INFA - Earnings call transcript Q2 2022

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Operator

Good afternoon, everyone, and welcome to Informatica's Fiscal Q2 2022 Earnings Conference Call. My name is Tia, and I will be your event specialist today. After the speaker's prepared remarks, there will be a question-and-answer session. Thank you. I would now like to introduce our host, Victoria Hyde-Dunn, Vice President, Investor Relations.

proceed. may You

Victoria Hyde-Dunn

afternoon review Good you joining for Thank second and quarter to Informatica's results. XXXX us you. thank [ph] earnings

on Amit are Eric Officer. today's Executive me and Financial Brown, Walia, Officer; Chief Joining Chief call

we Before reminders. we couple have of begin, a

slide release Investor are available Our Relations and on at website earnings presentation press investors.informatica.com. our

concludes. will be remarks IR prepared on the website after Our posted the conference call

a results expressed be During comments of as Actual we or nature. those from will making of and may call, risks materially the forward-looking differ various uncertainties. result implied a

on For our law. review and more we and included including forward-looking by titled risks, the statements revise information about obligation information no XX-Q update some required assume based or XXXX. Factors filing XX-K of statements, the as publicly the these please year of in Risk as recent forward-looking full filings, today, company's most except to for our SEC These section are

on be are of performance will accordance we of turn discussing financial GAAP. These prepared financial to nearest measures. substitute items measures Investor a is Amit. reconciliation can A U.S. GAAP available addition Additionally, in not with website. found afternoon’s Relations release the to call the and over slide my presentation in be financial for pleasure non-GAAP press measures these in It our certain to non-GAAP this and measure Informatica’s to

Amit Walia

year-over-year. strengthened beat being XX% with subscription growth today. But to our year-over-year cash begin that end and recurring Victoria, year-over-year being pleased you, guidance the end the was results non-GAAP of of high me growth good afternoon, ARR and joining everyone, let growth thank exceeded for operating our us you saying Well, are QX revenue thank that revenue and X% by Total deliver position and very we cloud We guidance. income. high XX% for annual

shift for continue the cloud. year, few end from this Our observe in the growth IDMC enterprise on we the mix software subscription we ARR are to and engine billion expected to can running by And track mission-critical importantly, $X milestone companies new workloads, existing achieve. is self-managed a and platform deliver customers of to

reiterating non-GAAP We full guidance metrics income. operating also our for year and ARR all are XXXX

lowering slightly headwinds. reflect however, to foreign are, exchange revenue total guidance We

insights Now and second let and second QX me financial share hand the the year the call observations full of provide for recap results to before to quarter business the Eric on over then half and I QX guidance. year

In product Now, how R&D prioritized strategic and talked partnerships. conference I year, we called to hosted annual our innovation about have we May our workloads cloud-first investments World. previously this through have accelerate Informatica customer

go and greater investment many in business with management I'll Our unveiled across to of functions expansion; platform. all three Thousands the and and theme around new customers We attended strategic executive from was strong I'll and around realize frame context, a customers personas comments strategic capabilities is To the your engagement priorities focus. strategic globe. broad today IT including to provide their innovation; help range product person further finally, levels, of and data. with our and begin user of detail data virtually, I'll my partnership value go-to-market. then data out and levels industry-leading partners

innovation. begin So, let me with product

across our accelerating build and been have digital intelligent to to their We journeys. customer transformation four pace drive distinct innovation meet enterprise our of needs data

departmental data management analytics, journey, launched data for with the simplifying first where We called are Data Loader workload and to begin democratizing we simplify execution. new me users. product Let a engineering

BigQuery, to minutes. to experience Snowflake users from simple for across the now an Loader move is offering Our zero help Data data is in insights available cost, X-click no zero Data code, zero that will DevOps Google SaaS a and infrastructure-required organization and departmental Databricks. Loader's

INFACore, single of turning simple allowing into environment. preview framework, a We development a within of their code users data pipes which thousands data for announced by of data a any development function, and integrated simplifies lines plug-in any source private science to composing and also transform from prepare consume,

our XXX apps. journey, Business customer MDM Now turning to and second

Business the are product We our and apps from software-as-a-service a expanded enables collaboration for customer, XXX version business a data data context, with we SaaS share In combine Data a to of our Informatica's record the of Azure. help and suppliers drive Microsoft products. be announced that and a Azure hundreds easily a accelerating single AI and uses of into rationalize, that truth for to supplier investment August. Master version in prebuilt spans and multidomain and Azure that insights. Informatica's ML customers overlapping, SaaS data sources long-standing customers of Microsoft in customers, of generally related MDM Management from conflicting provides Marketplace purchase golden foundation Azure create data and will version available truth MDM that on across

map multi-tenant completed road IDMC on offering. all this that. of multi-tenant product available have SaaS now we MDM, With our native excited about our with as products platform the I'm addition

with applications, our improve product onboarding We Supplier and relevant, clustered, data. risk; reduce to collaboration multi-tenant to efficiently speed purpose-built suppliers, cloud-native, MDM two of Product and acquire, also publish enriched additional and the XXX manage expanded XXX up

