Q1 2022 Teradata Corp Earnings Call
The world, leading companies are gaining meaningful business outcomes from the data analytics carry data provided.
Let me take a moment to address the devastation in Ukraine, we are firmly opposed to the brutal Russian attacks on Ukraine and quickly took decisive actions in support of the sanctions opposing the attacks.
We are a data company.
Our purpose is to transform how businesses walk people through the power of data with.
We cannot support data being deliberately abused to mislead or confuse people and we work with our customers every single day to use our platform to ensure data responsibility transparency and governance.
In the quarter, we stopped conducting business in Russia.
Customer interactions and services with all Russian accounts and confirmed that we did not have any suppliers critical to our supply chain from Russia or Ukraine.
Our actions were managed with a priority of support and care for employees, who are directly affected.
Our Russian business operations were small relative to the total company, but healthy and profitable.
The action, we took will impact our performance in EMEA, but was the right thing to do.
However, almost all of our business in Russia was on Prem and therefore does not change our cloud transformation strategy.
As such we are reaffirming our public cloud growth guidance of approximately 80% for the year.
Later, we will cover the updated 2022.
In more detail in a few minutes, reflecting the impact of ceasing, our Russia operations and increasing FX headwinds.
Turning to our technology innovation engine.
We can't tell for momentum releasing additional new analytic capabilities to all of our customers' data is the foundation for analytics and western New and database data transformation functions, we're accelerating time to value for data science team with rich analytic datasets.
Having additional functions and database enables customers to rapidly execute their analytic workloads on vantage across many use cases.
Data scientists spend a tremendous amount of their time wrangling data before they can use it.
Any more functions and database allows them to spend less time and move to value faster or.
For example in areas like advanced segmentation predictive maintenance of high value machine.
Our assessing the likelihood of a customer to buy in a retail shop online.
These enhancements continue our commitment to providing functions until that make it easy to use our vantage platform and help our customers drive real value from their data and analytics investment.
This is something we have done for years. One example is how we have embraced open source Python and R for both client side and and database use cases.
We've delivered language expansion patch genes for data scientists using Jupiter notebooks, and our studio to make it seamless to leverage vantage capabilities and they are familiar language syntax.
And for performance at scale use cases, we supported for several years, the importing of Python and R scripts directly into vantage to operationalize machine learning scripts.
Our approach is years ahead of the competition. We recently successfully trained and parallel over 375000 heightened models and vantage using the popular profit forecasting library. This.
This is enabling one of our retail customers to migrate several modeling pipelines from spark and move them to Terra data.
Our R&D organization will keep leading the way in delivering market, leading technology and a strong attention on cloud continues we have had enhanced cloud based self service capabilities for business continuity and disaster recovery.
<unk> partial and complete backups scheduling and backup management capabilities.
These improvements are designed to ensure our customers can continue to match the recovery objective to the right kind of protection.
Our engineering teams are also hard at work on technology advancements that we believe will bring exciting next gen capability to Terra data in the cloud as we pursue opportunities to grow our total addressable market.
We are adding high quality cloud digital natives to our already strong engineering organization to ensure we are driving new innovations for our customers.
And customer adoption of our cloud offerings demonstrate that our technology brings ongoing business value in the quarter our growth in cloud came from across all three regions and included both new customers and expansion.
<unk> data was selected payment again by leading organizations in all three major cloud platforms and in partnerships with <unk> and ISP. It goes without saying that nearly every deal was a competitive win for us.
Just a few.
One of the largest financial institutions in the World has expanded its teradata vantage environment, adding a robust backup solution on AWS.
Critical data necessary for required regulatory reporting.
This is the banks first cloud implementation paving the way for future cloud infrastructure deployment.
We're partnering with a global systems integrator on the implementation.
And Australian based multinational bank and a decades long every day the customer is migrating its own <unk> development system to vantage on AWS.
The first phase of the customer's journey to modernize as broader analytic ecosystem with parent data to improve resiliency and lay the foundation.
The hybrid multi cloud environment.
