Teradata to take $60m hit for withdrawal from Russia
Calls time on interactions and services with customers, including state-owned bank Sberbank
Data warehousing specialist Teradata is taking a $60 million hit by ending sales, operations and support in Russia following the country's invasion of Ukraine.
CFO Claire Bramley told investors that of the $60 million, around $10 million was removed from first quarter revenue, leaving a $50 million impact expected across the remaining three quarters of 2022.
Teradata CEO Steve McMillan said: "In the quarter, we stopped conducting business in Russia, ceased customer interactions and services with all Russian accounts, and confirmed that we do not have any suppliers critical to our supply chain from Russia or Ukraine. Our actions were managed with a priority of support and care for our employees who were directly affected.
"Our Russian business operations were small, relative to the total company, but healthy and profitable. The action we took will impact our performance in EMEA, but was the right thing to do. However, almost all of our business in Russia was on-prem, and therefore does not change our cloud transformation strategy," he said.
Russia's state-owned bank Sberbank is a prominent Teradata customer and presented at the data warehousing company's 2019 Universe conference.
Following Russia's invasion of Ukraine in late February, Teradata continued to support the bank, at least temporarily. On 1 March Teradata told The Register it was analyzing the impact of sanctions and would continue to follow all government regulations and restrictions.
In Teradata Q1 results for the three months ended 31 March, revenue edged up 1 percent year-on-year to $496 million. Gross profit fell to $301 million from $307 million a year earlier.
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In data warehousing, Teradata has built a global customer base of large banks, global retailers and fast moving consumer goods companies, mainly based on optimised on-prem appliance servers. But with the arrival of cloud-based data warehouses such as Snowflake, AWS Redshift, Microsoft Synapse and Google BigQuery, Teradata was perceived as being old-fashioned, at least from investors' perspective.
In 2018, it launched the cloud-based Vantage platform for analytics and data warehousing system, which separated compute from storage in the same way as so-called cloud-native data warehouses.
In 2020, the company saw the departure of former CEO Oliver Ratzesberger which followed disappointing results in calendar Q3 2019, when revenue dropped 11 percent year-on-year to $459 million.
In the latest financial results, annual recurring revenue (ARR) from public cloud hit $209 million, an increase of 69 percent year on year. Total ARR increased 2 percent to $1.43 billion over the same period.
One analyst pointed out that Teradata had talked about 130 percent ARR increase in the public cloud. McMillan said Q1 was "traditionally and seasonally our lowest quarter." He said public cloud ARR would be more than $1 billion by 2025. ®