Teradata Corporation

11/06/2026 | Press release | Distributed by Public on 11/06/2026 08:33

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A").
You should read the following discussion in conjunction with the Condensed Consolidated Financial Statements (Unaudited) and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements contained in the MD&A are forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of this Quarterly Report on Form 10-Q and in our 2025 Annual Report. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Overview
At Teradata Corporation ("we," "us," "Teradata," or the "Company"), we are focused on helping organizations activate the intelligence in their enterprise and turn the insights from across their organization into outcomes. We believe that we have architected our platform for autonomous AI operations and organizations' toughest data and analytics challenges, particularly as enterprises are evaluating how to cost-effectively deploy agentic AI. We've also seen an emergence of hybrid environments that reflected a growing understanding of how enterprises can best leverage both on-premises and cloud deployment options to meet their diverse organizational needs.
With our AI and knowledge platform, underpinned by our extensive patented workload management optimization technology, we believe we are well positioned to help enterprises become more autonomous, while enabling our customers to focus on managing, securing, and providing trustworthy data for AI and analytics across hybrid and multi-cloud environments.
To allow for greater transparency regarding the progress we are making toward achieving our strategic objectives, we utilize the following financial and performance metrics:
•Annual Recurring Revenue ("ARR") - annual value at a point in time of recurring contracts.
•Total Annual Recurring Revenue ("Total ARR") - annual contract value for all active and contractually binding term-based contracts at the end of the period, including cloud, recurring AI services, subscriptions, hardware rental, maintenance and software upgrade rights.
•Public Cloud ARR (included within Total ARR) - annual contract value for all active and contractually binding term-based contracts at the end of the period that are operated in a public cloud environment.
Third 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 third quarter of 2026:
•At the end of the third quarter of 2026, Total ARR was $1.512 billion compared to $1.490 billion at the end of the third quarter of 2025, increasing 1% as compared to the third quarter of 2025, including a 1% negative impact from foreign currency fluctuations.
•At the end of the third quarter of 2026, Public Cloud ARR was $700 million compared to $633 million at the end of the third quarter of 2025, increasing 11% as compared to the third quarter of 2025, with an immaterial negative impact from foreign currency fluctuations.
•Total revenue was $399 million for the third quarter of 2026, decreasing by $17 million compared to the third quarter of 2025, with recurring revenue down 2%. Perpetual software licenses, hardware and other revenue was flat year over year, and consulting services revenue decreased 21%. Foreign currency fluctuations did not have a material impact on total revenue for the quarter compared to the prior year.
•Gross margin decreased to 59.6% in the third quarter of 2026 from 60.8% in the third quarter of 2025, primarily due to a higher mix of Public Cloud revenue, the timing of infrastructure charges, and adverse deal mix within the Perpetual software licenses, hardware and other revenue in the period.
•Operating expenses for the third quarter of 2026 decreased 4% compared to the third quarter of 2025, largely from lower salary and wage expense in the third quarter of 2026, due to the impact of restructuring actions taken in the prior year, as well as incremental provisions for uncollectable accounts in the prior year that didn't recur in the current period.
•The Company saw an operating income of $54 million in the third quarter of 2026, compared to operating income of $61 million in the third quarter of 2025.
•Net income in the third quarter of 2026 was $38 million, compared to $40 million in the third quarter of 2025.
Results of Operations for the Three Months Ended September 30, 2026
Compared to the Three Months Ended September 30, 2025
Revenue
% of % of
In millions 2026 Revenue 2025 Revenue
Recurring $ 359 90.0 % $ 366 88.0 %
Perpetual software licenses, hardware and other 3 0.7 % 3 0.7 %
Consulting services 37 9.3 % 47 11.3 %
Total revenue $ 399 100 % $ 416 100 %
Total revenue decreased $17 million, or 4%, in the third quarter of 2026, with no material impact from foreign currency fluctuations. Recurring revenue decreased 2% as compared to the third quarter of 2025, with no material impact from foreign currency fluctuations. The decrease in recurring revenue for the third quarter of 2026 was impacted by lower annual upfront software subscription revenue, offset in part by growth from Public Cloud revenue. Revenue from perpetual software licenses, hardware and other was flat year over year, primarily consisting of perpetual hardware. Consulting services revenue decreased 21% or $10 million in the third quarter of 2026, with a 2% negative 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 and first half of 2026.
