Teradata (3T4) Q2 2026 Earnings Report

The call emphasized strong execution across product innovation, margin expansion, cash generation, and balance sheet improvement, alongside meaningful early customer traction for new AI-focused offerings. Near-term headwinds stem from consulting revenue weakness, ASC 606-related revenue timing that pressures H2 revenue linearity, and potential supply-chain/cost risks for on-prem hardware as Teradata Factory scales. On balance, the positives — product momentum, profitability gains, cash flow, and strategic positioning for agentic AI — outweigh the near-term operational and timing challenges, supporting confidence in the full-year targets.

Management reaffirmed its full‑year outlook for total ARR, total revenue and recurring revenue while raising FY non‑GAAP EPS to $2.65–$2.73 and increasing adjusted free cash flow guidance to $330–$350 million; for Q3 they expect recurring revenue down 4% to 2% YoY, total revenue down 6% to 4% YoY, and non‑GAAP diluted EPS of $0.55–$0.59 (non‑GAAP tax rate ~23%, weighted average shares ~96.7M, FY other expenses ≈$19M). They noted Q2 actuals of total revenue $410M (flat YoY), recurring revenue $363M (+3% YoY, +2% CC), total ARR +1% (+2% CC), cloud ARR +8% (+9% CC), Q2 non‑GAAP EPS $0.69, adjusted free cash flow $127M, net cash $323M (up $528M YoY), ~$40M of share repurchases (~1.3M shares) and payoff of the remaining $450M term loan, and said they expect modest sequential ARR growth into Q3 with the majority of ARR growth concentrated in Q4.