TDC - Earnings call transcript Q4 2024

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Operator

Good afternoon. My name is Joe, and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata 2024 Fourth Quarter and Full Year Earnings Call. [Operator Instructions] I would now like to hand the conference over to your host today, Chad Bennett, Senior Vice President of Investor Relations and Corporate Development.

You may begin your conference.

Chad Bennett

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

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

our number actual are While statements in results release materially. risk factors a to in current and today's uncertainties and are subject outlook, differ filings. these risks they that described earnings our to reflect of SEC could cause These

note which On call, that stock-based discussing update to as statements duty and will items to intends month. XXXX, Teradata compensation for today, the expense, file no them. forward-looking obligation XX-K Please other or later in today's the such year are release. excludes our special These XX, earnings of items financial we measures undertake described Form made as be ended December certain non-GAAP we this

also comparisons as We in Unless will items numbers flow, stated on growth on call a otherwise, XXXX and constant are and and constant basis. non-GAAP outlook currency. today's all such ARR cash free discussed revenue results discuss other non-GAAP currency

to today which on of at our website. Investor later GAAP included reconciliation earnings replay is of release, A investor.teradata.com. non-GAAP A page of our will call is available be in the on website accessible measures Relations our this conference

to Steve. I over now the call And will turn

Stephen McMillan

with $X.XXX cloud $XXX we of everyone. for as Thanks our in total and hello, us strategy and AI. In platform in we Thanks, joining billion our hybrid advanced trusted million Chad, today. XXXX, Cloud ARR for delivered ARR

see to and leverage massive volumes on of and the best exploring everywhere grow AI of the discussed are exponentially. companies the managing that As gen will for that data last realizing potential AI call, are requirement they we we how

Chief Financial details of on of company another Teradata Officer we a outside into our is moving position also our get from Claire to that Before Bramley at take results, we industry. the announced

our has search CFO leader. will transformation grateful Chief in the a for Claire have Smitherman, interim company's March will departure and continue her Officer, We're until Charles to cash closely supporting ensure Charles transition Accounting XX. We to work her on with assume process the durable and on free cloud tenure. leadership outstanding seamless and a her [indiscernible] a operational to instrumental been excellence flow Claire profitability and during driving financial position.

a the we year. our at reduced this in Claire, to on you that your We total actions to took position organization wish significant in actions executed of and results. business. the across expenses This go-to-market behalf challenging everyone been best a new growth back CRO, cost to restructured Teradata, ARR year. role. that Shifting new named return us We XXXX

AI win We with reoriented with AI us the position also innovations strongly to sweeping platform. a and our trusted introduced set to of organization designed hybrid

As the to we and partnerships for AI, with NVIDIA we strengthened partnerships with, launched new major also example, CSPs. pivoted

#X. returning job firmly and focused the company in growth execution on XXXX We to are is

improvement go-to-market settled from has expecting organization are we go-to-market our the and from continued in Our in restructuring, midyear teams. execution

our As allowing emerging cases financial enables. is pursue AI-based example, created technology services industry we to we an us that the use believe team best

concepts major a We AI AI for also gen of CX, generative have for proof underway case. use

can to personalization. customer next journey designed best and of experience quickly series that drive are customer use hyper a releasing are customers action, and implement results churn, around improved AI cases customer we Additionally,

technology across is our doubling delivering success innovation deployment customer customer's each to days team to down extend the on curated needs helping base. Our and of

and in in to XXXX see improvement rates of forward ARR. the started this We improvement both are expecting and we retention XXXX for are in on-prem a carry XXXX, year. retention rates over In second looking that to total half meaningful

