TERADATA CORP /DE/
For the period ended Mar 31, 2026. Filed May 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
TDC$31.80-2.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001628280-25-049313
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001628280-26-031053
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 74 current paragraphs.
29 unchanged; 35 reworded; 10 added; 33 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
At Teradata Corporation ("we," "us," "Teradata," or the "Company"), we are focused on helping organizations activate the intelligence in their enterprise and turn the insights from across their organization into outcomes. We believe that we have architected our platform for autonomous AI operations and organizations’ toughest data and analytics challenges, particularly as enterprises are evaluating how to cost effectively deploy agentic AI. We’ve also seen an emergence of hybrid environments that reflected a growing understanding of how enterprises can best leverage both on-premises and cloud deployment options to meet their diverse organizational needs.
Current report
With our AI and knowledge platform, underpinned by our extensive patented workload management optimization technology, we believe we are well positioned to help enterprises become more autonomous, while enabling our customers to focus on managing, securing, and providing trustworthy data for AI and analytics across hybrid and multi-cloud environments.
Current report
•Public Cloud ARR (included within Total ARR) - annual contract value for all active and contractually binding term-based contracts at the end of the period that are operated in a public cloud environment.
Current report
First Quarter Financial Overview
Current report
•Net income in the first quarter of 2026 was $335 million, compared to $44 million in the first quarter of 2025. Net income for the first quarter of 2026 included $280 million of after‑tax net proceeds from the SAP Settlement Agreement.
Current report
•Continued macroeconomic and geopolitical uncertainty, including evolving global trade and tariff policy and elevated interest rates, contributing to elongated customer decision cycles and staged purchasing decisions.
Current report
Other Income (Expense), net
Current report
For the three months ended March 31, 2026, the Company recorded $79 million of discrete tax expense related to the tax expense impact from the receipt of the SAP Settlement Net Proceeds.
Current report
As disclosed in Note 5, Supplemental Financial Information, of the Notes to Condensed Consolidated Financial Statements (Unaudited), during the three months ended March 31, 2026, we received $480 million cash from the SAP Settlement Agreement and paid $121 million in related expenses, that was reported as an operating activity for cash flow purposes.
Current report
•On November 17, 2025, the Board approved a share repurchase program (the "Repurchase Program") authorizing the Company to repurchase up to $500 million of its common stock. The Repurchase Program became effective on January 1, 2026, does not have an expiration date, and will continue until otherwise modified, suspended, or terminated. The purchases under the Repurchase Program may be made from time to time in the open market, in privately negotiated transactions, or by other means, including through Rule 10b5-1 trading plans, in accordance with applicable securities law and other regulatory requirements. The Repurchase Program does not obligate the Company to repurchase any shares under the authorization and the timing and amount of any repurchases will depend on a variety of factors, including the price of the Company’s common stock, general business and market conditions, and other investment considerations. There is a total authority of $470 million remaining under the Repurchase Program as of March 31, 2026.
Removed paragraphs (33)
Previous report
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 report
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 report
We are continuing to execute on our priorities, including supporting our customers, whether leveraging Teradata in a hybrid environment, in the cloud or on-premises, migrating customers to the cloud, helping them expand their Teradata environment or upgrade to the latest version of our platform, as well as adding new customers. We are also focused on accelerating innovation with our hybrid platform and ClearScape Analytics capabilities, delivering new AI capabilities to enable customers to take advantage of generative and agentic AI, and driving operational excellence and agility across the Company.
Previous report
•Public Cloud ARR (included within Total ARR) - annual value at a point in time of all contracts related to Public Cloud implementations of Teradata VantageCloud and does not include ARR related to private or managed cloud implementations.
