TDC - Earnings call transcript Q2 2019

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Operator

Good afternoon ladies and gentlemen. My name is Julie and I will be your conference operator today. I would like to welcome everyone to the Q2 2019 Teradata 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. Instructions] [Operator

would Finance turn Elsheshai. and ahead. I to call Please like of SVP Investor now that, the to over go With Relations, Nabil

Nabil Elsheshai

afternoon CFO, will lead quarter call today results. XXXX Teradata's Good Mark and then our to Culhane, discuss by Oliver financial Teradata's President Officer call. will Ratzesberger, second Executive Chief followed welcome and who earnings Teradata's our

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

number of they materially. While a with these described are our cause and could filings outlook, may These XX-K, SEC. and XX-Q are differ and statements subject risks actual reflect current factors in to that Teradata's the other uncertainties to results risk

compensation On will impairments, items financial discussing special which release, expense described today's in non-GAAP our stock-based software acquisition, capitalized certain asset and be cost, we reorganization related earnings other excludes call, costs. information, development including and as such items

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

GAAP will be non-GAAP at assumes investor.teradata.com. A included revise conference release, accessible obligation is of these results which in replay conference our to of is Teradata concerning information our information available our on or new call A this this measures a update call, future later provided during as result results. website. the whether to reconciliation of other earnings no and or results our today information

And over will Oliver. I now, turn call the to

Oliver Ratzesberger

execute on our an to to pleased update Good and we provide I'm are business strategy. strides on afternoon continuing the everyone. our make as positive we

analytics to platform Vantage world's leading scale. companies We competitive for are with at Analytics achieve the best-in-class uniquely data advantage our real-time intelligence helping

positioned doing no byproduct must businesses environment. to a in guide digital is our to uniquely environment. enable foundation. are excel Data this of analytics they that longer customers are Everyone rather is its digital at in and Teradata aware operate a business; today

and why keys customer focus our available results. on-prem Our then we key call, I and and then relentless you, are unmatched in technology today's success our win. will cover three to Mark multi-cloud, on On with will share cloud hybrid financial takeaways

advancing inside are cloud in as And we in a analytics value offers. the powerful and and provide increased today, interest First, I seeing cloud Teradata answers of cloud provides A same on-premises. number the examples. will our our is great position

Second, we are to software revenue continuing a our subscription-based strong driven transformation business. recurring

tomorrow. value recognizing Advantage customers Third, data the that the Analytics our from far old-school beyond making decision environment to the an autonomous to aligns And in warehousing and essential are spot. this capability. ecosystem where And investing comes needs is of is that we're today an sweet

start the Let's with cloud.

hybrid cloud. While and to important businesses, both to more more on-prem seeing beginning we move and enterprises are environments to cloud remain the

that first we aware cloud new and building with and we AWS in Azure making out offers are adding talent all are our big You cloud quarter. capabilities, investments, the announced

While we progress. by still have work to our do, we are encouraged

the has while requires with and can we scale what managing companies is need, analytics the start-ups require that complex to And run cloud-only have that There a deliver. of trying large enterprises in the environment and provided have their Teradata. of also cloud that infrastructure, cloud and realized power their flexibility are over realized robust that exactly performance scale the the engine deliver and need, hype they they at they in

yet data analyze information the throwing creating players instead complexity, cost still competitive instances to failing at problem In the required speed this world to multiple also see efficient flows. situations, cloud-only and we spin-up of at of in having digital scalability

insights and enterprise. points of limited only small can across scales creating billions data thousands service yet the to numbers of that set players real-time These users, require a cloud-only users customers queries, running solution of of

platform taking the where scalable and deliver see analytics on providing and is overhyped and validated. their and the gain environments cloud. knowledge to we Teradata cloud. this and fail We The providing in players now only same limited claims We're are are in learning capability more still efficient companies, cloud-only the simpler same players the capabilities cloud-only where scale capability the the delivering how strengths more from instances largest and the in to proven most even with are are still

