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Teradata (NYSE: TDC) lifts 2026 EPS outlook after Q2 margin gains

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(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Teradata Corporation reported second quarter 2026 results with total revenue of $410 million, roughly flat year over year, while continuing to emphasize higher-margin recurring business. Recurring revenue rose to $363 million, 89% of total revenue, and Total ARR reached $1.509 billion, including $686 million of public cloud ARR.

Profitability and cash generation improved. GAAP operating margin increased to 11.7% and non-GAAP operating margin to 21.5%. GAAP diluted EPS was $0.48 and non-GAAP diluted EPS $0.69. Cash flow from operations was $106 million and adjusted free cash flow $127 million. For full-year 2026, Teradata raised GAAP EPS guidance to $4.43–$4.51 and non-GAAP EPS to $2.65–$2.73, and now expects cash from operations of $665–$685 million, including a $315 million after-tax SAP settlement benefit, and adjusted free cash flow of $330–$350 million, while reaffirming modest ARR and revenue growth ranges and guiding third-quarter 2026 revenue and recurring revenue to decline mid-single digits year over year.

Positive

  • Non-GAAP diluted EPS rose to $0.69 from $0.47, with non-GAAP operating margin expanding to 21.5% from 16.4%, reflecting higher profitability on essentially flat revenue.
  • Cash flow from operations increased to $106 million from $43 million, and adjusted free cash flow rose to $127 million from $39 million, up 147% and 226% respectively, strengthening internal cash generation.

Negative

  • Consulting services revenue declined 24% year over year in the quarter, to $39 million from $51 million, and was down 19% for the first half of 2026.
  • Guidance calls for Q3 2026 total revenue to decline 6% to 4% year over year, with recurring revenue down 4% to 2% and full-year 2026 total revenue ranging from -2% to flat.

Insights

Analyzing...

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Total revenue Q2 2026 $410 million Second quarter 2026 total revenue versus $408 million in Q2 2025
Recurring revenue Q2 2026 $363 million Second quarter 2026 recurring revenue; 3% year-over-year increase and 89% of total revenue
GAAP diluted EPS Q2 2026 $0.48 Second quarter 2026 GAAP diluted EPS versus $0.09 per share a year earlier
Non-GAAP diluted EPS Q2 2026 $0.69 Second quarter 2026 non-GAAP diluted EPS versus $0.47 per share in Q2 2025
Cash flow from operations Q2 2026 $106 million Cash provided by operating activities in Q2 2026 versus $43 million in Q2 2025
Adjusted free cash flow Q2 2026 $127 million Second quarter 2026 adjusted free cash flow versus $39 million a year earlier
Total ARR as of June 30, 2026 $1,509 million Total Annual Recurring Revenue at June 30, 2026 versus $1,489 million at June 30, 2025
Public cloud ARR as of June 30, 2026 $686 million Public cloud ARR at June 30, 2026 versus $634 million a year earlier
Total Annual Recurring Revenue financial
"Total Annual Recurring Revenue ("Total ARR") is defined as the annual contract value"
Public cloud ARR financial
"Public cloud ARR is defined as the annual contract value for all active and contractually binding"
Public cloud ARR is the portion of a company’s annual recurring revenue that comes from products or services hosted on third‑party, widely available cloud platforms rather than on the company’s own servers. For investors it signals how much predictable, subscription-style income is tied to scalable, off‑site infrastructure — like regular rent from tenants in a shared office tower — which affects growth potential, margins and dependency on cloud providers.
Adjusted free cash flow financial
"Adjusted free cash flow as free cash flow less the gross proceeds from the SAP settlement"
Adjusted free cash flow is the amount of money a company generates from its operations after accounting for essential expenses and investments, like maintaining or upgrading equipment. It shows how much cash is truly available to grow the business, pay debts, or return to shareholders, helping investors see the company's financial health more clearly.
Non-GAAP diluted earnings per share financial
"Non-GAAP diluted Earnings Per Share $ 0.69 $ 0.47 $0.55 - $0.59 $2.65 - $2.73"
Non-GAAP diluted earnings per share is a company’s per-share profit figure that starts with reported net income but then removes or alters certain items (like one-time charges, stock-based pay, or other adjustments) and divides by the number of shares after accounting for things that could dilute ownership. Investors use it as a “cleaned-up” measure to judge ongoing profit on a per-share basis, but because companies choose what to adjust, it can be more subjective than the standard GAAP metric—like comparing a regular bank statement to one that omits irregular expenses to show a steadier month-to-month picture.
SAP settlement financial
"includes an after-tax net benefit of $315 million related to a settlement with SAP"
Total revenue Q2 2026 $410 million from $408 million in the second quarter of 2025
GAAP diluted EPS Q2 2026 $0.48 from $0.09 per share a year earlier
Non-GAAP diluted EPS Q2 2026 $0.69 from $0.47 per share in the prior-year quarter
Cash flow from operations Q2 2026 $106 million from $43 million in the second quarter of 2025
Adjusted free cash flow Q2 2026 $127 million from $39 million in the prior-year quarter
Guidance

