TERADATA CORP /DE/

Previous wording

At Teradata Corporation ("we," "us," "Teradata," or the "Company"), we believe that people thrive when empowered with trusted information. We are focused on helping organizations improve business performance, enrich customer experiences, and integrate data across the enterprise. As such, we strive to innovate and deliver trusted solutions for their toughest data and analytics challenges. That is why we built our comprehensive open and connected cloud analytics and data platform for artificial intelligence ("AI"). With our Teradata Vantage platform, underpinned by our extensive patented workload management optimization, we are well positioned to help enterprises solve business problems and deliver business breakthroughs with its capabilities to provide harmonized data, trusted AI, and faster innovation. As a result, we believe that we empower our customers - and our customers' customers - to make better, more confident decisions, engage in faster innovation, and drive positive impact within the enterprise.

Current wording

At Teradata Corporation ("we," "us," "Teradata," or the "Company"), we believe that people thrive when empowered with trusted information. We are focused on helping organizations improve business performance, enrich customer experiences, and integrate data across the enterprise. As such, we strive to innovate and deliver trusted solutions for their toughest data and analytics challenges. That is why we built our comprehensive open and connected cloud analytics and data platform for artificial intelligence ("AI"). With our hybrid cloud platform, named Teradata Vantage, underpinned by our extensive patented workload management optimization technology, we are well positioned to help enterprises solve business problems and deliver business breakthroughs with its capabilities to provide harmonized data, trusted AI, and faster innovation. As a result, we believe that we empower our customers to make better, more confident decisions, engage in faster innovation, and drive positive impact within the enterprise.

Previous wording

Teradata is recognized by industry analysts as offering a cloud analytics and data platform with next-generation, cloud-native deployment and expansive analytics capabilities. We believe we are differentiated by providing our analytics and data platform offering across a secure, multi-cloud ecosystem. Our differentiated approach spans deployments in the top Public Cloud service provider platforms of AWS, Microsoft Azure, and Google Cloud, as well as private cloud platform instances, on-premises, and hybrid environments.

Current wording

Teradata is recognized by industry analysts as offering a hybrid cloud analytics and data platform with next-generation, cloud-native deployment and expansive analytics capabilities. We believe we are differentiated by providing our hybrid cloud analytics and data platform offering across an open and connected ecosystem. Our differentiated approach spans deployments in the top public cloud service provider platforms of AWS, Microsoft Azure, and Google Cloud, as well as private cloud platform instances, on-premises, and hybrid environments.

Previous wording

As more fully discussed in later sections of this MD&A, the following were what we view as the more significant financial items for the third quarter of 2024:

Current wording

As more fully discussed in later sections of this MD&A, the following were what we view as the more significant financial items for the first quarter of 2025:

Previous wording

•At the end of the third quarter of 2024, ARR was$1.482 billion compared to$1.524 billion at the end of thethird quarter of 2023, decreasing 3% as compared to the third quarter of 2023, including a 1% positive impact from foreign currency translation.

Current wording

•At the end of the first quarter of 2025, Total ARR was $1.442 billion compared to $1.480 billion at the end of the first quarter of 2024, decreasing 3% as compared to the first quarter of 2024, including a 1% negative impact from foreign currency fluctuations.

Previous wording

•At the end of the third quarter of 2024, Public Cloud ARR was$570 million compared to $454 million at the end of thethird quarter of 2023, increasing 26% as compared to thethird quarter of 2023, including a 2% positivei mpact from foreign currency fluctuations.

Current wording

•At the end of the first quarter of 2025, Public Cloud ARR was $606 million compared to $525 million at the end of the first quarter of 2024, increasing 15% as compared to the first quarter of 2024, including a 1% negative impact from foreign currency fluctuations.

Previous wording

•Total revenue was$440 million for the third quarter of 2024, increasing by $2 million compared to the third quarter of 2023, with recurring revenueup 3%. Perpetual software licenses, hardware and other revenuewas flat, and consulting services revenue decreased 14%. Foreign currency fluctuations had a 2% adverse impact on total revenue for the quarter compared to the prior year.

Current wording

•Total revenue was$418 million for the first quarter of 2025, decreasing by$47 million compared to the first quarter of 2024, with recurring revenue down 8%. Perpetual software licenses, hardware and other revenue wasup 25%, and consulting services revenue decreased 28%. Foreign currency fluctuations had a 2%adverse impact on total revenue for the quarter compared to the prior year.