data data their together number I'd Microsoft analytics. to development, company for cloud like of running and exploration, in company, smarter on sensor with chosen from mining insights from a Teradata a management, for well on volumes to continuous share planning, data. needed the has comes a advanced is And its Azure, delivering to wins. wins will of asset YPF, up deliver predictive maintenance, data Azure Teradata scale to The our IoT investing our Vantage leading Vantage which sensor international energy platform partner leading standardized well bringing be and YPF strategic keep well-control. gain

data has and Tabcorp Australia to analytics from offerings. a Corp., use diversified a as world-class with improvement partnered public cloud group gambling us its Vantage transform to

better that scalability added to its analytics AWS provided hospitality to after competition. cloud than Snowflake, on customer commitments. its the Teradata ability manage customer customer company global The and better public determines A on the Teradata failed set, finance deliver and

for North adding capabilities a extend this always-on airline Vantage to new is American platform its Azure in the top supporting business enterprise. cloud A on continuity

subscription cover The is second to business. point I want our

to the strong subscription to focus achieved positively bookings responding model. transition transition software a business we we customers subscription-based shift their In with production continue of QX, to and environments XX% cloud, centric to bookings. to of more customers Teradata see As

is business. a of maintain recurring of more revenue, important it and lasting In are build that to customer the relationships world lifeblood ever the

will on focusing to efforts success grow. their our our We focus on have a only placing of this and traditional continue customers are the needs and long-standing

including our in subscription-based June, and growth revenue teams through Chief the here, models. delivered sales aligns brought via in Scott relationships global Scott's and of in Revenue success as guided business customer our To cloud Brown our we to He lasting deepen maintaining transformation, perfectly has customer skills objectives. and experience with Officer. wealth led business consistent creating consulting organizations

for announced joins where PTC, great leadership this Kathy Resources she to as another we was addition our responsible guiding in on depth very team will and executed for I excited from Teradata. we experience business prospectives and successful evolution bring about Officer. as Human to am Cullen-Cote, both us transformation. our Kathy the of Chief the brought And week, just Scott company outside as cultural She

the today, of the ever Looking facing digital at from environment coming organizations growing transformation not information stopping. is stream

governing must data is win. and to require up fact, scale the the the Organizations a with C to issue. answers of In compete suite and to keeping they this need and automate gathering analysis at they data now drive

Teradata good at have enterprises they we other our gone Vantage, vendor they this work beyond Teradata the large warehousing global is the any customers with, and longer leverage of need forefront require. data their enough. The across something more. This powering means now market in the warehousing Unlike world of And traditional data at revolution. no with traditional scale every analytics, the infrastructure with to we today, prebuild is

at and And delivering the value this we are best scale. very

warehousing progressed the likes Snowflake, of have cloud of beyond startups. the We many and Oracle data

become Here learning are our Internet a new and agency selected in Asia-Pacific region. few Vantage order examples. the in has travel The largest machine Teradata leading online the to Japan company capabilities e-commerce and in

with personalized further share. to used experience of be its both the goal customer sales and with digital expand offers, will suite Vantage increasing full more transformation the and The market

Teradata its customer bank its to and key regulations. help and an efficient to on scalable expanding improving and digital transformation platform for risk around environment long-standing its a Teradata China is initiatives journey, compliance The finance efforts. relies Everbright advance provide Vantage high-performance Bank, customer management, Teradata

in Vantage success. footprint its bank Teradata These to investment expanded been financial examples to order has consolidate that Teradata. cases to Vantage a and just company competitive and applications examples multinational from are growing simplify our A use new support from on migrated

cloud, because with the businesses' answers our ready be address the delivering benefit in unparalleled same We provide to a global strengths multi-cloud, that future, tremendous needs the the or on-premises. capabilities of is are our to This customers. and we to hybrid winning

I emphasize key closing, want In to my takeaways.

continue steadily Teradata platform and business our will market-leading software position in take analytics First, the our deliver cloud. and advancing outcomes to is we cloud

strong and a success of adoption our building continuing upon business our continued our Second, to drive strong of we're software. customer transition model heritage subscription-based to

comes data them that analytics Third, on-prem. from the and cloud customers investing ecosystem recognizing in traditional in takes the value both that are beyond warehousing, our Vantage

will Mark financial results. the us through walk now

Mark Culhane

and operating margin solid Oliver QX, solid delivered in everyone. performance. We and a quarter afternoon, by growth Thanks good highlighted recurring revenue and ARR

