My name is Jacqueline, and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata's Q3 2017 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Gregg Swearingen, Vice President of Investor Relations, you may begin your conference.

Good morning and thanks for joining us for our third quarter earnings call. Victor Lund, Teradata's CEO, will begin our call this morning, and then Oliver Ratzesberger, Chief Product Officer, will then discuss our Teradata Everywhere strategy. Then Chief Financial Officer, Steve Scheppmann, will discuss our third quarter results and our expectations for the full year. Our discussion today includes forecast and other information that are considered forward-looking statements. While these statements reflect our current outlook, they are subject to a number of risks and uncertainties that could cause actual results to vary materially. These risk factors are described in Teradata's 10-K, 10-Q and other filings with the SEC. On today's call, we will also be discussing certain non-GAAP financial information which excludes such items as stock-based compensation expense and other special items described in our earnings release including asset impairments, acquisition, reorganization, and transformation related costs, and the Marketing Applications business, which was sold in 2016. We will also discuss other non-GAAP items such as free cash flow and potentially constant currency revenue comparisons. A reconciliation of our GAAP results to our non-GAAP results and other information concerning these measures is included in our earnings release and on the Investor page of Teradata's website at teradata.com. A replay of this conference call will be available later on our website. Teradata assumes no obligation to update or revise the information provided during this call, whether as a result of new information or future results. And now, I will turn the call over to Vic.

Good morning and welcome to the Teradata third quarter earnings call. As our release highlighted, our Q3 results were better than expected. And as you will hear today, we are lined up for a stronger Q4. After our call last quarter, the number one question was why the change in attitude? The answer is really very easy, we are starting to see real traction with our strategy. Teradata Everywhere allows our customers to develop an analytic platform while reducing risk. They can deploy Teradata across a wide variety of technologies and have confidence that we will stay abreast of the ever changing ecosystem options. Oliver will cover this in his presentation. Finally, we are unique in our delivery of our offering to our customers. Not only do we come with strong technology and consultants that can deliver outstanding analytics, but we stay around to make sure that those analytic solutions deliver real value for our customers and do that at scale. Despite all of our changes, we still have some who view us as the old Teradata, which we decidedly are not. Not only are we rolling out Teradata Everywhere, but we are engaging with our customers in new ways. Our recent announcement with GE is an example. Through a new strategic partnership with GE Aviation, we will integrate flight analytics and IoT sensor data from GE with customer and operational data from Teradata, to help the airlines manage flight disruptions, increase operational efficiencies and probably most importantly, to improve customer experiences. Our unique capability to perform advanced analytics at scale, required by the world's largest airline, was the key factor in this partnership. Our enthusiasm is also driven by operating metric improvements, which Steve will cover in his presentation, which will include pipeline, TCore, ARR and reoccurring revenue growth.…

Good morning, everyone. We have been hard at work and taking some major steps forward with our innovations for analytics. Innovations that truly changed the game for our customers. And I'm pleased to update you on our progress. Let's start with the analytics challenges that businesses face. Business is continually changing. Companies require greater agility to meet dynamically-changing analytic workloads and user requirements. However, this is hard because of siloed solutions that limit deployment options and reduce flexibility and choice. There are more analytical tools and techniques available to business users than ever. However, this leads to a proliferation of departmentalized analytics that lead to marginalized decisions and create significant overhead. Companies are investing in analytics, but often those investments are focused on managing the technology rather than the business. And finally, there's a wide range of choices for deploying analytics, but being locked into a specific choice can limit the ability to easily change architecture over time. So companies face no small set of issues with analytics today. The good news is that we at Teradata are up to the challenge. Here are two examples of how customers are using Teradata to revolutionize their business and achieve exceptional outcomes. A global agricultural company is finding new ways to solve problems and fuel innovation through a belief that data and analytics are the future of agriculture. It is using Teradata to help address hunger by dramatically improving the time to value across areas such as products, reputation, customers, and safety. By integrating previously disparate silos of data, users are free to focus on solving real business problems. Taking advantage of our database portability in Teradata Everywhere, the company recently moved Teradata to the cloud to address needs for elasticity. One of the world's largest biotech companies is using Teradata to…

