Teradata (TDC) 5 Aug 222022 Q2 Earnings call transcript

Good afternoon. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata Second Quarter 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers, remarks there will be a question and answer session. now today, hand President Christopher Relations Corporate would to conference of I and host your Lee, Development. Instructions] like the to over Investor [Operator Senior Vice

conference. your begin may You

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

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

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

cash will website. numbers to currency of today of included basis. A flow call replay be Steve. this non-GAAP call Investor website. I on in We turn will measures and later of the our on accessible today's constant also on otherwise, non-GAAP teradata.com. the which reconciliation call earnings to non-GAAP Investor discuss At our discussed over are now and available other Relations will And conference A free page on release, our comparisons. as is results Unless such revenue items, stated GAAP all a is

for joining continued us quarter everyone. Thank the Chris, second XXXX. good and you of during momentum today. you, Thank afternoon Teradata’s

and demonstrate business important these our and results trends solid driven volatile what are economic our for cloud critically results Our we do customers by business our resilience momentum. during model,

Our ARR delivered million, business year-over-year our $XXX solid. growing quarter, cloud in strategy public and fundamentals In the of we constant XX% second is right, currency. are

base, ARR not cloud accelerated the connected we revenue [indiscernible] to substantially healthy as free in they provide our customers underpins more generation and growth both only enterprise Teradata sequentially, mission-critical Our the year-over-year is more also as demonstrates flows. value of customer revenue, to but now committed which of Recurring durable total well. XX% cloud and our cash

we of of also have non-GAAP earnings in more our passed of the We our the per flow both end million quarter, metrics, generated than quarterly outlook and exceeded outlook. XX% cash On annual $XXX we for free share. high

clear reflects more an analytics share ARR. leader execution our we on gives us including as outlook and total multi-cloud outlook, remarks. focus are ongoing a platform Claire that her our Our annual strategy profitable reaffirming for in will our data range expanded and conviction

we what said would the challenging environment. We current we macro keeping doing on even intent momentum do, are our in

customer when the focus succeed. multiyear require strategic best that data make industries analytics Our they stable strong, diversified in across businesses global to our customers trust leading Teradata, commitments. And many place are is and in their enterprises they

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environment clearly workloads of to the the Teradata cloud while hybrid the by on-prem. customers grow through maintain our winning cloud as in are logos, continuing showing their to results strength adding new incremental Our new both with to and environments the in and cloud expand efforts migrations on-prem

the We half look continue we to the ahead as expect second to successes customer of year.

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customer, Teradata analytics. is Teradeda build and flexible new PetroRio to As for business it can a leverage on environment relying a logical

on will legacy in how new flexibility, a Vantage. primarily from about executed our that as needs One price with one as were databases the running results enthusiastic chosen our on customer boutique mentioned no on and and for the on-prem hybrid data delays ultimately I leverage the deal American second the AWS. of its and to provides did from Microsoft. in to I competitive unexpected of is we to half achieved am migrate successful the long-standing website Best enter advantage the market Airlines, the Vantage year. the has Vantage unique its be integrating videos services environment. elasticity business-critical you performed and team strength migrated with very surprises develop Vantage labs analytics Vantage This migration cancer. Teradata homegrown deployed of U.S. Titan start and outlines customers growth macro Workloads personalized our health proud and foundation in challenging will the pipeline wins performance analytics or wins quarter. anything I into and the our desperate of encourge am quarter. see strategy data pipeline treat therapies There cloud to really our not systems operations. Azure to the on of We I then partners. as improve we care watch the this several the industry-leading in drove and airline to environment. and Vantage for a its customer and data largest strategy.

