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Informatica Corporation (INFA)

Q3 2010Earnings Call

October 21, 2010 5:00 p.m. ET


Stephanie Wakefield

Sohaib Abbasi – CEO

Earl Fry - CFO


Tom Roderick with Stifel Nicolaus

Tom Ernst – Deutsche Bank

Mark Murphy – Piper Jaffary

Michael Nemerhoff - Wedbush

Nathan Schneiderman – Roth Capital Partners

Mitesh Dhruv – Banc of America/Merrill Lynch

Nabil Elsheshal – Pacific Crest Securities

Brad Sills – Barclays Capital

Bradley Rebeck - Oppenheimer

Frank Sparacino – First Analysis



Good afternoon. I will be your conference operator today. At this time, I would like to welcome everyone to the Informatica Q3 Conference Call. (Operator Instructions)

I will now turn the conference over to Miss Stephanie Wakefield. You may begin your conference.

Stephanie Wakefield

Good afternoon, and thank you for joining us today. I’m here with Sohaib Abbasi, our CEO and Earl Fry, our CFO to discuss our Q3 2010 results, and to talk about our outlook for the business. I’ll read the Safe Harbor, and then hand it over to Sahaib for his comments.

Some of the comments we will make today are forward-looking statements including statements concerning our projected financial results for future periods, our growth and operational strategy, opportunities for growth in our position in the data inspiration market, the effective benefits for our customers from the use of our products and services, the expected benefits of our partnerships in the Informatica marketplace, and the planned use of our products and services by some customers for more than traditional data warehousing projects. The strength of customer demand for our products and services, customer adoption of our products and services, and our expectations regarding future industry trends in macro economic developments.

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. The forward-looking statement should not be relied upon as representing our views of any subsequent dates, and Informatica undertakes no obligations to update forward-looking statements to reflect events or circumstances after the date that they are made.

Please refer to our recent FCC filings including the Form 10Q for the quarter ended June 30th, 2010 for detailed descriptions of our risk factors that may affect our results. Copies of these documents may be obtained from the FCC, 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 due to the non-GAAP results are attached to the earnings press release. They’re also available in the supplemental metric section of our Informatica and investor relations website at

Before I hand it off to Sohaib, I’d like to remind you that this call is being webcast, and it will also be available for replay at I’d also like to ask you when get to the question and answer period to please confine yourselves to one question. We will allow additional questions if time permits. Thank you.

Sohaib Abbasi

Thank you, Stephanie.

I am extremely pleased to announce that in Q3, 2010, we obtained all-time record quarterly total revenues, and record third quarter license revenues. Our record Q3 results showcase the ever-increasing customer demand and our expansive product portfolio.

After Earl’s presentation of our financial results, I will outline the key reasons for our confident and conviction in our multi-year plan to exceed $1 billion in revenue.

Total revenues grew by 31% year-over-year to $161 million. New license revenues grew by 40% to $70 million. These growth rates are all the more remarkable as despite the great recession, Informatica has consistently recorded year-over-year growth for each of the past 30 consecutive quarters.

Total non-GAAP operating income grew by 37% with non–GAAP operating margin of 26%. With non-GAAP EPS up $.28, we achieved the most profitable third quarter to date. The record Q3 results yet again illustrate our sustained growth potential

In these times of uneven economic recovery and continued macro economic uncertainty, data matters more than ever for our customers to top business imperatives.

To be better prepared, enterprises are increasingly relying on their IP departments for timely and trustworthy data. No wonder organizations across multiple industries and geographic regions aspire to become data driven enterprises.

Informatica’s result indicates increasing customer demand within each of the major geographic regions. In the Americas, we attained broad-based record results including strong performance in healthcare and lifetime too. Our results include increasing contributions from our newer products, including MDM and ultra-messaging.

In Asia Pacific, we again obtained record quarterly license results. Data integration is more business critical than ever as illustrated by our customer win around the world.

In the U.S., one of the world’s largest research based pharmaceutical firms selected Informatica as a standard for projects within their global data management group. To help gain synergy in one of the biggest pharmaceutical combinations, the firm’s IP group plans to decommission thousands of redundant applications. By using Informatica database archiving, the critical data will be accessible even after these applications are decommissioned.

In addition, Informatica is helping automate data migration from legacy databases to their current data warehouse. With these initiatives, the firm expects to substantially reduce IP costs, contributing towards the corporate objective of saving $4 billion in merger synergy by 2012.

In Europe, one of the largest European retail and investment banks selected Informatica to manage some of IPs most important information assets, reference data. Using Informatica, the bank will manage IPs’ organizational structure data required for the variety of purposes including regulatory reporting, P&L analysis, and security management. The bank expects that this authoritative master reference data will be instrumental for their straight-through processing IT initiative to both improve operational efficiency, and better manage operational risks.

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