Informatica Inc. (INFA) came out with quarterly earnings of $0.41 per share, beating the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.32 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 7.89%. A quarter ago, it was expected that this company would post earnings of $0.30 per share when it actually produced earnings of $0.28, delivering a surprise of -6.67%.Over the last four quarters, the company ...

Financial Performance Highlights - Q4 2024 Subscription ARR reached $1.274 billion, a 12.5% year-over-year growth[10, 14] - Q4 2024 Cloud Subscription ARR was $827 million, representing a 34.1% year-over-year increase[10, 14] - Q4 2024 Total ARR grew by 6.1% year-over-year, reaching $1.73 billion[10] - FY 2024 Total Revenues amounted to $1.64 billion, a 2.8% year-over-year growth[10] - FY 2024 Non-GAAP Operating Margin was 32.8%[10] - FY 2024 Adjusted Unlevered Free Cash Flow (after-tax) was $579.1 million, a 28.4% year-over-year growth[15] Customer and Cloud Adoption - Cloud Subscription Net Retention Rate was 124% at the Global Parent level[10] - Average Subscription ARR per Customer grew by 14% year-over-year to $341,000[10] - Cloud Subscription ARR constitutes 48% of the Total ARR[42] Strategic Initiatives and Outlook - The company expects to repurchase approximately $100 million of its Class A common stock in the first quarter 2025[23] - The company anticipates FY 2025 Cloud Subscription ARR to be between $1.019 billion and $1.051 billion, representing approximately 25.1% year-over-year growth at the midpoint[91]

Revenue Performance - GAAP Total Revenues for Q4 2024 decreased 3.8% year-over-year to $428.3 million, missing guidance by $29.7 million[3]. - Total revenues for Q4 2024 were $428.3 million, a decrease of 3.9% compared to $445.2 million in Q4 2023[49]. - Total ARR for the full-year 2024 increased 6% year-over-year to $1.73 billion[4]. - Subscription revenue for the full year 2024 reached $1.1 billion, up 9.4% from $1.0 billion in 2023[49]. - Total Annual Recurring Revenue (ARR) increased to $1.725 billion in 2024 from $1.626 billion in 2023, marking a growth of 6.1%[61]. Cloud Subscription Metrics - Cloud Subscription Annual Recurring Revenue (ARR) increased 34% year-over-year to $827 million in Q4 2024[4]. - Cloud Subscription ARR rose to $827.3 million in 2024, up from $616.8 million in 2023, indicating a significant increase of 34.1%[61]. - The company reported 284 customers spending over $1 million in subscription ARR, an 18% increase year-over-year[13]. - Subscription Net Retention Rate at the end-user level was 104% in 2024, down from 106% in 2023[61]. - Maintenance Renewal Rate decreased to 92% in 2024 from 95% in 2023[63]. Profitability and Income - GAAP Operating Income for the full-year 2024 was $127 million, with a GAAP Operating Margin of 7.7%[8]. - Non-GAAP Operating Income for the full-year 2024 was $537.5 million, with a Non-GAAP Operating Margin of 32.8%[8]. - Net income for Q4 2024 was $9.8 million, compared to a net income of $64.3 million in Q4 2023[49]. - Non-GAAP net income for Q4 2024 was $128,601, up 32.2% from $97,297 in Q4 2023[55]. - GAAP income from operations for Q4 2024 was $63,426, compared to $36,832 in Q4 2023, reflecting a growth of 72.1%[56]. Cash Flow and Financial Position - Cash and cash equivalents increased to $912.5 million as of December 31, 2024, up from $732.4 million in 2023[51]. - Total cash provided by operating activities for the twelve months ended December 31, 2024, was $409,850, an increase of 53.7% from $266,347 in 2023[53]. - Adjusted Unlevered Free Cash Flow (after-tax) is expected to be in the range of $540.0 million to $580.0 million, representing approximately -3.3% year-over-year decrease at the midpoint[23]. - Adjusted Free Cash Flows (after-tax) margin improved to 35% in Q4 2024 from 26% in Q4 2023[59]. - Net Debt as of December 31, 2024, was $1.823 billion, compared to $1.842 billion in 2023[67]. Future Guidance and Expectations - The company expects Cloud Subscription ARR to reach $1 billion by the end of 2025[2]. - Guidance for Q1 2025 projects Total Revenues between $380 million and $400 million, representing approximately 0.4% year-over-year growth at the midpoint[18]. - GAAP Total Revenues are expected to be in the range of $1.670 billion to $1.720 billion, representing approximately 3.4% year-over-year growth at the midpoint[23]. - Total ARR is expected to be in the range of $1.755 billion to $1.795 billion, representing approximately 2.9% year-over-year growth at the midpoint[23]. - Cloud Subscription ARR is expected to be in the range of $1.019 billion to $1.051 billion, representing approximately 25.1% year-over-year growth at the midpoint[23]. Operational Insights - The company processed 110.7 trillion cloud transactions per month in Q4 2024, a 29% increase year-over-year[13]. - The transition from perpetual licenses to cloud offerings is expected to impact Maintenance ARR in future quarters[36]. - The company emphasizes the importance of Cloud Subscription NRR as a metric for understanding growth within its cloud subscription customer base[37]. - The company is focusing on reducing operating expenses and adjusting cash flows in light of current business needs and priorities[25]. - The company plans to provide a reconciliation of non-GAAP financial measures to GAAP measures for better transparency[28].