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analytics and Operating emissions support Vantage offering and imperative will be aircraft we help this sustainably environmental all a reduce We core aspects Together, as the change. Teradata ESG castle climate are and is core an of devastating of provide of develop effects the to our element working carbon will to together sustainability addressing the designed business. underlying and data initiatives. to platform of element a ESG support of operators

report as read through well ESG our progress just outlines made on it has the our sale, website. depth as annual have and have the released, increased focus responsible Our I we taken invite and the of and corporate as we been to attention a that actions you

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very over future. to remain confident in our As I the call turn I Claire

We in cloud. are growing

driving powerful value. keeps I'm need that about analytics. second shareholder getting better. enthusiastic year half cash a technology generating increases market, from have never-ending and the the total We for All is and returning growing in of accelerating our flows that free data profitability, market the on large addressable this organically and

to turn call Now the I'll Claire.

million Thank afternoon, you, $XX In the or good constant we sequential in Steve, ARR currency. $XX reported million second and everyone. of quarter, cloud growth

quarter range also the end earnings very $X.XX provided share, per flow. of generated of previously We free delivered healthy another above cash the and high

and consistent in our that forecast XXXX fiscal was outlook. line quarter underpins with This the

fiscal strategy XXXX we on growth we the Our by fundamentals. solid our do, remain achieve first forecast economic our current driven is our and financial challenging profitable outlook. we track to cloud environment are persistent what said and and currency by doing would we Despite headwinds,

approximately grew last Cloud Let's all sequentially, associated and shared This on-prem customers, of ARR constant to year-over-year by included X% and year-over-year, services, total cloud decreased by the year-over-year deals. declined proof Teradata. with for the On you the were better healthy quarter. there reported was sequentially in throughout logo get basis, second negative three ARR. into of our the a transportation number the million, double including a of year-over-year grew the financial seasonality. Russia quarterly grew new results, exiting driven on-prem new year-over-year have quarter reported basis, low quarter both the headwinds. year-over-year representing Total in and to with and This currency. few. a X% in came sequential starting sale new with year. approximately with Cloud government year-over-year a reported currency ARR industries rates ARR as number impact migration as approximately primarily momentum we new with growth as from strategy. $XX geographic in by logos and growth currency. XX% ARR of executing than million seen name Total digits. X-figure in in ARR constant continuing approximately existing historical On both a logos was a point grew $XX to migrations, the related amount is momentum and customers regions, the Cloud This XX% Total X% activity

on but deliver is our outlook constant track as our currency. are ARR ahead. approximately growth In last expansion year-over-year cloud the workloads the potential This with approximately the rate, of expansion planned Regarding XX% quarter, their to we growth same even year. for reported was versus on Vantage cloud our had still more expansions, test customers in cloud we net starting expanding and period and rate XXX%. in platform greater enterprises These the with smaller are development below

in addition, that expansion we growth. other see In the calculation two net are future trends not to rate that point

customers one are expanding that for of we one more migration First, modeled. than the at originally point

incremental second to us give ARR, from of our excellent trends, confidence cloud seeing pipeline hybrid this are growth are These seasonally their With target. existing non-cloud year's new expanding along half we regards cloud ability driven operations, in customers decreased reported. ARR and maintenance total also to with as Second, decreased upgrade workloads X% spend cloud rights shifting who achieve the as on-premise and to environment. stronger components cloud and primarily and their ceasing was year-over-year and customers by in last ARR subscription term or Teradata software year-over-year year's impacted headwinds reported numbers. subscriptions of ARR XX% which Both were Russia were by our currency

as an $XXX in constant as revenue. year-over-year constant and Total a year-over-year Recurring a to currency. X% decrease decrease revenue was decrease reported XX% in Moving was decrease an $XXX million, X% reported revenue X% and million, currency.

in negative Both XX% of percentage upfront in a revenue recurring year-over-year There of a XX% was XX% by a the recurring Teradata. were impact rate was of approximately approximately and revenue, in total of for the revenue for reported high the revenue headwinds. the recurring revenue. total affected ceasing impact and operations new quarter, currency Russia As of second growth

million remained had benefit this negative was have To small net a earnings our also in the color is quarter's on upfront revenue. ARR from There by positive a engagement. presentation revenue exiting the amount shows expected. that the there in was impact revenue we of recurring recurring expected add quarter. of slide million The a to less We $XX due growing quarter's from results revenue, is Russia. year-over-year also $X quarter business provided this approximately clearly as underlying It additional to was demonstrates that impact and recurring

