Wrapping up Q1 earnings, we look at the numbers and key takeaways for the data infrastructure stocks, including Teradata (NYSE: TDC) and its peers.
Generating insights from system level data is an increasing priority for most businesses, but to do so requires connecting and analyzing piles of data stored and siloed in separate databases. This is the demand driver for cloud based data infrastructure software providers, who can more readily integrate, distribute and process information vs. legacy on-premise software providers.
The 4 data infrastructure stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 0.9% below.
In light of this news, share prices of the companies have held steady as they are up 2.1% on average since the latest earnings results.
Weakest Q1: Teradata (NYSE: TDC)
Part of point-of-sale and ATM company NCR from 1991 to 2007, Teradata (NYSE: TDC) offers a software-as-service platform that helps organizations manage and analyze their data across multiple storages.
Teradata reported revenues of $418 million, down 10.1% year on year. This print fell short of analysts’ expectations by 2.4%. Overall, it was a mixed quarter for the company with a solid beat of analysts’ billings estimates but EPS guidance for next quarter missing analysts’ expectations significantly.
“Teradata met our outlook for all key metrics in the first quarter as a result of disciplined execution, continued pull through of the go-to-market actions taken last year and accelerating innovation,” said Steve McMillan, Teradata president and CEO.
Teradata delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 2.9% since reporting and currently trades at $21.31.
Read our full report on Teradata here, it’s free.
Best Q1: Elastic (NYSE: ESTC)
Started by Shay Banon as a search engine for his wife's growing list of recipes at Le Cordon Bleu cooking school in Paris, Elastic (NYSE: ESTC) helps companies integrate search into their products and monitor their cloud infrastructure.
Elastic reported revenues of $388.4 million, up 16% year on year, outperforming analysts’ expectations by 2.1%. The business had a strong quarter with accelerating customer growth and an impressive beat of analysts’ EBITDA estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.9% since reporting. It currently trades at $83.75.
Is now the time to buy Elastic? Access our full analysis of the earnings results here, it’s free.
C3.ai (NYSE: AI)
Founded in 2009 by enterprise software veteran Tom Seibel, C3.ai (NYSE: AI) provides software that makes it easy for organizations to add artificial intelligence technology to their applications.
C3.ai reported revenues of $108.7 million, up 25.6% year on year, exceeding analysts’ expectations by 0.8%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a solid beat of analysts’ EBITDA estimates and a narrow beat of analysts’ billings estimates.
Interestingly, the stock is up 16.8% since the results and currently trades at $26.91.
Read our full analysis of C3.ai’s results here.
Confluent (NASDAQ: CFLT)
Started in 2014 by the team of engineers at LinkedIn who originally built it as an internal tool, Confluent (NASDAQ: CFLT) provides infrastructure software for organizations that makes it easy and fast to collect and move large amounts of data between different systems.
Confluent reported revenues of $271.1 million, up 24.8% year on year. This result beat analysts’ expectations by 2.6%. It was a strong quarter as it also recorded EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
Confluent achieved the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is up 3.5% since reporting and currently trades at $24.60.
Read our full, actionable report on Confluent here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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