TERADATA CORP /DE/TDC
TERADATA CORP /DE/ Segments Disclosure
Segment, Other Supplemental Information and Concentrations
Teradata 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. 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 ("CODM"), who is our President and Chief Executive Officer, evaluates the performance of each segment by comparing segment revenue and segment gross profit results to historical and previously forecasted financial information on a monthly and quarterly basis to allocate operating and capital resources. Our CODM monitors assets for the consolidated Company but does not use assets by segment when assessing performance or making operating segment resource allocations.
The following table presents segment revenue, segment cost of revenue and segment gross profit for the Company for the years ended December 31:
| In millions | 2025 | 2024 | 2023 | ||||||||||||||
| Segment revenue | |||||||||||||||||
| Product Sales | $ | 1,462 | $ | 1,502 | $ | 1,537 | |||||||||||
| Consulting Services | 201 | 248 | 296 | ||||||||||||||
| Total revenue | 1,663 | 1,750 | 1,833 | ||||||||||||||
| Segment cost of revenue | |||||||||||||||||
Product Sales (1) | 464 | 453 | 446 | ||||||||||||||
Consulting Services (2) | 189 | 217 | 254 | ||||||||||||||
| Total segment cost of revenue | 653 | 670 | 700 | ||||||||||||||
| Segment gross profit | |||||||||||||||||
| Product Sales | 998 | 1,049 | 1,091 | ||||||||||||||
| Consulting Services | 12 | 31 | 42 | ||||||||||||||
| Total segment gross profit | 1,010 | 1,080 | 1,133 | ||||||||||||||
| Stock-based compensation expense | 17 | 17 | 17 | ||||||||||||||
| Acquisition, integration and reorganization-related costs | 6 | 5 | 1 | ||||||||||||||
| Total gross profit | 987 | 1,058 | 1,115 | ||||||||||||||
| Selling, general and administrative expenses | 502 | 565 | 635 | ||||||||||||||
| Research and development expenses | 280 | 284 | 294 | ||||||||||||||
| Total income from operations | $ | 205 | $ | 209 | $ | 186 | |||||||||||
(1) Cost of Product Sales includes product costs of $241 million in 2025, $223 million in 2024, and $193 million in 2023 for Public Cloud fees and direct product and third-party software costs associated with the Company's perpetual product sales. Depreciation expense included in Cost of Product Sales was $71 million in 2025, $79 million in 2024, and $88 million in 2023. The remaining cost of Product Sales includes payroll and benefits costs, and corporate allocations including back-office information technology, real estate, and other support services.
(2) Cost of Consulting Services includes payroll and benefit costs of $120 million in 2025, $137 million in 2024, and $149 million in 2023. The remaining cost of Consulting Services includes 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.
The following table presents revenues by geographic area for the years ended December 31:
| In millions | 2025 | 2024 | 2023 | ||||||||||||||
| United States | $ | 829 | $ | 894 | $ | 973 | |||||||||||
| International | 834 | 856 | 860 | ||||||||||||||
| Total revenue | $ | 1,663 | $ | 1,750 | $ | 1,833 | |||||||||||
The following table presents property and equipment, net by geographic area at December 31:
| In millions | 2025 | 2024 | |||||||||
| United States | $ | 132 | $ | 122 | |||||||
| International | 66 | 63 | |||||||||
| Property and equipment, net | $ | 198 | $ | 185 | |||||||
Concentrations. No single customer accounts for more than 10% of the Company's revenue for any period presented. No country outside the United States accounts for more than 10% of the Company's revenue or property and equipment, net, for any period presented. As of December 31, 2025, the Company is not aware of any significant concentration of business transacted with a particular customer that could, if suddenly eliminated, have a material adverse effect on the Company’s operations. The Company's hardware components are assembled primarily by Flex. In addition, the Company utilizes preferred supplier relationships to better ensure more consistent quality, cost, and delivery. There can be no assurances that a disruption in production at Flex or at a supplier would not have a material adverse effect on the Company's operations. 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.
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 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 26, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.