TDC - Earnings call transcript Q4 2017

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Operator

Good morning. My name is Berjel, I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata Corporation Q4 2017 Earnings Release Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. would turn I to call time, Swearingen. Gregg this like the to over At

Gregg Swearingen

thanks us activity. results will for for fourth and will our our morning, Good joining financial Operating Chief Mark call. this Oliver Officer, Lund, XXXX. Culhane, newly call discuss appointed quarter discuss for expectations Victor Teradata's CFO, our and CEO, customer our begin then morning. Ratzesberger, Then earnings XXXX our will

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

items on items such the measures during is conference constant conference included XXXX. impairments, statements new current and a which acquisition, cost, We also And of no Investor release, will to turn that other certain to to today concerning software earnings that information our as now, these the XX-K, a assumes on as compensation future these other with information, number factors in items free related replay to could provided result results call of and obligation of the to charge XX-Q subject information While later and discuss asset this expense they page results. this including are Teradata's at other filings revise the or risk revenue Tax special our and or Applications the cash financial which website. in over teradata.com. flow reflect results may excludes outlook, Vic. Act to actual described cost, and capitalized be described will call These of of uncertainties related earnings and the stock-based was comparisons. other whether vary non-GAAP sold, we business the of available our SEC. also discussing be in A tax GAAP and as call, are I'll Marketing call, On development risks update materially. reorganization, transformation Teradata information non-GAAP Teradata's currency our cause reconciliation today's such A non-GAAP website release results our

Victor L. Lund

morning, cash customers Good stronger had EPS, our very am quarter. than guidance flow about this conversion revenue, to to Mark we the that quarter. people a both report terms subscription numbers together We I take everyone. proud that and a Today, of in team exceeded pricing. coming success well for performance wins. deliver I of of through expected for I with our acceptance the focus to presentation. our of customer Teradata strong am pulling a fourth talk single strategy to in as you our will would together like ensure his strategic to as our pleased

continue see On strong the customer to front, our receptivity offerings. and strategy we to

options, a see flexibility in or whether cloud deployment customers the demonstrate are in combination. happy Our to Teradata on-prem,

is approach results is me Everywhere our a important as come is to turn together the strongest with analytic that Equally our outcome-led great future bring they has develop and has to out process. in our an understands that Everywhere. behind as to and their coupled analytic smart analytic environment. who interest is that build by not leveraging delivers never-ending Teradata changing quicker outcomes are Teradata customers ability driven they upside require together do to business When recognizing However, it been a de-risks our team folks, software. their that world-class Customers platform down, consulting their world strategy, our are change

our and people are faster, opposed believe our We motivated things know are that as to strategy wins. move seeing

the team from up this by continue that to point of build with year. more grow of to out XXX% strong For and Teradata we this great. that call, our probably than that also talent made I continues us talent the best is last our this time is should infusing indication outside funnel

a Chief very named can contributing Officer. Eric announced our that Tom reminder, as Chief Oliver as Earlier this both Culhane Operating CFO Mark was are positive and I ways. we we already quarter, let And in added you week, Revenue our last As know that Officer.

have our service, the As and strategy place and under we planning have operational in operations, our we sales, working, of core products, moved marketing, Oliver.

Now, affords strategy to team the drive high responsibility with to our impact forward. me them, strong resonates spend a while gives they one more This customers accelerate we have time Oliver and leader ensure with us our and more further to providing outcomes need. execution, with

the XXXX growth. expect let's past We double-digit while the for first we revenue future To be non-GAAP have deliver return to plan large while we time Teradata transformation a the shifting revenue our to plan position the and we our that, investments to remain in the years, hear to the increase of to discussed forward our As our generate supporting continuing four these transactions build over infrastructure team. to percentage XXXX to to in strength growth committed from Oliver. the and low for in Teradata look XXXX, subscription and EPS as our non-GAAP we two years. undertaking of achieve and With shows to EPS a results of

Oliver Ratzesberger

pleased help good taking drive spent as analytics very Thanks, help meeting Teradata in with me technology be investing will a time morning, of and excited more customers bit tell reactions them why Vic, join good to I'm on everyone. are and consulting. we you to data to their business and and share their And and responsibility outcomes. I've our grow. they they I'm I leverage today to today, analytics

