Core Insights - Teradata reported $416 million in revenue for Q3 2025, a year-over-year decline of 5.5%, with an EPS of $0.72 compared to $0.69 a year ago, exceeding the Zacks Consensus Estimate of $405.7 million by 2.54% and delivering an EPS surprise of 35.85% against a consensus estimate of $0.53 [1] Financial Performance Metrics - Annual recurring revenue (ARR) totaled $1.49 billion, surpassing the two-analyst average estimate of $1.39 billion - Public Cloud ARR was reported at $633 million, closely matching the average estimate of $633.62 million - Revenue from perpetual software licenses and hardware was $3 million, significantly below the average estimate of $4.02 million, reflecting a 57.1% decline year-over-year - Recurring revenue stood at $366 million, slightly above the three-analyst average estimate of $352.45 million, representing a year-over-year change of -1.6% - Revenue from consulting services was $47 million, compared to the average estimate of $48.6 million, indicating a 23% year-over-year decline [4] Stock Performance - Teradata shares have returned -6.2% over the past month, contrasting with the Zacks S&P 500 composite's +2.1% change, and the stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Teradata (TDC) reported quarterly earnings of $0.72 per share, exceeding the Zacks Consensus Estimate of $0.53 per share, and showing an increase from $0.69 per share a year ago, resulting in an earnings surprise of +35.85% [1] - The company achieved revenues of $416 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.54%, although this represents a decline from year-ago revenues of $440 million [2] - Teradata has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance in earnings [2] Earnings Outlook - The future performance of Teradata's stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.53, with projected revenues of $395.28 million, while the estimate for the current fiscal year is $2.18 on $1.62 billion in revenues [7] Industry Context - The Computer-Storage Devices industry, to which Teradata belongs, is currently ranked in the top 17% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Non-GAAP earnings per share for Q3 was $0.72, exceeding expectations by $0.17 [26] - Total revenue was $416 million, down 5% year-over-year, but above the high end of the outlook due to higher recurring revenue [24] - Total ARR grew 1% as reported and flat in constant currency, marking the second consecutive quarter of positive growth [23][22] Business Line Data and Key Metrics Changes - Cloud ARR grew 11% on both an as-reported and constant currency basis, with a cloud net expansion rate of 109% [23][24] - Recurring revenue was $366 million, down 2% year-over-year, but represented 88% of total revenue, up from 85% in Q3 last year [24] - Services revenue was $47 million, consistent with recent performance, transitioning from migration projects to AI services [24] Market Data and Key Metrics Changes - The company was named a leader in the Forrester Wave data management for analytics platforms, highlighting its suitability for hybrid cloud deployments [9] - Interest in AI, particularly agentic AI, is growing across industries, with most companies still in early stages of deployment [5][6] Company Strategy and Development Direction - The company is shifting from classic EDW to autonomous AI and knowledge platforms, focusing on hybrid environments [5][6] - Investments are being prioritized to capitalize on opportunities as a leading AI and knowledge platform for autonomous enterprises [29] - The company aims to provide a trusted data foundation that enhances AI performance and governance [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the return to total ARR growth and expects this trend to continue into 2026 [20][22] - The company is focusing on cost efficiencies and operational improvements to drive free cash flow growth [29][58] - Management noted that the hybrid deployment model is becoming increasingly important for customers [32][48] Other Important Information - The company launched several new AI services and capabilities, including the Teradata Agent Builder and enhancements to Clearscape Analytics [10][11] - The company is on track to complete over 150 AI engagements with customers this year [12] Q&A Session Summary Question: Insights on cloud ARR performance - Management indicated that cloud ARR performance met expectations, with a nuanced decision-making process for customers regarding deployment options [31][32] Question: Confidence in future free cash flow growth - Management attributed confidence in free cash flow growth to ARR growth and operational efficiency initiatives [34][35] Question: AI influence on pipeline and competitive win rates - Management noted an increase in AI-influenced pipeline and highlighted the