Informatica 10-Q 7 May 10 2010 Q1 Quarterly report Financial data

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Current assets:
Cash and cash equivalents	$152,024	$159,197
Short-term investments	202,438	305,283
Accounts receivable, net of allowances of $4,236 and $3,454, respectively	77,757	110,653
Deferred tax assets	26,478	23,673
Prepaid expenses and other current assets	20,447	15,251
Total current assets	479,144	614,057
Property and equipment, net	7,967	7,928
Goodwill	399,895	287,068
Other intangible assets, net	93,121	63,586
Long-term deferred tax assets	25,301	8,259
Other assets	7,392	8,724
Total assets	1,012,820	989,622
Current liabilities:
Accounts payable	8,150	4,274
Accrued liabilities	39,731	37,367
Accrued compensation and related expenses	30,523	41,523
Deferred tax liabilities	424	0
Income taxes payable	9,273	12,949
Accrued facilities restructuring charges	19,904	19,880
Deferred revenues	145,235	139,629
Convertible senior notes	201,000	0
Total current liabilities	454,240	255,622
Convertible senior notes	0	201,000
Accrued facilities restructuring charges, less current portion	29,833	32,845
Long-term deferred revenues	4,044	4,531
Long-term deferred tax liabilities	0	516
Long-term income taxes payable	11,695	11,995
Total liabilities	499,812	506,509
Commitments and contingencies (Note 12)
Stockholders' equity:
Common stock	91	90
Additional paid-in capital	456,608	434,262
Accumulated other comprehensive loss	(5,214)	(968)
Retained earnings	61,523	49,729
Total stockholders' equity	513,008	483,113
Total liabilities and stockholders' equity	$1,012,820	$989,622

PARENTHETICAL DATA TO THE CONDE

PARENTHETICAL DATA TO THE CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $)
In Thousands	Mar. 31, 2010	Dec. 31, 2009
Current assets:
Accounts receivable, allowances (in dollars)	$4,236	$3,454

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $)
In Thousands, except Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Revenues:
License	$55,047	$44,059
Service	80,083	64,999
Total revenues	135,130	109,058
Cost of revenues:
License	965	748
Service	23,057	18,472
Amortization of acquired technology	2,772	1,557
Total cost of revenues	26,794	20,777
Gross profit	108,336	88,281
Operating expenses:
Research and development	23,578	18,183
Sales and marketing	51,419	41,438
General and administrative	11,408	10,806
Amortization of intangible assets	2,710	2,051
Facilities restructuring charges	656	809
Acquisitions and other	3,649	0
Total operating expenses	93,420	73,287
Income from operations	14,916	14,994
Interest income	951	1,790
Interest expense	(1,580)	(1,671)
Other income, net	1,980	767
Income before provision for income taxes	16,267	15,880
Provision for income taxes	4,473	4,821
Net income	$11,794	$11,059
Basic net income per common share	0.13	0.13
Diluted net income per common share	0.12	0.12
Shares used in computing basic net income per common share	90,748	86,862
Shares used in computing diluted net income per common share	107,374	100,430

1_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Operating activities:
Net income	$11,794	$11,059
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,829	1,353
Gain on sale of investment in equity interests	(1,824)	0
Gain on early extinguishment of debt	0	(337)
Stock compensation	5,482	4,199
Deferred income taxes	(632)	(1,469)
Tax benefits from stock compensation	4,189	672
Excess tax benefits from stock compensation	(3,325)	(397)
Amortization of intangible assets and acquired technology	5,482	3,608
Non-cash facilities restructuring charges	656	809
Other non-cash items	(6)	610
Changes in operating assets and liabilities:
Accounts receivable	42,162	23,730
Prepaid expenses and other assets	2,403	(3,612)
Accounts payable and other current liabilities	(18,924)	(20,499)
Income taxes payable	(5,276)	665
Accrued facilities restructuring charges	(3,604)	(3,219)
Deferred revenues	2,776	(4,291)
Net cash provided by operating activities	43,182	12,881
Investing activities:
Purchases of property and equipment	(1,300)	(577)
Purchases of investments	(42,569)	(146,227)
Purchase of investment in equity interest	(1,500)	0
Sale of investment in equity interest	4,824	0
Maturities of investments	64,318	115,848
Sales of investments	81,047	14,097
Business acquisitions, net of cash acquired	(168,777)	(32,976)
Net cash used in investing activities	(63,957)	(49,835)
Financing activities:
Net proceeds from issuance of common stock	13,785	6,967
Repurchases and retirement of common stock	0	(5,910)
Withholding taxes related to restricted stock units net share settlement	(1,108)	0
Repurchases of convertible senior notes	0	(19,200)
Excess tax benefits from stock compensation	3,325	397
Net cash provided by (used in) financing activities	16,002	(17,746)
Effect of foreign exchange rate changes on cash and cash equivalents	(2,400)	(1,825)
Net decrease in cash and cash equivalents	(7,173)	(56,525)
Cash and cash equivalents at beginning of period	159,197	179,874
Cash and cash equivalents at end of period	$152,024	$123,349

