Teradata's Q4 2024 Earnings Call: Unpacking Contradictions in Cloud Strategies, On-Premise Erosion, and GenAI Progress

These are the key contradictions discussed in Teradata's latest 2024Q4 earnings call, specifically including: Cloud Migration Strategies and Customer Commitments, On-Premise Erosion, Cloud ARR growth expectations, ARR retention rates, and GenAI POCs:



ARR Trends and Challenges:
- Teradata reported Cloud ARR growth of 18% year-over-year in Q4 2024, while Total ARR declined by 4% year-over-year, both in constant currency.
- The decline in Total ARR was attributed to a challenging year with significant actions taken to position the company for growth, including restructuring and cost actions.

AI and GenAI Focus:
- The company introduced new AI and GenAI capabilities, like the Enterprise Vector Store, to support large-scale data management and AI/GenAI applications.
- This focus on AI and GenAI is aimed at leveraging the growing potential in these areas to enhance customer offerings and expand market opportunities.

Organizational Changes and Retention:
- Teradata named a new CRO and restructured its go-to-market organization to improve execution and customer retention.
- Changes in leadership and organizational structure were made to facilitate a pivot towards AI and GenAI solutions, enhancing customer success and retention.

Cloud Migration Dynamics:
- The company observed deal elongations and stage migrations, impacting cloud growth expectations.
- This was due to customers balancing their on-prem and cloud footprints, presenting opportunities for Teradata's hybrid technology capabilities.

Strategic Partnerships:
- Teradata formed partnerships with major CSPs and AI providers like NVIDIA and AWS to integrate AI capabilities into its platform.
- These partnerships are aimed at enhancing Teradata's AI and GenAI offerings and expanding its market reach.