Q4 2021 Informatica Inc Earnings Call
Good afternoon, everyone and welcome to the info math, because fourth quarter and full year 'twenty 'twenty. One earnings conference call. My name is to me here and I'll be your event specialist today. After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. Please press star followed by.
Good afternoon, everyone, and welcome to the Informatica's fourth quarter and full year 2021 earnings conference call. My name is Tania, and I'll be your event specialist today. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. Thank you. I would now like to introduce our host, Victoria Hyde-Dunn, Vice President, Investor Relations.
One on your telephone keypad. Thank you I would now like to introduce our host Victoria Hyde Dunn, Vice President Investor Relations.
Thank you good afternoon, and thank you for joining us to review Informatica fourth quarter and full year 2021 earnings results with me on the call today are Amin <unk>, Chief Executive Officer, and Eric Brown, Chief Financial Officer.
Thank you. Good afternoon and thank you for joining us to review Informatica's fourth quarter and full year 2021 earnings results.
With me on the call today are Amit Walia, Chief Executive Officer, and Eric Brown, Chief Financial Officer.
Before we begin, we have a couple of reminders. Our earnings press release and slide presentation are available on our Investor Relations website at investors.informatica.com. During this call, we will be making comments of a forward-looking nature. Actual results may vary materially from those expressed or implied as a result of various risks and uncertainties.
Before we begin we have a couple of reminders our earnings press release and slide presentation are available on our Investor Relations website at investors Dot Informatica Dot com. During this call we will be making comments on the forward looking nature actual results may vary materially from.
Those expressed or implied as a result of various risks and uncertainties for more information about some of these risks. Please review the company's SEC filings, including the section entitled Risk factors included in our most recent 10-Q and upcoming 10-K filing for the full year 2021.
For more information about some of these risks, please review the company's SEC filings, including the section titled Risk Factors, included in our most recent 10-Q and upcoming 10-K filing for the full year 2021.
These forward looking statements are based on information as of today, and we assume no obligation to publicly update or revise our forward looking statements except as required by law. Additionally, we will be discussing certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute.
These forward-looking statements are based on information as of today and we assume no obligation to publicly update or revise our forward-looking statements except as required by law. Additionally, we'll be discussing certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for measures of financial performance prepared in accordance with GAAP.
For measures of financial performance prepared in accordance with GAAP. A reconciliation of these items to the nearest U S. GAAP measure can be found in today's press release and in our slide presentation available on Informatica as Investor Relations website with that it's my pleasure to turn the.
A reconciliation of these items to the nearest U.S. gap measure can be found in today's press release and in our slide presentation available on Informatica's investor relations website. With that, it's my pleasure to turn the call over to Amit.
Paul over to Amish.
Thank you, Victoria. Good afternoon, everyone, and thank you for joining us as we review our fourth quarter and full year 2021 results and strategic priorities and guidance for 2022.
Thank you Victoria Good afternoon, everyone and thank you for joining us as we review our fourth quarter and full year 2021 results.
Strategic priorities and guidance for 2022.
We concluded our first year as a public company.
We concluded our first year end as a public company, and I'm very pleased with the results that the team delivered.
Very pleased with the results the team delivered.
We met our commitments and established an all-time quarterly record for total revenue, supported by strong operational performance and profitability.
We met our commitments and established an all time quarterly record fourth quarter revenue.
Courted by strong operational performance and profitability.
Our success is driven by our strategy of cloud first, cloud native with the secular tailwinds of digital transformation. Now let me turn to business.
Our success is driven by our strategy of cloud first cloud native.
But the secular tailwind of digital transformation.
Now, let me turn to business highlights from the fourth quarter.
Total revenues grew 8% year-over-year to a record $407 million dollars above the high end of guidance.
Total revenue grew 8% year over year to a record $407 million above the high end of guidance.
driven by subscription revenue of $230 million, which grew 23% year-over-year.
Driven by subscription revenue of $230 million.
Which grew 23% year over year.
Total ARR grew 17% year-over-year to over $1.3 billion, with strong contributions from subscription ARR of $802 million, which grew 32% year-over-year, exceeding the high end of our guide.
E. R. R grew 17% year over year to over one 3 billion with strong contributions from subscription E. R. R E $102 million.
<unk> grew 30% year over year exceeding the high end of our guidance.
Cloudy on our grew 40% year over year with $317 million and now represents 23% of Aqua.
Cloud ARR grew 40% year-over-year to $317 million and now represents 23% of our total ARR, up three percentage points year-over-year on a growing base.
Up three percentage points year over year on a growing base.
Q4 was also an impressive quarter of sales execution without the ability to sell a large multi year deals to new and existing customers.
Q4 was also an impressive quarter of sales execution with our ability to sell large, multi-year deals to new and existing customers.
remaining performance obligations or RPO grew 26% year over year to $1.2 billion.
Remaining performance obligations on RVO grew 26% year over year to $1 $2 billion.
Our growth drivers the customer demand for and provided because intelligent data management platform strong field execution and robust engagement with our strategic partners.
Our close drivers were customer demand for Informatica's Intelligent Data Management Cloud platform, strong sales execution, and robust engagement with our strategic partners.
We focused on and generated strong new customer additions and continued expansion and upsell activity from our existing customers.
we focused on and generated strong new customer additions and continued expansion and upsell activity from our existing customers.
