- Fourth quarter Total ARR of $1.522 billion, an increase of 3% as reported and 1% in constant currency from the prior year period(1)
- Fourth quarter Recurring Revenue of $367 million, up 5% as reported and 3% in constant currency(1)
- Fourth quarter GAAP diluted EPS of $0.38 and non-GAAP diluted EPS of $0.74(2)
- Full-Year 2025 Cash Flow from Operations of $305 million and Free Cash Flow of $285 million(3)
SAN DIEGO, Feb. 10, 2026 /PRNewswire/ -- Teradata (NYSE: TDC) today announced its fourth quarter and full-year 2025 financial results.
"Teradata delivered another set of strong results in the 4th quarter, as we again exceeded expectations for Total Revenue, Recurring Revenue and Free Cash Flow," said Steve McMillan, Teradata president and CEO. "Our full-year results demonstrate strong operational discipline and establish a solid foundation as we enter 2026.
"Teradata's Autonomous AI and Knowledge platform is soundly resonating with customers; they recognize that the strengths we have built over decades are ideal for today's market needs. Our differentiated performance, scale, and hybrid capabilities, supported by our AI services, are proving to be a valuable combination. We have confidence in our agentic AI-fueled future."
Fourth Quarter 2025 Financial Highlights Compared to Fourth Quarter 2024
- Public cloud ARR increased to $701 million from $609 million, an increase of 15% as reported and 13% in constant currency(1)
- Total ARR increased to $1.522 billion from $1.474 billion, an increase of 3% as reported and
1% in constant currency(1) - Recurring revenue was $367 million versus $351 million, an increase of 5% as reported and
3% in constant currency(1) - Total revenue was $421 million versus $409 million, an increase of 3% as reported and 1% in constant currency(1)
- Recurring revenue was 87% of total revenue versus 86%
- GAAP gross margin was 60.8% versus 59.4%
- Non-GAAP gross margin was 62.0% versus 60.9%(2)
- GAAP operating margin was 12.8% versus 9.5%
- Non-GAAP operating margin was 22.8% versus 17.6%(2)
- GAAP diluted EPS was $0.38 versus $0.26 per share
- Non-GAAP diluted EPS was $0.74 versus $0.53 per share(2)
- Cash flow from operations was $160 million compared to $156 million
- Free cash flow was $151 million compared to $148 million(3)
Full-Year 2025 Financial Highlights Compared to Full-Year 2024
- Public cloud ARR increased to $701 million from $609 million, an increase of 15% as reported and 13% in constant currency(1)
- Total ARR increased to $1.522 billion from $1.474 billion, an increase of 3% as reported and
1% in constant currency(1) - Recurring revenue was $1.445 billion versus $1.479 billion, a decrease of 2% as reported and 3% in constant currency(1)
- Total revenue was $1.663 billion versus $1.750 billion, a decrease of 5% as reported and 5% in constant currency(1)
- Recurring revenue was 87% of total revenue versus 85%
- GAAP gross margin was 59.4% versus 60.5%
- Non-GAAP gross margin was 60.7% versus 61.7%(2)
- GAAP operating margin was 12.3% versus 11.9%
- Non-GAAP operating margin was 21.2% versus 20.3%(2)
- GAAP diluted EPS was $1.35 versus $1.16 per share
- Non-GAAP diluted EPS was $2.58 versus $2.42 per share(2)
- Cash flow from operations was $305 million compared to $303 million
- Free cash flow was $285 million compared to $277 million(3)
- Share repurchases of $140 million, resulting in a return of free cash flow of 49%
Outlook
For the full-year of 2026:
- Total ARR growth of 2% to 4% year-over-year,
- Recurring revenue in the range of flat to 2% year-over-year,
- Total revenue range in the range of -2% to flat year-over-year,
- GAAP diluted EPS is expected to be in the range of $1.26 to $1.36
- Non-GAAP diluted EPS is expected to be in the range of $2.55 to $2.65 per share(2)
- Cash flow from operations of $330 million to $350 million
- Free cash flow of $310 million to $330 million(3)
For the first quarter of 2026:
- Recurring revenue in the range of 6% to 8% year-over-year,
- Total revenue in the range of 1% to 3% year-over-year,
- GAAP diluted EPS is expected to be in the range of $0.36 to $0.40 per share
- Non-GAAP diluted EPS is expected to be in the range of $0.75 to $0.79 per share(2)
Earnings Conference Call
The conference call will begin at 1:30 p.m. PT on February 10, 2026. Investors and participants may attend the call by dialing (646) 844-6383 and entering access code 738113. For investors and participants outside the United States, see global dial-in numbers here, and use access code 738113.
