TDC 10-K & 10-Q changes, risk factors and insider trading

As part of our business strategy,transformation, we continue to dedicate a significant amount of resources to our R&D efforts in order to maintain and advance our competitive position. However, we may not receive significant revenues from these investments for several years, if at all. R&D expenses represent a significant portion of our discretionary fixed costs. Please see Item 1. Business for a description of our strategy, transformation efforts, product offerings and services, and R&D and innovation efforts, including for our autonomous AI and knowledge platform and data and analytics capabilities.

Unanticipated delays or accelerations in our sales cycles makes accurate estimation of our Total ARR,Annual Recurring Revenue ("ARR"), Public Cloud ARR, and revenues difficult, and have resulted in, and could in the future result in, significant fluctuations in our quarterly operating results and have impacted, and could in the future impact, our ability to achieve any financial guidance and forecasts that we may provide.

Our business has substantially shifted from a traditional, perpetual pricing and revenue model to a subscription-based model in which less revenue is recognized upfront at the time the customer enters into a transaction. The pace and extent to which customers will continue to purchase, consume and renew our offerings on a subscription basis is variable and, therefore, has impacts on our results and operations. We also have flexible pricing options for our cloud customers, including consumption-unit based, "pay as you go" pricing. Under such a pricing model, we generally recognize revenue based on consumption. To the extent that customers opt for such a flexible pricing model, we may not be able to accurately forecast the timing of customer consumption of our offerings. In addition, the needs of our customers have quickly evolved from a cloud-only approach to considering hybrid platforms or remaining on-premises. As a result, our actual results may differ from our projections, particularly for Public Cloud ARR and Total ARR. Furthermore, our on-premises subscription arrangements may provide the customers with the right to cancel our agreement upon certain notice periods, which we may change in the future. Such arrangements may impact the timing of revenue recognition for these customers and result in fluctuations in our quarterly operating results.

Despite robust data security measures and skilled computer programmers, nation statenation-state sponsored cyber attackers (includingand fromhackers countries such as Iran, China, Russiadeploying and certain Eastern European nations)advanced and hackerspersistent threats may be able to penetrate our network security or that of our third-party providers and misappropriate or compromise our intellectual property or other confidential information or that of our customers, create system disruptions or cause shutdowns. They may also be able to develop and deploy viruses, worms, and other malicious software programs that attack our systems or products or otherwise exploit security vulnerabilities of our systems or products. In addition, phishing-scheme-perpetrators may be able to lure employees or contractors into providing such perpetrators with information that may enable them to avoid some of our network security controls or those of third-party providers which could result in system disruptions or a loss of confidential and proprietary information.

If our existing customers fail to renew, or cancel,cancel their subscription license arrangements or support agreements, or if customers do not renew on terms favorable to us, our business could be adversely affected.

Teradata’s platform offerings have been expanded to include a variety of subscription options, which impact the timing of when revenues are recognized and related cash flows are collected. The IT industry generally has been experiencing increasing pricing pressure from customers when purchasing or renewing support agreements. As some of our on-premises customers migrate all or a portion of their data analytics solutions to a cloud-basedcloud- environment,or hybrid based platform, some customers have selected a cloud-based offeringofferings of one of our competitors and existing customers may do so in the future. As a result, such customers have cancelled all or a portion of their arrangements with us and may continue to do so in the future. While customer cancellations we have had to date have not been material to our business, they could become material in the future. Mergers and acquisitions in certain industries that we serve could result in a reduction of the software and hardware being supported and put pressure on our subscription and support terms with customers who have merged. Given these factors, there can be no assurance that our current customers will migrate from on-premises to the cloud with Teradata, renew their subscription and/or support agreements, or agree to the same terms when they renew, which could result in our reducing or losing subscription and/or support fees which could adversely impact operating results.

Our development, marketing, and distribution plans depend in part on our ability to form strategic alliances with third parties that have complementary offerings, software, services, and skills. Our strategic partners include cloud service providers, consultantsalliance partners, system integrators and system integrators,consultants, software and technology providers, hardware support service providers, and indirect channel distributors in certain countries. These relationships involve risks, including our partners changing their business focus, entering strategic alliances with other companies, being acquired, including by our competitors, failing to meet regulatory requirements, data privacy or other laws, or performance criteria, improperly using our confidential information, exposing our data and/or customer information through the transfer of data to the cloud or otherwise or through other security breaches, or their market reputation deteriorating. If we fail to maintain or expand our relationships with strategic partners or if we are forced to seek alternative technology or technology for new solutions that may not be available on commercially reasonable terms, our business may be adversely affected.

As part of our strategy, our relationships with public cloud service providers, Amazon Web Services ("AWS"), Google Cloud, and Microsoft Azure, cancould impact our business. Our strategic relationships with these cloud service providers for our cloud offerings on their platforms require significant investments to ensure that our solutions are optimized in these cloud environments. In addition, there are geographies in which we operate that utilize alternative, local cloud-platform service providers where AWS, Google Cloud, and Microsoft Azure are inaccessible or not available. The cloud service providers maintain relationships with certain of our competitors, and our competitors may in the future establish relationships with additional competing cloud data platform providers. Furthermore, cloud service providers do and may in the future provide platforms that compete with VantageCloudour and VantageCloud Lake.platform. Any of these cloud service providers may decide to modify or terminate our business relationship, change the terms of any agreement or pricing terms that we have with them, or may otherwise enter into preferred relationships with one or more competing cloud data platform providers. If we are unsuccessful in meeting performance requirements or obtaining future returns on these investments, or if we are otherwise unable to maintain adequate relationships with any of these cloud service providers, our financial results may be adversely impacted.

Third-party vendors provide important elements to our solutions; if we do not maintain our relationships with these vendors or if these vendors cease to be going concerns, interruptions in the supply of our offerings may result. There are some components of our solutions that we purchase from single sources due to price, quality, technology or other reasons. For example, we rely on Flex as a key single source contract manufacturer for ourcertain on-premises hardware systems.offerings. In addition, we buy servers from Dell Technologies Inc. andInc., storage disk systems from NetApp, Inc.Inc., and graphics processing units ("GPU") from NVIDIA. Some components supplied by third parties may be critical to our solutions, and several of our suppliers may terminate their agreements with us without cause with 180-days' notice. In addition, we rely on certain vendors for hardware support services and parts supply. If we were unable to purchase necessary services, parts, components or offerings from a particular vendor and had to find an alternative supplier, our shipments and deliveries could be delayed. Also, quality issues, commodity, tariffs, transportation, wage, or other inflationary pressures, a disruption in our supply chain or the need to find alternative suppliers could impact the costs and/or timing associated with procuring necessary offerings, components and services. In any case, our operations could be adversely impacted. Similarly, our suppliers’ offerings and services have certain dependencies with respect to their own supply chain networks, and supply and/or inflation issues among our suppliers may also adversely impact our business.