First, and anything, subscription their can makes its to easier decisions time. move in de-risk Everywhere Teradata flexibility, unparalleled investment With licensing. buy any customers Teradata companies any way Teradata capability Everywhere, Teradata buy through helps and deploy customers strategy. anywhere, and it With support our analyze

analytics, have the companies analytics volume the scale customers data enterprise can to graph. to exploit and to users, needs software, combining insights. of of enable of to These complexity, data they of With to insights can of capabilities our whether robust tomorrow. and analytic concurrent the analytics regardless a learning business derive unique power or address question, With techniques business our their today machine we multiple time analytic drive and of differentiated from aggregations number series

customers see that as the Teradata superior are environments provide. Second, to analytics they results adding platforms our their

For data. rating increasingly focus example, integrated Teradata a leading a and our their The offering, help they was five-year to the the their as This healthcare taking rolled company of have leveraged third, the customers large our resources at retailer infrastructure skilled tight of this a making signed unlock a business system can improve in industry. can And to a core analytics use time budgets so Teradata. will understand value as-a-service Teradata retail and of they outcomes. agility customers in C-suite, software the retailer strategy outcome engagement for and challenging large are optimize their advantage on help operational and to manage channel our out this commitment the operational deal. case responsiveness group manage business via new IntelliCloud analytical their We adopting A sales on of ecosystem. subscription improvement consultants

expansion telco their capabilities, Teradata eliminate going For is to forward. adding elastic platform offer as-a-service provide asset and to analytics example, costs, reduce our purchases datacenter improve major service levels, a

will of With the our continue. in are this cloud, the strength trend analytics that we confident

to value forward we XXXX, companies to drive we business leading analytics. world's drive help innovations will continue from the to look As

us our the analytics globally that You platform companies is our XXX have heard largest say with spot and opportunities. we excels. where target the This analytics sweet Teradata

over from greater existing help to already five expand our continue XX value top next the two, about targeting added also get XXX or new customers we customers and their of top and these year accounts. ecosystems, we're While analytical XXX have new

clear the Teradata the enthusiasm team our want and to Mark, we be strategy. call As about as the dedication I to turn execute I over of

outstanding We have exceptional value people, real to delivering and are technology talented customers.

about excited beyond. XXXX and We are Mark? super

Mark A. Culhane

everyone. I'm the can importantly, Thanks, in amount is to at and not join deal Oliver, results cash this better-than-expected evidenced excited you revenue, company, short strategic even free morning the motion, only subscription-based are the and tell activity QX, working in that correct, are full I I'm EPS my converting good flow, From and but to of at terms transactions. more in joined you by total to of Teradata as and have the time Teradata. changes pleased are morning,

more Although a made we more of to stream we moving that business more are and of our create to lot subscription-based options on you feel intent confident progress recurring in XXXX, revenue in valuing. can attractive an

use revenue expected ARR full subscription-based or focus Although not longer, do perpetual any to of XXXX. shifted and $XXX have that options a million to we we of annual in equivalent to did million transactions $XXX year terminology the have target to we shift recurring our

equivalent of our worth the range. high-end year, expected we transactions, million $XXX had above For subscription-based the of full value

a XXXX. XX% of revenue result QX As basis, recurring in a on licenses product subscription customers from the purchasing quarter increased

increased year, XXXX. increase full revenue, increased a line XX% of X% over was was December and Total XX% from recurring Total million XX, XXXX in December via of and We in TCore about at the of or and expectations, $X.X that XX, in increased our was recurring over or an forecast revenue with with line $X third billion total For XXXX. increase subscription. booked our billion, XX% revenue product ARR $XXX XX%. XXXX,

metrics, which few to provide minutes. we speak forward, industry to Going a more plan standard you with I in will

expected, than business continue aggressively ended our our and Although, work our we and our customers, change more and business diligently year our to lead subscription-based benefits will shift to to activity offerings, new subscription approach cloud-based more Teradata for the which and to term longer model shareholders. move faster we with to

re-measurement is QX. our $XXX to related Before identified Teradata's excluding in QX which period, fourth quarter we want a million, GAAP reform in at the in and everyone results was to to XXXX a $XX by due I reflect to tax new net compensation $X.XX in was was release, $X.XX. We a expense repatriation in of stated of the items revenue guidance I EPS range tax comments majority stock-based as QX was beginning same was including our million $X.XX, in million, to of higher basis, offset related special on plan unless the million XXXX. which our charge to non-GAAP XX%. the The sure $XXX otherwise, that, XXXX. corporate today highlight the QX total $XX tax of earnings our other an a benefit, guidance charge tax such as deferred lower tax which liabilities revenue items my make Total results, partially over than incurred aware QX and above was rate loss net eight-year repatriation of tax pay of

