- Subscription Annual Recurring Revenue (ARR) in the third
quarter increased 15% year-over-year to $1.08 billion
- Cloud Subscription ARR in the third quarter increased 37%
year-over-year to $550 million
- Exceeds high end of guidance across all third quarter 2023
metrics; raises full-year 2023 Non-GAAP Operating Income and
Adjusted Unlevered Free Cash Flow (after-tax) guidance
- Announces restructuring plan to reduce global workforce by 10%;
the plan streamlines the Company’s cost structure as a direct
result of its cloud-only, consumption-driven strategy announced in
January 2023; the Company expects no impact to full-year 2023
guidance
Informatica (NYSE: INFA), an enterprise cloud data management
leader, today announced financial results for its third quarter
2023, ended September 30, 2023.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20231101362347/en/
Informatica Q3 2023 Highlights (Graphic:
Business Wire)
"Q3 represented another strong step forward as we accelerate our
cloud-only, consumption-driven strategy. Our team delivered another
quarter exceeding guidance for the top and bottom line as we help
customers increase productivity, drive efficiency, and become
AI-led, data-driven companies,” said Amit Walia, Chief Executive
Officer at Informatica. “We continue to accelerate our
innovation-led cloud transformation to make IDMC, powered by our AI
engine CLAIRE, the data management platform of choice for
enterprises across the globe as they build their modern data
architecture to drive their AI-driven digital transformation.”
Third Quarter 2023 Financial Highlights:
- GAAP Total Revenues increased 10% year-over-year to $408.6
million. Third quarter total revenues included a positive impact of
approximately $5.0 million from foreign currency exchange rates
(FX) year-over-year.
- GAAP Subscription Revenues increased 22% year-over-year to
$261.8 million.
- Total ARR increased 7% year-over-year to $1.58 billion. Third
quarter total ARR included a negative impact of approximately $1.4
million from FX year-over-year.
- GAAP Operating Income of $32.1 million and Non-GAAP Operating
Income of $128.1 million.
- GAAP Operating Cash Flow of $58.7 million.
- Adjusted Unlevered Free Cash Flow (after-tax) of $96.1 million.
Cash paid for interest of $38.0 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 2023 Business Highlights:
- Processed 71.3 trillion cloud transactions per month for the
quarter ended September 30, 2023, compared to 44.5 trillion cloud
transactions per month in the same quarter last year, an increase
of 60% year-over-year.
- Reported 224 customers that spend more than $1 million in
subscription ARR at the end of September 30, 2023, an increase of
17% year-over-year.
- Reported 1,978 customers that spend more than $100,000 in
subscription ARR at the end of September 30, 2023, an increase of
7% year-over-year.
- Achieved a Cloud Subscription net retention rate (NRR) of 118%
at the end of September 30, 2023.
Product Innovation:
- Announced CLAIRE GPT, a generative AI-powered capability that
will deliver the advancements of a natural language-based interface
to Informatica’s Intelligent Data Management Cloud (IDMC), is
available in private preview.
- Expanded partnership with Oracle: launched Oracle Cloud (OCI)
Point of Delivery (POD) in North America to scale our market reach;
expanded data governance capabilities with native scanners to
collect metadata and profile data for insights on Oracle Autonomous
Data and Oracle GoldenGate; and named launch partner for Private
Offers on Oracle Cloud Marketplace.
- Expanded partnership with Google: launched a new solution
combining SaaS Master Data Management on Google Cloud with Google
Cloud's customer data platform based on Google BiqQuery.
Industry Recognition:
- Named "An Outstanding Customer Service Experience" by J.D.
Power for the third consecutive year in Certified Assisted
Technical Support Program.
- Named a Winner in the Technology & Services Industry
Association® (TSIA) 2023 Innovation in Customer Portals that
Improve Digital Customer Experience category.
- Ranked #1 in the Dresner Advisory Services 2023 Master Data
Management Market Study.
- Named a Champion in the Bloor Research Market Update for Master
Data Management 2023 for the third consecutive year.
- Recognized in Constellation Research ShortList™ for Metadata
Management, Data Cataloging and Data Governance for the fourth
consecutive year.
