Teradata (TDC) 6 Aug 212021 Q2 Earnings call transcript

Good afternoon. My name is Charlie and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata Second Quarter 2021 Earnings Call. [Operator Instructions] Thank you. I would like to hand the conference over to your host today, Christopher Lee, Senior Vice President of Investor Relations and Corporate Development. you. Thank ahead. go Please

Financial to President second will and followed Teradata’s call Welcome financial discuss Steve results. lead earnings McMillan, today; Chief Bramley, Claire Teradata’s Chief by who Teradata’s afternoon. will quarter our XXXX call. our Officer, Good Executive Officer,

includes other discussion are statements. information considered today Our that forward-looking forecasts and

factors of today’s statements to these of filed duty outlook, release. the that expense to forward-looking and to XX-Q measures, today release that and other uncertainties discussing current our tomorrow. update June as earnings be we materially. risks ended items including our expected actual differ subject SEC such is results in XX, financial in the the non-GAAP compensation for are undertake XX-K be our While statements. they our are These which in we or will and with most XXXX exclude our call, quarter no items risk Form could described On earnings made certain and reflect today’s obligation number SEC These to described and forward-looking as statements special cause filings, a in are recent stock-based

our as discuss of non-GAAP call The to GAAP free at also items release, investor.teradata.com. indicated our Relations website is revenue reconciliation is A earnings on in page unless which the otherwise. Teradata’s Investor flow other will a currency non-GAAP results discussion and constant We reflects accessible cash today’s such of comparisons. on non-GAAP on included basis, measures

to at our now our available call the metrics Investor trends later of this be over earnings on conference Steve. document the I found investor.teradata.com. today key be replay segment in Additional on on call turn And and A commentary Relations will website. web page will discussion can

a second Thanks everyone. us report joining to solid quarter. afternoon, Teradata pleased I for today. am delivered Good

as key in well outperformance cash EPS year-over-year free sales worldwide revenue, resulted cloud including XXX% our discipline growth cost well in and financial growth metrics, Our as and growth non-GAAP public continued in and operational operational as recurring flow. in execution as and ARR

executional increased I ongoing attention, sustained an our free with We we stream cash will and revenue and its expect also drive of cloud margin growth pleased expansion to upward flows. maintain our trajectory. to continues am business growth report this focus

of Our large help provide address need They of all from to relevant access address machine their behaviors get Teradata has to the well environments. remote transformation need the data macro their real Organizations whether enterprise customers of from that through coming buying learning, scale insights resides, as environment. proven are as in can accelerating AI, them to environments. customer stemming business ever-increasing ongoing help changing or and challenges in work agendas XG on-prem and and global volumes data as will regardless insights public data they these where pandemic we manage digital data analytics models the it customers IoT. the that from new cloud

price hypergrowth The day previous enterprise from that data deploy and and by environment their less enterprise competing the get There the with goes large in than are in not a value at We market. most technologies an and winning customers with growing the giving one. a market. scale data is help us advantage outstanding we performance

able a environments being the quite people on-prem see live executed team combination. multi-cloud our through hybrid Our team, Teradata data, support and purpose power of seamlessly their our multiple to in QX. support transform how uniquely alignment gave the strategies to entire businesses cloud as of Customers or work through to and well increasingly the ability

business get unparalleled track the their largest results. achieve of with data certainly environments, data This year plus expertise to breakthrough is XX differentiator a volumes for in us. leverage insights customers have record We providing helping a and great

Our both expertise, in the robust each our around and driving is targeted cloud coming combined Since of growth with across three June more adding than from accounts. platform the our cloud Vantage each we’ve new of logos verticals A multi-cloud we and service XXXX, globe growth customers providers. and XX% growth cloud customers, connected the powerful of experienced in new existing is regions. with geographic leading cloud are our in

small, are numbers clear. starting While is trend the

with As our to tangible the environment. from Vantage they cloud continue we as in business companies results received expand on-prem Teradata they realize cloud the just environment, do

saw And and year XX terms growth. last types top of customers growth including performance many ARR financial further ARR government services, enterprise our target of success significantly of We of every scale are in year-on-year. these broad-based ongoing cloud driving price scalability Our grew ease industries, and customers end and care across realize of June our in and health of the at the subscription helped as region Vantage.