Previous wording

•Gross margin increased to 60.5% in the third quarter of 2024 from 59.1% in the third quarter of 2023, primarily due to improved Public Cloud margin rates and lower overall consulting services revenue compared to the prior year.

Current wording

•Gross margin decreased to 59.3% in the first quarter of 2025 from 61.1% in the first quarter of 2024, primarily due to lower consulting services margin rates, which were largely driven by lower overall consulting services revenue compared to the prior year.

Previous wording

•Operating expenses for the third quarter of 2024 decreased 9% compared to the third quarter of 2023, primarily due to lower employee compensation expenses including stock-based compensation expense in thethird quarter of 2024.

Current wording

•Operating expenses for the first quarter of 2025 decreased 23% compared to the first quarter of 2024, largely due to lower employee compensation expenses and the impact of restructuring actions taken in the prior year, as well as lower stock-based compensation expense in the first quarter of 2025.

Previous wording

•Operating income was$56 million in the third quarter of 2024, compared to$27 million in the third quarter of 2023.

Current wording

•Operating income was $66 million in the first quarter of 2025, compared to $48 million in the first quarter of 2024.

Previous wording

•Net income in the third quarter of 2024 was$32 million, compared to$12 million in the third quarter of 2023.

Current wording

•Net income in the first quarter of 2025 was $44 million, compared to $20 million in the first quarter of 2024.

Previous wording

•Cloud Net Expansion Rate for the third quarter of 2024 was 120%, compared to 123% for thethird quarter of 2023.

Current wording

•Cloud Net Expansion Rate for the first quarter of 2025 was 115%, compared to 123% for the first quarter of 2024.

Previous wording

Total revenue increased $2 million, or 0%, in the third quarter of 2024, including a 2% negative impact from foreign currency fluctuations. Recurring revenue wasup 3% as compared to thethird quarter of 2023 and included a 2% negative impact from foreign currency fluctuations. Recurring revenue for thethird quarter of 2024 included strong growth from Public Cloud revenue and a positive impact from annual upfront software subscription revenue associated with on-premises subscription software. Revenues from perpetual software licenses, hardware and other were flat year over year. Consulting services revenue decreased 14% in the third quarter of 2024, including a 2% negative impact from foreign currency fluctuations. The consulting services revenue decrease is an expected result of our overall strategy to have our consulting business focused on higher-margin engagements.

Current wording

Total revenue decreased $47 million, or 10%, in the first quarter of 2025, including a 2% negative impact from foreign currency fluctuations. Recurring revenue decreased 8%as compared to the first quarter of 2024 and included a 2% negative impact from foreign currency fluctuations. Recurring revenue for the first quarter of 2025 included strong growth from Public Cloud revenue, which was more than offset by a decrease in revenue from our on-premises business, as well as a smaller benefit from annual upfront software subscription revenue recognized in the current period. Revenue from perpetual software licenses, hardware and other increased $2 million year over year. Consulting services revenue decreased 28% in the first quarter of 2025, including a 2% negative impact from foreign currency fluctuations. The consulting services revenue decrease is an expected result of the lower order booking activity in the second half of 2024.

Previous wording

At the end of the third quarter of 2024, Total ARRdecreased 3% as compared to the third quarter of 2023, including a 1% positive impact from foreign currency fluctuations. At the end of the third quarter of 2024, Public Cloud ARRincreased 26% as compared to thethird quarter of 2023, including a 2% positive impact from foreign currency fluctuations. Public Cloud ARR growth in thethird quarter of 2024 was primarily driven by greater market awareness and customer demand of Teradata VantageCloud, our Public Cloud offering. Thedecreasesin subscription ARR and maintenance and software upgrade rights ARR were primarily driven by customer migrations to Public Cloud ARR, on-premises erosions, elongated deal closing cycles and lower on-premises expansion activity.

Current wording

At the end of the first quarter of 2025, Total ARRdecreased 3% as compared to the first quarter of 2024. At the end of the first quarter of 2025, Public Cloud ARR increased 15% as compared to the first quarter of 2024, including a 1% negative impact from foreign currency fluctuations. Public Cloud ARR growth in the first quarter of 2025 was primarily driven by greater market awareness and customer demand of Teradata VantageCloud, our Public Cloud offering. The decreases in subscription ARR and maintenance and software upgrade rights ARR were primarily driven by customer migrations to Public Cloud ARR, on-premises erosions, elongated deal closing cycles and lower on-premises expansion activity.

