter for the company, with its full-year revenue guidance coming in higher than Wall Street's estimates. However, the outlook for the full year operating loss is larger.

C3.ai had the weakest performance against analyst estimates in the group. The stock is down 22.8% since the results and currently trades at $24.27.

Read our full analysis of C3.ai's results here.

Elastic (NYSE:ESTC)

Started by Shay Banon as a search engine for his wife's growing list of recipes at Le Cordon Bleu cooking school in Paris, Elastic (NYSE:ESTC) helps companies integrate search into their products and monitor their cloud infrastructure.

Elastic reported revenues of $293.8 million, up 17.5% year on year, beating analyst expectations by 3.26%. It was a decent quarter, with revenue and non-GAAP operating profit exceeding expectations. Next quarter's guidance was largely ahead, and the full year outlook was raised as well. On the other hand, its net revenue retention fell.

Elastic had the weakest full year guidance update among the peers. The company added 30 enterprise customers paying more than $100,000 annually to a total of 1,190. The stock is up 29.3% since the results and currently trades at $80.05.

Read our full, actionable report on Elastic here, it's free.

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The author has no position in any of the stocks mentioned