Q2 2020 Teradata Corp Earnings Call
Your next week.
[music].
Good afternoon My name is Stacy.
Operator today at this time I like to welcome everyone to the Teradata due to 2020 <unk> earnings Conference call.
To be placed on mute to prevent any background noise.
After the speaker's remarks, there would be a question answer session you like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
If he would like to withdraw your question I suppose.
Keith.
Oh sure shy corporate development and Investor Relations you May begin your conference.
Good afternoon, and welcome to parity to his 2022nd quarter earnings call. The Mcmillan Teradata is president and Chief Executive Officer will lead our call today, followed by Mark holding period, as CFO, who will discuss our financial results.
Our discussion today includes forecast and other information that are considered forward looking statements. These statements reflect our current outlook and they are subject to a number of risks and uncertainties that could cause actual results could differ materially.
These risk factors are described in today's earnings release carried as most recent 10-K filed with the FCC and in the form 10-Q, four the quarter ended June Thirtyth Twentytwenty expected to be filed with the FCC in the next few days.
We undertake no duty or obligation to update our forward looking statement.
On today's call, we will be discussing certain non-GAAP financial measures, which excludes such items as stock based compensation expense. Another a special items described in our earnings release, we will also discuss other non-GAAP items, such as free cash flow and constant currency revenue revenue comparisons a.
A reconciliation of non-GAAP to GAAP measures is included in our earnings release, which is accessible on the Investor Relations page of our web site at Investor Day, Teradata Dot Com replay of this conference call will be available later today on our website and now I'll turn the call over to Steve.
Thanks, Bill and good afternoon, everyone.
Im truly owners as well is incredibly excited to join candidate as CEO and lead that great organization that is rich with opportunity.
Joined that quite a unique pain in history for next pandemic has caused companies to we spend and we want their business models.
The crisis has made one thing very clear.
Central role, Kevin data plays and our customer success.
Organizations need data to help them manage through these tumultuous times.
As companies and fast rapidly changing market situations and customer needs reengineer supply chains to source critical supplies are present to remotely support all operations, we realize the need to leverage stayed as an important asset to make better informed business decisions.
Leveraging all of the relevant data portable helps organizations have the agility they need to run us through these disruptions of today's on 17.
Companies of the size and reach of our customers need access to data at the scale only part of data can address the reliability security and dependability, they require and we deliver.
Data and analytics are foundational elements to digital transformation.
Transformation, which will be accelerating from only by the pandemics organizations to rapidly adapted this changing landscape.
Transform themselves to be leaders in the new economies.
To accomplish the transformation they need analytic insight, reaching data from all relevant sources.
Kevin data is the ability to deliver these enabling capabilities in both hybrid and multi client is unique and presented us with a tremendous opportunity.
Well Thats market Beitzel. It gives me great pleasure to open my first earnings call with CEO Delevering news of strong results in Q2.
The organization executed extremely well in the quarter. Despite the uncertainties posed by told at 19.
In Q2.
We exceeded our expectations and street gains for our key metrics with strong sales execution and good cost discipline, we generated robust they are our growth.
I think in free cash flow strong recurring revenue growth and solid earnings per share.
I will cover our financial results in greater detail as usual and today I will speak to three areas important for Teradata success.
First our ongoing technology innovation.
In our resilient execution during these unprecedented pain.
Third our continued customer success.
Then I will close with a few perhaps no comments with Teradata is new CEO.
I wanted to start with our technology innovations, particularly in the quite.
As I've spent time learning about the company I was pleased to see the robust body of work from our products organization I think develop from engineered use data and analytics technologies for both hybrid and multi cloud environments.
We are pleased that advantage with native object store or knows support has become generally available and required on ADW assets and this year.
And we will be Delevering advantage on GCP very soon as well.
With no analytic models can take advantage of VIX exponentially greater amounts of data stored in public cloud environments massively improving the scope and accuracy of the resulting in takes.
No support all for reduces the French in using data and acquired object store with data already advantage.