Previous report
•Cloud Net Expansion Rate - Teradata calculates its last-twelve months dollar-based cloud net expansion rate as of a fiscal quarter end as follows:
Previous report
◦We identify the ARR for active cloud customers in the fiscal quarter ending one year prior to the given fiscal quarter (the "base period");
Previous report
◦We then identify the Public Cloud ARR in the given fiscal quarter (the "current period") from the same set of active cloud customers as the base period, including increases in usage, as well as reductions and cancellations, and additional conversions of on-premises revenues to the cloud for customers active in the base period, all in constant currency; and
Previous report
◦The quarterly dollar-based, Cloud Net Expansion Rate is calculated by taking the ARR from the current period and dividing by the ARR from the base period.
Previous report
The last twelve-month dollar-based cloud net expansion rate is calculated by taking the average of the quarterly dollar-based cloud net expansion rate from the last fiscal quarter and the prior three fiscal quarters.
Previous report
Third Quarter Financial Overview
Previous report
•Net income in the third quarter of 2025 was $40 million, compared to $32 million in the third quarter of 2024.
Previous report
•Cloud Net Expansion Rate for the third quarter of 2025 was 109%, compared to 120% for the third quarter of 2024.
Previous report
•Uncertain industry macro-economic environment resulting in delayed customer spending, including for our consulting services.
Previous report
Other Expense, net
Previous report
For the three months ended September 30, 2025 and 2024, the Company had no material discrete tax adjustments.
Previous report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation, domestic research cost expensing and the business interest expense limitation, among other tax changes. While the Company continues to assess the impact of the tax provisions and elections available under the OBBBA on its consolidated financial statements, the Company currently believes that the tax provisions of the legislation are not expected to have a material impact on the Company’s effective tax rate and statement of operations.
Previous report
Compared to the Nine Months Ended September 30, 2024
Previous report
Revenue
Previous report
Total revenue decreased $99 million, or 7%, in the first nine months of 2025, with no material impact from foreign currency fluctuations. Recurring revenue decreased 4%. Within recurring revenue, Public Cloud revenue increased primarily due to expansions and migrations.
Previous report
Revenues from perpetual software licenses, hardware and other decreased 20% year over year in the first nine months of 2025.
Previous report
Consulting services revenue decreased 23% in the first nine months of 2025, with no material 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 and into 2025.
Previous report
Gross Profit
Previous report
Recurring revenue gross profit as a percentage of revenue was down from the prior year due to a higher mix of Public Cloud revenue as compared to on-premises revenue, which was partially offset by improvements in the Public Cloud margin rate.
Previous report
The increase in perpetual software licenses, hardware and other gross profit as a percentage of revenue was primarily driven by deal mix as compared to the prior year.
Previous report
Consulting services gross profit as a percentage of revenue decreased as compared to the prior year primarily due to the decrease in revenue versus the prior-year period, which was partially offset through capacity management. We continue to refocus our consulting organization on Vantage-oriented offerings and reduce our footprint in non-core consulting engagements.
Previous report
Operating Expenses
Previous report
SG&A expenses decreased 13% for the first nine months of 2025 as compared to the prior year, primarily due to continued cost discipline focused on cost reductions across the Company and lower stock-based compensation expense.
Previous report
R&D expe nses decreased for the first nine months of 2025 as compared to prior year, primarily due to continued cost discipline and lower stock-based compensation expense.
Previous report
Other Expense, net
Previous report
Other expense, net for the nine months of 2025 and 2024 is comprised primarily of interest expense on long-term debt and finance leases, losses resulting from foreign currency transactions, and benefit costs associated with our pension and postemployment plans, partially offset by interest income earned on our cash and cash equivalents. Other expense islowerin the first nine months of 2025 as compared to the first nine months of 2024 primarily due to$7 million lower costs resulting from foreign currency transactions compared to the prior period. Interest income islower primarily due to lower average interest rates during the current year as compared to the prior period.
Previous report
As disclosed in Note 5 of Notes to Condensed Consolidated Financial Statements (Unaudited), during the nine 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 in "Other" expense. During the nine months ended September 30, 2025 the Company incurred a pre-tax loss on investment of $1 million from Blue Chip Swap transactions.