With these to year. to positioned growth initiatives and return well hold, believe this are execute we we taking

pivot across in enterprise both [ Companies to we them and AI made ] ] pivot in we platform balancing becoming as [ cloud meet and how see TRID think Just data, faster decision-making XXXX scale. in order a the anymore, about leveraging hybrid scale they the about have towards more XXXX sophisticated at in first, we about started cloud effectively on-prem, to being the the capabilities. environments and is needs drive business choosing they diverse require. and It's not hybrid between in at operating both

our and Our believe connected to our taking platform along are positioning cloud hybrid approach teams our are our hybrid of with unatched. and and on-prem, trusted customers. AI capabilities We cloud open

of our continuing are adding a in to innovations are our extending our financial plan, trusted XXXX, and in as AI promoting hybrid and prudently In technology cloud investing our XXXX. Teradata disciplined technology, delivered broad tech managing We a we set approach leader and building data we strengths costs. upon managing stack, analytics, to strong

formats, to on-prem environments hybrid both look increasingly cloud are companies move table the more adopt and and we believe to positioned. compute well AI support we to open technologies As industry of embrace

of And expensive call, with to On accelerate use cases With LLMs, models NVIDIA's introduced Among domain-specific AI to integration XX to use more companies analyzer AI gen AI We cases about deliver last or Amazon the talked exceptional our we innovation those introduced gen productivity compute than that AI to were data deploy [indiscernible] capabilities of midsized streamline language AI complaint to our and experiences. boost to new of minimizing integration, solution open designed customer experiences, customers customer with or Bedrock. access take large movement, Cloud quarter. the help gen I our designed this gain integration small them AI can help processes. workloads. accelerated model including cases current advantage bring-your-own business last improve use rapid comers start help Vantage platform platform

offered solutions vendors AI in was Teradata the Microsoft ] one Load Additionally, [ with new early fabric of Hub. the

Cloud integration better Gemini also for advantage of We API to take data more AI designed Google models gen outcomes. announced with

bring capabilities out As and focus need. help customers on environments the designed to to we is to in cloud hybrid new XXXX, we start scale future our trusted the companies enterprise as the AI in significant work bring

than data in bring language large on other today your leverage management is for Xx our vectors Let's get difficult types. are AI most our store to enterprise new To our data data unstructured growing Vantage been the built value of faster look applications at in the looking AI extract that own insights out yet both and generative supports and Teradata example. structured has applications to are one vector as practices, data. Unstructured traditional model capabilities. system AI enterprises genetic from

Now full bringing enterprise to we are it scale.

that the Our and in scalable of search, full quarter store all cycle this is metadata management integrated preview indexing existing life processes intelligent supports Vantage Teradata data within vector to enterprise at brings a and scale. are our management data-based private seamlessly solution From enterprise generation and vector embedding and environment.

processing [ provide such use augmented we accelerated NVIDIA AI also document to ] autonomous or are cases agent Here, with centers. GPU partnering as call

solvency ways to AI AI an to ] new more hearing we lag easy the including kick this the large-scale capabilities, start enable them ML be requirements. honoring will accelerate are Then genetic way addition shortly we applications. a that bring bag our planning pipelines believe afterwards, on-prem exciting You'll of opportunities and to [ data customers weeks providing come with AI in coming while

platform will in that for connected our designed customers our strict without and and have to EDW analytics, open their requirements your model We these have are industries new enable demand, foundation believe service our AI enterprises many regulated levels. own capabilities deep and now. integrations we security, have the data independent are impacting and we bring

Our we were placed companies for management Capabilities Critical across among XXXX use use cases recently for strong recognized cloud the Gartner top capabilities database analytic reevaluated case. the in systems report X

help are I'll you Teradata that Now cases. address illustrate in customers use how analytics few new a and examples walk investing AI to through

management as ops, largest in One comprehensive model of feature companies in because language the cycle life in consulting with and customer enterprise pricing. life well our selected models strongly India and as platform included the Teradata for paying capabilities of as multiyear AI model a additive the deal such This database analytics new ClearScape our services. store insurance

cloud significant large and can implement at processing by perform of native in used ClearScape with on our trying spent has reduce times massive Carlo replacing our legacy Vantage this cluster conjunction NVIDIA After a parallelism bank GPUs. Japanese A it of huge to technology scale time global environment improve leader dollars capabilities, on and of to successfully our simulations and platform the demonstrating a that with large A hybrid costs cloud on-prem. competitive Monte and HPC focus relies decided Vantage enterprise offerings. shown system We millions to

capabilities. our establish them help taking We fast and have and capabilities, of data to start AI AI advantage including XXXX in new a their gen

excited especially platform now. total AI As Building growth. at emphasize technology believe cloud, ] I in delivering are genetic environments that ARR require. our scale We're the upon a the about to leading world's scale, and the organizations [ need to we have trusted foundation our enterprise [ ] I at hybrid we capabilities and in the close, want hybrid AI we customers AI innovation on laser-focused returning that in solutions the

