Teradata (TDC) 4 Nov 242024 Q3 Earnings call transcript

Good afternoon. My name is Cameron and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata Third Quarter 2024 Earnings Call. [Operator Instructions] I would now 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 Third 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

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

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

already a customer ecosystem, reported have everyone, QX deal our deals. to net added X XXX%, is in delivered hybrid all in spend fourth cloud joining partner that us position large solid to Thanks, Teradata trusted the AI and we grew seen staged Customers the total recently with technology there no cloud ARR thanks, is on Chad, enhanced more plan. growth grew X-figure migrate ARR. closed we our with expansion ARR, change of In are in cloud our QX, have transformational our strategic a in business to year-over-year Teradata of our quarter. Despite process. workloads in total and Cloud today. and as core rate innovations elements for a unchanged, and cloud our strengthen XX% The impact planning strong cloud

is going our our The needs drive us help the total of of ARR is business therefore, which reduction customers' quote help fundamentals XXXX. to this the full on-prem continued the However, cloud our mix and cloud our in businesses. across our in ongoing and XX% to the increase future serving strength shift healthy and both year. in an we outlook growth results we ARR in to are, anticipate XX% lowering our see a for to cloud We migrations, XXXX growth clear business in and

are commit Teradata to increasingly look We leverage as capabilities for the our long seeing term. they to transform technology customers hybrid and

move over into see our and We're rates. more data time address positioned of improving the in As Teradata both go-to-market strategic. see uniquely early cloud and are to the closing believe we we deals increasingly expect go-to-market organizations seeing with by have mentioned. the our prospects needs hybrid result differentiated We our These remain with that primarily in is improvement we comfortable X-figure greater we and have with reorganization and XXXX. shared, stages as engagement of becoming of I their on-prem evidenced very restructuring. both to we work signs renewal in deal We're customers we in The execution platform. are large and as the

million sales third taking continued with includes $XX logo timing cash strategic $X.XX add versus quarter. market-driven, grow earnings million are the third AI align to per AI pipeline to highly teams non-GAAP quarter, the $XX being QX Teams XXXX opportunities. the to decision-making and XX% share pipeline. of in on customers to in pipeline. in remains Our and these engagement. In to of actively Profitability our free adjusted the QX of extended new Teradata in and logos deals more we $X.XX on flow have profitable Teradata working customers' customer increased with closing our compared active remained large our an of deals XXXX. true we than the of new and are of our and

in will perception of Teradata. scale. foundation experience one strides received top-rated in to Teradata for protect explain. I'll is also as company Data we meeting look and as market scale alike recent positive with the we strategy, differentiation of in leader prospects, partners where data from we been ahead, Research response our want. in noted with Teradata our and start AI capital at GenAI made customers, to ecosystem at the need best view to that maintain attendees core platform data into on comments strategic requirements. at and We vendor ML our our always overall is board, clear customers the Teradata uphold as Teradata received grow our customer out AI and ranked our of the that their strengthen trusted great have from shared open possible and cash embrace of impressed recognition around position them analytics GenAI pleased potential help companies and that and heard as approach the flow organizations. One an scale and the they analytic margins, partners Angeles, consistent exemplary and the advancing We've they Ops workloads. value AI, analysts. Across in We bring and we brings analyst Ventana games. has breadth heard feedback we very We're their Los commitment also shareholders. When our were to and data and Ventana and called customers free connected the return applications innovations, who partnerships customers a to opportunity I at continue now their as Ventana's see events rated insights London trusted product will and with AI, from platform with that

to of customers. and possession advance strong events sweeping our in AI. capabilities Analytics, hybrid maximize Starting achieve was that our from return innovation. noted for outcomes and economics AI with analytics our faster superior differentiated of ClearScape on that enable productivity innovations customer ML trusted pace support Another to differentiated data business and AI pricing to our and announced designed science of investments. are their boost are more a to for set enhancements the It efficiently. engine They these also to innovation, our enhancements These investment intended we organizations

