Core Insights - Unstructured and Teradata have partnered to integrate Unstructured's data processing platform into Teradata Enterprise Vector Store, enabling enterprises to transform unstructured data into AI-ready formats without external tools [1] - The integration is set to be available to eligible Teradata customers starting April 2026, allowing automatic ingestion and processing of various unstructured content types [1] - Approximately 80% of enterprise data is in formats that AI systems cannot natively use, highlighting the importance of this partnership in enhancing data usability [1] Company Developments - Unstructured's platform can preprocess over 70 file types, generating production-quality embeddings directly within Teradata's environment [1] - The integration supports hybrid deployment models across multiple cloud platforms and on-premises environments, ensuring data sovereignty for sectors like financial services and healthcare [1] - Unstructured has achieved an Authority to Operate (ATO) at Impact Level 5 (IL5), allowing secure deployment of its platform for missions handling Controlled Unclassified Information [2] Industry Impact - The partnership aims to streamline the processing of unstructured data, which is critical for enterprises managing complex and regulated data environments [1] - The integration provides a complete, governed pipeline from raw content to AI-ready data, reducing the need for additional tools and complexity in existing environments [1] - Unstructured has been awarded contracts by the Department of the Air Force to develop scalable generative AI solutions, further solidifying its role in the defense sector [2]

Core Insights - Teradata has introduced new agentic and multi-modal data capabilities for its Enterprise Vector Store, enabling organizations to leverage generative AI and autonomous agents across various environments [1][2] - The solution addresses the challenges posed by the rapid growth of unstructured data, which is increasing at three times the rate of structured data, and aims to unify access to both data types [1][2] New Features - The Enterprise Vector Store includes features such as LangChain integration for enterprise-scale RAG pipelines, higher embedding dimensions of up to 8K, multi-modal embeddings for text, image, and audio, and hybrid search capabilities [1] - Automated ingestion and processing of unstructured data types, including documents, PDFs, images, and audio, with future support for video [1] Market Context - Nearly 80% of companies are deploying AI agents, with many expecting over 100% ROI from these initiatives, yet face barriers like fragmented data silos and limited scalability [1] - Traditional vector databases are insufficient for enterprise-scale AI deployments, necessitating a solution like Teradata's that can handle millions of documents and thousands of files per hour [1] Use Cases - In healthcare, Teradata's solution enables the integration of structured patient records with clinical notes and medical images for faster diagnosis [1] - In insurance, claims adjudication agents can process various data types to deliver faster, explainable decisions [1] - Military organizations utilize the technology for real-time tactical guidance by processing images and terrain data [2] Development and Deployment - Open integrations with SQL, Python, and LangChain facilitate the design and orchestration of autonomous agent workflows, allowing for rapid prototyping and deployment [2] - The platform supports the transformation of unstructured data into high-quality embeddings, bridging gaps between different data types [2] Executive Commentary - Teradata's Chief Product Officer emphasized the shift towards AI agents as the primary interface for enterprise intelligence, highlighting the need for a unified platform that supports both structured and unstructured data [2] - The CEO of Unstructured noted that the integration within Teradata's platform ensures production-quality, AI-ready data without compromising governance [2] Availability - The new capabilities for Teradata Enterprise Vector Store will be generally available to customers starting April 2026 [2]

