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Teradata Corporation (NYSE: TDC) Securities Fraud Class Action

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COMPANY       Teradata Corporation  
COURT United States District Court for the Southern District of California
CASE NUMBER 24-cv-01034
JUDGE The Hon. Judge Cynthia Bashant and Magistrate Judge Michael S. Berg
CLASS PERIOD  February 13, 2023 through February 12, 2024


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Case Background:

A class action lawsuit has been filed on behalf of those who purchased or acquired Teradata Corporation (“Teradata”) (NYSE: TDC) securities between February 13, 2023 and February 12, 2024, both dates inclusive (the “Class Period”). 

On February 13, 2023, Teradata issued a press release reporting its fourth quarter and full year 2022 financial results, and provided an outlook for the full year 2023.  In its outlook for 2023, Teradata stated that its “Public cloud [Annual Recurring Revenue] is expected to increase in the range of 53% to 57% year-over-year” and “Total [Annual Recurring Revenue] is expected to increase in the range of 6% to 8% year-over-year.”  Annual Recurring Revenue, or ARR, is the annual value at a point in time of all recurring contracts, including subscription, cloud, software upgrade rights, and maintenance—and is determined, in significant part, by the number of customer transactions the company is able close in that period.

On June 1, 2023, at TD Cowen’s Technology, Media & Telecom Conference, Teradata’s CFO disclosed that the company was beginning to experience delays in executing its deals with customers, stating that the company was facing “a little bit of additional scrutiny” by customers, and that it was “tend[ing] to see [] more people in the approval line [at customers],” with this issue cropping up “over the last couple of quarters” (i.e., around the time of the February 13, 2023 guidance).  Just a few days later, on June 7, 2023, at Bank of America’s Global Technology Conference, the company’s CFO again discussed the existence of additional scrutiny by customers, but asserted that the company was beginning to “understand who are all of the people that need to approve [a new] deal,” and so that “when we’re doing our own forecasting, we can be a lot more predictable.”  The company then reaffirmed its 2023 guidance on August 7, 2023, and again on November 6, 2023.

On December 7, 2023, at a Barclays Global Technology Conference, Teradata’s CFO revealed that Teradata had “an eight-figure deal that potentially [. . .] could get pushed out [of Q4 2023],” the effect of which “could put [the company] towards the low end or slightly below the range for cloud ARR that [it] previously gave.”  On this news, Teradata’s stock price fell $2.89 per share, or 6.24%, from a close of $46.29 per share on December 6, 2023, to close at $43.40 per share on December 7, 2023.

Finally, on February 12, 2024, Teradata announced its fourth quarter and full year 2023 financial results.  Among other things, Teradata stated that public cloud ARR increased by only 48% for full year 2023, falling well short of the company’s previously issued guidance for this performance metric, and disclosed that total ARR increased by only 6% for the full year 2023, which was at the low end of its guidance.  Teradata’s CEO attributed these disappointing results to “deal timing issues”—a concern the company was purportedly aware of when it issued its guidance back in February 2023, and that it claimed it was on top of as of June 2023.  Indeed, after acknowledging the existence of these issues, the company had continuously reaffirmed its February 12, 2023 guidance.  On this news, Teradata’s stock price fell $10.57 per share, or 21.66%, from a close of $48.79 per share on February 12, 2024, to close at $38.22 per share on February 13, 2024.

The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) under Teradata’s expanded business model, which involved engagement with additional customer business units and decisionmakers, transactions with the company’s customers took longer to finalize; (2) Teradata thus overstated its ability to close customer transactions within their intended timeframes under its expanded business model; (3) Teradata failed to timely close several customer transactions that it had factored into its outlook for 2023 ARR growth; (4) as a result, the company was unlikely to meet its full year 2023 Total and Public Cloud ARR expectations; and (5) as a result, the company’s public statements were materially false and misleading at all relevant times.

What is a Lead Plaintiff?

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

Complete this form with your transactions in Teradata Corporation securities between February 13, 2023 and February 12, 2024.

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# of Shares
Price per Share
Principal Amount
Amount Paid
Series or CUSIP
# of Contracts
Price per Contract
Exercise Price
Expiration Date
Did you purchase shares of Teradata Corporation prior to the Class Period?
Are you a current or former employee of Teradata Corporation ?
The submission of this form does not create an attorney-client relationship, nor an obligation on the part of Kessler Topaz or you to file a lead plaintiff motion in this matter. Any information you submit will be maintained as confidential. If Kessler Topaz, in its sole discretion, believes that you might be an appropriate lead plaintiff candidate, Kessler Topaz will contact you to discuss the matter and whether to establish an attorney client relationship. By signing this form you are authorizing us to contact you regarding this case and/or future cases.
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