metadata and journey, integrated data predictive marketplace and find, cloud data data catalog, privacy, Now data cloud-native governance and empowering needed users to data we powered customer use to all deep with We expanded understand, capabilities governance, enabling cases. with data intelligence, quality access Microsoft's BI. skills and where data broad turning the intelligence the the capabilities trust in data all third are Power for of governance by

on partnership integration announced Informatica's service. Snowflake data deeper our Snowflake and cloud collaborate the governance and of catalog expansion to between with We also

with active more where for the one-stop related can customer on API of enable give And to box connecting It and to trusted business minutes treat delivered fourth business shop with remains you single our is our fast, APIs. It in of secure highlights view XX% added have expansion as data nearly June we per our integrated, apps X Microsoft governed critical scanners IDMC Center their organizations potential detect and provides and quality global of our month of and even monitor, of brand-new the Within that And app is Salesforce, capabilities retire We solutions provides AI a issues an we more at dependable suite and API automated and lastly, transactions sequentially. XX usability. SAP along that unparalleled out our processing leveraging customers deploy, automatically to hard as terabytes replicate processes. increase operates to end-to-end hyperautomation, an serve trillion to and all context, database. ecosystems. significant to and breadth are simple, a a of create, IDMC We quality deeper mission-critical that the of detection, in deliver that metadata-aware that penetration IDMC and to continued data even customers APIs powered elements drive an base XX,XXX mission-critical Center is within announced and which cloud journey, new data our which data integration suite by integrated a data our transparency productivity, is by solutions to platform engine, XXXX, these cloud. more anomaly some a that, workloads. connections generate of and over are ever-increasing as the automate that very scale, XX% process to Informatica's CLAIRE, address XX.X leveraging approximately we The metadata platform data enterprise API intelligent into integrating other platform also for users. auto are APIs doubled, through domains. automation delivering data with our year-over-year And best-in-breed PII enabling reliably of identify and for classifications Azure

Informatica priority, me striving turn with enterprise as we and easiest within do let where with together ecosystem. Switzerland business make next to the to win partners the to the we Now of data are our are being our to

Informatica including about CEO at Thomas Guthrie, Cloud; Andy all Informatica Garman, strategic + talked World. Google marquee SVP, Kurian, from our marquee of -- Sales Oracle; EVP, Matt and these World digital-first ecosystem Azure; I from Marketing and I'm we're Group featured of leaders Adam Mendelsohn, partners, speaker Snowflake; our Now customers AI helping participation Cloud customer deeply Products build Scott industry have and Kleinerman, data how economy. Christian at Conway, prestigious Databricks. honored Products intelligent to in an at SVP, SVP, a enterprise from share competitive together AWS; insights on EVP stay

continue Databricks Cloud, management global and for GCP the data marketplace become a Microsoft, cataloging In modern And the new Summit, these partners its FullStride improvements Oracle. share INFACore excellent build was and application Alliance, private GCP technologies. strategic SQL, Oracle. of companies, as by in AWS, life Oracle and a also partner Powered KPMG sciences, more Oracle. now mentioned Several native data with a data Data more KPMG as were partner applications Summit, to Snowflake Modern recently analytics has Data data And Snowflake's with we and offerings: Informatica important cloud Platform At industry Snowflake's which group premier two launched and Migration. more expanded partnership new and enterprise data Services announced that platform partnership significant program KPMG Data we XXX% partners, of that for Informatica quarter, ecosystem and to the management and developer established traction Enterprise maintenance for Data warehouses data Oracle IDMC a new financial most innovation. the we very all competencies over now and libraries customer second accessible integration data extension Cloud And drive in year-over-year I awarded regional expanded the alongside platform the of to finally, to Cloud care Snowflake-native Google With lake centers integrator partners and infrastructure. a with of Databricks' wins collaboration data number and houses turning factories, plus At including joint and continue to governance via to Wipro's We partner Cloud KPMG, on AWS, have Databricks, Informatica this enterprise with for on to adoption Databricks key cloud joined volume services moving to tripled the providers, indicating widely customers the IDMC announced of boutique we as Informatica context, created major joined Informatica to In preview has and also year-over-year, earlier, framework. highlighted access health for cloud system we in expanded several and new to for available we were Beyond and ecosystem by data support partners data cloud. a their focuses -- integrator governance our of And reflective making quality on-prem framework, we announcement grew in transaction workloads named partners to partner the their preferred notebooks. World, continue Azure, AI system excellence advanced attract to industries. including partners. the co-sell with key migrations. in Infosys access continue the global supporting make integrator our solutions. our in we support our where now and that, migration stellar partnership,

that As ARR to X- from to once lag and ARR maintenance completed. it cloud before, approximately implementation XX-month said you an is convert all I've to know has

ongoing by at the our Our scale. product-led differentiated cloud recognized and marketplace IDMC, technology widely global to innovation reflects platform, been a commitment has delivering

market top Informatica second-largest event than TIBCO platforms We our to named vendors Forrester the categories IBM, in recently, one greater were report. Catalog in Wave's SAP. Enterprise as and QX the XXXX stream MDM. a Confluent, Data leader turning with recognized are We've of Choice been Enterprise more Gartner Peer named Data for finally, of share go-to-market And We the worldwide for And Insights XXXX. once Fabric in Customer as a named DataOps being both Software to again processing AG, proud XXXX motion. also vendor Gartner sales and

the by year-over-year XX% than number to in customer that remain increased customers $X spending strong more customers. subscription ARR very of Our highlighted relationships XXX as million

