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II

Informatica Inc. (INFA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $407.3M, up 1.7% YoY, and above S&P Global consensus by ~$5.5M; Non‑GAAP diluted EPS was $0.18, below consensus by ~$0.025. Management highlighted strong Cloud Subscription growth but did not host a call due to the pending Salesforce acquisition . Revenue consensus estimate $401.8M*, EPS consensus estimate $0.205*.
  • Cloud Subscription ARR rose 28.2% YoY to $901.0M; total ARR reached $1.72B (+3.1% YoY). Cloud NRR held at 120%, while maintenance renewal rate moved down to 89% as the mix shifts away from on‑prem .
  • Profitability mixed: Non‑GAAP operating margin contracted to 26.9% from 28.7% a year ago, while GAAP operating margin was 0.0% due to non‑cash and non‑recurring items; Adjusted unlevered FCF after‑tax was $58.7M for the quarter .
  • Management is progressing toward closing the Salesforce transaction and did not provide incremental guidance with Q2 results; Q1 guidance had set Q2 ranges that the company exceeded at the midpoints on revenue and Non‑GAAP operating income .

What Went Well and What Went Wrong

What Went Well

  • Cloud Subscription momentum: Cloud Subscription Revenue grew 30.1% YoY to $209.9M; Cloud ARR rose 28.2% YoY to $901.0M, underscoring durable demand for IDMC and CLAIRE AI .
  • Execution vs expectations: “We delivered a strong second quarter, exceeding midpoint expectations across all key revenue and profitability metrics” — Amit Walia, CEO .
  • Scale and customer activity: 128.2 trillion cloud transactions/month (+33% YoY) and Cloud NRR at 120%; Cloud Subscription ARR customers increased to 2,509 (+7% YoY) .

What Went Wrong

  • Margin compression: Non‑GAAP operating margin declined to 26.9% (vs 28.7% in Q2 2024), contributing to lower Non‑GAAP EPS vs consensus .
  • Legacy mix headwinds: Maintenance renewal rate decreased to 89% (from 96% a year ago) as on‑prem maintenance and self‑managed subscriptions continue their engineered decline amid cloud migration .
  • No earnings call/guidance update: Due to the pending Salesforce acquisition, Informatica did not host a Q2 call or provide fresh guidance, limiting near‑term visibility for investors .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
GAAP Total Revenues ($USD Millions)$400.6 $403.9 $407.3
Non‑GAAP Diluted EPS ($USD)$0.23 $0.22 $0.18
GAAP Operating Margin (%)2.4% 8.4% 0.0%
Non‑GAAP Operating Margin (%)28.7% 30.1% 26.9%
Cloud Subscription Revenue ($USD Millions)$161.4 $199.9 $209.9

Segment revenue disaggregation:

SegmentQ2 2024Q1 2025Q2 2025
Cloud subscription ($USD Millions)$161.4 $199.9 $209.9
Self‑managed subscription support and other ($USD Millions)$48.9 $41.5 $41.0
Maintenance ($USD Millions)$116.5 $103.2 $102.9
Self‑managed subscription license (point in time) ($USD Millions)$54.0 $42.6 $36.1
Professional services ($USD Millions)$19.8 $16.7 $17.4
Total revenues ($USD Millions)$400.6 $403.9 $407.3

Key KPIs:

KPIQ2 2024Q1 2025Q2 2025
Total ARR ($USD Millions)$1,668.2 $1,703.6 $1,719.7
Cloud Subscription ARR ($USD Millions)$702.6 $848.4 $901.0
Cloud NRR (Global Parent)126% 120% 120%
Maintenance Renewal Rate96% 93% 89%
Cloud transactions processed per month (trillions)96.6 119.3 128.2
Cloud Subscription ARR customers (count)2,340 2,475 2,509

