Informatica (INFA)

Q3 2011 Earnings Call

October 20, 2011 5:00 pm ET


Earl Fry - Chief Administrative Officer, Chief Financial Officer, Principal Accounting Officer, Executive Vice President of Global Customer Support and Secretary

Stephanie Wakefield - Vice President of Investor Relations

Sohaib Abbasi - Chairman, Chief Executive Officer and President


Brent Thill - UBS Investment Bank, Research Division

Tom Roderick - Stifel, Nicolaus & Co., Inc., Research Division

James Derrick Wood - Susquehanna Financial Group, LLLP, Research Division

Nabil Elsheshai - Pacific Crest Securities, Inc., Research Division

Mark R. Murphy - Piper Jaffray Companies, Research Division

Thomas Ernst - Deutsche Bank AG, Research Division

Patrick D. Walravens - JMP Securities LLC, Research Division

Edward Maguire - Credit Agricole Securities (USA) Inc., Research Division

Steven R. Koenig - Longbow Research LLC

Michael Turits - Raymond James & Associates, Inc., Research Division

Nathan Schneiderman - Roth Capital Partners, LLC, Research Division

Mitesh Dhruv - BofA Merrill Lynch, Research Division

Michael B. Nemeroff - Morgan Keegan & Company, Inc., Research Division



Good afternoon. My name is David, and I will be your conference operator today. At this time, I would like to welcome everyone to the Informatica Q3 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn the call over to Ms. Stephanie Wakefield, Vice President of Investor Relations. Ma'am, you may begin your conference.

Stephanie Wakefield

Good afternoon, and thank you for joining us today. I'm here with Sohaib Abbasi, our CEO; and Earl Fry, our CFO, to discuss our Q3 2011 results and to talk about our outlook for the business. I'll read the safe harbor and then hand it over to Sohaib for his comments.

Some of the comments we'll make today are forward-looking statements, including statements concerning our projected financial results for future period, our growth and operational strategies, our marketing growth opportunities, our technology leadership and product development, our product portfolio and opportunities, customer adoption of and demand for our products and services, including product upgrades and new releases, the expected use of and benefits from our products and services, the expected benefits of our partnerships and acquisitions, our effective tax rate, our herring plans, the impact of our recent acquisitions and our expectations regarding future industry trends and macroeconomic development.

All forward-looking statements are based upon current expectations and beliefs. However, actual results could differ materially. There are many reasons why actual results may differ from our current expectations. These forward-looking statements should not be relied upon as representing our views in any subsequent date. And Informatica undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date that they are made. Please refer to our recent SEC filings, including our quarterly report on Form 10-Q for the quarter ended June 30, 2011, for a detailed descriptions of the risk factors that may affect our results. Copies of these documents may be obtained from the SEC or by contacting our Investor Relations department.

During this afternoon's discussion, we will be using GAAP and non-GAAP numbers. Our GAAP results and the reconciliation of the GAAP results to the non-GAAP results are attached in the earnings press release and also available in the Supplemental Metrics section of our Informatica Investor Relations website.

Before I hand it over to Sohaib, I'd like to remind you that this call is also being webcast and will available for replay at I'd also like to ask you when we get to the question-and-answer period to please confine yourself to just one question. We will allow additional questions if time permits. Thank you. Sohaib?

Sohaib Abbasi

Thank you, Stephane. In Q3 2011, we obtained record results for third quarter license revenue, total revenue as well as EPS. Our Q3 results showcase the increasing customer demand, growing the adoption of our expansive product portfolio and our strengthening partner ecosystem. After Earl's presentation of our financial results, I will reiterate the key reasons for our firm conviction in our long-term growth plan beyond $1 billion in revenue.

Total revenue grew by 21% year-over-year to $196 million. New license revenue grew by 20% to $83.7 million. Q3 was not only the eighth consecutive quarter with year-over-year revenue growth of 20% or more, it also extended the Informatica track record as the 34th consecutive quarter of sustained revenue growth despite the great recession.

Total non-GAAP operating income grew by 27% with non-GAAP operating margin up 27.3%. With non-GAAP EPS of $0.34, we achieved the most profitable third quarter to date. The record Q3 results yet again illustrate our long-term growth potential.

The increasing customer demand signifies that organizations aspire to become data-driven enterprises in order to better manage in these times of macroeconomic uncertainty.

In EMEA, we attained third quarter record results with broader adoption of our latest products. In the Americas, our results include important wins across multiple verticals, including financial services, government and retail. To reiterate, by empowering the data-driven enterprise, data integration now has a more strategic role than ever before, as illustrated by our customer wins around the world.

In Europe, the interior ministry of a major government selected Informatica to upgrade its homeland security infrastructure. This organization will use Informatica Identity Resolution technology to match information related to visitors against their watch list to deny access. Not only will this organization be better prepared for the higher traffic associated with any future international events, it realized more immediate results by denying entry to individuals with criminal records in their first weekend of operations.

In the U.S., a leading brokerage and securities firm selected Informatica as the standard for its mission-critical, front office electronic-trading applications. By replacing 4 legacy messaging solutions with Informatica Ultra Messaging, this firm expects to eliminate performance bottlenecks and reduce latency in order to process more transactions at a lower cost.

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