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Informatica, Inc. (INFA)
:INFA
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Informatica
(NYSE:INFA)
61Neutral
Positive Factors
Cloud Revenue
Cloud subscription ARR grew 36.1% YOY to $747.8 million, beating prior estimate.
Financial Performance
The company generated adjusted unlevered FCF of $144.0 million, ahead of prior estimate.
Negative Factors
Cloud Transition
The company's Cloud transition is slowing down, guiding to 25% Cloud ARR growth in FY25, which is below its mid-term guidance.
Guidance and Forecasts
The company missed Q4 guidance and guided FY25 well below consensus.
Renewals and Churn
Higher churn and shorter contract lengths are negatively impacting ARR growth and are harder to fix.
Informatica (INFA) vs. S&P 500 (SPY)
Market Cap
$6.12B
Dividend YieldN/A
Average Volume (3M)2.34M
Price to Earnings (P/E)585.8
Beta (1Y)1.04
Revenue Growth2.81%
EPS GrowthN/A
CountryUS
Employees5,200
SectorTechnology
Sector Strength42
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.03
Shares Outstanding258,549,530
10 Day Avg. Volume1,848,358
30 Day Avg. Volume2,339,636
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.31
Price to Cash Flow (P/CF)12.90
P/FCF Ratio13.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.20Price Target Upside25.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Informatica Business Overview & Revenue Model
Company DescriptionInformatica (INFA) is a leading enterprise cloud data management company that empowers businesses to harness the transformative power of data. Operating primarily in the technology and software sector, Informatica offers a comprehensive suite of data management solutions, including data integration, data quality, data governance, and master data management, which enable organizations to drive their digital transformation initiatives and achieve strategic business outcomes.
How the Company Makes MoneyInformatica generates revenue through the sale of its software products and services, which are offered through a subscription-based model. Key revenue streams include licensing fees for its cloud-based data management solutions, professional services for implementation and support, and maintenance contracts. The company also benefits from strategic partnerships with cloud service providers and technology vendors, which help expand its market reach and customer base. Informatica's focus on innovation and its ability to adapt to the evolving needs of data-driven organizations play a significant role in sustaining its revenue growth.
Informatica Financial Statement Overview
Summary
Informatica demonstrates strong revenue growth and improved profitability, with significant strides in cash flow generation and leverage reduction. While profitability metrics have turned positive, sustaining this trajectory will be key in the competitive software industry. The balance sheet's strengthened equity position and reduced debt levels provide a stable financial foundation.Income Statement
Informatica has shown consistent revenue growth with a TTM increase of 2.81% from the previous year. The gross profit margin stands strong at 74.43%, indicating efficient cost management. The net profit margin has improved significantly to 0.61% in the TTM from a negative margin in previous years, reflecting a turnaround in profitability. EBIT and EBITDA margins are at 8.04% and 16.37% respectively, showing an improvement in operational efficiency.72
Positive
Balance Sheet
The company has a solid equity position, with an equity ratio of 43.69%. The debt-to-equity ratio has decreased significantly to 0.03 in the TTM, showing reduced leverage and a stronger balance sheet. Return on equity has turned positive at 0.43% from negative in prior years, indicating improved profitability relative to shareholders' equity.78
Positive
Cash Flow
Informatica's free cash flow has grown by an impressive 56.19% in the TTM, showcasing robust cash generation capabilities. The operating cash flow to net income ratio is 41.27, highlighting strong cash conversion from earnings. The free cash flow to net income ratio stands at 40.86, indicating efficient cash flow management.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.64B | 1.60B | 1.51B | 1.44B | 1.32B | Gross Profit |
| 1.31B | 1.26B | 1.16B | 1.11B | 1.01B | EBIT |
| 127.05M | 33.56M | 43.82M | 87.56M | 16.11M | EBITDA |
| 338.52M | 241.02M | 258.41M | 59.91M | 273.18M | Net Income Common Stockholders |
| 9.93M | -125.28M | -53.67M | -99.93M | -167.89M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.23B | 992.27M | 716.13M | 496.42M | 362.73M | Total Assets |
| 5.28B | 5.20B | 4.97B | 4.99B | 5.07B | Total Debt |
| 70.21M | 1.89B | 1.91B | 1.93B | 2.88B | Net Debt |
| -842.25M | 1.15B | 1.42B | 1.48B | 2.54B | Total Liabilities |
| 2.97B | 2.99B | 2.92B | 3.00B | 3.91B | Stockholders Equity |
| 2.31B | 2.21B | 2.05B | 1.98B | 1.17B |
| Cash Flow | Free Cash Flow | |||
| 405.91M | 259.80M | 194.59M | 217.87M | 153.92M | Operating Cash Flow |
| 409.85M | 266.35M | 200.06M | 228.68M | 167.75M | Investing Cash Flow |
| -70.71M | -55.88M | -185.96M | -32.41M | -52.51M | Financing Cash Flow |
| -146.21M | 21.37M | 40.89M | -86.37M | 70.29M |
Informatica Technical Analysis
Negative
17.65
Price Trends
20.98
Negative
23.49
Negative
24.76
Negative
Market Momentum
-0.77
Negative
35.22
Neutral
20.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INFA, the sentiment is Negative. The current price of 17.65 is below the 20-day moving average (MA) of 18.17, below the 50-day MA of 20.98, and below the 200-day MA of 24.76, indicating a bearish trend. The MACD of -0.77 indicates Negative momentum. The RSI at 35.22 is Neutral, neither overbought nor oversold. The STOCH value of 20.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for INFA.
