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Informatica Reports Record First Quarter Results

Achieves Revenue Growth of 19 Percent

REDWOOD CITY, Calif., April 19, 2007—Informatica Corporation (NASDAQ: INFA), a leading provider of data integration software, today announced financial results for the first quarter ended March 31, 2007.

Revenues for the first quarter of 2007 were $87.1 million, up 19 percent from the $73.1 million recorded in the first quarter of 2006.  License revenues for the first quarter were $37.6 million, up 15 percent from the $32.8 million recorded in the first quarter of 2006.  Net income for the first quarter, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $9.1 million or $0.10 per diluted share, up more than 65 percent from net income of $5.3 million or $0.06 per diluted share in the first quarter of 2006.  For the three months ending March 31, 2007, earnings per diluted share is calculated on an "if converted" basis, including the add-back of $1.1 million of interest and convertible notes issuance cost amortization, net of income taxes.

Non-GAAP net income for the first quarter of 2007 was $14.4 million or $0.15 per diluted share, up more than 25 percent from $11.3 million or $0.12 per diluted share in the first quarter of 2006.  Non-GAAP net income excludes charges related to purchased in-process research and development, equity-based compensation, facilities restructurings and the amortization of acquired technology and intangible assets.  A reconciliation of GAAP operating results and non-GAAP results is included below.

"Our customers' top-ranked business imperatives are driving greater demand for our technology across more types of data integration and data quality projects," said Sohaib Abbasi, chairman and CEO of Informatica.  "The growing adoption of our latest product releases is fueling license growth, and our expanding partnerships are further strengthening our competitive position.  Overall, the first quarter was a strong beginning to 2007."

Significant milestones achieved since January 2007 include:

  • Signed repeat business with 176 customers.  Customers continue to derive considerable value from their investments in Informatica solutions.  Repeat customers included Bank of America, Blue Cross Blue Shield of Massachusetts, Electronic Arts, Grupo Elektra S.A. de C.V, Level 3 Communications, New York Police Department, Toyota Motor Credit Corp, and TXU Business Services.
  • Added 41 new customers.  Informatica increased its customer base this quarter to 2,790 companies.  New customers include Centene Corporation, Cephalon, Collect America, eHarmony.com, Rajeev Gandhi Memorial College of Engineering, Taiwan Futures Exchange, Vente-privee.com, and Xiamen Local Taxation Bureau.
  • Won a $25 million judgment.  Informatica received a favorable verdict in its patent infringement lawsuit against Business Objects. The jury found that the two Informatica patents are valid and that Business Objects willfully infringed on both patents.  The finding of willfulness allows the judge to increase the damages by up to three times, and to award attorneys' fees.  Informatica has now requested an injunction against further sales of the infringing features of the software in question. Although an appeal by Business Objects is expected, Informatica will continue to vigorously defend its intellectual property rights.
  • Announced the expansion of Informatica VelocitySM to address data quality, legacy data migration and data governance as integral aspects of enterprise data integration, underscoring the corporate commitment to providing customers with access to best practices-based implementation frameworks.
  • Introduced Informatica On Demand Data Replicator, its first and the industry's only multi-tenant, on-demand service for cross-enterprise data integration, which can be quickly configured and used by business users using only a browser.

Stock Repurchase Program
Informatica also today announced that its Board of Directors has authorized the renewal of its stock repurchase program for purchases of common stock up to $50 million dollars.  The company expects to repurchase shares to partially offset the otherwise dilutive impact of stock option exercise activity.  Purchases may be made, from time to time, in the open market and will be funded from available working capital.  The number of shares to be purchased and the timing of purchases will be based on several factors, including the price of Informatica's stock, general business and market conditions, and other investment opportunities.

Conference Call and Webcast
Informatica will discuss its first quarter 2007 results on a conference call today beginning at 2:00 p.m. PDT.  A live Webcast of the conference call will be available at http://www.informatica.com/investor.  A replay of the call will also be available by dialing 617-801-6888, reservation number 71794568.

