TERADATA CORP /DE/ has recently released its latest 10-Q report. Teradata Corporation, together with its subsidiaries, provides an AI and knowledge platform in the United States and internationally. The company operates through Product Sales and Consulting Services, serving enterprise customers in sectors including financial services, healthcare and life sciences, public sector, manufacturing, retail, telecommunications, and travel and transportation.
In Item 2, Management’s Discussion and Analysis, Teradata said it is focused on helping organizations turn enterprise data into outcomes, with a platform designed for autonomous AI operations and hybrid deployments across on-premises and cloud environments. The company highlighted three financial and performance measures: annual recurring revenue, total annual recurring revenue, and public cloud ARR.
For the second quarter ended June 30, 2026, total ARR was $1.509 billion, up 1% from $1.489 billion a year earlier, including a 1% negative foreign-currency impact. Public cloud ARR rose 8% to $686 million from $634 million, also with a 1% negative currency effect.
Second-quarter revenue was $410 million, up $2 million from $408 million a year earlier. Recurring revenue increased 3% to $363 million, perpetual software licenses, hardware and other revenue rose to $8 million from $3 million, and consulting services revenue fell 24% to $39 million from $51 million.
Gross margin improved to 59.3% from 56.4%, with gross profit of $243 million versus $230 million. Teradata said the improvement was mainly due to a greater mix of recurring revenue and continued improvement in public cloud margin rate.
Operating expenses declined 5% to $195 million from $206 million. SG&A fell to $120 million from $135 million, while R&D rose to $75 million from $71 million as the company invested in public cloud and AI-related technology opportunities.
Operating income more than doubled to $48 million from $24 million, and net income increased to $46 million from $9 million. Other expense, net improved to a loss of $1 million from a loss of $11 million, helped by $7 million of interest income and a $3 million gain tied to termination of an interest rate swap.
The effective tax rate dropped to 2.1% from 30.8%. Teradata recorded $12 million of net discrete tax benefit in the quarter, mainly from tax elections to expense certain research and development costs for NCTI purposes.
For the first six months of 2026, revenue increased 3% to $854 million from $826 million. Recurring revenue rose 7% to $763 million, consulting services revenue declined 19% to $82 million, and perpetual software licenses, hardware and other revenue fell to $9 million from $13 million.
Six-month gross profit increased to $519 million from $478 million, lifting gross margin to 60.8% from 57.9%. Operating expenses were $390 million, up from $379 million, while operating income rose to $129 million from $99 million. Today the company's shares have moved -23.82% to a price of $26.20. For more information, read the company's full 10-Q submission here.
