Teradata Corporation (TDC)

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Teradata (TDC)

Q4 2012 Earnings Call

February 07, 2013 8:30 am ET

Executives

Gregg Swearingen - Former Vice President of Investor Relations

Michael F. Koehler - Chief Executive Officer, President, Director and Member of Executive Committee

Stephen M. Scheppmann - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

Analysts

Kathryn L. Huberty - Morgan Stanley, Research Division

Joseph K. Radigan - KeyBanc Capital Markets Inc., Research Division

Philip Winslow - Crédit Suisse AG, Research Division

Wamsi Mohan - BofA Merrill Lynch, Research Division

Gregory Dunham - Goldman Sachs Group Inc., Research Division

Brent Thill - UBS Investment Bank, Research Division

Raimo Lenschow - Barclays Capital, Research Division

Edward Maguire - Credit Agricole Securities (USA) Inc., Research Division

Jesse Hulsing - Pacific Crest Securities, Inc., Research Division

James Derrick Wood - Susquehanna Financial Group, LLLP, Research Division

Presentation

Operator

Welcome to the Q4 2012 Teradata Earnings Call. My name is John, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Mr. Gregg Swearingen. Mr. Swearingen, you may begin.

Gregg Swearingen

Good morning, and thanks for joining us for our 2012 Fourth Quarter Earnings Call. Mike Koehler, Teradata's CEO, will begin today by summarizing Teradata's fourth quarter and full year results. Steve Scheppmann, Teradata's CFO, will then provide more details regarding our financial performance, as well as our guidance for 2013. Our discussion today includes forecasts and other information that are considered forward-looking statements. While these statements reflect our current outlook, they are subject to a number of risks and uncertainties that could cause actual results to vary materially. These risk factors are described in Teradata's 10-K and other filings with the SEC.

On today's call, we will also be discussing certain non-GAAP financial information, which excludes such items as stock-based compensation and other special items. We'll also be talking about other non-GAAP items such as free cash flow and constant currency revenue comparisons. A reconciliation of our non-GAAP results to our reported GAAP results and other information concerning these measures is included in our earnings release and on the Investor page of Teradata's website, which can be found at teradata.com. A replay of this conference call will also be available later today on our website. Teradata assumes no obligation to update or revise the information included in this conference call, whether as a result of new information or future results.

I'll now turn the call over to Mike.

Michael F. Koehler

Thanks, Gregg, and good morning, everyone. Teradata finished the year with a solid fourth quarter. Revenue grew 10% over prior year, and was up 11% in constant currency, and non-GAAP earnings per share of $0.79 was up 20% from Q4 2011. For the year, revenue of more than $2.6 billion was up 13% as reported and 15% in constant currency. Non-GAAP earnings per share of $2.85 increased 23% over 2011. Overall, a very good year.

Turning to the regions. The Americas fourth quarter revenue grew 8% as reported and 9% in constant currency, and for the full year, revenue was up 13% as reported and in constant currency. New customer wins in the Americas during the fourth quarter included: O'Reilly Auto Parts; USDA Food Safety and Inspection Service; the state of Ohio, which will use Teradata for health and Medicaid spending analytics; the Ministry of Social Development in Brazil, which will be using Teradata to detect fraud and ensure that families benefit from the best use of public resources; CHRISTUS Health, which is integrating its clinical data across facilities to improve the quality of patient care; Bankview will be using Teradata for sales, click stream and marketing analytics; Pacific Gas & Electric, which is implementing Teradata for its smart meter data warehouse; Nautilus, a global fitness company, has purchased the Aprimo campaign management solution to support its marketing; and we added 2 Fortune 100 customers in the U.S. with plans to build out large-scale EDWs.

Expansions and upgrades in the Americas included: the U.S. Defense Commissary Agency; Hospital Corp. of America, which has added clinical applications to support healthcare reform requirements; Harvard Pilgrim Health Care, who used Teradata to help them expand from B2B into B2C; and Mohigan Sun Casino, which is using Teradata to support its 360-degree view of customer initiative.

Several Teradata customers in the Americas added Aster, Aprimo and eCircle Solutions in the quarter such as Comcast, which added our Aster Big Analytics Appliance as their data discovery platform for big data. This recently released appliance integrates Aster and Hadoop into a single appliance. Dell is implementing Teradata's integrated marketing management solution, as well as the Aster Big Analytics Appliance for analysis of multiple types of data. And GoDaddy.com, which is implementing our integrated marketing management and eCircle digital messaging applications to integrate call center and web interactions.

Turning to EMEA. Fourth quarter revenue grew 21% as reported and 24% in constant currency. For the full year, revenue increased 16% and 23% in constant currency. Excluding the benefit of eCircle revenue in 2012, EMEA's organic constant currency revenue growth was in the high teens, which was a strong performance given the economic climate there. For Teradata overall, eCircle contributed a little over 1 point of revenue growth in 2012.

Fourth quarter new customer wins in EMEA included: the Dutch tax authority; HSBC Turkey; and Turkcell, which plans to load 12 billion records of network probe data per day into its network operations data warehouse, which will enable analytics around its network and customer experience. Customer expansions and upgrades included: Media-Saturn, Europe's leading consumer electronics retailer, which has added a 6690 Active Data Warehouse with virtual storage and solid-state drives; TNT Express, which added a hybrid storage 6690 as well; NDAC, DHL, Ettika, Air France KLM, the National Traffic Department of Spain and one of the leading telcos in EMEA added an Aster system. And finally, Asia Pacific Japan grew revenue 2% as reported and 2% in constant currency, going against the prior year Q4, which had 28% revenue growth.

Read the rest of this transcript for free on seekingalpha.com