Restructuring Plan:
- Today, the Company announced a plan to reduce its workforce by
approximately 545 employees, representing 10% of the Company’s
current global workforce, and to reduce its global real estate
footprint (the “November Plan”). The November Plan is intended to
further streamline the Company’s cost structure as a direct result
of its cloud-only, consumption-driven (“CoCd”) strategy announced
in January 2023. The increased focus and simplicity of the CoCd
strategy enables the Company to deliver continued AI-powered
product innovation and strong Cloud Subscription ARR growth with a
lower expense base and higher operating margins. The Company
estimates that it will incur non-recurring charges of approximately
$35 million to $45 million in connection with the November Plan,
primarily related to cash expenditures for employee transition,
notice period and severance payments, employee benefits, real
estate-related charges, and other costs. The Company expects that
the majority of these charges will be incurred by the end of the
first quarter of 2024 and that the implementation of the November
Plan will be substantially complete by the end of the third quarter
of 2024. The Company estimates the cost savings benefit of these
actions to be approximately $84 million on a GAAP basis or
approximately $70 million on a non-GAAP basis in fiscal 2024.
Potential position eliminations in each country are subject to
local law and consultation requirements, which may extend this
process beyond the first quarter of 2024 in limited cases. The
charges that the Company expects to incur are subject to a number
of assumptions, including local law requirements in various
jurisdictions, and actual expenses may differ materially from such
estimates.
- Added Walia, "In January, we transitioned to a cloud-only,
consumption-driven strategy, which is the final leg of our
multi-year plan to drive profitable growth. We’ve already seen
significant benefits of these initiatives undertaken throughout
this year, including the strong momentum and execution reflected in
today’s earnings results. Our next phase of growth allows us to
further streamline our global cost structure without reducing our
growth expectations. We intend to finish our transition to a
cloud-only business model while maintaining sales capacity,
best-in-class product innovation and customer satisfaction. We have
strong momentum heading into the fourth quarter and look forward to
sharing more about our strategy at Investor Day.”
Ithaca L.P. Update:
- As disclosed in the Company’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2023, Ithaca L.P. (“Ithaca”), a limited
partnership affiliated with the funds advised by Permira Advisors
LLC, had an obligation to distribute its Class A Common Stock to
its limited partners as soon as practicable after October 29, 2023,
the two-year anniversary of the closing of the Company’s initial
public offering. We have been advised that on or about November 3,
2023, Ithaca plans to distribute approximately 8.6 million shares
of the Company’s Class A Common Stock to four of its limited
partners. Following this distribution, approximately 51.4 million
shares of Class A Common Stock will continue to be held in Ithaca
for approximately one year, unless otherwise sold by Ithaca or
distributed to Ithaca’s limited partners prior to such time.
Permira will continue to retain voting and investment power over
the shares held by Ithaca. The Company’s Class A Common Stock 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 31, 2023, the Company's Board of Directors (the
"Board") approved a new share repurchase authorization which
enables the Company to repurchase up to $200 million of its Class A
Common Stock through privately-negotiated purchases with individual
holders or in the open market. A committee of the Board will
determine the timing, amount and terms of any repurchase.
Upcoming Events:
- On December 5, 2023, the Company will host its 2023 Investor
Day in San Francisco at 1:00 p.m. PT. A live webcast and replay
will be available on the Company's Investor Relations website.
- On December 7, 2023, the Company is scheduled to participate in
a fireside discussion at the Barclays Global Technology Conference
at 2:30 p.m. PT. A live webcast and replay will be available on the
Company's Investor Relations website.
Fourth 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 November 1, 2023, guidance
for the full-year 2023 is 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.
- Raising Non-GAAP Operating Income from $420 million to $440
million to a range of $430 million to $450 million, representing
approximately 25% year-over-year growth at the midpoint of the
range.
- Raising Adjusted Unlevered Free Cash Flow (after-tax) from $370
million to $390 million to a range of $410 million to $430 million,
representing approximately 46% year-over-year growth at the
midpoint of the range.
Based on information available as of November 1, 2023, guidance
for the fourth quarter 2023 is as follows:
Fourth Quarter 2023 Ending December 31, 2023:
- GAAP Total Revenues are expected to be in the range of $420
million to $440 million, representing approximately 8%
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
$130 million to $150 million, representing approximately 23%
year-over-year growth at the midpoint of the range.
