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Sep 30
Teradata Q3 2025 Earnings Report
Teradata reported its third quarter 2025 financial results, exceeding revenue and recurring revenue guidance, and delivering non-GAAP earnings per share and free cash flow ahead of expectations.
Key Takeaways
Teradata delivered a solid third quarter in 2025, surpassing its revenue and recurring revenue guidance. The company also achieved non-GAAP earnings per share and free cash flow that exceeded expectations, leading to an affirmation of its full-year 2025 outlook. The CEO highlighted the Teradata knowledge platform's suitability for agentic AI workloads, emphasizing its performance and context for trusted results.
Total ARR reached $1.490 billion, showing a 1% increase as reported from the prior year period.
Public cloud ARR grew to $633 million, an 11% increase as reported compared to the third quarter of 2024.
GAAP diluted EPS was $0.42, while non-GAAP diluted EPS was $0.72, both showing an increase from the previous year.
Free Cash Flow for the quarter was $88 million, significantly higher than the $69 million reported in the same period last year.
Teradata
Teradata
Teradata Revenue by Segment
Revenue by Segment
Recurring Revenue
CapyFin.comPerpetual Software Licenses, Hardware and Other Revenue
CapyFin.comConsulting Services Revenue
CapyFin.com Forward Guidance
For the fourth quarter of 2025, Teradata expects recurring revenue to be in the range of -1% to -3% year-over-year in constant currency, and total revenue in the range of -2% to -4% year-over-year in constant currency. GAAP diluted EPS is projected between $0.26 and $0.30 per share, while non-GAAP diluted EPS is expected to be between $0.53 and $0.57 per share. For the full-year 2025, the company updated its GAAP diluted EPS outlook to $1.22 to $1.26 and non-GAAP diluted EPS to $2.38 to $2.42 per share. Cash flow from operations is anticipated to be $280 million to $300 million, with free cash flow between $260 million and $280 million. Teradata reaffirmed its full-year 2025 ranges for recurring revenue, total revenue, public cloud ARR growth, and total ARR.
Positive Outlook
- Reiteration of full-year outlook for Total ARR, Cloud ARR, and Free Cash Flow indicates confidence in overall business trajectory.
- Public cloud ARR growth is projected to be strong, with a range of 14% to 18% year-over-year in constant currency for the full year 2025.
- Full-year non-GAAP diluted EPS is expected to be robust, with a range of $2.38 to $2.42 per share.
- Anticipated full-year free cash flow of $260 million to $280 million suggests healthy cash generation.
- The company's platform is highlighted as ideal for agentic AI workloads, positioning it well for future growth in this area.
Challenges Ahead
- Fourth quarter recurring revenue is projected to decrease year-over-year, in the range of -1% to -3% in constant currency.
- Fourth quarter total revenue is also expected to decline year-over-year, in the range of -2% to -4% in constant currency.
- Full-year recurring revenue is anticipated to decrease, with a range of -3% to -5% year-over-year in constant currency.
- Full-year total revenue is expected to decline, with a range of -5% to -7% year-over-year in constant currency.
- GAAP diluted EPS for Q4 2025 is projected to be lower than the current quarter's GAAP EPS.
Revenue & Expenses
Visualization of income flow from segment revenue to net income