Teradata(US:TDC)2025-11-05 15:26Revenue Performance - Total Annual Recurring Revenue (ARR) reached $1.490 billion, a 1% increase from $1.482 billion in Q3 2024, with a 1% positive impact from foreign currency fluctuations [84]. - Public Cloud ARR increased by 11% to $633 million compared to $570 million in Q3 2024, with no impact from foreign currency fluctuations [84]. - Total revenue for Q3 2025 was $416 million, a decrease of $24 million or 5% from Q3 2024, with recurring revenue down 2% [84]. - Total revenue decreased by $99 million, or 7%, to $1,242 million for the first nine months of 2025 compared to $1,341 million in 2024 [1]. - Recurring revenue decreased by 4%, while Public Cloud revenue increased due to expansions and migrations [1]. - Revenue from perpetual software licenses, hardware, and other decreased by 20% year over year [2]. - Consulting services revenue decreased by 23% due to lower order booking activity in the second half of 2024 [2]. Profitability Metrics - Gross margin improved to 60.8% in Q3 2025 from 60.5% in Q3 2024, driven by a greater mix of recurring revenue [84]. - Operating income for Q3 2025 was $61 million, up from $56 million in Q3 2024 [84]. - Net income increased to $40 million in Q3 2025, compared to $32 million in Q3 2024 [84]. - Total gross profit decreased to $731 million, or 58.9% of revenue, down from $815 million, or 60.8% of revenue in 2024 [3]. - Selling, general and administrative expenses decreased by 13% to $373 million, representing 30.0% of revenue [6]. Cash Flow and Financial Position - Cash provided by operating activities was $145 million, a decrease of $2 million compared to the prior year [12]. - Free cash flow increased to $134 million for the first nine months of 2025, compared to $129 million in 2024 [14]. - The company had no outstanding borrowings on its $400 million Revolving Facility as of September 30, 2025 [22]. Taxation - The effective tax rate for Q3 2025 was 25.9%, down from 31.9% in Q3 2024 [94]. - The effective tax rate decreased to 25.6% for the nine months ended September 30, 2025, down from 33.6% in 2024 [10]. Market and Risk Factors - Cloud Net Expansion Rate was 109% in Q3 2025, down from 120% in Q3 2024 [84]. - No material changes to market risk factors were reported compared to the previous disclosures in the 2024 Annual Report [128]. - New accounting pronouncements are discussed in Note 2 of the Condensed Consolidated Financial Statements [127].