Core Insights - Teradata Corporation (NYSE:TDC) is recognized as a promising AI stock with significant potential for investors [1] - The company announced new features for its Enterprise Vector Store aimed at enhancing the use of generative AI and autonomous agents [2] Product Features - New features include unstructured integration for automating the ingestion of various document types such as PDFs, images, and audio, with video support expected soon [2] - The introduction of hybrid search capabilities that combine semantic, lexical, and metadata techniques to improve accuracy and context [2] - Multi-modal embeddings have been added to support text, images, and audio, enhancing semantic richness and allowing for up to 8K dimensions for greater accuracy and detail [3] Company Overview - Teradata Corporation provides a connected hybrid cloud analytics and data platform, operating in two segments: Product Sales and Consulting Services [4]

Core Insights - Teradata (TDC) shares have increased by 31.8% over the past six months, significantly outperforming the Zacks Computer & Technology sector's return of 3.2% due to improved Annual Recurring Revenue (ARR), cost savings, and productivity measures [1] - The launch of new products such as Enterprise Vector Store, MCP Server, AgentBuilder, and Autonomous Customer Intelligence is expected to drive future growth [1] - The enhanced ClearScape Analytics platform, designed for agentic AI, is a notable development that is anticipated to boost Teradata's free cash flow [1] Product Innovation and AI - Teradata combines consulting and technology to enable agentic AI and trusted data, leveraging deep expertise in AI/ML to assist clients in transitioning from proof-of-concept to production [2] - The new AI features in the Enterprise Vector Store allow for the integration of structured and unstructured data, enhancing data utilization for AI applications [3] - The platform supports Multi-Modal AI, enabling understanding of various content types and integrates with tools like LangChain for faster AI application development [3] AI Engagements and Partnerships - Teradata has completed over 150 AI engagements in 2025, helping clients address complex business challenges through AI [4] - The company is well-equipped to manage increased workloads from agentic AI, which can demand significantly more compute resources than traditional analytic workloads [5] - Teradata has established partnerships with major cloud service providers, including AWS, Microsoft Azure, and Google Cloud, enhancing access to its Vantage Cloud platform [7] Financial Guidance - For Q1 2026, Teradata expects adjusted net earnings between 75 cents and 79 cents per share, with a consensus estimate for net sales at $426.4 million, reflecting a year-over-year increase of 2% [8][9] - The 2026 adjusted net earnings are anticipated to be in the range of $2.55 to $2.65 per share, with net sales estimated at $1.64 billion, indicating a year-over-year decrease of 1.3% [9] Recognition and Rankings - Teradata has been recognized as a leader in the Forrester Wave Data Management for Analytics platforms and included in Gartner Peer Insights as "Voice of the Customer" for code-based libraries and low-code tooling [6]

Core Insights - Teradata Corporation is recognized as a promising stock for beginners in 2026, reporting a 15% growth in Cloud ARR and a non-GAAP diluted EPS of $0.74 for Q4 2025 [1] - The company is shifting focus towards AI and hybrid cloud solutions, launching innovations like the Enterprise Vector Store and MCP Server to enhance AI workload capabilities [2] - CEO highlighted a doubling of proof-of-concept AI activities in 2025, with many transitioning to production, and announced a partnership with Unstructured.io to improve AI model operations [3] Financial Performance - In Q4 2025, Teradata achieved total revenue of $421 million, with a 5% increase in recurring revenue [1] - Full-year total revenue for 2025 declined by 5% to $1.663 billion, while Q4 operating margin expanded to 22.8% [1] - The company generated $285 million in free cash flow for the year [1] Strategic Direction - Teradata is pivoting towards AI and hybrid cloud solutions to initiate a new growth cycle [2] - The company expects total ARR growth between 2% and 4% for 2026 [3] - The partnership with Unstructured.io aims to enhance the platform's relevance for complex AI model operations and unstructured data processing [3] Business Segments - Teradata operates in two segments: Product Sales and Consulting Services, providing a connected hybrid cloud analytics and data platform [5]