Financial Data and Key Metrics - Total revenues grew 3.4% YoY, and total ARR grew 6.7% YoY, both exceeding the midpoint of guidance ranges [8] - Cloud subscription ARR grew 36% YoY, reaching $748 million, representing 44% of total ARR [33] - Non-GAAP operating income grew 18% YoY, exceeding the high end of the guidance range [8] - Adjusted EBITDA was $155 million, and net income was $89 million, with net income per diluted share at $0.28 [43] - Cash plus short-term investments increased by $371 million YoY to $1.24 billion, with a net leverage ratio of 1.1x [45] Business Line Performance - Cloud subscription ARR is well diversified, with approximately 50% from integration (data integration, app, and API integration) and the other 50% from master data management, data catalog, and data governance use cases [11] - Customers spending over $1 million in subscription ARR increased by 18% YoY, while those spending over $5 million almost doubled YoY [10] - Average subscription ARR per customer reached over $327,000, a 15% increase YoY [10] - PowerCenter Cloud Edition represented over 90% of all modernization deals in Q3 [15] Market Performance - U.S. revenue declined 1% YoY to $262 million, while international revenue grew 11% YoY to $161 million [41] - Approximately 76% of cloud net new ARR in the trailing 12 months came from new cloud workloads and expansions [9] - 24% of cloud net new ARR in the trailing 12 months came from on-prem to cloud migrations [15] Strategic Direction and Industry Competition - The company is executing a cloud-only, consumption-driven strategy, focusing on AI-powered data management and GenAI capabilities [5][7] - Informatica is recognized as a leader in enterprise data catalogs and master data management, with high ratings in industry reports [20] - The company has expanded its GenAI Blueprints to all six strategic ecosystems, including AWS, Azure, Databricks, Google Cloud, Oracle, and Snowflake [18] Management Commentary on Operating Environment and Future Outlook - The macro environment remained stable during Q3, consistent with observations throughout the year [9] - Management reaffirmed full-year guidance, expecting cloud subscription ARR to grow 35.5% YoY in Q4 [47] - The company plans to expand CLAIRE GPT to EMEA, Asia Pacific, and Canada later in the quarter [27] Other Important Information - The company achieved a historic milestone, processing over 100 trillion cloud transactions per month [6] - Informatica was recognized as Oracle Cloud's Global ISV Business Impact Partner of the Year [17] - The Board of Directors approved a new share repurchase authorization of up to $400 million [50] Q&A Session Summary Question: Medium-term cloud subscription ARR growth expectations - The company remains confident in its medium-term guidance of 31% to 33% cloud subscription ARR growth between fiscal 2023 and 2026, with current performance exceeding expectations [56][57][58] Question: Sequential decline in $1M+ customers - The decline was attributed to state and local customers downsizing post-COVID use cases and some customers completing large migrations, leading to maintenance roll-offs [59][60] Question: Q4 guidance and budget flush expectations - Management expects a solid Q4, with no significant changes in tone or linearity compared to previous quarters [62][63][64] Question: Cloud growth breakdown and trends - Growth is well-diversified across data integration, master data management, and governance, with customers shifting from defensive cost-cutting to transformational initiatives [65][66][67] Question: Migration trends and PowerCenter Cloud momentum - Migration momentum remains strong, with PowerCenter Cloud driving modernization efforts, and the company expects this trend to continue into 2025 [69][71][72] Question: Public sector trends - Public sector customers are accelerating digital transformation and modernization efforts, with a strong focus on cloud adoption and GenAI [81][82] Question: Open Table formats and Informatica utilization - Early adoption of Open Table formats like Iceberg is driving increased demand for data preparation and quality services, benefiting Informatica's IP consumption [84][85][86] Question: Migration vs. net new ARR contribution - Migration contribution to net new ARR saw a slight downtick in Q3 but is expected to remain in the 25% to 30% range for the year, with long-term growth potential [95][96][97] Question: Confidence in Q4 net new ARR guidance - The company's confidence in Q4 net new ARR guidance is driven by a larger base, increased pipeline, and strong renewal rates [91][92][93]

Informatica Inc. (INFA) came out with quarterly earnings of $0.28 per share, missing the Zacks Consensus Estimate of $0.30 per share. This compares to earnings of $0.27 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -6.67%. A quarter ago, it was expected that this company would post earnings of $0.22 per share when it actually produced earnings of $0.23, delivering a surprise of 4.55%. Over the last four quarters, the compan ...

Financial Data and Key Metrics Changes - The company reported a record $703 million in cloud subscription ARR, marking a 37% year-over-year increase and exceeding the $700 million milestone for the first time [10][45] - Non-GAAP operating income grew over 31% year-over-year, surpassing the midpoint of the guidance range [10] - GAAP total revenues were $401 million, reflecting a 6.6% year-over-year increase, with foreign exchange rates negatively impacting revenues by approximately $1.6 million [47][49] - The gross margin was 82%, an increase of over 1.6 percentage points year-over-year, indicating a focus on maintaining healthy margins during the transition to cloud [24] Business Line Data and Key Metrics Changes - Cloud subscriptions grew 37% year-over-year, while self-managed subscriptions declined by 7% year-over-year to $494 million [19][20] - Subscription revenue, including cloud and self-managed subscriptions, increased 16% year-over-year to $264 million, representing 66% of total revenue [48] - Professional services revenues, which include implementation and consulting, decreased by almost $4 million year-over-year, as services partners took on more work [23] Market Data and Key Metrics Changes - U.S. revenue grew 7% year-over-year to $256 million, accounting for 64% of total revenue, while international revenue grew 5% to $144 million [49] - The company experienced a 28% year-over-year increase in customers spending more than $1 million in subscription ARR, with those spending over $5 million growing by 30% [36] Company Strategy and Development Direction - The company is focused on three strategic initiatives: data-driven digital transformation, modernizing legacy data estates, and delivering GenAI capabilities [18] - The launch of CLAIRE GPT, a generative AI chat assistant, is part of the company's strategy to enhance data management and customer engagement [9][16] - The company aims to become the "Switzerland of Data" and "Switzerland of AI," serving a broad ecosystem across various platforms [65] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the pace of migrations to cloud services, expecting growth in migrations to outpace average cloud subscription growth [4] - The macro-environment remained stable, with a healthy pipeline and strong customer momentum supporting the company's growth [118] - Management raised guidance for cloud subscription ARR and adjusted unlevered free cash flow after tax for the full year, reflecting confidence in operational health [35][132] Other Important Information - The company was recognized by IDC as the market share leader in both data integration and data intelligence markets [14] - The average subscription ARR per customer reached $321,500, a 17% increase year-over-year [36] - The company processed 97 trillion cloud transactions per month in June, growing 59% year-over-year [40] Q&A Session Summary Question: What are the primary reasons for the increased cloud ARR guidance? - Management noted that strong pipeline creation, healthy deal closures, and significant growth in large deals contributed to the optimism [30] Question: How does the company view the impact of table formats on the data integration space? - Management indicated that the adoption of table formats is seen as a net positive for the overall integration space [150] Question: Can you explain the dynamics of maintenance renewal rates and duration? - Management clarified that while maintenance renewal rates are increasing, the duration of self-managed subscriptions is decreasing, impacting GAAP revenue recognition [90][92]