effectiveness of their technology platform for AI workloads [36][37] Question: Guidance consistency and leading indicators - Management confirmed a consistent approach to guidance, utilizing various KPIs to assess outlook [38] Question: Competitive advantages in the AI space - Management emphasized patented technology and hybrid capabilities as key differentiators in the competitive landscape [40][41][42] Question: Services gross margin improvement - Management explained that improvements in services gross margin were due to right-sizing the organization and aligning costs with revenue [44][45] Question: Trajectory of cloud ARR and on-prem growth - Management indicated stabilization in on-prem growth and an expectation for continued expansion in cloud ARR [47][48] Question: Impact of federal shutdown on revenues - Management confirmed no impact from the federal shutdown on revenues [58] Question: Future free cash flow margin potential - Management highlighted operational efficiency measures that will benefit future margin and cash flow [59]

Financial Performance - Q3'25 - Public Cloud ARR reached $633 million, an increase of 11% year-over-year (YoY) and comprises 42% of Total ARR[9, 15] - Total ARR was $1490 billion, up 1% YoY[9] - Recurring revenue was $366 million, a decrease of 2% YoY[13] - Total revenue was $416 million, a decrease of 5% YoY[13, 21] - GAAP Diluted EPS was $042, an increase from $033 in Q3'24[13] - Non-GAAP Diluted EPS was $072, an increase from $069 in Q3'24[13] - Cash Flow from Operations was $94 million, an increase from $77 million in Q3'24[13] - Free Cash Flow was $88 million, an increase from $69 million in Q3'24[13] Financial Outlook - FY25 - Public cloud ARR is expected to grow 14% to 18% YoY in constant currency[43] - Total ARR is expected to grow flat to 2% YoY in constant currency[43] - Free cash flow is projected to be in the range of $260 million to $280 million[45]

Revenue Performance - Total Annual Recurring Revenue (ARR) for Q3 2025 was $1.490 billion, a 1% increase year-over-year, remaining flat in constant currency[3] - Total revenue for Q3 2025 was $416 million, a decrease of 5% as reported and 6% in constant currency compared to Q3 2024[4] - Recurring revenue was $366 million, down 2% as reported and 3% in constant currency from the previous year[4] - Recurring revenue for the nine months ended September 30, 2025, was $1,078 million, down 4% from $1,128 million in the same period of 2024[18] - Total segment revenue decreased by 5% to $416 million for the three months ended September 30, 2025, down from $440 million in 2024[24] - Product sales revenue declined by 3% to $369 million in Q3 2025, compared to $379 million in Q3 2024[24] - Consulting services revenue saw a significant drop of 23%, falling to $47 million from $61 million year-over-year[24] Earnings and Margins - GAAP diluted EPS for Q3 2025 was $0.42, compared to $0.33 per share in Q3 2024, marking a 27% increase[7] - Non-GAAP diluted EPS for Q3 2025 was $0.72, up from $0.69 per share in the same quarter last year[7] - GAAP Earnings Per Share for Q3 2025 was $0.42, up from $0.33 in Q3 2024, representing a 27.3% increase[13] - Non-GAAP Diluted Earnings Per Share for Q3 2025 was $0.72, compared to $0.69 in Q3 2024, indicating a 4.3% increase[13] - GAAP gross margin improved to 60.8% from 60.5% year-over-year[4] - Non-GAAP operating margin increased to 23.6% from 22.5% in the prior year[7] Cash Flow and Capital Expenditures - Free cash flow for Q3 2025 was $88 million, compared to $69 million in Q3 2024, reflecting a 28% increase[7] - Free Cash Flow for Q3 2025 was $88 million, compared to $69 million in Q3 2024, reflecting a 27.5% increase[14] - The company anticipates free cash flow for 2025 to be between $260 million and $280 million[14] - Total capital expenditures for the nine months ended September 30, 2025, were $20 million, compared to $18 million in the same period of 2024[14] Net Income and Assets - The company reported a net income of $40 million for Q3 2025, an increase from $32 million in Q3 2024, representing a 25% increase[18] - Net income for the three months ended September 30, 2025, was $40 million, compared to $32 million for the same period in 2024, reflecting a year-over-year increase of 25%[22] - Total assets increased to $1,761 million as of September 30, 2025, up from $1,704 million at December 31, 2024, representing a growth of 3.35%[20] - Total current liabilities decreased slightly to $906 million as of September 30, 2025, from $930 million at December 31, 2024[20] - Total stockholders' equity rose to $219 million as of September 30, 2025, compared to $133 million at December 31, 2024[20] Guidance and Outlook - The company reaffirms its full-year 2025 outlook for Total ARR, Cloud ARR, and Free Cash Flow[5] - The company expects 2025 full-year GAAP EPS guidance to be between $1.22 and $1.26[13] - The non-GAAP effective tax rate for Q3 2025 was 23.3%, down from 25.6% in Q3 2024[13] Stock Repurchase - The company repurchased $30 million of common stock during the three months ended September 30, 2025, compared to $15 million in the same period of 2024[22]

