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what it is
Teradata helps big companies store, manage, and analyze huge piles of data across cloud and on-prem systems.
how it gets paid
Last year Teradata made $1.7B in revenue. Recurring revenue was the main engine at $1.35B, or 81% of sales.
why growth slowed
Revenue fell 5.0% last year. The company’s public cloud annual recurring revenue metric is growing at a solid pace.
what just happened
Teradata posted revenue of $1.2B and EPS of $0.96, both ahead of expectations.
At a glance
C++ balance sheet — some cracks in the foundation
25/100 earnings predictability — expect surprises
12.9x trailing p/e — the market's not buying it — or you found a deal
41.5% return on capital — every dollar works hard here
xvary composite: 48/100 — below average
What they do
Teradata helps big companies store, manage, and analyze huge piles of data across cloud and on-prem systems.
Teradata wins where your data mess is already expensive. It sells into large enterprises that hate ripping out core analytics systems, and that pain supports a 41.5% return on capital. The plain-English version of recurring revenue is repeat sales you do not have to re-win every quarter, and that makes a 15.9% net margin possible even with revenue down 5.0%.
How they make money
$1.7B
annual revenue · their business grew -5.0% last year
Recurring revenue
$1.35B
+2.0%
Consulting services
$0.20B
9.0%
Software licenses
$0.08B
18.0%
Hardware and other
$0.03B
20.0%
The products that matter
enterprise analytics platform
Teradata Vantage
$1.7B business
this is the center of the entire $1.7B revenue base. if the platform keeps winning cloud workloads, the turnaround story holds together. if it does not, the legacy decline keeps showing up in consolidated revenue.
core platform
consulting and support
Services layer
no breakout disclosed here
the company does not give you a neat revenue split here, which is its own signal. if you buy TDC, you are underwriting the business as a whole, not a clean segment story with one obvious growth engine doing the heavy lifting.
disclosure is thin
Key numbers
12.9x
price/profit
P/E → how many dollars you pay for $1 of profit → so what: you are paying $12.90 for each $1 of trailing earnings, which is cheap next to a 41.5% return on capital.
41.5%
return on capital
Return on capital → profit generated from the money tied up in the business → so what: Teradata squeezes far more profit from each dollar invested than most software companies with shrinking sales.
15.9%
net margin
Net margin → how much profit remains from each revenue dollar after costs → so what: even with sales down 5.0%, Teradata kept about $0.16 of every $1.
$484M
long-term debt
Long-term debt → money the company owes over years → so what: debt is 14% of capital, which is manageable but not a zero-stress balance sheet.
Financial health
C++
strength
- balance sheet grade C++ — below average — limited financial resources
- risk rank 4 — safer than 20% of stocks
- price stability 20 / 100
- long-term debt $484M (14% of capital)
- net profit margin 15.9% — keeps 16 cents of every dollar in revenue
- return on equity 46% — $0.46 profit for every $1 investors have put in
C++ — net profit margin looks solid but balance sheet grade needs watching.
Total return vs. market
You invested $10,000 in TDC 3 years ago → it's now worth $9,270.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Teradata posted revenue of $1.2B and EPS of $0.96, both ahead of expectations.
The quarter looked better than the annual trend. Cost control helped, and free cash flow rose 28% vs. prior year while public cloud ARR kept growing.
$1.2B
revenue
$0.96
eps
58.9%
gross margin
the number that mattered
Free cash flow rose 28% vs. prior year, which tells you the turnaround is showing up in cash before it fully shows up in revenue.
-
teradata generated mixed results in the 2025 third quarter, which exceeded our expectations.indeed, teradata’s ongoing transformation from a traditional on-premises company, to a subscription-based, hybrid cloud analytics platform played a large role in these mixed results.
-
nonetheless, the company is effectively managing costs and improving operational efficiencies.
-
in fact, free cash flow was stronger than expected (up 28% vs. prior year), supporting the positive trend.overall, teradata outperformed our initial sales and share-earnings targets of $405 million and $0.55, which likely helped stage the partial recovery in its share price.
-
the company’s public cloud annual recurring revenue (arr) metric is growing at a solid pace.
-
in fact, some may say this is the most important metric to gauge growth.
source: company earnings report, 2026
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What could go wrong
the core risk is simple: cloud progress is real, but not real enough to stop the $1.7B revenue base from shrinking.
med
legacy decline keeps outrunning cloud growth
revenue fell 5.0% last year to $1.7B. if newer cloud subscriptions do not replace older workloads fast enough, the business keeps looking smaller even while management talks about progress.
that pressure lands straight on valuation. 12.9x earnings looks modest until the earnings base starts looking less durable.
med
volatile quarters keep the stock in the penalty box
earnings predictability is 25/100 and price stability is 20/100. in human-speak: this business is harder to model and easier for the market to punish when a quarter comes in messy.
even with a 26.5% operating margin and 13.9% net margin, inconsistent results can keep the multiple compressed.
med
there is less room for a prolonged stumble
a C++ balance sheet and $484M of long-term debt are manageable numbers, not catastrophic ones. they also do not give you the same margin for error you get from stronger software balance sheets.
if revenue stays weak for longer, investors stop focusing on cheap earnings and start focusing on flexibility.
med
data rules add friction to an already delicate transition
privacy and data-handling rules can raise compliance costs or complicate how enterprise customers use analytics platforms. that is a headache for any vendor. it matters more when your top line is already shrinking.
extra friction on a $1.7B revenue base makes it harder for the turnaround to look clean enough for a rerating.
if you own TDC, the kill criteria are not mysterious. revenue has to stop sliding and margins have to stop being the only part doing the heavy lifting.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next quarterly report
the next print needs to show the same thing in the same quarter: cloud progress, stable margins, and less revenue shrinkage. one without the others is not enough.
metric
public cloud ARR
management keeps pointing you here for a reason. if recurring cloud revenue keeps growing, investors give the story more time.
trend
revenue stabilization
one good cloud metric is not enough if total revenue keeps falling. you want to see the $1.7B base stop shrinking.
risk
institutional conviction
160 buyers versus 169 sellers is close, not catastrophic. it is still net selling, which tells you large holders are cautious rather than convinced.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts think the stock can outperform most names over the next 12 months.
risk profile
below average
stability score 4 — more volatile than most stocks. this is not where you hide when markets get jumpy.
chart momentum
below average
technical score 4 — the tape is still asking for proof, not just a turnaround pitch.
earnings predictability
25 / 100
the business can produce awkward quarters. if you own it, expect more variance than you get from steadier software names.
source: institutional data
Institutional activity
160 buyers vs. 169 sellers in 3q2025. total institutional holdings: 97.0M shares.
source: institutional data
Price targets
3-5 year target range
$23
$64
$31
current price
$44
target midpoint · +42% from current · 3-5yr high: $55 (+80% · 15% ann'l return)
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