Company Performance - Informatica Inc. reported quarterly earnings of $0.23 per share, surpassing the Zacks Consensus Estimate of $0.22 per share, and showing an increase from $0.17 per share a year ago [8] - The company posted revenues of $400.63 million for the quarter ended June 2024, which was a 6.5% increase from $375.99 million in the same quarter last year, but missed the Zacks Consensus Estimate by 0.34% [2] - Informatica has exceeded consensus EPS estimates four times over the last four quarters [9] Stock Performance - Informatica Inc. shares have declined approximately 14.2% since the beginning of the year, while the S&P 500 has gained 14.5% [3] - The current consensus EPS estimate for the upcoming quarter is $0.30 on revenues of $433.15 million, and for the current fiscal year, it is $1.11 on revenues of $1.69 billion [5] Industry Outlook - The Internet - Software industry, to which Informatica belongs, is currently ranked in the top 41% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [13] - The performance of Informatica's stock may be influenced by the overall industry outlook and trends in earnings estimate revisions [4][11]

Executive Summary & Q2 2024 Highlights [CEO Statement](index=1&type=section&id=1.1%20CEO%20Statement) The CEO expressed satisfaction with customer growth and strategic execution, raising guidance on key ARR and profitability metrics - The CEO is satisfied with customer growth and the execution of the cloud-first, consumption-driven strategy, raising guidance for cloud subscription ARR, total subscription ARR, and profitability[23](index=23&type=chunk) - The general availability of CLAIRE GPT in North America, combined with the IDMC platform, solidifies Informatica's leadership in enterprise AI-driven cloud data management[23](index=23&type=chunk) [Q2 2024 Financial Highlights](index=1&type=section&id=1.2%20Q2%202024%20Financial%20Highlights) The company reported strong revenue growth, significant increases in Cloud and Total Subscription ARR, and positive operating income Key Financial Metrics for Q2 2024 | Metric | Q2 2024 (Millions) | YoY Growth | | :--- | :--- | :--- | | GAAP Total Revenues | $400.6 | 6.6% | | GAAP Subscription Revenues | $264.3 | 16% | | GAAP Cloud Subscription Revenue | $161.4 | 35% | | Total ARR | $1,670 | 7.8% | | Subscription ARR | $1,200 | 15% | | Cloud Subscription ARR | $703 | 37% | | GAAP Operating Income | $9.5 | N/A | | Non-GAAP Operating Income | $114.9 | N/A | | GAAP Operating Cash Flow | $24.9 | N/A | | Adjusted Unlevered Free Cash Flow (after-tax) | $71.2 | N/A | - Total revenues were negatively impacted by approximately **$1.6 million** from foreign currency exchange rates, with a constant currency growth of **7.0%** YoY[46](index=46&type=chunk) [Q2 2024 Business Highlights](index=2&type=section&id=1.3%20Q2%202024%20Business%20Highlights) Key achievements include the CLAIRE GPT launch, expanded partnerships with major cloud providers, and growth in high-value subscription customers - Launched CLAIRE GPT in North America, the first generative AI-powered data management assistant leveraging the Informatica Intelligent Data Management Cloud (IDMC)[48](index=48&type=chunk) - Plans to expand global presence by opening an office in Saudi Arabia[48](index=48&type=chunk) - Processed **96.6 trillion** cloud transactions per month as of June 30, 2024, a **59% increase** YoY[18](index=18&type=chunk) Key Customer & Cloud Metrics (as of June 30, 2024) | Metric | Value | YoY Change | | :--- | :--- | :--- | | Customers spending >$1M in Subscription ARR | 272 | +28% | | Customers spending >$100K in Subscription ARR | 2,038 | +5% | | Cloud Subscription Net Retention Rate (End-user) | 119% | N/A | | Cloud Subscription Net Retention Rate (Global Parent) | 126% | N/A | Business & Product Updates [Product Innovation](index=2&type=section&id=2.1%20Product%20Innovation) Product advancements feature the launch of CLAIRE GPT and native SQL ELT capabilities for Databricks and Snowflake - Launched CLAIRE GPT in North America, enabling generative AI-powered data management using IDMC capabilities[48](index=48&type=chunk) - Introduced native SQL ELT capabilities for Databricks compute and Snowflake functions[13](index=13&type=chunk)[48](index=48&type=chunk) - Made Informatica's Cloud Data Integration-Free (CDI-Free) service available through Databricks Partner Connect[13](index=13&type=chunk) [Strategic Partnerships](index=2&type=section&id=2.2%20Strategic%20Partnerships) The company significantly expanded partnerships with Microsoft, Snowflake, Oracle, and Databricks to integrate its IDMC platform - Expanded partnership with **Microsoft** to launch a data quality native application for Microsoft Fabric, offer IDMC as an Azure Native ISV Service, and provide Cloud Data Access Management (CDAM) for Azure[48](index=48&type=chunk) - Expanded partnership with **Snowflake** to support native SQL ELT for over 250 Snowflake functions, launch a generative AI blueprint combining Snowflake Cortex AI with IDMC, and provide CDAM for Snowflake[48](index=48&type=chunk) - Expanded partnership with **Databricks** to achieve IDMC platform validation for Unity Catalog, provide a generative AI blueprint for DBRX customers, and launch native SQL ELT capabilities[13](index=13&type=chunk)[48](index=48&type=chunk) - Expanded partnership with **Oracle** to natively launch Cloud Data Governance and Catalog services on Oracle Cloud Infrastructure (OCI)[13](index=13&type=chunk) [Industry Recognition](index=3&type=section&id=2.3%20Industry%20Recognition) Informatica received multiple industry accolades, including partner of the year awards and recognition as a market share leader - Named **2024 Data Integration Partner of the Year** by Databricks and **2024 Build with Partner of the Year** by MongoDB[49](index=49&type=chunk) - Recognized by IDC as the **market share leader** in the worldwide Data Integration and Data Intelligence markets for 2023[49](index=49&type=chunk) - Named a **"Champion"** in Bloor Research's 2024 market update reports for Data Architecture, Data Quality, and Test Data Management[49](index=49&type=chunk) [Debt Repricing](index=3&type=section&id=2.4%20Debt%20Repricing) The company repriced its outstanding debt, reducing the applicable interest rate and expecting significant annual interest expense savings - Repriced its **$1.8 billion** of outstanding debt on June 11, 2024[13](index=13&type=chunk) - Reduced the applicable interest rate from **2.75% to 2.25%** and eliminated the credit spread