Previous report
Provision for Income Taxes
Previous report
•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$259 million remaining under the open market share repurchase program as of September 30, 2025.
Reworded paragraphs (35)
Previous wording
You should read the following discussion in conjunction with the Condensed Consolidated Financial Statements (Unaudited) and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements contained in the MD&A are forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Annual Report"). The Company 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.
Current wording
You should read the following discussion in conjunction with the Condensed Consolidated Financial Statements (Unaudited) and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements contained in the MD&A are forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of this Quarterly Report on Form 10-Q and in our 2025 Annual Report. The Company 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.
Previous wording
•Total Annual Recurring Revenue ("Total ARR") - annual value at a point in time of all recurring contracts, including subscription, cloud, software upgrade rights, and maintenance. Total ARR does not include managed services.
Current wording
•Total Annual Recurring Revenue ("Total ARR") - 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.
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 2025:
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 2026:
Previous wording
•At the end of the third quarter of 2025, Total ARR was $1.490 billion compared to $1.482 billion at the end of the third quarter of 2024, increasing 1% as compared to the third quarter of 2024, including a 1% positive impact from foreign currency fluctuations.
Current wording
•At the end of the first quarter of 2026, Total ARR was$1.492 billion compared to $1.442 billion at the end of the first quarter of 2025, increasing 3%as compared to the first quarter of 2025, including a 1% positive impact from foreign currency fluctuations.
Previous wording
•At the end of the third quarter of 2025, Public Cloud ARR was $633 million compared to $570 million at the end of the third quarter of 2024, increasing 11% as compared to the third quarter of 2024, with no impact from foreign currency fluctuations.
Current wording
•At the end of the first quarter of 2026, Public Cloud ARR was$686 million compared to $606 million at the end of the first quarter of 2025, increasing 13% as compared to the first quarter of 2025, with a 1% positive impact from foreign currency fluctuations.
Previous wording
•Total revenue was $416 million for the third quarter of 2025, decreasing by $24 million compared to the third quarter of 2024, with recurring revenue down 2%. Perpetual software licenses, hardware and other revenue reduced by 57%, and consulting services revenue decreased 23%. Foreign currency fluctuations had a 1% positive impact on total revenue for the quarter compared to the prior year.
Current wording
•Total revenue was $444 million for the first quarter of 2026, increasing by $26 million compared to the first quarter of 2025, with recurring revenue up 12%. Perpetual software licenses, hardware and other revenue reduced by 90%, and consulting services revenue decreased 14%. Foreign currency fluctuations had a 2% positive impact on total revenue for the quarter compared to the prior year.
Previous wording
•Gross margin incre ased to 60.8% in the third quarter of 2025 from 60.5% in the third quarter of 2024, primarily due to a greater mix of recurring revenue in the period.
Current wording
•Gross margin increased to 62.2% in the first quarter of 2026 from 59.3% in the first quarter of 2025, primarily due to a greater mix of recurring revenue in the period.
Previous wording
•Operating expenses for the third quarter of 2025 decreased 9% compared to the third quarter of 2024, largely from lower employee compensation expense in the third quarter of 2025, due to the impact of restructuring actions taken in the prior year.
Current wording
•Operating expenses for the first quarter of 2026 increased 71% compared to the first quarter of 2025, largely from legal fees related to the SAP Settlement Agreement, partially off-set by lower employee compensation expense in the first quarter of 2026, due to the impact of restructuring actions taken in the prior year.
Previous wording
•Operating income was $61 million in the third quarter of 2025, compared to $56 million in the third quarter of 2024.
Current wording
•The Company saw an operating loss of $36 million in the first quarter of 2026, compared to operating income of $66 million in the first quarter of 2025.