Core Insights - The artificial intelligence (AI) infrastructure segment is expected to maintain strong momentum in 2026, driven by robust demand, despite concerns over the high valuations of major AI companies [2][3]. Company Summaries Calix Inc. (CALX) - Calix reported adjusted earnings of $0.39 per share for Q4 2025, exceeding the Zacks Consensus Estimate of $0.38, and significantly up from $0.08 per share a year ago [4]. - Quarterly revenues reached $272.45 million, surpassing the Zacks Consensus Estimate by 0.90% [4]. - The company has integrated AI into its cloud platform to enhance operations and service delivery for broadband providers, with major clients including Lumen Technologies and Verizon [6]. - Calix's expected revenue and earnings growth rates for the current year are 15.6% and 41.5%, respectively, with a 4.9% improvement in the earnings estimate over the last 30 days [7]. Teradata Corp. (TDC) - Teradata reported adjusted earnings of $0.74 per share for Q4 2025, beating the Zacks Consensus Estimate of $0.55, and up from $0.53 per share a year ago [8]. - Total revenues were $421 million, exceeding the Zacks Consensus Estimate by 6.52% [8]. - The company is expected to benefit from improved annual recurring revenue (ARR) growth, cost savings, and productivity measures, which will drive free cash flow [9]. - Teradata's innovative AI capabilities and new product rollouts are anticipated to enhance its analytics offerings and drive long-term growth [10][12]. - The expected revenue and earnings growth rates for Teradata are -2.1% and -3.9%, respectively, with a 0.4% improvement in the earnings estimate over the last 90 days [13]. Lumen Technologies Inc. (LUMN) - Lumen reported adjusted earnings of $0.23 per share for Q4 2025, contrasting with a loss of $0.21 per share as per the Zacks Consensus Estimate, and an adjusted loss of $0.09 per share in the prior year [14]. - Total revenues were $3.041 billion, down 8.7% year over year, and missed the Zacks Consensus Estimate by 1.4% [14]. - The company is focusing on AI-driven solutions, securing $13 billion in Private Connectivity Fabric (PCF) deals by the end of 2025, with revenues of $41 million and $116 million recognized in Q4 and full-year 2025, respectively [15][16]. - Lumen's active customers for its network-as-a-service (NaaS) platform grew by 29% quarter over quarter, indicating strong demand for its services [17]. - The expected revenue and earnings growth rates for Lumen are -12.4% and 15.4%, respectively, with a significant improvement in the earnings estimate of over 100% in the last seven days [18].

Industry Overview - The momentum of the artificial intelligence (AI) infrastructure segment is expected to continue into 2026, supported by a bullish demand scenario [1] - Concerns exist regarding the overstretched valuations of major AI companies, including both infrastructure developers and application implementers [1] Company Highlights Calix Inc. (CALX) - Calix reported quarterly adjusted earnings of $0.39 per share, surpassing the Zacks Consensus Estimate of $0.38, and showing significant growth from $0.08 per share a year ago [6] - Quarterly revenues reached $272.45 million, exceeding the Zacks Consensus Estimate by 0.90% [6] - The company has integrated AI into its cloud platform to enhance operations and service delivery for broadband service providers [8] - Expected revenue and earnings growth rates for Calix are 15.6% and 41.5%, respectively, for the current year [9] Teradata Corp. (TDC) - Teradata reported quarterly adjusted earnings of $0.74 per share, beating the Zacks Consensus Estimate of $0.55, and up from $0.53 per share a year ago [11] - Total revenues were $421 million, exceeding the Zacks Consensus Estimate by 6.52% [11] - The company is expected to benefit from improved annual recurring revenue (ARR) growth, cost savings, and productivity measures [12] - Teradata's expected revenue and earnings growth rates are -2.1% and -3.9%, respectively, for the current year [16] Lumen Technologies Inc. (LUMN) - Lumen reported fourth-quarter adjusted earnings of $0.23 per share, contrasting with a Zacks Consensus Estimate of a loss of $0.21 [17] - Total revenues were $3.041 billion, down 8.7% year over year, and missed the Zacks Consensus Estimate by 1.4% [17] - The company secured $13 billion in AI-linked Private Connectivity Fabric (PCF) deals, boosting demand for its network-as-a-service (NaaS) solutions [18][19] - Lumen's expected revenue and earnings growth rates are -12.4% and 15.4%, respectively, for the current year [21]

Financial Data and Key Metrics Changes - Total ARR grew by 3% on a reported basis and 1% in constant currency, marking a stabilization milestone for the business [15][16] - Fourth quarter total revenue was $421 million, up 3% year-over-year as reported and 1% in constant currency, exceeding expectations [16][17] - Free cash flow for the year reached $285 million, surpassing the high end of the outlook [15][20] - Non-GAAP diluted earnings per share were $0.74, exceeding the top end of the outlook range by $0.17 [19] Business Line Data and Key Metrics Changes - Cloud ARR grew 15% as reported and 13% in constant currency, now representing 46% of total ARR [16] - Fourth quarter consulting services revenue was $53 million, down 4% year-over-year as reported and down 6% in constant currency [17] Market Data and Key Metrics Changes - Customer engagement across all regions and industries shifted towards AI and Elastic Compute, indicating a growing interest in AI solutions [7][13] - The company