Summary of Significant Accounti

Summary of Significant Accounting Policies
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Summary of Significant Accounting Policies	Note 1. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements of Informatica Corporation (Informatica, or the Company) have been prepared in conformity with generally accepted accounting principles (GAAP) in the United States of America. However, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the financial statements include all adjustments necessary, which are of a normal and recurring nature for the fair presentation of the results of the interim periods presented. All of the amounts included in this Report related to the condensed consolidated financial statements and notes thereto as of and for the three months ended March 31, 2010 and 2009 are unaudited. The interim results presented are not necessarily indicative of results for any subsequent interim period, the year ending December 31, 2010, or any future period. The preparation of the Companys condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions. The Company believes that the estimates, judgments, and assumptions upon which it relies are reasonable based on information available at the time that these estimates, judgments, and assumptions were made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates and actual results, Informaticas financial statements would be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require managements judgment in its application. There are also instances that managements judgment in selecting an available alternative would not produce a materially different result. These unaudited, condensed consolidated financial statements should be read in conjunction with the Companys audited consolidated financial statements and notes thereto for the year ended December 31, 2009 included in the Companys Annual Report on Form 10-K filed with the SEC. The condensed consolidated balance sheet as of December 31, 2009 has been derived from the audited consolidated financial statements of the Company. Revenue Recognition The Company derives its revenues from software license fees, maintenance fees, and professional services, which consist of consulting and education services. The Company recognizes revenue in accordance with Software Revenue Recognition (ASC 985-605-25), andthe Securities and Exchange Commissions Staff Accounting BulletinNo. 104 (SABNo. 104), Revenue Recognition, and other authoritative accounting literature. Under ASC 985-605-25, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or de

Cash, Cash Equivalents, and Sho

Cash, Cash Equivalents, and Short-Term Investments
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Cash, Cash Equivalents, and Short-Term Investments	Note 2.Cash, Cash Equivalents, and Short-Term Investments The Companys marketable securities are classified as available-for-sale as of the balance sheet date and are reported at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income in stockholders equity, net of tax. Realized gains and losses and permanent declines in value, if any, on available-for-sale securities are reported in other income or expense as incurred. Realized gains recognized for the three months ended March 31, 2010 and 2009 were $71,000 and $3,000, respectively. The realized gains are included in other income of the condensed consolidated statements of income for the respective periods. The cost of securities sold was determined based on the specific identification method. The Company sold approximately $35 million of its investment in marketable securities in December 2009 in anticipation of its cash requirement for the acquisition of Siperian. The following is a summary of the Companys investments as of March 31, 2010 and December 31, 2009 (in thousands): March 31, 2010 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash $ 141,936 $ $ $ 141,936 Cash equivalents: Money market funds 3,089 3,089 Certificates of deposit 6,999 6,999 Total cash equivalents 10,088 10,088 Total cash and cash equivalents 152,024 152,024 Short-term investments: Certificates of deposit 4,560 4,560 Commercial paper 4,985 4,985 Corporate notes and bonds 61,428 288 (57 ) 61,659 Federal agency notes and bonds 92,831 89 (64 ) 92,856 U.S. government notes and bonds 14,423 37 14,460 Municipal notes and bonds 23,880 39 (1 ) 23,918 Total short-term investments 202,107 453 (122 ) 202,438 Total cash, cash equivalents, and short-term investments * $ 354,131 $ 453 $ (122 ) $ 354,462 ___________ * Total estimated fair value above included $212,526 comprised of cash equivalents and short-term investments at March 31, 2010. December 31, 2009 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash $ 147,302 $ $ $ 147,302 Cash equivalents: Money market funds 10,895 10,895 Municipal notes and bonds 1,000 1,000 Total cash equivalents 11,895 11,895 Total cash and cash equivalents 159,197 159,197 Short-term investments: Certificates of deposit 5,040 5,040 Commercial paper 20,953 20,953 Corporate notes and bonds 63,168 364 (42 ) 63,490 Federal agency notes and bonds 143,840 200 (252 ) 143,788 U.S. government notes and bonds 24,515 44 (10 ) 24,549 Municipal notes and bonds 47,387 88 (12 ) 47,463 Total short-term investments 304,903 696 (316 ) 305,283 Total cash, cash equivalents, and short-term investments * $ 464,100 $ 696 $ (316 ) $ 464,480 ___________ * Total estimated fair value above included $317,178 comprised of cash equivalents and

