Teradata Corporation (TDC) experienced a pre-market plunge of 7.46% on November 5, 2024, despite reporting solid third-quarter 2024 earnings results. While the company's adjusted earnings per share of $0.69 surpassed analyst estimates, it was the lowered guidance for cloud Annual Recurring Revenue (ARR) growth that weighed on investor sentiment.

The data analytics solutions provider attributed the reduction in its cloud ARR growth outlook for the full year 2024 to a change in customer behavior. Teradata revealed that some large transformational cloud migration deals are being broken down into smaller, staged migrations by customers, leading to a shift in the mix between on-premise and cloud commitments.

However, Teradata maintained its guidance for total ARR, recurring revenue, and free cash flow for 2024, as the total customer spend and commitment with the company remain unchanged. The company emphasized its strong competitive position, highlighting its ability to win back customers from rivals like Snowflake and Databricks, owing to its differentiated hybrid platform capabilities.