TDC - Earnings call 4 2023 | Teradata Corporation

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Operator

Good afternoon. My name is Joel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions]

I would now like to hand the conference over to your host today, Christopher Lee, Senior Vice President of Investor Relations and Corporate Development.

conference. your begin may You

Christopher T. Lee

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

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

as differ of cause to current our While stock-based they and or and financial that of no are items release duty ended to number certain them. On be reflect such actual update year the undertake items today, as a compensation release. file These XX, December could that our earnings later outlook, intends XX-K made These this Teradata are we obligation risks statements XXXX, SEC call, factors which uncertainties exclude for these non-GAAP to and month. described today's discussing earnings note expense, risk we described the today’s materially. results subject measures in Form to will filings. our in Please special in are and forward-looking other statements

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

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

Stephen McMillan

joining Chris, us for today. everyone Thanks, thanks and

$X.XX with seeks shareholders. analytics value rise customer business re-investment with evolving the and ARR and of million and trusted from We solutions a data, to leading industry our on entire growth profitability, growth cloud business million data X/X of the more long-term is in our quarter. is Cloud strategy At to improving ARR strategy the focus landscape, across and ARR, in we of XXXX strategy which journey. AI. performance, milestone strong and Total return their XX% is toughest the deliver Total succeed platform We execute challenges. in hybrid the helping for company help more on with leaders—, see the growth $XX cloud of data integrating ARR many for the our closed believe representing navigate billion We analytics are analytics to world’s and ARR of enriching with AI. Underpinning generated core focus trusted strategy more and capital continuing our create putting disciplined this X%, financial particularly in data multi-cloud $XXX balance and by to build trust to the the our in enterprise. Teradata plan cloud their their of significant our winning customer in respectively. as a marketplace, accounts We of experiences, our and We innovate for than companies fourth and customers—, ARR, now of

driven ARR, Additionally, year, and on sequentially migration grew activity. primarily all by both regions year cloud

VantageCloud more Our a performance These environment. than now our business validate breakthrough across hybrid is Cloud Rate XXX%, statistics environment. was Expansion and platform operate customers a hybrid Net our in XX% cloud delivering of that

than profitable we generated growth range. delivered share more expectations, within We $XXX outlook earnings all XXXX full free our our growth exceeded cash non-GAAP flow, to of million ongoing cloud-first and year strategy. dedication demonstrating revenue per our We

to milestones, on and year due for deal total outlook ARR. was progress and cloud strategic our we solid This the financial of primarily XXXX ended below timing year a issues. Despite our

explain. me Let

becoming is more Teradata of even and our We to are all corporations strategic customers' that levels organizations. touching seeing

business including primarily the relying decision have order beyond example, IT. Board, we time, Over in to multiple IT more with the have moved deal. For executive with in on historically makers, Teradata. close now units we dealt This brings

to a includes cause handful deals was were an into XXXX. December investor of dynamics slipped December. a number mentioned X-figure move cloud These of in Of there low deal ARR of and or conference at transactions million that large growth. these, each $X worth Claire out of This more the

we miss in We set. taking to actions are already expectations had the the address ARR

We root causes slip. the have of reviewed each

are clear, in each to deals the customer address had teams majority demand. will more are To speak working diligently in plans not to close uncertainty the of executing Claire uncertainty taking. In actions Our in be we XXXX. are these our to we unique situation timing, and remarks,

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our strategy. of acceleration of an saw also with We growth partners, important profitable another element wins

decisions related however, total made They a erosion the ago see, large negatively do X some we few customer we year our are as introduced cloud-first half years impact than in were before XXXX. first to of on-prem strategy VantageCloud to platform. We headwinds and more this ARR that expect

actions we on-prem erosion that for these Due they XXXX were visibility contemplated always While time, and now into erosions known view timing XXXX goals. and are we to our into able into factored these as few rate our XXXX outlook. have our improved been to the we've decisions, an have factor these our some outlier,

