Informatica Inc. (NYSE:INFA) Q3 2023 Earnings Conference Call November 1, 2023 5:00 PM ET Company Participants Victoria Hyde-Dunn - Vice President of Investor Relations Amit Walia - Chief Executive Officer Mike McLaughlin - Chief Financial Officer Conference Call Participants Alex Zukin - Wolfe Research Matt Hedberg - RBC Brad Zelnick - Deutsche Bank Patrick Colville - Scotiabank Fred Havemeyer - Macquarie Koji Ikeda - Bank of America Howard Ma - Guggenheim Operator Hello, and welcome to the Informatica Inc ...

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Financial Data and Key Metrics Changes - The company raised its non-GAAP operating income and adjusted unlevered free cash flow after tax guidance for the full year, reflecting strong execution in the first half of the year [5][46][73] - Total ARR was $1.55 billion, an increase of 8% year-over-year, driven by new cloud workloads and steady renewal rates [67] - Subscription revenue increased 10% year-over-year to $228 million, representing 61% of total revenue compared to 56% a year ago [20][30] - Operating margin improved to 23.3%, a 4.5 percentage point increase from 18.8% a year ago [45] Business Line Data and Key Metrics Changes - Cloud subscription ARR was $513 million, a 37% increase year-over-year, now representing 49% of total subscription ARR, up from 42% a year ago [41] - Self-managed subscription ARR declined slightly to $530 million, down 1% sequentially and up 1% year-over-year [18] - Maintenance ARR was down 7% year-over-year to $505 million, in line with expectations [42] Market Data and Key Metrics Changes - US revenue declined 1.6% year-over-year to $239 million, while international revenue grew 6% year-over-year to $137 million [44] - Customers spending more than $1 million in subscription ARR increased by 22% year-over-year to over 213 customers [31] Company Strategy and Development Direction - The company is focusing on a cloud-only consumption-driven strategy, aiming to displace legacy and single-point solution vendors [15][30] - Informatica is expanding its cloud-native AI-powered IDMC platform capabilities, integrating recent acquisitions to enhance data access management and privacy solutions [29] - The company is committed to product innovation and has launched several industry-specific solutions, including IDMC for ESG sustainability [31] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment remained stable in Q2, with no significant changes expected in the near term [30][79] - The company is optimistic about its cloud growth opportunities and is focused on executing its strategy effectively [39][112] Other Important Information - The company ended the second quarter with cash plus short-term investments of $821 million and net debt of $1.03 billion [22] - Adjusted unlevered free cash flow after tax is expected to be in the range of $370 million to $390 million, representing a 32% year-over-year increase at the midpoint [23] Q&A Session Summary Question: What trends are being observed towards the end of the quarter and the first month of Q3? - Management indicated that Q2 was stable and July showed similar stability, with no significant changes observed [79] Question: How is the adoption of Generative AI progressing among enterprises? - Management noted that enterprises are exploring use cases for Generative AI, with significant value creation opportunities identified [82][84] Question: What is driving the migration activity to the cloud? - The company highlighted that customers are increasingly interested in IPU consumption and better spend visibility, contributing to accelerated migration [99] Question: What is the outlook for cloud NRR in the back half of the year? - Management stated that cloud NRR is expected to remain stable, with a focus on maintaining growth in cloud ARR [150] Question: How is the sales team adjusting to the cloud-only and IPU-led sales motion? - Management expressed confidence in the sales team's ability to adapt and execute effectively under the new model [121]

High Growth Subscription ARR Cloud Differentiation Q2 2023 Adjusted Unlevered Free Cash Flow Margin (after-tax)6 Guidance Q2 2023 Results Q2 2023 -3% YoY Change at Midpoint Subscription ARR Product Innovation: • Expanded partnership with Amazon: launched Amazon Web Services (AWS) Point of Delivery (PoD) in Japan to scale our market reach in Asia Pacific; launched Informatica's secure agent, Private Link, on AWS; and announced the availability of Cloud Data Integration-Free service for Amazon Redshift. • Exp ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q _____________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-40936 _____________________________ Informatica Inc. ____________________________ ...

