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It has been about a month since the last earnings report for Teradata (TDC - Free Report) . Shares have added about 7.7% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Teradata due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Teradata Corporation before we dive into how investors and analysts have reacted as of late.

Teradata Q2 Earnings Surpass Estimates, Revenues Increase Y/YTeradata Corporation reported second-quarter 2026 non-GAAP earnings of 69 cents per share, up 46.8% year over year. The figure surpassed the Zacks Consensus Estimate by 25.46%.

Revenues of $410 million increased 0.5% from the year-ago quarter and beat the consensus by 2.91%. Total annual recurring revenues (ARR) increased 1% as reported and 2% in constant currency to $1.509 billion.

TDC Builds Cloud & Subscription MomentumPublic cloud ARR advanced 8% year over year as reported and 9% in constant currency to $686 million. Cloud represented 45% of total ARR at quarter-end compared with 43% in the year-ago period.

Subscription ARR reached $750 million, down from $756 million a year earlier but above $729 million in the first quarter. Maintenance and software upgrade rights ARR declined to $73 million from $99 million.

TDC Q2 Top Line in DetailRecurring revenues reached $363 million, up 3% as reported and 2% in constant currency and represented 89% of total revenues. Product sales rose 4% year over year and 3% in constant currency to $371 million.

 Perpetual software license, hardware and other revenues, accounting for 2% of total revenues, surged 167% year over year and 313% in constant currency to $8 million.

Consulting services revenues, representing 9.5% of total revenues, fell 24% year over year and 23% in constant currency to $39 million.

TDC's Operating DetailsNon-GAAP gross margin expanded 220 basis points year over year to 60.5%, helped by a higher recurring-revenue mix. Recurring revenue gross margin improved 30 basis points to 67.8%, partly reflecting continued progress in cloud gross margin.

Non-GAAP selling, general and administrative expenses declined 8.4% year over year to $98 million. Research and development expenses fell 3.1% to $62 million.

 Non-GAAP operating margin improved to 21.5% from 16.4%, reflecting higher gross margin and a more optimized cost structure.

Teradata Pushes Deeper Into Agentic AIThe company launched the Teradata Autonomous Knowledge Platform during the quarter and brought major components, including AI Studio, to general availability early in the third quarter. The platform combines cloud, on-premise and hybrid deployment options with governed data, AI tools and agent capabilities.

Teradata also introduced Teradata Factory, a Dell-built on-premise system with integrated CPUs and GPUs for private AI workloads. Management highlighted early customer orders and interest, particularly among regulated organizations and customers with data sovereignty requirements. The partnership gives TDC access to Dell’s technology and go-to-market reach.

TDC’s Balance Sheet Remains StrongAs of June 30, 2026, Teradata had cash and cash equivalents of $414 million compared with $493 million as of Dec. 31, 2025. The company ended the quarter with net cash of $323 million after paying off the $450 million balance on its term loan.

Teradata generated $106 million in cash flow from operations during the quarter, up from $43 million in the year-ago period. Free cash flow increased to $105 million from $39 million, while adjusted free cash flow rose to $127 million from $39 million.

The company also repurchased approximately 1.3 million shares for $40 million during the quarter. Management continues to target the return of at least 50% of adjusted free cash flow through share repurchases.

TDC Provides Q3 & 2026 OutlookFor the third quarter of 2026, Teradata expects non-GAAP earnings of 55-59 cents per share. Total revenues are projected to decline 6% to 4% year over year, while recurring revenues are expected to decrease 4% to 2%. Management attributed the second-half revenue pattern to the timing of upfront revenue recognition from on-premises subscriptions during the first half.

For 2026, Teradata guided its non-GAAP earnings outlook to $2.65-$2.73 per share and adjusted free cash flow forecast to $330-$350 million. Cash flow from operations is expected to be between $665 million and $685 million, including an after-tax net benefit of $315 million from the SAP settlement.