Additionally, customers increased ARR more spending to $XXX,XXX X,XXX XX% year-over-year customers. than subscription in

Fin deeper Healthcare IDMC and Shield customer like Serv, Blue Life this Our for increasing focus year, announced York for customers City to Earlier on we well with and launched New of customers More we is vertical Management, City Bank for leading as as Cross Retail. discussions. Sciences and of Freddie Hospitals and launched and Services, Montreal Blue recently, Mac. with IDMC Wealth RBC IDMC Health industries Kansas Financial like

relevant more We cases. take and make continue it platform enterprises, to the industries to and use

of to master Let innovation, single-product assets improving leading maintaining purchased bank integration, Azure the view in Customer assets our a view data Paris part advantage to a cloud create Guaranz, their IDMC vendors, SaaS Azure architecture me the quality, mutual of based own and HDFC's API their Informatica's with company, Informatica platform, cap, to Bank, Informatica's employees. create In market management, digital you capabilities chose data operational and members several Quality examples data our their platform, full insurance XXX,XXX global XXth team will data by Norwegian excellence allowing cruise them Microsoft into X.X trusted with them governance digital sat, to give for the private billion on customers company transformation. and sector by in replacing chose a under its partner MDM management. XXX customers. of their wins. a be XXX Lines, customer the EUR to and including some XXX-degree largest all single Data HDFC customer own a to world's HDFC's largest and Cruise bank help as of support take transformation trusted and deployed management, France, Customer drive

with see Another Dhabi includes leveraged coordinated digital in multiyear a looking across processes, is entire demonstrate to Group. company first and cloud. co-win very towards single enable program, cloud a helping cloud modernization example and also a Snowflake business a data-driven transformation the a our with of common platform. Ports customers and PowerCenter data for our to which is true pleased the great leverage Group. their to to modernize one a all data strategic of data on relationship units We mentality partner culture. platform as journey investments leverage in Dhabi data We're deep Abu of Ports Abu undergoing looking to and technology platform Group Volvo. a The people, They're Cognizant to enterprise was and its management plan all to solution of Volvo embark to support IDMC management jointly customers

customer partner strong ecosystem. I execute recognized as leader are delivered as we and summary, to which TAM an outstanding step an reflect of So our innings back, growing expanded base fit, this and loyal a in results, product market QX industry consistently with in in and $XX our billion early we ability which strategic

continuing workloads. solutions digital relevance on Our cloud momentum best-of-breed I transformation needs. cloud data to IDMC believe mission-critical remains platform strong, Informatica's and resilience we our process are offer and customers' to delivering

We positive are managing for durable growth, continued the business cash flow and long-term profitability.

all now guidance we though for half Eric? of shareholders year, the first and And call customers, the to and think year. me let ahead even prudent you partners about over to the as Lastly, continue half remain we support. the full on ARR their for Thank employees, we Eric. turn second are to the our profitability for that, with metrics and

Eric Brown

the metrics delivered a cloud mission-critical everyone. healthy platform million good and income across workloads. Demand with afternoon, guidance the by beat ARR strong XX% high non-GAAP lower operating growing We and guidance quarter and total of revenue year-over-year. revenue IDMC at remained we for you, as total all process Amit, end higher spending. We of Thank strength $XX on ARR and exceeded

the for uncertain we to of the are a mentioned, are taking prudent balance Amit guidance approach As year. the macro environment mindful and of

commentary for provide the before me balance on expectations Let results XXXX. QX discussing of

the We $XX guidance. ARR, in And of second cloud the in performance to we year. results. in quarter high we was XX% ARR increase strong, quarter end second the versus once exceeding Total expected represents the prior $XXX over $X.X an XXXX. total on million added prior cloud ARR of the total new this sequentially, second the net of to versus to Cloud XXXX $XXX now year-over-year. year. increased in ARR year. X million billion. increasing total ARR quarter first QX in of And XX% XX% of again to $XXX remain deliver million Cloud net billion in net year-over-year ARR and ARR new Turning track points added year-over-year the percentage We $X.XX ARR new in versus million quarter added

the We shift to from continue self-managed to see mix cloud. sales a

customer ARR added mix of the of year, last Turning an high year. new in as of subscription XX% to million, customer to year-over-year. to net We This billion ARR growth approximately and year-over-year XX% The $XX subscription for the And new. track above ARR subscription XX% to on driven rate grew $X compared recurring net $XXX subscription XX% guidance a subscription customers ARR. we is quarter new subscription increased per of XXX%, total active now subscription increase the XX% nearly renewal The quarter million revenue $XXX an subscription the versus importantly, second the year-over-year of and in on XX% And average sequentially. our X,XXX our subscription increase in full $XXX,XXX, in to cloud. second was ARR annual in by end customers. remain of including improvements base year. flat net deliver million rates, prior retention subscription are

bookings sizes the of fluctuations metric initial large the to mentioned, of we new customers from expect new year. previously this expanding versus As deal customers the due in timing see to existing and in mix first

was year-over-year. lastly, were out $XXX expect a XXX% renewal subscription and we long net to better finished strong ARR with We the term only rate million percentage cloud point as year-over-year than that continue X% up one down at retention business. And we maintenance build expected rates