adjustment related to the LIBOR-to-SOFR transition[13](index=13&type=chunk) - Expected to save approximately **$11 million** in pre-tax interest expense annually[13](index=13&type=chunk) Financial Outlook & Guidance [Q3 2024 Guidance](index=3&type=section&id=3.1%20Q3%202024%20Guidance) The company provided Q3 2024 guidance with expected growth in revenues, ARR, and non-GAAP operating income Q3 2024 Financial Guidance (Midpoint) | Metric | Q3 2024 Guidance (Midpoint) | YoY Growth (Midpoint) | | :--- | :--- | :--- | | GAAP Total Revenues | $420 million | 2.8% | | Subscription ARR | $1.209 billion | 12.2% | | Cloud Subscription ARR | $743 million | 35.2% | | Non-GAAP Operating Income | $145 million | 13.2% | | Total ARR | $1.675 billion | 6.3% | - Expects cash interest payments of approximately **$36 million** in Q3 2024[54](index=54&type=chunk) - Expects basic weighted-average shares outstanding of approximately **304 million** and diluted weighted-average shares of approximately **312 million** for Q3 2024[55](index=55&type=chunk) [Full-Year 2024 Guidance](index=4&type=section&id=3.2%20Full-Year%202024%20Guidance) The company updated its full-year 2024 guidance, lowering total revenue expectations but raising ARR and profitability forecasts Full-Year 2024 Financial Guidance (Midpoint) | Metric | Full-Year 2024 Guidance (Midpoint) | YoY Growth (Midpoint) | | :--- | :--- | :--- | | GAAP Total Revenues | $1.670 billion | 4.7% | | Total ARR | $1.745 billion | 7.3% | | Subscription ARR | $1.282 billion | 13.2% | | Cloud Subscription ARR | $836 million | 35.5% | | Non-GAAP Operating Income | $548 million | 18.5% | | Adjusted Unlevered Free Cash Flow (after-tax) | $555 million | 23.0% | - GAAP Total Revenues guidance was lowered due to reduced professional services revenue, shorter average renewal duration for self-managed subscriptions, and an increased FX headwind of approximately **$4 million**[19](index=19&type=chunk) Estimated FX Impact in 2024 Guidance | Metric | Q3 2024 Impact (y/y) | Full-Year 2024 Impact (y/y) | | :--- | :--- | :--- | | Total Revenues | ~$3.5m negative | ~$7.0m negative | | Total ARR | ~$1.0m negative | ~$5.0m negative | | Subscription ARR | ~$1.0m negative | ~$3.0m negative | | Cloud Subscription ARR | $— | ~$2.0m negative | - Expects cash interest payments of approximately **$146 million** for the full year 2024[35](index=35&type=chunk)[54](index=54&type=chunk) - Expects full-year 2024 basic weighted-average shares of approximately **302 million** and diluted weighted-average shares of approximately **313 million**[55](index=55&type=chunk) [Guidance Assumptions & Cautionary Factors](index=3&type=section&id=3.3%20Guidance%20Assumptions%20%26%20Cautionary%20Factors) Financial guidance is based on current market conditions and fixed exchange rates, subject to various macroeconomic and business-specific risks - Guidance considers the impact of macroeconomic conditions and expected foreign exchange headwinds[24](index=24&type=chunk) - The company assumes exchange rates remain constant for the full year, based on rates at the beginning of the planning period[34](index=34&type=chunk) Assumed Exchange Rates for Full-Year 2024 | Currency | Planned Rate (as of 1/1/24) | Forecast Rate (as of 7/1/24) | | :--- | :--- | :--- | | EUR/$ | 1.10 | 1.07 | | GBP/$ | 1.27 | 1.26 | | $/CAD | 1.32 | 1.37 | | $/JPY | 141 | 161 | - A reconciliation of non-GAAP guidance to the most directly comparable GAAP measures is not available without unreasonable efforts due to the high variability and low visibility of certain items[25](index=25&type=chunk) Non-GAAP Financial Measures & Key Business Metrics [Non-GAAP Financial Measures Definitions](index=6&type=section&id=4.1%20Non-GAAP%20Financial%20Measures%20Definitions) The company utilizes non-GAAP measures like Adjusted EBITDA and Non-GAAP Operating Income to evaluate its operational performance - Non-GAAP measures are used to evaluate ongoing operations, for internal planning and forecasting, and to provide consistency and comparability with past financial performance[38](index=38&type=chunk) - Beginning in Q2 FY2024, the company adjusted certain non-GAAP measures to exclude employer payroll tax expenses related to stock-based compensation plans[38](index=38&type=chunk)[59](index=59&type=chunk)[76](index=76&type=chunk) [Adjusted EBITDA](index=7&type=section&id=4.1.1%20Adjusted%20EBITDA) Adjusted EBITDA is calculated by adjusting GAAP net income for taxes, interest, and various non-cash or non-recurring items - Adjusted EBITDA is calculated by adjusting GAAP net income (loss) for various non-operating and non-cash items[2](index=2&type=chunk) - The metric helps assess relative profitability in relation to balance sheet debt levels[2](index=2&type=chunk) [Non-GAAP Operating Income & Net Income](index=7&type=section&id=4.1.2%20Non-GAAP%20Operating%20Income%20%26%20Net%20Income) These measures exclude items like stock-based compensation and amortization to facilitate operational analysis and comparison across periods - Non-cash or non-recurring items are excluded to provide useful supplemental information and facilitate analysis of operating results[70](index=70&type=chunk) - Adjustments include stock-based compensation, amortization of intangibles, restructuring, acquisition-related costs, and sponsor-related costs, considering the income tax effect[70](index=70&type=chunk) [Adjusted Unlevered Free Cash Flow (after-tax)](index=7&type=section&id=4.1.3%20Adjusted%20Unlevered%20Free%20Cash%20Flow%20(after-tax)) This metric measures long-term liquidity by adjusting operating cash flow for capital expenditures and other specific items - Represents operating cash flow adjusted for capital expenditures, interest payments, equity compensation payments, and costs related to sponsors, acquisitions, and restructuring[39](index=39&type=chunk) - Provides a measure of long-term liquidity for core business operations[39](index=39&type=chunk) [Key Business Metrics Definitions](index=6&type=section&id=4.2%20Key%20Business%20Metrics%20Definitions) The company uses key metrics such as ARR and NRR to assess recurring revenue performance and customer retention [Annual Recurring Revenue (ARR)](index=7&type=section&id=4.2.1%20Annual%20Recurring%20Revenue%20(ARR)) ARR represents the expected annual billings from all active maintenance and subscription agreements, tracking the total recurring contract value - Represents the expected annual billings from all active maintenance and subscription agreements[26](index=26&type=chunk) - Calculated by multiplying contractual monthly recurring revenue (MRR) by 12, including contracts in renewal negotiations for up to six months[26](index=26&type=chunk) - Important for understanding the business as it tracks the annual cash value of all recurring contracts[26](index=26&type=chunk) [Subscription Annual Recurring Revenue (Subscription ARR)](index=8&type=section&id=4.2.2%20Subscription%20Annual%20Recurring%20Revenue%20(Subscription%20ARR)) Subscription ARR is the portion of ARR attributable only to subscription contracts, excluding perpetual license maintenance - Represents the portion of ARR attributable only to subscription contracts, including cloud and self-managed subscription ARR[40](index=40&type=chunk) - Excludes maintenance contracts on perpetual licenses[40](index=40&type=chunk) - Helps in understanding the annual cash value of recurring subscription contracts[40](index=40&type=chunk) [Cloud Subscription Annual Recurring Revenue (Cloud Subscription