Informatica Inc. (NYSE:INFA) Q1 2023 Earnings Conference Call May 3, 2023 5:00 PM ET Company Participants Victoria Hyde-Dunn - VP of IR Amit Walia - CEO Mike McLaughlin - EVP & CFO Conference Call Participants Andrew Nowinski - Wells Fargo Matt Hedberg - RBC Capital Markets Pinjalim Bora - JPMorgan Howard Ma - Guggenheim Securities Fred Lee - Credit Suisse Fred Havemeyer - Macquarie Patrick Colville - Scotiabank Allan Verkhovski - Wolfe Research Koji Ikeda - Bank of America Merrill Lynch Tyler Radke - C ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q _____________________________ Informatica Inc. _____________________________ (Exact name of registrant as specified in its charter) Delaware 61-1999534 (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition ...

Customer Base and Growth - The company has approximately 5,600 customers in approximately 100 countries and territories worldwide as of December 31, 2022[68] - The number of customers contributing more than $1 million in Subscription ARR increased from 104 in 2020 to 206 in 2022[68] - The number of customers contributing more than $100,000 in Subscription ARR increased from 1,361 in 2020 to 1,916 in 2022[68] - Approximately 90% of the company's total Subscription ARR for the year ended December 31, 2022, was generated from existing subscription customers[136] Customer Satisfaction and Retention - The company's renewal rates for subscription and maintenance in 2022 were 94% and 96%, respectively[81] - The Customer Satisfaction (CSAT) score for Q4 2022 was 4.7/5.0, with 77% of respondents rating the company 5/5[81] - The company's global customer support and success team consists of approximately 900 employees as of December 31, 2022[81] Revenue and Financial Performance - Subscription revenue growth rates were 15%, 26%, and 26% for the years ended December 31, 2022, 2021, and 2020, respectively, with subscription revenues of $857.2 million, $747.7 million, and $593.8 million for those years[134] - Maintenance revenue was $520.0 million in 2022, representing 35% of total revenue, compared to $558.5 million in 2021, which was 39% of total revenue[138] - The company incurred net losses of $53.7 million, $99.9 million, and $167.9 million for the years ended December 31, 2022, 2021, and 2020, respectively, with an accumulated deficit of $1,183.2 million as of December 31, 2022[191] - Amortization expense from acquired technology and intangible assets was $185.6 million, $241.0 million, and $284.0 million for the years ended December 31, 2022, 2021, and 2020, respectively[191] - Interest expense recognized due to debt incurred from the 2015 Privatization Transaction was $78.0 million, $132.4 million, and $149.4 million in the fiscal years 2022, 2021, and 2020, respectively[191] Cloud Strategy and Transition - The company has migrated approximately 3.6% of its installed base maintenance revenue to its cloud solution as part of its strategy to transition from perpetual licenses to cloud-based offerings[143] - The company's Intelligent Data Management Cloud (IDMC) platform is a key focus of its cloud-focused strategy, with increasing revenue derived from subscription-based offerings[142] - The company's agreements with AWS, Microsoft Azure, and Google Cloud have 3-year terms through 2024 or 2025, with termination clauses that could impact operations if triggered[144] - The company is directing significant financial and operating resources to implement a robust cloud offering, but there is a risk that the cloud offering may not develop as quickly as expected or scale to meet requirements[189] Market and Competitive Risks - The company faces risks related to security breaches and vulnerabilities, particularly as it integrates acquired companies and migrates self-managed products to its cloud platform[131] - Market competition is intensifying with new entrants, evolving customer requirements, and emerging technologies, particularly in cloud-based solutions[162] - The company’s ability to compete depends on factors like platform comprehensiveness, AI/ML integration, multi-cloud interoperability, and responsiveness to customer needs[164] - Increased competition and bundling strategies could impede the company's ability to sell additional products and services on favorable terms[165] - Consolidation among software vendors may lead to reduced market share or price reductions, harming the company's business and financial condition[166] Economic and Operational Challenges - Foreign currency exchange volatility negatively impacted revenues by approximately $48 million year-over-year in 2022[124] - The company experienced lengthening sales cycles, decreased pipeline conversion rates, and slower revenue growth in 2022[124] - High