as well XXXX than was Our guidance, a lower a the higher again to company's subscription our but full to model our investments as shift year due EPS revenue $X.XX, model. to non-GAAP largely than transformation increased subscription in the for EPS

product to XX.X%. Turning fourth QX gross the was higher margins, gross quarter XXXX's XX.X%, margin than slightly in

margin business range XXXX. Service the margin the XX.X% to gross gross XX.X% versus year due For versus was quarter our of made software. the believe use the that of in in QX XX.X% margin decrease the in in in demonstrate XX.X% XX.X% to margin lead quarter we increased basically gross was XXXX. Service fourth and consulting line in was targeted business will compared quarter product of in for XXXX. our outcome-led cases XXXX. The mid-XXs Overall with full to we the business fourth full to incremental XX.X% was customers investments XX% was in that gross for strategy consumption in Teradata's year, our XX%

change. year, mix full higher in our also the XXXX. to of services in compared XX.X% XX.X% the the gross investments was led business consulting For to margin and The

administrative count. quarter sales expenses, or was in and support Turning selling, head the sales expense of $XXX QX, XXXX, driven $XX from and by to operating fourth increasing largely general million million XX% increased

public administrative For fourth well by increased expense driven was platform. million cloud $XXX and quarter further Research initiatives, in million, managed the including the our as full $XX XXXX, strategic from million, quarter X% was analytical from XXXX. offerings, year, million $XXX of the selling, expense our and in in as and development investment general $X up

to $XX R&D with million R&D $XXX our to year, initiatives. a Total increased million of consistent the increased expectations plan compared increase. expenses $XX stated $XXX for For year-over-year our XXXX million strategic million, in

was operating than XX.X% the QX XX.X%, in As a for quarter items, these better all compares XXXX. and of result to expected margin

tax the for year, For related the items. period-over-period of was XX.X% our in Teradata's XX% tax rate full-year non-GAAP The rate XX.X% higher non-GAAP fourth XX% XX.X% the XXXX. rate period-over-period for XX% the XXXX. line impact and effective versus to as resulting non-GAAP pre-tax The margin the operating XX% XXXX tax percentage in than the rate expectation, to full was normal XXXX. increase but was quarter higher lower in in was was tax of with discrete a result earnings compared

end higher we provided million Full-year in by guidance, Free beyond, operating $XXX cash believe net Turning was $XX activities us to positively activities XXXX XXXX, cash million $XXX million million been XXXX cash to flow, million would the fourth otherwise by in XXXX million, than was impacted payments our have in that was in prior by was tax versus of net XXXX. free accelerating flow flow which cash full to QX compared year $XX year customers XXXX. reform. collected cash to U.S. and driven XXXX. $XXX operating was quarter the in provided compared by for to $XXX

capital XXXX. our investments Teradata's to support meaningfully transformation increased in planned, As

their as upfront In amount addition, cash options, we new of the transformation subscription-based customers decline. our early collect we our expect in to stages move will

we Turning as XX, $X.X of balance of almost entirely XXXX, was our to December sheet, billion approximately had held offshore. which cash

XXXX, not back buy of shares million repurchase in to used During cash approximately quarter. XX.X fourth We $XXX shares. million did the Teradata

XX, million share of approximately of earlier As of additional authorization us remaining repurchase $XXX total million we an $XXX week XXXX, authorization. approved and give our of a December this had $XXX to board million

term, taxes cash our pay cash world, for plan keep to general Regarding the of a our funds facility, corporate working we credit remainder net of requirements use to repatriation, held to portion around substantial offshore. and buyback these the In shares purposes. down repatriate short currently expect and the capital we

which higher subscription-based and in payments cash than $XXX accelerating million opportunistic XXXX, increasing We activity repurchase activity December XXXX, will was due was as transaction in on revenue deferred be XXXX. XXXX. Total to December into million XX, $XXX of customers XX,

expectations a move I that XXXX, things to our impact few discuss reported me going for Before results let should forward.

