TDC - Earnings call transcript Q2 2018

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Operator

Good afternoon. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata Second Quarter 2018 Earnings Conference 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. you. Thank Mr. President you Vice conference. begin Investor of Swearingen, may Relations, your Gregg

Gregg Swearingen

guidance. lead Oliver Culhane, afternoon, us who then Vic an Then earnings will joining thanks is activity. Lund, and customer update discuss call our CEO, Good our from for financial provide quarter joining for the and Europe, Operating our results Ratzesberger, Chief XXXX will call second and Teradata's on Mark our Officer, strategy today. will CFO, call. our

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

SEC. While discussing subject and risk these actual financial risks that such they non-GAAP in filings asset statements reflect we On related today's These described our information, expense the XX-Q other be reorganization, cause call, as are impairments, factors items current and capitalized to outlook, our development are special will XX-K, acquisition, results transformation could excludes materially. in including other Teradata's and costs. of items a compensation stock-based software differ costs, and release, which described to number earnings and uncertainties certain with

assumes no I a call or conference update information conference be this turn our concerning will replay result And results on results to in will website. available other non-GAAP items of and obligation to call constant results. A and page our such Vic. now, new this to We Teradata our these information on revise currency measures today revenue release also future of of is as and teradata.com. A earnings over reconciliation provided free other cash non-GAAP the comparisons. the later Investor at as discuss flow GAAP or whether call, included during the will information our

Victor L. Lund

afternoon, everyone. Good

another First, I'd thanks team my express the quarter. for to like Teradata outstanding entire to

in continued Our both received our year-over-year and our a growth and quarter well from revenue demonstrate pipeline. again regions being saw our by strategy We results increase that working is is customers. a this

want our the provide As were our by are Mark driven in to highlight release, earnings we adjusting guidance. I adjustments factors. will noted but detail, greater three

have to than First, previously anticipated. we as customers license are subscription faster stated, moving

In acceptance to stream. XXXX, we see a great our pricing above for subscription The on deployment to us, of subscriptions are half of revenues our sets one-time is new the fact, for and roughly transactions accelerating it of business And continue previous new perpetual predictable trend and flexible subscription. customers' from our as dependable in reflects options, our on news revenue conversion license first us and course guidance. two-thirds more

and I Second double is however. on This strengthening the us, a others. this about U.S. heard dollar impact know already has you've from

cost converted to reduced, in but produced strengthens, this goods our perspective when a revenues when on Our corresponding U.S. get of dollars reduction primarily our and in don't My panic products don't we in favor. sold. straightforward. your is the dollar Don't are the it since moves U.S. are when celebrate

primarily on upfront perpetual our subscription. customers lower-margin our towards purchasing are as revenue Third, weighted software hardware is

rate margin sales the on software. hardware are than the all margins While is lower these reduces it as because of positive hardware impact we revenue, know

am shift into message the that As give the to as Teradata to primarily to my our their see And I Oliver the giving you our impact. I hear as more mentioned earlier, Platform. went, to I from results specifics of are and I encouraging our FX stages starting our our the enthusiasm are and the they that our analytic the time on the consider at comprise and overwhelming directly enterprise large direction. are demonstrate of strategy. fully own but the gratifying changes strong Customers strategic customers in road beginning spending or a transactions global Everywhere much business the visited The are to remains from execution Teradata on prove whether advisor now in Europe, you I found customers wanted very from set customer Teradata is team positive value. rationalize of last tangible my our China, capabilities. and that our our quarter. end, COO naturally different perspective reflect from Mark, journey, will and role, accelerating has well Analytics It to ecosystem, reaction U.S., analytics customers stepped team. in delivering support subscription, Teradata guidance us the Everywhere very as In our elements trusted our we is opportunity adopting how Japan that both hear and the progressing to to I

will with the better the our Japan, to business is Teradata customers analytic Here are data in that work online together. risk to and allows their content a that key affords performance This met of are of Teradata supporting allows Teradata deliver offering team. Teradata in cost expanding with recent our new by benefits automates a its institution better they more my global its it interactions. large deploying China, The time, our scale. Everywhere Europe, to its scale own our accommodate is that while conjunction our backup examples platform. to enables consulting customer environment, to the an Teradata our solid reduced is support forward consumption it In is And which expanding to and a This need. of financial systems strategy our throughout of telco control example few customer multiple on In its timeline that consulting a at as of and move tasks large software. Unity knowing environment more reducing good platform systems as analytic operations to their I same is developing solutions leading solutions in provider a moves number the environment

they a demonstrate are we our is attribute role as examples that other adviser. key to these The all expanding of trusted

more predictable them (XX:XX:XX). both of an business help update us that, outcomes on the to additional on greater business This effective based with earnings Oliver, and And in We drive drive basis should use of ongoing an the use turn call our and revenue our provide technology. better are case. time, involved turn over over new for Teradata. strategy, to some I'll With on our who model will a differentiation, customers

