INFA - Earnings call transcript Q1 2024

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Operator

Good afternoon, ladies and gentlemen. Thank you for joining today's Informatica First Quarter 2024 Earnings Conference Call. My name is Sierra, and I will be your moderator for today's call. [Operator Instructions]. It is now my pleasure to introduce your host, Victoria Hyde-Dunn, Vice President of Investor Relations. Please proceed.

Victoria Hyde-Dunn

you. Thank thank Informatica's and Earnings Quarter for Call. Conference you afternoon, First joining XXXX Good

are Chief Amit Mike today me Joining Walia, Financial McLaughlin, Executive Officer. Chief and Officer;

couple Before reminders. have begin, a we we of

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

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

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

about Factors For risks, XX-Q review our information the these more some the please for recent the of including full filings section most year and filing company's included SEC XX-K titled XXXX. Risk in

update are These statements, today, information forward-looking we law. or except based as of required publicly as revise on forward-looking by our assume statements and to no obligation

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

to it's to the that, Amit. turn With call pleasure over my

Amit Walia

for Well, key call I by you, points. joining summarizing Thank thank you, will Victoria. everyone, X today. us start today's

our profitability above our line we week, First, metrics cloud-only full our guidance we growth delivered year a are solid pre-announcement reaffirming last with and guidance. all executing strategy. In and first consumption-driven XXXX quarter, got we key midpoint

multi-cloud, our governance acquisition data industry's platform, of access our the year. on accelerated launched modern journey deliver data best on from management serving hybrid only solutions new product management, enterprises. of data the technology data innovation We AI-powered further last and we needs Privitar cloud management access based Informatica's a multi-vendor, Second, products to

plan As the on our CLAIRE IDMC AI platform. we world, into GPT, launch Informatica chat head to we generative interface

executing gen migration our drive creation. on cloud-only Day, ongoing cloud Investor transformation, cloud and X fuel growth are to engines, digital consumption-driven share we data-driven and as across AI we value to Third, strategy consistently long-term focused growth our on-premise our

these detail. more let's Now in discuss topics

to ARR billion, tax X% ARR total grew operating XX% $XXX to subscription Total XX% Subscription [ to million and $X.XX million. increased was $XXX $XXX $XXX Adjusted million. Turning million. free ] year-over-year billion. non-GAAP after year-over-year X% year-over-year increased ARR and results. quarter XX% cash $X.XX revenue to first Cloud flow year-over-year year-over-year to income to unlevered rose grew

increased [ XX% to Customers subscription a sales in We customers. partners growth has drove ARR which $X saw teams pipeline. net our year-over-year trailing reached supported came from new now the to that strong average customers, of in more million new Approximately our cloud our We spend opportunities increased GXK workloads ] expansions. with existing a and in cloud markets ] year-over-year. new workloads in [ XX% ARR and increase months through by and ARR healthy than XX subscription cloud XXX XX% customer, $XXX,XXX, per

in the companies that advantage. We closed quarter great expansion deals our and many highlight logos with new platform

consolidation Derby care health few. U.K. provider leading region undertaking of services me record across of Trust Midlands ] University the a share program. transformational and Innovation a part a Let [ UHDB, the of patient electronic Hospitals the of Burton, is

specifically data chosen connecting across a modules as critical will disparate data IDMC data choice. As plan cloud and cloud strategic governance, in cloud of this has play its role hospital network. sources data IDMC UHDB's its part of quality a integration initiative, UHDB

regulations to marketplace Dubai compliance and business, data to the central will experience. address recently covenants with the Islamic the Bank support They a data quality, is and customer reporting ensure large bank UAE. in which bank IDMC requirements, Islamic proper enhance data their purchased

and tires ensuring systems products, with premium globe. in them quality financial ] the in is operations and suppliers, support IDMC of leader sustainable global and chain inventory the and in the us solutions across information managing a partnering mobility to optimize data to supply their our [ Bridgestone, customer

are and the system data [ complexity only manages scale any ] any or well-cost any partner We, at type, data of Informatica, location. any of and patent, the that management data

continued Snowflake, with ecosystem ] our We as OCI, Davis MongoDB. Microsoft, GCP, co-selling partners AWS, such [ and

with workloads Google customer Google We workloads Text. a Cloud, with announcements platform from at and also new and data Cloud for simplify With Google data new accelerate high-quality and AI MDM trusted the and Vertex ]. BigQuery Informatica [ Look we and Gemini power gen use BigQuery GCP made AI announced Google to Snowflake of extension to with

on We controls. also With delivery Google announced Arabia. and with Cloud announced and comprehensive for expansion Snowflake's governance of Snowflake Snowflake, point a in native Horizon, privacy Saudi with we support new data a integration global

of one Snowflake's also partners partner launch were We Horizon's ecosystem. for Snowflake

market. Our GSI to solutions partners IDMC embedded with continue to data create

ingest [ version ESG recently and to multitude ] AI ] a of data hub built data-driven of and for Gen apps. an cloud Cam IDMC. a process data enterprise PCS a the data sustainability [ released of on smart provision business example, For launched types pipeline the range disparate retail-specific

The of last Our XX program batch that the training. its XX in and at complete year modernization partners training. our launched are partners program to been the join program X of with saw master end first the now continues data partner management on-demand approved to the migration taking power is have partners expand program. system modernization

remains Innovation at paramount Informatica.