Financial Data and Key Metrics Changes - Teradata reported public cloud ARR of $6 million, a 16% year-on-year increase in constant currency [6] - Total ARR reached $1.44 billion, aligning with expectations on a constant currency basis [6] - Free cash flow generated in the quarter was $7 million, with non-GAAP EPS at $0.66, reflecting a 16% year-on-year increase [7][29] - Total revenue for Q1 was $418 million, down 10% year-on-year as reported and 8% in constant currency [27] - Recurring revenue was $358 million, down 8% year-on-year, with recurring revenue as a percentage of total revenue increasing to 86% from 83% [27] Business Line Data and Key Metrics Changes - Cloud ARR grew 16% year-on-year in constant currency, representing the midpoint of the 2025 outlook range [26] - The cloud net expansion rate was 115, impacted by lower expansion activity last year [26] - Total ARR declined 2% year-on-year on a constant currency basis, showing a two-point improvement from the end of 2024 [25] Market Data and Key Metrics Changes - The company is seeing positive effects from a focus on advanced analytics and industry use cases, both in cloud and on-premises [7] - The hybrid capabilities of Teradata are deemed relevant in times of macro volatility, meeting customer needs effectively [8] Company Strategy and Development Direction - Teradata is focusing on profitable growth and optimizing investments across all lines, including SG&A and R&D [39] - The introduction of the Teradata Enterprise Vector Store aims to enhance capabilities for AI workloads and autonomous business processes [10][22] - The company is committed to returning to total ARR growth in Q4 2025, with a focus on AI innovation and customer engagement [16][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the dynamic market and is working closely with customers to maximize data and analytics usage amid uncertainty [8] - The company expects meaningful year-over-year improvement in retention rates for the remainder of the year [25] - Management remains optimistic about returning to growth in 2025, despite macroeconomic challenges [16][32] Other Important Information - Teradata was recognized as a leader in the Forrester Wave on data management for analytics platforms, reflecting strong capabilities in hybrid cloud deployments [16] - New executive appointments include John Ederer as CFO and Samit Arora as Chief Product Officer, aimed at driving innovation and operational efficiency [17][18] Q&A Session Summary Question: Opportunities for cost efficiency - Management is focused on profitable growth and optimizing investments across all lines, including SG&A and R&D [39] Question: Understanding the Q2 EPS guidance - Factors affecting the lower EPS guidance include lower corporate spend and a higher cloud mix impacting the second quarter [43] Question: Lessons learned from past executive management - The company is entering a new phase, focusing on advanced analytics and AI solutions to meet customer demands [49] Question: Impact of hybrid solutions on cloud growth - Management sees good growth in cloud business and believes hybrid opportunities will continue to be significant [53] Question: Retention rates improvement - Retention rates have improved year-over-year, driven by customer success initiatives and enhanced service delivery [60] Question: Confidence in maintaining ARR guidance - Management has line of sight into execution and believes the guidance is solid despite macro uncertainties [64] Question: Update on government business exposure - The majority of government business is international, with minimal exposure to federal spending [71] Question: Benefits from go-to-market changes - The sales team is generating interest in AI capabilities, leading to improved customer engagement and faster deployment [75]

Financial Data and Key Metrics Changes - Teradata reported public cloud ARR of $6 million, a 16% year-on-year increase in constant currency [5] - Total ARR reached $1.44 billion, consistent with expectations on a constant currency basis [5] - Non-GAAP EPS was $0.66, reflecting a 16% year-on-year increase [6] - Total revenue for Q1 was $418 million, down 10% year-on-year as reported and 8% in constant currency [25] - Recurring revenue was $358 million, down 8% year-on-year as reported and down 6% in constant currency [25] - Total gross margin was 60.3%, down 190 basis points year-on-year [26] - Operating margin was 21.8%, up 270 basis points year-on-year [27] Business Line Data and Key Metrics Changes - Cloud ARR grew 16% year-on-year in constant currency, with a cloud net expansion rate of 115 [24] - Recurring revenue as a percentage of total revenue increased to 86%, up from 83% in the prior year [25] Market Data and Key Metrics Changes - The company is seeing positive effects from a focus on advanced analytics and industry use cases, both in cloud and on-premises [6] - The hybrid capabilities of Teradata are deemed relevant in times of macroeconomic volatility [6] Company Strategy and Development Direction - Teradata is focusing on AI and advanced analytics, with the introduction of the Teradata Enterprise Vector Store aimed at enhancing AI capabilities [9][10] - The company is committed to returning to total ARR growth in Q4 2025, with a focus on profitable growth and innovation [30] - The management emphasizes the importance of trusted data for AI success and aims to leverage its hybrid cloud platform to meet customer needs [8][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the dynamic market and is taking a prudent stance regarding the services business, which is subject to discretionary spending [7] - The company expects meaningful year-over-year improvement in retention rates for the remainder of the year [24] - Management remains optimistic about returning to growth in 2025 despite macroeconomic uncertainties [14][30] Other Important Information - Teradata was recognized as a leader in the Forrester Wave on data management for analytics platforms [14] - The company announced the appointment of a new CFO, John Ederer, and a new Chief Product Officer, Samit Arora, to drive innovation [15][16] Q&A Session Summary Question: Opportunities for cost efficiency - Management is focused on profitable growth and optimizing investments across all lines, including SG&A and R&D [38] Question: Understanding the Q2 EPS guidance - The decline in EPS is attributed to lower corporate spend and a higher cloud mix impacting the second quarter [42] Question: Lessons learned from past executive management - The company is entering a new phase, Teradata 3.0, focusing on advanced analytics and AI capabilities [48] Question: Confidence in maintaining ARR guidance - Management has line of sight into execution and is confident in the guidance provided for total ARR and cloud ARR [66] Question: Impact of tariffs on business - Management believes the sticky nature of Teradata's contracts mitigates the impact of tariffs on customer spending [82] Question: Update on retention rates - Management reports meaningful improvements in retention rates, driven by customer success initiatives [60] Question: Insights on AI-related products' revenue impact - Revenue impact from new AI capabilities is expected to materialize in the following year as customer interest grows [79]