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Teradata, a leading provider of hybrid cloud analytics and data platforms, reported its second quarter 2025 financial results on August 5, 2025, showcasing robust cloud growth amidst challenges in total revenue. The company continues to advance its AI-driven data solutions, maintaining a strong position in enterprise analytics.
Public cloud ARR grew 17% to $634M, up from $542M in Q2 2024.
Total ARR increased 2% to $1.489B, flat in constant currency.
Total revenue fell 6% to $408M, compared to $436M last year.
Non-GAAP EPS of $0.47 beat estimates of $0.40.
Recurring revenue was 87% of total revenue, up from 84%.
Full-year 2025 cloud ARR growth outlook reaffirmed at 14-18%.
Teradata reported a 17% increase in public cloud Annual Recurring Revenue (ARR) to $634 million, driven by demand for its Teradata Vantage platform. “Teradata executed well in Q2, building on our cloud growth and longstanding strength in on-prem to provide customers with their preferred hybrid data and analytics environments for implementing AI,” said Steve McMillan, President and CEO, Teradata. However, total revenue declined 6% to $408 million, reflecting challenges in transitioning on-premises customers to cloud solutions.
Non-GAAP diluted EPS reached $0.47, surpassing analyst expectations of $0.40, though down from $0.64 in Q2 2024. GAAP EPS was $0.09, compared to $0.38 last year. Recurring revenue, comprising 87% of total revenue, dropped 4% to $354 million. Gross margins contracted, with GAAP at 56.4% (down from 60.8%) and non-GAAP at 58.3% (down from 62.2%), due to shifts in revenue mix. Cash flow from operations and free cash flow remained steady at $43 million and $39 million, respectively.
Teradata announced a global restructuring plan, reducing its workforce by 9-10% to cut operating expenses by $75-80 million annually, with initial costs of $45-50 million. This initiative aims to enhance profitability and focus on revenue-generating areas, supporting long-term growth in cloud and AI analytics. The company repurchased $28 million in stock during Q2, aligning with its goal to return at least 50% of free cash flow to shareholders.
For Q3 2025, Teradata forecasts a 7-9% decline in total revenue and a 4-6% drop in recurring revenue, with non-GAAP EPS expected at $0.51-$0.55. The full-year outlook projects public cloud ARR growth of 14-18%, total ARR flat to 2% growth, and total revenue down 5-7%. Free cash flow is expected to remain strong at $250-280 million. These projections reflect cautious optimism amid market transitions.
Teradata’s Q2 2025 results highlight its strength in cloud analytics, with a 17% increase in public cloud ARR signaling robust demand. Despite total revenue challenges, the company’s focus on AI-driven hybrid platforms and operational efficiencies positions it for sustained growth in the evolving data analytics landscape.
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