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1. Company Snapshot

1.a. Company Description

Teradata Corporation, together with its subsidiaries, provides a connected multi-cloud data platform for enterprise analytics.The company offers Teradata Vantage, a data platform that allows companies to leverage their data across an enterprise, as well as connects various sources of data to drive ecosystem simplification and support customers on their journey to the cloud through an integrated migration.Its business consulting services include support services for organizations to establish a data and analytic vision, and identify and operationalize analytical opportunities, as well as enable a multi-cloud ecosystem architecture and ensure the analytical infrastructure delivers value.


In addition, it offers support and maintenance services.The company serves clients in financial services, government, healthcare, manufacturing, retail, telecommunications, and travel/transportation sectors through a direct sales force in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan.Teradata Corporation was incorporated in 1979 and is headquartered in San Diego, California.

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1.b. Last Insights on TDC

Teradata Corporation's recent performance was positively driven by its Q3 earnings beat, with earnings of $0.72 per share exceeding the Zacks Consensus Estimate of $0.53 per share. Recurring and cloud revenues are growing, while profitability is improving due to cost controls boosting margins. The company's cloud growth and margin gains lifted investor sentiment, despite overall sales remaining in decline. Additionally, institutional investors such as IFP Advisors Inc increased their holdings, with a 405.4% rise in shares. AI and cloud initiatives offer potential for future growth.

1.c. Company Highlights

2. Teradata's Q3 2025 Earnings: A Strong Beat on Revenue and EPS

Teradata reported a robust third quarter, with non-GAAP earnings per share of $0.72, significantly ahead of expectations of $0.53. Total ARR growth was also ahead of expectations, representing the second consecutive quarter of positive growth. The company's revenue performance was equally impressive, beating guidance ranges. Gross margin improved sequentially from Q2, contributing to the considerable upside on non-GAAP earnings per share. Free cash flow increased on a year-over-year basis for Q3 and the year-to-date, demonstrating the company's ability to generate cash.

Publication Date: Nov -10

📋 Highlights
  • Revenue & Recurring Revenue Beat Guidance:: Q3 revenue and recurring revenue exceeded guidance ranges, with total ARR growth at 1% (1% reported, flat in constant currency).
  • Non-GAAP EPS Outperformed Outlook:: Delivered $0.72 non-GAAP EPS, significantly ahead of guidance, with full-year guidance raised to $2.38–$2.42.
  • Strong Free Cash Flow Growth:: Q3 free cash flow rose YoY, with full-year guidance narrowed to $260M–$280M, reflecting improved operational efficiency.
  • AI-Driven Customer Wins:: Notable expansions in cloud and on-prem platforms, including automotive, heavy industry, and financial services clients.
  • Cloud ARR Momentum:: Cloud ARR expected to return to growth in Q4, supported by AI workload capabilities and hybrid deployment flexibility.

Revenue Growth and ARR Performance

The company's total ARR growth was 1% as reported and flat in constant currency, exceeding the top end of their total revenue and recurring revenue guidance. Cloud ARR performed in line with expectations in Q3, and the company expects it to return to growth in the fourth quarter. The AI influence pipeline is increasing, and the company's architecture is well-suited to handle AI workloads, both on-prem and in the cloud.

Valuation and Growth Expectations

With a P/E Ratio of 22.03 and an EV/EBITDA of 10.57, the market appears to be pricing in moderate growth expectations. Analysts estimate next year's revenue growth at -0.4%, indicating a continued decline. However, Teradata's guidance suggests a narrowing of the decline, with recurring revenue expected to be in the range of minus 1% to minus 3% year-over-year on a constant currency basis. The company's focus on AI services and consulting is expected to drive growth, with the potential to increase relevance in the marketplace and help customers deploy AI solutions efficiently.

Operational Highlights and Outlook

Teradata's CEO, Steve McMillan, highlighted several customer wins, including a multinational automotive manufacturer expanding its Teradata Cloud platform on AWS. The company is shifting towards its partner ecosystem, focusing on ARR growth, and developing its consulting and services organization to support AI services. The company's guidance for the full year remains unchanged, with a reiterated outlook for 2025. The company is confident in its ability to deliver profitable growth and higher free cash flow next year, driven by its investments in AI and consulting capabilities.

Free Cash Flow and Margin

The company's free cash flow margin currently stands at 21%, with the company expecting cost takeout to help drive free cash flow growth into next year. The company's focus on optimizing its business is expected to drive continued financial improvement, with a Free Cash Flow Yield of 11.17% indicating a relatively attractive valuation.

