INFORMATICA REPORTS SECOND QUARTER REVENUES OF $222.4 MILLION
Achieves 18 Percent Software Revenue Growth and 17 Percent Total Revenue Growth
• Second quarter software revenues of $91.4 million, up 18 percent year-over-year
• Second quarter total revenues of $222.4 million, up 17 percent year-over-year
• Second quarter GAAP earnings per diluted share of $0.16 and non-GAAP earnings per diluted share of $0.31
• Signed 94 deals over $300,000 and 15 deals over $1 million
July 25, 2013 – Informatica Corporation (Nasdaq:INFA), the world’s number one independent provider of data integration software, today announced financial results for the second quarter ended June 30, 2013.
“Our results reflect more strategic customer decisions as organizations, across many verticals, aspire to become data-centric enterprises,” said Sohaib Abbasi, chairman and chief executive officer, Informatica. “Informatica is well-positioned for sustained growth with our two key advantages: the industry’s only virtual data machine, Vibe, simplifies information infrastructure and the comprehensive Informatica Platform puts information potential to work.”
Financial Highlights for the Second Quarter Ended June 30, 2013
Total revenues for the second quarter of 2013 were $222.4 million, an increase of 17 percent from $190.5 million in the second quarter of 2012. Software revenues were $91.4 million, an increase of 18 percent from $77.6 million in the second quarter of 2012. Within software revenues, license revenues were $80.1 million, up 13 percent year-over-year, and subscription revenues were $11.3 million, up 70 percent year-over-year.
Income from operations for the second quarter of 2013, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $25.9 million, compared to $28.2 million in the second quarter of 2012.
GAAP net income for the second quarter of 2013 was $18.2 million, compared to $20.1 million in the second quarter of 2012, and GAAP net income per diluted share was $0.16, compared to $0.18 per diluted share in the second quarter of 2012.
Non-GAAP income from operations for the second quarter of 2013 was $49.6 million, up 8 percent from $45.9 million in the second quarter of 2012. Non-GAAP net income for the second quarter of 2013 was $34.1 million, up 5 percent from $32.4 million in the second quarter of 2012 and non-GAAP net income per diluted share was $0.31, up 7 percent from $0.29 per diluted share in the second quarter of 2012. Non-GAAP income from operations and non-GAAP net income exclude charges and tax benefits related to the amortization of acquired technology and intangible assets, facilities acquisition-related adjustments, acquisition and other charges (benefit), and share-based compensation. A reconciliation of GAAP results to non-GAAP results is included below.
For the six month period ended June 30, 2013, total revenues were $436.7 million, up 13 percent from $386.5 million in the first six months of 2012. Software revenues for the first six months of 2013 were $179.3 million, up 10 percent from $163.5 million in the first six months of 2012. Within software revenues, license revenues were $158.2 million, up 5 percent year-over-year, and subscription revenues were $21.1 million, up 69 percent year-over-year. Income from operations for the first six months of 2013, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $50.6 million, compared to $66.2 million in the first six months of 2012. GAAP net income for the first six months of 2013 was $36.1 million, compared to $46.6 million in the first six months of 2012, and GAAP net income per diluted share was $0.32, compared to $0.41 per diluted share in the first six months of 2012. Non-GAAP income from operations for the first six months of 2013 was $97.8 million, compared to $102.5 million in the first six months of 2012. Non-GAAP net income for the first six months of 2013 was $68.9 million, compared to $72.0 million in the first six months of 2012 and non-GAAP net income per diluted share was $0.62, compared to $0.64 per diluted share in the first six months of 2012.
Additional Highlights Achieved Since April 2013:
• Introduced Informatica Vibe. Vibe is the industry’s first and only virtual data machine to simplify the information infrastructure with the value proposition of “Map Once. Deploy Anywhere.”
• Introduced Informatica PowerCenter Express. PowerCenter Express, powered by Vibe, economically addresses departmental data integration needs and seamlessly scales to enterprise-class PowerCenter editions such as Big Data Edition.