Goodwill and Intangible Assets

Goodwill and Intangible Assets
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Goodwill and Intangible Assets	Note 3. Goodwill and Intangible Assets The carrying amounts of intangible assets other than goodwill as of March 31, 2010 and December 31, 2009 are as follows (in thousands): March 31, 2010 December 31, 2009 Gross Carrying Amount Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount Developed and core technology $ 86,339 $ (24,786 ) $ 61,553 $ 55,350 $ (22,048 ) $ 33,302 Customer relationships 33,534 (16,023 ) 17,511 31,426 (14,029 ) 17,397 Vendor relationships 7,908 (1,408 ) 6,500 7,908 (992 ) 6,916 Other: Trade names 2,494 (975 ) 1,519 2,494 (835 ) 1,659 Covenants not to compete 2,000 (1,317 ) 683 2,000 (1,217 ) 783 Patents 3,720 (285 ) 3,435 3,720 (191 ) 3,529 In-process research and development 1,920 1,920 $ 137,915 $ (44,794 ) $ 93,121 $ 102,898 $ (39,312 ) $ 63,586 Amortization expense of intangible assets was $5.5 million and $3.6 million for the three months ended March 31, 2010 and 2009, respectively. The Companys weighted-average amortization period is six years for developed and core technology, is five years for customer relationships, vendor relationships, trade names, and covenants not to compete, and is ten years for patents. The amortization expense related to identifiable intangible assets as of March 31, 2010 is expected to be $17.3 million for the remainder of 2010, $21.2 million, $18.3 million, $15.7 million, and $8.4 million for the years ending December 31, 2011, 2012, 2013, and 2014, respectively, and $10.3 million for the years thereafter. The increase of $31.0 million in the gross carrying amount of developed and core technology was primarily due to the intangibles of $21.3 million and $9.8 million acquired from Siperian and 29West, respectively. The increase of $2.1 million in the gross carrying amount of customer relationships was primarily due to the intangibles of $1.6 million and $0.6 million acquired from Siperian and 29West, respectively. See Note 15. Acquisitions,of Notes to Condensed Consolidated Financial Statements for a further discussion. In addition, $2.3 million of developed and core technology, and $3.7 million of customer relationships at March 31, 2010, related to the Identity Systems and PowerData acquisitions, were recorded in European local currencies; therefore, the gross carrying amount and accumulated amortization are subject to periodic translation adjustments. Subsequent to adoption of SFAS No. 141(R) on January 1, 2009, Business Combinations (ASC 805), the Company has acquired certain customer relationships for approximately $13.3 million from Applimation, AddressDoctor, Agent Logic, Siperian, and 29West acquisitions, which consist of software maintenance agreements. These renewable agreements are usually for a duration of one year and renewable afterward. The costs of renewal of these contracts are reflected in the cost of service revenues. In the first quarter of 2010, in conjunction with our acquisition of Siperian, we recorded in-process research and development (IPR

Convertible Senior Notes

Convertible Senior Notes
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Convertible Senior Notes	Note 4. Convertible Senior Notes On March8, 2006, the Company issued and sold Convertible Senior Notes (Notes) with an aggregate principal amount of $230million due 2026. The Company pays interest at 3.0% per annum to holders of the Notes, payable semi-annually on March 15 and September 15 of each year, commencing September15, 2006. Each $1,000 principal amount of Notes is initially convertible, at the option of the holders, into 50 shares of our common stock prior to the earlier of the maturity date (March15, 2026)or the redemption or repurchase of the Notes. The initial conversion price represented a premium of 29.28% relative to the last reported sale price of common stock of the Company on the NASDAQ Stock Market (Global Select) of $15.47 on March7, 2006. The conversion rate is subject to certain adjustments. The conversion rate initially represents a conversion price of $20.00 per share. After March15, 2011, the Company may from time to time redeem the Notes, in whole or in part, for cash, at a redemption price equal to the full principal amount of the Notes, plus any accrued and unpaid interest. Holders of the Notes may require the Company to repurchase all or a portion of their Notes at a purchase price in cash equal to the full outstanding principal amount of the Notes plus any accrued and unpaid interest on March15, 2011, March15, 2016, and March15, 2021, or upon the occurrence of certain events including a change in control. Pursuant to a Purchase Agreement (the Purchase Agreement), the Notes were sold for cash consideration in a private placement to an initial purchaser, UBS Securities LLC, an accredited investor, within the meaning of Rule501 under the Securities Act of 1933, as amended (the Securities Act), in reliance upon the private placement exemption afforded by Section4(2) of the Securities Act. The initial purchaser reoffered and resold the Notes to qualified institutional buyers under Rule144A of the Securities Act without being registered under the Securities Act, in reliance on applicable exemptions from the registration requirements of the Securities Act. In connection with the issuance of the Notes, the Company filed a shelf registration statement with the SEC for the resale of the Notes and the common stock issuable upon conversion of the Notes. The Company also agreed to periodically update the shelf registration and to keep it effective until the earlier of the date the Notes or the common stock issuable upon conversion of the Notes is eligible to be sold to the public pursuant to Rule144(k) of the Securities Act or the date on which there are no outstanding registrable securities. The Company has evaluated the terms of the call feature, redemption feature, and the conversion feature under applicable accounting literature, including Derivatives and Hedging(ASC 815) and Debt With Conversion and Other Options (ASC 470-20)and concluded that none of these features should be separately accounted for as derivatives. In connection with the issuance of the Notes, the Company incurred $6.2million of issuance costs, which primarily consisted of investment banker fees and legal and other professional fees. These costs