For Q3 2026, Teradata expects recurring revenue to be in the range of -4% to -2% year-over-year and total revenue in the range of -6% to -4%, with GAAP diluted EPS of $0.27–$0.31 and non-GAAP diluted EPS of $0.55–$0.59. For full-year 2026, it guides GAAP diluted EPS to $4.43–$4.51, non-GAAP diluted EPS to $2.65–$2.73, cash flow from operations of $665–$685 million including a $315 million after-tax SAP settlement benefit, adjusted free cash flow of $330–$350 million, Total ARR growth of 2%–4%, recurring revenue flat to 2% growth, and total revenue between -2% and flat year-over-year.

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FAQ

How did Teradata (TDC) perform financially in the second quarter of 2026?
Teradata reported Q2 2026 revenue of $410 million, roughly flat year over year, with GAAP diluted EPS of $0.48 and non-GAAP diluted EPS of $0.69. Profitability improved as GAAP operating margin rose to 11.7% and non-GAAP operating margin reached 21.5%.

What were Teradata (TDC)’s recurring revenue and ARR metrics for Q2 2026?
In Q2 2026, Teradata generated recurring revenue of $363 million, up 3% year over year and representing 89% of total revenue. Total ARR was $1.509 billion, including $686 million of public cloud ARR, which grew 8% as reported.

What guidance did Teradata (TDC) provide for Q3 2026 and full-year 2026?
For Q3 2026, Teradata expects total revenue down 6% to 4% year over year and GAAP EPS of $0.27–$0.31, with non-GAAP EPS of $0.55–$0.59. For 2026, it guides GAAP EPS to $4.43–$4.51 and non-GAAP EPS to $2.65–$2.73.

What is the impact of the SAP settlement on Teradata (TDC)’s 2026 outlook?
For full-year 2026, Teradata expects cash flow from operations of $665–$685 million, which includes an after-tax net benefit of $315 million related to a settlement with SAP. Adjusted free cash flow guidance of $330–$350 million excludes this settlement impact.

How are Teradata (TDC)’s cloud and subscription businesses performing?
As of June 30, 2026, public cloud ARR was $686 million, up 8% year over year (9% in constant currency). Overall, Total ARR reached $1.509 billion, growing 1% as reported and 2% in constant currency, highlighting the company’s subscription and cloud focus.
TERADATA CORP /DE/0000816761false00008167612026-08-042026-08-04


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549  
__________________
 
FORM 8-K  
__________________
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
Date of Report (date of earliest event reported): August 4, 2026  

 
TERADATA CORPORATION
(Exact name of registrant as specified in its charter)

Commission File Number 001-33458
 
Delaware75-3236470
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
 
17095 Via Del Campo
San Diego, California 92127
(Address of principal executive offices and zip code)
 
Registrant’s telephone number, including area code: (866) 548-8348
 
N/A
(Former name or former address, if changed since last report)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par valueTDCNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐



Item 2.02    Results of Operations and Financial Condition.
Teradata Corporation ("Teradata" or the "Company") is furnishing the following information as required under Item 2.02 “Results of Operations and Financial Condition” of Form 8-K. Such information, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.
On August 4, 2026, the Company issued a press release setting forth its second quarter of fiscal year 2026 operating results as well as current outlook estimates for the third quarter of 2026 and for the full-year 2026 (the "Earnings Press Release"). A copy of the Earnings Press Release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.
The Company also posted supplemental material dated August 4, 2026, on the Investor Relations page of its website at investor.teradata.com. Except as specifically noted herein, information on the Company’s website is not, and will not be deemed to be, a part of this Current Report on Form 8-K or incorporated into any other filings the Company may make with the Securities and Exchange Commission.