As Oliver progress bookings make stated, new of and our on were add-on our continue we XX% subscription-based to transition. as

We XX% our or continue be year for of subscription-based. the to expect to bookings more

hardware at reported purchases. our XX% $XXX of recurring includes revenue a came from and perpetual in consisted of results, revenue $XX in In rights, was which of maintenance and subscription-based X%, Perpetual year-over-year predominantly perpetual increase in upgrade QX, which license-related million, revenue, currency. million constant terms transactions

Consulting as QX $XXX in and currency expected. in revenue, XXXX which XX% decreased was QX from million constant XX%

solutions strategy the our is via consulting on consulting resources and focus uniquely not value the Our to are Teradata-related. enabled significantly engagements customer that reducing are by Teradata we that engagements platform, drive

in ARR increased grew QX. currency. the XX% million $XX constant of and from Year-over-year, XX% end ARR

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

from from QX X% up and was billion, XX% $X.X backlog approximately of XXXX QX XXXX. Our up

affect growth up versus only our is our by that this added the past. are three-year to in deals will what for important team durations compensating deals It on we in change, to to we shorter backlog up XXXX in help deal To our note impacted five-year sales desire be intended versus XXXX.

be calculated bookings XXXX. until growth deal of and business likely using durations not result, a backlog normalize, backlog will in trends indicator a As good

stock-based our Before that reflect it I few items non-GAAP in otherwise, as I identified our of expense excludes want unless earnings such elements which stated compensation release. continue results and results, highlight today make comments my a basis, on items QX special to operating Teradata's a key other to clear

in to revenue XX% our XXXX. versus margin Turning margin, gross was QX gross of XX% recurring

margin QX was a revenue, the a of recurring lower XXXX subscription-based in than mix As maintenance and rights having expected, upgrade which revenue hardware license-related rentals margin lower more result from in embedded our as software due carried perpetual business. year-over-year revenue subscription to

the to recurring year. in continue to the revenue We be our for expect full XXs low margin

our margin QX software license XX.X% and Gross and of compared to was revenue perpetual XX.X%. hardware XXXX,

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

in fluctuations. negatively regions In hedge we addition, on transactions where cannot intercompany swings currency by margin gross was our hardware currency impacted

We have hardware-related, these much of the smaller impacts predominantly revenue now gross has the fluctuations margins. total these become margins an had impact gross past, that affecting on our but currency has perpetual perpetual and currency in impact hardware outsized

the second the quarter result hardware of And second moves, margins for versus be we XX.X% overall currency the in mid-XXs to of quarter in these a expect in year. XX.X% As was full the margin now XXXX. perpetual gross

of mix higher margin a expansion a The revenue consulting percentage was and offset lower improved which margin. recurring perpetual of result margins,

expect to gross margin year. the overall points for be XXX to continue We basis up to XXX

to This margin our our was expenses target focus the the million versus actions QX market. operating year enterprise in XXXX. XX.X% was to organization Operating driven on operating or versus by commercial X.X% Turning decline $XX expenses, declined prior align our X% in period. prior to and total quarter go-to-market for QX

We continue basis expand margins XXX year-over-year. operating roughly to expect points to

was Teradata's resulted for quarter discrete Court than charge the second non-GAAP tax contingency. a that during Ninth in rate quarter Circuit a due Appeals recorded of expected of to XX.X% tax the ruling for a tax higher

our full XX% the to continue rate year. to tax for expect approximate we However, year

restructuring including cash on $XX for expenditures capitalized additions flow, cash $XX XXXX, activities net free resulted We cash to provided operating spent payments. was by quarter. software, $XX to million the ongoing million in total capital QX million $XX million and of which in Turning flow in

of and and company's the timing transition billings may less a model comparisons than subscription-based collections be therefore, reminder, to prior years. a meaningful cash impacts As in year-over-year the

we to comparisons of by cash large QX the earnings on payment transaction QX call. addition, are which last received year year's discussed a In multiyear in skewed prior XXXX,

shares second Teradata have million were and X.X aggressive the we million. shares. $XXX we During our bought quarter, million $XXX for stock million bought stock approximately Year-to-date, buyback or of in X.X approximately