cost is workload best business brought are movement VantageCloud Spark or face. data BYO for cases enable domain-specific announced daily October, are or operationalize for Apache now out Many a and trusted of reduces management, use to for credit their Spark data costs. Customers open capability. to customers are be to with this models cost that one can Cloud's leverage data enterprise-grade to LLM million have need to learning, to to analytics perform and including expensive Scientists data aren't industry best Vantage new workloads or migration simply savings some processing VantageCloud The VantageCloud use and Teradata tailored reengineering results cost recognizing were to with Analytics data Data Bring-your-own models that real-world ClearScape code scale. be language XX% And that from source designed suited using value. were security breaks the cases language XX% and and AI scale. larger a machine providers bring-your-own free at companies deploy bricks, and significantly their needs, compared records. model integration We can for model the prohibitive. complexity all able data can specific GenAI and hugging records dramatic. capability consumer to and at small example, in eliminating like easily recently run bank to designed choose XX use to large workloads warehouse. In our XX transaction models card trialed data for to and moving Latin without use case American effectively we language faster million The every of medium to horizontal and allows convert Organizations

size for of either tools now that depending and purpose-built with GPUs AI fine-tuning, large For ability and complex also Teradata's complex customers customers and CPUs to GPUs movement. language or siloed training AI develop or strategically LLMs flexibility complexity provides needs, GenAI including model, applications the and on business to generative leverage be not allow ClearScape, them with amounts to the leverage large the constrained operate or of to data workflows require more

and being these data language privacy so trust. to more easier we and security, deploy the organizations to movement models models the addition overall, of to minimize maximize can and expense the that In cost-effective data bring also

with access see scape in customers these All With features. AI deliver are these open the continuing we as today. and ClearScape most market the have what we capabilities and announcements, to new clear ML powerful connected analytics VantageCloud to

been for innovation help experience smooth stronger, an pleased never Louis technologies bring his facilitate engineering and Product make and to appointed we that at innovation to Louis end of I'm technologies, Officer, our pace Hillary our technology be will report role. at and leaving engineering Teradata has out excellent of enterprises our larger the Louis deep Ashton, will I'm Teradata. innovations year technology expertise focus led have excited of Chief a driving and will Our Teradata knowledge leading of innovation office on at Officer. Technology of in and and Chief the Landry CTO advanced has the them that years transition emerging accelerate as his our Teradata.

faster and and with platform NVIDIA's and strengthen ecosystem, announced computing GenAI on NVIDIA's our and use investment. is the AI applications workloads remains integration Lake we open development in on our of of accelerated their large everyday innovations AI focus of return our We and integration connected choice platform with recently As deploy cases VantageCloud affordably for our partnerships our to designed for both platform more on customers AI environment build and to Vantage to immediate front small. accelerate Gen center. enable trusted deployment

complex We dbt's data is transformation also with that scale sets believe announced tools Together, we at governance and we organizations manage that in bring analytics We combine integrated with with empowering and can less security now Teradata helping ability teams unparalleled effort. AI data agile to raw robust large-scale initiatives. enterprise-grade enable turn insights. All and manual Cloud. reliability, of their our the transform actionable platform to to with accelerate management and into that service ML data engineering data dbt

complaints. reduce solution customer we help analyzer churn, powerful introduced opportunity new their already prevent data concert address analyzer and solutions we in signals a case. built to companies with pipeline Lake use customer AI-driven and to designed experience Finally, announcements. complaint to is on and generative solution is had continuously The order reaction to capture in designed AI healthy customers' great consulting. Customer improve complaint edge customer and our for a We've VantageCloud this have identify,

with Face act example, on integrate in help for analyze analytics summarize process. This responses signals a and customers faster into of data. can effectively more leveraging them. We calls a solution XXX,XXX and to we in from demonstrated automating classifying All we how team model treatment integrated output moving an Action. Hugging to provides single manual quickly day, workflows AI-driven help their a For demonstrated could XX,XXX from the day analyze workflow the how and use Best bring-your-own up calls analytic customer customers, feature next ClearScape companies entity and and address models, without our our

customer recent executed cost reaching, We data to Their AWS. massive These cloud the with engagement and sampling XXX the I'll Snowflake for our improving are our this our events customer announcements illustrate migrated offering. help trusted seeing in wrap goal: customer. great on action. of Lake increasing achieve of migrated including satisfaction trusted. we before cloud had customers of to be U.S. VantageCloud should insurance implemented company a years the far a of value are lifetime strategy had can the member savings, some goal quote benefits A Hadoop data up with and and its the account S&P that with ago wins and interest lake value as X and a

