Teradata Q2 2025 Earnings: Revenue Exceeds Expectations, GAAP EPS Misses Mark

Teradata Corp reported Q2 2025 revenue of $408 million, beating analyst estimates, but GAAP EPS missed at $0.09. The company's recurring revenue declined 4% to $354 million, while public cloud annual recurring revenue (ARR) increased 17% to $634 million. Teradata's total ARR reached $1.489 billion, up 2% YoY. The company's pivot to cloud-based solutions is crucial for future growth, but challenges remain in maintaining profitability amidst revenue decreases.

Teradata Corp reported its Q2 2025 financial results, revealing a mixed bag of performance indicators. The company's revenue stood at $408 million, surpassing analyst estimates, but GAAP EPS fell short at $0.09. The company's recurring revenue declined 4% to $354 million, while public cloud annual recurring revenue (ARR) surged 17% to $634 million. Teradata's total ARR reached $1.489 billion, marking a 2% year-over-year increase.

The company's pivot to cloud-based solutions is evident in the significant growth of its public cloud ARR, indicating strong demand for its VantageCloud offerings. However, the overall revenue contraction and margin compression signal underlying challenges. Teradata's gross margin contracted by 440 basis points to 56.4%, driven by a higher cloud mix, severance costs, and lower consulting revenue. Operating cash flow fell 27% to $51 million, and the cash balance decreased to $369 million amid ongoing share repurchases.

The cloud net-expansion rate slipped to 112%, indicating a deceleration in customer growth. Consulting services posted negative gross profit and a 19% revenue drop, further impacting profitability. The company expects restructuring charges of $20-25 million through 2025 and faces multiple lawsuits, including a trade-secret case with SAP and securities and derivative suits. Despite these challenges, Teradata's stockholders' equity rose to $176 million, reversing a prior negative trend.

References:
[1] https://www.stocktitan.net/sec-filings/EXPI/form-4-e-xp-world-holdings-inc-insider-trading-activity-28707ba57a47.html