In to has XXXX, pace restructuring look with we pipeline positive increased, monetizing X% ARR go-to-market organically to ARR in We to partners innovations, growth The as technology growth are in seeing traction expect we advancements we both to our of this cloud of flat improvement these and quality. XX% future. our forward year. build XX% from and and total achieve and

Now I'll turn the call Claire. to over

Claire Bramley

in met cost the net the year-over-year, cloud X% and in cloud range, our everyone. both second In you, total expansion half Cloud efforts Thank QX rate year-over-year, year. by ARR primarily declined XXX% QX, total optimization ARR. its earnings of Non-GAAP exceeded The afternoon, Teradata driven XX% guidance continued currency. for share grew ARR 'XX. and implemented good was per guidance in Steve, constant ranges and ARR

terms exceeding year. the of of gave While of our non-GAAP the year the in free presented to the durability we by EPS ARR earnings business and fiscal demonstrate flow guidance charges growth, we cash XXXX continue at beginning that

XXXX $XXX million cash free healthy year represents XX% of a flow Fiscal margin.

XX% share also in flow investors the We of cash to of free repurchases. returned form

year. As sales These improve We XXXX. ARR that growth additional bring we we multiple last include our to giving believe go-to-market visibility last rigor total actions and Steve sales designed greater cycles changes execution to this return us to in that swift that improvements. will a enable into year's can are pipeline mentioned, see productivity year drivers took

year expect also full improved We retention rates.

we monetizing plan XXXX deliver in the all and introduced in to anticipate innovation we Lastly, XXXX.

cloud XXXX. approach total XX% the at we As XX% of of over ARR to ARR exit close and should XXXX, is end

year. growth cloud expect XX% ARR approximately continue of healthy to We this

migrations. of We also see should which AI increasing interest in to hybrid net differentiation, on-prem our higher lead expansion

was share fiscal revenue. on constant impacted in and now XX%, million, year currency. starting points with recurring negatively X X% up as year-over-year period. revenue quarter revenue. details The me the was Recurring a our total was more by from from year-over-year revenue financial Let Fourth and upfront percentage rate XX% X% of as quarterly reported prior revenue year-over-year results, $XXX from year down down growth

total and quarter $XXX million, Fourth XX% constant as X% down reported year-over-year revenue in was currency.

the and outlook billion within currency. recurring billion X% X% $X.XXX was an X% at end For exceeded Total also [ reported of increase range as our revenue constant as $X.XXX down currency. at reported [ in X% the of a revenue and ] year, in ] constant range our full decrease of outlook high

Total year-over-year. year-over-year Moving Operating revenue and to basis upfront gross XX.X%, quarter by free margin for gross changes points XXX cash driven down primarily [ impact. flow. was basis was margin operating down margin Both profitability margin points XXX were ], and XX.X% year-over-year. the

$XX Non-GAAP $XXX the per top our is diluted We repurchased end and decrease were which million the the million shares. a approximately on of sequentially cash earnings X quarter, year-over-year $XX range. quarter, flow million million a or basis. In approximately a exceeding increase generated fourth million of free we share $X.XX, guidance in $XX

million $XXX shares. million full the repurchased or year, we For X.X

context. I financial like provide additional I'd provide our for annual to XXXX, Before outlook some

our In renewal, and quarter. largest historical QX seasonality, lowest growth with highest line is evasion

In both to in cloud be below at before sequentially half, we XXXX. and for growth expect low of to end total decline first ARR half. our total a range to guidance accelerate and the our the range such, second significant second weighting rate QX. ARR expect the cloud of As in And both be of ARR we growth anticipate the the half

