NYSE: TDC TERADATA CORP /DE/ 8-K

Teradata reports $480M SAP settlement, raises 2026 cash flow guidance on $302M net benefit

Filed May 5, 2026 · Period ending May 5, 2026 · ~1 min read

Key Changes

high

Settled litigation with SAP for $480M gross ($302M net after-tax cash benefit), adding $2.90 to Q1 GAAP EPS; company expects to pay ~$57M in related taxes by year-end 2026.

Exhibit 99.1 view on EDGAR →
high

Q1 2026 total ARR grew 3% to $1.49B, public cloud ARR up 13% to $686M; recurring revenue rose 12% to $400M, total revenue up 6% to $444M.

Exhibit 99.1 view on EDGAR →
high

Raised full-year 2026 GAAP EPS guidance to $4.22–$4.32 and operating cash flow to $642M–$662M (includes SAP settlement); reaffirmed non-GAAP EPS of $2.55–$2.65.

Exhibit 99.1 view on EDGAR →
medium

Q1 operating cash flow surged to $401M (vs. $8M prior year) and free cash flow to $390M (vs. $7M), both boosted by SAP settlement; adjusted free cash flow $31M.

Exhibit 99.1 view on EDGAR →
medium

Q2 2026 guidance: recurring revenue -2% to flat, total revenue -2% to -4%, non-GAAP EPS $0.53–$0.57, reflecting normal seasonality and contract timing.

Exhibit 99.1 view on EDGAR →

Summary

Teradata disclosed a major litigation settlement with SAP, receiving $480 million gross in Q1 2026. After legal fees and taxes, the net after-tax cash benefit is $302 million, with approximately $57 million in cash taxes due by year-end. The settlement added $2.90 to Q1 GAAP diluted EPS, which expected to reach $3.47 versus $0.45 in the prior-year quarter.

Operating and free cash flow surged to $401 million and $390 million respectively, compared to $8 million and $7 million a year earlier, driven by the settlement proceeds. Underlying business performance showed steady progress. Total ARR grew 3% year-over-year to $1.49 billion, with public cloud ARR up 13% to $686 million. Recurring revenue rose 12% to $400 million and total revenue increased 6% to $444 million.

Non-GAAP diluted EPS of $0.88 (versus $0.66 prior year) reflects operational improvement independent of the settlement. The company raised full-year 2026 GAAP EPS guidance to $4.22–$4.32 and operating cash flow to $642 million–$662 million, both incorporating the SAP benefit, while reaffirming non-GAAP EPS of $2.55–$2.65 and ARR growth of 2%–4%. Q2 guidance anticipates normal seasonal softness with recurring revenue flat to down 2% and non-GAAP EPS of $0.53–$0.57.

Section-by-Section Diff

Event · Item 2.02 — Results of Operations and Financial Condition

~200 words

Teradata disclosed Q1 2026 earnings results and updated guidance for Q2 and full-year 2026.

2 Added

Added Q1 2026 earnings and 2026 guidance high

Added in current filing · verify on EDGAR →

On May 5, 2026, the Company issued a press release setting forth its first quarter of fiscal year 2026 operating results as well as current outlook estimates for the second quarter of 2026 and for the full-year 2026

Teradata announced its first quarter 2026 financial results and provided updated guidance for the second quarter and full year 2026. The specific financial metrics and outlook figures are contained in the press release attached as Exhibit 99.1, which is not included in this 8-K body text.

Added Supplemental investor materials medium

Added in current filing · verify on EDGAR →

The Company also posted supplemental material dated May 5, 2026, on the Investor Relations page of its website at investor.teradata.com.

Teradata made additional supplemental materials available on its investor relations website to accompany the earnings announcement. These materials typically provide detailed financial tables, metrics, and management commentary beyond what appears in the press release.

Event · Exhibit 99.1

~4,600 words View exhibit on EDGAR ↗

Teradata reported Q1 2026 results with 3% ARR growth and disclosed a $480M gross settlement with SAP, yielding $302M net after-tax benefit.