AI-enabled also Along to management modern, net that on the new accessible users. with simplified options its me reporting empowered experience, visual discuss MDM deeper In and few hierarchies. a with and IDMC. insights complex self-service and are delivered updated enhanced important capabilities, user we product survivorship XXX very stewards data apps, experience Let new get of and business our innovations is a for

MRD support ] [ fabric [ data governance for server govern data BBX deeper new warehouse, ecosystem enables data to catalog host seamlessly Microsoft and ]. Cloud scanners and for and data OCI

SAP support BW, profiling SAP Azure Synapse Additional included accelerate product our Athena. Teradata, and is and also HANA, for

See we time safety help compliance policy-based governance the metadata down the with it in our data solution. with and the our data acquisition of data, with February, to mitigate of cloud last data regulations. on from launched been our In technology use based access the year Privata is ] reduce using privacy laws IDMC and misuse simplified cloud capabilities enhances with has automated July risk data enable [ to into and organizations takes are and data and integrated CAM catalog. sharing new management security classifications controls in associated that and that provision

cloud used data in conjunction consistently cloud the data products or that means accelerate IDMC hybrid related data cloud with self-service. integration with Integration of data protected platforms through marketplace assets delivery to all consumers with data data and to trusted and for the

modernization. Now turning to

to We XXX% months the on-prem of on-prem have We came starting $X cloud customer from is self-managed trailing percentage deals to XX closed migrations net maintenance grew cloud up ARR. and ARR which over modernization modernization in close of accelerate. as points X to XX Approximately which billion XX% year-over-year. new cloud are over cloud sequentially deals,

all adoption cross-sell more cross-selling in IDMC all over XX% are quarter. edition, of projects from Once allowing operational workloads enables center are the mission-critical yields, into of future. it upsell modernization stronger cloud power modernize, We last workloads. we up new which easily and XX% Modernization represented us seeing customer to

accelerate data largest a U.S. and plans customer investment modernization the Informatica to fiber-to-the-home Communications, their one story. and data The the expansion on-prem will great solution. enables of MDM pure-play with with to governance. IDMC, modernization This address of use providers ] data the including master their MDM customer is [ Frontier recent improve and in Informatica platform integration,

great play. experiences every story, sustainable work global Another and moment food and a at life, leader in learn, here modernization Sodexo, in valued

on-prem its to leveraging America Azure prepare data in based platform as coming North data platform group IDMC its of as and its to cloud. on management supply is Sodexo migration from master well

Informatica report. industry analysts for We this This are continue innovation pleased Platform positioned has Magic in in a leader as time Integration that ninth Quadrant are leader hear the and we XXXX recognized an Gartner to is to be Gartner the as Service. that the from

named the highest axis as We Execute axis. the on to of the were Data Quadrant the report. Augmented Informatica Gartner in positioned Magic the Gartner Completeness Quality Solutions well as Ability as Vision on furthest leader also XXXX for the

recognized Forrester Enterprise also the offerings. for for score highest Data the as received Informatica a Wave leader current in The Fabric We're QX XXXX.

fueled Now looking productivity it. AI against ahead, regarding gen which by observations gains I outsized Look, the be me next share and let that for strategy digital some innovation AI, is to drive gen will and transformation executing believe phase enterprises. for of firmly poised our

strategy. the realizing an is we revolution, ] AI As [ house strategy creating gen developing enter are data enterprises that a AI

is data, Preparing Informatica. ] Informatica for mastering, XX% and IDMC processing March is from First, to ready only at-scale the in architectures with AI partners data comprehensive AI gen gen the cloud driving stack governing modern data, solution the and and hear is except accessing ensuring of data through AI their data. year-over-year. data, reality for management collecting that breadth enterprise customers We data it processed mission-critical transactions AI-led for the everyone growing quality, involves cataloging [ management time mission-critical again claiming platform. time project as workloads. and XX your IDMC trillion gen is

] NLP cloud. AI productivity, drive is accessing XX,XXX engine in the embedded to and solutions, [ on breadth leveraging metadata in over and terabytes connections XX and now over of ML our our metadata algorithms all CLAIRE, leveraging intelligence metadata active

no AI AI makes AI underway AI AI integration In strategy to to us of AI of Informatica well where for surging let to capabilities are being customers the our gen [ use apps and gen their simple, models different into customers available without code. and API IDMC X easier AI, update way already to a from models, Informatica gen implementation. the gen our platform. existing customers it our advanced strategy, their with ] gen from for gen new IDMC AI Informatica, both Efforts we capabilities the and This any now categories: gen services divided assist services use with is area with can for changing code add developers

and solution use ensuring fast-moving software innovate and is AI guys needs. development life [ for cycle built business IDMC AI complex This control, and their we as customers governance a cases. API drives for space gen ] use scalability, performance our capabilities Our with better gen in ready

trends, Informatica, chat game journey, gen democratize of a AI all and this in data interface data the data developed will of user-friendly CLAIRE format They To KPIs, ]. top revolutionize AI with, management PII be able to relevant will understand GPT. and again, is A insight. enterprise. from to area Users assets NLP throughout we language Now management any changer. data to assets, [ or now able customers' have we find tables, sensitive the the support crises important through customers NLP columns, complex questions any more our easily do pass believe will be a natural using transformational to explore

extensively re:Invent range various AWS health users quickly data associated with data operationalization definitions, of we technology. customers warehouses services, exploring and private Additionally, wide CLAIRE able Synapse, on and then explore financial care, dependence Databricks which CLAIRE data will that ELT Users data part of and pipelines are business GPT the are that like scores, SQL as quality data, as BigQuery understand cases stakeholders allow the such ], to industries preview. search and in AI ], engaged lineage the GPT owners workload products with [ terms, the use gen data is and of Azure will [ of generate are a using be on in of participating to manufacturing assets these while Snowflake, assets. Google data new NLP stages, with