Item 9.01        Financial Statements and Exhibits.
(d)    Exhibits:
The following exhibits are attached with this current report on Form 8-K:
Exhibit No.Description
99.1
Press Release, dated August 4, 2026, issued by the Company (Earnings Press Release).
104
Cover Page Interactive Data (embedded within the Inline XBRL document).



Safe Harbor Statement

This Current Report on Form 8-K 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.



SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
TERADATA CORPORATION
Date: August 4, 2026By:/s/ John Ederer
John Ederer
Chief Financial Officer






Exhibit 99.1
image1.jpg
INVESTOR CONTACT
Chad Bennett
chad.bennett@teradata.com


MEDIA CONTACT
Jennifer Donahue
jennifer.donahue@teradata.com
                    
Teradata Reports Second Quarter 2026 Financial Results

•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)

SAN DIEGO – Aug. 4, 2026 -- 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 at help.events.q4inc.com/eahc/international-dial-in-numbers, 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
20262025% Change as Reported% Change in CC
Recurring revenue$363 $354 3%2%
Perpetual software licenses, hardware and other8 3 167%313%
Consulting services39 51 (24)%(23)%
  Total revenue$410 $408 —%—%
Product Sales$371 $357 4%3%
Consulting Services39 51 (24)%(23)%
   Total revenue$410 $408 —%—%
Revenue
(in millions)
For the Six Months ended June 30
20262025% Change as Reported% Change in CC
Recurring revenue$763 $712 7%5%
Perpetual software licenses, hardware and other9 13 (31)%(26)%
Consulting services82 101 (19)%(19)%
Total revenue$854 $826 3%2%
Product Sales$772 $725 6%5%
Consulting services82 101 (19)%(19)%
Total revenue$854 $826 3%2%

As of June 30
20262025% 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 30ended June 30
Gross Profit:20262025% Chg.20262025% Chg.
GAAP Gross Profit$243 $230 6%$519 $478 9%
   % of Revenue59.3 %56.4 %60.8 %57.9 %
Excluding:
Stock-based compensation expense4 5 8 9 
Reorganization and other costs1 3 4 3 
Non-GAAP Gross Profit$248 $238 4%$531 $490 8%
   % of Revenue60.5 %58.3 %62.2 %59.3 %
Operating Income
GAAP Operating income$48 $24 100%$12 $90 (87)%
   % of Revenue11.7 %5.9 %1.4 %10.9 %
Excluding:
Stock-based compensation expense33 31 62 53 
Reorganization and other costs7 12 14 15 
SAP settlement costs$— $— $121 $— 
Non-GAAP Operating Income$88 $67 31%$209 $158 32%
   % of Revenue21.5 %16.4 %24.5 %19.1 %
Net Income
GAAP Net Income
$46 $9 411%$381 $53 619%
   % of Revenue11.2 %2.2 %44.6 %6.4 %
Excluding:
   Stock-based compensation expense33 31 62 53 
Reorganization and other costs6 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 Revenue16.1 %11 %17.7 %13.2 %



For the Three MonthsFor the Six Months
ended June 30ended June 302026 Outlook
Earnings Per Share:
2026202520262025Q3FY
GAAP Earnings Per Share
$0.48 $0.09 $3.95 $0.55 $0.27 - $0.31$4.43 - $4.51
 Excluding:
Stock-based compensation expense0.34 0.32 0.64 0.54 0.31 1.27 
Reorganization and other costs0.06 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.