team complex most this for and and we introduced Teradata was business back. Lake Our VantageCloud and workloads, demonstrated company's solution won the that best the cost-effective

insurance more support we're on on customers' Our Cognizant collaborating division business will AWS with migration. the lake offering the and

win largest chose with the needs. Teradata of We Pacific. Teradata. also and win It on on significant bank competitive regulatory runs Asia achieve the and one reliability compliance to this risk, performance AWS had a banks And the in reporting robust

department. can a will working run constraints analytic integrate innovation AWS Fortune of an agility finance Lake This with VantageCloud a VantageCloud cases data. bank that use and its also develop added the We further insurance capabilities. giant Lake innovation platform as XXX with enhance significant evolution to to so additional And finally, workloads their AI/ML move marks production on for

strong we we value delivering that market I'll I that customers. for reiterate accelerating We and innovations our close, strengths, and remain and growth to see AI, to aligns are opportunity committed As innovation.

can dynamics, begin more well under enterprises as changing grown uses. cloud evolve We capital to proven commercialize than in returning AI that that have AI hybrid a our platform market aggressively as while Teradata believe with business $X.X to X with billion years and trusted we positioned are shareholders. we've We ARR to does

take We to to and growth. been continue actions improve will have

go-to-market differentiated meaningful changes ] organization We from X with our the people taking while changes, believe improve CRO changes have early quarters, it's have material firmly We designed in in to technology, to to go-to-market are in the seeing the growth and in made we our made our leadership Rich for actions products in our role results we [ and execution. future. and still us we return in believe right known those

Claire. pass the I'll Now call to

cloud XX% year. of and this Thank last from grew you, quarter, third ARR, In Steve, good total to up XX% afternoon, our ARR everyone. time the at

doubled and our free We free margin Year-over-year strong operating cash improvement and over points. flow generation. margin, continue nearly XXX operating basis profitability increased demonstrate to in cash flow

recurring, migration deals. gross As Steve of intact XX%. our XX% within our operating being and mentioned, a over we XX% cloud product a our margin large delivering transformational remains business of nature of different of durable model anticipate total over a with revenue The margin

total overall improvement outlook, retention With our to we going reiteration the our of continue in rates expect ARR forward.

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

Third currency. by prior from quarter We the up $XXX saw net of growth year-over-year Recurring revenue from strong year-over-year reported quarter. Recurring was up in small driven in total recurring benefit constant in upfront X% as from was a as revenue. year revenue XX% revenue the million, the and X% period. revenue cloud percentage a revenue was XX%

$XXX revenue X% lower was constant offset The consulting reported total quarter growth Third currency flat year-over-year recurring was as year-over-year by million, partially revenue constant in currency. and in up revenue.

the year cash flow doubled million a and EPS which free a basis. basis. strategic XX.X%, shares. upfront a revenue. least earnings committed was year-over-year, for flow. the drivers generated Year-to-date, is of range. $XX guidance form quarter, to million Total the primary XXX per repurchases, approximately nearly we of on revenue. were diluted cash margin our increase outperformance the $XX XX.X%, exceeding free at and XX% year-over-year. $XX We of Non-GAAP million of gross points X.X Moving returning and we share full our points recurring In in have was top repurchased basis The year-over-year the flow free end up $X.XX, remain sequentially or quarter, basis currency million third margin in driven by to returned we was over XXX on Operating XXX% share cash focus profitability and on up

full our outlook. XXXX Moving to year

constant previous and for ranges outlook total revenue ARR metrics. revenue recurring a As cash We our ARR revenue, in our the currency for flow. total reaffirm and outlook free are reminder,

total different Although unchanged, seeing we is ARR a on-prem. between are mix cloud and

deals ARR, more stage XX% For transformational for expect to we cloud anticipate of XX%. migrations now large the growth and

We share $X.XX are It to per is non-GAAP the earnings increasing outlook. now $X.XX.