Our management consulting services business in India has chosen vantage on Azure as its cloud data platform.
Reporting as tax practice, and later scaling to support other business functions and geographies.
New Teradata customer chose vantage over Microsoft sent out.
First on product capabilities and performance.
The data will collaborate with best firm, which is also one of our global Si partners on the implementation.
A Canadian multinational financial services firm has chosen vantage on azure, creating a path for cloud migration and ecosystem modernization. This long time customer already leveraging vantage on prem for a multitude of use cases spanning operational and real pain functions.
Analytics and regulatory compliance.
It is.
Remain laser focused on this effort.
It's always gratifying to receive positive recognition demonstrates her commitment D. S G and I'd like to mention a couple of recent recognitions received.
First <unk>.
Heavy data was named in Barron's ranking of America's 100, most sustainable companies for the first pain in 2022.
Selected from the largest 1000 publicly traded companies.
100 last name's companies that scored the highest <unk> 230 E. S. G performance indicators.
Second.
Heavy data was again recognized by Ethisphere is one of the world's most ethical companies in 2022 <unk>.
<unk> 13 consecutive years and receiving less important designation.
Operating ethically and with integrity has been part of our ethos from <unk> very beginning.
Honored to be recognized for our dedication to doing business, the right way as well as our commitment to socially responsible and sustainable business practices.
In addition, we recently received great recognition for vantage data platform.
Two of the largest and fastest growing segments and the data and analytics market, our customer experience and marketing analytics.
Heavy data was named a leader and Ivy Sea's Marketscape report on world wide customer data platforms for data and marketing operations users.
Our platform was noted for helping these business functions <unk> data and analytics <unk> using granular customer data more sophisticated modeling in real time interaction.
At the past the cold to clear I'm pleased and the progress we're making as a code leader 11 Amazing basements headed comes for our customers. We are confident our strategy and direction and they're investing in a strong future to generate long term shareholder value player.
<unk>.
Over to you.
Thank G C. Good afternoon, everyone.
Tara daycare delivered revenue and profit in line with expectations during the first quarter physical 2022.
Financial highlights and the quota include.
Can I tell revenue at $496 million.
1% a year over here as reported and 4% here either here in constant currency.
Preparing revenue of $386 million.
Oh, Dear I think yeah, right, a 4% accurate politics six per cent in constant currency.
Operating margin of 23.2% down 20 basis points here either here in line with expectations.
non-GAAP E P S 65 cents.
At the mid point about previously provided range.
And free Cashway of $150 million.
$105 million in the same period last year.
I see you've mentioned, we achieve these pockets without despite C thing <unk> operations in Russia, which was small healthy and profitable.
As a management team, we fully support essentially <unk> internationally and I thought with all of that if you are affected by this horrendous situation.
Russia's invasion of Ukraine occurred after we provided at 2022 outlets on February 7th.
Upon deciding to cease operations in Russia during the first quarter.
We have a maid anticipated contributions for the partial period from <unk> and the projections for Q2, two cheerful 2022 outlets.
<unk> operations in Russia resulted in a minimal impact to cloud error due to the <unk> of a Russian <unk>.
In 2022, we had anticipated title <unk> from Russia, a 55 <unk> <unk>.
Approximately 4% of the title error reported in 2021.
The related total revenue for the full year 2022 was fixed $8 million.
Or approximately three per cent of the policy 2021 title revenue.
Off the $60 million, approximately $10 million, which men days in the first quarter.
And the remaining $50 million will be removed and approximately equal amount for the remaining three quarters.
Sounds like a bit of <unk> of a Russian occupation was in line with the company's average of of carrying gross margin I for the last two years.
Which is approximately 75 per cent.
This reduction and profitability without and a 29 cent adverse impact on 2022 non-GAAP diluted E. P. S.
I will look that back to the the Max during my comments on the quarter and 2022 at <unk>.
Let's get him to the core today without starting with <unk>.
We continue to execute against all connected Multicloud strategy shared with you last year.
<unk> increased by approximately two per cent you ready to get <unk> and three per cent here I think is in constant currency.