For the Three MonthsFor the Six Months
(in millions)ended June 30ended June 30Outlook
20262025202620252026
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

# # #
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SCHEDULE A

TERADATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts - unaudited)
For the Period Ended June 30
Three MonthsSix Months
20262025% Chg20262025% Chg
Revenue
Recurring$363 $354 3 %$763 $712 7 %
Perpetual software licenses, hardware and other8 3 167 %9 13 (31)%
Consulting services39 51 (24)%82 101 (19)%
Total revenue410 408 0 %854 826 3 %
Gross profit
Recurring 243 235 520 485 
% of Revenue66.9 %66.4 %68.2 %68.1 %
Perpetual software licenses, hardware and other2 — 3 1 
% of Revenue25.0 %— %33.3 %7.7 %
Consulting services(2)(5)(4)(8)
% of Revenue(5.1)%(9.8)%(4.9)%(7.9)%
Total gross profit243 230 519 478 
% of Revenue59.3 %56.4 %60.8 %57.9 %
Selling, general and administrative expenses120 135 360 251 
Research and development expenses75 71 147 137 
Income from operations48 24 12 90 
% of Revenue11.7 %5.9 %1.4 %10.9 %
Other (expense) income , net(1)(11)472 (19)
Income before income taxes47 13 484 71 
% of Revenue11.5 %3.2 %56.7 %8.6 %
Income tax expense1 4 103 18 
% Tax rate2.1 %30.8 %21.3 %25.4 %
Net income$46 $9 $381 $53 
% of Revenue11.2 %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
Basic93.9 95.3 93.5 95.2 
Diluted96.2 96.0 96.4 97.0 



SCHEDULE B

TERADATA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions - unaudited)
June 30, 2026December 31, 2025June 30, 2025
Assets
Current assets
Cash and cash equivalents$414 $493 $369 
Accounts receivable, net256 251 293 
Inventories5 13 5 
Other current assets98 80 90 
Total current assets773 837 757 
Property and equipment, net191 198 205 
Right of use assets- operating lease, net8 7 9 
Goodwill397 399 400 
Capitalized contract costs, net39 42 37 
Deferred income taxes166 209 231 
Other assets84 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 liability46 50 60 
Current portion of operating lease liability2 2 4 
Accounts payable55 96 115 
Payroll and benefits liabilities91 120 84 
Deferred revenue560 533 521 
Other current liabilities91 88 89 
Total current liabilities845 914 898 
Long-term debt— 431 443 
Finance lease liability45 45 46 
Operating lease liability6 4 5 
Pension and other postemployment plan liabilities111 114 108 
Long-term deferred revenue12 11 12 
Deferred tax liabilities12 12 10 
Other liabilities34 18 39 
Total liabilities1,065 1,549 1,561 
Stockholders' equity
Common stock1 1 1 
Paid-in capital2,361 2,305 2,244 
Accumulated deficit(1,617)(1,923)(1,932)
Accumulated other comprehensive loss(152)(153)(137)
Total stockholders' equity593 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 MonthsSix Months
2026202520262025
Operating activities
Net income$46 $9 $381 $53 
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization23 23 48 43 
Stock-based compensation expense33 31 62 53 
Deferred income taxes4 (6)40 4 
Loss on Blue Chip Swap1 — 1 — 
Changes in assets and liabilities:
Receivables66 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 liabilities8 16 (9)(13)
Net cash provided by operating activities106 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 equivalents2 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 period816 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 30For the Six Months Ended June 30
20262025% Change As Reported
%
 Change Constant Currency(2)
20262025% Change As Reported
%
 Change Constant Currency(2)
Segment Revenue
Product Sales$371 $357 4%3%$772 $725 6%5%
Consulting Services39 51 (24)%(23)%82 101 (19)%(19)%
Total segment revenue410 408 0%0%854 826 3%2%
Segment gross profit
Product Sales248 239 529 492 
% of Revenue66.8 %66.9 %68.5 %67.9 %
Consulting Services— (1)2 (2)
% of Revenue— %(2.0)%2.4 %(2.0)%
Total segment gross profit248 238 531 490 
% of Revenue60.5 %58.3 %62.2 %59.3 %
Reconciling items(1)
(5)(8)(12)(12)
Total gross profit$243 $230 $519 $478 
% of Revenue59.3 %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: View Original Filing on SEC EDGAR

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