Teradata (TDC) 5 Aug 242024 Q2 Earnings call transcript

Good afternoon. My name is Matt, and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata Second Quarter 2024 Earnings Call. [Operator Instructions]. I would like to hand the conference over to your host today, Chad Bennett, Senior Vice President of Investor Relations and Corporate Development.

You may begin your conference.

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

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

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

items comparisons We ARR other free discuss non-GAAP constant currency as will outlook flow, in and also cash and revenue currency. XXXX such growth constant

will all call over on I website. And accessible our of this to measures is replay is GAAP Relations available otherwise, in will turn today's our basis. non-GAAP to of the release, Steve. at be our call Investor results which website stated numbers Unless discussed A page non-GAAP included and reconciliation are conference call on now, investor.teradata.com. A a the earnings of in

us everyone, today. joining Thanks, for

We're keeping team. us on to and started, our have to adding Capital. the get company. expertise years covering SaaS his you Chad Craig-Hallum companies Chad welcome date up Chad of we Teradata I'd to and software to As excited joined at after like Teradata to

cloud Also, cloud our cloud, expanding reflects the ARR cloud, ongoing Teradata interest hybrid constant the choose strong with growth of customers performance increasing results in with as capabilities. currency. This when in are XX% value. us differentiated they see the QX demonstrate they in Our our in

Our rate cloud at the XXX%, declined growth, X-figure by total cloud doubled year-over-year. Despite of number we expansion customers and have cloud ARR remains ARR X% strong net the ARR year-over-year.

per free Additionally, cash of non-GAAP we delivered generated million earnings $X.XX of flow. share $XX and

Looking need recognize longer our at and fully performance challenged to the cycles. We our customer overall, results continues to be we by industry macro decision improve our execution. environment

are reduction. results, and actions focus for including led We financial of on outlook into and rest our reset XXXX. to of increased have review a to improve our undergone the bringing year taking cost comprehensive This this has a

cost in Revenue has with Petley, with brought upon to team, go-to-market large about efficiencies. In other review, regions best for are has leverage The and creating tenure. resonate of the drive half and Rich the the building results our deal practices globally, realigned has management new increased also introduced actions the sales speed encouraged Let's new Officer. been during his function organization. generated XXXX. quarter, that opportunities start I second which meaningfully Rich Chief the from to EMEA, our structural outperformed Last while effectiveness, pipeline discipline worked global we he the

we In prior momentum. doubling year. what logo deals year. was pipeline, it continued Our Xx see to the In pipeline second we half, the ARR for also to new ARR QX over of large our X-figure increased new last in anticipate has logos of

decision-making see we to continue the we consistent is this a cycles, are believe experiencing in However, and with others longer what industry.

opportunity IT decision we business makers seeing across platform deals hybrid to units. This cycles. lengthen what decision it beyond analytics, is moves yet nature departments our of more strategic help the are with affords cloud analytics, with more multiple environment calls, and compound the best-in-class us possible and Teradata deal prior in noted in I'’ve does understand involved As our from and

We that slipped expect of to deal example, out XXXX. QX in closed transaction elongation X-figure continue, one QX the we and just

thorough and realigned rigor discipline Following the review decided from market with business, the we reduce to of our go to our additional the outlook. organization, have applied

the Our longer revised it outlook deal risks of on-prem expansions. environment and the scrutiny for reflects see as uncertain or macro and cycles with the accounts less well additional pipeline, we

and for ahead, are move addressing customers. will deliver believe we growth that value we vectors As we accelerate increased

and reduction approximately non-revenue taking a the to proactive aspects remain XX%. We're operating reduce committed areas, headcount reducing growth. Claire across measures are of where continue financial generating flow, outlook revenue in to in revised more we we'll of X% expenses detail. will the all cover can We invest cash to areas accelerate on expenses our free in and earnings including business. focusing to and protecting in We results

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As spot the I in remain of partner taking data AI our call opportunity. stakes, maintaining in delivering growth are customers. rapidly executing. to hand as commitment cloud and enduring actions technology and to trusted is in our our solid trusted we sweet committed and trusted table the are a becoming With We confident Claire, to

the Our at data innovations that Teradata attention analytics. and forefront will keep delivering remain of on

remain we and We on strong in momentum that flow. maintaining are protecting cash our equally and profitability drive dedicated value customers, steadfast to partnerships for free

