Industry Summary Articles

Informatica, a leader in enterprise AI-powered cloud data management, announced financial results for its third quarter 2024, ended September 30, 2024.

“Q3 was another impressive quarter for us, driven by customer demand for the IDMC platform and continued successful execution of our cloud-only, consumption-driven strategy. We achieved a historic milestone at Informatica by surpassing 101 trillion processed cloud transactions per month. This accomplishment reflects our commitment to product innovation, customer-centricity, and our goal of being the Switzerland of Data and AI,” said Amit Walia, Chief Executive Officer at Informatica. “We see great momentum in AI-powered data management use cases. We believe Informatica is well-positioned to strategically support enterprises and empower customers to leverage AI for data readiness and simplify their data estates.”

Third Quarter 2024 Financial Highlights:

• GAAP Total Revenues increased 3.4% year-over-year to $422.5 million. Total revenues included a negative impact of approximately $1.2 million from foreign currency exchange rates (FX) year-over-year. Adjusted for FX rates, total revenues increased 3.7% year-over-year.
• GAAP Subscription Revenues increased 10% year-over-year to $287.9 million. GAAP Cloud Subscription Revenue increased 37% year-over-year to $175.8 million and represented 61% of subscription revenues.
• Total ARR increased 6.7% year-over-year to $1.68 billion. Total ARR included a positive impact of approximately $1.4 million from FX rates year-over-year. Subscription ARR increased 13% year-over-year to $1.22 billion. Subscription ARR included a positive impact of approximately $0.9 million from FX rates year-over-year.
• Cloud Subscription ARR increased 36% year-over-year to $747.8 million. Cloud Subscription ARR included a positive impact of approximately $0.3 million from FX rates year-over-year.
• GAAP Operating Income of $50.9 million and Non-GAAP Operating Income of $151.0 million. GAAP Operating Margin increased 430 basis points to 12.1% and Non-GAAP Operating Margin increased 450 basis points to 35.8% compared to the prior year period.
• GAAP Operating Cash Flow of $106.5 million.
• Adjusted Unlevered Free Cash Flow (after-tax) of $144.0 million. Cash paid for interest of $36.2 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 2024 Business Highlights:

• Processed 101.3 trillion cloud transactions per month for the quarter ended September 30, 2024, compared to 71.3 trillion cloud transactions per month in the same quarter last year, an increase of 42% year-over-year.
• Reported 264 customers that spend more than $1 million in subscription ARR at the end of September 30, 2024, an increase of 18% year-over-year.
• Reported 2,074 customers that spend more than $100,000 in subscription ARR at the end of September 30, 2024, an increase of 5% year-over-year.
• Achieved a Cloud Subscription net retention rate (NRR) of 120% at the end-user level and 126% at the global parent level as of September 30, 2024.

Product Innovation and Business Updates:

• Expanded partnership with Oracle: announced general availability of Informatica’s Intelligent Data Management Cloud (IDMC) platform services for Oracle Cloud Infrastructure (OCI) that includes Cloud Data Governance & Catalog, PowerCenter Cloud Edition, and Metadata Scanners for Oracle GoldenGate 23ai.
• Announced the availability of Gen AI blueprints for AWS, Databricks, Google Cloud, Microsoft Azure, Oracle Cloud and Snowflake ecosystems. The blueprints include standard reference architectures, prebuilt, ecosystem-specific “recipes” and Gen AI model-as-a-service and vector database connectors to minimize Gen AI development complexity and accelerate implementation.
• Celebrated the 20th anniversary of Innovation Labs (iLabs), Informatica's flagship research and development center in Bangalore, India.
• Announced the appointment of Mitesh Dhruv to the Board of Directors and Chair of the Audit Committee.

Ithaca L.P. Update:

• As disclosed in the Company's Form 10-Q for the quarter ended June 30, 2024, approximately 33.4 million of our Class A shares are owned by Ithaca L.P. (Ithaca), a limited partnership affiliated with the funds advised by Permira Advisors LLC (Permira). We have been advised that in early November 2024, Ithaca plans to distribute approximately 9.3 million of these shares to certain of its limited partners. The remaining shares will continue to be held by Ithaca, where Permira will continue to retain voting and investment power. The Class A shares to be distributed by Ithaca to its limited partners will be available for immediate resale in the public market at the discretion of the applicable limited partner.