ARR)](index=7&type=section&id=4.2.3%20Cloud%20Subscription%20Annual%20Recurring%20Revenue%20(Cloud%20Subscription%20ARR)) Cloud Subscription ARR is a subset of Subscription ARR representing the annual cash value from hosted cloud contracts - Represents the portion of ARR attributable to hosted cloud contracts[60](index=60&type=chunk) - A subset of total Subscription ARR that provides visibility into the growth of the cloud subscription business[60](index=60&type=chunk) [Subscription Net Retention Rate (NRR)](index=8&type=section&id=4.2.4%20Subscription%20Net%20Retention%20Rate%20(NRR)) Subscription NRR compares the subscription ARR from the same cohort of customers at the end of a period to the prior year - Compares the subscription ARR contract value from the same cohort of customers at period-end to the prior year[4](index=4&type=chunk) - Growth is driven by price increases, increased consumption, and new product sales to existing customers, offset by losses from price decreases, reduced usage, and cancellations[4](index=4&type=chunk) - **Cloud Subscription NRR** continues to outperform Total Subscription NRR as self-managed customers transition to cloud offerings[4](index=4&type=chunk) [Cloud Subscription Net Retention Rate (Cloud Subscription NRR)](index=8&type=section&id=4.2.5%20Cloud%20Subscription%20Net%20Retention%20Rate%20(Cloud%20Subscription%20NRR)) Cloud Subscription NRR measures the ability to sell additional products to the cloud customer base over a year - Compares the cloud subscription ARR from the same cohort of customers (at both end-user and global parent levels) at period-end to the prior year[61](index=61&type=chunk) - Measures the company's ability to sell additional products to its cloud subscription customer base[61](index=61&type=chunk) [Maintenance Annual Recurring Revenue (Maintenance ARR)](index=8&type=section&id=4.2.6%20Maintenance%20Annual%20Recurring%20Revenue%20(Maintenance%20ARR)) Maintenance ARR represents the portion of ARR from maintenance contracts supporting perpetual licenses, which is expected to decline - Represents the portion of ARR attributable only to maintenance contracts, including those supporting perpetual licenses[72](index=72&type=chunk) - Expected to decline in future quarters as the company shifts focus from perpetual licenses to cloud offerings[72](index=72&type=chunk) [Revenue Disaggregation Definitions](index=9&type=section&id=4.2.7%20Revenue%20Disaggregation%20Definitions) This section defines the components of subscription revenue, including self-managed license, support, and cloud subscription revenues - **Self-managed subscription license revenue**: From customers and partners using the company's self-managed software over the subscription term[21](index=21&type=chunk) - **Self-managed subscription support and other revenue**: Primarily from license support contracts sold with self-managed subscription licenses[5](index=5&type=chunk) - **Cloud subscription revenue**: From cloud subscription offerings where the company develops, hosts, manages, and supports the application and infrastructure[62](index=62&type=chunk) [Reconciliations of GAAP to Non-GAAP](index=13&type=section&id=4.3%20Reconciliations%20of%20GAAP%20to%20Non-GAAP) This section provides detailed reconciliation tables bridging GAAP financial measures to their non-GAAP counterparts [Non-GAAP Income from Operations Reconciliation](index=13&type=section&id=4.3.1%20Non-GAAP%20Income%20from%20Operations%20Reconciliation) This table reconciles GAAP operating income to non-GAAP operating income, showing a significant year-over-year increase GAAP to Non-GAAP Income from Operations Reconciliation (Six Months Ended June 30) | Metric | 2024 (Thousands) | 2023 (Thousands) | | :--- | :--- | :--- | | GAAP income (loss) from operations | $12,689 | $(35,333) | | Stock-based compensation-related charges | 132,677 | 105,550 | | Amortization of intangibles | 65,518 | 74,402 | | Restructuring | 5,254 | 27,724 | | Acquisition-related costs | 7,205 | — | | Sponsor-related costs | 773 | — | | **Non-GAAP income from operations** | **$224,116** | **$172,343** | | Non-GAAP operating margin (% of total revenue) | 28.4% | 23.2% | [Non-GAAP Net Income Reconciliation](index=13&type=section&id=4.3.2%20Non-GAAP%20Net%20Income%20Reconciliation) This table details adjustments from GAAP net income to non-GAAP net income, which grew substantially from the prior year GAAP to Non-GAAP Net Income Reconciliation (Six Months Ended June 30) | Metric | 2024 (Thousands) | 2023 (Thousands) | | :--- | :--- | :--- | | GAAP net income (loss) | $14,162 | $(268,820) | | Stock-based compensation-related charges (1) | 132,677 | 105,550 | | Amortization of intangibles | 65,518 | 74,402 | | Restructuring | 5,254 | 27,724 | | Debt refinancing costs | 1,366 | — | | Acquisition-related costs | 7,205 | — | | Sponsor-related costs | 773 | — | | Income tax effect | (86,499) | 153,922 | | **Non-GAAP net income** | **$140,456** | **$92,778** | Non-GAAP Net Income Per Share (Six Months Ended June 30) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Non-GAAP net income per share—basic | $0.47 | $0.32 | | Non-GAAP net income per share—diluted | $0.45 | $0.32 | [Adjusted EBITDA Reconciliation](index=14&type=section&id=4.3.3%20Adjusted%20EBITDA%20Reconciliation) This table reconciles GAAP net income to Adjusted EBITDA, which increased compared to the same period last year GAAP Net Income (Loss) to Adjusted EBITDA (Six Months Ended June 30) | Metric | 2024 (Thousands) | 2023 (Thousands) | | :--- | :--- | :--- | | GAAP net income (loss) | $14,162 | $(268,820) | | Income tax (benefit) expense | (44,545) | 181,634 | | Interest income | (27,172) | (17,503) | | Interest expense | 77,430 | 72,517 | | Debt refinancing costs | 1,366 | — | | Other income, net | (8,552) | (3,161) | | Stock-based compensation-related charges | 132,677 | 105,550 | | Amortization of intangibles | 65,518 | 74,402 | | Restructuring | 5,254 | 27,724 | | Acquisition-related costs | 7,205 | — | | Sponsor-related costs | 773 | — | | Depreciation | 6,071 | 8,408 | | **Adjusted EBITDA** | **$230,187** | **$180,751** | [Adjusted Unlevered Free Cash Flow Reconciliation](index=14&type=section&id=4.3.4%20Adjusted%20Unlevered%20Free%20Cash%20Flow%20Reconciliation) This table reconciles net cash from operating activities to adjusted unlevered free cash flow, showing strong year-over-year growth Adjusted Unlevered Free Cash Flow (Six Months Ended June 30) | Metric | 2024 (Thousands) | 2023 (Thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $156,494 | $106,587 | | Less: Purchases of property, plant, and equipment | (1,565) | (3,115) | | Add: Equity compensation payments | — | 121 | | Add: Restructuring costs | 16,473 | 25,620 | | Add: Acquisition related costs | 6,682 | — | | Add: Sponsor-related costs | 429 | — | | Adjusted Free Cash Flow (after-tax) | $178,513 | $129,213 | | Add: Cash paid for interest | 75,704 | 71,062 | | **Adjusted Unlevered Free Cash Flow (after-tax)** | **$254,217** | **$200,275** | | Adjusted Unlevered Free Cash Flow (after-tax) margin | 32% | 27% | - Cash taxes paid were **$31.8 million** for the six months ended June 30, 2024, compared to **$48.9 million** in the prior year period[10](index=10&type=chunk) [Key Business Metrics Data](index=11&type=section&id=4.4%20Key%20Business%20Metrics%20Data) This section presents data for key business metrics, including ARR breakdowns, NRR, customer counts, and cloud transaction volume [ARR and NRR Metrics](index=15&type=section&id=4.4.1%20ARR%20and%20NRR%20Metrics) The company reported strong growth in Cloud Subscription ARR and maintained healthy NRR