TERADATA CORP /DE/TDC
TERADATA CORP /DE/ Revenue Disclosure
Revenue from Contracts with Customers
Disaggregation of Revenue from Contracts with Customers
The following table presents a disaggregation of revenue for the years ended December 31:
| In millions | 2025 | 2024 | * | 2023 | * | |||||||||||||||
| United States | ||||||||||||||||||||
| Recurring | $ | 765 | $ | 815 | $ | 862 | ||||||||||||||
| Perpetual software licenses, hardware and other | 7 | 7 | 13 | |||||||||||||||||
| Consulting services | 57 | 72 | 98 | |||||||||||||||||
| Total United States | 829 | 894 | 973 | |||||||||||||||||
| International | ||||||||||||||||||||
| Recurring | 680 | 664 | 630 | |||||||||||||||||
| Perpetual software licenses, hardware and other | 10 | 16 | 32 | |||||||||||||||||
| Consulting services | 144 | 176 | 198 | |||||||||||||||||
| Total International | 834 | 856 | 860 | |||||||||||||||||
| Total Revenue | $ | 1,663 | $ | 1,750 | $ | 1,833 | ||||||||||||||
* Prior period information has been reclassified to conform to the current period presentation.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets, and customer advances and deposits (deferred revenue or contract liabilities) on the consolidated balance sheet. Accounts receivable include amounts due from customers that are unconditional. Contract assets relate to the Company’s rights to consideration for goods delivered or services completed and recognized as revenue but billing and the right to receive payment is conditional upon the completion of other performance obligations. Contract assets are included in other current assets on the balance sheet and are transferred to accounts receivable when the rights become unconditional. Deferred revenue consists of advance payments and billings in excess of revenue recognized. Deferred revenue is classified as either current or noncurrent based on the timing of when the Company expects to recognize revenue. These assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period. The following table provides information about receivables, contract assets and deferred revenue from contracts with customers:
| In millions | December 31, 2025 | December 31, 2024 | |||||||||
| Accounts receivable, net | $ | 251 | $ | 234 | |||||||
| Contract assets | $ | 6 | $ | 4 | |||||||
| Current deferred revenue | $ | 533 | $ | 512 | |||||||
| Long-term deferred revenue | $ | 11 | $ | 10 | |||||||
Revenue recognized during the year ended December 31, 2025 from amounts included in deferred revenue at the beginning of the period was approximately $461 million.
Transaction Price Allocated to Unsatisfied Obligations
The following table includes estimated revenue expected to be recognized in the future related to the Company's unsatisfied (or partially satisfied) obligations at December 31, 2025:
| In millions | December 31, 2025 | Year 1 | Year 2 and Thereafter | |||||||||||||||||
| Remaining unsatisfied obligations | $ | 2,182 | $ | 1,473 | $ | 709 | ||||||||||||||
The amounts above represent the price of firm orders for which work has not been performed or goods have not been delivered and exclude unexercised contract options outside the stated contractual term that do not represent material rights to the customer. Although the Company believes that the contract value in the above table is firm, approximately $1,167 million of the amount includes customer-only general cancellation for convenience terms that the Company is contractually obligated to perform unless the customer notifies the Company otherwise. The Company expects to recognize revenue of approximately $537 million in the next year from contracts that are non-cancelable. The Company believes the inclusion of this information is important to understanding the obligations that the Company is contractually required to perform and provides useful information regarding remaining obligations related to these executed contracts.
Contract CostsThe Company capitalizes sales commissions and other contract costs that are incremental direct costs of obtaining customer contracts if the expected amortization period of the asset is greater than one year. These costs are recorded in Capitalized contract costs on the Company’s balance sheet. The capitalized amounts are calculated based on the sales commissions for individual multi-term contracts. The judgments made in determining the amount of costs incurred include whether the commissions are in fact incremental and would not have occurred absent the customer contract. Costs to obtain a contract are amortized as selling, general and administrative expenses on a straight-line basis over the expected period of benefit, which is typically four years. These costs are periodically reviewed for impairment. The following table identifies the activity relating to capitalized contract costs:
| In millions | December 31, 2024 | Capitalized | Amortization | December 31, 2025 | ||||||||||||||||||||||
| Capitalized contract costs | $ | 46 | $ | 21 | $ | (25) | $ | 42 | ||||||||||||||||||
| In millions | December 31, 2023 | Capitalized | Amortization | December 31, 2024 | ||||||||||||||||||||||
| Capitalized contract costs | $ | 68 | $ | 13 | $ | (35) | $ | 46 | ||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.