<unk> after a amazing Russia related era, which affected <unk> and.
Like the primary driver of the sequential decline entitle era.
<unk> and the Americas, and a P J region, yeah over here.
Consistent with <unk> <unk> is S seasonal light point.
And as a reminder, the fourth quarter it last season, Oh, Hi.
With regard to the components of title era.
Subscription era increased by more than 6% <unk>, but declined approximately 2.5% sequentially.
And the quota that was at a a three point of negative impact from subscription Ara associated with Russia.
Maintenance and stuff why outbreak right Ara declined <unk> Uhm sequence me, primarily driven by Russia.
But oh, thanks, I'm perpetually customers migrating to on premises cloud prescriptions on Terra data.
This was expected and in line with that strategy shed about 2021 invest today.
Public cloud Ara, 69% <unk> as reported and 70 per cent. Your eyes are you in constant currency.
Cloud <unk> and O three geographic weekend <unk> and sequentially.
<unk> <unk> in the third quarter was driven primarily by extension.
We experienced healthy expansion activity from a higher number his knee and existing cloud customer. That's just the same period last year.
These customers are adding more you walked right onto the vantage kind of platform, while also maintaining hybrid environment on Terra data.
We feel good <unk> net expansion in the course of approximately 132 cents.
We also continue to see new loci magenta.
Please point of our strategic execution.
The number of new leg customers based on premises and in the cloud <unk> better than historical seasonality.
Moving to revenue.
Total revenue was $496 million.
A 1% increase year over year as reported and a 4% increase in constant currency.
We continue to build on a higher base of preparing revenue, which grew four per cent you already begin I'm, 6% in constant currency.
<unk> is driving a higher mix ever carrying begging me.
As a percentage of total revenue recurring revenue was 78% in the first quarter.
A significant majority of the $10 million total revenue impact from Russia, which related to preparing revenue.
Regarding upfront revenue everybody instrument.
In the first quarter, the net impact upfront revenue with an approximate positive $29 million.
This was in line with our expectations.
For reference this compared to a positive 24 million dollar impact in the first quarter of 2021.
<unk> 29 million dollar benefit due to revenue pulled into the first quarter from the next three quarters, partially offset by upfront repairing revenue recognized and prior coaches.
From the menu alright expansion of <unk>.
Upfront Avenue provided an approximate one percentage point a positive impact on the year as of yet recurring revenue growth rate.
Looking ahead, we continue to see the same quantity shape of 2022 <unk> upfront recurring revenue as we experience in 2021.
Despite this quote is net upfront revenue being higher than the same period last year.
We continue to motto unless hesitate impact E. P. S. In 2022 and the benefit received in 2021.
Regarding perpetual I'm consulting revenue.
<unk> amount came in line with expectations.
We continue to execute an <unk> strategy.
Moving to a higher mark and prescription modal and collaborating with partners that drive higher adoption and consumption of Paradise.
Amazing to profitability.
Terra data delivered a healthy <unk>, 62.9%.
Gross profit dollars, where any slightly down from the same period last year.
This is primarily due to the <unk> operation and negative effects impact.
All set by a higher mix a subscription base repairing revenues and a benefit from the positive impact upfront revenue embankment in the quarter.
Operating profit margin with a <unk> 23.2 per cent and a quarter.
With operating profit Dot is swearing sequentially, but flat to the same period last year.
We executed the plan operating expense investments in class operation going to market and R&D.
Continued a cough discipline and took actions to address indirect costs drop Jack related to the unplanned pleasure of our questions operation.
All of these activities resulted in fast sorta, adding cause I'd like to check 65 cents the.
The mid point of the previously provided outlook range.
This includes all surfing six cent related to Russia during the quarter.
Padding to free cash flow and capital allocation.
Free cash flow generated in the quarter with $150 million driven primarily by two effective.
First we achieved <unk> cash conversion efficiency, there's a favorable where I can catch some dynamic <unk> sequentially.
Second we received an approximate $58 million income tax refund related to Abkhaz at Kerry back pain.