Core Insights - Teradata Corporation (NYSE: TDC) is transitioning from traditional on-premises business to a cloud-based platform powered by AI and machine learning [1] Company Overview - Teradata is an enterprise analytics and data platform provider [1] - The company is focusing on hybrid platforms as part of its transition strategy [1]

Company Background - John Ederer has transitioned from a Wall Street analyst to the CFO of Teradata, bringing over 10 years of experience in the finance and enterprise software sectors [3][4] - Ederer has a diverse background, having worked with both public companies and private equity-backed businesses, which provides a comprehensive understanding of different business models [4] Previous Experience - Prior to joining Teradata, Ederer was at Model N, a vertical SaaS business, where he successfully implemented a profitable growth strategy over four years [4]

Teradata (TDC) 2025 Conference Summary Company Overview - **Company**: Teradata (TDC) - **Event**: Citi Tech Conference, September 4, 2025 - **Speaker**: John Ederer, CFO Key Points Company and Industry Context - Teradata is undergoing a business model transformation towards cloud and subscription services, with a focus on AI and data modernization [5][9][10] - The software market is experiencing challenges, particularly in application sectors, but data-related services are showing healthy results [12][13] Financial Performance and Strategy - FY '24 faced challenges, but the company is stabilizing in FY '25 and setting up for growth in FY '26 and beyond [9][11] - Priorities include driving a profitable growth strategy and improving the "Rule of 40" metric, which combines growth rate and profit margin [10][11] - The company aims to achieve durable free cash flow growth, with guidance indicating flat operating margins year-over-year despite headwinds [41][42] AI and Market Trends - Increased demand for AI is reshaping the market, leading to a natural rebalancing of IT investments [14][15] - Teradata is seeing a shift in customer demand towards secure and efficient AI deployment at scale, which bodes well for its business [15][16] - The company is experiencing enthusiasm around new product announcements, such as Enterprise Vector Store and AI Factory, which are positively influencing the sales pipeline [18][19] Customer Engagement and Retention - Improved customer engagement and retention strategies are yielding better results, with a focus on early identification of risk factors [25][26] - The company has seen a reduction in migration dependence, indicating a shift towards hybrid environments where customers can invest in AI without full migration [29][30] Competitive Landscape - Teradata is positioning itself uniquely with a hybrid solution that combines on-premise and cloud capabilities, appealing to customers' needs for efficiency and scalability [62][64] - The competitive landscape includes players like Databricks and Snowflake, but Teradata's focus on hybrid solutions is seen as a differentiator [62][66] Capital Allocation and Shareholder Returns - The company is committed to returning 50% of its free cash flow to shareholders through stock buybacks, indicating confidence in its financial health [79][80] - There is a recognition of the need to balance growth opportunities with shareholder returns [79] Organizational Changes - Recent restructuring efforts have optimized the marketing organization and improved alignment between product development and sales, enhancing overall execution [40][55] - New leadership has been brought in to drive improvements in go-to-market strategies and customer engagement [54][55] Future Outlook - The company is optimistic about returning to positive growth and achieving double-digit growth in the future, driven by AI and hybrid platform opportunities [37][38] - Continued investments in product development and market strategies are essential for long-term growth and shareholder value [46][47] Additional Insights - Teradata is actively pursuing new logo opportunities in both on-premise and cloud environments, indicating a balanced approach to market expansion [72][73] - The company is leveraging AI internally to improve efficiencies, although quantifying specific savings remains challenging [51][52] This summary encapsulates the key insights and strategic directions discussed during the Teradata conference, highlighting the company's focus on growth, AI integration, and shareholder value.

[PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements, notes, and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Teradata's financial performance declined in the second quarter and first half of 2025 compared to the same periods in 2024, with total revenue, gross profit, operating income, and net income all decreasing year-over-year, primarily driven by lower recurring and consulting services revenue [Note 3. Revenue from Contracts with Customers](index=10&type=section&id=Note%203.%20Revenue%20from%20Contracts%20with%20Customers) Total revenue declined in both the US and International markets for the three and six months ended June 30, 2025, with remaining unsatisfied performance obligations of $1.841 billion, of which $1.233 billion is expected to be recognized within the next year Disaggregation of Revenue (in millions) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **United States** | $201 | $221 | $415 | $469 | | **International** | $207 | $215 | $411 | $432 | | **Total Revenue** | **$408** | **$436** | **$826** | **$901** | - As of June 30, 2025, the company had **$1.841 billion** in remaining unsatisfied performance obligations, with **$1.233 billion** expected to be recognized in the next year and **$608 million** thereafter[25](index=25&type=chunk) - Revenue recognized during the first six months of 2025 from deferred revenue at the beginning of the period was **$344 million**[24](index=24&type=chunk) [Note 6. Income Taxes](index=12&type=section&id=Note%206.%20Income%20Taxes) The effective tax rate for the first six months of 2025 was 25.4%, a significant decrease from 34.5% in the same period of 2024, with the full-year 2025 effective tax rate estimated at approximately 27.5% Effective Tax Rate | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | 30.8% | 32.7% | | **Six Months Ended June 30** | 25.4% | 34.5% | - The estimated annual effective tax rate for 2025 is approximately **27.5%**, considering the forecasted earnings mix by jurisdiction and discrete tax items[35](index=35&type=chunk) - The company does not expect the Pillar Two global minimum tax rules to have a material impact on its annual effective tax rate[34](index=34&type=chunk) [Note 8. Commitments and Contingencies](index=14&type=section&id=Note%208.%20Commitments%20and%20Contingencies) The company is involved in significant litigation, including an ongoing lawsuit against SAP where a favorable appeals court ruling has remanded antitrust and trade secret claims back to the district court, and new putative securities class action and shareholder derivative lawsuits - In the lawsuit against SAP, the Ninth Circuit overturned a lower court's summary judgment, reviving Teradata's antitrust and trade secret claims, with a trial scheduled for April 13, 2026[46](index=46&type=chunk) - A securities class action lawsuit was filed on June 14, 2024, alleging violations of federal securities laws related to the company's 2023 financial outlook for Total ARR and Public Cloud ARR[47](index=47&type=chunk) - A shareholder derivative lawsuit was filed on May 2, 2025, based on similar allegations as the securities class action, asserting claims for breach of fiduciary duty and unjust enrichment against the Board of Directors and former CFO[48](index=48&type=chunk) [Note 12. Segment and Other Supplemental Information](index=18&type=section&id=Note%2012.%20Segment%20and%20Other%20Supplemental%20Information) Effective August 5, 2024, Teradata realigned its business into two operating segments: Product Sales and Consulting Services, with Product Sales generating $492 million in gross profit for the first half of 2025, while Consulting Services reported a gross loss of $2 million - The company now manages its business under two new operating segments: (1) Product Sales and (2) Consulting Services[64](index=64&type=chunk) Segment Gross Profit (Six Months Ended June 30, in millions) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | **Product Sales** | $492 | $540 | | **Consulting Services** | $(2) | $20 | | **Total segment gross profit** | $490 | $560 | [Note 13. Reorganization and Business Transformation](index=20&type=section&id=Note%2013.