Teradata tops expectations on public cloud momentum and its stock surges – News

Veteran big-data analytics company Teradata Corp. delighted investors today as it reported fourth-quarter earnings and revenue that far surpassed analysts’ expectations, sending its stock higher in extended trading.

The company delivered earnings before certain costs such as stock compensation of 74 cents per share, easily beating Wall Street’s guidance of 54 cents. Revenue for the period rose 3% from a year earlier, to $421 million, well ahead of the $400.3 million analyst target. Recurring revenue increased 5%, to $367 million, and now accounts for 87% of the company’s total.

The impressive results had a noticeable impact on Teradata’s bottom line, as the company reported net income of $37 million for the quarter, up from just $25 million a year earlier. It represents a solid turnaround; two years prior, the company had been mired in the red.

President and Chief Executive Steve McMillan (pictured) also hailed the company’s strong full year results, which he said “demonstrate strong operational discipline and establish a solid foundation as we enter 2026.”

Teradata is one of the oldest data analytics companies in the business, and is credited with helping to popularize the “big data” trend that emerged during the 2000s. It sells database software and other services, with its flagship offering being the Vantage data analytics platform for business intelligence. It allows workers to process information using analytics engines such as Spark and TensorFlow.

Like many legacy software companies, Teradata is in the midst of a transition to the cloud, and in recent years it has partnered with public cloud infrastructure giants such as Amazon Web Services Inc., Google LLC and Microsoft Corp. to host its software on their servers. That transition is proceeding well, as the company showed impressive growth in terms of its public cloud annual recurring revenue, which rose 15%, to $701 million, in fiscal 2025. Total ARR increased 3%, to $1.522 billion.

With its cloud offerings gaining momentum, Teradata’s next pivot is toward artificial intelligence. The company wants to become the foundational enterprise platform for autonomous AI agents that can perform tasks on behalf of human workers with minimal supervision.

Key to that is the new Autonomous AI and Knowledge Platform that launched in September. It’s designed to support AI agents that can process information, reason and act independently. It integrates both structured and unstructured data to generate business insights that agents can take action on.

McMillan said the platform is really resonating with customers. “They recognize the strengths we have built over the decades are ideal for today’s market needs,” he said. “Our differentiated performance, scale and hybrid capabilities, supported by our AI services, are proving to be a valuable combination. We have confidence in our agentic AI-fueled future.”

That confidence was reflected in the company’s guidance. Teradata is expecting good things for the current quarter and year ahead. For the first quarter, it’s projecting earnings of between 75 and 79 cents per share, well ahead of the 67-cent-per-share consensus. For the full year, it’s looking for a profit of between $2.55 and $2.65 per share, versus expectations of $2.50 per share.

Teradata has also forecast total ARR growth of between 2% and 4% in fiscal 2026, and free cash flow of between $310 million and $330 million. Investors liked what they saw, as Teradata’s stock surged more than 13% after-hours, erasing most of the losses it has endured in the year to date. As a result, the stock is now down just 3% so far this year.

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