In the first quarter, we repackage approximately 5.1 inches.
$250 million and <unk>.
As in asking February we entered into a 250 million dollar accelerated Chevy purchase agreements that was funded with cash on hand.
80% of the I S, which reflected as a reduction in our outstanding chess in February .
The <unk> with incremental to the $50 million open market share repurchases, we made in January 2022.
With the $300 million Chevy patches in the first quarter, we are well north about annual target of retaining at least 50 per cent free cashback to shareholders via Chevy practices.
We continue to allocate capital to investments in the company that support our strategy a cloud acceleration unprofitable bread.
With regard to the 2022 outlet I would like to provide some context on the second quarter and the rest of the year.
We are focused on the fundamentals the drive through and a scaling cloud business.
Healthy perfect ability and generation of gerbil free cashback.
We continue to expect cloud era, great to accelerate sequentially throughout the year.
We know that our fourth quarter is seasonally Ah highest quarter <unk> and we expect similar results from a <unk> and cloud <unk> perspective and 2022.
Pipeline support <unk>.
Steve mentioned, a cloud transformation strategy is unchanged and on track.
We are pleased to reaffirm outlook for public cloud <unk> of approximately 80 per cent <unk> as reported and incompetent currency.
Thanks to improvement and are working capital. We are also able to reaffirm our free cashback outlook of approximately $400 million.
However.
<unk> of Russian operation and recent currency movements have a more direct impact on the rest about 2022 outlets that.
Continued strengthening of the U S. Dollar has created in increments of 150 to 200 basis point currency headwinds to the outlook on a reported basis compared to what we shared with us in February .
Based on the end of April 2022, right.
Know estimating a currency headwinds of approximately 350 to 400 basis points <unk> and 2022.
If you exclude Russia and currency headwinds.
Then we would be in line with the 2022 outlets provided on last coaches, adding school.
<unk> outlet is reflective of our current makes my country as well as other information used offering a business that we know today.
Given the currency headwinds, we thought it useful to provide an outlet in constant currency.
<unk> 2022.
With that title era is now projected to decline in the life single digit percentage range, Yeah Rodriguez as reported.
On a constant currency basis type two error is anticipated to <unk> and the <unk> single digit percentage range.
Titled Repairing revenue is now anticipated decline in the lettuce tomato single digit percentage range <unk> is reported.
On a constant currency basis total recurring revenue is projected to be flat to grow in the low single digit percentage range.
Total revenue is now expected to decline in the mid to high single digit percentage range here for Ya as reported.
On a constant currency basis total revenue is anticipated to decline and malaria single digit percentage range.
non-GAAP earnings cause I need to check on now projected to be in the range of one dollar and 65 cents.
Two one dollar and 65 cents.
The impact of Russia is an approximate eight cents headwind in each of the three remaining fiscal quotas.
Some of which we anticipate to offset.
Currently driving an additional headwind of eight to 10 cents in titusville, the remainder of 2022.
For the second quarter of 2022, we anticipate non-GAAP earnings cause I need to check to be in the range 26 cents to 30 cents.
We project the non-GAAP tax rate to be approximately 21% in the second quarter and approximately 25 per cent for the phone again.
We all faithful across the weighted average diluted chaz outstanding you'll be approximately 108 million chest and the second quarter and for the full year.
Thank you very much for your time today, let's please open Nicole a question.
At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad will pause for just a moment she can pile the Q&A roster and the interest of giving everyone. An opportunity. We appreciate that you limit yourself to one question.
And one follow up your.
Your first question comes from the one of <unk> with Bank of America. Thank you you May proceed.
Yes. Thank you <unk> your your Russia, just tomatoes 60 million in revenues and 29th Avenue.
And blessed there's about $30 million was for 100 cough, that's driving a lot more negative leverage that I would've thought so any color there on why the hold Caruso high and sounded like you wrote about <unk> impact in the next three quarters, what why doesn't bug work down if I interpreted that derive and can you bridge the.