In 2023, Teradata introducedhas aevolved newits brand identity,and messaging, including ourits messagingemphasis aroundon trustedautonomous AI and knowledge-based data and trustedanalytics AI. With this brand we striveofferings, to bereflect modern,changes innovative,in customer needs and reflectivemarket ofconditions. our vision for the future. Our updated brand is designed to highlight Teradata’s role as a leader in AIRecognition and hybrid cloud data and analytics. We believe that recognition and the reputation of our brand isare keyimportant to our success, including our ability to retain existing customers as well ascustomers, attract new customers and partners.partners, and achieve our growth expectations in the data management and analytics market. While we leverage our decades of experience in data analytics and database management services, we believe we have evolvedcontinue to provideevolve the modernour offerings customersto need.address Thesecustomer includeneeds theacross cloud-nativecloud, architecture of Teradata VantageCloud Lake, the end-to-end pipeline of AI/ML capabilities in ClearScape Analytics, our on-demand AI/ML engine in the cloud that delivers a completely self-service experience with Teradata AI Unlimited,hybrid, and ourAI-enabled commitmentenvironments. to providing a platform compatible with OTFs to provide an open and connected ecosystem offering to our customers. The failure forIf the market todoes not recognize our brand attributes or forif there to beare misperceptions in the market regarding our autonomous AI, cloud, hybrid, AI, or other capabilities could negatively impactcapabilities, our ability to upgrade existing on-premises customers to our hybrid cloud-based solutions,customers, drive expansion/ or consumption growth, and/or acquire new customers forcould ourbe on-premisesadversely and hybrid cloud businesses.affected. In addition, damage to the reputation of our brand could result in, among other things, customer cancellations or non-renewals, lowerchallenges employeein retentionattracting and productivity,retaining employees, vendor relationship issues, and investorincreased scrutiny from investors and other stakeholder scrutiny,stakeholders, any of which could materially affect our revenue and profitability.

Increases in the costcost, or reduced availability, of components used in our product, and/or increases in our other costs of doing business, have, and could continue to, adversely affect our profit margins.

Our cloud offerings are dependent on cloud service providers and require significant investments to ensure that our solutions are optimized in these environments. Some of our key hardware components are assembled and configured by Flex. Flex also procures a wide variety of components used in the assembly process on our behalf. Although many of these components are available from multiple sources, we utilize preferred supplier relationships to better ensure more consistent quality, cost and delivery. Components used in our products require commodities as part of their manufacturing. In addition, we have a global employee population. As such, increased costs and/or commodity and other inflation, and/or increased tariffs on certain items imported from foreign countries have affected our profit margins and could continue to result in declines in our profit margins. Historically, we have mitigated certain cost increases, in part, by increasing prices on some of our products and collaborating with suppliers, reviewing alternative sourcing options, and engaging in internal cost reduction efforts, all as appropriate. However, we may not be able to fully offset increased costs. Further, if any price increases we adopt are not accepted by our customers and the market, our net sales, profit margins, earnings, and market share could be adversely affected.

Challenges with the design and implementation of our new enterprise resource planning ("ERP") system could adversely impact our business and operations.

Disruptions could occur as a result of supply chain challenges; decreases in work force availability; availability of natural resources availability; natural disasters;disasters, including inclement weather, includingwhich ascan be exacerbated by global climate change; man-made disasters; or other external events, such as terrorist acts or acts of war, pandemics and/or epidemics, boycotts and sanctions, widespread criminal activities, or protests and/or social unrest, or other events, atat, or in proximity toto, any of our facilities or those of our customers, vendors, data warehouses, distribution channels, and public cloud service providers. Such events and disruptions could make it difficult or impossible to deliver products and services to our customers or perform critical business functions and could adversely affect our business.

Our headquarters and data centerlab are located in California, a region with a history of seismic activity, wildfires and an extreme risk of drought, flooding, and vulnerability to future water scarcity. As such, we could experience disruptions as a result of natural disasters and/or extreme weather conditions, including sea-level rise, earthquakes, tornadoes, hurricanes, earthquakes, floods, tsunamis, typhoons, drought, and fire, that could impact our business and operations. Such events could pose physical risks to our facilities and data center,lab, result in power outages and shortages, and/or result in failures of global critical infrastructure, telecommunication and security systems, natural resource availability, such as energy and water sources, employees’ ability to work, availability of supply chain and logistics, and the additional costs to maintain or resume operations such as costs to repair damages to our facilities, equipment, infrastructure, and business relationships, each of which could negatively impact our business and operations. Furthermore, environmental regulations are increasing in their frequency of issuance and applicability to our company, particularly due to our operations in California and the European Union. Such regulations may result in changes in the demand for resources that could adversely impact the availability or cost of goods and services, including natural resources necessary to run our business.

The world economy, including our business, realized significant disruption during the COVID-19 pandemic. The occurrence of future global pandemics and/or regional epidemics may disrupt our business in the future. The extent to which our business may be affected in the future is highly uncertain and cannot be predicted as it would be dependent on factors such the duration and scope of the pandemic; governmental, business, and individuals' actions in response to the pandemic; and the impact on economic activity such as financial market instability.

We have completedundertaken, and may continue to undertake, reorganization efforts in connection with our business transformation and webroader maycost continueoptimization to complete reorganization activityinitiatives in furtherance of our strategy. In addition, fromFrom time to time, we may wind down certain business activities and/or facilities, cease doing business in certain geographic areas, and/or perform other organizational reorganization projects in an effort to reduce costs and optimize operations. For example, in 2022, we ceased our operations in Russia to comply with sanctions imposed as a result of Russia’s invasion of Ukraine and in 2023 we ceased our direct operations in China. In addition, on August 5, 2024, we announced thatthe werealignment had realignedof our sales function and hadthe initiatedinitiation of global restructuring and cost reduction actionsactions, elements of which continued into 2025. Reorganization activities, including workforce reductions, leadership and management transitions, and changes to optimizeorganizational operations, reduce non-revenue generating expenses, and drive efficiencies for long-term growth and profitability. Reorganization activitiesstructures, involve risks as theyand may divert management's attention from our core businesses, increase expenses on a short‑term basisbasis, reduce revenues, or reducedisrupt revenues.execution of our strategy. We may also experience a loss of continuity, loss of accumulated knowledge, or loss of efficiency during such transitional periods, all of which may negatively impact our business, financial condition, operating results, and cash flows.