quarter positive compares XXXX. million For impact reference, second in to a $XX this the of

in recurring we ahead, upfront the XXXX. the revenue see Looking in second shape a change quarterly and of net half

expect to the in amount net continue the but anticipate fourth negative We amount a now third quarter. net positive a in quarter,

per earnings year. $X.XX net similar anticipate a recurring we benefit now upfront last to As to a related result, to revenue, share

higher-margin greater higher consulting drive perpetual that execute to revenue, model we Teradata. moving collaborating with and our partners adoption strategy, and and more Regarding subscription to against of continue consumption revenue a

upfront quarter decline year-over-year revenue and dollars abatement was profit Moving Teradata's were $XXX and continue operations gross to margin second in the impacts, margin business margin gross and the quarter. to margin due rate as in the margin to operating profit year-over-year negative negative in Cloud cloud impact XX.X% in ceasing are scale XX.X% currency from in we gross decline gross was lower quarter our improving profitability. was revenue. Operating The dollars is dollars primarily million. margin our attributable to the Russia, primarily revenue.

continue to of adoption invest our and R&D cost continuing greater discipline. in We solid consumption platform to cloud, and while go-to-market also drive

Second $X.XX the even range $X.XX the the favorable of share tax from quarter outlook for high benefit after earnings end per $X.XX provided exceeded diluted of previously a accounting of more rate.

in capital conversion last cash and of repurchased Turning second operational the Free trends we free shares into primarily $XX cash quarter cash flow approximately $XX of sustaining efficient positive X dollar X.X during flow million to collections to cash the the in to our was $XXX driven allocation. by transaction total. February completion million, or entered related In are quarter Of generated quarter, repurchase quarters. believe the as the our the shares $XX incremental million million related shares this and we million in ASR we undervalued. amount, over

be of the We opportunistic year. the half will second to continue during

flow have our to returned cash XXX% first the year-to-date shareholders. of For XXXX, half of free we

better extended the On expense company. regards and the company and our return annual flexibility past shareholder securing We risk. includes of Day, like capital the rest outlook, drives and investment of also pricing that a we and With repurchases we structure, quarter rate the year. strategy, to provide in That XXXX the upsized maturities to entered minimize supports returns. remain also context from capital swaps this our facilities our an profitable to and cloud to June, on for increased In Investor we debt allocation interest the some our growth. cross-currency share new conjunction, into third and the committed reduce that would acceleration As reminder committed I target. continued interest to XX% but

perspective, a have The the XXXX. pipeline quarter in growth ARR sequentially will and and to our to fourth our total that accelerate ARR quarter ARR we cloud our continue a expect strength throughout confidence that of seasonally highest dollar is from year. know sales improve. We growth cloud We similar continues pattern from weighted

mentioned, continue in Steve the customers see we that cloud. in As current economic rates. still win more to in the our to Teradata environment, commit have conviction strong substantially ARR. Despite cloud our We increasing

are widening environment. for for timing macroeconomic We ARR deal given and the range total outlet the building on-prem in conservatism to account

We dollar against financial the currency XXXX towards of have rates. basis. our reaffirm continued are we the April though headwinds end reported U.S. reviewed our outlook for in since XXXX, the our if of strengthening currency July constant could end ranges a forecast on Despite and the other currency all pleased to be we lower of exchange to elements worsen. continue

will we to to million cloud $X.XX. diluted be our flow and growth as approximately of to and earnings This cash in of per healthy XX% in free durable and ARR the focus With the Free reaffirm approximately range that, $XXX non-GAAP on XXXX financial We generation. flow $X.XX currency. year-over-year fundamentals outlook. profitability constant that reported drive in share continue cash includes

widening are in in percentage in the low year-over-year single-digit currency. year-over-year percentage range digit to to single-digit grow the low to we outlook decline ARR, total range in single reported the range and constant decline the For as mid-single-digit low

and found presentation. in Our press be complete our outlook earnings quarter can second release XXXX

anticipate full For the to range share quarter $X.XX in the the per approximately XXXX, the to project and be earnings for third We the to $X.XX. diluted non-GAAP approximately rate non-GAAP tax in quarter third of we of be XX% XX% year.