Oliver Ratzesberger

I provide in and are is three today's Vic, good Thanks, emphasize transformation. great takeaways. progress afternoon, will On our everyone. my to pleasure we It update an call, key making on strategic

digital our needs as and market enterprises take the on First, is point world strategy on transformation. addressing around

to in digital is our large and their that cases growth propelling increased is transformation Everywhere differentiated competitive enhance key our validates with our are And takeaways both offering, are adoption These will new strategy strategy offering. Platform I our momentum. customer continues. at our including proof revenue recognize serve customer address digital transformation we the global advantage. Teradata share improve are QX in value, critical Teradata's capabilities drive Americas value. IntelliCloud-as-a-service of why organizations and customers. analytics confirmed regions resonating third, build efficiency, and our our Second, have throughout The direction. use Teradata very mission to of enterprises Teradata strategic real-world And three we digital Analytics some worldwide our to confident new that business is International The and growth. we and acquiring Companies models,

achieve scale analytics addresses customers business strategy of market enterprise this directly high-impact need. helping outcomes at Our through

customers the are of increased We through meeting our needs Everywhere and software Teradata driving of our our offering. consumption strategic

move powerful and of deploy and four to the leadership. extensive No analyze buy the Teradata Everywhere to unmatched help tenets anything, the of our Our anywhere, breadth any analytics technology, other key Teradata flexible our Everywhere customers anytime. options remains way the in provides deployment strategy and analytics leverage With industry. company pricing

to the multiple is large cloud in for moving and operations flexibility that to analytics key and with of move to cloud. Teradata to to Platform. fastest the seeing realize communications advancements the the packaged our Everywhere is manufacturer, offers a cloud. increasingly workbenches with XXX And business enterprise-ready combines In analytics by agency multiple competitive extreme to multinational direct-to-customer perform This strategic the customers product momentum in trusted our as-a-service data analysts the companies the and messaging languages, decisions of or Teradata two Teradata cloud customers and we of cloud. leverage enables operationalize is support made as global is data from their Another Azure government data differentiated consumer scientists Teradata that scalable agile on Analytics Teradata running its goods secure types improve offers and to scale move choice. The public that Everywhere an offers. in One, Teradata quarter, analytics the and top consumer advanced and CPG analytics of to its at a they infrastructure new path will indication tools, both to our personalization providing for on connected are and

by Asset high such analytics Platform. such business new of use emergent weather case utilization data. failures new from addressing analytics insights in they types leveraging occur, before sensors, is brings turn including that Teradata a put, an new twins new This class which service diverse companies as drive as and workloads. digital factories asset Analytics avoid and example we Simply helps problem predict the with are asset disruption of ensure themes new and connected data analytic IoT or geolocation

the of Analytics Teradata number leveraging We have a Platform. customers already

journey customer and improve to the to is customers, of analytics One enhancing adding and thereby testing line subscriber is existing use driving retention to leading world's expansion, growth. line additions cases telcos top

manufacturing added by top score evaluating line. to customer XXX on chain capabilities new volume a Another translate (XX:XX:XX) resource under improved data. its availability. acquisition large expected advance which to accuracy million new scoring crew telcos improved ability millions its models manufacturer records can A performance their through based our dollars and model much its over This greater to XX supply of optimize previous multinational system and is XXx increase can minutes, their faster overall is several and XD more into than customer of in processes customer now generating a analytics

business the of of generate environment. Conference, our sensor Platform to analytical Analytics today's dramatic dynamics. customers this address these allowing Teradata and suited is is Everywhere, data fact, saw customers were outcomes informed Analytics These by results times and is will them Teradata of action. in in attendees to up helping Annual query system XX% is being market in us outstanding. Platform. User and Teradata Teradata our XXX It ideally of In see Analytics received more power Teradata including process illustrate more our Everywhere customer resources, This upcoming well that simplified that Teradata new reductions dramatically how to examples time the Universe the At a new Group Teradata the