Our business and results of operations are affected by international, national and regional economic conditions. In particular, the IT industry in which we operate is susceptible to significant changes in the strength of the economy and the financial health of companies and governmental entities that make spending commitments for new technologies. Accordingly, adverse global economic, inflationary, recessionary, and market conditions, including in certain economic sectors in which many of our customers operate (such as retail,financial services, healthcare, manufacturing, financial services or government), may adversely impact our business. For example, adverse changes to the economy could impact the timing of purchases by our current and potential customers or the ability of our customers to fulfill their obligations to us. In addition, decreased or more closely scrutinized spending in our customers’ businesses and in the industries we serve, may adversely impact our business. Uncertainty about future economic conditions may make it difficult for us to forecast operating results and to make decisions about future investments. In addition, our inability or failure to quickly respond to inflation and the resulting buying behaviors of our customers could harm our business, results of operations and financial condition. Our success in periods of economic uncertainty may also be dependent, in part, on our ability to reduce costs in response to changes in demand, inflation or other activity.

Internal control over financial reporting, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control objectives will be met. These inherent limitations include system errors, the potential for human error and unauthorized actions of employees or contractors, inadequacy of controls, temporary lapses in controls due to shortfalls in transition planning and oversight of resources, internal control failures as a result of the implementation and use of our new ERP system, and other factors. Consequently, such controls may not prevent or detect misstatements in our reported financial results as required under rules of the SEC and the New York Stock Exchange ("NYSE") rules,, which could increase our operating costs or impair our ability to operate our business. Controls may also become inadequate due to changes in circumstances, and it is necessary to replace, upgrade or modify our internal information systems from time to time. In addition, unforeseen risks may arise in connection with financial reporting systems, including with our new ERP system, due to inefficient business processes, business process reengineering projects, or changes in accounting standards.

Increased scrutiny from governments, investors, rating agencies, customers, and other stakeholders regarding our environmental, social, and governance ("ESG") practices, commitments, goals and performance and our inability to achieve any ESG goals we establish could impose additional costs, expose us to new risks, or negatively impact our reputation.

The ESG regulatory landscape is constantly changing, with regulatory requirements and stakeholder expectations continuously evolving.evolving Asacross amultiple result,jurisdictions. ourOur ability to meet program goals and objectives may be challenged by a variety of factors, including the complexity of implementing ESG initiatives across our operations and supply chain, unforeseen economic or operational constraints, and shifts in market dynamicsdynamics, orand evolving regulatory frameworks.frameworks and reporting standards. We are workingcontinue to align our reportingdisclosures with emergingevolving ESGframeworks disclosureand frameworks,regulatory newrequirements, regulations,such includingas those passedadopted in the European Union and the state of California,California. However, uncertainty remains regarding the timing, scope, and potentialenforcement newof these regulations, which could impact our compliance obligations, disclosure requirements,processes whileand wereporting also seek to report timely on progress toward our ESG objectives.practices. We have established ESG goals,goals and we expect to continue todoing establishso. additional ESG goals in which our ESG goals and/or our ESG programOur performance may be reviewedevaluated by third-party providersorganizations, such asincluding rating agencies whoand sustainability indices, whose assessments may unfavorablynot evaluatealways reflect our ESGinitiatives initiatives.favorably. If we fail, or are perceived to fail, to meet our stakeholders’ and/or raters’ expectations or regulatory requirements, we could be exposed to increased costs associated with compliance or operational changes, risk of litigation, difficulty in attracting and retaining employees, negative investor sentiment, and an adverse impact on our reputation.

Our cloudplatform and service offerings are designed to offerincorporate AI/ML capabilities, which exposes us to an emerging and uncertain regulatory environment and rapidly changing technologytechnology, whereand any inabilityfailure to comply with anyapplicable suchrequirements regulations maycould result in reputational harm, liability and disruption to our business operations.

The AI/ML regulatory environment is rapidly evolving, and it is difficult to predict the impact thesuch evolving regulatory landscapechanges may have on our business, results of operations and financial condition. Teradata’sEvolving platformsAI-related andregulations ClearScapecould Analyticsrequire are designedchanges to deliverour harmonizedAI-enabled data,features AI/ML,or andplatforms, fasteror innovationlimit tocustomer facilitateuse betterof decision-making.our AI/MLofferings, technologiespotentially aredelaying rapidlydevelopment, changing,increasing andcosts, withor thereducing evolvingdemand. regulatoryIn environment,addition, we may be subject to increased regulatory requirements,requirements asand wellrelated asrisks, other risks such asincluding data privacy concerns, intellectual property disputes, and exposure to litigation.

The IT industryindustry, particularly for data analytics and AI solutions, is intensely competitive and evolving, and competitive pressures could adversely affect our pricing practices or demand for our offerings and services.

We operate in the intensely competitive IT industry, particularly for data analytics and AI solutions, which is characterized by rapidly changing technology, evolving industry standards and models for consuming and delivering business and IT services, frequent new product introductions, and frequent price and cost reductions. In general, as a participant in the data analytics and AI solutions market, we face:

Our competitors include established companies within our industry, including Amazon,AWS, Google,Databricks, IBM,Google Oracle,Cloud, Microsoft,Microsoft Azure, Snowflake, and SAP,others, many of which are well-capitalized companies with widespread distribution, brand recognition and penetrationa ofstrong ourpresence productin platformsthe andmarkets servicewe offerings.serve. The significant purchasing and market power of these larger competitors, which have greater financial resources than we do, could allow them to surpass our market penetration and marketing efforts to promote and sell their offerings and services. In addition, many other companies participate in specific areas of our business, such as enterprise applications, analytic platforms andplatforms, business intelligence software.software and AI enablement. In some cases, we may partner with a company in one area of our business and compete with them in another. In particular, in delivering our Teradata VantageCloud offerings in a cloud environment to certain of our customers, we partner with each of Amazon Web Services, Google,Google Cloud, and Microsoft,Microsoft Azure, which are public cloud service providers. The status of our business relationships with these companies can influence our ability to compete for analyticdata dataanalytics and related AI-enabled solutions opportunities in suchthese areas. In addition, we see additional competition from both established and emerging cloud-only data vendorsvendors, AI-focused companies, and open-source providers. Failure to compete successfully with new or existing competitors in these and other areas could have a material adverse impact on our ability to generate additional revenues or sustain existing revenue levels.

Federal, state and foreign governments continue to adopt new, or modify existing, laws and regulations addressing data privacy and the collection, processing, storage, transfer and use of data. Some of these impose new obligations directly on the Company as both a data controller and a data processor, as well as on many of our customers. New laws also require us to evaluate any required changes to our solutions and services on an ongoing basis to enable Teradata and/or our customers to comply with the new legal requirements and may also increase our potential liability through higher potential penalties for non-compliance. Further, lawsproposed suchand as theevolving European Union’sprivacy proposedand e-Privacyelectronic Regulationcommunications regulations are increasingly aimed at the use of personal information for marketing purposes, and the tracking of individuals’ online activities. These new or proposed laws and regulations are also subject to differing interpretations which may be inconsistent among jurisdictions. These and other requirements could reduce demand for our solutions and services, require us to take on more onerous obligations in our contracts, restrict our ability to store, transfer and process data or, in some cases, impact our ability to offer our solutions and services in certain locations or our customers' ability to deploy our solutions globally. For example, existing and developing laws regarding how companies transfer personal data across borders can be unpredictable and subject to legal challenge and could result in further limitations on the ability to transfer data across borders, particularly if governments are unable or unwilling to create new, or maintain existing, mechanisms that support cross-border data transfers. Additionally, certain countries have passed or are considering passing laws requiring local data residency. The costs of compliance with, and other burdens imposed by, privacy laws, regulations and standards may limit the use and adoption of our solutions and services, reduce overall demand for our solutions and services, make it more difficult to meet expectations from or commitments to customers, lead to significant fines, penalties or liabilities for noncompliance, or slow the pace at which we close sales transactions, any of which could harm our business.