Our cloud platform differentiation continues to result in strong enterprise performance. I'll give you some examples.
Our cold platform differentiation.
Tenuous to result in strong enterprise performance.
I'll give you some examples here.
We added 26 subscription enterprise customers that spent $1 billion or more in subscriptions ending the fourth quarter with a record 153 customers.
We added 26 subscription enterprise customers that spent $1 million or more in subscription ARR, ending the fourth quarter with a record 153 customers, an increase of 47% year-over-year and 20% sequentially.
An increase of 47% year over year and 20% sequentially.
At the end of Q4, we have 1,600 customers.
At the end of Q4 via 1600 customers that spent greater than $100000 in subscription.
that spend greater than $100,000 in subscription ARR and 22% increase year-over-year.
22% increase year over year.
55% of subscription customers are net new.
55% of subscription customers are net new and our average subscription annual recurring revenue per customer in the fourth quarter grew to over $221,000, a 21% increase year over year on an active base of more than 3,600 subscription customers.
And our average subscription annual recurring revenue for customer in the fourth quarter group over $221000.
21% increase year over year on an active base of more than 3600 subscription customers.
By leveraging our sizable billion dollar plus investment in R&D over the last five years now 85% of our subscription that comes from that net new products on IV M C.
By leveraging our sizable billion-dollar-plus investment in R&D over the last five years, now 85% of our subscription ERR comes from the net new products on IDFC.
Our AI engine, Clare, is embedded in the IDMC platform to drive intelligence and automation at scale, enabling us to process 27.8 trillion cloud transactions per month as of December 2021.
Our AI engine Claire is embedded in the IBM Z platform to drive intelligence and automation at scale.
<unk> us to process 27.8 trillion cloud transactions per month as of December 2021.
In summary, we are seeing great expansion across the board with our portfolio, both in large enterprises and an expanding commercial customer base.
In summary, we are seeing great expansion across the board with our portfolio both in large enterprises and an expanding commercial customer base.
Turning to Boardwalk, let me highlight some customer wins to give you some color on our execution.
Now turning to go-to-market, let me highlight some customer wins to give you some color on our execution.
starting with North America. T-Mobile, which everybody knows, is the second largest wireless carrier in the US and a longtime Informatica customer.
Starting with North America T mobile, which everybody knows is the second largest wireless carrier in the U S and a longtime and from a customer.
We are excited to announce that we have signed a new multi-year agreement with them to use Informatica's MDM Customer 360 SaaS platform to support their initiatives around T-Mobile for business.
We are excited to announce that we have signed a new multiyear agreement with them to use Informatica M. B M customer 360, SaaS platform to support that initiative around T mobile phone business.
Looking to the Asia Pacific region, our new public sector deals with Petrobras, a Malaysian oil and gas company already owned by the government of Malaysia and ranked among the Fortune Global 500.
Looking to the Asia-Pacific region, a new public sector deal is with Petronas, a Malaysian oil and gas company wholly owned by the Government of Malaysia and ranked among the Fortune Global 500.
Petronas embarked upon a digital transformation initiative that had identified multiple new digital projects that required access to a single, complete, trusted view of technical master data within their upstream business.
Petronas embarked upon our digital transformation initiative that had identified multiple new digital projects that required access to a single complete clustered view of technical master data within the upstream business.
Because of the complexity, Petronas needed a master data management product designed for all architecture styles, including centralized, consolidated, and coexistence.
All of the complexity Petronas needed a master data management product design for all architecture styles, including centralized consolidated and coexistence.
Petronas chose Informatica as a long-term partner, beginning with an initial MDM implementation and growing globally across all Petronas group companies.
Donuts Jordan for Mitek as a long term partner beginning with an initial MBM implementation anvil and growing globally across all Petronella group companies.
Another notable new deal in our EMEA region is with the <unk>.
Another notable new deal in our EMEA region is with the Alshaya Group, a leading retail franchise operator for international brands including H&M, PS Chang, Starbucks, The Body Shop, Cheesecake Factory, Victoria's Secret, and Vestem to name a few.
A leading retail franchise, operator for international brands, including engine M. P. F. Chang's Starbucks body shop, Cheesecake factory Victorias secret and less time to name a few.
This Kuwait-based company operates more than 4,000 stores across the Middle East and North Africa, Russia, Turkey, Central and Eastern Europe , as well as scale online and digital businesses.
This glib based company Opex more than 4000 stores across the Middle East and North Africa, Russia, Turkey, Central and Eastern Europe , as well as scale online and digital businesses.
Recognizing the depth of our intelligent data management cloud platform as triad, Joe's Informatica and toy business 360 platform, our partnership with Microsoft and Azure marketplace presence, adding additional value to our shire and its long term digital goes.
Recognizing the depth of our intelligent data management cloud platform, Alshayar chose Informatica's end-to-end Business 360 platform.
Our partnership with Microsoft and our Azure Marketplace presence added additional value to Alshaya in its long-term digital goals.
Another great example of land and expand customer story is Rolls-Royce. I think everybody knows this 115 year old company. They have four main operating companies, civil aerospace, defense, power systems, and electrical. Rolls-Royce is a long time
Another Great example of our land and expand customer stories roles with I think everybody knows this 150 newer company. There are four main operating companies Civil Aerospace defense power system that electrical <unk>.
Rolls Royce is a long time and providing a powerful new customer and they also have a strategic partnership with Microsoft as a preferred vendor.
and they also have a strategic partnership with Microsoft as a preferred cloud vendor.