ARR in a As will reduced favor in gradual we and of licenses decline this a time. result sales cloud of have maintenance in perpetual over significantly naturally reminder, offerings,

revenue, foreign end million revenue the of year-over-year self-managed XX% and as of upside to $XXX by year revenue. Turning year-over-year GAAP stronger from and X% Subscription IDMC. guidance above recognition, to Subscription partially We ago an million. represented total demand XX% high increase due revenue revenue million exchange. for delivered to a XX% revenue reflects offset in total $XXX increased $X to compared of subscription customer

revenue. point operations. and Our of one percentage professional up were revenue. million total revenue $XXX total subscription of platform a of XX% total XX% make XX% mission-critical and based total XX%, our revenue million, customer was the to X% up represented on the ago with grew year-over-year as of total remains representing representing million, revenues. revenue fluctuates demonstrates IDMC U.S. in of representing services line maintenance of Stand-alone Consulting difference business from X% renewal to revenue customers' requirements, revenue rate of education and revenue part at year-over-year quarter. grew a XX% revenues. the the year in resilience International expectations represented Maintenance and XX% $XXX $XXX

to that our we about they how choose launched It's turning our featuring also years as pricing consumption-based our Recall X.X IPUs Now consumption-based Units, any Processing seamlessly since use cloud services. to and and dynamically pricing. solutions customers model, Informatica allow known IPUs. been of

IPUs double indicating IPU-based, new represented our Approximately roughly of bookings ARR, to XX% healthy were year approximately cloud As a compared cloud offering. a of ago. of XX% of QX, this momentum

Before the QX, quarter and the is I non-GAAP to Gross profitability XX% discussing notwithstanding shift will results moving out second for our otherwise unless point to that similar stated. to like cloud. mix I'd to metrics, be margin

For our support in expenses, travel and we marketing to event. QX an World operating Informatica expenses observed increase

year. second the out half to the Looking of

based in greatest slowed to opportunity EBITDA $XX per high cloud strategic reduced of the was $XX and shares was income our expansion. above $X.XX income the approximately a was ended shares. on $XX XXX XXX diluted in count net spending. cash million by approximately million of with Net strong and in a This The Net acceleration, optimizing trailing basic XX-month We net Adjusted revenue adjusted innovation and second outstanding. million. resulted debt Operating investments ratio $X.X of of the and of due billion position and areas share and was exceeded was million rate diluted and short-term quarter $XX million for we expectations X.Xx. higher with We $XXX very for product share new was end have spending million partnership net EBITDA cash investments hiring, of million. $XXX leverage income the are guidance million.

$XX Xx primary than delever and due cash naturally year We end after flow of business expect the to reasons. Xx end $XX then approximately the to lower XXXX. of million expectations and below million free the tax by to approximately two Unlevered our by to this was

portion First, tax we higher-than-expected had of a a payments million cash outflow timing-related. is from $XX cash in which QX,

saw $XX adverse our increase year. million also cash was QX We compared in slight operating summarizes GAAP QX. last in million day outstanding, flow resulted in to results. for $XX which capital sales a working a QX This

guidance. Now let me to turn

growth the continue improving. approximately to renewal the healthy high rates lines from cloud feel We the achieving ARR predictable durable cloud margins. confident for in the our We underfunded shift revenue about gross XX% are of full and good remain subscription growth mix year business, and and our cloud the as continues, stream, to self-managed

year, While first balance of the we beat the flowing the through prudent subscription we given the the results not did with approach in half year keeping macro cloud of see environment. our better-than-expected current are in ARR and the

for Now guidance. year full

XXXX Looking guidance. at year full the

ending as We are for XXXX, reiterating the guidance XX, December year follows.

approximately the ARR midpoint $X.XX of billion, in the total the at billion XX% representing of to $X.XX growth expect year-over-year We range range.

range XX% growth We the at representing ARR million midpoint range. the $X.XX of $XXX expect subscription billion, the approximately to year-over-year of in

midpoint in range. the XX% cloud the of million of expect growth range representing the We year-over-year $XXX approximately at million, ARR to $XXX

We income expect $XXX of range million. the non-GAAP operating $XXX to in million

to the guidance headwinds updating in stronger dollar. year revenue At $XX We billion be reducing billion. $X.XX currency we revenue are the approximately to GAAP a million full $X.XX a of by due total are U.S. range midpoint, from to approximately XXXX total

rates exchange income. our do affect operating foreign Now

ARR operating guidance and considerable expenses as holding our operating control a since natural business. renewals Net, income are a unchanged spending we non-GAAP overall is mitigated denominated amount currency our the However, serving foreign further in full impact offset. we we our optimize as have of year

as flow to $XXX our see in customers unlevered are in are be year payments, increase some a of Most delay to in variance a quarters we $XXX loaded We is working guidance terms of million are we overall free bookings, starting midpoint, slight cash more $XX are XXXX creating the bit flow DSOs. by of full to this million. the range cash back-end unlevered and free lowering our the after-tax capital-related At million. updating