Other Comprehensive Income

Other Comprehensive Income
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Other Comprehensive Income	Note 5. Other Comprehensive Income Accumulated other comprehensive income refers to gains and losses that, under GAAP, are recorded as an element of stockholders equity and are excluded from net income, net of tax. Other comprehensive income activity consisted of the following items (in thousands): Three Months Ended March 31, 2010 2009 Net income, as reported $ 11,794 $ 11,059 Other comprehensive income: Unrealized loss on investments (1) (30 ) (496 ) Cumulative translation adjustments (2) (4,480 ) (2,831 ) Derivatives gain (loss) (3) 264 (350 ) Other comprehensive income $ 7,548 $ 7,382 _________ (1) The tax effects on unrealized loss on investments were $19,000 and $317,000 for the three months ended March 31, 2010 and 2009, respectively. (2) The tax effects on cumulative translation adjustments were $144,000 and $73,000 for the three months ended March 31, 2010 and 2009, respectively. (3) The tax effects on cash flow hedging gain (loss) were $169,000 and ($223,000) for the three months ended March 31, 2010 and 2009, respectively. Ending balance of accumulated other comprehensive loss as of March 31, 2010 and December 31, 2009 consisted of the following (in thousands): March 31, 2010 December 31, 2009 Net unrealized gain on available-for-sale investments $ 202 $ 232 Cumulative translation adjustments (5,589 ) (1,109 ) Derivatives gain (loss) 173 (91 ) Accumulated other comprehensive loss $ (5,214 ) $ (968 ) Informatica did not have any other-than-temporary gain or loss reflected in accumulated other comprehensive loss as of March 31, 2010 and December 31, 2009. Informatica determines the basis of the cost of a security sold and the amount reclassified out of other comprehensive income into statement of income based on specific identification. The following table reflects the change in accumulated investment unrealized gain (loss) included in other comprehensive income for the three months ended March 31, 2010 and 2009 (in thousands): Three Months Ended March 31, 2010 2009 Net unrealized investment gain balance, net of tax effects at beginning of the year $ 232 $ 879 Investment unrealized loss, net of tax effects (30 ) (496 ) Net unrealized investment gain balance, net of tax effects at end of the period $ 202 $ 383 The following table reflects the change in accumulated derivatives gain (loss) included in other comprehensive income for the three months ended March 31, 2010 and 2009 (in thousands): Three Months Ended March31, 2010 2009 Net unrealized derivatives gain (loss) balance, net of tax effects at beginning of the year $ (91 ) $ 51 Reclassified to the statement of income, net of tax effects 10 39 Derivatives gain (loss) for hedging transactions, net of tax effects 254 (389 ) Net unrealized derivatives gain (loss) balance, net of tax effects at end of the period $ 173 $ (299 ) See Note 1. Summary of Significant Accounting Policies, Note 6. Derivative Financial Instruments, and Note 12. Commitments and Contingencies of Notes to Condensed Consolidated Financial State

Derivative Financial Instrument

Derivative Financial Instruments
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Derivative Financial Instruments	Note6. Derivative Financial Instruments The functional currency of Informaticas foreign subsidiaries is their local currencies, except for Informatica Cayman Ltd., which is in euros. The Company translates all assets and liabilities of its foreign subsidiaries into U.S.dollars at current exchange rates as of the applicable balance sheet date. Revenues and expenses are translated at the average exchange rate prevailing during the period, and the gains and losses resulting from the translation of the foreign subsidiaries financial statements are reported in accumulated other comprehensive income (loss), as a separate component of stockholders equity. Net gains and losses resulting from foreign exchange transactions are included in other income or expense, net in the condensed consolidated statements of income. Informaticas results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Indian rupee, Israeli shekel,euro, British poundsterling, Canadian dollar, Japanese yen, Brazilian real, and Australian dollar. The Company initiated certain cash flow hedge programs in an attempt to reduce the impact of certain foreign currency fluctuations starting in the fourth quarter of 2008. The purpose of these programs is to reduce the volatility of identified cash flows and expenses caused by movement in certain foreign currency exchange rates, in particular, the Indian rupee and Israeli shekel.Informatica is currently using foreign exchange forward contracts to hedge certain non-functional currency anticipated expenses reflected in the intercompany accounts between Informatica U.S. and its two subsidiaries in India and Israel. Exposures resulting from fluctuations in the foreign currency exchange rates applicable to these foreign denominated expenses are covered through the Companys cash flow hedge programs initiated since the fourth quarter of 2008. The foreign exchange contracts initiated in 2008 expired in November 2009. In December 2009, the Company entered into some additional forward contracts with monthly expiration dates through January 18, 2011 for Indian rupees and Israeli shekels. The Company releases the amounts accumulated in other comprehensive income into earnings in the same period or periods during which the forecasted hedge transaction affects earnings. Informatica has forecasted the amount of its anticipated foreign currency expenses based on its historical performance and its 2009 and 2010 financial plans. As of March 31, 2010, these foreign exchange contracts, carried at fair value, have a maturity of ten months or less. During the first quarter of 2010, the Company did not enter into any new forward exchange contracts, and the Company closed out approximately two foreign exchange contracts per month when the foreign currency denominated expenses are paid and any gain or loss is offset against income. Informatica and its subsidiaries do not enter into derivative contracts for speculative purposes. As of March 31, 2010, a derivative gain of $173,000 was included in accumulated other comprehensive income, net of applicable taxes. The Company

