Informatica Inc.

Good afternoon, thank you for attending today's Informatica Inc. fiscal year third quarter 2024 conference call. My name is Cameron and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. And I would now like to pass the conference over to your host, Victoria Hyde-Dunn, Vice President of Investor Relations. You may proceed.

Thank you. Good afternoon, and thank you for joining Informatica's third 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 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 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 a 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 is my pleasure to turn the call over to Amit.

Thank you, Victoria, and everyone for joining us today. I will start today's call by summarizing three key points. First, we are pleased to report another solid quarter. Third quarter results exceeded the midpoint of our guidance ranges. driven by continued customer momentum and consistent execution of a cloud-only consumption-driven strategy. Second, we achieved a historic milestone, surpassing 100 trillion processed cloud transactions per month. This speaks to IDMC's incredible scale and product capabilities as the industry's only AI-powered cloud platform processing mission-critical data management use cases. And third, With a comprehensive IDMC platform and Gen-EI capabilities, including expanding Clare GPT's global footprint, we believe Informatica is even more well-positioned to strategically support enterprises and empower customers to use AI for data readiness and simplify their data estate. Starting with third quarter results, total revenues grew 3.4% year-over-year, and total ARR grew 6.7% year-over-year and both were above the midpoint of our guidance ranges. Cloud subscription ARR grew 36% year-over-year and came in at the high end of our guidance range. We strengthened our cash position and grew non-GAAP operating income by 18% year-over-year, exceeding the high end of our guidance range. Now looking into the fourth quarter, we are reaffirming full year guidance and our focus remains on executing plan to conclude 2024 strongly. The macro environment remains stable during the third quarter, consistent with our observations throughout the year. Approximately 76% of our cloud net new ARR in the trailing 12 months came from new cloud workloads and expansion. We are attracting new customers and expanding opportunities in the G2K market, supported by a robust partner ecosystem and healthy cloud pipeline. Customers that spend more than a million in subscription ARR increased 18% year over year, and customers that spend more than 5 million in subscription ARR almost doubled year over year. We saw continued strong growth in average subscription ARR per customer, which reached over 327,000, a 15% increase year over year. Our cloud business is very well diversified. Approximately half of the cloud subscription ARR is from integration, which comprises of data integration and app and API integration solutions. And the other half comes from master data management, data catalog, and data governance use cases. These solutions cover a broad set of customer use cases, focusing on both the technical and business users across a digital enterprise, addressing everything from the front-end customer revenue generation to back-end business productivity-oriented use cases. We are seeing healthy growth across these solutions as customers create significant value using the IDMC platform. And for that, let me share a few great customer stories. Subaru implemented our cloud data integration service to enable cross-departmental management of product lifecycle data from car development and manufacturing to sales and maintenance. Now, enhanced car quality drives higher productivity and customer satisfaction. Citizens employed our massive data management capabilities to build a single customer view, enabling real-time personalization across many touch points. The architecture built on AWS and IDMC reduces data onboarding and democratizes access to trusted data. To create exceptional experiences, Holiday Inn Club Vacations unified its customer data with our cloud master data management, data governance, and data quality solutions. With a 360-degree view of every member, the company will drive greater personalization across online and offline touchpoints, including building long-term loyalty. Eberdrola, a global energy leader, top wind power producer, and one of the largest electricity companies, is enhancing its partnership with Informatica's IDMC platform to launch a global data governance project. This initiative aims to standardize its data strategy across its subsidiaries across the globe in UK, Spain, and in the US, incorporating its technical ecosystem of AWS and Azure. I had the pleasure of meeting Dr. Anish from Dr. Wendy's et al., India iLabs Locations 20-year celebration last month. To keep pace with digital therapeutics and forensic regulations, Dr. Reddy's reimagined its cloud data strategy for the AI era. Now the team uses Informatica's IDMC platform to automate data governance and quality across its data integration and engineering pipelines, speeding up project delivery and clinical AI use cases. Next. Approximately 24% of cloud net new ERR in the trailing 12 months came from on-prem to cloud migrations. This is still a very small portion of our on-prem install base, but it enables us to modernize our customers' mission-critical workloads and, of course, leads to then platform expansion opportunities for us. We see strong customer adoption of PowerCenter Cloud Edition, which now represents over 90% of all modernization deals in Q3. For example, Lumen Technologies, a global integrated network solutions provider, has successfully modernized their on-prem power center workloads to IDMC, accelerating time to value and minimizing migration costs and effort in its expansion to the cloud. A leading global food, snack, and beverage corporation is modernizing the power center footprint to IDMC and expanding the users to include master data management and data governance. This will allow them to create a comprehensive enterprise AI-powered data management platform powered by Informatica with Azure as part of its global digital transformation. Turning to our ecosystem partners, we are pleased to be recognized by Oracle Cloud as the Global ISV Business Impact Partner of the Year, reflecting the rapid growth and success of our strategic partnership with Oracle. We announced expanded governance