Teradata Corporation

Company Overview

Business Model: Teradata Corporation is focused on enabling organizations to activate enterprise intelligence and transform insights into business outcomes. The Company's core offering is an autonomous AI and knowledge platform, underpinned by extensive patented workload management optimization technology and robust data and analytics capabilities. Teradata Corporation's platform is designed for enterprise-grade workloads, offering deployment flexibility across public cloud (AWS, Microsoft Azure, and Google Cloud), private cloud, on-premises, and hybrid environments. Revenue is primarily generated through subscription offerings, which are flexibly priced from capacity-based to consumption-based models, contributing to a recurring revenue stream. The Company also provides a broad range of consulting services, including AI Services, support, maintenance, and managed services, to guide customers in their data analytics and AI deployments.

Market Position: Teradata Corporation targets large-scale data users and global enterprise companies across industries such as Financial Services, Healthcare and Life Sciences, Public Sector, Manufacturing, Retail, Telecommunications, and Travel/Transportation. The Company differentiates itself through its platform's architecture for autonomous AI operations, hybrid capabilities, open and connected ecosystem approach, patented workload management, and a focus on delivering optimal price performance across deployment options. With over four decades of domain expertise and proven industry knowledge models, Teradata Corporation aims to help customers build data foundations and provide enterprise context to AI solutions. The market is intensely competitive, with participants including AWS, Databricks, Google Cloud, Microsoft Azure, Snowflake, and traditional legacy competitors.

Recent Strategic Developments: In 2025, Teradata Corporation continued its transformation into a leading AI and knowledge platform, marked by significant technology innovations and strategic partnerships. Key innovations included the launch of Enterprise Vector Store for improved AI use cases, Teradata AI Factory for on-premises AI (integrating with Nvidia NIM Services and GPUs, Teradata AI Workbench and ClearScape Analytics), ModelOps updates to ClearScape Analytics, MCP Server for connecting AI systems with enterprise data, Teradata AgentBuilder for deploying autonomous AI agents, and Autonomous Customer Intelligence to enhance customer experience. The Company expanded its partner ecosystem in 2025, adding ServiceNow, Salesforce, and Fivetran, while strengthening existing relationships with cloud service providers and technology partners like NVIDIA, NetApp, and Dell. Additionally, Teradata Corporation initiated a realignment of its sales function and global restructuring efforts in August 2024, continuing into 2025, to optimize operations and reduce non-revenue generating expenses.

Geographic Footprint: Teradata Corporation operates globally with approximately 5,100 employees as of December 31, 2025, located in approximately 38 countries. The corporate headquarters is in San Diego, California, which is owned and represents approximately 73% of the Company's total square footage. The Company operates 40 facilities across 29 countries, with 9 facilities dedicated to Research and Development activities. In 2025, 50% of total revenues were generated from outside the United States, with the United States contributing $829 million and international operations contributing $834 million.

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: 59.4%
• Operating Margin: 12.3%
• Net Margin: 7.8%

Investment in Growth:

• R&D Expenditure: $280 million (16.8% of revenue)
• Capital Expenditures: $19 million
• Strategic Investments: Teradata Corporation intends to continue investing in R&D areas that are anticipated to generate growth, such as technologies supporting AI/ML, including for on-premises environments. Specific investment amounts for these initiatives beyond the R&D expenditure are not separately disclosed.

Business Segment Analysis

Product Sales

Financial Performance (2025):

• Revenue: $1,462 million (Total Revenue less Consulting Services Revenue)
• Gross Margin: 68.3%
• Key Growth Drivers: Public Cloud Annual Recurring Revenue (ARR) increased by 15% year-over-year, driven by a net expansion rate of 108% and migrations from on-premises to Teradata Corporation's cloud platform. Foreign currency exchange rate fluctuations had a positive 2% impact on Public Cloud ARR. This growth partially offset a decline in revenue from on-premises solutions and maintenance and software upgrade rights. Product Portfolio:
• Subscription software licenses (on-premises and cloud).
• Cloud and hardware rental offerings.
• Perpetual software licenses, hardware, and other third-party products.
• AI and Knowledge Platform, Enterprise Vector Store, Teradata AI Factory, ModelOps updates to ClearScape Analytics, MCP Server, Teradata AgentBuilder, Autonomous Customer Intelligence. Market Dynamics:
• The segment addresses the full spectrum of data analytics and AI needs, supporting cloud-only, multi-cloud, hybrid, and on-premises deployment strategies. It focuses on large-scale data users, particularly global enterprise companies, and is positioned to capitalize on the exponential growth in data volumes and complex workloads driven by accelerating generative and agentic AI adoption.