Stock Repurchases and Retiremen

Stock Repurchases and Retirement of Convertible Senior Notes
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Stock Repurchases and Retirement of Convertible Convertible Notes	Note 7. Stock Repurchases and Retirement of Convertible Senior Notes The purpose of Informaticas stock repurchase program is, among other things, to help offset the dilution caused by the issuance of stock under our employee stock option and employee stock purchase plans. The number of shares acquired and the timing of the repurchases are based on several factors, including general market conditions and the trading price of the Companys common stock. These purchases can be made from time to time in the open market and are funded from the Companys available working capital. In April 2006, our Board of Directors authorized a stock repurchase program of up to $30 million of our common stock until April 2007. In April 2007, Informaticas Board of Directors authorized a stock repurchase program for up to an additional $50million of its common stock. In April 2008, Informaticas Board of Directors authorized repurchase of an additional $75million of its common stock under the stock repurchase program. In October 2008, Informaticas Board of Directors approved expanding the repurchase program to include the repurchase of a portion of its outstanding Convertible Senior Notes (Notes) due in 2026 in privately negotiated transactions with holders of the Notes. From April 2007 to December 31, 2009, the Company repurchased 6,498,121 shares of its common stock at a cost of $97 million and $29 million of its outstanding Notes at a cost of $27 million. The Company has approximately $0.3 million available to repurchase additional shares of its common stock or redeem the remaining of its Notes under this program as of December 31, 2009. In January 2010, the Board of Directors authorized repurchase of an additional $50million of its common stock and outstanding Notes under the stock repurchase program. This repurchase program does not have an expiration date. The repurchased shares are retired and reclassified as authorized and unissued shares of common stock. The Company may continue to repurchase its common stock and outstanding Notes from time to time, as determined by management under programs approved by the Board of Directors. The Company did not have any repurchases pursuant to the stock repurchase program during the three months ended March 31, 2010.

Stock Compensation

Stock Compensation
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Stock Compensation	Note 8. Stock Compensation Informatica grants restricted stock units (RSUs) and stock options under its 2009 Employee Stock Incentive Plan.Informatica uses the Black-Scholes-Merton option pricing model to determine the fair value of option awards granted. The Company is using a blend of average historical and market-based implied volatilities for calculating the expected volatilities for employee stock options and market-based implied volatilities for its Employee Stock Purchase Plan (ESPP). The expected term of employee stock options granted is derived from historical exercise patterns of the options while the expected term of ESPP is based on the contractual terms. The risk-free interest rate for the expected term of the option and ESPP is based on the U.S. Treasury yield curve in effect at the time of grant. Stock Compensation (ASC 718) requires the Company to estimate forfeiture rates at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical forfeitures to estimate its future forfeiture rates. The Company increased its forfeiture rate for stock options from 8% in 2009 to 10% in 2010, which did not materially impact its stock compensation. The forfeiture rate for RSUs remained at 10% for both 2009 and 2010. The Company amortizes its stock compensation using a straight-line method over the vesting term of the awards. The Company estimated the fair value of its stock compensation awards related to stock options granted using the following assumptions: Three Months Ended March 31, 2010 2009 Option Grants: Expected volatility 36 % 46-48 % Weighted-average volatility 36 % 46 % Expected dividends Expected term of options (in years) 3.7 3.6 Risk-free interest rate 1.9 % 1.6 % ESPP: * Expected volatility 33 % 51 % Weighted-average volatility 33 % 51 % Expected dividends Expected term of ESPP (in years) 0.5 0.5 Risk-free interest rate ESPP 1.7 % 0.4 % ____________ * ESPP purchases are made on the last day of January and July of each year. The allocations of stock compensation for the three months ended March 31, 2010 and 2009 are as follows (in thousands): Three Months Ended March 31, 2010 2009 Cost of service revenues $ 662 $ 531 Research and development 1,609 1,118 Sales and marketing 1,773 1,367 General and administrative 1,438 1,183 Total stock compensation 5,482 4,199 Tax benefit of stock compensation (1,140 ) (889 ) Total stock compensation, net of tax benefit $ 4,342 $ 3,310

