Informatica Inc.

for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. It is now my pleasure to introduce your host, Victoria Hyde-Dunn, Vice President of Investor Relations. Please proceed.

Thank you. Good afternoon, and thank you for joining Informatica's first quarter 2024 earnings conference call. Joining me today are Amit Walia, Chief Executive Officer, and Mike McLaughlin, Chief Financial Officer. Before we begin, we have a couple of reminders. Our earnings press release and slide presentation are available on our Investor Relations website at investors.informatica.com. Our prepared remarks will be posted on the IR 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 implied 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 10-Q and 10-K filing for the full year 2023. 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 a 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 our slide presentation available on Informatica's investor relations website. With that, it's my pleasure to turn the call over to Amit.

Well, thank you, Victoria. Thank you, everyone, for joining us today. I will start today's call by summarizing three key points. First, we delivered a solid first quarter executing our cloud-only consumption-driven strategy. In line with our pre-announcement last week, we delivered all key growth and profitability metrics above our midpoint guidance, and we are reaffirming full-year 2024 guidance. Second, we further accelerated Informatica's product innovation journey to deliver the best data management products on the industry's only AI-powered data management platform, serving a multi-vendor, multi-cloud hybrid needs of modern enterprises. We launched Cloud Data Access Management, our new data access and governance solution, based on technology from our acquisition of Privatar last year. As we head into Informatica world, we plan to launch Clare GPT, our generative AI chat interface on the IDMC platform. First, as we shared at our investor day, we are focused on consistently executing our cloud-only consumption-driven strategy across three growth engines. ongoing data-driven digital transformation, our on-premise to cloud migration, and GenAI to fuel cloud growth and drive long-term value creation. Now let's discuss these topics in more detail. Turning to first quarter results, cloud subscription ARR grew 35% year-over-year to 653 million, subscription ARR increased 13% year-over-year to 1.16 billion, And total ARR rose 7% year-over-year to 1.64 billion. Total revenue grew 6% year-over-year to 389 million. And non-GAAP operating income increased 29% year-over-year to 109 million. Adjusted unlevered free cash flow after tax was 183 million. We increased opportunities with existing customers. and drove new workloads in G2K markets through our sales teams and our partners supported by a healthy cloud pipeline. Approximately 72% of our cloud net new ARR in the trailing 12 months came from new cloud workloads and expansions. Customers that spend more than a million dollars in subscription ARR increased 24% year-over-year to 258 customers. we saw strong growth in average subscription ARR per customer, which now has reached to $310,000, a 15% increase year-over-year. We closed many new logos and expansion deals with great companies in the quarter that highlight our platform advantage. Let me share a few. University Hospitals of Derby and Burton, UHDB, part of the NHS Foundation Trust, A leading provider of healthcare services across the Midlands region of the UK is undertaking a transformational electronic patient record consolidation program. As a part of this strategic initiative, UHDB has chosen IDMC as its platform of choice. IDMC specifically is cloud data governance, cloud data integration, and cloud data quality modules will play a critical role in connecting disparate data sources across UHDB's hospital network. Dubai Islamic Bank is a large Islamic bank in the UAE. They recently purchased IDMC to address the data quality, data governance and data marketplace requirements, which will ensure proper reporting to the business, support compliance with central bank regulations and enhance their customer experience. Bridgestone, a global leader in premium tires and sustainable mobility solutions, is partnering with us and our MDM solutions to support them in managing and ensuring the quality of their products, suppliers, financial information, and customer data to optimize the supply chain and inventory operations across the globe. We at Informatica are the Switzerland of data, and the only data management partner at scale that manages data of any type, any pattern, any complexity, or any workload across any location. We continued co-selling with our ecosystem partners such as Microsoft, AWS, GCP, OCI, Snowflake, Databricks, and MongoDB. We also made new announcements with Snowflake and GCP at Google Cloud Text. With Google Cloud, we announced a new MDM extension for Google BigQuery to simplify and accelerate the use of