This new releases vantage continues our focus on driving innovation and their software so that customers can apply analytic insight to date, our forever. It resides and an on premise supply and external data store or cloud storage environment.
Because 90, so for is consistent from one environment for the next rescues reviews and the process is greatly simplified bring faster time to value with the scale security availability and analytics performance customers rely on from Teradata.
Vantage with no support was developed with direct input from our customers and partners about the real world use cases.
One eylea access customer leverage vantage and I O T census data stored in a cws three.
To perform predictive maintenance and more than 650000 pieces of equipment.
Keep in the fleet running drives more consistent and predictable operations for them and increasing customer satisfaction.
We're also bring at 30 day trial and advantage and required for customers to directly at fast and experience the power advantage and test that advanced analytics on our leading platform and acquired.
Starting in Q2 best Global program is available by invitation and brings faster evaluations as well as reduced paint the value for our customers.
The trial offers end database analytics enough support and includes access to pre loaded dataset. So that customers can easily explore various business outcomes from advanced analytics.
The trial also showcases completely modernize you X for banks age, which makes it easier for business users to take advantage of our platform.
Well I'm still evaluating the business I'm pleased to see the strength of innovation that Teradata. However, we can improve or execution in this arena and accelerate up quite efforts in the momentum.
Turning to our execution during the covered 19 crisis.
With their data team demonstrated great resiliency and has acted quickly in smoothly to remote work environments with focused on supporting our employees for the challenges posed by the time, then it as well as being there to support our customers regardless of physical constraints.
To further support our customers during the pandemic ran enable customers to extend their knowledge of heightened level data and some say by offering or training for free.
And a great showing of the demand for Teradata expertise, we sold more than 14000 people take advantage of desk learning opportunities.
Further we re imagined the all of our advance into 100% structurally speeches and their teams collaborative remotely with hundreds of customers and prospective customers explaining how companies can leverage teradata to get the insights they need.
Last quarter, we talked about developing virtual executive briefing centers to advance our sales motions filed a world needed to what remotely we've had tremendous response from customers as well as to tell contributions from teradata employees to the high quality virtual interactions.
Actual engagement plaza and continuing to develop into opportunities for us.
As we moved through Q3.
Chilling gauge wins continue and our offices remain closed our goal is the safety over employee globally and the faces that highly dynamic situation. We plan to reopen offices only when we believe there will be safe environments for employees and guests.
In the meantime, we will continue to operate remotely and I'm pleased with how our teams have demonstrated their ability to adapt and keep advancing the business.
Strong relationships with our stable customer base combined with a deeply rooted dedication to delevering business value for our customers are serving as well during these uncertain times.
As we continue to support our customers in the digital transformation. We are modernizing our go to market motions. In Q2, we continued the rollout of our customer success program put our teams are working to ensure our customers are maximizing the business value from their investment and Kelly data technology.
Our customer success program also focuses on increasing customer satisfaction.
We are seeing very positive response from customers with this program and believe it will drive significant expansion opportunities overcame.
The work on building or modern sales capabilities remains underway as we enter Q3.
Simultaneously, our marketing programs are pivoting to focus on customer use cases and deeper digital experiences.
We are assertively taken by the narrative on Teradata. These capabilities in acquired with an integrated campaign addressing the Mets perceptions that others have proliferated, it's great to see as on new offense.
Just one example is in its standing web and now we recently held with independent analyst volume Mcknight and bring to international one of the world's leading casual dining restaurant companies with brands Chili's and Maggiano is little ethylene.
Thats Webinars centers on frankly journey to the cloud with Teradata and flight Brinker chose vantage on ADW asked to drive advanced analytics machine learning and data science across this organization.
With vantage delivered as a service and acquired Brinker can apply advanced analytics and predictive modeling to business to improve demand in traffic forecasting team member management and recommendation engines for customers and more youre welcome to lessen to Thats. Great example of how our customers migrate to the cloud it's available from our web.
Okay.