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recognized and Cloud ML the innovations they strongest noted and including Management through noted Teradata workload and Database AI Gartner QueryGrid, its deep robust optimized for in execution Magic our through our and Systems. Analytics, technology management Gartner Quadrant have vision the industry. integration, offering ClearScape we ecosystem our in our strength also cloud that analytic capabilities with in

in spot Relationship. warehousing. top also We Awards Best TrustRadius and #X to categories the customer ratings Feature honored earned the Value in were in that Best #X X #X Best Price, in data all “"Best learn in of" Teradata Set in for

Software GX value Leader, Teradata are excellence Winter by in and the wholly Enterprise these as recognized customer Momentum reviews. also We categories recognition, types determined of report. for in XXXX they marketplace its

reinforce of forefront. at innovation our and All while these distinctions commitment customers value the keeping to

always November, ongoing we're In acknowledged. demonstrating While support when earned XXXX equality. we equally recognition LGBTQ+ score our pleased is highest are technology, our Index, pleased workplace Foundation's our XXX Equality Human for Rights the earn Teradata on the Campaign again to of of strong Corporate culture

of are action. in We this proud Core tribute Principles our of

platform complete to moved is cloud delivered less In cloud the everyone our at have strategy, for closing, emphasize AI. than company relentlessly that I Since data we cloud-first to as X we ten-fold years. Teradata in on growth focused analytics and want winning

market. was the of in cloud Our growth ahead XXXX far

technology In innovations has and addition, partnerships. team around made our solid the progress

on path over profitable achieve capabilities. excellence strategy. ARR focused are on to We of XXXX. $X the do, operational remain as our build we our continue we We cloud processes billion as will on by strengthen year-end we And growth firmly and to

Now let's more turn go to the Claire to through call details.

Claire Bramley

of everyone. the afternoon, and of of XXX the per non-GAAP good and growth above year-on-year over XXXX, share Teradata margin operating annual and earnings XX% year-on-year. high outlook you, In growing points range with $X.XX, expansion basis Thank end delivered profitable

flow million. free $XXX of cash delivered We

revenue our and the in demonstrate midpoint to was continue Recurring capital currency. year-on-year This the growing annual with XX%. XX% delivering line range. XXXX as returns was our billion, cash for target flow to X% We reported shareholders, $X.X of in of constant commitment to by outlook X% approximately exceeding free annual of

billion X% $X.X our was and revenue at growing in year-on-year as within Total currency. X% also outlook approximately range in constant reported XXXX,

Our cloud X%. remained net at increase sequential a rate expansion strong XXX%, of

and XX%. our Our ending outlook $XXX as X% XX% cloud XX% X% to range grew our range growing reported X%. to X% of ARR to year-on-year constant of in was Total compared million, versus ARR outlook currency

of final capture mentioned, saw not period end the of approximately land As ARR during did we in though outlook year. QX year, the cycle the deal linearity cloud December, of elongation fully versus XXXX those Even deals the dollars the improved XXXX the unexpected XX% Steve last of same weeks at the many we with had of the still month. closing new in

We our internal and are improve taking to adapt measures quickly processes.

We conversion rates. composition to pipeline and are attention paying extra

also sales We improving are sales focusing continue to on productivity. enablement

In addition, we continue taking to company. entire across cost actions efficiencies are driving optimization the

of All outlook inform and profitable position the company to these growth. to XXXX the durable helped accuracy our initiatives continue for of

Recurring growth $XXX cloud total as starting cloud. by revenue growing Fourth quarterly details continue shift intentional X% our to Let experienced me regions we million, and recurring X All revenue, led recurring constant reported currency. as growth with our Year-on-year more financial year-on-year. now results, as percentage share a revenue was revenue on year-on-year increase of revenue. XX%. over was quarter revenue strong was strong cloud the in a mix revenue, in

recurring net in with shared we XXXX negative impact million you million was The last in quarter the of was a recurring was in compared with Upfront $XX upfront line which $XX million expectations XXXX. revenue in $X to revenue quarter. the

quarter Fourth stable. consulting currency. revenue constant was growth million, year-on-year in as $XXX be reported revenue to Quarterly continues X% and total

the As revenue shift mix expected, given to the perpetual continues decline to cloud.