XX shares XX%. million. tax of approximately rate of million. project outstanding non-GAAP weighted full outlook Additional assumptions a average approximately expense of include Other We year approximately $XX

slight net expansion still deceleration, in anticipate Our with levels. we rate line a be historical to but

cash quarter non-GAAP be the $X.XX on of of committed free remain Previously outstanding average XX% earnings the next million. of return we to for ensure remains actions cash fourth per growth of to shareholders outlook of in flow track we the XXXX. tax of We focus, project flow ARR to our rate buybacks. and and durability reduction our profile approximately and margin announced are XX.X% as range in to return the form year. to share total $X.XX. Free be to the shares weighted growth the our anticipate We Regarding non-GAAP XX.X cost diluted

an fiscal QX February. our time during earnings very you call outlook provide will today. XXXX your our We Thank for update to in much

open questions. Let's the please call for

RBC. [Operator Instructions] comes line Your the Hedberg first with from of Matt question

Maybe one Claire. and for for then Steve one

there top of how of customers bit company think are cloud noted you mix sort sort Is the I'm and of it I'm medium-term the And that's obviously industry-wide curious, at this that unique that You double-click a Do mix could part of sort was in has mark, you more. just of thinking on just of something migration. kind overall base? outlook your is of of maybe acceleration. if to an curious when about a it's sort thing? total your on growth part sort cloud big a maybe cloud of changed the change

and strategy our the smaller where and perspective. cloud prepared both But we breaking on-prem back Fundamentally, migration seen are that material we and let staged a conversion from large in way a in have platform change remarks, question, cloud business, a a that an into The I ask our to buying doing leveraging nature. come as the afterwards. my actually question cloud hybrid for you they're can And seeing are both as deals. Matt, more Thanks, the these from recently down on-prem. of is in strength I'll said they clearer behavior and our run approaching in handful cloud nature they're customers deals. that, their a in of perspective They're

we a to mix the committing your are seeing point, So change of on-prem. in and cloud

a so 'XX perspective. while opportunity, gain. that's change we're 'XX, we don't than we talked see full to total the total our less why commitment And in returning year initially, we to the growth ARR or cloud, from And ARR total a reiterated about and

set a X-figure saw convert we X-figure So into a cases, deals. handful essentially, of some deals in of

That's flush to question growth I like then December And of wondering, Steve. about essentially? of think you Got a the guidance super budget on-prem contemplate us blocks it bit bit historically priority helpful, we year. building budget sort are did that And To tends on-premise a of impact feels I Claire. maybe maybe more it. a And a wondering, QX see think this a lot a I'm wondering, of related I when higher that I'm guess sort what and on are me, for of your bit of base. more reacceleration, cloud. then within spending even there's And than maybe flush, your think, more that given maybe more cloud do

yes. Matt,

total expect and uplift by on 'XX us. with part customer And factor that analysis. first budget for at in regards Steve what flush, as both customer haven't into and ARR cloud factored any to to just budget question from our for ARR. your So updated we a assumptions look we close said, done We've pipeline your a of

think metrics into so generally say So XXXX, flush look driving just end we With would forward quarter. to the as on future, we're last I the talked you that December. assumed in of towards no for I regards still on-prem XXXX budget the about at

total free we and Steve flow just a also ARR XXXX continue in as growth year-over-year well. in and in XXXX, ARR in in growth growth our means cash to XXXX anticipate robust cloud mentioned, As that

with quarter, year. naturally, at So in earnings, it, detailed we provide February would we're we'll And normally which which our not it next when line providing of this guidance. is in QX is provide

from comes line Ved ISI. question next Your Evercore with Chirag the of

given quarters, you're process? does indexing Steve, customer you at this business And to what next if change mix on-prem couple of much renewals your of to cloud, approach and in the versus you change this think how on that decision-making seeing guide point? about the to and innovation, are support over terms the approach contracts, cloud

for question. Chirag, Thanks, the

we So in believe continues I completely it our cloud-first relevant cloud marketplace are a for Herida the enable to we reiterate, customers. to just on-prem. as they perspective, ] capabilities reposition additional We And believe modern that from we develop want committed to [ actually the that our and strategy. innovations

own I model. talking bring being able as about an example, to So language your was

are technology cloud able the and to our actually and in We to capability, development deliver technologies that leverage actually on-prem. both

only, absolutely from focus So on very first, as to is we first perspective, keep as well would strategy. I a it's much still of that intact. not the forward, mission, our the cloud say strategic look remains our cloud cloud that but strength pipeline cloud

