TDC - Earnings call transcript Q3 2021

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Operator

Good afternoon. My name is Tania, and I will be your operator for today’s call. At this time, I would like to welcome everyone to the Teradata Third Quarter 2021 Earnings Call. All lines will be placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator to Lee, conference Investor Senior Corporate like host Relations to today, Development. Christopher Vice hand would over the your and I President of

begin conference. may You your

Christopher Lee

welcome outlook. Chief Executive financial will will earnings and Good Claire third followed call discuss results Officer, Teradata's Financial Bramley, Teradata's and McMillan, our Teradata's lead quarter Chief afternoon, President call. to today; Steve our by our and XXXX who Officer,

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

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

cash to currency accessible today will flow is our the We Steve. will call GAAP release, this investor.teradata.com. at And call in over constant also A included of non-GAAP now, discuss will is I earnings our and of other on turn Investor free comparisons. the as of measures website. A Relations be such later available our page conference to on revenue items website reconciliation replay non-GAAP which

Steve McMillan

financial and we product Good profitable some our value growth on company. Investor for strategy executing cloud-first importantly, proposition is direction, Chris. again. X us pervades is total And transformation In we our and differentiated strategic streams approaching At We've versus for recurring recurring and and of Thank meaningful continued pace model. fresh year, XX%. joining journey, you everyone. revenue durable our met Day, our today. as provided our a afternoon, Thanks, into expectations as because percentage QX, This for predictable revenue revenue of last increased now approximately percentage a once our flow. points our cash and revenue

were XX% cloud substantial third will In and addition, a day in was metrics and growth ARR both of related slip public In to non-GAAP rate the of last our detail. out fourth QX handful XXXX. Claire We large deals a to quarter $XXX quarter, address EPS our the QX million. was customer the above GAAP timing. financial over had of of expectations. and This outlook our more

completed We these cover have transactions are million QX, than and of in in quarter. have that all more confident, and we the closed will close already $X we fourth expected that the transactions we most

more which build QX any quarter. deals in in our to continue We than engine, delivered other upon execution cloud

is pipeline are bigger our deals. robust cloud quarter, working fourth the and to ahead Looking we on

depth, we that solid. QX had at more proof-points Looking strategy in our is numerous

our progress enterprise new accounts enterprise our large We all new accounts. regions. yet QX leading target quarter of highest of tens executing our are within and added for are customers. market making was across We of cloud

winning on-prem. and the the logos new We cloud to in keep pace are in determined up

onboard, dedicated win. teams Our coming starting new and are sales up already are logo to ramping

day their them their value scale platform often These and companies gating to their analytics. from every greatest Teradata mission enterprises extract with environments help smoothly extreme the world's complexity largest to single data global in cloud. on migrate enterprise to are We the depend the critical

Customers solution led on-prem our managing transitioning of cloud migrating connected to through enterprise to our and verticals. time and stakeholders analytics of analytic with migrating platform enterprise are to transactions are functions take our many these requiring in numerous careful the interconnectivity planning healthcare, the data first can are the recognizing requires of overcome is pack terms the customers’ transportation quarter, all multiple coordination time, customers these across and to multi-cloud In target Vantage. cloud for types increasingly with they the and Teradata ecosystem. cloud As Teradata large with of challenges the consideration best aspects the government of the some the for of the

Airlines. Just one American recent example the is cloud a of to seamless migration

EDW American XX just As years, Teradata customer on more on-prem Azure. massive migrated Teradata its for to Teradata than

frictionless Our executed virtually and for scalability cargo of including every collective thousand part users to analytic community. airlines is provides marketing. airlines Airlines many business business a management, revenue department initiatives, team and the market The planning, platform for efficiently its successful technical to to reporting of network employees migration operations, The provide American to greater supports speed and very of and Teradata capability agility, from highly access Teradata strategy migration. and

extremely have an Cloud and and the of platform remains when told for We growth that the users performance with front business often issue and a mandate center many us. a for organizations. of direction not cloud its move Vantage pleased been to clear are if. The speed It's is Azure. in

the our quarter. customers in of regions saw each that pleased in cloud are We growth

cloud, Additionally, grow start in we Teradata. they once that the are customers seeing with

expansion and in more as greater Our more Teradata XXX%, quarterly cases, multi-cloud add the continues data use be users than to workloads rates trend and customers of their to platform. data more cloud healthy net