%20Reorganization%20and%20Business%20Transformation) The company initiated a global restructuring plan in August 2024 to optimize operations, expecting to incur total charges of $20 million to $25 million, and recognized $7 million in restructuring-related expenses for the first six months of 2025 - A global restructuring was initiated on August 5, 2024, to optimize operations and reduce expenses, with actions expected to be completed by the end of 2025[67](index=67&type=chunk) - Total expected charges for the restructuring are approximately **$20 million to $25 million**, with total cash expenditures estimated at **$45 million to $50 million**[68](index=68&type=chunk) - In the first six months of 2025, the company recognized **$7 million** in restructuring costs (**$2 million** in COGS, **$5 million** in SG&A) and paid **$11 million** in cash related to these actions[69](index=69&type=chunk)[70](index=70&type=chunk) Condensed Consolidated Statements of Income (Unaudited) | In millions, except per share amounts | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | $408 | $436 | $826 | $901 | | **Gross profit** | $230 | $265 | $478 | $549 | | **Income from operations** | $24 | $66 | $90 | $114 | | **Net income** | $9 | $37 | $53 | $57 | | **Diluted EPS** | $0.09 | $0.38 | $0.55 | $0.58 | Condensed Consolidated Balance Sheets (Unaudited) | In millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $757 | $749 | | **Total assets** | $1,737 | $1,704 | | **Total current liabilities** | $898 | $930 | | **Total liabilities** | $1,561 | $1,571 | | **Total stockholders' equity** | $176 | $133 | Condensed Consolidated Statements of Cash Flows (Unaudited) | In millions | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $51 | $70 | | **Net cash used in investing activities** | $(6) | $(13) | | **Net cash used in financing activities** | $(119) | $(220) | | **Decrease in cash, cash equivalents and restricted cash** | $(51) | $(185) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategic focus on its hybrid cloud platform, Teradata Vantage, and AI capabilities, highlighting a 17% increase in Public Cloud ARR but a 6% decrease in total Q2 revenue year-over-year, attributed to elongated deal cycles and lower consulting demand [Overview and Financial Metrics](index=21&type=section&id=Overview%20and%20Financial%20Metrics) Teradata is focused on its hybrid cloud analytics and data platform, Teradata Vantage, to address complex data challenges and AI, with Public Cloud ARR growing 17% to $634 million in Q2 2025 and a Cloud Net Expansion Rate of 112% - The company's strategic priorities include migrating customers to the cloud, accelerating innovation in its hybrid platform and ClearScape Analytics, and delivering new AI capabilities[76](index=76&type=chunk) Key Performance Metrics (as of June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Total ARR** | $1,489 million | $1,465 million | | **Public Cloud ARR** | $634 million | $542 million | | **Subscription ARR** | $756 million | $802 million | | **Cloud Net Expansion Rate** | 112% | 123% | [Results of Operations](index=23&type=section&id=Results%20of%20Operations) For Q2 2025, total revenue fell 6% to $408 million, driven by a 4% drop in recurring revenue and a 19% drop in consulting services, while gross margin declined from 60.8% to 56.4% due to a higher mix of public cloud revenue and lower consulting margins - Q2 2025 total revenue decreased by **6%** year-over-year, with recurring revenue down **4%** and consulting services revenue down **19%**[81](index=81&type=chunk) - Q2 2025 gross margin decreased to **56.4%** from **60.8%** in Q2 2024, primarily due to a higher mix of Public Cloud revenues and lower consulting services margins[80](index=80&type=chunk)[86](index=86&type=chunk) - For the first six months of 2025, SG&A expenses decreased **14%** and R&D expenses decreased **4%** compared to the prior year, primarily due to cost discipline[103](index=103&type=chunk)[104](index=104&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=28&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) Cash from operations was $51 million for the first six months of 2025, down from $70 million in the prior year, with the company repurchasing 2.9 million shares for $72 million and maintaining $400 million available under its revolving credit facility Free Cash Flow (Six Months Ended June 30, in millions) | Component | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $51 | $70 | | Less: Expenditures for property and equipment | $(5) | $(9) | | Less: Additions to capitalized software | $— | $(1) | | **Free cash flow** | **$46** | **$60** | - In the first six months of 2025, the company repurchased approximately **2.9 million** shares of common stock for **$72 million**[113](index=113&type=chunk)[14](index=14&type=chunk) - As of June 30, 2025, the