So we are advancing on many fronts all to support and grow our customer base, we have a broad number of wins in the quarter and I'd like to walk through a small sample of a recent cloud wins.
Vodafone extended the strategic partnership with Teradata with a new multiyear multimillion dollar commitment utilizing vantage to improve network intelligence digital customer experience Aiotv and finance.
We look forward to continuing to work with Vodafone to help drive is facing for the telco and the future.
A major U.S. supermarket chain as migrating to vantage on any WMS and here we won over cloud only vendors. This is the first step and growing teradata is value proposition and expanding into new use cases, including expanded store information trait loss prevention HR analytics and.
More.
Our European Energy company migrated to the cloud with fan who joined NWS.
Here, we won against computation from quite only providers based on our unmatched capability to scale and the flexibility and our pay for what you use consumption model.
The customer has an extensive set abuse cases, including expanding its three six degrees view of 11 million BCC customers, improving the customer journey and defining these customer segments based on advanced analytics.
One of the world's largest gaming and hospitality companies select advantage on as your vessels acquired only technology affirm utilizes teradata to drive its loyalty rewards program a nine out of every $10 of revenue flows through applications running on vantage.
As the company continues to modernize and transform its business is working with teradata to simplify the ways stakeholders analyzed data to make better and more timely decisions across the entire enterprise with a consistent data set.
However, data will be collaborating with global integrated cognizant on this project.
A leading us wholesaler is migrating to on Prem Sessoms advantage on ADW us.
Despite compensation from Chris quite only providers Teradata isn't consumption model when the deal.
The customers beginning a multi phased deployment that will ultimately replace redundant data March running on other databases through outages equals testing.
Teradata is collaborating with eight Ws and a major global systems integrator to expand usage vantage and drive business value for the customer.
A large Canadian Taylor is migrating key applications to the acquired as part of its quite as fast mandate.
Teradata and Microsoft work together to provide a compelling offer that involve replicating data on a near real pain basis from the customers on Prem sets them to vantage on his year. This it was it to seamlessly transition key business reporting initiatives and the case of a disaster with minimal disruption.
Best customer has a long history of working with Teradata and use that with the volume increased process daily it can seriously consider a cloud on those solutions that kind of scale to meet its price performance requirements.
We will continue to want to accelerate our quite efforts and drive high quality wins foster lasting relationships based on business value in our differentiated technology and services.
Before I pass the call Tomorrow, I would like to take a level playing to talk to you about apply I joined Teradata, what I see is there opportunity and how do I see our business.
Teradata is market possession and opportunity are tremendous.
As I previously stated data and analytics are the foundation of accompanies digital future and Teradata provides the best technology in a while to enable companies to leverage the data apply analytics to solve mission critical problems and compete in the market.
This is why company beltre future on Teradata and incredibly knowledgeable people, we have bring truly unmatched expertise to help companies get great value added the data.
I've only been a teradata for two months. So now is not the pain for new strategy statements, but rest assured we have tirelessly working on driving our cloud transformation and improving financial returns.
The primary focus of Maine is to create the strategic context, and operating plans for the company, which will share in the coming quarters.
For now I want to address a few sensational elements crucial to our future.
Well when in required and we'll continue to offer choice and quite deployment options to meet our customers' needs.
Part of the strategy will not change and I will make sure. We are focused on accelerating our move to the cloud.
In addition, I believe great technology company focused on platform and not product and there's a huge opportunity as we transform teradata to be the leading analytics platform for a hybrid and multi cloud world.
We will continue to leverage our differentiated expertise and consulting and services to enable our customers and our partners to achieve the best analytic outcomes.
And finally, we will aim to grow profitability with a balance focus on growth and returns optimizing and streamlining our operations where needed without impacting our customers. We will operate with a sense of urgency and productive paranoia as we move Taylor data into the future.
As we grow a resource will continue to be one that values inclusion and diversity.
Our entire leadership team recently stick together and pledge the all employees to take a set of actions ensuring that teradata cultivate a workplace for quality inclusion diversity and openness our company wide priority and we're aligning with our deep commitment to social responsibility, we have begun holdings.