Facilities Restructuring Charge

Facilities Restructuring Charges
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Facilities Restructuring Charges	Note 9. Facilities Restructuring Charges 2004 Restructuring Plan In October 2004, the Company announced a restructuring plan (2004 Restructuring Plan) related to the December 2004 relocation of the Companys corporate headquarters within Redwood City, California. In 2005, the Company subleased the available space at the Pacific Shores Center under the 2004 Restructuring Plan. The Company recorded restructuring charges of approximately $103.6million, consisting of $21.6million in leasehold improvement and asset write-offs and $82.0million related to estimated facility lease losses, which consist of the present value of lease payment obligations for the remaining three-year lease term (as of March 31, 2010) of the previous corporate headquarters, net of actual and estimated sublease income. The Company has actual and estimated sublease income, including the reimbursement of certain property costs such as common area maintenance, insurance, and property tax, net of estimated broker commissions of $3.9million for the remainder of 2010, $5.4million in 2011, $5.5million in 2012, and $1.7million in 2013. Subsequent to 2004, the Company continued to record accretion on the cash obligations related to the 2004 Restructuring Plan. Accretion represents imputed interest and is the difference between the non-discounted future cash obligations and the discounted present value of these cash obligations. At March31, 2010, the Company will recognize approximately $4.5million of accretion as a restructuring charge over the remaining four years term of the lease as follows: $1.6million for the remainder of 2010, $1.6million in 2011, $1.0million in 2012, and $0.3million in 2013. 2001 Restructuring Plan During 2001, the Company announced a restructuring plan (2001 Restructuring Plan) and recorded restructuring charges of approximately $12.1 million, consisting of $1.5 million in leasehold improvement and asset write-offs and $10.6 million related to the consolidation of excess leased facilities in the San Francisco Bay Area and Texas. During 2002, the Company recorded additional restructuring charges of approximately $17.0 million, consisting of $15.1 million related to estimated facility lease losses and $1.9 million in leasehold improvement and asset write-offs. The Company calculated the estimated costs for the additional restructuring charges based on current market information and trend analysis of the real estate market in the respective area. In December 2004, the Company recorded additional restructuring charges of $9.0 million related to estimated facility lease losses. The restructuring accrual adjustments recorded in the third and fourth quarters of 2004 were the result of the relocation of its corporate headquarters within Redwood City, California in December 2004, an executed sublease for the Companys excess facilities in Palo Alto, California during the third quarter of 2004, and an adjustment to managements estimate of occupancy of available vacant facilities. In 2005, the Company subleased the available space at the Pacific Shores Center under the 2001 Restructuring Plan through May 2013, which was subsequently subleased until July

Income Taxes

Income Taxes
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Income Taxes	Note 10. Income Taxes The Companys effective tax rates were 27% and 30% for the three-month periods ended March 31, 2010 and 2009, respectively. The effective tax rates differed from the federal statutory rate of 35% primarily due to benefits of certain earnings from operations in lower-tax jurisdictions throughout the world, offset by compensation expense related to non-deductible stock compensation, nondeductible transaction costs, and the accrual of reserves related to uncertain tax positions. The Company has not provided for residual U.S. taxes in any of these lower-tax jurisdictions since it intends to indefinitely reinvest these earnings offshore. In assessing the need for any additional valuation allowance in the quarter ended March 31, 2010, the Company considered all available evidence both positive and negative, including historical levels of income, legislative developments, expectations and risks associated with estimates of future taxable income, and ongoing prudent and feasible tax planning strategies. As a result of this analysis, consistent with prior quarters it was considered more likely than not that the Companys deferred tax assets that are not stock compensation related would be realizable. As a result, the remaining valuation allowance is primarily related to deferred tax assets that were created through the benefit from stock option deductions on a with and without basis and recorded on the balance sheet with a corresponding valuation allowance prior to the Companys adoption of Stock Compensation (ASC 718).Pursuant to Stock Compensation (ASC 718-740-25-10), the benefit of these deferred tax assets will be recorded in the stockholders equity when they are utilized on an income tax return to reduce the Companys taxes payable, and as such, they will not impact the Companys effective tax rate. The unrecognized tax benefits related to Income Taxes (ASC 740), if recognized, would impact the income tax provision by $15.4 million and $13.2 million as of March 31, 2010 and 2009, respectively. The Company has elected to include interest and penalties as a component of tax expense. Accrued interest and penalties as of March 31, 2010 and 2009 were approximately $2.4 million and $2.0 million, respectively. The Company files U.S. federal income tax returns as well as income tax returns in various states and foreign jurisdictions. Informatica is under examination by the Internal Revenue Service for fiscal years 2005 and 2006. Due to net operating loss carry-forwards, substantially all of our tax years remained open for tax examination. In 2009, the Company reached an agreement with the Internal Revenue Service to settle certain matters, including cost sharing and buy-in amounts for tax years ended December 31, 2001 through 2006. The tax provision impact as a result of the settlement was $7.0 million of which $6.1 million was accrued for previously. The Company has been informed by certain state and foreign taxing authorities that it was selected for examination. Most state and foreign jurisdictions have three or four open tax years at any point in time. The field work for certain state audits has commenced and is at vari

