Informatica Reports Record Second Quarter Results

Achieves Revenue Growth of 21 Percent and Operating Margin Increase of 300 Basis Points

REDWOOD CITY, Calif., July 17, 2008 -  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, 2008.

Revenues for the second quarter of 2008 were $113.8 million, up 21 percent from the $94.3 million recorded in the second quarter of 2007.  License revenues for the second quarter were $48.5 million, up 16 percent from the $41.8 million recorded in the second quarter of 2007. Net income for the second quarter, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $11.5 million or $0.12 per diluted share, up more than 9 percent from net income of $10.5 million or $0.11 per diluted share in the second quarter of 2007.  For the three-month periods ended June 30, 2007 and June 30, 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 net income for the second quarter of 2008 was $16.7 million or $0.17 per diluted share, up more than 6 percent from $15.6 million or $0.16 per diluted share in the second quarter of 2007.  Non-GAAP net income excludes charges related to purchased in-process research and development, share-based payments, facilities restructurings and the amortization of acquired technology and intangible assets.  A reconciliation of GAAP operating results and non-GAAP results is included below.

For the six-month period ended June 30, 2008, revenues were $217.5 million, an increase of 20 percent from the $181.4 million recorded for the first six months of 2007. License revenues for the first six months of 2008 were $92.7 million, up 17 percent from $79.4 million in the first six months of 2007.  GAAP net income for the first six months of 2008 was $22.7 million or $0.24 per diluted share, up over 14 percent versus $19.6 million or $0.21 per diluted share in the first six months of 2007.  Non-GAAP net income for the first six months of 2008 was $32.4 million or $0.33 per diluted share, up over 6 percent versus $30.0 million or $0.31 per diluted share in the first six months of 2007.  For the six-month periods ended June 30, 2007 and June 30, 2008, earnings per diluted share is calculated on an “if converted” basis, including the add-back of $2.2 million of interest and convertible notes issuance cost amortization, net of income taxes.

“We are pleased with our record second quarter results” said Sohaib Abbasi, chairman and CEO of Informatica.  “These results further highlight that our value proposition for IT organizations to “do more with less” has promoted even broader customer adoption of our products and services in the current macroeconomic environment.”

 Significant milestones achieved since April 2008 include:

  • Signed repeat business with 239 customers.  Customers continue to derive considerable value from their investments in Informatica solutions.  Repeat customers included Advanced Micro Devices, Affymetrix, Chinatrust Commercial Bank, Deutsche Post, OAO Vimpelcom, State of Rhode Island, Taiwan Futures Exchange, and Virgin Media.
  • Added 287 new customers.  Informatica increased its customer base this quarter to 3,313 companies including 68 new Informatica customers and 219 customers added through the Identity Systems acquisition.  New customers include Alameda Alliance for Health, Allergan, Capita Life & Pensions Services, NAL Resources Management, National Oilwell Varco, Servico Federal de Processamento de Dada, and Syndicate Bank.
  • Launched Informatica 8.6.  Advancing leadership in data integration and data quality, Informatica announced the first comprehensive, unified, and open platform for data integration, Informatica 8.6. This latest release delivers new product and Software-as-a-Service offerings including PowerCenter Real Time Edition, On-Demand Data Loader Service, B2B Data Exchange, and Data Quality with identity resolution. This comprehensive platform addresses the complete range of data integration requirements within the enterprise and beyond.
  • Completed Acquisition of Identity Systems, a global leader in identity resolution technology. Identity resolution enables precise identity search and matching to find all the required critical information for an individual or organization. This strategic acquisition will extend Informatica products with innovative technology to search, match and resolve identity data about a variety of objects including people, companies and products. 
  • Launched Informatica On Demand Data Loader Service for Salesforce.  The newest addition to its Software as a Service (SaaS) offerings, the IOD Data Loader Service, is a bi-directional integration offering that allows Salesforce administrators to automate many Salesforce integration processes such as synchronizing account information with other applications, creating back office orders from closed opportunities, and loading leads.
  • Announced Innovation Awards. Informatica hosted the tenth annual Informatica World Conference in Las Vegas, Nevada.  At the event, Bank of America, Deutsche Post, Duke Energy, KPN, Paramount, and Virgin Media were among the customers honored with Innovation Awards for their innovative application of Informatica technologies to drive business advantage.
  • Recognized in the "Leaders" Quadrant in the Gartner Data Quality Tools Magic Quadrant.  According to Gartner, “leaders in the market demonstrate strength across a complete range of data quality functionality, including profiling, parsing, standardization, matching, validation and enrichment. They exhibit a clear understanding and vision of where the market is headed, including recognition of non-customer data quality issues and the delivery of enterprise-level data quality implementations. Leaders have an established market presence, significant size and a multinational presence.”