• Introduced Informatica Cloud Summer 2013. The latest release of the award-winning Informatica Cloud family now delivers process automation and master data management (MDM) advances, connectivity to SAP solutions in the cloud and general availability of cloud data masking.
• Launched Informatica MDM 9.6. Informatica MDM 9.6 introduces database independence, proactive data security, enhanced support for big data and new MDM solutions.
• Completed the Acquisition of Heiler Software GmbH. With Heiler, Informatica now offers leading Product Information Management solutions for customers to optimize multi-channel commerce.
• Expanded Market Leadership. Informatica was positioned by Gartner, Inc. in the leaders quadrant in the 2013 Data Integration Magic Quadrant. Additionally, research firm The Information Difference positioned Informatica as the market leader in its Data Quality Landscape and Master Data Management Landscape reports.
• Earl Fry Named Best CFO. Informatica’s CFO, CAO and EVP, Global Customer Support and Services, won the prestigious title of Best CFO, Software, at the Institutional Investor 2013 Best CFO Awards Dinner for the fourth year in a row.
Reclassifications
During the first quarter of 2013, Informatica performed a review of the presentation of certain of the company’s revenue categories and adopted a revised presentation, which Informatica believes more accurately reflects the company’s evolving product and service offerings. A change was made to rename other revenues to subscription revenues and to present subscription revenues and license revenues as software revenues. Other revenues were previously presented in services revenues. A corresponding change was made to present cost of license revenues and cost of other revenues as cost of software revenues. This change in presentation will not affect total revenues, total cost of revenues or total gross margin. Conforming changes have been made for all prior periods presented.
Conference Call and Webcast
Informatica will discuss its second quarter 2013 results on a conference call today beginning at 2:00 p.m. PT. The live conference call can be accessed at http://www.informatica.com/investor or by dialing 866-652-3154, reservation number 21096790. A replay of the call will also be available by dialing 404-537-3406, reservation number 21096790.
About Informatica
Informatica Corporation (Nasdaq:INFA) is the world’s number one independent provider of data integration software. Organizations around the world rely on Informatica to realize their information potential and drive top business imperatives. Informatica Vibe, the industry’s first and only embeddable virtual data machine (VDM), powers the unique “Map Once. Deploy Anywhere.” capabilities of the Informatica Platform. Worldwide, over 5,000 enterprises depend on Informatica to fully leverage their information assets from devices to mobile to social to big data residing on-premise, in the Cloud and across social networks. For more information, call +1 650-385-5000 (1-800-653-3871 in the U.S.), or visit www.informatica.com.
Non-GAAP Financial Information
To supplement Informatica’s condensed consolidated financial statements prepared and presented on a GAAP basis, Informatica uses non-GAAP financial measures of income from operations, net income and net income per share. These measures are adjusted from income from operations, net income or net income per share prepared in accordance with GAAP to exclude the charges and expenses discussed above. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for, or superior to, income from operations, net income or net income per share prepared in accordance with GAAP.