The company reaffirmed its forecast for total ARR growth of 2-4% year over year, recurring revenue growth of flat to 2%, and total revenue performance ranging from a 2% decline to flat.

How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -13.49% due to these changes.

VGM ScoresCurrently, Teradata has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Teradata has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Snowflake Boosts Growth by Doubling Down on AITeradata NYSE: TDC reported second-quarter results marked by growth in recurring revenue, expanded operating margins and higher free cash flow, while reaffirming its full-year outlook for total annual recurring revenue, total revenue and recurring revenue. The company raised its full-year non-GAAP earnings-per-share guidance and adjusted free-cash-flow forecast.

President and Chief Executive Officer Steve McMillan said the company’s first-half performance reflected demand for its hybrid data platform as enterprises work to move artificial intelligence initiatives into production. “Our hybrid capabilities and our on-prem strength in particular, continue to resonate with customers running the most demanding and regulated workloads,” McMillan said.

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Second-Quarter Financial Results Teradata Corporation Stock is a Turnaround PlayChief Financial Officer John Ederer said total ARR rose 1% year over year as reported, or 2% in constant currency. Cloud ARR increased 8% as reported and 9% in constant currency. Ederer said Teradata remains focused on total ARR growth, noting that the mix between cloud and on-premise subscriptions can vary by quarter.

Total revenue was $410 million, flat year over year, exceeding the high end of company guidance by two percentage points. Recurring revenue rose 3% as reported to $363 million, or 2% in constant currency, and exceeded the high end of guidance by three percentage points. Consulting services revenue fell 24% year over year to $39 million, although the company said bookings improved and project backlog increased. Non-GAAP operating margin expanded to 21.5% from 16.4% a year earlier. Non-GAAP diluted EPS was $0.69, exceeding the top end of Teradata’s outlook by $0.12. Adjusted free cash flow was $127 million for the quarter. Ederer attributed the revenue outperformance primarily to the timing of revenue recognition in the on-premise business. Total gross margin increased 220 basis points year over year to 60.5%, aided by a greater mix of recurring revenue. Recurring revenue gross margin rose 30 basis points to 67.8%.

Teradata ended the quarter with a net cash position of $323 million, an increase of $528 million from a year earlier. The company repurchased approximately $40 million of stock, or about 1.3 million shares, during the quarter and paid off the remaining $450 million balance on its term loan.

AI Platform Rollout and Customer Activity McMillan highlighted the company’s May launch of the Teradata Autonomous Knowledge Platform, which is intended to support enterprise agentic AI deployments across cloud, on-premise and hybrid environments. He said the platform, including its AI Studio component, reached general availability in early in the third quarter.

The platform includes Teradata Cloud capabilities designed to support always-on and elastic compute needs; Teradata Factory, an on-premise offering developed with Dell Technologies that combines CPUs and GPUs; Teradata AI Studio; and Tera, a natural-language interface for data analysis, coding and multi-agent orchestration.

McMillan said enterprises are contending with production challenges in AI. Citing a company survey of 1,000 senior technology and data leaders, he said 90% expect to increase agentic AI investment over the next year, while nearly two-thirds have seen only small or emerging positive returns so far. He said 40% of surveyed technology leaders reported that more than 40% of their AI pilots had not reached production because their infrastructure was not designed to support them.

The company also made its data analyst agent available through AWS Marketplace and expanded support for native open table formats. Teradata has joined the Agentic AI Foundation and said its Enterprise Model Context Protocol server is already in use with customers.

McMillan cited several early customer engagements, including a South Asian telecommunications company that selected Teradata Factory for an AI modernization project; a Japanese banking group implementing Teradata Cloud, AI Studio and AI Services; and an expansion with a North American financial institution using AI Studio. He also said a U.S. healthcare company expanded its on-premise production system to support government regulations.