Guidance Changes

MetricPeriodPrevious Guidance (Q1 release)Current Guidance (Q2 release)Change
GAAP Total RevenuesQ2 2025$391M–$411M Not provided (pending Salesforce transaction) Withdrawn/Not provided
Total ARRQ2 2025$1.690B–$1.714B Not provided Withdrawn/Not provided
Cloud Subscription ARRQ2 2025$889M–$901M Not provided Withdrawn/Not provided
Non‑GAAP Operating IncomeQ2 2025$93M–$107M Not provided Withdrawn/Not provided
GAAP Total RevenuesFY 2025$1.670B–$1.720B No update in Q2 due to pending transaction Maintained (no change)
Cloud Subscription ARRFY 2025$1.019B–$1.051B No update in Q2 Maintained (no change)
Non‑GAAP Operating IncomeFY 2025$546M–$566M No update in Q2 Maintained (no change)
Adjusted Unlevered FCF (after‑tax)FY 2025$540M–$580M No update in Q2 Maintained (no change)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
AI/Technology initiativesExpanded GenAI blueprints and partnerships (Q4); CLAIRE Copilot previews, growing GenAI usage and customers (Q1) Announced AI Agent Engineering, CLAIRE Agents; expanded integrations with AWS, Databricks, Microsoft, NVIDIA, Oracle, Salesforce, Snowflake Accelerating product innovation and ecosystem breadth
Cloud modernization“Final phase to cloud‑only,” modernization uplift ~1.5–1.7x expected in 2025; modernization roll‑offs temporarily distort ARR mix (Q1) Cloud ARR +28.2% YoY; legacy ARR (maintenance/self‑managed) continues to decline; Cloud NRR 120% Continued mix shift toward cloud; legacy decline as planned
Renewals/NRRQ4 operational renewals issues addressed; Q1 cloud renewal rate sequentially up; Cloud NRR 120% (Q1) Cloud NRR 120%; maintenance renewal rate fell to 89% amid modernization Cloud renewals stabilizing; maintenance renewals pressured
FX/macroFX headwinds/tailwinds discussed; guidance reaffirmed (Q1) FX contributed ~$3.8M YoY positive to revenue Modest FX tailwind in Q2
Partner ecosystemDatabricks, Google, GSIs expanding programs (Q1) Multiple expanded partnerships across hyperscalers and AI platforms Broadening integrations support demand
Guidance/visibilityQ1 reaffirmed FY25 guidance and provided Q2 ranges No call or guidance update due to pending Salesforce deal Visibility limited in Q2; transaction focus

Management Commentary

  • “We delivered a strong second quarter, exceeding midpoint expectations across all key revenue and profitability metrics, led by a 28% year-over-year increase in Cloud Subscription ARR.” — Amit Walia, CEO .
  • “Powered by CLAIRE AI, Informatica’s IDMC platform remains at the forefront of AI, helping our customers and partners build a trusted data foundation, simplify governance, and enable seamless integration across data estates.” — Amit Walia .
  • “2025 marks the final phase of our business model transformation journey to being a cloud-only company…we remain on track to reach…$1 billion in Cloud Subscription ARR.” — Q1 call, Amit Walia .
  • “We continued working toward closing the transaction with Salesforce.” — Q2 press release .

Q&A Highlights

  • Guidance and FX: Management reaffirmed FY25 guidance in Q1 and chose not to micromanage constant currency updates after one quarter; FX tailwinds could help revenue but were not flowed into guidance .
  • Renewals: Cloud renewal rate was sequentially up in Q1 and consistent with expectations; operational changes implemented are bearing fruit .
  • Modernization uplift: Expected average uplift ratio of ~1.5–1.7x for 2025; Q1 was slightly above that range, with long‑term lifetime value from modernization prioritised over near‑term uplift multiples .
  • NRR dynamics: Modernizations can weigh on Cloud NRR mechanically while raising net new; Q1 Cloud NRR was 120% with variability expected .
  • AI pipeline: Multiple pre‑production AI workloads using IDMC; momentum expected to contribute in 2H though not guided as a discrete line item .

Estimates Context

Actual vs S&P Global consensus:

MetricQ2 2024Q1 2025Q2 2025
Revenue Consensus Mean ($USD Millions)$403.1*$391.8*$401.8*
Actual Revenue ($USD Millions)$400.6 $403.9 $407.3
Non‑GAAP Diluted EPS Consensus Mean ($)$0.220*$0.235*$0.205*
Actual Non‑GAAP Diluted EPS ($)$0.23 $0.22 $0.18
  • Q2 2025: Revenue beat by ~$5.5M (~1.4%) vs consensus; Non‑GAAP diluted EPS missed by ~$0.025. The margin step‑down (26.9% vs 28.7% a year ago) likely contributed to the EPS shortfall . Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Cloud engine intact: Cloud Subscription ARR +28.2% YoY to $901.0M, Cloud NRR 120% — evidence of resilient expansion despite legacy roll‑offs .
  • Top‑line beat, EPS miss: Revenue ~$407.3M beat, Non‑GAAP diluted EPS $0.18 missed vs consensus; margins compressed YoY, tempering earnings power despite revenue strength . Consensus values from S&P Global*.
  • Mix shift continues: Maintenance renewal rate 89% and self‑managed declines are consistent with the strategy to transition to cloud‑only; investors should expect legacy headwinds alongside cloud growth .
  • Cash generation: Adjusted unlevered FCF after‑tax of $58.7M in Q2 and strong TTM adjusted EBITDA underpin balance sheet flexibility through the transition .
  • Product/partner catalysts: New AI Agent Engineering and CLAIRE Agents plus expanded hyperscaler/AI partnerships (AWS, Databricks, Microsoft, NVIDIA, Oracle, Salesforce, Snowflake) support multi‑platform demand for IDMC .
  • Near‑term visibility muted: No Q2 call and no guidance update given pending Salesforce acquisition; trading may hinge on transaction progress rather than fundamentals alone .
  • Watch margins and legacy roll‑offs: A return to 30%+ Non‑GAAP operating margins would support EPS trajectory; monitor the cadence of maintenance/self‑managed roll‑offs vs modernization uptake .

S&P Global disclaimer: All consensus estimate values marked with * were retrieved from S&P Global.