Our employees and access to specialized talent are critical to our success. Our future success dependsdepends, in part, on our ability to attract, retain, develop, and motivate the services of senior management and other key personnelpersonnel, including in all areas of our Company, includingproduct engineering and development, marketinggo-to-market functions, information security and salesother professionals,roles requiring expertise in AI/ML and consultants.cloud-based technologies. Competition for highly skilled personnel andhas acquiredintensified talentas incompanies the current environment, specifically the IT industry is intense. We have experienced, and may continueseek to experience, voluntary workforce attrition, including the loss of senior management and key personnel, in part due to the highly competitive job market in our industry. Furthermore, we are required to attract and retain talent with expertise in cloud-based technologies andaccelerate AI/ML capabilities,adoption. particularlyAs witha respectresult, to our engineering, development and services teams. No assurancethere can be madeno assurance that key personnel will remain with us, and it may be difficult and costly to replace such employeespersonnel and/or obtainhire qualified talent who are not employees. WeWhile we have implemented apolicies, including remote workingand policyhybrid work arrangements to expandbroaden our talent poolpool, forthese keymeasures personnelmay andnot fully mitigate competitive pressures. If we cannotare predict the longer-term workforce implications. Our failureunable to execute onkey initiatives or successfully hire, retain, and replace key personnel, our keycompetitiveness, cultureinnovation initiatives,capabilities, hire,and retainbusiness or replace our key personneloperations could havebe amaterially materialand adverseadversely impact on our business operations.affected.

In the normal course of business, we are subject to proceedings, lawsuits, claims and other matters, including those that could relate to the environment, health and safety, employee benefits, export controls and trade compliance, shareholder matters, intellectual property, a variety of local laws and regulations, and other regulatory compliance and general matters. See "Note 10-Commitments and Contingencies" in the Notes to Consolidated Financial Statements in this Annual Report. Because such matters are subject to many uncertainties, their outcomes are not predictable. There can be no assurances that the amounts required to satisfy alleged liabilities from such matters will not impact future operating results.

In addition, we are subject to diverse and complex laws and regulations, including thoseregulations relating to technology,technology (including AI/ML,ML), corporate governance, ESG reporting, environmental protection, privacy and data privacy,protection, taxation, public disclosure, and reporting, which are rapidly changingevolving and subject to possible changes in the future.change. From time to time, we may conduct internal investigations to ensure compliance with such laws and regulations, the costs or results of which could impact our financial results. In addition, we may be subject to unexpected costs in connection with new public disclosure or other accounting or regulatory requirements that are issued from time to time. Laws and regulations impacting our customers, such as those relating to privacy, data protection and digital marketing, could also impact our future business. Because we do business in the government sector, we are generally subject to audits and investigations which could result in various civil or criminal fines, penalties or administrative sanctions, including debarment from future government business, which could negatively impact the Company’s results of operations or financial condition.

As a technology company, our intellectual property portfolio is crucialcritical to supporting our continuingknowledge abilityplatform tofor beautonomous a leading hybrid cloud dataAI and analyticsrelated platform provider for trusted AI.offerings. We strive to enhance and, as much as is legally and reasonably possible, protect our proprietary intellectual property rights through patent, copyright, trademark and trade secret laws, as well as through technological safeguards and the actions of our people. These efforts include protection of the offerings and application, diagnostic and other software we develop.

Where gaps exist in our intellectual property protection, even if such gaps are reasonable, our business could be materially adversely impacted. We may be unable to prevent third parties from using our technology without our authorization or independently developing technology that is similar to ours, particularly in those countries where the laws do not protect our proprietary rights as fully as in the United States (such as Iran, China and certain Eastern European countries whothat may use Nation State Sponsored Advanced Persistent Code ("NSSAPC") to advance their own industries). With respect to inventions for which we choose to file patent applications, we may not be successful in securing patents for these claims, and our competitors may already have applied for patents that, once issued, will prevail over our patent rights or otherwise limit our ability to sell our offerings.

Tax rules may change in a manner that adversely affects our future reported results of operations or the way we conduct our business. Further changes in the tax laws could arise as a result of the base erosion and profit shifting project that was undertaken by the Organization for Economic Co-operation and Development ("OECD"). The OECD, which represents a coalition of member countries, recommended changes to numerous long-standing tax principles impacting how large multinational enterprises are taxed. In particular, the OECD has issued its guidance on the Global Anti-Base Erosion rules, with the purpose of ensuring multinational companies pay a 15% global minimum tax on the income generated in each of the jurisdictions where they operate in, referred to as "Pillar Two." Many jurisdictions, including several European Union members and G20 countries, have enacted Pillar Two as of January 1, 2024. Pillar Two did not have a material impact to our effective tax rate in 2025 and 2024. We are continuing to monitor developments and evaluating the impacts these new rules will have on our future tax rate, including eligibility to qualify for the safe harbor rules.

In addition, we operate in certain jurisdictions that utilize foreign currency controls that may temporarily restrict access to foreign currency which results in excess cash in the jurisdiction that cannot be remitted outside of the country and is, therefore, subject to foreign currency exchange rate risk. For example, the Company has operations in Argentina. Commencing in October 2023 and continuing throughout 2024,2024 and 2025, the Company began entering into Blue Chip Swap transactions (a foreign exchange mechanism which effectively results in a parallel U.S. dollar exchange rate) in order to remit cash from its Argentine operations and such action resulted in a pre-tax loss on investment of $1 million, $4 million and $13 million during 2025, 2024 and during 2023, respectively.

•Revenue of $1,750$1,663 million decreased by 5% in 20242025 as compared to 2023,2024, with a 1%2% decrease in recurring revenue. Foreign currency fluctuations had a 2% adverseno impact on total revenue and a 2%1% adversepositive impact on recurring revenue compared to the prior year. In addition to adverse foreign currency impact, theThe recurring revenue decline was primarily driven by a decrease in revenue from on-premises solutions, which was offset in part by an increase in Public Cloud revenue. Perpetual software licenses, hardware and other revenue decreased by 49%26% and consultingConsulting servicesServices revenue decreased by 16%.19%. Revenues from perpetual software licenses, hardware and other decreased primarily due to our strategic shift towards recurring revenue. The decline in consulting service revenue was additionally due to our focus on higher-margin engagements and purposeful decrease in consultingConsulting servicesServices given the development of our strategic partner ecosystem.