and shift subscription our to subscription, including We have now pricing customers and are seen more options, offering. aggressively moving cloud to our IntelliCloud

expect reported operating As how impacted to transactions. XXXX. as new cash to free as XXXX revenue to shift will it's estimate how affect we our in XXXX, approximately more this to a difficult and options, flow will profit, of result, pricing year In bookings our XX% XX% transactions, full EPS as be the shift subscription-based of subscription customers well with much to subscription-based structured by our mix

ASC result recognition, in of been so successful that XXX over recognition versus we'll revenue In transactions we terms in in have ratable XXXX. time do impact, and structuring upfront continue to

impact to While our the ASC thus we of of to have reported still revenue upon lost diligently XXX, X% ASC in XXX, worked XXXX. approximately we see revenue adoption reduce expect reducing of

flat to All rates, that end deals mix expect said, to given $X.X it approximately close currency full to of billion the result, our be billion, results on $X.XX year we financial the month utilizing revenue assumptions and types mentioned up to January difficult total As in XXXX previously X%. to and a is the predict the uncertain due expected impact to year. throughout

from rules, subscription QX less we more XXXX. XXX in and of were revenue ASC XX% ratable We than XX% recurring our business, under in grow and will XX of successful increase than ago. excess than and recurring to legacy subscription/cloud deals revenue Since we business in of in to perpetual slightly revenue, more be the expect our revenue new subscription recognized double we be revenue total subscription/cloud to anticipated maintenance which structuring our deals more in Within days XXXX. total expect upfront XXX% we consists approximately see

to $XXX $XXX in As a to million. revenue QX result, be we million expect approximately total

full year-over-year the continue $XX XXXX, expenses $XX up in year approximately our million, operating occurring strategic $XX approximately which will from that expect million in of XXXX, likely to with by majority million We increase investments to to QX. increase,

non-GAAP XXXX evaluating still Tax enacted Cuts Jobs the estimating (XX:XX:XX), Job While to (sic) currently we the full we of Act XX%. our [Tax Cuts are year recently rate be are and approximately effects tax Act] effective and

heavily Reform mix further Tax complete the and further tax detailed we tax actual effective our and our is of Act on subject rate as guidance the from dependent interpretive to earnings authorities. analysis However, is refinement

tax to slightly the of timing XXXX we items. to related the our rate XXXX, be impact earnings of half in effective the in and As the higher due of seasonality to tax normal expect pre-tax first

currently So effective XX%. estimate non-GAAP we our for QX, be rate tax approximately to

We are $X.XX is to in the estimating EPS our QX approximately to be is to full year expected This non-GAAP range. $X.XX, XXX outstanding upon based XXXX to average full year million. EPS be approximately non-GAAP shares QX of $X.XX weighted $X.XX and and

in bookings, TCore new as you a subscription model familiar and and subscription-based health measure to billing transactions structured impact conversion are of very our that capital already subscription in required metrics to ARR, of provide we growth, operating underlying continue are the plan additional our many as of transactions Since our progress the in QX shifting investments As of Due structure to that the investments into occur metrics results, subscription-based of and XXXX. the show to approximately QX, customer to our free and which plus to in of coming year relatively now impacted the many level remaining given XXXX related during heavily revenue and minus expected XXXX XXXX, out QX EPS variables, quarter timing quarters anticipate year. quarter, be payments compared the dependent and million, is seasonally to including more we late accelerated lowest received first or be $XXX to percentage XXXX of to in than upon our expense beginning better business mix is $XX bookings the such which will frequency new cash million, transactions flow our is with.

maintenance XXXX XXXX. grow transactions. structured XX% customers the expect XXX. But to high And to of term-based excess see we in expect we and as increased expect basis, in of of consumption of XX% XX%. at contracts XXXX services to customers cases as subscription-based of or subscription/cloud bookings ARR which growth incremental within top TCore whether the be approximately existing based, comprises Teradata use mix terms a from in approximately bookings new we we in we that, continue new subscription/cloud, teens expect to perpetual addition XX% On ARR, In grow to

will P&L of align to approach including with we hardware plan transition progress reporting our to are manage presentation also to in ready for is perpetual on and closing, In revenue license our correct, a XXXX This transparency track revenue better resonating better the as software And we strategy that, revenue. we We operator, consulting view model. take provide with customers. our classification new you recurring the follows: how to subscription-based change revenue, our and and it's it's and financial business, working to with as questions.