now We In has be million addition, authorization. opportunistic continue share to share $XXX our Board of an incremental repurchasing $XXX we'll of repurchase million have and authorization, shares. our authorized repurchase in

transactions of remains to include Turning increase headwind. Full percentage XX% XX% mentioned, and or continue range to to recurring Both revenue the subscription-based one QX currency to guidance, And of our growth unchanged previously to our to XX%. bookings. year we from comprise full our XX% guidance of two points I XX% update. which more of as ARR year expect in will

is revenue consulting million XXXX company perpetual And to business Consistent $XXX as to its to prior is decline range with on to of consulting focus $XXX services. million high the XXXX expectations, XX% higher at revenue value-add versus expected expected consulting XXXX. realigns from the approximately the end decline

GAAP share stock-based to $X.XX continues and to Teradata full special earnings $X.XX earnings a basis, $X.XX company share range. non-GAAP the which excludes the XXXX $X.XX range. year to be expects the per in items, per to expense expect On other compensation in

Recurring in expected $X.XX the revenue is to is be the XXXX to range. in XXXX share the be $X.XX to third range. expected to in quarter $XXX $XXX of million per GAAP quarter the earnings million third in

Third quarter non-GAAP to compensation $X.XX stock-based earnings range. to share be expense items $X.XX special expected other in excluding per the and is

which related continue And be to free to million expect we to of restructuring million $XXX the in cash flow our actions. finally, to $XXX payments range, cash the includes impact

their continue Teradata. shift increase consumption to closing, solid subscription-based In and have we of customers and our options aggressively towards a QX,

to And take with we ready are questions. that, operator,

Operator

now Instructions] the begin [Operator question-and-answer will We session.

with Your your Please is America. line Wamsi ahead, of go first open. question comes Mohan Bank from

Wamsi Mohan

Yes, thank you.

the I out know I you but your a -- you you could called scheme revenue And estimates going is into trajectory headwinds you quick that address FX But revenues. call -- going also just below of apologies some I that somewhat overall recurring quarter. into joined our I Sorry, comps for the follow-up. a if in of the late your that easier you're guide you quarter. little are just next facing if And had address have wondering really I slightly this. next but for recurring was

Mark Culhane

like Yes, in it's really the guide Yes, to QX, compared QX so this our is timing Mark. have also for QX we expect acceleration prior good, just Yes. just QX is as but year we deals. we Wamsi, of this -- for saw well. a in

So, to then it's when the start timing really when do and deals they the of happen revenue. just due flow to

Wamsi Mohan

a you Okay, It's maintaining actually are lot. much this guys that guide. weaker impressive environment great. overall Thanks macro pretty in your

competitive got on follow-up, And higher, into bit really Vantage benefits not little any sort look at did the is you've folks in talk are given it you And at over were standpoint in feedback translating list trying And on of the of can a quarter? price rates there? more a what customer into who what to sort yet? moving it's that's my ASP a from Or -- the As your what to way any did is faster all all? that Vantage you see you. you translating subscription most win Thank -- over?

Oliver Ratzesberger

Okay.

just So going together last just platform bringing to remind, Vantage part of October our warehousing released that are beyond data strategy year. capabilities really what Analytics is.

So of Teradata previously together new in time machine portfolio. bringing the learning, and did is really broadening there the enterprise in IoT, series, capabilities, this the data is not that application features have advanced

other also had sets of it's in that the And combining past. feature products the we

a And lot so see in we of interest Vantage.

we fastest-adopted the to momentum in is that fact, seeing that are product Teradata And continues positive release time. very Vantage there. some quite be In in out

Vantage analytics in given take digital and examples given we cloud, in customers of do financial today Several data, also with customers to today's data to a traditional where of at bring adopting examples their have IoT that but are together the of advanced and call with to transformation really digital drive scale. the new examples couple it. We need are