The live webcast, as well as a replay, will be available on the Investor Relations page of the Teradata website at investor.teradata.com.
Supplemental Financial Information
Additional information regarding Teradata's operating results is provided below as well as on Teradata's website at investor.teradata.com.
1. The impact of currency is determined by calculating the prior-period results using the current-year monthly average currency rates. See the foreign currency fluctuation schedule, which is used to determine revenue on a constant currency ("CC") basis, on the
Investor Relations page of the Company's website at investor.teradata.com.
Revenue
(in millions)
For the Three Months ended December 31
2025 2024 % Change as % Change in CC
Reported
Recurring revenue $367 $351 5 % 3 %
Perpetual software licenses, hardware and other 1 3 (67 %) (69 %)
Consulting services 53 55 (4 %) (6 %)
Total revenue $421 $409 3 % 1 %
Product Sales $368 $354 4 % 2 %
Consulting Services 53 55 (4 %) (6 %)
Total revenue $421 $409 3 % 1 %
Revenue
(in millions)
For the Twelve Months ended December 31
2025 2024 % Change as % Change in CC
Reported
Recurring revenue $1,445 $1,479 (2 %) (3 %)
Perpetual software licenses, hardware and other 17 23 (26 %) (25 %)
Consulting services 201 248 (19 %) (19 %)
Total revenue $1,663 $1,750 (5 %) (5 %)
Product Sales $1,462 $1,502 (3 %) (3 %)
Consulting Services 201 248 (19 %) (19 %)
Total revenue $1,663 $1,750 (5 %) (5 %)
As of December 31
2025 2024 % Change as % Change in CC
Reported
Annual recurring revenue* $1,522 $1,474 3 % 1 %
Public cloud ARR** $701 $609 15 % 13 %
The impact of currency on ARR is determined by calculating the prior period ending ARR using the current period end currency rates.
* Total Annual Recurring Revenue ("Total ARR") is defined as the annual contract value for all active and contractually binding term-based contracts at the end of the period, including cloud, recurring AI services, subscriptions, hardware rental, maintenance, and software upgrade rights. The Company believes this is a useful metric to investors as it demonstrates progress toward achieving our strategic objectives as outlined in the Form 10-K and Form 10-Q.
** Public cloud ARR is defined as the annual contract value for all active and contractually binding term-based contracts at the end of a period that are operated in a public cloud environment. The Company believes this is a useful metric to investors as it demonstrates progress toward achieving our strategic objectives as outlined in the Form 10-K and Form 10-Q.
2. Teradata reports its results in accordance with GAAP. However, as described below, the Company believes that certain non-GAAP measures such as free cash flow, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net
income, and non-GAAP diluted earnings per share, all of which exclude certain items, and which may be reported on a constant currency basis, are useful for investors. Our non-GAAP measures are not meant to be considered in isolation to, as substitutes for, or superior to,
results determined in accordance with GAAP, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Each of our non-GAAP measures do not have a uniform definition under GAAP and therefore, Teradata's
definition may differ from other companies' definitions of these measures.
The following tables reconcile Teradata's actual and projected results and EPS under GAAP to the Company's actual and projected non-GAAP results and EPS for the periods presented, which exclude certain specified items. Our management internally uses supplemental non-GAAP
financial measures, such as gross profit, operating income, net income, and EPS, excluding certain items, to understand, manage and evaluate our business and support operating decisions on a regular basis. The Company believes such non-GAAP financial measures (1) provide useful
information to investors regarding the underlying business trends and performance of the Company's ongoing operations, (2) are useful for period-over-period comparisons of such operations and results, that may be more easily compared to peer companies and allow investors a view
of the Company's operating results excluding stock-based compensation expense and special items, (3) provide useful information to management and investors regarding present and future business trends, and (4) provide consistency and comparability with past reports and
projections of future results.
For the For the
Three Months Twelve Months
(in millions, except per share data) ended December 31 ended December 31
Gross Profit: 2025 2024 % Chg. 2025 2024 % Chg.