Rolls Royce is an aggressive digital transformation, where data is a key component to that digital transformation.
Rolls-Royce is an aggressive digital transformation where data is a key component to that digital transformation.
They saw value in our IDMC Cloud Platform, selecting Informatica as a strategic partner with their initial investment in Axon, data quality, and the enterprise data catalog to solve the data challenge.
They saw value in our Ibm's cloud platform selecting and from I think as a strategic partner with our initial investment in axon data quality and the enterprise data catalog to solve the data challenges.
Q4 was also highlighted by increased collaboration with our strategic partners, we had strong engagement with our ecosystem and global system integrator partners, winning new deals a reflection about Switzerland upbeat a management position in the market that customers really value.
Q4 was also highlighted by increased collaboration with our strategic partners. We had strong engagement with our ecosystem and global system integrated partners winning new deals, a reflection of our Switzerland of data management position in the market that customers really value.
In the fourth quarter, the number of ecosystem wholesale Vince grew over two and a half times year over year and the marketplace transaction volume growth for Titan, Europe , where youre, indicating excellent traction with key ecosystem partners.
In the fourth quarter, the number of ecosystem coastal winds grew over two and a half times year over year and the marketplace transaction volume grew four times year over year indicating excellent traction with key ecosystem partners.
On the product innovation side, we extended our partnership reach where he was a launch partner for the Snowflake governance accelerated program and also big data governance, any badge, reflecting our ability to deliver data democratization data protection and data governance for the small think data cloud.
On the product innovation side, we extended our partnership reach where we were the launch partner for the Snowflake Governance Accelerated Program and earned Snowflake's Data Governance Ready badge reflecting our ability to deliver data democratization, data protection, and data governance for the Snowflake data.
At AWS reInvent conference, we announced new solutions for AWS data governance and data democratization for Databricks Delta Lake.
At AWS re invent conference, we announced new solutions for AWS and data governance and data democratization for dws is deadly.
We announced cloud modernization programs with AWS, Microsoft, and GCP. We also announced an expansion of our strategic partnership with Google Cloud at Google Cloud Next.
We announced cloud modernization programs at AWS, Microsoft and UCB, We also announced an expansion of our strategic partnership with Google Cloud at Google Cloud next.
A great example of a strategic partner pull in is at the bank of Montreal, The fourth largest bank in Canada, and if the North America by assets, serving 12 million customers BMO.
A great example of a strategic partner convene is with the Bank of Montreal, the fourth largest bank in Canada and eighth in North America by assets, serving 12 million customers.
PMO had a goal for all of their decisions to be data-driven and realized that they had to elevate the data management practices and use of data and analytics.
BMO had a goal for all of their decisions to be data driven and realize that they have to elevate the data management practices and use of data and analytics.
Limited by existing technologies BMO recognized the need for comprehensive end to end data management solution and they are leveraging informatics solutions, including axon data governance enterprise data clock data catalog and Informatica data quality.
Limited by existing technologies, BMO recognized the need for a comprehensive end-to-end data management solution, and they are leveraging Informatica solutions, including Axon data governance, enterprise data catalog, and Informatica data quality. In addition, BMO has partnered with Deloitte during the evaluation, and continues to collaborate post-sale on the delivery. The strategic partnership of Informatica and Deloitte will allow BMO to be a digitally powered bank that draws on actionable insights.
In addition, BMO as partner of Deloitte during the evaluation and continuous to collaborate posting on the delivery of.
The strategic partnership of Informatica, and Deloitte will allow vmware to be a digitally powered.
That draws on actionable insights.
Now, let me turn to product innovation, let me continue to democratize data and enables data driven decision, making for our customers to real time analytics data governance data sharing and data intelligence.
Now, let me turn to product innovation, where we continue to democratize data and enable data-driven decision making for our customers through real-time analytics, data governance, data sharing, and data intelligence.
Beginning with the launch of an industry first informatica cloud Ddos marketplace that provide self service data sharing with a seamless data shopping experience for consumers of all skills across a hybrid multi platform and price.
beginning with the launch of an industry-first Informatica Cloud Data Marketplace that provides self-service data sharing with a seamless data shopping experience for consumers of all skills across a hybrid, multi-platform, and hybrid platform.
Powered by clear, our AI engine being able customers to easily find and shared realtime data and analytical models more broadly and effectively and we've automated memory tasks.
Powered by Clare, our AI engine, we enable customers to easily find and share real-time data and AI analytical models more broadly and effectively, and we automate manual tasks.
Second we added more clear our automation, including self integrating systems automated app to app data synchronization automated changed it a gotcha automated MLR and ddos capabilities automated influence or data quality rules.
Second, we added more clear AI-powered automation, including self-integrating systems, automated app-to-app data synchronization, automated change data capture, automated MLOps and DataOps capabilities, automated inference for data quality rules.
automated schema matching, and automated curation of data assets for improving customer productivity at scale.
Automated scheme of matching and automated curation of data ethics, but improving customer productivity at scale.
Third we are helping data engineers and application developers accelerate development and include the performance of beta pipes for data warehouses data lakes and application modernization use cases with.
Third, we are helping data engineers and application developers accelerate development and increase the performance of data pipes for data warehouses, data lakes, and application modernization use cases.
We extended our API management support for third-party APIs to enable customers to better govern, manage, and secure all of their enterprise data and business APIs.