Informatica believes the disclosure of such non-GAAP financial measures is appropriate to enhance an overall understanding of its financial performance, its financial and operational decision making and as a means to evaluate period to period comparisons. These adjustments to the Company’s GAAP results are made with the intent of providing both management and investors a more complete understanding of Informatica’s performance, by excluding certain expenses and expenditures such as non-cash charges and discrete charges that are infrequent in nature, such as charges related to acquisitions that may not be indicative of its underlying operating results. In addition, Informatica believes these non-GAAP financial measures are useful to investors because they allow for greater transparency into the indicators used by management as a basis for its financial and operational decision making. Informatica believes that the disclosure of these non-GAAP financial measures provides consistency and comparability of its recent financial results with its historical financial results, as well as to the operating results of similar companies in Informatica’s industry, many of which present similar non-GAAP financial measures to investors. As an example, Informatica believes that it enhances comparability with similar companies’ operating results by excluding stock compensation in its non-GAAP financial measures because of the different types of stock-based awards that companies may grant and because ASC 718 (“Stock Compensation”) allows companies to use different valuation methodologies and subjective assumptions. In addition, Informatica believes that both management and investors benefit from referring to these non-GAAP financial measures when planning, analyzing and forecasting future periods. There are a number of limitations related to these non-GAAP financial measures: (1) the non-GAAP measures exclude some costs that are recurring, particularly stock compensation, and we believe that stock compensation will continue to be a significant recurring expense for the foreseeable future; because stock compensation is an important part of our employees’ compensation, such payments can impact their performance; and (2) the items we exclude in our non-GAAP measures may differ from the components our peer companies exclude when they report their non-GAAP measures. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP measures and evaluating non-GAAP measures together with the corresponding measures calculated in accordance with GAAP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||||
Software | $ | 91,428 | $ | 77,606 | $ | 179,334 | $ | 163,497 | |||||||
Service | 131,011 | 112,886 | 257,405 | 223,015 | |||||||||||
Total revenues | 222,439 | 190,492 | 436,739 | 386,512 | |||||||||||
Cost of revenues: | |||||||||||||||
Software | 2,501 | 2,444 | 4,643 | 4,268 | |||||||||||
Service | 36,463 | 30,392 | 72,493 | 60,126 | |||||||||||
Amortization of acquired technology | 5,621 | 5,361 | 11,345 | 10,992 | |||||||||||
Total cost of revenues | 44,585 | 38,197 | 88,481 | 75,386 | |||||||||||
Gross profit | 177,854 | 152,295 | 348,258 | 311,126 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 41,668 | 34,791 | 81,191 | 69,563 | |||||||||||
Sales and marketing | 89,510 | 72,667 | 173,567 | 140,376 | |||||||||||
General and administrative | 19,181 | 14,992 | 37,668 | 30,677 | |||||||||||
Amortization of intangible assets | 2,000 | 1,576 | 3,988 | 3,228 | |||||||||||
Facilities restructuring and facility lease termination costs | — | — | — | 710 | |||||||||||
Acquisitions and other charges (benefit) | (436 | ) | 67 | 1,214 | 353 | ||||||||||
Total operating expenses | 151,923 | 124,093 | 297,628 | 244,907 | |||||||||||
Income from operations | 25,931 | 28,202 | 50,630 | 66,219 | |||||||||||
Interest and other income, net | 374 | 680 | 1,076 | 1,378 | |||||||||||
Income before income taxes | 26,305 | 28,882 | 51,706 | 67,597 | |||||||||||
Income tax provision | 8,139 | 8,796 | 15,633 | 20,982 | |||||||||||
Net income | $ | 18,166 | $ | 20,086 | $ | 36,073 | $ | 46,615 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.17 | $ | 0.19 | $ | 0.33 | $ | 0.43 | |||||||