The Company is assuming constant FX rates for the year based on
the rates at the start of the full-year 2023 planning period. For
reference purposes, the assumed FX rates for our top four
currencies in full-year 2023 are as follows:
Currency
Planned Rate
EUR/$
1.07
GBP/$
1.20
$/CAD
1.35
$/JPY
132
Using the foreign exchange rate assumptions noted above, the
Company has incorporated the following FX impacts into 2023
guidance:
Q4 2023
Full-Year 2023
Total Revenues
~$5m positive impact y/y
~$1m positive impact y/y
Total ARR
~$3m negative impact y/y
~$10m negative impact y/y
Subscription ARR
~$3m negative impact y/y
~$7m negative impact y/y
Cloud Subscription ARR
~$1m negative impact y/y
~$3m negative impact y/y
In addition to the above guidance, the Company is also providing
fourth quarter and full-year 2023 cash paid for interest estimates
for modeling purposes. For the fourth quarter 2023, we estimate
cash paid for interest to be approximately $40 million. For the
full-year 2023, we estimate cash paid for interest to be
approximately $149 million.
In addition to the above guidance, the Company is also providing
a fourth quarter and full-year 2023 weighted-average number of
basic and diluted share estimates for modeling purposes. For the
fourth quarter 2023, we expect basic weighted-average shares
outstanding to be approximately 292 million shares and diluted
weighted-average shares outstanding to be approximately 297 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 third quarter 2023
financial results and financial outlook for the fourth 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 513620. 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.
Forward-Looking Statements
This press release and the related conference call and webcast
contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These statements
may relate to, but are not limited to, expectations of future
operating results or financial performance, including expectations
regarding achieving profitability and our GAAP and non-GAAP
guidance for the fourth quarter and 2023 fiscal year, the effect of
foreign currency exchange rates, the effect of macroeconomic
conditions, management’s plans, priorities, initiatives, and
strategies, our efforts to reduce operating expenses and adjust
cash flows in light of current business needs and priorities, our
expected costs related to restructuring and related charges,
including the timing of such charges, the impact of the
restructuring and related charges on our business, results of
operations and financial condition, plans regarding our stock
repurchase authorization, the distribution of Class A common stock
by certain of our stockholders and management's estimates and
expectations regarding growth of our business, the potential
benefits realized by customers from our cloud modernization
programs, market, and partnerships. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot
be predicted or quantified. In some cases, you can identify
forward-looking statements because they contain words such as
“anticipate,” “believe,” “contemplate,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “should,” “target,” “toward,” “will,” or
“would,” or the negative of these words or other similar terms or
expressions. You should not put undue reliance on any
forward-looking statements. Forward-looking statements should not
be read as a guarantee of future performance or results and will
not necessarily be accurate indications of the times at, or by,
which such performance or results will be achieved, if at all.
Forward-looking statements are based on information available at
the time those statements are made and are based on current
expectations, estimates, forecasts, and projections as well as the
beliefs and assumptions of management as of that time with respect
to future events. These statements are subject to risks and
uncertainties, many of which involve factors or circumstances that
are beyond our control, that could cause actual performance or
results to differ materially from those expressed in or suggested
by the forward-looking statements. In light of these risks and
uncertainties, the forward-looking events and circumstances
discussed in this press release may not occur and actual results
could differ materially from those anticipated or implied in the
forward-looking statements. These risks, uncertainties,
assumptions, and other factors include, but are not limited to,
those related to our business and financial performance, the
effects of adverse global macroeconomic conditions and geopolitical
uncertainty, the effects of public health crises on our business,
results of operations, and financial condition, our ability to
attract and retain customers, our ability to develop new products
and services and enhance existing products and services, our
ability to respond rapidly to emerging technology trends, our
ability to execute on our business strategy, including our strategy
related to the Informatica IDMC platform and key partnerships, our
ability to increase and predict customer consumption of our
platform, our ability to compete effectively, and our ability to
manage growth.
Further information on these and additional risks,
uncertainties, and other factors that could cause actual outcomes
and results to differ materially from those included in or
contemplated by the forward-looking statements contained in this
release are included under the caption “Risk Factors” and elsewhere
in our Annual Report on Form 10-K that was filed for the fiscal
year ended December 31, 2022, and other filings and reports we make
with the Securities and Exchange Commission from time to time,
including our Quarterly Report on Form 10-Q that will be filed for
the third quarter ended September 30, 2023. All forward-looking
statements contained herein are based on information available to
us as of the date hereof and we do not assume any obligation to
update these statements as a result of new information or future
events.