We extended our API management support for third party API to enable customers to better govern manage and secure all of their enterprise data and business EPS.
Next as we've noted earlier, we continued to see strong interest from our on Prem customers wanting to modernize to the cloud and leverage our cloud native <unk> platform, we improve automation tools and expanded support for additional systems, including mainframe enhancing features support for Azure and AWS redshift real.
Next, as we've noted earlier, we continue to see strong interest from our on-prem customers wanting to modernize to the cloud and leverage our cloud-native IDMC platform.
We improved automation tools and expanded support for additional systems, including mainframe, enhancing feature support for Azure and AWS Redshift, real-time support, and handling of advanced transformation, including data quality transformations and configurations.
Sizable and handling of advanced transformation, including data quality transformations and configurations.
Eight 2% apart installed base has migrated to the cloud at a 1.9 X conversion rate from maintenance the IRR to Claudia.
Today, 2% of our install bases migrated to the cloud at a 1.9x conversion rate from maintenance ERR to cloud ERR.
And more recently, we achieved FedRAMP certification, meeting the most stringent global security standards and Fed regulations, giving our government customers peace of mind and testing cloud data management platform to help them modernize, drive efficiency, and deliver digital first experiences for their employees and the citizens across the country.
And more recently, we achieved fed ramp certification meeting the more stringent global security standards and fed regulations, giving our government customers peace of mind and best in class cloud data management platform to help them modernize and drive efficiency and deliver digital first experiences for their employees and citizens across the country.
Lastly, informatica differentiated cloud technology platform is consistently recognized by industry analysts beginning.
Lastly, Informatica's differentiated cloud technology platform is consistently recognized by industry analysts.
Beginning with Gartner, we are proud once again to be named a leader in the Gartner Magic Quadrant for master data management solutions. This is the sixth time in a row and positions Informatica as one of the longest running leaders in the MDM Magic Quadrant.
Beginning with Gartner, we are proud once again to be named a leader in the Gartner Magic quadrant for Master data management solutions. This is the sixth time in a row and positions Informatica as one of the longest running leaders in the MDA Magic quadrant.
We recently received a strong rating in Gartner's 2021 Vendor Rating Report in three categories, including strategy, products, and technology.
We recently received a strong reading and Cognos 2021 vendor reaping report in three categories, including strategy product and technology.
We are fortunate to be one of the two companies at Gawker covers in this vendor rating across the globe.
We are fortunate to be one of the 32 companies that Gartner covers in this vendor rating across the globe.
We were also awarded a 2021 new product of the year by the business Intelligence group for Informatica of Ibm's It platform.
We were also awarded the 2021 New Product of the Year by the Business Intelligence Group for Informatica's IDMC platform.
And CRN recognized Informatica as the top 100 cloud company in 2022. We have strong.
And CRM recognizing for Mitek as a top 100 cloud company in 2022.
We have strong momentum coming out of 2021, and we could not be more excited about the opportunities in front of us this year.
and we could not be more excited about the opportunities in front of us this year.
Our strategic priorities and key areas of investment and Triple It begins with product innovation to enhance capabilities and drive more use cases for our cloud identity platform.
our strategic priorities and key areas of investment.
It begins with product innovation to enhance capabilities and drive more use cases for our Cloud IDMCP.
Second, continue to scale and expand our global enterprise sales motion. And third, strategic partnership expansion. Let me give you a brief explanation of all of that.
<unk> continues to scale and expand our global enterprise sales motion and third strategic partnership expansion. Let me give you a brief explanation of all of them.
First, around product innovation. The breadth of our IDMC platform is unparalleled and no other product in the market today provides a suite of seven best-in-class, best-in-breed solutions powered by Clare, our AI engine, and over 50,000 plus metadata we're connected.
Around product innovation, the breadth of what ideas at Blackburn is unparalleled and no other product in the market today provides a suite of seven best in class best in breed solution powered by clear our AI engine and over 50000, plus metadata with connectors, we look forward to sharing a lot more on product innovation I can put.
We look forward to sharing a lot more on product innovation at Informatica World in May, which is our user conference.
Article, while EMEA, which is our user conference.
Second, we continue to expand our global sales motion. Our core sales motion is twofold, landing new customers into the IDMC platform and expanding our installed customer base through selling new cloud workloads across the.
Second we continued to expand our global sales.
Of course sales motion is to landing new customers into the IBM Z platform and expanding installed customer base through selling new chemicals across the seven better be prototypes.
With maintenance renewal rates of 95% and subscription renewal rate of 92% on a growing customer base, we have ample opportunity for land and expand the new use cases.
With maintenance renewal rates of 95% and subscription renewal rate of 92% on a growing customer base, we have ample opportunity for land and expand the new use case.
As we scale our go to market internally with strategic partners. We are amplifying our focus on industry driven go to market sales motion.
As we scale our go-to-market internally with strategic partners, we are amplifying the focus on industry-driven go-to-market sales.
We will create new routes to market through a combination of sales team organized by verticals, in top-tier geographies, and increased emphasis on industry-aligned use case-based selling across the board.
We will create new routes to market through a combination of sales team augmented by verticals in pop your geographies and increased emphasis on industrial line youll still be selling across the board.
Additionally, we'll be investing more and more in high velocity selling motion for departmental buyers.
Additionally, we'll be investing more in modern high velocity selling motion for departmental buyers.
