- Earnings call transcript Q3 2022

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Operator

Good afternoon. My name is Daniel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata Third Quarter 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers, remarks there will be a question and answer session. you. Thank Instructions] [Operator like Christopher the of Lee, Development. and now your Investor over host Corporate today Senior to would conference hand to Relations I Vice President

conference. You begin your may

Christopher Lee

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

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

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

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

Steve McMillan

outlook second QX, In all us delivered million, top momentum range. am our our in Thank our in XXXX, We we good at I ARR cloud by you afternoon, our today. Thanks, for growing cloud and everyone. Chris, improving regions growth with delivered of we year-over-year pleased rates. and the joining profitability driven accelerated ever. end achieved year-over-year, as constant Cloud progress, was geographic cloud currency. largest nearly $XXX win ARR XXX% quarter ongoing

we As are year-to-date. are volume ARR, also cloud the we of our accelerate transactions nearly increasing cloud doubling the executing, we amount

as unlocking move data. build that to the In with our migration, value relationships and the as for less they quarter, realize cloud cloud the large continue we signed in an customers comes It encouraging number they customers transactions a XX path discover the we continue easily the as a and lowest achieve that, migrations small sizes, can and breakthrough were from with balanced start cost results addition to to is see an insights cloud including than a We risk data. least fastest when deals a the Teradata eight-figure as of their well months. maintain expansion, been transaction of smaller portfolio has with they number These that that with is all to from of scale of customer us and and large long-term often expansions. to their us as cloud, with eight-figure

we recognize macroeconomic exist data the through Our market to value platform mission-critical today. deliver and that best the the in customers and recessionary in our strong analytics Teradata's growth as cloud cloud concerns the demonstrates pressures capabilities, that navigate

and in flat was declined by X% Our constant as total reported. currency ARR

joined ceasing our into our years To operations remind business we just where our a we headwinds on first. to When moment ago, put discussed effects before, like As this currency results I'd our Russia. and primarily pivoted I these was to we strategy cloud are and the due take have everyone to and two context, continued in advanced transformation of journey.

another that achievements third step on reflect journey. quarter's Our

for our with Our or option small designed sellers rapid growth and cloud. strategy are to and and profits weight customers to shareholders they with with capital a is the help cloud Teradata for to lead delivering sell continued faced our migrate on-prem of the return cloud the balanced expansion subsequently with

take our forward more selling future ARR our remarks, our through recently but effectively helping in in quarter architecture. result, now guidance. With cloud base financial also been Cloud customer's in will Claire cloud the XXXX value from success on outstanding are team sales to account out seasonally driving We've realizing And the a and with cloud we touch in migrations. hundreds future Teradata existing Analytics achieve the market. strongest conviction and environment. drive cloud securing ARR outlook. want gives top priority and while we a As achieve our QX moving us and focused details set goal our built XXXX that our the is we ensuring exactly invested a growth have are executing for our to and that of set our on reaffirm Teradata's I We've our have sticky workloads plays our cover capabilities. keep to natural ambitions strategy in on-prem strongly. analytic relentlessly performing expansion. health and expansions is the us place we've ongoing customers experiences teams assertively on ClearScape of give We set customer sales and up it cloud our on their her on out announced customer based long-term embraced lens against

next of basis, with not business sustainable growth While the cloud cloud leading reported and is beyond, the to as are especially portion economics. pleased total growth we and our mix that committed faster and we year on in a rapid accelerate a to becomes greater did stickier and growing are we our longer-lasting

to it's insights and a the is that look scale our horizon multi-cloud proudly innovations, we our in deliver. at on the analytics we it We competitive on major remain in significant extract faster third value deliver ability from product to our and and users what expand all offerings strategy a eyes We core, customers to power for full empower our the drive yet an Teradata to technology VantageCloud and took to as data our designed confident next-generation at leader. in cloud-native that all-new its VantageCloud We In quarter be need object to that architecture. firmly easy story point. know use at Our automatically the needed. We highly our most as and of year built possible with best is Lake we growth platform known enable beyond. and on companies profitable steps years. low-cost data, are and and as committed their cost is leverage elastic forward innovation Lake, first remain Teradata launched smarter, announcing the

a faster a As to enterprise of differentiated total believe Lake beyond ownership. result, our cases the VantageCloud entirely at opportunities and Lake ad markets needs up capabilities the expect advances cost technology customers. our We these access, we for expands hoc reach use scale our to and and new all departmental extends governance open data. without moving better at provide and analytics more exploratory lower massive powerful mission-critical of