Gartner named Teradata a “visionary” in its 2026 Magic Quadrant for AI platforms for data science and machine learning, according to McMillan.

Outlook and Revenue Timing Teradata reaffirmed its full-year outlook ranges for total ARR, total revenue and recurring revenue. It increased its full-year non-GAAP diluted EPS outlook to $2.65 to $2.73 and raised adjusted free cash flow guidance to $330 million to $350 million.

For the third quarter, the company expects recurring revenue to decline 4% to 2% year over year and total revenue to decline 6% to 4%. Teradata forecast non-GAAP diluted EPS of $0.55 to $0.59 for the quarter.

Ederer said the anticipated second-half revenue declines reflect the accounting timing of on-premise subscriptions under ASC 606 rather than a change to the company’s annual expectations. More revenue from on-premise subscriptions was recognized upfront during the first half, leaving less revenue to recognize in the third and fourth quarters.

Management said it expects modest sequential dollar growth in ARR from the second to third quarter and continues to anticipate that most of its annual ARR growth will occur in the fourth quarter. McMillan said the company has not included substantial upside from its newly launched products in its current guidance.

Capital Allocation and Hardware Costs Ederer said Teradata’s current capital-allocation priorities are organic research and development, followed by share repurchases and strategic mergers and acquisitions. The company continues to target 50% of adjusted free cash flow for buybacks, excluding the benefit from the SAP settlement.

On hardware availability and pricing, Ederer said Teradata has sufficient inventory for its existing platform through 2026. He said potential supply-chain and pricing pressure could affect the newer Teradata AI Factory offering, but the company is focused on pricing the product to protect margins. McMillan added that the Dell partnership provides access to Dell’s purchasing capabilities and has helped expedite deliveries for some early AI Factory orders.

About Teradata (NYSE:TDC)Teradata Corporation is a global provider of enterprise analytics and data management solutions designed to help organizations unlock value from their data assets. The company offers both cloud-based and on-premises platforms that support data warehousing, big data analytics, and machine learning. Through its flagship analytics ecosystem, Teradata enables businesses to integrate, analyze, and manage large volumes of structured and unstructured data at scale.

Central to Teradata's product suite is the Teradata Vantage analytics platform, which unifies diverse data types across multiple environments—including public and private clouds—into a single, coherent architecture.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Recurring revenue of $363 million, an increase of 3% as reported and 2% in constant currency(1) GAAP Operating Margin of 11.7%, up 580 basis points from the prior year period Non-GAAP Operating Margin of 21.5%, up 510 basis points from the prior year period(2) Cash flow from operations of $106 million, up 147% from the prior year period Adjusted free cash flow of $127 million, up 226% from the prior year period(3) , /PRNewswire/ -- Teradata (NYSE: TDC) today announced its second quarter 2026 financial results.

"Teradata again delivered a solid quarter, growing total ARR, recurring revenue, and meaningful free cash flow," said Steve McMillan, president and CEO of Teradata. "We are pleased with our strong product innovation this quarter, highlighted by the launch of our Autonomous Knowledge Platform, bringing a powerful set of capabilities to help enterprises deploy agentic AI. With our differentiated hybrid platform, positive customer reaction, and tangible operating leverage, we remain confident in our future, and are increasing our outlook for non-GAAP EPS and Adjusted Free Cash Flow."

Second Quarter 2026 Financial Highlights Compared to Second Quarter 2025

Total ARR increased to $1.509 billion from $1.489 billion, an increase of 1% as reported and 2% in constant currency(1) Public cloud ARR increased to $686 million from $634 million, an increase of 8% as reported and 9% in constant currency(1) Total revenue was $410 million versus $408 million, flat as reported and in constant currency(1) Recurring revenue was $363 million versus $354 million, an increase of 3% as reported and 2% in constant currency(1) Recurring revenue was 89% of total revenue versus 87% GAAP gross margin was 59.3% versus 56.4% Non-GAAP gross margin was 60.5% versus 58.3%(2) GAAP operating margin was 11.7% versus 5.9%  Non-GAAP operating margin was 21.5% versus 16.4%(2) GAAP diluted EPS was $0.48 versus $0.09 per share Non-GAAP diluted EPS was $0.69 versus $0.47 per share(2) Cash flow from operations was $106 million compared to $43 million Free cash flow was $105 million compared to $39 million(3) Adjusted free cash flow was $127 million compared to $39 million(3) Outlook

