Teradata Narrows Full-Year Revenue Outlook to High End

The Tip Desk · November 8, 2026 · 3 min read

Third-quarter revenue was $399 million, down 4% from a year earlier, as the analytics vendor lifted full-year EPS ranges and kept ARR growth at 2% to 4%.

Teradata (TDC) reported third-quarter 2026 revenue of $399 million, down 4% as reported and in constant currency from $416 million a year earlier, after a flat year-over-year print in the second quarter.

The analytics vendor said total annual recurring revenue rose to $1.512 billion from $1.490 billion, up 1% as reported and 2% in constant currency. Public cloud ARR increased to $700 million from $633 million, an 11% gain on both bases.

Recurring revenue was $359 million, down 2% as reported and in constant currency from $366 million a year earlier, and accounted for 90% of total revenue versus 88%. Consulting services fell to $37 million from $47 million, a 21% decline as reported. Product sales were $362 million versus $369 million.

GAAP diluted earnings were $0.40 a share versus $0.42 a year earlier. Non-GAAP diluted EPS was $0.70 versus $0.72. GAAP operating margin was 13.5% versus 14.7%; non-GAAP operating margin was 21.8% versus 23.6%. GAAP gross margin compressed to 59.6% from 60.8%; non-GAAP gross margin fell to 60.7% from 62.3%.

Cash flow from operations was $91 million compared with $94 million a year earlier. Free cash flow was $85 million versus $88 million. Adjusted free cash flow was $96 million versus $88 million.

President and CEO Steve McMillan said the company marked another quarter of progress against goals set at the start of the year, driving total ARR growth, improving profitability and delivering strong free cash flow. He said an increased pace of new product innovation and new AI service capabilities is driving positive interest from customers.

The company released Teradata Factory for general availability, an integrated GPU system combining analytics, AI, and governance. It evolved Tera into an agentic coworker for enterprise data work, announced Tera Context Engine, a vendor-neutral layer connecting databases, platforms, pipelines, catalogs, models, and AI agents, and launched Tera Harness, an execution layer that routes work to skills, tools, data, and models. Teradata also made its Data Analyst Agent available in AWS Marketplace and integrated the Autonomous Knowledge Platform with Microsoft OneLake.

For full-year 2026, Teradata increased GAAP diluted EPS to a range of $4.63 to $4.67 from $4.43 to $4.51, and non-GAAP diluted EPS to $2.86 to $2.90 from $2.65 to $2.73. It narrowed recurring revenue to 1% to 2% year-over-year and total revenue to -1% to flat, both at the high end of prior ranges. It reaffirmed total ARR growth of 2% to 4%, cash flow from operations of $665 million to $685 million, which includes an after-tax net benefit of $315 million related to a settlement with SAP, and adjusted free cash flow of $330 million to $350 million.

For the fourth quarter of 2026, the company expects recurring revenue of -2% to -4% year-over-year, total revenue of -4% to -6% year-over-year, GAAP diluted EPS of $0.26 to $0.30 a share, and non-GAAP diluted EPS of $0.58 to $0.62 a share.