explore, will to and real-world an of as and bringing one together for business collaborate receive XXX-plus our impacting around Management analytics Choice has handful to by is the XXXX, created continues toughest have this value users. differentiated thrive. industry and our for Data industry-leader smartest Tech We winner as Solutions transform achieve conference for identified with our of resonate reviews will that strategy the we We them better poised to Las the Gartner the Teradata is outstanding recognized the acknowledgment on to Customer been as solutions momentum in are also is our with of and for of right were minds global the customers Analytics October in Leaders value. based Universe noticed held analytics one an wherewithal mix XXX challenges business that strong providers operate next-generation cloud-based and our innovative world. very provide The enterprises recently be customer XXXX year named learn Thomson recognized. customers of how how into Vegas and of ideas gratifying analytics were showcase by outcomes. only the was to the to Analytics and Reuters, Teradata data and Best in future, one solve as of a industry big Top the It a

the the even data define remain As use enterprise cases the customer point are right we and mission needs on in technology strategy, meet steadfast as thrive. have industry. that on strategy you market we recognitions skilled in I analytic market-leading for and our cloud-based solutions. consultants conviction that and can assure our these to demonstrate, is most a and we We

Now, details. let's on Mark hear the from

Mark A. Culhane

afternoon, everyone. good and Oliver, Thanks,

of on quarterly exceeding results, were Our strong I'm subscription-based, add-on better are to again call expectation increasingly subscription-based. we flow, are full given our in expectations momentum earnings terms EPS, past two-thirds XX% and mix more bookings quarter and mix new transactions, last pleased the for shift to increasing for report for year full once to but free subscription-based seeing the XX% revised we expected only to our XX% bookings be subscription-based cash mix of even revenue, to bookings non-GAAP of bookings XX% our this than Since, continued our our not to importantly, year. the be and of our

perpetual year-end results, We perpetual to a which year-over-year was from ahead In opportunity, software guidance drove total million, which currency. perpetual versus revenue, license-related $XXX license in higher reported terms on-premise was revenue, $XXX customer forecast our XX% subscription our was Perpetual rights in expectation. to and constant million resulted hardware above a $XXX total upgrade their $XX which was perpetual QX revenue a transactions, million. QX, of our our is and revenue in $XXX includes maintenance as expectations range and from XX%, subscription-based of via purchase Recurring our revenue which transactions, than million. a revenue increase of of revenue budgetary had governmental due million

QX hardware related XXX ARR, have the the X% We on $XX our total choosing second the based million margin consulting, year-over-year. negative more was strategy quarter. to transaction. consulting After opportunities, half business focus it during from are on $XXX services. upfront towards we shifted perpetual customers decreased X% buy that of XXXX will is ARR doing In Within approximately to mix which million currency the AR as decline in as well the excluding QX movement we QX ARR less as predominantly increased in as bookings a lower FX, negative subscription-based increased perpetual growth to year implementation are top analytical XXX% year-over-year. our revenue shifts continue subscription in license, year-over-year expect was If revenue related.

ARR subscription license-related As to related our to subscription, upgrade mix our while growing shift continues and bookings we perpetual maintenance see declining. rights

billion, from XXXX, more approximately and $X.X end Our increase year-end an XX% X% of approximately the XXXX. backlog from XXXX, XX% was from QX March XX, than of

our on and $X.XX $X.XX such items in results, reflect EPS basis, was my as identified highlight excludes unless special the earnings release. to it otherwise, the $X.XX, range Teradata's that I items continue clear comments a I QX expense stock-based to in non-GAAP today Before operating which make other want stated results EPS was QX $X.XX, expected and the reported Upside our quarter in than than in guidance to higher quarter. XXXX. by of better second both revenue to the our perpetual compensation driven

