Sign in

You're signed outSign in or to get full access.

II

Informatica Inc. (INFA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a clean top-line beat and solid profitability: revenue $403.9M (+3.9% YoY) above the guide midpoint; non-GAAP operating income $121.6M; GAAP operating margin 8.4% and non-GAAP margin 30.1% .
  • Revenue beat consensus while EPS came in light vs Street: revenue $403.9M vs $391.8M consensus*; non-GAAP EPS $0.22 vs $0.235 consensus* (Q1 2024 and Q4 2024 were revenue miss/beat mix) . Values retrieved from S&P Global*.
  • Cloud momentum intact: Cloud Subscription ARR $848.4M (+30% YoY) and cloud subscription revenue $199.9M (+32% YoY); Cloud NRR 120% and 175+ GenAI customers using IDMC capabilities .
  • Guidance: Q2 2025 introduced (revenue $391–$411M; non-GAAP OI $93–$107M) and full-year 2025 reaffirmed (revenue $1.67–$1.72B; cloud ARR $1.019–$1.051B); management flagged FX tailwinds not flowed into headline guide .
  • Narrative catalyst: accelerating modernization to cloud, agentic AI roadmap (CLAIRE Copilot, CLAIRE GPT) and operational renewal fixes; watch Q2 free cash flow normalization and on‑prem roll-off cadence .

What Went Well and What Went Wrong

What Went Well

  • Cloud growth and mix: cloud subscription revenue $199.9M (+32% YoY) and Cloud Subscription ARR $848.4M (+30% YoY); cloud now ~50% of total ARR, up from ~40% a year ago .
  • Execution vs guide: "Results above all first quarter 2025 guidance metric range midpoints" with non-GAAP operating margin up 200 bps YoY to 30.1% and GAAP operating cash flow $154.2M .
  • AI/product momentum: CEO—“we exceeded midpoint expectations… driven by new cloud workloads, strong cloud net expansion… increased Gen AI usage, and accelerating migrations…”; CLAIRE Copilot previews; expanded Databricks and Google partnerships .

What Went Wrong

  • EPS vs Street: non-GAAP EPS $0.22 came in below consensus* $0.235 despite revenue beat* . Values retrieved from S&P Global*.
  • Ongoing headwinds from on‑prem roll-off: maintenance and self‑managed ARR declined (maintenance $433.1M; self-managed $422.1M), with CFO reiterating a “double overlap” roll-off dynamic through mid‑2025 .
  • Q2 outlook implies typical first-half linearity but lower sequential profitability vs past patterns; adjusted unlevered FCF guided to $55–$75M for Q2 (vs Q1 $186.0M) on working capital normalization .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$422.5 $428.3 $403.9
GAAP Operating Margin (%)12.1% 14.8% 8.4%
Non-GAAP Operating Margin (%)35.8% 37.9% 30.1%
Gross Margin (%)82% 84% 82%
GAAP Diluted EPS ($)$(0.05) $0.03 $0.00
Non-GAAP Diluted EPS ($)$0.28 $0.41 $0.22
Estimates vs ActualsQ1 2024Q4 2024Q1 2025
Revenue Consensus Mean ($USD Millions)$387.9*$457.0*$391.8*
Revenue Actual ($USD Millions)$388.6 $428.3 $403.9
Primary EPS Consensus Mean ($)$0.2018*$0.3752*$0.2351*
Non-GAAP EPS Actual ($)$0.22 $0.41 $0.22
Values retrieved from S&P Global*.

Segment revenue disaggregation

Revenue Component ($USD Thousands)Q3 2024Q4 2024Q1 2025
Cloud subscription$175,809 $186,808 $199,935
Self-managed subscription license (point-in-time)$65,498 $65,841 $42,579
Self-managed subscription support and other$46,627 $44,800 $41,496
Maintenance$110,888 $110,888 $103,209
Professional services$19,968 $19,968 $16,678
Total revenues$422,481 $428,305 $403,897

KPIs and ARR

KPIQ3 2024Q4 2024Q1 2025
Total ARR ($USD Thousands)$1,681,776 $1,725,457 $1,703,575
Cloud Subscription ARR ($USD Thousands)$747,811 $827,307 $848,359
Self-managed Subscription ARR ($USD Thousands)$471,030 $447,135 $422,078
Maintenance ARR ($USD Thousands)$462,935 $451,015 $433,138
Cloud Subscription NRR (Global Parent)126% 124% 120%
Cloud transactions processed per month (trillions)101.3 110.7 119.3
Maintenance renewal rate94% 92% 93%

Guidance Changes

MetricPeriodPrevious Guidance (date)Current Guidance (date)Change
GAAP Total RevenuesQ2 2025N/A$391M–$411M (May 7, 2025) New
Total ARRQ2 2025N/A$1.690B–$1.714B (May 7, 2025) New
Cloud Subscription ARRQ2 2025N/A$889M–$901M (May 7, 2025) New
Non-GAAP Operating IncomeQ2 2025N/A$93M–$107M (May 7, 2025) New
GAAP Total RevenuesFY 2025$1.670B–$1.720B (Feb 13, 2025) $1.670B–$1.720B (May 7, 2025) Maintained
Total ARRFY 2025$1.755B–$1.795B (Feb 13, 2025) $1.755B–$1.795B (May 7, 2025) Maintained
Cloud Subscription ARRFY 2025$1.019B–$1.051B (Feb 13, 2025) $1.019B–$1.051B (May 7, 2025) Maintained
Non-GAAP Operating IncomeFY 2025$546M–$566M (Feb 13, 2025) $546M–$566M (May 7, 2025) Maintained
Adjusted Unlevered FCF (after-tax)FY 2025$540M–$580M (Feb 13, 2025) $540M–$580M (May 7, 2025) Maintained
Cash paid for interestQ2/FY 2025$30M / $118M (Feb 13, 2025) $30M / $116M (May 7, 2025) Lower FY cash interest
Diluted weighted-average sharesQ2/FY 2025306.3M / 316.4M (Feb 13, 2025) 306.3M / 309.2M (May 7, 2025) Lower FY diluted shares