And as are adoption, market do product uptick I seeing why on slight there. actually have our in And that of customers the in features see history the not pricing because release are seeing and our the we We extra Vantage said, so that. interest. we're we questioning good target is all this where we big is that fastest-adopted in on

lot this with, is going a a say, they In capabilities. than cheaper having and or interest enjoying are to product competitor let's to on two of get order package in then to three products -- similar fact, other

from it so very comes recently had favorably they of to a customer the alternatives us when Vantage in And the TCO cloud perspective, Teradata a in that to compare cloud. some and have comes just

change a we Hadoop globally really is prior see that competition what What the is -- same coming and less quarter. are do lot we hitting out So, in there the and that hard same out seeing saw really, we across no competitors there, now.

cloud, general, Good Vantage the shift more lot to of so And Everywhere, everywhere. momentum. for interest Teradata a in there

Wamsi Mohan

the for Thanks color Oliver.

Operator

ahead, Company. Derrick comes question next line go is from from Your Wood Cowen your Please open. and

Derrick Wood

feeling close Great. the Thank getting you ARR. cycles you're rates? and and your And close nice how on job net Can on us rebound able are on new deals? you to with track give and color you back whether about some slip sale

just anything positive a that see why out, to come but maybe Mark, maybe given revenue, it linearity wondering net to kind more just the little impact new to maybe was we'd if thought of through And more. or recurring bit due call I was there else FX, didn't ARR

Mark Culhane

Yes.

we've signed customers with QX. agreements in So, yes, those

In QX, and timing really. there. Nothing that linearity -- terms specific of it's the to of flow through starts when just timing

Derrick Wood

maybe And doing is on definitely in in of -- of cloud. there interest What out more a you cloud adoption your a seems you're you seeing lift guys help terms Azure? to Greenfield? it I'd business more or in Okay. Is bit is you're the it like are because the about AWS And stepping the touch facilitate stones are shift from the more common enthusiasm what it footprints seeing existing of what customers? through and

Oliver Ratzesberger

seeing as have commercial the mix that we our general, a this said, but on interest an we in It's year. uptick also market our customer focus In in and includes are that put more cloud segments you of that. target mega-data, have

that workloads we way customers They're depth are more moved depth trying, seeing -- the past have testing was production there. out The certainly systems. in test

new workloads the expanding. growing that added are them and on platforms. lift of or to shifts being some workloads Usually, being yes, see and doing we So existing

emphasis done -- of and security, is sure a of sensible to a are paramount in on some the way space, that of security they the the time a extra base. especially to see we unnecessary that that lot in a making our customers general, is concern risks, In move making spend on mega-data in lot cloud themselves exposing customer sure

and we to driving is and enterprise to as our experience more that But in them interest to are certainly are we move commercial as cloud. mega-data working with that, applying

away we are the quite customers there know have And honestly. in that certainly cloud uptick is in the quite Teradata, not world of seeing that part, superior an what, And also out cheaper out increase from the on-premise is disappointed, that's other base. there tested and offerings and saying, are offerings coming you combined but customer us cloud, also just and interest the than competing in the for

Derrick Wood

Great. the Thanks color. for

Operator

comes next open. question go Your Huberty is line your Morgan from from Katy ahead, Stanley. Please

Katy Huberty

around Good you. Thank hardware macro the demand to impact as enterprise hardware capital went conversations technology weaker quarter, are afternoon. second companies and spending talking about -- plans through the they Other the year. for starting

Did in of immune? June? business think you in this quarter may face early that would you the headwind? in not, you're Or see July And Thanks. your any do why weakness current month that if the suggest

Oliver Ratzesberger

such somewhat there that, But see from a -- our the or software-subscription our with No, strong we we to software Also, of any hardware. no, macro separated not customer one is headwind fact, turn doing and base. seeing don't interest we primarily things that on are what Vantage happening clearly business. in and we company, as to

Katy Huberty

hear. to great That's

year-on-year. I figure comparable you backlog Just as June exiting a quarter? quarter think What's XX% the last was said up the Mark, follow-up, that

Mark Culhane

From think June we I a ago, said-- year

Katy Huberty

quarter. said exiting March this quarter; XX%, was you wondering just think that what I

Mark Culhane

But in because compared we a thing. duration less deals XXXX, doing Year-over-year, Yes. prepared our that we about don't XX%. as versus remarks. said XXXX we're duration June it that's at And look June