XX.X% Gross XXXX. margin. versus our was the of gross of to margin Turning recurring revenue quarter XX% second in

from was As lower which XXXX revenue license and expected, software having than rights. margin QX revenue the recurring lower mix in the maintenance subscription-based carries upgrade more year-over-year perpetual margins related revenue, due to

and to We low range be license revenue hardware margin second compared Gross continue to software our XX.X% of revenue XX.X%. QX XX%s expect margin our in was to in recurring the the XXXX's perpetual half as XXXX. of

due particularly was related sales. predominantly our of hardware software business subscription, as more this shifts margin revenue the lower expected, to to becoming As mix

to We XXXX the improve XXXX. QX half of consulting expect improved X.X% gross be X.X% QX from levels of year the QX and compared perpetual given our margins And revenue both range margins to perpetual QX the forecasted transaction. in in profile in full current revenue for and second to low-XX%s current

second company second this as an full this the QX quarter for XX% the of of margins XX.X% to is XXXX. of The is in the half to clear approximately versus consulting and there seasonal business. of a trend quarter from in We margins area focus to profile improve the of continue was levels we business gross expect improve to the XX.X% the for year. margin Overall year and slightly to the margin second in XXXX expect our better meaningfully be profitability

to We XXXX gross second year. the expect be level, XX% the half margins in for approximately QX from the full improve and

million QX, second or Turning million general increasing to in the quarter $X of and Selling, operating administrative expense $XXX was XXXX. X% from expenses.

to activities half the Teradata development group of marketing increased and XXXX, SG&A in as same second of XXXX $XX annual XXXX QX Research million, was expenses to because versus sales related quarter second and conference half expect increase the Universe, flat October. our in with Analytics XXXX. first QX user our and We QX with expense

X.X% expect QX expenses QX Total in We level. prior as XXXX slight QX year X.X% increased to and million the in in XXXX. XXXX increase period. or margin was X% versus Operating the compared versus $X quarter for QX QX

level to expected as tax the than QX from in for half. to quarter due margin Teradata's largely improve operating lower in was non-GAAP U.S. second expect recently the XXXX this XX.X% tax the of reform. rate second We enacted XX%

to tax fluctuate to rate and depending levels upon approximate year items. tax of expect the effect quarterly full XX% continue our discrete quarterly income We and non-GAAP pre-tax

was subscription. were impact over in primarily The QX time. the company $X as subscription-based CapEx were moving software quarter capitalize of second the mix expenditures capital to Additions driven increased both million net provided $XXX to the to part by increase this flow, was XXXX. the XXXX. contract the second operating of in positive by activities receipt million various mentioned of higher $XX cash ongoing than in transactions the QX working from prior than flow options years. to multi-year The driven as collecting to company's timing transition the the of year Turning in previously. the the customer which million $XX impact items expected capital customers activities in was upfront was by on in cash purchasing Cash Capital as customer doubling more of in payment QX compared and of a less XXXX million better operating the in results period payment government well quarter cash offset $XX in of of partially from by expenditures pay million than

a cash free versus quarter million As million second second in of $XX $XX the quarter flow result, the XXXX. was for

are free million to full free negative cash be free to expected $XXX now expectations We flow $XXX cash to cash flow the flow raising for our with and expected positive. to QX slightly QX year be million be

balance sheet, we had of Turning our as XX, million to XXXX. cash $XXX June of

first we our loan. buy of the repatriated $XXX back and mostly half pay million, During down shares XXXX, to term

remainder purposes. We We shares in of a for in bring portion to XXXX. general approximately buy funds keep corporate these use to total back million to back expect the $XXX plan repatriated and

in During the million repurchasing of million. X.X as bought approximately to for million Teradata currently authorization shares. shares $XX be than stock X.X have second of Year-to-date, maintenance approximately million quarter, the shares seasonality billings. remaining, December deferred or we we bought during was we'll share due was and $XX million which $XXX of XXXX. Total XX, June subscription-based revenue million and repurchase have half XXXX, We transactions $XXX of XX, second $XXX higher million the XXXX, of on increasing opportunistic

guidance. turning Now to

As a earnings which year are I transactions experiencing and will our have at previously the call our increase significant XX% XXXX. expect guidance we beginning bookings, mentioned, last be XX% was our increased from subscription-based to now full of to the original to XX% of in year we movement expectation XX% which

third be to Therefore, bookings. cash anticipated aware, days margins, be flow now to negative XXXX In million all to free $X.XX revenue addition, in and revenue foreign full QX now billion, and by revenue, million. in EPS, be we ago. these billion revenue year expect $XXX of expected subscription-based X currency total particularly estimated $X.XX to we quarter movements XXXX with we expect XXXX increase profit, to $XXX our in significant are are Because impacted XX factors, approximately X.X-point than expected reported to operating and you two we as seen less have the

the range XXX is QX. expected now approximately our revenue EPS and result perpetual average This shares full And $X.XX. the full $X.XX be million lower is approximately hardware assumptions weighted a are perpetual year to due XXXX shares XXX based outstanding to average million. weighted QX new year of estimating $X.XX revenue on non-GAAP to outstanding As to non-GAAP in based expected mix margins to to predominantly related, we be of these now EPS be on $X.XX of