broader is critical cloud bank's X,XXX the users ANZ Teradata analytics, the data than competing two on profitability The Google business its to Teradata core Vantage Here customer company product has and enterprise is been a in lending. part market. and regulatory where financial Cloud. migrating services This multinational including platform for we is a platform mandate. applications reporting, more handful initiatives, Its decades. Teradata more supporting of is are The Banking than many Group for business its examples migration responsible winning of different to customer

partnering deploying to is committed and industry. productivity management oilfield to have freight Vantage Here migration just we of data This one A global sensor analytics. life customer's Azure data day from cloud. in SI safety, in migrating using are on Cloud the cloud. leading is Teradata of a part innovation continual is a services ecosystem and improve transaction in oil companies platform to one new of and quality gas America technology leading customer on analytic on is closed the to majority transportation the company the with of its to of long-term This advanced QX. global support and its large QX the as Azure fell of that on deals the Teradata over largest Vantage North one to line the BNSF plan the

from against migration be and we support will effort and with provide leading analytics marketing. partner, won cloud-native Microsoft. Here Consulting Teradata will operations the reporting for competition finance, Teradata our and

effort, As part IBM will both of Azure mainframe environment Microsoft integrated be into this Teradata components. a and analytic hybrid with

to the read/write advanced increasing an loyalty important of equipment and in customer Vantage Teradata a on and cloud. on on cloud supportive [Indiscernible] analytics factor AWS data Azure new used longstanding a data as native make largest AWS, AWS-SX during migrating world's available and analytics as Korea on both capabilities and it NOS POCs The include process. services Vantage as leverage testing. customers, to customer to migrating in one development The HR, from most and a leverage before demos Accenture will competition modernization for was based environment will and vendors. applications migration its is admired solutions Azure be utilize a cloud well its manufacturer for the The AWS platform. efforts choosing tech the ability and as analytics leading for Vantage richer selecting work, customer finance, cloud Teradata Vantage AWS the company's evaluation considered service. was analytics care with Vantage partner airline, Another leading as environment to and

is can now research study Native Storage [Vantage their To analytic Our accelerate power our the was whether transforming supporting our must enable clickstream deliver competitive. Independent recent This enterprise multiple data customers QX We the through website enhancement to on-prem data live environments, of makers cloud We IoT scale. IT in of never target work data leverage hybrid people they we relevant stock database a our providing cloud-only, leverage businesses on fronts. all. felt to by keep or exactly business needed data, any and differentiated help what functions time and partner real to Azure introduced value in been advanced Blob Teradata has new driving weather Stream] Object and outcomes. more In performance innovations decision analytic cases. market purpose quarter, emerging are how and Vantage, Bourne, that a and and at market. we to of these new is Vanson power that multi-cloud, remain develop And business Stores, Customers significant use the AWS-SX, building we a evolve leading tools to technologies database continuously to released combination XX% possession, different. Firm, no or Cloud delivering end of successfully meaningful adding customers technology and use near analytics the or choice leveraging new XX their Research of data, Google stream end by

customers to model scale. activity, third-party to our run with and brought network Own enhancements their analytics data communications Your update an focus delivered our of in and with allows keeping bring also Intelligent enterprise to Network own we drivers, analytic with our support Optimization. into Bring tools built full that at Model market XG And including language customer capabilities Vantage to models We on

accelerate in and increasingly the agility results execute We for exceptional to designed the These experience. partner customers succeed. build our with an know We ecosystem to that strong as go-to-market and help are drive succeed, Teradata to the furthering well. transformation greater move when organization actions we cloud and customer are an our

get drive to cloud. investing from maximize data faster environment Teradata the are results the our execution their of customers in to optimal the and We cloud value help

specialist We quickly in sellers close to execute cloud each are and more to and deploying region specialist senior cloud deals. teams cloud progress architect

We successes data cloud capabilities flywheel Strong to senior scale cloud partnerships building partnerships create organization. accelerate analytics. our to partner a mutually in and are doubling down and drive global expertise and and beneficial have the in effect and on strength added

help a Here will is partnerships announced that AWS. a strategic new propel Today, with us collaboration forward. agreement few we

help use increase simple broad and Vantage array launch AWS to with are Vantage on of it are make to on development With exciting adoption and joint programs and with AWS. Cloud de-risk this both together AWS We Services the to working scale. enterprise to services committed across journey integrations customers cloud migrate, modernize product AWS announcement, we the at

