They are utilizing their trusted enterprise data to get trusted results to improve their interactions with customers or improve their supply chain. In terms of monetary impact, I think it’s something that we’ll continue to monitor how it’s driving overall expansion activities for us, but we’re very bullish on it. And clearly, I was thinking about Teradata, not as a monolithic software architecture, but an open platform where we can integrate in some of these advanced services is going to drive more load as we move into the future.
Wamsi Mohan: Okay. Thanks, Steve. And a quick one for Claire. Where are you focusing on for the cost takeout that you called out? And what does that mean for the OpEx profile in terms of SG&A and R&D. R&D has been ticking up sequentially through the year? And do you still expect to repurchase shares in 4Q as you already exceeded your stated target for the year? Thank you.
Claire Bramley: Sure. Yes, let me just take the question on the cost actions. So what we’re trying to do here is look at areas where we can reinvest to be able to get a higher return on investment. And really focus on the best return and driver of profitable growth. So we’re not anticipating our total cost structure to come down because we’re reducing in some areas and then reinvesting in other areas. We think that’s going to set us up well but the fact that we are making those actions now mean that in 2024, we will also be able to get some revenue leverage as we move forward as well. So that’s what we’re doing from a cost action standpoint. With regards to your second question. Which I didn’t write down, so maybe you can remind me, Wamsi, what your second question was?
Wamsi Mohan: Claire, just on buybacks, just given you’ve already exceeded the years, 75% target —
Claire Bramley: Yes. Those with regards to share repurchases. We are not planning to be adaptive in Q4 in the market as we were in Q3. Obviously, with the share repurchase of $141 million in Q3, that was a big quarter for us. And it was very opportunistic given where our price was during the quarter. Q4, we will continue to be opportunistic, but we’re definitely not anticipating the same level share repurchase in Q4, but we will maintain the kind of opportunistic approach depending on where our share price is. We do really believe that this is a good use of our capital and good value and return to shareholders.
Operator: The next question is from the line of Chirag Ved with Evercore ISI. Your line is now open.
Chirag Ved: Congratulations on the quarter. So net new cloud ARR was strong and with these results in mind, when you speak with your customers and prospective customers, are you getting the impression that customers today are more willing to modernize their data estates and migrate to cloud now versus perhaps 6 months or a year ago? Or do you still see some of the broader hesitation that’s perhaps existed in the market for the better part of the past year that could be pushing timelines out for 2024.
Stephen McMillan: So I’ll take that just from a — what we’re seeing from a customer perspective is just to increase confidence in the Teradata technology platform and the ability for us to take the most complex, what loads in the world to the cloud in a very successful way. Teradata gives them a path to execute and a path to migrate to cloud that no other technology can provide to them. So we continue to see that strength in demand and strength in the pipeline. I mentioned in answer to the first question that we got in terms of, we see that pipeline continuing into Q4 for us to execute against. In terms of customer interest from a cloud perspective, we still see that as one of the top buying or investment points that customers are making.
I was talking to one of the large banks a couple of weeks ago. And they look at utilizing cloud technologies is an absolute essential capability in order for them to take advantage of all of the research and development organizations like Teradata and Microsoft execute from providing these services in the cloud so that they can have a differentiating capability into the future. As well as we from a Teradata perspective, put together a compelling commercial proposition so that they are motivated to move to the cloud with us. And that enables us to get them to a point where we can expand with them in the cloud as we take advantage of these services available in that modern environment.
Operator: The next question is from the line of Chad Bennett with Craig-Hallum. Your line is now open.
Chad Bennett: So maybe Steve or Claire, just in terms of VantageCloud lake and ClearScape, just now that we’re, I think, close to annualizing or a year into market with these, and I understand you’re on AWS and recently just came on Azure at the beginning of this quarter. How should we think about the contribution of those 2 products or platforms to whether it’s fourth quarter cloud bookings or ARR or maybe a better indication is into next year. Are you expecting those to be material to the cloud ARR growth at some point in the next 3, 4 quarters?
Stephen McMillan: Hey, Chad. It’s Steve. Thanks very much for the question. I think a couple of points. I think we’ve said it in the past that during 2023, most of our cloud business has been driven on VantageCloud Enterprise. We’re seeing that, as you pointed out, acceleration of interest and deployment new workloads on VantageCloud lake. Those tend to be smaller and grow rapidly over time. So we would expect VantageCloud lake to become more and more important from a revenue and ARR perspective as we move through 2024. What I would say is when we did our marketing event possible in Orlando. We had a major customer stand up on stage and talk about going live and moving their on-prem system, directly to VantageCloud Lake. So I think the traction that we’re getting in the marketplace is super exciting, both in terms of helping with that migration opportunity but also helping with expansion. And as I said, that will become more and more relevant as we move into 2024.
Chad Bennett: Got it. And then maybe one quick follow-up. Just on a couple of the hyperscalers in their announcements recently, quarterly announcements. Well, they still mentioned kind of the headwinds from cloud customers asking for workload optimizations in the cloud. I think a couple of them were able to stabilize their year-over-year growth or increase their year-over-year growth because they are starting to see data usage around AI and LLMs actually in the last 3 months or in the quarter. I know you’ve talked about it in this call more than I’ve heard and I think the majority of your customers are on fixed contracts. But if we think about kind of the workload or data usage coming from AI or LLM, is that something that you can tangibly see in your base. I don’t know if it necessarily help you from a net expansion standpoint now. But maybe up on renewal or someone getting to their caps quicker, on a fixed contract. Is there any early indications of that? Thanks.