Previous wording

In the third quarter of 2024, we experienced the following trends as compared to thethird quarter of 2023:

Current wording

In the first quarter of 2025, we experienced the following trends:

Previous wording

•Customers expanding into additional cloud capabilities as they see value when they migrate to VantageCloud as compared to the capabilities they had in an on-premises environment.

Current wording

•Customers expanding into additional cloud capabilities as they see value when they migrate to VantageCloud.

Previous wording

•Uncertain industry macro-economic environment resulting in delayed customer spending.

Current wording

•Uncertain industry macro-economic environment resulting in delayed customer spending, including for our consulting services.

Previous wording

As a portion of the Company’s operations and revenue occur outside the United States, and in currencies other than the U.S. dollar, the Company is exposed to fluctuations in foreign currency exchange rates. Based on currency rates as of September 30, 2024, Teradata is now estimating a 1.25%-to-1.75% negative impact from currency translation on our 2024 full-year total reported revenues.

Current wording

As a portion of the Company’s operations and revenue occur outside the United States, and in currencies other than the U.S. dollar, the Company is exposed to fluctuations in foreign currency exchange rates. Based on currency rates as of March 31, 2025, Teradata is now estimating a flat-to-0.50% nega tive impact from currency translation on our 2025 full-year total reported revenues.

Previous wording

We expect to see elongated deal closing cycles continue and are now expecting cloud migration activity with some customer accounts to be pushed out to future quarters, which will negatively impact Public Cloud ARR growth in 2024. We expect expansion and migration activity as the primary contributors for Public Cloud ARR growth in 2024.

Current wording

We expect to see continued elongated deal closing cycles continue and that cloud migration activity with some customer accounts will continue to be implemented on a staged basis over time. We expect expansion and migration activity as the primary contributors for Public Cloud ARR growth in 2025.

Previous wording

The decrease in recurring revenue gross profit as a percentage of revenue was primarily due to a higher mix of Public Cloud revenues versus on-premises revenue as compared to the prior-year period, offset in part by continued improvement in our Public Cloud margin rate, and the positive margin impact from annual upfront software subscription revenue.

Current wording

Thedecreasein recurring revenue gross profit as a percentage of revenue was primarily due to a higher mix of Public Cloud revenues versus on-premises revenue as compared to the prior-year period, offset in part by continued improvement in our Public Cloud margin rate.

Previous wording

Selling, general and administrative ("SG&A") expense decreased year over year due to continued cost discipline focused on cost reductions across the Company, as well as lower variable incentive compensation and stock-based compensation expense. Research and development ("R&D") expense decreased year over year also due to continued cost discipline efforts.

Current wording

Selling, general and administrative ("SG&A") expense decreased year over year due to continued cost discipline focused on cost reductions across the Company, including as part of our Restructuring, as well as lower stock-based compensation expense. Research and development ("R&D") expense decreased year over year also due to continued cost discipline efforts.

Previous wording

Other expense, net in the third quarter of 2024 and 2023 is comprised primarily of interest expense on long-term debt and finance leases, losses resulting from foreign currency transactions, as well as benefit costs on our pension and postemployment plans, partially offsetby interest income earned on our cash and cash equivalents. Other expense islower in 2024 primarily due to decreased foreign currency losses of $8 million as compared to the prior period. Interest income islower primarily due to a lower average cash balance.

Current wording

Other expense, net in the first quarter of 2025 and 2024 is comprised primarily of interest expense on long-term debt and finance leases, losses resulting from foreign currency transactions, as well as benefit costs on our pension and postemployment plans, partially offsetby interest income earned on our cash and cash equivalents. Other expense is lower in 2025 primarily due to decreased foreign currency losses of $9 million as compared to the prior period.

Previous wording

For the nine months ended September 30, 2024, the Company recorded $3 million of net discrete tax expense, a majority of which related to tax expense from stock-based compensation vesting.

Current wording

For the three months ended March 31, 2024, the Company recorded $1 million of net discrete tax benefit, a majority of which related to additional tax expense from stock-based compensation vesting.