Katy Huberty

Congrats it. quarter. on Got the

Mark Culhane

Thanks. you. Thank

Operator

Deutsche is from Karl go ahead, Please Bank. your open. line Keirstead

Karl Keirstead

questions. earlier that quarter. in see you're some Two Mark, an Thanks. you in question expecting to acceleration mentioned fourth the

some guide an I XX% just guide, if revs hit the just growth. I To the and see XX% XX% you Is you that? of XQ? Thanks the So a of to through high the roughly math run stuff to is seeing acceleration bit revs. little it into deal XQ needs your talk XQ recurring recurring that the pipeline lot. visibility midpoint spilling Could a you're end think to where into maybe just XQ hit on why

Mark Culhane

Yes.

in on sequential that, we a and is lot look over we happened QX increase what there yes, Karl, ago, go had So, back fourth quarter at large year QX. if a a -- very

our So, we that implies forecast that guide on QX and yes, aware also ago. earlier see in based saw we the deals like year I'm happening a

customers holidays get in from and shut for stuff trying they anything shut think done before moving wheeled it in there I before they else. down to got down get anything to and

Karl Keirstead

long-term helpful, that the about? fairly And sheet, down balance that is all Okay, Mark. came duration then a on that's you're DR see follow-up hard sequentially, the I deal talking

comp assuming in And issue thought might that it that affect I late was is sales made XQ. the

wouldn't explain QX DR. decline So, that to XQ long-term in really the

So, another that maybe is duration-related to out. figure a Thanks one explanation there us help lot.

Mark Culhane

Yes.

not X Where, all a So, actually multiyear long-term defer, year more have ago, on ago, short-term QX in saw or do seen that anything quite saw year. this have multi anything a paid took defer did with do paid to XXXX. different which duration. have types, than of two get deal, year large years we a a deal from cash to deal three It you multiyear we very QX we particularly doesn't again, and on year's get

from is just March So, the typical. kind June your of sequential normal to

to receipts across the expect haven't continue multiyear that year. driving I defer any year this We decline long-term had to the balance are cash don't up, of so

Operator

Reback line open. Brad is ahead, go with Please Stifel. your

Brad Reback

to Hey, commentary. thanks back cloud very much. the Oliver, switching

begin customers providing type versus there? flexibility just of move, you opportunities workloads As consumption-based around are to long-term contracted pricing what

Oliver Ratzesberger

been Universe with year's several the that testing now doing one have that year, that that probably Yes, is consumption-based have announced data on we pricing. we rollouts we as completed and said engineering this year of And are us. we last have this as task I also Conference, customers earlier and -- at on

that points our really in see it's defines get points, different have the Teradata and customer base. the see that, after a of the that sees can usage we we of just ability industry We out and interest from consumption clearly we and that for pre-committed price ad -- the usage lot love hoc they there. interest assets see base. modeling a are that They like with -- cloud choice norms set obviously model now from different the price we customer And

said like subscription so, Having customers also the offering.

capacity So, it's not customers elasticity are be for a of model. and necessary well to on don't being choice saying base. customer received for But consumption-based going the demand it's go something applications, the certain the cases we that we that model in and the certain our the model very it's want in is through for and And one that consumption use to customer have. that gives offerings

Having our the not very model consumption that pure every the of that of predictability yes like predictability of -- customers customer said also year we a some model. feedback of We've also our that either. they financial so, subscription upgrade got model model subscription during the wants choice like the over might

is And this and And is, will Everywhere, us make choice. about customer Teradata we base. continue to ago, a see the base so our half started And and you into easier years choice to this was all again, for it that the give as two customer reception and positive. customers it very consume and again, investing

Brad Reback

one And quick follow-up. Excellent. then

were in year? back go-to-market of fiscal Or more With of Thanks. happen do modification you structure next that the in the expect force any meaningful half Brown, the the hiring does Scott that year? of changes sales

Oliver Ratzesberger

don't expect No, changes.

execution. In here. ground, Scott model about the on feet hard. an fact, the take drive making that we he's and getting it, all He's is his about it drive stability have quickly And place, impact in execution quickly

on So, it. changes have what more hard very him in we board. taking and up executing are to not we set XXXX, encouraged what really this about is we on about is This have and have

Brad Reback

Excellent. very much. Thanks

Operator

from Please line Fargo. ahead, your go is Winslow Phil Wells open.