Thanks, Oliver, and good morning, everyone. We had a good quarter driven by the execution of our strategy. Highlights from the third quarter include our reported revenue and EPS in Q3 was better than we expected as the momentum we started to see in Q2 continued, and we expect Q4 to be even stronger. Reported total recurring revenue increased 8% from the third quarter of 2016, while reported recurring product revenue increased 14% from the third quarter of 2016. Total ARR increased 10% from the third quarter of 2016, while product ARR, which excludes maintenance, increased 23%. Additionally, I'd like to point out that all of these metrics increased sequentially from Q2. Total services grew 4%, including 6% maintenance revenue growth as customers continue to increase TCore and the size of their Teradata systems. Consulting services revenue was up 1%. However, our new focus within consulting services, business consulting, which helps customers identify new business use cases and, as a result, should drive increased consumption of Teradata, increased more than 20% from Q3 2016. For the remainder of my comments, I'll be discussing our results on a non-GAAP basis. Product gross margin in the third quarter was 69.2% versus 71.4% in Q3 of 2016. The decline in product gross margin was largely due to deal mix, driven by a higher overall mix of hardware revenue. Services gross margin in the quarter was 42.7%, a decrease from the 47.7% in Q3 2016. Services margins continue to be impacted by the strategic investments we are making, including in our consulting business, which we have discussed before, is a driver of our business-led strategy to drive increased consumption of Teradata's products. As we said last quarter, these investments will impact services gross margin throughout the course of the year. However, we do expect…

In closing, the first thing – I'm sure a lot of you have seen the announcements we put out. A couple of things I'd like to say. Personally, I want to thank Steve for everything that he has done not only for the company but for me. As I've taken over this new position, Steve was the voice of reason, the voice of reality, and the person who pushed us to make sure that we delivered on all the promises that we made. Steve is a fighter, and I know that he's going to take on his health challenges and will win that battle and have a better life forward. And I'm sure that you'll join me in wishing Steve the very best. However, I have the great benefit of having Steve around. I'll still have him to talk to and weigh in on his great experience and advice that he'll continue to give me. I'm also pleased to introduce Mark Culhane, who will be starting as our new CFO on or about November 10. I've known Mark for many years. He's strategic, drives results and knows how to scale an organization. Mark has been a part of many transformational initiatives; several of them that are right on point with the transformation that we are undergoing today, and I'm sure his advice and counsel will be a great benefit to us. You will also notice that in the announcement the name Eric Tom. Eric is coming in as our Global Chief Revenue Officer. Like Mark, Eric brings strong executional background in similar roles. By mixing him with the great talent we have at Teradata will allow us to drive better execution in our go-to-market. Eric, coupled with the strong team we have, we'll have a better customer focus, and I think we will see accelerating results as a result of that. With that, I will turn it over to the operator for questions.

Please limit yourself to one question. Your first question comes from Wamsi Mohan from Bank of America Merrill Lynch. Your line is open.

Yes. Thank you. Good morning. Vic, you noted in your highlights that the sales funnel is increasing driven by customer adoption of new purchasing and deployment options. Can you talk about the time it's taking now to close deals, how that might have changed under this new model? And any more clarity based on the funnel how customers are choosing to deploy Teradata?

Thanks. So, a couple of things about the question. We are seeing a bit of a lengthening in the sales process time driven principally by two things. One is the fact that as we have gone to subscription pricing and all that, it surprisingly is taking our customers some time to work through that. They have capital budgets that have been approved they want to go at. So that has been a process that's taken a little longer than we had anticipated, but it's getting there. So it'll shrink back down over time as people have in their budgeting process where they are. And then, analytics by their nature, business outcomes require the building of a business case. And with our consulting with our customers doing that, so that's taking a little longer, but we're moving through that process. The pipeline is getting built up, and I think we'll continue – I think we will see an accelerating rate of our deal closes going forward. And in fact, we're seeing that today. We are in Q2 and then Q3, we have broad-based adoption of where we're going. We didn't have huge deals, so it's broad-based. And so the number and the size of the transactions is going up as well. So I think we're seeing good traction there. It's going to take a little bit of time to do this with the consulting led (30:19) and build our organization out. We have a lot of opportunities, and we've just got to – one of our key challenges is to get enough people in line and ready to do this going on (30:33), and we're doing that. We will get there. But I feel really good about what we're seeing in the pipeline; the number, the quality, and the interest on our customers. I mean, our customers, I spend a lot of time with them, and they are very, very interested in what we're doing. And that's one of the reasons I feel so great about where we're going. I mean, customers really, really like what we're doing.

