Teradata Reports Third Quarter 2026 Financial Results

Recurring revenue accounted for 90% of quarterly revenue, compared with 88% a year earlier.

Rhea-AI Summary

Teradata (NYSE: TDC) reported third-quarter 2026 revenue of $399 million, down year over year, while raising its full-year earnings outlook. Revenue fell 4%, and recurring revenue declined 2% to $359 million. Annual recurring revenue, the annual value of active term-based contracts, rose 1% to $1.512 billion; public cloud ARR increased 11% to $700 million.

GAAP diluted earnings per share fell to $0.40 from $0.42. Operating cash flow declined to $91 million from $94 million, while adjusted free cash flow increased to $96 million from $88 million. Teradata now expects full-year GAAP diluted EPS of $4.63–$4.67 and narrowed revenue guidance to the high end of its previous range, at a 1% decline to flat. It reaffirmed 2%–4% ARR growth and $330 million–$350 million adjusted free cash flow. For the fourth quarter, the company expects revenue to decline 4%–6%.

18 points · 2 major

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0 major · 15 points

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Positive

• Major point. Forward-looking: it has not happened yet and may not happen.2026 GAAP diluted EPS outlook increased to $4.63–$4.67.
• Major pointNine-month free cash flow increased to $580 million from $134 million, including $480 million in SAP settlement proceeds. 15% of market cap
• Moderate pointTotal annual recurring revenue rose 1% year over year to $1.512 billion; constant-currency growth was 2%.
• Moderate pointPublic cloud ARR increased 11% year over year to $700 million, also 11% in constant currency.
• Moderate pointAdjusted free cash flow increased to $96 million in Q3 2026 from $88 million in Q3 2025.
• Moderate point. Forward-looking: it has not happened yet and may not happen.2026 total revenue outlook narrowed to the previous range’s high end: a 1% decline to flat.
• Moderate pointNine-month revenue increased 1% year over year to $1.253 billion; constant-currency revenue was flat.
• Moderate pointNine-month recurring revenue rose 4% year over year to $1.122 billion; constant-currency growth was 3%.
• Moderate pointNine-month GAAP gross profit rose 4% to $757 million; margin increased to 60.4% from 58.9%.
• Moderate pointNine-month GAAP net income rose 351% year over year to $419 million.
• Moderate pointNine-month operating cash flow increased to $598 million from $145 million.

7 minor points

• Minor point. Forward-looking: it has not happened yet and may not happen.2026 non-GAAP diluted EPS outlook increased to $2.86–$2.90.
• Minor point. Forward-looking: it has not happened yet and may not happen.2026 recurring revenue outlook narrowed to the previous range’s high end: 1%–2% year-over-year growth.
• Minor point. Forward-looking: it has not happened yet and may not happen.2026 ARR growth outlook reaffirmed at 2%–4% year over year.
• Minor point. Forward-looking: it has not happened yet and may not happen.2026 operating cash flow outlook reaffirmed at $665 million–$685 million, including a $315 million after-tax SAP settlement benefit.
• Minor point. Forward-looking: it has not happened yet and may not happen.2026 adjusted free cash flow outlook reaffirmed at $330 million–$350 million.
• Minor pointRecurring revenue mix increased to 90% of Q3 2026 revenue from 88% in Q3 2025.
• Minor pointNine-month GAAP diluted EPS increased to $4.36 from $0.96.

Negative

• Moderate pointQ3 revenue declined 4% year over year to $399 million, also down 4% in constant currency.
• Moderate pointQ3 recurring revenue fell 2% year over year to $359 million, also down 2% in constant currency.
• Moderate pointQ3 GAAP gross profit fell 6% to $238 million; margin declined to 59.6% from 60.8%.
• Moderate pointQ3 GAAP operating income fell 11% to $54 million; margin declined to 13.5% from 14.7%.
• Moderate pointQ3 GAAP net income declined 5% year over year to $38 million.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Q4 2026 recurring revenue outlook calls for a 2%–4% year-over-year decline.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Q4 2026 total revenue outlook calls for a 4%–6% year-over-year decline.
• Moderate pointNine-month GAAP operating income fell 56% to $66 million; margin declined to 5.3% from 12.2%.