due margin higher profitability cloud expansion Moving million. by and Teradata's was year-on-year primarily quarter subscription fourth total gross rate flow. in cash profit X% and gross were driven greater gross to dollars and margin, $XXX to increase free volumes. both The reported

operating Quarterly million, and $XX operating profit XX.X%. was margin was

an XXX basis contributed year-on-year. of Continued XX.X%, a and expansion discipline cost operating to leverage operating XXXX points approximately of margin

company We that in the focusing opportunities generate future growth. continued position business attractive to invest XXXX, returns prudently and on our during for

cash in of driven quarterly non-GAAP quarter, more the of diluted efficient $XXX exceeding a by cycle. activities of end $X.XX, flow share generated our million per outlook These free We resulted quarterly earnings high range. conversion cash this

XXXX in improved to XXXX. QX of DSO the versus Our XX XX of in days fourth quarter days

Before I'd annual headwind full approximate This, Related an X of at This anticipate negatively impact the comments set affects XXXX, an revenue. on-prem in financial for to our to is revenue, impact like we impact the percentage negative regarding Steve's in make I year to for some upfront nominal. recurring to X% context. comments to provide XXXX. a related to XXXX the erosions, turn, in total outlook is because ARR X% recurring quarter point We forecast the the creating net the year. approximate X% expected end of first

of currency to at currency XXXX, our outlook on January negative rates to XXXX components. the anticipate for end we exchange and ARR Based impact X% of a revenue X.X%

much the we forecast half ARR, half. dollar year first growth cloud the second with throughout XXXX For of being sequential the than larger

dollar of growth the year. the the sequential and the in we quarter decline dollar the following for quarter, For total ARR, in growth forecast second positive first remainder

to fourth with For ARR, the year, and total line we our historical anticipate of strongest both be in seasonality. the quarter quarter to continue cloud

year, ARR growth enabling total we thus full ARR growth. on-prem exceed the expect For to cloud erosion,

we For continue of cloud, cloud expansion, cloud scale total gross to to XXX%. expansion rate continue a of net we gross XXXX mix approximately benefits. we the continue margin as versus expect but to estimate a as we increase slight margin, anticipate headwind achieve On

XXXX optimize On costs the operating level to while maintain driving efficiency. to as expect company across margin, our we we continue

that brand continue prioritize investments creation We in discipline balanced and as with cost where growth will areas, awareness. nonrevenue-generating AI, These investing also will such spend. as we to generate continue we areas in be demand

weighted be XXXX. growth more back-half return we Regarding by anticipated driven in XXXX, capital our of commit XX% than profile to flow the flow, of expect free continue shareholders. results to On we minimum our allocation, cash to to cash a free

macro set factors XXXX have environment ARR, and we fourth these with carefully Finally, dynamics and our the to evaluated quarter prudently outlook. taken cloud incorporated impacting address step to the along the

XXXX, range X% to is on recurring to of to the in is to in flow as Total year-on-year for of expected is revenue is to X%. ARR X%. is ARR in for flat the to range $XXX Total to outlook $XXX to range XX% X%. range anticipated increase be a year-on-year of follows: million. grow currency annual which expected Total Non-GAAP in and the Free million in ARR year-on-year revenue revenue XX%. of constant the share of Cloud projected increase grow range range Our to earnings $X.XX. to $X.XX is to year-on-year basis of per X% anticipated is the diluted cash in the

non-GAAP Here XX.X%, shares other A weighted are expense modeling some million, of million. approximately average $XX XX.X assumptions of outstanding approximately XXXX: rate for tax of

quarter rate shares range $X.XX. XXXX, first we non-GAAP XX.X% the the We be of in be to share to average the and anticipate approximately outstanding diluted to of XXX.X earnings $X.XX project per to million. weighted the For tax non-GAAP be

and To cloud close, at profitability cash durable solid ARR over ending generated future free We $X.X that a with market. billion and rates the year, than with stronger growth and cloud flow. are historical XXXX was

We against make continue strategy. to good profitable cloud-first our growth progress

drive the XXXX, cloud exceed ARR to of expect continued over total to ARR end $X enabled the achieve to remain million path on of by end and growth cloud us the of to XXXX. ARR We by $XXX billion which