Net Income per Common Share

Net Income per Common Share
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Net Income per Common Share	Note 11. Net Income per Common Share Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share reflects the potential dilution of securities by adding other common stock equivalents, primarily stock options and common shares potentially issuable under the terms of the Convertible Senior Notes, to the weighted-average number of common shares outstanding during the period, if dilutive. Potentially dilutive securities have been excluded from the computation of diluted net income per share if their inclusion is anti-dilutive. The calculation of basic and diluted net income per common share is as follows (in thousands, except per share amounts): Three Months Ended March 31, 2010 2009 Net income $ 11,794 $ 11,059 Effect of convertible senior notes, net of related tax effects 961 1,138 Net income adjusted $ 12,755 $ 12,197 Weighted-average shares of common stock used to compute basic net income per share (excluding unvested restricted stock) 90,748 86,862 Effect of dilutive common stock equivalents: Dilutive effect of unvested restricted stock units 384 Dilutive effect of employee stock options 6,192 2,951 Dilutive effect of convertible senior notes 10,050 10,617 Shares used in computing diluted net income per common share 107,374 100,430 Basic net income per common share $ 0.13 $ 0.13 Diluted net income per common share $ 0.12 $ 0.12 The diluted net income per common share calculation requires the dilutive effect of convertible securities to be reflected in the diluted net income per share by application of the if-converted method. This method assumes an add-back of interest and amortization of issuance cost, net of income taxes, to net income if the securities are converted. The Company determined that for the three months ended March 31, 2010 and 2009, the Convertible Senior Notes had a dilutive effect on diluted net income per share, and as such, it had an add-back of $1.0 million and $1.1 million for the three months ended March 31, 2010 and 2009, respectively, in interest and issuance cost amortization, net of income taxes, to net income for the diluted net income per share calculation. In calculating its diluted net income per common share, Informatica excluded 18,000 and 3,124,000 of its options for the three months ended March 31, 2010 and 2009, respectively, since the inclusion of these options would have been anti-dilutive.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Commitments and Contingencies	Note 12. Commitments and Contingencies Lease Obligations In December 2004, the Company relocated its corporate headquarters within Redwood City, California and entered into a new lease agreement. The initial lease term was from December 15, 2004 to December 31, 2007 with a three-year option to renew to December 31, 2010 at fair market value. In May 2007, the Company exercised its renewal option to extend the office lease term to December 31, 2010. In May 2009, the Company executed the lease amendment to further extend the lease term for another 3 years to December 31, 2013. The future minimum contractual lease payments are $2.5 million for the remainder of 2010, $3.4 million, $3.5 million, and $3.6 million for the years ending December 31, 2011, 2012, and 2013, respectively. The Company entered into two lease agreements in February 2000 for two office buildings at the Pacific Shores Center in Redwood City, California, which was used as its former corporate headquarters from August 2001 through December 2004. The leases expire in July 2013. In 2001, a financial institution issued a $12.0 million letter of credit, which required the Company to maintain certificates of deposits as collateral until the leases expire in 2013. As of June 2008, however, the Company was no longer required to maintain certificates of deposits for this letter of credit related to its former corporate headquarters leases at the Pacific Shores Center in Redwood City, California. The Company leases certain office facilities under various non-cancelable operating leases, including those described above, which expire at various dates through 2013 and require the Company to pay operating costs, including property taxes, insurance, and maintenance. Operating lease payments in the table below include approximately $57.0 million for operating lease commitments for facilities that are included in restructuring charges. See Note 9. Facilities Restructuring Charges, above, for a further discussion. Future minimum lease payments as of March 31, 2010 under non-cancelable operating leases with original terms in excess of one year are summarized as follows (in thousands): Operating Leases Sublease Income Net Remaining 2010 $ 20,742 $ 1,848 $ 18,894 2011 26,316 2,503 23,813 2012 25,849 2,550 23,299 2013 17,182 1,313 15,869 2014 1,858 1,858 Thereafter 1,967 1,967 $ 93,914 $ 8,214 $ 85,700 Of these future minimum lease payments, the Company has accrued $49.7 million in the facilities restructuring accrual at March 31, 2010. This accrual includes the minimum lease payments of $57.0 million and an estimate for operating expenses of $17.4 million and sublease commencement costs associated with excess facilities and is net of estimated sublease income of $20.2 million and a present value discount of $4.5 million recorded in accordance with Statement of Financial Accounting Standards No. 146 (As Amended), Accounting for Costs Associated with Exit or Disposal Activities (SFAS No. 146). Warranties The Company generally provides a warranty for its software products and services to its customers for

Significant Customer Informatio

Significant Customer Information and Segment Reporting
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Significant Customer Information and Segment Reporting	Note 13. Significant Customer Information and Segment Reporting Segment Reporting (ASC 280) establishes standards for the manner in which public companies report information about operating segments in their annual and interim financial statements. It also establishes standards for related disclosures about products and services, geographic areas, and major customers. The method for determining the information to report is based on the way management organizes the operating segments within the Company for making operating decisions and assessing financial performance. The Company is organized and operates in a single segment: the design, development, marketing, and sales of software solutions. The Companys chief operating decision maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. The following table presents geographic information (in thousands): Three Months Ended March 31, 2010 2009 Revenues: North America $ 87,690 $ 71,783 Europe 33,370 24,728 Other 14,070 12,547 $ 135,130 $ 109,058 March 31, 2010 December 31, 2009 Long-lived assets (excluding assets not allocated): North America $ 95,782 $ 65,384 Europe 3,869 4,610 Other 1,437 1,520 $ 101,088 $ 71,514 No customer accounted for more than 10% of the Companys total revenues in the three months ended March 31, 2010 and 2009. At March 31, 2010 and 2009, no single customer accounted for more than 10% of the accounts receivable balance.