7 minor points

• Minor pointQ3 consulting revenue fell 21% year over year to $37 million; constant-currency revenue declined 19%.
• Minor pointQ3 GAAP diluted EPS fell to $0.40 from $0.42 a year earlier.
• Minor pointQ3 operating cash flow declined to $91 million from $94 million a year earlier.
• Minor pointQ3 free cash flow declined to $85 million from $88 million a year earlier.
• Minor pointNine-month consulting revenue fell 20% year over year to $119 million; constant-currency revenue declined 19%.
• Minor pointNine-month perpetual licenses, hardware and other revenue fell 25% to $12 million, also down 25% in constant currency.
• Minor pointNine-month capital expenditures increased to $18 million from $11 million a year earlier.

News Explained

For the nine months ended September 30, 2026, operating cash flow included gross SAP settlement proceeds, while adjusted free cash flow excludes those proceeds and adds settlement-related expenses and taxes, and full-year operating-cash-flow guidance includes an after-tax settlement benefit.

Key Figures

Total ARR: $1.512 billion Public cloud ARR: $700 million Total revenue: $399 million +5 more

Total ARR

$1.512 billion

Q3 2026; $1.490 billion in Q3 2025, up 1% as reported

Public cloud ARR

$700 million

Q3 2026; $633 million in Q3 2025, up 11% as reported

Total revenue

$399 million

Q3 2026; $416 million in Q3 2025, down 4% as reported

GAAP diluted EPS

$0.40

Q3 2026; $0.42 in Q3 2025

Non-GAAP diluted EPS

$0.70

Q3 2026; $0.72 in Q3 2025

Adjusted free cash flow

$96 million

Q3 2026; $88 million in Q3 2025

FY26 GAAP diluted EPS outlook

$4.63 to $4.67

Full-year 2026 range increased

FY26 non-GAAP diluted EPS outlook

$2.86 to $2.90 per share

Full-year 2026 range increased

Previous Earnings Reports

1 past event · Latest: Aug 04

Same Type 1 event

1. Aug 04

   Q2 2026 results

   24h Move

   -23.7%

   Set FY26 EPS guidance at $4.43–$4.51 GAAP and $2.65–$2.73 non-GAAP.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

gaap, non-gaap, constant currency, gpu

4 terms

gaap financial

"Third quarter GAAP diluted EPS of $0.40"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

non-gaap financial

"non-GAAP diluted EPS of $0.70"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

constant currency financial

"an increase of 1% as reported and 2% in constant currency"

Constant currency is a way of measuring financial results that removes the effects of changes in currency exchange rates. It allows for a clearer comparison of a company's performance over time by showing what the numbers would look like if exchange rates had stayed the same. This helps investors understand whether growth comes from actual business improvements or just currency fluctuations.

gpu technical

"an integrated GPU system combining analytics, AI, and governance"

A GPU (graphics processing unit) is a specialized computer chip designed to handle many calculations at once, originally for rendering images and video but now widely used for tasks like artificial intelligence, data analysis and high-performance computing. Investors watch GPU demand and prices because strong sales often signal growth for chip makers and their customers, affect profit margins and capital spending, and can forecast wider trends in gaming, AI adoption and cloud services.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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• Cash flow from operations of $91 million and Adjusted Free Cash Flow of $96 million⁽³⁾
• Third quarter GAAP diluted EPS of $0.40 and non-GAAP diluted EPS of $0.70⁽²⁾
• Reiterate full year outlook for Total ARR and Adjusted Free Cash Flow; narrowing the Total Revenue and Recurring Revenue outlook to the high-end of the range

SAN DIEGO, Nov. 5, 2026 /PRNewswire/ -- Teradata (NYSE: TDC) today announced its third quarter 2026 financial results.

"In Q3, Teradata marked another quarter of progress against the goals we set at the start of the year, driving total ARR growth, improving profitability and delivering strong free cash flow," said Steve McMillan, president and CEO, Teradata. "The increased pace of new product innovation and new AI service capabilities is driving positive interest from customers."

