Teradata Corporation Q1 2008 Earnings Call Transcript

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2008-05-19 15:51:09.0

Tags: Teradata, Professional Services, Call Transcript, Earnings, Morgan Stanley, Sales Strategy, Sales Force Management, Sales, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Matt Summerville – Keybanc.

Matt Summerville – Keybanc Capital Markets

Mike, can you give us some sort of idea with respect to how much you’ll actually be investing into this, if you want to call it, sales initiative? What that unabsorbed fixed cost is going to look like in 08 and 09?

Michael Koehler

In 2008, Matt, it will be somewhere between $5 million and $6 million and we factored into the 08 guidance. When you look out to 2009 it’s basically the cost that comes on the 30 territories we added in 2008 which is approximately 60 people and we get that cost for the full year and then it depends on the timing of the 30 territories that we add in 2009.

Matt Summerville – Keybanc Capital Markets

Couple questions on the quarter, if you look at the mix or your service business is up 20%. If I break that into two parts, the professional services piece and the customer support [audio difficulties 00:09:44]

Operator

One moment, please. We’ll move on to the next question from Katy Huberty – Morgan Stanley.

Katy Huberty – Morgan Stanley

Can you help us understand where the confidence comes from in raising the international growth rate for this year in light of what you’ve already seen in the US in terms of the slow down and the potential for currency to become less of a tailwind as we go through the year? What are you seeing in the pipeline and the funnel that gives you that confidence?

Michael Koehler

Katy, what we’re seeing is extremely strong activity in all the international geographies including Asia Pacific / Japan which was flattish and actually down net of currency benefit. So when we take a look at the activity we have at this moment and the activity longer term and the funnel metrics, we’re clearly going to be up from what we originally expected entering the year.

Operator

The next question comes from Matt Summerville – Keybanc.

Matt Summerville – Keybanc Capital Markets

I was starting to ask this before I think I got cut off, if I look at the mix of service revenue during the quarter, services sales were up about 20%. Can you talk about what the underlying growth was on professional services versus support services and then to the extent that all this PS work you’re doing is a leading indicator of what’s to come in terms of product sales?

 

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