Informatica Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Matt Hedberg - RBC Capital Markets - Analyst : So Mike, you guys are coming off of a really nice quarter. And I think there's a lot to unpack here. Certainly, the cloud is -- the cloud growth has been exceptional. But could you just like maybe level-set us for the demand environment, from the 3Q perspective versus the first half, what are you seeing out there? And I guess, what leaves you optimistic about the back half of the -- or the Q4 of this year?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Well, the questions are going to go down from there, I think --

Question: Matt Hedberg - RBC Capital Markets - Analyst : Just because you mentioned some comments that had made me think. One of the things we heard is all the elections causing some maybe slowdown in decisions, which I candidly -- I don't know if people just use that as an excuse to like say, well, let's give us more time. Have you noticed any change on behavior post-election?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Okay. Looking at guidance, total ARR and cloud ARR outperformed in the quarter, but you left 2024 guidance unchanged. Maybe just unpack the thought there, because you guys have had a really strong kind of first nine months of the year. But just unpack the thoughts around kind of the Q4 guidance philosophy.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Yes. No, that makes sense. I'm just thinking, Mike, we got a lot to cover here. I'm trying to look through my questions here. But let's talk about -- so let's stay on the cloud. If you were to -- looking back nine months, how would you characterize cloud migrations thus far relative to sort of your thoughts going into the year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2024 / 6:20PM, INFA.N - Informatica Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference

Question: Matt Hedberg - RBC Capital Markets - Analyst : Is not migration.

Question: Matt Hedberg - RBC Capital Markets - Analyst : It's a fair point, yes.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Why do you think that was the case? Was it just timing of when some deals were coming up for the potential?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Well I guess -- but then back to the point you made a couple of minutes ago, is that the new business engine is the new business and just net new sales into the existing base on cloud is still robust and really the engine that is driving the --

Question: Matt Hedberg - RBC Capital Markets - Analyst : The new business piece, one of the questions that I'm sure you guys get and I get all the time is like, Informatica is a 30-year-old technology. Like can't we just do this through just APIs, or can't we just do like direct connects? Like why do we need Informatica? So, and clearly, the new business, the new customers, attached to new cloud workloads, customers are saying a different thing. Like why do we keep getting asked that question? And I guess, what is the relevancy of informatics into the future?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Right. That's where I was going with it.

Question: Matt Hedberg - RBC Capital Markets - Analyst : So some of what you're saying, and I agree with this, is that the complexities are even higher than what they were a decade ago, and it doesn't diminish the need for an Informatica as that kind of that data migration, data privacy, governance layer. That's just -- it only intensifies. And so the question I get is like, well, I'll just do this all in Databricks, like I don't -- and that -- but that's not what you're seeing out there either.

Question: Matt Hedberg - RBC Capital Markets - Analyst : How does -- this sort of Iceberg tables, how does that come up in conversation with customers when they think about storage?

Question: Matt Hedberg - RBC Capital Markets - Analyst : The other topic, we haven't talked about Gen AI in the first 15 minutes, but you guys have been early in terms of productizing CLAIRE GPT. Talk about how customers are leveraging that. And how do you think about expressing success in the future to investors that, hey, Informatica is -- we're thinking about it and we're able to monetize it and it's driving ARR for us.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Yes. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2024 / 6:20PM, INFA.N - Informatica Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference

Question: Matt Hedberg - RBC Capital Markets - Analyst : Got it. Let's pivot to Ithaca and the secondary distribution that you guys had. There was a -- Rick and I shared a number of e-mails and conversations about it at the time, and I get a ton of inbounds on it. Because I think there was just a lot of confusion. Like is this the same thing? Is it different? Walk us through what -- was it two weeks ago now or a week -- I don't even remember.

Question: Matt Hedberg - RBC Capital Markets - Analyst : So then I guess, some of this is out of your control, it's just executing and delivering, and the rest of the liquidity takes care of itself. But just remind people, how much is left with Ithaca and -- how much is left with Ithaca? And yes, I mean, obviously, 65 is going to probably keep going lower. But just what's left with that piece? And then just so that people are square on kind of the sponsors plus Ithaca.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Okay. The other thing that we talked about was your opportunity for buyback. And I just saw, was it yesterday, a $400 million authorization.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Great. No, that's super helpful. I think -- and I'm going to ask you one other question, and we'll see if there's -- here's a good group, we'll see if there's a question. We'll keep people awake. Thinking about 2025, are there any high-level guardrails? I mean cloud continues to grow at -- and I don't know if there's another cloud business growing that fast at that scale organically, north of 35%. Are there any guardrails you'd give us, because you had some midterm targets out there, but any way -- sort of like guideposts for 2025? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2024 / 6:20PM, INFA.N - Informatica Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference

Question: Matt Hedberg - RBC Capital Markets - Analyst : An acceleration from -- yes.

Question: Matt Hedberg - RBC Capital Markets - Analyst : With ARR leading the way and --

Question: Matt Hedberg - RBC Capital Markets - Analyst : Because of cloud being more than 50% of the mix at that point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2024 / 6:20PM, INFA.N - Informatica Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference

Question: Matt Hedberg - RBC Capital Markets - Analyst : Is there a question out in the group here or in the audience? I know you guys are all dying to ask Mike a question. Because I get a lot of e-mails. All right. Well, wave a hand if you do have one in the last couple of minutes. One of the questions -- just -- I'm sorry, curious, one of the big inbounds we've had post-election is with DOGE and with government efficiencies. And you guys have a fairly good-sized federal business public sector. I'm of the opinion I think software can be an enabler. I think it could help the government become even more efficient. I mean do you see any opportunities for the theoretical more efficient government to lean into technology, maybe Informatica even more than they did historically?

Question: Matt Hedberg - RBC Capital Markets - Analyst : In the short term.

Question: Matt Hedberg - RBC Capital Markets - Analyst : So you don't see any real change --

Question: Matt Hedberg - RBC Capital Markets - Analyst : Yes. It's -- I think we're all just trying to figure out. We just had a panel, and one of the predictions was on would leave the DOGE before the next 12 months. And so we'll see what happens with that. But, yes. Maybe -- we've got about a minute left. Just to wrap it up. I mean there's -- I really like the mechanics of Informatica. I like the valuation. I like the opportunity for acceleration and margin expansion. There's a lot to consider and the fact that the float is a lot higher than it was a year ago, that will continue to, I think, benefit the stock as well. What are you most excited about for the next 12 months? And when we're sitting next November, what are you going to look back like, wow, that was maybe better than I thought or -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2024 / 6:20PM, INFA.N - Informatica Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference

Question: Matt Hedberg - RBC Capital Markets - Analyst : Yes, I couldn't agree -- and then just from my perspective, people are saying like, give me an idea that you think has got some idiosyncratic elements, maybe it's not 15 times revenue. I think Informatica, especially from an accelerating model, margin expansion, it just feels like you're in the sweet spot for I think what people are going to be looking for. So we're excited for 2025, and for -- yes, you close out 2024 first. But best of luck from all of us at RBC. Thanks for coming, Mike, and --