Teradata Stock Earnings Reports

Teradata reported a strong Q3 2025 with revenue and recurring revenue beating guidance, non-GAAP EPS of $0.72 (well above outlook), and free cash flow of $88M (+28% YoY). Total ARR returned to positive growth for a second consecutive quarter (total ARR up 1% reported, flat in constant currency) driven by improved retention and expansions; cloud ARR grew 11% with a cloud net expansion rate of 109%. Gross margins improved (total gross margin 62.3%), services margin turned positive after cost alignment, operating margin and EPS were ahead of expectations. Management reiterated full-year guidance for ARR and revenue, raised FY non-GAAP EPS guidance to $2.38–$2.42, and narrowed free cash flow guidance to $260M–$280M while planning to return ~50% of free cash flow via buybacks (Q3 repurchases ≈ $30M). Strategy update: Teradata is positioning itself as an “autonomous AI and knowledge platform” for Agentic AI and hybrid deployments (on‑prem, cloud, private cloud), launching new capabilities (Enterprise Vector Store, MCP Server, AgentBuilder, AI services, AI Factory) and emphasizing workload performance, hybrid flexibility, industry data models, and partner integrations. Management expects AI-driven workloads (Agentic AI) to increase platform demand and compute needs dramatically and views Teradata’s architecture and query engine as a competitive moat for these high-concurrency, low-latency AI workloads. Key risks noted include deployment mix uncertainty (cloud vs on‑prem) that may impact ARR composition and near-term linearity.