] will tailwind available a consumption into the many this are will believe As for for Informatica this will We later to month, pleased IDMC using announce GPT market. our the us we head be years to come. customers [ that we CLAIRE IP be

and we of predictable revenue model, flow grow. [ digital As subscription ] commitments act business to consistently and cloud pipeline is growth strong of retention value continued up, customer long-term free a only I and laid Day data-driven strong transformation cash our that on cloud AI and on our cloud has ongoing rates wrap gen fuel and by are that creation. to out Investor drive executing remains we strong focused Operational on-prem driving health as that very base, business our unlevered healthy

] all announcements to our my this believe well Thank product and also Informatica innovation at for for their continued a us that's our to [ this We our commitment. durable, month. shareholders supporting We thank customers, future pretty profitability. good I partners for us. like growth demos look later and World sharing to colleagues more consistent would forward to XXXX work and continues you position Informatica hard

please away. over the Mike. With that, take Mike, let turn to call me it

Michael McLaughlin

Amit, metrics with another our you, was midpoint growth delivering board and key QX above the everyone. Thank all to the of start financial a good great solid afternoon, across guidance, the and profitability year.

results begin of remind ARR Informatica's and QX our by review I'll how the best GAAP to revenues. understand

perpetual ARR and licenses no ARR cloud-only to ARR we X X which decline. result year-over-year gradual direct fall actively gradually of delivered continue longer maintenance we also therefore, and cloud revenue sell growth categories: [ Our these going was which subscriptions, the our into forward. in ] strategy, of revenue trajectories of XX and on are expect The and categories subscriptions, self-managed and declining are, this

the $X.XX an year. ARR, new stable customers in workloads, cloud new which ARR total million subscription over With increase with was versus by This in real net primarily ] [ existing rates. driven that expansion and X.X% with let's the year. strong We prior and net maintenance $XXX prior mind, was added of start billion, cloud total

negatively February guidance. by a increase XX% above Cloud $X.X million exchange ARR $XXX the year-over-year total of million, Foreign and midpoint subscription was ARR our $X.X impacted million.

New net ago. sequentially. a million and now cloud net up ARR, strong XX% customers subscription with $XX subscription XX% year Cloud represents cloud expansion total from ARR year-over-year ARR million existing $XXX of workloads our to of and new

Foreign cloud by $XXX,XXX. subscription exchange negatively ARR impacted

subscription percentage net XXX%, at flat at Our point user was the year-over-year. cloud flat cloud last level rate XXX%, up end rate versus subscription quarter retention parent level net retention and year-over-year the X global was

ARR, the forecasted sum decline ARR in million, this down slower which the $XX in sequentially, as cloud guidance. Subscription to was declined which ARR down was is year-over-year. midpoint than our million billion, February year-over-year of XX% This February. subscription to self-managed over quarter Self-managed a expected $XXX simply X% ARR, and the X% slightly above we of $X.XX grew was

ARR subscription Foreign billion. exchange negatively impacted by $X.X approximately

migrations of component The which The million. perpetual from ARR our approximately past, $XXX to year-over-year of maintenance migration the total ARR. on-premise the ARR to maintenance momentum customer early on-premise Maintenance for cloud self-managed IDMC opportunity platform. total third are QX cloud our of helped us. of to and of power introduction we in be power base XX% sold a migrating represents is of in large The accelerate cloud has last of continues center down center year in edition base licenses was space, the X% our volume seeing now to our signed from

As and [ of quarter. the last QX, have migrated our from up end of base X.X% ] ARR of self-managed cloud, X.X% we maintenance to

power We ARR migrations, a [ average center these life-to-date and ratio ] uplift have X.X including on MDF.

offset [ XX% X.X% X total ARR in to growth increase, Cloud ARR These components of declines year-over-year. growth summed subscription subscription drove this and ]. self-managed by ARR gradual ARR

our we the our as We portion expect result year throughout noted strategy. larger a accelerating and trends subscription as portion consumption-driven on fast-growing And expect total intentional to begin ARR [ XXXX total direct this cloud-only growth our Day, ] our Investor of as revenue cloud continue a total ARR of of business. owns to similar and we

decline to Now by review the million strong due X.X% revenue first million, exceeds GAAP guidance total and I'd approximately of to slower-than-expected our our growth of for like in midpoint revenues an revenue. somewhat quarter. February the increase $X were a year-over-year. results This $XXX cloud self-managed

year-over-year year subscriptions, revenue a revenue, million, representing ago. positively to basis. XX% managed exchange XX% includes increased Foreign subscriptions of which $XXX by total approximately Subscription revenues compared a million $X.X total impacted cloud on to XX% and year-over-year

due renewal higher renewal self-managed rates, to renewal rate lower was X percentage subscription quarterly cloud XX%, down points by rates. subscription offset Our year-over-year approximately subscription

and maintenance migrations churn professional our maintenance came total XX% for half into year-over-year. services rate million, falling represented our $XXX Mains Revenues category quarter. and from percentage quarter, down maintenance cloud XX%, maintenance gross revenue was our were [ X Almost renewal of to revenue points of this ] the

implementation, education, consistent down which and last year-over-year, this of includes with make $X the services, consulting category and up million quarter. Professional were remainder

our seen share revenue been services in quarters, implementation of have greater prior our as assume for has implementation declining As that year-over-year a partners work our customers. we

pleased this was year-over-year. growing XX% trend. Cloud with subscription or revenue $XXX revenues, XX% subscription We million are of

reminder, the these between relative of vary a rates growth due and revenue X ARR to As may difference the timing from differ period. recognition metrics to

$XXX Turning approximately international to while would of Using revenue year, of the international in revenue to grew representing revenue revenue geographic year-over-year. XX% to of representing XX% grew $XXX the been distribution rates business. XX% revenue million, have $X.X quarter, QX from total the U.S. X% exchange million year-over-year million. growth lower international last