Financial and Performance Measures
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 September 30, 2026 and 2025 our Total ARR consisted of:
In millions 2026 2025
Public Cloud $ 700 $ 633
Subscription 744 765
Maintenance and Software upgrade rights 68 92
Total ARR $ 1,512 $ 1,490
At the end of the third quarter of 2026, Total ARR increased 1% as compared to the third quarter of 2025, including a 1% negative impact from foreign currency fluctuations. At the end of the third quarter of 2026, Public Cloud ARR increased 11% as compared to the third quarter of 2025, with an immaterial impact from foreign currency fluctuations. Public Cloud ARR growth in the third quarter of 2026 was primarily driven by customer demand of our Public Cloud offering and customer migrations. The decreases in Subscriptions and Maintenance and Software upgrade rights ARR were primarily driven by customer migrations to Public Cloud ARR and on-premises erosions.
In the third quarter of 2026, we experienced the following trends:
•Customers expanding into additional cloud capabilities as they see value when they migrate to our Public Cloud offering.
•Customer interest in AI-driven use cases continues to grow across various industries, including initial transactions incorporating our AI capabilities.
•Some customers implementing cloud migration projects on a staged basis over time.
•Began transitioning customers to a new unit-based pricing model designed to provide greater flexibility in how customers consume compute capacity across deployment options, including elastic and consumption-oriented purchasing.
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 September 30, 2026, Teradata is now estimating an approximately 0.5% positive impact from currency translation on our 2026 full-year total reported revenues.
We expect expansion and to a lesser degree, migration activity as the primary contributors for Public Cloud ARR growth in 2026.
Gross Profit
% of % of
In millions 2026 Revenue 2025 Revenue
Recurring $ 239 66.6 % $ 250 68.3 %
Perpetual software licenses, hardware and other (1) (33.3) % 3 100.0 %
Consulting services - - % - - %
Total gross profit $ 238 59.6 % $ 253 60.8 %
The decrease in recurring revenue gross profit as a percentage of revenue was impacted by a higher mix of Public Cloud revenues versus on-premises revenue as compared to the prior-year period, the impact of upfront subscription software revenue recognized earlier in the year, as well as the timing of certain infrastructure charges recognized in the period, offset in part by continued improvement in our Public Cloud margin rate.
Perpetual software licenses, hardware and other gross profit as a percentage of revenue decreased as compared to the prior-year period primarily due to deal mix.
Consulting services gross profit as a percentage of revenue was flat as compared to the prior year as cost reduction efforts were taken reflective of the revenue decline over the past year.
Operating Expenses
% of % of
In millions 2026 Revenue 2025 Revenue
Selling, general and administrative expenses $ 109 27.3 % $ 122 29.3 %
Research and development expenses 75 18.8 % 70 16.8 %
Total operating expenses $ 184 46.1 % $ 192 46.2 %
Selling, general and administrative ("SG&A") expense decreased year over year due to lower employee salary and wage expense, the result of continued budget discipline focused on cost reductions across the Company, including the impact of restructuring actions taken in the prior year, as well as incremental provisions for uncollectable accounts in the prior year that didn't recur in the current period. 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 Expense, net
In millions 2026 2025
Interest income $ 3 $ 2
Interest expense (2) (7)
Other (5) (2)
Other expense, net $ (4) $ (7)
Other expense, net in the third quarter of 2026 and 2025 is comprised primarily of interest expense on finance leases, as well as benefit costs on our pension and postemployment plans, offset in part by interest income earned on our cash and cash equivalents, and gains/losses from foreign currency transactions.
