Teradata Corp at Citi TMT Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tyler Radke - Citi - Analyst : Got it. And since joining, yeah, I guess, what were sort of the things that attracted you to Teradata? And what have kind of been your first impressions?

Question: Tyler Radke - Citi - Analyst : Okay. Great. And that's a good segue into kind of your biggest priorities. Obviously, Teradata has been on this transition to the cloud and the subscription, and free cash flow is kind of gone through fits and starts of improving and deteriorating. So how do you kind of assess where we're at, what the growth in free cash flow business of this business can ultimately become?

Question: Tyler Radke - Citi - Analyst : Got it. And zooming out, just kind of thinking about some of the big picture trends, obviously, there's a lot of negativity in the software market right now, more so on the application side, just with seat models and concerns around SEO or UI, UX disruption. I think on the data side, there's -- we've seen some pretty healthy results from the -- obviously, the hyperscalers, some of the cloud consumption models. Even Q2 for you was better than recent trends. So where -- what are you just seeing in terms of the AI and data modernization conversation? And is that starting to show up for you in a positive way?

Question: Tyler Radke - Citi - Analyst : Okay. And -- I mean, is there signs of that, that you can see whether it's in the numbers? Obviously, ARR is one thing, but even pipeline or -- even earlier stage in lead gen? Or anything you could point to where you're seeing that uptick?

Question: Tyler Radke - Citi - Analyst : Right. Okay. But I think is this something that you think plays out in the coming quarters? Or is this like a next year thing? Just a sense on the timing on when it can improve growth?

Question: Tyler Radke - Citi - Analyst : Right. And just going back to this last quarter, you saw a pretty healthy ARR performance. I think you talked about some deal timing benefits. Could you just recap some of the highlights of the quarter, how you're feeling about the year? If that was simply timing? Or do you think there's kind of a turn in the business, better execution, renewal rates, et cetera?

Question: Tyler Radke - Citi - Analyst : On that point, is that just better engagement kind of person to person? Or is there kind of additional telemetry that you've been able to add into the usage to kind of look at that?

Question: Tyler Radke - Citi - Analyst : Yeah. We've heard some of the cloud vendors, whether it was Microsoft last call, even Snowflake and AWS, Google as well call out strong migration trends. And I'd just be curious, are you seeing -- it sounds like you feel better about kind of the erosion risk and everything. But is there any additional risk you see from some of those cloud native migrations? Or maybe there -- you think those migrations are coming from a different competitor, whether it's IBM or Hadoop or some of the other legacy vendors out there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2025 / 1:30PM, TDC.N - Teradata Corp at Citi TMT Conference

Question: Tyler Radke - Citi - Analyst : Interesting. So as you think about that impact on you, I mean, is there -- is that deflationary at all to growth? Or is it -- I mean, obviously, you have -- you support the on-prem environment well and you should see the stronger demand show up there, but -- yeah.

Question: Tyler Radke - Citi - Analyst : Right. And I think on those growth targets a few years ago, well -- before your time, hold you these targets, there were plans to kind of return the company to double-digit growth and part of that was like $1 billion cloud target and everything. How do you -- like given this dynamic that you've seen, do you feel like you can get back to double-digit growth with kind of this hybrid nuance you added in? Or does that kind of rely more on the cloud?

Question: Tyler Radke - Citi - Analyst : Right. Okay. And on some of the changes, last year, I think there was a roughly 10% restructuring, which is one of the biggest in quite some time, but -- what's -- yeah, I mean, what's sort of been the fallout or not fallout in a bad way, but kind of the postmortem on that? Have there been any headwinds that you've had to work through? Or maybe this has just kind of created a new sense of focus and you talked about the team moving with more urgency. But just give us a quick rundown of all the changes.

Question: Tyler Radke - Citi - Analyst : Right. What -- I mean, from your perspective, you talked about the return to Rule of 40 or not return, but the path to getting the Rule of 40. Obviously, I'm not going to hold you to Rule of 40 in a time frame. But as you think about the margin side, which is the side that you can control the most, just given the top lines can be difficult. But what are the additional levers of efficiency you think about? And maybe it is pricing and packaging as well. But how do you think about the additional levers that the business has?

Question: Tyler Radke - Citi - Analyst : Yeah. And maybe on that topic, just with AI, I mean, if you -- I'm sure you're doing a lot of experimentation and perhaps production use cases internally. What have been some of the highest ROI returns and any way to quantify savings in terms of headcount or dollars that you've seen just from the internal AI efficiencies?

Question: Tyler Radke - Citi - Analyst : Got it. Okay. You hit on go-to-market a bit. I know there's been some new go-to-market leadership as well. Just walk us through what's changing. Is it sort of redoing territories, verticals? Is it changing incentives around new business versus retaining business? Just give us an overview on the strategic changes there.

Question: Tyler Radke - Citi - Analyst : I got you. Okay. And on the partner channel, where -- I mean, I know this has been an initiative for many years. Historically, Teradata had an even larger consulting and services business as you do now that we're competing with partners. So kind of wanting to not compete with them as much and get them to sell. So like where are we on that journey? Do you have goals on partner influence, ARR, ACV that you can talk to?

Question: Tyler Radke - Citi - Analyst : Okay. Got it. And then on the competitive front, you talked a little bit about this more demand for hybrid use cases on-prem, which I think is relatively unique to Teradata and being able to offer that hybrid capability. But clearly, Databricks and Snowflake continue to grow and, if not, accelerate. So how are you just kind of positioning Teradata? Because I imagine most of your customers may use all three. Do you kind of feel like that hybrid approach is the way you're resonating and kind of showing up as a unique offering relative to those larger players?

Question: Tyler Radke - Citi - Analyst : Yeah, it's interesting to hear that. I mean, because as we look like public cloud, industry growth actually accelerated pretty meaningfully this quarter. Azure accelerated, even AWS accelerated, Snowflake, Mongo, like -- we saw a lot of acceleration on the board. So maybe it's just kind of a rising tide too.

Question: Tyler Radke - Citi - Analyst : Yeah. And as you think about your target customers, I know in years past, there was kind of a reemphasis on the new logo opportunity. That was something that the company kind of abandoned many years ago. Where are we at on the new logo stuff? And like are you often targeting? Is it more legacy on-prem system you're targeting? Or are you also going after kind of cloud natives?

Question: Tyler Radke - Citi - Analyst : Right. And then last year, the topic of iceberg tables and kind of the open data formats was -- open table formats was very topical. Obviously, it's still around today, maybe less of a dominant in the conversations. But just frame for us, how does Teradata support those capabilities? And to the extent you've seen customers adopt them, has that had any impact on their Teradata spend?

Question: Tyler Radke - Citi - Analyst : Got it. Okay. Well, in the last couple of minutes, I would love to just kind of hit on capital returns and everything. I mean, clearly, the stock is trading at one of the lowest multiples it's been in quite some time. And the business has demonstrated ability to generate healthy levels of free cash flow. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2025 / 1:30PM, TDC.N - Teradata Corp at Citi TMT Conference I'm sure you think it could be a lot higher. But how are you just thinking about capital allocation, maybe getting more aggressive on share repurchases. I think the company has done some ASRs in the past, but just frame for us how you're thinking about the intrinsic value of the business.

Question: Tyler Radke - Citi - Analyst : Right. Okay. Great. Well, John, thank you very much for coming to the Citi Conference and sharing your initial take. It's only been a couple of quarters in, but look forward to seeing what's in store.