Now let's call the Claire. to pass

you, a the currency, year-over-year, erosions second our we We continue expansion slipped first rates. In from that we net healthy XXXX. Total forward-looking at view ARR to and disclosed of in the ARR of $XX compared XX% last declined the this these good X-figure XXX%. growth be supported remained quarter grew driven previously and currency, closed believe constant as lower had when cloud to half of and on-prem everyone. in impact ARR cloud Steve, an activity. outlier expansion from will million XXXX retention by QX rate Thank afternoon, the quarter, deal sequentially constant and cloud year-over-year by large erasions,

levels deal deal cycles remains continue pipeline customers. elongated strategic experience our engagement of activity with and While higher strong, large driven our by we to

we an outlook. back-end on conversion We deal reflect more weighting closures the pushed a and being of in lowering more are seeing to of which even are out, stance XXXX. To leads timing pipeline, large expansion prudent our activity pronounced

As and later mentioned, measures costs remarks. reduce go-to-market taking Steve my efficiency. are I quantify we improve in these non-revenue productivity generating will to proactive and measures

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

revenue revenue small recurring saw revenue year-over-year impact down revenue in million, upfront constant and year-over-year $XXX as a offset and erosions and on-prem positive growth prior million. currency. was of a total reported Recurring from $X was strong positive from year quarter growth revenue a Second as XX% percentage the the XX%, X% revenue upfront up cloud from by We currency. Net was period. X% in anticipated

and X% Second currency. year-over-year down quarter due revenues. lower in X% perpetual primarily year-over-year consulting is to $XXX change constant total down million, and reported revenue as The was

Moving to cash free profitability and flow.

share of expansion and up our Total perpetual continue was up and year points to with a consulting profitability. Operating be strong XX%, points XX.X%, driven over pleased top-end basis per gross gross our revenues. We the exceeding margins XXX XXX Non-GAAP year-over-year, earnings basis was $X.XX, cloud margin guidance year. margin by in diluted was lower range.

flow by driven benefited lower compensation. XX% In an reduced In gross quarter, and $XX to of shares. expenses we generated is the at least free shareholders remain margin cash headcount the year-over-year decline $XX to million We sequentially. ARR. million the the from or approximately the due repurchased to in X.X quarter, free of share in strength, $XX returning linearity committed increase million We variable form flow addition The we is of quarter operating cash second million which of repurchases. to in

to an turning total, million cover Before reduction X we run we approximately operating outlook, expenses are In basis. on that the over the reducing to $XX to the actions anticipate $XX let implementing me by cost rate million XX next annualized months.

total $XX million to of profit million to amount cost of savings impact to paid anticipated million to areas. The into We bottom the the non-GAAP also drop associated be is $XX be which growth expected from operating will $XX XXXX to is payments to in severance this in $XX estimate While million, portion $XX to we approximately line, from cash XXXX. million revenue-generating some these plan a invest reductions. $XX back benefit of of million

Moving outlook. to our full XXXX year

for outlook reminder, ranges are revenue and in the a constant metrics. ARR currency As our

to total total full to revenue as XX% approximately XXX basis is decline $XXX of to cloud to follows: X% million; XXX X%; of as XX%; cash churn lower share due revised from flow free growth points basis to per to or XXXX year recurring XXX basis total down flat follows: change approximately $X.XX. A Our non-GAAP of outlook of expansions; point activity; XXX erosion basis is points, ARR earnings million to deal on-prem to from largely the breakdown revenue $X.XX ARR decline expected ARR be points timing. approximately to $XXX X%; impact X%; to X%

lower offset by second flow billings free ARR lower are to payments, operating the expenses. revision, due Regarding the cash severance primary drivers half reduction; are partially which

year for XXX total on basis approximately points outstanding and a using basis headwinds rates, currency, of points million. shares full ARR; average on end Additional non-GAAP XX.X currency of cloud June outlook rate million; of the of XXX XX.X%. ARR on of $XX year-over-year assumptions we anticipate include: We other points weighted project approximately approximately tax XXX revenue, basis expense approximately

to diluted share in We outstanding earnings quarter third of to XXXX. non-GAAP We Regarding rate $X.XX the our weighted shares range million. the be outlook of and anticipate for the $X.XX. non-GAAP project approximately be per the average XX% to tax of XX.X