For the third quarter of 2026:

Recurring revenue in the range of -4% to -2% year-over-year Total revenue in the range of -6% to -4% year-over-year GAAP diluted EPS is expected to be in the range of $0.27 to $0.31 per share Non-GAAP diluted EPS is expected to be in the range of $0.55 to $0.59 per share(2)  For the full year 2026, Teradata increases the following ranges:

GAAP diluted EPS is now expected to be in the range of $4.43 to $4.51 Non-GAAP diluted EPS in the range of $2.65 to $2.73 per share(2) Cash flow from operations of $665 million to $685 million, which includes an after-tax net benefit of $315 million related to a settlement with SAP Adjusted free cash flow of $330 million to $350 million(3) For the full year 2026, Teradata reaffirms the following ranges:

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 Earnings Conference Call

The conference call will begin at 1:30 p.m. PT on August 4, 2026. Investors and participants may attend the call by dialing (585) 542-9983 and entering access code 369709903. For investors and participants outside the United States, see global dial-in numbers here, and use access code 369709903.

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 June 30

2026

2025

% Change as
Reported

% Change in CC

Recurring revenue

$363

$354

3 %

2 %

Perpetual software licenses, hardware and other

8

3

167 %

313 %

Consulting services

39

51

(24 %)

(23 %)

  Total revenue

$410

$408

0 %

0 %

Product Sales

$371

$357

4 %

3 %

Consulting Services

39

51

(24 %)

(23 %)

  Total revenue

$410

$408

0 %

0 %

Revenue

(in millions)

For the Six Months ended June 30

2026

2025

% Change as
Reported

% Change in CC

Recurring revenue

$763

$712

7 %

5 %

Perpetual software licenses, hardware and other

9

13

(31 %)

(26 %)

Consulting services

82

101

(19 %)

(19 %)

  Total revenue

$854

$826

3 %

2 %

Product Sales

$772

$725

6 %

5 %

Consulting Services

82

101

(19 %)

(19 %)

  Total revenue

$854

$826

3 %

2 %

As of June 30

2026

2025

% Change as
Reported

% Change in CC

Annual recurring revenue*

$1,509

$1,489

1 %

2 %

      Public cloud ARR**

$686

$634

8 %

9 %

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, adjusted free cash flow, non-GAAP gross profit, non-GAAP operating income, 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

Three Months

For the

Six Months

(in millions, except per share data)

ended June 30

ended June 30

Gross Profit:

2026

2025

% Chg.

2026

2025

% Chg.

GAAP Gross Profit

$243

$230

6 %

$519

$478

9 %

   % of Revenue

59.3 %

56.4 %

60.8 %

57.9 %

 Excluding:

  Stock-based compensation expense

4

5

8

9

   Reorganization and other costs

1

3

4

3

Non-GAAP Gross Profit   

$248

$238

4 %

$531

$490

8 %

  % of Revenue

60.5 %

58.3 %

62.2 %

59.3 %

Operating Income

GAAP Operating Income

$48

$24

100 %

$12

$90

(87 %)

   % of Revenue

11.7 %

5.9 %

1.4 %

10.9 %

Excluding:

  Stock-based compensation expense

33

31

62

53

    Reorganization and other costs

7

12

14

15

    SAP settlement costs

-

-

121

-

Non-GAAP Operating Income   

$88

$67

31 %

$209

$158

32 %

  % of Revenue

21.5 %

16.4 %

24.5 %

19.1 %

Net Income

GAAP Net Income

$46

$9

411 %

$381

$53

619 %

   % of Revenue

11.2 %

2.2 %

44.6 %

6.4 %

Excluding:

  Stock-based compensation expense

33

31

62

53

  Reorganization and other costs

6

12

13

15

  SAP settlement

-

-

(359)

-

  Income tax adjustments(i)

(19)

(7)

54

(12)

  Non-GAAP Net Income   

$66

$45

47 %

$151

$109

39 %

% of Revenue

16.1 %

11.0 %

17.7 %

13.2 %

For the Three Months

ended June 30

For the Six Months

ended June 30

2026 Outlook

Earnings Per Share:

2026

2025

2026

2025

Q3

FY

GAAP Earnings Per Share

$0.48

$0.09

$3.95

$0.55

$0.27 - $0.31

$4.43 - $4.51

Excluding:

  Stock-based compensation expense

0.34

0.32

0.64

0.54

0.31

1.27

  Reorganization and other costs

0.06

0.13

0.14

0.15

0.02

0.24

  SAP settlement

-

-

(3.72)

-

-

(3.72)

  Income tax adjustments(i)

(0.19)

(0.07)

0.56

(0.12)

(0.05)

0.43

Non-GAAP Diluted Earnings Per Share

$0.69

$0.47

$1.57

$1.12

$0.55 - $0.59

$2.65 - $2.73

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 $67 million discrete income tax effect of the SAP settlement recorded in the first half of 2026. 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 GAAP effective tax rate and non-GAAP effective tax rate for the three months ended June 30, 2026, was 2.1% and 23.3%, respectively, and June 30, 2025, was 30.8% and 19.6%, respectively. For the six months ended June 30, 2026, the Company's GAAP effective tax rate and non-GAAP effective tax rate was 21.3% and 24.5%, respectively and June 30, 2025, was 25.4% and 21.6%, respectively.

3.

As described below, the Company believes that free cash flow and adjusted free cash flow are useful non-GAAP measures for investors. Free cash flow and adjusted free cash flow do not have a uniform definition under GAAP in the United States and therefore, Teradata's definitions may differ from other companies' definitions of this measure. Teradata defines free cash flow as cash provided by/used in operating activities, less total capital expenditures and adjusted free cash flow as free cash flow less the gross proceeds from the SAP settlement, plus the non-recurring legal and other expenses incurred in connection with the SAP litigation and resulting settlement, and taxes paid specific to the settlement agreement. Teradata's management uses free cash flow and adjusted free cash flow to assess the financial performance of the Company and believes they are useful for investors because they relate 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 and adjusted free cash flow adjusts the impact of the SAP settlement. Neither free cash flow or adjusted free cash flow represent the residual cash flow available for discretionary expenditures since there may be other non-discretionary expenditures that are not deducted from these measures. These non-GAAP measures should not be considered as a substitute for, or superior to, cash flows from operating activities under GAAP.

(in millions)

For the
Three Months

For the
Six Months

ended June 30

ended June 30

Outlook

2026

2025

2026

2025

2026

Cash provided by operating activities (GAAP)

$106

$43

$507

$51

$665 to $685

           Less total capital expenditures

(1)

(4)

(12)

(5)

(~20)

Free Cash Flow (non-GAAP measure)

$105

$39

$495

$46

$645 to $665

           Less SAP gross settlement proceeds

-

-

(480)

-

(480)

           Plus legal and other expenses

-

-

121

-

121

           Plus taxes specific to the settlement

22

-

22

-

44

Adjusted Free Cash Flow (non-GAAP Measure)

