Teradata (TDC) 7 Aug 232023 Q2 Earnings call transcript

Good afternoon. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata Second Quarter 2023 Earnings Call. All lines have been place on mute to present any background noise. After the speakers remarks there will be a question-and-answer session. Instructions] [Operator

to Senior over Relations Vice Development. like today, your and the Lee, Christopher President hand would to conference host Corporate I of Investor

may You conference. your begin

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

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

Form current outlook, XXXX, of release and for no June our few filed are XX-Q obligation to are subject that While be cause including number days. reflect ended these today's quarter made to and to factors that they today, to update a SEC we filings, These are the our statements expected risks as could the earnings statements SEC our described in the XX, risk uncertainties with most the and in of XX-K These undertake differ and within recent next actual or is results in duty them. materially. forward-looking Form

compensation today's described and will call, certain stock-based discussing financial other which On excludes release. as items special be measures, items earnings in such our non-GAAP we expense

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

over turn to will the I now And Steve. call

in in ARR growth accelerated Thanks Thanks, well progress XX% for today. cloud strategy. growth quarter organization key year-on-year executed as business. In quarter hi am the Chris, everyone. executed we areas total the another second XXXX. the profitable is the I pleased very making the many team of solid joining QX that Teradata and us increasing on

strong ARR public cloud We in XX% another quarter of brought year-on-year. growth with growing

migrate from and As see use results Vantage we the them Cloud our business cases cloud expanding platform. and Teradata they as Teradata, realize Analytics customers workloads Data to with

expansion Our QX, XXX% trailing large XX-month way. cloud verticals with financial across was services, from coming XXX% leading healthcare various telecommunications in net from and rate with up expansions industry the

increase We currency. million an total of revenue constant second $XXX delivered year-over-year in in in the quarter, XX%

a our first impact This company year-over-year total XXXX, growing growth milestone enabled quarter QX business revenue the by and cloud Teradata marks results. key meaningful its since at total on

our per across beating partners, better Our the as earnings financial ongoing delivering share all and technology across our broad this commitments of analyzing non-GAAP recognition a strategy. end the our on based industry cloud range. of to led innovation with board. data We're I'm high of momentum guidance leading and really proud confident discipline momentum and $X.XX in our platform execution paired are our the the business our and

making and in are strengthening sales finally technology, the engagement I'll some effective purposeful Today, our the ESG. our and and partner commitments execution, we area the marketing ongoing our on some of of highlights increasing straits big cover differentiated and

innovations. with Let's start Teradata's technology

ago, weeks few a VantageCloud Just Microsoft we Teradata Lake on announced Azure.

large AI need within generative Learning. robust VantageCloud today. AI as Azure such is language ability Azure our AI Analytics and including deploy offers their services excited is models that to Lake and support on including enhanced customer's Machine globally Microsoft and with This to dramatically integration manage designed scale cloud We're end on Azure the capabilities native of ML. means available increase and enterprise for ML to businesses now by architecture customers VantageCloud Our end analytics our Lake ClearScape

they as customers helping can already are and value explore business begin positioned how gen drive outcomes. AI to well and are We

growth a objectives. product ML fully greater from metadata use our use As discover, Stemma's the customers joined our to pleased help roadmap, and technology We're our apply effectively. to and Stemma, pioneering expertise intend of and acquisition continue announce helps of integrate more users analytics platform data team the Stemma's will their accelerate products managed to innovative were investment. Teradata the their native, our organization AI value excited and trust data We to our has to get that into cloud we Stemma we catalogue solution.

use the as excited topic our We addresses. AI We're today all increasing is pressures our broader today hot value. value. and complex AI. complexity. deliver uniquely AI AI facing data we our of advantage help complete platform part cases, and already see help productivity generate are to strategic solve and of to We cloud most AI of data believe much imperative challenges see that that positioned Teradata the leaders gen take massive unprecedented bringing that gen in them enterprise a AI create to new of the platform promise analytics is Teradata, the AI view to business continuously and At customers in innovation. new increased to We opportunities and bring brand for as Business

share example. me Let an

orders guests in ensuring This order's historical daily timely takes positive hospitality time. AI to against go order times account global and guest availability order in model information accurately X dining preparation each One result cook models dine platform of into in over for to-go our volume, third predict AI cook meal serving Teradata guests food results party a forecast and hot customers, uses company to and The times. which to and application a million experience.

customer. and a at operators customer needed. AI provides cleaner, based cleanliness safer and dining is predicts uses This and a This just of The number restaurant AI is health healthier, in in variables a experiences. an model example restaurant on safety. and to results model for monitors triggers alert this one change Additionally, behavior and if of use