Informatica Risk Analysis
Informatica disclosed 77 risk factors in its most recent earnings report. Informatica reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Informatica Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $6.51B | 177.74 | 3.92% | ― | 26.10% | 0.16% | |
75 Outperform | $7.28B | 27.33 | 31.22% | ― | 29.86% | 128.19% | |
67 Neutral | $5.96B | 217.49 | 1.38% | ― | 9.05% | ― | |
64 Neutral | $6.13B | ― | -17.68% | ― | 32.25% | 20.56% | |
61 Neutral | $6.12B | 585.81 | 0.44% | ― | 2.81% | ― | |
60 Neutral | $7.81B | ― | -0.20% | ― | 30.93% | 99.45% | |
57 Neutral | $20.94B | 10.43 | -13.41% | 2.52% | 4.53% | -23.34% |
* Technology Sector Average
Performance Comparison
INFA
Informatica
17.75
-17.92
-50.24%
FOUR
Shift4 Payments
79.29
13.49
20.50%
CCCS
CCC Intelligent Solutions Holdings
8.59
-3.19
-27.08%
S
SentinelOne
17.91
-3.95
-18.07%
SRAD
Sportradar Group AG
21.19
9.74
85.07%
GTLB
Gitlab
42.53
-14.07
-24.86%
Informatica Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -29.88% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture, with strong growth in cloud subscriptions and successful on-premises to cloud migrations. However, challenges with renewal rates, GAAP revenue impacts, and a lower uplift ratio for modernizations tempered the positive developments. The overall sentiment is balanced, with both positive and negative aspects highlighted.Highlights
Cloud Subscription ARR Growth
Cloud subscription ARR grew 34% year-over-year in Q4, representing nearly half of the total ARR. Cloud net retention rate was 124%, and cloud customer count grew by 8% for the year.
Record On-Premises to Cloud Migrations
Informatica closed a record year for on-premises to cloud migrations, growing 42% year-over-year. This development is positive for long-term upsell and cross-sell opportunities.
AI and GenAI Capabilities
Informatica's platform processed over 110 trillion cloud transactions per month, growing over 29% year-over-year. Informatica for GenAI now has about 100 customers using GenAI capabilities on the platform.
Non-GAAP Operating Income and Free Cash Flow Growth
Full-year 2024 non-GAAP operating income grew 16% year-over-year, and adjusted unlevered free cash flow after tax grew 28% year-over-year.
Leadership in Data Management Market
Informatica was named a leader in the 2024 Gartner Magic Quadrant for Data Integration Tools for the 19th consecutive time.
Lowlights
Lower Renewal Rates
Renewal rates were lower than forecast, with natural churn increasing by roughly 2 percentage points for both cloud and self-managed subscriptions.
Impact on GAAP Revenue
GAAP total revenues for Q4 2024 were $428 million, a decrease of 3.8% year-over-year. Factors impacting revenue included lower renewal rates, reduced renewal term lengths, lower professional services revenues, and unfavorable foreign exchange rates.
Lower Uplift Ratio for Modernizations
The average modernization uplift ratio was 1.7, down from 2.0 last quarter. The expected uplift ratio for 2025 is 1.5 to 1.7.
Adjusted Guidance for 2025
Guidance for 2025 was adjusted to reflect lower renewal rates, higher modernization deals, and other factors, resulting in lower growth projections than previously anticipated.
Company Guidance
In the Informatica Inc. Fiscal Q4 2024 call, several key metrics and guidance for 2025 were discussed. The company reported a total ARR of $1.73 billion, marking a 6.1% year-over-year increase, with cloud subscription ARR growing 34% to $827 million, now representing 48% of total ARR. Despite these growth figures, the quarter fell short of expectations due to lower renewal rates and an elevated mix of modernization projects, impacting GAAP revenue. Informatica anticipates cloud subscription ARR will reach $1 billion in 2025, contributing about 60% of total ARR by year-end. For 2025, the company expects total ARR growth of approximately 2.9% and GAAP total revenue growth of about 3.4%. The guidance reflects adjustments for lowered renewal rates, a higher proportion of modernization deals, and a modest decline in the average modernization uplift ratio.Informatica Corporate Events
Executive/Board Changes
Informatica Appoints New Chief Accounting Officer
Neutral
Mar 11, 2025
Informatica Inc. announced a leadership transition within its finance department, appointing Francis Santiago as the new Group Vice President and Chief Accounting Officer, effective March 5, 2025. Santiago, who has been with the company for over 13 years, succeeds Mark Pellowski, who is retiring after 20 years of service. Santiago’s compensation package includes a base salary of $390,500, a target bonus, and equity awards, aligning with the company’s executive compensation practices.
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Informatica’s Board Changes Amid Financial Reporting
Neutral
Feb 13, 2025
On February 10, 2025, Brian Ruder resigned from Informatica’s Board of Directors, and Alex Vander Linde was appointed as a new director, nominated by Permira. Informatica reported its financial results for the fourth quarter and full-year 2024, highlighting a 34% increase in Cloud Subscription ARR. The company faced challenges in the fourth quarter, including lower renewal rates and revenue impacts due to currency fluctuations. Despite these challenges, Informatica aims to reach $1 billion in Cloud Subscription ARR by the end of 2025. The company is recognized for its leadership in data management and innovation, expanding partnerships and launching new products in the AI and cloud spaces.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.