We expect these the trends second the to half in of continue year.

addition, account, In additional expecting September Taking more taxes $XX we this into guidance $X all as we're to million this establishing of QX year. are million XX, ending cash XXXX, for follows. the quarter

ARR We of $XXX million range midpoint to of the year-over-year XX% growth $XXX the approximately range. million, expect subscription in at representing the

expect midpoint in million $XXX the range $XX the million. the representing growth $XXX we And of XX% operating expect We million of approximately to cloud $XX ARR non-GAAP year-over-year range. at million, income the to of range in

QX impact be We range of the $XXX exchange the year-over-year the million, foreign We income We of QX $XX total $XXX rate net and range. expect estimate to the growth tax in million midpoint of non-GAAP of representing revenues reported around to XX%. GAAP non-GAAP X% at a approximately million.

For non-GAAP well. rate a the year, XX% as we full tax estimate

and Looking to XXXX fiscal beyond.

long-term We expect cash XX%, reflects geographic and based operational taxes continue structure where to activity. the tax settle rate on steady-state to distribution of non-GAAP we which of expect a

million. to purposes, be For cash unlevered flow approximately we free modeling $XX estimate QX

shares average third basic the of million outstanding XXX shares. be to outstanding we expect XXXX, weighted be average approximately shares to diluted for million shares weighted approximately Additionally, quarter and XXX

be XXX XXXX, the outstanding weighted began achieve million shares operating million midpoint to subscription of outstanding and with and average year the closing, year-over-year grow XX% we shares For diluted approximately be average to an basic shares to to million this cloud expect we year approximately XXX million, in of In at weighted shares. $XXX non-GAAP range. the billion by objective ARR $XXX ARR $X income approximately full

of track on operator, we the metrics. Thank questions. for these these may are meet our full you. line And year first and are half objectives you through reiterating open for guidance the now the year, to We

Operator

from with Matt question Hedberg The the first RBC of is Markets. line Instructions] Capital [Operator

Matt Hedberg

And results. a great difficult operating Really obviously, it's environment.

cycles, Is that ARR strong by maintaining buying you noted the and approvals maintaining nature? of Have what, in elongation you're at you're we're that You that -- just certainly level prudence any XQ. here, month seen a extra could guidance, a increasing changes some with it happen seems conservatism of or like that results expectation guess something or That's anything any prudent. point? which I into not like

Amit Walia

good to you. to talk Matt,

throughout last I think couple we’ve can use of maintaining I if so as I’ll a word. we talked you I I months, a going and of the much uncertain looking I that of prudency, we’re course at think on, know. the of with Look, macro sense all think are that think repeat all

be how and thing we’ve we serve. what could think we terms thing and half right the about right and to pretty But the into and a guide that momentum look, walk be prudent see do -- to do see workloads our the to the is I just So thoughtful and half, what I for world year up. for is be keeping had the second think shapes first by market us good we obviously the in of what offer to

Eric Brown

And saw third about terms a net change Matt, given question, we're purchasing month others... in the and first of QX quarter, in towards returns, to versus in month into the of your no response the what there's end we

Matt Hedberg

the of of are you’re to how slowdown. just if -- in There how lot that. on from all of anecdotes sort questions of and an Yes. And consumption, success. models trend curious really you you consumption seems in it’s I sense we’re might interested it the progress. economic about expanding traction that lot have then too, trend, for think like investors, to IPU might That’s a perhaps a see on continue but hear. Any your great any sort an And base? Obviously, that

Eric Brown

asking. for Thanks Yes.

ago, mix So of nearly look in balance XX% we were of of now IPUs. first comprised right ending ARR at cloud year being seeing business cloud cloud QX, new our of our shift if We're IPU-denominated. XX% business. new IPUs that. great I as in we're now, XX% roughly a A all, net denominated And

to continue there's to So And push it. the uptake in offer. going to great we're regards

a XX be offering. XX-XX here. to that first anniversary the to the the we of term kind into would at the And ago. over the expect years kind mix terms of will of patterns, X-year of we’re near like X.X X We years product in up we’re We’ll read cohort usage kind of about months. quarters. on give about kind in better of two again, first in And back their And as customers about kind launch a scale us seeing of X.X see

Operator

is question of the Bora from line Pinjalim next with JPMorgan. The

Pinjalim Bora

the on Congrats mind is bit want I that since top I guess to more. little macro of everybody, thread a needle for quarter.

did talk seeing anything of kind I'm strength you would pipeline. characterize trying as hiring slowing second about you're half? down to in the of enter of quality You the the the the and How strength Is -- you if understand -- pipeline well. as

Amit Walia

No. Thanks Pinjalim. for the question,

break think into I X. and terms I'll in it --

I our I And very remains in CEOs, basically Europe We transformation, So high last of terms When their be met Informatica very demand for those World. in think of priority. on conversations continuing and I a robust. the had digital week in pipeline top was creation that lake context, data healthy. are and had transformation of digital to bunch

these are having conversations. We

uncertain be rate. elongated. is are customers, of the There pipe see time pipe. more scrutiny of translated more are economy of naturally, pockets Quite you and of more more facing not on of that where think that a There will who the the scrutiny. like environment current deals to get I macro pockets deals, this. conversion customers other than probably in impact is course, there It's

rate, surprise And increase, that's world the think, current a pipe would strong interest. see. And not say, is So we pretty general, deal cycles given in increase. healthy in But where environment. I look, scrutinies that's what I the

Pinjalim Bora

Yes, understood.