AI frontier exciting. of new the is certainly Well,

on received as leadership quarter, vision Research Forrester AI, cloud We a in our noted from that includes recognition focuses at are a report cloud leadership our strategy way. warehouse data maintaining its well. cloud new scale. Teradata's we and acknowledging the Early ML strong The

pointed out end and differentiators optimization, volumes AI also Teradata's broad of data require Teradata. support, extensive a use use of analytics, Forrester and and set ML and database deployment analytics, cases. longstanding of scale multi-regional options, analytics out both of strengths

will value continue We significant in to of bringing our work support to customers.

see customer sales are the in a The Vodafone, three our based execution. leading telco has UK and ecosystem also Google and support campaigns several including focus quarter, adding of chosen on Teradata. the with business In some to marketing on with I mentioned strategy, to the transactions all Germany relationship continued their on-prem seven we the hyperscalers. to we deliberate figures, customers to second VantageCloud provider in large has longstanding migrate Teradata modernize markets, strategic and and EMEA their marketing including and renewed enterprise commissions. data their sales VantageCloud key

deal on signed a expanded a and We AWS. with in it cloud U.S. Fortune XX large with Teradata healthcare the as company migrated

the annual cloud analytic quarter intelligence for end, the for business positions to provide as accommodate for financial support customer to this and open reporting, enrollment Moving as their requirements members. yearend well month end,

customer the and service provider of is its process analytical cloud telco is redefining future The in internet in on to Azure. major with migrating the America architecture. VantageCloud Lake A Latin

This customer's with our not Our the and and risk. executed Teradata fully that scale team evaluation only but requirements, only faced level this so requirements. a service some but did not of capabilities complied lowest exceeding determined demonstrating and enterprise and heavy meeting, Excel competition vendors thorough at its

customer resources. Vantage as selected auto Teradata was competitor's leading Japan in cyber-attacks future. enhance headquartered the to to Vantage's sophisticated to moved meet customer to power learning it operations, will bring platform enhancing offering data its analytics fraud its overall to governance. with as expand needs in analytics The manufacturer realized machine unable the governance and world and to Teradata A for advanced and to analytics and cybersecurity core more capabilities the cybersecurity prevent fewer allow

one airlines. scale VantageCloud. a temporal business when customer the major meet example workloads of environment us won its and to moved This customer using it couldn't the at expanding business customer's data. with XX% We their An of a as U.S. to this needs by was system competitor's because applications grew environment

all the do. very at of we remain Customers forefront

Our customer powerful thrive analytics need in know times. global large survive and and these to dynamic they data enterprises base of

to achieve their dedicated them trusted at partner than absolutely goals being are a know We and helping better none that is us. there

ourselves believe central Being to to for that this challenging are continued greater deliver component means partner through and We a partnerships to customer stronger we've value in customers achieving engagement. our execute are partner we first strategy success, area. our

key two on hosted that trajectory. we partner events June, our energized and focused In

to our with guide from comprised most the partner respective strategic Our plans. first board executive partner advisory our executives bolster and team IT companies met of

strong can partner We'll partners more Teradata discover our together to for exponential drive our customers. results forum ways new hosted We also partners. building of with future XXX we than a top bringing continue

quarter, this had the for Teradata bring Last energy and experience offering, announced customer the converged is company one of best Teradata. in our and partnered with we deal that with A resulting our possible joint Dell clients integrate of customers we company's Vantage infrastructure. platform best seven with U.S. technologies figure breed together their Dell's first to a for to utilizing provide

supply time integrated and chain skillset of announcements and made for scale. partnership company, board with train, our also customers advanced Analytics payments AI software tends data to quarter. with we any DataIQ capabilities analytics ClearScape market analytics the and FICO analytics allow at in are We that to to to to of solution Vantage optimization. partner operationalize import all-in-one of Further, models insurance with challenges solutions one Teradata we these solve collaboration to We claims, that strengthening new prepare, DataIQ, advisory plans fraud, operationalize bringing a DataIQ, platform. models the and real users enables and an The integration and announced AI number bring members designed announced between inside analytics

zero our the that share efforts, carbon and society ESG planet. and stronger view neutrality that state committed is deeply in ambitious to as proud Teradata a the impact also our company to net quarter a commitments takes on declaring of position and we in ethical responsible emissions. a I'm

X, transparent to hold We by our by have to X communities, XXXX. net carbon We've emissions emissions and our the resolved X made Scope accountable and XXXX shareholders, Scope customers, be for ourselves in stakeholders. and and public other X, X and we zero as employees, commitment of Scope end neutral

at incredible look proud. I and I'm progress the made we very have So

cloud operating mindset. transformation into We a analytics as market and We've leader. platform first continue data with partner a leaned our

with Our sales are in customers market, growing and marketing efforts Teradata. the are and resonating importantly,

the and reaffirm great confidence future outlook. As turn call to I'm XXXX you. I in our our pleased to to Claire, I Claire, have over

good everyone. Thank and afternoon you, Steve,

with filled highlights was in both including and year-over-year growth strong quarter dollar cloud second public sequential Our many and total ARR.