Consulting Services

Financial Performance (2025):

• Revenue: $201 million (-19% YoY)
• Gross Margin: 6.0%
• Key Growth Drivers: The decrease in Consulting Services revenue was an expected outcome of lower order booking activity in the second half of 2024 and into 2025. This decline also reflects a purposeful reduction in non-core consulting engagements and a strategic refocusing of the organization on Teradata Vantage-oriented offerings, complemented by the development of a strategic partner ecosystem. Product Portfolio:
• Guidance on establishing data analytics and AI vision.
• Enabling modern, hybrid ecosystem architectures.
• Identifying and operationalizing opportunities for customers.
• AI Services to rapidly productionize AI workloads.
• Support and maintenance services.
• Managed services offerings. Market Dynamics:
• The segment works closely with global and regional systems integrators to accelerate innovation and digital transformation for joint customers. It focuses on assisting customers in their transition from AI concept to production, leveraging Teradata Corporation's platform and methodology.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: In 2025, Teradata Corporation repurchased approximately 5.8 million shares of its common stock for $140 million, at an average price of $24.34 per share.
• Dividend Payments: Teradata Corporation has not paid cash dividends and does not anticipate paying cash dividends to common stockholders in the immediate future.
• Future Capital Return Commitments: As of December 31, 2025, $222 million remained authorized under the open market share repurchase program. A new Repurchase Program, authorizing up to $500 million of common stock repurchases, became effective on January 1, 2026, with no expiration date.

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: $493 million
• Total Debt: $551 million (comprising $456 million in Term Loan principal outstanding, $50 million in current finance lease liabilities, and $45 million in long-term finance lease liabilities).
• Net Cash Position: $37 million (Cash and Equivalents less Term Loan principal outstanding).
• Credit Rating: Not disclosed in the filing.
• Debt Maturity Profile: The Term Loan has principal payments of $25 million due in 2026 and $431 million due in 2027. The $400 million Revolving Facility is due and payable on June 28, 2027, with no outstanding borrowings as of December 31, 2025.

Cash Flow Generation (2025):

• Operating Cash Flow: $305 million
• Free Cash Flow: $285 million
• Cash Conversion Metrics: Cash provided by operating activities increased by $2 million compared to 2024, benefiting from higher net income (adjusted for non-cash items) and improved growth in deferred revenue balances, partially offset by higher receivables and lower payables.

Operational Excellence

Production & Service Model: Teradata Corporation's operational philosophy centers on helping organizations activate intelligence and achieve outcomes through its autonomous AI and knowledge platform. The platform is architected for enterprise-grade workloads and designed to address complex data and analytics challenges. Service delivery is executed through a global customer services organization, offering a range of services including AI Services, support, maintenance, and managed services. The Company operates with a fully flexible work environment, empowering employees to optimize their productivity.

Supply Chain Architecture: Teradata Corporation outsources the assembly and configuration of its hardware components primarily to Flex Ltd. Flex Ltd. also procures a wide variety of components on behalf of Teradata Corporation. The Company utilizes preferred supplier relationships to ensure consistent quality, cost, and delivery, with these suppliers typically maintaining alternative processes or facilities for business continuity.

Key Suppliers & Partners:

• Contract Manufacturer: Flex Ltd. (for on-premises hardware offerings assembly and configuration).
• Server Supplier: Dell Technologies Inc.
• Storage Disk Systems Supplier: NetApp, Inc.
• Graphics Processing Units (GPU) Supplier: NVIDIA.
• Cloud Service Providers: AWS, Microsoft Azure, Google Cloud.
• Alliance Partners: ServiceNow, Salesforce, Fivetran (for AI/ML, LLMs, tools, data and application integration solutions).

Facility Network:

• Manufacturing: Outsourced to Flex Ltd.
• Research & Development: Teradata Corporation operates 9 R&D facilities, totaling approximately 95 thousand square feet, with about 75% of this space being owned.
• Corporate Headquarters: Located in San Diego, California, and is owned by the Company, comprising approximately 73% of its total square footage.
• Distribution: The Company operates 40 facilities across 29 countries, including office, repair, warehouse, and other miscellaneous sites, with the remaining 533 thousand square feet being 73% owned and 27% leased.

