v3.25.2
Segment and Other Supplemental Information
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Segment and Other Supplemental Information Segment and Other Supplemental Information
On August 5, 2024, Teradata announced that it realigned its sales function and initiated global restructuring to optimize operations. Due to these organizational changes Teradata now manages its business under two segments, which are also the Company’s operating segments: (1) Product Sales and (2) Consulting Services. The Company’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. 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, who is the Company's President and Chief Executive Officer, evaluates the performance of the segments based on revenue and multiple profit measures, including segment gross profit. For management reporting purposes, assets are not allocated to the segments. Prior period segment information has been reclassified to conform to the current period presentation.
The following table presents segment revenue and segment gross profit for the Company:
 Three Months Ended
June 30,		Six Months Ended June 30,
In millions2025202420252024
Segment revenue
Product Sales$357 $373 $725 $769 
Consulting Services51 63 101 132 
Total revenue408 436 826 901 
Segment cost of revenue
Product Sales (1)
118 111233 229
Consulting Services (2)
52 54103 112
Total segment cost of revenue170 165 336 341 
Segment gross profit
Product Sales239 262 492 540 
Consulting Services(1)9 (2)20 
Total segment gross profit238 271 490 560 
Stock-based compensation expense5 5 9 9 
Acquisition, integration, reorganization, and transformation-related costs3 1 3 2 
Total gross profit230 265 478 549 
Selling, general and administrative expenses135 131 251 292 
Research and development expenses71 68 137 143 
Income from operations$24 $66 $90 $114 
(1) Cost of Product Sales, for the three months ended June 30, included product costs of $59 million in 2025 and $54 million in 2024 for Public Cloud fees and direct product and third-party software costs associated with the Company's perpetual product sales. Depreciation expense for the three months ended June 30, included in Cost of Product Sales, was $19 million in 2025, and $20 million in 2024. The remaining cost of Product Sales included payroll and benefits costs, and corporate allocations including back-office information technology, real estate, and other support services. Cost of Product Sales, for the six months ended June 30, included product costs of $123 million in 2025 and $109 million in 2024 for Public Cloud fees and direct product and third-party software costs associated with the Company's perpetual product sales. Depreciation expense for the six months ended June 30, included in Cost of Product Sales, was $35 million in 2025, and $41 million in 2024. The remaining cost of Product Sales included payroll and benefits costs, and corporate allocations including back-office information technology, real estate, and other support services.     
(2) Cost of Consulting Services, for the three months ended June 30, included payroll and benefit costs of $33 million in 2025 and $34 million in 2024. The remaining cost of Consulting Services included corporate allocations, including back-office information technology, real estate, and other support services. Cost of Consulting Services, for the six months ended June 30, included payroll and benefit costs of $65 million in 2025 and $71 million in 2024. The remaining cost of Consulting Services included 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.