Recent Accounting Pronouncement

Recent Accounting Pronouncements
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Recent Accounting Pronouncements	Note 14. Recent Accounting Pronouncements In October 2009, the FASB issued an Accounting Standard Update (ASU No. 2009-13) or (EITF No. 08-01) which requires a vendor to allocate revenue to each unit of accounting in many arrangements involving multiple deliverables based on the relative selling price of each deliverable. It also changes the level of evidence of standalone selling price required to separate deliverables by allowing a vendor to make its best estimate of the standalone selling price of deliverables when more objective evidence of selling price is not available. The best estimate of selling price can be used when VSOE or third-party evidence (TPE) of fair value are not available. Cloud services is a model of software deployment whereby a vendor licenses an application to customers for use as a service on demand and is within the scope of this ASU. Informatica is currently using these revenue models on a limited basis and the amount of revenue generated from these models is not material at this time but is growing. This ASU is effective for the arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Informatica will adopt this ASU as of January 1, 2011 and the Company expects that its adoption will not materially impact the consolidated financial statements. In January 2010, the FASB issued an Accounting Standard Update (ASU No. 2010-02) which provides for decreases in ownership of a subsidiary a scope clarification. The objective of this update is to address implementation issues related to the changes in ownership provisions in the Consolidation Overall Subtopic (Subtopic 810-10) of the FASB Accounting Standards Codification, originally issued as FASB Statement No. 160 Noncontrolling Interests in Consolidated Financial Statements. This update is effective beginning in the first interim period or annual reporting period ending on or after December 15, 2009. The Company has adopted this ASU in the first quarter of 2010 and its adoption did not have an impact on the consolidated financial statements. In January 2010, the FASB issued an Accounting Standard Update (ASU No. 2010-06) which provides amendments to Subtopic 820-1 that requires new disclosures regarding transfers in and out of Level 1 and 2 and activities in Level 3 for fair value measurements. This ASU also provides clarification to existing disclosures regarding fair value measurement disclosures for each class of assets and liabilities and valuation techniques. This ASU and guidance for new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for disclosures related to activities in Level 3. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company has adopted this ASU in its entirety as required in the first quarter of 2010. In February 2010, the FASB issued an Accounting Standard Update (ASU No. 2010-09) which provides amendments to remove the requirement for an SEC filer to disclose a date in both issued and revised financi

Acquisitions

Acquisitions
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Acquisitions	Note 15. Acquisitions Siperian, Inc. On January 28, 2010, the Company acquired Siperian, Inc., (Siperian) a privately held company incorporated in Delaware. Siperian providesan integrated model-driven master data management (MDM) platform that adapts to most business requirements. The acquisition extends the Companys data integration software to include Siperians technology. The Company acquired Siperian in a cash merger transaction valued at approximately $130million. As a result of this acquisition, the Company also assumed certain facility leases and certain liabilities and commitments. Approximately $18.3 million of the consideration otherwise payable to former Siperian stockholders, vested option holders and participants in Siperians Management Acquisition Bonus Plan was placed into an escrow fund and held as partial security for the indemnification obligations of the former Siperian stockholders, vested option holders, and participants in Siperians Management Acquisition Bonus Plan set forth in the merger agreement and for purposes of the working capital adjustment stated in the contract. The escrow fund will remain in place until July 28, 2011, although 50% of the escrow funds will be distributed to former Siperian stockholders, vested option holders, and participants in Siperians Management Acquisition Bonus Plan on January 28, 2011. The following table presents the purchase price allocation of $102.9 million and the acquirees transaction related costs and debt settlement of $27.1 million which was paid by the Company on January 28, 2010 or shortly thereafter. This amount consists of investment banker, legal and accounting fees, certain employee related compensation, and debt settlement as of the date of this acquisition (in thousands): Goodwill $ 78,360 Developed and core technology 21,340 Customer relationships 1,630 In-process research development 1,920 Assumed liabilities, net of assets (333 ) Total purchase price allocation 102,917 Acquirees transaction related costs and debt settlement 27,083 Total $ 130,000 Informatica has finalized plans to terminate certain employees and vacate certain facilities of Siperian. The cost associated with such exit activities, which are reflected in the Acquisition related expenses in the Statement of Income is as follows (in thousands): Termination of certain employees $ 326 Vacating certain facilities of Siperian 1,121 Total $ 1,447 Informatica does not expect to incur any additional expenses related to these exit activities in the future. Informatica estimated$6.6 million for sales and use tax liabilities, foreign income tax liabilities, and costs for certain product warranty issues. Further, Informatica has made some additional estimates regarding recoverability of accounts receivable and miscellaneous accruals. The following table presents the unaudited pro forma results of Informatica (including Siperian) for the three-month periods ended March 31, 2010 and 2009 (in thousands, except per share amounts). The unaudited pro forma financial information combines the results of operations of Informatica and Siperian as though the com

Document Information

Document Information
	3 Months Ended Mar. 31, 2010
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31

Entity Information

Entity Information (USD $)
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010	Jun. 30, 2009
Entity [Text Block]
Entity Registrant Name	INFORMATICA CORPORATION
Entity Central Index Key	0001080099
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$1,486,699,000
Entity Common Stock, Shares Outstanding		91,834,000
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1