And our new consumption based pricing model continues to provide more flexibility and allows us to attract new customers and drive increased adoption of the <unk> platform within existing customers.
And our new consumption-based pricing model continues to provide more flexibility and allows us to attract new customers and drive increased adoption of the IDMC platform within existing customers.
Third, turning to our strategic partners. This past year, we deepened our strategic relationships with our hyperscalers and cloud ecosystem partners, including AWS, Microsoft Azure, GCP, Snowflake, and Databricks.
Turning to our strategic partners. This past year, we deepened our strategic relationships with our Hyperscale and cloud ecosystem partners, including AWS, Microsoft Azure with GCB Snowflake in pediatrics and this year, we will continue to expand our core sell at market lease opportunities.
And this year, we will continue to expand our co-sell and market place opportunities.
Without GSI partners, we're doubling down even more than current engagements and forging new partnerships since 'twenty 'twenty, when we launched our customer and partner certification program to ABF certified more than 17000 individuals across GSI and channel partners.
With our GSI partners, we're doubling down even more in current engagements and forging new partnerships.
Since 2020, when we launched a customer and partner certification program, today we have certified more than 17,000 individuals across GSIs and channel partners.
We're introducing a new selling motion to accelerate the migration of on Prem workloads to cloud what GSI partners and some of our largest strategic partners are big migrations centers of excellence with access to a migration factory tools to help customers migrate their one provoked looks the cloud seamlessly with less risk.
We're introducing a new selling motion to accelerate the migration of on-prem workloads to cloud to our GSI partners. And some of our largest strategic partners have built migration centers of excellence with access to our migration factory tools to help customers migrate their on-prem workloads to the cloud seamlessly with less risk.
We continue to deliver on our commitments.
I'm proud of the execution from 5,500-plus informaticans across the globe to help us achieve a very strong 2021.
Proud of the execution from 5500 classes from articles across the globe to help us achieve a very strong 2021.
And we recently welcomed Jim Krueger as a chief marketing officer, Jim has more than 25 years of experience driving high velocity sales motion within enterprise cloud software companies, including demand Gen brand product and solution market.
And we recently welcomed Jim Kruger as our Chief Marketing Officer. Jim has more than 25 years of experience driving high-velocity sales motion within enterprise cloud software companies, including demand gen, brand, product, and solution market.
We believe the resiliency of our recurring revenue model and strong cash flows will help us to achieve double digit revenue growth. This year, the operating health of the businesses sorry.
We believe the residency of our recurring revenue model and strong cash flows will help us to achieve double-digit revenue growth this year. The operating health of the business is solid.
And we're on track to deliver $1 billion in subscription ARR in 2022. Quite an impressive journey for Informatica, which when I think back in 2015, we were less than $100 million in subscription ARR.
And you're on track to deliver $1 billion in subscription the IATA when he can he do.
Quite an impressive journey for Informatica, which when I think back in 2015, we will let that $100 million in subscription.
With that let me hand, the call went off to Eric Eric.
With that, let me hand the call over now to Eric.
Thank you Amit and good afternoon, everyone Q4 was a strong finish to our first fiscal year end post IPO and we delivered a very good quarter let.
Thank you, Amit, and good afternoon, everyone. Q4 was a strong finish to our first fiscal year-end post-IPO, and we delivered a very good quarter.
Let me provide some commentary on our results before discussing our expectations for Q1 and full year 2022.
Let me provide some commentary on the results before discussing our expectations for Q1 and full year 2022.
Turning to our Q4 results, we delivered $4 $6 7 million in total revenues with 8% year over year.
Turning to our Q4 results, we delivered $406.7 million in total revenues with 8% year-over-year growth, which was above the high end of our guidance range. Our results were driven by healthy expansion and upsell activity from our existing customers and new customer additions, including large enterprise deals. In fact, for the full year, we observed strong new customer momentum and grew new logo total contract value, or TCV, by 29% year-over-year.
Which was above the high end of our guidance range. Our results were driven by healthy expansion and upsell activity from our existing customers and new customer additions, including large enterprise deals in fact for the full year, we observed strong new customer momentum and grew new logo total contract value or <unk> by 29 per.
<unk> year over year.
In terms of revenue contribution, 90% of total revenues are recurring and highlight the stability of our financial model. This drives the better-than-expected cash flow, and we'll discuss later. Subscription revenues increased 23% year-over-year to $229.7 billion and were better than our internal expectations. Subscription revenues represented 56% of total revenues as compared to 49% year ago and reflect strong customer demand for our cloud solutions.
In terms of revenue contribution 90% of total revenues are recurring and highlight the stability of our financial model. This drives the better than expected cash flow I will discuss later subscription revenues increased 23% year over year to $2 $29 7 million and were better than our internal expectations subscription revenues represented 56%.
Total revenues as compared to 49% year ago, and reflects strong customer demand for our cloud solutions.
Maintenance and professional services revenues were flat year over year as expected at $166 8 million and represented 41% of total revenues for the quarter.
Maintenance and professional services revenues were flat year over year as expected at $166.8 million and represented 41% of total revenues of the quarter.
Standalone maintenance revenue represented 34% of total revenue.
Standalone maintenance revenue represented 34% of total revenues.
Consulting and education revenue make up the difference and fluctuates based on customer requirements representing 7% of total revenue.
Softening in education revenue make up the difference and fluctuates based on customer requirements, representing 7% of total revenues.