these expect largest are that to demonstrated the cloud large path to customers the have of move continuously set Teradata the the We the the utilize we Teradata in we continue path the and that and a cloud workload technology complex, to in some cloud for to world cloud. to organizations the migration with [indiscernible]

not future, pushing we we're part we strategy out move remain that it code fundamental we seeing any line migration that remain and our of and a as growth will of in that into believe we're execution overall the cloud because pipeline, time still the committed just we're not forward. deterioration seeing -- strategy seeing to So

point you. of maintain maybe for QX in for what where QX X Can happened the you're and was in revenue Claire, guide. at Recurring view? full from expecting then, year talk And the what in of through came the recurring ahead you street you QX Great. revenue and

Yes.

just but not slight We was more So big revenue Chirag, change. a terms so a modeling, a the of linearity that a see total both linearity we're hits expecting from which did difference in revenue, of benefit I in upfront recurring internally. more and what think more it's of revenue

just is expecting, QX, to slight between full remained guide we're and what the QX year So a why which unchanged. no overall change shift

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

made staged migrations like Steve, budgets mean, I you're I would seem go do this tight have customers moving you is been now? the this you the cloud a decision? budgetary-driven that why of wanted I it the macro think happening? while. in for And to I terms a commentary to with back is around mean guess why seeing

So you And what's this broader on was your happening kind is in only extends of trend sample clarify, think theory customers makes is next why and size you why of year? just that to QX, the a now? this that what that into this saw just a function versus

the for thanks Tyler, Yes, question.

the we've they months, a how in with So our in events, plan forward. to customers what the to of branded over marketing past us couple L.A. talk our plans depth number and opportunity their and gave move regarding customer are London of both

handful Now we're of deals. really our in seeing an very a impact large

deals, and cases, and take approach deal So to risk But to across just customers entire migrate where program, to the more choosing with on-prem cloud. But that the they're customers in that expect the to both transformational those early this committing at make looking those from Teradata to X incremental many Teradata that fourth staged estate process. cloud -- migration we in programs cloud a X-figure we've their we X-figure deal spend executing. they with a a that for close are the the their perspective, major still handful They're of to signed signed. quarter, less in a like are that deals real appetite committing and we path the are these seeing and we for essentially had and

longer instead X-figure of period. X multiple So deals X-figure a we'll over deal, close time

Claire. on a Very helpful. for follow-up And that

growth guide in So Or $X you XXXX $X is talked change which last cloud that was this Do you I sort expect $X business ramping seeing cloud trajectory in XX% XXXX. does to of and of XXXX? in quarter, still cloud around prior the think XXXX, billion your billion? similar about as billion in

the a their I $X we're these see stage path timing I say for ARR cloud guess, the billion on we just Naturally, Tyler, in processes. customers to detailed still would of on working that, XXXX. with

We will in XXXX, era stages XXXX to recover but we definitely, for of the anticipate in obviously XXXX. to So we some anticipate additional of this don't update in mentioned, as cloud close Steve these February. all

back Steve that XXXX with come part cloud but still we'll said, the over to the migrate billion to time. as they're us ARR, $X still on So we see because, committing

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

just Steve, be do feels start between of some have perfect this a Teradata just this timing that erosion, headwinds has have year deal a you how you nothing pressures. with supplied wondering dynamics. it headwinds maybe year you I'll and competitive faced migration, of encountered can storm some I'm And like now bit with elongation on-prem to sure the that

us platforms? are gain is potentially cycles cycling For maybe to this cells customers related to a this risk maybe have taking follow-up. risk the longating those company-specific a example, are to help and isn't longer just those quick issues? that -- and is evaluating are comfort competitive there there Just then And cloud-native a migrate cloud. more Is sign I some that other timing that

convert opportunities over these are we that perspective. fact that to expect refer to to us actually those customers the in are want pipeline. a And making commitments an Look, to Erik. cloud Thanks, I absolutely time on-prem the and from Yes. both

