Sheldon McMeans: Hi, this is Sheldon McMeans for Raimo. Thanks for taking our question. I first wanted to ask about some of your newer announcements, AI Unlimited, open table format support, the expanded AWS partnership. Are any of these impacts embedded in the re-acceleration and guidance, or is it more what you’re seeing in the reacceleration and guidance or is it more what you’re seeing in your existing pipeline for existing workloads that’s giving you confidence?
Steve McMillan: Yes, thank you for the question. Yes, our announced, super excited about our announcements around AI Unlimited and support for open table formats. We really believe that it’s a differentiated capability in the industry supporting both iceberg and delta lake formats from an open table format. Perspective AI Unlimited is certainly a facility that’s going to enable us to attract new workloads into the Teradata ecosystem and new users into the Teradata ecosystem. In terms of creating an impact or a meaningful impact to our total ARR and total cloud ARR, we see these as fueling the pipeline and acting as a catalyst for us so that we can discuss with those customers a move into VantageCloud offers that we have and accelerate that overall expansion of VantageCloud environments for existing customers, but also win those new logos.
And as was pointed out, we had over 100 new logos added to the pipeline in the last few months. It’s the strength of our technology and the strength of our roadmap that’s enabling us to have those conversations and put across our uniquely differentiated value proposition, so, really excited about the technology landscape that we have and the offers that we’ve made available over the last couple of months.
Sheldon McMeans: Great. Thank you. And then, a quick follow-up, did the headwinds from those couple of large on-prem erosions fully play out in Q1 or is there still some impact expected to fall in Q2? And is that why ARR is expected to be relatively flat quarter-over-quarter in Q2?
Steve McMillan: Yes, so from a total ARR perspective for Q1, we executed pretty much as we expected. From an overall ARR and what we saw in terms of our customer base, we are will see some impacts in Q2. As we noted in last quarter’s call, it’s pretty consistent, there’s been no change in the last 90 days in terms of the overall landscape. And we still have good faith in terms of our full-year guide.
Operator: Thank you. The next question is from the line of Chirag Ved with Evercore ISI. Your line is now open.
Chirag Ved: Hi, thanks for taking the question and good to hear from you. So, as we continue through the initial stages of this AI cycle, many companies today want to start incorporating new GenAI capabilities. But we’ve heard that many of these companies don’t have the modernized data stack required to support AI implementation today. I just wanted to get your thoughts on whether there was some level of data quality issue in the market overall, how companies who are making inroads on addressing this, and whether you view these market dynamics as a tailwind for Teradata looking ahead? Thank you.
Steve McMillan: Yes, thanks for the question. So, I think the way that we see the AI marketplace playing out is that organizations that have a modern data stack and can leverage their enterprise data warehouse, which is where the most trusted data from an enterprise exists, but also combine with data that is in a lake construct and also a lake-house construct, that is really going to be the winning formula for data platforms going forward. And it certainly underpins our technology strategy in terms of having a data platform with the broadest choice of deployment options. The other really important thing is, in those analytics environment, to be able to deploy those advanced analytic AI and GenAI models at scale very efficiently, without letting costs run out of control.
That is something, and that financial governance is something that Teradata is very accustomed to. Our platform has unique differentiated capabilities in terms of moving some of these most complex models into production at scale. Some examples of that from the prepared remarks, we’re really looking at healthcare organizations that were, at a massive scale, improving patient outcomes by running multiple models against all of the patients that they have in their ecosystem. And to do that effectively, they have to combine data from multiple sources to enable them to do that. And then just from a governance and data governance perspective, as something that Teradata has always been strong in, with our added capabilities, looking at data lineage, and trust in the data that we have inside an organization, it really does enable Teradata to be trusted AI solution for our customers.
And that’s getting some great traction in terms of the discussions that we’re having across all industries just now, actually, so really well-placed from a technology perspective. To the point that you brought up, I think that’s what customers are looking for from a solution, and it’s what Teradata can deliver today.
Chirag Ved: All right, thank you.
Operator: Thank you. The next question is from Tyler Radke with Citi. Your line is now open.
Unidentified Analyst: Hi, good afternoon. This is [indiscernible] in for Tyler. Thanks for taking the question here. We have a lot of questions around ARR already, so I’m not going to go there. My question is around on-prem erosion. Good to hear that the erosion was as expected and you view it as an outlier for this year. But for investors the trend [indiscernible] is this a one-time event. Could you provide some of the action steps that you’ve taken and what was already accounted for on this erosion?
Steve McMillan: Yes, thanks for the question. As we look at the erosions for full-year, we don’t see any changes to our outlook today versus 90 days ago, and that is all factored into our outlook for the year. As we take a step back, we absolutely run the most complex and mission-critical workloads for the world’s largest enterprises. And we do have a very detailed understanding of what’s going on inside those customers. We created a customer success function a few years ago, and they have a really disciplined approach to assess account health, what’s going on inside the customer, our level of engagement. We have telemetry now in terms of understanding what’s going on for the environment, how we’re engaging partners inside that organization.
So, we really do have a great 360-degree view of the customer and what’s happening. And so, we do see 2024 as being an outlier and to our renewal rates. And we anticipate that to improve into 2025. And we’ve got a handle on all of the levers to do that.
Unidentified Analyst: Got it, that makes sense. I have a follow-up for Claire around your confidence on the renewals for the back-half of the year, specifically excluding some of the split deals for ’23. How does that [2H] (ph) renewal looks like versus the same time from a year ago? Thanks.