IPUs. deals. our bookings pricing our QX also first quarter MDM cloud The of to records which supplier a products, for primarily cloud remainder were multiyear for IPU-based XX% Turning were or Approximately new consumption-based consumption-based is bookings customer of committed model.

on Now move was will X In results our up non-GAAP Please our percentage unless margin to stated. discuss I point XX%, QX, to that gross profitability I'd like otherwise metrics. note year-over-year.

gross maintaining $X.X with focused expenses charges transitions are were part expectations, as We nonrecurring healthy approximately on of to restructuring Operating as we XXXX plan, incurred cloud. restructuring the our of million. consistent our margins business November

$X in for of approximately year We restructuring remainder full expect to additional XXXX. the charges incur million

a over outstanding share shares. $XXX percentage point $XXX income approximately of per on Adjusted growing the Operating approximately million. share net year-over-year was $X million our EBITDA $XXX was income Net XX% million. based exceeding approximately and XXX was million a income $X.XX guidance improvement was XX.X%, diluted million, Basic Operating million ago. count midpoint margin by and diluted year February was from X.X was $XX shares.

faster significantly working million, $XXX capital better collections was tax after flow due cash than to other dynamics. free and unlevered cash Adjusted expectations

cash capital than flow QX, favorable free these reverse and lower therefore, XXXX. QX be working significantly to will factors expect QX in We

expected emphasized in can As basis. why we was cash and is highly track cash free flow be of past, remarks, have of the When than from on are while get that free the that cash significantly half ] cash on line year XXXX linearity with quarter-to-quarter, full flow metric historic should full with flow a volatile free which to QX QX [ for line lower, flow that guidance. see of much discussion QX only first you'll year is we've my expected full later formally year be we flow in be the deliver cash flow expectations the we free in in and free to is free to cash higher our our

Cash quarter of paid in the million, with cash increase $XXX expectations. $X.X net a in adjusted strong and leverage $XXX resulted plus XX debt end was was of an for $XX million, this $XXX million, at line ended ratio March. interest of trailing with million in cash was EBITDA the first position of in short-term investments We Net year-over-year. billion, a months of quarter X.Xx the

with guidance guidance, and worth from turn we're offset FX. and metrics consumption-driven pound solid for euro, FX-related can revenues our revenue our full comfortable issued have results we ARR Despite assumptions. all year we total for previously noting this, Now reaffirming the headwinds XXXX. fiscal U.S. in I'll the guidance to in year, XXXX cloud-only that to resulted starting maintaining year for strategy. compared incremental previous comfortable as yen are full in the headwinds delivered the confidence It's reflecting strengthening are QX the the against and of We dollar recent

our this details guidance find and FX in filed assumptions release of we press year can full the afternoon. the You

we XX, establishing basis. ARR subscription second expected Next, quarter. self-managed the decline and guidance Similar to both sequential as second this mind, With to maintenance on quarter while cloud ARR and June in we're guidance grow the ending follows. for first XXXX, to for the a year-over-year is to quarter, expect turning

million total $XXX expect in revenues GAAP to the We million, to approximately be $XXX representing range year-over-year of growth. X.X%

approximately to to ARR year-over-year of billion, [ growth. range $X.XXX be ] expect We XX% representing subscription in the $X.XXX billion

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

like purposes, modeling pieces For of information. a I'd to few additional more provide

First, we to the quarter cash flow tax to expect free $XX of in the million unlevered range be second million. adjusted $XX after for

put our particular [ Now cash QX context. free in I quarter-to-quarter to right of flow, the the expectation want draw to attention for this so volatility ] is

which capital quarter-over-quarter I experienced will timing is we to cash working favorability adjusted QX was down tax in free flow after be These earlier, reverse and year-over-year. mentioned the should that sheet and factors QX, dynamics. QX due other As unlevered balance why in

flow XXXX, is first of free look full Furthermore, when year you'll for at in typical guidance. expectation expectations flow which see in medium-term the laid midpoint, represents is and we cash you midpoint Day. midpoint line expectations first line guidance, which our cash with generation our line However, that our $XXX our out at half Investor of million operating half XXX% the our linearity with our at with is income, our non-GAAP the the in at

will we be and approximately full for ]. interest paid quarter interest for Moving based on estimate on, up rates using the million month year, $XXX million silver [ in X forward the second $XX cash

taxes, rate for Third, our full XXXX. non-GAAP year we rate and expect tax that the to was QX to continue with XX%, respect

assumptions. count share our lastly, And

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

weighted of outstanding shares XXX full diluted expect weighted average the shares approximately be we be XXXX, For XXX million basic million approximately and to year to shares. shares outstanding

off QX great with we're In are a summary, start we our XXXX. in to pleased performance, and

hybrid multi-cloud of are consumption-driven and delivering best the consumption-based the our data strategy consistently cloud-native on only executing modern the enterprise. platform, the cloud-only We by needs industry's multi-vendor, management serving products focused on

for the can you open now questions. Operator, line

Operator

begin now session. the [Operator Instructions]. Q&A We

America. today Bank with question Ikeda first Our Koji comes of from

Koji Ikeda

me X here. for Just

plus net question customer additions there count, First the the in million-plus strong was customer $X really on new XX% quarter.

record. think strongest that's the on I

cases net particular to in the you or is is new it's do increasing driving And X driving is is, common among these there growth here question plus X that the strong metric, future? use continue anticipate growth. customers new X the the that million net customers a that So maybe theme in