to us. -- So are we start with they those cloud journeys expect them

prepared how Snowflake more staged recently the the made in to Latin happy the American of workloads and the my against Teradata back doing decision X migrated in execution execution. perspective essentially that half utilizing it's bank competitive Databricks. they're twice that had backs. up actually, terms to cost. a really of perspective. a I to from also I'm From from we're doing win very mentioned speed has Teradata, and had catalog we're how competitive the remarks, we're platform the are And doing continuously utilizing in to we're come building made fast that proud as I'm players customer competitive a with reference process it cloud. and competitive a But and just from Databricks. I competitive approach of And to that newer perspective, seeing the they So migrated like a

of convinced our query lowest comparison cost in absolutely competition. are We per the to

of as of I organizations appetite. see cloud and and what some about look actually deals getting risk world, way think with very the cloud largest of Teradata it's large And technology. the DC we the at risk for we migrating to as least the really these benefits in all the

the So that against. I and other the deploying something of that they're of can deliver hybrid in our terms think technology our none is capabilities way using set competition actually

that a execute leveraging they differentiated and a migration position. capability through hybrid as so And [indiscernible]

So we perspective. that can a doing that's how well from assured more be we're competition

what kind on-prem that maybe That's my in then gross you, your -- different helpful. mix you've about cloud and margin dynamics Okay. gross mix revenue margin and recurring a really these base, to is line really little can for Has more growth follow-up some revenue when underlying changed the and bottom stabilize time maybe of change which about given between the you you thought profile your just expect is, of of talk and to expand? bit and and business? recurring start Claire, that shifting kind of And as now

Erik. Thanks, Yes.

that we've able quarters. with we've the with been of mix over gross an just though offset regards pleased even our impact cloud the actually stable we've ARR, margin gross improvement has and the margin margin So gross I'm been rate. by of that, to been in cloud negative our couple recurring to very last increasing our margin, total And that

to to change. year-over-year cloud a and stability. the improvement as quarter-over-quarter ARR, seeing negative future offset expecting and rate that of continue And to maintain the think we in we're increase impact that we continued cloud continue mix and look will that out from the margin the mix I we seeing continue, So into and

of Your next question comes Guggenheim. with from the line Ma Howard

on want I -- pretty already it's just further? can I I I -- migration explanation you're concrete you data competitive or on Steve, that, slower Teradata? even that on-premise really translate losses? understand the renewal maybe stickiness contractual, support was around migrations base into some Or could maybe the to expansions, just you or future -- conversations more I So verbal share can its pronounced it's telemetry brainstorming. of cloud next mean, confidence the what gave you migrations commits not you timing migrations. a have But maybe anything of right, stage what calling year? instill stage that so if to point a it's maybe that data was on thorough won't customer I thinking maybe

the just Thanks these about. for aggregate fact, in changed like And ARR saying And in our of It's the talking to timing really overall, And deal from about, we've our deal large shape unchanged. by lost off we our we're level. had point of all we talking opportunities strong. And total execution. Look, question. changed strategically start accounts that just pipeline I'd positioned set. were Yes. in of any that opportunity at cloud hasn't also remains are the terms remains not

renewal better XXXX. execution, So actually as we've and terms growth has the commitment move Teradata specifically the going we to half some spend total help half that's our the in customer in power of second ARR with of I look got total rates into of And unchanged. If XXXX. remained our commitment and retention in second

we numbers? year? some to help into as why look underway. Got next expect -- that November around kick us and next understand they help that, it. not we back you recent XXXX, speaking is in. I mean, the we're can already, discrete of us kick making but I significant respect Can of And should a the you're for any conference, acceleration how product will And your these far, not reorg So for your quarter at when I mean initiatives. initiatives the paint just there's on you customer would guidance so in in picture giving pretty initiatives Claire, year, big right? you're go-to-market

Yes.

So to we total are Harold. ARR committing growth in a XXXX,

an of compared committing to the are improvement XXXX supporting we XXXX. total in So X main of that that's And percentage that a growth higher cloud. to ARR an drivers increase include

So that growth. obviously more drives

growth XXXX, that will the in robust anticipating and increase So cloud. percentage we are of

as for year-over-year we finally, year improvement on-prem XXXX. And well. retention expecting the The we in are expect well rates, other a our thing expansion in is as full meaningful improvement

will we year, would where which to growth XXXX. So to cloud compared there's that improvement ARR helping a obviously to back say, are total robust including growth next move things, us is I be in meaningful multiple

with question next Markets. Your comes line from Nehal Northland Capital of Chokshi the