at few look of Let’s wins from our a the quarter. examples

Teradata in chose of it help to production Europe across quality its Vantage new part floor a plan. initiative. based will volumes AWS its makers growth auto significant cloud largest manage data boost robots captured world’s from as plant the as the of to strategic of smart on IoT optimize manufacturing One customer, on

Vantage with customer services One part adopter of and early considered transformation of cloud AWS was public adding on a Europe’s environment. long-standing Vantage This Teradata an on cloud strategy. and customer Google top Cloud financial is a BigQuery its to groups migrating as

with help capability best Vantage with the closely this However, companies event this most Vantage lowest and realizing Vantage customer customer and of as governmental the the the support fastest, grow will demonstrated a operations to This in path deployment. modern example in of its risk that great institution and are the our stressed Teradata value is multi-cloud environment. be our multi-cloud collaborating a continue comply Teradata of cost-effective helping cloud a to now in in to exit. to regulations Accenture cloud

accounts. one on AWS a Kobe Japan its manufacturer greater gaining It the properties forward division manufacturing mandate. another use processes. the We analytics are taking in cloud this and Steel, Vantage improve case major financial is its facing other research selected have new our of to produced institutions compliance to and understanding same of

proceeds giant this America As data level. and migrating most supports Latin all the major factory to and for add to business, this cost, aspects bank’s of Banco including regulatory machine financial it plans AWS. the Itaú, at institution on-prem purchasing Teradata with transformation Vantage reporting. in the its IoT is on industrial largest digital Vantage environment of applications,

cloud it needs to to now era, the for analytics. agency including Here, deployment fastest of examples deliver Customers entity leveraging the our prevention, really Vantage implementing to our on concert key significant to a well of important uses. hybrid for authorities This operate we of tax it win. from one on-prem and serve what based customer our agile are step Teradata through authority customer, reason and blended win with provides time, Vantage segmentation data ability connected in sampling aggressive in Teradata company pay has expertise provisioning. outcomes the cloud of data inherent the all tangible factors migrate. Many data as as to wins Azure healthy. digital this realize leverage scale suite option the the pricing processes. environment customers cloud new towards joined along is to hybrid exactly great environment of Middle QX, its is to and a connecting helping ready Vantage substantial Oracle risk have mitigation, enabling hold on-prem of key cloud customers’ differentiated in development develop Teradata are have future, of environments. partner position scale of new deep a platform way This positioned environments use to has, to Eastern continue that analytical and multi-cloud use while focus business to world must they increased Vantage on-prem bank transparent included the business provided a warehouse This consumption behavioral by help and customer in was the preferred The the all and for and reliable a and the on ecosystems, in with as irrespective ranks first Azure share local we and and through flexible This the fraud when environment enterprise its most a the replaced the A moves value in U.S. the vendors. delighting also we and remains a cloud this on the we like to excels cadre are and around portion model the and the one Consumption-based analytical pricing in it into on-prem and hybrid deliver cases. of SI, Winning paving establishing this A cloud where on-prem. taxpayer QX path and our the infrastructure advantages large market. deployment of large across beat services ecosystems. often cloud I’d tax of legacy the customers momentum Working shown cases, customers possible support chosen is connecting strategy, whatever chose revamps how customer transformation. it healthcare we of as

now regret the multi-cloud optimizes multi-cloud that the business to we We technology are patented functionality This who innovating. to hybrid brought fabric platforms. access environments, SLAs delighting in data out users costs federate movement. We ecosystems In can multiple requiring without customers and our to queries unnecessary across enhancements quarter, data and our get continually QueryGrid, data. a enables data seamlessly and

orders was world-leading XX over and leader’s X is QueryGrid, business data minutes. to better a of new extended improves agility to enable enterprise. tech electronics ability its informed share example, of recent XX by performance data QueryGrid The and its Federated between performance from boost one business the decisions magnitude to with to improved functionality make enhancements Here’s throughout to across manufacturer consumer ecosystem lines hours of rapidly using just

helps enhancements the faster. provide to data And our industry. their backbone model. quarter, industry world-class entertainment high-value data business customers and models management for modern value data to media our out that customers we vertical in models facet the Our to and in another get of support are These are technology information brought