for easier the we scale a with of even machine very deploy strategic insights We most easily more announced cloud, to AI and solutions growing about enterprise customers collaboration that the excited AI will it HXO Vantage. platform build helping and learning our analytics quickly outcomes. partnership inform are growth. strategic enables and In recently in with their integration accelerate meaningful to Hybrid arena, joint both AI that at from get and the the customers AI the make important integration drive value This and HXO from business Cloud us new

and to help our we company, and harness with easily in are we and executing to Global powerful in Vantage of Accenture's customers partnership we our growth resolute a for with Together, combination factory to of are deepening the recognized will in progressing joint Teradata I'm our at our Vantage stronger transitions also to are are accountability to The Migration operate cloud pleased urgency, enable to seeing Cloud across team unparalleled We Data smooth sense our building enthusiasm customers. I'm pleased cloud. data joint organization that and a scale global be capabilities ability strategy. the migrate go-to-market drive Accenture. the

Looking largest is growth. quarter our for traditionally ahead, QX ARR

of seven We seeing range. and robust have more cloud the and quarter, deals deals are in a for cloud larger we pipeline the eight-digit some trends and

end planning some business, the large can business dedicated closing that year. of the entire be with be and you the the coordination will $XXX million these dynamics, focused We the associated will approximately with and believe to these closely Given team especially transactions. managing our by of certain cloud be

than have to grow path year-on-year. We more XXX%

annualized that stated right incredibly growing right expanding growing to technology, However, our and lower growth year-over-year year-over-year. cloud an and believe cloud with today At platform and the based and new existing business and and this timing analytics. experienced we our strong with customer growth the prudent from true strategy that pleased is I product dedicated ARR That on connected in large given differentiated to people. XXX% we and is is market. We Investor in QX, the our our substantial a with ones profitable large position Day outlook in Teradata experience adding a data September, XX% competitive remain in a remains it cloud business, for approximately the a we a rate customers, and growth right company multi-cloud to market outstanding enterprise providing growing very remain

commitment clearly This winning confidence delivering is to today new repurchase keep that shareholders value. capital returning share on executing focus in $X to a to and Our is and reflected we billion shareholder our strong the authorization by announced repurchase.

insights. the Claire for pass call over to additional I'll Now,

Claire Bramley

up or reported. highlights Quarterly million up XX these or of as Teradata beat of margin recurring you, of and basis revenue midpoint afternoon, XX points and operating profit above keep Thank in better key year-over-year to Steve fiscal of year-over-year, growth financial good fiscal X% metrics. and us of quarter many outlook. of results basis and revenue track previous margin delivered line prior points in outlook Gross In of $X.XX our our or on XX.X%, EPS pleased year $XXX line expectations. the profit year-over-year that am than include the XXXX non-GAAP I on third everyone. achieve $X.XX XX.X%, our with

Year-to-date our our of compared prior prior share single-digit to by Despite transaction $X revenue a per of full-year against our it of low impacted year-to-date ARR include that growth year, versus our double-digit which our range $X.XX to unfortunate single QX, our full-year outlook cash in line outlook is full-year of slipped the which to the in of growth year-to-date highlights, ARR total $XXX compared flow to million. with X% million. versus range previous many full-year XX% of $XXX Some $X.XX the of range Earnings quarter outlook $X.XX our growth. year of and at growth. XXXX mid-to-high million outlook cloud free handful is into highlights high of recurring of least third

covered QX. As days of Steve amount noted, the have in already we early this

close therefore We QX products. successfully have that we continue pipeline, seen, to have the deals we and want We value good confident our ever robust our a remain with and strongest customers economics.

business. renewed accountability and transformation on journey, Over undertaken driving Teradata XX the rigor, last months, has have had a greater as we our discipline focus in the

are driving cloud intra-quarter to We migrations benefits go-to-market accelerate increased improved SI our linearity, activities and Partners focused investment CSP are and in we the from globally, on increasing seeing stronger partnerships cloud. to with

than get XX% $XX results. Now increased our ARR transformation Total by X% existing customers faster Subscription and and quarter, X% that logo reported environments constant growth, X% and value sequentially. pace last digital year-over-year year-over-year continue and activities multi-cloud proof-points all our year-over-year for choose deep most and with than acquisition ARR, to positive scale, new the our customers a all subscription product in X% cloud drive knowledge and of Americas. along keeps let's efforts Teradata in a our from regions the Total ARR all EMEA, price in growth provides on-premises across customers. growth. as ARR combination grew We the driving added from sequentially. XX% logo million a the from APJ are to half little three industry from from to delays. migrating slight We both into resulting Growth with ARR a customers both expansion. Starting though three These customers million emerging. currency. this new new are sequentially. at grew $X that resulted increased sequential and of remainder decline and geographic year-over-year in continue year-over-year and we perpetual enterprise cloud Teradata's grew Public licenses in differentiated on-premises the and in In at more Vantage transactional performance and expertise. regions occurred Of from a great sequentially saw best sequential even