Operator

Your first question ahead. America. Bank Wamsi comes Please Mohan from from of go

Wamsi Mohan

any looks on flow thoughts cash of $XXX but guiding was longer-term share, you've profile said there? it you of maybe for you. funnel Thank up Thank was, share clearly more color there XXXX know here, on any traction million or would morning. Mark, this And large and hybrid Vic, sort customers to longer-term, the color I you expanding about can you're share like? also customers rev, normalized Yes. look the what beyond, drivers XXXX, at refresh, long-term last Can talk what cloud, you. only like normalized year. to free growth, is your half key Are recurring time peak flow revenue increased free free the new you're here? about as continues and Good of XXX% the so you flow levels, cash we how maybe wallet given grow mix cash look color can from you here some about thinking some

Victor L. Lund

Wamsi, it's Vic.

it a this So the to does combined. mean here, it's continue quickly cop grow going things out like funnel, but to all is those and on I seem really

have not engaged, think something to of think the I couple I know They our how our a growth a the customers, demoralized, that's were, I right. we that about. the so focused driving are think didn't idea strategy thing in the them, a place, to now funnel to years go to teams is bit with talk customers ago, big

opposed I strategy to comments, As hope people in that our works. my now customers, believe said our mean our to as I

just having to So, their with allowed engagement. that to to – talk relevant more our things get them I think customers to engagement about are customers, to has us

forward converted in as you managing in put facing cycles in we to just to about thinking three and here. next them our going happen to the making our know, our long as all we that Salesforce effort a sure are behind funnel, so lot As what's of years and teams

refresh a And the engaged engagement across are just spectrum on driving using the so but I large anything getting platform exploring teams with our analytic getting increase are that's to back the it's increases to and they're thing large are customer new new, there. than in driving engagements combination biggest of funnel ways. interested in think that think is but everything, I think our the more thing Teradata And base that in it's fully in we're I everything, customers new our where engagements

Mark A. Culhane

so you start on that continue subscription build cash clearly revenue because Wamsi, growth, are harder of obviously revenue free businesses back heavily we cash the We dependent until subscription. to to of flow. and numbers. then the the it's recurring know mean in as to that question flow in expect I shift know that majority those longer basis, continue to growth to see so on turned subscription Free And we we shift impacts on growth flow's we've we term, as a going cash to free your happening to sort recurring

what of full flow like. growth So looks made for model. longer longer I expect a term, we've that to have views that year in once shift that, in – cash But clearly, we'll the more outlooks we the the term later think, subscription terms on free

Wamsi Mohan

guys. Thanks,

Operator

from comes Katy next question from ahead. Your Morgan go Huberty Stanley. Please

Kathryn Lynn Huberty

morning. Good you. Thank

then, customers, it at reform? to of they feel more ones analytics? why and around you quarter spending And results money and customer the transition, you. could quick of a tracking from the fourth Just what repurchase a you post-tax One, fourth the shares of such in and in like the quarter Does quick XXXX? your prioritization me. as follow-up, spend seeing behavior not terms of accelerate Thank are there's just subscription given couple strong in ahead

Victor L. Lund

were, and Vic. question the and more, then talk did the when last for I well of shares wanted about it's Oliver other. transition matter we're didn't can a in just that prudent to study out in take was first, I'll glad to is turned a to and through I Mark Mark I the about repurchase we that's We middle it shares to business this Katy, it everything. think understand working bit his was Mark. I and think from one QX; We busy were transition bought and we nicely where and not. me closing retrospect, number where Steve we a hands substantial get repurchased hands timing a quarter a so the the stock of the I'm around have get of moved it my and already. but the we around we the talked purchased with and In personally, had of call. things, shares everything, the wanted could up did, his Mark

Oliver Ratzesberger

lot seeing the that Katy, have is complex that they dominant just have seeing It's lot and de-risk in over general, changing. arrived environments. a the couple of to into impact behavior what play Teradata lot yes, we're changes; a analytics fact last customer and their they to sure driving and business technologies, customers although specific see helps of because They Everywhere is much platform I'm the Yeah, changing, activity decisions that expensive with just customer the is Teradata of are as lot how and well. their environments. more analytical systems, law difficult not regarding Teradata very of at years behavior Overall, tax we're is outcomes, their deployed silos starting of a analytical a with to and that them it and realize that

changes factors is a together a there's yes, of factor coming analytical at that, lot just shifting so strategy we factor tax environments. And said that resonating time as are one is absolutely struggling while larger with a behavior, shift the of you are certainly law customer their but and see customers when the

Kathryn Lynn Huberty

you Thank the for color.