<unk> ordered a second quarter D B S as well it feels like some of the impact of coming from the upfront revenue, that's probably about 10 cents or so Russia sub eighth of sequentially. So what are the other moving pieces that get to the to to guide them early thank you.
Hey, Wednesday, yeah. Thanks for the questions and <unk> jumped straight anti first of all let me take add a quarter of a quota question that you have that on about E. P. S says we are seeing a carpet of headwinds as you mentioned with regards to you upfront, we so benefit in the first quarter, but we all antics.
The pacing of less of an impact for the rest of the year, but you 22324, and we saw in 2021, indeed, the reduction of Russia with a with a partial in the first quarter say, we saying a beggar impact for that in Q2, and Q3 and Q4 and also we are seeing additional.
Headwinds from currency there as you hopefully head and are prepared remarks, we have updated that guy to reflect the most recent currency rate is at the end of April .
Seeing additional headwinds of up to 200 basis points, which is also giving headwinds as we move at Q1 Q2, and the rest of the year.
If it got to the iPhone, Russia impact.
As I mentioned to walk with a partial impact at that we saw we have very profitable.
Business in Russia, as I mentioned, the Grace nausea, and we're gonna approximately 75%, which is in line with a recurring revenue marching across.
Across the company said when that dropped three for that $60 million of revenue. We do have some offsets as you would've been in my bridge in terms of upsets within the Russian cockpit <unk> <unk> <unk> in total so just to go back to that high level bridge, the midpoint of our previous Sky was.
At 187 within a 24 cents.
<unk> from Russia, with being eight to 10 cents headwind from currency and then we're off setting approximately six cents to get to the mid point at the need for you guys of one dollar and 60 cents.
Okay. Thank you and.
D for you or just touch on the fact that you are reiterating your guide X. These changes from affection and Russia are you're not seeing any impact.
On your annual pipeline feels like the world is more worried about a recession and just curious to see what what you're saying and you'll put blind any color that would be good. Thank you.
Hi, <unk>. Thanks for the question and fight we are continuing to see an increase in the quality and size of pipeline for the full year.
As you know we work on large complex deals taken the largest customers data and workloads to the cloud and these large deals means that we could variability from quarter to quarter Uhm at the other end of the scale, we're starting to see an increase in smaller volume. Both of these are starting to promote the pipe <unk> really.
Strong confidence that we've got a good pipeline of opportunity that supports or 80% year on year growth in the cloud and.
That pipeline is weighted towards second tops.
One of the examples I gave him the prepared remarks was on Australia Bank moving it's <unk> system to the quote clearly that starts off small, but as we work with that bank. The azo production system is that's clearly going to be a much bigger deal, which it will be in the pay for <unk>.
And the year, so lots of dynamics going on there, but the papers looking really good we're really pleased with her the transformation is progressing and the capabilities that will bring into our customers to support our outlook.
Okay. Thank you you too.
The next question comes from Chad Bennett with Craig Hallum. Your line is open.
[noise] great. Thanks for taking my questions. So clear image, maybe just a follow up or a little more detail on the the upfront revenue.
In the quarter benefit in the quarter.
I think you know the thinking go it in at least from my standpoint was the first half of last year, you had quite a bit of benefit from upfront revenue wreck I think related to term license arrangements on the subscription side of the business I guess is is that effectively.
What happened again to even more of a benefit this quarter cause I was under the assumption that we we were really no longer offering those deals if that was the case.
Yeah, Let me just talk about as <unk> as you mentioned to add that there's <unk> business, though as they even you unexplained that business with US we have that benefit upfront revenue that then get <unk> been moved from the remaining three quarters. We some other benefits in in 2020.
One we obviously so the renewal of the F. A Q1, but we did see some incremental benefit as well it actually wasn't line without expectations and so we were expecting to you want to be.
Uhm.
Line with what we saw which was the $29 million benefit at but we do expect that to <unk> cause we guide for you the rest of the year. So.
Not a not a surprise for us it is very similar to what we saw Q1 last year, we have a $24 million benefit and she one of those Jeremy sore throat increases that in the queue. One of this year.