figures as of Q2 2024 Annual Recurring Revenue (ARR) (as of June 30) | Metric | 2024 (Thousands) | 2023 (Thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Cloud Subscription Annual Recurring Revenue | $702,600 | $512,615 | +37.1% | | Self-managed Subscription Annual Recurring Revenue | $493,935 | $529,723 | -6.8% | | Subscription Annual Recurring Revenue | $1,196,535 | $1,042,338 | +14.8% | | Maintenance Annual Recurring Revenue on Perpetual Licenses | $471,697 | $505,186 | -6.6% | | Total Annual Recurring Revenue | $1,668,232 | $1,547,524 | +7.8% | Net Retention Rate (as of June 30) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Subscription Net Retention Rate (End-user level) | 106% | 107% | | Cloud Subscription Net Retention Rate (End-user level) | 119% | 116% | | Cloud Subscription Net Retention Rate (Global Parent level) | 126% | 122% | [Customer Metrics](index=16&type=section&id=4.4.2%20Customer%20Metrics) The number of customers with subscription ARR over $1 million and $100,000 both increased year-over-year Subscription ARR Customer Count (as of June 30) | Metric | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Customers spending >$1M in Subscription ARR | 272 | 213 | +28% | | Customers spending >$100K in Subscription ARR | 2,038 | 1,940 | +5% | [Cloud Transaction Volume](index=16&type=section&id=4.4.3%20Cloud%20Transaction%20Volume) The volume of monthly cloud transactions processed by the company saw a significant 59% year-over-year increase Cloud Transactions Processed Per Month (Trillions) | Period | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | June 30, 2024 (monthly) | 96.6 | 60.7 | +59% | [Net Debt Reconciliation](index=16&type=section&id=4.4.4%20Net%20Debt%20Reconciliation) The company's total net debt decreased from the end of 2023, reflecting an improved cash position Net Debt Reconciliation (in millions) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Dollar Term Loan | $1,833 | $1,842 | | Less: Cash, cash equivalents, and short-term investments | $(1,129) | $(992) | | **Total net debt** | **$704** | **$850** | [Disaggregation of Subscription Revenues](index=16&type=section&id=4.4.5%20Disaggregation%20of%20Subscription%20Revenues) Cloud subscription revenue showed strong growth, while self-managed subscription components saw a slight decline Subscription Revenue Disaggregation (Three Months Ended June 30, in thousands) | Revenue Type | 2024 | 2023 | | :--- | :--- | :--- | | Cloud subscription | $161,422 | $119,244 | | Self-managed subscription license | $53,976 | $56,878 | | Self-managed subscription support and other | $48,908 | $51,467 | | **Subscription revenues** | **$264,306**| **$227,589**| Subscription Revenue Disaggregation (Six Months Ended June 30, in thousands) | Revenue Type | 2024 | 2023 | | :--- | :--- | :--- | | Cloud subscription | $312,860 | $231,022 | | Self-managed subscription license | $105,924 | $107,427 | | Self-managed subscription support and other | $97,499 | $103,062 | | **Subscription revenues** | **$516,283**| **$441,511**| Consolidated Financial Statements [Consolidated Balance Sheets](index=11&type=section&id=5.1%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total liabilities and an increase in stockholders' equity as of June 30, 2024 Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $798,465 | $732,443 | | Total current assets | $1,783,137 | $1,752,586 | | Total assets | $5,121,805 | $5,202,082 | | Total current liabilities | $878,873 | $1,053,381 | | Total liabilities | $2,795,989 | $2,989,484 | | Total stockholders' equity | $2,325,816 | $2,212,598 | - Accounts receivable, net decreased to **$318.7 million** as of June 30, 2024, from **$500.1 million** as of December 31, 2023[7](index=7&type=chunk) - Deferred revenue (current and non-current) decreased to **$697.5 million** as of June 30, 2024, from **$786.7 million** as of December 31, 2023[7](index=7&type=chunk) [Consolidated Statements of Operations](index=10&type=section&id=5.2%20Consolidated%20Statements%20of%20Operations) The company's total revenues increased, and it reported net income for the quarter, a significant improvement from the prior year's net loss Consolidated Statements of Operations Highlights (Three Months Ended June 30, in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total revenues | $400,625 | $375,988 | | Subscriptions revenue | $264,306 | $227,589 | | Gross profit | $317,730 | $290,396 | | Income (loss) from operations | $9,464 | $(5,386) | | Net income (loss) | $4,828 | $(152,466)| | Income tax (benefit) expense | $(19,081) | $122,065 | Consolidated Statements of Operations Highlights (Six Months Ended June 30, in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total revenues | $789,232 | $741,419 | | Subscriptions revenue | $516,283 | $441,511 | | Gross profit | $624,582 | $573,930 | | Income (loss) from operations | $12,689 | $(35,333) | | Net income (loss) | $14,162 | $(268,820)| | Income tax (benefit) expense | $(44,545) | $181,634 | - Research and development expenses decreased to **$79.2 million** in Q2 2024 from **$87.7 million** in Q2 2023[64](index=64&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=5.3%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased significantly, contributing to a net increase in cash and cash equivalents for the period Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $156,494 | $106,587 | | Net cash (used in) provided by investing activities | $(67,210) | $24,458 | | Net cash (used in) provided by financing activities | $(15,910) | $3,296 | | Net increase in cash and cash equivalents | $66,022 | $134,924 | | Cash and cash equivalents at end of period | $798,465 | $632,803 | - Cash paid for interest was **$75.7 million** for the six months ended June 30, 2024, up from **$71.1 million** in the prior year period[75](index=75&type=chunk) - Cash paid for income taxes, net of refunds, was **$31.8 million** for the six months ended June 30, 2024, down from **$48.9 million** in the prior year period[75](index=75&type=chunk) Forward-Looking Statements & Disclaimers [Forward-Looking Statements](index=5&type=section&id=6.1%20Forward-Looking%20Statements) The press release contains forward-looking statements subject to various risks and uncertainties detailed in SEC filings - Forward-looking statements relate to future operating results, financial performance, guidance, foreign exchange rates, macroeconomic conditions, management plans, product development, and partnerships[57](index=57&type=chunk) - These statements are subject to risks and uncertainties, including adverse global macroeconomic conditions, geopolitical uncertainty, public health crises, and the ability to attract and retain customers, develop new products, and manage growth[20](index=20&type=chunk)[57](index=57&type=chunk) - Further details on risks are included in the company's Annual Report on Form 10-K for the year ended December 31, 2023, and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024[37](index=37&type=chunk) [Non-GAAP Measures Disclaimer](index=6&type=section&id=6.2%20Non-GAAP%20Measures%20Disclaimer) Non-GAAP financial measures are supplemental and should not be considered a substitute for GAAP information - Non-GAAP measures are for supplemental purposes only, have limitations, and should not be used as a substitute for GAAP financial information[38](index=38&type=chunk) - Comparability may be reduced as other companies in the industry may calculate similarly titled non-GAAP measures differently[38](index=38&type=chunk) - Investors are encouraged to review the relevant GAAP