empowers More importantly, it innovation. customers more our to drive

analytics and through discover better ownership. meeting meeting proud of that most economics. the in data, The we're of query on customers ClearScape game-changing announcements, them world the the With advantage model the enthusiastic engineering known their the I growth. prospects AI/ML analytics massive on With for. anywhere the governance and incredibly seeing partners generate increased in as Immediately analytic the along analytics been our XX interest industry, cloud-native best-in-class a growing great market, design Analytics, with rapidly customers to cloud our analytics capabilities than even analytic entirely meeting I like complex new value best data in-database bring newly announcements of fully with has at we and more new lake X,XXX to platform total AI critical further house management Analytics years is and these more spectrum laser VantageCloud It helping ClearScape or and the we that functions believe open organization's patterns Analytics their cloud. problems. market designed cost powerful, These an operationalize that game-changing meet ClearScape expanding a road, First our live and with response access customer's period. following We series customers' their our analytics accelerate have data high-performing moving generating we two tools lower solve model ML capabilities, believe, business and announced Teradata faster are by demand ethos opportunities. the with strategies our to incremental pipeline door take and forth fundamentally of and ML We can all initiatives. scale of introducing at enormous data. of expanded full that and focus also that and of needs. our with around connected With with from model capabilities opening Cloud great functions in-database the and Lake enables message ops took towards most we enable scale, that are are warehouse, We we engine the am to than VantageCloud, flexibility with to changing deployment integrated are of result our and for and ongoing introduced Teradata the took contributes time our

insurance actuarial environment analytics XXX runs its This date. Fortune VantageCloud its adopter early Lake. on Our is and customer to an of closes customer Teradata financials

product migrate the the successful production industry on this analytics workload easily cloud. process. drive It in flexibility, as will Teradata expanded and workloads a a the the customers long-standing momentum modernize business Azure. without initial strategic the demanded cloud. exploratory Teradata performance disaster few elasticity price cloud VantageCloud its and industry-leading to examples chose of A to any our up leader customer spin one impacting continue for business value. of A of like to delivery the to migration package asset I'd use to confidence and more compute our lake Azure further new remaining their and recovery and Our data in and it commit continuity in to share clusters with provides on its the workloads. to to enable gives

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quarter, the in digital In digital recognizing its fintech services. was as to customer transformation we helping bank largest customer were for transformation and the named and commercial IDC's of Teradata, full One on enable the its will rankings. drive reduce help With we in Microsoft again data-driven honored migrated Azure richer leader fast-track goals achieve arming products faster power market XXX this fintech financial and top new role them that retail leveraging financial industry is play of institutions analytics decision-makers be to Chile's VantageCloud data. and time with to a insights Teradata an to by recognized innovate and experiences.

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relationship AI announced accelerate business value. Kyndryl will capabilities recently outcomes to new our and we also with unmatched experienced by to bringing joint SI together analytic and time analytics, strategic enable speed customers our teams, with consulting ML, leverage advanced global We a Kyndryl's

As sustainable commitment to we our also recognized pleased for business and are to recently be ESG move We by practices. practices. forward, ethical advancing strong to were EcoVadis our we commitment

sustainability proud chain designation and labor suppliers to procurement. emissions ethics world supply footprint. many of sustainable the are environment carbon assess of the customers to dimensions, are environmental, rights, improve reviewing the on partners We and our across challenging their sustainability around increasingly Companies rely and this cloud human of their including and as a EcoVadis enterprise of their number reduce

climate of are We develop devastating as platforms. our doing to our in we effects committed part addressing the change,

cloud had lowest are sweet lowest our footprint note carbon We platforms, and to use the of cost analyst enterprise in workload case pleased the comparison for firm VantageCloud an the generated our spot. that data

we that the efforts. and assured will front can of You sustainability at our be keep center

at mission-critical scale. You've heard workloads relationships cultivate our needs that for stability we've business deliver that during us a customers' say resilient of times volatility. provides model consistently strong and built customer We

excited As cloud look their move us position on we to are the customers factors of side. These new remainder the year. to to bring well customers, our our execute to of bring innovation to about for the capabilities solutions, to along will offerings guidance advantage our us. incremental take am success at of value and cloud cloud and the the very with new our the I they and efficiencies value the they

great cost stakeholders. a optimize growth evaluate structure, prepare focusing to recognizing right. while growth, companies cloud Customers to and Teradata We strategy is XXXX, moving our market know and data. we the dynamic all our and compete is committed revenue to our differentiated as and we As employees, in on with profitable cloud and positioning customers continuously a to market in leader analytics like enter adjust we the are our

momentum, profitable and our company. We keep are conviction, growth to customer-driven remain a operating be with

refine investments align to with will our a priorities as and accelerate needed, focus adjust continue our to growth. keep We our to and sharp