Thank shares the million XXX and time forecast today. the also diluted year. for approximately million outstanding be much you approximately to in your third shares the average quarter shares weighted We full for very XXX

the Let's please for questions. open call

the from Craig-Hallum. of Instructions] Bennett first question comes Your with Chad line [Operator

ARR out cloud public revenues for of So priced our impression just cloud of public on didn't impacts on the What guess dollars? quarter. And U.S. quarter, Last kind in I on a FX call ARR. and really, we the that get was despite cloud this impact the the of in cloud I the the -- public being business, ARR, FX the rest change under business majority quarter? was we

this Claire. is question. your Thanks Yes, for

say, we and between reported So did year-over-year constant XX% the year-over-year yes, see an and as between currency. you XX% impact,

year noticed currency. may we in of XX% constant You full and did approximately our have guide reported keep

mix laid just current the a on the that with out seeing mix year, for currency it's and impact few in But quarter for a line So that full the the has in what we're QX unchanged impact. a bigger we is previously.

a half in expect we I seen is but second something FX we should from expect? know in public in year do currency, to constant cloud? reported the the headwind quarter you we've of So the reiterated delta the

I you No, that but QX as think a in finish small to towards, as in may contracts QX, we're going more your mix how that is U.S. to in you dollars. weighted to in move impact look be there

the So significant will headwind regards to currency. with half a see not second

me, And maybe quick follow-up could. I for one if

plus, the kind use Steve, trailing around expansion, metric. the and and cases matter, I XXX XX-month that on -- of kind Just the or of kind net of it's But initially just and a that. understand test language for just Claire development

detail have of how cohort So years how years kind of there. don't those years necessarily, back they've and I in XX do we but if know months cohorts think you kind and And how has provide can standpoint? a we cohorts about maybe played XX-month cohort expansion out, any of from aging and or

very start really question. interesting at I'll look cohorts. the for when off. It's the Chad, we much Yes, Thanks

and base actually the the are the our on of and are strategy think sales playing executing migration what's cloud our start exactly to ARR team that their to as I customer migration. incented out cloud of with maximize

that first point cloud incremental at ARR So compared of to on-prem we seeing migration. are ARR

actually achieve migration, solid we subsequent for capturing we've and that models first our the out then of impacting in expansion ARR, But XXXX. overall, that they're set for it very more those also are fiscal still it's the that cohorts, for rate. net we means to on actually year, that point goals guidance cloud terms for and so for expansion have and And both of the the the

simply we're on seeing of So we expansion that subsequently said, see more expect that time. as to is through expansion and life cohort, continue that the through migration, improve move to we the reducing

from line Your of next question comes the Tyler Radke with Citi.

Claire, as us could on-prem on macro feel understand guess And good on or of the expansions, if then cloud more range feel into and you terms understand of wider like economics because you cloud? does terms you Just seeing ARR. you it just and are guess think hurt some those the cloud help help the the total of number. cloud I any secondly, conservatism are between just side, I embedding in moving about conversions, rate, going close range. the pretty deal see about you assumptions timing? does just more the that more ARR first ARR total in we pieces wider us that help are

Yes, your thanks two for question.

ARR QX we macro as regard year. less the range point end towards good given in your some may total highest QX and time question all, account conservatism into also strong see then really to little converting over quarter it regard -- in and but impact economics see be of the with migration. the that expansion expansion to ARR. that to the more knowing on we we the volatility be of of bit you is total as in are see we is growth. strong. they look potential are current may continue Absolutely, take really of to of our on-prem to expansion, a deal the second We What of is first for the actually extended continues see With us. is terms adding So timing very That there

we're confidence, we're year billion not us also approximately to gives So we full approximately the $X just on of XX%. that's of long-term the guide are, track today, XXXX. what that what in for estimate thanks But XXXX in doing

are as and where today the customer continue we billion will $X also and in the and So to get happy to benefit XXXX. wins, half the that the and second on to with we coverage we're over of based see seeing very this we today wins what the that we year see

on flow. And Claire, just free cash

the implied the flow obviously, year the mix is does second currency look like if for cash seasonality guide half maintaining cash despite So free or full of impressive. some the headwinds we flow, look free as It at is last currency and than help able kind higher little a you're year. a bit levers how bit we than just saw be year? at might Maybe why to us those understand disposal your the of different offset seasonality headwinds last

Yes, absolutely.