•Gross profit as a percent of revenue was 59.4% in 2025, a decrease from 60.5% in 2024, a slight decrease from 60.8% in 2023, primarily due to a higher mix of Public Cloud revenue, and declines in Consulting Services revenue outpacing associated cost reductions. These factors were partially offset by an improvement in Public Cloud margins year-over-year.

•Operating expenses in 20242025 decreased by 9%8% as compared to 2023,2024, primarily driven by our cost discipline initiativesinitiatives, primarily within selling, general and aadministrative favorable("SG&A") impact from foreign currency fluctuations.expenses.

•Operating income was $205 million in 2025, down from $209 million in 2024, up from $186 million in 2023.2024.

•Net income was $114$130 million in 20242025 versus net income of $62$114 million in 2023,2024, primarily due to lower operatingexpenses expensesfrom foreign currency exchange rate fluctuations, and lower income taxinterest expense. Diluted net earnings per share was $1.16$1.35 in 20242025 compared to diluted earnings per share of $0.61$1.16 in 2023.2024.

20242025 compared to 20232024 - Total revenue decreased 5% in 2024,2025, which included a 2% negativeno impact from foreign currency exchange rate fluctuations. Recurring revenue declined 1%2% in 2024,2025, which included a 2%1% negativepositive impact from foreign currency exchange rate fluctuations. Within recurring revenue, a decline in revenue from on-premises solutions was partially offset by growth in Public Cloud revenuerevenue, asconsistent wewith continuedprior-year to migrate customers to the cloud.trends.

As a portion of our operations and revenue occur outside the United States, and in currencies other than the U.S. dollar, we are exposed to fluctuations in foreign currency exchange rates. Based on currency rates as of December 31, 2024,2025, Teradata is estimating a 1.5%-to-2.0%0.25%-to-0.75% negativepositive impact from currency translation on our 20252026 full-year total revenues.

Total ARR decreasedincreased 6%3% versus the prior year, with declines in Subscription, and Maintenance and Software upgrade rights ARR off-set in part by growth in Public Cloud ARR. Foreign currency exchange rate fluctuations had a negativepositive 2% impact on total ARR. Our overall Total ARR declineincrease wasreflects primarilymeaningful driven by on-premises erosions, elongated deal closing cycles and lower on-premises expansion activity, and was partially offset by growthimprovement in Publiccustomer Cloudretention ARR.as compared to the prior year.

Public Cloud ARR increased 15% versus the prior year primarily due to on-premises customers migrating to Teradata VantageCloud along with a net expansion rate of 117%.108%, as well as on-premises customers migrating to Teradata's cloud platform. Foreign currency exchange rate fluctuations had a negativepositive 3%2% impact on Public Cloud ARR. Public Cloud ARR growth and the Cloud Net Expansion rate were primarily driven by customer demand for our differentiated offerings, resulting in new workloads for both migrations and expansions. Subscription ARR decreased 12%4% in 20242025 from the prior year primarily due to migrations from on-premises to Public Cloud, and included a 2%3% adversepositive impact from foreign currency exchange rate fluctuations.

20242025 compared to 20232024 - The slight decrease in gross profit as a percentage of revenue was primarily driven by a higher mix of Public Cloud revenue, offset in part by improving Public Cloud gross profit rates year-over-year.

Recurring gross profit as a percentage of revenue was down from the prior year, primarily because of the negative gross profit rate impact onfrom increased Public Cloud revenue, partially offset by improved Public Cloud gross profit rates year-over-year.

The decreaseincrease in perpetual software licenses, hardware and other gross profit as a percentage of revenue was primarily driven by deal mix and a higher ratio of perpetual hardware to software revenue as compared to prior year as the vast majority of all customers have transitioned to our subscription-based offerings, consistent with our overall strategy.

R&D expenses decreased in 20242025 as compared to the prior year. R&D expenses were impacted by continued cost discipline initiatives as compared to the prior year.year, offset in part by targeted investments around new market opportunities.

We intend to continue investing in R&D areas that we anticipate will generate growth, such as technologies that support AI/ML and OTF,ML, including for on-premises environments.

Effective on January 1, 2022, the U.S. tax law changed to require that R&D expenses be capitalized and amortized for tax purposes under Internal Revenue Code Section 174; as a result of this law change, weWe recognized approximately $2 million of tax expense related to global intangible low-taxed income ("GILTI") in our marginal effective tax rate for 20242025 and approximately $2 million for 2023.2024. We expect that a majority of our foreign earnings will be repatriated to the U.S.

On August 5, 2024, Teradata announced that it realigned its sales function and initiated global restructuring to optimize operations. Due to these organizational changes, Teradata now manages its business under two segments, which are also the Company’s new operating segments: (1) Product Sales and (2) Consulting Services. Teradata’s Product Sales segment represents the results for the Recurring Revenue and Perpetual Software Licenses, Hardware and Other line items and the Consulting Services segment represents the Consulting Services line item, each as disclosed in the Company’s financial statements and in the tables in this Form 10-K. As the revenue and gross margin trends for these business categories are already discussed in the sections above, there is no separate segment discussion presented here. Our segment information is presented in "Note 1414-Segment, Other Supplemental Information and Concentrations" of Notes to Condensed Consolidated Financial Statements.Statements in this Annual Report.

Teradata ended 20242025 with $420$493 million in cash and cash equivalents, a $66$73 million decreaseincrease from December 31, 2023,2024, after using approximately $215$140 million for repurchases of Company common stock during the year. Cash provided by operating activities decreasedincreased by $72$2 million to $303$305 million in 20242025 compared to 2023.2024. The decrease in cashCash provided by operating activities wasbenefited primarily due to lower billings year over year driving a decrease in deferred revenue and a lower receivables balance in 2024 as compared to the prior year. This was offset in part byfrom higher net income, adjusted for non-cash items, in 20242025 as compared to 2023.2024, as well as improved growth in deferred revenue balances, partially offset by higher receivables and lower payables balances in 2025 as compared to the prior year. Teradata used approximately $37$35 million of cash in 20242025 for reorganization activities, including the re-alignment of our go-to-market function and other activities to optimize our workforce, as compared to $43$37 million used in 20232024 for similar purposes.

Financing activities and certain other investing activities are not included in our calculation of free cash flow. In 2024,2025, we entered into Blue Chip Swap transactions in order to remit cash from our Argentine operations that resulted in a pre-tax loss on investment of $4$1 million, compared to $13$4 million of such pre-tax losses in 2023,2024, the net purchases of which are reported in other investing activities in the Consolidated Statement of Cash Flows. In 2023, other investing activities also included our strategic acquisition of Stemma Technologies. The acquisition of Stemma Technologies was not financially material. There were no other material other investing activities in 20242025 and 2023.2024.