We ARR in expect the quarter. fourth to growth return to total

anticipate to to for total XXXX total single-digit revenue, With related is primary decline a negative anticipate headwind XXXX growth upfront points range on Our currency XXXX revenue of ago, ] ARR created the of XXXX, at in headwind constant outlook. consulting recurring currency rate year-over-year on a a basis. Compared million movements revenue currency a we X% end rates impact our Using revenue. to driver X basis to months December the currency we exchange recurring outlook. respect our XXXX rate will We the to XXXX an high in income. $XX anticipate operating XXX the XXX [ approximately revenue

gross On due to we cloud approximately basis by mix expect margin, XXX partially cloud points decline improvements. currency offset total and rate

we the and expenses, margin, as cost year's our to key announced while company last we previously maintain expenses our to actions. on operating remain from Regarding XXXX track to continuing investments. with expect we actions rate optimize prioritize On across cost continue benefit

FX and fiscal cash is items flow slightly negatively have by due the ARR be our flow, since and XXXX impacted total being last lower our These by headwinds approximately million XXXX. We free in impacted linearity. year quarter. anticipate free free ARR bookings QX cash QX Regarding negative free $XX to 'XX cash flow flow rate exit cash to

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

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

to capital allocation, are pleased on have our with we made date. program repurchase On progress the we share

outstanding weighted Our and sheet average our all-time is shares balance remains low, solid. at an

a we on for to growth. and which return shareholders. priority XXXX ARR to to return a is balance presents headwind revenue guidance growth decline, flow, free first capital of our Our investments plan to Based cash

dilution cash to debt more will form XX% share to are targeting We position in a free we and the return repurchases, continue shareholders improve net flow XXXX. over which of of of expect in our than offset

on anticipate For basis. quarter X% of X% the first minus revenue of XXXX, range year-over-year we recurring to constant currency be in minus the a to

year-over-year outstanding range diluted total We a $X.XX. We project expect of shares be to XX.X% tax on ]. approximately earnings approximately average to XX.X to in We share the in points. the the [ We per a timing non-GAAP X% year-over-year range impact $X.XX be non-GAAP to the weighted rate million to minus be and to X% basis currency revenue anticipate anticipate constant be of negative XXX basis. minus of

to of XXXX in for innovation. year ARR strategic to ARR. and XX% will in opportunities I dedicated the initiatives our my As my to heartfelt It to the paying the and year bring customers positioned shareholders. Teradata cloud honor from strong no has transformation motion company an that is the with team, of the years. The company. loyal be and total past role and by been want transition driven part growth well a have gravity X our has return from the end continued I foundation new express upcoming prepare have to build journey to CFO, as set I to achievements doubt we of and over supportive ARR

for all time Thank today. you your

Now the questions. call for let's open

Operator

first Ved line [Operator from question is Instructions] The of with Evercore Chirag ISI. the

Chirag Ved

quarters. new you Claire for congratulations able your on on a growth this than, And maybe point? and with you the comment I from team think, investors job. been little and customers several prospective to over in It's cloud partnering of about migrations pleasure first anticipated. you. last thinking your at lot lower cloud came the Are a hyperscalers how the customers a Steve, are

you're double could you if on click internally wondering data with Just what seeing platforms?

Stephen McMillan

deal We XXXX, along with their of yes, at balance see some for their a more terms thanks out, for you customers cloud footprint. how the looking on-prem process pointed elongation Chirag, question. did as stage migrations QX with, they footprint in

I their you're customers think right our plays a opportunity that real us what hybrid starting into and the conversations area technology from capabilities, for see are to change. we

today, of those consistent And I around those and are gen executing to but it AI is environments innovations gen delivered technology different looking us into the XXXX, a of the these best way QX executing are we that as at between a capability XX the the they gives across and we at different in helping we've look our portfolio AI got on-prem. customers in are take the customers today. production. And in what's even in POCs balancing of marketplace. unique And clearly, believe these projects executing example, cloud place the number progress Teradata what being that all For set

Chirag Ved

And slightly Can guide, the in growth. ARR is Claire, for Cloud you you you. confidence ARR one that speak the it. Got to give and deselling stable which factors

any seen ] time, same clarity -- can return the cloud half NRR here? at back you XXXX. But has rates You've provide so [ the improved of dealed would in appreciate

