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Informatica Corp. (INFA)

Q3 2009 Earnings Call

October 22, 2009 5:00 pm ET


Stephanie Wakefield - Senior Director of IR

Sohaib Abbasi - Chief Executive Officer

Earl Fry - Chief Executive Officer


Mark Murphy - Piper Jaffray

Tom Ernst - Deutsche

Tom Roderick - Thomas Weisel Partners

Brent Williams - Benchmark

Frank Sparacino - First Analysis

Brad Whitt - Broadpoint AmTech

Nabil Elsheshai - Pacific Crest Securities

Derrick Wood - Wedbush Securities

Nathan Schneiderman - Roth Capital

Brad Sills - Barclays Capital



Good day, ladies and gentlemen, and welcome to the Q3, 2009 Informatica earnings conference call. My name Kiana and and I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions).

I would now like to turn the call over to the Ms. Stephanie Wakefield, Senior Director of Investor Relations. You may proceed.

Stephanie Wakefield

Good afternoon and thank you for joining us today. I am here with Mr. Sohaib Abbasi, our CEO, and Mr. Earl Fry, our CFO to discuss our Q3, 2009 results and to talk about our outlook for the business. I will read the Safe Harbor and then hand it over to Sohaib for these comments.

Some of these comments we’ll make today are forward-looking statements, including statements concerning our being well positioned to pursue our growth strategy, our projected financial results for future periods, opportunities for growth in the data integration market, the expected benefits to our customers and products with the acquisition and integration of Agent Logic, its employees and its technology, the planned use of our products by some customers for more than traditional data warehousing projects, the strength of customer demand for our products, customer adoption of our latest product lines, efforts being conducted with strategic partners, and our expectations regarding future industry trends and macroeconomic development.

All future-looking statements are based upon current expectations and beliefs. However, actual results could differ materially. There are many reasons why actual results may differ from our current expectations. These forward-looking statements should not be relied upon as representing our views as of any subsequent date, and Informatica undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date that they are made.

Please refer to our recent SEC filings, including the Form 10-Q for the quarter ended June 30, 2009 for a detailed description of the risk factors that may affect our results. Copies of these documents maybe obtained from the SEC or by contacting our Investor Relations department.

During this afternoon’s discussion, we will be using GAAP and non-GAAP numbers. Our GAAP results and the reconciliation of the GAAP results to the non-GAAP results are contained in and attached to the earnings press release, and in the supplemental metric section of our Investor website at

Before I hand it to Sohaib, I would like to remind you that this call is being webcast and will also be available for replay at the Investors Relations website. I would like to ask you, when we get to the question-and-answer period to please confine yourself to just one question. We will allow additional questions if time permits. Thank you.

With that, I’ll hand it to Sohaib.

Sohaib Abbasi

Thank you, Stephanie. In Q3 2009, we achieved record third quarter revenues and record third quarter operating income, making it our 20th consecutive quarter of record non-GAAP operating income. With our time tested strategy and the team’s proven operational discipline, Informatica attained sustained record results over the past five years. Even over the past year or two, during the deepest economic recession of our generation.

Unlike most enterprise software companies, Informatica reported positive revenue growth and higher operating income growth every quarter during this economic recession. Total revenues grew by 8% year-over-year to $123.4 million, and new licensed revenues grew by 9% to $50 million. Adjusting for the impact of changes in currency exchange rates, total revenues and new license revenues would have grown by more than 10%.

Total non-GAAP operating income grew by 22% year-over-year, with non-GAAP operating margin up 25%. With non-GAAP EPS of $0.22, we attained the most profitable third quarter ever. I would like to commend and applaud the Informatica team for their extraordinary efforts and disciplines.

Our business is progressively benefiting from improving macroeconomic conditions across several industries in most major geographic regions. Now, more customers are pursuing strategies for business survival rather than simply business survival. The associated IT initiatives have raised the priority and urgency of the enabling data integration. In fact, our regional results reflect these trends.

In the Americas, our results highlight increasing customer demands across several vertical industry segments. In parts of Europe, particularly the UK and Germany, the early signs of teaching customer priorities and purchasing processes are encouraging, and in Asia Pacific including Japan, customer demand underscores a bigger business potential for us to realize.

In the Americas, one of the largest fast food chains in the world selected Informatica for their Global Information Management Project to help fuel revenue growth. Using Informatica PowerCenter and Data Quality, they will reconcile product data anomalies, and build a data hub for a single view of products.

Delivering, timely, holistic and trustworthy data, this product the data hub will enable product and many focused marketing campaigns to drive incremental business. Also in the Americas, the US Transportation Security Administration or TSA chose Informatica as the standard data integration suite for all TSA screening and credentialing systems. With this decision, TSA plans to expand their use of Informatica beyond the enterprise data warehouse for the consolidated business process performance reporting.

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