big afternoon, year Today, and the more went public about of highlighted. Starting good We operational with Scott outlook. in Vic our doubled doubled including customers ARR. our wins XXXX, and just will XXXX you, everyone. mentioned, along, cloud, Thank our XXXX as and saw the the a progress cloud, several cloud in in our we nearly financial with improvements momentum talk increasing in QX, results, including few which conclude cloud as competitive than I our made Scott,
the a for Cloud only opportunity option is multi-cloud at and huge we environment. true scale for are Teradata a hybrid as
we in our Vantage position. driving of launched competitive in To help demonstrate areas our the we that power this customers of are strengthen what growing other Given experience it and easier efficiency momentum, recently cloud, investing further significantly with while area, Vantage new heavily capabilities the possible in R&D. to improved make will Teradata is
should spoke about, This be a new expanded focus over the time, that go-to-market help at in growth and Teradata. will support Scott enabler new logo trial great driving environment
out didn't turn XXXX as liked. have we While as well would
that we As position operational set in successes we a much several in stronger exited progress we made XXXX. the us issues, significant entering year, up addressing and had
we our little in transition, are XXXX. First, as model and completed largely expecting we perpetual no mentioned, Vic revenue to business
much more we addition, around savings significant to enterprise serve segments organization our [indiscernible] and In markets, cost driving a model commercial key market realigned and go-to-market effective our
through end Vantage-oriented this By Finally, part should the our organization footprint XXXX, we of in dramatically and engagements. consulting reduced consulting we refocused consulting in transformation. noncore offerings, we on of XXXX, be our and the
in we While in result this improvements XXXX. reduction didn't the margin expected
in margins improve term. positioned significantly. allowing This profitable consulting are reported improve meaningfully longer growth our XXXX, dynamic should for We better to
to term, organization focus while Longer strategic to greater we for partner allow and on customers. deepening us to a ecosystem engagements, more total simplification expect our product continue creating value consulting Teradata's
Now turning to the financials.
As walks through document of placed discussion an statements. the update our outlook of growth the various XXXX. then our and transformation segments key dynamics discuss website consulting and on driving dynamics in our some a earnings our have reminder, on we an that for will IR margins, I financial including discuss the
to Our expectations. QX in results our slightly better line than were largely
total XXXX, X% year-over-year. ARR growth For ended at
the related of cloud-related subscription upgrade ARR composed and rights and Our is to subscription-based ARR services. end perpetual legacy and of to At up software subscription ADRR, rights down software ARR. ARR related and services managed and and ARR, maintenance categories; our which related ARR upgrade million grew XXXX, our million, maintenance main XX%. $XXX million ARR perpetual of of consisted X license managed $XXX cloud-related of $XXX XX% of XX%. related makeup
Importantly, an in inflection important design our subscription of and licenses merely subscription The to also point now maintenance transformation. and compared software related in or our half existing by incentives slower to nearly ARR convert of upgrade XX% subscription ARR and perpetual is rate total that which compensation from comprise in to is decline ARR, nearing licenses. our changes XXXX removed growing results cloud-related without
continue rights our ARR growth, maintenance double subscription is Over to to to related we while upgrade likely continue digits. time, to low software healthy and decline show expect business
For subscription-based. QX, XX% our bookings were of
bookings metric in as we because [Technical difficulty] will mix to revenue subscription we XX% total while dramatic expect year, currently in full be last and peaked largely mentioned no longer a XXXX, be after we on the over revenue the of XXXX. converting perpetual us were behind a declines For the the of total. perpetual it for long quarter, revenue little have no bookings key subscription-based customers are resulting in to headwinds XXXX time, and deals tail maintenance there creates will providing
million, Deferred revenue was $XXX XX% at down came in year-over-year. which
in a to aware year-over-year. are couple be dynamics key of when deferred comparing there revenue our However, of
revenue, any XXXX. came And deals as a multiyear deferred large we as XXXX from multiyear down Our discussed earnings prepaid revenue calls. long-term we XXXX, to few didn't prior and prepaid expected which we amortized have similar have deals in on
were billing reduction to deferred the terms trend engagements. this from expect We our deals was driven annual or away we be consulting and moving expect continue less our planned the nearly as forward. consulting all to those revenues, consistent outliers, going noncore And with in short-term decline by focus in
make to investors deferred We and growth understand forward, the understand be balance. look not will at companies near-term key driving this breakdown we billings dynamics total and going and deferred but many subscription to investors analyzing providing wanted headwinds sure deferred our
commitment the year-over-year. X% XXXX. grew strength backlog significantly shows adoption to Total and relationships this and product continued believe of contract core overall our Despite platform. of our durations We short compared customer
in our only reduction in on compensation X a to changed our compensate in to XXXX, X well XXXX. over contract to meaningful years to we versus up years from deals X a durations reminder, in years years This XXXX. structure XXXX As in closer X drove
We deal stable XXXX. durations in expect to remain
results on stock-based otherwise, items make release. other it a earnings Teradata's comments reflect which such today excludes Before I compensation to basis, identified want clear stated and that as my continue, in items unless I our special non-GAAP expense
non-GAAP For expanded basis XXX the gross points. margins year,
revenue we dynamic expansion, continue perpetual shift from this expect in expansion, margin Just XXXX. this range and consulting of higher-margin below and revenue to revenue lower-margin recurring our margin to drove target mix
incremental, be our recurring Considering most our points margins to in a another customers roughly margin. short-term more revenue over will basis drive total since to cloud will margins Teradata are and expand headwind in XXX our gross time. business than XXXX. value revenue as gross believe gross margin XXX have In XXXX believe we significant currently with see line is dynamics, lower we overall XXXX, happy will we overall cloud to of recurring this margins recurring these expect incremental gross We and than business
Total the and flat drive were all to margins we operating functions in total largely as work X% organization. in operating XXXX expenses declined across this Despite hard year-over-year. efficiency decline, operational
the decline to deliver our improvement driven and the forward. cloud operating of the moving total allow offset As aggressively revenue by invest subscription were rightsizing in transition to streamlined consulting model will organization footprint margin gains. This will efficiency us
margins operating expect we result, expand in roughly a XXX basis to As XXXX. points
Now of our outlook. turning to the rest
cloud, of and go-to-market position believe Vantage product in operational our forward sales and stable cloud We expanding are advantage a and long-term and in stronger investments going prospects key opportunities. we in a are to leadership, make vantage much XXXX confident We offerings. XXXX with the entering will maturing growth organization than our in stronger take and
For X%. XXXX, the no reduced at given slightly revenues the well. and to for as revenue consulting in digits. least to least we Taking be of revenue, at consideration perpetual mid-single X% We of perpetual expect growth flat XXXX we full expect ARR recurring revenue And total to grow essentially in believe into growth recurring year. down reduced will revenues revenue little
EPS non-GAAP shares XXX.X of to based million an weighted a of XX on outstanding. expect average in assumption $X.XX $X. range We
XXXX. We cash flow also expect at in $XXX free least million
outstanding. shares our non-GAAP While QX, revenue restructuring we XXXX, $XX in $XX roughly of we free million is flow to with million be recurring expect Through cash the which million expect magnitude million in $X.XX and restructuring will into of million our significantly weighted to $XXX still EPS guide. $XXX charges versus lower XXXX average baked of XXX
operator, with that, take we to And would questions. like
