NEW YORK, June 14, 2024 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against Teradata Corporation (NYSE:) (Teradata or the Company) (NYSE: TDC) in the United States District Court Southern District of California on behalf of all persons and entities who purchased or otherwise acquired Teradata securities between February 13, 2023 and February 12, 2024, both dates inclusive (the Class Period). Investors have until August 13, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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Teradata, together with its subsidiaries, provides a connected multi-cloud data platform for enterprise analytics. Historically, Teradata primarily dealt with the information technology departments of its customers. However, as the Company expanded its business model and strategic objectives, it increasingly began to engage with additional customer business units.
To measure the Company’s progress in achieving its strategic objectives, Teradata utilizes certain financial and performance metrics including Total Annual Recurring Revenue (ARR)”or the annual value at a point in time of all recurring contracts, including subscription, cloud, software upgrade rights, and maintenance”and, included within Total ARR, Public Cloud ARR”or the annual value at a point in time of all contracts related to public cloud implementations of its cloud data platform. Accordingly, Teradata’s Total ARR for a certain time period is determined, in significant part, by the number of customer transactions the Company is able close in that period.
On February 13, 2023, Teradata issued a press release reporting its Q4 and full year 2022 financial results. In providing an outlook for the full-year 2023, the press release stated that Public cloud ARR is expected to increase in the range of 53% to 57% year-over-year and Total ARR is expected to increase in the range of 6% to 8% year-over-year.
Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) under Teradata’s expanded business model, which involved engagement with additional customer business units and decisionmakers, transactions with the Company’s customers took longer to finalize; (ii) Teradata thus overstated its ability to close customer transactions within their intended timeframes under its expanded business model; (iii) Teradata failed to timely close several customer transactions that it had factored into its outlook for 2023 ARR growth; (iv) as a result, the Company was unlikely to meet its full year 2023 Total and Public Cloud ARR expectations; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On December 7, 2023, at a Barclays Global Technology Conference Teradata’s Chief Financial Officer Defendant Claire Bramley revealed that the Company had an eight-figure deal that potentially [. . .] could get pushed out [of Q4 2023], the effect of which could put [the Company] towards the low end or slightly below the range for cloud ARR that [it] previously gave.
On this news, Teradata’s stock price fell $2.89 per share, or 6.24%, to close at $43.40 per share on December 7, 2023.
Then, on February 12, 2024, Teradata announced its Q4 and full year 2023 financial results. Among other things, the Company stated that due to deal timing issues public cloud ARR increased by only 48% and total ARR increased by only 6% for the full year 2023, falling well short of the Company’s previously issued expectations for these performance metrics.
On a conference call held that same day to discuss the Company’s Q4 and full year 2023 results (the Q4 2023 Earnings Call), Teradata’s Chief Executive Officer Defendant Stephen McMillan (McMillan) confirmed that the deal timing issues related to the Company’s failure to timely finalize certain transactions that would have contributed to full year ARR growth if they had been closed in 2023. Specifically, Defendant McMillan claimed that because Teradata is becoming even more strategic to corporations and touching all levels of [its] customers’ organizations, there were more executive decision makers required to close these deals and that [t]hese dynamics cause a number of transactions to move into 2024. As a result, Defendant McMillan revealed that there was a handful of large deals that slipped out of December [2023] and each were worth $2 million or more of cloud ARR growth.
On this news, Teradata’s stock price fell $10.57 per share, or 21.66%, to close at $38.22 per share on February 13, 2024.
If you purchased or otherwise acquired Teradata shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
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