Third Quarter 2026 Financial Highlights Compared to Third Quarter 2025

• Total ARR increased to $1.512 billion from $1.490 billion, an increase of 1% as reported and
  2% in constant currency⁽¹⁾
• Public cloud ARR increased to $700 million from $633 million, an increase of 11% as reported and 11% in constant currency⁽¹⁾
• Total revenue was $399 million versus $416 million, a decrease of 4% as reported and 4% in constant currency⁽¹⁾
• Recurring revenue was $359 million versus $366 million, a decrease of 2% as reported and
  2% in constant currency⁽¹⁾
• Recurring revenue was 90% of total revenue versus 88%
• GAAP gross margin was 59.6% versus 60.8%
• Non-GAAP gross margin was 60.7% versus 62.3%⁽²⁾
• GAAP operating margin was 13.5% versus 14.7% 
• Non-GAAP operating margin was 21.8% versus 23.6%⁽²⁾
• GAAP diluted EPS was $0.40 versus $0.42 per share
• Non-GAAP diluted EPS was $0.70 versus $0.72 per share⁽²⁾
• Cash flow from operations was $91 million compared to $94 million
• Free cash flow was $85 million compared to $88 million⁽³⁾
• Adjusted free cash flow was $96 million compared to $88 million⁽³⁾

Q3 2026 Product and Innovation Highlights

• Released Teradata Factory for general availability, an integrated GPU system combining analytics, AI, and governance that keeps data within an organization's own walls.
• Evolved Tera into an agentic coworker for enterprise data work, letting anyone analyze data, build AI applications, operate infrastructure, and automate workflows in natural language.
• Announced Tera Context Engine, a vendor-neutral layer that connects databases, data platforms, pipelines, catalogs, models, and AI agents, giving AI governed business knowledge wherever data lives.
• Launched Tera Harness, an execution layer that routes work to the right skills, tools, data, and models, improving AI accuracy, speed, and efficiency.
• Made Teradata's Data Analyst Agent available in AWS Marketplace and integrated Teradata Autonomous Knowledge Platform with Microsoft OneLake, so customers can run Teradata AI on OneLake data without moving or copying it.
• Tera delivered 53% lower cost per reliably solved task than Snowflake Cortex Code, compared to Snowflake's own published benchmark data on the data-eng-bench. This internal test used a public benchmark of data pipeline engineering created by Snowflake Labs and Bespoke Labs.

Outlook

For the full-year 2026, Teradata increases the following ranges:

• GAAP diluted EPS is now expected to be in the range of $4.63 to $4.67
• Non-GAAP diluted EPS is now expected to be in the range of $2.86 to $2.90 per share⁽²⁾

For the full-year 2026, Teradata narrows to the high-end of the previous ranges:

• Recurring revenue in the range of 1% to 2% year-over-year
• Total revenue in the range of -1% to flat year-over-year

For the full-year 2026, Teradata reaffirms the following ranges:

• Total ARR growth of 2% to 4% year-over-year
• 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 fourth quarter of 2026:

• Recurring revenue in the range of -2% to -4% year-over-year
• Total revenue in the range of -4% to -6% year-over-year
• GAAP diluted EPS is expected to be in the range of $0.26 to $0.30 per share
• Non-GAAP diluted EPS is expected to be in the range of $0.58 to $0.62 per share⁽²⁾ 