We have two share repurchase programs that werehave been authorized by our Board of Directors:

•Our open market share repurchase program provides for the repurchase of Teradata stock periodically on an ongoing basis in open market transactions, through 10b5-1 programs, through accelerated share repurchase programs, in privately negotiated transactions, or through the use of derivative instruments, in accordance with applicable securities rules regarding issuer repurchases. The open market share repurchase program will expire on December 31, 2025. On November 1, 2021, our Board of Directors authorized an additional $1 billion for share repurchases under the open market share repurchase program. There iswas a total authority of $352$222 million remaining under the open market share repurchase program as of December 31, 2024.2025. On November 17, 2025, the Board approved the Repurchase Program authorizing the Company to repurchase up to $500 million of its common stock. The Repurchase Program became effective on January 1, 2026, does not have an expiration date, and will continue until otherwise modified, suspended, or terminated. The purchases under the Repurchase Program may be made from time to time in the open market, in privately negotiated transactions, or by other means, including through Rule 10b5-1 trading plans, in accordance with applicable securities law and other regulatory requirements. The Repurchase Program does not obligate the Company to repurchase any shares under the authorization and the timing and amount of any repurchases will depend on a variety of factors, including the price of the Company’s common stock, general business and market conditions, and other investment considerations.

Other financing activities, including net share settlement for the payroll tax liability of section 16 officers (as discussed in Item 5 of this Annual Report on Form 10-K), offset by proceeds from the ESPP and the exercise of stock options, net of tax, was a net inflow of $1 million for 2025 and a net outflow of $1 million for 2024 and a net inflow of $7 million for 2023.2024.

Long-Term Debt. On June 28, 2022, we entered into a Credit Agreement that provides for (i) a five-year unsecured term loan in an aggregate principal amount of $500 million (the "Term Loan"), and (ii) a five-year unsecured revolving credit facility in an aggregate principal amount of up to $400 million, including a $50 million sublimit for the issuance of standby letters of credit and a $50 million sublimit for swingline loans (the "Revolving Facility" and, collectively with the Term Loan, the "Credit Facility"). Our long-term debt is discussed in "Note 1212-Debt" of Notes to Consolidated Financial Statements.Statements in this Annual Report. In addition, as disclosed in "Note 99-Derivative Instruments and Hedging Activities" of Notes to Consolidated Financial Statements,Statements in this Annual Report, Teradata entered into an interest rate swap to hedge approximately 90% of the floating interest rate of the total $500 million Term Loan and a cross currency swap to hedge a portion of Euro currency exposure of its net investment in certain foreign subsidiaries.

Leases. In the normal course of business, we enter into operating and finance leases that impact, or could impact, our liquidity. Leases and minimum lease obligations as of December 31, 20242025 are described in detail in "Note 1313-Leases" of Notes to Consolidated Financial Statements.Statements in this Annual Report.

Transition tax is the remaining current payable balance recorded on our balance sheet as of December 31, 2024, of the one-time tax on accumulated foreign earnings resulting from the 2017 Tax Act. The payments associated with this deemed repatriation are being paid over seven years ending in 2025. Purchase obligations are committed purchase orders and other contractual commitments for goods and services and include non-cancelable contractual payments for fixed or minimum amounts to be purchased in relation to service agreements with various vendors for ongoing telecommunications, information technology, hosting and other services.

We also have postemployment and international pension obligations that may affect future cash flow. These items are not included in the table of obligations shown above. We are also potentially subject to concentration of supplier risk. Our hardware components are assembled primarily by Flex Ltd. ("Flex"). Flex procures a wide variety of components used in the manufacturing process on our behalf. Although many of these components are available from multiple sources, we utilize preferred supplier relationships to better ensure more consistent quality, cost, and delivery. Typically, these preferred suppliers maintain alternative processes and/or facilities to ensure continuity of supply. Given our strategy to outsource manufacturing activities to Flex and to source certain components from single suppliers, a disruption in production at Flex or at a supplier could impact the timing of customer shipments and/or Teradata’s operating results. In addition, a significant change in the forecasts to any of these preferred suppliers could result in purchase obligations or components that may be in excess of demand. Postemployment and pension obligations are described in detail in "Note 8—Employee Benefit Plans" in the Notes to Consolidated Financial Statements.Statements in this Annual Report.

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require significant management judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. The significant accounting policies and estimates that we believe are the most critical to aid in fully understanding and evaluating our reported financial results are discussed in the paragraphs below. Teradata’s senior management has reviewed these critical accounting policies and related disclosures with the Audit Committee of Teradata’s Board of Directors. For additional information regarding our accounting policies and other disclosures required by GAAP, see "Note 1—Description of Business, Basis of Presentation and Significant Accounting Policies" in the Notes to Consolidated Financial Statements.Statements in this Annual Report.

We review the standalone selling price on a periodic basis and update it, when appropriate, to ensure that the practices employed reflect our recent pricing experience. We maintain internal controls over the establishment and updates of these estimates, which includes review and approval by management. For the year ended December 31, 20242025 there was no material impact to revenue resulting from changes in the standalone selling price, nor do we expect a material impact from such changes in the near term. Refer to Notes"Note 11-Description of Business, Basis of Presentation and 3Significant Accounting Policies" and "Note 3-Revenue from Contract with Customers" in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for discussion of our revenue recognition policies.

We issue service-based and performance-based restricted share units. We measure compensation cost for service-based restricted share unit awards at fair value and recognize compensation expense over the service period. Our performance-based restricted share units vest only if specific performance conditions are satisfied. The number of shares that will be earned pursuant to our performance-based restricted share unit awards will vary based on actual performance. No shares will vest if the thresholdcertain objectives are not met. In the event the objectives are exceeded, additional shares will vest up to a maximum payout. The cost of our performance-based restricted share awards is expensed over the performance period based upon management’s estimate and analysis of the probability of meeting the performance criteria. Because the actual number of shares to be awarded is not known until the end of the performance period, the actual compensation expense related to our performance-based restricted share unit awards could differ from our current expectations. We account for forfeitures for both service-based and performance-based restricted share units as they occur instead of estimating forfeitures at the time of grant and revising those estimates in subsequent periods if actual forfeitures differ from our estimates.

FirstSecond Quarter Financial Overview

As more fully discussed in later sections of this MD&A, the following were what we view as the more significant financial items for the firstsecond quarter of 2026:

•At the end of the firstsecond quarter of 2026, Total ARR was $1.492$1.509 billion compared to $1.442$1.489 billion at the end of the firstsecond quarter of 2025, increasing 3%1% as compared to the firstsecond quarter of 2025, including a 1% positivenegative impact from foreign currency fluctuations.