Thank you much your very for time today.

call open the questions. Let's for please

Operator

comes Instructions] of [Operator from the Tyler first Radke. question line Your

Tyler Radke

the kind guess churn pieces just pieces in moving So unpack the of here. understand event XXXX question, to a the slip to lot the on the I on-prem deals of first here moving and between side.

consensus that's $X impacted kind below But negatively in XXXX. in much think to there's event. So not too hit think did bit the room billion growth Seemingly, cloud by I for there. XXXX, ARR this I the about not to slow churn of a your come that if guidance, for

strong unpack event? guess that, been a on-prem can think like you've it sounds I what's us while. just the of erosion cloud So but then the for you giving the on kind in that I of confidence secondly, X-year the were you expecting expecting not call outlook? And many

coming So maybe in if you us of other bit more could any just just a these and there's let the frame events if add little color years?

Stephen McMillan

for Yes. question. Tyler, the Thanks,

our a to X.X we're proud Just over take back, last years. step of the really little execution

new in that analytics, XXx a to at the we're to looking drive are us give demonstrates in generating, market, It lot right into we got putting we've forward, are the You're data advancements is of great confidence got market the the how we've just continuously, we've technology cloud of team we that terms execute. right got growth. platform, right that of AI all a the says going really technology strategy, and that the interest

to So that execute make as we give and focus determination. real we for XXXX, prudent to realistic clearly, are some go with XXXX our we through And guidance. being guidance we that want sure are and going we in when

net with was our they interest our major customers and data we to expansion cloud. capabilities the that it increased customers rate grow into that with the really their Our us these good in in that really XXX% have analytics platform and they are core to sign deploy and we when a QX and in of committed the cloud continue

deals. just point, This we event ARR our to to cloud Now was for a purely X from the timing solutions. any don't see unpack of lack demand your our events,

month in remarks, in lots our customers, within a we the As cases. last broadly more inside last prepared the and engage many weeks. data was to analytics different of our quarter our closed customers more strategic interesting and large our What as pointed this become use and tended with and to have more in see we discussion that level in opportunity are board many the closed AI of few we out deals

they However, use it want did customers inside CSPs they and have leverage. consider things cycles data want decision-making they which as use, our to the make slightly language like to placements, to models elongated which

platform our to of thing Teradata about of technology. choice that whole in the a that is So terms we the great customers give range

we're into But right where that deal a And of deploy to Claire to those XXXX, point to competitive building to deals going an not of make deals for pipeline on better the XXXX. close an that come a complex absolutely that some technology so deals the the mentioned is handful the and make they here, decision-making more majority we want those those to are of we as X-figure deals. complex well and visibility December. Clearly, we in of focused saw conference use play, that included top large lot we $X a give are in They're construct nature, that absolutely deal absolute much management for going investor them but want that something that on more cycles criteria as and forward. flexibility slipping over in we and deal deploying decision-making these larger into million at of are sure

for if encapsulates look we really ARR correct. then that cloud QX. And absolutely to what for So growth happens ARR our you're XXXX, total at

major that known We have we've on-prem erosions about some X for time.

able of about XXXX In it XXXX, And multiple not we've platform, down in as the ARR. into known intent the of gave. nail timing -- ARR, erode does to ends that the it customers to on-prem our erosions, those that's total we that our we these we Clearly, just VantageCloud guidance capability. our are cloud impact timing actually factor we before years, doesn't work those the launched with when erosions but to that impact fact,

to them So our we goals. we XXXX those backed known those also had goals we've and some about set for erosions time, when because

an were set And people different which very answer Tyler. goals, forward. together, so cloud from achievable factors XXXX. perspective known that's QX included happening XXXX, a our execution we've in then from XXXX with these in that elements, perspective, Long our there, we technology still as and But our X confident those in move all we're on-prem in guidance we being when and our our we are put happened that believe very for do what's what and

Tyler Radke

It it. was Yes, I multipart a question. appreciate

up driving to net you relates seen, in Is tick expansion cloud growth? rate as are XXXX expansions to was those relates which see. ticked the the seeing How it retention contribution follow-up, point, in another thinking that presumably, rate to for cloud terms the to deals that further? issues expansions slipping. quick that same as up great from are And not about of in timing a there it room you've Just

Claire Bramley

Tyler, this Claire that take I'll Claire. is -- question.