Non-GAAP Financial Measures and Key Business Metrics
We review several operating and financial metrics, including the
following unaudited non-GAAP financial measures and key business
metrics to evaluate our business, measure our performance, identify
trends affecting our business, formulate business plans, and make
strategic decisions:
Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S.
generally accepted accounting principles (GAAP), we believe the
following non-GAAP measures are useful in evaluating our operating
performance. We use the following non-GAAP financial measures to
evaluate our ongoing operations and for internal planning and
forecasting purposes. We believe that these non-GAAP financial
measures, when taken collectively, may be helpful to investors
because they provide consistency and comparability with past
financial performance. However, non-GAAP financial measures are
presented for supplemental informational purposes only, have
limitations as an analytical tool, and should not be considered in
isolation or as a substitute for financial information presented in
accordance with GAAP. In addition, other companies, including
companies in our industry, may calculate similarly titled non-GAAP
measures differently or may use other measures to evaluate their
performance, all of which could reduce the usefulness of our
non-GAAP financial measures as tools for comparison. A
reconciliation is provided below for our non-GAAP financial
measures to the most directly comparable financial measures stated
in accordance with GAAP. Investors are encouraged to review the
related GAAP financial measures and the reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP
financial measures, and not to rely on any single financial measure
to evaluate our business.
Non-GAAP Income from Operations and Non-GAAP Net Income
exclude the effect of stock-based compensation expense-related
charges, amortization of acquired intangibles, equity compensation
related payments, expenses associated with acquisitions, and
strategic investments, and are adjusted for income tax effects. We
believe the presentation of operating results that exclude these
non-cash or non-recurring items provides useful supplemental
information to investors and facilitates the analysis of our
operating results and comparison of operating results across
reporting periods.
Adjusted EBITDA represents GAAP net loss as adjusted for
income tax benefit (expense), interest income, interest expense,
loss on debt refinancing, other income (expense), stock-based
compensation, amortization of intangibles, equity compensation
related payments, restructuring, acquisition costs, and
depreciation. Equity compensation-related payments are related to
the repurchase of employee stock options. We believe adjusted
EBITDA is an important metric for understanding our business to
assess our relative profitability adjusted for balance sheet debt
levels.
Adjusted Unlevered Free Cash Flow (after-tax) represents
operating cash flow less purchases of property and equipment and is
adjusted for interest payments, equity compensation payments,
restructuring costs (including payments for impaired leases), and
executive severance. We believe this measure provides useful
supplemental information to investors because it is an indicator of
our liquidity over the long term needed to maintain and grow our
core business operations. We also provide actual and forecast cash
interest expense to aid in the calculation of adjusted free cash
flow (after-tax).
Key Business Metrics
Annual Recurring Revenue (ARR) represents the expected
annual billing amounts from all active maintenance and subscription
agreements. ARR is calculated based on the contract Monthly
Recurring Revenue (MRR) multiplied by 12. MRR is calculated based
on the accounting adjusted total contract value divided by the
number of months of the agreement based on the start and end dates
of each contracted line item. The aggregate ARR calculated at the
end of each reported period represents the value of all contracts
that are active as of the end of the period, including those
contracts that have expired but are still under negotiation for
renewal. We typically allow for a grace period of up to 6 months
past the original contract expiration quarter during which we
engage in the renewal process before we report the contract as
lost/inactive. This grace-period ARR amount has been less than 2%
of the reported ARR in each period presented. If there is an actual
cancellation of an ARR contract, we remove that ARR value at that
time. We believe ARR is an important metric for understanding our
business since it tracks the annualized cash value collected over a
12-month period for all our recurring contracts, irrespective of
whether it is a maintenance contract on a perpetual license, a
ratable cloud contract, or an on-premise term-based subscription
license.
Maintenance Annual Recurring Revenue represents the
portion of ARR only attributable to our maintenance contracts. We
believe that Maintenance ARR is a helpful metric for understanding
our business since it represents the approximate annualized cash
value collected over a 12-month period for all our maintenance
contracts. Maintenance ARR includes maintenance contracts
supporting our on-premise perpetual licenses. Maintenance ARR
should be viewed independently of maintenance revenue and deferred
revenue related to our maintenance contracts and is not intended to
be combined with or to replace either of those items.
Subscription Annual Recurring Revenue represents the
portion of ARR only attributable to our subscription contracts. We
believe that Subscription ARR is a helpful metric for understanding
our business since it represents the approximate annualized cash
value collected over a 12-month period for all our recurring
subscription contracts. Subscription ARR excludes maintenance
contracts on our perpetual licenses to provide information
regarding the period-to-period performance and overall size and
scale of our subscription business as we continue to focus our
efforts on subscription-based licensing. Subscription ARR should be
viewed independently of subscription revenue and deferred revenue
related to our subscription contracts and is not intended to be
combined with or to replace either of those items.