Okay. Thanks for the color and then maybe maybe first I just.
In terms of the public cloud.
Are are growth and visibility in reiteration, which is all good to see I guess.
Can you give us a little more color I. It was great to hear is kind of the deals you cited migrations of new logos, but just kind of the progress on the new logo side with the team there with another quarter under their belt, what you're seeing in terms of active.
Activity deal size, and so forth and and maybe cut out what the expectation qualitatively is at least four new logo generation as we go through the year here as much as you can sure.
Yeah. Thanks, Yeah, the companies come a long way in a short time.
Significant growth through 2020 significant growth in 2021 and set to grow our <unk>, our our by 80 per cent in 2022 that gross estimate is supported by that really strong pipeline, we see a lot of really large deals with some of her biggest customers.
We're starting to see really great increasing traction from the new logo sales team.
We we talked a little bit and two for about a new logo <unk> worst continuing to see really good progress there and I think what it's really demonstrating charges overall, we've got the right strategy the right technology and the right people to execute and our strategy is really resonating in the market.
Great. Thank you for taking my questions.
The next question comes from Eric <unk> with Morgan Stanley . Your line is open.
Good afternoon. Thank you for for taking my question, maybe maybe Claire I'll start off with you to just you know really nice gross margin this quarter. Despite the pressures that I'd imagine coming from inflation, obviously F X. So maybe you can just walk us through some of the boats and pigs that you saw this corner of the the Doctor to land, where you did and then.
Maybe as we move through the year and your expectations that we should think about on a quarterly basis. When it comes to affection and other cost pressures that are that are clearly just swimming in the world today.
Thank you answer the question absolutely I'd be happy to you Sir as you said flat K. So gross margin in queue compared to fiscal Q4 of 21, which we were very happy with their on a few pets, okay and that we have some headwinds coming in so currency continues to be a headwind.
As we mentioned and that increases as we go through to the rest of the year. We also have the headwind a cloud. So the good news at that cloud revenue in volumes are continuing to glare, but that is a headwind as a class margins are still trailing I'll average recurring revenue great margin, but that one.
Pets or take a little bit coming from the upfront revenue as well as I as I mentioned in Q1, which would have been benefit quota I've a quarter. If I led to the rest of the year Alright, as I mentioned, we have got incremental headwinds coming from Russia.
Two quota out clearly that compared to our previous outlet, that's an incremental eight cents per quarter. So titled 21 24 cents.
F F is a headwind at the rate for have been moving a lot recently. So we made sure to include outlet at the end of April and that's given us and for the rest of the year, an extra eight to 10 cents a.
Headwind and again as al Cloud revenue continues to cry that creates a headwind for us as well so a number of different pets and take that I think the underlying recurring revenue and margin is strong with pleased with the performance that we've seen in T. One and the outlets that we have.
<unk> because once you do a job full currency and for Russia. We're in line with what we were saying back in February price on the top line and from an E. P. S standpoint.
Okay totally on everything you can to data please.
Eric I think I think just from a <unk> R. E source perspective, we want to be very transparent and set goals and guidance that we are confident that we will be able to achieve and so that's why we've been very transparent about the impact of Russia and the impact of the most <unk>.
<unk> ethics headwinds that we're seeing uhm, but as clear said the fundamentals of the company are incredibly strong.
No that's perfect. Thank you for the color scheme, maybe I'll follow up with you just to build on the earlier question I just wanted to clarify and make sure I understood a lot of really nice customer success. Examples, but we can you just clarify were those and it was at a combination of migration expansion and completely new customers.
Just want to kind of breakdown, how how to think about each of those factors. When when you talked about when you talk about some of those click the customers liquor stores. Thanks.
Yes, the in my prepared remarks, we actually had all three of those examples we had an example of some expansions. An example of migrations and then Annette and customer in India. So when I when I give examples I like trying to paint a picture of who we are succeeding in each.
<unk>. The fact that our technology said is really differentiated and enables us to when you customers and also give her existing customers the best possible path to the cloud I think the other thing is you know as I talked about the analytics capabilities and the E. I N M L capability.