company had **$469 million** principal outstanding on its Term Loan and no borrowings under its **$400 million** Revolving Facility[119](index=119&type=chunk)[62](index=62&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports that there have been no material changes to the market risk factors previously disclosed in its 2024 Annual Report on Form 10-K - There have not been any material changes to the market risk factors previously disclosed in the 2024 Annual Report[125](index=125&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective, with a new global cloud ERP system implemented through Q1 2025 to enhance internal controls over financial reporting - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[127](index=127&type=chunk) - A new global cloud ERP system was implemented in phases through Q1 2025 to modernize financial processes and enhance internal controls, with ongoing evaluation of these control changes throughout 2025[128](index=128&type=chunk) [PART II—OTHER INFORMATION](index=31&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section provides details on legal proceedings, risk factors, equity transactions, and other required disclosures [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company incorporates by reference the information from Note 8 of the financial statements, which details ongoing litigation, including a significant lawsuit against SAP and newly filed securities class action and shareholder derivative lawsuits - Information regarding legal proceedings is incorporated by reference from Note 8, which discusses litigation with SAP and recent class action lawsuits[131](index=131&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - No material changes to the risk factors disclosed in the 2024 Annual Report have occurred[132](index=132&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) During the first six months of 2025, Teradata repurchased approximately 2.9 million shares, with $285.2 million remaining available for future repurchases under the open market share repurchase program expiring on December 31, 2025 Share Repurchases for the Six Months Ended June 30, 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | **First Quarter 2025** | 1,563,247 | $27.92 | | **Second Quarter 2025** | 1,297,308 | $21.74 | - As of June 30, 2025, a maximum of **$285.2 million** may yet be purchased under the open market share repurchase program[134](index=134&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, no director or officer of Teradata adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[136](index=136&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, new offer letters for executives, stock incentive plans, and required certifications - Exhibits filed include offer letters for executives Sumeet Arora, John Ederer, and Scot Rogers, as well as details on the 2023 Stock Incentive Plan and the 2025 New Employee Stock Inducement Plan[137](index=137&type=chunk)

Core Insights - Teradata reported mixed results for Q2 2025, with growth in public cloud annual recurring revenue (ARR) but declines in overall revenue and profitability [1][6][9] Financial Performance - Public cloud ARR increased by 17% year over year to $634 million, representing approximately 42.6% of total ARR [5][10] - Total revenue reached $408 million, exceeding analyst estimates of $399.65 million, but down 6.4% from $436 million in Q2 2024 [2][6] - Non-GAAP EPS was $0.47, surpassing the consensus estimate of $0.40, but down 26.6% from $0.64 in the prior year [2][6] - Non-GAAP operating margin fell to 16.4%, down from 22.0% in the prior-year period [2][7] - Free cash flow remained flat at $39 million, consistent with the previous year [2][7] Business Strategy - Teradata's strategy focuses on accelerating the shift to cloud-based recurring revenue, emphasizing hybrid cloud and AI capabilities, strategic partnerships, and R&D investment [4][8] - The company is investing in extending VantageCloud's support for vector data and enhancing partnerships with technology providers like Nvidia and Anaconda [8] Future Outlook - Management expects recurring revenue to decline between 4% and 6% year over year in constant currency for Q3 and fiscal 2025, with total revenue projected to decrease by 5% to 7% [9][10] - Public cloud ARR is anticipated to grow between 14% and 18% year over year in constant currency for fiscal 2025 [9] - Monitoring of consulting services revenue is critical, as further declines could exacerbate margin pressures [10]