Abstract
Teradata will report fiscal Q4 2025 results on February 10, 2026 Post Market, and the preview below consolidates market forecasts and company indications for revenue, margins, net income, and EPS, alongside recent analyst positioning and key fundamental swing factors.Market Forecast
- Consensus for the current quarter points to revenue of $400.62 million (down 3.45% year over year), with estimated adjusted EPS of $0.56 and EBIT of $81.40 million (up 18.08% year over year). Where disclosed, the company’s model suggests a continued high gross margin profile and a stable-to-improving net margin versus last year; YoY comparisons indicate moderate EPS expansion supported by cost discipline and mix. - Recurring revenue remains the core of the model, with the business mix highlighting subscription and services resilience and a managed transition in license/product. The most promising vector remains recurring revenue, supported by consumption-driven cloud deployments and attached services, although absolute growth is expected to be modest in the near term.Last Quarter Review
- Teradata’s prior quarter delivered revenue of $416.00 million (down 5.45% YoY), a gross profit margin of 61.30%, GAAP net profit attributable to shareholders of $40.00 million with a net profit margin of 9.62%, and adjusted EPS of $0.72 (up 4.35% YoY). - Profitability inflected positively as net income rose on improved mix and cost controls, driving quarter-on-quarter net profit growth of 344.44%. - Main business highlights: Recurring revenue reached $366.00 million, consulting services delivered $47.00 million, and licenses and products contributed $3.00 million; the revenue structure underscores an ongoing pivot to recurring revenue as the primary engine.Current Quarter Outlook (with major analytical insights)
Main business: Recurring revenue and services stability
The company’s main business mix is anchored by recurring revenue, which totaled $366.00 million in the prior quarter and comprised the vast majority of company sales. This foundation supports margin visibility and predictability as more customers adopt subscription and usage-based contracts. For the quarter to be reported, the revenue estimate of $400.62 million implies a sequential downtick from the prior period but reflects normalization after a stronger consulting contribution and timing differences in renewals. Management’s margin framework points to a durable gross profit margin in the low 60.00% range, while net margin resilience hinges on operating expense containment and mix. As recurring revenue remains the largest component, we expect stable cash conversion dynamics and a limited working-capital drag, helping sustain adjusted EPS near the $0.56 estimate despite top-line softness.Most promising business: Cloud and consumption-led recurring revenue
The strongest structural opportunity lies in the cloud and consumption-led recurring revenue stream embedded within the broader recurring category. This strategy allows customers to scale usage and expand workloads, often tied to analytics modernization and migration programs. Although the current quarter’s revenue estimate indicates a 3.45% YoY decline for total revenue, the recurring base is expected to hold share within the mix, mitigating volatility in license/product. As consumption ramps are typically staggered, near-term revenue recognition can be uneven; however, trailing gross margin of 61.30% and prior-quarter EBIT outperformance suggest that favorable unit economics still apply. Should the company capture incremental workload expansion or accelerate cloud migrations among large enterprises, the incremental gross profit drop-through could support EBIT outperformance relative to the $81.40 million estimate and add upside risk to the $0.56 EPS forecast.Key stock-price swing factors this quarter
Investors are likely to focus on the trajectory of recurring revenue growth and any commentary on net expansion rates, which will set the tone for fiscal 2026 pipeline confidence. A second swing factor is operating leverage; the prior quarter’s 9.62% net margin and a 344.44% quarter-on-quarter net profit change highlight sensitivity to cost management and mix, meaning even modest top-line variance could produce outsized EPS variability. A third swing factor is license/product contribution, which was $3.00 million last quarter; any rebound here could ease the YoY revenue decline, but a continued de-emphasis would keep overall growth modest while supporting margin mix. Finally, guidance for subscription conversions and multi-year commitments will influence how quickly revenue stabilizes and whether EBIT growth of 18.08% YoY proves conservative.Analyst Opinions
Most recent institutional commentary over the last six months skews cautiously constructive, with a majority of previews anticipating in-line to slightly better profitability against modest revenue pressure, effectively balancing top-line caution with margin confidence. Analysts emphasize the durability of the recurring revenue base and margin expandability through disciplined operating expense management, aligning with the estimate trajectory for $81.40 million EBIT and $0.56 EPS. Several high-profile previews note that downside to revenue appears manageable given the subscription mix, while potential upside exists if cloud consumption accelerates or consulting recovers from a seasonally lighter period.The majority stance expects limited multiple expansion until revenue re-acceleration becomes clearer, but recognizes that the company’s profitability mechanics are improving as indicated by prior-quarter performance and current-quarter EBIT growth forecasts. This translates into a view that risk-reward hinges on commentary around consumption trends, renewal timing, and cross-sell momentum within the installed base. Overall, the dominant narrative is that modest revenue softness is likely already reflected in expectations, leaving room for EPS to meet or slightly exceed the $0.56 benchmark if cost discipline and mix persist.
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