And Wamsi, I should add, the quality of that sales pipeline has improved significantly from my perspective. I looked at the pipeline as of 9/30, and I see the growth in the offerings bucket and the closing bucket, the percentage of growth. So that tells me these opportunities are moving through that sales funnel, and those are the areas that I'd like to see grow as that offering and that opportunity to close. So I just wanted to add you that perspective also.

No, that's helpful. Steve, I wanted to say it's been a pleasure working with you, and good luck. You were really clear on the last call, by the way, that free cash flow could be negative in the second half. It seems that free cash flow was weaker partly from this workforce optimization initiative that you called out. Of that $20 million, can you give us some sense of how much is already completed in 3Q? And what regions or functions are you targeting in this, and when should we see the flow-through of savings kick in? Thank you.

Yeah. Thanks, Wamsi, for giving me the opportunity to give more color on that. The workforce optimization, our whole focus and our strategy was to really drive a higher performance culture, and we're looking at the – the style or the manner in which to execute that. And when we started this process and finalized it in Q3, we said we want to be more aggressive up-front and identified about 100 people and the – and it was across the board, Wamsi. It was really looking at where are our objectives, strategic objectives going forward in the future, and how do we best align our resources to achieve those objectives? And it was across the board throughout Oliver's team, go-to market, back office, my teams, and what we said in Q3, we want to be more aggressive. It's not a workforce reduction; it's a workforce optimization. And the best time to align those resources and get them onboard to benefit 2018 is right now. So that $20 million that we looked at, about half of it is in the – Q3, another half in Q4, and then a little bit in 2017. Again, to my previous comment that I made, this is not a workforce reduction. This is a workforce optimization. So it's not a cost reduction – implied cost reduction effort. We are going to hire the people, hire the talent, and optimize and continue to drive our culture to a higher-performing level. So, thank you. And personally, Wamsi, it's been great working with you over those 10 years.

Thanks, Steve.

Your next question comes from Raimo Lenschow from Barclays. Your line is open.

Hey. Thanks for taking my questions. Steve, first of all, I always have enjoyed working with you, and we will all miss you. A question from me was if you look at the Q3 numbers, it looked like if I look through, your licenses came in a little bit – your product licenses came in a little bit better than I expected. If I look at the gross margin, it looks like there was a little bit more hardware replacement going on. Can you just – like in terms of you managing the company, can you talk a little bit about like how much visibility do you get in terms of customers deciding to go with the new business model versus the old business model? Do you think that you get more visibility as you go through the process? Can you talk to that a little bit to help us modeling going forward? Thank you.

Yeah. I'll just say from a customer's perspective, yes, we are seeing as we go through that, and they are wanting to see what we've got. They're interested in the process. I talked a little about risk, and Oliver talked about risk from our customer's perspective. So, Teradata Everywhere has opened up discussions we never had before, the ability to deploy anywhere they want, to drive it across multiple technologies is really resonating with our customer base. When I took the job, I wondered, are we – everything was around – have we missed Hadoop, had we missed whatever, cloud was going away. In fact, I think what I've learned from our customers when I'm out with them , they are trying to sort all this out. I mean, there's a lot of confusion in the market about what means what, where do we go, where are we at. And I think our willingness with portable license, ability to cross multiple technologies has really allowed us to engage in our customers in a way that they never would have before. And importantly, from my perspective, it gets our consulting teams in to help them think about stuff. And they are starting to think about Teradata as not a hardware company anymore, but something that's going to help them drive long-term business outcomes. And that's happening across the board. I mean, I was in a big meeting on Monday, I guess, with one of our largest customers. And we had a discussion and fully engaged. I mean, they came in not prepared, I think, to have that discussion with us, and at the end of the day, the meeting went over a couple of hours. Totally focused around the outcome on what we could deliver and help them with. So, we're seeing a lot of traction in our strategy. It plays well with our customers. And so, I feel really strongly that it's doing – and we are seeing it in the pipeline. I mean, the growth in our pipeline is partially driven by execution, but I think the biggest bulk of the increase in the pipeline is driven around the change in our strategy and the receptivity of our customer base.