Amit Walia

you. of to Well, growth you saw. all, the first board hear from Great across as Good

what's think IDMC it scaled offering trend have driving particular the of So and what the they as across customers, are for cases board, the of on increase we size points is in up the "hey, to landing that for on scale that's out multiproduct cases the attractive increased." That's to can has the we the variety being of more a I use And this use office have look, that customers serves, continue and more for obviously, I have and use every customers see. seeing. one, fully many need at it think, are because I that end office. larger these basically to entry IDMC front use and hope back with, they

Koji Ikeda

it about then ago, lose Got I model know a I the you of and year or IPU launched for guys it a there's there. pricing it. And a know use just Mike. follow-up here component

So I just onetime wanted quarter unused true-ups? this in benefits to ask, there any consumption from were

Michael McLaughlin

Koji. all, not No, at

and a that up per upfront signed regardless recognize that consumption. the works to It way is you the us and regardless ratable of that We you different IPU X.X a We a adjustment for back on have a can amortize the year. selling introduced true-up go We if that from throughout committed buy buy that, the in consumption-based have no IPUs. a contracts amortized capacity never or like more, of a those to IPUs we our companies designed model down IPs folks rather run goes for there's IPUs IPUs it consume pricing of year. revenue out for consumption come multiyear longer which of the than than that The is basis last that special folks amount year for was might see -- go we can It's consistently year, it's Flex seasonal but you users actually other been model. upfront. that year. of anything which been configuration committed we as about, IPUs or that And pay

Operator

question with Our RBC next from Markets. Capital Hedberg comes Matt

Matthew Hedberg

from maybe on perspective, the about talk Congrats guess Great. environment. just I the high-level demand a just QX. could strong you

broad environment strong the had of large you said, such guys despite, of customers. customer quarter. in really global to kind XQ You enterprise have you demand you saw guys large what a coverage a Is similar like

Just characterize customers sort are you spending how curious thinking now. could about right if of

Amit Walia

for Matt, Yes. the question. thanks

So I think demand that same in saw environment the saw in the stays we QX. we as QX

additional top initiative that everybody I divisional the that, think or has to is transmission. to the say, everybody commentary one prioritizing I'll ] [ to is needless add data

breadth churn So we the back-office we end customer that softest being can of serve [ of cases a or that up IDMC, beneficiary it's cases. use of the supply ] the chain the use because breadth to of solve whether or a analytics, we

a have a opportunities up to broad ends set that within actually customer. of allowing So us

obviously modernizing future. AI us, cloud, obviously, the increased [ get the without you can ] workloads. is, for benefits have modernization, it serve of to Even Second because ability have in the people the we realizing are mission-critical gen going that they cannot see

a of launch And center a definitely MDM saw power with obviously, we of and picked up modernization, for the tailwind And modernization. that. edition having it's a win that So has for bit us. cloud

days, half next we times, every year but And that winnings early gen lastly, to wanting definitely we there. over ] , see something I've we And are organization [ repeated AI the on early many more that out, in happening expect going shoots second area. seeing and and work IDMC the GPT more CLAIRE on with green in of and more do early

in towards move seeing that of We area. doing reprioritization are absolutely things budgets

IT somewhat the budgets that the So overall argue we think you benefiting that are to the slower, ways from are cycle to demand but turns. even can though those be continue about

Matthew Hedberg

you initiatives great like should are Or a think that's of you do impact think Once customer for it Actually, at there's AI kind in dovetail sales the and leverage guess, really Do you AI. preparing about you AI accelerates their things gen the do and key in AI point you risk that say, as gen looking Do anticipate, seems leverage decisions? down ] gen data journey? maybe customers to positioned it think a as customers I slows are part a that being -- customers like think how gen guys broader question. it things I their as [ of about you well cycles? in maybe rails

Amit Walia

in the hard anything that is a future one. Looking at area in

asset, can I with that we for many completed. the digital that. it beauty use by is the projects IDMC, have of them describe transformation IDMC non-gen actually think what of way, an way are yet And IDMC I this they all that way, that . We even today. the know doing not Customers AI for have AI gen

do them can use time. And approvals to the basically choose does cleansing, the is The and in customer, for same for way, quality taking leveraging AI many that bring mortgage places, LLM and a is by app data get a a all ], be company everything IDC loan that whichever matter through, was [ that from let example services platform minutes, I a and happen we them go of our financial long the cases. giving mortgage, is good capability integration gen was approvals used for

And a They they do than comes do happen." have customers And way the have I later don't is start Same doesn't have saying, can that same want They beauty other. while capabilities. if GPT CLAIRE it. so project, can that of or of to gen course, on platform, down. AI others flexibility even helps "Hey, to hand, other anything decide the I slow the So small the us. one it, that

are actually about. So that's way going customers the

Operator

Our with Deutsche Bank. Brad next comes from question today Zelnick

Brad Zelnick

on us year? give Amit, modernization this just full can that other build? uptake center XX% can share? that's XX% of deals by last the built were is you the color and and cloud stat pipeline much power maybe guide more any I that edition into heard up for how you quarter. influenced uptake from color And But that,

Amit Walia

headed QX that has that shown had you direction wanted you accelerated. that in has go to that tell that can we would on well -- is say modernization in I Well, we And absolutely absolutely and And path. or direction. that with shared expected it I is

gave lot of obviously, the say, even become cloud And And be continue edition that a we'll baked to into the -- of as opportunities. to growth, were makes I think in. our center is what guide us, baked that. part the to that's ARR needless expect that for be pick continue the guide I we our into up well to that what customers. power to for year. kick proved for be And in expect and we lion's which That's edition that number and to share, for in for that, part our QX to this has you it expecting what power to see cloud easier the So year