4 Added

Added SAP litigation settlement high

Added in current filing · view on EDGAR →

On February 19, 2026, Teradata entered into a settlement agreement with SAP. From the settlement, Teradata received a gross payment of $480 million in the first quarter of 2026. After accounting for legal fees and other expenses for the litigation and resulting settlement, the pre-tax net amount was $359 million, with $79 million of tax expense being recognized as a discrete item for US GAAP purposes in the first quarter. The net after tax settlement positively impacted GAAP Diluted EPS by $2.90 in the first quarter of 2026.

Teradata settled litigation with SAP, receiving $480 million gross in Q1 2026. After legal fees and expenses, the pre-tax net was $359 million; after $79 million in tax, the net after-tax benefit was $280 million, adding $2.90 to GAAP diluted EPS. The company expects to pay approximately $57 million in cash taxes related to the settlement by year-end 2026, resulting in a total after-tax cash benefit of $302 million.

Added Q1 2026 earnings high

Added in current filing · view on EDGAR →

Total ARR increased to $1.492 billion from $1.442 billion, an increase of 3% as reported and 2% in constant currency ... Public cloud ARR increased to $686 million from $606 million, an increase of 13% as reported and 12% in constant currency ... Recurring revenue was $400 million versus $358 million, an increase of 12% as reported and 9% in constant currency ... Total revenue was $444 million versus $418 million, an increase of 6% as reported and 4% in constant currency ... GAAP diluted EPS was $3.47 versus $0.45 per share ... Non-GAAP diluted EPS was $0.88 versus $0.66 per share

Teradata reported Q1 2026 total ARR of $1.492 billion (up 3% year-over-year), public cloud ARR of $686 million (up 13%), recurring revenue of $400 million (up 12%), and total revenue of $444 million (up 6%). GAAP diluted EPS was $3.47 (versus $0.45 prior year), heavily influenced by the SAP settlement; non-GAAP diluted EPS was $0.88 (versus $0.66), reflecting underlying operational improvement.

Added Q2 2026 guidance medium

Added in current filing · view on EDGAR → · paraphrased

For the second quarter of 2026: Recurring revenue in the range of -2% to flat year-over-year ... Total revenue in the range of -4% to -2% year-over-year ... GAAP diluted EPS is expected to be in the range of $0.22 to $0.26 per share ... Non-GAAP diluted EPS is expected to be in the range of $0.53 to $0.57 per share

Teradata guided Q2 2026 recurring revenue to decline 2% or remain flat year-over-year, total revenue to decline 2% to 4%, GAAP diluted EPS of $0.22 to $0.26, and non-GAAP diluted EPS of $0.53 to $0.57. The sequential revenue decline reflects normal business seasonality and timing of customer contracts.

Added Full-year 2026 guidance update high

Added in current filing · view on EDGAR → · paraphrased

For the full year 2026, Teradata increases the following ranges: GAAP diluted EPS is now expected to be in the range of $4.22 to $4.32 ... Cash flow from operations of $642 million to $662 million, which includes an after-tax net benefit of $302 million related to a settlement with SAP ... Adjusted free cash flow of $320 million to $340 million ... For the full year 2026, Teradata reaffirms the following ranges: Total ARR growth of 2% to 4% year-over-year ... Recurring revenue in the range of flat to 2% year-over-year ... Total revenue range in the range of -2% to flat year-over-year ... Non-GAAP diluted EPS in the range of $2.55 to $2.65 per share

Teradata raised full-year 2026 GAAP EPS guidance to $4.22 to $4.32 (from prior guidance not disclosed here) and operating cash flow to $642 million to $662 million, both reflecting the SAP settlement. The company introduced adjusted free cash flow guidance of $320 million to $340 million. It reaffirmed total ARR growth of 2% to 4%, recurring revenue of flat to 2%, total revenue of -2% to flat, and non-GAAP EPS of $2.55 to $2.65.