healthy customer of and Vantage platform from momentum cloud XX% growth as public see year-over-year in demand for ARR to growth reported. year-over-year ARR the of continue XX% We Teradata resulting reported as total

basis, public of new our primary we've on-prem healthy added reported improving activity incremental growth. in of trading recurring of as and expansion On up increasing months was strengthening and growth rate growth [indiscernible] for million a XX number dollars. ARR customers and onto a cloud to profit $XX Organic under million sequential an quarter existing the revenue workloads subscription net cloud the expansion $XX ARR driving generation platform, of ARR our XXX%, performance driver growth

of in with per because am quarter share in first of growth execution the to results cloud non-GAAP reported demonstrate the our above company-wide guidance pleased the highlight continues $X.XX, high against in range, resulted strategy. the we've I it another profitable end financial diluted quarter. earnings second slightly the This our

share revenue. results, Let with more details starting financial our now some me on

various This growth was $XXX growth in X% the Second was in year-over-year continued large healthy XX% dynamic to team over quarters, contributed quarter resulting the several constant our multiple verticals. Growth execution deals driven million, expansion growth across year-over-year reported, of as currency. market revenue revenue recurring year-over-year. last cloud by and go-to industry

revenue declines down the China Recurring [ph]. and in percentage wind revenue Americas total in leading with region, more growth and revenue Performance XX% that the year. offsetting overcoming was in started a way. includes a based the headwinds strong this Recurring which APJ of EMEA as was currency EMEA earlier broad than was

Russia. expectations. was This the no quarter there revenue in recurring first period impact year-over-year line growth the with quarter in impact where was was our operations of from ceasing on minimus There from upfront

the and run Second is reported was X% growth constant recurring growth due revenues $XXX The business year-over-year is XX% to revenue anticipated. quarter consulting a year-over-year in revenue currency. that a total rate million, change as as in year-over-year stabilizing primarily strength its and

margin million of and our $XXX profit We operating profitability the generation strong rates on-prem generation million quarter improving XX%. cloud a second to and of an profit on drivers both profit Moving was of gross profit the and achieved in approximately higher was Operating XX%. dollar volume margin in primary in was dollar $XX gross quarter, year-over-year. gross healthy. The approximately margin

up Total R&D year-over-year, flat were in expense. both sequentially operating expenses with increases marketing but and and modest sales

$X.XX remain GAAP disciplined in the lower to well includes a prior rate is assumption our prioritize diluted $X.XX, earnings benefit of unchanged. tax as return versus generating continue cost share rate in non of from resulted investments that a growth. which simply year since for a This activities is tax future on our focus We difference positive guidance. the timing quarter as full These our per

a in from line of that earnings we historical February. of of tax flow incremental past Turning our approximately cash to call generated cash to flow mentioned the on linearity. this our but was was quarter, This flow cash expectations, and payments million $XX allocation, million different which due with $XX and timing invoicing this free free we cash capital

We are still to on guidance. annual our track free cash achieve flow

Given supports XXXX financial that the pipeline outlook. our sales

annual We of shares, free in at first our of repurchase take flow to shareholders cash resulting of return to our XX%. XXX% continue advantage half balance sheet ahead our least strong to of a of target

people at in Stemma add our to allocation. As cash share platform. great technology flow off and also capital XXXX Steve free is it XX% remain opportunity to via great We of Technologies to our repurchases. acquisition of We discipline was example noted, the returning an committed least a believe complimentary

the the With regards on of would XXXX quarter some outlooks, the all like rest to reaffirm to context the third of elements We I and XXXX provide year. outlook. our

the our view see year. as midpoint our to outlook best of the continue annual We of

growth to macroeconomic Given we dollar quarter our the forecast the ARR second historical seasonality quarter. sequential and fourth public quarter cloud environment, the from third

cloud expect Teradata platform, our growth. for we strongest for demand continue VantageCloud ARR our the the quarter quarter Given public be to fourth that will dollar

comparisons cloud our of cloud public the moderate anticipate came almost because XXXX half. of growth to ARR XXXX year-on-year better in versus our the in linearity and growth second year-over-year half tougher rate We of where second XXXX, XX% both