And Raimo, I just want to add, your revenue comment, that recurring revenue, particularly as it relates to our subscription and rental, was the strongest increasing component in that total – in that product – recurring product revenue lineup. So again, continued strength. The product ARR growing over 20% in the quarter. Again, continued strength in that recurring revenue model that we saw coming out of Q2, with the exception of that one customer that converted. And then, expect that to continue in Q4.

Perfect. Okay. Thank you. All the best, Steve.

Hey. Thanks, Raimo.

Your next question comes from Philip Winslow from Wells Fargo. Your line is open.

Hi. Thanks, guys for taking my question. And Steve, sorry to see you leave. I mean, you're really one of the good guys in the industry and it's been a real pleasure working with you. Yeah. I hope you guys could just touch on the – just the price environment that you're seeing out there right now. Obviously, you talked about the high-teens TCore growth. I wonder if you can just give us some color on pricing and kind of how you're thinking about Q4 and then some of your early commentary on next year's numbers too. Thanks.

Yeah. So, a couple of things from that perspective. I think, first of all, we aren't seeing any erosion in our pricing in the market for our TCore, et cetera. Part of that is driven around – we have a new operational discipline in the business we didn't have before. I'm not particularly interested in giving price concessions at quarter end to drive revenue. We haven't done that this year. We are not going to do that. We don't need to do that. We bring value to our customers, so we have that discipline. We are not chasing, so that helped us with where we are. I think also the other thing that's made that easier is subscription pricing makes it easier to hold your price because it doesn't make that much difference quarter-to-quarter. But operationally, we are just – we have some discipline, we haven't had before. We're going to continue to have that. And so, our pricing has remained constant during the year. We aren't seeing any degradation of that.

Got it. Thanks, guys.

Thanks, Phil.

Your next question comes from Jesse Hulsing from Goldman Sachs. Your line is open Jesse Hulsing - Goldman Sachs & Co. LLC: Yeah. Thank you, guys. And Steve, I'll echo everyone else's thoughts, it's been a real pleasure working with you over the last five or six years and best of luck.

Thanks, Jesse. Jesse Hulsing - Goldman Sachs & Co. LLC: Yeah. It seems like you kind of introduced a new metric this quarter with product ARR growth. I know you guys talked about it as being strong last quarter. But this quarter, I think, is the first that I can find that you put some growth around it, which is appreciated. Can you give us a sense of how big of a base that is, does this include upgrade rights and kind of the legacy stuff or is this just new Teradata Everywhere subscription revenue?

I got you Jesse. Yes. Let me peel that back. Yes, we said in the prepared remarks, our total recurring – total ARR will be about $1.1 billion and – product ARR represents about a third of that. Now, product ARR is what you described. It's our cloud. It's our subscription, so software upgrade rights. And it's everything in total ARR except the maintenance piece of it, okay? And so, it is the legacy's – and if you look at its – the predominant pieces are the rights of the software upgrade, then it's the subscription, rental, and then it's the cloud, kind of in that priority. Now, the percentage growth is in that subscription, rental and that cloud. The rights of the software upgrade is primarily the legacy software upgrade rights. But that is included in that product ARR, and then we just exclude the maintenance from that piece. Jesse Hulsing - Goldman Sachs & Co. LLC: Got you. And can you give us a sense of how big the product ARR excluding upgrade rights is as far as – I guess, in absolute dollar value?

No. I mean, the software upgrade rights is substantially the largest component in there at this point in time. But that is getting smaller and smaller as a percentage of the total as we go quarter-on -quarter, year-over-year. The growth areas is in the subscription and the rental, as Vic described, with the customers adoption of that and the cloud model. Jesse Hulsing - Goldman Sachs & Co. LLC: Got you. And then I have a question for Oliver. Oliver, if you're still on the call, I'm curious, I mean it seems like if I look at – I've seen you guys speak at some conferences and your marketing has really been focused on price per query and price performance as a ratio that customers should be focused on. And I'm wondering how's that – you've always been focused on that, but it seems like you're really pushing that in the cloud versus Amazon and Google and the others. How is that resonating with customers? Is that something that people are latching on to?