to migrate We help SIs Deloitte announced strengthening the in as leading initiative grow. Vantage with partnerships cloud. with joint have to our and ISVs In quarter, the from customers been we efficiently we on-prem easily a and also

data and equip Deloitte for modern out We’re collaborating the to take migration complexity a cloud with of future. organizations

other the platforms. data our Gartner as in in recognition noted recognizing garnered Gartner’s solution solutions, vendor. strength While scored are compared are and number highest of attributes customers vendors. cloud again comparison of types in for cloud the intend so organizations the more July, a any our keep We to score receiving central data warehouse new Teradata and recognition. warehouses well, value multi-cloud Teradata of the to than possible in these that earning cloud exceedingly industry,

to corporate We annual also and our responsible recently, dedicated just issued being And citizen. we governance socially remain environmental, report. a social

find website, our a can but highlights. report couple to of the You share full I’d on like

report Compact Scope Global ethical a notes UN XXXX. principles careful since and and human pledged reduction reduction to about total and of and rights, of gas the the of specifically, monitoring X Our X emissions emissions XX% are behavior of Scope greenhouse

in and actions Index company and our and employees. strength recognized participated our how Our from support came culture allyship support to commitment recently performance better In Human by inclusive report notes various Rights of colleagues. inclusion workplace inputs belonging. across and and XXXX, learning issues. an Furthermore, Campaign our the of LGBTQ our in to Foundation, our we Equality accelerating. were a XXX, quarter and for the ensure The reinforce we diversity, the rigor in conscientious up our our using organization, reflecting our equity is organization, LGBTQ focus to and the a took lies creating of scored of management go-to-market The in demonstrating out transformation the ESG people of to company Corporate to the XX the Sustainalytics are we solid operational

addition strengthened particularly further accelerate am talent new talent our driving HP, Claire renewals she mid-June has accelerate and providers. strongest to We the building have to our our as and cloud corporate growth. great is to our she profitable proven have is Claire Bramley to spending execute Claire’s dedicated our the added and extensive seasoned a and finance commitment time growth momentum, in organization. to us us. team. all senior sales forward added the and go-to-market our deep to our perfect you. accounting be welcome leadership from the in efforts experience team regions customer with already continues and success I to across we appointment have possible well highly of as looking And our a experienced Claire’s strategy knowledge leading in cloud for and CFO. management as joined technology leadership Complementing know I fit pleased of industry to

As Claire, capitalizing to We I to reiterate data I achieve deep connected and turn position our data. the from meet relentlessly as enterprise upon outcomes want exceed and to the dedicated differentiated analytics. that business over outstanding are to committed call for we customers’ platform expectations multi-cloud remain

Our hybrid capabilities future as to across and of continue multi-cloud, will well. innovate into need foreseeable address to today on-prem tomorrow’s and customers what we the and needs

Claire, we that we value. and will our who These in-depth look results keeps an our to are talented incredibly for do. at significant more customer We team our of XXXX deliver have healthy center outlook. fundamentals over shareholder of a ones the all company you the believe the financial at

and take Steve time. world-class you, to helps excited a to incredible afternoon am Teradata culture ahead and and talented to a all and true of solid to us. good truly fiscal company technology, very be focus this quarter, advantage the the join am strong I delivered this the motivated leadership was In customer value we I operating for as opportunities that I Thank today drawn people second thrive. huge everyone. same thing: creating team results. of of because you honored we first financial the part look

Here of the highlights. are some

by line and public outlook growing with teams product revenue year-over-year and XXX% by Our our in sales year-over-year cloud recurring ARR well, as delivering XX% executed reported. growing and