And lastly, perpetual license revenue is $10.2 million in the quarter, down as expected 60% year-over-year, and represented about 2.5% of total revenues. As a reminder, we are not actively selling perpetual licenses to new customers and expect perpetual licenses to remain an insignificant percentage of total revenues. Our shift to a recurring revenue model is effectively complete.
And lastly, perpetual license revenue was $2 2 million in the quarter down as expected, 60% year over year and represented about two 5% of total revenues. As a reminder, we are not actively sold perpetual licenses to new customers and expect perpetual licenses to remain an insignificant percentage of total revenues.
Our shift to a recurring revenue model is effectively complete.
As Amin mentioned earlier with strong global sales execution in the quarter revenue from the U S grew 8% year over year to $2 $47 4 million, representing 61% of total revenue International revenue grew 7% year over year to $1 $59 3 million, representing 39% of total revenue and up two percentage points sequentially. We continue.
As Amit mentioned earlier, we had strong global sales execution in the quarter. Revenue from the US grew 8% year over year to $247.4 million, representing 61% of total revenue. International revenue grew 7% year over year to $159.3 million, representing 39% of total revenue, and up two percentage points sequentially. We continue to see opportunities in front of us as countries outside the US look to the cloud as part of their digital transformation.
To see opportunities in front of us as countries outside the U S were up to the cloud as part of their digital transformation.
Now turning to our total air our increased 17% year over year to 1.3 dollars 6 billion in the fourth quarter, we added $200 million in net new <unk> in 2021 versus the prior year.
Now turning to ARR, total ARR increased 17% year over year to $1.36 billion in the fourth quarter. We added $200 million in net new ARR in 2021 versus the prior year.
We are introducing total ARR as a new full year guidance metric for 2022 and are on our way to over 1.5 billion in expected total ARR this year.
We are introducing total IRR as a new full year guidance metric for 2022 and are underway to over $1 5 billion and expected total ear are this year.
Subscription <unk> increased 32% year over year to $802 3 million in the fourth quarter above the high end of guidance and driven by new subscription customer base and cross sell from existing customers subscription are all represented 59% of total air are up seven percentage points year over year and up two percentage points sequentially.
Subscription ARR increased 32% year-over-year to 802.3 million in the fourth quarter above the high end of guidance and driven by new subscription customer growth and cross-sell from existing customers. Subscription ARR represented 59% of total ARR, up 7 percentage points year-over-year, and up 2 percentage points sequentially.
As we guided to $1 billion unexpected subscription <unk> in fiscal 2022, we note that today there are only about 30 other public technology companies. Currently at this 1 billion plus scale of subscription <unk>.
As we guide to 1 billion in expected subscription ARR in fiscal 2022, we note that today there are only about 30 other public technology companies currently at this 1 billion plus scale of subscription ARR.
Claudia are increased 40% year over year to $317 million in the fourth quarter and was in line with expectations quality are all represented 40% of total subscription are up three percentage points from a year ago and up one percentage point sequentially. We.
Cloud ARR increased 40% year-over-year to 317 million in the fourth quarter and was in line with expectations.
Cloud ARR represented 40% of total subscription ARR, up three percentage points from a year ago, and up one percentage point sequentially. We added $90 million in net new cloud ARR in 2021 versus the prior year. And net new cloud ARR in 2021 increased 50% year-over-year in dollar terms as compared to 2020, indicating strong cloud momentum.
We added $90 million and net new cloud <unk> and 2021 versus the prior year.
New cloud <unk> in 2021 increased 50% year over year in dollar terms as compared to 2020, indicating strong cloud momentum.
We expect approximately 40% year over year cloud <unk> growth in each quarter in fiscal 2020, maintaining this high growth while scaling the business.
We expect approximately 40% year-over-year cloud AR growth in each quarter in Fiscal 2020, maintaining this high growth while scaling the business.
Lastly, maintenance <unk> was flat year over year at $5 $57 $9 million with strong renewal rates and represented 41% of total air are down seven percentage points from a year ago. As a reminder, we have significantly reduced sales of perpetual licenses in favor of cloud offerings and this will naturally result in a gradual decline in maintenance.
Lastly, maintenance ARR was flat year over year at 557.9 million with strong renewal rates and represented 41% of total ARR, down 7 percentage points from a year ago. As a reminder, we have significantly reduced sales of professional licenses in favor of cloud offerings, and this will naturally result in a gradual decline in maintenance ARR over time. As a result, we expect maintenance ARR of approximately 525 million for full year 2022.
<unk> overtime as a result, we expect maintenance era of approximately 525 billion for full year 2022.
Subscription net retention rate or subscription and our Q4 was 114% flat year over year as I mentioned last quarter, we expect to see fluctuations in this metric due to the mix of new bookings from new customers versus existing customers and the timing of awards initial deal sizes of expanding in their first year.
Subscription net retention rate or subscription NRR in Q4 was 114% flat year over year. As I mentioned last quarter, we expect to see fluctuations in this metric due to the mix of new bookings from new customers versus existing customers and the timing of large initial deal sizes expanding in their first year. We remain focused on driving subscription NRR above 120% as a longer term goal.
We remain focused on driving subscription and are are above 120% is a longer term goal.
Now turning to consumption based pricing 2021 marks the first full year of our consumption based pricing model featuring Informatica processing units also known as <unk>.