rates the cloud, Day. XXX% the We in our we expansion are in continue positive Investor experience outlined excess of trends that healthy in recent to that sustaining

the new logo more added against customers our cloud a also of proof-point We strategy. in quarter executing

the they at growth new future start, While customers be the we can try, as small sizes deal these and buy see with expand. opportunities

was increase revenue. and a turning million, revenue as Now currency. in Total X% $XXX reported to year-over-year constant

revenue. We higher recurring a continue build of X% and primarily base a mix This on year-over-year currency. to constant growth in which recurring revenue, is of by higher grew X% driven

third recurring percentage in was XX% As the a revenue of revenue, total quarter.

year. revenue fiscal first quarter, of quarter, the impact when an upfront our In million the was arrangements. upfront negative related the Regarding revenue. quarters third with the revenue was of $XX lower to the recurring there In expectations. impact two was line net third net compared in This to materially approximate upfront

impact negative For and due $XX the the recurring of deals. into to million to second a expansion of reference, the $XX partially revenue compares to the in positive or quarter, is third million offset upfront recognized renewal all $XX net year quarter from half this first The in the QX. QX by revenue on-premises in put million related

As collaboration anticipated drive higher the higher made consulting and model were partners a year-over-year greater shift and Teradata. margin to of perpetual consumption both lower adoption revenue that strategic with subscription and given

profitability. to Moving

small offset XX.X%, perpetual consulting XXXX, revenue. quarter This a was well due impact Third from into higher fiscal lower XX revenue last as was as to and pulled points approximately basis primarily quarter arrangements year's first the slightly margin subscription-based mix upfront the unfavorable rate. than was of from which a a mix margin half forward of third from impact the negative third gross higher by quarter, partially recurring

by last quarter sequentially structure the the supporting lower in R&D. cost and X% go-to-market was combination higher and cost a Total expenses from offset cloud activity, XX margin investment third basis made driven year's up than year-over-year. by operating discipline, partially in of XX.X%, sequential operating quarter’s Third both were flat points

exceeded of per actual $X.XX delays, range than expected, Of favorable lower being $X.XX and to the $X.XX by mix. the expenses $X.XX cost $X.XX, revenue at outlook earnings quarter relate to midpoint. our to $X.XX relate relate of Third share to recurring $X.XX $X.XX

free Turning and to allocation. capital flow cash

We million of the in generated cash our flow. $XXX cash billing. September $XXX free seasonality In of quarter, XXXX of end year-to-date free XXXX, flow at fiscal to was flow third least was million. are guidance the $XX Through cash track on free achieve the due to million

metrics increase in driven the Our slight days quarter-over-quarter, due invoices by showed outstanding received. payable of improvement an cash to timing conversion

outstanding strong, Our about days did by remain sales to days sequentially. although two it increase three

We third continued the to back shares take or X.X offset of to strong advantage quarter, balance approximately stock million our buying we in repurchased In dilution. total. sheet, million $XX

months first the share of million of $XXX shareholders. on nine for year-to-date purchases to return XX% spent year, of cash For we the flow free a fiscal

least at full-year, to cash the support company on purchases, For cloud return growth profitable investment via track while to continuing for are of free and share acceleration. XX% strategy to we make flow to the shareholders our in

the consistent XXXX. program framework share outlined end in to capital Day. with effect press to value that allocation increase This utilized under our billion As noted open repurchase that shares. we can additional of billion authorized shareholder total at approximately action Board this immediately and repurchase be earnings have commitment an our $X $X.X in market the our release, our Investor authorized We a is until now of

rate a to scaling business. and on our move me healthy very large Overall, we cloud a outlook. growth Let have

for we XXX% the in at strength cloud products, of see ARR path least QX, with our Given in to achieve the robust our growth full-year. along pipeline do

difficult However, volatility the large we and to deals. of predict some September October of it to will very pipeline the we also dates saw between due close continue is is our to possible see timing how it as

range. business ARR regards of year-over-year, the the updated continuing the our stated, is earnings in $X.XX still Steve to $X.XX while previous we per outlook to approximately growth in an non-GAAP With share earnings diluted approximately the $XXX range share, raising invest to or $X.XX, to from As increase our XX% midpoint cloud of be of per million. are