Operator

from go comes Brad Please ahead. question Stifel. from next Your Reback

Brad Robert Reback

Great.

color Just sheet, Mark, contributor other any than there? and larger liabilities assets real the quick, going the were to balance in much quarter typically, a

Mark A. Culhane

QX some know, so I the we – happening no, move and it's are some Clearly, that normal as subscription Brad, based rental is not thing that assets assets stuff. subscription year-end kind our our on in there some we think You really, of of going front, other of of transactions things and have on.

On front, things the and right. liability like is book, accruals from we right, to some tax of clearly, tax-related that it that had

$XXX large extremely in charge. So million $XXX you a took took we $XXX we of know QX charge like million well, – tax, net million was

liability seeing the – tax sheet which accrual balance on reform for impact that that's is you're the there, largely the sitting there side QX on So that sure.

Brad Robert Reback

subscription in you're real to Great. can details provide, such accounting? that under follow-up, you And transactions structure continue recognize then quick on any able you ASC how can maybe them XXX way a to the

Mark A. Culhane

sure. Well,

our recognition on our customers, those kinds So options of for whether of things elasticity all an structure under provides towards drive it's as-a-service, plenty rental, deal ASC ratable basis, XXX. revenue

So an – deal for that. and allowance our structure provides

Brad Robert Reback

much. Great. very Thanks

Mark A. Culhane

Thank you.

Operator

from comes Your question from Goldman ahead. next Sachs. Please go Jesse Hulsing

Jesse Hulsing

you. Mark, guys. question a for thanks Yeah,

with mentioned you XXXX cloud/product than did subscriptions double. that expect you to for Can in finish that in think fiscal subscription? you where us, or XXXX product more I you baseline double

Mark A. Culhane

be whatever to to revenue grow it going it's expect it's – other revenue our And the we be cloud as we revenue, in course, against be We that double. change, of I versus my and to components understand Jesse, and on in you'll subscription, income going XXX% then break between we're perpetual into going break perpetual kind we're forward – then, statement, able within recurring to that we do change it But and than face cloud don't in of revenue. product don't consulting thing. and to margins subscription out Yes, prepared more of revenue, that Yeah. not consulting the today, comments, recurring revenue, that excess what components revenue. to or mentioned the out a are that of moving recurring revenue once we

Jesse Hulsing

or Got Thank you're if private converting subscription doing, Oliver. this infrastructure at it. may, in A When cloud, on you're that many you quick follow-up the subscription look guess of versus just how that licenses? deals service a product from the for is maybe provider those Amazon are and or cloud I I another you.

Oliver Ratzesberger

see a in cloud we based signed run offering the we're the IntelliCloud thanks have in IntelliCloud on-premises now we of Jesse, and on we to private into also that growth for continued have public everything, customers. private the mix use moving starting We of cloud the question. see cloud, we it infrastructure. environment We our see on broad production see that cases

broad pricing subscription see with coupled software and offering. we So, for a our adoption of hardware both as-a-service that offering, they're

in on cylinders or pick So choice to us cloud Teradata give right what at them it's want on like cloud where that they on own all this Azure, what's be center, customers or Everywhere in really be their they is data in really value for time. in to that they're and now. for AWS the can with they want public firing picking And point whether whether based the on a we private best

change one without in future, charges that they In we move point given can for their allows incurring know any at fact, to in to and them choice that want time that Everywhere choice deployment the do extra they licensing fees. anytime pick even fact can if any Teradata the

And resonating well so, is very really is our with that what customers.