Operational Metrics: No specific capacity utilization, efficiency measures, or quality indicators were explicitly disclosed in the filing.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Teradata Corporation primarily sells and markets its solutions and services through a direct sales force, with over 80% of its employees in customer-facing and/or revenue-driving roles.
• Channel Partners: The Company extends its market reach through strategic partnerships with cloud service providers (AWS, Microsoft Azure, Google Cloud), alliance partners (including independent software vendors, technology partners, open-source software distributors, and resellers), and leading global and regional systems integrators and consultants.
• Digital Platforms: Marketing efforts include a global website, digital marketing, paid media, demos and trials of software, in-person and online events, public relations, social media, influencer and partnership marketing, and customer and developer advocacy programs.

Customer Portfolio: Enterprise Customers: Teradata Corporation focuses its marketing and sales efforts on enterprises that prioritize data analytics and AI/ML as strategic to improving business performance. The Company targets key buying centers, including technology buyers and users, business leaders, and analytics buyers and users. Customer Concentration: No single customer accounted for 10% or more of Teradata Corporation's total revenue in any period presented. Geographic Revenue Distribution (2025):

• United States: 49.8% of total revenue ($829 million)
• International: 50.2% of total revenue ($834 million)

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: Teradata Corporation operates in a large and growing multi-billion dollar data management and analytics market, which industry analysts forecast to grow at a double-digit rate. The market is characterized by rapid technological change, evolving industry standards, frequent new product introductions, and intense competition. The accelerating adoption of generative and agentic AI is expected to drive exponential growth in data volumes, queries, and mixed workloads, increasing the complexity, cost, and risk associated with managing data analytics and AI/ML environments. There is a resurgence of hybrid environments, emphasizing the need for effective operation across both on-premises and cloud.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• AWS: Competes in the data analytics and AI solutions market, also a public cloud service provider partner.
• Databricks: Direct competitor in data analytics and AI solutions.
• Google Cloud: Competes in the data analytics and AI solutions market, also a public cloud service provider partner.
• Microsoft Azure: Competes in the data analytics and AI solutions market, also a public cloud service provider partner.
• Snowflake: Direct competitor in data analytics and AI solutions.
• Other: Includes traditional legacy competitors, emerging cloud-only data vendors, AI-focused companies, and open-source providers.

Emerging Competitive Threats: The market is rapidly growing with increasing AI adoption, leading to new and emerging technologies, competitors, and business models. Cloud service providers also offer platforms that compete with Teradata Corporation's offerings.

Competitive Response Strategy: Teradata Corporation's strategy focuses on AI, hybrid and multi-cloud ecosystem simplification, and providing solutions for the most scalable and complex workloads. The Company emphasizes its differentiated technology innovations that deliver scale and integration, aiming to provide business value. It also offers hybrid capabilities and portable licensing to de-risk customer buying decisions.

Risk Assessment Framework

Strategic & Market Risks

• Market Dynamics: The rapidly changing and intensely competitive nature of the IT industry and data analytic platform business, including ongoing consolidation, new and emerging technologies (AI/ML), and pressure on price/performance gains.
• Technology Disruption: Shortened product life cycles, the need for continuous innovation, and increased difficulty/complexity in producing new offerings with greater capacity and performance, which may lead to reliability, quality, and operability issues.
• Customer Concentration: Risks associated with customer cancellations or non-renewals of subscription arrangements or support services, and the potential for customers to migrate to competitors' offerings.

Operational & Execution Risks

• Supply Chain Vulnerabilities: Dependency on Flex Ltd. as a key contract manufacturer for hardware and reliance on single-source suppliers for certain critical components (e.g., Dell Technologies Inc., NetApp, Inc., NVIDIA). Disruptions in production, global component shortages, or inflationary pressures could impact costs and timing of customer shipments.
• Geographic Concentration: Risks inherent in operating in foreign countries, including foreign currency fluctuations, foreign currency controls, and adverse economic, political, legal, regulatory, compliance, cultural, and public health conditions.
• ERP System Challenges: Challenges related to the stabilization and optimization of the newly implemented enterprise resource planning (ERP) system could result in operational disruption, increased costs, or impacts to financial reporting.
• Cybersecurity Incidents: Exposure to cybersecurity threats, cyberattacks, and disruptions or failures of information systems (internal or third-party), which could impact reputation, business, and financial results, especially with expanded cloud- and hybrid-based platforms.
• Reorganization Activities: Risks associated with ongoing reorganization efforts, including workforce reductions and changes to organizational structures, which may divert management attention, increase expenses, or disrupt strategy execution.