So -- $X to to with assume we Steve just deals rate like to to or continue to mentioned. confirm, we that. expansion as your slip of as to forward anything model XXXX XXX% out of that a point to and billion, part XXXX net get Nothing to do, the

So us you QX, up once the customers we uptick did XXX%. of the migration in we seeing at also, XX are to see with point the with see well. an as we're But on mentioned, pleased that months. as good We're after expansion cloud expansion both

So good trends there.

for and the very our think products. for look prudent XXX% But outlook as out to much demand mark, for we XXXX to to indicating we assume that our we that also see I it's continue think XXXX.

Operator

Bennett of Craig-Hallum. line next question the The from is Chad with

Chad Bennett

business I we're to I over correctly, X% all X ARR, ARR million are or imagine call. total correct? the, eroding, just $XX away? of X% parts, of that they I'll sure make total be yes, represent to understand -- the call So it, to $XX of these But on Is million moving going customers going that's that representing to kind

Claire Bramley

Claire Yes. again. it's Chad, here

ongoing kind of would everyday part business. see our then So erosions yes, Steve large and that we've we erosions got of mentioned X as on-prem that

driving the X% erosions to quarter ARR of point, X% sequential first that is the on-prem your decline in XXXX. to So in

Chad Bennett

we -- couple of recurring known these a our if in Okay. 'XX were And ago knew years, years so for comfortable that so known growth other revenue targets about are around or with ARR have been we out then and we these growth gave since still erosions?

Claire Bramley

Yes.

so So these the is closely, mentioned we've point, the to erosion much tracking and that think was of customers overall surprise. no risk been to always timing Chad, them difficult predict. known, I more The your Steve very

timing on surprises of of haven't formal I to additional in no that for my up a what our So numbers there. as that. so are exact we terms into rightly on These given we path that's But recently XXXX stand continuing XXXX. incorporated outlook. update XXXX, mentioned, the

Operator

is question Woodring Stanley. next line Erik The with from of Morgan the

Erik Woodring

Maybe Steve, start you. with I if

conversion some initiatives pipeline comments pipeline to mentioned -- composition, sales rates, You address around enablement.

optimization, few get next that on-premise outlier. feels a You just was bit cloud some and talked an slip back erosion about some there that a year, more which cost deals was severe than we'll

we of a looking took XXXX? of balance on kind how in than I those do you about bullish at XXXX? with made you're slippage just you are transformation So the goals longer-than-expected that stance kind what the you more that in and for talking Or comments the out set of some occurred XQ

Stephen McMillan

I in just for this timing. was you IT was how across Yes. in at not I'll demand Thanks an look for the think restate the It us. uncertainty question, transformations rarely industry, Erik. Look, again, uncertainty in they're linear as And terms of they manifest.

cloud-first of deals terms on a the We against. that are in cloud path executing we're

gave year. is, a and $X slipped and XXXX we of And guidance deliver out don't or guidance that prudent that and provide deals deals want we our terms we to that around that into a those execution set last deal believe deliver that that as sure XXXX. we for sure to to XXXX, make guidance when in at we've had million That the we What handful those concern the out guidance goals, company ensure of as they not of so we number look management against. Or does back from goals a XXXX we of our to again, control of impacts factored execute that XXXX of in we we always that slip the issued see we execute right have on around give weeks us ability the or XXXX. and make these which, we business again, can that the different both

company those from think So on to goals. achieve still perspective, a path a we're I

put We out the confident management timely a ensure and close for in are some to those to XXXX. have -- we've we got that that in we guidance fashion, system deals we're that we improvements execute

