Informatica Reports Record Third Quarter Revenues Of $113.8 Million

Achieves Revenue Growth of 19 Percent and Operating Margin Increase of 370 Basis Points

REDWOOD CITY, Calif., October 16, 2008 -  Informatica Corporation (NASDAQ: INFA), the leading independent provider of enterprise data integration software and services, today announced financial results for the third quarter ended September 30, 2008.

Revenues for the third quarter of 2008 were $113.8 million, up 19 percent from the $96.0 million recorded in the third quarter of 2007.  License revenues for the third quarter were $45.8 million, up 12 percent from the $41.0 million recorded in the third quarter of 2007. Income from operations for the third quarter, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $17.7 million, up 56% from $11.3 million in the third quarter of 2007.  GAAP net income for the third quarter was $13.4 million or $0.14 per diluted share, in comparison to net income of $14.4 million or $0.15 per diluted share in the third quarter of 2007.  For the three-month periods ended September 30, 2007 and September 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 income from operations for the third quarter of 2008 was $25.4 million, up 48% from $17.2 million in the third quarter of 2007.  Non-GAAP net income for the third quarter of 2008 was $18.9 million or $0.19 per diluted share, up from $18.8 million or $0.19 per diluted share in the third quarter of 2007.  Non-GAAP income from operations and non-GAAP net income exclude 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 results to non-GAAP results is included below.

For the nine-month period ended September 30, 2008, revenues were $331.3 million, an increase of 19 percent from the $277.4 million recorded for the first nine months of 2007. License revenues for the first nine months of 2008 were $138.6 million, up 15 percent from $120.4 million in the first nine months of 2007.  GAAP income from operations for the first nine months of 2008 was $44.7 million, up 63 percent from $27.4 million in the first nine months of 2007. GAAP net income for the first nine months of 2008 was $36.0 million or $0.38 per diluted share, up 6 percent from $34.0 million or $0.36 per diluted share in the first nine months of 2007.  Non-GAAP income from operations for the first nine months of 2008 was $65.6 million, up 44% from $45.4 million in the first nine months of 2007.  Non-GAAP net income for the first nine months of 2008 was $51.3 million or $0.52 per diluted share, up over 4 percent from $48.8 million or $0.50 per diluted share in the first nine months of 2007.  For the nine-month periods ended September 30, 2007 and September 30, 2008, earnings per diluted share is calculated on an “if converted” basis, including the add-back of $3.3 million of interest and convertible notes issuance cost amortization, net of income taxes.   Non-GAAP income from operations and non-GAAP net income exclude charges related to purchased in-process research and development, share-based payments, facilities restructurings and the amortization of acquired technology and intangible assets.

“I would like to recognize and commend the Informatica team for their exceptional operational discipline to attain third quarter record revenues and operating income in these extraordinary times of macroeconomic turmoil,” said Sohaib Abbasi, chairman and CEO of Informatica.

  Significant milestones achieved since July 2008 include:

  • Signed repeat business with 231 customers.  Customers continue to derive considerable value from their investments in Informatica solutions.  Repeat customers included Autotrader.com, CVS Pharmacy, EMD Serono, Goodyear Tire & Rubber Company, Groupe Pernod Ricard, NAVTEQ Corporation, Norwich Union, and Telemar Norte Leste.
  • Added 55 new customers.  Informatica increased its customer base this quarter to 3,368 companies. New customers include BBVA, Beijing Administration for Industry & Commerce, Hawaii Medical Service Association, Luz y Fuerza del Centro, Messe Frankfurt, Omnicom Media Group, and Turk Telekomunikasyon.
  • Positioned in the "Leaders Quadrant” in the Gartner Data Integration Magic Quadrant.i According to Gartner, “Leaders have significant mind share in the market, and resources skilled with their tools are readily available. These vendors establish market trends, to a large degree, by providing new functional capabilities in their products, and by identifying new types of business problems where data integration tools can bring significant value. Examples of deployments that span multiple projects and types of use cases are commonplace in their customer base.”
  • Customer KPN won2008 Ventana Research Information Management Leadership Award. KPN was recognized, for its use of Informatica technology, as the organization that has most successfully used information to advance business and improve its performance. The Leadership Awards recognize pioneers and leaders, organizations and individuals that exemplify technology best practices.
  • Recognized as one of the "Top 100 most influential technology vendors for 2008." In  the annual State of the Market Report survey by Aberdeen Group, Informatica was recognized as one of the key vendors driving business value through technology. Over 9,000 executives were asked to name the companies that had the most impact on their businesses in the last year.

Conference Call and Webcast
Informatica will discuss its third 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 617-801-6888, reservation number 74458670.

GAAP to Non-GAAP Results
(in thousands, except per share data and percentages)
(unaudited)
 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2008   2007   2008   2007









GAAP Net income   $ 13,381   $ 14,446   $ 36,108   $ 33,996









Plus:                

Amortization of acquired technology   1,283   726   2,854   2,175
  Amortization of intangible assets   1,502   361   2,857   1,079
  Facilities restructuring charges   896   1,003   2,764   3,078
  Purchased in-process research and development       390  
  Share-based payments   4,038   3,753   11,984   11,671
  Tax benefit of amortization of intangible assets and restructuring charges   (1,420)   (815)   (3,221)   (815)
  Tax benefit of purchased in-process research and development       (152)  
  Tax benefit of share-based payments   (748)   (676)   (2,244)   (2,375)









Non-GAAP Net income   $18,932   $18,798   $51,340   $48,809
                 
                 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2008   2007   2008   2007
Diluted net income per share: *                









Diluted GAAP Net income per share   $   0.14   $   0.15   $   0.38   $   0.36









Plus:                
  Amortization of acquired technology   0.01   0.01   0.03   0.02
  Amortization of intangible assets   0.01   -     0.03   0.01
  Facilities restructuring charges   0.01   0.01   0.02   0.03
  Purchased in-process research and development   -     -     -     -  
  Share-based payments   0.04   0.04   0.11   0.11
  Tax benefit of amortization of intangible assets and restructuring charges   (0.01)   (0.01)   (0.03)   (0.01)
  Tax benefit of purchased in-process research and development   -     -     -     -  
  Tax benefit of share-based payments    (0.01)   (0.01)    (0.02)   (0.02)









Diluted Non-GAAP Net income per share   $   0.19   $   0.19   $   0.52   $   0.50









Shares used in computing diluted GAAP Net income per share   103,740   103,151   103,735   102,912
Shares used in computing diluted Non-GAAP Net income per share   104,435   103,914   104,640   103,723


*Diluted EPS is calculated under the "if converted" method for the three and nine months ended September 30, 2008 and 2007.
This includes the add-back of $1.1 and $3.3 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, 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 June 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 October 16, 2008 and Informatica undertakes no duty to update this information.

i The full definition of Leaders also includes the following:  “Leaders in the data integration tools market are front-runners in the convergence of single-purpose tools into an offering that supports a range of data delivery styles. These vendors are strong in the more traditional data integration patterns such as ETL, they support newer patterns such as data federation, and provide capabilities that enable data services in the context of SOA.”

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 3,350 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: Informaticais a 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.

Note: The Magic Quadrant is copyrighted 2008 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.