Informatica Reports Record Third Quarter License Revenues, Total Revenues And Earnings

Achieves Third Quarter Record GAAP Operating Margin of 18 Percent and Non-GAAP Operating Margin of 25 Percent

REDWOOD CITY, Calif., October 22, 2009 - 

Informatica Corporation (NASDAQ: INFA), the world's number one independent provider of data integration software, today announced financial results for the third quarter ended September 30, 2009.

Revenues for the third quarter of 2009 were $123.4 million, up eight percent from the $113.8 million recorded in the third quarter of 2008. License revenues for the third quarter were $50.0 million, up nine percent from the $45.8 million recorded in the third quarter of 2008. Income from operations for the third quarter, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $22.3 million, up 26 percent from $17.7 million in the third quarter of 2008. GAAP net income for the third quarter was $16.2 million or $0.17 per diluted share, up 21 percent from $13.4 million or $0.14 per diluted share in the third quarter of 2008. For the three-month periods ended September 30, 2009 and September 30, 2008, earnings per diluted share was calculated on an "if converted" basis, including the add-back of $1.0 million and $1.1 million, respectively, of interest and convertible notes issuance cost amortization, net of income taxes.

Non-GAAP income from operations for the third quarter of 2009 was $30.9 million, up 22 percent from $25.4 million in the third quarter of 2008. Non-GAAP net income for the third quarter of 2009 was $22.3 million or $0.22 per diluted share, up over 15 percent from $18.9 million or $0.19 per diluted share in the third quarter of 2008. A reconciliation of GAAP results to non-GAAP results is included below.

For the nine-month period ended September 30, 2009, revenues were $349.8 million, up six percent from the $331.3 million recorded for the first nine months of 2008. License revenues for the first nine months of 2009 were $142.8 million, up three percent from $138.6 million in the first nine months of 2008. GAAP income from operations for the first nine months of 2009 was $54.4 million, up 22 percent from $44.7 million in the first nine months of 2008. GAAP net income for the first nine months of 2009 was $39.2 million or $0.41 per diluted share, up over seven percent from $36.1 million or $0.38 per diluted share in the first nine months of 2008. Non-GAAP income from operations for the first nine months of 2009 was $81.0 million, up 23 percent from $65.6 million in the first nine months of 2008. Non-GAAP net income for the first nine months of 2009 was $58.1 million or $0.59 per diluted share, up 13 percent from $51.3 million or $0.52 per diluted share in the first nine months of 2008. For the nine-month periods ended September 30, 2009 and September 30, 2008, earnings per diluted share is calculated on an "if converted" basis, including the add-back of $3.1 and $3.3 million, respectively, of interest and convertible notes issuance cost amortization, net of income taxes.

"With our time-tested strategy and the team's proven operational discipline, Informatica has attained sustained record results over the past five years," said Sohaib Abbasi, chairman and CEO of Informatica. "In 2010, with improving macroeconomic conditions, Informatica is well positioned for strong growth through relentless innovation that delivers compelling business value to our customers."

Significant milestones achieved since July 2009 include:

  • Signed repeat business with 237 customers. Customers continue to derive considerable value from their investments in Informatica solutions. Repeat customers included ACH Food Companies, Cincinnati Children's Hospital, CVS Pharmacy, Electronic Arts, ING Continental Europe, Ministerie van Defensie, Paramount Pictures and Vivo Celular.
  • Added 64 new customers. Informatica increased its customer base this quarter to 3,857 companies. New customers include APS Healthcare, Cyfrowy Polsat, China Mobile Jiangsu, Hachette Book Group, HDFC Bank, Ruby Tuesday, University of Michigan and VMware.
  • Acquired Agent Logic. The acquisition expands Informatica's addressable market with an additional high-growth, adjacent technology category - Complex Event Processing (CEP). The combination of CEP and data integration enables organizations to be more responsive, adaptable and agile.
  • Expanded partnership with HP. Informatica and HP will deliver a new portfolio of integrated business intelligence solutions that help customers accelerate business decisions and optimize business performance by giving them access to more timely and accurate information.
  • Partnered with Intel. Intel SOA Expressway will embed Informatica B2B Data Transformation for integrating and transforming data from legacy and proprietary formats to SWIFT and other payment networks, thus accelerating integration and messaging of financial industry information across disparate formats and systems.
  • Earned top marks in Customer Loyalty in TNS Custom Research Data Integration Software survey. For the fourth consecutive year, Informatica earned top marks in Customer Loyalty in the 2009 Data Integration survey conducted by independent research firm TNS, a world leader in market insight and information.

Conference Call and Webcast
Informatica will discuss its third 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 32146396.

GAAP to Non-GAAP Results
(in thousands, except per share data)
(unaudited)



Three Months Ended
September 30,

Nine Months Ended
September 30,


2009
2008
2009
2008









GAAP Net income
$16,192
$13,381
$39,240
$36,108









Plus:








Amortization of acquired technology
2,081
1,283
5,497
2,854

Amortization of intangible assets
2,754
1,502
7,239
2,857

Facilities restructuring charges
557
896
1,961
2,764

Purchased in-process research and development
-
-
-
390

Share-based payments
4,369
4,038
13,132
11,984

Patent contingency accrual reversal
(1,170)
-
(1,170)
-

Tax benefit of amortization of intangible assets and restructuring charges
(1,979)
(1,420)
(5,453)
(3,221)

Tax benefit of purchased in-process research and development
-
-
-
(152)

Tax benefit of share-based payments
(940)
(748)
(2,787)
(2,244)

Tax effect of patent contingency accrual reversal
456
-
456
-









Non-GAAP Net income
$22,320
$18,932
$58,115
$51,340




















Three Months Ended
September 30,

Nine Months Ended
September 30,


2009
2008
2009
2008
Diluted net income per share: *
















Diluted GAAP Net income per share
$ 0.17
$ 0.14
$0.41
$0.38









Plus:








Amortization of acquired technology
0.02
0.01
0.05
0.03

Amortization of intangible assets
0.02
0.01
0.07
0.03

Facilities restructuring charges
0.01
0.01
0.02
0.02

Purchased in-process research and development
-
-
-
-

Share-based payments
0.04
0.04
0.13
0.11

Patent contingency accrual reversal
(0.01)
-
(0.01)
-

Tax benefit of amortization of intangible assets and restructuring charges
(0.02)
(0.01)
(0.05)
(0.03)

Tax benefit of purchased in-process research and development
-
-
-
-

Tax benefit of share-based payments
(0.01)
(0.01)
(0.03)
(0.02)

Tax effect of patent contingency accrual reversal
-
-
-
-









Diluted Non-GAAP Net income per share
$ 0.22
$ 0.19
$ 0.59
$ 0.52









Shares used in computing diluted GAAP Net income per share
103,516
103,740
102,507
103,735
Shares used in computing diluted Non-GAAP Net income per share
104,936
104,435
103,535
104,640


* Diluted EPS is calculated under the "if converted" method for the three and nine months ended September 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 million and $1.1 million for the three months ended September 30, 2009 and 2008, respectively, and $3.1 million and $3.3 million for the nine months ended September 30, 2009 and 2008, respectively.

About Informatica
Informatica Corporation (NASDAQ: INFA) is the world's number one independent provider of 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 3,850 enterprises 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.

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 Agent Logic and expected benefits to our customers and products, efforts being conducted with strategic partners 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 Agent Logic'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 June 30, 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 October 22, 2009 and Informatica undertakes no duty to update this information.

###

Note: Informatica and Agent Logic 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.