We sequential ARR expect QX. anticipate be flat in ARR growth to in total cloud of dollar We acceleration QX. sequentially

than the be XX% the deliver more by the large deal supported strongest which year of expect Xx the We and quarter cloud fourth our the pipeline, of growth, of is quarter to annual larger this push billion or to XXXX. in into XXXX, of while time XXXX our changes us, in regards to last front we year. With XXXX opportunity will target ARR given $X the our outlook, we confident remain have the cloud of strength

of close The similar taken remains year-over-year prudent anticipate XXXX. measures and continue ARR our to time in ARR, very total both the longer margin your outlook in low we approximately growth strong competitive in reflect you much see a $XXX to change should in XX% strong, our free growth proactive pipeline, to conversion cloud and migrations of expansions. low cloud deals taking our the growth our cash stance to be The for position. Thank continue XXXX no and adjustments which million today. will flow in to rate on to have business. more we in $XXX to range closing, in million. In mid-single-digit our result We and operating

open please for the Let's call questions.

Woodring of line Stanley. Erik the with Morgan from comes question First Instructions] [Operator

within net I'll cloud you. I start ARR model you or growth your rate. know maybe with Steve, that, forecast, XXX% expansion

are You're you as help about cloud falling XXX% maybe Can short hood? deal on-prem obviously follow-up, please. think of quarters, of you a those last expansions net are ARR, migrations, categories? and where how migrations. logos across outperforming under the biggest of be have the ARR the either categories you then XXX%, strong And I that underperforming. Last about handful at, just we cloud on new to might which or call headwind quarter, impacting net you point talk at means it, migrations did X short on What's understand outside what's of elongation the cloud X us each falling those is happening expansion but

has QX, Yes. that Thanks $XX second we by deals are the to was decision customer remained Erik. in Yes, push in on clearly On that we strong, making change pipeline. pipeline into the we the in where did our to off basis, deals constant buying a and question, see they in not We're you're holding cloud. currency right. The behavior are sequential half, of some losing grow for below absolutely cloud did that ARR, on expectations. but seeing migrate million but those

those pipeline, our said, that of really migration exacerbated as as So be that and you are it prudent, terms our continues, think during the the well. we observation I be is said, some overall in second seeing deals an to would we're out and elongation we ARR and expansion year. From deal cloud us push of doing perspective, more for guidance leading quarter,

least Our the as And XXX% think rate expanded we at at cohort we months expansion we XXX%. business, XX of as look about that move had ago we having customers at forward.

last our of about logos cloud half on-prem double the won new logo pipeline. mentioned the the half had to there quarter earnings I year. really -- terms there. logo wins the second year, I in the half some new last were in logo new great second in we and of was new logos, prepared strength second logos. we We some that quarter, which both the we in mentioned call the in of be in second New the activity that believe in as new remarks. And look will the in

are elongation a accordingly. putting So as it, we we pressure that we altered full have on is that's look why our guidance at year deal seeing ARR, and cloud

with year. is Maybe, Macro Obviously, I I'm very if been volatile up it's follow and you. Okay. curious. a very Claire, challenging uneven. just

confidence, some to was X, the performance about XXXX, year, gives in ago, what some confidence X, provided but think months us not really of confidence with from, that only does give and in you deal the those you after metrics this X given understanding the can't you which you a volatility providing those metrics stem performance unforeseen those? some can't -- XXXX Where As lot to undershoot commentary for guiding of XXXX give cetera? really again, the elongation, you that of et of

Thanks, Erik.

with end the deals deal me deals. our senior us attracting we're are one on conversion and close for pipeline, assumptions non-large one against our [indiscernible] our of heavily pipeline, deals, sponsorship large current and rest low and all using XXXX. and start the in What leadership those historical the deals, of the of on rate that let our large of So all confidence we discounted deal the is we've gives outlook reviewed by then executive

things So that done of there's we've a number in XXXX.