All the Teradata platform that really points to expanding our time and expanding our time beyond fort or competition can deliver because nobody else has it was kind of a deep performing capabilities and saved her platform.
Do not 375000 modeling example, nobody else can perform at that scale. So uhm, we give examples which kinda spend you logo expansion on migration. Thanks for the question.
No. Thank you for that.
The next question comes from Derek Wood with Cowen and company.
One is open.
Hey, guys. Thanks, Thanks for taking my questions.
<unk> could you talk about how your renewal portfolio looks this year versus the past years and with the conversations are like for customers looking to move more workload through a cloud.
It'd be remind instrument I know that you know when you get to the cloud expansion rate strengthen but what's the kind of initial revenue conversion what'd you do G. A customer maker workload ship them on for them to go out.
Yeah. Thanks for the question account a couple of parts that we saw good renewal rates in Q1 happy with with her renewals are going and Ah really good call out when we see customers initially moved to the cloud we actually do see really good expansion, so uhm because it just didn't.
Late for like they're usually doing some form of transformation or incremental incremental workload.
We're really excited as well with the launch of a new backup and recovery capabilities in the cloud that means that we can go go to each of the customers that are currently I'm operating with us in the crowd and give them a range of backup and recovery options, which will lead to incrementally expansion for her existing.
Customer base, so good renewals and uhm.
Good expansion rates when we lose those customers initially to the cloud.
Great and Claire I'm not sure if I caught it but how.
How much did Russia and pack total are are in Q1 of <unk> just try to get a sense as to what the air are caught your currency growth would've been excluding the rush impact.
Yeah, absolutely. So the majority of the 55 million dollar came out and two one so that's giving us a headwind of full points on a title era.
Okay. Thank you.
You're very welcome.
The next question comes from Tyler Rodkey with City. Your line is open.
Alright. Thank you for taking my question I wanted to ask you about.
What you saw in terms of expansions on the cloud business in Q1 looked like the sequential growth and cloudy or was was the smallest.
We've seen in a while and Claire you talked about I believe seeing near 130 per cent expansion right, where I I think in the past you you've talked to in excess of 130. So I just wanted to see if if that may be down takes a little bit and you know obviously, you're guiding to kind of Ah reacceleration for the full year. So it just kind of.
What underpins your confidence Sir thank you.
Hey, Tyler I'll I'll start off.
R Q1 is traditionally and seasonally our our lowest quarter, especially moving from two four which is seasonally our highest quarter in terms of sales execution. So we saw it a little bit of that moving from Q4 to Q1 in terms of the overall results. So we did anticipate a sequential <unk>.
<unk> two four as our seasonal I in Q1 is our seasonal low.
In terms of <unk> net expansion rate it did round up to 130%, we're still confident about the overall expansion rate and save the business for cloud and as we look both for this year and for long term. So the guidance that we gave from a 2025 <unk>.
<unk> of being over a billion dollars a V. R. R and declared we're still very confident that we can achieve both the 80% for this year and over a billion dollars is a R. R and required by 2025.
Thanks for the color there I wanted to talk about the AWS partnership, which I I know, it's been a bit of a recent focus for the company can you just talk about your your pipeline there in terms of joint deals and you know kinda.
How how you expect that to play out and potentially grow over this year in terms of the the partnerships.
Yeah. Thanks, So we're seeing good good traction across all three cloud providers Uhm AWS is or is their largest partner really good growth with the juror, though and continuing gross M with G. C P.
In terms of the partnership with AWS, We actually ran it joined engineering session with AWS recently, which I could I I think underpins, how deep or partnership as with AWS in terms of has enjoying engineering teams working at the.
The real integrations are going to look like and that that really lays the foundation.
Technical foundation to take that to our joint customers to deliver some really significant value. So we're continuing to see that partnership develop will continue to see that partnership expand I'm very excited by all of the traction across all of the code providers, but AWS me sure, especially.
Thank you.
The next question comes from Ramo when shell with Barclays. Your line is open.
Thank you.