Previous wording

Effective on January 1, 2022, the U.S. tax law changed to require that R&D expenses be capitalized and amortized for tax purposes under Internal Revenue Code Section 174. This requirement has an impact on global intangible low-taxed income ("GILTI") tax. We are currently forecasting approximately$4 millionof tax expense related to GILTI in our marginal effective tax rate for 2024.

Current wording

Effective on January 1, 2022, the U.S. tax law changed to require that R&D expenses be capitalized and amortized for tax purposes under Internal Revenue Code Section 174. This requirement has an impact on global intangible low-taxed income ("GILTI") tax. We are currently forecasting approximately $2 million of tax expense related to GILTI in our marginal effective tax rate for 2025.

Previous wording

We estimate that the full-year effective tax rate for 2024 will be approximately 34%, which takes into consideration, among other things, the forecasted earnings mix by jurisdiction, the estimated impact to GILTI tax (including the requirement to capitalize R&D for tax purposes), and the estimated discrete items to be recognized in 2024. The forecasted tax rate is based on the foreign profits being taxed at an overall effective tax rate of approximately 23%, as compared to the U.S. federal statutory tax rate of 21%.

Current wording

We estimate that the full-year effective tax rate for 2025 will be approximately 28.4%, which takes into consideration, among other things, the forecasted earnings mix by jurisdiction, the estimated impact to GILTI tax (including the requirement to capitalize R&D for tax purposes), and the estimated discrete items to be recognized in 2025. The forecasted tax rate is based on the foreign profits being taxed at an overall effective tax rate of approximately 24%, as compared to the U.S. federal statutory tax rate of 21%.

Previous wording

On August 5, 2024, Teradata announced that it realigned its sales function and initiated global restructuring to optimize operations. Due to these organizational changes, Teradata now manages its business under two segments, which are also the Company’s new operating segments: (1) Product Sales and (2) Consulting Services. Teradata’s Product Sales segment represents the results for the Recurring Revenue and Perpetual Software Licenses, Hardware and Other line items and the Consulting Services segment represents the Consulting Services line item, each as disclosed in the Company’s financial statements and in the tables in this Form 10-Q. As the revenue and gross margin trends for these business categories are already discussed in the sections above, there is no separate segment discussion presented here. Our segment information is presented in Note 12 of Notes to Condensed Consolidated Financial Statements (Unaudited).

Current wording

On August 5, 2024, Teradata announced that it realigned its sales function and initiated global restructuring to optimize operations. Due to these organizational changes, Teradata now manages its business under two segments, which are also the Company’s operating segments: (1) Product Sales and (2) Consulting Services. Teradata’s Product Sales segment represents the results for the Recurring Revenue and Perpetual Software Licenses, Hardware and Other line items and the Consulting Services segment represents the Consulting Services line item, each as disclosed in the Company’s financial statements and in the tables in this Form 10-Q. As the revenue and gross margin trends for these business categories are already discussed in the sections above, there is no separate segment discussion presented here. Our segment information is presented in Note 12 of Notes to Condensed Consolidated Financial Statements (Unaudited).

Previous wording

Cash provided by operating activities was $147 million, which decreased by $52 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease in cash provided by operating activities was primarily due to working capital dynamics including the impact of lower billings. Teradata used approximately$24 million of cash in the first nine months of 2024 for reorganizing and transforming its operations and go-to-market functions to align to its strategy, as compared to $30 million in the first nine months of 2023. Teradata expects that approximately $25 to $30 million in additional cash will be used in the last three months of 2024 in connection with the implementation of the Restructuring discussed in Note 13 of Notes to Condensed Consolidated Financial Statements (Unaudited).

Current wording

Cash provided by operating activities was$8 million, which decreased by$19 million in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease in cash provided by operating activities was primarily dueto working capital dynamics and the volume and timing of billings. Teradata used approximately $5 million of cash in the first three months of 2025 for reorganizing and transforming its operations and go-to-market functions to align to its strategy, as compared to $13 million in the first three months of 2024. Teradata expects that approximately $30 to $35 million in cash will be used during 2025 in connection with the implementation of the Restructuring discussed in Note 13 of Notes to Condensed Consolidated Financial Statements (Unaudited).

Previous wording

Financing activities and certain other investing activities, are not included in our calculation of free cash flow. As disclosed in Note 5 of Notes to Condensed Consolidated Financial Statements (Unaudited), during thenine months ended September 30, 2024, we entered into Blue Chip Swap transactions in order to remit cash from our Argentine operations that resulted in a pre-tax loss on investment of$3 million that is reported as an investing activity for cash flow purposes. There was also an immaterial holdback payment related to our strategic acquisition of Stemma Technologies, made in the nine months ended September 30, 2024.

