Financial Highlights - Public Cloud ARR reached $634 million, a 17% year-over-year increase, comprising 43% of Total ARR[9] - Total ARR increased by 2% year-over-year to $1.489 billion[9] - Q2'25 Recurring Revenue was $354 million, a 4% year-over-year increase[13] - Q2'25 Total Revenue was $408 million, a 6% year-over-year decrease[13] - Q2'25 GAAP Diluted EPS was $0.09, down from $0.38 in Q2'24[13] - Q2'25 Non-GAAP Diluted EPS was $0.47, down from $0.64 in Q2'24[13] - Q2'25 Cash Flow from Operations was $43 million, consistent with Q2'24[13] - Q2'25 Free Cash Flow was $39 million, consistent with Q2'24[13] Financial Outlook - The company projects FY25 Public cloud ARR growth of 14% to 18% YoY in CC[43] - The company projects FY25 Total ARR growth of flat to 2% YoY in CC[43]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Teradata's Q2 2025 performance exceeded expectations, driven by strong public cloud ARR growth and outperforming EPS, despite overall revenue declines, with full-year outlook reaffirmed - CEO Steve McMillan highlighted strong execution in Q2, building on cloud growth and on-premise strength to support customers' hybrid data and analytics environments for AI implementation[2](index=2&type=chunk) Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | Change (Reported) | Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | Public Cloud ARR | $634M | $542M | +17% | +15% | | Total ARR | $1.489B | $1.465B | +2% | 0% | | Recurring Revenue | $354M | $368M | -4% | -4% | | Total Revenue | $408M | $436M | -6% | -7% | | GAAP Diluted EPS | $0.09 | $0.38 | -76% | N/A | | Non-GAAP Diluted EPS | $0.47 | $0.64 | -27% | N/A | - The company reiterated its full-year 2025 outlook for Total ARR, Cloud ARR, and Free Cash Flow[3](index=3&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) Teradata provided its Q3 and updated full-year 2025 financial outlook, projecting continued revenue declines for Q3, narrowing full-year revenue guidance, and reaffirming ARR and free cash flow targets Q3 2025 Outlook | Metric | Expected Range (YoY Growth, Constant Currency, %) | | :--- | :--- | | Recurring Revenue | -4% to -6% | | Total Revenue | -7% to -9% | | **Metric** | **Expected Range (USD)** | | GAAP Diluted EPS | $0.24 to $0.28 | | Non-GAAP Diluted EPS | $0.51 to $0.55 | Full-Year 2025 Updated & Reaffirmed Outlook | Metric | Updated Range | Reaffirmed Range | | :--- | :--- | :--- | | Total Revenue (YoY, CC, %) | -5% to -7% | - | | GAAP Diluted EPS (USD) | $1.04 to $1.12 | - | | Non-GAAP Diluted EPS (USD) | $2.17 to $2.25 | - | | Public Cloud ARR (YoY, CC, %) | - | 14% to 18% | | Total ARR (YoY, CC, %) | - | 0% to 2% | | Recurring Revenue (YoY, CC, %) | - | -3% to -5% | | Free Cash Flow (million USD) | - | $250 to $280 | [Financial Performance Analysis](index=3&type=section&id=Financial%20Performance%20Analysis) This section details Teradata's financial results, highlighting strong public cloud ARR growth amidst overall revenue and profitability declines for Q2 and the first six months of 2025 [Revenue and Annual Recurring Revenue (ARR)](index=3&type=section&id=Revenue%20and%20Annual%20Recurring%20Revenue%20(ARR)) Q2 2025 total revenue decreased, driven by declines in recurring revenue and consulting services, contrasting with strong growth in Public Cloud ARR and a modest increase in Total ARR Revenue Breakdown | Revenue Type | Q2 2025 (million USD) | Q2 2024 (million USD) | % Change (Reported) | | :--- | :--- | :--- | :--- | | Recurring revenue | 354 | 368 | -4% | | Consulting services | 51 | 63 | -19% | | **Total revenue** | **408** | **436** | **-6%** | Annual Recurring Revenue (ARR) as of June 30 | ARR Type | 2025 (USD) | 2024 (USD) | % Change (Reported) | % Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | Public cloud ARR | $634M | $542M | 17% | 15% | | Total ARR | $1.489B | $1.465B | 2% | 0% | [Profitability Analysis (GAAP vs. Non-GAAP)](index=4&type=section&id=Profitability%20Analysis%20(GAAP%20vs.