During move location of corporate headquarters announced quarter, we our the Dayton our the San closure and of to Diego.

estimate to will as is of which timing the more We provide flow. separately the current majority versus million call expense, closure impact be cash $XX million intend of information will $XX proceed. XXXX the approximately this we XXXX to on expense in and Our of out

We full non-GAAP continue year to approximately to XXXX our effective be expect rate XX%. tax

be expect our also approximately We QX to rate effective tax XX%.

on the I'd you provide to year full metrics. update an like Now following for expectations key with our

expect and Adjusted billion ARR, XX% in X% prior mind on movement, our growth we transaction X% in the versus revenue movement recurring of for to of a negative grow subscription, adjusting went for perpetual $X.X the terms currency after impact QX currency in approximately XXXX. XXXX. is we negative ARR. Keep forecast In as over currency expect government that after

faster mix The XXXX the months left we move While now the half of amortize we move And revenue. bookings growth, structured to a to to in to second expect to limited not previously transactions. subscription XX% expected, bookings new given XX% significant XXXX contribution mix our subscription-based will as than faster is recurring be to there expect positively impact in subscription to XXXX. XXXX revenue

In the increase this we current faster customers of is beyond our Teradata, could consumption their extent during financial the than is our revised results. that, that for they and future recently And of operator, questions. This the had options impacted. percentage fantastic its company positive year, with our our year of demonstrating subscription extremely financial we to to expectation ready have strategy as results the take be to are the even working. expectation, increases QX we negatively mix course As shifting are and a said current our closing, our

Operator

question from your line America. the Mohan from of comes And Wamsi of first Bank

open. is line Your

Wamsi Mohan

with the this and driven I overachievement maybe guide? afternoon. your implies unique lower XQ a address million in making to slightly quite XQ, together second When Can subscription you that How attribute that Mark and $XX the for government. put you're and it due the in maybe it's the lowered shift is for tight is $XX much specifically to (XX:XX) It of would hurt you back by what or XQ, know so. thank that from for a revenue so organic in the deal by the demand? or net like is looks it half, changes million Yes, bit half assumptions you in Good you. or sharply FX

Mark A. Culhane

Yeah. the or thanks. is is shift in Wamsi. so movement demand. to here subscription. all Well, Thanks, There to due no demand It in reduction

We perpetual to significant down in expecting of are move the upward what decline impact XX is the our biggest subscription total back revenue interest ago, customers' half we in of given a the why in our strategy. the given year year That significant from year-over-year. our revenue is strong days thought

Wamsi Mohan

Thank applications of we customers sort you. mentioned Thank other sense also some Teradata you. sense Give some if on to but could, or to AWS. there? Azure, of Could of you you And AWS? what I give that Oliver, us being are heard us customers moves Okay. willing run examples

Oliver Ratzesberger

cloud you, cloud. of of general, deployment cases data. the strategy well we to customers the new public that cloud. the we or it's simply Wamsi. are went Yeah. these are think adopted de-risk of and Azure, in These part existing cases being new had choose customers Everywhere what in hybrid cloud. can call ability Teradata to by use to. form two our includes on that as are use on public we And are terms testing types lot on where are customers their What customers and a Thank Azure into in cloud internal their that with both In go and type see we applications part, they AWS, decisions of that against In deployment is as public of today's seeing callouts significant moving were our the

Wamsi Mohan

you. Thank

Operator

And your Stanley. Katy from the line from of Huberty question comes next Morgan

line is open. Your

Kathryn Lynn Huberty

Thank end. Two you. questions Good afternoon. from my

actually in of given really to happen. flow is The potentially see, that cash stabilize about talked expected now the subscriptions, to move have XXXX? from could which free about I subscriptions a think, get three-quarters to could setup when for we first that, we great is to bookings we've

next lumpiness of think a Just to that's is that, then distraction hardware a curious the successful to whether secondly, subscription. possibility you bit transition year? And a

just other in that on bigger-picture software-only hardware model so, Thank some software towards question, companies recent see have the the past? company the Teradata move its you. long a successfully is we it ware, over delivers necessary branded done or And could term, a

Mark A. Culhane

This I'll is talk one. bit Oliver first the about Mark. second then Katy. the Sure, and take one a have I'll

possible free customers' the in see a yes, So, faster next yes, end full the And through in clearly strong year grows is – up into subscription year interest to moving strategy flow it our given this that. we move We'll come the of and interest is that but where cash stabilizes, out year. that's definitely possibility.

