News Column

Informatica Reports Record Quarterly Revenues of $276.0 Million and Record Annual Revenues of $948.2 Million

January 23, 2014

Achieves 19 Percent Software Revenue Growth and 18 Percent Total Revenue Growth In Fourth Quarter Record fourth quarter software revenues of $134.6 million , up 19 percent year-over-year Record fourth quarter total revenues of $276.0 million , up 18 percent year-over-year Fourth quarter GAAP earnings per diluted share of $0.36 and record non-GAAP earnings per diluted share of $0.49 Annual GAAP earnings per diluted share of $0.78 and record non-GAAP earnings per diluted share of $1.44 Record deferred revenues of $298.1 million REDWOOD CITY, Calif. , Jan. 23, 2014 (GLOBE NEWSWIRE) -- Informatica Corporation (Nasdaq:INFA), the world's number one independent provider of data integration software, today announced financial results for the fourth quarter and year ended December 31, 2013 . "Our 2013 results demonstrate increasing customer demand and improved operational discipline," said Sohaib Abbasi , chairman and chief executive officer, Informatica . " Informatica is well-positioned for sustained growth by maintaining our singular focus and by continuing to innovate for key technology mega-trends that are elevating the role of our technology platform." Financial Highlights for the Fourth Quarter and Year Ended December 31, 2013 Total revenues for the fourth quarter of 2013 were $276.0 million , an increase of 18 percent from $234.7 million in the fourth quarter of 2012. Software revenues were $134.6 million , an increase of 19 percent from $112.8 million in the fourth quarter of 2012. Within software revenues, license revenues were $120.8 million , up 16 percent year-over-year, and subscription revenues were $13.7 million , up 57 percent year-over-year. Income from operations for the fourth quarter of 2013, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $61.0 million , up 37 percent from $44.6 million in the fourth quarter of 2012. GAAP net income for the fourth quarter of 2013 was $39.9 million , up 28 percent from $31.1 million in the fourth quarter of 2012, and GAAP net income per diluted share was $0.36 , up 29 percent from $0.28 per diluted share in the fourth quarter of 2012. Non-GAAP income from operations for the fourth quarter of 2013 was $81.2 million , up 26 percent from $64.7 million in the fourth quarter of 2012. Non-GAAP net income for the fourth quarter of 2013 was $54.8 million , up 21 percent from $45.2 million in the fourth quarter of 2012 and non-GAAP net income per diluted share was $0.49 , up 20 percent from $0.41 per diluted share in the fourth 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 restructuring and facility lease termination costs, building operating expenses related to the headquarters move, acquisition and other charges, acquisition integration-related tax expenses, and share-based compensation. A reconciliation of GAAP results to non-GAAP results is included below. For the year ended December 31, 2013 , total revenues were $948.2 million , up 17 percent from $811.6 million in 2012.Software revenues for the year ended December 31, 2013 were $413.7 million , up 18 percent from $350.2 million in 2012. Within software revenues, license revenues were $367.1 million , up 14 percent year-over-year, and subscription revenues were $46.7 million , up 60 percent year-over-year. GAAP income from operations for the year ended December 31, 2013 was $138.9 million , up 2 percent from $136.0 million in 2012. GAAP net income for the year ended December 31, 2013 was $86.4 million , compared to $93.2 million in 2012, and GAAP net income per diluted share was $0.78 , compared to $0.83 per diluted share in 2012. Non-GAAP income from operations for the year ended December 31, 2013 was $233.0 million , up 10 percent from $212.3 million in 2012. Non-GAAP net income for the year ended December 31, 2013 was $160.7 million , up 9 percent from $147.1 million in 2012 and non-GAAP net income per diluted share was $1.44 , up 10 percent from $1.31 per diluted share in 2012. Additional