Teradata Corporation (NYSE: TDC) shares experienced a significant drop of 13.14% in after-hours trading on Wednesday, following the release of the company's fourth-quarter 2024 financial results and a lackluster outlook for 2025.

In the fourth quarter, Teradata's total revenue declined 11% year-over-year to $409 million, missing analysts' expectations. The drop was driven by a 25% decrease in consulting services revenue and an 8% decline in product sales revenue. For the full year 2024, total revenue fell 5% to $1.75 billion.

Despite the top-line weakness, Teradata managed to improve its profitability, reporting non-GAAP diluted earnings per share (EPS) of $0.53 for Q4 2024, down 5% from the prior year but better than analysts' projections. However, the company's outlook for 2025 was disappointing, forecasting total revenue to decline between 4% and 6% in constant currency terms and non-GAAP diluted EPS to be in the range of $2.15 to $2.25, missing analyst estimates.

In addition to the lackluster financial performance and guidance, Teradata announced that Chief Financial Officer Claire Bramley will be leaving the company, effective March 31, to take a CFO position at another firm outside Teradata's industry. The company has initiated a search process to identify a permanent successor.

Analysts cited the challenging macroeconomic conditions and customers' cautious spending as reasons behind Teradata's revenue decline. However, the company's focus on cloud and subscription-based offerings, as well as cost-cutting measures, helped bolster its profitability. Despite these efforts, the muted outlook for 2025 and the CFO's departure have raised concerns among investors, leading to the sharp sell-off in Teradata's stock.