As Steve see customer said, in we change do behavior. that

that us close and that's confidence pipeline using and gives conversion assumptions, gone are our the because heavily outlook, assumptions discounting we've low-end of As factored QX, what our the through in into XXXX. we've we deal

rate, the net a move XX% to XXXX, tailwind us the mix that outlook, as And the As is as grow still maintain and cloud year. to as we we XXXX. continue out we our our growing we into we ARR midpoint continue as cloud into some new is of the in helps have things cloud business expansion growth clearly, with we XXX% strongly. move a to XXXX, approximate that Even of look benefit guide the

that the headwind in The going our into have we XXXX improvement rate. retention is other

and lower half through seen as of to exit on-prem HX in that have rate go rate large due improve we that exit we We're continue we to So in retention XXXX, of first the XXXX. as -- the we XXXX a the improve retention saw. to we're anticipating that seeing year erosions we

We we of taking those So mentioned we of in anticipate in finally, into are that's some accelerate remarks, help a reinvestments growth another number back to cost reinvest cost headwind. And our reduction then certain to activities. as areas. savings

Radke next the from of is Tyler The Citi. line with question

kind with about curious deal talking some about been X quarters all. environment We've now now. is for relates of whether you Obviously, guess elongation in months that sort as having what like that's to I decisions how is the piece. macro ago? And that's versus the tough the of been on to very topical to If a of Yes. few you're much could X of this shifts now architecture latest space And conversation I'm just involving at out the future conversations comment different Teradata the push for tables? that Iceberg holding targets, up here it

making our the We for buying a definitely decision working spend customer competitive Tyler, terms perspective. we're scrubbing they're we're change sure Again, and a major they in from exacerbated that Thanks, change right really we're in an behavior making environment budgets that seeing are of as not the the of Yes. question. terms not in are in, seeing big losses opportunities. seeing and

said QX a of fact, can corporations, those of we under strong last had these as large of In of the imagine, X-figure size execution from perspective. we've deals, in a It's But pipeline of you scrutiny prepared year. really an are got things in deals. Xx remarks was, the big our one we coming lot what inside

for from a I asking work to think can format. the the so that embrace impact are table do combining lot those question the And table Thanks close open together a perspective. that open around formats. to We of

our Object our solution models technology the perspective. We're flexible and models, same applying of and kind from platform from supports to believe do perspective multiple connected and is the to Teradata Our fought strategy not analytics a platform or AI or open most customers support multiple has technology that can that bigger ecosystem and open they table open dynamic of into industry data Native war to that so to their OTFs. We trusted that and analytics and from connected language the well-placed Teradata Store data and own that the OTFs terms enterprise, in been won an outputs. the customers they business a in the approach know bring models, data use enable of data all the we they an our trust format, super large have so trusted And can today, the get AI that GenAI believe platform. and themes winning we models is and from we're one where

then right year's? on follow-up this? and And about relates Great. operating understand million And restructuring moving expenses, there the savings next to here. cash Pretty Just the If sort between year's the free difference guess as to way flow pieces to think to a you help right flow that guide the of workforce. on Claire, I this is restructuring. that that cash the us bridge the about of from for the significant, just your I maybe the think, XX% about of way of XX% take $XX gets just is savings. I it

$XX rate Tyler. of XXXX. Yes, run to to headcount savings from which is million $XX $XX of reductions expected total expected the course, million, $XX Absolutely, our in million annualized million so is

this As months, so the X in place these not I take to all will to of happen actions is mentioned, 'XX. going XX next over some of

are reinvestment, a we anticipating rate in annualized prior With million assume approximately 'XX. savings, to to XXXX. that cash will $XX impact $XX So million total, anticipating that $XX cash to to in payments $XX million, fiscal cash $XX of fiscal I payment of of million of run million to XXXX. impact, $XX which In from into will we paid be a million $XX are flow would severance means regards $XX million to the XX% fiscal cash million

line the Guggenheim. question with from Next is Howard Ma of

of dovetail off restructuring. Tyler's Maybe on question to

So Claire. one have for I a follow-up for Steve, and then

guidance? appropriate So weighting, Steve, deals the what restructuring the the more is account achieve you And that the efforts given gives what back-end measures to to QX coverage? the confidence close that pronounced the you've to in you impact close need just of on taken

industry took perspective, out talent closer to our a the a be new From the and layer as basis the leader, We regional streamlined to enabled well Yes. to ] that the is as our new Thanks that into Officer Teradata, has to record structure for team all And and the proven reduce more commitments. in go-to-market positions time Revenue the think and organization, I top Rich's a opportunity also management, Chief opportunity delivering their got those global a overall actually to go-to-market said, taken company. that. We've question. of I taking organization. has We've having key customer. us review promote geographical of great who track around [ taken inside some leadership on have the

