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Segment and Other Supplemental Information | 9 Months Ended
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Sep. 30, 2025
Segment Reporting [Abstract] |
Segment and Other Supplemental Information | Segment and Other Supplemental Information 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. The Company’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. For purposes of discussing results by segment, management excludes the impact of certain items, consistent with the manner by which management evaluates the performance of each segment. This format is useful to investors because it allows analysis and comparability of operating trends. It also includes the same information that is used by Teradata management to make decisions regarding the segments and to assess financial performance. The chief operating decision maker, who is the Company's President and Chief Executive Officer, evaluates the performance of the segments based on revenue and multiple profit measures, including segment gross profit. For management reporting purposes, assets are not allocated to the segments. Prior period segment information has been reclassified to conform to the current period presentation. The following table presents segment revenue and segment gross profit for the Company:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
In millions | 2025 |  | 2024 |  | 2025 |  | 2024
Segment revenue |  |  |  |  |  |  |
Product Sales | $ | 369 |  |  | $ | 379 |  |  | $ | 1,094 |  |  | $ | 1,148 |
Consulting Services | 47 |  |  | 61 |  |  | 148 |  |  | 193 |
Total revenue | 416 |  |  | 440 |  |  | 1,242 |  |  | 1,341 |
Segment cost of revenue |  |  |  |  |  |  |
Product Sales (1) | 114 |  |  | 114 |  | 347 |  |  | 343
Consulting Services (2) | 43 |  |  | 55 |  | 146 |  |  | 167
Total segment cost of revenue | 157 |  |  | 169 |  |  | 493 |  |  | 510 |
Segment gross profit |  |  |  |  |  |  |
Product Sales | 255 |  |  | 265 |  |  | 747 |  |  | 805 |
Consulting Services | 4 |  |  | 6 |  |  | 2 |  |  | 26 |
Total segment gross profit | 259 |  |  | 271 |  |  | 749 |  |  | 831 |
Stock-based compensation expense | 4 |  |  | 4 |  |  | 13 |  |  | 13 |
Acquisition, integration, reorganization, and transformation-related costs | 2 |  |  | 1 |  |  | 5 |  |  | 3 |
Total gross profit | 253 |  |  | 266 |  |  | 731 |  |  | 815 |
Selling, general and administrative expenses | 122 |  |  | 137 |  |  | 373 |  |  | 429 |
Research and development expenses | 70 |  |  | 73 |  |  | 207 |  |  | 216 |
Income from operations | $ | 61 |  |  | $ | 56 |  |  | $ | 151 |  |  | $ | 170 |
(1) Cost of Product Sales, for the three months ended September 30, included product costs of $60 million in 2025 and $55 million in 2024 for Public Cloud fees and direct product and third-party software costs associated with the Company's perpetual product sales. Depreciation expense for the three months ended September 30, included in Cost of Product Sales, was $18 million in 2025, and $19 million in 2024. The remaining cost of Product Sales included payroll and benefits costs, and corporate allocations including back-office information technology, real estate, and other support services. Cost of Product Sales, for the nine months ended September 30, included product costs of $183 million in 2025 and $164 million in 2024 for Public Cloud fees and direct product and third-party software costs associated with the Company's perpetual product sales. Depreciation expense for the nine months ended September 30, included in Cost of Product Sales, was $53 million in 2025, and $60 million in 2024. The remaining cost of Product Sales included payroll and benefits costs, and corporate allocations including back-office information technology, real estate, and other support services. (2) Cost of Consulting Services, for the three months ended September 30, included payroll and benefit costs of $29 million in 2025 and $35 million in 2024. The remaining cost of Consulting Services included corporate allocations, including back-office information technology, real estate, and other support services. Cost of Consulting Services, for the nine months ended September 30, included payroll and benefit costs of $94 million in 2025 and $106 million in 2024. The remaining cost of Consulting Services included corporate allocations, including back-office information technology, real estate, and other support services. Certain items, including stock-based compensation and reorganization-related costs, were excluded from segment gross profit to conform to the way the Company manages and reviews the results by segment.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name 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