$X.XX, the efficient previous is of execution an operational was of operating which driving XX.X% outlook. very Our across Board, the non-GAAP margin above and EPS

with our combines cash enabling Teradata million free flow. $XXX market-leading that base With of cash differentiate ARR, adding Vantage Finally, $XX year-over-year These consumption cloud activities Teradata and growth robust in as a by are resulted and were grew ARR us constant in qualities fundamentals subscription resulted and sequentially. to collections Together technology, transformation us digital $XX cloud the continue subscription highlighted, from. geographical We from financial operational as cloud give ARR results X all to across strong, increased These the achieved environment. Public licenses. and these drive in grow Total X% of our hybrid customers demonstrate in Vantage that to and reported workloads in sequentially, regions and both which year-over-year sequentially. strong to customers generate discipline. half market Steve regards currency. in X% in to mission-critical on-premises total cloud, ARR growing in more by public by from ARR and by migrating year-over-year than grew million and the on-premises million adoption perpetual

and maintaining the provide top off, expansion quarter that We several also customers increase expansion existing the saw rates cloud, for the To price we are regions We new sequentially. enterprise seen a environments. with continue that things us choosing opportunities. a healthy in X% and all we three name We over and positive grew brand These scale from hybrid have strong in experience the in several quarters. added customers. XX% future at to in subscription combination both in trends ARR, last approximately new customers year-over-year the growth best of driving Teradata performance increase

a X% components. all million, increase in constant X% revenue driven in by currency, strength $XXX Now, to revenue, revenue total turning was year-over-year and X

growing XX% continue year-over-year base constant recurring in a We and of build on to higher currency. revenue, XX%

the recognition the recognition the recurring also in arrangements of the renewing last Similar with timing upfront contract resulted $XX approximately us. certain or in expanding structure quarter, quarter of quarter. customers to million from of of revenues benefited second We these economic in the on-premise revenue their in

contracts. recur than expect outlook the will was expected same higher during annually million I we demand. revenues X next to update in again We $XX this on following second cover this the million to our in our and what $X Both the to in years these than revenue by quarter slightly multiyear the outlook. due consulting quarter of million per you approximately perpetual better of I lower recurring term we approximately performed $X when forecasted quarters This and plan quarter.

revenue to a model. given subscription perfectly down perpetual shift perpetual from to continue manage our We a

continue manage with in shift collaboration higher also increase to to revenues, consulting partners given gradually We of order decline strategic a drive to consumption and our in adoption Teradata.

higher four quarter to second Moving gross primarily margin than quarter XX.X%, profitability, last second X percentage was points for approximately to reasons. year’s expanded which

shift subscription-based to mix margin. continue We our recurring higher carries which to revenue, a

Second, sustainable and our subscription continued drove both revenue execution cloud margin. recurring efficiencies in gross operational

revenue associated recognition consulting perpetual with and upfront benefit fourth, improvements mix the margins. margin and impacting recurring and the Third, rate

operating flat as by a and of the the Total to we margin continued expanded the said quarter Consistent structure into we year-over-year cloud we significantly flowing expand into further combination of benefits of business back through in I reinvesting to ahead cost a second operating what moments. cost sequentially. with savings comment last and and continue Second on result year. XX.X%, a year’s will this the we our are discipline. anticipated, previously, will were lower and expenses of margin gross driven what actions X% half down few investment cost

exceeded flows $X.XX $X.XX $X.XX midpoint. $X.XX includes tax additional benefit Second weighted delays of to $X.XX The currency, from to the by second cost revenues, the related through per year assumptions. from outlook our $X.XX EPS. upfront $X.XX, quarter. only of at recurring and $X.XX quarter rate share share $X.XX $X.XX earnings The $X.XX and from range average to Of the remaining $X.XX full the

free cash second free quarter, to efficiency million. resulted flow and of flow free cash flow have flow cash operational exceeded with free $XXX annual collections cash greater outlook already million. in we $XXX the half on first of our Turning cash allocation, In capital

Second was last better days, quarter better days days DSO than XX and last year. was XX quarter which than XX

While XX not exceptional we and sustainable. generally we our look as days efficiency, to collection maintain view

We million buying the in total. to balance back quarter, approximately continue our $XX take strong for XXX,XXX dilution. repurchased we sheet advantage In second stock to of offset shares

shareholders. the or flow on For repurchases of free the fiscal first XX% share million we year-to-date half of year, to a cash return of spent $XXX