•At the end of the firstsecond quarter of 2026, Public Cloud ARR was $686 million compared to $606$634 million at the end of the firstsecond quarter of 2025, increasing 13%8% as compared to the firstsecond quarter of 2025, with a 1% positivenegative impact from foreign currency fluctuations.

•Total revenue was $444$410 million for the firstsecond quarter of 2026, increasing by $26$2 million compared to the firstsecond quarter of 2025, with recurring revenue up 12%.3%. Perpetual software licenses, hardware and other revenue reducedincreased by 90%,167% ($5 million), and consulting services revenue decreased 14%.24%. Foreign currency fluctuations haddid not have a 2% positivematerial impact on total revenue for the quarter compared to the prior year.

•Gross margin increased to 62.2%59.3% in the firstsecond quarter of 2026 from 59.3%56.4% in the firstsecond quarter of 2025, primarily due to a greater mix of recurring revenue in the period.

•Operating expenses for the firstsecond quarter of 2026 increaseddecreased 71%5% compared to the firstsecond quarter of 2025, largely from legal fees related to the SAP Settlement Agreement, partially off-set by lower employee compensation expense in the firstsecond quarter of 2026, due to the impact of restructuring actions taken in the prior year.

•The Company saw an operating lossincome of $36$48 million in the firstsecond quarter of 2026, compared to operating income of $66$24 million in the firstsecond quarter of 2025.

•Net income in the firstsecond quarter of 2026 was $335$46 million, compared to $44$9 million in the firstsecond quarter of 2025. Net income for the first quarter of 2026 included $280 million of after‑tax net proceeds from the SAP Settlement Agreement.

Results of Operations for the Three Months Ended MarchJune 31,30, 2026

Compared to the Three Months Ended MarchJune 31,30, 2025

Total revenue increased $26$2 million, or 6%,0%, in the firstsecond quarter of 2026, includingwith ano 2% positivematerial impact from foreign currency fluctuations. Recurring revenue increased 12%3% as compared to the firstsecond quarter of 2025 including a 3%1% positive impact from foreign currency fluctuations. Recurring revenue for the firstsecond quarter of 2026 included growth from higherPublic Cloud revenue, offset in part by lower annual upfront software subscription revenue associated with on-premises subscription software and public cloud revenue growth, which contributed to the year-over-year growth rate as we experienced continued interest in our hybrid platform.revenue. Revenue from perpetual software licenses, hardware and other decreasedincreased $9$5 million year over year.year, primarily driven by perpetual hardware. Consulting services revenue decreased 14%24% or $7$12 million in the firstsecond quarter of 2026, with a 1% positivenegative impact from foreign currency exchange rate fluctuations. The consulting services revenue decrease is primarily the result of lower order performance from the second half of 2025.2025 and first quarter of 2026.

Our Total ARR is composed of three main categories: (1) Public Cloud ARR, (2) ARR related to on-premises subscription-based contracts and private cloud ("Subscription ARR"), and (3) ARR related to our legacy perpetual maintenance and software upgrade rights. At MarchJune 31,30, 2026 and 2025 our Total ARR consisted of:

At the end of the firstsecond quarter of 2026, Total ARR increased 3%1% as compared to the firstsecond quarter of 2025, including a 1% positivenegative impact from foreign currency fluctuations. At the end of the firstsecond quarter of 2026, Public Cloud ARR increased 13%8% as compared to the firstsecond quarter of 2025, with a 1% positivenegative impact from foreign currency fluctuations. Public Cloud ARR growth in the firstsecond quarter of 2026 was primarily driven by customer demand of our Public Cloud offering and customer migrations. The decreases in subscription ARR and maintenance and software upgrade rights ARR were primarily driven by customer migrations to Public Cloud ARR and on-premises erosions.

In the firstsecond quarter of 2026, we experienced the following trends:

•Customer interest in AI-driven use cases continues to grow across various industries.industries, including initial transactions incorporating our AI capabilities.

As a portion of the Company’s operations and revenue occur outside the United States, and in currencies other than the United States ("U.S.") dollar, the Company is exposed to fluctuations in foreign currency exchange rates. Based on currency rates as of MarchJune 31,30, 2026, Teradata is now estimating 0.0%-0.5% positive impact from currency translation on our 2026 full-year total reported revenues.

The decreaseincrease in recurring revenue gross profit as a percentage of revenue was primarily due to unfavorablecontinued on-premisesimprovement dealin mix,our andPublic Cloud margin rate, offset in part by a higher mix of Public Cloud revenues versus on-premises revenue as compared to the prior-year period, offset in part by continued improvement in our Public Cloud margin rate.period.

Selling, general and administrative ("SG&A") expense increaseddecreased year over year due to thelower impactemployee ofcompensation expense, the $121 millionresult of expenses incurred in connection with the SAP litigation and related settlement and an increase stock compensation expense partially offset by continued budget discipline focused on cost reductions across the Company.Company, including the impact of restructuring actions taken in the prior year. Research and development ("R&D") expense increased year over year due to investments in Public Cloud and AI-related technology opportunities offset in part by continued cost reduction initiatives.

Other Income (Expense),Expense, net

Other income (expense),expense, net in the firstsecond quarter of 2026 and 2025 is comprised primarily of, legal expenses,of interest expense on the recently paid-off long-term debt and finance leases, losses resulting from foreign currency transactions, as well as benefit costs on our pension and postemployment plans, generally partiallylargely offset by interest income earned on our cash and cash equivalents and othergains income.from Otherforeign incomecurrency (expense) has improved by $481 million year-over-year primarily due to the receipt of the SAP Settlement Amount as disclosed in more detail in Item 1. Financial Statements to this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the "Form 10-Q") (see Note 5. Supplemental Financial Information and Note 8, Commitments and Contingencies).transactions.

The effective tax rates for the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

For the three months ended MarchJune 31,30, 2026, the Company recorded $79$12 million of net discrete tax expensebenefit, a majority of which related to theadditional tax expensebenefit impactresulting from theavailable receipttax elections to expense certain research and development costs for purposes of thecomputing SAP Settlementits Net Proceeds.Controlled Foreign Corporation Tested Income ("NCTI").

For the three months ended MarchJune 31,30, 2025, the Company recorded $1 million of net discrete tax benefit,expense, a majority of which related to tax benefits from uncertain tax position reversals due to the Company's completion of its IRS audit related to its 2020 federal tax return, which was largely offset by incrementaladditional tax expense from stock-based compensation vesting. The Company received a final no change audit ruling from the Congressional Joint Committee on Tax in early Februaryvesting of 2025.stock-based compensation.

We estimate that the full-year effective tax rate for 2026 will be approximately 25%,23%, which takes into consideration, among other things, the forecasted earnings mix by jurisdiction, the estimated impact to NCTI tax, and the estimated discrete items to be recognized in 2026. We are currently forecasting approximately $0.2 million of tax expense related to NCTI in our marginal effective tax rate for 2026. In addition, the Company has recorded $16 million of NCTI tax expense as a discrete item in the first quarter of 2026 related to the impact from the SAP Settlement Agreement.