Now turning to consumption-based pricing, 2021 marks the first full year of our consumption-based pricing model featuring Informatica Processing Units, also known as IPUs.
IPUs allow our customers to dynamically and seamlessly choose how they use any of our cloud solutions and services. In 2021, IPUs represented approximately 20% of cloud ARR, and this percentage increased by approximately three times compared to 2020. And in the fourth quarter, approximately 43% of our cloud net new bookings were IPU-based, indicating accelerating uptake of this.
It to use with our customers to dynamically and seamlessly choose how to use any of our cloud solutions and services in 2021, ICU represented approximately 20% of cloud era and this percentage increased by approximately three times compared to 2020.
And in the fourth quarter, approximately 43% of our cloud net new bookings were Apu based indicating accelerating uptake of this offering.
Before moving to our profitability metrics I'd like to point out that I will be discussing non-GAAP results for the fourth quarter unless otherwise stated our gross margin was 82, 3% and we maintained a stable level throughout the year notwithstanding the mixed shift to cloud.
Before moving to our profitability metrics, I'd like to point out that I will be discussing non-gap results for the fourth quarter, unless otherwise stated. Our gross margin was 82.3%, and we maintained a stable level throughout the year, notwithstanding the mixed shift to cloud. Consistent with expectations, we accelerated investments in Q4 across all functional areas to capture the significant momentum we're seeing in the market as we continue to hire, make investments to support growth, and prepare for public company operations.
System with expectations, we accelerated investments in Q4 across all functional areas to capture the significant momentum we're seeing in the market as we continue to hire make investments to support growth and prepare for public company operations.
We have several strategic priorities in 2022 and view this as an important year to continue investing in sales and marketing, research and development, and partner ecosystem initiatives.
We have several strategic priorities in 2022 and view this as an important year to continue to invest in sales and marketing research and development and partner ecosystem initiatives.
Q4, non-GAAP operating income was $95 1 million slightly above our expectations. Adjusted EBITDA was $101 3 million and net income was $54 million net income per diluted share was <unk> 20 based.
Q4 non-GAAP operating income was $95.1 million, slightly above our expectations. Adjusted EBITDA was $101.3 million, and net income was $54 million. Net income for our diluted share was $0.20 based on 275.4 million diluted shares outstanding. The basic share count for Q4 was 267.5 million shares. Capital structure.
Based on $275 4 million diluted shares outstanding the basic share count for Q4 was $2 67 5 million shares.
Capital structure and cash flow upticks, we ended the year at a strong cash position with cash plus short term investments of $486 4 million net debt was $1 three 8 billion and with full year adjusted EBITDA of $3 $77 4 million. This resulted in a net leverage ratio of three seven times.
We entered the year in a strong cash position with cash plus short-term investments of $496.4 million. Net debt was $1.38 billion, and with fully-adjusted EBITDA of $377.4 million, this resulted in a net leverage ratio of 3.7 times, down from 6.2 times last year.
Down from six two times last year looking ahead, we expect the business will naturally delever due to our healthy cash margins and we intend to steadily reduce our net leverage ratio over the next two to three years to approximately two times.
Looking ahead, we expect the business will naturally de-lever due to our healthy cash margins, and we intend to steadily reduce our net leverage ratio over the next two to three years to approximately two times.
On liver-free cash flow after tax was $104.5 million in the fourth quarter. And for the full year, on liver-free cash flow after tax was $332.2 million, approximately $38 million above guidance midpoint.
Unlevered free cash flow after tax was one of $4 5 million in the fourth quarter and for the full year Unlevered free cash flow. After tax was $332 2 million approximately $38 million above guidance midpoint.
Operating cash flow in Q4 was 86.3 million, an improvement of 10%, and operating cash flow was 228.7 million for the full year, an increase of 36% year-over-year due to top-line revenue growth, strong renewals, and working capital efficiencies.
Operating cash flow in Q4 was $86 3 million an improvement of 10% and operating cash flow was $228 7 billion for the full year, an increase of 36% year over year due to topline revenue growth strong renewals and working capital efficiencies.
RPO grew 26% year-over-year to $1.2 billion. We are pleased with the growth in RPO, however, we continue to believe ARR is the best metric to understand the business's performance as it removes variability associated with billings and contract duration.
<unk> grew 26% year over year to $1 2 billion were pleased with the growth in <unk>. However, we continue to believe <unk> is the best metric to understand the businesses performance as it removes variability associated with billings and contract duration.
Now key modeling assumptions.
Before accounting for the first quarter and full year 2022, I would like to provide some additional color on certain financial model assumptions.
Before accounting for the first quarter in full year 2022, I would like to provide some additional color on certain financial model assumptions.
First let me discuss our expectations for non-GAAP operating income as we mentioned last quarter total revenues and non-GAAP operating income ranges are in part dependent upon the mix of air our additions of cloud versus self managed subscriptions silk managed subscriptions are subject to ASC 606 upfront revenue recognition as opposed to cloud subscriptions, which are rare.
First, let me discuss our expectations for non-GAAP operating income. As we mentioned last quarter, total revenues in non-GAAP operating income ranges are in part dependent upon the mix of ARR additions of cloud versus self-managed subscription.
Self-managed subscriptions are subject to ASC 606 upfront revenue recognition as opposed to cloud subscriptions which are recognized rapidly over time.
<unk> rapidly over time.