Jesse Hulsing

helpful. That's you. Thank

Operator

Cowen question comes Wood next from Your ahead. Company. from go & Please Derrick

J. Derrick Wood

anecdotes when any you to customers job metrics like can there uplift quarter. thanks growth. cloud? I guiding Great, shift term Are high-teens are on or around the or give you in looks to spending get and you what I the for us mean, guys nice TCore guess

the cloud. growth to just when like companies of kind of trying or looks So a term get to impact shift sense what workload

Mark A. Culhane

subscription/cloud there the But that customers is entirely of Yeah, basis, purchasing our we amount perpetual shift it's Mark. seeing is it are it from what so we're depending additional a people that. just varies when their at they or everything depends It moving whether This Derrick. on Thanks, off to – perspective maintenance a they're on incremental on customer, clearly they're convert that we reduced seeing not depends. so uplift. seeing TCore are

and to that seeing to as in expect transition. seeing obviously itself that And recurring are So see uplifts continue continue manifests to we grow. continue to we're we revenue we happen why

J. Derrick Wood

think north And average length contract the is years. then, I perpetual your of Mark, equivalent Great. just three number in

you still you're to move are XXX, you term it? perhaps contracts, there – or be are ASC something the three-year, going to With to do doing shorten doing expect when

Mark A. Culhane

to difference we But see because in to So, we're seeing funnel there. versus basis, tenure large, yeah, movement stay drastically. some moving today anything could by to We're that term that our not and that's be approximately across, being continue, – my relatively a on on think anticipating that cloud suggests would consistent. QX be it'll that but I across saw historically certainly the to we terms. dependent I on-prem in three-year expect potentially

J. Derrick Wood

guys. Thanks, right. all Okay,

Operator

Your Bachman Bank question Montreal. comes from next Keith ahead. go Please of from

Keith Frances Bachman

first much. But real words say over one which CY versus would is way growth, it for consistent normalized think the on more in new think and be, there you be new what I'm way lift about related. versus growth durable that revenues would Hi. provided or it there growth thought XXXX question. going normalize to workloads. any the a what and for if also into question the what Thank slightly two CY growth a if to as you very there any and transaction XXXX, buckets, to you you growth, do to could be that's kind one they're is, for any me. base, first a if your capacity bookings think you about Wamsi's, bit about drive that but in ask billings which provided? I is growth you different And similar workloads, revenue think time, different two, the the parse Thanks frankly about the the Is about growth way that? you way of second would to rate economic for capacity for you – And other the much low one had single-digit very think taking is, the is

Mark A. Culhane

stated, which expect to So, Keith, of revenue plus sort subscription, on your because we flat we've in as a the will... normalized X%, shift midst growth, of to we're

Keith Frances Bachman

Yes sir.

Mark A. Culhane

XXXX ...continue across and XXXX.

made middle that's we that growth we've once expect the In obviously So be longer-term shift, of larger that to the shift. difficult.

So – growth of... billings but zero we longer-term, terms X% on we greater than in how do think about to expect question obviously revenue On that growth. and your

Keith Frances Bachman

be new versus clear workloads. to capacity just here, really And

Mark A. Culhane

I from think way we in it if and yeah, new, that I – that ...capacity versus don't know of perspective. forecasting don't

don't not growth So, I'm that today be be I billings a – we – that on to don't at would honest looking something perspective.

So...

Keith Frances Bachman

Okay.

that mentioned try than existing capacity it trying definition you're grow new then, your you've key are workloads. me and way different assume customers to your accounts your existing Let are new more by within customers, you expansions? thought workloads Within also those about, as so I just a you getting

Oliver Ratzesberger

Yes.

back just question big what our great the the last year. integrated here analytics year going which of platform, the quarter the take the in analytics is – is user at by group So, live announced end And me at way. you platform just second let conference, of here we which

because stacks analytics with have a technology There's environments have that data platform. We analytics integrate many are that to in be warehouse customers of customers different up from we want with into into full-fledged to Teradata their just to used now lot they we're lining striking a do a to so platform, taking that use a cases seeing deploy today of workloads had that. are that that what lot

together, platform. the new course, things cases set healthy and new workloads seeing the Teradata towards and graph, up So, whether platform put of we that the it's use analytics those is a learning, here, of, series, delivers, coming time capabilities coming as whether existing new these analytics Teradata lining whole a very whether mix together are you machine capacity it's

a our with yes, resonating customers. are So very healthy well the very in and seeing capabilities mix new that are we

Victor L. Lund

Vic. is this then, And

Keith Frances Bachman

Okay.

