Informatica Corporation (INFA)

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Informatica (INFA)

Q2 2011 Earnings Call

July 21, 2011 5:00 pm ET


Earl Fry - Chief Administrative Officer, Chief Financial Officer, Principal Accounting Officer, Executive Vice President of Global Customer Support and Secretary

Stephanie Wakefield - Vice President of Investor Relations

Sohaib Abbasi - Chairman, Chief Executive Officer and President


S. Kirk Materne - Evercore Partners Inc.

Mitesh Dhruv - BofA Merrill Lynch

Thomas Ernst - Deutsche Bank AG

Karl Keirstead - BMO Capital Markets U.S.

James Wood - Susquehanna Financial Group, LLLP

Nathan Schneiderman - Roth Capital Partners, LLC

Michael Turits - Raymond James & Associates, Inc.

Bradley Whitt - Gleacher & Company, Inc.

Bradley Sills - Barclays Capital

Nabil Elsheshai - Pacific Crest Securities, Inc.

Unknown Analyst -

Mark Murphy - Piper Jaffray Companies

Tom Roderick - Stifel, Nicolaus & Co., Inc.



Good afternoon. My name is Allie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Informatica 2011 Second Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to your host, Ms. Stephanie Wakefield, Vice President of Investor Relations. Ma'am, 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 Q2 2011 results and to talk about our outlook for the business. I'll 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 market and growth opportunities; our technology leadership and product development; our product portfolio and opportunities; customer adoption of and the demand for our products and services, including product upgrades and new releases; the expected use of and benefits of our products and services; the expected benefits from our partnerships and acquisition; our effective tax rate; our hiring plans; the impact of our recent acquisitions; and our expectations regarding future industry trends and macroeconomic developments. 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 our quarterly report on Form 10-Q for the quarter ended March 31, 2011, for detailed descriptions 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 to the earnings press release and are also available in the Supplemental Metrics section of the Informatica Investor Relations website at

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

With that, I will turn it to Sohaib.

Sohaib Abbasi

Thank you, Stephanie. In Q2 2011, we obtained record second quarter revenues and record second quarter non-GAAP operating income. This afternoon, I will outline the key business drivers for our second quarter results. After Earl's presentation of our financial results, I will comment on our progress on Big Data and discuss secular technology mega-trends that are reshaping the computer industry while elevating the role of data integration.

Total revenues grew by 24% year-over-year to $192.7 million. New license revenues grew 23% to $86.3 million in Q2, our seventh consecutive quarter with year-over-year license revenue growth over 20%. With non-GAAP EPS of $0.33, we achieved the most profitable second quarter to date. Our record Q2 results showcase our expansive product portfolio, growing customer demand and strong partner ecosystem. Our Q2 results reflect the increasing adoption of our product portfolio, driven by the top business imperatives of our customers. As headlined by the latest Big Data technology trend, enterprises aspire to become data-centric enterprises across the commercial industry and the public sector. In EMEA, we attained second quarter record results with broader adoption of our latest products. In the Americas, our results represent important wins across multiple verticals. By empowering the data-centric enterprise, data integration now has a more strategic role than ever before, as illustrated by our customer wins around the world.

In Europe, one of the largest leaders in financial services selected Informatica as part of a near $1 billion IT project to replace their core general ledger application. The old general ledger, with more than 1,000 data feeds was too unwieldy for timely analysis of risk positions. By migrating and transferring the data from the legacy system to the new group-wide general ledger system, the firm will be better prepared for risk management with timely and accurate reporting.

In the Americas, Hyatt, the global hospitality leader selected Informatica MDM to grow revenues by offering incentives for more hotel stays by frequent customers, particularly their gold passport members. By combining data from the reservations, sales, customer loyalty program, and property management systems, hired operators will have a single view of the customer. Using this customer data hub, Hyatt will promote more hotel stays by catering to the preferences of their top customers and targeting them with special marketing promotions.

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