Yoni Simoes's questions to Informatica Inc (INFA) leadership • Q1 2025
Question
Yoni Simoes, on behalf of William Power at Robert W. Baird & Co., asked about the drivers behind the sequential decline in the cloud net retention rate (NRR). He questioned whether it was due to difficulties with cross-selling, a slowdown in workload expansion, or other factors.
Answer
CFO Mike McLaughlin explained that NRR has natural variability, especially in the smaller first quarter. He highlighted a key structural factor: as cloud modernizations become a larger portion of growth, more new cloud logos are added from the on-prem base. These new logos do not factor into the NRR calculation for their first year, which is based on the existing cloud customer base from a year prior. This dynamic naturally puts some mathematical pressure on the NRR metric.