Informatica Reports Record 2008 Revenues Of $455.7 Million With 16% Annual Growth

Achieves Annual Operating Margin Increase of Over 400 Basis Points

REDWOOD CITY, Calif., January 29, 2009 - 

Informatica Corporation (NASDAQ: INFA), the leading independent provider of enterprise data integration software and services, today announced financial results for the fourth quarter and the year ended December 31, 2008.

Revenues for the fourth quarter of 2008 were $124.4 million, up nine percent from the $113.9 million recorded in the fourth quarter of 2007.  License revenues for the fourth quarter were $57.2 million, up four percent from the $54.9 million recorded in the fourth quarter of 2007. Income from operations for the fourth quarter, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $39.5 million, up 98 percent from $20.0 million in the fourth quarter of 2007.  As a result of currency fluctuations, total revenues for the fourth quarter of 2008 were negatively impacted by $5.6 million and GAAP income from operations was negatively impacted by $1.6 million.  GAAP net income for the fourth quarter of 2008 was $19.9 million or $0.21 per diluted share, in comparison to $20.6 million or $0.21 per diluted share in the fourth quarter of 2007.  Fourth quarter 2008 results reflect a tax rate that tripled in comparison to the fourth quarter of 2007.  For the three-month periods ended December 31, 2007 and December 31, 2008, 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 income from operations for the fourth quarter of 2008 was $35.6 million, up 41 percent from $25.2 million in the fourth quarter of 2007.  Non-GAAP net income for the fourth quarter of 2008 was $23.5 million or $0.24 per diluted share, in comparison to $24.7 million or $0.25 per diluted share in the fourth quarter of 2007.  Non-GAAP income from operations and non-GAAP net income exclude charges and benefits related to purchased in-process research and development, share-based payments, facilities restructurings, the amortization of acquired technology and intangible assets, patent-related litigation proceeds net of patent contingency accruals, and accruals for certain income tax audit contingencies.  A reconciliation of GAAP results to non-GAAP results is included below.

For the year ended December 31, 2008, revenues were $455.7 million, an increase of 16 percent from the $391.3 million recorded in 2007. License revenues for the year 2008 were $195.8 million, up 12 percent from $175.3 million for the year 2007.  GAAP income from operations for 2008 was $84.2 million, up 78 percent from $47.4 million for 2007.  GAAP net income for the year 2008 was $56.0 million or $0.58 per diluted share, in comparison to $54.6 million or $0.57 per diluted share for the year 2007.  Full-year 2008 results reflect a tripling of the tax rate compared to 2007.  Non-GAAP income from operations for the year of 2008 was $101.2 million, up 43 percent from $70.6 million for the year 2007.  Non-GAAP net income for 2008 was $74.8 million or $0.76 per diluted share, in comparison to $73.5 million or $0.75 per diluted share in 2007.  For the year 2008, the impact of currency fluctuations was more modest, positively affecting total revenues by $2.4 million and negatively impacting GAAP income from operations by $0.9 million.  For the years ended December 31, 2007 and December 31, 2008, earnings per diluted share is calculated on an "if converted" basis, including the add-back of $4.3 million in 2008 and $4.4 million in 2007 of interest and convertible notes issuance cost amortization, net of income taxes.  Non-GAAP income from operations and non-GAAP net income exclude charges and benefits related to purchased in-process research and development, share-based payments, facilities restructurings, the amortization of acquired technology and intangible assets, patent-related litigation proceeds net of patent contingency accruals, and accruals for certain income tax audit contingencies.

"We are pleased with the record quarterly operating results that rounded out our fourth consecutive record year.  Our results, with a more than 400 basis point increase in annual operating margins, again demonstrate the operational discipline of the Informatica team to navigate the economic turmoil," said Sohaib Abbasi, chairman and CEO of Informatica. "We are well prepared to pursue our strategy and continue to focus on operating income in the quarters to come."

Significant milestones achieved since October 2008 include:

  • Signed repeat business with 279 customers.  Customers continue to derive considerable value from their investments in Informatica solutions.  Repeat customers included American Electric Power, Hudson's Bay Company, Norwich Union, Sanofi Pasteur, Thomson Financial, and Unum Group.  
  • Added 84 new customers.  Informatica increased its customer base this quarter to 3,452 companies. New customers include Aspen Marketing Services, Alberta Cancer Board, Banque Accord, Fundação Dos Economiarios Federais, National Board of Medical Examiners, Schneider Electric Industries, and Vektis.
  • Added two industry veterans to Informatica's board of directors. Mark Garrett, chief financial officer of Adobe Systems, and Gerald Held, a 30-year industry veteran and database pioneer, joined Informatica's board of directors.  Garrett serves as a member of the Informatica audit committee.  Held serves as a member of the Informatica compensation and strategy committees.
  • Reached milestone with 50 OEM partners. Informatica continued to expand OEM partnerships in the traditional enterprise software solutions arena, as well as in the emergent cloud computing category.  Informatica's cloud computing partners include: iPartners, Responsys, Revionics, SignalDemand, and Zyme Solutions.
  • Announced alliance agreement with preeminent technology leader in Japan, NEC Corporation. Under this agreement, NEC will market PowerCenter in Japan under its own brand, Infoframe Data Coordinator Solution Suite, supported by a dedicated engineering team.  
  • Launched industry's first On Demand Data Synchronization Service for cloud computing.  Informatica provides Salesforce CRM administrators with a simple self-service capability to expedite time to value from CRM implementations, while reducing reliance on IT. The new service automates the steps required to ensure that on-premise data is kept consistent and current with data in Salesforce CRM and the Force.com platform.
  • Recognized as one of the "Companies to Watch" in 2009.  Leading industry publication, Intelligent Enterprise, recognized Informatica as one of the companies leading the way in innovation and business optimization. Informatica is acknowledged for helping smart enterprises make the most of technology in the challenging economy to maximize financial and operational performance.
  • Named a finalist for two customer services awards in the 3rd annual Stevie Awards. The world's premier business awards recognised Informatica in the Customer Service Department of the Year and The Best Use of Technology in Customer Service categories. The Stevie Awards honor and generate public recognition for the accomplishments of sales and customer service professionals worldwide.