As convinced XXXX. reinforcing of over can $X to call we in I'll our unlock confidence turn the I everyone. call billion goal about market Thanks, continue our now our over to addressable turn to achieving ARR our that Claire, the opportunity, total more remain of Claire. of technology cloud even

Claire Bramley

environment. million year-over-year. and Steve $XX results the Teradata's good nearly third of currency doubling quarter, growth volatile especially pleased ARR rate growth, cloud a the increase I Thank execution Two reported you, the quarter afternoon, that or macroeconomic million am everyone. $XX considering in include: in highlights in sequential key with in

non-GAAP the XXXX share per demonstrating fiscal We track at We of profitability. to all also outlook $X.XX, elements remain outlook. end our range company's of continued high the focus and on of earnings achieve our delivered on

we We are to the we would of continue us. do opportunities said about and be what ahead doing I excited

future have a making leader, and still progress we multiyear do are to analytics relentlessly transformation, and as ARR our cloud but We focused revenue work driving growth. data on remain and differentiated we on

the year-over-year we with cloud, constant against XX% growth track more in Cloud goals ARR with of the in Total year-over-year decrease demonstrating all This by reported. long-term migration. to four X% regions, is impact increases make $XX in by constant strong positive durable to currency, the reported $XX $XX achieve they in approximate Russia presentation as XX% on subscriptions. in The continue customer in earnings you commitment continue there which million is Page business driven X. X% operations negative into underlying insights unlock ARR. to cloud a new as obscure well headwind was significant million in a and Of headwinds on-prem the meaningful grew a our reported. primarily dollars cloud. on currency $X.XXX was from get year. in third currency growth was strategy performance, negative cloud-first represents billion, that achieve EMEA. ARR ARR This sequential was Teradata in which quarter. as rate, keeping of geographic us, our currency quarterly approximate expansions sequential as declined model us their Let's environment. resilient basis, percentage quarterly approximately results growth ARR growth that a was and associated million. addition, was the outcomes shown third business. resulting quarter, ongoing driven in to to constant in in impact Year-over-year results, On our flat point progress that In sequentially in the reported our amount, primarily this This year-over-year total ARR as Customers an and shared an in cloud starting and and Persistent in success as the business ceasing currency had earlier our with by currency

In customers addition quarter Teradata. of increasing that Steve existing commitments of a mentioned, we seven-figure migration. had on-premise new number to the with solid. the cloud Expansion in also cloud an eight-figure to was These are activity also cloud number from came the that deal

by net and care, services, of and rate logos new cloud historical year-over-year Total are consistent Our number incremental name last adding health seasonality than cloud. added workloads XXX%, government new to with cloud. with We the a weighting grew new customers supported expansion existing in few. was was the towards increasing customers sectors to The the quarter. rate that better financial a

total X% $XXX currency was Moving reported. currency to million, in million, decrease revenue a a decrease year-over-year reported. revenue, and Recurring was as X% as a $XXX X% decrease constant a constant decrease year-over-year revenue in X% and

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

a quarter the this X% Both continued reported there the approximately total X% earnings by approximately affected US in of Russia was shown of revenue. for year-over-year rate the revenue strength and dollar. for in operations presentation, and ceasing in negative growth were As of impact recurring

than revenue United more States. total is context, For XX% of our outside the

was add results additional revenue. our Russia. to to revenue Now, due quarter's exiting color an this to $XX total from million removed of approximate There

to line relates $XX the revenue, a in our net quarter. was there upfront for it million, As negative assumptions with

compares million the net but reference, impact in quarter negative of a this no $XX to impact year-over-year. For third XXXX,

in the continue our perpetual against we execute consulting and strategy. decline revenues, to Regarding

revenue and of consumption partners higher subscription Teradata. and Moving more drive adoption to a collaborating greater to with higher-margin model

primarily dollars third was our our were as the reported to due profit revenue. the was margin business both in dollars year-over-year rate and margin in gross to revenue. $XXX Russia. we Teradata's scale operating to decline higher gross sequentially lower Operating year-over-year are profit decrease in due as ceasing margin XX.X% $XX year-over-year quarter XX.X% and in Cloud gross was was operations quarter reported primarily gross continue cloud to headwinds Moving dollars profitability, million. margin and currency margin margin million of and The