Victor L. Lund

seeing, off been the might driving I The much analytics and is principally larger workloads and – just add look weeds down there around move one the driven that did. more the transactions would we're the that that, have I that thing deals transactions not but before I higher have we in so probably been larger higher. we

– I everything, bit Oliver a seeing and it of but around said, so, we're analytics new And definitely momentum is like workloads.

can Our deals the don't funnel close well, how not revenue in not help what but to the we're brings, also XX drive the as seeing, question Everywhere environments what Teradata that are as are build them of save cost only they and and days understanding about that's customers the in but it reducing $XXX, we're engaging by seeing number funnel, back and have.

of all things those together. so, coming And are

so, seeing board. receptivity the we're And across

Keith Frances Bachman

very All right. thanks, gentlemen, helpful. Many

Operator

go Winslow from next Fargo. Your ahead. Please question from Philip Wells comes

Philip Winslow

Hey. Thanks a on guys, congrats QX. strong and

that saw payment flow You and think of $XXX how was to that AR. the above wondering QX? how which $XXX saw QX, shift and of obviously question much follow-up the in I'm think, deferred assuming how and uptick made you comment also should us on impacting you that you accelerated Thanks. million in range do sort mentioned you color give some your How accelerated revenue that you about we to cash deferred? we could a if A, then talked model about. that, much that how payments that subscription, And is we of million I'm was QX, equal impacting QX in that

Mark A. Culhane

your to question. So first Phil,

QX, of the slightly, I XX% You to XX%, don't perpetual know, know, approximately, et roughly was equivalent cetera. half number,

perpetual it's equivalent a perpetual on equivalent not obviously, equivalent is basis because a the ARR, ARR perpetual on ACV metric. smaller an So

see In up, payments we deferred given accelerated so revenue that looks also payments took other things it as you and some terms reform gives was on long-term vendors that indication like, our roughly forth, that what up, we so of almost your was little and clearly can you less our well, of. question the tax than to the accelerated $XX million. advantage Obviously of

net the cash us for to – impact put flow free it's the So, would range of above that our XXXX. is still

million, $XX us impacted it by net. So, $XX probably million,

Philip Winslow

guys. Great. Thanks, Awesome.

Operator

have for more We time one question.

comes Deutsche go Your Please Karl from Keirstead ahead. Bank. question from

Karl E. Keirstead

great. Thank you fitting Oh, for in. me

further question. Phil's into maybe I'll So sneak to

I on but durations least to second you in and the You that collecting year? and in words, see would fourth license wanted DR, delta, what moment due why my reason take free a accelerated revenues that can upfront subscriptions. was line terms XXXX? outperformance In – the fourth ask more on Teradata that payments, just the at a the you quarter be one-time accelerated we certainly were I above of in flow perpetual may helped flow. to question cash Mark, payment little that your primarily thinking, bit cash way is the Mark whether shortening to in you the in on And perpetual nature. then and again invoicing in other that or down mentioned cash free also so could be quarter you. that Thank less this would are Is why describe that

Mark A. Culhane

Okay.

drove largest outperformance the front. as that on transactions it, question is cash (XX:XX:XX) well year. QX quarter our that on that good during the accelerated So, drove QX to seasonally the was subscription-based largely and It volume no. flows, did what Obviously your payments, the cash with

perpetual, forward, see versus normally to flow that free of impact subscription billing cash a whatever. annual going shift that. quarterly of may all because deal is we – the free So, get to biggest looking impacts on a not From the or cash flow to perspective, or upfront driven an billings, multi-year we're

free the to impact company we where So, it we of then transactions the XX% you volume history depends that we're where biggest ultimately bill shift that billing as is upfront. perpetual license XX% be largely expect which to on is frequency of to a said everything what flow. to cash That's and compared subscription,

Karl E. Keirstead

a Thanks both. on helpful lot. That's Okay.

Victor L. Lund

future. to seeing quarter be as of time and fourth and we're I'd every thank I what Obviously, thank spend to to with continue That's about our we're joining proud Perfect, conclude I our all our one, call. excited you about you. of going like us today. more customers. excited for more

marketplace, works strategy it's unique think and the resonates Everywhere. to Our ability the I and move in Teradata

at right the to doing to more ability more and are are that But as flexible we unfold what and go shareholders continue it you we things on hope call. more, but means to very, some we're Teradata. I helping customers thank think want, forward be our and resonating. we those shareholder more there people joining for out are driven Again, of Our they more our about drive achieve importantly, for positive We've people and our things seeing fact value, and very as drive to much just I future Teradata what well. to and be us the excited our continue what here in all going about so

Operator

This may concludes today's conference call now and you disconnect.

Teradata (TDC) 8 Feb 182017 Q4 Earnings call transcript