Conference Call and Webcast
Informatica will discuss its fourth quarter and full-year 2008 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 16059547.


About Informatica
Informatica Corporation (NASDAQ: INFA) is the leading independent provider of enterprise data integration software and services. With Informatica, organizations can gain greater business value by integrating their information assets across the enterprise.  More than 3,400 companies worldwide rely on Informatica to reduce the cost and expedite the time to address data integration needs of varying complexity and scale.  For more information, call +1 650 385 5000 (1-800-653-3871 in the U.S.), or visit www.informatica.com.

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GAAP to Non-GAAP Results
(in thousands, except per share data and percentages)
(unaudited)
 
    Three Months Ended
December 31,
  Years Ended
December 31,
    2008   2007   2008   2007
GAAP Net income   $ 19,872   $ 20,620   $ 55,980   $ 54,616
Plus:                
Amortization of acquired technology   1,271   619   4,125   2,794
  Amortization of intangible assets   1,718   362   4,575   1,441
  Facilities restructuring charges   254   (64)   3,018   3,014
  Purchased in-process research and development       390  
  Share-based payments   4,337   4,300   16,321   15,971
  Patent related litigation proceeds net of patent contingency accruals   (11,495)     (11,495)  
  Accruals for certain income tax audit contingencies   5,000     5,000  
  Tax benefit of amortization of intangible assets and restructuring charges   (1,206)   (358)   (4,427)   (1,173)
  Tax benefit of purchased in-process research and development       (152)  
  Tax benefit of share-based payments   (780)   (744)   (3,024)   (3,119)
  Tax effect of patent related litigation proceeds net of patent contingency accruals   4,483     4,483  
Non-GAAP Net income   $23,454   $24,735   $74,794   $73,544
                 
                 
    Three Months Ended
December 31,
  Years Ended
December 31,
    2008   2007   2008   2007
Diluted net income per share: *                
Diluted GAAP Net income per share   $   0.21   $   0.21   $   0.58   $   0.57
Plus:                
  Amortization of acquired technology   0.01   0.01   0.04   0.03
  Amortization of intangible assets   0.02   -     0.04   0.01
  Facilities restructuring charges   -     -     0.03   0.03
  Purchased in-process research and development   -     -     -     -  
  Share-based payments   0.04   0.04   0.16   0.15
  Patent related litigation proceeds net of patent contingency accruals   (0.11)   -     (0.11)   -  
  Accruals for certain income tax audit contingencies   0.05   -     0.05   -  
  Tax benefit of amortization of intangible assets and restructuring charges   (0.01)   -     (0.04)   (0.01)
  Tax benefits of share-based payments   (0.01)   (0.01)   (0.03)   (0.03)
  Tax effect of patent related litigation proceeds net of patent contingency accruals   0.04   -     0.04   -  
Diluted Non-GAAP Net income per share   $   0.24   $   0.25   $   0.76   $   0.75
Shares used in computing diluted GAAP Net income per share   101,767   103,452   103,278   103,252
Shares used in computing diluted Non-GAAP Net income per share   101,957   104,332   103,937   103,942

 

* Diluted EPS is calculated under the "if converted" method for the three months and the years ended December 31, 2008 and 2007.
This includes the add-back of interest and convertible notes issuance cost amortization, net of income taxes of $1.1 million each for both three-month periods, and $4.3 million and $4.4 million for the years ended December 31, 2008 and 2007, respectively.

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, income from operations 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, income from operations or net income per share prepared in accordance with GAAP in the U.S.

Forward Looking Statements
This press release contains forward-looking statements relating to Informatica's opportunity for growth in the data integration market and expected benefits to our customers and products. 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; and (3) lack of control regarding our strategic partners' devotion of adequate resources to promote, sell, implement, and support our products,    Additional risks and uncertainties are included under the caption "Risk Factors" in Informatica's report on Form 10-K for the year ended December 31, 2007 and 10-Q for the quarter ended September 30, 2008, which are 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 January 29, 2009 and Informatica undertakes no duty to update this information.

Note: Informaticaand PowerCenterare 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.