Phil Winslow

mean you and with taking my talked and use Oliver question. R remarks. guys SQL, your when Vantage's formats. does of follow those some you prepared just talk languages, there's in about up to -- not Hey I also getting customers, data integration cases Python but thanks support wanted for just to of on customer a multiple how multiple

of sequel customers' Vantage And Point one another Vantage? and the of influencing supporting views it say learning. let's that or support machine how that is that might and R do How they a guys are Python might actually thinking

the that? customers Just -- how on are what's feedback from

Oliver Ratzesberger

Yes.

is -- out coming And if are there's that look take market in couple to pervasive there are the this is together. that a hold forces of you starting So, at really digital realizing with mobile and companies more together and more bring in need they data And other world. around marketing customer traditional they closer IoT the are sources. to financial that sensor, data

combine it unstructured extremely the extremely And that they hard a starting that, traditionally, to when data, into link. of different makes an go hard. or realize time led need to time-series would go data data And is build data types to operationalize would silos And they them is into systems, that proliferation of siloed system. of to series unstructured data what it are

control XD and put advanced of into we What these that path-based system. really is data sequel, traditional virtual new brought have brought We we Vantage time event-based we are brought brought we together we temporal as with doing the Vantage, capabilities or brought sequel we've straight series, into and system. languages;

What a all that to that's and chain data companies. really to up all all get allows, holistic And sensor the something we a focus allows time, first that on allows or these mobile for data, get customers have do other to that view data and even companies on. put or it examples with couple to supply data together financial of of way ERP really data the the machine up these example, -- customers' well of you -- for or yes, today the CEO

data, So, like of business drive how of data diverse to the business impact do an agile that into the in customers simple few way to and we make analytics outcomes. in as set the quick they make as drive possible together so to instances iterate to and the bring order do that can a it need

loose course. of And people of be is. where roadmap and combined to where data. hundreds them years. hood millions or different taking for under And the What so billions of one the or The setting and talent next really whether storage structural And sensor train it's Python of certainly data are for data opportunity our several quickly relation existing trillions Vantage languages, for of and will or types Vantage all different of with want they points allowing them and that's customer data. the the formats are R for is millions

Phil Winslow

your a margin for also targets? also through those mean at line on of Great. margin year, follow some how sort thanks you for Day. item just there Thanks. And those. I then comments should maybe term Can about progression we from help a to you the gross perspective? think color gross some longer gave us up Analyst Mark, Obviously,

Mark Culhane

gross drag. expected, to becomes we which clearly shifting I expect gross year-on-year, margins improve mean more and is less to lift that, perpetual right? Yes. as mean a we year recurring, the mix and I get of off more each of every margin you

improved what as then improving consulting we've And with doing we're well. overall on consulting are margins we our said, as focus and expect

those across going. at for to are feel numbers. that's we're to continue that where we where of good XXXX and We year to Analyst XXXX we where progress Day how All we about this contributing see and and

Phil Winslow

Great. Thanks guys.

Operator

Raimo your is line Lenschow ahead, Please from open. go Barclays.

Raimo Lenschow

follow-on slightly clients? more at in a of presentation, footprint I'm has gave a the had is Oliver. Can lot a then a wondering thank there is geographic was a you customer Two with And there. kind examples because I I you. quick talk the is look obviously relationship Azure about competitor? it quick that bit Or little Redshift because question. the earlier the broader? better Hey, of When questions AWS for in different you

Oliver Ratzesberger

we've interest -- see We No. seen both and AWS good Azure. general across

You probably focus Azure. mega-data see enterprise, in enterprise, strong see some where examples spot are sweet very that's right? enterprise on maybe on They And given more their is. our and the you companies

bit our more a and a naturally, is. base of little between so And Azure there's customer where affinity customers'

from more cloud both in us But that, interest space fronts. of in is coming sides. different partnership And will And you on we no. than other hear that various good This the public quarters. see