There's approximately for which is of the modeling of share non-GAAP This average rate no change We million. assumption due XXXX, versus outlook. the XX% and have tax $XX one in update weighted prior increase to of to shares million. approximately our $XXX.X is price expense outstanding our approximately other

range you the of your XXXX is estimate Our time follows. is We diluted as $X.XX outlook share here. outstanding shares quarter as tax to Thank be anticipate for to for project XX%, non-GAAP the the the very average per We third rate today. earnings of be weighted non-GAAP approximately to in $X.XX. before same the and much

now open Let's call the questions. up for

of question will Capital [Operator from Matt Instructions] the first RBC Hedberg line The Markets. be with

Your line is open. now

seeing better get the results of on just I in wanted cloud for, I are most sense elements for double important just quarter. that to comments saw comps, some half QX on the you start of and to wanted guys Great. there ARR a the there. was driving that to that click second I performance. the strong on Continue the and of deliver maybe to Thanks great Steve, Obviously, but about there. success wanted to heard the, kind double successes the XXX. questions acceleration click the on and the some with the cloud and in congrats

question. Thanks Matt. Hey, Yes. the for

and As of Claire that all was growth, primary we our across industries. prepared her across remarks, expansion said in the and organic saw geographies driver

in the the my deals. some remarks, of in leading prepared finance, said I way As of telco healthcare terms

of that and deal volumes. great sizes other was a thing in Matt good deal we range saw The

migrate with figure those had customers our and and to of commercial of, continue overall But a terms seven model a I that what robust a well us. were that to testimony is driving of six it's number cloud deals think, see is numbers. in as think performance. figure we number So we the deals I of is level that business driving expansion And how to

the recognize really they it expand deliver saw workloads. continue workloads open our how interesting cloud, connected the, from in some feedback we can and through And and great base and Forrester was I the the how and those it to got that competitive mission [ph] QX Gartner terms from that They think successes. really, can strength customers. some with we demonstrated in wins differentiates they competition, how platform, of recently the critical those really we had And of those

that again, that of net but innovation. Matt, technology was a really see to balance was on different it it rate in from XXX, So continuum to expansion whole based great up quarter XXX the progression wins, and and

great hear. That's AI, minutes about. into a wants you mentioned then, before up, remarks couple obviously as that's to went that gen but a investor follow just a you prepared topic think hear Maybe your I and every to

I do monetization. I there. an would to you Just AI to foresee on think helpful. I'm attribute growth future initiatives? really some the opportunity monetization I you do had there foresee, success to interesting mean, be monetization I question some down guess of you. gets of actual gen and sort the curious, comments that Thank on wondering articulate the

open AI, customers real and the outcomes for AI cloud data as our see deliver Teradata of real business, linking ability services particularly AI platform, in we like the with a Azure today AI a gives us as native our and and language analytics and trusted tailwind cloud connected gen having against large that ML data. capability for models Yes, corpus to

already, improve experience we either AI we've you of like trust terms operationalize of strategies customers AI on something day. or experience every different to employee in they execute. data can number Teradata how customer is and that a already AI ethical that the based And So trusted things single can deliver helped

challenges biggest these data science where and AI the the that's into production. Teradata, projects actually is with of one AI putting surpasses And And solutions competition.

amounts ability those utilizing data and process of AI that models score Our the competition. is massive data to unmatched by basically

we help And lift planet that competition. we're biggest on real can our to AI So the than the operationalize seeing organizations as a quicker the business.

Thank with be of Lenschow next you. Raimo The will question the Barclays. line from

Your open. now line is

Congrats Two one as for for Well questions, well. thank one from done. Claire. Hey, you. me Steve,

customers on-premise as like an first question. there, well? the nature Steve, the on projects my as or Is on do over see see moving for their expansion workloads of On what's building you there? existing Vantage momentum you, like of the That's one done you deployment to that first

Yes, I think actually with. expansions from Raimo. our driver was primary But clearly the activities is cloud that growth for a we're very migration perspective, something happy

native something can of Our that customers they Teradata large some that native level seeing lowest customers, environment price and than services our workloads systems is VantageCloud come re-architected because level modernize the customers that cloud migration the from they've competition. gives their advantage been expect way and AI platform, the critical on-prem better services we've mission integration data and with the risk, very them cloud our to of of is that a And want of their ability move services for those are do that's the to they at only utilize, that those operate with take attractive into possible services. way modern the modern that performance CSP type to of

for proud our of the but activity cloud So both growth, expansion QX. we very see overall driving

be so was the then So well, Yes, timing aware somehow And that's was cash just, one just little a mismodeled then? bit we this tax, anything terms is interesting. at of QX QX, quarter cash flow a in as extra done. Well need of to of number half is Perfect. bit, there Okay. timing? the the that look if we it that like of normal flow, Claire, or terms just all little really in you second