to We on continue the Those the momentum but difficult are to I customers. talent deals and close and that. in X-figure see in the we've focused our more that mentioned largest traction deals team pipeline. got right right the

a and executed already. activity, structure go-to-market perspective. putting is new restructuring an the from of of all ownership is deal incredibly from that The execution restructuring, perspective, in that terms place being In clear

to areas, As a invest areas to on the we the balance in focus continuing but going generating business. company, sure we we're to make inside look growth at further restructuring of our the are whilst non-revenue that maintaining

it more be churn like could customer Or the in part guidance for additional basis year? XXX happened balance Claire, Is And customer what come QX. may into there Okay. unexpected for been the the to as large called sounds large there churn in to the reduction? of that have out of QX -- similar factored points you the

QX. still talked impact the those that erosions final unexpected see We didn't we were of churn on-prem we XXXX. about in large of seeing the No, any back end at

activity are the in expected. points churn assumptions QX our XXX basis for churn as there risk, the your have impact actually point, high risk accelerated have of customer To that So of updated in that the an a fiscal of has as is been a some a year expecting hit XXXX. customer -- customers, and 'XX. That highlighted additional couple we of full into we and timing

QX, year points. our updated XXX no by surprises basis you assumption mentioned, but we have, So full as in

Ved Chirag Evercore The next with ISI. question the of is line from

So just are thinking support? potential Credits, some this the incremental to VantageCloud on retention future that you How steps to and as existing partner front, you're mitigate are success customers incentives, in erosions taking erosion to the migrating? potentially are customer leverage what quarter-over-quarter? And seeing you about incentivize of opposed opportunity?

host the for terms our that you're got a whole customer success of activities We've we're right. in function. of question. Yes, undergoing Thanks absolutely

We we on-prem of to terms back. more erosion to step little from expecting XXXX more in we going to rate. normalized erosion a normalize earlier, back are us And erosion know taking an and outlier XXXX into that known as than having Claire a that, an said have Just was as be years. move did other perspective

Just reflecting have pattern think from offering Teradata that when it's did that many to ago, ago, in decision back, place the we the about have the we that X-plus years migrate a so have you off customers perspective, made years if not today. Teradata usually cloud we erosion have

platform future customers So that the at a we've strategy. of relevant our being the great getting save is committing customer many, strategy cloud ARR to we a of had and committing get key end execute many these business inside our customers. ensuring our terms our to cloud at are their significant to that, us Teradata that XX% some total our us of to deployed And of cloud-first in QX base indication to as up perspective. and for are That's remaining our success from

customers successful success however, motivation company that cloud to leadership base some base the grow customer customer they with that of as we're years, that we also visibility A customers the being proactive that been terms would the that's see, continuously into have got to we us, we've management function a on to to move for on-prem confident super move our new of with we've what's the in so the of the last place our in organization, some understand our we a successful. cloud have with commercial that and ensure customers, Over is And business with base cases, grown our Most the we're testimony And inside great cloud. from the going are include around great number we us. safe into the taking to that cloud the also place actions forward. that around when plans couple very of that in we the deploying. and move us. We that customer developments some demonstrating in value technology of different

Maybe the one the course more any Have quick end. consistent environment? last on my pretty one of competitive over seen you just Or has changes quarters? remained it few in the

environment be Yes. We've to competitive seen consistent. fairly the

from super are a We perspective. delighted Teradata

with most our platform modern new us Google technologies, our all our Lake got the us from platform, terms as partner a product their of utilize in start we've Unlimited that's new enable release on their a provider. Also at going their product, Microsoft very that Now that most a addressing, AI VantageCloud integrated launched enables GCP customers Teradata of technology Microsoft to advanced and level to Fabric technologies in announcements. or to the cloud close with new

from enable forward. a the move environment, technologies see which competitive we new So compete more but as effectively at and major to we're the certainly, any more putting level, Teradata perspective, we changes us out there in macro don't

Northland of with from is line the question Chokshi Markets. Capital Nehal Next

Two questions for Claire.