financial measures and the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures[38](index=38&type=chunk) Company Information & Contacts [About Informatica](index=9&type=section&id=7.1%20About%20Informatica) Informatica is a leader in enterprise AI-driven cloud data management, serving a global customer base with its IDMC platform - Informatica is a leader in enterprise AI-driven cloud data management[73](index=73&type=chunk) - Developed the Informatica Intelligent Data Management Cloud (IDMC), an end-to-end data management platform powered by CLAIRE AI[73](index=73&type=chunk) - Serves customers in approximately 100 countries, including over 80 of the Fortune 100[73](index=73&type=chunk) [Investor & Public Relations Contacts](index=9&type=section&id=7.2%20Investor%20%26%20Public%20Relations%20Contacts) This section provides contact information for the company's investor relations and public relations departments - Investor Relations Contact: Victoria Hyde-Dunn (vhydedunn@informatica.com)[6](index=6&type=chunk) - Public Relations Contact: prteam@informatica.com[16](index=16&type=chunk) [Webcast and Conference Call Details](index=5&type=section&id=7.3%20Webcast%20and%20Conference%20Call%20Details) Details for the Q2 2024 earnings call, including dial-in numbers and webcast information, are provided - The conference call to discuss Q2 2024 financial results and Q3/full-year 2024 outlook is scheduled for July 30, 2024, at 2:00 p.m. Pacific Time[56](index=56&type=chunk) - Dial-in details: 1-833-470-1428 (U.S.) or 1-404-975-4839 (International), with conference code 653349[56](index=56&type=chunk) - A live webcast and replay will be available at investors.informatica.com[56](index=56&type=chunk) [Upcoming Events](index=3&type=section&id=7.4%20Upcoming%20Events) The company will participate in several investor conferences and events in August and September 2024 - Investor meetings are scheduled at the KeyBanc Technology Leadership Forum (August 5, 2024) and the Wolfe Research TMT Conference (September 11, 2024)[50](index=50&type=chunk) - Fireside chats are scheduled at the Deutsche Bank Technology Conference (August 28, 2024), Citi's Global TMT Conference (September 4, 2024), and the Goldman Sachs Communacopia & Technology Conference (September 10, 2024)[50](index=50&type=chunk)

[Part I. Financial Information](index=7&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's financial statements, management's analysis, market risk disclosures, and internal controls [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) Total revenues increased 6% to $388.6 million, net income reached $9.3 million, and operating cash flow significantly improved [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details segment operations, revenue disaggregation, long-term debt, and restructuring expenses - The company operates as a single reportable segment, with the CEO acting as the Chief Operating Decision-Maker (CODM)[32](index=32&type=chunk) Disaggregation of Revenue by Type (in thousands) | Revenue Type | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Cloud subscription | $151,438 | $111,778 | | Self-managed subscription license | $51,948 | $50,549 | | Maintenance | $117,678 | $125,375 | | Professional services | $18,931 | $25,328 | | **Total Revenues** | **$388,607** | **$365,431** | - As of March 31, 2024, the company had total long-term debt of **$1.84 billion** related to its dollar term loan facility, maturing in 2028[55](index=55&type=chunk)[58](index=58&type=chunk) - In Q1 2024, the company recorded **$4.3 million** in restructuring expenses related to its November 2023 plan, which aimed to reduce its workforce by approximately **10%** and reduce its real estate footprint[76](index=76&type=chunk) - Remaining performance obligations were **$1.5 billion** as of March 31, 2024, with approximately **66%** expected to be recognized as revenue over the next twelve months[72](index=72&type=chunk) Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Total Revenues** | **$388,607** | **$365,431** | | Subscriptions | $251,977 | $213,922 | | Gross Profit | $306,852 | $283,534 | | Income (Loss) from Operations | $3,225 | $(29,947) | | **Net Income (Loss)** | **$9,334** | **$(116,354)** | | Diluted EPS | $0.03 | $(0.41) | Condensed Consolidated Balance Sheets Highlights (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $855,068 | $732,443 | | Total Current Assets | $1,700,036 | $1,752,586 | | **Total Assets** | **$5,084,914** | **$5,202,082** | | Total Current Liabilities | $896,681 | $1,053,381 | | Long-term debt, net | $1,802,033 | $1,805,960 | | **Total Liabilities** | **$2,822,099** | **$2,989,484** | | **Total Stockholders' Equity** | **$2,262,815** | **$2,212,598** | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $131,642 | $69,882 | | Net cash provided by investing activities | $4,430 | $48,979 | | Net cash (used in) / provided by financing activities | $(7,885) | $14,912 | | **Net increase in cash and cash equivalents** | **$122,625** | **$135,028** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue grew 6% driven by cloud subscriptions, total ARR reached $1.64 billion, and Adjusted EBITDA increased [Key Business Metrics and Non-GAAP Financial Measure](index=33&type=section&id=Key%20Business%20Metrics%20and%20Non-GAAP%20Financial%20Measure) This section details key business metrics like ARR and Cloud Subscription NRR, alongside Adjusted EBITDA reconciliation Key Business Metrics (in millions, as of March 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Cloud Subscription ARR | $652.5 | $483.3 | | Subscription ARR | $1,157.7 | $1,020.9 | | **Total ARR** | **$1,636.5** | **$1,533.4** | | Cloud Subscription NRR (Global Parent) | 124% | 124% | | Cloud Subscription NRR (End-user) | 119% | 118% | - The company had **258 customers** with over **$1 million** in Subscription ARR as of March 31, 2024, up from 208 in the prior year[138](index=138&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | GAAP net income (loss) | $9,334 | $(116,354) | | Adjustments (Tax, Interest, D&A, etc.) | $102,140 | $205,367 | | **Adjusted EBITDA** | **$111,474** | **$89,013** | [Results of Operations](index=40&type=section&id=Results%20of%20Operations) This section analyzes revenue performance by stream, cost of software revenues, and operating expense trends Revenue Performance (in thousands) | Revenue Stream | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Cloud subscription | $151,438 | $111,778 | 35% | | Subscriptions (Total) | $251,977 | $213,922 | 18% | | Maintenance | $117,678 | $125,375 | (6)% | | Professional services | $18,931 | $25,328 | (25)% | | **Total Revenues** | **$388,607** | **$365,431** | **6%** | - The **6% increase** in total revenues was primarily driven by a **35% increase** in cloud subscription revenues, which now represent **39%** of total revenues[184](index=184&type=chunk) - Cost of software revenues increased by **31%** to **$46.8 million**, mainly due to higher fees for third-party hosting services and increased personnel-related expenses to support the growing cloud business[193](index=193&type=chunk) - Operating expenses as a percentage of revenue decreased from **86% to 78%** year-over-year, largely due to a significant reduction in restructuring costs from **$27.3 million** in Q1 2023 to **$4.4 million** in Q1 2024[182](index=182&type=chunk)[202](index=202&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) This section reviews cash position, operating cash flow, and long-term debt obligations and maturities - As of March 31, 2024, the company