Teradata Q2 Earnings Call Highlights

Teradata exceeded second-quarter expectations: Revenue was $410 million, recurring revenue rose 3% to $363 million, non-GAAP operating margin expanded to 21.5%, and diluted EPS reached $0.69. Adjusted free cash flow totaled $127 million, while the company ended the quarter with $323 million in net cash after repaying its term loan. AI platform expansion is central to Teradata’s strategy: The company launched its Autonomous Knowledge Platform, spanning cloud, on-premise and hybrid environments, as customers seek to move AI projects into production. Early customer deployments include telecommunications, banking and healthcare organizations. Teradata raised profitability and cash-flow guidance but expects near-term revenue declines: Full-year non-GAAP EPS guidance increased to $2.65–$2.73 and adjusted free-cash-flow guidance to $330–$350 million. Third-quarter revenue and recurring revenue are expected to decline year over year because of on-premise subscription revenue-recognition timing, not weaker annual demand. Snowflake Boosts Growth by Doubling Down on AI Teradata NYSE: TDC reported second-quarter results marked by growth in recurring revenue, expanded operating margins and higher free cash flow, while reaffirming its full-year outlook for total annual recurring revenue, total revenue and recurring revenue. The company raised its full-year non-GAAP earnings-per-share guidance and adjusted free-cash-flow forecast. President and Chief Executive Officer Steve McMillan said the company’s first-half performance reflected demand for its hybrid data platform as enterprises work to move artificial intelligence initiatives into production. “Our hybrid capabilities and our on-prem strength in particular, continue to resonate with customers running the most demanding and regulated workloads,” McMillan said. Second-Quarter Financial Results Teradata Corporation Stock is a Turnaround Play Chief Financial Officer John Ederer said total ARR rose 1% year over year as reported, or 2% in constant currency. Cloud ARR increased 8% as reported and 9% in constant currency. Ederer said Teradata remains focused on total ARR growth, noting that the mix between cloud and on-premise subscriptions can vary by quarter. Total revenue was $410 million, flat year over year, exceeding the high end of company guidance by two percentage points. Recurring revenue rose 3% as reported to $363 million, or 2% in constant currency, and exceeded the high end of guidance by three percentage points. Consulting services revenue fell 24% year over year to $39 million, although the company said bookings improved and project backlog increased. Non-GAAP operating margin expanded to 21.5% from 16.4% a year earlier. Non-GAAP diluted EPS was $0.69, exceeding the top end of Teradata’s outlook by $0.12. Adjusted free cash flow was $127 million for the quarter. Ederer attributed the revenue outperformance primarily to the timing of revenue recognition in the on-premise business. Total gross margin increased 220 basis points year over year to 60.5%, aided by a greater mix of recurring revenue. Recurring revenue gross margin rose 30 basis points to 67.8%. Teradata ended the quarter with a net cash position of $323 million, an increase of $528 million from a year earlier. The company repurchased approximately $40 million of stock, or about 1.3 million shares, during the quarter and paid off the remaining $450 million balance on its term loan. AI Platform Rollout and Customer Activity McMillan highlighted the company’s May launch of the Teradata Autonomous Knowledge Platform, which is intended to support enterprise agentic AI deployments across cloud, on-premise and hybrid environments. He said the platfor.