UPDATED 05:37 EDT / NOVEMBER 10 2015

Teradata Connect 2014 event NEWS

Teradata’s torment continues in Q3 as revenues decline again

Big Data vendor Teradata Corp. has chalked up another disappointing financial quarter, and has said it’s taking drastic action to rectify the situation by getting out of the business for marketing applications.

The company’s revenues fell again, with the $606 million it raked in over the third quarter representing a nine percent decrease from the same period last year. Total profits hit $78 million, which is way better than the $265 million it lost in the previous quarter, but still down 17 percent from one year ago. Teradata’s main Data and Analytics business brought in the lion’s share of the revenues at $557 million, while its Marketing Applications unit pulled in $49 million.

For Teradata, it’s revenues have declined for four straight quarters, and that’s more than enough to get jittery shareholders worrying. As a result, CEO Mike Koehler has decided now is the time to try and do something to stop the rot.

“We remain confident in Teradata’s technology, our roadmaps and competitive leadership position in the market and we are taking actions to increase shareholder value,” Koehler said in a statement. “We are making transformative changes to the company for longer term success, and are also aligning our cost structure for near term improvement.”

That seems to be gobbledygook-speak for saying the company is looking to cut its costs, as Koehler’s next sentence reveals:

“Our Marketing Applications team has made great progress this year, and has market leading solutions,” the CEO said. “As part of our business transformation, we determined it best to exclusively focus our investments and attention on our core Data and Analytics business. We are therefore selling our Marketing Applications business.”

Koehler also wants to streamline the business that isn’t being sold:

“In parallel, we are launching key transformation initiatives to better align our Data and Analytics solutions and services with the evolving marketplace and to meet the needs of the new Teradata going forward,” he continued.

We already know that the “new” Teradata envisaged by Koehler is making some transformative changes – earlier this year it announced plans to make its software and services available on Amazon Web Services from Q1 2016. In addition, from next year customers will be able to run Teradata’s software on any hardware, rather than using the firm’s own gear. Teradata has also spoken of cutting costs in R&D and go-to-market areas, which suggests lay-offs are very much a possibility going forward.

Teradata needs to do something, because its guidance for the fourth quarter won’t be encouraging too many investors. The company said it’s expecting Q4 revenues of around $708 million, which amounts to a seven percent decline from the same quarter in 2015.


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