Logs in some of the challenges facing the world today has opened conversation and knowledge are key to driving change.
While we have more what to do and will take some time to get to where we should be we are stocking from a strong foundation, we have the technology belt for a hybrid and multi cloud world, we have outstanding people and a very strong customer base.
We have a vibrant and strong culture and the passion IC to help customers get the greatest value from the data assets is absolutely energizing.
I'm confident that I made the right decision and joining teradata.
With the ongoing pandemic the second half remains uncertain for many organizations and no one knows when everything will return to more normal predictable environment.
Despite uncertainties, we are listening to the market and our customers. We are committed to responding with speed and agility and ensuring we are providing value for our customers supporting our people and delivering on our expectations.
I look forward to providing updates as we progress.
With that I'll pass the call Tomorrow.
Thank you Steve.
I would like to publicly welcome you to Teradata.
As Steve said, we had a very solid quarter with healthy results in all three regions.
And I'm very proud of the way the organization has come together executed.
We generated robust your growth.
Strong free cash flow growth.
Healthy recurring revenue growth and solid EPS enabled by actions, we took the manage expenses given the uncertain environment.
We mentioned on our last call some of the actions we took in Q1 in support of our customers.
Including temporary free capacity or extended payment terms and these actions helped move transactions forward this quarter.
But more importantly helped us to deepen our relationships with our customers.
Before I continue to highlight a few key elements of our Q2 operating results.
I want to make it clear that unless otherwise stated my comments today reflect teradata as a result.
Non-GAAP basis.
With excludes items, such as stock based compensation expense.
Other special items identified in our earnings release.
Additionally commentary on key segment trends can be found in their earnings discussion document and the IR website at investor that Teradata Dot com.
We generated 52 million incremental or our this quarter.
$39 million in constant currency.
This resulted in 358 million in recurring revenue.
Growing 6% reported an 8% in constant currency.
And was well above our guidance range.
As we said last quarter, we wanted to remain conservative in our outlook given the overall uncertainty, but as you can see we had a very strong quarter.
Consulting revenue declined 26%, 24% in constant currency. This is an area that has seen more headwinds from coated maintaining.
Some customers continue to manage discretionary spending.
We believe consulting will continue to see headwinds in the second half given the ongoing uncertainty due to various levels of outbreaks and continued remote work mandate.
Moving on the gross margin.
Recurring revenue gross margins were 69.8% up 230 basis points sequentially, but down 120 basis points a year over year as the mix of recurring revenue that include hardware and lower margin cloud revenue created a near term headwind over.
Overtime, we expect recurring revenue gross margins to expand as we see less mix headwind.
And expect to see significant growth margin expansion in our cloud offering over the next 18 to 24 month.
Consulting revenue gross margin was 15.9%.
As improve utilization and better price realization helped drive significant movement versus last year.
Some of his purport performance was due to catch up of projects impacted at the end of Q1.
And we will normalize in the second half.
And we're still expecting consulting revenue margins to be in the low double digits for the year.
Total gross margins came in at 58.9% of 620 basis points year over year.
The improvement was driven primarily by revenue mix shift to higher margin recurring revenues and away from perpetual in consulting revenue.
Total operating expenses were up 2% year over year.
The primary driver of this increase was amortization.
Capitalized sales compensation as required under age as see six or six.
We continue to reallocate spend towards our cloud initiative.
Well as our expanded go to market efforts with partners and customers success.
To follow these efforts.
As well as manage expenses given the uncertain environment, we took several actions to manage operating expenses, including limiting travel and entertainment.
Moving marketing events to virtual.
As well as limit other discretionary spend.
Additionally, we also converted a portion of our annual performance cash based incentive comp.
Who share based performance grant.
Potentially help non-GAAP operating margin and EPS in Twentytwenty between 50, and 100 basis points.
And five to 10 cents of EPS.