inflation in the U.S. and other geographies is increasing expense pressure to adjust salary structures to align with higher cost of living, potentially leading to higher voluntary attrition[152] - Sales force turnover, particularly in Q1, impacts software revenue generation, with new hires typically requiring nine months to reach full productivity[151] - Competition for skilled personnel, especially sales engineers with data management and cloud expertise, is intense, with competitors offering greater financial resources[150] Workforce and Organizational Changes - Company announced a workforce reduction plan in January 2023, cutting approximately 450 employees, representing 7% of its global workforce, with estimated non-recurring charges of $25 million to $35 million, primarily for employee transition and severance payments[147] - The company's corporate culture is considered a key contributor to its success, and maintaining this culture as the company grows is crucial to fostering innovation and creativity[213] Legal and Regulatory Risks - The company faces risks from legal and regulatory changes, particularly in data privacy and localization laws, which could reduce demand for cloud and professional services[148] - Data protection and privacy regulations, such as GDPR and CCPA, pose risks of enforcement actions, fines, and reputational damage[226] - Security breaches or unauthorized access to personal information could result in costly notifications, lawsuits, and negative publicity[227] - The company may face fines up to 20 million Euros or 4% of its annual global turnover under GDPR for non-compliance[230] - The company has incurred substantial expenses to comply with GDPR and may need further operational changes, potentially impacting revenue[230] International Operations and Risks - Approximately 31%, 33%, and 33% of the company's revenue was derived from outside the North American region for the years ended December 31, 2022, 2021, and 2020, respectively[254] - The company has approximately 2,700 employees in India as of December 31, 2022, making it susceptible to significant operating expense impacts due to exchange rate changes[262] - The company faces risks in international markets, including geopolitical disruptions, exchange rate fluctuations, slower collections, increased operating costs, and challenges in protecting intellectual property[255] - The company's international operations are exposed to risks such as wage inflation in India and Brazil, regulatory changes, and compliance with U.S. and foreign laws, including GDPR and FCPA[255] Debt and Financial Obligations - The company's total indebtedness as of December 31, 2022, was $1.84 billion[289] - Cash flows dedicated for debt service requirements totaled $98.6 million in 2022, including $14.1 million in principal payments and $84.6 million in interest payments[292] - Net cash provided by operating activities was $200.1 million in 2022, with $284.6 million before interest payments[292] - Approximately 35% of net cash provided by operating activities (before interest payments) was dedicated to debt service in 2022[292] - A breach of covenants under the credit agreement could result in an event of default, potentially accelerating debt repayment[300] Product and Market Acceptance - The company's traditional data management products, such as PowerCenter and PowerExchange, continue to comprise a significant portion of revenues, and a decline in market acceptance could decrease revenues[207] - Newer products may face market acceptance challenges due to customer budget priorities, macroeconomic uncertainty, and technical difficulties[210] - Market acceptance of products could be impacted by increased competition, technological shifts to cloud-based solutions, and customer confusion[211] Seasonal and Quarterly Fluctuations - The company's business is seasonal, with highest demand in Q4 and lowest in Q1, leading to fluctuations in quarterly bookings and cash flows[215] - Quarterly and annual results may fluctuate significantly due to factors like customer retention, market growth rates, and economic conditions[216] Strategic Investments and Acquisitions - Company acquired GreenBay Technologies in August 2020 for AI/ML solutions and Compact Solutions in July 2020 for metadata connectivity tools to enhance its CLAIRE-powered IDMC platform[157] - The company acquired GreenBay Technologies in August 2020 and Compact Solutions in July 2020, which present risks such as integration challenges and potential financial impacts[201][202] Open Source and Intellectual Property Risks - The company faces risks related to the use of open source software, including potential litigation and compliance with open source licenses[278] - The