Yes, Raimo. good question,

drivers the the included tax year. your what that and payments, linearity our So within cash different guide this was was of and slightly year fully billings. into timing which to I year last firm is, of point, on year would say our The cash our than is full seasonality main flow

so high for we've that reiterate, full given confidence have year. confidence in to want outlook full we our full the in year Just number, the

be I guide. to impact remainder through the And versus model QX So QX of of you no you would there. full number free assume cash year, number can to And the, then point, the to say of rest last the a flow year. your as the similar year for get QX the for years will

Thank next will you. line Wamsi Mohan with of The question Bank the from America. be of

now open. is Your line

thank ARR you the Hi, both questions in slightly It's questions. I quarter. public Ruplu Claire. Wamsi the guess first for against XX% had my all growth, taking quarter for today. a Claire, two with and strong have than you very growth in cloud I filling for lower XX%

So versus half the XQ help in parse rank versus growth compares look us can XQ. drove growth? logo expansions year, the migrations versus are for the contribution you help when of you order And quarter? what from we us second year-on-year at new the the tougher like Can looks

about we how XQ expect then to growth we So to should going revenue sequential XQ going XQ should to XQ XQ? think and XQ year-on-year accelerate from from to growth and

Okay in got there. I

cover let try me So that. and

So and come point, QX that with very the we to your that expansion. saw the growth did in of pleased majority from performance we're

in at quarter. of quarter. also into point but the net that we the we migration, are seeing So that expansion the is strong see net mentioned, in a see XXX%, That's expansion not migration, was rate. positive so rate the factored of as And point the Steve which we at expansion

followed migrating, new yes, the but at expansion, then strong and to of So contribution, a much amount we're from performance then still you most see coming migrations want its a if still we logos. there, smaller look from

set it. you into half the look second you of As the year

compares year, in tougher QX. the half We in especially second of have the

the to pleased this linearity. that managing We year are fact we're our with improve

dollar both for cloud But And will out area ARR to cloud year growth I QX the the increase still QX as you been QX, QX total compared QX but in look QX as quarter QX from has ARR for of as rest a at to the quarter. and in growth that ARR mentioned, a you remain growth. to us. can biggest you to our will slight look our So growth growth be anticipate focus at biggest

So kind revenue. story as the of behind ARR you're looking that's the – at

biggest you if revenue, that's obviously focus recurring growth for on driver think us. I the

we in low Although from HX we a the biggest consulting our revenue growth saw so look But quarter, versus stabilize us, quarter this did if a which better the in and the at see is was HX quarter, it. driver good. is growth probably from you at consulting recurring way to look

X% similar we're to which deliver our And averaging midpoint to HX. track the in full So midpoint revenue around second saw to QX growth very get around of half, then growth in implies on the year our in that of full date out outlook. we coming in to a so of guide is to the recurring what year X%

Thanks details it. the Got there. for

ask you gross me Let a follow margins. on up

the And recurring through was So as contribution you in gross expect quarters we revenue of recurring of XQ, upfront on to So go recurring your revenue sequentially benefit XXX What just in margins? revenue, thoughts year. the gross bps for margins second on the XX%. gross margins the the remaining should half any declined XQ?

Yes, absolutely.

recognition a remember by is QX normal well gross as this as that you minimis. will was to in you decline it slight million. de a $X driven We number, not last whereas that said million, and seasonality upfront that recurring big QX QX margin was I rate the remarks standpoint revenue positive mentioned a in a in saw and revenue negative year from So $XX It's my QX compared a impact prepared seasonality. is is so that upfront

of we're QX. of going less QX and QX seen we've impact So the in kind year expecting remainder of as the an into

full would and say lower XXXX for I full than fiscal that So full $XX fiscal to revenue, example, year. was year the the be if you upfront for look year, we're expecting XXXX XXXX the at reported we million,

helps with modeling. the hopefully So that that

from Craig-Hallum. Thank of The Chad next line you. will Bennett question be the with

now Your line is open.

my for Great. Thanks taking question.

make the understand ARR half call the, on want follow the Claire. the to eighth ARR on you, up in cloud of maybe I second to iteration the just So just just on sure

the up obviously third think the if a terms looked in ARR cloud we then standpoint seasonally net saying up in new I new cloud do material in side? think at on dollar you're a in second half sequentially it third fourth cloud about dollars quarter. here, grow on should ARR the ARR the amount quarter, net and in side, be from How the the, quarter year-over-year you

Yes.

you If we second should to able the look higher at are, total a half deliver year-over-year. in dollars be growth we

in unique the the on-prem in that we guess ARR And positive, subscription was ARR then rate year I'm growth in the I subscription a think considering anything how a that subscription was first positive, the on-prem terms there quarter growth the second subscription in think of quarter Okay, in great. of put is about half? in second Thanks. this how about quarter or where forward the the ARR strength and went in to think I about there on-prem subscription that ARR should just, half, cloud year-over-year, on-prem saw and to second growth the just up you going

nothing was there were abnormal, yes, we pleased. So so

the imagine cloud. seeing the can you QX, performance expansions we're strong on-prem and again As in in with both on

good that's to So see.