Jesse, yes. Thank you for the question. Yes, absolutely. This is something that – especially when our customers move to the cloud, which normalizes their hardware costs inherently because they purchase the hardware in the cloud at whatever price point that is published there. And with storage prices just being fixed and standard, they are looking really at how much workload can they do at scale. And a lot of our customers, when we talk to our largest customers, they come to us and say we have so many different environments, and by the way, we have focused on building new technologies. But the biggest problem that they all see is like it's one thing to build a prototype of something, it's very different to put these analytical capabilities into production at scale. And when they run at scale then the cost per throughput is the real measurement that they ultimately need to do. And the differences that you see is cloud on cloud, our software versus the comparative software that is out there, and this is something that resonates very well with our customer base right now. So, yes, answer is it makes a big difference we believe. Jesse Hulsing - Goldman Sachs & Co. LLC: Okay. Thank you, guys. Appreciate it.

Your next question comes from Bhavan Suri from William Blair. Your line is open. Bhavan Singh Suri - William Blair & Co. LLC: Thank you. And Steve, I'll echo what everyone said, but on a personal level, I will really miss you. It's been a good seven, eight years.

Thanks, Bhavan. Bhavan Singh Suri - William Blair & Co. LLC: I know Mark well too, but all the hope for a speedy recovery, my friend.

Thanks. Bhavan Singh Suri - William Blair & Co. LLC: Yeah. I'll dive in really quickly here. Just one for Oliver. First, to start off with, when you look at the demand and you look at the growth, I guess is there a way of thinking about how much of this is pent-up demand for expanding existing deployments, right? So, for a few years customers are spreading the assets. I mean, I feel that we've got guys incrementally buying, or are these sort of brand-new net large-scale EDW sort of deployments? How should we think about that mix, and what are you seeing from customers?

Bhavan, thanks. It's both. Yes, it is pent-up in some accounts, but it's also new analytical use cases that they really are starting to deploy at scale. And the mix of them, and the ability for them to derisk the decision of where to deploy, this is something that we are seeing across the board. The fact that they can go with Teradata in the on-premise world, in our cloud deployments and in the public cloud allows them to make these decisions and deploy these analytical capabilities. So, whether it is pent-up demand or whether it is new capabilities both are driving that growth in adoption and it's unlocking that growth that we're seeing in the market. Bhavan Singh Suri - William Blair & Co. LLC: Got it. Got it. And then one quick follow-up. I've been a big proponent of sort of the software-only version, and I understand the optimization of the hardware obviously very well, but sort of, if you look at the software-only version and the gross margin associated with it, just want to get, sort of, how is the uptake of the software-only progressing? We haven't heard much of that. And I understand, obviously, performance optimization, but how are you guys thinking about, a, what customers are saying for that, and then investment in the software-only version?

So, it is definitely a choice for our customers. We see it in test development, various forms that it's being deployed in certain use cases. It is one of the choices that we offer, right? We offer software-only, we offer it on Teradata hardware, we offer it in the Teradata cloud and in the public cloud. And if you think about it, it is the same software that runs across all of these environments. So whether it's the software-only in the customer side or whether it is Teradata on AWS or Teradata cloud, is the exact same software. In general, at scale, what we see for the customers that we focus on, the top 500, there will always be a mix for the foreseeable future because at scale, this is where our deployment options and where things like IntelliFlex give us the capability to deploy into existing data centers. Or large companies have vested interests to continue to leverage that by also being enabled, however, to do things in the cloud or on commodity hardware. So, we see a mix. And it's something that ultimately when customers look at that and see as the cost performance of what they get with our hardware, it allows them to de-risk the deployment of the software. And so this is why we see a healthy mix I think of that. Bhavan Singh Suri - William Blair & Co. LLC: Got it. Thanks for the color. Thank you, guys.

Your next question comes from Derrick Wood from Cowen & Company. Your line is open. J. Derrick Wood - Cowen & Co. LLC: Thanks. And Steve, we'll miss you. It's been great to work with you, and good luck.

Hey. Thanks, Derrick. J. Derrick Wood - Cowen & Co. LLC: So, you guys have some interesting developments where the up-front license contracts are expected to have a nice kind of pop in Q4, yet you're talking about increasing momentum and interest in the subscription pricing. And I know you talked about this kind of dynamic last quarter, but can you just go through why this is happening, and then kind of what we should think about 2018? Should the up-front license business step back down and see more contract conversion to subscriptions, or would you expect this dynamic to continue?