Teradata ARR. no change in terms total means of it but what takedown total understand us in ARR, on in year-end cloud Help given workloads change

an capability see It's customers recent much and of Nehal, lot question. customers. And the had that ways to Teradata our that both for we talk with the that. analytic utilizing thanks very our capabilities way. the of enormous to meet can executing capabilities and effective met. the the perspective, talk The we customers is customer requirement And or which events our to still that utilize data operate be definitely they our and These platform to the recently, that that to do really all database at technologies. where efficient the scale from analytic most and what to are as working. environment we've is thing in the resonated customers developments them fact these been in When the our we or enable about I them in opportunity Teradata to analytics most the a want platform that do they is want we've had they're have

that can the that. something environment, they So want If can in those do that's marketplace platform if to in the to do they hybrid a the of across that to giving that. in we want Teradata If prem, X terms platform uniquely on want leverage can they deliver leverage they in cloud, that Teradata environments. do

platform for modern modern of environments. these we a Teradata utilizing demand and workloads the in in So still terms real see

or that. cloud, asked an thought I why with question converts because on reason the there's to on-premise customer that expansion an I their that in is on-premise estate associated So

the So migrations, cloud not have a have slowdown if in we correct? Is you total ARR. actually less would that

Yes.

good grand things, that we that the our do on we see we terms range and guided, In average, normally of total an migration. uplift point in range. ARR a point, build that of scheme in Howard, the at of So were able to

but there our to reduction AR impact in that linked we've absorb of yes, to cloud the an So numbers. been the able previous total is ARR,

Understood. I see.

of takedown of for $XX for a customers? $XX a XXXX. there then to significant within that million cloud million concentration the couple Okay. like ARR And Is just

that a is it you've about moved I mentioned and that from questions, customers those, And rapidly where the few in would deals handful the I it goes of to clearly, have to the -- X is figures. talking prior and inside you marketplace. us seeing of quite We're cloud expand figures up and that the capture What still combination to say many those X number. in that something expansion question spend and cloud we there with Teradata ARR just But to execute systemic seeing also the and build is, need a our about. of committed migration us. the [indiscernible] looking customers our clearly are to the customers cloud we've been with cases. and on both actually we'll overall on-prem

this And frequency the it. of X you're if seeing or or Snowflake, what's quarter a then any type customer within And few boomeranging that Teradata. a quarter the customer a Teradata in year you Got more I that frequency sneak to Steve, to can in. ago? relative cited back change case? of

capabilities platform an our data for from and that platform analytics seeing from example, definitely and Databricks. science becomes perspective more us compete more performing the We're also for workloads, those our to in Yes. enabling

a it's go past. requirements ability [ and customer continue message to back strategy, as the to win-back So CloudForte that enabling been ] us needs to we in able we the customer haven't development with and address the in our

I will competitive position to and our improve continue So over believe time.

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

these of And address trends cadence, expectations are are deal way not where as in spoken of follow-up. you Steve, And you base perhaps changes in progressing, but any have macro that in you've terms just cloud just 'XX? business I spend well. maybe the large just well, can you in are broader as about, seeing those just migrations the seeing going into a the

remarks just tomato spend very both the pressures the -- strong. Pacific But Yes, We We And strong, our the know business I think and about see in we a clearly, don't talked see the you a environment. customer against well. remaining region the Asia that of increased world. winning reiterate largest we of talked Wamsi, competitive bank prepared in in our the organizations fundamentals highly Teradata with in I'll some into competitive now very deal future. I my remain business

where banks to next ARR So hugging increase our working We're perspective. using AI to to use example. having total we're are growth we us the the commitment has a we're spend models market we're AI with that that confidence working deploying generative an large from given the year. From return Teradata that say U.S. addressable as language capabilities to some going the in developing platform, with an in actually cases face perspective,

in in analytical that that and data starting of warehousing we're workloads not sure we also lake operate but the we data against. our can presence So lake terms to expand enterprise might only make house data maximize and

into the confident we future. I'm will terms in move the opportunity have as So we that of

Okay. And I guess also. around on just AI to up your point follow

the that you that's Or of timing? of proof of this think significantly now? like and and AI you business? would How got about you faster do sales think proof will that Is your translate active long life, will concept quarter pipeline XX% this of a said includes grow rate this something that's You something much engagement. XX% pace from have pretty pipeline