the in quarter, the non-GAAP the tax $X.XX. XX% we For the of approximately rate to per approximately expect to anticipate diluted We in and earnings be XX% for range to $X.XX fourth full-year. be share fourth the quarter

outstanding anticipate shares the We weighted to approximately also average million. $XXX be

mid-to-high reaffirming expected high key are is expected total in which single-digit XXXX the for low-to-mid flow double-digit range total to grow our revenue, in time range, is anticipated least very which cash be percentage year-over-year following $XXX metrics. percentage range We to recurring single-digit the much at which today. million. Total to single growth, is outlook to fiscal Thank ARR you low your be revenue, is year-over-year, and which to for the the in year, grow for free expected the percentage

for please the questions. open call Let's

Operator

[Operator Huberty proceed. from Katy Instructions] The line first Please Morgan the question is of with Stanley.

Kathryn Huberty

Good me. you. Thank A Yes. couple of afternoon. from questions

to First, quarter? that it for more you given and deal impact quarter you've such helpful a those material slippage you on is outlook think be I the of your ARR fourth there think why the about most would in cloud why hear saw third deals, now closed

Steve McMillan

Hi, Katy. the Thanks for question.

the was said significant a as with sales we most as the just companies handful complex workloads, deals, was it we slipped the customers was although in QX on-prem timing deals, When Teradata that $X ARR. the prepared the processes It of taking quarter, cloud at we both surprise teams those reasons. into we're learned closing the at the customer deals. in was the teams for a our fantastic closing million are for world it and what a we’re As predominantly teams some biggest a and were of look deals approval few of remarks, our to their to

good we strength got pipeline the we for QX, that from had a a the look deal As in ever we've cloud see largest of at perspective. We've pipeline pipeline. that have quality we

ARR from that figures expectation being we seven learnings our as deals given be confident know, we QX, of in had an for cloud transparent and year-on-year. million But that set of to guidance set like ARR we We for to $XXX in eight are cloud we approximately the you wanted have and we growth. to XX% guidance, and like

Kathryn Huberty

reconcile third Okay. it comments you guess that such to to encouraging, Thank cloud in that you. I a And sequential Steve is that, team But with ARR the new quarter how do record starting new which million execute. new the a that really the $X number that lightest number to quarter in was history. record cloud of connected saw sales hear of in growth, your customers, logo logos is we recent

Just talk about sizes and playing how that's logos new out? the deal for

Steve McMillan

multi-million We than of remains execution. execution when center where Yes. for in of for customers. volatility smaller and introduce terms – are got engine, do of are types a before. deals on. does that results. – an introduce the a that into which Clearly, we've deals from set cloud our the in large really deals, a that you set our of ever very complexity business, whole have running built shape cloud delivered more we're front us dollar and of means we given QX deals of like the terms our workloads That We large, barbell executing it cloud deals swept in process we And growth our a cloud and if our those of a given scaling just are deals deals large a

the QX QX. of team is is in We've in on As perspective. great the I biggest against we and said prepared from that look growth opportunity an focused opportunity pipeline incented as ARR remarks, QX, and pipeline got executing of quarter our at a

Kathryn Huberty

of one partnership any just the can pipeline you terms had you if of such there in. in maybe cloud meaningful I growth in cloud Okay. as that of view qualitative coming AWS integration more AWS seek is just potential your that was go any was How to disruption into that impact And think do the And this XXXX? awareness some deals? ARR that

Steve McMillan

Yes.

are It's integration forward with product that joint with execution best excited Teradata activities is in sales development world One super from it around and agreement for a from team from us. best with joint with into of terms play the number the engineering, and the with product AWS marketing translates of and a our dimensions. AWS. a getting strategic collaboration AWS, sales We what AWS together engineers engineers really

So didn't driven quarter, of the third in that timing purely by execution of was linearity it in deals that – impact the timing those or deals. and the

significant XXXX. at question. are close partnership looking into that and the Thanks as QX the we drive and as AWS for enter the out accelerate value something We can business

Kathryn Huberty

Great. Thank you.

Operator

next is Mr. the Craig-Hallum. Huberty. Chad The you, question line Thank from Please of Bennett with proceed.

