Teradata (TDC) 2024 RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference summary

Competitive positioning and technology vision

• Focused on analytics in hybrid, multi-cloud environments, enabling customers to operate both on-prem and in the cloud for maximum flexibility and price-performance differentiation.

• Unique ability to handle large, complex workloads at scale, especially in AI and analytics, attracting customers back from competitors like Snowflake and Databricks due to superior speed and cost efficiency.

• Cloud business has grown from near zero to over $500 million in four years, with strong partnerships with AWS, Microsoft, and Google, including deep integration with Microsoft Fabric.

• Competes effectively with hyper-growth peers by focusing on profitable growth and free cash flow, often winning head-to-head technology comparisons.

Transformation and organizational changes

• Shifted from a services-heavy model to a technology and platform focus, inverting R&D to prioritize cloud innovation.

• Undertook restructuring to streamline management, bring senior leadership closer to large deals, and refocus sales on high-value transactions.

• Appointed a new sales leader and reset growth outlook in response to deal elongation and changing customer buying patterns.

Financial performance and outlook

• Achieved strong Q3 results, beating consensus on revenue, profitability, and free cash flow, despite continued elongation of large deal cycles.

• Maintains high customer spend commitments, with many customers increasing their commitments even as deal closures are delayed.

• Reiterated total ARR guidance for the year and expects continued ARR and cloud growth into 2024 and 2025, driven by high retention and expansion rates.

• Cloud now represents over a third of total ARR, with a path to $1 billion in cloud ARR by 2026.