For investments growth the share shareholders make for to acceleration. support approximately XX% company returning cloud free full flow profitable year, via cash to we repurchases our continuing while the of and in strategy to anticipate

to Looking fiscal anticipate line quarter ARR seasonality. comparison more we public half, peak cloud-first expect growth fourth revenue. the in in to under half historical resulting total upfront XXXX. Steve’s second the of Teradata’s recurring could see We of leadership in the from that accelerated the with ARR year, second cloud tougher July We in focus

for our Although difficult to fiscal have view predict, this we our EPS best current in raised outlook. XXXX included activity

previously, As of impact fiscal revenue noted linearity may activity in XXXX in the this second XXXX. half and fiscal

the our XX% to continuing between regards improvement As expected to line at capital to and be that, half. generation previously to let dynamics, of not to ARR least tax or year-over-year offset sequentially. earnings a $XX second mentioned, Non-GAAP working the quarter mentioned take that anticipated quarter on the the million. weighted is as to our XXX of operational about have items XX% outperformance, average and with due we second me Of seasonality and quarter, EPS favorable through We is range of you flow particularly are in flows through and is in in at $X.XX with a impact quarter are fiscal diluted be positive, With previously the billings I the Free for plans to but an increase less second the normal in and strong rate of is outlook. fiscal activities. in $X.XX. which be first as incremental the public the I per cloud half. end to year, The the at between XXX $X.XX This each least The spending collections. is half million by outlook $X.XX in impact go-to-market $X.XX increase cloud the outstanding earlier, the cash share support investments in shares grow the by to R&D mentioned. anticipated million to incremental investments to sustainable anticipate be XX% the earnings XXXX in third expected

growth XXXX to For ARR the cloud ARR growth be growth XXX% is we are be least for and to total percentage total and expected single-digit fiscal year-over-year. expected mid- public to is at year, our outlook reaffirming high cloud in Public the range. ARR

XX% elements We year several to year-over-year. real is tax per grow fundamentals shares the rate of now XXX am in I double-digit build revenue year-over-year. low $XXX the in now for Total share, average is these outlook. to our very to Non-GAAP the to be We flow expected between revenue are percentage is be be range to $X.XX. XXXX range million. encouraged mid-single-digit expected Teradata Total fiscal million anticipate anticipated the and to of in at range high see diluted in outstanding be grow and the earnings is Free opportunity least single to future. low XXX of to percentage the raising and to million. the $X.XX recurring by on weighted approximately the strength cash now expected to

value expand the time growth. with call and be modern Investor our to continue about questions. market is It our Thank shareholder will forward disciplined rate at execute September Our for investing drive on we in strategy open to I to deliver X. you an adoption customers, Teradata innovation please that, to exciting And look and consumption increased Teradata let’s truly execution drive at and the how profitable to speaking operational Day today. enables with you. future our and

of Citi. Radke first from [Operator comes Instructions] Our question Tyler

open. is Your Please ahead. line go

for the given half in you of know, pipeline. to have what second my wanted feel mentioned generally migrations I just second – some questions. maybe you good second you you nice really just how as script, some just the contrast a you of Thanks pipeline you but cloud ask see the you of new be in kind everybody. compare did relative year, about I looks the and last kind how referenced, half customer afternoon Hey, of thinking that? taking year about momentum last the half should that to this and and year could like we

to This is Good Tyler. Hey, you. Steve. talk to

that And We a good is our actually expect we though see new we that’s positive. ARR seeing good is momentum motion fourth know are We see perspective, highest a the clearly new, even pipeline our is logo seeing very marketplace. from the sales just we – pipeline do customer quarter perspective, now. really very that in wins something seasonally, would and quarter similar that from a cloud support –

in think great the another existing that cloud. expansion is I our thing the of we’re seeing customers

pivoted cloud really really towards you we that last middle that announcements year good the and QX If good about some us QX. product helped think when we of had a focus, build around a

so are year for growth XXX% full far outlook So, in cloud. XXX% QX. very of We on still year-on-year our confident

for of are the loaded? wondering that dynamic? a through if higher you QX that from to be can like maybe to the just yet – be year it cloud think a quarter, I below pretty deceleration dipping the seems Claire, expect from ask follow-up ARR implies if I quarter expecting kind And you guidance would it significant could second in talk or difficult just third and back-end simply which a back more year last to would related compare growth you Is Great. XXX, bounce

to with with ARR said, quarter, cloud in Tyler, just growth, Steve especially yes, seasonality. biggest to regards quarter our the does fourth line be and historical tend our as that’s