Chad Bennett

for Thanks question. my Great. taking

or start. just year you've many, or are fast they Steve, on off the having we migration more good the conversion good start, today an migration the following because terms now just to or and started I So half of also. now, first conversations cycles sales that The so getting right guess, – cycle that to conversation easier predictable done converting base see year base pipeline and cycle? of this right you're I the are challenging up sales more and its kind guess, – it's or honestly and migration conversations more you cycles, topic. last migrating a extremely in Pretty of cloud that got

Steve McMillan

Chad. Hey for the question. Thanks

that with conversations in what customers think engine building. the see having really across those execution is starting of to we're team I terms

to they One is of successful sales the guiding accelerate discussions have are things executing cloud. investing and so the in of and to the those the that migration customers mentoring customers, continue our been and done those that cloud rest with we've to team Teradata Teradata [indiscernible] in specialists salesforce sales

pipeline. opportunity base, got a our our got migration of still perspective. we in We've reflected a of In lot a still customer existing terms that's from QX lot and

perspective cloud significant a the deals from more a big said, very, As of lots and pipeline, past. I it's in tied we've very than a seen deals and migration

those deals Teradata migrating mission the that in all in we So cloud across taking the that see of increasing the customers complex continuing most terms and to providers, our and executing We're in of transformation cloud executing right we cloud our to we're are in the interest three offerings public direction. see globally, believe and the our mission. critical really value successfully advancing workloads them to

Chad Bennett

yourself Okay. Then or maybe for Claire. one either

had and you for cloud and business. a an you I feel month Analyst months two still comfortable targets. Day of ago, ago, the specifically, and assume portion targets gave half You the long-term business a with those the

Steve McMillan

You go ahead, Claire.

Claire Bramley

close the because these close Yes. ARR Investor deals going we this and just at planning still I QX. with regards all of our say, we're cloud situation expect to Day, and big to shared is deals a was we to timing information and to in these

long-term XXXX, very projections. still are Obviously, provide quarter impact update and medium but medium next Investor on our we long-term confident with at you anticipate our and We on in shared Day. projection formal more no we'll a

Chad Bennett

then And maybe one, quick you. Thank real one quick. Perfect.

So just initially, I competitive and understand into new who deals saw? landscape on small any insight logo, can the wins Steve, you you on the they're just give and those but

Steve McMillan

cloud. Microsoft IBM we from we our in And whole offerings traditional the to the on-prem from are logos, both also of to and terms won the providers of Snowflake world. of range who Yes. AWS, and Google, competition and Databricks – competition and Chad, new like happy and native in cloud And tend Oracle the see beat always the

that market of Teradata in logos we're star the definitely terms team winning and a Really how of emotion, it's demonstrates they're new of And the that in and taking proud deliver of of new our capabilities terms so to the logos. and in winning really the we relevance proud – how these cloud. of team can proof-point

Chad Bennett

color. the for Thanks Great.

Operator

RBC Bennett. Matt Markets. Mr. line question next of from The Capital you, is with Hedberg the Thank

open. Your is line

Matthew Hedberg

think you think all I think extent? but think, really start the in for sort positive question. your you obviously also hybrid situation, the reps for trends? a could you. you to business the a I in to out great a that but about getting I how greater even guess, logo Hey business Certainly, about is mean, extent? I Steve, reopening success help on guys. a Thanks it to help one in environment, greater see. new I mean, could of pipeline to we've thrived And new could with do field do upsell, have work think wins impact that a new as taking

Steve McMillan

logo to especially salesman, and customers spoken really a haven't from a that perspective. I again, looking meeting met isn't to new Matt, or Yes. forward salesman getting a out

new have is strengths them to can we in One really move the and folks do help existing conversations that us of that that – a our forward. know of face-to-face motion and customer we from the we we have executing to terms being where to we that perspective, fantastic enable logo can customer as able cloud. relationships migrate motion, will we accelerate that But to base believe those

Matthew Hedberg

it. Got

about the be chain then in fourth model I piece. And anything perspective in I have still that contemplated these you customers you helpful. your trying – to Did quarter much That's hardware quarter? of that new aren't to this a days. deals supply ask notice Okay. obviously, might additional from on-premise mean, guys you outlook? But have guys procure hardware. Or

Steve McMillan

insight out I'll really lot let talk any our and Yes. get their data Claire by to cloud to is software using Teradata about our – about chain impacts I from isn't of do data a lot this, of supply want software, the growth with their environments, cloud Claire, the impacted but in a best all. perspective, at technology the talk or think clearly chain? But value to customers our you supply a

Claire Bramley

Steve. you, Thank Yes.

