Informatica Inc.

Good afternoon, everyone, and welcome to Informatica's physical Q1 2022 earnings conference call. My name is Brika, and I'll be your event specialist today. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. Thank you. I would now like to introduce our host, Victoria Hyde-Dan, Vice President, Investor Relations.

Good afternoon, and thank you for joining us to review Informatica's first quarter 2022 earnings results. Joining me on today's call are Amit Walia, Chief Executive Officer, and Eric Brown, Chief Financial Officer. Before we begin, we have a couple of reminders. Our earnings press release and slide presentations are available on our Investor Relations website at investors.informatica.com. Our prepared remarks will be posted on the Investor Relations website after the conference call concludes. During the call, we will be making comments of a forward-looking nature. Actual results may differ materially from those expressed or as a result of various risks and uncertainties. For more information about some of these risks, please review the company's SEC filings, including the section titled Risk Factors included in our most recent 10Q and 10-K filing for the full year 2021. These forward-looking statements are based on information as of today, and we assume no obligation to publicly update or revise our forward-looking statements except as required by law. Additionally, we will be discussing certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not substitute for measures of financial performance prepared in accordance with GAAP. A reconciliation of these items to the nearest U.S. GAAP measure can be found in this afternoon's press release and in our slide presentation available on Informatica's Investor Relations website. It is my pleasure to turn the call over to Amit.