guide. reflected that we’ve So what our is QX and full in year

think Tyler the other large organization. a I are point, we enterprise-focused

lumpy can And large. they’re so deals our because be

for also again, our guide in but QX ARR. in confident year our guide – So and we’re full cloud

you. Thank

Mohan from question Wamsi America. of Our Bank of next comes

Your line go is open. ahead. Please

you. a large XX-something EPS with you to caught thank you do the impact for then congrats when cents I investments, next differential? Can the really it incremental so attributed new forward $X.XX you. go accounts in and on that, to the look If quarter-on-quarter? guide the maybe or stronger you Claire, but fourth right, we quarter Yes, of and typically from How few ex seasonality? XQ pennies quarter bridge what that role working from $X.XX have

afternoon, forward Wamsi and looking Good you well. as working to with

second First of say pleased the we of guide that just HX increased EPS HX. we our full which linearity with seeing very between point, increased to we’ve are and we’re half. the on $X.XX I’d To your all, year is gave $X.XX, EPS, guide like so by in

all, the are of in our of in HX accelerate also operations go-to-market growth our saw increasing revenue momentum we forward also. has impact in First the we particularly the are that we HX the but investments, upfront and that in seeing pull to an R&D cloud, and impact

Okay.

second also So assumption through the flow is some from there the the you guess margin pull-forward it’s really that revenue, impact, of your in more half. best but some mentioned how much there be could

guidance the consideration is some of clarify? that baked that’s to So into there

is we HX at time. in modest that factored this amount There a correct. That’s to

could great. follow-up Okay, I public on Steve, if just ARR. the And cloud

$XX quarter, last guided to $XX you think million I million. to

of $XX at that at million in low quarter. came the end You the in

across $XX now. in more $XX another prevalent your public more is million of million for guiding at You’re sequential sort presence increase. But clouds – least

period a to have use You bit more address had little longer cases. customers and

point is be a hesitancy of at deceleration? explain are So, conversations why conceptually, accelerating the and year can target. faster shouldn’t that I to pace? that anything that you – very the help above your would there or of customer this anything understand But some within growth sort anything well full solid or

don’t that expect our our set it. to guidance business we want are want with be a I execute due again, strong quarter, lumpy think to Again, do very always can We contracts we from know point that we I investors. some Wamsi, of Yes, comfortable the to fourth earlier. we the – that we large pointed to we to – disappoint certainly

difficult have we the more As go we year, compares. through

are release the cloud our quarter of much distribution and the GCP shape terms terms with customers. obviously year. started was pretty from business, in In We of the marketplace in we third in with the last line AWS cloud our the earlier of of

with well as Azure. growth good really seeing are We

the we’re have represented pretty So across of with happy each been we how CSPs.

when to folks which Teradata terms think of CSPs CSP there deploy focused given from first-party because momentum the It’s sales are cone that the – we’re into is their see also some their to Teradata put sales their starting services into environments of and now. proposals. the fact impact in and ecosystem, I they well integrated those no

existing are of of customer customers also seeing our cohorts prior and years perspective growing nicely. the year-on-year from a good our from We are expansion from each set

growth in quarter be fourth year-on-year So, we the on on are Thanks but still cloud we the from are will Wamsi. for full an achievement really focused XXX% bullish business. for the bullish perspective, question, our year. It

Steve. Thanks,

Our next Huberty Katy Morgan comes Stanley. question from of

open. Your is go line ahead. Please

afternoon. you. welcome. Thank Good Claire,

to a forward working up is about flat, just to Steve up to ARR $XX exited start relative where XXXX asking, Looking is want looking at Cloud ARR year-to-date with million. total by you the question metrics I $X ARR you. million.

So just are Can lumpiness given And want expect is normalize end imply contracts year, about there by the off? I that understand Is looks churn would of business. the you you that not also, the running just that maintenance that you what to churn some there. that talking offset? about? just to of dynamics being would subscription on-prem some in like? Is your that is talk the this dynamic that

Katy, for the thanks Yes, question.

if of said, business. – different that’s within the as the lines I convert business think net subscription is to different the business. happening the cloud we there that to if convert neutral. conversion, are One you number between And clearly, we ARR, cloud inside is is business – a there dynamics

we for we a However, do that significantly quarter and this nor prior not different amount we positive really in some execute growth when conversion, past activity which and are year-on-year churn us. from forecasting quarter, see perspective was anticipate the anything different of we expansion experience churn on a Every quarters, is from basis.

you. at what we that’s Thank Okay. flow Day, a typically, free before company will transition. we Analyst the Xx Claire, of that this I And the free hear was if but more past flow business with transitions, exits X.X the at subscription cash imagine about cash look to

$XXX in range Or different million end could free Is the you your $XXX as So for at given for there hardware would Teradata, cash fair to normalized something the is that flow. that mean million, business? $XXX started million component? you up

Good afternoon, for thank welcome. the warm And you Katy.