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/GenAI initiativesSurpassed 101T monthly transactions; AI blueprints across ecosystems ~100 customers using GenAI; CLAIRE GPT expanded; 270k LLM calls over 4 months 175+ customers using GenAI on IDMC; ~200k LLM calls in Q1; CLAIRE Copilot previews; agentic AI plans Accelerating adoption and product cadence
Cloud-only transformationCloud ARR +36% YoY; growing mix Cloud ARR +34% YoY; noted renewal missteps and higher modernization mix Cloud ARR +30% YoY; cloud ~50% of total ARR; renewal rate sequentially up per mgmt Healthy growth; renewal ops improving
Supply chain/tariffs/macroNot highlightedCFO: FX headwinds; macro addressed in forward-looking risk CEO: “fluid macro environment,” pipeline healthy; CFO: FX tailwinds not flowed into guide Neutral-to-cautious
Product performanceCloud subscription revenue up 37% YoY Cloud subscription revenue up 33% YoY; maintenance declines Cloud subscription revenue up 32% YoY; maintenance down ~12% YoY Consistent mix shift
Regional trendsNot disclosedUS down 6% YoY; International down 1% YoY US +6% YoY to ~$256M; International +1% YoY; FX −$6.6M impact to revenue US growth; FX sensitivity
R&D/executionPartnerships Oracle/OCI; Forrester Data Catalog leader Ops renewal issues identified; fixes underway New CPO appointment; operational model changes and AI-driven retention program Strengthening execution processes

Management Commentary

  • CEO: “We exceeded midpoint expectations across all key revenue and profitability metrics with Cloud Subscription ARR growth of 30% year-over-year driven by new cloud workloads, strong cloud net expansion from customers, increased Gen AI usage, and accelerating migrations…” .
  • CFO: “Operating margin was 30.1%, a 200 basis point improvement… Adjusted unlevered free cash flow after tax was $186 million… Q2 free cash flow will be significantly lower than reported for Q1” .
  • CEO on operations: “We have taken steps to address the operational missteps in our renewals… new retention operating model… leveraging our internal AI models to identify potential risk accounts earlier” .
  • CFO on guidance and FX: “We are comfortable reaffirming all previously issued guidance for the full year… we have chosen not to flow [FX] into the guide” .

Q&A Highlights

  • Guidance posture: Reaffirmed FY guide; FX tailwinds acknowledged but not flowed through; Q2 softer vs past quarterly linearity but first-half pattern similar to historic .
  • Renewals: Cloud renewals sequentially up and “consistent with expectations”; operational fixes in place (alignment of sales and customer success, AI-driven retention model) .
  • Modernization economics: Average uplift ratio expected at ~1.5–1.7x in 2025 (slightly above range in Q1); modernization brings additional IPU sales and better renewal rates over lifecycle .
  • Mix implications: Higher modernization share temporarily depresses reported ARR (due to credits and ASC 606 effects), unlocking hidden ARR at renewal .
  • AI adoption trajectory: Numerous pre‑production workloads; expectation to monetize Informatica‑for‑GenAI workloads in H2 .

Estimates Context

  • Q1 2025: Revenue beat consensus ($403.9M vs $391.8M*); non-GAAP EPS miss ($0.22 vs $0.2351*). The beat/miss pattern reflects strong cloud revenue growth and mix, but EPS impact from operating expense seasonality and lower on‑prem revenue recognition . Values retrieved from S&P Global*.
  • Prior quarters: Q4 2024 revenue missed ($428.3M vs $457.0M*) but EPS beat ($0.41 vs $0.3752*); Q1 2024 revenue roughly in line ($388.6M vs $387.9M*) and EPS beat ($0.22 vs $0.2018*) . Values retrieved from S&P Global*.
  • Implications: Consensus likely to adjust up on cloud revenue trajectory and down modestly on near‑term EPS given continued on‑prem roll-off and Q2 margin cadence discussed by management .

Key Takeaways for Investors

  • Cloud growth remains robust with improving renewal execution; the transformation mix continues to swing toward cloud, supporting durable ARR growth despite on‑prem roll-off .
  • Expect near‑term volatility in ARR and revenue optics from modernization accounting (credits, shorter on‑prem renewal terms), but lifecycle value and renewal stickiness favor long‑term expansion .
  • Watch Q2: revenue $391–$411M and non‑GAAP OI $93–$107M; free cash flow normalization ($55–$75M) should not derail FY FCF targets ($540–$580M) .
  • AI roadmap (CLAIRE Copilot, CLAIRE GPT, agentic AI) plus hyperscaler/Databricks integrations is a medium‑term growth catalyst; monitor conversion of pre‑production use cases to revenue in H2 .
  • Shareholder returns: $100M buyback in Q1 (4.9M shares at $20.50); $596.8M remaining authorization—share count guidance reduced for FY 2025 .
  • Risk checks: FX sensitivity; renewal rates; migration uplift within 1.5–1.7x range; services revenue shifting to partners dampens PS revenue but supports ecosystem scale .