saw a resurgence of interest in its hybrid model, with customers leveraging both on-prem and cloud deployment options [6][10] Company Strategy and Development Direction - The company aims to help organizations activate intelligence in their enterprises through autonomous AI systems [6] - A focus on product development and innovation is planned to capitalize on the substantial market opportunity in AI [26] - The company is committed to building partnerships that strengthen its ecosystem and extend capabilities [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing a profitable growth path into 2026, driven by improved retention and customer engagement [5][14] - The company anticipates typical seasonality in ARR, with Q1 expected to be a decline quarter followed by stabilization and growth [21][76] - Management highlighted the importance of AI solutions as a key growth driver moving forward [30][38] Other Important Information - The company announced a board refreshment initiative, with a new independent director joining soon [27] - The company plans to reauthorize its buyback program for another $500 million starting in 2026 [20] Q&A Session Summary Question: On-premise AI materiality and customer investment - Management sees on-premise AI as a key growth driver, with increased POC activity leading to production deployments [30] Question: Free cash flow growth versus EPS guidance - The difference in growth rates is attributed to a one-time tax benefit in Q4, affecting EPS but not free cash flow [32][33] Question: Growth inflection drivers - The growth is attributed to improved demand and proactive product and go-to-market strategies [36][38] Question: Business mix and visibility in 2026 - Migration activity is complex and timing can be uncertain, while expansions provide more consistent growth visibility [40][41] Question: Impact of last deals and deal cycle improvements - Management noted strong performance across industries and improved retention rates, contributing to growth [46][48] Question: Contribution from new AI-related solutions - New product capabilities are expected to drive excitement, but not significantly factored into current financial outlook [60][61] Question: Hardware refresh status - The new hardware platform is expected to be available by Q2 or Q3, with sales teams preparing for its launch [64][65] Question: Investments in headcount and sales hiring - The company plans to invest in forward-deployed engineering and product development to enhance AI solutions [70] Question: Seasonality and new initiatives impact - Typical seasonality is expected, with minimal impact from new products in the first half of the year [75][76] Question: Board refreshment and governance - The board refreshment process is ongoing, with a focus on skill mix and governance improvements [78]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue was $421 million, up 3% year-over-year, exceeding expectations due to higher recurring revenue [17] - Total ARR grew 3% on a reported basis, marking a stabilization milestone for the business [15][16] - Free cash flow for the year reached $285 million, exceeding the high end of the outlook [20] Business Line Data and Key Metrics Changes - Recurring revenue for Q4 was $367 million, up 5% year-over-year, driven by higher upfront revenue from term license subscriptions [17] - Consulting services revenue for Q4 was $53 million, down 4% year-over-year, indicating challenges in this segment [17] Market Data and Key Metrics Changes - Cloud ARR grew 15% as reported, now representing 46% of total ARR, reflecting a strong shift towards cloud solutions [16] - The trailing 12-month cloud net expansion rate was 108%, indicating robust customer engagement in cloud services [16] Company Strategy and Development Direction - The company is focused on harnessing AI systems to enhance enterprise decision-making and operational efficiency [6][10] - A hybrid model combining on-prem and cloud solutions is being emphasized to meet diverse customer needs [6][10] - The launch of new products, including the Enterprise Vector Store and Teradata AI Factory, aims to drive AI adoption and operationalize autonomous AI [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing profitable growth into 2026, supported by strong customer engagement and product innovations [5][14] - The company anticipates a typical seasonal decline in ARR in Q1, followed by stabilization and growth in subsequent quarters [22] Other Important Information - The board announced the addition of Melissa Fisher, enhancing governance and oversight [27] - The company plans to invest more in product development to capitalize on market opportunities while maintaining profitability [26] Q&A Session Summary Question: On-premise AI materiality and customer production status - Management sees on-premise AI as a key growth driver, with increased production activity from proof of concepts [30] Question: Free cash flow growth versus EPS guidance - The difference in guidance is attributed to a one-time tax benefit in Q4, affecting EPS but not free