Teradata Corporation (NYSE:TDC) just released fourth-quarter 2015 results on Thursday. Though they may not look impressive at first glance, the enterprise data warehousing specialist is still in the thick of a transformation aimed at improving operational efficiency and rejuvenating growth.

Let's take a closer look at what Teradata achieved:

Taradata Corporation results: The raw numbers

 

Q4 2015 Actual

Q4 2014 Actual

Growth (YOY)

Revenue

$719 million

$761 million

 -6%

GAAP Net Income

$41 million

$118 million

 -65.3%

GAAP Earnings Per Share

$0.31

$0.77

 -59.7%

Data source: Teradata Corporation.

What happened with Teradata this quarter?

  • On an adjusted (non-GAAP) basis, which offers perspective by excluding items like stock-based compensation and goodwill impairment, net income fell 32.9% year over year, to $94 million, and declined 23.1% on a per-share basis, to $0.70.
  • That brought full-year 2015 revenue to $2.53 billion, down 7% from 2014, and 2% at constant currency. Meanwhile, 2015 GAAP loss per share came in at $0.89, and 2015 adjusted earnings arrived at $2.06 per share.
  • These results were in line with expectations. Teradata's latest guidance called for full fiscal-year 2015 revenue to be down 6% to 8% on a reported basis from 2014, with a GAAP loss per share of $0.71 to $0.51, and adjusted earnings per share of $2.00 to $2.20.
  • Teradata's top line in Q4 included a 6% decline from the data and analytics segment, to $669 million, and a 4% drop in marketing applications revenue, to $50 million.
  • Within the former, consulting revenue accelerated to 6% growth in the second half of the year, up from 2% in the first half.
  • Recurring revenue climbed 7% for the year to represent 47% of total revenue in 2015, up from 43% in 2014. Excluding one-time professional services, recurring revenue was 59% of total sales.
  • Revenue in the Americas grew 3% year over year in Q4.
  • International revenue fell 1% for the year, capped by an 8% year-over-year decline in the fourth quarter, albeit mostly due to "lumpiness" in sales in Western Europe, Australia, and China.
  • Big data new-customer wins increased sequentially with each quarter in 2015, helping big-data revenue rise more than 50% in 2015.
  • Teradata managed cloud revenue is still small, "but growing rapidly and very strategic to us," according to Teradata CEO Mike Koehler.
  • Made "solid progress" implementing its business transformation as outlined last quarter, including the expected exit of the marketing applications business. During the subsequent conference call, management stated they expect to sell the marketing applications business "in the next few months," given "strong interest" from a number of buyers
  • Repurchased 3.5 million shares of stock for $99 million, bringing full-year repurchases to 19 million shares for $647 million. This leaves $573 million remaining under Teradata's current repurchase authorization.
  • Remain on track to cost reductions of $70 million in 2016.

What management had to say 
Koehler elaborated:

We have developed a comprehensive transformation blueprint and are on the path to return the company to meaningful and sustainable revenue growth. Teradata continues to be universally known as the leader in high performance data analytics. Many of our customers are leaders in their industries, and we are their partner of choice for driving business value from their data. Our transformation plan builds on this position of strength, and will advance our leadership and expand our market opportunity.

Looking forward 
Teradata anticipates exiting the majority of its marketing applications business by the end of the first quarter of 2016, so expects to include $40 million in revenue during the quarter attributable to marketing applications on a GAAP basis. As a result, Teradata anticipates GAAP revenue of $2.315 billion to $2.36 billion for the full year 2016, down 7% to 8% from 2015 (or 5% to 7% at constant currency).

On an adjusted basis, which means excluding marketing applications revenue, Teradata expects 2016 revenue of $2.275 billion to $2.32 billion, or down 8% to 10% -- down 6% to 8% at constant currency -- from 2015. Excluding the revenue contribution from marketing applications in 2015, Teradata's revenue would have declined just 2% to 4%, or flat to down 2% at constant currency.

Next, Teradata expects 2016 GAAP earnings per share of $1.68 to $1.83 -- including a loss from marketing applications in the first quarter -- while adjusted earnings per share should be in the range of $2.35 to $2.50, or growth of 14.1% to 21.4% over 2015. By contrast, analysts' consensus estimates predicted Teradata would achieve higher revenue in 2016 of $2.38 billion, but lower earnings of $2.29 per share.

In the end, Teradata didn't necessarily need to demolish expectations to impress the market. More than anything, I think investors should be more than pleased the company continues to show progress in its transformation initiatives. If it can continue to do so in the coming quarters, Teradata should emerge a stronger company for it, and one better positioned to consistently generate shareholder value over the long term.

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Teradata. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.