Just be the or -- to you’re this you at see the deal deferrals. But anything? not of things that, cycles deal seeing so lengthening certain, understand point, might I

Amit Walia

nothing the I of Well, think ordinary. out

in make macro the maniacally half the close we overdelivered execute that's prudence the things the executing, that We first see sure our carrying to half. ARR year again, half like play we that half. same in Eric guidance year. And in for way keeping but assuming guidance those very as We're to gave. on the a the reflected of may full You where our in are for second to our the were the the we eyes in continue first out of environment first Obviously holding metrics. this. We ground did kind obviously

Pinjalim Bora

$XX Got is is it. revenue, -- little Or versus a quick bit mix And saying FX? FX. second The there half? in in Is million, conservatism a Eric. reduction it’s from think shift it to XXX% the the I you’re follow-up

Eric Brown

FX the from seen second that of we XXX% first nearly observed more being versus in half what the half. with in It's

Operator

The next Alex question is from the line with Research. Zukin of Wolfe

Strecker Backe

the in modelling Is customers to for more? handful This Alex. that us that on it the payments. specific year? how it some that forward customers? delay then for own on Can regions? going into is Eric, were there you of trying just your mentioned half are Strecker specific you And Is you back a just of elaborate coming of factoring out

Eric Brown

Yes. last a Sure. we good you flow operating really -- know, and on as overperformance working capital. cash year, We had

year. a our of we're increase observed end delaying the didn't DSOs. we finely customers of X-day We're -- our elevated payments in had were all the we quarter, X-day to this expecting of in of we really level of payments. tuned DSO what the to QX is DSOs at persist get those more We Net, last sequentially. end slightly customers, saw that select in were week there in new as And the major the quarter. of And geos, So expecting customers them.

we $XX the That's as now the end so rough That's million year. of extra four to of tough, working right of and of the And numbers, DSOs. thinking run adverse what an around days capital. we're when

so level And QX. we're slightly in on in assuming saw that the elevated we what summary is based

Operator

of question of is next Bank the with The America. from Koji Ikeda line

Koji Ikeda

appreciate follow payments, of the I just and that. I there. on up kind question the in wanted wanted to on to that previous kind color fully Eric, of delay understand just

just could future? the cash affect future, been about that delay this the thinking So Or payments, now? just further thinking how unlevered flow isolated in free in about potentially has the

Eric Brown

Yes. event. would as transient kind This I of is a what characterize

late, directly case, did say. of the trying let's it in crosses our as your kind People week I seen that in just past these a by are If macroeconomic in things impacts think paying it the manage kind slowdowns. we've to that of stats. -- quarter,

we're persists and we're the is that assuming elevation flow. to modification current slight So what level QX throughout here hence, the the that at, a QX free and our unlevered cash

unlevered of million. year thing cash higher outflow is flow payment $X impacting $XX to million a other The full free tax cash

things minus two those cash year. the the full driving million unlevered are on $XX flow the So for free

Amit Walia

to one the Koji, serve we is Eric mean, -- what remember, add segment. said thing enterprise I true that I’ll

are customers all Our customers talk we the about. of

a customers crosses shape we Eric They globe. long-standing at as -- are is said. form. any think across the have transient duration or thing, way, We I in this as blue-chip a and I So the look that customers, don’t understand think this been These anything longer them.

Eric Brown

of profile. drill one down there, seen Yes. And in level no just more debt Koji, bad we've kind to change

are of change kind across as outlook to credit these our So customer delays simply a profile a opposed bit of base. in

Koji Ikeda

it. Got I one And may. follow-up here, Got just it. if

pretty cloud thinking I from new pretty QX sequential through net the the good, it here, ARR run like it about Just if add, looks guidance sequential basis. a the healthy like looks ARR it add cloud implied subscription model,

seasonal enterprise to just in but sales confidence So renewal here, you just curious I understand cycle has of kind what and given the that strength. the really seasonality hear

net the margin. QX a ARR big If new by that be sequential guidance, you that highest here achieve pretty would

Amit Walia

to mission-critical on numbers not I'll be still as focused I'll the Look, I well. are break again go I'll into workloads. going We And let digital X. Eric candid, like enterprises and to away. it transformation. serve That's add think

about taken the half, we in scrutiny. data deals invest derisk at and the we see can Given to us a second Obviously, guidance. of to prudent people the have continue uncertain has sure day, carry end happen, can overachievement customer to be discussions. half have talked gives the or governance that, whole with first, elongate, first their healthy ability that year the our there the more that digital yes, first But made macro, in to and we business a way, and making

the ones I with or I having Europe last was -- in I before week absolutely now. was week customers, we’re the are forget explaining, conversations last. as our So

I All to by you sure do my make the conversations of customer, I I’m How the And in better, is I help better can are a happening data success sure across my board. world. want conversations the were numbers? I how how customers how -- customer do good? understand quality add Eric, analytics. multi-cloud make do to Those around do get I