not software are baked mentioned, economic Anything in impacted impact on see supply the a of forward-looking already terms due impact to we We would chain as our Steve material not guide. nature. is seeing into the that

Operator

of next The is Wamsi the of you. proceed. America. Thank question with Mohan Please Bank from line

Ruplu Bhattacharya

declined Wamsi the Were It's expected in as quarter-over-quarter what time the Ruplu sequentially. on XXX was long was had also upfront questions. down been were margins deals revenue? from down revenue taking recurring you actually It Hi. X% my basis for and margins impact points actually today. and pull Thank it's you filling a sequentially. for that Claire, forward since

Claire Bramley

Hi, quarter-over-quarter that recognized Ruplu. the impact impact Thank upfront QX. of And in half indeed and you net first are seeing in the the from fiscal we for the question. seasonality saw we negative the

million $XX and QX in impact So QX, have QX. a had a and in we negative just net as over we reminder,

and our quarter-over-quarter So strong business with on the a I'm really the and cloud from achievement. standpoint momentum we're result revenue both an getting a a yes, traction we are margin seeing margin, pleased performing as rate The standpoint year-over-year. is impact of well. underlying

Ruplu Bhattacharya

Thanks that. question Okay. for Steve. one for Maybe

who but logos, that coming about you've back. lot come customers and the Teradata talked customers, called go uptake see customers of new or quarter? in back? and to Did You've boomerang leave this more talked in the slowdown rate also the a past something then competitors about they of you Any that

Steve McMillan

Yes.

customers. Airlines large see that complex can complex Teradata we uses terms cloud. of accelerate team sales our Certainly, great to as successful referenced call, migrating it's fact every was that help recognize the and the discussions continuing day transformation the successfully cloud. with example that cloud. partner And migrating migration to of American I they the environment customers to help and them the can in a a workloads in very challenges workloads our in of the them do think actually are I that And demonstrate the a something into their of that

these Teradata them give As to path recognizing a are the we're demonstrating cloud. proof-points, I our fantastic that certainly customers think can

Ruplu Bhattacharya

into And if for called why out that think XX% down and we year-on-year. cards? I full-year just Is When in. XX% guidance change had cloud said approach taking conservative to you've XXXX, I can Thanks more so that's ARR guidance far. know Analyst more a details growth. taking the in you're I the your that? the one sneak public you're to still for at any there look ARR the that Is Day

Claire Bramley

impact not a update we on projections update We're Ruplu. Day. quarter, not but we gave next long-term that do I will quarter. formal anticipate this any a to formal Hi, the medium or at giving Investor I that do reemphasize give want

in this still is best view point that at time. So our

volatility just timing and As timing a the reminder, out so one to was this as quarter just increased shifting from slippage, year. next deals we the close

expecting deals these and on or our So projections. are impact we medium no all to long-term close of

Ruplu Bhattacharya

Okay. Thanks.

Steve McMillan

add just would to that. I

terms cloud that look seen, validation I deals QX, value right real got the we've that our at we've great got solution the it's pipeline we've pipeline. biggest for in for the cloud pipeline of think a the in we technology biggest proposition, strategy, customers. And as great deals a the we've a seen ever

super we Teradata. for provide excited plan to the So are long-term

Ruplu Bhattacharya

you Thank much. so right. All

Operator

next The with Mohan. Mr. is from question the line Radke you, Citi. of Thank Tyler

is open. line Your

Tyler Radke

now? Hey, sorry about that. Can hear me you

Steve McMillan

Tyler. Hey,

Tyler Radke

Steve. Hey,

QX First for given it counterintuitively that majority backend in kind some seeing time the year, kind goes of you, in loaded projected can to net of most hit the more such and kind should you're we're see on-prem is hardware. this expansions new getting net about faster this the looks of kind just ARR theory we're cloud, vast thinking unusual about not forward? So I and quarter. the so what of basis. question because new more year kind throughout going and are like straightforward And of that somewhat of making guess, a it on just how one improving consistent in QX you I recall a you an linearity ARR quarterly with provisioning that new year little this bit

Steve McMillan

a couple and Claire I'll Tyler, comment Yes. maybe to then well. ask things of as

as growth strongest QX ARR we quarter. our think I see always seasonally,

the in even be they tending cloud large migration towards last fourth on-prem customers week to then that of activity what's And as to our driving I tends quarter, really workloads of enterprise and because cloud. the complex terrific think is the the business tending last history migrate the month of quarter. the agreements and towards success existing

with of can existing have it contracts. their the is those beneficial customers to of find Now we point in renewal we time actually discussions the – point where

to So on-prem pattern in and previously are subscription their cloud terms and we we also how we merging tend of have similar forward solutions. a sold with taking in customers on-prem solutions engage revenues, their them how to

we drive get of expansion those motions. through real the a business cloud as us focus progression So into for to steady continuously that year as