support for the OCI ecosystem with new GoldenGate scanners, the availability of Power Center Cloud Edition on OCI, and our generative AI blueprint for Oracle Generative AI and Oracle Database 23 AI. As we become the Switzerland of Gen AI, we have launched Gen AI blueprints for all six strategic ecosystems, including AWS, Azure, Databricks, Google Cloud, Oracle, and Snowflake. For Databricks, we GA support for Databricks LLM functions. We have native SQL pushdown. and will showcase the blueprint and our latest Databricks integrations and innovations at the Databricks World Tours. With our GSI partners, we saw continued strong progress from our partners with Informatica, enjoying a prominent place in their data and AI practice. For example, Capgemini launched a solution to help customers modernize Databricks using Informatica. Additionally, we celebrated 25 years of partnership with Deloitte, our most successful global partner, with a practice of 6,000 Informatica trained and certified professionals. The partnership has never been stronger, and we launched a joint plan to accelerate our growth together and take advantage of the opportunity to help our customers modernize and get their data ready for AI. We are the innovators in our industry and we're pleased to be named a leader in the Forrester Wave Enterprise Data Catalog's Q3 2024 report. We also achieved the highest rating possible in the Dressner Advisory Services Data Catalog Market Study and Master Data Management Market Study 2024 reports. For the fourth consecutive year, we were certified by J.D. Power for outstanding customer service experience in its Certified Assisted Technical Support program. We were also pleased to receive two 2024 awards from the Technology and Services Industry Association, or TSIA, for leveraging AI in revenue generation workflows and innovation in knowledge categories. This recognition is third-party confirmation of Informatica's core value proposition to customers. We have the best data management product in the industry, offered on the only cloud data AI-powered platform, serving the multi-vendor, multi-cloud, and hybrid needs of enterprise customers. In September, we crossed a historic milestone In less than 10 years, IDMC has now grown to process 200 billion cloud transactions per month to 101 trillion cloud transactions per month. This remarkable journey demonstrates our commitment to product innovation, customer centricity, vendor neutrality, and productivity at scale across hundreds of enterprise systems with varying latencies and formats. Now let me turn to GenEye. Informatica is an enterprise's path to AI-ready data management. Our efforts to assist customers with their AI strategic initiatives are twofold. Informatica for GenEI and GenEI from Informatica, both available on the IDMC platform. Let me give you more color. Informatica for Gen AI, which is where all of our solutions on IDMC are critical to drive Gen AI projects, we offer the only Switzerland of data and AI platform with deep native integration across all cloud ecosystems and data platforms. As a system of record for metadata across an enterprise, IDMC allows users to seamlessly build and scale Gen AI apps across different clouds, ensuring flexibility and future-proofing the data estate. Customers are choosing IDMC to build enterprise Gen-AI apps using a no-code, low-code interface, eliminating the need for specialized skills. We've introduced Gen-AI recipes pre-built for common patterns like RAG, prompt engineering, and AI agents, which have seen rapid adoption. Hundreds of customers have downloaded them in just a month with recipes for AWS, GCP, Azure, and Oracle available now, and Snowflake and Databricks coming later. Real-life customer stories include One, a leading multinational biopharmaceutical company leveraging Gen-AI with contextualized data from IDNC to accelerate its clinical trials, ensuring optimal patient and site selection for successful outcomes. In Latin America, a retail giant is enhancing its customer experience using IDNC with OpenAI, delivering personalized product recommendations that improve overall customer engagement and boost their sales. A major US-based global event management company is using IDMC and OpenAI to speed up future development of their SaaS platform by automating client feedback into technical specs, significantly improving efficiency and reducing the time to value. Now, to the second part, GenEI from Informatica, we've expanded clear GPT capabilities, including support for complex data lineage graph queries. Data lineage is one of the most popular use cases for our cloud data governance and catalog solutions. Additionally, Clare GPT aggregate metadata exploration capabilities will help our data governance stewards better understand the data landscape, which is a huge need within an enterprise, making it easy to manage complex, fragmented data landscapes with natural language queries. Hundreds of our customers are using Clare GPT today, and the usage is expanding briskly. Recent Clare GPT customer stories include a consumer finance company using Clare GPT with their executive leadership and management teams to obtain answers to their ad hoc natural language queries on Snowflake without any need to know SQL or Python. An appliances company in Mexico is using Clare GPT with cloud data governance and data catalog to understand critical data elements, identify the stakeholders for those data elements, and understand the lineage of that data. We are excited to announce that we plan to expand Clare GPT to EMEA, Asia Pacific, and Canada later this quarter. Informatica for GenAI and GenAI from Informatica both are driving more use cases and IPO consumption on the IDMC platform, which is a tailwind for us for many, many years to come. We believe that the need for effective cloud data management is only increasing, driven by growing data complexity, fragmentation, evolving decision requirements, and proliferation of this fragmented data across a myriad of systems, including warehouses, lakes, databases, apps, data science, and Gen AI, and many, many more. We excel in this area more than any other company in the market today and at enterprise scale. So as I wrap up, I want to thank all of my Informatica colleagues, our partners, our customers, and shareholders for their support. We are pleased with our performance and remain focused on executing a cloud-only strategy as we close the year. With that, let me turn the call over to Mike. Mike, please take it away.