Teradata Announces Impressive Financial Results for Q4 and Full-Year 2025

Teradata's Financial Performance for Q4 and Full-Year 2025

On February 10, 2026, Teradata Corporation (NYSE: TDC) unveiled its financial results for the fourth quarter and full fiscal year 2025, demonstrating solid growth across key metrics. The results indicate a promising trajectory as the company prepares for 2026 and beyond.

Fourth Quarter Highlights

For the fourth quarter, the company reported a total Annual Recurring Revenue (ARR) of $1.522 billion, which reflects a 3% year-over-year increase and a 1% rise in constant currency. This growth underscores Teradata's commitment to enhancing its platform and services. Notably, recurring revenue for this quarter reached $367 million, representing a 5% increase or a 3% rise in constant currency compared to the same period last year.

The gross profit for the fourth quarter was $256 million, resulting in a GAAP gross margin of 60.8%, up from 59.4% the previous year. This notable increase underscores the efficiency of operations and cost management strategies employed by the company.

GAAP diluted earnings per share (EPS) also showed improvement, coming in at $0.38, compared to $0.26 per share a year prior. The non-GAAP diluted EPS stood at $0.74, rising from $0.53.

Full-Year 2025 Performance

When examining the full year, the total revenue was reported at $1.663 billion, a decrease of 5% from 2024. However, it's important to note that recurring revenue constituted 87% of total revenue, affirming the stability of Teradata’s income streams.

Despite overall revenue declines, the company's effective cost management resulted in a cash flow from operations of $305 million. Additionally, free cash flow stood at $285 million for the year, reflecting a strong operational cash generation ability.

Strategic Outlook for 2026

Looking ahead, Teradata projects an ARR growth of 2-4% for 2026, with recurring revenue expected to remain flat to a 2% increase year-over-year. This cautious optimism signals confidence in both market conditions and the company's strategic direction. GAAP diluted EPS is forecasted to be in the range of $1.26 to $1.36, with non-GAAP diluted EPS anticipated between $2.55 and $2.65.

Teradata's President and CEO, Steve McMillan, stated, "Our results demonstrate strong operational discipline and establish a solid foundation as we enter 2026. Our Autonomous AI and Knowledge Platform resonates well with customers, showcasing the strengths we've built over decades are ideal for today’s market needs."

Employing cutting-edge AI services, Teradata aims to fundamentally reshape its offerings, providing additional value to its customers as they navigate the complexities of the data landscape.

Conclusion

Teradata's financial results for Q4 and the entirety of 2025 illustrate resilience despite external market challenges. As the company enters 2026, its commitment to transforming operations through innovative AI capabilities positions it favorably within an evolving tech landscape. The emphasis on maintaining efficiencies while striving for growth will be crucial as Teradata continues to solidify its standing as a leader in data analytics and AI solutions.