Informatica Reports Record Second Quarter Revenues And Earnings

Achieves Second Quarter Record GAAP Operating Margin of 15 Percent and Non-GAAP Operating Margin of 23 Percent

REDWOOD CITY, Calif., July 23, 2009 - 

Informatica Corporation (NASDAQ: INFA), the leading independent provider of enterprise data integration software and services, today announced financial results for the second quarter ended June 30, 2009.

Revenues for the second quarter of 2009 were $117.3 million, up three percent from the $113.8 million recorded in the second quarter of 2008. License revenues for the second quarter were $48.7 million, compared to $48.5 million recorded in the second quarter of 2008. Total revenues were negatively impacted by currency fluctuations. Using currency exchange rates from the second quarter of 2008, total revenues would have been $6.5 million higher in the second quarter of 2009.

Income from operations for the second quarter of 2009, calculated in accordance with U.S. generally accepted accounting principles (GAAP),was a second quarter record $17.1 million or 15 percent of revenue, up 17 percent from $14.6 million in the second quarter of 2008.GAAP net income for the second quarter of 2009 was $12.0 million or $0.13 per diluted share, in comparison to $11.5 million or $0.12 per diluted share in the second quarter of 2008. For the three-month periods ended June 30, 2009 and June 30, 2008, earnings per diluted share was calculated on an "if converted" basis, including the add-back of $1.0 and $1.1 million, respectively, of interest and convertible notes issuance cost amortization, net of income taxes.

Non-GAAP income from operations for the second quarter of 2009 was $26.5 million or 23 percent of revenue, up 22 percent from $21.7 million in the second quarter of 2008. Non-GAAP net income for the second quarter of 2009 was $18.7 million or $0.19 per diluted share, up 12 percent from $16.7 million or $0.17 per diluted share in the second quarter of 2008. Non-GAAP income from operations and non-GAAP net income exclude charges and tax benefits related to the amortization of acquired technology and intangible assets, facilities restructurings, purchased in-process research and development, and share-based payments. A reconciliation of GAAP results to non-GAAP results is included below.

For the six-month period ended June 30, 2009, revenues were $226.4 million, an increase of four percent from the $217.5 million recorded for the first six months of 2008. License revenues for the first six months of 2009 were $92.8 million, up from $92.7 million in the first six months of 2008. GAAP net income for the first six months of 2009 was $23.0 million or $0.25 per diluted share, up from $22.7 million or $0.24 per diluted share in the first six months of 2008. Non-GAAP net income for the first six months of 2009 was $35.8 million or $0.37 per diluted share, up over 10 percent from $32.4 million or $0.33 per diluted share in the first six months of 2008. For the six-month periods ended June 30, 2009 and June 30, 2008, earnings per diluted share is calculated on an "if converted" basis, including the add-back of $2.1 and $2.2 million, respectively, of interest and convertible notes issuance cost amortization, net of income taxes.

"Our sustained record results over the previous five years, despite the unprecedented macroeconomic challenges, underscore the merits of our focused strategy to establish Informatica as the number one independent leader in the data integration market," said Sohaib Abbasi, chairman and CEO of Informatica. "I would like to recognize the Informatica team for their exemplary operational discipline."

Significant milestones achieved since April 2009 include:

  • Signed repeat business with 237 customers. Customers continue to derive considerable value from their investments in Informatica solutions. Repeat customers included Alliant Energy, Allergan, Bank of America, Cadbury Adams, Deutsche Post, Harvard Business School, Maryland Department of Education and Safaricom.
  • Added 65 new customers. Informatica increased its customer base this quarter to 3,793 companies including 65 new Informatica customers and 64 customers added through the AddressDoctor acquisition. New customers include China Southern Power Grid, Comprehensive Health Management, Directorate General of Immigration Indonesia, Friends Provident Management Services, Japan Post, Sterling Health Plans and Swire Beverage.
  • Announced PowerCenter Cloud Edition and Informatica On Demand PowerCenter Service. PowerCenter Cloud Edition enables IT departments to deploy PowerCenter on Amazon's Elastic Computing Cloud (Amazon EC2) infrastructure to integrate data managed by Amazon EC2, other cloud computing vendors and even on-premise applications.
  • Acquired AddressDoctor to advance Data Quality leadership by adding premier global address validation capabilities covering more than 200 countries and territories. With AddressDoctor, Informatica customers gain global address validation as part of a comprehensive data quality product offering.
  • Positioned in the Leaders Quadrant in the Gartner 2009 Data Quality Tools Magic Quadrant. According to the report, "the market for data quality tools continues to enjoy significant growth despite challenging economic conditions and the general curtailment of IT budgets. Organizations are aware that data quality competence is fundamental to the success of critical initiatives such as master data management (MDM), information governance, business intelligence (BI) and IT modernization."
  • Announced Ninth Annual Innovation Awards. 2009 winners were recognized for achieving exemplary business value and showcasing operational efficiencies through their use of the Informatica Data Integration Platform. The overall winner for 2009 was Carnival Cruise Lines for "A Strategic Approach to Data Integration." Additional winners include Australian Department of Innovation, Industry, Science and Research (DIISR), Australian Pharmaceutical Industry, Avaya, Bax Global/Schenker, BNSF, Centene, Duke Energy, ICICI Prudential Life Insurance Company, NBC Universal, Smith & Nephew and Zyme Solutions.
  • Received certification for Informatica's Application Information Lifecycle Management solutions for Data Archiving on the Hitachi Content Archive Platform. The Hitachi and Informatica relationship provides customers with a cost-effective way to archive, store and retrieve business critical information.
  • Informatica CFO Earl Fry recognized as Finance Executive of the Year 2009. Mr. Fry was awarded Stevie Awards in the 7th annual American Business Awards and in the 6th annual International Business Awards in recognition of his contributions to Informatica's growth and his exceptional financial stewardship.