Which we believe will have no significant share dilution impact in 2021, when the final annual performance incentive achievement is determined.
For the full year, we will continue to occur areas to optimize our cost structure.
While investing in our key strategic initiative in cloud and transforming our go to market organization to support our recurring revenue model and expand our opportunities in the market.
As a result or the cost actions were taken in the first half.
We now expect full year operating expenses to be roughly flat to down year over year.
We had an exceptionally strong free cash flow quarter, driven by excellent execution from our collection organization.
As we mentioned last quarter, we had roughly 30 million in collections that slipped from Q1, but were collected in April.
And this combined with the overall strong quarter resulted in free cash flow for the quarter of 115 million.
Bringing free cash flow through the first half two $113 million.
As we said last quarter, we are confident that 2019 was the bottom for free cash flow during our transition.
And we have already exceeded that number.
As of the first half of Twentytwenty.
In addition, we expect incremental free cash flow for the second half to be positive as well.
Our financial position remains very strong and we ended the quarter with 494 million in cash.
After the initial shock in late March in early April to our customer base.
We saw conditions stabilize and end customer engagement return to very healthy level.
As a result, when you're already in the second quarter was better than our expectations for Q2.
And so far customer engagement trends have remained healthy at the start of Q3.
We will continue to support our customers in these unprecedented time.
And believe our long term relationships and rock solid technology, our advantages that will allow us to continue to expand our existing customer relationship.
While our customer base isn't getting noon.
We serve the largest most stable companies in the world.
As a reminder, less than 12% of our revenue comes from industry hardest hit by the economic changes drop by coal that 19.
We came into the year set up for a strong year.
And remain cautiously optimistic based on the pipeline, we see for the second half.
However, with continued disruption of daily life.
An uncertain business conditions.
We believe it's prudent to remain conservative and consistent with last quarter, we will only be providing guidance for Q3.
For Q3, we expect recurring revenue in the range of 359 million to 361 million.
And non-GAAP EPS.
Between the range of 28 cents and 31 cents.
In addition, we continue to expect or full year tax rate to be approximately 23% and.
And a full year share count of approximately 111 million shares.
And finally other than abundance of caution.
Our share buyback program will remain suspended until further notice.
And with that operator could you. Please open the call for questions.
As a reminder to ask a question. Please press star one on your telephone keypad Gulfstar one to ask a question now.
And your first question cancer, Katy Huberty with Morgan Stanley.
Thank you good afternoon, congratulations on the quarter, Steve welcome to the team, we really look forward to working with you I wanted to first ask you a question and that is it sounds like cloud in your mind is the biggest opportunity for Teradata. So can you provide a little more detail around what it is you are asking.
Team to go do around cloud is it entirely.
Engineering, what what features need to be added two to the product what what needs to be done around go to market and then.
How should we think about the timeline for teradata to become.
Incredibly competitive against a growing field in the in the cloud space in particular.
Hey, TV and thank you very much for the question and that thank you for the congratulations on all except to congratulations on behalf of the entire Teradata team as you know obviously stat appointed CEO at the beginning in June and you're absolutely right, we see cloud.
As Sam I be substantial opportunity in the marketplace replied from the ITC numbers, we see acquired growing in just under 38%.
And we see an on premise what loads going around 4%. So there is a fantastic opportunity. There. The team has made some good progress and acquired already and you can see that from some of the wins, but there the impact to the focus on quite it really does touch every single part.
Of the company.
From a product perspective, you saw some of the innovations that were delivered in Q2 from native object storage. An example.
The trials capability and updated you X, which is much more quite light you tenders have it operates add but we also.
We also see the changes impacting our go to market motion. So.
Looking at things like customer success, how can we work with customers are using our products and required to ensure that they are getting incremental usage.
The product development focus will continue.
Currently reviewing all of our spanning from a product development perspective, and ensuring that we're prioritizing the acquired and quite a development.
As part of for spanned envelope from a product development.
Angle I, we really do feel that so we are currently to taxes, having acquired but as we move forward that we'll be able to increase that overall level of competition.