Earnings Conference Call

The conference call will begin at 1:30 p.m. PT on November 5, 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 September 30
	2026		2025		% Change as Reported		% Change in CC
Recurring revenue	$359		$366		(2 %)		(2 %)
Perpetual software licenses, hardware and other	3		3		0 %		(25 %)
Consulting services	37		47		(21 %)		(19 %)
Total revenue	$399		$416		(4 %)		(4 %)
Product Sales	$362		$369		(2 %)		(2 %)
Consulting Services	37		47		(21 %)		(19 %)
Total revenue	$399		$416		(4 %)		(4 %)
Revenue
(in millions)
	For the Nine Months ended September 30
	2026		2025		% Change as Reported		% Change in CC
Recurring revenue	$1,122		$1,078		4 %		3 %
Perpetual software licenses, hardware and other	12		16		(25 %)		(25 %)
Consulting services	119		148		(20 %)		(19 %)
Total revenue	$1,253		$1,242		1 %		0 %
Product Sales	$1,134		$1,094		4 %		2 %
Consulting Services	119		148		(20 %)		(19 %)
Total revenue	$1,253		$1,242		1 %		0 %
	As of September 30
	2026		2025		% Change as Reported		% Change in CC
Annual recurring revenue*	$1,512		$1,490		1 %		2 %
Public cloud ARR**	$700		$633		11 %		11 %

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 Nine Months
(in millions, except per share data)		ended September 30						ended September 30
Gross Profit:		2026		2025		% Chg.		2026		2025		% Chg.
GAAP Gross Profit		$238		$253		(6 %)		$757		$731		4 %
% of Revenue		59.6 %		60.8 %				60.4 %		58.9 %
Excluding:
Stock-based compensation expense		5		4				13		13
Reorganization and other costs		(1)		2				3		5
Non-GAAP Gross Profit		$242		$259		(7 %)		$773		$749		3 %
% of Revenue		60.7 %		62.3 %				61.7 %		60.3 %
Operating Income
GAAP Operating Income		$54		$61		(11 %)		$66		$151		(56 %)
% of Revenue		13.5 %		14.7 %				5.3 %		12.2 %
Excluding:
Stock-based compensation expense		33		29				95		82
Reorganization and other costs		-		8				14		23
SAP settlement costs		-		-				121		-
Non-GAAP Operating Income		$87		$98		(11 %)		$296		$256		16 %
% of Revenue		21.8 %		23.6 %				23.6 %		20.6 %
Net Income
GAAP Net Income		$38		$40		(5 %)		$419		$93		351 %
% of Revenue		9.5 %		9.6 %				33.4 %		7.5 %
Excluding:
Stock-based compensation expense		33		29				95		82
Reorganization and other costs		1		7				14		22
SAP settlement		-		-				(359)		-
Income tax adjustments(i)		(5)		(7)				49		(19)
Non-GAAP Net Income		$67		$69		(3 %)		$218		$178		22 %
% of Revenue		16.8 %		16.6 %				17.4 %		14.3 %

	For the Three Months ended September 30				For the Nine Months ended September 30				2026 Outlook
Earnings Per Share:	2026		2025		2026		2025		Q4		FY
GAAP Earnings Per Share	$0.40		$0.42		$4.36		$0.96		$0.26 - $0.30		$4.63 - $4.67
Excluding:
Stock-based compensation expense	0.34		0.30		0.99		0.85		0.31		1.30
Reorganization and other costs	0.01		0.07		0.14		0.23		0.08		0.21
SAP Settlement	-		-		(3.73)		-		-		(3.73)
Income tax adjustments(i)	(0.05)		(0.07)		0.51		(0.20)		(0.07)		0.45
Non-GAAP Diluted Earnings Per Share	$0.70		$0.72		$2.27		$1.84		$0.58 - $0.62		$2.86 - $2.90