discipline. high while cost in resulted demonstrating which range marketing, and invest at in and non-GAAP the of R&D, cloud, provided. share previously diluted We end continue the of $X.XX, outlook also earnings per This sales was to

cash allocation. efficient and quarter was Free $XX conversion. capital million year-over-year, increasing flow Turning free flow cash cash by to driven in the generated

quarters. last a operational of to We collections the trend six continue over positive sustain cash

million we We believe to quarter. a XXXX, approximately remain the are also being our third Year-to-date we in undervalued. cash $XX continue significantly inventory saw current million as will benefit the with transformation target. efficient total, quarter, that or management In we of to fourth one of year-to-date shares significantly cloud-first ahead repurchased company. shareholders, of have our market continued in shareholder our the to Under flow XX% the we annual conditions, free September returns. our of be returned allocation through XXX% capital committed opportunistic We drives shares

We reported to outlook. element. $X.XX $X.XX. our constant flow our of per and approximately cash growth and as This We in for diluted reaffirmed earnings currency our outlook all be at non-GAAP $XXX million. cloud $X.XX midpoint to Moving XXXX share free ARR, approximately XX% of includes year-over-year range maintaining the in narrowed to

quarter quarter outlook in XXXX year be found couple outlook. press I'd full a complete like know release of sequentially. is help and Our make comments can sales confidence our We to gives accelerate ARR our seasonally that Based XXXX and frame our presentation. to dollar earnings third us fourth highest pipeline growth current our will that on cloud quarter ARR sales our from a perspective. total

our persist may incremental quarter-over-quarter XX our full the the towards or outlook absorbed in lower If have of be year end currency basis headwinds headwinds results then outlook. points currency We increase, ranges. approximately our of

cost EPS optimizing not impact continue free structure. XXXX We to do immaterial non-GAAP actions to cash our anticipate XXXX only various restructuring an impact to planning from flow. and any are We

conjunction impact financial our call XXXX the of in the next earnings details quarter's from provide will XXXX with outlook. We

the here are the Before of questions, some we considerations for year. to modeling move rest

in we the project diluted the of fourth rate share in per the forecast very the you quarter to million $X.XX approximately fourth and outstanding earnings time approximately shares million We approximately $X.XX. the for anticipate be to non-GAAP be in XXXX, range today. XXX non-GAAP full fourth diluted tax quarter to XX% XX% and quarter For the of shares be XXX year. Thank approximately for your the We year. full much to the shares average for weighted

questions. for Let's please open the call

Operator

Your Erik Woodring Instructions] of comes question of [Operator the proceed. from line Stanley. Please first Morgan

Erik Woodring

that question you Thank comments the make your on and guys. prepared remarks, direct Congrats my then to taking macro that a is, first one. it's environment. Hey, like a questions many you on to you Steve, fairly in didn't for tonight. the simple And number my results. I'd or

So get Did you just conversations how of, Meaning change kind have macro I'd starting XQ to your, to evolved? relative love in on see Is how to evolving? download macro your of Thanks. the customers XQ? have with then super your cycles Any customers' commentary there impact or downsizing that follow-up. terms I helpful. businesses? color an be of in Any could a sales of share lengthening have And deals? anything on would you

Steve McMillan

Yes, to to customer assessing customers We've our seeing We're very Erik. operational around behavior got that. discipline significant we rigorous spend their our time. Thanks, and impact Yes. patterns. not changes are any a continuously this the at patterns

strength don't are deal What be interest capabilities buying talked environments that business in be of of tend the out to critical. the also execute model, that of they proud delays longer think, say we the terms have. customer our Teradata any We have absolutely in we're of us the of that continued cloud about types patterns I is, The the I that tend the really workloads say And we and with ordinary. the commitments see would we've significant term. mission to

VantageCloud inside Our I cements with customers. new technology product launch our think, architectures advanced Lake, us into

we've that But take throughout at the we advantage have we and -- Teradata what to making taking cloud. enabled capabilities the cloud that of very terms do are of organization. think the that's macroeconomic ever seriously And so, it perspective. second highest responses from in them see right And got the the a we to environment looking to I quarter sure take us QX

