Teradata (TDC) Financials

Teradata’s latest results show improving balance-sheet quality and solid operating cash generation, but revenue remains below 2023 levels and quarterly profitability is volatile. In Q2 2026, revenue was $410 million, down from $444 million in Q1 2026 and $462 million in Q2 2023. However, gross profit of $243 million represented a 59.3% gross margin, while operating income was $48 million, or 11.7% of revenue.

• Operating profitability recovered in Q2 2026. Teradata generated $48 million of operating income after reporting a $36 million operating loss in Q1. The improvement primarily reflected SG&A falling to $120 million from $240 million in Q1.
• Cash generation remains strong relative to reported earnings. Q2 2026 operating cash flow was $106 million, more than double the $46 million of net income. Operating cash flow also improved from $8 million in Q1 2025 and $41 million in Q3 2024.
• The company eliminated reported debt during Q2. Short-term and long-term debt both declined to zero at June 30, 2026, from a combined $449 million in Q1 2026. Teradata repaid $450 million of debt during the quarter, reducing future interest-rate and refinancing risk.
• Share repurchases continue to support per-share results. Teradata repurchased $40 million of common stock in Q2 2026, following buybacks of $34 million in Q1 and $38 million in Q4 2025. Weighted-average basic shares declined to 93.9 million in Q2 2026 from 101.4 million in Q1 2023.
• Equity has improved substantially from earlier periods. Total common equity reached $593 million in Q2 2026, compared with $54 million in Q1 2024 and $122 million in Q3 2023. Retained losses remain significant, but the overall equity cushion has strengthened.
• Gross margins have been relatively resilient despite lower revenue. Gross margin was approximately 59% in Q2 2026, compared with about 60% in Q2 2025, 61% in Q2 2024 and 60% in Q2 2023. This suggests cost of revenue has generally moved in line with sales, although top-line growth has not returned.
• Q1 2026 net income was unusually dependent on non-operating gains. The company reported $335 million of net income in Q1, largely because of $476 million in other income. Q2 net income fell to $46 million as other income turned into a $2 million expense, making Q2 a more representative view of recurring profitability.
• Revenue trends remain concerning. Quarterly revenue declined from $476 million in Q1 2023 and $462 million in Q2 2023 to $410 million in Q2 2026. The latest figure was also below $421 million in Q4 2025, indicating continued pressure on demand or renewals.
• Liquidity narrowed sharply after the debt repayment. Cash and equivalents fell to $414 million from $816 million in Q1 2026, while total current liabilities were $845 million. The current ratio was therefore below 1.0, although Teradata’s large deferred-revenue balance may provide an important operating-liability context.
• Financing activity consumed substantial cash. Q2 2026 financing outflows totaled $507 million, including the $450 million debt repayment and $40 million of buybacks. Net cash declined by $401 million during the quarter, leaving less cash available to absorb a further operating slowdown.

Overall, Teradata’s financial profile is mixed. Debt elimination, recurring operating cash flow and a stronger equity position are meaningful positives. The key risks are declining revenue, a sub-1.0 current ratio and the company’s continued reliance on cost control and capital allocation to support shareholder returns. Investors should also distinguish Q2’s recurring operating performance from Q1’s unusually large other-income benefit.