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Sep 30, 2025
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.
Revenue by Segment
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
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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