As disclosed in Note 5 of Notes to Condensed Consolidated Financial Statements (Unaudited), during the three months ended September 30, 2026 and 2025, the Company incurred immaterial pre-tax investment losses related to Blue Chip Swap transactions.
Provision for Income Taxes
Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant infrequent or unusual items which are required to be discretely recognized within the current interim period.
The effective tax rates for the three months ended September 30, 2026 and 2025 were as follows:
2026 2025
Effective tax rate 24.0 % 25.9 %
For the three months ended September 30, 2026, the Company had no material discrete tax adjustments.
For the three months ended September 30, 2025, the Company had no material discrete tax adjustments.
Effective January 1, 2024, many jurisdictions where we conduct business, including several European Union members and G20 countries, have enacted a 15% global minimum tax on the income generated in each of the jurisdictions in which we operate, referred to as "Pillar Two" of the Global Anti-Base Erosion rules framework that was undertaken by the Organization for Economic Co-operation and Development ("OECD"). We are continuing to monitor developments and evaluate the impacts of the Pillar Two rules; we do not expect the Pillar Two rules to have a material impact to our annual effective tax rate.
We expect that a majority of our foreign earnings will be repatriated to the U.S. As a result, the effective tax rates in the periods presented are largely based upon the forecasted pre-tax earnings mix between the U.S. and other foreign taxing jurisdictions where we conduct our business.
We estimate that the full-year effective tax rate for 2026 will be approximately 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.
The forecasted tax rate is based on the foreign profits being taxed at an overall effective tax rate of approximately 20%, as compared to the U.S. federal statutory tax rate of 21%.
Revenue and Gross Profit by Operating Segment
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 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).
Results of Operations for the Nine Months Ended September 30, 2026
Compared to the Nine Months Ended September 30, 2025
Revenue
% of % of
In millions 2026 Revenue 2025 Revenue
Recurring $ 1,122 89.5 % $ 1,078 86.8 %
Perpetual software licenses, hardware and other 12 1.0 % 16 1.3 %
Consulting services 119 9.5 % 148 11.9 %
Total revenue $ 1,253 100 % $ 1,242 100 %
Total revenue increased $11 million, or 1%, in the first nine months of 2026, with a 1% positive impact from foreign currency fluctuations. Recurring revenue increased 4%, with a 1% positive impact from foreign currency fluctuations, and benefit from higher Public Cloud revenue, which increased primarily due to expansions and migrations.
Revenues from perpetual software licenses, hardware and other decreased $4 million, or 25% year over year in the first nine months of 2026.
Consulting services revenue decreased 20% in the first nine months of 2026, with a 1% negative impact from foreign currency fluctuations. The consulting services revenue decrease is primarily the result of lower order performance from the second half of 2025 and the first half of 2026.
Gross Profit
% of % of
In millions 2026 Revenue 2025 Revenue
Recurring $ 759 67.6 % $ 735 68.2 %
Perpetual software licenses, hardware and other 2 16.7 % 4 25.0 %
Consulting services (4) (3.4) % (8) (5.4) %
Total gross profit $ 757 60.4 % $ 731 58.9 %
Recurring revenue gross profit as a percentage of revenue was down slightly, with the impact of a higher mix of Public Cloud revenues versus on-premises revenue largely offset by continued improvement in our Public Cloud margin rate as compared to the prior-year period.
Perpetual software licenses, hardware and other gross profit as a percentage of revenue decreased as compared to the prior-year period primarily due to deal mix.
Consulting services gross profit as a percentage of revenue improved somewhat as compared to the prior year primarily due to cost reduction efforts taken over the past year.
