Teradata Q1 ARR Grows 3% to $1.49B as Cloud ARR Hits $686M
Teradata’s Q1 2026 ARR rose to $1.492B (up 3%) with public cloud ARR at $686M (up 13%) and recurring revenue of $400M (up 12%). Operating cash flow was $401M and free cash flow $390M, both boosted by a $359M pre-tax SAP settlement, and GAAP EPS jumped to $3.47 from $0.45.
1. Q1 2026 Financial Highlights
Total ARR reached $1.492 billion, up 3% year-over-year (2% in constant currency), while public cloud ARR climbed 13% to $686 million (12% in constant currency). Recurring revenue rose 12% to $400 million, total revenue increased 6% to $444 million, GAAP gross margin improved to 62.2% and non-GAAP margin to 63.7%, with GAAP diluted EPS at $3.47 and non-GAAP diluted EPS at $0.88.
2. SAP Settlement Boosts Cash Flow and EPS
Teradata received a $480 million gross payment from an SAP litigation settlement, resulting in a $359 million pre-tax benefit after fees and expenses and a $79 million discrete tax charge. The settlement added $2.90 per share to GAAP EPS and contributed $359 million to both operating cash flow and free cash flow in the quarter.
3. Forward Guidance and Outlook
For Q2 2026, recurring revenue is projected down 2% to flat, total revenue down 4% to 2%, GAAP EPS of $0.22–$0.26 and non-GAAP EPS of $0.53–$0.57. Full-year 2026 guidance includes ARR growth of 2%–4%, non-GAAP EPS of $2.55–$2.65, operating cash flow of $642–$662 million and adjusted free cash flow of $320–$340 million.