Teradata (TDC) UBS Women in Tech Summit summary

Transformation and strategy

• Underwent a major shift to a cloud-first model, launching a cloud-native product in January 2023 and expanding to all major cloud providers by June 2023.

• Focused on large enterprises with significant data needs, leveraging strengths in data lineage, performance, and open, connected analytics.

• VantageCloud Lake and AI Unlimited products enable smaller, experimental workloads and AI use cases, supporting both new and existing customers.

• Emphasis on supporting open table formats to provide flexibility and attract new customers, while monitoring potential revenue impacts.

• New CRO is driving increased partner engagement and operational excellence to accelerate growth and improve deal closure efficiency.

Market environment and financial outlook

• Observed elongated sales cycles due to strategic, high-level customer decision-making, especially around AI and data architecture.

• Despite longer deal cycles, the pipeline remains strong, with stable conversion rates and growing confidence for 2024 and 2025.

• On-premises customer erosion in early 2024 was anticipated due to prior lack of cloud-native offerings; retention rates expected to recover in 2025.

• Reaffirmed public cloud ARR growth guidance of 35%-41% for 2024, supported by robust pipeline analysis and strong net expansion rates (123%).

• Free cash flow guidance for 2024 is slightly higher than 2023, with a step up to at least $450 million in 2025, driven by cloud growth, margin expansion, and operational efficiencies.

AI, innovation, and operational efficiency

• AI Unlimited product offers serverless, self-serve analytics for AI workloads, aiming to drive adoption and expansion among both new and existing customers.

• Internal use of AI is encouraged for efficiency, with a focus on experimentation and reinvestment of savings rather than mandated cost reductions.

• Operational improvements include real estate footprint reduction and ongoing cost management, with reinvestment in R&D and sales.

• Cloud margin expansion and economies of scale are key drivers for improved operating margins, targeting low 20% range by 2025.