GAAP Gross Profit $256 $243 5 % $987 $1,058 (7 %)
% of Revenue 60.8 % 59.4 % 59.4 % 60.5 %
Excluding:
Stock-based compensation expense 4 4 17 17
Reorganization and other costs 1 2 6 5
Non-GAAP Gross Profit $261 $249 5 % $1,010 $1,080 (6 %)
% of Revenue 62.0 % 60.9 % 60.7 % 61.7 %
Operating Income
GAAP Operating Income $54 $39 38 % $205 $209 (2 %)
% of Revenue 12.8 % 9.5 % 12.3 % 11.9 %
Excluding:
Stock-based compensation expense 30 27 112 119
Reorganization and other costs 12 6 35 28
Non-GAAP Operating Income $96 $72 33 % $352 $356 (1 %)
% of Revenue 22.8 % 17.6 % 21.2 % 20.3 %
Net Income
GAAP Net Income $37 $25 48 % $130 $114 14 %
% of Revenue 8.8 % 6.1 % 7.8 % 6.5 %
Excluding:
Stock-based compensation expense 30 27 112 119
Reorganization and other costs 9 6 31 30
Income tax adjustments(i) (5) (6) (24) (25)
Non-GAAP Net Income $71 $52 37 % $249 $238 5 %
% of Revenue 16.9 % 12.7 % 15.0 % 13.6 %
For the Three For the Twelve
Months Months 2026 Outlook
ended December 31 ended December 31
Earnings Per Share: 2025 2024 2025 2024 Q1 FY
Guidance Guidance
GAAP Earnings Per Share $0.38 $0.26 $1.35 $1.16
$0.36 - $0.40
$1.26 - $1.36
Excluding:
Stock-based compensation expense 0.31 0.27 1.16 1.21 0.29 1.22
Reorganization and other costs 0.10 0.06 0.32 0.30 0.18 0.34
Income tax adjustments(i) (0.05) (0.06) (0.25) (0.25) (0.08) (0.27)
Non-GAAP Diluted Earnings Per Share $0.74 $0.53 $2.58 $2.42
$0.75 - $0.79
$2.55 - $2.65
i. Represents the income tax effect of the pre-tax adjustments to reconcile GAAP to Non-GAAP income based on the applicable jurisdictional statutory tax rate of the underlying item. Including the income tax effect assists investors in understanding the tax provision
associated with those adjustments and the effective tax rate related to the underlying business and performance of the Company's ongoing operations. As a result of these adjustments, the Company's non-GAAP effective tax rate for the three months ended December 31, 2025,
was 22.8% and December 31, 2024, was 17.5%. In addition, for the first quarter and full year 2025, we included a discrete tax adjustment of ($0.06) for the reversal of tax reserves due to the final settlement of an IRS audit in the first quarter of 2025. For the twelve
months ended December 31, 2025, the Company's non-GAAP effective tax rate was 22.4% and December 31, 2024, was 24.0%.
3. As described below, the Company believes that free cash flow is a useful non-GAAP measure for investors. Free cash flow does not have a uniform definition under GAAP in the United States and therefore, Teradata's definition may differ from other companies' definitions of
this measure. Teradata defines free cash flow as cash provided by/used in operating activities, less investing activities related to capital expenditures for property and equipment and additions to capitalized software ("total capital expenditures"). Teradata's management
uses free cash flow to assess the financial performance of the Company and believes it is useful for investors because it relates the operating cash flow of the Company to the capital that is spent to continue and improve business operations. In particular, free cash flow
indicates the amount of cash generated after capital expenditures which can be used for among other things, investments in the Company's existing businesses, strategic acquisitions, strengthening the Company's balance sheet, repurchase of Company stock and repay the
Company's debt obligations. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other non-discretionary expenditures that are not deducted from the measure. This non-GAAP measure should not be considered as a
substitute for, or superior to, cash flows from operating activities under GAAP.