Operating Expenses
% of % of
In millions 2026 Revenue 2025 Revenue
Selling, general and administrative expenses $ 469 37.4 % $ 373 30.0 %
Research and development expenses 222 17.7 % 207 16.7 %
Total operating expenses $ 691 55.1 % $ 580 46.7 %
SG&A expenses increased 26% for the first nine months of 2026 as compared to the prior year, primarily due to the impact of the $121 million of expenses incurred in connection with the SAP litigation and related settlement and an increase in stock-based compensation expense partially offset by continued budget discipline focused on cost reductions across the Company, including the impact of restructuring actions taken in the prior year.
R&D expenses increased for the first nine months of 2026 as compared to prior year, due to investments in Public Cloud and AI-related technology opportunities offset in part by continued cost reduction initiatives.
Other Income (Expense), net
In millions 2026 2025
Interest income $ 13 $ 7
Interest expense (14) (20)
Other 469 (13)
Other income (expense), net $ 468 $ (26)
Other income (expense), net for the nine months of 2026 and 2025 is comprised primarily of the SAP Legal Settlement Amount proceeds, interest income earned on our cash and cash equivalents, and gains from foreign currency transactions, offset in part by interest expense on long-term debt (which was paid off in June 2026) and finance leases, as well as benefit costs associated with our pension and postemployment plans. Interest income is higher primarily due to higher average cash balances during the current year as compared to the prior period. Other income (expense) has improved by $494 million year-over-year primarily due to the receipt of the SAP Legal Settlement Amount as disclosed in more detail in Item 1. Financial Statements to this Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 (the "Form 10-Q") (see Note 5. Supplemental Financial Information).
During the second quarter of 2026, the Company recorded a gain of approximately $3 million related to the fair value of the Company's interest rate swap upon its termination, see Note 7, Derivative Instruments and Hedging Activities, for further details. As disclosed in Note 5 of Notes to Condensed Consolidated Financial Statements (Unaudited), during the nine months ended September 30, 2026 and 2025, the Company incurred $1 million of pre-tax investment losses related to Blue Chip Swap transactions.
Provision for Income Taxes
The effective tax rates for the nine months ended September 30, 2026 and 2025 were as follows:
2026 2025
Effective tax rate 21.5 % 25.6 %
For the nine months ended September 30, 2026, the Company recorded $66 million of net discrete tax expense, a majority of which related to the tax expense impact from the receipt of the SAP Settlement Net Proceeds.
For the nine months ended September 30, 2025, the Company recorded $1 million of net discrete tax benefit, as the discrete tax benefit recognized in the first quarter of 2025 related to the reversal of uncertain tax positions due to the Company's completion of the IRS audit of its 2020 tax return, was mostly offset by incremental tax expense from stock-based compensation vesting.
Financial Condition, Liquidity and Capital Resources
Cash provided by operating activities was $598 million, which increased by $453 million in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. $326 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, of the Notes to Condensed Consolidated Financial Statements (Unaudited) of this Form 10-Q. Teradata used approximately $29 million of cash in the first nine months of 2026 for severance payments, as compared to $20 million in the first nine months of 2025.
Teradata's management uses a financial measure called "free cash flow," which is not a measure defined under GAAP. We use free cash flow (which we define as net cash provided by operating activities less investing activities related to capital expenditures for property and equipment and additions to capitalized software) as one measure of assessing the financial performance of the Company, and this may differ from the definitions used by other companies. The components that are used to calculate free cash flow are GAAP measures taken directly from the Condensed Consolidated Statements of Cash Flows (Unaudited). We believe that free cash flow information is useful for investors because it relates the operating cash flow of the Company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash available after capital expenditures, for among other things, investments in the Company's existing businesses, strategic acquisitions and repurchases of Teradata common stock. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other non-discretionary expenditures that are not deducted from the measure. This non-GAAP measure should not be considered a substitute for, or superior to, cash flows from operating activities under GAAP.