And competitive ability by introducing new features and functions.
The one thing I think that we do have to address from a teradata perspective, as and we're not seeing as a modern and relevant cloud player and the focus from the marketing organization as really to change.
Perceptions in the marketplace.
You had from the strength of the when is that we were having inquiries that clearly and we can went well and and we've launched a recent campaign called mess Busters adequate looks set to really we educate the marketplace in terms of.
The misperception that may have been.
Right and about Teradata, and our ability to execute from acquired perspective.
So I think can based not just one aspect to focus on cloud as total organizational transformation.
I'd be remiss as well if I didn't say it also has to do with a cultural transformation of the company and Tam So I think with agility.
Really being conscious of speech in time to market and Delevering incredibly well. So it's great to see the product development team coming on time and against the commitments that they may need for AD delivery of new features and functions and say display.
Today, I hope I answered all the questions for you.
No that's great Mark can I just.
Ask one follow up and it's about guidance for the September quarter, if I remember back when you guided.
The June quarter, you essentially said that it assumed.
Very little in the way of new business and the remaining two months in.
In May and June.
Is that the same way that you approach September guidance or how would you characterize it as it relates to the degree of conservatism.
Sure, Yes, we're taking a conservative approach.
The bottom end of our guidance is very similar.
On that front clearly we were the beneficiary in Q2.
As we said in Q1 year or build that didnt happen with all the shelter in place scrambling going around the last two weeks in March.
On both trying to get renewals done as well as some of that they would add on stuff. So.
Clearly benefited Q2, we didnt have that same phenomenon.
The experience that the eligible so yes, we're taking a we're taking a conservative.
Conservative view towards so going forward.
Great. Thank you.
Your next question comes from Phil Winslow Wells Fargo.
Hi District telegram Paul Thanks for taking my question.
First of all Steve Congratulations congratulations on all we're looking for working with you and the rest of the team.
The questions.
You can talk a little bit about kind of building on the last credit here can talk about.
The mix of new versus just the quarter just curious how your customer conversations are going up our customers expanding on particular, France.
It was a lot of the conversations that you've been having and given the recent positive on maintaining foot.
And just kind of risk.
Thanks.
Okay. Thank you so much the question Ed cranks up a little bit, but then I think CAD. They actually to the question is there Ryan and are we seeing expansion are we seeing new use cases, and how are we doing and carries over existing customer base and attracting new customers. So let me just.
Touching a few of those points and expansion as a key driver for us at one of the really interesting things any items that I found out during my initial paying as that our customers only came to use about 20% of the features and capabilities as the product and as they expand the use of those that.
Capabilities, it really gives us the opportunity to de lever new use cases for the customer and sets teradata on a growth trajectory and say there and say during testing customer base and obviously our focus on a customer success function really looks to drive that the other thing I would say and there's been a real.
I opener for me as the expertise in innovation of our people and Tams all how they utilize teradata to drive new and innovative use cases for our customers you heard about some of that in the prepared remarks in terms of.
Working with companies around Aiotv.
Working with companies will affect predictive maintenance, but.
Some of the some the fantastic cash innovations that are also incredibly relevant to what we do today. So as an example.
We've developed a dashboard, which allows us to process information from AG sales data sources for a company and the internal data sources. They can provide executive management and say the company an idea of friendly should we open offices or stores or.
And they are overall business in terms of debt totaled 19 environment. So it's an incredibly exciting to see some of those existing use cases, it's really nice to see that happening in acquired but I want to stress that.
We are truly a hybrid and multi cloud player and and so we see those use cases being deployed both on premise and and the required.
So I think the opportunity is there to continue to expand to add to the customer base and we're seeing some really nice wins and some really nice growth in acquired business.
Okay. Thanks, I guess I'm wondering what you're hearing in terms of event. The service in recent given the backdrop and invented a little bit about GCP.
Hi, Mark I'm just.
How about coverage since have changed now.
Given the backdrop thanks.