Cloud Subscription Annual Recurring Revenue represents
the portion of ARR that is attributable to our hosted cloud
contracts. We believe that Cloud Subscription ARR is a helpful
metric for understanding our business since it represents the
approximate annualized cash value collected over a 12-month period
for all our recurring Cloud contracts. Cloud Subscription ARR is a
subset of our overall Subscription ARR, and by providing this
breakdown of Cloud Subscription ARR, it provides visibility on the
size and growth rate of our Cloud Subscription ARR within our
overall Subscription ARR. Cloud Subscription ARR should be viewed
independently of subscription revenue and deferred revenue related
to our subscription contracts and is not intended to be combined
with or to replace either of those items.
Subscription Net Retention Rate (NRR) compares the
contract value for Subscription ARR from the same set of customers
at the end of a period compared to the prior year. We treat
divisions, segments, or subsidiaries inside companies as separate
customers. To calculate our Subscription NRR for a particular
period, we first establish the Subscription ARR value at the end of
the prior-year period. We subsequently measure the Subscription ARR
value at the end of the current period from the same cohort of
customers. The net retention rate is then calculated by dividing
the aggregate Subscription ARR in the current period by the
prior-year period. An increase in the Subscription NRR occurs as a
result of price increases on existing contracts, higher consumption
of existing products, and sales of additional new subscription
products to existing customers exceeding losses from subscription
contracts due to cancellations. We believe Subscription NRR is an
important metric for understanding our business since it measures
the rate at which we are able to sell additional products into our
subscription customer base.
Cloud Subscription Net Retention Rate compares the
contract value for Cloud Subscription ARR from the same set of
customers at the end of a period compared to the prior year. We
treat divisions, segments or subsidiaries inside companies as
separate customers. To calculate our Cloud Subscription NRR for a
particular period, we first establish the Cloud Subscription ARR
value at the end of the prior year period. We subsequently measure
the Cloud Subscription ARR value at the end of the current period
from the same cohort of customers. Cloud Subscription NRR is then
calculated by dividing the aggregate Cloud Subscription ARR in the
current period by the prior year period. An increase in the Cloud
Subscription NRR occurs as a result of price increases on existing
contracts, higher consumption of existing products, and sales of
additional new subscription products to existing customers
exceeding losses from subscription contracts due to price
decreases, usage decreases and cancellations. We believe Cloud
Subscription NRR is an important metric for understanding our
business since it measures the rate at which we are able to sell
additional products into our cloud subscription customer base.
About Informatica
Informatica (NYSE: INFA), an Enterprise Cloud Data Management
leader, brings data to life by empowering businesses to realize the
transformative power of their most critical assets. We have created
a new category of software, the Informatica Intelligent Data
Management Cloud™ (IDMC). IDMC is an end-to-end data management
platform, powered by CLAIRE® AI, that connects, manages and unifies
data across any multi-cloud or hybrid system, democratizing data
and enabling enterprises to modernize and advance their business
strategies. Customers in more than 100 countries, including 85 of
the Fortune 100, rely on Informatica to drive data-led digital
transformation. Informatica. Where data comes to life.