About Informatica
Informatica Corporation (NASDAQ: INFA) is a leading provider of enterprise data integration software and services. Using Informatica products, companies gain greater business value by integrating all their information assets.  More than 2,790 companies worldwide rely on Informatica to reduce the cost and expedite the time to address data integration needs of any complexity and scale.  For more information, call 650-385-5000 (1-800-653-3871 in the U.S.), or visit http://www.informatica.com.

 

GAAP to Non-GAAP Results
(in thousands, except per share data and percentages)
(unaudited)
 
    Three Months Ended
March 31,
   
    2007   2006        
GAAP Net income    $  9,094   $   5,268        
Plus:                
Amortization of acquired technology   722   452        
  Amortization of intangible assets   356   130        
  Facilities restructuring charges    1,049   1,149        
  Purchased in-process research and development   -     1,340        
  Share-based payments   4,041   3,000        
  Tax benefit of share-based payment   (867)   -          
Non-GAAP Net income   $ 14,395   $ 11,339        
                 
                 
    Three Months Ended
March 31,
   
    2007   2006        
Diluted net income per share:                
Diluted GAAP Net income per share   $   0.10   $   0.06        
Plus:                
  Amortization of acquired technology   0.01   0.01        
  Amortization of intangible assets   -     -          
  Facilities restructuring charges   0.01   0.01        
  Purchased in-process research and development   -     0.01        
  Share-based payments   0.04   0.03        
  Tax benefit of share-based payment    (0.01)   -          
Diluted Non-GAAP Net income per share   $ 0.15   $ 0.12        
Shares used in computing diluted GAAP Net income per share   102,638   97,147        
Shares used in computing diluted Non-GAAP Net income per share   104,129   98,102        

*  Diluted EPS is calculated under the "if converted" method for the three months ended March 31, 2007.  This includes the add-back of $1.1 million of interest and convertible notes issuance cost amortization, net of income taxes.

Non-GAAP Financial Information
To supplement the company's condensed consolidated financial statements presented on a GAAP basis, Informatica uses non-GAAP financial measures of net income and net income per share. These measures are adjusted to exclude the charges and expenses discussed above.  The company believes the disclosure of such non-GAAP financial measures is appropriate to enhance an overall understanding of its historical financial performance.  These adjustments to the company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the company's underlying operational results, trends, and marketplace performance.  Informatica believes that the inclusion of these non-GAAP financial measures provides consistency and comparability with its historical financial results, as well as comparability to similar companies in the company's industry, many of which present similar non-GAAP financial measures to investors.  In addition, these non-GAAP financial measures are among the primary indicators management uses as a basis for its planning and forecasting of future periods.  The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or net income per share prepared in accordance with GAAP in the U.S.

Safe Harbor
This press release contains forward-looking statements relating to Informatica's opportunity for growth in the data integration market, efforts being conducted with strategic partners and the company's intention to repurchase shares of its common stock under the stock repurchase program.  Such statements involve risks and uncertainties, and actual results may differ materially from the results described in this press release.  The potential risks and uncertainties that could cause actual results to differ include, among others, risks related to (1) competition with larger companies that have longer operating histories and greater financial, technical, marketing, and other resources; (2) uncertainty in the state of IT spending and the continued growth in the market for data integration solutions in general; (3) factors related to the stock repurchase program including the market price of  the company's stock, general business and market conditions, and management's determination of alternative needs and uses of the company's cash resources and (4) lack of control regarding our strategic partners' devotion of adequate resources to promote, sell, implement, and support our products, as well as those risks and uncertainties included under the caption "Risk Factors" in Informatica's report on Form 10-K for the year ended December 31, 2006, which is on file with the SEC and is available on the company's investor relations website at http://www.informatica.com.  All information provided in this release is as of April 19, 2007 and Informatica undertakes no duty to update this information.

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Note: Informatica, Informatica On Demand Data Replicator, and Informatica Velocity are registered trademarks of Informatica Corporation in the United States and in jurisdictions throughout the world. All other company and product names may be trade names or trademarks of their respective owners.