Erik Woodring

since a stronger maybe first Steve. your to XQ Thank helpful. for believe US exiting year. it you've for on one expectations full headwinds held for headwinds this year you, at emerging growth and these really target you. direct for Obviously, earlier And least of -- dollar. That's introducing I'll uptick we've Despite Claire, Russia, then, quarter. your annual been FX the this seeing, Okay. your ARR I some cloud

So just is you target now And FX reaching larger us headwind you able for than can confidence for to the year-end And you what's you're two, kind your how me. a one, thought giving XX of, that’s cloud understand what days Thanks. ARR? help in growth offset ago? it then

Claire Bramley

Erik. Thanks, great year, yes, especially, obviously, very target to Yes, for approximately of we're full able all And, XX%. to question. elements the outlook of happy, our maintain be our cloud ARR growth

We are seeing our currency headwinds.

to the even that We number we a a pipeline But for our able because reinforce are but good delta expecting as reported to for numbers behavior, any that the very our customer significantly account, mix slightly US and the approximately mix there mentioned, that year -- see, narrow be gap factoring not currency into confident on given QX. cloud that our currency. the the increase will different to are we between and be seeing of both full constant reported in constant ARR, that deal Steve coverage in will of think we our from basis on XX%, behavior specifically in

Erik Woodring

you, Thank so much. Great.

Claire Bramley

Thank you.

Operator

of Your of line the Derrick Co. Cowen from proceed. & Please, next comes Wood question

Derrick Wood

Thanks. quarter. congratulations strong and I'll really thank echo on I’ll And you -- cloud let a my

shifts and move. still if that kind but know is that where you or in changed to talked when make seeing And at? at you're has don't a expect revenue cloud the maybe companies is - if continue about migration all? You should trend level off you I Claire, decide Claire, Is of to guys a think got QX, cloud do bigger I you pattern net this the retention rate mean for whips kind of or Steve seeing this

Steve McMillan

So the take of first part that question, Derrick. I'll

a my So as yes, remarks just team mentioned prepared this I sales well. our pattern, from think I in

for across deal large-scale as the have the our But on-prem. Our are do the have of hybrid and those teams sales focusing the lot cloud team. in sales moving where focus deployments are a certainly to a portfolio We sales those We still good customers larger are teams customer cloud. of migrations the the on deals. sizes obviously

those of focused huge that. teams we're So are have cloud the on certainly move customers deals. We on workloads of and dependent into sales and some these overly lots not to definitely mega opportunity the major

on And that or out focus have really they we're for seeing cloud Claire to if think the the that's our go hand cloud to probably if did the a behavior migration. to about pushing terms I deal choice sales an are of expansion But doing what it incented rate. of anything I'll -- net think that the migration they I in on-prem to lot teams. expansion the of talk

Claire Bramley

Thanks, certainly. Yes, Steve for and thanks the question.

So confident of mentioned, as ARR expansion in mentioned, And expansion that at rate results conversion of in XX% stable was that's think very the But cloud year growth we and quarter-over-quarter. our that level at good seeing great seeing QX this rate. and saw I full consistent a I actually the point. strength in as our we're Steve that time We're migrations. at we're

Derrick Wood

that lot pause of One headwinds, companies Thanks. in refine prune headcount of I kind follow-up guess any of it. here. macro mentioned That's light as FX tougher helpful. of to a -- adjust operations and you'll Got In continue growth you to needed. light maybe even having headcount. Steve

Just trade-off costs? that the you growth kind environment headcount when adjust you're or looking or things manage have operational at profitability kind of to control about having can and the thinking that maybe discretionary changing are you of versus in how spend growth to

Steve McMillan

a has growth revenue will commitment that be Teradata been my Derrick company. know, you And always profitable Yes.

continuously as organizations are right real taking optimizing we're of make and of assess way. so overall And expense cost example. our advantage -- Clearly, an to sure as we structure in a the our that optimized it's estate lot footprint

of to our have great launch investing And we're to that the in make in new commitments we're as perspective. deliver to continue investments that business, from especially the we've we're our cloud spending deliver something assess investing to we've the actions some optimize forward engineering do made. we'll in sure right demonstrates really money our that sure So areas continuously we'll we from where product how that team new continue growth that marketplace. We to that taken we make on the engineering to or regular product move operational and launch

Derrick Wood

Got on a Congrats it. Thanks. solid quarter.

Steve McMillan

Thanks. Thanks, Derrick.