Financial & Regulatory Risks

• Demand Volatility: Fluctuations in operating results, timing of transactions, and difficulty in accurately estimating revenues (Total Annual Recurring Revenue and Public Cloud Annual Recurring Revenue) due to lengthy sales cycles and variable customer purchasing behavior.
• Foreign Exchange: Exposure to foreign currency exchange rate risk due to significant international operations (50% of total revenues from outside the United States in 2025) and operations in approximately 38 countries with various functional currencies. Foreign currency controls in certain jurisdictions (e.g., Argentina) can also lead to losses.
• Credit & Liquidity: Indebtedness could adversely affect financial condition and limit financial flexibility, requiring dedication of cash flow to debt payments and potentially limiting additional financing.
• Regulatory & Compliance Risks: Subject to diverse and complex global laws and regulations, including those related to technology (AI/ML), data privacy, environmental protection, and ESG reporting. Evolving AI-related regulations could require product changes, increase costs, or reduce demand.

Geopolitical & External Risks

• Geopolitical Exposure: Risks from operating in foreign countries, including the impact of economic, political, legal, regulatory, compliance, cultural, public health, and other conditions abroad, as well as local conflicts and wars.
• Trade Relations: Foreign trade policy changes, trade regulations, disputes, and tariffs could adversely affect sales of solutions and services.
• Sanctions & Export Controls: United States export controls and local country import controls, with changes potentially delaying product introduction or restricting sales to certain countries or customers.
• Global Economic Fluctuations: Impact of global economic fluctuations, including catastrophic events, epidemics, pandemics, inflation, recessions, and labor availability, on markets, suppliers, customers, and partners.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas: Teradata Corporation's R&D efforts are centered on extending its platform with consistent and differentiated capabilities to meet the performance and scale requirements of enterprise data, analytics, and AI uses, moving towards fully autonomous enterprises. Key areas include:

• AI/ML Capabilities: Developing technologies that support AI/ML, including for on-premises environments, agentic AI, generative AI, AI agents, ClearScape Analytics, Enterprise Vector Store, Enterprise Feature Store, Teradata AgentBuilder, MCP Server, and Autonomous Customer Intelligence.
• Hybrid/Multi-cloud Integration: Building deep integration with cloud data and analytic ecosystems, including advanced analytics and AI/ML tools, to create an open and connected platform.
• Workload Management: Leveraging patented workload management optimization technology, query optimization, and massively parallel architecture. Innovation Pipeline: The Company anticipates significant R&D expenditures, which may include complementary strategic acquisitions, to support the flow of innovative technologies and maintain its leadership in autonomous AI and knowledge.

Intellectual Property Portfolio:

• Patent Strategy: Teradata Corporation owns 534 patents in the United States and is the exclusive licensee of four additional patents in the United States and counterpart patents in foreign countries. The Company's patent strategy aims to protect its proprietary intellectual property rights.
• Licensing Programs: Many of the patents owned by Teradata Corporation are licensed to others, and the Company is licensed to use certain patents owned by others.
• IP Litigation: The Company has been involved in material intellectual property disputes, such as the litigation with SAP SE, SAP America, Inc., and SAP Labs, LLC, which was settled in February 2026.
• Copyrights & Trade Secrets: Teradata Corporation owns copyrights and trade secrets in its code base, which comprises all of its software offerings, reflecting hundreds of person-years of development work.

Technology Partnerships:

• Strategic Alliances: Teradata Corporation collaborates with cloud service providers (AWS, Microsoft Azure, Google Cloud) to optimize its solutions in their cloud environments.
• Research Collaborations: The Company partners with technology providers such as NVIDIA (GPUs), NetApp (storage disk systems), and Dell Technologies Inc. (servers) to leverage industry-leading components and extend its platform capabilities.
• Other Alliances: Partnerships with ServiceNow, Salesforce, and Fivetran augment its platform capabilities in areas like AI/ML, LLMs, tools, and data/application integration.