high-quality trusted data from Informatica to power Gen-AI workloads with Vertex AI and Google Gemini and customer data platform workloads with Google BigQuery and Looker. We also announced a global expansion with a new point of delivery on Google Cloud in Saudi Arabia. With Snowflake, we announced comprehensive integration with and support for Snowflake Horizon. Snowflake's native data governance and privacy controls. We were also one of Snowflake's launch partners for Snowflake Horizon's partner ecosystem. Our GSI partners continue to create solutions with IDMC embedded to take to market. For example, PCS recently launched an enterprise cloud data pipeline to ingest a multitude of disparate data types and process and provision the data for a range of smart data-driven business apps. Capgemini released a retail specific version of the ESG sustainability hub built on IBM's. Our partner migration program continues to expand with 55 partners now in the power center modernization program. The master data management modernization program that is launched at the end of last year saw its first batch of six partners complete training. Ten more partners have been approved to join the program and are taking the on-demand training. Innovation remains paramount at Informatica. Let me discuss a few net new product innovations on IBM C. In the MDML 360 apps, we delivered a new visual experience that is modern, accessible, and AI-enabled, and very important for our business users. Along with its updated user experience, data stewards are also empowered to get deeper insights with self-service reporting capabilities, enhanced survivorship options, and simplified management of complex hierarchies. Cloud data governance and catalog enable a deeper ecosystem support for Microsoft Fabric Data Warehouse, hosting on OCI to seamlessly govern data and new data scanners for MariaDB Server and DB2. Additional profiling support is also included for Teradata, SAP HANA, SAP BW, and external tables for Oracle, Azure Synapse, and Athena. In February, we launched a new cloud data access management solution. CDAMP enhances data security and privacy with capabilities that help organizations reduce the time it takes to safely provision data, mitigate the risk associated with data misuse, and simplify compliance with laws and regulations. CDAMP is based on the technology from our acquisition of Privatar in July of last year and has been integrated into ID&C to enable data use and sharing with policy-based controls that are automated using classifications and metadata in our cloud data governance catalog. Integration with IDMC means that data can be consistently protected for hybrid and cloud data platforms with cloud data integration or use in conjunction with the cloud data marketplace to accelerate the delivery of trusted data products and related assets to all data consumers through self-service. Now turning to modernization. We have close to a billion dollars of on-prem maintenance and self-managed DRR. Approximately 28% of cloud net new ARR in the trailing 12 months came from on-prem to cloud migrations, which is up three percentage points sequentially as cloud customer modernization deals are starting to accelerate. We closed over 30 cloud modernization deals, which grew over 100% year over year. We are seeing stronger customer adoption of PowerCenter Cloud Edition, which represented over 80% of all modernization deals, up from 60% last quarter. Modernization projects are all operational mission-critical workloads. Once we modernize, it enables cross-selling into new workloads more easily, allowing us to upsell and cross-sell IDMC in the future. Frontier Communications, one of the largest pure-play fiber-to-the-home providers in the U.S., is a great customer expansion and modernization story. Their recent investment with Informatica enables the modernization of their on-prem platform to IDMC, including data integration, MDM, and data governance. This will accelerate their plans to improve customer experience and master address data with Informatica's MDM solution. Another great modernization story is Sodexo, a global leader in sustainable food and valued experiences at every moment in life, learn, work, heal, and play. Sodexo is leveraging IDMC in its group data platform built on Azure, as well as to prepare its upcoming migration of its supply master data management platform in North America from on-prem to cloud. We continue to hear from industry analysts that we are an innovation leader and are pleased to be recognized as the leader in the 2024 Gartner Magic Quadrant for Integration Platform as a Service. This is the ninth time that Gartner has positioned Informatica as a leader in this report. We were also named the leader in the 2024 Gartner Magic Quadrant for Augmented Data Quality Solutions report. Gartner positioned Informatica as the furthest on the completeness of vision access, as well as the highest on the ability to execute access. We were also recognized as