Claire Bramley

Yes, transition. work pleasure kind as my my Thank a absolutely, Chirag. your too. you well been It's on for regarding side,

in so seeing trends, guidance perspective a those patterns ARR from took we because fact the we me regards the this we're a different we the with and how of you we little year that Cloud slightly set the approach to guidance XXXX, let So XXXX. time gave, in about learn in give just that last bit that to

that deal factored that And We on talking about migrations X-figure what just we've deals. the we limited is So the the reliance timing. also done in. were large stage

be that once sure X-figure large difficult to deals, fact they obviously, made we've the don't without So our replace. guide can those they're very that met happen,

So that some rate across both a a include we're me little on-premise made good our total our retention gives drivers the that beginning is terms year approach that significantly ARR terms pipeline, well. which us erosion, at the bit seeing confidence improved an improved visibility changes of giving go-to-market the different of in as within really also and of of in the we organization of and

Operator

The next Citi. with Tyler the Radke line question of is from

Unknown Analyst

on luck endeavorers it great it's Tyler thanks mix on incremental us logos there's paper also more any if working pleasure gives And guess, Is color This of could growth from the you give here. Claire, for that how expecting? the expansion? And been Good your details is future the it the you. Claire to I you're other for for impacts better find providing with some understand then on us confidence? pipeline that of I 'XX, help guess, the you formats new open all

Claire Bramley

absolutely. Yes,

an So we're first migration XX-XX yes, expansion so of approach. anticipating all, from standpoint, approximately

will of new pass to mentioned we to new XXXX of progress to through Steve pipeline beginning over think, more see then but specifically throughout start in as migrations some the as we'll I'll a at With to a logos in little XXXX. my remarks, prepared again, a good that of new it the logos, XXXX, still talk the year innovations in we benefit to the regard innovation. more as expansions And XXXX, just that anticipate year. be I maybe we we the logos, the about be bit growth. overall our with think to saw coming contributor I progress we small of to I continue see

Stephen McMillan

for Wasi. the Yes. question. Thanks Thanks,

open addressable our of marketplace, As our AI store we for them a vector terms we opportunity the perspective have Teradata our that unique customers. our why [ taking for environment those that are and I AI some highlighted, customers, solutions gen see Teradata. said real an or to partners a have AI a and gen new capability, would to up in store solutions an their AI target market delivering to the be in unique VIA at number That's enterprise example, of ] operate AWS we're and real actually enabling for AI differentiation us look marketplace to and enterprise and by vector capabilities inside in delivered capabilities the from

haven't business So about at super look we're new excited that a we as the business new in lot factored opportunity. But for that. outlook of and we XXXX,

So we through we execute see as aside the that year.

Unknown Analyst

Thanks -- was be my next to actually question. that going

So I'm good here.

Claire Bramley

words. Thanks, [indiscernible]. Thanks for the kind

Operator

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

Erik Woodring

of et I'll both kind I has some echo think, team comments. There's -- ARR And everything. ARR the lot to of step we better in expectations. work see a if stack, And as I a period of expectations have XX you XXXX been here. part look would for of and Cloud recurring well, the a the people, side, growing, nice appreciate argue, good down, the Steve, I but of into cetera. technology, bit years, the below take Teradata growth the Claire great we Well luck some across on revenue back, everyone's with transformation. work it's done is still total go-to-market, personnel, been for from approach, a

to and kind so kind accelerate cadence of to guess a And does just divisive turnaround there this taken be more regular of is to my action get growth. company question -- of need I broad back

about Just to the probably we're the as environment, of our most going prolific see AI think I in that spending backdrop lifetime.

from needs the get help transformation on kind consistently, done me of This And to? follow-up. I to what a quick Just cetera? have Teradata to et move growing normal then understand is