On August 5, 2024, Teradata announced that it realigned its sales function and initiated global restructuring to optimize operations. Due to these organizational changes, Teradata now manages its business under two segments, which are also the Company’s operating segments: (1) Product Sales and (2) Consulting Services. Teradata’s Product Sales segment represents the results for the Recurring Revenue and Perpetual Software Licenses, Hardware and Other line items and the Consulting Services segment represents the Consulting Services line item, each as disclosed in the Company’s financial statements and in the tables in this Form 10-Q. As the revenue and gross margin trends for these business categories are already discussed in the sections above, there is no separate segment discussion presented here. Our segment information is presented in Note 12, Segment and Other Supplemental Information, of the Notes to Condensed Consolidated Financial Statements (Unaudited).

Cash provided by operating activities was $401$507 million, which increased by $393$456 million in the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025. $359$337 million of the increase was due to the SAP Settlement Net Proceeds received as a result of the SAP Settlement Agreement as discussed in Note 5, Supplemental Financial Information, and Note 8, Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements (Unaudited) of this Form 10-Q. Teradata used approximately $11$21 million of cash in the first threesix months of 2026 for severance payments, as compared to $5$11 million in the first threesix months of 2025.

As disclosed in Note 5, Supplemental Financial Information, of the Notes to Condensed Consolidated Financial Statements (Unaudited), during the threesix months ended MarchJune 31,30, 2026, we received $480 million cash from the SAP Settlement Agreement and paid $121 million in related expenses,expenses. Additionally, $22 million in cash taxes related to the SAP Settlement Net Proceeds were paid during the first half of 2026, that was reported as an operating activity for cash flow purposes.

Financing activities and certain other investing activities, are not included in our calculation of free cash flow. There were no material other investing activities for the threesix months ended MarchJune 31,30, 2026.

Teradata’s financing activities for the threesix months ended MarchJune 31,30, 2026 and 2025 primarily consisted of cash outflows for term loan debt repayments, share repurchases and payments on our finance leases. Financing cash outflows were higher in 2026 primarily due to the repayment of the remaining $450 million principal balance of the Company's term loan debt, compared to regularly scheduled principal payments on the term loan debt during 2025. At MarchJune 31,30, 2026, we had no outstanding borrowings on our $400 million Revolving Credit Facility (as defined below).

•On November 17, 2025, the Board approved a share repurchase program (the "Repurchase Program") authorizing the Company to repurchase up to $500 million of its common stock. The Repurchase Program became effective on January 1, 2026, does not have an expiration date, and will continue until otherwise modified, suspended, or terminated. The purchases under the Repurchase Program may be made from time to time in the open market, in privately negotiated transactions, or by other means, including through Rule 10b5-1 trading plans, in accordance with applicable securities law and other regulatory requirements. The Repurchase Program does not obligate the Company to repurchase any shares under the authorization and the timing and amount of any repurchases will depend on a variety of factors, including the price of the Company’s common stock, general business and market conditions, and other investment considerations. There is a total authority of $470$430 million remaining under the Repurchase Program as of MarchJune 31,30, 2026.

In the aggregate under the dilution offset share repurchase program and the Repurchase Program, we repurchased approximately 1.22.5 million shares of common stock at an average price per share of $29.03$29.76 in the threesix months ended MarchJune 31,30, 2026.

Other financing activities, including net share settlement for the payroll tax liability of section 16 officers (as discussed in Item 2. Unregistered Sales of Equity Securities and Use of Proceeds), offset by proceeds from the ESPP and the exercise of stock options, net of tax was a net outflow of $5$7 million for the threesix months ended MarchJune 31,30, 2026 and a net outflow of $2 million for the threesix months ended MarchJune 31,30, 2025. The ESPP proceeds are included in other financing activities, net in the Condensed Consolidated Statements of Cash Flows (Unaudited).

Our total cash and cash equivalents held outside the United States in various foreign subsidiaries was $450$359 million as of MarchJune 31,30, 2026 and $462 million as of December 31, 2025. The remaining balance held in the U.S. was $366$55 million as of MarchJune 31,30, 2026 and $32 million as of December 31, 2025. The Company expects that a majority of its foreign earnings will be repatriated to the U.S. Effective January 1, 2018, the U.S. moved to a territorial system of international taxation, and as such will generally not subject future foreign earnings to U.S. taxation upon repatriation in future years.

Management believes current cash, cash generated from operations and the $400 million available under the Revolving Credit Facility will be sufficient to satisfy future working capital, research and development activities, capital expenditures, pension contributions, and other financing requirements for at least the next twelve months. The Company principally holds its cash and cash equivalents in bank deposits and highly-rated money market funds.

The Company’s ability to generate positive cash flows from operations is dependent on general economic conditions, competitive pressures, and other business and risk factors described in the 2025 Annual Report and elsewhere in this Quarterly Report on Form 10-Q. If the Company is unable to generate sufficient cash flows from operations, or otherwise comply with the terms of the Revolving Credit Facility or its term loan agreement,Facility, the Company may be required to seek additional financing alternatives.

Long-term Debt. On June 28,24, 2022,2026, wethe Company entered into a Credit Agreement thatwith provides for (i) a five-year unsecured term loan in an aggregate principal amountBank of $500America, millionN.A., as Administrative Agent and the lenders party thereto (the "TermCredit LoanAgreement"),. andThe (ii)Credit Agreement provides for a five-year unsecured revolving credit facility in an aggregate principal amount of up to $400 million, including a $50 million sublimit for the issuance of standby letters of credit and a $50 million sublimit for swingline loans (the "Revolving Facility" and, collectively with the Term Loan, the "Credit Facility"). The Revolving Credit Facility replaces our prior credit agreement which was entered into in 2022 (the "Prior Agreement"). In connection with the execution of the Revolving Credit Facility, the $450 million term loan outstanding under the Prior Agreement was repaid in full. Our long-term debt is discussed in Note 10, Debt, of the Notes to Condensed Consolidated Financial Statements (Unaudited). In addition, as disclosed in Note 7 Derivative Instruments and Hedging Activities, of the Notes to Condensed Consolidated Financial Statements (Unaudited), Teradata entered into an interest rate swap to hedge approximately 90% (or $411 million as of March 31, 2026) of the floating interest rate of the outstanding principal of the $500 million Term Loan and a cross currency swap to hedge a portion of Euro currency exposure of its net investment in certain foreign subsidiaries. As of MarchJune 31,30, 2026, the Company had no borrowings outstanding under the Revolving Credit Facility, leaving $400 million in borrowing capacity available under the Revolving FacilityCredit and the Term Loan principal outstanding was $450 million.Facility.