Thank you, Victoria. Good afternoon, everyone. I am pleased to be with you today. Before we begin with our business results, I would like to acknowledge the humanitarian crisis in Ukraine. We join our customers, partners, our employees and the global community in condemning the unprovoked invasion of Ukraine by Russia. As a company, bound together by our values and respect for all, our hearts are with the people of Ukraine and all those with friends and family in the region. Many of our employees around the world are directly helping with the refugee crisis in many ways, and I couldn't be prouder of Team Informatica for the speed and generosity of their response. As a company, we have donated to Doctors Without Borders and Save the Children for Ukraine. Informatica has a strong purpose-driven culture, and that has never been more evident than it is today. From a business perspective, Informatica has suspended all new sales in Russia in compliance with the U.S. government's actions, and the impact is not material for our Q1 results or longer-term financial outlook. Now I would like to share my perspective on first quarter business results. and then hand the call over to Eric to review our first quarter financial results. Afterward, I'll come back to share my observations on the business at large before turning the call over to Eric again to provide full year and Q2 guidance. So turning to Q2, we started fiscal 2022 strong with both subscription annual recurring revenue and cloud annual recurring revenue exceeding the high end of the guidance with growth at 32% and 43% year-over-year, respectively. During the quarter, we observed a better-than-expected sales pipeline mix shift from self-managed to cloud, and we expect this dynamic to continue given the strong demand for digital transformation. We also strengthened our operating profitability and cash flow execution and exceeded the high end of guidance for non-GAAP operating income. Now, last quarter when I spoke to you, we listed three strategic priorities and key areas of investment focus for 2022. The first is product innovation. The second is continuing to scale our go-to-market. And the third is strategic partnership expansion. I would like to use this framework for today's update. So turning to our first priority, we are working extensively to enhance our IDNC platform advantage and focusing R&D investments to drive cloud-first new workloads. We believe the breadth of our IDMC platform is unparalleled. It provides a suite of seven best-in-breed solutions powered by Clare, our AI engine, with over 50,000 metadata-aware connections. IDMC platform operates at a significant scale, processing 32.2 trillion cloud transactions per month as of March 2022, an increase of 65% year-over-year and 16% sequentially. In the first quarter, we leveraged our product innovation, rather our new product innovation, to further strengthen our customer engagement across four distinct journeys. Beginning with the first customer journey, analytics, where we added a lot of innovation last quarter, here we are democratizing and simplifying data engineering workload execution at every step of the software lifecycle. Like in design time, we are providing a simple wizard-based local interface to build very complex data pipelines. We added replication for many new sources like Google Analytics, SAP S4 HANA, NetSuite, and ServiceNow to cloud data warehouse targets with application ingestion. At runtime, we now provide an advanced serverless capability to run data engineering workloads that auto-scale without any infrastructure provisioning or tuning. And lastly, we operationalize machine learning at scale by consuming machine learning models within data engineering pipelines. Turning to the second customer journey business 360, last quarter we launched a cloud native multi-tenant master data management solution that delivers accurate, complete, and trustworthy master data across enterprise-wide business processes. With AI automation powered by our AI engine Clare, we support mastering of all key business entities such as customer, product, supplier, location, and many more to provide clean and consistent 360 views. Linking relationships across master data entities increases the simplicity and productivity of managing multiple domains across the enterprise. We also increase the openness of our platform with new APIs to integrate MDM with other applications. Moving to our third customer journey, data governance and privacy, we improved data sharing with the ability to shop for trusted data and AI models through a self-service, very simplified cloud-based data marketplace integrating data quality with business context organic expansion of the marketplace based on user requests order context selection to streamline ordering and personalization of the marketplace look and feel we also advanced automated data classification with over 50 out-of-the-box data classifiers to jumpstart automation and cataloging and improve serverless scanning for deep metadata connectivity an automated lineage of data across multi-cloud and hybrid data warehouses and data links. And next, let me talk to our fourth newly added customer journey this year that we call application integration and hyper-automation. Today, the app software landscape is extremely fragmented with apps in the cloud, on-prem, from different vendors or custom apps that are just not designed to work together. Customers are struggling to integrate and connect their apps to automate their end-to-end business processes. In this journey, we're advancing our customers' ability to seamlessly orchestrate the exchange of any kind of data across any latency through these apps, whether it's cloud, mobile, on-prem apps, used in business processes across the entire landscape of an enterprise. Our IDMC platform that is powering these journeys continues to win accolades from industry analysts which as you all know is a very important consideration for enterprise customers when they are looking to make purchasing decisions. We are proud once again to be named a 2022 Gartner Peer Insights customer's choice for data integration tools, making Informatica the only vendor to receive this accolade four consecutive times. More recently, we were named the Fast Company's annual list of world's 50 most innovative companies for 2022. And Informatica ranked number two in the very competitive enterprise category. I am really proud of this one. We are deeply grateful for this prestigious recognition, which speaks to our ongoing commitment to delivering product-led innovation on a global scale. Now turning to our second priority, we made excellent strides in scaling our go-to-market sales motion. We had another solid quarter of sales execution with our ability to sell large multi-year deals to new and current customers. At the end of first quarter, we now have 164 customers that spend more than 1 million in subscription ARR, an increase of 50% year-over-year, and 1,732 customers that spend more than 100,000 in subscription ARR, an increase of 22% year-over-year. Last quarter, I spoke about creating new routes to market, demonstrating our strategic commitment to industry-specific vertical solutions. I'm very pleased to say we've reached an important milestone in that strategy in launching our industry-specific IDMC verticals with the launch of IDMC for Retail, a cloud-neutral, end-to-end data management solution for the retail industry. IDMC for Retail enables retail companies to deliver highly personalized, digital-first customer experiences across all channels at enterprise scale. Customers across the globe in key verticals Financial services, retail, healthcare, consumer goods, and public sector have selected our IDMC platform across all the four journeys I mentioned. Let me give you a few notable examples. Beginning with Gilead Sciences, a biopharmaceutical company with a mission to discover, develop, and deliver innovative therapeutics for people with life-threatening diseases. Gilead chose Informatica as a strategic partner for their master data management global rollout and expansion to bring enterprise data across all Gilead locations. This solution allows Gilead to process clinical trials data faster and will provide the ability to detail analysis for a global rollout across all Gilead product lines. We're also very pleased to see existing customers expand the cloud portfolio with Informatica. Burton Snowboards, a longtime customer, is adding capabilities for data mastering and governance with Informatica's cloud-native master data management, Axon data governance, and enterprise data catalog. Moving to the public sector, Ontario Health, is a government agency that is responsible for ensuring high quality health care services, serving almost 15 million citizens across Ontario, Canada. Ontario Health is now leveraging our IBM platform in partnership with Microsoft Azure to move more workloads and data from on-prem to the cloud, lowering the risk and overall cost via cloud data architecture. And lastly, a great retail customer is TaylorMade. For all the golf enthusiasts, a creator of revolutionary cloud products and is supported by a network of almost 1500 PGA professionals. TaylorMade selected Informatica to manage their customer data across multiple cloud ecosystems, helping them integrate multiple data sources to provide both the customer and customer service teams a real-time and trusted vision of order and inventory data. Moving to our third priority, which is to make Informatica the easiest to do business with and win together with strategic partners. We had another quarter of strong engagement with ecosystem and global system integrator partners in winning new deals. This reflects our Switzerland of data management position in the market that customers value. In the first quarter, the number of ecosystem co-sell wins grew over 97% year over year. Market-based transaction volume doubled year over year, including excellent transaction with key ecosystem partners. Yesterday, we announced an expanded partnership with Snowflake that will result in deeper product integrations for data governance, acceleration and scaling of joint marketing and demand gen activities, and expanded field sales collaboration. This is in addition to our already existing cloud data warehouse modernization program, which already enables some of the largest Informatica power center deployments in the world to successfully migrate to the Snowflake data cloud. We look forward to closer engagement with Snowflake. turning to our global system integrator partners. We added new partners with cloud expertise to our partner program, and we continue to make improvements to the program to attract new partners. We expanded our strategic partnership with Wipro, and we leveraged their deep industry expertise and global reach to expand customer adoption of IDNC and accelerate cloud modernization for global customers. As a part of this partnership, 2,500 of Wipro's consultants will be trained on Informatica's cloud IDNC platform and solutions. We have We also have more partners in the process of establishing centers of excellence with access to a migration factory to help customers migrate their on-prem workloads to the cloud. We're already seeing new maintenance to cloud migration deals from existing partners. These are all operational workloads and the customer drives the pace of digital transformation, which is approximately a nine to 12 month lag to convert from maintenance ARR to cloud ARR once the implementation is completed. With that context, Let me now hand the call over to Eric to discuss Q1 financial results. Eric.