cash flow [32] Question: Growth inflection drivers - The growth is attributed to improved demand and proactive product enhancements, particularly in AI solutions [36] Question: 2026 outlook visibility and uncertainties - Migration deals are complex and timing can be uncertain, while expansions provide more consistent growth visibility [40] Question: Impact of large deals on performance - Strong deal momentum across various industries has contributed positively to performance, with improved retention rates expected to continue [46] Question: Contribution from new AI-related solutions - New product initiatives are expected to provide upside potential, but not heavily factored into current financial outlooks [62] Question: Hardware refresh status and customer visibility - The new hardware platform is expected to be available in late Q2 or Q3, with sales teams preparing customers for its deployment [66] Question: Investments in headcount and sales hiring - The company plans to focus on forward-deployed engineering and product development to enhance AI solution delivery [72]

Financial Data and Key Metrics Changes - Total ARR grew by 3% on a reported basis and 1% in constant currency, marking a stabilization milestone for the business [15][16] - Fourth quarter total revenue was $421 million, up 3% year-over-year as reported and 1% in constant currency, exceeding expectations [16][17] - Free cash flow for the full year reached $285 million, surpassing the high end of the outlook [15][19] - Non-GAAP diluted earnings per share were $0.74, exceeding the top end of the outlook range by $0.17 [18] Business Line Data and Key Metrics Changes - Cloud ARR grew by 15% as reported and 13% in constant currency, now representing 46% of total ARR [16] - Consulting services revenue for the fourth quarter was $53 million, down 4% year-over-year as reported and down 6% in constant currency [17] Market Data and Key Metrics Changes - Customer engagement across all regions and industries shifted towards AI and Elastic Compute, indicating a growing interest in AI solutions [6][12] - The company saw a resurgence of interest in its hybrid model, with customers leveraging both on-prem and cloud deployment options [5][21] Company Strategy and Development Direction - The company is focused on harnessing Agentic AI systems to enable autonomous decision-making at enterprise scale [5] - A strong emphasis is placed on product development and innovation, with plans to invest more resources in this area to fuel future growth [15][26] - The company aims to maintain a hybrid deployment strategy to meet diverse customer needs driven by data sovereignty and regulatory environments [5][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering 2026 on solid footing, with expectations for continued growth in total ARR, operating margin, and free cash flow [15][23] - The company anticipates typical seasonality in ARR, with Q1 expected to be the largest renewal and highest erosion quarter [20][23] Other Important Information - The company announced a board refreshment initiative, with plans to add new independent directors to enhance governance [27] - A new partnership with Unstructured.io was established to automate the ingestion of unstructured content into analysis-ready data [10] Q&A Session Summary Question: On-premise AI materiality and customer investment - Management sees on-premise AI as a key growth driver, with increased POC activity leading to production deployments [30] Question: Free cash flow growth versus EPS guidance - The difference in guidance is attributed to a one-time tax benefit in Q4, affecting EPS but not free cash flow [32][33] Question: Drivers behind growth inflection - The AI marketplace is opening new opportunities, with improved retention rates and product announcements contributing to growth [36][38] Question: Visibility on migration versus expansion - Migration deals are complex and timing is hard to gauge, while expansions provide more consistent revenue growth [40][41] Question: Impact of new AI-related solutions on revenue - New product capabilities are expected to contribute to growth, but not heavily factored into current financial outlook [62] Question: Investments in headcount and sales hiring - The company plans to invest in forward-deployed engineering and product development to enhance AI solutions [68][70] Question: Seasonality and revenue growth expectations - Typical seasonality is expected, with Q1 showing erosion followed by growth in subsequent quarters [73][75] Question: Board refreshment and governance changes - The board refreshment process is ongoing, with a focus on enhancing skill mix and governance [77] Question: Characteristics of successful software companies in AI transition - The company emphasizes its role as a data layer for AI, positioning itself for growth in the autonomous AI space [81][82] Question: Operating margin expansion drivers - Expansion will be driven by gross margin improvements and efficiencies in operating expenses [84]