$127

$39

$158

$46

$330 to $350

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 third 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: our strategy and ongoing business transformation, significant execution risk for our cloud, hybrid, on-premises, Artificial Intelligence ("AI") and Machine Learning ("ML") offerings, operational disruptions and unforeseen circumstances, impact of unanticipated delays or acceleration in our sales cycles to make accurate estimates impacting quarterly operating results, financial guidance and forecasts, the global economic environment and business conditions in general, including inflation, tariffs, and/or recessionary conditions; impact of price increase on our net sales, profit margins and earnings, 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 restructuring actions; risks inherent in operating in foreign countries, export controls and trade compliance, including sanctions, tariffs, foreign currency fluctuations, and/or acts of war; risks associated with data privacy, IP-enforcement actions, 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 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 empowers enterprises to turn intelligence into autonomous action, grounding AI agents in deep business context and trusted data. As AI agents multiply, Teradata is the context foundation, governance layer, and performance backbone that companies need now. The Teradata Autonomous Knowledge Platform puts AI into production across cloud, on-premises, and hybrid environments. See how 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
[email protected]

MEDIA CONTACT
Jennifer Donahue
[email protected]

Schedule A

TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share amounts - unaudited)

For the Period Ended June 30

Three Months

Six Months

2026

2025

% Chg

2026

2025

% Chg

Revenue

Recurring 

$       363

$        354

3 %

$                763

$   712

7 %

Perpetual software licenses, hardware and other

8

3

167 %

9

13

(31 %)

Consulting services

39

51

(24 %)

82

101

(19 %)

Total revenue

410

408

0 %

854

826

3 %

Gross profit

Recurring

243

235

520

485

% of Revenue

66.9 %

66.4 %

68.2 %

68.1 %

Perpetual software licenses, hardware and other

2

-

3

1

% of Revenue

25.0 %

0.0 %

33.3 %

7.7 %

Consulting services

(2)

(5)

(4)

(8)

% of Revenue

(5.1 %)

(9.8 %)

(4.9 %)

(7.9 %)

Total gross profit

243

230

519

478

% of Revenue

59.3 %

56.4 %

60.8 %

57.9 %

Selling, general and administrative expenses

120

135

360

251

Research and development expenses

75

71

147

137

Income from operations

48

24

12

90

% of Revenue

11.7 %

5.9 %

1.4 %

10.9 %

Other (expense) income, net

(1)

(11)

472

(19)

Income before income taxes

47

13

484

71

% of Revenue

11.5 %

3.2 %

56.7 %

8.6 %

Income tax expense

1

4

103

18

% Tax rate

2.1 %

30.8 %

21.3 %

25.4 %

Net income 

$         46

$            9

$                381

$     53

% of Revenue

11.2 %

2.2 %

44.6 %

6.4 %

Net income per common share

Basic 

$       0.49

$        0.09

$               4.07

$  0.56

Diluted

$       0.48

$        0.09

$               3.95

$  0.55

Weighted average common shares outstanding

Basic

93.9

95.3

93.5

95.2

Diluted

96.2

96.0

96.4

97.0

Schedule B

TERADATA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions -  unaudited)

June 30,

 December 31, 

June 30,

2026

2025

2025

Assets

Current assets

Cash and cash equivalents

$               414

$               493

$               369

Accounts receivable, net

256

251

293

Inventories

5

13

5

Other current assets

98

80

90

Total current assets

773

837

757

Property and equipment, net

191

198

205

Right of use assets - operating lease, net

8

7

9

Goodwill

397

399

400

Capitalized contract costs, net

39

42

37

Deferred income taxes

166

209

231

Other assets

84

87

98

Total assets

$             1,658

$            1,779

$             1,737

Liabilities and stockholders' equity

Current liabilities

Current portion of long-term debt

$                    -

$                 25

$                 25

Current portion of finance lease liability

46

50

60

Current portion of operating lease liability

2

2

4

Accounts payable

55

96

115

Payroll and benefits liabilities

91

120

84

Deferred revenue

560

533

521

Other current liabilities

91

88

89

Total current liabilities

845

914

898

Long-term debt

-

431

443

Finance lease liability

45

45

46

Operating lease liability

6

4

5

Pension and other postemployment plan liabilities

111

114

108

Long-term deferred revenue

12

11

12

Deferred tax liabilities

12

12

10

Other liabilities

34

18

39

Total liabilities

1,065

1,549

1,561

Stockholders' equity

Common stock

1

1

1

Paid-in capital

2,361

2,305

2,244

Accumulated deficit

(1,617)