Share Repurchase Authorization:

• On October 29, 2024, the Company's Board of Directors (the Board) approved a new share repurchase authorization which enables the company to repurchase up to $400 million of its Class A common stock through privately-negotiated purchases with individual holders or in the open market. This new authorization replaces the prior $200 million repurchase authorization. No repurchases have been made under the existing authorization. A committee of the Board will determine the timing, amount and terms of any repurchase.

Upcoming Events:

• On Tuesday, November 19, 2024, the Company is scheduled to participate in a fireside chat discussion at the RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference in New York, at 1:20 p.m. Eastern Time. A live webcast and replay will be available on the Company's Investor Relations website.
• On Tuesday, December 3, 2024, the Company is scheduled to participate in a fireside chat discussion at the UBS Global Technology and AI Conference in Scottsdale, AZ, at 2:15 p.m. Mountain Time. A live webcast and replay will be available on the Company's Investor Relations website.
• On Wednesday, December 4, 2024, the Company is scheduled to participate in a fireside chat discussion at the Wells Fargo Technology, Media and Telecommunications Summit in Rancho Palos Verdes, CA, at 8:45 a.m. Pacific Time. A live webcast and replay will be available on the Company's Investor Relations website.
• On Tuesday, December 10, 2024, the Company is scheduled to host investor meetings at the Scotiabank Global Technology Conference in San Francisco, CA.
• On Thursday, December 12, 2024, the Company is scheduled to host investor meetings at the Barclays Annual Global Technology Conference in San Francisco, CA.

Fourth Quarter and Full-Year 2024 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 October 30, 2024, guidance for the fourth quarter 2024 is as follows:

Fourth Quarter 2024 Ending December 31, 2024:

• GAAP Total Revenues are expected to be in the range of $448 million to $468 million, representing approximately 2.9% year-over-year growth at the midpoint of the range.
• Subscription ARR is expected to be in the range of $1.265 billion to $1.299 billion, representing approximately 13.2% year-over-year growth at the midpoint of the range.
• Cloud Subscription ARR is expected to be in the range of $829 million to $843 million, representing approximately 35.5% year-over-year growth at the midpoint of the range.
• Non-GAAP Operating Income is expected to be in the range of $162 million to $182 million, representing approximately 6.3% year-over-year growth at the midpoint of the range.

Based on information available as of October 30, 2024, the Company is reaffirming guidance for the full-year 2024 as follows:

Full-Year 2024 Ending December 31, 2024:

• GAAP Total Revenues are expected to be in the range of $1.660 billion to $1.680 billion, representing approximately 4.7% year-over-year growth at the midpoint of the range.
• Total ARR is expected to be in the range of $1.718 billion to $1.772 billion, representing approximately 7.3% year-over-year growth at the midpoint of the range.
• Subscription ARR is expected to be in the range of $1.265 billion to $1.299 billion, representing approximately 13.2% year-over-year growth at the midpoint of the range.
• Cloud Subscription ARR is expected to be in the range of $829 million to $843 million, representing approximately 35.5% year-over-year growth at the midpoint of the range.
• Non-GAAP Operating Income is expected to be in the range of $538 million to $558 million, representing approximately 18.5% 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 $545 million to $565 million, representing approximately 23.0% 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 full-year 2024. For reference purposes, the assumed FX rates for our top four currencies in full-year 2024 are as follows:

Using the foreign exchange rate assumptions noted above, the Company has incorporated the following FX impacts into 2024 guidance:

In addition to the above guidance, the Company is also providing fourth quarter 2024 Total ARR for modeling purposes. Total ARR is expected to be in the range of $1.718 billion to $1.772 billion, representing approximately 7.3% year-over-year growth at the midpoint of the range.

In addition to the above guidance, the Company is also providing fourth quarter and full-year 2024 cash paid for interest estimates for modeling purposes. For the fourth quarter 2024, we estimate cash paid for interest to be approximately $32 million. For the full-year 2024, we estimate cash paid for interest to be approximately $144 million, using forward rates based on 1-month SOFR and a credit spread of 225 basis points.

In addition to the above guidance, the Company is also providing a fourth quarter and full-year 2024 weighted-average number of basic and diluted share estimates for modeling purposes. For the fourth quarter 2024, we expect basic weighted-average shares outstanding to be approximately 307 million shares and diluted weighted-average shares outstanding to be approximately 315 million shares. For the full-year 2024, we expect basic weighted-average shares outstanding to be approximately 303 million shares and diluted weighted-average shares outstanding to be approximately 313 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 third quarter 2024 financial results and financial outlook for the fourth quarter and full-year 2024 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 408713. 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.

Search for Informatica on CIMdata.com