Eric Brown

a versus new Yes. And assume And too, see course change the towards net guidance. midway net mentioned of the informs we view that's other point implied this this quarter-by-quarter QX year, the We new improvement of thing, NRR kind over in cloud rate self-managed. in versus what [ph] part and improvement cloud, significant remix the pipeline the and business can sequentially cloud year at QX And on we in steady self-managed mix the sequentially a on QX of our call of change the too. business. of the

noted self-managed in improvement too, thing, ending year-over-year that And renewals. had renewal the I in cloud, renewals. nice is rate also our point nice two and better rates a cloud improve rates, subscription we've second overall a percentage tell renewal that increase do inside year-over-year is seen The in and your improvement. renewal There's that. you or to can way on We one cloud to balances another

outlook and So for certainly that the helps QX. QX cloud ARR

Operator

Citi. from line question is Tyler next of with The Radke the

Tyler Radke

Can you me hear okay?

Amit Walia

Tyler. Yes,

Tyler Radke

see how And under you’re number if as you’re about in more that could heard adapting scrutiny products to solutions. or customers of an to curious supporting the seeing wanted a from niche budgets overall benefiting I’m macro increased are comment on point that. consolidating We’ve if terms you from platforms just and talk appetite just environment and and companies I of consolidations. maybe

Amit Walia

Yes.

I of platform think one where look advantage platform lets the products Quadrants, see best-of-breed platform whole to unique and there seamlessly of consumption you IPU-based very can are our two integrated. Number on all a at fits is in a reference And is that to it. the have any multi-cloud customers' model very strategy open is absolutely, environment. products, Number into three and service a customers are any platform in very from Magic a single start the the microservices-driven number we ways having three, the go as architecture incremental easily. the service

struggling just cases use final to a where but money those spend and things of are out allowing to them use only expand point also to get take us All to are multiple not customers integrating providers case. the

this. see in we across So benefits board, like the an environment those especially

Tyler Radke

in or cloud having their seen Great. customers, map the And as these increase on-premise Just are you’re this their migration you’ve overall just conversation they’re customers? as of to cloud prioritization them with in just overall the year? terms seeing any the the shift update, versus for just decrease road your thinking change cloud in of terms you about that

Amit Walia

be to No change, honest.

change general, quarter than or we what saw of last quarter see before in in think, I we the migrations. terms no

our that, on focused absolutely still of say help majority customers I'll -- focus, net the with call, workloads. percentage tremendous our area The of can Migration area in of overall we think it is every said And we’ve you through every is we I look, we've as go a ARR. new think we cloud in offerings. continued a our small having I those always always are when to grow we look are cloud our which business, at to conversations.

it’s lag Of course, have migrate cloud. the takes a of to takes a months. in change couple last But that we in been while from It them to because, having workload. conversations operational those the no obviously, an what

Operator

the with from is Bank. question next of line Brad The Zelnick Deutsche

Unidentified Analyst

sort are if there that Or you the cloud color? out I Brad. into of to framework, strength? Is I Any contribution you some for that mean, dig product on wanted around particular module parts just portfolio portfolio Jamie be provide the anything would outperforming? It's can call of could adoption. great. any

Amit Walia

like participation of of a of our take that, from MDM it’s me It’s love it's that it's workload. an the kind like to you in workload. be MDM see the -- I was to breadth is you or that's needed example, data governance. We of platform of And quality, be It’s in asking whether pretty and It's you data kids can analytics, portfolio on needed and whether governance customer an equally Jamie. like of the more. it's workload. my strong -- Actually, honest, platform. data needed Sure, the candid, I think which analytics -- kind I apps talking something in beauty about a

of So have we quite participated them use in it those all cases, quite use context cases, of of well, think and healthily.

customers, time the hedge traverse we natural customers any in office that is the those back we and office that our traverse thing churn, And other the like fact, point many we a gives we use have the note helping investment way full cases business, use company. enterprise. our cases from obviously wherever all because the us at cases, get that that doing go. dollars with a supply the can serve the new analytics front In understand to of to managing Whether use within chain, it’s given

board, the across So pretty it’s participation good Jamie.

Operator

Fred line with The from next the is Macquarie. question Havemeyer of

FredHavemeyer

Informatica Loader cloud. I the Data natively was workflows. wanted in the that workloads supporting machine seeing the recall first you’re and in back ML and around World artificial and just to cloud with intelligence at AI learning I momentum begin that

recently, talk public So workloads any of in momentum ML recall could companies cloud in the cloud of their to initial businesses. importance that you’re the traction cloud their talking number AI the about of seeing you there? hearing sort about and companies, I Particularly, a

color what some and So would love context you’ve seen.

