Business Outcome Led, Technology Enabled Investor Presentation Q4 2017
Safe-Harbor Statement Statements in this presentation and remarks and responses made in connection with this presentation include forward-looking statements that are based on current expectations and assumptions. These forward-looking statements include statements with respect to Teradata s future plans, expectations, beliefs, prospects and intentions and are subject to a number of risks and uncertainties that could affect our future results and could cause actual results to differ materially from those expressed in such statements. A detailed discussion of these risks and uncertainties is contained in Teradata s U.S. Securities and Exchange Commission (SEC) filings, including the company s most recent reports on Form 10-K and Form 10-Q, particularly under the heading Risk Factors. Copies of these filings are available online from the SEC or the company s investor page at: http://investor.teradata.com/financialperformance/sec-filings. Teradata undertakes no duty to update any information set forth in this presentation in light of new information or future events. Non-GAAP Financial Disclosures Certain non-gaap financial information regarding operating results is included with this presentation and may be discussed during the remarks and responses made in connection with this presentation to supplement Teradata s consolidated financial statements presented on a GAAP basis. Reconciliations of the differences between GAAP and non- GAAP financial measures are available on our investor page at http://investor.teradata.com/financialperformance/historical-non-gaap-measures. We believe that certain non-gaap financial information (such as Teradata s results excluding stock compensation expense and other special items, the exclusion of the marketing applications business which was sold during 2016, revenue on a constant currency basis, and free cash flow) is helpful in understanding our past financial performance and future results. We believe that providing these non-gaap measures in addition to the related GAAP measures provides investors with greater transparency to the information used by management in its financial and operational decision-making and allows investors to see our results as management does. This non-gaap financial information is not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with Teradata s consolidated financial statements prepared in accordance with GAAP. 2
What we do We empower companies to achieve high-impact business outcomes through analytics at scale on an agile data foundation 3
Long-term strategic objectives Deliver business outcomes for our customers through analytics at scale focused on companies with the largest analytic opportunities powered by market-leading hybrid cloud technology enabled by world class talent passionate about customer success yielding double digit revenue growth with strong expansion of EPS & FCF 4
Significant market opportunity - enabling double digit growth Focus: Business outcome led, technology enabled - From selling technology to delivering business value through analytics - From IT transactions to a trusted advisor to business and IT Approach: Easy to buy, easy to grow - From on-premises deployment to portable hybrid cloud solutions - From complex, a la carte options to simplified, consistent offerings - From primarily CapEx options to OpEx alternatives Business model: Shift to more predictable and recurring revenue - From perpetual licenses to subscription-based licenses Deliver business value by being the best analytical partner to the world s leading firms 5
Dat a M over BAR/DSA Ecosyst em M anager QueryGrid View point List ener Operat ional Analyt ics Plat form Service App Framew ork U I /UX Plat form Teradata Everywhere FLEXIBILITY IntelliCloud (IntelliFlex / IntelliBase / AWS) Public Cloud (AWS / Azure Marketplace) Private Cloud (VMware) On-Premises (IntelliFlex / IntelliBase) Analytical Ecosystem Unified Data Architecture PERFORMANCE 6 2017 Teradata
The strongest analytics offering in the world Our offering: Business outcome led, technology enabled Analytics Solutions & Architecture Consulting Analytic Business Consulting & Analytic Solutions Ecosystem Architecture Consulting Hybrid Cloud Solutions Teradata Everywhere TM Why we win Proven experience in solving the toughest analytical problems Real-world expertise in what really works World s best technology: production-scale, deployment agnostic 7
Strategy focuses on companies with greatest analytic potential Increased penetration and share of wallet in top 500 analytical opportunities ~50% of addressable market is in the top 500 companies, defined by analytic potential.where Teradata is most differentiated Largest opportunity for consumption growth: Data volumes, complexity, and analytical opportunities Expanded relationships with business buyers, reinvigorated relationships with IT Restructured account teams with new focus on solving business problems Initiated company re-tooling to support new sales approach (including, compensation alignment, account-based marketing, talent investments) 8
Increasing resources for the largest customers and prospects Higher focus Global Top 500 Opportunities Larger, dedicated account teams for existing and new accounts, expanded relationships with business buyers Global Top 501-2,000 Opportunities Account team and industry consultants serve multiple clients, supported by inside sales Global Top 2,001-5,000 Opportunities Technology focused, standard offers with lower cost sales model, including public cloud marketplace Lower focus 9
Multiple deployment options priced to create attractive, comparable options for customer Revenue Comparison Gross Profit Dollar Comparison Total revenue Total gross profit dollars Note: Comparison shown for consistent unit of IntelliFlex Enterprise bundle; may vary based on configuration and deployment options 10
Metrics to track our success Recurring Revenue (% of total revenue) - Product recurring revenue ( rights to software license upgrades, subscription and cloud) - Maintenance and Support Annual Recurring Revenue (ARR) - Total ARR - Product ARR Business Consulting Revenue TCore growth: measures the growth in consumption of Teradata 11
2017 Key strategic initiatives Product Consulting Sales Deliver our products across platforms Teradata Everywhere and shift to portable subscription pricing at customer s discretion Focus consulting efforts on business and ecosystem sales enablement to drive TCore consumption Transform our salesforce to be more consultative with increased productivity and focus Setting the stage for Revenue, EPS, and FCF growth in 2018 12