(in millions) For the For the
Three Months Twelve Months
ended December 31 ended December 31 Outlook
2025 2024 2025 2024 2026
Cash provided by operating activities (GAAP) $160 $156 $305 $303
$330 to $350
Less total capital expenditures (9) (8) (20) (26) (~20)
Free Cash Flow (non-GAAP measure) $151 $148 $285 $277
$310 to $330
Note to Investors
This release contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements generally relate to opinions, beliefs, and projections of expected future financial and operating performance, business trends, liquidity, and market conditions, among other things. These forward-looking statements are based upon current expectations and assumptions and often can be identified by words such as "expect," "strive," "looking ahead," "outlook," "guidance," "forecast," "anticipate," "continue," "plan," "estimate," "believe," "focus," "see," "commit," "should," "project," "will," "would," "likely," "intend," "potential,"
or similar expressions. Forward-looking statements in this release include our 2026 first quarter and 2026 full year financial outlook and product innovation and demand. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including those relating to: the global economic environment and business conditions in general, including inflation, tariffs, and/or recessionary conditions; the ability of our suppliers to meet their commitments to us; the timing of purchases, migrations, or expansions by our current and potential customers, including our ability to retain customers; the rapidly changing and intensely competitive nature
of the information technology industry, the data analytics business, and artificial intelligence capabilities; fluctuations in our operating, capital allocation, and cash flow results; our ability to execute and realize the anticipated benefits of our refreshed brand, business transformation program or restructuring, sales and operational execution initiatives, and cost saving initiatives, including the restructuring actions; risks inherent in operating in foreign countries, including sanctions, tariffs, foreign currency fluctuations, and/or acts of war; risks associated with data privacy, cyberattacks and maintaining secure and effective products for our customers, as well as,
internal information technology and control systems; the timely and successful development, production or acquisition, availability and/or market acceptance of new and existing products, product features and services, including for our artificial intelligence, cloud, on-prem, and hybrid offerings; tax rates; turnover of our workforce and the ability to attract and retain skilled employees; protecting our intellectual property; availability and successful execution of new alliance and acquisition opportunities; subscription arrangements that may be cancelled or fail to be renewed; the impact on our business and financial reporting from the implementation of a new ERP system and
changes in accounting rules; and other factors described from time to time in Teradata's filings with the U.S. Securities and Exchange Commission, including its most recent annual report on Form 10-K, and subsequent quarterly reports on Forms 10-Q or current reports on Forms 8-K, as well as Teradata's annual report to stockholders. Teradata does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
About Teradata
Teradata is the AI platform built for the autonomous era. Our AI + Knowledge Platform and multifaceted AI Services help enterprises deploy solutions with deep domain expertise and full enterprise context. Wherever data resides--cloud, on-prem, or hybrid--Teradata connects and scales to deliver the performance AI needs. Learn more at Teradata.com.
The Teradata logo is a trademark, and Teradata is a registered trademark of Teradata Corporation and/or its affiliates in the U.S. and worldwide.
INVESTOR CONTACT
Chad Bennett
chad.bennett@teradata.com
MEDIA CONTACT
Jennifer Donahue
jennifer.donahue@teradata.com
Schedule A
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts - unaudited)
For the Period Ended December 31
Three Months
Twelve Months
2025 2024 % Chg 2025 2024 % Chg
Revenue
Recurring $367 $351 5 % $1,445 $1,479 (2 %)
Perpetual software licenses, hardware and other 1 3 (67 %) 17 23 (26 %)
Consulting services 53 55 (4 %) 201 248 (19 %)
Total revenue 421 409 3 % 1,663 1,750 (5 %)
Gross profit
Recurring 248 243 983 1,038
% of Revenue 67.6 % 69.2 % 68.0 % 70.2 %
Perpetual software licenses, hardware and other (2) 4
% of Revenue 0.0 % (66.7 %) 23.5 % 0.0 %
Consulting services 8 2 20
% of Revenue 15.1 % 3.6 % 8.1 %
Total gross profit 256 243 987 1,058
% of Revenue 60.8 % 59.4 % 59.4 % 60.5 %
Selling, general and administrative expenses 129 136 502 565
Research and development expenses 73 68 280 284
Income from operations 54 39 205 209
% of Revenue 12.8 % 9.5 % 12.3 % 11.9 %