3. NewsRoom

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Top Big Data Stocks Set to Accelerate the AI-Powered Future

Dec -04

Source: zacks.com

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Teradata Corporation (TDC) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -04

Source: seekingalpha.com

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Ensign Peak Advisors Inc Reduces Position in Teradata Corporation $TDC

Dec -01

Source: defenseworld.net

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Boston Partners Acquires 1,059,875 Shares of Teradata Corporation $TDC

Nov -28

Source: defenseworld.net

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Teradata to Present at Upcoming Investor Conferences

Nov -24

Source: businesswire.com

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TDC or PSTG: Which Is the Better Value Stock Right Now?

Nov -21

Source: zacks.com

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Best Value Stock to Buy for Nov. 21st

Nov -21

Source: zacks.com

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New Strong Buy Stocks for Nov. 21: TDC, SBFG, and More

Nov -21

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.57%)

6. Segments

Services and Other

Expected Growth: 2.5%

Teradata's Services and Other segment growth of 2.5% is driven by increasing demand for cloud-based analytics and consulting services, expansion of existing customer relationships, and growth in emerging markets. Additionally, the company's investments in digital transformation and innovation are contributing to the segment's growth.

Subscription Software Licenses

Expected Growth: 3.5%

Teradata's Subscription Software Licenses growth is driven by increasing demand for cloud-based analytics, expansion into new industries, and growing adoption of hybrid cloud environments. Additionally, the company's investments in emerging technologies such as artificial intelligence and machine learning are contributing to the growth.

Consulting

Expected Growth: 2.0%

Teradata Corporation's 2.0% growth in consulting is driven by increasing demand for data analytics and cloud-based services. The company's expertise in hybrid cloud solutions, artificial intelligence, and machine learning is attracting new clients. Additionally, its strategic partnerships and acquisitions are expanding its market reach, contributing to the growth.

Perpetual Software and Licenses, Hardware and Other

Expected Growth: 1.8%

Teradata's 1.8% growth in Perpetual Software and Licenses is driven by increasing demand for cloud-based analytics and hybrid cloud environments. Hardware growth is fueled by rising adoption of IoT and edge computing. Other segment growth is attributed to growing demand for consulting and managed services, as well as expansion into new markets and industries.

7. Detailed Products

Teradata Vantage

A cloud-based analytics platform that integrates data warehousing, big data analytics, and machine learning to provide a unified analytics environment

Teradata IntelliCloud

A cloud-based analytics platform that provides a managed analytics environment for data warehousing, big data analytics, and machine learning

Teradata IntelliSphere

A software platform that provides data integration, data quality, and data governance capabilities

Teradata QueryGrid

A software platform that enables fast and secure data sharing and analytics across multiple systems and platforms

Teradata Aster

A software platform that provides advanced analytics and machine learning capabilities for big data

Teradata Consulting Services

A professional services organization that provides strategy, implementation, and management services for analytics and data management

8. Teradata Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Teradata Corporation's products and services are highly specialized, making it difficult for substitutes to emerge. However, the increasing adoption of cloud-based solutions and open-source technologies poses a moderate threat of substitutes.

Bargaining Power Of Customers

Teradata Corporation's customers are largely large enterprises and governments, which have limited bargaining power due to their dependence on Teradata's products and services.

Bargaining Power Of Suppliers

Teradata Corporation has a diversified supply chain, and its suppliers have limited bargaining power due to the company's significant market presence and negotiating power.

Threat Of New Entrants

The data analytics and cloud computing markets are highly competitive, and new entrants face significant barriers to entry, including high research and development costs and the need for significant investments in infrastructure and talent.

Intensity Of Rivalry

The data analytics and cloud computing markets are highly competitive, with established players such as Amazon Web Services, Microsoft, and Oracle competing fiercely for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 80.88%
Debt Cost 8.66%
Equity Weight 19.12%
Equity Cost 8.66%
WACC 8.66%
Leverage 422.96%

11. Quality Control: Teradata Corporation passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Remitly Global

A-Score: 4.7/10

Value: 2.6

Growth: 6.0

Quality: 6.2

Yield: 0.0

Momentum: 8.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Marqeta

A-Score: 4.2/10

Value: 5.4

Growth: 7.4

Quality: 3.4

Yield: 0.0

Momentum: 5.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Verint Systems

A-Score: 4.0/10

Value: 5.9

Growth: 4.7

Quality: 5.9

Yield: 0.0

Momentum: 3.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Teradata

A-Score: 3.8/10

Value: 5.5

Growth: 4.1

Quality: 6.8

Yield: 0.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Five9

A-Score: 3.4/10

Value: 3.1

Growth: 7.6

Quality: 3.4

Yield: 0.0

Momentum: 2.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Confluent

A-Score: 3.3/10

Value: 4.4

Growth: 6.6

Quality: 3.8

Yield: 0.0

Momentum: 3.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

29.86$

Current Price

29.86$

Potential

-0.00%

Expected Cash-Flows