In fact, I guess, we start with customer choice. We've said that over and over. And so, that is going to continue to be what drives our strategy. It's very interesting to go through and sort of – why it's difficult to give you an answer to that is we see customers are more and more moving to a subscription pricing. We're seeing it come that way; a continued interest in it. The issue is – the hardest thing in us gauging is customer politics inside their own organization, right? And I know that sounds weird, but you've got to – you either have a capital budget or you've got operating margins, and how those have been set for this year and how the people that are deploying Teradata have to make those choices has been driven as much around the politics they've got to play inside of their own company as they do what their choice would be. I think we're seeing people wanting to move subscription; very interested in that. I think that they have to start working through their process to get approval. It's easier for them in some cases. We had two of those in the quarter where they wanted to go subscription, but they had budget left this year, and so they did a perpetual deal just because they could get it done this year, so. But I do think the overall trend is to subscription. I think that people more and more like that, and I expect that it will continue to grow over time. You'll remember, last quarter we talked a little bit about the U.S. is moving faster than international. We are now in the international pipeline starting to see an increased interest in subscription there as well. But it is still as a percentage of transaction smaller than we're seeing in the Americas. So I know that's a long-winded answer, but that's kind of what we see. But we are seeing – and there's a lot of what's happening is not just around how they can buy it. I think the flexibility that we've shown and we've shown our willingness to help customers do and our focus on analytics is probably, in my mind, probably the number-one thing that's driving increased interest. Not necessarily that they're going to do it right now, but that they can build something that will help them do that. And so I think showing that we are flexible with their interests at mind has been as equally important in the building of the funnel. J. Derrick Wood - Cowen & Co. LLC: Sure. No, that's good color. And Steve, on ASC 606, I mean, if you were to establish contracts that were more favorable for you on a rev rec basis, what would that look like?

Yeah. Derrick, I mean, the key comes down to cancellation clauses or the periods of time in which, you know, the short-term duration of those to renegotiate them, okay? That's the key driver as to the benefits of spreading that revenue, you know, ASC 606 over time. It's the cancellation clauses and the renewal periods. Again, as Vic said, we're going to give the right choice; do what's right for the customer. And when it all comes down to, you know, as we're looking at Q4 and Q1, it comes down to time when the contract starts. So in order to mitigate that potential lost revenue between ASC 605 and ASC 606, we may look at opportunities that give us the ability to minimize that concept of lost revenue between ASC 605 and ASC 606 effective 1/1/2018. And so long-term, we're going to continue to look at – we understand the benefits of that recurring revenue model, okay. Again, it doesn't affect the recurring free cash flow or the cash flow associated with those. We understand the benefits, we understand the trigger points. But again, getting back, we want to make sure we're giving the right choice to the customer that Vic described. And I echo Vic's points with respect to those customers. The customers are learning this as we go, even in the U.S. because, again, as Vic said, a lot of these people are managed on OpEx, and CapEx is kind of outside of their individual business model. And so they're looking at, hey, if I do OpEx, that gets below that – that's that non-cash line on my operating model and I'll focus on CapEx. But as Vic said, they are learning. They're understanding the benefits of this recurring model, and I expect that education and those benefits continue to evolve in 2018. J. Derrick Wood - Cowen & Co. LLC: Okay. Thank you.

Your next question comes from Brad Reback from Stifel. Your line is open. Brad Robert Reback - Stifel, Nicolaus & Co., Inc.: Great. Thanks very much. And Steve, best of luck.

Hey, Brad. Thanks. Brad Robert Reback - Stifel, Nicolaus & Co., Inc.: Oh yeah. Absolutely. Just returning to the ASC 606 question, Steve. The $600 million to $620 million guide, what type of impact, if any, does that have from potential contracting terms in 4Q with respect to ASC 606? So if you got more favorable terms, would that provide upside, or is that already priced – baked into that?

No, Brad. I mean, we're looking at the deals now with the teams. Right now, it's a minimal impact because it would have been a more negative impact on the lost revenue, cumulative lost revenue going into $118 million. But the impact in the revenue in the quarter will be nominal if those things got recognized in Q4, and then we just increased the lost revenue item. So, it really comes down to the contracts that would have been rateable under ASC 605. We would've gotten a small piece in theory in December and that we would just increase that "lost revenue" and the adjustment to retained earnings effective 1/1/2018. So, what we're looking at doing is if we have the opportunity is to look at the start dates of these contracts, put at 1/1/2018 and then recognize that under ASC 606. But also I want to reinforce we're doing the retrospective approach where we will provide you next year those numbers under ASC 605 on a comparable basis for 2018. So, you'll see the differences between ASC 605 and ASC 606 primarily in Q1 of 2018. Brad Robert Reback - Stifel, Nicolaus & Co., Inc.: Got it. And then one just real quick follow-up. Vic, I think last quarter you guys talked about a couple of large transactions that you expected to close before the end of the year. Not sure if there was any mention of those on the call specifically. Just any update on that would be great. Thanks.