due that question, It about X% First like Is calendar $XX free is flow cash correct? flow. reduction the in equate a cash million expectations. looks your about and that billings, to would reduction million free of to 'XX reduced $XX dividend

Nehal. right, that's Yes,

from have take, is lower low lower assumption a end, You and point, need a down your to the year. $XXX to from billing million. to to of $XXX the guided reduction so million in Also remember revenue ARR midpoint we the

is So 'XX. revenue, and one of the impacts and both 'XX ARR which lower main drivers

cash obviously, severance, higher impact, cost other payment from is reduction. The making by we're partially that offset a

'XX some free the then $XX calendar increase you're and you're on to thoughts flow, projecting it million providing also on Okay. cash initial And year-over-year.

growth So $XX million would be ARR projected due to and overall payments, million is presumably, restructuring from no and $XX you're the projecting. other basically that then the additional billings

Yes.

be XXXX. will million there to actually, $XX of So $XX expected million payments severance in

fiscal severance those do million $XX from a $XX to $XX being $XX but $XX million severance with payments, of million payments million million 'XX. to split, to 'XX, to are we million $XX see So and in benefit lower

in So benefit see reductions, paid a cost growth to To ARR benefit, anticipating point, still severance being your billings, but we we is see in do improvement which and some mentioned. also anticipate from we you are also we have payments XXXX. a what

with from Matt the line Next Hedberg RBC. question of is

you. it the Or for Can one things went the was about you on? deteriorate talk linearity did quarter quarter? in QX? throughout consistent curious, Steve, the I'm as kind of

of Matt, be thanks particular back-end Yes, software companies for loaded a are, towards the kind tend, question. the of enterprise quarter. We many end to as

lot the quarter. of we of end at execution, And linearity skews so the look our to a back always as

the customer of actually decisions of quarter give of QX making us a our and in it were go we perspective. terms that results overall of, messages as we're getting visibility that doesn't about around course, clearly through So impact from from we We our spend patterns, saw lot happening. a the base the

Got it.

you're business. count, think the all to the prepared Okay. Claire, think X% head in of And you reducing I remarks, then, across on reduction I expenses the in said XX% areas

on reinvest a maybe think bit then focus I And it savings. headcount guess, little the like the total some net you're detail coming? areas. I there to think maybe noted the of be to net generating planning targeted also about I like you these on what secondarily, more like reductions are a revenue that basis? on of non-net and guess rehiring, where reductions a of would some sounds a some way is

Yes.

said, than geographic the rather layers we've on we so your a and the focusing previously. in teams, done out setup more made taking regional as some Steve industry to and management, additional changes of So point, go-to-market verticals reorganization had

So go-to-market the of been there a organization. in number changes have

across board to but have that across everywhere. non-revenue prioritize are activities, we investments looking prioritized to tried we generating the We our have ensure

we marketing, give we be XX opportunity including those obviously, regards the products, comes of non-revenue what and savings the of be it on a will us X savings to is the we're we that further in are give exact the guide generating taking go-to-market where months, to the to trying number reinvest We on out generating. But accelerate over our XXXX the months. see details we'll next When including with so to finalizing because plans reinvestments areas. X we So non-revenue maximize we this still next in and to will are reinvestment, at that can to able the end XXXX be areas of to do see But help beyond. the our XX some that anticipate do growth over year. as

of with Next from Walravens question is line Citizens Patrick JMP. the

guess anchoring Fortune or they're that their with vendor? a primary on data in I strategy, warehouse would Great. is data as single start I do you general, companies XXX are selecting determining see what that

players marketplace. very question. the think end see market, AI path deployments world's but to the lots way. And able solutions. thanks different capabilities an for perspective, we our scale. are much to them for being in then as really as know the and being the high-performance able not database of in we're enterprise From or warehouse cost-efficient Pat, platform look we're analytics having just and lots plays data the the mixed certainly like best into also support, the which well Look, for the lakehouse, and I for we there's GenAI that of at can of warehouse looking the also in organizations out the to at compete solution like the complex compete in we enterprise workloads from that new in we bringing terms And that an for analytics, largest to are at perspective, deliver data lake we compete -- cost-effective, executing most most cloud room that

of are set. that It's many possible see entire at address of objective and in Teradata solutions we across one our think looking provide our our to workloads inside to engine each customers. that solution the patterns multiple those I customers best

of Okay. go call listed they're everyone decided well have I Asia you that process. else the Pac to to that mean guys bank and as in and in everyone Databricks on the example this replacing heard that