Diluted | $ | 0.16 | $ | 0.18 | $ | 0.32 | $ | 0.41 | |||||||
Shares used in per share calculation: | |||||||||||||||
Basic | 108,138 | 108,245 | 107,904 | 107,889 | |||||||||||
Diluted | 111,344 | 113,027 | 111,305 | 112,888 | |||||||||||
INFORMATICA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, | December 31, | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 193,048 | $ | 190,127 | |||
Short-term investments | 411,130 | 345,478 | |||||
Accounts receivable, net of allowances of $4,747 and $5,460, respectively | 151,058 | 171,893 | |||||
Deferred tax assets | 24,804 | 23,350 | |||||
Prepaid expenses and other current assets | 36,035 | 29,396 | |||||
Total current assets | 816,075 | 760,244 | |||||
Property and equipment, net | 143,281 | 145,474 | |||||
Goodwill and intangible assets, net | 573,508 | 577,381 | |||||
Long-term deferred tax assets | 27,419 | 24,087 | |||||
Other assets | 4,730 | 5,031 | |||||
Total assets | $ | 1,565,013 | $ | 1,512,217 | |||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Accounts payable and other current liabilities | $ | 122,347 | $ | 128,742 | |||
Deferred revenues | 263,258 | 241,968 | |||||
Total current liabilities | 385,605 | 370,710 | |||||
Long-term deferred revenues | 9,329 | 8,807 | |||||
Long-term deferred tax liabilities | 1,951 | 2,523 | |||||
Long-term income taxes payable | 21,910 | 21,195 | |||||
Other liabilities | 1,513 | 3,459 | |||||
Total liabilities | 420,308 | 406,694 | |||||
Equity: | |||||||
Total Informatica Corporation stockholders’ equity | 1,144,705 | 1,103,105 | |||||
Noncontrolling interest | — | 2,418 | |||||
Total equity | 1,144,705 | 1,105,523 | |||||
Total liabilities and equity | $ | 1,565,013 | $ | 1,512,217 | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Operating activities: | |||||||
Net income | $ | 36,073 | $ | 46,615 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 7,263 | 5,458 | |||||
Share-based compensation | 29,379 | 20,627 | |||||
Deferred income taxes | (3,663 | ) | (930 | ) | |||
Tax benefits from share-based compensation | 3,518 | 10,325 | |||||
Excess tax benefits from share-based compensation | (4,810 | ) | (10,037 | ) | |||
Amortization of intangible assets and acquired technology | 15,333 | 14,220 | |||||
Other operating activities, net | (2,462 | ) | 938 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 21,308 | 35,556 | |||||
Prepaid expenses and other assets | (1,298 | ) | 11,888 | ||||
Accounts payable and accrued liabilities | (8,131 | ) | (21,977 | ) | |||
Income taxes payable | (4,572 | ) | (9,074 | ) | |||
Accrued facilities restructuring charges | — | (23,977 | ) | ||||
Deferred revenues | 20,989 | 22,065 | |||||
Net cash provided by operating activities | 108,927 | 101,697 | |||||
Investing activities: | |||||||
Purchases of property and equipment | (5,017 | ) | (134,847 | ) | |||
Purchases of investments | (232,304 | ) | (121,818 | ) | |||
Investment in equity interest, net | — | 22 | |||||
Maturities and sales of investments | 164,620 | 96,287 | |||||
Business acquisitions, net of cash acquired | (7,464 | ) | — | ||||
Net cash used in investing activities | (80,165 | ) | (160,356 | ) | |||
Financing activities: | |||||||
Net proceeds from issuance of common stock | 30,100 | 27,177 | |||||
Repurchases and retirement of common stock | (42,982 | ) | (29,652 | ) | |||
Withholding taxes related to restricted stock units net share settlement | (5,570 | ) | (5,950 | ) | |||
Payment of contingent consideration | (2,490 | ) | (4,120 | ) | |||
Excess tax benefits from share-based compensation | 4,810 | 10,037 | |||||
Purchase of acquiree stock | (6,365 | ) | — | ||||
Net cash used in financing activities | (22,497 | ) | (2,508 | ) | |||
Effect of foreign exchange rate changes on cash and cash equivalents | (3,344 | ) | (2,346 | ) | |||
Net increase (decrease) in cash and cash equivalents | 2,921 | (63,513 | ) | ||||
Cash and cash equivalents at beginning of period | 190,127 | 316,835 | |||||
Cash and cash equivalents at end of period | $ | 193,048 | $ | 253,322 | |||
