Informatica, an enterprise cloud data management leader, announced financial results for its third quarter 2022, ended September 30, 2022.
“We delivered subscription ARR growth above expectations with strong bottom-line performance despite the uncertain macroeconomic environment. Our financial discipline, combined with a strong balance sheet and a geographic and product-diverse footprint, demonstrates the resilience and durability of our business,” said Amit Walia, Chief Executive Officer at Informatica. “We continue to transition from a cloud-first to a cloud-only company with significant momentum and ample longer-term growth opportunities. As mission-critical workloads expand, we’ve scaled the IDMC platform to process over 44 trillion cloud transactions per month, up from 23 trillion cloud transactions a year ago.”
Third Quarter 2022 Financial Highlights:
- GAAP Total Revenues increased 3% year-over-year to $372.0 million. Third quarter total revenues included a negative impact of approximately $15 million from foreign currency exchange rates (“FX”) year-over-year.
- GAAP Subscription Revenues increased 10% year-over-year to $214.0 million.
- Total ARR increased 14% year-over-year to $1.47 billion. Third quarter total ARR included a negative impact of approximately $8 million from FX year-over-year.
- GAAP Operating Income of $2.6 million and Non-GAAP Operating Income of $83.7 million.
- GAAP Operating Cash Flow of $53.3 million.
- Unlevered Free Cash Flow (after-tax) of $76.8 million.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
Third Quarter 2022 Business Highlights:
- Processed 44.5 trillion cloud transactions per month for the quarter ended September 30, 2022, as compared to 23.3 trillion cloud transactions per month in the same quarter last year, an increase of 91% year-over-year.
- Reported 191 customers that spend more than $1 million in subscription ARR at the end of September 30, 2022, an increase of 50% year-over-year.
- Reported 1,852 customers that spend more than $100,000 in subscription ARR at the end of September 30, 2022, an increase of 17% year-over-year.
- Achieved a subscription net retention rate of 112% at the end of September 30, 2022.
Product Innovation:
- Expanded partnership with Microsoft to help enterprises operationalize AI/ML capabilities in the Microsoft Intelligent Data Platform (MIDP). Informatica was named an initial partner in the MIDP Partner Ecosystem program.
- Launched a new strategic partnership with Abu Dhabi Digital Authority (ADDA) to offer enterprise data management services to 76 government entities in Abu Dhabi. Informatica was selected as a recommended technology in the Abu Dhabi Data Enablement Program, which aims to empower government entities with standardized technologies to help develop and build data programs.
- Launched Intelligent Data Management Cloud (IDMC) for Higher Education vertical to further enable education institutions to modernize their data infrastructure with an AI-powered, secure, and scalable solution to connect the academic community, make data-led decisions, and support innovative teaching and learning.
Industry Recognition:
- Recognized as a Leader in the 2022 Gartner® Magic Quadrant™ for Data Integration Tools report. This makes 17 consecutive years of being a Leader, and Informatica is once again positioned furthest on the axis for completeness of vision and highest on the ability to execute axis.
- Recognized as a Leader in the IDC MarketScape: Worldwide Data Catalog Software 2022 Vendor Assessment. This is the second consecutive time Informatica was named a Leader.
- Informatica scored highest in all four data integration tools use cases in the 2022 Gartner® Critical Capabilities for Data Integration Tools report.
- Named a 2022 Gartner® Peer Insights™ Customers’ Choice for Data Masking.
- Awarded the 2022 STAR Award for innovation and excellence in three key categories: Customer Growth & Renewal, Customer Success and Support Services Automation, all in one year by the Technology & Services Industry Association® (TSIA), the leading association for today's technology and services organizations. Informatica enters the TSIA “Hall of Fame” as a winner in five TSIA STAR award categories since 2020.
- Informatica CEO, Amit Walia, named Top Cloud Executive in 2022 Stratus Awards for Cloud Computing.
Fourth Quarter and Full-Year 2022 Financial Outlook
The Company provides the financial guidance below based on current market conditions and expectations and subject to various important cautionary factors described below. Guidance includes the impact from macroeconomic conditions and foreign exchange headwinds. Based on information available as of October 26, 2022, guidance for the fourth quarter of 2022 and full-year 2022 is as follows:
Fourth Quarter 2022 Ending December 31, 2022:
- GAAP Total Revenues are expected to be in the range of $398 million to $408 million, representing flat year-over-year growth at the midpoint of the range. Fourth quarter total revenues guidance includes a negative impact of approximately $15 million from FX year-over-year.
- Subscription ARR is expected to be in the range of $980 million to $990 million, representing approximately 23% year-over-year growth at the midpoint of the range.
- Cloud ARR is expected to be in the range of $425 million to $431 million, representing approximately 35% year-over-year growth at the midpoint of the range.
- Non-GAAP Operating Income is expected to be in the range of $93 million to $103 million.
Full-Year 2022 Ending December 31, 2022:
- GAAP Total Revenues are now expected to be in the range of $1,505 million to $1,515 million, representing approximately 5% year-over-year growth at the midpoint of the range. Full-year total revenues guidance includes a negative impact of approximately $47 million from FX year-over-year.
- Total ARR is now expected to be in the range of $1,505 million to $1,521 million, representing approximately 11% year-over-year growth at the midpoint of the range. Full-year total ARR guidance includes a negative impact of approximately $23 million from FX year-over-year.
- Subscription ARR is now expected to be in the range of $980 million to $990 million, representing approximately 23% year-over-year growth at the midpoint of the range.
- Cloud ARR is now expected to be in the range of $425 million to $431 million, representing approximately 35% year-over-year growth at the midpoint of the range.
- Non-GAAP Operating Income is now expected to be in the range of $330 million to $340 million.
- Unlevered Free Cash Flow (after-tax) is expected to be in the range of $290 million to $310 million.
In addition to the above guidance, the Company is also providing a fourth quarter and full-year 2022 weighted-average number of basic and diluted share estimates for modeling purposes. For the fourth quarter 2022, we expect basic weighted-average shares outstanding to be approximately 284 million shares and diluted weighted-average shares outstanding to be approximately 288 million shares. For the full-year 2022, we expect basic weighted-average shares outstanding to be approximately 281 million shares and diluted weighted-average shares outstanding to be approximately 286 million shares.
Reconciliation of non-GAAP operating income and unlevered free cash flow after-tax guidance to the most directly comparable GAAP measures is not available without unreasonable effort, as certain items cannot be reasonably predicted because of their high variability, complexity, and low visibility. In particular, the measures and effects of our stock-based compensation expense specific to our equity compensation awards and employer payroll tax-related items on employee stock transactions are directly impacted by the timing of employee stock transactions and unpredictable fluctuations in our stock price, which we expect to have a significant impact on our future GAAP financial results.
Webcast and Conference Call
A conference call to discuss Informatica’s third quarter 2022 financial results and financial outlook for the fourth quarter and full-year 2022 is scheduled for 1:30 p.m. Pacific Time today. To participate, please dial 1-844-200-6205 from the U.S. or 1-929-526-1599 from international locations. The conference passcode is 619433. A live webcast of the conference call will be available on the Investor Relations section of Informatica’s website at investors.informatica.com where presentation materials will also be posted prior to the conference call. A replay will be available online approximately two hours following the live call for a period of 30 days.