And the million in compared this the of on that actually, quarter. are $XXX guide quarter EPS full our to free the fact, So said, guide environment, current last of flow. cash guide with we happy very as macroeconomic approximately maintaining you our year

flow working in again We've our And with cash QX, trends that. that With capital. a working for in and very is seen you've free happy with some in example, $XXX generation capital. done of biggest cash So generation, the generation. regards flow opportunity seen million great to collections, as we've cash of our

conversion that year. keep sheet balance can and and as cash strong cycle working that we confident we're through continue So capital healthy we the

the of of Your line next comes Wamsi Mohan America. question with from Bank

a which relatively resiliency But your you high year you anticipated. should strong And noted is growth. the outlook the mission-critical that ARR I of enterprise of If be comments, would some seem at a given more noted at us have of flat. also Steve, the total your Russia, we couldn't in constant at it you downturn. today, pipeline. your prepared it's was resilient macro And midpoint, workloads, initial that currency, your at know beginning you more single-digit to that And look X points

have So a if that can -- constant the total you follow through the sort currency just up. of help square from year beginning ARR lens, I possible? the of change now in And through your

total the biggest our that So head, said, are currency, sales our and workloads around you are run campaigns clearly and inside we or right marketing we campaigns. had in workloads as What you run competitors, the our we Russia lags the business, or yes. the on Unlike don't and -- discretionary mission-critical. of many customers see ARR it absolutely

operations We their solid run books, are run our customer critical business. organizations, base. chains, their close that means ARR sticky is the supply helping very these our operate, that and in And the of

for the quality pipeline in our quantity second as those opportunities. of and to Our strengthen pipeline cloud -- we half both continues progress year the

I the a biggest and guess, So FX perspective. from is delta Russia

you FX? driving versus your the think recurring Claire, moving you at second maybe expectations cause in quarter and about payments? Can level How on lowest the talk quarter. How the that in here? underlying of on change is And fourth called in out change? upfront And is And that's that side, more about relative the you just can upfront now the I of to upfront actually maybe sort revenues much while. a is a that of much talk margins were delta an gross pieces what

Absolutely.

factors quarter-over-quarter two point we with yes, revenue see both that regards and margin, to your So year-over-year. to recurring

full a the have we all, impact of revenue of recurring Russia. quarter of first So in

So an impact there.

impact. And our obviously earnings see the it the and of currency on upfront in case people seen also X, We impact presentation. Page haven't just

those we're seeing. across ARR, and have total laid headwinds actually revenue quarter that by out revenue recurring We three the impact of

upfront FX us. everyone Russia. last Russia I revenue, as for business from accretive earnings, an was in So remember will believe And

bottom in the we and have did year-over-year the So drop QX. we're revenue out decline seeing a that upfront of line to FX

is million I your said that on-premise current the reminder, our a as give my saw by to XX. of negative Wamsi, So so of why of a on in and difficult predict, timing, just a estimates. the which just renewal in is we compared $X purely been expansion positive reminder, driven impact tend high-level quarter prepared to always point, we to a remarks, It kind of as has customers. To

as well And with small difference out same the as a versus we slight a look were deal the was there just in we said, positive. QX, what negative HX. net timing. to you So And as it's that's slight expecting

Stanley. next with Your Woodring of from question line Morgan comes the Erik

our about XQ the but coming This on the revenue you given half your full which EPS you your the by outlook hasn't I is, talk why changed? outlook unchanged, down year slightly. guide Erik that I implies for kept is guess is Sabrina then first out Can beat a follow-up. EPS is second Woodring. midpoint, have And

absolutely. Yes,

So taxes. actually, of end top the the the the of was above $X.XX actually the from favorable range $X.XX