GAAP TO NON-GAAP RESULTS
(in thousands, except per share data)
(unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Total revenues | $ | 222,439 | $ | 190,492 | $ | 436,739 | $ | 386,512 | ||||||||
Operating income: | ||||||||||||||||
GAAP operating income | $ | 25,931 | $ | 28,202 | $ | 50,630 | $ | 66,219 | ||||||||
Percentage of GAAP operating income to total revenues | 12 | % | 15 | % | 12 | % | 17 | % | ||||||||
Plus: | ||||||||||||||||
Amortization of acquired technology – Cost of revenues | 5,621 | 5,361 | 11,345 | 10,992 | ||||||||||||
Amortization of intangible assets – Operating expenses | 2,000 | 1,576 | 3,988 | 3,228 | ||||||||||||
Facilities restructuring and facility lease termination costs – Operating expenses | — | — | — | 710 | ||||||||||||
Building operating expense – Operating expenses (1) | 591 | 645 | 1,231 | 355 | ||||||||||||
Acquisitions and other charges (benefit) – Operating expenses | (436 | ) | 67 | 1,214 | 353 | |||||||||||
Share-based compensation – Cost of revenues | 1,433 | 1,023 | 2,763 | 2,110 | ||||||||||||
Share-based compensation – Research and development | 4,978 | 3,478 | 9,418 | 6,963 | ||||||||||||
Share-based compensation – Sales and marketing | 5,686 | 3,141 | 10,375 | 6,479 | ||||||||||||
Share-based compensation – General and administrative | 3,752 | 2,367 | 6,823 | 5,075 | ||||||||||||
Non-GAAP operating income | $ | 49,556 | $ | 45,860 | $ | 97,787 | $ | 102,484 | ||||||||
Percentage of Non-GAAP operating income to total revenues | 22 | % | 24 | % | 22 | % | 27 | % | ||||||||
Net income: | ||||||||||||||||
GAAP net income | $ | 18,166 | $ | 20,086 | $ | 36,073 | $ | 46,615 | ||||||||
Plus: | ||||||||||||||||
Amortization of acquired technology – Cost of revenues | 5,621 | 5,361 | 11,345 | 10,992 | ||||||||||||
Amortization of intangible assets – Operating expenses | 2,000 | 1,576 | 3,988 | 3,228 | ||||||||||||
Facilities restructuring and facility lease termination costs – Operating expenses | — | — | — | 710 | ||||||||||||
Building operating expense – Operating expenses (1) | 591 | 645 | 1,231 | 355 | ||||||||||||
Acquisitions and other charges (benefit) – Operating expenses | (436 | ) | 67 | 1,214 | 353 | |||||||||||
Share-based compensation – Cost of revenues | 1,433 | 1,023 | 2,763 | 2,110 | ||||||||||||
Share-based compensation – Research and development | 4,978 | 3,478 | 9,418 | 6,963 | ||||||||||||
Share-based compensation – Sales and marketing | 5,686 | 3,141 | 10,375 | 6,479 | ||||||||||||
Share-based compensation – General and administrative | 3,752 | 2,367 | 6,823 | 5,075 | ||||||||||||
Income tax adjustments | (7,647 | ) | (5,320 | ) | (14,306 | ) | (10,928 | ) | ||||||||
Non-GAAP net income | $ | 34,144 | $ | 32,424 | $ | 68,924 | $ | 71,952 | ||||||||
INFORMATICA CORPORATION
GAAP TO NON-GAAP RESULTS
(in thousands, except per share data)
(unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Diluted net income per share: | ||||||||||||||||
Diluted GAAP net income per share | $ | 0.16 | $ | 0.18 | $ | 0.32 | $ | 0.41 | ||||||||
Plus: | ||||||||||||||||
Amortization of acquired technology | 0.05 | 0.05 | 0.10 | 0.10 | ||||||||||||
Amortization of intangible assets | 0.02 | 0.01 | 0.04 | 0.03 | ||||||||||||
Facilities restructuring and facility lease termination costs | — | — | — | 0.01 | ||||||||||||
Building operating expense (1) | 0.01 | 0.01 | 0.01 | — | ||||||||||||
Acquisitions and other charges (benefit) | — | — | 0.01 | — | ||||||||||||
Share-based compensation | 0.14 | 0.09 | 0.27 | 0.19 | ||||||||||||
Income tax adjustments | (0.07 | ) | (0.05 | ) | (0.13 | ) | (0.10 | ) | ||||||||
Diluted Non-GAAP net income per share | $ | 0.31 | $ | 0.29 | $ | 0.62 | $ | 0.64 | ||||||||
Shares used in computing diluted Non-GAAP net income per share | 111,344 | 113,027 | 111,305 | 112,888 | ||||||||||||
________________
(1) Represents expense from operating future headquarters buildings purchased in February 2012 prior to expected occupancy by Informatica, which the Company previously reported in periods prior to the acquisition as a part of the “Facilities restructuring charges (benefit) – Operating expenses.”