INFORMATICA INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per
share data)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenues:
Subscriptions
$
261,828
$
214,009
$
703,339
$
618,799
Perpetual license
205
1,208
1,024
6,180
Software revenue
262,033
215,217
704,363
624,979
Maintenance and professional services
146,530
156,734
445,619
481,358
Total revenues
408,563
371,951
1,149,982
1,106,337
Cost of revenues:
Subscriptions
39,133
27,692
113,443
77,573
Perpetual license
162
147
555
476
Software costs
39,295
27,839
113,998
78,049
Maintenance and professional services
41,533
50,649
128,556
152,574
Amortization of acquired technology
3,013
8,703
8,776
26,776
Total cost of revenues
83,841
87,191
251,330
257,399
Gross profit
324,722
284,760
898,652
848,938
Operating expenses:
Research and development
85,862
80,403
255,608
239,590
Sales and marketing
129,997
132,282
393,035
404,831
General and administrative
41,911
31,255
122,027
92,461
Amortization of intangible assets
34,481
38,231
103,120
115,351
Restructuring
407
—
28,131
—
Total operating expenses
292,658
282,171
901,921
852,233
Income (loss) from operations
32,064
2,589
(3,269
)
(3,295
)
Interest income
10,447
2,813
27,950
4,308
Interest expense
(39,327
)
(22,185
)
(111,844
)
(51,570
)
Other income, net
5,519
3,963
8,680
12,020
Income (loss) before income taxes
8,703
(12,820
)
(78,483
)
(38,537
)
Income tax (benefit) expense
(70,573
)
2,782
111,061
10,757
Net income (loss)
$
79,276
$
(15,602
)
$
(189,544
)
$
(49,294
)
Net income (loss) per share attributable
to Class A and Class B-1 common stockholders:
Basic
$
0.27
$
(0.06
)
$
(0.66
)
$
(0.18
)
Diluted
$
0.27
$
(0.06
)
$
(0.66
)
$
(0.18
)
Weighted-average shares used in computing
net income (loss) per share:
Basic
289,354
281,859
287,133
280,361
Diluted
296,556
281,859
287,133
280,361
INFORMATICA INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except par
value data)
September 30,
December 31,
2023
2022
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
612,107
$
497,879
Short-term investments
256,986
218,256
Accounts receivable, net of allowances of
$5,088 and $4,608, respectively
273,355
454,759
Contract assets, net
89,455
95,221
Prepaid expenses and other current
assets
125,053
132,638
Total current assets
1,356,956
1,398,753
Property and equipment, net
152,464
160,574
Operating lease right-of-use-assets
58,055
67,735
Goodwill
2,340,632
2,337,036
Customer relationships intangible asset,
net
698,152
794,898
Other intangible assets, net
22,079
33,094
Deferred tax assets
16,428
13,076
Other assets
152,991
165,733
Total assets
$
4,797,757
$
4,970,899
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
7,956
$
38,002
Accrued liabilities
39,049
58,844
Accrued compensation and related
expenses
106,748
150,118
Current operating lease liabilities
16,365
17,514
Current portion of long-term debt
18,750
18,750
Income taxes payable
28,951
3,758
Contract liabilities
599,675
676,470
Total current liabilities
817,494
963,456
Long-term operating lease liabilities
46,279
55,178
Long-term contract liabilities
14,696
23,007
Long-term debt, net
1,809,891
1,821,760
Deferred tax liabilities
27,296
18,604
Long-term income taxes payable
37,810
30,601
Other liabilities
3,778
3,932
Total liabilities
2,757,244
2,916,538
Stockholders’ equity:
Class A common stock; $0.01 par value per
share; 2,000,000 and 2,000,000 shares authorized as of September
30, 2023 and December 31, 2022, respectively; 247,049 and 239,749
shares issued and outstanding as of September 30, 2023 and December
31, 2022, respectively
2,471
2,398
Class B-1 common stock; $0.01 par value
per share; 200,000 and 200,000 shares authorized as of September
30, 2023 and December 31, 2022, respectively; 44,050 and 44,050
shares issued and outstanding as of September 30, 2023 and December
31, 2022, respectively
440
440
Class B-2 common stock; $0.00001 par value
per share; 200,000 and 200,000 shares authorized as of September
30, 2023 and December 31, 2022, respectively; 44,050 and 44,050
shares issued and outstanding as of September 30, 2023 and December
31, 2022, respectively
—
—
Additional paid-in-capital
3,466,037
3,282,383
Accumulated other comprehensive income
(loss)
(55,690
)
(47,671
)
Accumulated deficit
(1,372,745
)
(1,183,189
)
Total stockholders’ equity
2,040,513
2,054,361
Total liabilities and stockholders’
equity
$
4,797,757
$
4,970,899
INFORMATICA INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Operating activities:
Net income (loss)
$
79,276
$
(15,602