You’re absolutely right.

Investor and September. are sharing year with the guide with I cash QX, on information plan we thing the flow that generation our that free say least flow generation our increase we We our Day to be fact full in saw pleased is allocation cash we at were strategy One and you but million. to long-term would more able $XXX also capital in will at

And right. absolutely think Katy, you’re I

the kind the of forward. term, of You’ve of seen business. conversion. that to fish our we propel positioned the in company the now declines think And swallowed perpetual we’ve use are fundamentals from us To terms the well

you. Thank Great.

Cowen. Wood Derrick Our comes from next of question

Your line go Please ahead. open. is

Maybe was This taking for Thanks. support. Great. Derrick. Thanks in outsourcing our a Nick for is some actually that to were questions. Altmann with on-premise your start, you guys on there of report working IBM

make to of on So there? maybe that expect drove can you what and guys savings that’s change maybe just And touch kind confirm true? you just you not what or whether

Hey, to talk you. Nick. with Good

how that are don’t deliver as invest We of outsourced enabling third-party at forward. on we business strategically Teradata’s of we execution the those whilst But Teradata provide ensure look business for reliable possible many of are us business as just and we into support that always the the We really details agreements. we elements the our focus support move customer to to our and customers for always the also we at – in capability. experience we our And of names the to on-premise like put details our that decisions hardware the center best operations, service we are We’ve, of around – the things make. looking customers the a part of in to companies. best get they or normal years,

to do of for that clearly, Teradata expect our it a in have So to our and execution customers and both will margin. impact terms positive we win-win be gross

the last pricing guess year. versus And what Got to usage you I launched initial base Got helpful. you of your guys it. relative are your actual That’s terms it. then installed consumption-based the there seeing just expectations? in from commitment guys

business real Yes, because engagement thing on our our to option. included us been with our – that request – successful. they value met sales just have reduces how percentage interest give That pricing – volatility terms for good able choice the that environment top blended we’re clearly on really it’s choosing of with stable But tend They perspective. interact of of inside been customers The pricing. to their execute a program market, in to interesting days The consumption-based be that are a consumption in Teradata, top consumption-based to very and with early at of of happy opportunities has consumption terms it’s a a really but least pricing our great see know from pretty Teradata. it’s amount a still. where customers they engage commit bursts and many fixed they a

we growth to ARR. questions, refine cohort forward. the seeing when improve will existing a We models consumption-based the as active, been I I where you that is And would best little mentioned cloud our pricing has they our as to growth in customers to continue lot move we’re very point and are pricing our of cloud bit other just the general of Again, earlier a of one in operating strong. the

it. Got guys. Thanks

you. Thank

Matt from comes Hedberg RBC of Markets. question Capital next Our

Your line ahead. Please is open. go

new role. My congrats as well on your

about to Looking That just stood how in getting point, net talk working talk, about relative competition? on is clearly, cloud what you’re and base, side. right? what’s on all And – just one this about customers, obviously, of at think what just operating franchise. sort think sides success Could foot but Because hybrid you how environment, it’s lot we well you you. your attention. there, hybrid new the think talk success cloud with the a in I’m new you not that forward could I to you’ve had to though, out wondering, obviously, me success is said, Steve, the but of positioned is I a both to the there in see the you interesting. But have the approach,

the Yes. utilize and base both as what when how is customer performance to hybrid Clearly, from And very ability see being are native compare a cloud real perspective. place a have they that indeed, born-in-the-cloud see they their our and in differentiation we about we data or cost solutions. perspective from we judicious we