So not benefit. knock-on that's a

unchanged. for tax overall It's Sabrina. a of the our Our tax is just rate. seasonality rate year

year, seen the And -- if a we slight so second of currency deterioration the by have points. also half slight to basis headwinds, additional actually XX have forward the we -- rate we and approximately look currency the with in a seen

year absorbing that our EPS full we're well. into So as

missed sorry. So they EPS drivers an big standpoint. are from the I your kind follow-up of question,

customer environment? or And end Yes. your Have macro can geography, you talk the changes been since the decision-making just a the the of about how evolved quarter? deal pace conversations follow-up of size is, customer given have by there any

existing -- Thanks the we're got customer with no perspective. We We've We're this our Again, base. those our doing. long-term for understand Sabrina, Steve. existing deltas seeing customer not organizations. question. relationships solid what in very customers that are from is

weakness or buying any the the our seen We earlier, either And to signal are demand haven't of cloud year. continue in the we're for this mentioned what past customers I our seeing actually as offers pipeline increase. for or for quarter rest

and good base model critical gets customer our stability is point multiyear demand perspective. agreements So us that business what said signal that those they've around commented results. from some that that gives a ARR That mission and financial means us cloud some we're and

Matt Your Markets. of RBC line with Capital question Hedberg the from next comes

talk pace Hedberg. Anushtha with, will how development. key the start could you to hiring Maybe about from remainder be the the what about XXXX, thinking you're of environment? inflationary of given areas is the This in And of

new cloud Yes, we head you critical going recruited a EMEA our for Thank especially we're the even continue or organization. hiring quarter the to past of so, question. talent talent, we've in

of looking investments. are We prudently very all across our

to focus profitable growth. sure Our we is make that maintain

in capabilities invest areas haven't recruitment any key will a we perspective, cloud business where to skills think seen growth from driven We our will to advance and a the we perspective. especially challenges strategy. continuing from, in from cloud continue be that

the genuine are is who bring I again, investment on to also create of an ensure culture perspective, in that But actually think real but really the creates from to profitable their rate prudent a be Teradata. we the the talent. we to that stay think People great have that want for company. attract to of culture growth. investments of people our and They one authentic strengths with us that that for work cells. I us, want results, can Teradata they the to of place going coming And love environment to kind enables we demonstrate positive

benefit enterprises Teradata's the competitors could of in addition better And serve prioritize the to as how then in recessionary about functionality, a does than platform in you in landing investments, environment, logos? increasingly performance new the as scenario? price -- durability current a ROI And talk does

one a performance The we platform. Price Absolutely. stickiness critical. that customers of our mission is also absolutely for workloads our price that Yes. logos, increases and key it then way are new performance we the win run

the incredibly is and at of strong. analytics ML from platform the perspective. actually look AI So and I it an durability

Our the XX% of platform. about customers tend only of capabilities the to use

that a capabilities, platforms other as for again, are for their opportunity Teradata So we see to, on use those key opportunity environment. our as platform. they're to reduce enables customers very have Teradata capabilities us they for gives us customer perhaps in and well paying they already us and be also that stack in the and and that already inside utilize technology that spend stable

of line Barclays. Raimo the from Lenschow comes question next with Your

Sheldon on for Raimo. This is

moving looks growth be quarter? a perspectives in the to upfront segment And certainly it double-digit last the constant hearing currency quarter, declined strong like a the on We the by macro different are This environment revenue X% versus for challenging in Americas in is region. quarter. recognition is the and from mission-critical surprise given Was it insulation Would that the little consider? nature. to you? there and there a parts less the surprising any And Russia FX

Yes.

end, So absolutely, the you head. on hit the towards them

there but saw, recognition. from are is constant Americas and growing we in revenue said, in constant specifically you for you as impact currency first currency actually upfront As the big in the QX, the declining we're half,

in we between seasonality growth year. impact So for are of this overall QX year versus last it's seeing the for constant But QX currency a Americas. the half, of