)
$
(189,544
)
$
(49,294
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
4,203
5,091
12,674
16,461
Non-cash operating lease costs
3,776
4,124
12,800
12,841
Stock-based compensation
56,508
34,155
162,058
97,988
Deferred income taxes
358
(27,439
)
4,356
(84,786
)
Amortization of intangible assets and
acquired technology
37,494
46,934
111,896
142,127
Amortization of debt issuance costs
870
898
2,574
2,735
Amortization of investment discount, net
of premium
(1,225
)
(280
)
(2,976
)
(280
)
Changes in operating assets and
liabilities:
Accounts receivable
23,303
34,562
182,550
174,716
Prepaid expenses and other assets
(1,187
)
6,650
25,894
10,341
Accounts payable and accrued
liabilities
(4,740
)
(2,742
)
(108,067
)
(112,792
)
Income taxes payable
(96,176
)
7,728
32,574
22,591
Contract liabilities
(43,742
)
(40,820
)
(81,484
)
(93,301
)
Net cash provided by operating
activities
58,718
53,259
165,305
139,347
Investing activities:
Purchases of property and equipment
(1,804
)
(573
)
(4,919
)
(1,573
)
Purchases of investments
(107,148
)
(132,577
)
(255,073
)
(181,245
)
Maturities of investments
28,307
20,287
180,007
67,588
Sales of investments
15,712
—
39,510
—
Business acquisition, net of cash
acquired
(12,476
)
—
(12,476
)
—
Net cash used in investing activities
(77,409
)
(112,863
)
(52,951
)
(115,230
)
Financing activities:
Payment of debt
(4,688
)
(4,688
)
(14,064
)
(9,376
)
Proceeds from issuance of common stock
under employee stock purchase plan
12,098
19,146
28,229
32,790
Payments of offering costs
—
—
—
(2,085
)
Payments for dividends related to Class
B-2 shares
—
—
(12
)
(24
)
Payments for taxes related to net share
settlement of equity awards
(15,152
)
—
(26,252
)
—
Net activity from derivatives with an
other-than-insignificant financing element
—
2,283
—
(4,851
)
Proceeds from issuance of shares under
equity plans
12,039
5,063
19,692
17,537
Net cash provided by financing
activities
4,297
21,804
7,593
33,991
Effect of foreign exchange rate changes on
cash and cash equivalents
(6,302
)
(5,538
)
(5,719
)
(16,341
)
Net (decrease) / increase in cash and cash
equivalents
(20,696
)
(43,338
)
114,228
41,767
Cash and cash equivalents at beginning of
period
632,803
543,201
497,879
458,096
Cash and cash equivalents at end of
period
$
612,107
$
499,863
$
612,107
$
499,863
Supplemental disclosures:
Cash paid for interest
$
38,027
$
23,753
$
109,089
$
54,234
Cash paid for income taxes, net of
refunds
$
25,224
$
22,492
$
74,110
$
72,951
INFORMATICA INC.
NON-GAAP FINANCIAL MEASURES
AND KEY BUSINESS METRICS
(in thousands, except per
share data)
(unaudited)
RECONCILIATIONS OF GAAP TO NON-GAAP
Reconciliation of GAAP net income
(loss) to Non-GAAP net income
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
(in thousands)
(in thousands)
GAAP net income (loss)
$
79,276
$
(15,602
)
$
(189,544
)
$
(49,294
)
Stock-based compensation
56,508
34,155
162,058
97,988
Amortization of intangibles
37,494
46,934
111,896
142,127
Equity compensation
—
19
—
147
Restructuring
407
—
28,131
—
Acquisition costs
1,584
—
1,584
—
Executive severance
—
33
—
99
Income tax effect
(94,653
)
(12,932
)
59,269
(35,662
)
Non-GAAP net income
$
80,616
$
52,607
$
173,394
$
155,405
Net income (loss) per share:
Net income (loss) per share—basic
$
0.27
$
(0.06
)
$
(0.66
)
$
(0.18
)
Net income (loss) per share—diluted
$
0.27
$
(0.06
)
$
(0.66
)
$
(0.18
)
Non-GAAP net income per share—basic
$
0.28
$
0.19
$
0.60
$
0.55
Non-GAAP net income per share—diluted
$
0.27
$
0.18
$
0.59
$
0.54
Share count (in thousands):
Weighted-average shares used in computing
Net income (loss) per share—basic
289,354
281,859
287,133
280,361
Weighted-average shares used in computing
Net income (loss) per share—diluted
296,556
281,859
287,133
280,361
Weighted-average shares used in computing
Non-GAAP net income per share—basic
289,354
281,859
287,133
280,361
Weighted-average shares used in computing
Non-GAAP net income per share—diluted
296,556
286,794
292,072
285,163
Reconciliation of GAAP income (loss)
from operations to Non-GAAP income from operations
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
(in thousands)
(in thousands)
GAAP income (loss) from operations
$
32,064
$
2,589
$
(3,269
)
$
(3,295
)
Stock-based compensation
56,508
34,155
162,058
97,988
Amortization of intangibles
37,494
46,934
111,896
142,127
Equity compensation
—
19
—
147
Restructuring
407
—
28,131
—
Acquisition costs
1,584
—
1,584
—
Non-GAAP income from operations
$
128,057
$
83,697
$
300,400
$
236,967
INFORMATICA INC.