Oliver Ratzesberger

versus software. On the regarding second part of hardware Katy, that

other time – them I as software but of most something plus separation many are an customer targeting already for aren't see and top strategy – important This that as the is Teradata then a the hardware, this choice a be customers important, part first specialized most pick and for to of their having is centers, cloud. to say that the option. Teradata and options think feel because in that are portfolio valuing of to we Everywhere, last big relevant that between unique as of that choice XXX really and critical The available time a offer the of big a that the model. that move them customers we fact everywhere, of us around and appropriate it their discussed are really option part that own options not flexibility, is Everywhere gives hardware, actually deploy in portions we our the way that they it this to gives strategy We business any customers telling deploy our differentiator increased strategy and public data their cloud, that our or own are hardware absolutely is of

strategy. see foreseeable for the so of our we part this And as future

that's believe a of a what and customers we're part we giving of Of to cloud where to course, ultimately software our driving focus want they choice big deploy, has our strategy. is shifted picking the but hybrid

Kathryn Lynn Huberty

Thank you.

Operator

comes Reback from line Stifel. Your from question of next the Brad

is line open. Your

Brad Robert Reback

much. when AWS perspective, it Vic to does From or a Teradata, you gross Great. Thanks very per Azure profit versus previously on-prem? someone an Thanks. higher-level or query think Oliver, look if how deploys about

Victor L. Lund

if to just to different better, cloud your like questions query you would the understand understand public per to is a compared customer deployments? profit So, runs on-prem in the

Brad Robert Reback

Exactly.

Victor L. Lund

So...

Brad Robert Reback

or that less? if mean, money of amount is I same

Victor L. Lund

the queries. So, profit an deployment options the very, because the other TCore are seeing into general, we're is go and can't normalize from XXXs the top or In across first different important deployments performance or a profit cost similar highly is workloads. query software seeing, very per But what workload. This different to what the that, across really that's options. high demanding that we're per these deployment seeing profit potential on query general, In similar query query than Teradata between is or is profit I we don't customer's dependent calculate thing within our the we're for we options, is – that strategy. by necessarily platforms, why Everywhere metric obviously is us

these fractions options of Everywhere part tens on do And we that's know of we at often us, deployment have. these at our from a strategy. can queries queries that day, of month platforms. a pennies Teradata really billions We know you millions deliver As we of core all of that a

these deployment business derisks model, ultimately decisions. deployment that believe for our single customers' of choice us deployment we the like options. us, we the one of every a And from for of So

Brad Robert Reback

Great. very Thanks much.

Operator

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

Your line is open.

Raimo Lenschow

If mean, like kind wondering. I in can dynamic hardwares understand subscription a you there? you And just comments drive help to is you customer only earlier me? Like it to Oliver. or almost of theory, trying people can more choice I'm to subscription, or quick because for customer it. influence have one software go choice? get that you help can follow-up. you I on – I'm perpetual. Hey. like or kind handle with that it's is just full good It's a the is the just it Thanks. just Hey, of to toward around

Oliver Ratzesberger

We question. multiple this influencing great are a Raimo, ways. absolutely through Yeah.

portfolio, was First customers year. all, they're step introduced Move our that of on Anytime, complete if the we subscription. can get only first including last Teradata the the That Everywhere

incentives We've are first new to earlier on go them target for flexibility those subscription-based a so be that sell customers that at we over why are Teradata, said what our that top with the our and to fixed together, subscription and rapidly is base we model, perpetual. every others choice. we that customer customers are we are that history is need. government a subscriptions mix our capabilities, given absolutely sell understand solution are factors subscription together they you're offering all in the of want told budgets in these spend new, have for coming coming also best go year new as we part also to they point As to that's the customers market like Having really of the sales this subscription seeing and possible the for have and to so, will in and on in these sure the agencies future. is to increasing you incenting deploying percentage and we have goal XXX time as customer incentives to time certain in make And that that we the there flexible

Raimo Lenschow

in But is we for enough quick the more that the or recurring Is the is the there that other Mark, think that moving – the of there big I the get start percentage what getting of do subscription higher then in moving your towards a follow-up line. question, see And Mark. parts XXXX? you – only back point in bookings, but subscription of that already are year revenue Okay. like to needle? obviously in the as well. At kind pure obviously

Mark A. Culhane

Yeah, three-year and it in haven't It's not our that. in model update that Analyst year, We'll – it we'll half XXXX where evaluate will we our take heading Day a this broken that look back of be see see as the later we this year. at we out. in

Raimo Lenschow

Okay.