(1,923)

(1,932)

Accumulated other comprehensive loss

(152)

(153)

(137)

Total stockholders' equity

593

230

176

Total liabilities and stockholders' equity

$             1,658

$            1,779

$             1,737

Schedule C

TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions - unaudited)

For the Period Ended June 30

Three Months

Six Months

2026

2025

2026

2025

Operating activities

Net income 

$                  46

$                    9

$                 381

$                  53

Adjustments to reconcile net income to net cash provided

  by operating activities:

Depreciation and amortization

23

23

48

43

Stock-based compensation expense

33

31

62

53

Deferred income taxes

4

(6)

40

4

Loss on Blue Chip Swap

1

-

1

-

Changes in assets and liabilities:

Receivables

66

14

(5)

(59)

Inventories

-

8

8

13

Current payables and accrued expenses

(32)

(24)

(47)

(54)

Deferred revenue

(43)

(28)

28

11

Other assets and liabilities

8

16

(9)

(13)

Net cash provided by operating activities

106

43

507

51

Investing activities

Expenditures for property and equipment

(1)

(4)

(11)

(5)

Additions to capitalized software

-

-

(1)

-

Business acquisitions and other investing activities, including loss on Blue Chip Swap

(1)

(1)

(1)

(1)

Net cash used in investing activities

(2)

(5)

(13)

(6)

Financing activities

Repurchases of common stock

(40)

(28)

(74)

(72)

Repayments of long-term borrowings

(450)

(6)

(456)

(12)

Payments of finance leases

(15)

(17)

(32)

(33)

Other financing activities, net

(2)

-

(7)

(2)

Net cash used in financing activities

(507)

(51)

(569)

(119)

Effect of exchange rate changes on cash and cash equivalents

2

14

(4)

23

(Decrease) increase in cash, cash equivalents and restricted cash

(401)

1

(79)

(51)

Cash, cash equivalents and restricted cash at beginning of period

816

369

494

421

Cash, cash equivalents and restricted cash at end of period

$                 415

$                 370

$                 415

$                 370

Supplemental cash flow disclosure:

Non-cash investing and financing activities:

Assets acquired by finance leases

$                    8

$                  19

$                  28

$                  52

Assets acquired by operating leases

$                    2

$                    1

$                    3

$                    2

Schedule D

TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions - unaudited)

For the Three Months Ended June 30

For the Six Months Ended June 30

2026

2025

% Change
As Reported

% Change
Constant
Currency (2)

2026

2025

% Change
As Reported

% Change
Constant
Currency (2)

Segment Revenue

Product Sales

$           371

$           357

4 %

3 %

$           772

$           725

6 %

5 %

Consulting Services

39

51

(24 %)

(23 %)

82

101

(19 %)

(19 %)

Total segment revenue

410

408

0 %

0 %

854

826

3 %

2 %

Segment gross profit

Product Sales

248

239

529

492

% of Revenue

66.8 %

66.9 %

68.5 %

67.9 %

Consulting Services

-

(1)

2

(2)

% of Revenue

0.0 %

(2.0 %)

2.4 %

(2.0 %)

Total segment gross profit

248

238

531

490

% of Revenue

60.5 %

58.3 %

62.2 %

59.3 %

Reconciling items(1)

(5)

(8)

(12)

(12)

Total gross profit

$           243

$           230

$           519

$           478

% of Revenue

59.3 %

56.4 %

60.8 %

57.9 %

(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.

SOURCE Teradata