Yes.

demonstrate number inside we that think and workloads those of customers production out concept you at into ecosystem. concept the proof I our then them that that for from are at trusted all operating scale reasons is of take we their their and a are GenAI is operationalize and for to data said idea of as more that failing at can recent and XX%, data them we moving of science One AI of the actually look AI scale, able a with GenAI, projects, than that not of are study, XX%

move we're look we I our our them at opportunities And pay on of we as customers can scale proof tailwind into and to them that environment, of prove us deploy in solutions as to help that a that's to think we to pipeline the able not add production just lever to out for future. the so but actually concept really the these going at

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

Great. you are migration growing ecosystem. you movements with has seeing data changing talk My of storage customers? lot about behavior guys this contemplating iceberg do anything in the your cloud broader a of Steve, first from iceberg? do there's What question, to companies data analytics adoption think And to

Yes.

as think great open talk an native a store. And to table customers nearly I we plan one single leverage opportunity see format our of that about they we to on every how us. object for

Our lake X customers don't our we platform particular lock cloud formats. open format. And into table supports table open

in data as light that structure object in perspective, and that Lake, strategy we native both that as something a data object that that's ecosystem at table look from support a If we an iceberg Teradata that amount the Delta looking of way stores is at to native we open around a Teradata the have stores, format. we see want again increase as We to our putting look TAM in only that now. touches and

data we is expand that magnitude order in the of often terms have As data opportunities of organization. we than that and we look our the opportunity larger structured to an an inside look an at future, to, again, marketplace the addressable as unstructured

Your Walravens comes question of Patrick the from Citizens JMP. with next line

on the -- and So a top you're characteristics moving individual? that you're in be Steve, looking Officer. the sort that Chief you I What in is that is think new looking Product what are mentioned Hillary to your of remarks for going for

Pat, thanks for your question.

clear, that to Just Officer. a engineering Louis chief going we as is Hillary our actually appointed technology this Technology on, to are and leverage we from taking announced move both bench to is be a management, organization but so have be Chief perspective, I inside strength the product product going that Landry the opportunity officer to

focus the into have report we the we have that company inside move and management we focus elevating future, to product engineering nicely the to those I'm the take company the and directly product me. As rules have

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

you in questions. less the the side, want unchanged outperformed anything came this of flow on Two year Perfect. follow-up to timing Steve. that things cetera, I quarter, then that X in, point And but quick you full have QX, for Claire, et around cash out?

performance pleased anticipate free with We cash your regards there slight our to a with To Raimo, to Yes. working capital. impact the were point, we be of linearity flow.

slightly overperformed to and previous So expectations. our BPO on DSO compared

last full would that and a QX we year. meeting between the guide But our the that cash will be linearity it just QX. in And good in we feel impact saw time the year, range of free this be similar being flow for about and so flow cash a increase

next Your UBS. the question Austin comes from line with of Dietz

more slowed on And this I the Steve, I several slow But stage expansion than would in-quarter of a net rate it that the by lot believe toward that. quarter, they're the and spent time Claire, piece call cloud more to nature migrations trailing know on we've so percentage metric it's points. seemed have far. XX-month a

this expansion net mind you unpacking medium And just you think what rate cloud should term? perspective a over net to that the near from saw we expansion about do then quarter? how So

Yes. Thank Austin, question. for the you,

expansion So you XXX% XX-month net rate trailing is and in our metric. as mentioned, QX was a

will impact expect driven do XXXX. was continue mix migrations And further versus look see, deceleration. what a that business. that's some the with given to our forward, And European monitor We stage we into QX our vertical also of So deceleration of expansions. we care in we mainly obviously will the that and health by as the migrations be

XX reminder, expansion in net So as not the included our expansion conversion rate. for a point is the months first of at

also by that as of we we're update So our migrations. the customers' timing impacted migration

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

Thank cash and and accelerating of and in free firmly thanks, returning you, The believe capital on that protecting for to future the to committed our differentiated Thank fundamentals we shareholders. we everybody, growth, remain our and are improving questions. growth. We growing all you technology and and flow Teradata's strong, execution business all. focused remain and that our

call. today's conference concludes This

disconnect. now may You