And the specifically both then versus quarter? How the quick and in pricing has follow-up, consumption may. element, your a expectations I reception the if the consumption capacity-based element been and that the how from perform with on did customers blended piece

Yes.

that our year. customers So again, but by bulk is capacity revenue financial far take some and model agreements, us surety results around fixed business of the our model, we seeing pricing the in blended which are advantage of our for of away, and actually that, gives

utilize when are agreements well first the starting customers think those new for our workload. as as consumption We way a to We logos. see in great to

real our move for need, a insight gives what at customers start really cloud fixed grow. financials that even see best for that forward. with into want the is can us can capacity. rate us is customers a they So because as then But we get contract reduced you small those we with first just agreements, the then blended in of a what to business and of And model

far small customers a streams. advantage attractive an it's part it's of. by of But existing revenue our model are So taking away, recurring and that our

with the Your from comes next Derrick of Cowen. question line Wood

it macro. not seeing impact I a material you're what But from late. I've like the sounds jumped on from heard so far,

respect confident to but wanted And ARR, there business if weaker? around terms make versus remain look that renewals, those the for assume quarter, demand an perhaps on I was to that which expecting guidance and decline You some of of area was up second your in that in X% pipeline in in currency, perhaps that constant X% touch maybe with in QX. total you you stronger ARR, on-prem a I cloud, the Was about Or to on-prem I some flat or are half? renewal at was come down that a in renewals of up that with delay decline that do last slip? the and little

we're total let on Yes, start ARR. just seeing the impacts me that on

revenue which we earnings of X% our may the and see currency seeing you'll presentation, have year-over-year. impacts that actually new seeing year-over-year, revenue. and revenue you we're we're ARR on there total have So total X recurring a that is And impact what missed down Page across it Russia breaks added that disclosure across

and about, actually, impact XX% revenue and revenue headwind. were include we recurring talking So a significant increases to, seasonality impact and that of combination currency from total if Russia year-over-year. And you timing revenue a being the that's upfront on and

actually to hopefully, look So that at that I'll macro. growing talk additional clarifies once a you the Steve the is look pass and about to disclosure, And have at business that expected. underlying just that as

our customers financial we revenue rest commitment have also great the of as that for you in the fixed macro workloads we through a performance. lot us From to -- know, the recurring multiyear half commitments a our addition model we gives The gets in executing Yes. mesh-critical Derrick, the are revenue of gets customers, business perspective, as And second XX% of confidence rock-solid that move being our capacity year. around in now revenue stability our platform. stability that, his

a there from strong have are macro clearly, financial model. So impacts, very a perspective, very, but we

there there conversion beyond cash Or guys free like going light to were guide -- clarity something flow you don't that the pull that focus, but that levers to and I around And job year done have are free of be be repeatable on year? be FX year. just cash impacts kept Are able of then health this I you headwinds, tough next this, on is were cash can that back in onetime mean you durable? into this -- that the could the there great Russia really a know question, the flow.

believe So conversion is durable, performance. within focus cash the absolutely I consistent great, Derrick,

about QX, a a is in durable. tax do in but have absolutely, which the year, in generation we benefit flows. absolutely which confidence XXXX. we refund our of out by cash have conversion is Investor line free We did And Day cash talked I have at sight durable cycle So approximately of long-term laid I as $XXX of still benefit, last quarter, million good

turn Steve now remarks. the his for I time. further will no questions at final back are over call McMillan this There to

Thank you, Lisa.

As we I've sign our confidence got future. in off, great

right. absolutely in strategy Our the is company

in second accelerate to year for of pipeline are strong cloud, the the we're We growing a driving and half that momentum. the

all remains our takes for capabilities about delivering I'm the We platform us smarter, mission-critical can and shareholder industry-leading enterprises the that excited focused and into and for data on so over innovate cloud. joining value. upcoming announcement Thanks scale today. the next-generation Vantage world, Our stronger grow companies in analytics really that incredibly our remain faster

This conference concludes call. today's

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