had **$1.11 billion** in cash, cash equivalents, and short-term investments, up from **$992.3 million** at the end of 2023[208](index=208&type=chunk) - Net cash provided by operating activities was **$131.7 million**, a significant increase from **$69.9 million** in the prior-year quarter, primarily driven by higher net income and favorable changes in working capital, particularly accounts receivable collections[213](index=213&type=chunk)[214](index=214&type=chunk) - The company's Term Facility debt matures on October 29, 2028, and is repayable in quarterly installments of **0.25%** of the initial principal amount[223](index=223&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate and foreign currency risks, with hedging strategies for Indian Rupee exposure - The company's primary market risks are interest rate sensitivity on its variable-rate debt and foreign currency exchange risk on international operations[230](index=230&type=chunk)[232](index=232&type=chunk) - A hypothetical **0.25%** change in interest rates would alter the company's annual interest expense by approximately **$4.6 million**[231](index=231&type=chunk) - A hypothetical **10%** adverse movement in foreign currency exchange rates would have negatively impacted operating income by about **$12.3 million** in Q1 2024[233](index=233&type=chunk) - The company utilizes foreign exchange forward contracts to hedge against volatility in the Indian Rupee, with notional amounts to buy **$93.9 million** of the currency as of March 31, 2024[235](index=235&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[238](index=238&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[239](index=239&type=chunk) [Part II. Other Information](index=52&type=section&id=Part%20II.%20Other%20Information) This section addresses legal proceedings, risk factors, equity sales, defaults, and other required disclosures [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is not party to any legal proceedings that would materially adversely affect its business or financials - The company is not presently a party to any legal proceedings that management believes would have a material adverse effect on its business[242](index=242&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from customer retention, macroeconomic factors, security, business model transition, and indebtedness [Risks Related to Our Business and Industry](index=53&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This section details risks from customer retention, macroeconomic factors, security breaches, business model transition, competition, and key personnel - The business could be harmed by an inability to attract and retain customers, adverse macroeconomic factors (inflation, geopolitical disruptions), and security breaches[248](index=248&type=chunk)[250](index=250&type=chunk)[254](index=254&type=chunk) - Failure to successfully manage the transition to a cloud- and subscription-based model, including a consumption-based pricing model, could adversely affect results[270](index=270&type=chunk) - The market for the company's products is highly competitive, with competition from custom-built solutions, point solution vendors, cloud service providers, and large stack vendors[287](index=287&type=chunk)[289](index=289&type=chunk) - The loss of key personnel or an unexpected turnover in the sales force could negatively impact growth and operational results[274](index=274&type=chunk) [Risks Related to Regulation](index=74&type=section&id=Risks%20Related%20to%20Regulation) This section addresses risks from evolving privacy laws, tax law changes, AI technology, and export and import controls - The company is subject to complex and evolving laws related to privacy, data protection, and security (e.g., GDPR, CCPA), which could impose substantial costs and inhibit sales[359](index=359&type=chunk)[360](index=360&type=chunk) - The company's effective tax rate is difficult to project and could be adversely affected by changes in tax laws, such as the OECD's global minimum corporate tax, or adverse results of tax examinations[352](index=352&type=chunk)[353](index=353&type=chunk) - The development and use of AI technologies present new regulatory, ethical, and security risks that could result in reputational harm or liability[366](index=366&type=chunk) - The business is subject to U.S. and international export and import controls, which could impair the ability to compete in international markets[369](index=369&type=chunk) [Risks Related to Our Indebtedness](index=87&type=section&id=Risks%20Related%20to%20Our%20Indebtedness) This section highlights risks from substantial indebtedness, restrictive covenants, and variable interest rate exposure - The company has substantial indebtedness of approximately **$1.82 billion** as of March 31, 2024, which could make it difficult to satisfy obligations and limit financial flexibility[415](index=415&type=chunk) - The Credit Agreement contains restrictive covenants that limit the ability to incur additional debt, pay dividends, make acquisitions, and sell assets[416](index=416&type=chunk)[424](index=424&type=chunk) - Borrowings under the Credit Facilities are at variable interest rates, exposing the company to interest rate risk, especially as prior interest rate swaps have matured[428](index=428&type=chunk) [Risks Related to Ownership of Our Class A Common Stock and Our Capitalization Structure](index=89&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock%20and%20Our%20Capitalization%20Structure) This section discusses risks from private equity sponsor control, 'controlled company' status, and potential future stock sales - The company's private equity sponsors (Permira and CPP Investments) control approximately **78%** of the combined voting power, giving them controlling influence over matters requiring stockholder approval[436](index=436&type=chunk)[451](index=451&type=chunk) - As a "controlled company" under NYSE rules, Informatica is exempt from certain corporate governance requirements, such as having a majority of independent directors[450](index=450&type=chunk) - Substantial future sales of Class A common stock by the sponsors could depress the market price of the stock[433](index=433&type=chunk)[434](index=434&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=96&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[464](index=464&type=chunk) [Item 3. Defaults Upon Senior Securities](index=96&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[465](index=465&type=chunk) [Item 4. Mine Safety Disclosures](index=96&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[466](index=466&type=chunk) [Item 5. Other Information](index=96&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[467](index=467&type=chunk) [Item 6. Exhibits](index=97&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The exhibits filed include certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act of 2002, along with Inline XBRL documents[469](index=469&type=chunk) [Signatures](index=98&type=section&id=Signatures) The report was duly signed on May 2, 2024, by the company's CEO and CFO - The report was duly signed on May 2, 2024, by the company's CEO and CFO[472](index=472&type=chunk)

First Quarter 2024 Ended March 31, 2024 Financial Measures Forward-looking statements are based on information available at the time those statements are made and/or management's good faith beliefs and assumptions as of that time with respect to future events and are subject to risks and uncertainties 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 ...