The table below shows net cash provided by operating activities and net cash used in investing activities related to capital expenditures, along with free cash flow, for the following periods:
Nine Months Ended September 30,
In millions 2026 2025
Net cash provided by operating activities $ 598 $ 145
Less:
Expenditures for property and equipment (16) (10)
Additions to capitalized software (2) (1)
Free cash flow $ 580 $ 134
As disclosed in Note 5, Supplemental Financial Information, of the Notes to Condensed Consolidated Financial Statements (Unaudited), during the nine months ended September 30, 2026, we received $480 million cash from the SAP Settlement Agreement and paid $121 million in related expenses. Additionally, approximately $33 million in cash taxes related to the SAP Settlement Net Proceeds were paid during the nine months ended September 30, 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 nine months ended September 30, 2026.
Teradata's financing activities for the nine months ended September 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 September 30, 2026, we had no outstanding borrowings on our $400 million Revolving Credit Facility (as defined below).
We have two share repurchase programs that were authorized by our Board of Directors:
•The dilution offset share repurchase program allows us to repurchase Teradata common stock to the extent (i) cash is received from the exercise of stock options and (ii) employees purchase Teradata stock pursuant to the Teradata Employee Stock Purchase Plan ("ESPP"). The purpose of the dilution offset share repurchase program is to offset dilution from shares issued pursuant to the exercise of stock options and shares purchased under the ESPP.
•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 $377 million remaining under the Repurchase Program as of September 30, 2026.
In the aggregate under the dilution offset share repurchase program and the Repurchase Program, we repurchased approximately 4.5 million shares of common stock at an average price per share of $29.55 in the nine months ended September 30, 2026.
Share repurchases are reported on a trade date basis. Our share repurchase activity depends on factors such as our working capital needs, our cash requirements for capital investments, our stock price, and economic and market conditions.
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 $3 million for the nine months ended September 30, 2026 and a net inflow of $3 million for the nine months ended September 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 $413 million as of September 30, 2026 and $462 million as of December 31, 2025. The remaining balance held in the U.S. was $19 million as of September 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, the Company may be required to seek additional financing alternatives.
Long-term Debt. On June 24, 2026, the Company entered into a Credit Agreement with Bank of America, N.A., as Administrative Agent and the lenders party thereto (the "Credit Agreement"). The 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 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 two cross currency swaps to hedge a portion of Euro currency exposure of its net investment in certain foreign subsidiaries. As of September 30, 2026, the Company had no borrowings outstanding under the Revolving Credit Facility, leaving $400 million in borrowing capacity available under the Revolving Credit Facility.
The material terms and conditions of Revolving Credit Facility are substantially similar to the material terms and conditions of the Prior Agreement, except for the removal of sustainability features and the term loan commitment present in the Prior Agreement and certain other changes to covenants and other matters.
Contractual and Other Commercial Commitments. Other than the Credit Agreement, interest rate swap termination and new cross currency swaps, there has been no significant change in our contractual and other commercial commitments as described in the 2025 Annual Report. Our commitments and contingencies are discussed in Note 8, Commitments and Contingencies, of the Notes to Condensed Consolidated Financial Statements (Unaudited).
Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with GAAP. In connection with the preparation of these financial statements, we are required to make assumptions, estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and the related disclosure of contingent liabilities. These assumptions, estimates and judgments are based on historical experience and assumptions that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgment. Our critical accounting policies are those that require assumptions to be made about matters that are highly uncertain. Different estimates could have a material impact on our financial results. Judgments and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions or circumstances. Our management periodically reviews these estimates and assumptions to ensure that our financial statements are presented fairly and are materially correct. We assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us as of September 30, 2026 and through the date of this report. The accounting matters assessed included, but were not limited to, our allowance for doubtful accounts, stock-based compensation, the carrying value of our goodwill and other long-lived assets, financial assets, valuation allowances for tax assets and revenue recognition.
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 2025 Annual Report. Teradata's senior management has reviewed these critical accounting policies and related disclosures and determined that there were no significant changes in our critical accounting policies in the nine months ended September 30, 2026.
New Accounting Pronouncements
See discussion in Note 2, New Accounting Pronouncements, of the Notes to Condensed Consolidated Financial Statements (Unaudited) for new accounting pronouncements.
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