Mark A. Culhane

license, fast we're largely decline upgrade our clearly rates with base. the faster. traditional But perpetual because At related growing and Yeah. – focused install maintenance on

Raimo Lenschow

Yeah.

you. perfect. That nice be you. to Okay, Thank Thank hear. would

Operator

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

is Your line open.

J. Derrick Wood

growth up probably in strongest deal in over and saw the And helped obviously I potentially four perpetual the outpacing. now Americas but the and international Thanks. years, with it's caught Great. We growth it's think. it, really converged

it maturity And have you the that I a is demand, could what it is follow-up. wondering Just is if model? of it you're quick that to flesh And out, sales productivity, then, compare then seeing internationally.

Victor L. Lund

Vic. This is Yeah.

more was think come the disruption time came when the little a think And to strategy. around starting seeing around Americas we we field part in and had made in that than it's the our are in it, driven that and in teams of at We strengthening of we we in internationally change I had I was part U.S. better. the

U.S., as probably I the the behind to to interest But level that's organization interest primary we in would starting pay it. I the And the think at a starting say, are thing the is engagement higher off globally. see particularly we're driving well. in months, lot in think that's getting a six more I the last and

Mark A. Culhane

one well, perpetual And not referenced Mark. we an just was comment this transaction, Americas' transaction. The international is that transaction as an Derrick,

J. Derrick Wood

Okay. And XX% then, in of number. and Mark, was bookings that there's a said ratable perpetuals perpetual big and bookings you obviously

pretty strong you So overall bookings that a suggests had number.

way out also was directional on XX% You equivalent some like growth color? at to an perpetual a us quantify in growth a give least Is or backlog. or basis, called what ACB there

Mark A. Culhane

QX things of QX, perpetual I've significantly what the And an perpetual given I basis. subscription decline to bookings year, we we calculate had quarter. based robust the a forecast across our but mean, subscription sort don't year-over-year on we I over half of as extremely bookings see on any in Yeah, longer, back clearly the equivalent said, expect

J. Derrick Wood

Thanks. helpful. That's Okay.

Operator

from Goldman of next question Your comes Hulsing line Sachs. Jesse from the

line is open. Your

Jesse Hulsing

taking for guys. my Thanks Hey question. two. I have

first it added something think housekeeping million The because just $XX I like increased number? in question. dollar But or constant quarter-over-quarter? billion you the you Mark, absolute ARR said one currency. was what $X.XXX growth that Was X% is a think I

Mark A. Culhane

Yeah, we in a said that billion, bit it made was X% the after FX ARR. year-over-year and I comments the is total on $X.X over number

Jesse Hulsing

then, but a a workloads in at moving are to there's cloud that you have cloud, use other to Got migrating? you. for early some your that question infrastructure at customers with or set I essentially, around options. are move look Oliver. started Are are customers you if the Teradata different So customer, that releases out these for you called starting to these guess you. have And existing customers? those cases just Thank looked of to the cloud see traction newer

Oliver Ratzesberger

we're these that mix when examples that to in use thanks. new advanced with Yes, moving And functions being and look it's new Yeah. of we Jesse, originated cases both at use to a in obviously especially there's by customers. customers like also existing seeing there. that cloud be are and data started really sensor It's they're cloud flexibility gave some for of data getting the But and cases the types some customers. the that part analytical utilized we our of of this. forms

clearly that they're much are around we when us making. it's platform complicated, from Teradata moving many to single also the lot top the the that's early like cloud instantiating announced too Teradata looking Analytics we have of tell we on the infrastructure, many Teradata systems systems, integrate the Everywhere too into existing hard is getting a Teradata and are and of on Platform too that gotten And it customers parts, technology have of interest their or the are cloud what world that choice that Platform. seeing existing seen a validation we different Analytics a their for customers to Moving too a

public new And in choices. to Teradata new other so, are new functions, integrations, deployment cases are that as some capabilities customers have adopting towards addition use out and those of the we cloud rolled analytical Everywhere that absolutely in

