Teradata Corporation (NYSE:TDC) Q2 2023 Earnings Call Transcript

Chad Bennett: Great. Thanks for taking my question. So just to follow up on maybe the eighth iteration of the, the ARR in the second half on the call just on cloud ARR just want to make sure I understand you, Claire. I think you’re saying cloud ARR in dollar terms should be up sequentially in the third quarter here, and then obviously seasonally up a material amount in the fourth quarter. How about if we looked at it from a net new ARR standpoint on the cloud side, do you think net new ARR dollars grow year-over-year in the third quarter, second half in the, on the cloud side?

Claire Bramley: Yes. If you look at the second half in total we are, we should be able to deliver a higher growth dollars year-over-year.

Chad Bennett: Okay, great. And then I think this is the first quarter in about a year where subscription on-prem subscription ARR growth went positive, and I’m just, considering the strength you saw in the cloud ARR in the quarter to put up a positive, on-prem subscription ARR growth year-over-year, just in terms of how to think about that on-prem subscription ARR going forward or in the second half, I guess was there anything in the second quarter that was unique there and how should we think about the growth rate of that on-prem subscription in the second half? Thanks.

Claire Bramley: So yes, there was nothing abnormal, so we were pleased. As you can imagine with the performance in Q2, again we’re seeing strong expansions on both on-prem and in the cloud. So that’s good to see. I think as you move forward in terms of what the overall impact is for the full year, we’ll start to see more of a migration impact in the second half of the year. So second half of the year we’re expecting migrations to outweigh expansions, whereas so far in the first half of the year, it’s been expansions, outweighing migrations, so still anticipating good projection on our total ARR as based on our outlook that you can see, but I wouldn’t necessarily anticipate as the migrations would outweigh the expansions in the second half.

Operator: Thank you. The next question will be from the line of Howard Ma with Guggenheim Securities. Your line is now open.

Howard Ma: Okay, great. Thank you for taking the question. I have one for Steve and one for Claire. I’ll start with Claire and I just want to ask about the, what’s implied in second half cloud ARR guidance in a slightly different way? Take it into consideration what you just said. So with about five months left the year, how would you describe the, how you feel about visibility into the new ARR that’s required? And specifically, you just talked about, the, excuse me, the migration expected in the second half to outweigh expansions, but is there, can you comment on any large deals and how, in how they’ll ramp, so how do you feel about migrations and expansions relative to kind of what you already have in the bag, if you will?

Claire Bramley: Yes, absolutely. So I think based on the pipeline that we’re seeing, we’ve got a very good coverage as we look forward, which gives us high confidence in our full year outlook. We do need to do more in dollars to your point on cloud ARR, but that’s normal seasonality in the second half and particular in Q4. So as we look at our pipeline, and to your point, the deals that we’re working through right now, we have very high confidence in being able to meet the full year outlook that we’ve given.

Howard Ma: Okay, great. That’s encouraging. And one for Steve, I want to ask about Lake. Are you still on track to move the entire base of VantageCloud Enterprise customers onto Lake by year end? And a related question is, we were wondering how seamless is that migration process from enterprise to Lake and once customers are on Lake, do you expect higher expansion relative to enterprise, due to its superior architecture or, for other reasons? Thank you.