Operator

next from Please Radke Your line proceed. question comes Citi. Tyler of of the

Tyler Radke

you afternoon. year made Thank for you. around next to wanted ask the I you about comments XXXX. Good

wanted improving growth. ARR Just that referenced confirm to you

would growth ARR on those then just So constant drives accelerating ex-Russia X% Thank sense assume that you expansions little what it a this Maybe gives understand we us currency is ex I in it think that us If an growth. the confidence? quarter a bit. a Is numbers? means confidence? ARR that acceleration give Just unpack that? that about from Is what you. that just cloud? And help issues,

Steve McMillan

Thanks then Tyler. technical more of to for Claire some hand start financials. over the maybe I'll and

sales are growth cloud strategy and on our Our executing well total to growth. to going get we back are teams as as

sticky those commitments our getting are the workloads. critical long-term customers they as from running move meshing We cloud to

more use that about environments. We've it's their of the I plays optimizing the times think customer easier. Partners help the of and plans chain, cloud that We've -- analytics optimize of SI mixes total continue supply invested cases. still in our work us that to more also to ARR excited but see environment the customers in doing lots with think very and I'm sticky sales data turbulent have macroeconomic utilizing growth drive macroeconomic, ARR accelerate got elastic us where to is team, their that an as motion to the that But expansion advantage And we're in success the our analytic with the and you'll in is for environment. of transform and that, for workloads cloud I whether desire challenging transformation operations. to our do also this much customers

cloud we seeing space as think I analytics and opportunity points market on are I'll you forth. answer continuing move maybe the So Claire in the FX so let But data good and forward. we

Claire Bramley

absolutely. Yeah,

to confirm at first update all XXXX Tyler, this time. any guidance for So not or of we're giving just

and on XXXX at call. in headwinds update So we our in operations will provide of quarterly we've from earnings an significant both Russia Clearly that the ceasing currency. had next

guidance final what We next. don't an basis. earnings. is and this as very outlook. can to happen give include going that But latest we situation factoring be always, I next at rates we into we'll our on the currency want our So pretend predict always monitor in I to as ongoing

the despite are pleased and headwinds to for QX in example, able we for our with fact there So QX that were outlook. we year example that between full were additional build

Tyler Radke

us Great. quarter, of Thanks understand of to some which number I deals, in to back a those see a in impressive eight-figure And couple color. guess deals going of I is just you for referenced the think this things. help environment. very large the

sense transactions. got -- was figure from those you maybe pulled eight-plus typically then that First, deals to those close a for is any tend know were to give close you. early on that conversions, much how they what And those in us deals, secondly were premise? when Thank of those contracts I cloud did cloud stuff sounded relative QX? QX like it spending expanded on

Steve McMillan

from their of certainly represents forward what had they're a those for expansion in to customers. deals they spending very deals clearly commitment doing the spending what those really of on-premise terms in It terms great We're So of were in about excited large execution. cloud. yes, both

I is I to see forward QX. a QX in pipeline healthy. our pull from Claire didn't level QX think would mentioned the prepared as significant of looking say also we remarks

we growth year-over-year for XX% the So maintain everything the approximately by ARR is outlook fact that our cloud on XXXX. of pointing end to

clearly by execution sales out They advantages great in of cloud. So those selling there Teradata the the teams. are

Tyler Radke

much. Thanks so

Steve McMillan

Tyler. Thanks,

Operator

Barclays. Raimo question of next comes proceed. Lenschow The Please you. Thank from

Raimo Lenschow

Hey, that the at and Vantage gives kind since the of pipeline? Can terms how of like and was the seen also me a the me how you've have positive that storage you customers cloud. that what separation customer helping path received like well. feedback launch kind your clear thank them of of surprised from like like Lake thing of some speak in to but really existing you the compute from news like Stephen of as the and you congrats the really launch one the far nice so into that's

Steve McMillan

it as the evaluation of making and feedback Yes. around out in them with you real it's great technology and them. message thousands strategy of from taking their that those and We're the and the No customers terms getting launch the in cloud-first we're on took meeting real and absolutely how and Raimo. person interest. know We getting world. initial lots after lots of road of the that met And customers for getting

we already Cloud running capabilities have and up available Analytics announcement complex and to really now data our we the deploy are think us it point, can that and of provide warehouse opportunity the Cloud in I enterprise some offering isn't announcement it lot always using native in-database the workload, customers can terms the The and in of our platform lake object an have the they the use our gives now our as the your the part house. for get got competition done that deployment on-prem but But to pointing customers Teradata around to We drives deploy of a lake, technology cost and we I can as sticky our do storage analytic and customers Lake we've so provide where data technology. options, a cases a on right very as enables We core to cloud which think platform. Lake, do. optimized great. can able in interesting an is that of best which those as launch ClearScape well, immensely data utilized to we