Yes, we were really excited that end third quarter, we'll be announcing advantage on GCP.
And we really believe given the success that.
Google Cloud platform is having in the marketplace, we really think that that will expand and open up a whole new set of customers for us we've already got some pilots going on with their existing customer base in terms of utilizing vantage on AG, Google cloud platform that are really driving some.
Interest in use cases.
What we're finding is that.
Wedding and requires and very much share already helping customers reduce the risk in that transformation and then we will well in required because carrier data has got the scale underperformance, where prepaid security and reliability, we're truly the safe choice.
For customers that are moving from and an on premise environment and moving more towards the clients and obviously, our native object store technology that we launched.
Will enable us access exponentially larger.
Management data and required and really and open up brand new use cases.
For our customers and highly deployed.
Thank you.
Your next question.
Got it Barclays.
Hey, Thanks for taking my question and opportunistic.
I wanted to ask you first.
You said you had a when on the consumer based on the consumption pricing model in the cloud.
I was hoping you could kind of expand on.
What the consumption pricing model as for Teradata and how it's different.
I can't cloud vendors.
I think as pre timeframe very much the welcome and thank you for the question.
Not surprisingly our consumption pricing model enables our customers just to pay for what is being used and so it's very much in line with with where you'd expect from acquired based.
Delivery model, and I think where we set ourselves.
Where we set ourselves apart is the fact that and Teradata allows you to utilize those capabilities at performance and scale. So not only as it about tad pain just for what you use but you also get the benefits our.
Or.
But we tend to be a lower cost per query and when you utilize carry data technologies compared to some of the other cloud providers.
And that consumption based pricing as something that.
I guess is the flexibility to deploy and a real hybrid and multi quite environment and a consistent way. So it gives good FCC for our customers as they deploy workloads across lots of different environments.
Hey, that's really the differentiation as Terry data as it comes about when we combine that consumption pay for what you use AD pricing model with all of the benefits of Teradata in terms of low cost decrease.
And scaling that across both on premise and public quite environments.
With that answered the question for you Chris.
Great. Thank you.
Just a question on.
For Q2 recurring revenue growth of 19% in India.
Like I am extremely strong number I was hoping to get a little bit more color on what drove the strength there.
Yeah.
I mean is.
Strong quarter, clearly had some things that came out of Q1 that didnt close that close early so hopefully early perspective.
You know.
And Dave shifted.
Very well from perpetual to subscription, which is helping you know much more so than they did across 90 118. So.
That's that's a big big piece of it you know the U.S. was the first to make the shift now we feel really good ships.
Both or other reasons, both safety data as well as women.
Hey, Mark I think I think its while it was a fantastic CAD corridor and one of the key and what the only reason for growth and EMEA, they executed well across and lots of different countries in lawsuits deal sizes, new deals, but on the voter I'd like to point ever be to that.
Fantastic when it Vodafone, which was referenced in the prepared remarks that really drove and.
Fantastic when Ed.
It's really core to Vodafone strategy in terms of how are they are running and managing the network and how they want to be a telco or enter service provider in the future and so there were some really fantastic when for EMEA. So three banks for asphalt in that.
All right. Thank you both.
Yes.
No no further questions at this time I would now like to turn the call over to Steven Macmillan for final.
Thank you so much and that I'd, just like to accelerate again as an absolute pleasure for me to have joined Teradata as the CEO I'd like to thank publicly that teradata team for their execution and add to Q the resilience they've shown.
True add a pandemic and the focus that they've had in terms of.
Delivering to our customers and the at the.
Pandemic as a challenging time for all of those and we very much and fraud.
We're going to have some success as we move forward through the second half the year and it's clear that Teradata is essential in helping the largest organizations in the world leveraged data to get the answers that they need.
Our execution, we we really do expect that to continue on and we're going to move forward with a balanced view of growth and returns while keeping our customers at the center of all that we do so thank you very much and thank you for AD.
Turning into this earnings call.
Thank you for joining today.
Now disconnect.