Steve the lookout and industry, there's obviously, a fair amount of momentum for a lot of players out there what do you see in terms of where your solution is playing particularly well I'm thinking protocols.
Or regions.
In terms of like where people have like very do.
Conflicts deployment with a lot of reports running so it's really difficult.
So you are much much better option to kind of move into the cloud could you speak to that a little bit and then the second question was when you build momentum like how much over me do you have for partners as I used to help people migrate into the cloud.
Is that something that says.
You need to work on all can look on thank you.
Right well. Thank you very much for the question I said in the prepared remarks, we seem good growth across all free geographies and across all three clothes service providers in terms of an industry focus strategically as we laid out at our aim session. We focus in seven key.
Verticals.
Credibly deep industry capabilities and so he does have some vertical we saw a lot of good traction uhm over the last 12 months with financial services firms retailers and manufacturing moves into the cloud and clearly some health care organizations is there.
Looking to address the challenge you've been saved their industry are analytics capabilities me cause really attractive from a retail perspective.
Running those models that I cannot outlined in the in the prepared remarks I think it's also interesting that you know the market has seen the importance of hybrid capabilities know some of the most recent and then it's been a really kind of cementing. This strategy that we've had in place for some time now just as an example.
<unk> has had the capability to access.
On premise native objects doors from providers like Bell for the last the last 12 months no over 12 months and being able to run that workload and a hybrid fashion a lot of our customers are deployed in a hybrid manner give us the ability to deliver the best possible experience <unk>.
Ross private and public close to one of the banks I referred to in my prepared remarks actually Ella Street, the creation of that hybrid code environment, where they have data gravity on trim and they're also utilizing.
New services delivered csp's integrate into Tara data and then tying it all together with a <unk> technology.
Stay on the street. So we can provide that real hybrid environment today with real solutions. So.
We're really happy I think we've been selected and those kind of use cases because of our total cost of ownership and that's that's why we went into the marketplace. So really excited about how we're seeing the market expanding the opportunity that sets it out in front of us and gives us some real confidence for the future. Thanks for the question right.
Mhm.
[noise]. The next question comes from <unk> Wall reason with J P. M Securities. Your line is open.
Thank you so much as <unk> I'm curious how are you feeling about your ability to attract and retain talent, especially in this environment and then on the cloud specialist sales organization, what does a typical rep profile looked it looked like there.
You so much.
Thank you. Thanks for the question. So yeah, we're having some great talent great success recruiting talented all levels in the organization and we just brought N a new highly experienced leader for our EMEA region Super excited to see what Richard is going to deliver forest, but not.
Only bad I mentioned in my prepared remarks that were growing cloud engineering talent uhm.
Uhm across all of our Geography's actually in attracting uhm I prefer to MS cloud native digital experts into our product engineering organization, we've seen.
Good retention and <unk>, our organization and the ability to really get the best out of our engineers as we're developing leading edge solutions. So it's it's I think and say Tara data, we provide a great culture, where people want to come and work and bring their genuine authentic sales to work in the <unk>.
Also get an opportunity to walk on leading edge technologies delivering business that it comes with nobody else cannot can so I think very happy from a talent perspective from a sales specialists in quite a sales specialist point of view, we've taken some of our best sellers from across all.
All of the regions and put them into a code specialist sales unit to support our account executives in terms of driving <unk> their accounts and that's working incredibly well we're seeing some good strength from that and that's helped drawing that pipeline the lessons reaffirm the with 480 per cent year on your <unk>.
And next year.
There are no further questions at this time I will now turn the call back over to Steve Mcmillan for his final remarks.
Thank you operator, and thanks for everyone joining us today.
We remain on track with our strategy is absolutely right for a market enterprise customers are always striving for optimum business that it comes at this scale the require or add new logos and expanding access to my accounts as companies realized great value from the Teradata platform and we all remain absolutely committed to.
To accelerating growth and continuing or recognize technology leadership to help our customers get amazing business results.
Thank you very much I'll look forward to talking to your next quota.
This concludes today's conference call you may now disconnect.