You other other vendors, were one warehouse vendors. data several of

something So wondering are and I'm is others? how that Steve? large just it organizations that not to replace that, Is is one the Or deciding common? common do, that most pick

our Teradata our say version But vendor decisions before would at customers any they're if cloud running a had I customer. some perspective our workloads, especially we see that In a Teradata. What cases, their got in ecosystem running massively to mission-critical tend address the our we a structure. look Teradata now a workloads is at great them. are a in GenAI from old that marketplace of AI years, systems for advanced ecosystems to we with [indiscernible] what is very we with parallel they fantastic make and architecture some at have, that's is decisions in doing. and scale, then to We've now the the know us, we move they've Pat, of that's core enterprise available from thing that good what computing place for customers' the conversation have made we away is parallel most key technologies of and been been on-premise, a absolutely never

to customers, future. high-performance the workloads all of inside address So be a to Or I think from Store? move Native are the are best is table the Object to customers to are workload need and What their workload storage most compete the into placed start to they as going for well engines who at storage? right able block address objective format inside we they in we looking Our Teradata Do they really open our can lower-cost need a do patterns. perspective? run those or requirements

Next line Mohan question Wamsi Bank from the America. with is of of

benefit there So benefit $XX that in to Claire, benefit net the into $XX restructuring on million XXXX XXXX? flows incremental is of EBIT EBIT, million in

Yes, Wamsi.

So annualized to your in million. rate of $XX anticipating are point, run $XX we to million

about that so we fiscal about benefit. -- prior of to hit to So reinvestment, 'XX, an will see XX% assuming incremental

that to growth. reinvest, are when want we will opportunities long-term drive mentioned, we looking at ultimately looking we As at

fiscal we're governance we our high of still be obviously, finalizing should invest based in there approach. on, do So the investment how on modeling but benefit 'XX, on return much

XXXX question looking is be organic next thoughts about going you for million there the year-on-year? Or single-digit with contemplating if that is and going is preliminary with margin, of that of a the really year? EBIT declining? EBIT improvement this level savings? of would organic is north some then the XX on cost bridge actually declining your $XX Because to And into are low margin that expansion. EBIT supersedes you how that it's XX% top basis points EBIT of line guess, at of flow increase net I sort if Claire, an investment cash Is organic

Yes.

question, good you. Wamsi. Thank So

assumptions, XX% do we are in standpoint, our look to reduction, because a these taking -- your see be cloud in 'XX. And proactive grow So range we from when flow to dollars and measures into from anticipate top fiscal and and low of look out growth, terms our the terms line lower from in expand year-over-year in billings our improvement, that's a dollar as point, gross to are able the sorry, to continuing it we cost benefit growth margin offset at of we'll we also we cash from plus EBIT by in, where 'XX 'XX factored an from severance.

So driving benefit cash that's impact. the year-over-year from the what's

move dollar XX% So we that's XXXX. operating and growth to we anticipate how margin we to have factored of some in, that but see low get that we into as anticipate

is line question Wood from Next the of TD Derrick Cowen. with

you're the of Steve is reorg. versus reduction you're from from anticipating can due for or outlook, pipeline much and couch how today motions coming go-to-market to what wondering in anticipated your from in the how terms whether in ARR sales of cycles restructuring? is seeing this this you the guess from much much of the Claire, disruption I disruption just Just

terms Derrick. Thanks -- No. disruption any don't for anticipate of go-to-market from in question, We execution. the

continued customer do, these exacerbated of of What we beat. deal terms that have faith got pointed pipeline our best seen up folks that's though, we've have got we it. a we've They've go-to-market deals. into a As missing deals taken for as in. we team I on really the said, drumbeat leadership great of organization, elongation cycle, as sales decision-making absolute in that I that X-figure in cycles, the see, some The put of to, especially XQ without that large

expansions. it. Got mentioned seeing prepared In -- you less on-prem Understood. you're your remarks, the

you're I on think updated you how does flat kind excluding framework of just migrations. what been change seeing had on-prem in of growth slightly light in in your positive expansion guidance framework a and guess to of I running this activity?