Michael McLaughlin

both Investor 'XX to over growth Doing was discussion from we And seeing be math coming high in a we're And in time should buildup medium-term others migrations. growth. December, the source that's growth we entirely from another XX% our out the what of from sums remember ARR upon based that to offered Day cloud in we growth you that of external to as up QX. estimates, what XX% and IDMC And mid-XX%, our of migration-driven 'XX TAM is TAM expectation our consistent plus that guidance mid- expect and way, with from XX% based think of XX%. upon play

Brad Zelnick

follow-up that Maybe whether to else you little just in anything I we a bit the which appreciating? on it's maintenance It's a but below was just just And helpful anything not churn what sequentially. the specific customer appreciate maybe shared a call prepared ARR, out, else we're have expected comments already might any reminder. or remarks,

Michael McLaughlin

that the it to not been Almost Yes. remarks, was obvious my gross half churn enough. our base really due center it maintenance may bringing the up. mentioned Thanks have for this of in power in briefly to I from on-prem and migrations cloud. is, It quarter

components. And business or from moving churn -- away went other migration, independent the is So of part back they churn. talked again, use because or migration. about of the churn of our churn Day what we're I for call from got to of That's we by the who maintenance will another maintenance of went X they is expectations cloud. That's be the decline customers self-managed exogenous case of then sort One out that's Investor the decline or company. to bought self-manage, and the made getting when both the up natural the and

almost in bucket, several very last our natural churn So to much been for this was that in churn cloud maintenance maintenance of years. the seeing what quarter after we've quarter, half was that and line with after the quarter quarter

Brad Zelnick

] from migrations the don't anything lot of from we new seasonality be to ARR call think for majority the the we the And the is perhaps that stronger. that missing [ to mean it. strength business, is this. as not I out what a would hog we even in about behavior QX else expect one migration -- wouldn't you apologize. accounting cloud is there see coming is to there's just Got But and that that know of that corollary migrations. we're and see in I there but, I more.

Michael McLaughlin

It's No, doing you're do. exactly not to anything. missing what it expected we

migration Our upon our that in new guide ]. we for are and were self-insurance being as very based of maintenance and with what mix projections was ARR [ saw line the much

So down it. we're it's the right happy with and fairway,

Operator

comes question Fargo. Andrew AI next gen from Wells with Nowinski Our

Andrew Nowinski

are how of major trends that want cost with results I they've on cloud to now to question the seeing, about optimization end. the all an a just I'm So from to sort heard you're cost hyperscalers we've start correlated your trend? coming talked optimization wondering and all

Amit Walia

optimizations look, said all the mean, I the Well, times going on. that when are I've

or things up the never workloads never community because what went were happened the workloads. went that down going never crazy serve that selling mission-critical we community badly and For us, I We us good over for we or up, to has start-up [ large one very the belly call penetrated venture of into nice-to-have ] so down.

continue selling doing. we what thoughtful to We workloads, were and were very much enterprises demand very to was operational about we where tied

rate consistently say very that consistent. And case, you've would been ARR seen has in that growth our cloud I

platform. we've and usage year-over-year, XX% very about also the has you've seen month, had consistently net in cloud or within that $XX talked that XX% also trillion XX% has adoption you've range. of grown the quarter, seen migration new a of what our that, what seen transactions every You've been IDMC number growing cloud a very thoughtful. to And

of us, has ever a just [ for So been I a problem and problem not some kind and today, in was ] of ways, kind that see that problem.

Michael McLaughlin

upon you quarter-to-quarter upfront else, And not the capacity, IPU revenue multiyear way those others the purchase subject the model an model because volatility. also drive a Based in consumption IPU or which are everyone works, we're I'll more Yes. IPUs, remind or unlike Andrew, actual is that can and our results. direct of quarterly of consumption the adjacencies to see spaces committed ARR consumption of in of you that that pricing just

operations our over be quarter. about trends just referencing very and or said, of good, in companies That And this it. some optimization seen those ] [ trends hear haven't we the cost being consumption, we utilization we what are very other cost quarter to next IPUs correlated of utilization the those our from of feel terms particularly of you're good

Amit Walia

go of the team. adoption I business the of ] have there. sale fantastic for remiss value make [ and that customer do would I sure creation buy sure They a the making right and the cases job our customers they in use success plug to is

has as that ]. that almost work [ like So created team to

Andrew Nowinski

then I to that, we that see put any that the pre-announcement? you ask intra-quarter. out news heard your just M&A you about as a to Okay. wanted question And disruption prompted it from Did relates

Amit Walia

saw you the gave. -- we think quarter I

very what but does from QX, some Mike line midpoint. metrics and we we good that QX feel, where in small great is, year, what I in about indicator of everybody we think reminding think midpoint guide to we a pretty very guide feel a shared is across quarter, a how And seasonally executed we've way, we for are it. the terms I bottom the about clean of and good to job in top beat we the good all feel which start year, the the in

Operator

Our next Baird. Power with question that Will comes from

William Power

in with Great. to more Maybe about that a with of mean indicators hear trust we're GPT. the early I'd CLAIRE cases early it's seeing in but love any to lot you're to I I kind there weeks. of early, Amit, would start still great. use a recognize couple going you, hear be I

Amit Walia

No, should pretty Informatica get live main that. see Will, and I with doing as at you'll I've Obviously, be that. like before think what we're World, the And with about that stage demo excited indeed, product we said, there.

provider with the XXX-plus or very, some allocate care able mission-critical great locations. I very customers tell able being that did we interface you it. across different staffing a their run chat can large cases through almost had preview We've enterprise health saw the using we to the be And use great to basically quickly drugs some

more real purposes. in management So be being of call that do at service, understand a discovery even degree of the case ] doing able or risk Or time the the things look data what I to to saw and manufacturing able a for [ to being able and large something in basically governance can give we chain care. financial manage and data by in supply much company patient that higher a the to

do whole lot to of a take saw a again, and able little data democratized a us the allows lot a things cases, lot more it management those we to probably less productivity. be more use that So being pointing bit time, that

the excited use So we ]. saw in those all it I'm once pretty preview. GA cases goes about [ of it

excited it's be I into part we as about the expect, be well that adoption walking the the next things about. course we, think obviously, second year we company, should definitely model IPU year, of to the think this half as that happening, a of then are over and going

