Teradata's 2025 Earnings Call: Discrepancies in Operating Leverage, Sales Execution, and ARR Guidance

Generated by AI AgentEarnings Decrypt
Wednesday, Aug 6, 2025 10:09 am ET1min read
Aime RobotAime Summary

- Teradata reported $1.49B ARR in Q2, up 2% YoY, with $634M cloud ARR showing 15% growth, driven by migrations and expansions.

- Improved retention extended contracts into 2024, supported by effective contract management and customer satisfaction with AI/data solutions.

- New AI tools like Teradata AI Factory and Enterprise Vector Store aim to enhance customer experience and competitive edge in AI.

- 2025 guidance highlights discrepancies in operating leverage and sales execution, impacting future performance.



Revenue and ARR Performance:
- reported total ARR of $1.49 billion for Q2, up 2% year-over-year as reported.
- The company experienced improved deal execution with some deals closing earlier than expected, contributing to the revenue growth.

Cloud ARR Growth:
- Teradata's cloud ARR was $634 million, showing a 15% constant currency growth rate, aligning with full-year guidance of 14% to 18%.
- The growth was supported by cloud migrations and expansions, with a balanced mix of both driving revenue.

Improved Retention Rates:
- Teradata achieved better retention rates, with improvements extending customer contracts into the second half of the year.
- This was due to effective contract management and customer satisfaction with Teradata's AI and data management capabilities.

Focus on AI and Innovation:
- Teradata introduced several new AI capabilities, including the Teradata AI Factory, Enterprise Vector Store, and MCP server.
- These innovations are aimed at leveraging AI to enhance customer experience and drive more value from trusted data, enhancing Teradata's competitive position in the AI landscape.

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