Erik Woodring

of That's a different with Okay. that maybe or at calling really am that I question original to recall questions, follow-up at multiple one it's can of out. is, I engaging And top then decision-makers seen guess you're deals I on just maybe you the new not And slippage my helpful. date customers. haven't you customers Q&A. the like prospective

large So why Xst now? I was it one related question it of just something company-specific, expanded beyond deal December, guess that. the is but to just figure

to broader? this So you makes quarter not And isolated something this think what and that that's me. purely for is it

Stephen McMillan

Yes.

great whether those that been to continuing in which I against every platform or that causes CSP to it are we understand know those wanted in in opportunities. We to one the play. the and single had see the decisions. different We they they root wanted an which interest use units uncertainty of think capabilities involved may just we're have the that or that on business opportunities use

we XX%. in of take good going over we've momentum our in close XXXX. Look, step We of handful from great think deals I got to that we they're $X particular if back how grew out So had those handle deals XXXX. by terms cloud at ARR those a a on it, were million in

our ARR forward and ahead If the look we're marketplace. in compare good XXXX. that, we're seeing that's to And of data growth grow the that -- and are you is XXXX, total continuing in for we happening that cloud as XXXX, analytics way growth to still

Claire value shareholders. make that commit we're also being in of are XXXX, in And that a that our a share can both we result per a that We growth of for did commitment share. and we business generating free that we to sure earnings also therefore, per we all cost our in flow strategy. value in prudent of you our would dynamics to the And saw that for delivered from but XXXX expense our successful cash execute still cash is earnings very profitable that perspective indicated And deliver So being our terms outlined, had positive. XXXX. flow business had free and terms

Operator

question of is line Bank with Wamsi the next from The America. Mohan of

Ruplu Bhattacharya

deal. looks large of first year? the to timing that expecting I in Claire, filling Wamsi half you like we cash X-figure you've me how flat about Or in, free of it's Ruplu bridge It's something guidance cash of year-on-year, flow the that close? come in is the think help for timing is half And mean flow? can you're also to should with today. It you the back help that can a given? deal respect like the but the

Claire Bramley

Wamsi, thanks for the question.

just customer Steve with in issue back no as there's mentioned we December, there. And with or said, the to continue that on competitive deal to So work the that. threat we regards

able through just and working to them of new on it's timing. close them customers with So be with a to case -- the working

expectation think HX I good with to deal. regards a is that specific

As Steve mentioned, majority are we close deals of those the expecting XXXX. in slip to

of profile our revenue mention -- A year, first we're free flow out a be is reminder, could half second growth them from will that, by and, but both cash it in that that year. With lot profitability. obviously, the Some of more around the generated in point, if the the year just the so be the XXXX. are the growth the And saw seeing we've therefore, I as of a my into income. take move generated, cash in slight half range than we profitable of of did you standpoint, timing the remarks, them some to there's towards that. to potentially free the recurring will half the fact that of midpoint. The of the of flow a regards therefore, your cash generating prepared guidance, year-over-year a will because Obviously, put revenue, towards -- we second

confidence really have a we expect into in great XXXX, to saw cycle through cash we that conversion driven and profitable continue flow growth mainly cash and by generation. XXXX. that It's free We good

Operator

from is TD line question next with The the of Wood Derrick Cowen.

James Wood

Steve, you've if assume for growth year. pretty net we X% the That X% through to targets the guess, build QX, close X% and for ARR full in does to, gets significant year. assume in ARR new got I

what gives that you in on So see confidence built through such just that to ARR you improvement an any color the year? share more

Stephen McMillan

Yes.

We and technology what going customers. Teradata demand our execute. strong fantastic see and know the to terms in AI We we last understand understand Wood, the enhancements geared the year. enterprise quarter. execution. And the terms enable our how in our the as in some strongest always of made platform year of towards they're are up sales We I can to -- put into see pointed last be terms motion and the know to their in to Derrick marketplace. of platform. plans weeks think We've to QX out, customers we seasonality that our being ML last is and workloads

of total for it ARR half we and strategic number believe the cloud currently we ARR, now a ability XXX%. the out of to total of terms major our in just slated that becomes of total cloud was to that of with growth rates, move as more do drive that both sort and expansion the the And overall have in it's will said the us X/X net over QX, our we're to is modeling year. We our then As second again, the ARR continue and transactions XXX% split We compound of gives our through that cloud. year. pipeline in compound They're a ARR we that close of ARR.