Stephen McMillan

our X cloud and last start picture pivoted dollars from the the journey. every and in really of And But having NVIDIA, cloud think XXXX, address a turnaround partnerships that's think overall highlighted at capabilities us. the of of to marketplace, continue Okay. their cloud And I I more that orientation with we with that we in of the in and opportunity we pivot transformation first next focus the billion from X from close integrations $X.X to the company with native more over the AI is, becomes What Microsoft AWS has business really and AI to over move our technology Gemini that meaningful Google gen high-growth in has the the perspective and focus of some part set years, by a terms that into as delivered us -- also to the the perspective. in front are how build have a Taking presence of the foundation more Fabry AI contribute AI Bedrock we say company I as in a gives considerably. set nice essentially to business an forward. being we'll ARR we company. and And laid foundation that the apart new and starts more gen in to marketplace would Teradata on in the AI that

marketplace, this What our but move underpin new store, new capture some vectors believe we enterprise year we're our very or strong they to into we new growth basis on very is new capability that and manage doing end-to-end to the which is can and continuing Teradata to sales motion, either that very future. for to customers those utilize transform an allows vector and will the this market offering a as take looking release AI our TAM execution sales messages on-prem technologies we're so sales a

Erik Woodring

But flow headwind. EPS become and incremental the that's FX a year-over-year. has and of also of understand an cash transformation. Okay. appreciate through period down at to kind Claire, all you've guiding midpoint, for cost I cutting And cost I that feedback. slightly then gone you're

to off building metrics year, to the how maybe just understand of And you've believe especially and should declines how it next me thinking some there? much help about those Just embedded in that? so might can be be in you blocks as why we get kind you you paying conservatism not if slight

Claire Bramley

Erik. Thanks, Yes.

yes, I which both last cash see think all, that so is actually in talked impact So months and X approximately materialize about, or year-over-year, of that free EPS I is sizable FX the your flow, the million, to regards we point, fairly with so. the big first year-over-year, and $XX did headwinds X to

area decline naturally XXXX The as other a in ARR, would XXXX. finish revenue means that we is I say negative with in

So and profitability. standpoint, impacts standpoint, a free P&L our billings a revenue from and from flow that obviously, our cash

offset the Now, helping to lower cloud from to from any negative headwinds so that mix we revenue. any also offset negative actions our helping year took mix, impact. us last They're impact are coming us

that. not we're sure So reinvest able that want guide full into savings that in And of the growth. offsetting to is we're we've What we make to definitely really we of not to is offset reason our currency. do impact decided EPS the the can some that those back

you As to XXXX us get in to back for important really growth. mentioned, ARR total

that got we we make keep availability Naturally, to of that of want So investment sure we've a lot learnings XXXX. from

most of that those we're of reinvest that So we set so we ARR is the some being to get back but to guidance, savings reason like think this XXXX growth. as to we would prudent total can

Operator

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

Nehal Chokshi

cloud acceleration be -- expecting to similar a drive going 'XX. the on is happen, to needs and the that can acceleration? you're that Claire, through calendar bookings to go next greater you that you mentioned ARR describe a of half you cloud Or order ARR to improve it over it overall basis ARR that more ARR quarters, significantly be you as that? that what level In have is X trajectory for and to acceleration expect in a to to back drive

Claire Bramley

Yes.

line what XXXX with of in in seasonality. the historical in kind line saw and it's So we with

biggest I and origins renewal as quarter. -- mentioned lowest So exception. in highest the our prepared is QX always No remarks, growth,

for QX of regions what in happen example, about in tend And XX% our that about is for Just in historically. see QX to XX% ARR. total And we HX.

kind linearity erosion drive it does trend that So see. that is piece that we of the

requiring fact off acceleration second year. that those the bookings. a tend erosions in the necessarily in not to just drop It's huge it's So additional the half of

Nehal Chokshi

And your much calendar on-premise was for characterize exactly calendar and erosion expectation 'XX? And of see. in I can 'XX dollars? you then what's how millions

Claire Bramley

I What meaningful amount. would say improvement exact XXXX. we mentioned, as as that exit a do the is disclosed a we haven't we we Yes, meaningful see though,

we pleased happen year improvement activity. the XXXX. quarter also expecting we're very the that with start saw and that the fourth So for improvement of visibility the We're to in continue have of XXXX into going we into 'XX, that