I of you of think half more as overall forward a the to the migration we'll what move second is see terms in full the year, year. in impact the impact of start for

the good outweighing ARR So as necessarily on second we're in been our anticipating second expansions, outweigh year, still I total so half migrations anticipate of but projection expansions, so first half outlook expansions the whereas based would in year to of far that it's see, the wouldn't migrations on our the as the migrations, outweigh expecting half. the can you

Howard question with Thank will Securities. you. be Guggenheim The from Ma line of next the

open. line Your is now

Okay, Claire you you I said. with for great. it what into ask about the in ARR question. Steve one implied and what's just have to Take start for the, a for way? taking slightly I half second Claire. one want consideration I'll different just in Thank cloud and guidance

you feel the in there, how bag, outweigh year, ramp, expansions months new is and expansions, about how, ARR migrations talked required? deals So if just the, migration you in with to you do the any of already me, would that's the And they'll what how you expected about, but the, in relative the half how kind describe visibility large comment excuse five about and into to the can you will? left you have specifically, you on feel so about second how

Yes, absolutely.

in outlook. look do full year think seeing, that's good pipeline the particular we We to in very that your we're do and I confidence need in a got point cloud but So second on more dollars seasonality normal forward, as on coverage our the based which we've ARR, high half in to us gives QX.

look the point, our and given. high deals as your at So that able being we're we outlook working have confidence we we've the in very right full meet now, to to that through pipeline, year

encouraging. still or, end? Thank question great. onto to on the you for enterprise And by wondering once And Okay, you. Steve, track higher you how related is reasons? to to and enterprise, Lake expect migration its Lake Lake. customers want on I a year Enterprise one VantageCloud about Are to That's ask is, base from Lake, move expansion of were do seamless to relative that superior architecture we for due other process customers entire are

thanks Howard question. Yes, for the

population like of that the the use in migrate just entire or the data. ML when Enterprise What is terms cases like is departmental So our actually VantageCloud haven't AI been over. by we really adoption VantageCloud enterprise customer against -- we of customer the models of experimental we're so utilizing driven set migration announced seeing would and to VantageCloud of

it's us. play so a And expansion great really for

great excited lake to end looking it's a we're this being solution, nature to because as VantageCloud us some native going enterprise to coalescing its that, to have forward it's perspective, fully nature expand for how ability do do that going because a into year, that's because because drive VantageCloud start our because opportunities very VantageCloud technology of dynamic, of pretty expansion the and highly Lake cloud XXXX. about self-service from technology. we're of to the our with able And we're essentially to the of we By

you. be the next will Morgan The Woodring question of line from Stanley. with Thank Erik

is Your open. line now

helpful. the on terms of for maybe quarter. share really you concerns inability then to to color needs over just in and ability on my your versus taking days XXXX? about from the analytics the you Thank spend or follow-up. data macro you, have to conversations data more versus XX not Thank with how you. customer the if would and could be I a I caution post budget, trended maybe some customers if the questions. you guys. come open in could just analytics their that the can customers desire maybe spend to start of desire last Steve, on Congrats potentially Hey And your maybe on just that and Just

Yes.

market. seeing still think the I customer priorities perspective Certainly, analytics stays it our for in in demand we're a the and robust a three data from spend. top

over interest kind of recently customers JPMC activities. I Beer putting was about Lori our may went is think the and a there. looking of think business from lot the out declared that that billion and already in talking projects. at and AI public have and value off some remarks customers analytics, from any from And returns in really gen are of risks generation data macro AI out AI I our taking $X be

got The business from not capacity as from a Teradata degree other more strong model, given would opposed I that is fact – a fixed that macro in insulated is which model. our add a consumption a the high consumption-related thing revenues already of we're environment, just a to perspective, are to we've

are And reduce customers are spend. optimization the so trying a lot macro cloud to environments where about and talking of organizations

every for customers have storage workloads. out mission-critical the in squeezing our of for Teradata a some site of very part of and predictable We compute terms in capability

insulated So a macro the interest market. needs from we're language customer of But analytics, data their books. close kind driving those in seeing continue from environments every models and in certainly AI, terms large of because to tailwind lot we're to of demand

it's just maybe Claire, if I second sorry ARR It's At my it's beat Great. And you, That's Thank a question. really not question. ask a an helpful. dead not cash question then, horse here. Steve. flow you, free – least to to

comfort then to me. versus, And more in us for it different, in know strongest it so back free and quarters? other XQ Just why is I cash why cash XQ so but imply your in much. XQ but big just on free looks comes have history relative questioning, kind data. and seasonality as historical linearity you track maybe it, as of account into give what does understanding the Thank what comment can really XQ I'm taking that's versus not flow I XQ normal far flow, you the confidence that's specifically versus