company has been subject to patent infringement claims, such as a suit filed by Akoloutheo LLC in March 2020, which was resolved for an immaterial amount[281] - The company's agreements with customers and partners require placing the source code of products into escrow, limiting control over third-party actions[286] Government Contracts and Compliance - Sales to government entities accounted for approximately 10% or less of the company's revenue for the past three fiscal years ended December 31, 2022[266] - Government contracts may require the maintenance of certain security clearances for facilities and employees, which can entail additional costs and delays[267] - The company's subsidiary, Informatica Federal Operations Corporation, is required to maintain facility security clearances and be insulated from foreign ownership, control, or influence[271] - Government contracts contain provisions that give the government rights to terminate contracts for convenience or default, potentially leading to unrecovered costs and liabilities[273] - The company reached a settlement of $21.9 million in March 2019 related to a civil False Claims Act investigation[276]

Financial Data and Key Metrics Changes - Total ARR for Q4 2022 increased by 11.5% year-over-year to $1.52 billion, driven by strong new business sales and subscription renewals [66] - Subscription ARR reached $994 million in Q4, representing a 24% year-over-year increase, with a net retention rate of 111% [67][68] - GAAP total revenues were $399 million in Q4, down 2% year-over-year, impacted by foreign exchange fluctuations [69][70] - Gross margin for Q4 was 82%, maintaining a stable margin throughout the year [71] Business Line Data and Key Metrics Changes - Cloud ARR increased over 42% year-over-year to $451 million, now representing approximately 45% of total Subscription ARR [99] - Maintenance ARR finished at $523 million, down 6% year-over-year, with a strong renewal rate of 96% [101] - Subscription revenue increased approximately 4% year-over-year to $238 million, representing 60% of total revenue [102] Market Data and Key Metrics Changes - U.S. revenue grew 6% year-over-year to $262 million, representing 66% of total revenues, while international revenue decreased 14% year-over-year to $137 million [103] - The company has migrated 3.6% of its maintenance installed base to the IDMC platform, up from 2.8% the previous quarter [53] Company Strategy and Development Direction - The company is transitioning to a cloud-only, consumption-driven strategy, focusing on expanding IPU adoption and launching a flexible IPU pricing model [1][63] - The strategic objectives include accelerating cloud migration opportunities and maintaining high renewal rates [63][64] - The company aims to streamline operations and improve efficiencies through its cloud-only model, which is expected to enhance operating leverage [73][96] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertain macroeconomic environment but remains optimistic about the company's cloud-focused growth strategy [72][94] - Deal cycles are elongated, but the health of the pipeline remains strong, with a focus on digital transformation through data management [15][94] - The company expects total ARR growth of approximately 5% year-over-year for 2023, with a focus on balanced growth and profitability [107] Other Important Information - The company reported a net income per diluted share of $0.24 for Q4, with unlevered free cash flow after-tax of approximately $92 million [104] - A reduction in force was announced to align the cost structure with the new strategy, with estimated cost savings of approximately $50 million in FY2023 [106] Q&A Session All Questions and Answers Question: What attracted the new CFO to Informatica? - The new CFO was attracted by the company's financial model and its potential for delivering increased profitability as it grows [109] Question: Can you elaborate on the go-to-market strategy and sales incentives? - The company is focusing on converting maintenance to cloud and expects to see more net new workloads driving growth [112][113] Question: What are the assumptions around the ARR guidance? - The company sees headwinds in the macro environment but remains thoughtful about customer spending and deal cycles [122]

Where data comes to GAAP Financial Measures Investor Presentation This presentation contains forward-looking statements about Informatica and the environment in which Informatica operates. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, market size and growth opportunities, the calculation of certain of our key financial and operating metrics, capital expenditures, plans for future operations, competitive position, technological capa ...