Previous wording
Total revenue decreased $24 million, or 5%, in the third quarter of 2025, including a 1% positive impact from foreign currency fluctuations. Recurring revenue decreased 2% as compared to the third quarter of 2024 including a 1% positive impact from foreign currency fluctuations. Recurring revenue for the third quarter of 2025 included growth from Public Cloud revenue, which was more than offset by a decrease in revenue from our on-premises business. Revenue from perpetual software licenses, hardware and other decreased $4 million year over year. Consulting services revenue decreased 23% in the third quarter of 2025, including a 1% 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 and into 2025.
Current wording
Total revenue increased$26 million, or 6%, in the first quarter of 2026, including a 2% positive impact from foreign currency fluctuations. Recurring revenue increased 12% as compared to the first quarter of 2025 including a 3% positive impact from foreign currency fluctuations. Recurring revenue for the first quarter of 2026 included growth from higher annual upfront software subscription revenue associated with on-premises subscription software and public cloud revenue growth, which contrib utedto the year-over-year growth rate as we experienced continued interest in our hybrid platform. Revenue from perpetual software licenses, hardware and other decreased$9 million year over year. Consulting services revenue decreased 14% or $7 million in the first quarter of 2026, with a 1% positive impact from foreign currency exchange rate fluctuations. The consulting services revenue decrease is primarily the result of lower order performance from the second half of 2025.
Previous wording
At the end of the third quarter of 2025, Total ARR increased 1% as compared to the third quarter of 2024, including a 1% positive impact from foreign currency fluctuations. At the end of the third quarter of 2025, Public Cloud ARR increased 11% as compared to the third quarter of 2024, with no significant impact from foreign currency fluctuations. Public Cloud ARR growth in the third quarter of 2025 was primarily driven by 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 and on-premises erosions.
Current wording
At the end of the first quarter of 2026, Total ARRincreased 3% as compared to the first quarter of 2025, including a 1% positive impact from foreign currency fluctuations. At the end of the first quarter of 2026, Public Cloud ARRincreased 13% as compared to the first quarter of 2025, with a 1% positive impact from foreign currency fluctuations. Public Cloud ARR growth in the first quarter of 2026 was primarily driven by customer demand of our Public Cloud offering and customer migrations. The decreases insubscription ARR and maintenance and software upgrade rights ARR were primarily driven by customer migrations to Public Cloud ARR and on-premises erosions.
Previous wording
In the third quarter of 2025, we experienced the following trends:
Current wording
In the first quarter of 2026, we experienced the following trends:
Previous wording
•Customers expanding into additional cloud capabilities as they see value when they migrate to VantageCloud.
Current wording
•Customers expanding into additional cloud capabilities as they see value when they migrate to our Public Cloud offering.
Previous wording
As a portion of the Company’s operations and revenue occur outside the United States, and in currencies other than the United States ("U.S.") dollar, the Company is exposed to fluctuations in foreign currency exchange rates. Based on currency rates as of September 30, 2025, Teradata is now estimating an immaterial impact from currency translation on our 2025 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 United States ("U.S.") dollar, the Company is exposed to fluctuations in foreign currency exchange rates. Based on currency rates as of March 31, 2026, Teradata is now estimating 0.0%-0.5% positive impact from currency translation on our 2026 full-year total reported revenues.
Previous wording
We expect to see continued cloud migration activity with some customer accounts that 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.
Current wording
We expect expansion and to a lesser degree, migration activity as the primary contributors for Public Cloud ARR growth in 2026.
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.
Current wording
The decrease in recurring revenue gross profit as a percentage of revenue was primarily due to unfavorable on-premises deal mix, and 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
Consulting services gross profit as a percentage of revenue decreased as compared to the prior year primarily due to the decrease in revenue as compared to the prior-year period.
Current wording
Consulting services gross profit as a percentage of revenue increased as compared to the prior year primarily due to cost reduction efforts taken over the past year.
Previous wording
Selling, general and administrative ("SG&A") expense decreased year over year due to the impact of continued cost discipline focused on cost reductions across the Company. Research and development ("R&D") expense decreased year over year due to cost reduction initiatives, offset in part by investments in Public Cloud and AI-related technology opportunities.
