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Informatica, an enterprise cloud data management leader, announced financial results for its first quarter 2023, ended March 31, 2023.

“Informatica delivered an outstanding first quarter that exceeded all key operating metrics, highlighted by cloud subscription ARR growth of 41% year-over-year. We continue to see momentum with enterprise customers purchasing mission-critical new cloud workloads on our Intelligent Data Management Cloud (IDMC) platform and strong customer renewal rates,” said Amit Walia, Chief Executive Officer at Informatica. “We are encouraged by the early momentum of our cloud-only, consumption-driven strategy. Our customers and partners are embracing Informatica’s differentiated IDMC platform to accelerate their digital transformation journeys.”

First Quarter 2023 Financial Highlights:

• GAAP Total Revenues increased 1% year-over-year to $365.4 million. First quarter total revenues included a negative impact of approximately $7.0 million from foreign currency exchange rates (“FX”) rates year-over-year.
• GAAP Subscription Revenues increased 8% year-over-year to $213.9 million.
• Total ARR increased 10% year-over-year to $1.53 billion. First quarter total ARR included a negative impact of approximately $3.4 million from FX rates year-over-year.
• GAAP Operating Loss of $29.9 million and Non-GAAP Operating Income of $84.8 million.
• GAAP Operating Cash Flow of $69.9 million.
• Adjusted Unlevered Free Cash Flow (after-tax) of $123.4 million. Cash paid for interest of $34.5 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.”

First Quarter 2023 Business Highlights:

• Processed 54.3 trillion cloud transactions per month for the quarter ended March 31, 2023, as compared to 32.2 trillion cloud transactions per month in the same quarter last year, an increase of 69% year-over-year.
• Reported 208 customers that spend more than $1 million in subscription ARR at the end of March 31, 2023, an increase of 27% year-over-year.
• Reported 1,921 customers that spend more than $100,000 in subscription ARR at the end of March 31, 2023, an increase of 11% year-over-year.
• Achieved a Cloud Subscription NRR of 118% at the end of March 31, 2023.*

* Beginning with the first quarter of fiscal 2023, we introduced Cloud Subscription NRR, a new key business metric. Please refer to the section titled Key Business Metrics below for its definition.

Product Innovation:

• Launched Informatica Cloud Data Integration (CDI) Free and PayGo solution — the industry's only free cloud data loading, integration and ELT/ETL service — supported by major data warehouses/lake solutions, including Amazon Redshift, Azure Synapse, Databricks Delta Lake, Google BigQuery, and Snowflake. CDI-Free is an easy-to-use cloud service that allows users to process up to 20 million rows for ELT or reach 10 processing hours for ETL per month for free. CDI-PayGo has all the capabilities of CDI-Free with no limit on processing rows or hours of usage, in addition to customer support and SOC2 compliance.
• Launched Flex Informatica Processing Unit (Flex IPU) consumption-based pricing model in which IPUs expire at the end of the contract anniversary year, providing more flexibility for users with highly variable or seasonal usage patterns.
• Launched Microsoft Azure Cloud Point of Delivery (PoD) in Dubai to scale our market reach in the Middle East.

Environmental, Social and Governance ("ESG") Initiatives:

• Published inaugural Informatica 2022 Sustainability Report.

Second Quarter and Full-Year 2023 Financial Outlook

The Company provides the financial guidance below based on current market conditions and expectations and it is subject to various important cautionary factors described below. Guidance includes the impact from macroeconomic conditions and expected foreign exchange headwinds versus the prior year comparable periods.

Based on information available as of May 3, 2023, guidance for the second quarter of 2023 is as follows:

Second Quarter 2023 Ending June 30, 2023:

• GAAP Total Revenues are expected to be in the range of $355 million to $365 million, representing approximately 3% year-over-year decrease at the midpoint of the range.
• Subscription ARR is expected to be in the range of $1,020 million to $1,030 million, representing approximately 14% year-over-year growth at the midpoint of the range.
• Cloud Subscription ARR is expected to be in the range of $501 million to $507 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 $67 million to $77 million, representing approximately 3% year-over-year growth at the midpoint of the range.

Based on information available as of May 3, 2023, the Company reaffirms previously provided guidance for the full-year 2023, as follows:

Full-Year 2023 Ending December 31, 2023:

• GAAP Total Revenues are expected to be in the range of $1,570 million to $1,590 million, representing approximately 5% year-over-year growth at the midpoint of the range.
• Total ARR is expected to be in the range of $1,585 million to $1,615 million, representing approximately 5% year-over-year growth at the midpoint of the range.
• Subscription ARR is expected to be in the range of $1,098 million to $1,118 million, representing approximately 11% year-over-year growth at the midpoint of the range.
• Cloud Subscription ARR is expected to be in the range of $604 million to $614 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 $400 million to $420 million, representing approximately 17% year-over-year growth at the midpoint of the range.
• Adjusted Unlevered Free Cash Flow (after-tax) is expected to be in the range of $340 million to $360 million, representing approximately 21% year-over-year growth at the midpoint of the range.

The Company is assuming constant FX rates for the year based on the rates at the start of the planning period. For reference purposes, the assumed FX rates for our top four currencies in full-year 2023 are as follows:

Using the foreign exchange rate assumptions noted above, the Company has incorporated the following FX impact into 2023 guidance:

In addition to the above guidance, the Company is also providing second quarter and full-year 2023 cash paid for interest estimates for modeling purposes. For the second quarter 2023, we estimate cash paid for interest to be approximately $37 million. For the full-year 2023, we estimate cash paid for interest to be approximately $145 million.

In addition to the above guidance, the Company is also providing second quarter and full-year 2023 weighted-average number of basic and diluted share estimates for modeling purposes. For the second quarter 2023, we expect basic weighted-average shares outstanding to be approximately 287 million shares and diluted weighted-average shares outstanding to be approximately 291 million shares. For the full-year 2023, we expect basic weighted-average shares outstanding to be approximately 288 million shares and diluted weighted-average shares outstanding to be approximately 293 million shares.

Reconciliation of non-GAAP operating income and Adjusted 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 first quarter 2023 financial results and financial outlook for the second quarter and full-year 2023 is scheduled for 2:00 p.m. Pacific Time today. To participate, please dial 1-833-470-1428 from the U.S. or 1-404-975-4839 from international locations. The conference passcode is 819836. 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.

To view the original press release, please click here.

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