Highlights Achieved Since October 2013 : Announced Informatica Vibe Data Stream for Machine Data. Informatica Vibe Data Stream delivers high-performance data streaming technology to capture ultra-high volumes of high-velocity machine data such as sensor data, weblog data, application log data and call detail record data. Announced Informatica Dynamic Data Masking support for Hadoop. Informatica Dynamic Data Masking delivers policy-based data security for Hadoop and addresses big data security concerns. Announced Informatica Cloud Winter 2014. Informatica Cloud Winter 2014 delivers advances in the areas of Cloud Data , Process Integration, Cloud Master Data Management (MDM), Cloud Test Data Management (TDM) and Cloud Connectors for hybrid IT. Announced partnership with Cloudera . A joint solution for data warehouse optimization lowers costs and provides an enterprise-ready data platform that scales to meet the data storage and processing requirements for big data projects. Positioned in the visionary quadrant in Gartner's 2013 Magic Quadrant report for Master Data Management (MDM) of Product Data Solutions. The Gartner report states that Informatica MDM advanced in "completeness of vision" and "ability to execute on that vision." Positioned in the leaders quadrant in Gartner's 2013 Magic Quadrant report for Data Masking Technology. The Gartner report recommends that enterprises "make data masking technologies and best practices an integral part of the enterprise's software life cycle and data management processes." Achieved top marks in customer loyalty for data integration, for the eighth consecutive year. According to the 2013 Data Integration Customer Satisfaction Survey conducted by independent research firm TNS, Informatica led the competitive field in total performance, with the most favorable scores for overall quality of products, product reliability and meeting customer needs for support, professional services and education/training. Approved additional $100 million stock repurchase authorization. Informatica's Board of Directors has approved an additional $100 million to augment the existing authorization under the company's common stock repurchase program. 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 fourth quarter and full year 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 888-895-3521, reservation number 25900440. A replay of the call will also be available by dialing 404-537-3406, reservation number 25900440. 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. Forward Looking Statements This press release contains forward-looking statements, including those related to our long term growth opportunities. Such statements involve risks and uncertainties and actual results may differ materially from the results described in this press release. The potential risks and uncertainties that could cause actual results to differ include, among others, risks related to competition with larger companies that have longer operating histories or greater financial, technical, marketing and other resources; sales execution; and uncertainty in the state of IT spending and the growth of the market for data integration solutions. Additional risks and uncertainties are included under the caption "Risk Factors" in Informatica's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 , which has been filed with the SEC and is available on our investor relations website at http://www.informatica.com . All information provided in this release is as of January 23, 2014 and Informatica undertakes no duty to update this information. Note: Informatica , Informatica Vibe, Informatica Platform, Informatica Vibe Data Stream, Informatica Data Masking, Informatica Dynamic Data Masking, Informatica Cloud and Informatica Master Data Management, are trademarks or registered trademarks of Informatica Corporation in the United States and in jurisdictions throughout the world. All other company and product names may be trade names or trademarks of their respective owners. INFORMATICA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended December 31 , Years Ended December 31 , 2013 2012 2013 2012 (unaudited) (unaudited) Revenues: Software $ 134,578 $ 112,828 $ 413,738 $ 350,175 Service 141,460 121,913 534,433 461,396 Total revenues 276,038 234,741 948,171 811,571 Cost of revenues: Software 2,485 2,065 9,838 7,844 Service 39,422 32,603 149,136 122,798 Amortization of acquired technology 5,337 5,816 22,307 21,980 Total cost of revenues 47,244 40,484 181,281 152,622 Gross profit 228,794 194,257 766,890 658,949 Operating expenses: Research and development 42,517 38,046 165,875 143,607 Sales and marketing 106,588 92,067 374,315 305,682 General and administrative 16,814 17,247 77,641 63,616 Amortization of intangible assets 1,848 1,888 7,729 6,578 Facilities restructuring and facility lease termination costs 710 Acquisitions and other charges 408 2,467 2,797 Total operating expenses 167,767 149,656 628,027 522,990 Income from operations 61,027 44,601 138,863 135,959 Interest and other income, net 394 102 1,859 1,808 Income before income taxes 61,421 44,703 140,722 137,767 Income tax provision 21,503 13,637 54,327 44,585 Net income $ 39,918 $ 31,066 $ 86,395 $ 93,182 Net income per share: Basic $ 0.37 $ 0.29 $ 0.80 $ 0.86 Diluted $ 0.36 $ 0.28 $ 0.78 $ 0.83 Shares used in per share calculation: Basic 108,462 107,627 108,146 107,874 Diluted 111,457 110,802 111,394 112,089 INFORMATICA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31 , 2013 2012 (unaudited) Assets Current assets: Cash and cash equivalents $ 297,818 $ 190,127 Short-term investments 379,616 345,478 Accounts receivable, net of allowances of $4,135 and $5,460 , respectively 204,374 171,893 Deferred tax assets 32,898 23,350 Prepaid expenses and other current assets 34,541 29,396 Total current assets 949,247 760,244 Property and equipment, net 157,308 145,474 Goodwill and intangible assets, net 564,767 577,381 Long-term deferred tax assets 44,865 24,087 Other assets 6,834 5,031 Total assets $ 1,723,021 $ 1,512,217 Liabilities and Equity Current liabilities: Accounts payable and other current liabilities $ 144,493 $ 128,742 Income taxes payable 14,184 Deferred revenues 285,184 241,968 Total current liabilities 443,861 370,710 Long-term deferred revenues 12,938 8,807 Long-term deferred tax liabilities 44 2,523 Long-term income taxes payable 29,878 21,195 Other liabilities 550 3,459 Total liabilities 487,271 406,694 Equity: Total Informatica Corporation stockholders' equity 1,235,750 1,103,105 Noncontrolling interest 2,418 Total equity 1,235,750 1,105,523 Total liabilities and equity $ 1,723,021 $ 1,512,217 INFORMATICA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31 , 2013 2012 (unaudited) Operating activities: Net income $ 86,395 $ 93,182 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 14,978 12,284 Share-based compensation 57,204 42,803 Deferred income taxes (24,067) (4,651) Tax benefits from share-based compensation 26,082 16,463 Excess tax benefits from share-based compensation (27,495) (17,021) Amortization of intangible assets and acquired technology 30,036 28,558 Other operating activities, net (352) (854) Changes in operating assets and liabilities: Accounts receivable (32,009) 8,723 Prepaid expenses and other assets 418 10,593 Accounts payable and accrued liabilities 13,839 (2,282) Income taxes payable 9,596 1,553 Accrued facilities restructuring charges (23,977) Deferred revenues 46,525 35,127 Net cash provided by operating activities 201,150 200,501 Investing activities: Purchases of property and equipment (26,508) (141,610) Purchases of investments (367,584) (266,088) Investment in equity interest, net (2,001) (257) Maturities and sales of investments 332,517 208,399 Business acquisitions, net of cash acquired (7,464) (90,542) Purchase of developed technology (400) Net cash used in investing activities (71,440) (290,098) Financing activities: Net proceeds from issuance of common stock 58,669 41,351 Repurchases and retirement of common stock (92,068) (80,983) Withholding taxes related to restricted stock units net share settlement (7,342) (6,686) Payment of contingent consideration (4,170) (8,050) Excess tax