William Power

more of flat as XXX%, look I of just through forward kind through move I Any quickly, kind here at maybe Yes. the right number. of is think that think healthy hearing customer I I couple a in we about guess sequentially, weeks. to year? I Great. a think kind I Mike, guess, still a balance? and Okay. level, takes the of expect puts to the level to mean, ARR,

Michael McLaughlin

about like points, feels we it up the center Well, don't points it's bounce -- the gravity don't down of couple should it's it expect This overly celebrate. if a Yes, several if is. for will couple panic, around a next that quarters. of

Operator

next from Pinjalim JPMorgan. Bora today question Our comes with

Jaiden Patel

MDM Bora. other? Pinjalim one across and data qualitatively if a different pillars behind for seeing it the Patel Is a government. integrations, traction around bit Jaiden wind to your Are understand the is versus data This possible little you product core even of

Amit Walia

many if Look, platform. the because lines we story. beauty of break so don't going different always times, That said the that And an you're products that on do is it's a reality I've when multiple different doing combination they projects, project our product [ of data case customers high analytics in the bare make quality sure a use quality. as or and it of and app we're the integration, to going integration to clean bring it's together data minimum, whether use integration, we're ] data to gen AI, of it's

project you some basically sure and a is making or as you you want so [ of long And that multi-product are that, MDM ]governance, project. on put Whether course, every to do you do are covenants. so democratizing you forth.

that the been that product have has the always us duty been Our best goal we has for industry. in

So best to go it's whichever the product with, begin industry. project want with in to you with, whichever want you

platform, them that pricing, of consume given on beauty you is up its consumption-based can X all anything. the that which is The end other beauty

] cases, And cases, hence, governance in You gen can kinds XXX very dial we the doing world upon Customer or well. you we is the they are, And scale analytics, Product where the All are depending of are traditional mastering and analytics, of or well. look. so down look course, see very dial at XXX been well. and use very has definitely [ customers done doing which use up, AI always obviously of that's -- that flexibility

how them, lens to products. versus world the that's the of see all of So we

Operator

Great.

comes today from question Securities. Howard next with Guggenheim Our Ma

Howard Ma

customer tagline. guess enterprise if you company we that phrase And for with -- were to it quality, making XXX% AI base cataloging, point except I like is or use this really et your I with could even experimenting pressure AI Is that gen said driven you base, is ready that cetera? at require everyone really data, a of But is these capabilities, for customer that Amit, portion to test your for your AI XX%? what actively Informatica consider gen governance is data gen what capabilities? it portion robust cases exploring

Amit Walia

Thanks for question, Howard. the

all, of now. that the right tagline is company First

brand the campaign on. that's going So

that So line. using little self-serving bit I and was bit a little --

So way, you World, it, when the something come see by that, gen way, reality [ the Informatica to customers. The to is is you'll that by where history go the ] question it's in ground tagline we everywhere. very but check of of tagline of course, the mean that -- And AI. I level But actually times is at the the gen data down one everybody is is super excited Board is strong. AI in those the that is level the about reality true. of

we So feel we less in that have opportunity our that customers point. an to help

on that's [ your what's ]. to to happen look, question, second be Coming

conversations that is is up data ] [ value coming As will I'm tops that a to come at sales very that the do giving or all and our the best are whether the And data, in realizing about. stuff are good and the talked AI job [ is having. complete customers good that from how reality and quality, down, people just rise it do you bottoms customers, you talking ] difficult is folks that's coming to with

let's So to just conversations, "hey, about I'm Help talk more go and how our of it." understand that. like, more me about

lord. that, when that." the of hub, "oh, is customers our from other comes we help all, first "good movement hub them the and -- with when And they can And realize

have right the from to you here is, at and AI gen my it. go project?" anything, So have with I can them yes, do answer if use now right don't IPUs, I IDMC purchased I now me these

CLAIRE value existing you even is, the but the need as project GPT can we with new all a [ ] with a gen that customer. AI them. an if Why better, to explained you do you of this things stuff help customer, proposition is to today, you And do are course,

will we are So Informatica conversations this. around all seeing World Those are the that. be

that learning that's and and hearing demos are talking be what that's the we right customers and But the our see -- You'll now. stuff. all and seeing

Howard Ma

actually want Brad's modernization. the to quantifying of about question a a I makes back to cloud That for too. I lot have Mike, follow-up Okay. sense. circle

timing believe a of because QX, about up So there's ARR? how cloud it next cloud ] in up should XX more XXX% -- we And ARR showing year year-over-year. the half modernization modernization recognition? believe when more the should [ ARR? about second show is up contractions I I think think remarks, cloud lag you more we in Is just prepared should in Cloud to in the we said How Or think your so generally, guess, weighted? about it they'll I benefit