Yes. I'll let of and part take first the Claire question that comment. just

budget are cloud they're moving There's cloud. delaying then point no to expanding also to the in In terms their on-prem expansion. that of as about seeing their cloud, we're the and it are expanding and they footprint what customers is the thinking on-prem then shift and in expanding

the cloud out migrations that as We're expansions cloud technology right technology customers an us. And the those at the is typically not are point subsequent and terms that I'll of a but into we So these impact on commitment opportunities are they consider to of considered elongation of in slippage does to see reecho talked those set. Teradata both deals the seeing our of the seeing them the also to some deal into to point and strategy being their ], we [ are terms moving quarters. migration, have ARR, This pushing just shipped We're about the in with before. on-prem from expansions and cloud, the total of future competition. on-prem these lost as

cloud. migrate that, these excluding expansion, up, in the expansion [indiscernible]. to Yes. to us now believe just or to do decline. then And with as jump that not they because we opportunity, as flat that's slightly actually be But expect anticipate time to on-prem reduction and I'll larger an point, we the We'd your we move over grow, tend cloud, would large Steve accounts of mentioned, in. To to once to see we the

from Raimo Barclays. Next Lenschow question line the is of with

people looking they're second half obviously, the X-figure pipeline must Like new they second there? the participating what's logo The side, the the of and what Xx coming versus then Or are the the are be the the of double clearly for? are where of in? again. -- customers for especially you these where kind logo the XXXX, deals, market, in half more Like, that of like pipeline pipeline size? new typical -- on the profile talked about, you the What's

Raimo. Thanks, Yes.

geographies seeing of the a all industries. view across in seeing logos we're balanced very think we're I of -- new terms all and across

in Japan are assurance. for as Lake logos VantageCloud using use of bank new example who revenue are I that buying the a mentioned case. most So an

it's Teradata And those industry Because advanced use of actually and value, how take experience interesting. use biggest business to the and inside we really on in that for whole enterprises so new got analytics and new cases history those the we've take can our technology world data customers.

would The is other platform. thing strength our Raimo, of point the I out, hybrid

logos, in perspective the So and from new on-prem we're seeing both an cloud.

new different going a different what to actually deployment be and use year last second models, geographies. And operations different success, half a half, different the in double across perspective. us industries from in that balanced gives new very which I execute results second that logo we we cases, it's of is to think, did think generate logo So breadth and

Austin of Next Dietz question is line UBS. with from the

real to want your where few hear views nice architectures to in years. I open don't appear open Steve, architecture around and next change the analytics data industry question, the is to over the Iceberg industry. adoption to From Tyler's formats be impacting deal on yet. But cycles like there towards more headed seems table be to your connect. shifting just response in a

years. market landscape competitive next would the on I do in changes data the few some thoughts open love the over headed next market? is on yes, the data the at few formats where how evolving analytics Does query analytics years? data table you How just the industry it analytics I see become about performance Iceberg over do So point? think you your tables guess

for question. Yes. Thanks the

points. of some I think we those covered

an So there. table format, from battle I is I the don't think think open complete

as future. supports here today, approach coming advantage out advance, that are table the technologies have connected of in table an open that formats. that our we those our enable multiple take but formats ecosystem are open those new ones is So and to to the And customers also open

mission-critical. our point, the in the we for VantageCloud see an address that deploy That and high the storage performance AI -- will great, query -- real-time Teradata a got in in think query less from going of mean want as on customers released high-performance enables got best workloads we've storage most we appropriate got solutions perspective, I The are engine? And tier. cases. be your be, Who's for It's deploy that to which to might workloads all I complex elastic engine. look cloud to built super it's different super Unlimited. our of high-performance engine are to battles analytic database. the use that we performance forward, the our on into us lots to use a less mission-critical block It's capabilities Lake query right storage

or that AI to So and it open and make our can we connected focused analytic absolutely advanced analytic approach advantage on. sure are the something models, that customers capabilities, that is most be take of GenAI

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

We've confident got our We've call, Look, a to win. we've are successfully. we've in Thank are today. you, for and that moving end place technology, opportunity fantastic everybody, as plans we for joining like in we a the the we market us to I'd of to emphasize great that got got forward got team execution, absolutely committed front us. and

today's concludes call. This conference

disconnect You lines. may your now