Yeah. So, we didn't do any of those in Q3, but we still, yes, we have several large transactions that are on track for Q4. We haven't lost any deals and so still there in active negotiation. So, they're still in our pipeline and on track. Brad Robert Reback - Stifel, Nicolaus & Co., Inc.: Great. Thank you very much.

Yes.

Your next question comes from Keith Bachman from Bank of Montreal. Your line is open.

Hi. Many thanks. And Steve, I want to wish you the best in the challenges that lay ahead. I have...

Yeah. Thanks, thanks.

Yeah. Yeah.

Thanks, Keith.

Best of luck there. I have two questions that are related but I'm going to ask them one at a time. And that, I was hoping to get number one, a little greater dimensions on new customers or new workloads, I should say, versus capacity buys, if you will, from existing customers. Is there any way to think about that or give us more specifics on dimensions associated with how much is impacting either your revenues and/or the growth of installed base? Is there any more specifics you could give us on workloads, again, existing customers versus new workloads?

Yeah. Keith, and what we're seeing – and this really ties into our consulting-led, business-led consulting, driving more TCore growth. What we're seeing is a large percentage of the TCore growth is coming in our top 500.

Right.

These are where the use cases are driving opportunities for growth. In addition, we continue to see stronger acceptance of our – as Vic mentioned earlier, stronger acceptance of our consultants on a broader scale just not hardware focused. We're getting brought into conversations, as Vic mentioned, even on the conversation earlier this week that these are opening the doors. It's still very, very early, Keith – very early in the process to understand the key drivers. But with the largest growth of our TCore coming from those top 500, it's a good inference that those are being more business-led than purely just technology refreshes, hardware refreshes.

Yeah. And I might just add, I watched TCore grow because it is growth – absolute growth. In other words, it's not replacement growth. I mean, it actually has to be a larger install we have before it gets in there, whether it be an existing or a new customer. So, we have to be expanding our footprint in existing customers as well as new ones. And we have both of those going on in the quarter. But that is how I'm looking at the business now is, are we actually growing the use of Teradata over and above where we are today. And when I first – I think, the first call I had, I had a lot of discussion with some of you all about everybody is moving off of Teradata, right. They're going somewhere else. We're not seeing that at all. Actually our customers – installed customer base is now starting to expand their footprint with us. And so, the TCore growth is, in fact, expansion of Teradata from wherever it comes. So it's true growth.

Okay. Well, let me try the second question which definitely relates. I've heard a couple of times that Teradata, including at your user group event in LA or Anaheim a few weeks ago, that the flexible business model is one of the reasons why you're seeing new renewed interest in Teradata, but I wanted to break that down. In cloud, we're actually not. It's a small number, growing fast, but it's still a small number. We're not detecting a lot of interest because the performance aggregation on the hardware is pretty meaningful and there's data gravity issues, if you will. But perhaps you can correct me if I'm wrong. So, I think it comes down to the difference between license and subscription. And yet, the TCO, I think, is very similar between license subscription. So, is it really about flexibility, i.e., business units can make operating budget decisions as opposed to capital decisions or is it – was it more fine grain than that?

No. It is absolutely about derisking the decision. And by the way, the comment that you made that – about performance impact in the cloud, we are not seeing that, right.

Okay.

We have migrated significant customers also into the cloud and they are seeing a great performance and – when we show the benchmarks, we compare that to other platforms in the cloud. So, for customers to have that choice and to have the ability to say, no matter if I start on-premises or in the cloud, I can switch and decide at any given point in time, we have that. And that's what's driving the adoption from the customer base.

Okay. All right. Fair enough. Many thanks. Best of luck, gentlemen.

Thank you so much and thank you for...

Thank you.

...for joining us today. I think that's all the time we got. Actually, we're past a little bit. Thank you for your participation and support and interest. We look forward to reporting a strong fourth quarter on our next call. Thank you all for joining.

At this time, this concludes today's conference call. You may now disconnect.