Teradata Corp /de/ (TDC) · Nov 5, 2026 · Earnings
Beat — Non-GAAP diluted EPS $0.70 vs ~$0.58 consensus
Teradata earnings topped the published EPS bar and lifted full-year guidance, but recurring revenue declined and quarterly margins narrowed.
Teradata is in the middle of a cloud-and-AI transition: public cloud ARR is growing faster than the overall base, while legacy revenue and consulting remain under pressure. Its Q2 outlook already called for Q3 revenue to decline 4%–6% and non-GAAP EPS of $0.55–$0.59, with full-year EPS guidance at $2.65–$2.73.
The quarter beat the earnings bar, but not because the core top line accelerated. Non-GAAP diluted EPS was $0.70 versus a published consensus of about $0.58, while revenue of $399 million was modestly above the published $395.76 million estimate. Revenue still fell 4% year over year, recurring revenue fell 2%, and consulting services dropped 21% (Revenue table). The result was therefore an earnings beat layered onto a still-soft demand picture, not a clean growth reacceleration.
| Q3 2026 | Q3 2025 | Consensus / prior guide | |
|---|---|---|---|
| Total revenue (Revenue table) | $399M (-4%) | $416M | ~$395.8M consensus |
| Recurring revenue (Revenue table) | $359M (-2%) | $366M | -4% to -2% guide |
| Non-GAAP diluted EPS (EPS reconciliation) | $0.70 | $0.72 | ~$0.58 consensus |
| Non-GAAP operating margin (Operating Income) | 21.8% (-1.8 pts) | 23.6% | 21.0%–22.0% implied by prior guide |
| Public cloud ARR (ARR table) | $700M (+11%) | $633M | $686M at Q2 |
| FY non-GAAP diluted EPS outlook (EPS reconciliation) | $2.86–$2.90 | — | $2.65–$2.73 prior guide |
The strategic transition is progressing, but unevenly. Public cloud ARR reached $700 million, up 11%, and total ARR rose 1% to $1.512 billion (ARR table). That supports the cloud migration thesis, but total ARR growth remains below the 2%–4% full-year target previously reaffirmed, while consulting and non-recurring product revenue continue to contract. The company also highlighted new AI distribution and integration efforts: it made its Data Analyst Agent available in AWS Marketplace and integrated its Autonomous Knowledge Platform with Microsoft OneLake. 〔0〕
Higher full-year EPS guidance is the clearest positive change, but the quality of the quarter is mixed. FY non-GAAP EPS guidance moved to $2.86–$2.90 from $2.65–$2.73, while adjusted free-cash-flow guidance stayed at $330–$350 million (EPS reconciliation; Free Cash Flow outlook). At the same time, quarterly gross margin fell to 59.6% from 60.8% and non-GAAP operating margin fell to 21.8% from 23.6% (Gross Profit; Operating Income). Management’s AI narrative is gaining product support—“The increased pace of new product innovation and new AI service capabilities is driving positive interest from customers.”—but the reported numbers show that monetization has not yet translated into broad revenue growth.
Bottom line: This is a modestly better-than-expected earnings report with raised profit guidance, but it does not rewrite Teradata’s business story. The cloud-and-AI transition is advancing, yet weak recurring revenue and lower margins keep the signal mixed rather than decisively strong.
Q4 earnings report, early 2027
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