benefits from share-based compensation 27,495 17,021 Purchase of acquiree stock and noncontrolling interest (6,365) (437) Net cash used in financing activities (23,781) (37,784) Effect of foreign exchange rate changes on cash and cash equivalents 1,762 673 Net increase (decrease) in cash and cash equivalents 107,691 (126,708) Cash and cash equivalents at beginning of the year 190,127 316,835 Cash and cash equivalents at end of the year $ 297,818 $ 190,127 INFORMATICA CORPORATION GAAP TO NON-GAAP RESULTS (in thousands, except per share data) (unaudited) Three Months Ended December 31 , Years Ended December 31 , 2013 2012 2013 2012 Total revenues $ 276,038 $ 234,741 $ 948,171 $ 811,571 Operating income: GAAP operating income $ 61,027 $ 44,601 $ 138,863 $ 135,959 Percentage of GAAP operating income to total revenues 22 % 19 % 15 % 17 % Plus: Amortization of acquired technology - Cost of revenues 5,337 5,816 22,307 21,980 Amortization of intangible assets - Operating expenses 1,848 1,888 7,729 6,578 Facilities restructuring and facility lease termination costs - Operating expenses 710 Building operating expense - Operating expenses (1) 731 4,409 1,502 Acquisitions and other charges - Operating expenses 408 2,467 2,797 Share-based compensation - Cost of revenues and Operating expenses (2) 12,956 11,220 57,204 42,803 Non-GAAP operating income $ 81,168 $ 64,664 $ 232,979 $ 212,329 Percentage of Non-GAAP operating income to total revenues 29 % 28 % 25 % 26 % Net income: GAAP net income $ 39,918 $ 31,066 $ 86,395 $ 93,182 Plus: Amortization of acquired technology - Cost of revenues 5,337 5,816 22,307 21,980 Amortization of intangible assets - Operating expenses 1,848 1,888 7,729 6,578 Facilities restructuring and facility lease termination costs - Operating expenses 710 Building operating expense - Operating expenses (1) 731 4,409 1,502 Acquisitions and other charges - Operating expenses 408 2,467 2,797 Share-based compensation - Cost of revenues and Operating expenses (2) 12,956 11,220 57,204 42,803 Income tax adjustments (5,302) (5,911) (19,765) (22,407) Non-GAAP net income $ 54,757 $ 45,218 $ 160,746 $ 147,145 INFORMATICA CORPORATION GAAP TO NON-GAAP RESULTS (in thousands, except per share data) (unaudited) Three Months Ended December 31 , Years Ended December 31 , 2013 2012 2013 2012 Diluted net income per share: Diluted GAAP net income per share $ 0.36 $ 0.28 $ 0.78 $ 0.83 Plus: Amortization of acquired technology 0.05 0.05 0.20 0.20 Amortization of intangible assets 0.02 0.02 0.07 0.06 Facilities restructuring and facility lease termination costs 0.01 Building operating expense (1) 0.01 0.04 0.01 Acquisitions and other charges 0.02 0.02 Share-based compensation (2) 0.11 0.10 0.51 0.38 Income tax adjustments (0.05) (0.05) (0.18) (0.20) Diluted Non-GAAP net income per share $ 0.49 $ 0.41 $ 1.44 $ 1.31 Shares used in computing diluted Non-GAAP net income per share 111,457 110,802 111,394 112,089 (1) Represents expense from operating current headquarters buildings purchased in February 2012 prior to occupancy in September 2013 by Informatica , and expense from operating former headquarters buildings subsequent to the occupancy of current headquarters in September 2013 . The Company previously reported the expense for the current headquarters buildings in periods prior to the purchase as a part of "Facilities restructuring charges (benefit) - Operating expenses." (2) The allocation of the share-based compensation is as follows: Three Months Ended December 31 , Years Ended December 31 , 2013 2012 2013 2012 Cost of service revenues $ 1,479 $ 1,178 $ 5,525 $ 4,349 Operating expenses: Research and development 4,237 4,095 19,002 14,919 Sales and marketing 3,946 3,440 19,323 13,518 General and administrative 3,294 2,507 13,354 10,017 Total share-based compensation $ 12,956 $ 11,220 $ 57,204 $ 42,803 CONTACT: Debbie O'Brien Corporate Communications + 1 650 385 5735 dobrien@informatica.com Stephanie Wakefield Investor Relations + 1 650 385 5261 swakefield@informatica.com Source: Informatica Corporation


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