the leader in the Forrester Wave for Enterprise Data Fabric Q1 2024. Informatica received the highest score for current offerings. Now, looking ahead, let me share some observations regarding GenAI and our strategy for executing against it. Look, I firmly believe that the next phase of digital transformation will be fueled by GenAI, which is poised to drive outsized innovation and productivity gains for enterprises. As we enter the Gen AI revolution, enterprises are realizing that developing an AI strategy actually requires creating a data strategy first. The reality is that everyone is ready for Gen AI, except your data. Informatica is driving the modern data management stack for Gen AI enterprise architectures as the only comprehensive and at-scale AI-led data management platform. Preparing data for Gen AI project involves collecting data, cleansing data, cataloging data, ensuring quality, mastering, governing, and accessing it through Informatica's IDMC. We hear time and time again from customers and partners that the breadth of IDMC's solution is mission critical to processing their workloads. IDMC processed 92 trillion mission critical cloud transactions in March, growing 69% year over year. Claire, our AI engine is embedded in all our solutions, leveraging ML algorithms and NLP on metadata to drive intelligence and productivity, accessing over 50,000 metadata-aware connections, and now leveraging over 48 terabytes of active metadata in the cloud. Our efforts to assist customers with their AI strategy, or GenAI strategy, is divided into two categories. Informatica for GenAI, and GenAI from Informatica, both available from the IDMC platform. In the area of Informatica for GenAI, we are already well underway with our new API and AMP integration services where customers can use services for a simple no-code way to add advanced GenAI capabilities to existing IDMC implementation. This makes it easier for developers to use different GenAI models, us being now the Switzerland of models, and let customers update their apps with GenAI capabilities without changing any code. Our GenAI solution with built-in software development lifecycle and API governance drives better control, performance, and scalability, ensuring GenAI is ready for complex business needs. This is a fast-moving space as we innovate and our customers use IDMC capabilities for their GenAI use cases. Now, in the area of GenAI from Informatica, we believe this is a game changer. To support our customer's AI journey, we have developed KRGPT, a transformational chat interface to do all of the complex data management tasks through NLP in a user-friendly format that will revolutionize and democratize data management throughout the enterprise. Users will now be able to easily find relevant data assets, tables, columns, PII-sensitive data, and more using NLP queries. They will be able to explore data assets with, again, natural language questions to understand trends, KPIs, top customers, or any important insight. Additionally, Clared GPT will allow users to quickly understand the lineage of that data, dependence of data assets, and search and explore business terms, definitions, data quality scores, which are the data owners and stakeholders associated with these data assets. Users will then be able to generate new data products with ELT pipelines using NLP on data warehouses like Snowflake. AWS Redshift, Azure Synapse, Google BigQuery, and Databricks Delta Lake. While the operationalization of Genia workload is in its early stages, we are extensively engaged with customers of various industries such as healthcare, financial services, manufacturing, and technology that are participating in a wide range of use cases as part of the Clare GPT private preview. As we head into Informatica world later this month, we are pleased to announce that the Clare GPT will be available to IDMC customers using our IPU consumption model. We believe this will be a tailwind for us for the many years to come. As I wrap up, we are focused on consistently executing our commitments that we laid out on our investor day and driving ongoing data-driven digital transformation, on-prem to cloud migration, and GenEI to fuel cloud growth and drive long-term value creation. The operational health of our business remains very strong. As evidenced by a predictable subscription revenue business model, strong customer base, healthy cloud pipeline and retention rates, and strong unlimited free cash flow that has only continued to grow. We believe this continues to position as well for durable, consistent future growth and profitability. Thank you to all my Informatica colleagues for their hard work and continued commitment. I would also like to thank our customers, our partners, and our shareholders for supporting us. We look forward to sharing more product innovation announcements and some pretty cool demos at Informatica World 2024 later this month. With that, let me turn the call over to Mike. Mike, please take it away.