Leadership & Governance

Executive Leadership Team (as of February 27, 2026)

Leadership Continuity: The Company has seen recent changes in its executive leadership team with new appointments to Chief Financial Officer, Chief Product Officer, and Chief Administrative Officer in 2025. The Chief Operating Officer and Chief Revenue Officer also assumed their current roles in 2025 and 2024, respectively, indicating ongoing evolution of the leadership structure.

Board Composition: The Board of Directors provides overall oversight of enterprise-wide risks, including cybersecurity. The Audit Committee is specifically delegated oversight responsibility for risks from cybersecurity threats, reviewing the adequacy and effectiveness of information security policies, internal controls, and related mitigation plans.

Human Capital Strategy

Workforce Composition (as of December 31, 2025):

• Total Employees: Approximately 5,100 employees globally.
• Geographic Distribution: Approximately 30% of employees are in the United States, with 70% located across the rest of the world in approximately 38 countries.
• Skill Mix: The Company emphasizes attracting and retaining talent with specialized expertise in AI/ML and cloud-based technologies, which are critical to its success. Workforce headcount decreased during fiscal 2025 as part of efforts to align and optimize talent for profitable growth strategies.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Teradata Corporation aims to attract, retain, develop, and nurture innovative, curious, and skilled talent. It offers a fully flexible work environment, competitive pay, and comprehensive health and wellness benefits and programs.
• Retention Metrics: Not explicitly disclosed, but the Company acknowledges competition for highly skilled personnel as a risk to retention.
• Employee Value Proposition: The Company fosters a collaborative culture built on transparency, trust, and support, empowering employees to live its core principles: customer and market driven, agility in execution, and accountability.

Diversity & Development:

• Diversity Metrics: Not explicitly disclosed in the filing.
• Development Programs: Teradata Corporation supports professional development through on-demand learning resources (e.g., LinkedIn Learning) and facilitated learning opportunities (e.g., Communication, Emotional Intelligence, Influence, Time Management). It also offers executive and leadership development programs.
• Culture & Engagement: The Company strives to create an inclusive workplace free from discrimination, where employees feel they belong and are engaged.

Environmental & Social Impact

Environmental Commitments: Climate Strategy: While specific climate strategy details are not extensively disclosed, Teradata Corporation is subject to environmental protection laws and regulations. The Company's Credit Agreement was amended in September 2023 to include key performance indicators related to environmental, social, and governance (ESG) targets, which can impact fees and applicable margins. Supply Chain Sustainability: Not explicitly detailed in the filing.

Social Impact Initiatives:

• Community Investment: Teradata Corporation supports local STEM education programs and empowers employees through its Teradata Cares program, which promotes volunteerism and giving. The Company provides matching donations for employee contributions to qualified non-profit agencies, project grants, and supports communities where its employees reside. Employees are granted four paid days per year for volunteer efforts.
• Product Impact: Not explicitly detailed in the filing.
• ESG Reporting: The Company faces increased scrutiny from governments, investors, rating agencies, customers, and other stakeholders regarding its ESG practices, commitments, goals, and performance. It continues to align its disclosures with evolving frameworks and regulatory requirements, particularly in the European Union and California.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Teradata Corporation's new contract bookings and renewals exhibit seasonality, typically with lower volume in the first calendar quarter and higher volume in the fourth calendar quarter. Historically, contract bookings in the third month of each quarter are significantly higher than in the first and second months, with the majority occurring in the last quarter of the fiscal year.
• Economic Sensitivity: The Company's business and operating results are affected by international, national, and regional economic conditions. The IT industry, in which Teradata Corporation operates, is susceptible to significant changes in economic strength and the financial health of companies and governmental entities, which can impact spending on new technologies.
• Industry Cycles: The Company's business is influenced by sector-specific cyclical patterns in industries it serves, such as financial services, healthcare, manufacturing, and government.

Planning & Forecasting: The size and complexity of sales transactions, coupled with lengthy sales cycles and multiple levels of customer approvals, make forecasting difficult and can lead to variability in quarterly financial results. The shift to subscription-based and consumption-based pricing models also introduces variability in revenue recognition and forecasting.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations: Teradata Corporation is subject to diverse and complex global laws and regulations, including those pertaining to technology (such as AI/ML), data privacy, environmental protection, and ESG reporting. Compliance with these evolving regulations has not historically had a material effect on capital expenditures, earnings, or competitive position. International Compliance: The Company operates in numerous foreign jurisdictions and is subject to multi-jurisdictional requirements, including increasing environmental regulations in California and the European Union. Data Privacy: Current and evolving privacy laws and regulations, along with cross-border data transfer restrictions, may impact the use and adoption of Teradata Corporation's solutions and services. The Company is required to maintain global security certifications such as ISO 27001, PCI, and FedRAMP®.