Current wording

Financing activities and certain other investing activities, are not included in our calculation of free cash flow. As disclosed in Note 5 of Notes to Condensed Consolidated Financial Statements (Unaudited), during the three months ended March 31, 2024, we entered into a Blue Chip Swap transaction in order to remit cash from our Argentine operations that resulted in a pre-tax loss on investment of $2 million that was reported as an investing activity for cash flow purposes. There were no other material other investing activities for the three months ended March 31, 2025.

Previous wording

Teradata’s financing activities for the nine months ended September 30, 2024 and 2023 primarily consisted of cash outflows for share repurchases and payments on our finance leases. At September 30, 2024, we hadno outstanding borrowings on our $400 million Revolving Facility (as defined below).

Current wording

Teradata’s financing activities for the three months ended March 31, 2025 and 2024 primarily consisted of cash outflows for share repurchases and payments on our finance leases. At March 31, 2025, we had no outstanding borrowings on our $400 million Revolving Facility (as defined below).

Previous wording

•Our open market share repurchase program provides for the repurchase of Teradata stock periodically on an ongoing basis in open market transactions, through 10b5-1 programs, through accelerated share repurchase programs, in privately negotiated transactions, or through the use of derivative instruments, in accordance with applicable securities rules regarding issuer repurchases. The open market share repurchase program will expire on December 31, 2025. On November 1, 2021, our Board of Directors authorized an additional $1 billion for share repurchases under the open market share repurchase program. There is a total authority of $381 million remai ning under the open market share repurchase program as of September 30, 2024.

Current wording

•Our open market share repurchase program provides for the repurchase of Teradata stock periodically on an ongoing basis in open market transactions, through 10b5-1 programs, through accelerated share repurchase programs, in privately negotiated transactions, or through the use of derivative instruments, in accordance with applicable securities rules regarding issuer repurchases. The open market share repurchase program will expire on December 31, 2025. On November 1, 2021, our Board of Directors authorized an additional $1 billion for share repurchases under the open market share repurchase program. There is a total authority of $313 million remaining under the open market share repurchase program as of March 31, 2025.

Previous wording

In the aggregate under the dilution offset share repurchase program and the open market share repurchase program, we repurchased approximately 4.9 million shares of common stock at an average price per share of $38.07 in the nine months ended September 30, 2024.

Current wording

In the aggregate under the dilution offset share repurchase program and the open market share repurchase program, we repurchased approximately 1.6 million shares of common stock at an average price per share of$27.92 in the three months ended March 31, 2025.

Previous wording

Other financing activities, including net share settlement for the payroll tax liability of section 16 officers (as discussed in Item 2. Unregistered Sales of Equity Securities and Use of Proceeds), offset by proceeds from the ESPP and the exercise of stock options, net of tax was a net outflow of $1 million for the nine months ended September 30, 2024 and a net inflow of $6 million (including fees from the credit facility agreement) for the nine months ended September 30, 2023. The ESPP proceeds are included in other financing activities, net in the Condensed Consolidated Statements of Cash Flows (Unaudited).

Current wording

Other financing activities, including net share settlement for the payroll tax liability of section 16 officers (as discussed in Item 2. Unregistered Sales of Equity Securities and Use of Proceeds), offset by proceeds from the ESPP and the exercise of stock options, net of tax was a net outflow of $2 million for the three months ended March 31, 2025 and a net outflow of $6 million for the three months ended March 31, 2024. The ESPP proceeds are included in other financing activities, net in the Condensed Consolidated Statements of Cash Flows (Unaudited).

Previous wording

Our total cash and cash equivalents held outside the United States in various foreign subsidiaries was$328 million as of September 30, 2024 and $428 million as of December 31, 2023. The remaining balance held in the United States ("U.S.") was $20 million as of September 30, 2024 and $58 million as of December 31, 2023. The Company expects that a majority of its foreign earnings will be repatriated to the U.S. Effective January 1, 2018, the U.S. moved to a territorial system of international taxation, and as such will generally not subject future foreign earnings to U.S. taxation upon repatriation in future years.