%20Non-GAAP)) Q2 2025 profitability significantly declined across both GAAP and Non-GAAP measures, with GAAP Net Income experiencing a steep **76%** drop to **$9 million** Q2 Profitability Comparison | Metric | Q2 2025 (GAAP, million USD) | Q2 2024 (GAAP, million USD) | Q2 2025 (Non-GAAP, million USD) | Q2 2024 (Non-GAAP, million USD) | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | 230 | 265 | 238 | 271 | | Operating Income | 24 | 66 | 67 | 96 | | Net Income | 9 | 37 | 45 | 62 | Q2 Margin Comparison | Margin | Q2 2025 (GAAP, %) | Q2 2024 (GAAP, %) | Q2 2025 (Non-GAAP, %) | Q2 2024 (Non-GAAP, %) | | :--- | :--- | :--- | :--- | :--- | | Gross Margin | 56.4 | 60.8 | 58.3 | 62.2 | | Operating Margin | 5.9 | 15.1 | 16.4 | 22.0 | [Earnings Per Share (EPS) Analysis](index=5&type=section&id=Earnings%20Per%20Share%20(EPS)%20Analysis) Q2 2025 saw a significant decrease in both GAAP and Non-GAAP diluted EPS, with the company providing Q3 and full-year 2025 guidance Diluted Earnings Per Share (EPS) Comparison | Period | GAAP EPS (USD) | Non-GAAP EPS (USD) | | :--- | :--- | :--- | | Q2 2025 | 0.09 | 0.47 | | Q2 2024 | 0.38 | 0.64 | | Q3 2025 Outlook | 0.24 - 0.28 | 0.51 - 0.55 | | FY 2025 Outlook | 1.04 - 1.12 | 2.17 - 2.25 | [Cash Flow Analysis](index=5&type=section&id=Cash%20Flow%20Analysis) Q2 2025 cash flow from operations and free cash flow remained flat year-over-year, while both metrics decreased for the first six months of 2025 Cash Flow Summary | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Six Months 2025 (million USD) | Six Months 2024 (million USD) | | :--- | :--- | :--- | :--- | :--- | | Cash from Operations (GAAP) | 43 | 43 | 51 | 70 | | Free Cash Flow (Non-GAAP) | 39 | 39 | 46 | 60 | - The company reaffirmed its full-year 2025 free cash flow outlook of **$250 million to $280 million**[7](index=7&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) The unaudited consolidated financial statements reflect lower Q2 and six-month revenue and net income, an increase in total assets, and decreased net cash from operations for the six-month period [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2025 income statement highlights include a decrease in total revenue to **$408 million**, a decline in gross profit, and a sharp fall in net income to **$9 million** Q2 2025 Income Statement Highlights | Line Item | Q2 2025 (million USD) | Q2 2024 (million USD) | | :--- | :--- | :--- | | Total Revenue | 408 | 436 | | Total Gross Profit | 230 | 265 | | Income from Operations | 24 | 66 | | Net Income | 9 | 37 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Teradata's balance sheet shows total assets of **$1.737 billion**, total liabilities of **$1.561 billion**, and an increase in total stockholders' equity Balance Sheet Summary | Account | June 30, 2025 (USD) | Dec 31, 2024 (USD) | June 30, 2024 (USD) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $369M | $420M | $301M | | Total Current Assets | $757M | $749M | $665M | | Total Assets | $1.737B | $1.704B | $1.622B | | Total Current Liabilities | $898M | $930M | $889M | | Total Liabilities | $1.561B | $1.571B | $1.547B | | Total Stockholders' Equity | $176M | $133M | $75M | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities decreased, with significant cash used for stock repurchases and debt repayments, resulting in a net decrease in cash Six Months 2025 Cash Flow Highlights | Line Item | Six Months 2025 (million USD) | Six Months 2024 (million USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | 51 | 70 | | Net cash used in investing activities | (6) | (13) | | Net cash used in financing activities | (119) | (220) | | Net decrease in cash | (51) | (185) | [Segment Information](index=10&type=section&id=Segment%20Information) Teradata's Q2 2025 segment performance shows a **4%** decrease in Product Sales revenue and a **19%** decline in Consulting Services revenue, with the latter operating at a negative gross margin Q2 2025 Segment Performance | Segment | Revenue (million USD) | % Change (Reported) | Gross Profit (million USD) | Gross Margin % | | :--- | :--- | :--- | :--- | :--- | | Product Sales | 357 | -4% | 239 | 66.9 | | Consulting Services | 51 | -19% | (1) | -2.0 | | **Total** | **408** | **-6%** | **238** | **58.3** | [Notes and Disclosures](index=4&type=section&id=Notes%20and%20Disclosures) This section provides supplemental information, including the rationale for using non-GAAP financial measures and a disclaimer regarding forward-looking statements and associated risks - The company believes non-GAAP measures are useful for investors as they provide insight into underlying business trends, facilitate period-over-period comparisons, and offer consistency with past reports and future projections[11](index=11&type=chunk) - The forward-looking statements highlight risks including the global economic environment, supply chain issues, competitive pressures in the IT and AI industries, and risks associated with data privacy and cyberattacks[15](index=15&type=chunk)