	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 $69 million discrete income tax effect of the SAP settlement recorded in the first nine months 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 September 30, 2026, was 24.0% and 20.2%, respectively, and September 30, 2025, was 25.9% and 23.3%, respectively. For the nine months ended September 30, 2026, the Company's GAAP effective tax rate and non-GAAP effective tax rate was 21.5% and 23.2%, respectively and September 30, 2025, was 25.6% and 22.3%, 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 ended September 30				For the Nine Months ended September 30				Outlook
	2026		2025		2026		2025		2026
Cash provided by operating activities (GAAP)	$91		$94		$598		$145		$665 to $685
Less total capital expenditures	(6)		(6)		(18)		(11)		(~20)
Free Cash Flow (non-GAAP measure)	$85		$88		$580		$134		$645 to $665
Less SAP gross settlement proceeds	-		-		(480)		-		(480)
Plus legal and other expenses	-		-		121		-		121
Plus taxes specific to the settlement	11		-		33		-		44
Adjusted Free Cash Flow (non-GAAP Measure)	$96		$88		$254		$134		$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 fourth 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
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 September 30
			Three Months						Nine Months
			2026		2025		% Chg		2026		2025		% Chg
Revenue
Recurring			$       359		$        366		(2 %)		$            1,122		$1,078		4 %
Perpetual software licenses, hardware and other			3		3		0 %		12		16		(25 %)
Consulting services			37		47		(21 %)		119		148		(20 %)
Total revenue			399		416		(4 %)		1,253		1,242		1 %
Gross profit
Recurring			239		250				759		735
% of Revenue			66.6 %		68.3 %				67.6 %		68.2 %
Perpetual software licenses, hardware and other			(1)		3				2		4
% of Revenue			(33.3 %)		100.0 %				16.7 %		25.0 %
Consulting services			-		-				(4)		(8)
% of Revenue			- %		-				(3.4 %)		(5.4 %)
Total gross profit			238		253				757		731
% of Revenue			59.6 %		60.8 %				60.4 %		58.9 %
Selling, general and administrative expenses			109		122				469		373
Research and development expenses			75		70				222		207
Income from operations			54		61				66		151
% of Revenue			13.5 %		14.7 %				5.3 %		12.2 %
Other (expense) income, net			(4)		(7)				468		(26)
Income before income taxes			50		54				534		125
% of Revenue			12.5 %		13.0 %				42.6 %		10.1 %
Income tax expense			12		14				115		32
% Tax rate			24.0 %		25.9 %				21.5 %		25.6 %
Net income			$         38		$          40				$               419		$     93
% of Revenue			9.5 %		9.6 %				33.4 %		7.5 %
Net income per common share
Basic			$      0.41		$       0.42				$              4.50		$  0.98
Diluted			$      0.40		$       0.42				$              4.36		$  0.96
Weighted average common shares outstanding
Basic			92.6		94.2				93.2		94.9
Diluted			95.5		95.5				96.2		96.5

 

								Schedule B
TERADATA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions -  unaudited)
				September 30,		December 31,		September 30,
				2026		2025		2025
Assets
Current assets
Cash and cash equivalents				$               432		$              493		$               406
Accounts receivable, net				202		251		309
Inventories				13		13		5
Other current assets				84		80		91
Total current assets				731		837		811
Property and equipment, net				183		198		203
Right of use assets - operating lease, net				7		7		7
Goodwill				397		399		399
Capitalized contract costs, net				38		42		35
Deferred income taxes				164		209		212
Other assets				83		87		94
Total assets				$            1,603		$           1,779		$            1,761
Liabilities and stockholders' equity
Current liabilities
Current portion of long-term debt				$                   -		$                25		$                 25
Current portion of finance lease liability				46		50		56
Current portion of operating lease liability				2		2		3
Accounts payable				74		96		100
Payroll and benefits liabilities				116		120		96
Deferred revenue				466		533		527
Other current liabilities				73		88		99
Total current liabilities				777		914		906
Long-term debt				-		431		437
Finance lease liability				43		45		47
Operating lease liability				5		4		5
Pension and other postemployment plan liabilities				110		114		104
Long-term deferred revenue				11		11		12
Deferred tax liabilities				12		12		10
Other liabilities				32		18		21
Total liabilities				990		1,549		1,542
Stockholders' equity
Common stock				1		1		1
Paid-in capital				2,398		2,305		2,279
Accumulated deficit				(1,636)		(1,923)		(1,923)
Accumulated other comprehensive loss				(150)		(153)		(138)
Total stockholders' equity				613		230		219
Total liabilities and stockholders' equity				$            1,603		$           1,779		$            1,761

 

