What happened 

Shares of Teradata (TDC 1.21%) were climbing fast this morning after the company reported fourth-quarter results that were better than expected. The data management company beat both Wall Street's expectations for earnings and the average estimate for revenue. 

That boosted investor optimism in the tech stock this morning, sending shares up 12% as of 11:03 a.m. ET.

So what

The company reported non-GAAP (adjusted) earnings of $0.35 in the quarter, which was down 38% from the year-ago quarter but was good enough to beat Wall Street's average estimate of $0.31. 

Additionally, the company's sales declined by 5% in the quarter to $452 million, but that still outpaced analysts' consensus estimate of about $423 million. 

The company's annual recurring revenue (ARR) in its public cloud segment was also a bright spot, rising by 77% to $357 million in the quarter. Management also noted that recurring revenue now accounts for 79% of total sales, up from 77% in the year-ago quarter. 

"Teradata had a strong 2022, including achieving our largest quarter of cloud growth ever, and meeting or beating every element of our annual outlook," Teradata CEO Steve McMillan said in a press release. 

On the company's earnings call, McMillan pointed out the company's fourth-quarter results as proof that Teradata has achieved its goal of becoming a cloud-first company, saying: "Just over two short years ago, we declared that Teradata would be cloud-first, and the entire team stepped up and executed with determination and consistency. Once we set our sights on our cloud-first future, we have delivered more than a sixfold growth in cloud."

Now what 

Investors were also optimistic about Teradata's first quarter after management said that adjusted earnings will be in the range between $0.60 to $0.64, which is higher than Wall Street's average estimate of $0.59. And with the company's leadership also saying that Teradata is on track to achieve $1 billion in cloud ARR in 2025, investors were confident that the data management company is headed in the right direction.