Sure. No problem.

deferred strong you're a capital, through obviously, coming and also a a is other strength line, if higher assets as we've also it particularly we're on also got in our yes income So combination our seeing looking net liabilities. revenue benefit and year-over-year, our -- at performance working

a giving a if different through is your year, has look last from to we've with think cash of us So you our our number QX to I of it big strength. items outstanding, QX provided was It point. given biggest strength, for day activities, But sales going coming got be not in the of receivables, our which operating impact unseasonably example, high. at us

think a I flow big high does that in to benefit year not give cash we're of So QX a and standpoint. anticipating as from be us that's something this

The you. Tyler from will next Thank of question with line Radke be the Citi.

open. Your now line is

landscape. taking Steve, Thanks ask for wanted question. to the you, I the on just competitive

the competitor talked executing has double So closest competition growth business public cloud the about quarter. of clearly, against that ARR I you your been And public some your mean in your about wins well. is

did modern that what of legacy could when was just more in competitors? or in you sorry, win you're any or the rates or competitors from -- about examples So customers there? seeing on-prem out primarily you. those quarter, customer you you talk legacy And about share on-prem talk could terms color, Thank

Yes. Thanks, Tyler.

of I in data really kind mix cloud do providers whole they competitive have executing they cost actually native tend to kind we at capability. past of and then to the workloads cloud in service and like think look the diligence, pop perspective. customers helping we at big go from look kind is breaks; terms they competitors benchmark find due performance, seen least see that actually of through them from with in the the on-prem running of at of the that much the price solutions an born They we landscape. up And world, advantage tend that total of as Snowflake us are providers battles. competitive what cloud environment. that in can in a categorized the the look all at cloud we those move traditional gives risk the in the way the on-prem Oracle we the I've terms of haven't differential such great IBM the to execute the And of in change competitive

think the their customers make is, would increase in what other as the Cloud, of environments move point is I the they those as to our expanding I terms commitment to to migrate the cloud. us

driver were that I of highest And customers growth move this past quarter so great think use given the platform migration data forward as they But put the grow cloud. our continuously the that get as And benefit to strategy they us from that's from expansion some that's into was move that. to new cases the just the of certainly start growth. it in demonstrates cloud the see on-prem that incremental to against we the to terms new And platform, to utilize activity that and our platform to with this, platform.

for a follow-up And Thanks. Claire.

Yet potentially the or obviously in a that momentum of I just frame verticals should that Could full delivered year. start timing some seems but there's talk just how you've there of full uptick expansion are the about you rate maybe reiterated year deals here just net outperformance to of the relative the some off two the terms a in targets? you're a in taking mindful times mean, are half could year offsets? and first row in some business, that unchanged maybe an of like couple in guidance of half. from be of kind lot what the here, the we sectors cloud to So despite strong the of you've momentum? of quarters the what first away Thanks. Or the

Yes. Thanks, Tyler.

in naturally, second half. first with and the quarter So we are our the pleased performance for

I linearity think from us the linearity half and a of lot been try growth that focus has some back the is of a though. of the for improve take of and to It improved that year. coming out

that with pleased we're we're So the progress there. making

We mentioned on easier total the so both HX. to from the a linearity back We've year the growth call, got we've of and much and from standpoint much particularly we've lot this easier in have in I the think compares. than are a got HX year, ARR of better cloud ARR compares also, deliver still half a standpoint. as

the a result, midpoint our about remains do full output we So year. as believe, best of the view

room And we that out sure to it us also gives surprises as the year. make some there's no close

stabilizing, seems be companies environment to very be closely. can continuing volatile the scrutinize their many still macroeconomic So but with spend to

the sight of with line So we our full linearity fact we're to for And good pleased outlook. it's be we're have important prudent. think that and year improving the

with from Securities. next The line of be the will question JMP Walravens you. Thank Patrick

now is line open. Your

question. Hey. for Thanks on is for the Pat. This taking Hobbs Owen

have you you of wondering if that was the of enough I to opportunities on there? talent capitalize you So theme to all AI AI, the see feel kind returning PhD-level

Owen. for Hey, Thanks question. the Yes.

having the a for been Fortunately, from sure get – and a That's passion. years. company, being Teradata analytics that our XX best get employees our that's are over we around X,XXX making mean global the data focused our core absolute customers been world that the from on perspective, I all

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scientist technology The artificial intelligence in complex democratize the be is to platform designed intelligence so and data that models. don't to need a science get to or deploy or artificial best have that VantageCloud to data you we

and work – organizations You bench use. can those already you that utilize that the tools