Michael McLaughlin

actually, an number. more XX Thanks, was ]. it Yes. than Howard. [ was approximate And That

that quick clarification. Just

there quarter. we sign to cloud when signing So benefit a in ARR out that migration a deal is

the stream, the ARR that migration to for see full rate the the while because built words, the happening run credits not However, is of that stages the initial And is existing rules of you the maintenance full actually customer migration in ARR, that provide the better this of to follow. we have being we against to amount their accounting customer. that's is that, because some

is So that of contribution being said, the not terms lag ARR great. in

goes collateral underlies that So as when forecast, is into those the growth we part our that ], that's build of part this and our migrations the accelerate, of and that year. [ XX% and sign

to power the the cloud less in versus on-prem edition or is time X because the cloud thing center quickly. edition months less more migrate to is power One of years different length decommissioned it cloud center power is takes center maintenance migration traditional version, that with the that from center or power old is X using

old that sooner is gets fast. maintenance provided guidance All it all for modeling that But that of churn up style the in And so I 'XX. shows out of embedded very migration. you would the than of complicated we've under the that very assure

Operator

Deutsche Next Bank. Colville from Patrick question comes with

Unknown Analyst

for ARR, term? Where power maintenance X it's percentage the year is over I one Joe migrated. Patrick X.X% Of the or of self-managed going on and center This over do ] already had the maybe set Colville. [ Vandi on migration. cloud or next you medium

Michael McLaughlin

regarding the ARR contribution I to versus cloud would specific finding new We're a guidance Yes. medium-term net number migration-related instead the on but cloud point set. of to you not that,

we pace the is that share of we migrated self-managed. have the that through the did at full we maintenance we Day December less XXXX guidance the at that of center expect of we the Investor in time which half sort in less than directional still medium-term considerably Now on-prem model guidance general than period, get by gave medium-term will of of end power of half, maintenance, or end that towards our type and base

Unknown Analyst

I it. guess, more Got is more so And contribution then early for meaningful I a maybe it's are maybe expect a in now, the days right and AI on X of but me. happening you about still the takeaway But mean the conversations that generative call lot of talk far. XXXX?

Amit Walia

Correct.

this the the happened year [ step all working the at happening, first following was And that's network I very build-out highest happening. the had I you a of by cloud storage, now. be that. first to the latter things think happening we a think take it's as the those is year, expect which natural is ] course of for following When transition. And were technology any about half built, if what 'XX, think should all back, the way, you right

there world things. without covenants the and AI work, you on ] takes risk more gen more of data and of just that The [ obviously, those then the because obviously kinds the layer compliance, over thinking, upscale move can't deal

cloud following ways, follow. its natural very it's some also that in So of technology evolution course

Operator

Radke today Tyler with question from Citi. Final comes

Tyler Radke

Mike. for first the Maybe question you,

more Just some center full just point you these weighted But gives more you Cloud could relative I this half might year, this as about year seasonality back-end bit the we look ARR kind for that visibility. know ago? power seem given a at the a the loaded year of the talk a the historical for outlook maintenance second half be be in what in of weighted it more why kind may just deals confidence seasonality. and migration just does to of second little

Michael McLaughlin

Tyler, we this so. expected look, question

call this this is the offered were a we versus second we're call virtually half exact year ago is call year look that terms last that X year. of at guidance first this guidance it on we linearity in that half exactly ago, year the you where in in this time providing what If in

exactly in half don't year. we looking know first versus percentage say but second versus sat where math you're I'm of terms I X what this happy Now within points at, to time at it's last half

So nothing It's to there's really year. same nothing we pattern here. see different than the last there's saw

Tyler Radke

about the to you Got looking that And the I'm here Is as over few power to curious end-of-life on kind essentially are support you're power next center moving years? extent and thinking it. traditional clarification. of at just to dates accelerate the Helpful something this? migrations, maintenance an then you're what up of a center kind contemplating lever

Amit Walia

path. basically times books service very the And about Tyler, our customers. customers. Literally, said workloads about their is, of And want closing never first happen thoughtful we [ about look, of for ethos part on of of been integral disrupting I've in from part are to company deviate that [ without how migrations all, power ] we is and how us. we've our that them think we'll critical we fast sometimes ] that as this some customers. our And make this our many customers center what

the that We're going thoughtful. to to put be case, full [ ] hammer company very, solve, in basically a very going we're So that it to that's nail. on go have never a

think very think So any that's it. customers we our as material decisions. we we such And about to closely how about talk

in a QX. So we're no we saw seeing into some great [ what change In with pass edition, this I ] feel as uptick just are to ways, cloud doing. like we

[ believe the chief long is don't if term, in medium cloud, also customers the not see opening I to philosophically conversation not to we AI, think gen AI power that the I'm be get of I'm for and way would cloud. to And as me, ]. I the the there with is that having about modernize the

opening was hammer maybe for which so basically that also of will using any of should at say, drive in those things accelerate up eyes the some of terms or a all stick tailwinds kind a I that's of goodness thinking So lot I a things. of us to versus we look

Operator

your for all Q&A you This questions. conclude will Thank session. the

over now to to call I management like So any closing remarks. back would the conference for turn

Amit Walia

platform Well, the we which operate that Look, very reiterate are Thank and I you. scale the all and market time. at company. everybody questions taking look, thing a we unique I'll best In are, the a with position. appreciate current, and products with the very a the we us we one special the clear in delivering that and coming up initiatives with the innovation the are AI AI gen us, very, most unique driving the engine sets upscale AI and from

you to our our customer us hear be consistent and very today, We what you guidance for always our our QX bottom from about I well where today are from guide great going in in we for And but top as as saw this line line. that's are our execution, to year. as feel efforts. innovation with

some of cool almost hearing to get they demos amazing why is all choose from some of today. about will our is you NRR, look help to which World Informatica customers it us as Excited drive they innovation, you there, I and why forward and Informatica to course, walking to where see seeing directly our and,

about then So I'm World the call. next at look where at you we excited are seeing there, Informatica and if to forward of all not earnings and

Operator

That Thank you participation. will for conclude today's your all conference call.

your may disconnect You lines. now

Informatica (INFA) 1 May 242024 Q1 Earnings call transcript