Current wording
Selling, general and administrative ("SG&A") expense increased year over year due to the impact of the $121 million of expenses incurred in connection with the SAP litigation and related settlement and an increase stock compensation expense partially offset by continued budget discipline focused on cost reductions across the Company. Research and development ("R&D") expense increased year over year due to investments in Public Cloud and AI-related technology opportunities offset in part by continued cost reduction initiatives.
Previous wording
Other expense, net in the third 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 down $2 million year-over-year primarily due to lower losses in foreign currency exchange rate fluctuations as compared to the prior period.
Current wording
Other income (expense), net in the first quarter of 2026 and 2025 is comprised primarily of, legal expenses, 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, generally partially offsetby interest income earned on our cash and cash equivalents and other income. Other income (expense) has improved by $481 million year-over-year primarily due to the receipt of the SAP Settlement Amount as disclosed in more detail in Item 1. Financial Statements to this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the "Form 10-Q") (see Note 5. Supplemental Financial Information and Note 8, Commitments and Contingencies).
Previous wording
For the nine months ended September 30, 2025, the Company recorded $1 million of net discrete tax benefit, as the discrete tax benefit recognized in the first quarter of 2025 related to the reversal of uncertain tax positions due to the Company's completion of the IRS audit of its 2020 tax return, was mostly offset by incremental tax expense from stock-based compensation vesting.
Current wording
For the three months ended March 31, 2025, the Company recorded $1 million of net discrete tax benefit, a majority of which related to tax benefits from uncertain tax position reversals due to the Company's completion of its IRS audit related to its 2020 federal tax return, which was largely offset by incremental tax expense from stock-based compensation vesting. The Company received a final no change audit ruling from the Congressional Joint Committee on Tax in early February of 2025.
Previous wording
We estimate that the full-year effective tax rate for 2025 will be approximately 27%, which takes into consideration, among other things, the forecasted earnings mix by jurisdiction, the estimated impact to GILTI tax, and the estimated discrete items to be recognized in 2025. We are currently forecasting approximately$2 million of tax expense related to GILTI in our marginal effective tax rate for 2025.
Current wording
We estimate that the full-year effective tax rate for 2026 will be approximately 25%, which takes into consideration, among other things, the forecasted earnings mix by jurisdiction, the estimated impact to NCTI tax, and the estimated discrete items to be recognized in 2026. We are currently forecasting approximately$0.2 million of taxexpense related to NCTI in our marginal effective tax rate for 2026. In addition, the Company has recorded $16 million of NCTI tax expense as a discrete item in the first quarter of 2026 related to the impact from the SAP Settlement Agreement.
Previous wording
The forecasted tax rate is based on the foreign profits being taxed at an overall effective tax rate of approximately 20%, as compared to the U.S. federal statutory tax rate of 21%.
Current wording
The forecasted tax rate is based on the foreign profits being taxed at an overall effective tax rate of approximately 17%, 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 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, Segment and Other Supplemental Information, of the Notes to Condensed Consolidated Financial Statements (Unaudited).
Previous wording
Cash provided by operating activities was $145 million, which decreased by $2 million in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Teradata used approximately $20 million of cash in the first nine months of 2025 for severance payments, as compared to $24 million in the first nine months of 2024. Teradata expects that approximately $25 to $30 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).
Current wording
Cash provided by operating activities was$401 million, which increased by$393 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. $359 million of the increase was due to the SAP Settlement Net Proceeds received as a result of the SAP Settlement Agreement as discussed in Note 5, Supplemental Financial Information, and Note 8, Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements (Unaudited) of this Form 10-Q. Teradata used approximately $11 millionof cash in the first three months of 2026 for severance payments, as compared to $5 million in the first three months of 2025.
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 the nine 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 and a pre-tax loss of $1 million for the nine months ended September 30, 2025, that was reported as an investing activity for cash flow purposes. There wereno other material other investing activities for the nine months ended September 30, 2025.