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Thank you.

next question the line will of you. Thank be Chokshi from Northland with The Securities. Nehal

line open. now Your is

want area that area? the and quarter. for prep. impacting that's gen how And of you do Yes. to that the on area in you as focus I little taking question. see What are competitive landscape, Thank guys in data well? the of a AI seeing area Nice you particularly

Yes.

some think we I one that challenges. and exact reasons those of bought of for the was reasons Stemma

data that a customer If two challenges you think Stemma, about is for discovery. Stemma addresses the

that that So trusted absolutely actually essential. say and then got you've capabilities And those are ensuring in the think AI, data the data. ecosystem on and or lineage fan about data when AI you ethical

to Stemma the that the the customers. bringing the have the is solutions our people to technology deliver capability that in [indiscernible] a of to great we So Teradata can they've the and addition terms they got platform

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you as of see the Could do you discuss Great. Stemma? competitors who primary

could that again? question catch quite it. I'm didn't ask I you sorry,

of competitors Who primary Stemma are the the acquisition?

got feed data and have number to in that of Yes. the they've and to organizations as in offering data in uniquely placed developing We different the ensures capability are saw in that catalog that terms it saw got not Stemma team. we great marketplace that marketplace, they're but models the a and analytics capabilities they is add into possible have they a pretty they're the the their of area, the the – analytical best Certainly, platform.

Cowen. the The next Wood will you. Thank be with TD question of from Derrick line

Your line is open. now

of Data buyers, Data guys, Great. approach different that fairly really for Thanks selling Data some seen motions, data taken use mean platform. for one environments? vendors running approach is will. a you ask taking between strategic about approach, on different strategies wanted have you types Warehouse questions. addressing What kind and if Lake take different of underlying is Lake, at your of all different maybe about go-to-market of -- and but of new Others kind both two selling you're but more platforms, stores, Cloud single I cases. thinking is longer-term I how to your what a a and centralized different these my buying approach we've an

Yes.

Our philosophy is different We choice. platform different to our of as from all competition believe this a can at look service those it three And deployment choices. perspective. our we that really do

cloud So stored one the whether three models enable of and the that in and our the enable competition Data deployment than those technology data to any Lake a will our cloud, customers all in that's underlying of cloud integrate our together cloud, customer wants data and data a warehouse models House any the data utilize can. a better to of deploy Data those or in Lake in

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that. for thanks Steve,

to how Sorry, got discussions macro, you or early. headwinds kind that of six update movers started the Claire, spending optimization if whether has yet workload and over this But it's kind generative so sorry it's it AI asked. late, become feels But too we've of the to curious changed an heard months on that's three like consumption-based but the been don't on just guys know same – have from I dynamics to get in pure still models behavior, have the cloud. any – and how last I

much. very Thanks sure. Yes,

good So yes, is seeing what in business. strength expansion our we're

in earlier strong our cloud expansions expansion mentioned That's call seeing also performance reflected but expansion the also we're rate, the the of strong So both but on-prem. at in in seeing migration. net point we that

you the our wanting They're mission-critical to Teradata on platform. that So have back that that take risk, have not think I workloads to platform. to they want confidence the that the our fact comes maintain in customers Vantage they

of customers, what with and happy year. the been the that's pipeline half having those that and look strong very forward we've gives as second conversations to the the dynamics we So us with

there's I obviously We're the a there, volatility but that being a little macro very very standpoint, macro, less prudent. bit still watching think we're still out closely. from macro

of not of still higher not to deals, scrutiny continue but or move We because that macro. see – disappear the away of level on seeing deals kind

that's So I analytics, your importance And think support moving of to important into of strong good it. sign the the the with importance and AI of AI, point, like Vantage forward. it's the data to a have to that gen the the quality a of platform go that analytics quality Teradata data

in door the that I as think So the earlier AI Steve gen call. in for becoming space as well opening us mentioned is a tailwind

strong continue really obviously pipeline to having closures So this macro not closely. point, we impact from good very monitor but or an conversations, at deal

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

and strong as of take innovation believe today. experience meet to expansion looking quarter. in adoption and the most continued all seeing again our its thanks, and our at customers we everyone, We've our There's unmatched data year-end execute of confident providing trusted really We're guidance plan. our rates. and we positioned you, companies in with joining and in challenges years complex advantage data you Thank much. scale the And to a recognize differentiated platform, us help Thank of really of so to data benefits, VantageCloud with strategy progress as speaking we're you and got forward massive customer commitment uniquely pleased in are emerging world AI. We're next our really our handling analytics healthy we're for QX. and we

today's conference concludes That call.

disconnect. now may You