Conference Call and Webcast
Informatica will discuss its second quarter 2009 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 41395997.

 

About Informatica
Informatica Corporation (NASDAQ: INFA) is the world's number one independent leader in data integration software. The Informatica Platform provides corporations with a comprehensive, unified, open and economical approach to lower IT costs and gain competitive advantage from their information assets. More than 3,700 companies worldwide rely on Informatica to access, integrate and trust their information assets held in the traditional enterprise and in the internet cloud. 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)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2009 2008 2009 2008
GAAP Net income $11,989 $11,503 $23,048 $22,727
Plus:
Amortization of acquired technology 1,859 951 3,416 1,571
Amortization of intangible assets 2,434 993 4,485 1,355
Facilities restructuring charges 595 921 1,404 1,868
Purchased in-process research and development - 390 - 390
Share-based payments 4,564 3,832 8,763 7,946
Tax benefit of amortization of intangible assets and restructuring charges (1,821) (1,049) (3,474) (1,801)
Tax benefit of purchased in-process research and development - (152) - (152)
Tax benefit of share-based payments (958) (694) (1,847) (1,496)
Non-GAAP Net income $18,662 $16,695 $35,795 $32,408
Three Months Ended
June 30,
Six Months Ended
June 30,
2009 2008 2009 2008
Diluted net income per share: *
Diluted GAAP Net income per share $ 0.13 $ 0.12 $0.25 $0.24
Plus:
Amortization of acquired technology 0.02 0.01 0.03 0.01
Amortization of intangible assets 0.02 0.01 0.04 0.01
Facilities restructuring charges 0.01 0.01 0.01 0.02
Purchased in-process research and development - - - -
Share-based payments 0.04 0.04 0.09 0.08
Tax benefit of amortization of intangible assets and restructuring charges (0.02) (0.01) (0.03) (0.02)
Tax benefit of purchased in-process research and development - - - -
Tax benefit of share-based payments (0.01) (0.01) (0.02) (0.01)
Diluted Non-GAAP Net income per share $ 0.19 $ 0.17 $ 0.37 $ 0.33
Shares used in computing diluted GAAP Net income per share 100,692 104,457 101,019 104,403
Shares used in computing diluted Non-GAAP Net income per share 102,038 104,898 101,902 104,925

* Diluted EPS is calculated under the "if converted" method for the three and six months ended June 30, 2009 and 2008. This includes the add-back of interest and convertible notes issuance cost amortization, net of applicable income taxes of $1.0 and $1.1 million forthe three months ended June 30, 2009 and 2008, respectively, and $2.1 and $2.2 million for the six months ended June 30, 2009 and 2008, 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, Informatica's acquisition of AddressDoctor, expected benefits to our customers and products and assumptions regarding product release and service availability. 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) successful integration of AddressDoctor's products and employees and the achievement of expected synergies; (4) lack of control regarding our strategic partners' devotion of adequate resources to promote, sell, implement, and support our products; and (5) delays or changes in announced product and service functionality. Additional risks and uncertainties are included under the caption "Risk Factors" in Informatica's report on Form 10-Q for the quarter ended March 31, 2009, which are on file with the SEC and are available on the Company's investor relations website at http://www.informatica.com/. All information provided in this release is as of July 23, 2009 and Informatica undertakes no duty to update this information.

Note: Informatica, PowerCenter Cloud Edition, Informatica On Demand PowerCenter Serviceand AddressDoctorare trademarks or registered trademark 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.