Current wording
Financing activities and certain other investing activities, are not included in our calculation of free cash flow. There wereno material other investing activities for the three months ended March 31, 2026.
Previous wording
Teradata’s financing activities for the nine months ended September 30, 2025 and 2024 primarily consisted of cash outflows for share repurchases and payments on our finance leases. At September 30, 2025, we had no outstanding borrowings on our $400 million Revolving Facility (as defined below).
Current wording
Teradata’s financing activities for the three months ended March 31, 2026 and 2025 primarily consisted of cash outflows for share repurchases and payments on our finance leases. At March 31, 2026, we had no outstanding borrowings on our $400 million Revolving Facility (as defined below).
Previous wording
In the aggregate under the dilution offset share repurchase program and the open market share repurchase program, we repurchased approximately 4.3 million shares of common stock at an average price per share of$23.94 in the nine months ended September 30, 2025.
Current wording
In the aggregate under the dilution offset share repurchase program and the Repurchase Program, we repurchased approximately 1.2 million shares of common stock at an average price per share of$29.03 in the three months ended March 31, 2026.
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 netinflow of$3 million for the nine months ended September 30, 2025 and a net outflow of$1 million for the nine months ended September 30, 2024. 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$5 million for the three months ended March 31, 2026 and a net outflow of$2 million for the three months ended March 31, 2025. 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$386 million as of September 30, 2025 and$350 million as of December 31, 2024. The remaining balance held in the U.S. was $20 million as of September 30, 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.
Current wording
Our total cash and cash equivalents held outside the United States in various foreign subsidiaries was$450 million as of March 31, 2026 and$462 million as of December 31, 2025. The remaining balance held in the U.S. was $366 million as of March 31, 2026 and$32 million as of December 31, 2025. 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"). 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$422 million as of September 30, 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 September 30, 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$463 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, Debt, of the Notes to Condensed Consolidated Financial Statements (Unaudited). In addition, as disclosed in Note 7 Derivative Instruments and Hedging Activities, of the Notes to Condensed Consolidated Financial Statements (Unaudited), Teradata entered into an interest rate swap to hedge approximately 90% (or$411 million as of March 31, 2026) 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, 2026, 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$450 million.
Previous wording
On September 21, 2023, the Credit Agreement was amended to establish key performance indicators with respect to certain environmental, social, and governance ("ESG") targets, pursuant to which certain positive or negative adjustments would be made to various fees and applicable margin based on Teradata’s performance against such ESG targets.
Current wording
On September 21, 2023, the Credit Agreement was amended to establish key performance indicators with respect to certain ESG targets, pursuant to which certain positive or negative adjustments would be made to various fees and applicable margin based on Teradata’s performance against such ESG targets.
Previous wording
Contractual and Other Commercial Commitments. There has been no significant change in our contractual and other commercial commitments as described in the 2024 Annual Report. Our commitments and contingencies are discussed in Note 8 of Notes to Condensed Consolidated Financial Statements (Unaudited).
Current wording
Contractual and Other Commercial Commitments. There has been no significant change in our contractual and other commercial commitments as described in the 2025 Annual Report. Our commitments and contingencies are discussed in Note 8, Commitments and Contingencies, of the Notes to Condensed Consolidated Financial Statements (Unaudited).
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 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 nine months ended September 30, 2025.
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 2025 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, 2026.
Previous wording
See discussion in Note 2 of Notes to Condensed Consolidated Financial Statements (Unaudited) for new accounting pronouncements.
Current wording
See discussion in Note 2, New Accounting Pronouncements, of the Notes to Condensed Consolidated Financial Statements (Unaudited) for new accounting pronouncements.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Results of Operations for the Nine Months Ended September 30, 2025
Previous report — wording carried elsewhere
The effective tax rates for the nine months ended September 30, 2025 and 2024 were as follows:
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, the Company recorded $3 million of net discrete tax benefits, a majority of which related to tax expense from stock-based compensation vesting.