Raimo Lenschow

Okay, of and would I the other if a because guys more would perfect. I assume competition where the see -- is significantly in mentioned is before, on, very, think commercial part you question was -- you market I had powerful. solution in theory, you And cloud then Teradata of about as mean the you it very some the

competition Can for more So, enterprise, I in assume please? to probably that, a assessment? and you is you if need ready fair Is Teradata talk commercial. that would

Oliver Ratzesberger

Yes.

of it launched the competition are way. yes, space, commercial. So, focus we come It's more however, commercial, opportunity the primarily that put of our the now see and you'll course. tense, a data also force Is commercial seeing the see interesting in more extra in small we this on very also some cloud that we mark sales year lot

experienced some it's the Because longer. space that that months even or them the and has Redshift for likes XX Snowflake last of now of XX,

for scale working And some us. after of them even they it's still but not made say commercial have where experiences different

to us commercial a So, to has where point they in more what competition funnel lot in than deals offer. something customers need that out come else the and the

we saying of on so little general, what is commercial are surprise quite a bit and And the positive side. in a momentum a

the their seeing falling especially there interest in promises. much of we how by are short So, driven competitors cloud,

Raimo Lenschow

Perfect. Thank you. Interesting.

Operator

[Operator Instructions]

open. Your from from next line question go Radke your Please is comes Citi. Tyler ahead,

Tyler Radke

Hey, are talking the about and wanted terms about you Vantage the ask of for latest about just Oliver, Are customers the being in adoption talking clarify Teradata thank you to of the upgrading when among kind product you're that to? of best maybe us I version you. platforms releases.

the the add-ons just you're install talking Or adoption base could in through the is and about talk how graph you quantify? maybe And then Vantage if of the seeing of terms engine? uptake you you. of type of the like some are about Thank uplift any

Oliver Ratzesberger

that numbers break software yes, last capabilities have the we versions out in as seeing base Vantage of October, the up particular. of that So, new adopted. about is we launched latest set of that but that the And make that various some it Vantage examples. a of also being engines. year our we goes is don't customer strong in existing adoption But in customers talked through different is

and customer that systems to a their Many in to of base them have as do too simplify platform certainly is helping Vantage also too technologies ecosystem. realizing interest driven many for driving are them. they inability them single the of the many by

features, all And that said, Vantage. so functions, we programming this in is various as together languages, come

interest learning decisioning and the market. the autonomous there in machine And in obviously is out

leak and hear and because You it to AI deployments around a take get repeatable data flapped the a really results. it's unmanaged lot about standalone hard customers and against with having software world problems

the where the Vantage in now customers data, control implement diversion base much that's future is a customer it allows where this governance and hands the puts customer's machine right into is. that interest extraction the With and to more structuring really the and and of Vantage learning is repeatable that

Tyler Radke

Great. maybe or a follow-up for And either Mark. you, then Oliver

at Anything to to geographic some presume, a do geographies there. revenue, was stages, that the numbers the at? is the various subscription rates of we're kind talk growth looking call transition. there how about geos? with by those with to looking Just bag obviously respect of of has mix out just in I execution Maybe

Mark Culhane

Yes.

both So, been subscription movement have year. pleasantly surprised and with EMEA been APAC great. to this It's the

year-over-year, you're That's in huge what in at came down compare at, APAC. that the QX was deal big looking that's driving a if what there. had we Looking

what's that. it's transition, subscription it's So, impacting

headed we're pleased forward So, what and both EMEA. on where we're seeing we're moving APAC and with

Tyler Radke

you. Thank Okay.

Operator

and comments. now back to for Ratzesberger President over Oliver closing turn call will I the CEO, your

Oliver Ratzesberger

everyone. Thanks

positive we very exciting working and at of strides. all to are momentum We incredibly are during ongoing an continuing time Teradata make

our tomorrow. and address platform today developed and are to positioning, revenue subscription-based cloud recurring our needs advancing the Vantage We our strong of business a continuing to transformation software-driven

aligned focused Thank And delivering the We've to you strong on firmly shareholders. we to customer on relentlessly our and are internal ongoing our much. success. and team established focus customers driving are value continue very

Operator

This concludes today's conference call.

You now disconnect. may

Teradata (TDC) 1 Aug 192019 Q2 Earnings call transcript