Operator

question next of Matt RBC. line The with from Hedberg is the

Unknown Analyst

is little gen just like commonalities for a for some proof a maybe Swanson of if I AI that deeper Teradata. driven the And Vector little by a exciting mentioned earlier, like characteristics you wondering why to This it's but seeing? those Yes. sounds stuff could of Matt they're Matt. those bit sort was different just into you concepts. you're there's if bit Steve, XX be early go maybe store, the little common of choosing any It on and on-prem, AI between coming the

Stephen McMillan

leveraging technologic Yes. These actually Thanks the question, solutions for today. Matt. are are [ ] into

face the solutions at models bringing in example, our looking and see the models language for So running actually are the environment Teradata being We the lot hugging CX Teradata of and customers small space. like that into language environment. a

best the in long and different banks Teradata in proactive center world's way. the effective action technology unstructured of different can customer maybe CX then U.S. X next utilizing they and most that look efficient of those We've taking some the workloads data, e-mails technology. for number call this and or data execute may drive look seen at agents or and Teradata this complicated stand predictions that of very the deployment a recommendations most interaction to at it solutions. So essentially reason be is fact, the the And make chat logs

to terms cost if efficient cost-effective customers we're path kind enterprise economics to very of the with in why you of have AI in language enable that AI enterprise some of that really requirement excited that's that scale of new the gen our AI, reducing coming that at example, solutions. and deploy we scale has that And gen a Sea are Deep And to solutions these the are a and as AI highlighting think way. of and of models cost actually an out the pointed of about

characteristics to those able be to to us customers. for great it's demonstrate our So

Unknown Analyst

the year? how you're improved X and go-to-market they're last of XXXX. is way monetize thinking return to rates kind a kind pieces year full then about innovation mentioned the of you year, to changes those think And in growth you of I Claire, get ARR the then, in guidance? your retention to of but next was Or related, And progression contribution the rank ARR to kind terms to think about there of how very obviously

Claire Bramley

your point think I indited. very are

I XX last been X think in the the have is over we rate. that improvement that or working and one visibility retention our things months on of

mentioned, a I of linearity So standpoint that think total to help in impact is getting a big is a growth. our ARR I terms terms big and from back as of in

of go-to-market I areas. the say, visibility improve terms that So erosion, meaningful us strongest is visibility, of improve year-over-year in visibility pipeline. changes to the our that one Obviously, improvement, to would team helping improve

the in giving So this at year. I guidance of is that driver growth actually wouldn't say that, we're the makes actual about that point feel the that us good the necessarily

can the we of to And then to we different customers growth. development and innovation, the obviously, anything terms drives that in give of that about into point Ultimately our products your offerings is what them. with regard our talk

So back huge in in obviously, that, I factor a of growth think, XXXX. total cloud to is the interrelated the ARR But areas. at XX% midpoint and terms other to is driving of very growth getting

Operator

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

Cole Erskine

expander, out -- capabilities when where in your we up? spin Steve, might query is a but own excited about with format on I'll engine for with you. This that production on to just on bring TAM know provide see you table could that and have been Could update be you I Cole workloads just Derek. customers as us start any open guys with color start your an trying

Stephen McMillan

We see Thanks to for we're question. Yes. table that platform. continue still and improve a open the Teradata going deliver to in format is the on capability critical

have of is key be tenets and connected. the One open to that we

that have is these new and our table customer we bear common opens Iceberg So up engine, environment the absolutely we're the about more us. and we want organization. within support that and Apache for volumes inside [indiscernible] massive capabilities and engine the And customer at we those a expect our Delta to then and of query to that capabilities format become data more thinking to AI and essential data putting open critical bringing against both that Teradata Lake, massive analytical that really

And new execution. customers' support our road continues there map product our to deliver capabilities more to

But is data we're strategy performance We where data I be they performance to that about single although and analytical are may really make some think, see them. they want from table storage And to execution, data then really into a the format. or important, proof enterprise gene topic our warehouse execution what every seeing bring to and data it seeing data fantastic layer. real for it not unstructured as even we're AI And workloads is but customers perspective. customer, early a need to both that perspective super some days, making we're meaningful environment, lake in customers talking an very interesting. is our of open analyzable from about think is that to critical that's still It's terms really that think executing interesting of that a concepts I an of or taken on in for OTF the different and capabilities

