Alphabetical terms of a taxonomy

gistfile1.txt

<?php

$taxonomy = 'category'; // set your taxonomy here

$terms = get_terms( $taxonomy, [
    'hide_empty' => true,
    'orderby' => 'name',
    'order' => 'ASC',
  ] );

$grouped_terms = [];

foreach ( $terms as $term ) {
  $first_letter = strtoupper( $term->name[0] );

  if ( ! isset( $grouped_terms[ $first_letter ] ) ) {
    $grouped_terms[ $first_letter ] = [];
  }

  $grouped_terms[ $first_letter ][] = $term;
}

$output = '';

foreach ( $grouped_terms as $letter => $terms ) {
  $output .= '<h2>' . $letter . '</h2>';
  $output .= '<ul>';

  foreach ( $terms as $term ) {
    $output .= '<li><a href="' . esc_url( get_term_link( $term ) ) . '">' . $term->name . '</a></li>';
  }

  $output .= '</ul>';
}

echo $output;

?>