INFA

Informatica Corporation (INFA)

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Informatica Corporation (INFA)

Q4 2010 Earnings Call

January 27, 2011 5:00 pm ET

Executives

Stephanie Wakefield - VP of IR

Sohaib Abbasi - CEO

Earl Fry - CFO

Analysts

Tom Roderick - Stifel Nicolaus

Michael Tirith - Raymond James

Mitesh Dhruv - Bank of America

Michael Nemeroff - Wedbush Morgan Securities

Mark Murphy - Piper Jaffray

Edward Maguire - CLSA

Nabil Elsheshai - Pacific Crest Securities

Derrick Wood - SIG Susquehanna

Frank Sparacino - First Analysis Corporation

Brian Wallins - Gleacher & Company

Brad Sills - Barclays Capital

Presentation

Operator

Good afternoon. My name is [Shanel] and I will be your conference operator today. At this time, I would like to welcome everyone to the Informatica Q4 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

(Operator Instructions). Thank you. I will now turn the conference over to Stephanie Wakefield, Vice President of Investor Relations.

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 fourth quarter and full-year 2010 results and to talk about our outlook for the business. I will read the Safe Harbor and then hand it over to Sohaib 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 strategies, our marketing growth opportunities, our product portfolio, customer adoption of and demand for our products and services, the use and expected benefits of our products and services by customers, the expected benefit from our partnerships and our expectations regarding future industry trends and macroeconomic development.

All forward-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 September 30th, 2010 for a detailed discussion of the risk factors that may affect our results. Copies of these documents may be 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 attached in the earnings press release and are also available in the supplemental metrics section of our Informatica Investor Relations at website at www.informatica.com/investor.

Before I hand it over to Sohaib, I'd like to remind you that this call is being webcast and will also be available for replay on the website. I'd also 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.

Sohaib Abbasi

Thank you, Stephanie. I am delighted to report that that Informatica achieved two major milestones with our all-time record results in Q4 2010. For the first time, we attained quarterly license revenues over $100 million and annual total revenues over $650 million. Today, I will highlight the key accomplishments of the quarter and the full-year 2010. After Earl's presentation of our financial results, I will comment on our sustainable market opportunity to grow to $1 billion and beyond.

In Q4 of 2010, total revenue grew by 31% year-over-year to a new quarterly record of $198 million. License revenue grew by 40% year-over-year, to yet another record of $100.2 million. With non-GAAP operating margin of 30.7%, and non-GAAP EPS of $0.39, we achieved the most profitable quarter to-date.

For the full-year 2010, total revenues grew by 30% to $650 million and license revenue grew by 38% to $295 million. In other words, we obtained the highest revenue growth rate in a decade. I would like to recognize and thank the Informatica team for their remarkable contributions to attain our record results.

Over the past five years, we achieved a compound annual growth rate for software license revenue of 20%, and for operating income of 37%, despite the Great Recession. Our growth strategy and the team's operational discipline are driving record results in all economic times. As a reminder, our three-pronged growth strategy is to expand across all major geographic regions, advance our product leadership and grow beyond data warehousing.

The continually improving operational discipline is driving increasing contributions across all the geographic regions. Our relentless pace of innovation, complemented by strategic technology acquisitions has dramatically expanded our addressable market opportunity. By delivering differentiated business critical value beyond data warehousing, Informatica is now an even more strategic IT partner for our customers.

In 2010, we achieved record results in each major geographic region, including the Americas, EMEA, and Asia-Pacific. In the Americas, we benefited from our broadest ever product portfolio and the highest ever customer demand. We attained our best ever results with successes across multiple vertical segments, including important wins in financial services, life sciences, transportation and the public sector.

In Europe, we accelerated our growth momentum in the second half of the year, reflecting improved operational discipline and an improving macroeconomic environment. Our strong results in Central and Northern Europe include important customer wins in financial services, energy, life sciences, and transportation segments. And in Southern Europe, despite the uneven macroeconomic environment, we attained our internal targets.

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