Core Insights - Teradata (TDC) shares have increased by 42.7% over the past three months, significantly outperforming the Zacks Computer & Technology sector's return of 2.8% due to improved Annual Recurring Revenue (ARR), cost savings, and productivity measures [1][10] - The company is expanding its portfolio with new products like Enterprise Vector Store, MCP Server, AgentBuilder, and Autonomous Customer Intelligence, which are expected to drive future growth [1] - Enhanced ClearScape Analytics with unified ModelOps capabilities for agentic AI is a notable development that is anticipated to boost Teradata's free cash flow [1] Product Innovation and AI - Teradata uniquely combines consulting and technology to enable agentic AI and trusted data, leveraging deep expertise and talent in AI/ML [2] - The company has completed over 150 AI engagements in 2025, assisting clients in solving complex business problems through AI [2] Workload Management - Teradata is well-equipped to manage increased workloads from agentic AI deployments, which can amplify workloads by up to 25 times and require 50 to 100 times more compute resources than previous analytic workloads [3] - The company's patented workload management and query optimization contribute to a high-performance environment for complex AI workloads [3] Industry Recognition - In Q3 2025, Teradata was recognized as a leader in the Forrester Wave Data Management for Analytics platforms and included in Gartner Peer Insights as "Voice of the Customer" for code-based libraries and low-code tooling [4] Strategic Partnerships and Acquisitions - Teradata has formed partnerships with major cloud service providers like Amazon Web Services, Microsoft Azure, and Google Cloud, enhancing access to its Vantage Cloud platform [5] - The acquisition of Stemma Technologies has expanded Teradata's capabilities in data search and exploration [5] Financial Guidance - For Q4 2025, Teradata expects adjusted net earnings between 53 cents and 57 cents per share, while for the full year 2025, adjusted net earnings are projected to be between $2.38 and $2.42 per share [6] - The Zacks Consensus Estimate for Q4 2025 net sales is $395.2 million, reflecting a year-over-year decrease of 3.3%, while the estimate for 2025 net sales is $1.64 billion, indicating a 6.4% decrease [7][8] Stock Performance - Teradata's stock has shown significant gains, attributed to improved ARR, AI focus, cost savings, and productivity measures, despite a projected decline in net sales [10]

Core Insights - The big data industry focuses on companies that process, store, and analyze vast amounts of structured, unstructured, and semi-structured data, providing tools for data mining, transformation, visualization, and predictive analytics [1][3]. Company Summaries Fair Isaac Corp. (FICO) - Fair Isaac is experiencing strong financial performance, driven by growth in its Scores and Software segments, with an expected revenue growth rate of 21.1% and earnings growth rate of 34.6% for the current year [7][9]. - The company has expanded its scoring models to include 'Buy Now, Pay Later' loan data, enhancing predictive accuracy [7]. - FICO's Lenders Leading Inclusion Program supports better decision-making for lenders [8]. Teradata Corp. (TDC) - Teradata's prospects are bolstered by an improvement in ARR growth rate and productivity measures, with an expected revenue growth rate of -0.6% and earnings growth rate of 3.6% for the current year [11][14]. - The company is well-positioned to support Agentic AI workloads, managing critical enterprise data and delivering necessary performance [11]. - Recent acquisitions, such as Stemma, enhance Teradata's data search capabilities and analytics offerings [13]. F5 Inc. (FFIV) - F5 is benefiting from strong software growth, particularly in public cloud and security offerings, with an expected revenue growth rate of 1.8% and earnings growth rate of -5.2% for the current year [15][18]. - The company has made six acquisitions over the past five years to enhance its network security capabilities [16]. - F5's strong presence in Layer 4-7 content switching positions it well in the application networking market [17]. S&P Global Inc. (SPGI) - S&P Global is positioned to benefit from the growing demand for business information services, with an expected revenue growth rate of 7.2% and earnings growth rate of 11.6% for the current year [19][21]. - Recent acquisitions, including ProntoNLP, ORBCOMM, and TeraHelix, enhance its capabilities in textual data analytics and supply chain insights [19][20]. - The company's service launches are aiding growth and expanding market reach [19]. Moody's Corp. (MCO) - Moody's is leveraging its dominant position in the credit rating industry and strategic acquisitions to support top-line expansion, with an expected revenue growth rate of 7.8% and earnings growth rate of 11.9% for the current year [22][24]. - Recent acquisitions, such as securing majority ownership in Middle East Rating & Investors Service, are diversifying its revenue streams [23]. - A rebound in bond issuance volume is anticipated to drive growth for Moody's [23].