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]

Teradata (TDC) Q1 2025 Earnings Call May 06, 2025 04:30 PM ET Speaker0 would like to hand the conference over to your host today, Chad Bennett, Senior Vice President of Investor Relations and Corporate Development. You now may begin. Speaker1 Good afternoon, and welcome to Teradata's first quarter twenty twenty five earnings call. Steve McMillan, Teradata's President and Chief Executive Officer, will lead our call today followed by Sumit Arora, Teradata's Chief Product Officer and then Charles Smotherman, T ...