Other expense, net (1) (9) (27) (45)
Income before income taxes 53 30 178 164
% of Revenue 12.6 % 7.3 % 10.7 % 9.4 %
Income tax expense 16 5 48 50
% Tax rate 30.2 % 16.7 % 27.0 % 30.5 %
Net income $37 $25 $130 $114
% of Revenue 8.8 % 6.1 % 7.8 % 6.5 %
Net income per common share
Basic $0.40 $0.26 $1.38 $1.18
Diluted $0.38 $0.26 $1.35 $1.16
Weighted average common shares outstanding
Basic 93.0 95.5 94.4 96.4
Diluted 96.4 97.4 96.6 98.2
Schedule B
TERADATA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions - unaudited)
December 31, September 30, December 31,
2025 2025 2024
Assets
Current assets
Cash and cash equivalents $493 $406 $420
Accounts receivable, net 251 309 234
Inventories 13 5 18
Other current assets 80 91 77
Total current assets 837 811 749
Property and equipment, net 198 203 185
Right of use assets - operating lease, net 7 7 8
Goodwill 399 399 394
Capitalized contract costs, net 42 35 46
Deferred income taxes 209 212 226
Other assets 87 94 96
Total assets $1,779 $1,761 $1,704
Liabilities and stockholders' equity
Current liabilities
Current portion of long-term debt $25 $25 $25
Current portion of finance lease liability 50 56 57
Current portion of operating lease liability 2 3 4
Accounts payable 96 100 106
Payroll and benefits liabilities 120 96 111
Deferred revenue 533 527 512
Other current liabilities 88 99 115
Total current liabilities 914 906 930
Long-term debt 431 437 455
Finance lease liability 45 47 30
Operating lease liability 4 5 5
Pension and other postemployment plan liabilities 114 104 104
Long-term deferred revenue 11 12 10
Deferred tax liabilities 12 10 9
Other liabilities 18 21 28
Total liabilities 1,549 1,542 1,571
Stockholders' equity
Common stock 1 1 1
Paid-in capital 2,305 2,279 2,192
Accumulated deficit (1,923) (1,923) (1,913)
Accumulated other comprehensive loss (153) (138) (147)
Total stockholders' equity 230 219 133
Total liabilities and stockholders' equity $1,779 $1,761 $1,704
Schedule C
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions - unaudited)
For the Period Ended December 31
Three Months Twelve Months
2025 2024 2025 2024
Operating activities
Net income $37 $25 $130 $114
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 23 22 90 100
Stock-based compensation expense 30 27 112 119
Deferred income taxes 7 (16) 31 (11)
Loss on Blue Chip Swap 1 1 4
Changes in assets and liabilities:
Receivables 58 13 (17) 52
Inventories (8) (2) 5 (5)
Current payables and accrued expenses 18 36 (48) (1)
Deferred revenue 5 27 22 (70)
Other assets and liabilities (10) 23 (21) 1
Net cash provided by operating activities 160 156 305 303
Investing activities
Expenditures for property and equipment (9) (7) (19) (24)
Additions to capitalized software (1) (1) (2)
Business acquisitions and other investing activities, including loss on Blue Chip Swap (1) (1) (6)
Net cash used in investing activities (9) (9) (21) (32)
Financing activities
Repurchases of common stock (38) (29) (140) (215)
Repayments of long-term borrowings (6) (6) (25) (19)
Payments of finance leases (18) (17) (69) (71)
Other financing activities, net (2) 1 (1)
Net cash used in financing activities (64) (52) (233) (306)
Effect of exchange rate changes on cash and cash equivalents (22) 22 (30)
Increase (decrease) in cash, cash equivalents and restricted cash 87 73 73 (65)
Cash, cash equivalents and restricted cash at beginning of period 407 348 421 486
Cash, cash equivalents and restricted cash at end of period $494 $421 $494 $421
Supplemental cash flow disclosure:
Non-cash investing and financing activities:
Assets acquired by finance leases $10 $4 $77 $29
Assets acquired by operating leases
$ - $4 $2 $5
Schedule D
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions - unaudited)
For the Three Months Ended December 31 For the Twelve Months Ended December 31
2025 2024 % Change % Change 2025 2024 % Change % Change
As Reported
Constant As Reported Constant
Currency Currency
(2) (2)
Segment Revenue
Product Sales $368 $354 4 % 2 % $1,462 $1,502 (3 %) (3 %)
Consulting Services 53 55 (4 %) (6 %) 201 248 (19 %) (19 %)
Total segment revenue 421 409 3 % 1 % 1,663 1,750 (5 %) (5 %)
Segment gross profit
Product Sales 251 244 998 1,049
% of Revenue 68.2 % 68.9 % 68.3 % 69.8 %
Consulting Services 10 5 12 31
% of Revenue 18.9 % 9.1 % 6.0 % 12.5 %
Total segment gross profit 261 249 1,010 1,080
% of Revenue 62.0 % 60.9 % 60.7 % 61.7 %
Reconciling items(1) (5) (6) (23) (22)
Total gross profit $256 $243 $987 $1,058
% of Revenue 60.8 % 59.4 % 59.4 % 60.5 %
(1) Reconciling items include stock-based compensation, amortization of acquisition-related
intangible assets and acquisition, integration and reorganization-related items.
(2) The impact of currency is determined by calculating the prior period results using the current-year
monthly average currency rates.
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SOURCE Teradata Corporation