NON-GAAP FINANCIAL MEASURES
AND KEY BUSINESS METRICS
Adjusted EBITDA Reconciliation
Three Months Ended September
30,
Nine Months Ended September
30,
Trailing Twelve Months ("TTM")
Ended September 30,
2023
2022
2023
2022
2023
(in thousands)
(in thousands)
(in thousands)
GAAP net income (loss)
$
79,276
$
(15,602
)
$
(189,544
)
$
(49,294
)
$
(193,925
)
Income tax (benefit) expense
(70,573
)
2,782
111,061
10,757
119,782
Interest income
(10,447
)
(2,813
)
(27,950
)
(4,308
)
(32,866
)
Interest expense
39,327
22,185
111,844
51,570
138,294
Other income, net
(5,519
)
(3,963
)
(8,680
)
(12,020
)
(5,656
)
Stock-based compensation
56,508
34,155
162,058
97,988
199,932
Amortization of intangibles
37,494
46,934
111,896
142,127
158,594
Equity compensation
—
19
—
147
185
Restructuring
407
—
28,131
—
28,131
Acquisition costs
1,584
—
1,584
—
1,584
Depreciation
4,132
5,092
12,540
16,286
17,261
Adjusted EBITDA
$
132,189
$
88,789
$
312,940
$
253,253
$
431,316
Adjusted Unlevered Free Cash
Flows
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
(in thousands, except
percentages)
(in thousands, except
percentages)
Total GAAP Revenue
$
408,563
$
371,951
$
1,149,982
$
1,106,337
Net cash provided by operating
activities
$
58,718
$
53,259
$
165,305
$
139,347
Less: Purchases of property, plant, and
equipment
(1,804
)
(573
)
(4,919
)
(1,573
)
Add: Equity compensation payments
47
159
168
504
Add: Executive severance
—
—
—
3,919
Add: Restructuring costs
1,144
182
26,764
575
Adjusted Free Cash Flow (after-tax)(1)
$
58,105
$
53,027
$
187,318
$
142,772
Add: Cash paid for interest
38,027
23,753
109,089
54,234
Adjusted Unlevered Free Cash Flows
(after-tax)(1)
$
96,132
$
76,780
$
296,407
$
197,006
Adjusted Free Cash Flow (after-tax)
margin(1)
14
%
14
%
16
%
13
%
Adjusted Unlevered Free Cash Flows
(after-tax) margin(1)
24
%
21
%
26
%
18
%
(1) Includes cash tax payments of $25.3 million and $22.5
million for the three months ended September 30, 2023 and 2022,
respectively and $74.1 million and $73.0 million for the nine
months ended September 30, 2023 and 2022, respectively.
Key Business Metrics
September 30,
2023
2022
(in thousands, except
percentages)
Cloud Subscription Annual Recurring
Revenue
$
549,507
$
400,271
Self-managed Subscription Annual Recurring
Revenue
527,687
536,123
Subscription Annual Recurring Revenue
1,077,194
936,394
Maintenance Annual Recurring Revenue on
Perpetual Licenses
498,697
531,357
Total Annual Recurring Revenue
$
1,575,891
$
1,467,751
Subscription Net Retention Rate
106
%
112
%
Cloud Subscription Net Retention Rate
118
%
115
%
INFORMATICA INC.
SUPPLEMENTAL
INFORMATION
Additional Business Metrics
September 30,
2023
2022
Maintenance Renewal Rate
95
%
96
%
Subscription Renewal Rate
94
%
94
%
Customers that spend more than $1 million
in Subscription Annual Recurring Revenue(1)
224
191
Customers that spend more than $100,000 in
Subscription Annual Recurring Revenue(2)
1,978
1,852
Cloud transactions processed per month in
trillions(3)
71.3
44.5
(1)
Total number of customers that spend more
than $1 million in Subscription Annual Recurring Revenue.
(2)
Total number of customers that spend more
than $100,000 in Subscription Annual Recurring Revenue.
(3)
Total number of cloud transactions
processed on our platform per month in trillions, which measures
data processed.
Net Debt Reconciliation
September 30,
December 31
2023
2022
(in millions)
Dollar Term Loan
$
1,847
$
1,861
Less: Cash, cash equivalents, and
short-term investments
(869
)
(716
)
Total net debt
$
978
$
1,145
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101362347/en/
Investor Relations: Victoria Hyde-Dunn
vhydedunn@informatica.com
Public Relations: prteam@informatica.com
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