Teradata Reports $410 Million Revenue and $46 Million Net Income in Q2 2026

Teradata Corporation reported its financial results for the second quarter of 2026, revealing a total revenue of $410 million, a slight increase of $2 million compared to the same period in 2025. The company's recurring revenue rose by 3% to $363 million, driven by growth in Public Cloud offerings, which saw an 8% increase in Annual Recurring Revenue (ARR) to $686 million. However, consulting services revenue experienced a significant decline of 24%, totaling $39 million, attributed to lower order performance from previous quarters. The gross margin improved to 59.3%, up from 56.4% in the prior year, primarily due to a higher mix of recurring revenue.

In terms of profitability, Teradata reported a net income of $46 million for the second quarter, a substantial increase from $9 million in the same quarter last year. This growth was bolstered by a reduction in operating expenses, which decreased by 5% to $195 million, largely due to lower employee compensation expenses following restructuring actions taken in the previous year. The company’s operating income also rose to $48 million, compared to $24 million in the second quarter of 2025.

The filing highlighted significant strategic developments, including the completion of a settlement agreement with SAP, which resulted in a net cash benefit of approximately $359 million after accounting for related legal expenses. This settlement contributed to a notable increase in cash provided by operating activities, which reached $507 million in the first half of 2026, compared to $51 million in the same period of 2025. The company also repaid its $450 million term loan, resulting in no outstanding borrowings under its new $400 million revolving credit facility.

Operationally, Teradata's Total ARR at the end of the second quarter was $1.509 billion, reflecting a 1% increase year-over-year, despite a negative impact from foreign currency fluctuations. The company reported a total of approximately 93 million shares of common stock outstanding as of July 24, 2026. The filing indicated that Teradata is focused on expanding its Public Cloud capabilities and enhancing customer engagement through a new unit-based pricing model, which aims to provide greater flexibility in compute capacity consumption.

Looking ahead, Teradata anticipates continued growth in Public Cloud ARR, driven by customer demand and migration activities. The company expects that macroeconomic factors, including geopolitical uncertainties and elevated interest rates, may influence customer decision cycles. Nonetheless, management remains optimistic about leveraging its AI-driven solutions to meet evolving customer needs and drive long-term growth.