Industry Overview - The artificial intelligence (AI) infrastructure space is gaining momentum, with previous concerns about DeepSeek being overstated. The global trend towards digitization is creating opportunities in markets such as 5G, blockchain, and AI. Companies are rapidly adopting generative AI, machine learning (ML), blockchain, and data science to secure a competitive edge [1] Company Recommendations - Five AI-focused stocks with favorable Zacks Ranks that have potential for double-digit returns in the short term are HubSpot Inc. (HUBS), Okta Inc. (OKTA), Adobe Inc. (ADBE), NICE Ltd. (NICE), and Teradata Corp. (TDC). Each stock carries either a Zacks Rank 1 (Strong Buy) or 2 (Buy) [2] HubSpot Inc. (HUBS) - HubSpot provides a cloud-based customer relationship management platform and is experiencing steady multi-hub adoption from enterprise customers. Pricing optimization in its starter edition is leading to solid client additions [5][6] - The integration of HubSpot AI features is enhancing customer value, and its seat pricing model reduces barriers for customer engagement. The growing adoption of inbound applications is a positive factor [6] - Expected revenue and earnings growth rates for HubSpot are 15.4% and 15%, respectively, for the current year, with a slight improvement in earnings estimates [7] - The short-term average price target for HUBS indicates a potential increase of 39.7% from the last closing price of $542.41, with a maximum upside of 71.5% [8] Okta Inc. (OKTA) - Okta operates as an identity partner, offering a suite of products for identity management and security. The company leverages AI to enhance security and user experience [10][11] - Expected revenue and earnings growth rates for Okta are 9.4% and 16.7%, respectively, for the current year, with an improvement in earnings estimates [13] - The average short-term price target for OKTA suggests a potential increase of 29.9% from the last closing price of $95.43, with a maximum upside of 55.1% [14] Adobe Inc. (ADBE) - Adobe has integrated AI applications across its flagship products and introduced generative AI-driven tools like Adobe Firefly. The company is diversifying into digital marketing services [15][16] - Expected revenue and earnings growth rates for Adobe are 9.5% and 11.8%, respectively, for the current year, with a recent improvement in earnings estimates [17] - The average short-term price target for ADBE indicates a potential increase of 35.2% from the last closing price of $365.79, with a maximum upside of 65.4% [18] NICE Ltd. (NICE) - NICE is benefiting from the strength of its cloud business and the adoption of AI-powered solutions, enhancing customer experience through its CXone platform [19][20] - Expected revenue and earnings growth rates for NICE are 7% and 11.2%, respectively, for the current year, with an improvement in earnings estimates [21] - The average short-term price target for NICE suggests a potential increase of 33.9% from the last closing price of $153.41, with a maximum upside of 95.6% [22] Teradata Corp. (TDC) - Teradata is experiencing strong cloud annual recurring revenue (ARR) growth, supported by strategic partnerships and demand for its AI solutions [23][24] - Expected revenue and earnings growth rates for Teradata are 2% and 8.3%, respectively, for the next year, with a slight improvement in earnings estimates [24] - The average short-term price target for TDC indicates a potential increase of 19.5% from the last closing price of $21.59, with a maximum upside of 62.1% [25]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Teradata (TDC) as a strong candidate for value investors due to its favorable valuation metrics and earnings outlook [2][4][7]. Group 1: Value Investing Strategy - Value investing is a popular strategy that relies on traditional analysis of key valuation metrics to identify undervalued stocks [2]. - The Zacks Rank and Style Scores system can help investors find stocks with specific traits, particularly those with high value grades [3]. Group 2: Teradata's Valuation Metrics - Teradata (TDC) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4]. - TDC's current P/E ratio is 9.88, significantly lower than the industry average of 18.50 [4]. - The P/S ratio for TDC is 1.2, compared to the industry's average P/S of 1.49, suggesting it is undervalued [5]. - TDC's P/CF ratio stands at 9.39, well below the industry average of 21, indicating a solid cash outlook [6]. Group 3: Earnings Outlook - The combination of TDC's favorable valuation metrics and strong earnings outlook positions it as one of the market's strongest value stocks [7].