there of we factors in put confidence for us all give these that gains the XXXX. So to out combine

at I think and Teradata that marketplace advantage have generally, think cloud take consumption-based as knows we you ability perspective. to of I a look from everybody the usage the

dynamics that we've of the the of think cloud in to business. underlying the that. going course guidance We see analytics but terms we're believe we prudent out But are year this a players We're seeing. benefit from consumption through and number generally, the the starting what deliver given that put to we of is marketplace data up in of that and tick will the

James Wood

If follow-up cost just optimization Great. the That's Claire helpful color. a on could for -- quick I efforts.

Just and the place take wondering cost to be When in to is do on more quantification regions expect job it a color or functions? you get any certain little savings? completed on going bit this to

Claire Bramley

them as XXXX, non-revenue-generating on of cost continue continue expect quarter would XXXX. They optimization generating -- you and focusing areas, expect. We're happen Yes. we -- in great through we're to the efforts some seeing

is focused we other on The approach. thing do returns-based a much very

to opportunity see return. higher we reinvest think will into that a areas dollars we where generate So

that. We also do

the few example, we engineering big out area, called I standpoint our and from AI, to as in in generation demand a things prepared something for think especially I continue space a remarks, well obviously invest in.

that efficiency So really the from non-revenue-generating making, trade-offs on we're the getting specifically making focusing and on returns just are focus we're areas. investments in the those expecting right we

Operator

ISI. line is with the Ved from Chirag of question next Evercore The

Chirag Ved

cloud that consumption-based the right customers environments resume. macro and cloud of your hybrid mentioned projects operating You hyperscalers the are are on XX% where now cloud several names where the and seeing to migration

is had cloud So all a preferring Or do increasingly especially customers, for does think we've And customers shift for impact their customers again? a prioritizing hybrid in Teradata's focus renewed this you position large only? are how deployments fundamental cloud-first forward? there moving projects

Stephen McMillan

technology hybrid has Thanks for of What had the I the Teradata platform. Teradata can we cloud we've operate think to and the Teradata strengthened migrating continued we customers migration the we that tremendous as our Look, perspective, the in slowdown a saw see environment. and success benefits from question. that the never a a platform. from platform is We've cloud, strengthen

the characteristics. to reasons cloud, regulatory can into performance-based or customers data So do of want some requirements not for governance actually the that we ensure or some put maybe

The you're set sets our core data the the and in as keep platform the find to know way environment. We workloads technology their cloud. them both out operate and ML world's want of modernize critical the analytics, What and capabilities enables a these customers to data largest the and telco, some deploy data is you them the is in their hybrid benefits that platform and world. new in Teradata of solution your If get the a to network for best some most on-prem data of for completely AI to to use on-prem. Teradata platform

And customers of a best our enterprise so deploy. production actually proof enterprise deploy scale enabling we AI to we the and out our are models and and want that price these the in get enter concept to way know customers of in that terms of performance,

from options that These So lake a very and data data they data or competitive, the want all are her a lakehouse. Teradata deployment supports. to a have platform architectures or warehouse with It's competitors both XXX% and our to how it the workload hybrid help and of us that to the customers to uniquely address a cloud perspective execute Teradata marketplace platform. the from move positions differentiated

providers to going to data the these analytics that an more from pressure concerned of not to that address niche perhaps there's platform be in I'm move Teradata can some increase So competitive complexity. the and cloud

Operator

with Barclays. The next from of Raimo question Lenschow line is the

Sheldon McMeans

This is for Raimo. Sheldon on McMeans

last customer you turning a conservative performance you going? do discussed your acquisition new taking the new previously contribution guidance rather in have initiatives fiscal new rate how year to logo are want ask You I on 'XX? from How logos your fiscal are back still does engine. year assume contribution? greater regarding And than stance Or year? these 'XX a

Stephen McMillan

as progress continue to we other logo more that with XXXX. In we QX, are making are into perspectives. we with new any momentum logos We the we happy quarter, Yes, than the new want went added through XXXX.