Trade & Export Controls:

• Export Restrictions: Teradata Corporation's offerings are subject to United States export controls and local country import controls. Changes in these regulations could delay international product introductions or restrict sales to certain countries or customers.
• Sanctions Compliance: The Company is exposed to risks related to the imposition of sanctions against countries, companies, persons, or entities with whom it does business.
• Anti-bribery/Anti-corruption: The Company is subject to the United States Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010, and similar anti-bribery and anti-corruption laws in other countries.

Legal Proceedings:

• SAP Litigation: Teradata Corporation was involved in litigation against SAP SE, SAP America, Inc., and SAP Labs, LLC, alleging trade secret misappropriation and anticompetitive practices. The U.S. Court of Appeals for the Ninth Circuit overturned a district court decision, remanding antitrust and trade secret claims for further proceedings. SAP's petition to the Supreme Court was denied. On February 19, 2026, Teradata Corporation entered into a Settlement Agreement with SAP, resolving all past and pending litigation. Teradata Corporation will receive a gross payment of $480 million, with an estimated net cash benefit of $355-$362 million before taxes.
• Securities Class Action: A putative securities class action lawsuit, Ostrander v. Teradata Corporation, was filed alleging federal securities law violations. The court granted Teradata Corporation's motion to dismiss, and final judgment was entered in the Company's favor on January 6, 2026. No notice of appeal has been filed.
• Shareholder Derivative Actions: Two pending shareholder derivative actions, Brennan v. McMillan, et al. and Lipshutz v. McMillan, et al., with similar allegations, are currently stayed.

Tax Strategy & Considerations

Tax Profile (2025):

• Effective Tax Rate: 27.0% (compared to 30.5% in 2024).
• Rate Drivers: The 2025 effective tax rate included a net $2 million discrete tax benefit, primarily from a $9 million tax benefit due to the reversal of unrecognized tax benefits (majority from the settlement of the 2020 federal income tax audit), largely offset by $7 million of additional tax expense from stock-based compensation vesting.
• Unrecognized Tax Benefits: As of December 31, 2025, Teradata Corporation had $38 million in unrecognized tax benefits, with $13 million recorded as a non-current liability and $25 million offset against deferred tax assets.
• Valuation Allowance: The Company recorded $110 million in valuation allowances in 2025, including $69 million against California R&D tax credit carryforwards, $24 million against US Foreign Tax Credit Carryforwards, and $17 million related to operating entities with cumulative 3-year net operating losses.

Geographic Tax Planning:

• International Tax Structure: The United States transitioned to a territorial system of international taxation effective January 1, 2018, generally not subjecting future foreign earnings to U.S. taxation upon repatriation.
• Foreign Earnings: Teradata Corporation considers a majority of its foreign earnings not indefinitely reinvested outside the United States and has recorded $4 million of deferred foreign withholding tax expense for certain earnings expected to be taxable upon remittance.

Tax Reform Impact:

• OECD Pillar Two: The Global Anti-Base Erosion rules (Pillar Two), ensuring multinational companies pay a 15% global minimum tax, did not have a material impact on Teradata Corporation's effective tax rate in 2025 or 2024. The Company continues to monitor developments and evaluate future impacts.

Insurance & Risk Transfer

Risk Management Framework: Teradata Corporation's cybersecurity program is integrated into its Enterprise Risk Management (ERM) program, designed to protect information and systems from unauthorized access, use, disclosure, disruption, modification, or destruction. The program includes processes for assessing, identifying, and managing material cybersecurity risks, defining roles and responsibilities (Cybersecurity Incident Response Plan), continuous employee training, communication protocols, and incident detection/response tools. The Company's information security processes are built on global practices, standards, and frameworks, including ISO, IEC, and NIST Cybersecurity Framework. Teradata Corporation engages external advisors and independent security firms to review, assess, test, and certify components of its cybersecurity program.

Insurance Coverage: Teradata Corporation maintains insurance coverage for certain liabilities related to cyber-attacks and/or data breaches. However, the Company acknowledges that such coverage may not adequately cover all potential costs, expenses, liabilities, and damages that could arise from such incidents.