Core Insights - Teradata Corporation (NYSE: TDC) is viewed as a value investment opportunity despite increasing competition from Databricks and a decrease in Annual Recurring Revenue (ARR) [1] Company Analysis - The article highlights a cautious optimism regarding Teradata's prospects as a value investment [1] - The company faces growing competition, particularly from Databricks, which may impact its market position [1] - There is a noted decline in ARR, which could be a concern for investors [1] Industry Context - The financial landscape is characterized by volatility, with historical references to market extremes such as the dot-com bubble, financial crisis, and the coronavirus pandemic [1] - The article emphasizes the importance of understanding market behavior and the potential for trading and investing around these extremes [1]

Industry Overview - The Zacks Computer-Storage Devices industry is expected to experience robust growth due to factors such as digital transformation, edge computing, AI workloads, and enterprise cloud adoption [1] - The increasing demand for secure storage solutions driven by rising cyberattacks will further enhance the need for sophisticated data storage [1] - Major players in the industry include Western Digital Corporation (WDC), NetApp, Inc. (NTAP), and Teradata Corporation (TDC) [1] Trends Impacting the Industry - The rapid proliferation of AI is reshaping the tech landscape, leading to increased demand for high-speed, high-capacity, and low-latency storage solutions [3] - Traditional storage architectures are being replaced by NVMe-based SSDs and software-defined storage to meet the data throughput required by AI applications [3] - Cloud storage technologies are evolving, with companies leveraging AI and machine learning to optimize storage solutions and manage increasing data complexity [4] Market Conditions - Worldwide IT spending is projected to reach $5.61 trillion in 2025, reflecting a 9.8% increase from 2024, with the Devices segment expected to grow by 10.4% [5] - Despite positive IT spending forecasts, escalating trade tensions and macroeconomic uncertainties pose challenges to the industry [5] - The Zacks Computer-Storage Devices industry has underperformed the S&P 500, declining 32.4% over the past year compared to the S&P 500's gain of 9.7% [10] Company Highlights - **Western Digital (WDC)**: Focused on cloud end-markets, WDC is addressing supply chain challenges and expects strong data center demand to drive sales. The company has secured long-term deals through mid-2026 [17][18] - **Teradata (TDC)**: TDC's innovations in AI and hybrid cloud are gaining traction, with partnerships with major cloud service providers enhancing its offerings. The company has launched the Enterprise Vector Store to support AI applications [21][22] - **NetApp (NTAP)**: NTAP is experiencing increased demand for its all-flash arrays and expects to capture more market share. The company reported five-fold year-over-year growth in its AI business for the fiscal fourth quarter of 2025 [27][29]

Core Insights - Snowflake (SNOW) and Teradata (TDC) are significant players in the cloud analytics industry, with Snowflake focusing on a cloud-based platform for data management and analysis, while Teradata offers a hybrid cloud platform that integrates data analytics and management for enterprise workloads [1][2] Market Overview - The global cloud analytics market was valued at $35.7 billion in 2024 and is projected to reach $118.5 billion by 2029, growing at a CAGR of 27.1%, indicating a robust opportunity for both SNOW and TDC as businesses increase investments in data-driven decision-making and AI analytics [2] Teradata (TDC) Performance - TDC has experienced a 16% year-over-year growth in public cloud Annual Recurring Revenues (ARR), reaching $606 million in Q1 2025, with cloud services now constituting 42% of total ARR, up from 35% a year ago [3][10] - TDC launched the Enterprise Vector Store in March 2025, enhancing its AI capabilities and enabling real-time insights from diverse data types [4] - In May 2025, TDC partnered with Fivetran to streamline data integration from over 700 sources into VantageCloud, facilitating low-code integration and accelerating AI adoption [5] - TDC completed the IRAP assessment at the PROTECTED level, enhancing its credibility in sensitive industries and public sector [6] - TDC's partnerships with major cloud providers and global system integrators bolster its enterprise reach and cloud ecosystem [7] Snowflake (SNOW) Performance - SNOW reported a 26% year-over-year growth in product revenues, with 606 customers generating over $1 million in trailing 12-month revenue as of April 30, 2025 [8][10] - The total customer base for SNOW increased to 11,578, including 754 of the Forbes Global 2000, contributing significantly to its revenue growth [9] - SNOW has launched several new tools, including Cortex AI+SQL and SnowConvert, to enhance cloud modernization and AI-driven workflows for enterprise users [11] - Leading enterprises like Canva utilize SNOW's AI Data Cloud for personalized user experiences, indicating strong product-market fit [12] Stock Performance and Valuation - Year-to-date, SNOW shares have increased by 36.8%, while TDC shares have decreased by 28.2%, with SNOW's performance driven by strong AI product momentum and customer growth [13] - SNOW shares are currently considered overvalued with a Value Score of F, while TDC shares are viewed as undervalued with a Value Score of B, trading at 14.49X and 1.3X forward Price/Sales respectively [16] - The Zacks Consensus Estimate for SNOW's fiscal 2026 earnings is $1.06 per share, reflecting a 27.71% year-over-year increase, while TDC's estimate for 2025 is $2.16 per share, indicating a 10.7% year-over-year decrease [19] Investment Outlook - Both SNOW and TDC are well-positioned in the enterprise data and cloud analytics space, but TDC is currently favored due to its strong cloud ARR growth, expanding AI capabilities, and strategic partnerships [20][21] - TDC's hybrid cloud architecture offers greater flexibility for complex enterprise environments, giving it a competitive edge [21] - TDC holds a Zacks Rank 2 (Buy), while SNOW has a Zacks Rank 3 (Hold), suggesting a stronger investment case for TDC at this time [22]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Teradata (TDC) as a strong value stock based on its financial metrics and Zacks Rank [2][4][7]. Company Analysis - Teradata (TDC) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4]. - The stock is currently trading at a P/E ratio of 9.70, significantly lower than the industry average of 18.76 [4]. - TDC's Forward P/E has fluctuated between 8.41 and 14.66 over the past 52 weeks, with a median of 12.71 [4]. - The P/S ratio for TDC is 1.23, compared to the industry average of 1.43, suggesting it is undervalued [5]. - TDC has a P/CF ratio of 9.20, which is also lower than the industry average of 18.22, indicating a solid cash outlook [6]. - Over the past 12 months, TDC's P/CF has ranged from 8.10 to 22.09, with a median of 15.44 [6]. - These financial metrics collectively suggest that TDC is likely undervalued and presents a strong investment opportunity [7].

Core Insights - The article highlights the significance of Big Data in enhancing business decision-making, risk management, and operational efficiency through advanced analytics and AI technologies [3][4]. Company Summaries Confluent Inc. (CFLT) - Confluent operates a data streaming platform, providing managed cloud-native SaaS and self-managed software solutions [7]. - Expected revenue and earnings growth rates are 19% and 32.4%, respectively, for the current year, with a 20.5% improvement in earnings estimates over the past 30 days [8]. - The short-term average price target indicates a potential increase of 28.9% from the last closing price of $21.05, with a maximum upside of 71% [9]. Blackbaud Inc. (BLKB) - Blackbaud offers cloud software and services, achieving solid execution of strategic goals with organic revenue growth and stock buybacks [10][11]. - Expected revenue and earnings growth rates are -3.1% and 17.9%, respectively, with an 8.4% improvement in earnings estimates over the past 30 days [12]. - The short-term average price target suggests a 10.7% increase from the last closing price of $62.12, indicating a maximum upside of 36.8% [12]. Sprout Social Inc. (SPT) - Sprout Social provides a web-based social media management platform, offering AI-powered solutions for various social media functions [13][14]. - Expected revenue and earnings growth rates are 11.3% and 20.6%, respectively, with a 10.3% improvement in earnings estimates over the past 30 days [14]. - The short-term average price target indicates a potential increase of 30.7% from the last closing price of $21.55, with a maximum upside of 94.9% [15]. HubSpot Inc. (HUBS) - HubSpot delivers a cloud-based customer relationship management platform, experiencing steady adoption and integration of AI features [16][17]. - Expected revenue and earnings growth rates are 15.4% and over 100%, respectively, with a 49% improvement in earnings estimates over the past 30 days [18]. - The short-term average price target suggests a 19% increase from the last closing price of $621.25, indicating a maximum upside of 49.7% [18]. Teradata Corp. (TDC) - Teradata provides a hybrid cloud analytics platform, benefiting from strong cloud ARR growth and strategic partnerships with major tech companies [19][20]. - Expected revenue and earnings growth rates are -6.5% and -2.1%, respectively, with unchanged earnings estimates over the past 30 days [20]. - The short-term average price target indicates an 18.7% increase from the last closing price of $21.82, with a maximum upside of 60.4% [21].

Contact Information: Bragar Eagel & Squire, P.C. Brandon Walker, Esq. Marion Passmore, Esq. (212) 355-4648 investigations@bespc.com www.bespc.com About Bragar Eagel & Squire, P.C.: Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit w ...