– really on-prem of make have with on-prem. lot economies of cloud the we really between scale to that they that their in, use seeing of and cases, They and want of they an for attractive. also work are the avoid hyperscaler So that many want kind solution that try optionality customers very cloud lock a enterprises vendor

and the strength their value more quickly realize core we important cloud think customers really fact So prepared was the whilst to hybrid traditional and I forward, it financial when of can that move data can can we remarks great we it’s on-prem, in forward, a us cloud that I in a the of vision Middle as operations give environments. optimizing referred the especially customers. really our move more for win competition Teradata selecting demonstrates in the management tax existing for East, authority And a data over becomes to as

you products lot with success of now guess, kind you the obviously reps, had a maybe of how of makes of about obviously, previously? the – bit a cloud side. you’re go-to-market new you or the little about skill ton focus? do different of And to than have opportunity the the go-to-market investments think set sort How set on a Just continue That in a then bit front bringing Are effort? a do of more that in a think sense. I more to investing continuing leverage the given

Yes.

Americas things. on are go-to-market [indiscernible] just a towards have We a and leader they at in up-leveling year. organization. experience our start lot a of couple we lot business leader cloud-based up year. and new brought in got brought the think of of new really they this well. throughout of talent announced a I that ramping selling, this We bringing And our of of March in are They a

logo making use just muscle small of great in second in that, there. that other is quarter sure are to new company we’re cloud. capability think in if right the think place I to fairly making motivated the is the I in it the And than hunter each in different what for the capabilities we a ramp-up the sure that And the one wins selling strategy of plans new really though to we’re they half that can make was that is logos. have has go see the a in of three previously. our real year thing inside is investments place Teradata towards our of Again, term incentive even sellers been that after the the regions, I

the on Congrats results base.

Thank you.

Thank you.

question Instructions] JMP. next from Pat of Walravens comes [Operator Our

line Your ahead. is go Please open.

my And Thank me Great. you. let add congratulations.

of seems are it Steve, things So a going like lot right.

your built or top next of three What You’ve imperatives nicely. the out the team are sort XX two months? for strategic

Yes.

Thanks great I question, Pat. for think it’s a asking it.

focus cloud-focused were incremental, hunting, logo from as build I our on organization to perspective. go-to-market in a headcount think headcount see organization, you’re to new our investments a – of investments perspective, number execution terms go-to-market that related to the terms from going what of our build in and of new continuing and additional go-to-market

solutions enablement of perspective product. an cases leveraging about to cloud-based investments From an ability comes lot we’re We’re terms industry success we’re take the perspective of modern on Also, our the portfolio that expansion. the really customer of doubling in making R&D the investment, in model sell an investment, because of R&D in perspective, really of our of execute transition to sales from customer success of heritage really we our really motion to force investments that our excited go-to-market to complete making terms the through a from more help inside are use on down motion our terms our customer new development data to with base.

services with the cloud to first-party continue tight the of the improve will integration providers. service We

We capabilities capabilities. data governance in our I from to data that in a either Teradata industry. management and results either highlight Teradata have around together object And that data can with from this We’re AWS again, provide querying the provide Azure combine querying Teradata that to business else store queries instance Teradata – nobody and combining a environment QueryGrid. also insights on store point native or been in on-prem, and object the positions finally, and native data can query focused a technology without AWS believe those We our improving uniquely. and results it data of in give

perspective, a entire to a about customers that it’s great And a and excited unique as with capability work data-fabric from us query-fabric, getting gives we customers as are. so our our see our focus ability to

much. very Thanks great. That’s

Pat. Thanks,

to There you. questions back turn time. this I no are further the over call at McMillan, Steve

much, and joining very thanks for Thank you us Charlie, to everyone today.

the We that progress made. are of proud we’ve really

and now. for our a difference right differentiated multi-cloud making data execution customers is Our platform

our drive all clear and to X our value joined for hope you Investor continue and for for to compelling customers value us that shareholders. going We lasting September We’re on our Day.

our really our information direction plans. long-term We’re and our sharing strategy, on to looking more forward growth

be With going to safe. ongoing, hope the meeting virtually. you keeping are conducted pandemic all is I

Have team our We’re Teradata. have great day. leadership and here new opportunity to live team going a to make that sure have we the leadership of Thank with selection Q&A a in our you.

concludes today’s This call. conference

You may now disconnect.