some time. great feedback. it's exciting We're getting So an

Raimo Lenschow

mission-critical and the on It cloud a looked optimizing are and deceleration and out value I there then little can you I'm spend. And numbers and getting AWS touched you seems Perfect. see Azure at – you people if bit kind Yes. of know the like and different you don't sure numbers with of you a early do of kind about being you this we Like, going slightly Is that? times? the of the cloud think in should how uncertain life of to and there. following to that what it are you willingness cycle kind Like, you Like, guys? terms of also different? with kind engage cloud customer of in in see

Steve McMillan

about environment. industry strength. Well, our fixed fixed optimized And competition terms financial Because capacity blended we run fixed that governance more capacity a model management long-term to the that customers see does strength the customers, workload it. the way of a an around, play that of models And their in. customers we our and I and workload agreements of, and real the contracts as think have how capacity utilize to actually built best utilizing patents compared before our can and in in with have that analytics have our business our pricing data query how we've our optimization, our in customers mentioned construct

Our analytics capabilities capabilities their they and providers environment Teradata. utilize say, enable reduce customers maybe that on the optimize dependency analytic -- inside can so one-off and

So reasons I macroeconomic the capabilities have of the using good patented some environment sales cloud Raimo. are that better cloud-native is those the Teradata think some than why teams in our don't as solutions

Raimo Lenschow

Yeah.

Okay. good you Perfect. It makes total Thank and sense. luck.

Steve McMillan

you. Thank

Operator

Your next Bennett Chad from proceed. question the of of comes Please Craig-Hallum. line

Chad Bennett

Thanks Great. me for in. fitting

that to talking Is From insights did mid-last terms targets to just year? XX they months on churn how Steve into you're Analyst time be this on-prem business. over That your still Day and were target think seems that the grow maybe or year. about great. them or year I of Claire a in even would like of since your that business it any case? terms gross just on-prem anybody's just able next standpoint net subscription business you So, then the the just growth migrations in if question lifetime over subscription about a being business on-prem frame. around XX subscription thinking and a But of or late-last And

Steve McMillan

Yeah.

of not economics. certainly think, be it a to as us. from engine macroeconomic growth would So terms I on-prem look environment it's flat the in going of I our at for Yeah. an kind perspective, overall And say that

we So actually best experienced a to perspective, move prevent but churn Yeah. churn them to that the levels, cloud. to the churn is way from

-- business, get at certainly any we're they're move a we in And not And to locked us. so cloud, the seeing so look surprises customer we with we that commitment that when when the long-term overall we there.

looking So the that's at. vector really that we're growth

Chad Bennett

-- has at growth maybe where of then growing follow-up, obviously, which you one your you decent where just or migrations or have hitting if at at kind And kind some it would, new at terms or cloud of of out has ARR look in you been kind today? ball, components Okay. Steve, and the great, are a we whether are now of an you scale in logos, crystal but nobody guys the where terms it end got to third has But of you the you been thought today also. year-to-date variations you the rate in look quarter the its if any net are played you are outlier expansion or of target at of terms there in are how way of

Steve McMillan

Yes.

sales migrated increased what and whereas had was migration customers' that think the ARR -- seeing I is of we're then we out expanded some we that might on subsequently. more teams environment the pattern seen

right think out going I sales are the the deal to box, teams big the now right.

the So gives planning. look approximately number seeing, we to of XX% it rate and getting we're if us model currently initial for at it growth. our But I think a ARR through as to cloud certainly year-on-year that expansion difference about still that's that the the

line Day in we're with we that change make broadly mix. Investor to said in think, I So at slight what

New logos, did in we new logos QX.

the got be and marketplace is it's of We more marketplace got more potential, the workloads value continue deliver, we've perspective. to the you, clear growth challenging. criticality that momentum from great for to the data that macroeconomic win and logos our It that we are be that analytics is in But great the got absolutely customers to new a that the with say we've we've challenging environment. pleased To with propositions

Chad Bennett

Thanks it. the on Got job quarter. Nice much.

Steve McMillan

Thanks Chad.