								Schedule C
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions - unaudited)
		For the Period Ended September 30
		Three Months				Nine Months
		2026		2025		2026		2025
Operating activities
Net income		$                  38		$                  40		$                419		$                  93
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		25		24		73		67
Stock-based compensation expense		33		29		95		82
Deferred income taxes		1		20		41		24
Loss on Blue Chip Swap		-		1		1		1
Changes in assets and liabilities:
Receivables		54		(16)		49		(75)
Inventories		(8)		-		-		13
Current payables and accrued expenses		39		(12)		(8)		(66)
Deferred revenue		(95)		6		(67)		17
Other assets and liabilities		4		2		(5)		(11)
Net cash provided by operating activities		91		94		598		145
Investing activities
Expenditures for property and equipment		(5)		(5)		(16)		(10)
Additions to capitalized software		(1)		(1)		(2)		(1)
Business acquisitions and other investing activities, including loss on Blue Chip Swap		-		-		(1)		(1)
Net cash used in investing activities		(6)		(6)		(19)		(12)
Financing activities
Repurchases of common stock		(57)		(30)		(131)		(102)
Repayments of long-term borrowings		-		(7)		(456)		(19)
Payments of finance leases		(13)		(18)		(45)		(51)
Other financing activities, net		4		5		(3)		3
Net cash used in financing activities		(66)		(50)		(635)		(169)
Effect of exchange rate changes on cash and cash equivalents		(1)		(1)		(5)		22
Increase (decrease) in cash, cash equivalents and restricted cash		18		37		(61)		(14)
Cash, cash equivalents and restricted cash at beginning of period		415		370		494		421
Cash, cash equivalents and restricted cash at end of period		$                433		$                407		$                433		$                407
Supplemental cash flow disclosure:
Non-cash investing and financing activities:
Assets acquired by finance leases		$                  11		$                  15		$                  39		$                  67
Assets acquired by operating leases		$                    -		$                    -		$                    3		$                    2

 

																Schedule D
TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions - unaudited)
		For the Three Months Ended September 30								For the Nine Months Ended September 30
		2026		2025		% Change As Reported		% Change Constant Currency (2)		2026		2025		% Change As Reported		% Change Constant Currency (2)
Segment Revenue
Product Sales		$           362		$           369		(2 %)		(2 %)		$        1,134		$        1,094		4 %		2 %
Consulting Services		37		47		(21 %)		(19 %)		119		148		(20 %)		(19 %)
Total segment revenue		399		416		(4 %)		(4 %)		1,253		1,242		1 %		0 %
Segment gross profit
Product Sales		240		255						769		747
% of Revenue		66.3 %		69.1 %						67.8 %		68.3 %
Consulting Services		2		4						4		2
% of Revenue		5.4 %		8.5 %						3.4 %		1.4 %
Total segment gross profit		242		259						773		749
% of Revenue		60.7 %		62.3 %						61.7 %		60.3 %
Reconciling items(1)		(4)		(6)						(16)		(18)
Total gross profit		$           238		$           253						$           757		$           731
% of Revenue		59.6 %		60.8 %						60.4 %		58.9 %
(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.

 

View original content:https://www.prnewswire.com/news-releases/teradata-reports-third-quarter-2026-financial-results-302931340.html

SOURCE Teradata

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Teradata’s third-quarter 2026 earnings and revenue?

Teradata reported $399 million in revenue and $0.40 in GAAP diluted EPS for the third quarter of 2026. Revenue declined 4% year over year, and GAAP diluted EPS fell from $0.42. Non-GAAP diluted EPS was $0.70, compared with $0.72 a year earlier.

What is Teradata’s full-year 2026 earnings outlook?

Teradata raised its full-year 2026 outlook to $4.63–$4.67 in GAAP diluted EPS and $2.86–$2.90 in non-GAAP diluted EPS. For the fourth quarter, it expects GAAP diluted EPS of $0.26–$0.30 and non-GAAP diluted EPS of $0.58–$0.62.

How does Teradata calculate adjusted free cash flow?

Teradata calculates adjusted free cash flow by subtracting SAP gross settlement proceeds from free cash flow and adding back related non-recurring legal and other expenses and settlement-specific taxes paid. Free cash flow is operating cash flow less capital expenditures. In Q3 2026, $85 million of free cash flow plus $11 million of settlement-specific taxes produced $96 million of adjusted free cash flow.