Claire, of out to how bring our what points? quarterly a intra-quarter want change continue weeks will lumpiness you'll Azure but perspective, from all And of that the degree a that we of that volatility do some quarter. to also can I high with working deals we execution. really is think from make so last linearity help you we're I of the on see think do

Claire Bramley

just I'll add that. to

ARR, in our at despite QX, Our big cloud comes your pipeline from people see. a of terms we very confidence that point confidence robust quarter being to that

in prepared have it mentioned is we remarks, As my the seen. strongest I ever

that October So we well. fact great in the we big had to QX have that the pipeline as us in and in, we've currently confidence start a are that gives our that quarter

to R&D, we going we're really make all QX in help sales, in on investments regards the focusing that And intra-quarter CSPs go-to-market across strengthen that us the SIs partnerships our beyond. in So increased linearity that's and our and and as think acceleration making to with cloud I cloud.

Tyler Radke

XX% this follow-up the X% for Yes. total currency. And quarter growth in you, to And total CAGR long-term ARR to with ARR. X% financial Claire, maybe constant model I know decelerated had to

So certainly reacceleration.

and you in Given on deals a QX here? ARR a X% from what is low here you're expecting to just of see it and kind reaccelerates point these bunch of think the with good pipeline,

Claire Bramley

Yes.

mid-to-high seeing. XXXX your pipeline your single-digit that to to momentum from that the growth are To expecting our found point, to year, accelerate the we and have and guide to beyond. we are guide point, the acceleration the our So continue this as for we into we cloud get

Tyler Radke

you. Thank

Operator

final with from Thank Wood is Cowen. you, Derrick Mr. Radke. The question

Your line open. is

Nicholas Altmann

Nick taking you is guys. actually guys. And one Altmann The is for questions. a larger for our Derrick. deal This becoming much about an Great. you focus traction getting much Yes. Thanks that how that Thanks Can meaningful next mentioned channel on there years? can maybe was aided be maybe over SI. talk just how and by several you're you the like for

Steve McMillan

This pivot organization. Yes. question. an is complete great us Thanks for Nick. a as a That's

services time its that over and business. you If had Teradata built think up consulting

work environments. those they will for the most question. can creating move partners that deliver to transform really in propositions on – that of as a made these we the some forward. projects frankly, and Thank that compete great their you. see of as we important That catalyst was a And that to We how getting really doing help that that Teradata customer we're real the customers. complex value committed Accenture have the that them our some terms work We with partners factory, traction, we've inside educate joint our with not migration investment is

Nicholas Altmann

mentioned just some And earlier cloud building that had Thanks. ARR on deals the but in regards lowered of you the closed, just to those of the slippage, one deal Great. guys then guidance. public questions

in just of guidance any deals some wondering your those that can expectations, come sort the give deals more versus outlook? slipped basis reconcile and So on bit that of to lighter you or how a little I'm just to an close your ACD colors the maybe versus

Steve McMillan

say the purely deals would Yes, it linearity. sure. is was with I – do What to

executing, our that that customers. deals We discipline so we're on the for are keeping both financial beneficial and they're Teradata mutually

Our seen, business, in size are of that we really we see deals help to a it the place in closing bigger what confidence when seen, the and from complexity us those we've see compare robust are deals see those of both pipeline, we gives pipeline we our what and move the providing happened complex of execute, challenge. value deals key reasons on-prem set a the and learned why see of we've ever and we've we've put deals more again, we cloud lot of a more Certainly as into QX currently but XXXX. than cloud customers deals of as They what we're that in QX, timing in we them feel in cloud the for it than can being more that which to actions. ever drive

Operator

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

Steve McMillan

Yes. everyone Thanks you. us today. Thank for joining

customers got I strategy. we've talk with remain week, I As that right convinced every the

is best in people our are and Our business. among the technology unmatched the

going the analytics that against Thank value. enterprise world’s leading are help And momentum going, for competition winning you enterprises exactly we and platform as they keep telling shareholder to so data multi-cloud need. for connected Our driving much. are is the and want

Operator

call. conference today's concludes This

now You disconnect. may

Teradata (TDC) 5 Nov 212021 Q3 Earnings call transcript