Operator

next Please of comes Your RBC Capital of Markets. proceed. question from line Matthew the Hedberg

Unidentified Analyst

and any Matt seems new a on to bit My as logo traditional Thank this quarter. on for versus new [ph] could with about in insights spoke Karman a then customer feedback provide our market Tim can how that congrats about? excited XXXX you question hire is is you well year Can on This Thanks for great. the customer little that as platform opportunities this platform VantageCloud journey? you the more Hedberg. you're adds And question XXXX, the in dig taking particularly on any the you. way pave

Steve McMillan

question. you the Yes, sure. for Thank

customers did have a to that That's cloud So we the of their What bulk on-prem enterprise Vantage business Enterprise. addition point small today. put for start those – and grow. we of through us start the the it, price the the the big VantageCloud that the good Lake, the of into are believe Enterprise using where drive in QX. elasticity that opportunity growth And that seeing is to gives and this of that straight is platform the deals that's on we're technology point in because attractive the to business enabled VantageCloud our customers those initial future. we've with price getting see landing then Lake VantageCloud VantageCloud the value customers component we're and bulk by taking will good

changing the assumption will guidance around FY business. business look of VantageCloud cloud As our like QX on Enterprise. have or in will Most we didn't be large do lake at for a that of our we we the QX, fundamentally that XXXX, trajectory

experimental an get our different a workloads hoc opportunity it's to and of driving to workload inside be into look future customers, move growth going ad we we at So, as catalyst as cloud lake forward.

Unidentified Analyst

the for color. Thanks Great.

Operator

of Mohan proceed. next Bank Your America. Wamsi of the question line comes from of Please

Wamsi Mohan

side Yes. Thanks. on-prem of the back business. just to the Thank you. going Yes. Steve,

some anything sort hyperscalers all? One that And a the on-prem that changing Do to the seeing at a are way have you in displacement a as Are I seeing competitive customer. change long-time you or of on-prem a hyperscalers have pipeline? created of is one-off, in seems follow-up. pipeline you of the that with view

Steve McMillan

Yeah.

was and and had before planned that there major technology customers activity what today. made we into tends back, decision based have years the that on decision capabilities move if an and to is, to Wamsi they think cloud alternative on that we're seeing we've we started a be got that I a executed

way. what interest recommitting very we cloud to think We the architecture, fact the hyperscalers of work in them. that made that, years, on partnership best clearly, on it the to platform. hyperscalers, can experience made three analytics either. we're the that data that cloud, take its and effective way customers workloads announcements now last with based and of the use on-prem product to can from they the progress I the in a the in because in effective take When two we've take we've to we're are most but do cost seeing is not the with technology frightened great We available get have least they over compete our all cloud it the is we and the to customers realize to the recently, them them

seeing where lot component having it, realizing really on-prem large deployment need their execute customers future are optimize that. that can organizations capabilities component on-prem both on once they future possible of can and the a them it's they're so of is data environment all of both in from the an become whether analytics by those be give the their And a And the we in and these we're the to cloud best of with models. cloud. we to they part technology engage in will the continue it way we execution cloud of these lot And and architecture, best that or

Wamsi Mohan

flow, think that how into Thank guiding Thank trajectory free any takes Okay. in how thinking progression be longer-term cash you're we you. Steve. on the should And cash about XXXX? as be? not think puts from target about I And about large looking and flow XXXX the $XXX you, we terms know helpful. but, this should Claire, very That's we maybe to linear your free million should of

Claire Bramley

continuous Yes mentioned, basis question. seen on you at cash are earnings for that Wamsi, XXXX this the with the And efficient not call cycle happy as to but XXXX. for we've thanks conversion fiscal really planning we guide a throughout

as about continuous headwinds XXXX in from So, and of in we a obviously, is moving that growth looking come the seen talked that of momentum for that as we terms we've forward currency. in opportunity Russia out And XXXX.

row but fiscal efficiency seen multiple and to the cash standpoint to easy cash for of conversion out flow that's just in think would into on nothing cycles say and continue from extend I the very quarters that consistent ordinary that a So, now fact that XXXX. an we've perform we

Wamsi Mohan

Thanks, Yes. Claire.

Claire Bramley

Thank you.

Operator

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

Steve McMillan

you, Thanks today. everyone joining Yes, us thank operator. for

We momentum are our ongoing growth. cloud with really pleased and accelerated our

We year-end. are financial and We reaffirm for confident differentiated absolutely outlook. value hope committed healthy in to much our our you very strategy and returns you our we have our happy driving a all for XXXX as are customers Thank shareholders and

Operator

today's conference concludes call. This

may disconnect. You now

Teradata (TDC) 8 Nov 222022 Q3 Earnings call transcript