Announced Planned Retirement of Girish Pancha by the End of 2008
Girish Pancha, executive vice president and general manager, data integration, announced his plan to retire by the end of 2008.  Pancha will continue his responsibilities at Informatica through his transition and will work with CEO Sohaib Abbasi to ensure a smooth transfer of his daily responsibilities and management of the business unit.

Conference Call and Webcast
Informatica will discuss its second quarter 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 +1 617-801-6888, reservation number 27697598.

GAAP to Non-GAAP Results
(in thousands, except per share data and percentages)
(Unaudited)
 
    Three Months Ended
June 30 ,
  Six Months Ended
June 30 ,
    2008   2007   2008   2007









GAAP Net income   $ 11,503   $ 10,456   $ 22,727   $ 19,550









Plus:                

Amortization of acquired technology   951   727   1,571   1,449
  Amortization of intangible assets   993   362   1,355   718
  Facilities restructuring charges   921   1,026   1,868   2,075
  Purchased in-process research and development   390     390  
  Share-based payments   3,832   3,877   7,945   7,918
  Tax benefit for amortization of intangible assets and restructuring charges   (1,049)     (1,801)  
  Tax benefit of purchased in-process research and development   (152)     (152)  
  Tax benefit of share-based payments   (694)   (832)   (1,496)   (1,699)









Non-GAAP Net income   $16,695   $15,616   $32,408   $30,011
                 
                 
    Three Months Ended
June 30 ,
  Six Months Ended
June 30,
    2008   2007   2008   2007
Diluted net income per share: *                









Diluted GAAP Net income per share   $   0.12   $   0.11   $   0.24   $   0.21









Plus:                
  Amortization of acquired technology   0.01   0.01   0.01   0.01
  Amortization of intangible assets   0.01   -     0.01   0.01
  Facilities restructuring charges   0.01   0.01   0.02   0.02
  Purchased in-process research and development   -     -     -     -  
  Share-based payments   0.04   0.04   0.8   0.8
  Tax benefit for amortization of intangible assets and restructuring charges   (0.01)   -     (0.02)   -  
  Tax benefit of purchased in-process research and development   -     -     -     -  
  Tax benefit of share-based payment    (0.01)   (0.01)    (0.01)   (0.02)









Diluted Non-GAAP Net income per share   $   0.17   $   0.16   $   0.33   $   0.31









Shares used in computing diluted GAAP Net income per share   104,457   103,206   104,403   102,778
Shares used in computing diluted Non-GAAP Net income per share   104,898   103,951   104,925   103,472


*Diluted EPS is calculated under the "if converted" method for the three and six months ended June 30, 2008 and 2007.
This includes the add-back of $1.1 and $2.2 million of interest and convertible notes issuance cost amortization, net of income taxes for both periods, 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 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.

SafeHarbor
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, 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, 2007 and 10-Q for the quarter ended March 31, 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 July 17, 2008 and Informatica undertakes no duty to update this information.

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 all their information assets across the enterprise.  More than 3,300 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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Note: Informatica, PowerCenter, Informatica Data Quality, Informatica B2B Data Exchangeand Informatica On DemandData Loader Service are trademarks or 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.