Teradata Reports $1.663 Billion Revenue for Fiscal Year 2025, 5% Decrease from 2024

Teradata Corporation reported a total revenue of $1.663 billion for the fiscal year ending December 31, 2025, reflecting a 5% decrease compared to $1.750 billion in 2024. The decline was primarily attributed to a 2% drop in recurring revenue, which amounted to $1.445 billion, driven by reduced revenue from on-premises solutions. However, this was partially offset by a 15% increase in Public Cloud revenue, which reached $701 million. The company’s operating income was $205 million, slightly down from $209 million in the previous year, while net income rose to $130 million from $114 million, resulting in diluted earnings per share of $1.35, up from $1.16 in 2024.

In terms of operational changes, Teradata has been undergoing a significant transformation, including a realignment of its sales function and a global restructuring initiative aimed at optimizing operations and reducing costs. This restructuring has led to a total charge of approximately $20 million, with cash expenditures estimated between $45 million and $50 million. The company also reported a decrease in operating expenses by 8% to $782 million, primarily due to cost discipline initiatives. As of December 31, 2025, Teradata employed approximately 5,100 individuals, a reduction from previous years as part of its optimization strategy.

Geographically, Teradata's revenue was split between the United States, contributing $829 million, and international markets, which accounted for $834 million. The company has emphasized its commitment to hybrid and cloud solutions, with a focus on enhancing its AI and knowledge platform capabilities. The Total Annual Recurring Revenue (Total ARR) increased by 3% to $1.522 billion, driven by improved customer retention and a net expansion rate of 108% in Public Cloud ARR. The company anticipates continued growth in this area, particularly as it expands its offerings and partnerships.

Looking ahead, Teradata's management expressed optimism about future performance, particularly in the context of increasing demand for cloud-based solutions and AI capabilities. The company expects to see expansion as a primary contributor to Total ARR growth in 2026, alongside ongoing efforts to enhance its product offerings and customer engagement strategies. Additionally, Teradata is preparing for a significant cash inflow from a recent settlement agreement with SAP, which is expected to provide a net benefit of approximately $355 million to $362 million after expenses, further bolstering its financial position.