Amit Walia

Fred. Sure,

I it parts. I'll break think, again, into two

we levers all, AI build big of and in First ML.

started back fact, we CLAIRE In XXXX, XXXX. in

first CLAIRE, So our engine, AI every is product. all, embedded of in

in human automation, many a and I talked data basically then more things -- cannot that about, So CLAIRE rules whether anomaly detection. finds quality, and it's intelligence and providing are you goes naturally like find. There's

running more of on helping just of world XX CLAIRE metadata. the metadata. terabytes So multi-tenant it's driving And context it's a It's are and that in value customers getting more. existing scaling products, and leverage already today, our cloud we smarter, in

context Loader. in early launched question. me the Data the days, you asked Secondly, we the of Data Loader, Indeed,

realize are or or -- sure I talked there we There, bring of even expect clicks and Databricks make user the strategy three usage. excited. jobs is it make user to We We're that business it there but or that these things about goal to. expectations. integration experience. talked in we're attempt And days early come. obviously, that easy and more matter those all business doing not complex pretty our great simplified complex they're does and BigQuery, That's our tracking IT traction. -- used user there exceeded make user the it a Our data dramatically a our is about a doing such it's to Snowflake that to early days, been the

FredHavemeyer

Informatica and And vertical-specific just then in across here also -- with I'd vertical -- health back as your IDMC you World, updates solutions to just love highlighted go-to-market? ask, broadly, with strategy believe provide question care, announced you you ask I and more industry-specific progress to about a that more. follow-up could then, financial I solutions think any and specific wanted life your services, I sciences verticalized

Amit Walia

a question. it's No, terrific Yes.

goal or types or sciences are governance of get health say, whether look, regulations the our there we make data way sure software customized many when want we bring versus business the all do not that But not is types application we're they -- them. verticalize industry-specific, the quality, we are to That's or financial verticalization to sure we up -- So think company play. inherently for the is UX. way to data versus like to life that about things that care are retail, we UI data an and let's more services versus you make they things could it's where of

That’s for to spend them? reduces particular for the it and amount accelerates time So to of they what projects industry to people does get their to the them customize to going done what value, have and it Reduces needs. to do their we’re expenses expect And IDMC we for course to that for us do, more do verticals connectors, and more whether the take as more use cases. to more continue to industry-specific over continue rules, and more to of and these time models. scanners, it’s verticals AI that

Operator

line Fargo. is Nowinski The Wells from of Andrew next the with question

Andrew Nowinski

you if now, presumably revenue longer-term you lower outlook solution just then I more international in for your slowdown guess, But you were customers? I a I in question FX the again. is FX headwinds force international appreciate had Europe. from a on factor expensive to customers in spending also and did

Eric Brown

No. recap is This FX, in. I really mention we Eric. quarter. just days We're didn't first to FX the change mean XX the in in

to XX% us, It's dollar Here it's and we that stronger functional going are remain for currencies clear halfway the to I it kind has at is year-over-year. the U.S. it's of strong. currency It's plus mean our XX% that very matter. -- the point, strengthened.

that translation change want we $XX do we're a with large in in impact. And non-U.S. million operating is the rather to has is expenses. to FX thing So unique like the in that very nothing dollar-denominated international. out that I demand It other amount point have simply of in a

because give rupee, And so euro, FX we us our with have offset. U.S. a hedge et that built-in from India strong natural cetera, natural expenses dollar the

we're the so line to full we're bottom offset, the income changing for line net absorb for that, we're And and holding op And notwithstanding constant top non-GAAP year. the able impact that OpEx only. FX with

just so as that And to make on FX I well. point wanted

Andrew Nowinski

maybe any guess, well even as to well? provide how Okay, through you follow If geographically, in I was could Europe demand on got last can that. of up it. month I as that, as the If quarter color just July

Amit Walia

of – for ordinary that in I saw the in Europe are think degradation or pretty we Nothing us. mean any be I demand see don’t Europe honest. all. seeing, We we at performed to so fine out

Eric Brown

revenue line X% with adjusted would If XX% Maybe too, much international FX have pretty in talked we had of growth up clarify, been that at being U.S. it we XX%, year-over-year to QX. about rate, year-over-year. Yes. for revenue growth roughly

helps FX impact. that maybe the calibrate further So

Operator

pass questions CFO, at you. back no time. remarks. will this are for Eric it There Brown, to Thank closing I additional any

Eric Brown

operator. Great. you, Thank

a a as recap hit quickly So we the I’d midyear like point. bit to of do

of guidance midpoint. with non-GAAP XX% So first million $XXX at the full cloud by of all, $X end we subs year, opened billion ARR for in year the the XXXX of growth, operating income ARR

and as impact only top payment slightly ARR back full The as advantages is to $X.X cycles year due see of the QX. things flow the The the billion elongated free is of decrease of objectives of excellent, taxes. our higher We ahead to line-only cash of cash that our unlevered changing for scale these end discussed of of the is health and we evident. total in a and underlying FX are Amit, transient business customer in you.

Amit Walia

And Well, thanks, company. that, that customers, look, unique reiterate a cloud-native we look time, very has I'd and their from running platform. to workloads, I'll ability a year pretty on we're on customers that both great I once your observe workloads IDMC momentum Eric. Thank and And great quarter, that We've again, we next to profitability. always on mission-critical and mission-critical new and scaled, the second multi-tenant, to forward building given the current healthy for said platform. track us reiterate deliver enterprise half, a half out to we like the reported very remain the we a for commitments quarter. first growth reported for our you much full focus and

Operator

That concludes today's conference call.

You may your disconnect lines. now

Informatica (INFA) 31 Jul 222022 Q2 Earnings call transcript