Current wording

Our total cash and cash equivalents held outside the United States in various foreign subsidiaries was$330 million as of March 31, 2025 and$350 million as of December 31, 2024. The remaining balance held in the United States ("U.S.") was $38 million as of March 31, 2025 and$70 million as of December 31, 2024. The Company expects that a majority of its foreign earnings will be repatriated to the U.S. Effective January 1, 2018, the U.S. moved to a territorial system of international taxation, and as such will generally not subject future foreign earnings to U.S. taxation upon repatriation in future years.

Previous wording

Management believes current cash, cash generated from operations and the $400 million available under the Credit Facility will be sufficient to satisfy future working capital, research and development activities, capital expenditures, pension contributions, and other financing requirements for at least the next twelve months. The Company principally holds its cash and cash equivalents in bank deposits and highly-rated money market funds.

Current wording

Management believes current cash, cash generated from operations and the$400 million available under the Credit Facility will be sufficient to satisfy future working capital, research and development activities, capital expenditures, pension contributions, and other financing requirements for at least the next twelve months. The Company principally holds its cash and cash equivalents in bank deposits and highly-rated money market funds.

Previous wording

Long-term Debt. On June 28, 2022, we entered into a Credit Agreement that provides for (i) a five-year unsecured term loan in an aggregate principal amount of $500 million (the "Term Loan"), and (ii) a five-year unsecured revolving credit facility in an aggregate principal amount of up to $400 million, including a $50 million sublimit for the issuance of standby letters of credit and a $50 million sublimit for swingline loans (the "Revolving Facility" and, collectively with the Term Loan, the "Credit Facility"). The Credit Facility replaces our prior revolving credit agreement in the maximum principal of $400 million and our prior term loan agreement in the principal amount of $500 million, both of which were entered into in 2018 (the "Prior Agreements"). In connection with the execution of the Credit Facility, the $400 million term loan outstanding under the Prior Agreements was repaid in full. Our long-term debt is discussed in Note 10 of Notes to Condensed Consolidated Financial Statements (Unaudited). In addition, as disclosed in Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited), Teradata entered into an interest rate swap to hedge approximately 90% (or$444 million as of September 30, 2024) of the floating interest rate of the outstanding principal of the $500 million Term Loan and a cross currency swap to hedge a portion of Euro currency exposure of its net investment in certain foreign subsidiaries. As of September 30, 2024, the Company hadno borrowings outstanding under the Revolving Facility, leaving$400 million in borrowing capacity available under the Revolving Facility and the Term Loan principal outstanding was$487 million.

Current wording

Long-term Debt. On June 28, 2022, we entered into a Credit Agreement that provides for (i) a five-year unsecured term loan in an aggregate principal amount of $500 million (the "Term Loan"), and (ii) a five-year unsecured revolving credit facility in an aggregate principal amount of up to $400 million, including a $50 million sublimit for the issuance of standby letters of credit and a $50 million sublimit for swingline loans (the "Revolving Facility" and, collectively with the Term Loan, the "Credit Facility"). Our long-term debt is discussed in Note 10 of Notes to Condensed Consolidated Financial Statements (Unaudited). In addition, as disclosed in Note 7 of Notes to Condensed Consolidated Financial Statements (Unaudited), Teradata entered into an interest rate swap to hedge approximately 90% (or$433 million as of March 31, 2025) of the floating interest rate of the outstanding principal of the $500 million Term Loan and a cross currency swap to hedge a portion of Euro currency exposure of its net investment in certain foreign subsidiaries. As of March 31, 2025, the Company hadno borrowings outstanding under the Revolving Facility, leaving$400 million in borrowing capacity available under the Revolving Facility and the Term Loan principal outstanding was$475 million.

Previous wording

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require significant management judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. The significant accounting policies and estimates that we believe are the most critical to aid in fully understanding and evaluating our reported financial results are discussed in the 2023 Annual Report. Teradata’s senior management has reviewed these critical accounting policies and related disclosures and determined that there were no significant changes in our critical accounting policies in the nine months ended September 30, 2024.

Current wording

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require significant management judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. The significant accounting policies and estimates that we believe are the most critical to aid in fully understanding and evaluating our reported financial results are discussed in the 2024 Annual Report. Teradata’s senior management has reviewed these critical accounting policies and related disclosures and determined that there were no significant changes in our critical accounting policies in the three months ended March 31, 2025.