small capabilities in new things and to about users will had, new Unlimited introduction which As utilizing tend grow start excited logos great customers, to Teradata that will get and be always super start new for the AI we've into like across quickly. that logos new very and these marketplace, We're a Teradata said, world. the we ecosystems

we yes, don't new move expect logos from contribution So a as we dollar huge forward.

we're with the local we're making engine. happy However, progress from new that that

Operator

[Operator from next is of question Markets. Instructions] Hedberg line with the Matt Capital The RBC

Simran Biswal

on This is Matt Simran for Hedberg.

for this to compared Can dollars? look coverage Just pipeline last XXXX year it in And about me. the how does year? one you talk

Stephen McMillan

Yes.

coverage say the specifically. the about ahead at starting lot We of rates. marketplace super being don't growth the grew been that seeing We're I great. a think details in and our pipeline was cloud our is attractive, the strong What we right? would of market go performance way in seeing has seeing that platform. we're And come I marketplace into our in XXXX, to market engine logo online. XX% We're new that a interest

execution. to realistic So approach on issued and XXXX, a always as the guidance at guidance based a prudent look approach we I think we we've that for that issued

Operator

Guggenheim Ma The of next the line from is question Securities. Howard with

Howard Ma

My XXXX the question on also is outlook.

Teradata unclear still that's is outlook by case. driven leading I ranges, the strong into the cloud, story was but the So XXXX an today's up earnings accelerating it's if trend, total with under ARR that impression

anything is much as their has ARR you've -- answer there before? kind and prevent XXXX? explained answer just they still you if fervor can if this journeys -- total But in from aside, up? can are Or you that but hit back executing on as So with Steve competition And putting on on and should should customers you adequately your -- picked Claire, else earlier, accelerating of on-premise cloud the you erosions. Teradata are as -- not, that growth we that

Stephen McMillan

Yes.

still I great think perspective, a we're seeing interest. from customer

You highlighted vehicle utilize that just look at seeing and lot to journey. that being the modernization interest prepared range of of I the the cloud our a of different wins remarks. in their We're platform

any so them. motion, environment. and those very As happening competitive we matured how serve in our we they're strategic to we the much plans look not what's that's at customers, given be that going can with seeing environments to opportunity in change whether customers the assess have understand our that strategically, the really we long-term us customer customer We're but and ensure place. they success And we

of of AI our types of can Some potentially growth an really in and of we We're our on-prem of the language approach couldn't deploying in execution. It's think enough do different customers unique of models. other approach, opportunities terms different that terms use working OpenAI of you of capabilities we see have things, business. a providers. to lot with driving terms And some give with that have in overall the there demand in platform terms are multiple a supports I boosting for confidence us fairly that us they

Operator

with Nehal The next Chokshi Northland Markets. Capital line question is of from the

Nehal Chokshi

hybrid. cloud you questions was give are I customers a as been these as apologize asked. operating a Steve, us mentioned greater of Could percent that now advance it than ago? far you if what have Yes. sense XX% year in But

Stephen McMillan

Yes.

we in quoted to XX%, the think a back, I we've said number it that's look and if XX% past. was we

and of clearly the interest across environment. and capability creating And differentiator terms on-prem of and operating we a a hundreds great world, are the hybrid with have both that the cloud got fabric clearly, query now us, environment. hybrid in we're in we've across that in and our major in that in working hundreds customers of the that So terms cloud is and corporations unique seeing customers

Operator

questions for are further Steve in There to I concluding no over turn like back would queue. McMillan to the remarks. call

Stephen McMillan

for everyone, joining us today. Thanks,

ahead, We continue the remain we harmonized AI platform analytics and we As and complete look delivering data, AI. data are cloud company trusted going focused to for that better, much. more innovate our customers market. dynamic empower performance. faster make We confident our excited truly decisions business really are improve to in to as about innovations and their future this very absolutely Thanks overall the on

Operator

This concludes conference call. today's

You may disconnect. now

Teradata (TDC) 12 Feb 242023 Q4 Earnings call transcript