Cole Erskine

you've Great. that think of better just term, of talked number could sense seeing months. the for shape you. downtick total we in the about one about But Very cloud you there? in last and maybe been you've helpful. when across then, medium couple NRR potential reacceleration cloud on-prem The can And retention of Claire, us a that give NRR again,

Claire Bramley

absolutely. Yes,

to So XXXX all, line we just first did mention what expecting. next I of finish that were in with time

there. good for was surprises no that So

out churn the half As the the of be some the and To second made anticipate of see we XXXX, of to that impact of the in kind of and the to comments year weighted of and more linked I've to the the we sense migration expansion. first of half look year. more already erosion the

cloud rate to expansion reflect will as with net well. that Our regards

time. could reaccelerates over before it decelerate So it then

Operator

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

Raimo Lenschow

Claire, Perfect. we will miss you, first of all.

that. more a And start Let's to start. fundamental question with

table obviously, relationship maybe not or in month How between the something, but If that obviously, structured, you structured relationship there's grew that follow-up. do will is you of kind guys of evolving of then like that out open And discussion, this you see you but X do play the structured more kind is of the your do And up format, about -- you open think is grow warehousing -- can you more table this out this kind guys lake think you differently? come format, data, time? having data of is big with, a how I one how how over that which data play and everything world. think like how have

Stephen McMillan

and thank something technology think fantastic enterprise world you open store is performance one the parallel vector I capability. and all the terms with we that's able a massive take being EDW construct. needs table of has the gen and best get the that which of to of set bets, computing volumes scale Yes, Teradata those benefits ETF make been our make AI of things out we massive see to Yes, store already Teradata's a But to of is in really either even Teradata an to opportunity in performing that and have say AI question. the as more swaps more for technology vectors. And data, data, how architectures format environments large to core of always

and an doing taking store or enable world's data structured as outnumbers an looking OTF just or conjunction results data can actually enterprise it's away, files organizations you world those it's whether data with analysis whether have matter language vectors that into Teradata's get numbers no data largely the putting stored that's and data. today. meaningful out best of that amount data most pools the of to vector the meaningful against and vector and to unstructured get taking unstructured by in And unstructured store, in at managing by So massive taking next which ending in unstructured example, models data, the the it and that far OTF fails where of the we we're

times ahead. exciting So

Raimo Lenschow

we're at kind Yes. like we're trying you, kind And to looking leading then the of for the indicators. -- Claire at one look Obviously, of

I If more some you about the ARR -- this like, think us, this billings came on like of? it be they some cloud of talk about cannot bit weaker can to you like a to you weaker little the quarter, quarter public discussed dynamics on on answered side. you one-off kind apologize, we there earlier stuff that might the aware Is And call, of need have already. that the in

Claire Bramley

Yes.

you're I narrative. maybe of some for think looking linearity kind

be year. anticipate the prepared the of my for range So remarks in low we what that full to gave ARR end I was I said the cloud that

previously in range just So from that. actually first half the of because full of view that on total total the year mentioned, the the I to a And you erosion that the end gave. a will of year, ARR low standpoint then ARR below give happened activity as the be

revenue and ARR end did total and low our Cloud just guidance on ARR below. I at some recurring So [indiscernible] revenue the give also in QX.

ARR. expect, So of is our would exit total mean, QX revenue closely as following recurring that in you -- I

So recurring terms we're X% in minus minus Hopefully, some that to and X% helps X% linearity modeling. in to range a for of giving X% minus currency total revenue. constant minus of

Operator

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

Stephen McMillan

can also much. our We're And need continue Thanks, enterprise that everyone, we've to excited hybrid to at XXXX, gen XXXX. the with today. the world's We whilst need which Thank the that we're returning very TAM we in analytics you growth innovate to forward customers on today. and deliver now. customers. organizations right Teradata and and got scale, capabilities really know empowering expand trusted our platform the AI delivering joining solutions built going really leading for to we're for look capabilities, condition AI in in We us about our building we that AI

Operator

conference This call. concludes today's

now disconnect. may You

Teradata (TDC) 11 Feb 252024 Q4 Earnings call transcript