Jesse Hulsing

That's clarification X% what growth reported the Oliver. question, rate constant was And one quick super. the at Mark. of ARR? currency, If Thanks, was

Mark A. Culhane

Yeah, you're currency, in constant reported. bit a It right. was in X% higher

Jesse Hulsing

you. Thank

Operator

question line Summit Group. comes the from Insights next from of Your Srini Nandury

line open. Your is

Srini Nandury

you for you and the please you, if your question. what competition guys? talk big Thank my with may. in I for to Can do talk about do a right. competition about compete you use they how Oliver, general All taking and you question picture

Oliver Ratzesberger

Competition a – market is competition been yes, topic having us. has of us. said for couple here. topic Teradata Well, things in a a always so, for

for cloud running First on our out the and the on positioned hardware – options, hardware, the The the options, our all, strategy our choice compared that is uniquely to analytics. in running we fairly private there, are seeing public go-to-market is unique compared competition. competition to their strategy stack of Teradata Everywhere unique our of industry multiple cloud are own the

comes world cases, concurrency, the Having the these out there there every on the out use there's of differentiating billions queries competitors and with at out there further the been the of and of know some competition competition to the now simple wins. that differentiate the that target especially straight largest that run, said are need the built no analytical that can and learning, into they're as other match yes, billions queries and the they machine to reality, the use is as so, cases, there, be it top scale. In platform, complex concurrency, us queries that advertised small when often hallmark big high us, run deep to Platform extending Analytics into further we Our workloads, to departmental of Teradata us in new the are always no enterprises from month field. advanced fact learning in platform models XXX, currently of platforms we we have

are And competition so, we watching very closely.

that. over can companies Teradata I we that And out the systems complexities at do of a have of grown seeing strong tried scale they've you're because part that interest and they are lot out solutions overall, last said very solutions the for earlier, unique obviously there trying consolidate part, see facing different at out technology of need the so seeing But that that to has it is years, difficult what platform with departmental to there. really the scale, realizing silos things their is and many operate customers there and very of couple and big one customer many of in that are various are in so out in many they a And they've silos. they that some is made infrastructures seeing have brought win we business very Teradata. We startups to for there companies as hard

Srini Nandury

you. Thank

Operator

have enough more time caller. one We for

Your last Wells Phil question Winslow comes from the Fargo. line of from

is line open. Your

Philip Winslow

sweeps called through what we the Thanks Obviously, my starting of cloud sweeps to you this you that think used maybe about of more talk the taking for sort center some just cloud coming that mean, happening and Are pretty sweeping of of also again, here? now, of there your about? cloud. sweep out dynamics you wins Hey, Floor I data to guess, question. see you But are floor of both or of seeing on-premise. we size business transaction? like the call do I kind sizable into sort how here also the kind sort you them for impacting guys. and are other and

Oliver Ratzesberger

sweeps. So, interesting them that you call cloud

over of stack started that some increase latest last In seeing questions into the because are to already that latest sweep phenomenal versions. answer Teradata make seeing it's customers want we or with made they the what to overall we operating demand that cloud First for data lot it's deployed capabilities have Teradata decisions, lot no, of scientists the as and all and technology have to we adopt the the their Everywhere, the that a we're really day. of that we platforms customer and and in that run have easier them particular, and results to improvements Everywhere demand requires of has get they're Analytics several our Platform drive dynamic customers for requires it's they operate these integrating a two and them integrated customers our business is of platform it because technologies, to doing their technology every that And are de-risking forefront Everywhere Teradata interest – do technology for sweep of they floor at out What look how all, a ultimately there's Teradata stack, that believe results that of there. pent-up of business we seeing the SQL that the don't a we the of and years from here. driving

wish And to the the the Everywhere technologies yes, floor – the so it to the our to, some Platform course, and be of create and leads leverage at demand it's this customers sweeps is or of flexibility these and of Teradata ultimately sweets, but forefront to starting to of analytical ability cloud elasticity, make the our capabilities.

Philip Winslow

Yeah, a (XX:XX). lot. Thanks right. use All to if you want cloud

Victor L. Lund

think for customers. joining our All right. and strategy are Thank call answering for look so traction going, Everyone, getting much We're interest to forward And your across our big you we're aligned. our and I questions thank you base today. we well your about from nice excited XX where customer days now.

Operator

concludes conference call. This today's

may disconnect. You now

Teradata (TDC) 2 Aug 182018 Q2 Earnings call transcript