Cloud AR represents 40% of subscription AR. As customers purchase more cloud offerings on the IDBC platform, we expect the mix of cloud AR as a percentage of subscription AR to gradually increase.
What are your are represents 40% of subscription IRR as customers purchased more cloud offerings on the IDC platform. We expect the mix of cloud there are as a percentage of subscription there are to gradually increase and also as Amit mentioned, we have ample high quality business opportunities, which would require incremental expenses given the healthy cloud market.
And also, as Amit mentioned, we have ample high-quality business opportunities which require incremental expenses given the healthy cloud market environment.
Ironman.
We are of the opinion that making these investments will position us position us even better to achieve our long term non-GAAP operating income margin of 36% to 39% of total revenues.
We are of the opinion that making these investments will position us even better to achieve our long-term non-gap operating income margin of 36% to 39% of total revenue.
Second, let me discuss our expectations for P&L tax rates. We reported 2021 non-GAAP net income and a non-GAAP tax rate of 22%.
Second let me discuss our expectations for P&L tax rates, we reported 2021, non-GAAP net income and non-GAAP tax rate of 22%.
For 2022, we're estimating a 23% non-GAAP tax rate looking at fiscal 2023 and beyond we continue to expect a long term steady state non-GAAP tax rate of 24%, which reflects where we expect cash taxes to sell based on our structure and geographic distribution of operational activity.
For 2022, we are estimating a 23% non-GAAP tax rate. Looking at fiscal 2023 and beyond, we continue to expect a long-term steady state non-GAAP tax rate of 24%, which reflects where we expect cash taxes to settle based on our structure and geographic distribution of operational activity.
Third, let me discuss our expectations for SHARE's outstanding.
Third let me discuss our expectations for shares outstanding.
For the first quarter of 2022, we expect basic weighted average shares outstanding to be approximately 280 million shares and diluted weighted average shares outstanding to be approximately 286 million shares.
For the first quarter of 2022, we expect basic weighted average shares outstanding to be approximately 280 million shares and diluted weighted average shares outstanding to be approximately 286 million shares.
For the full year 2022, we expect basic weighted average shares outstanding to be approximately 284 million shares, and diluted weighted average shares outstanding to be approximately 288 million shares.
For the full year 2022, we expect basic weighted average shares outstanding to be approximately 284 million shares and diluted weighted average shares outstanding to be approximately 288 million shares.
Our IPO lockup expires, invested options and eligible shares can be traded starting February 28, 2022. We estimate that approximately 256 million shares of Class A common stock, including approximately 11 million vested options, will become eligible for sale in the public market at the opening of the market on February 28.
Our IPO lockup expires invested options and elbow.
Shares can be traded starting February 28, 2022, we estimate that approximately 256 million shares of class a common stock, including approximately $11 million vested options will become eligible for sale in the public market at the opening of the market on February 28.
Fourth let me discuss our expectations for Unlevered free cash flow after tax.
Fourth, let me discuss our expectations for unlevered free cash flow after tax.
Our outlook for full year 2022 takes into account three facts.
Our outlook for full year 2022 takes into account three factors improving net income a discrete non operational item and an increase in investment in strategic growth initiatives. The one discrete nonoperational item is higher expected cash taxes of approximately $23 million driven by U S federal tax.
Improving net income, a discrete non-operational item, and an increase in investment in strategic growth initiatives.
The one discrete non-operational item is higher expected cash taxes.
approximately $23 million driven by U.S. federal tax requirements to capitalize R&D beginning in 2022 versus expensing those costs in period. While there's still a possibility that legislation will be enacted that defers the requirement to capitalize R&D, we are including higher cash taxes in our current outlook as will be required to make these payments unless the existing law is amended by legislation before the end of March.
To capitalize R&D, beginning in 2022 versus expensing those costs in period, while their store possibility that legislation will be enacted that defers the requirement to capitalize R&D, we are including higher cash taxes and our current outlook as we'll be required to make these payments unless the existing laws amended by legislation before the end of <unk>.
March.
Guidance, taking all this into account we are establishing guidance for the first quarter of 2020 too. Many March 31st two as follows we expect total revenues in the range of $3 $57 million to $367 million, representing approximately 8% year over year growth at the midpoint of the range, we expect subscription <unk> in the range of.
Guidance. Taking all this into account, we are establishing guidance for the first quarter of 2022 ending March 31, 2022 as follows. We expect total revenues in the range of $357 to $367 million, representing approximately 8% year-over-year growth at the midpoint of the range. We expect subscription ARR in the range of $830 to $840 million, representing approximately 30% year-over-year growth at the midpoint of the range.
$830 million to $840 million, representing approximately 30% year over year growth at the midpoint of the range.
We expect cloud ARR in the range of 333 to 339 million, representing approximately 40% year-over-year growth at the midpoint of the range.
We expect cloud <unk> in the range of $333 million to $339 million, representing approximately 40% year over year growth at the midpoint of the range.
And we expect non-GAAP operating income in the range of $66.5 million to $73.5 million.
We expect non-GAAP operating income in the range of $66 5 million to $73 5 million.
We are establishing guidance for the full year 2022 ended December 31, 2022 as follows we expect total revenues in the range of $1 billion $585 million to $1 billion $605 million, representing approximately 10% year over year growth at the midpoint of the range, we expect total <unk> and <unk>.
We are establishing guidance for the full year 2022 ending December 31st, 2022, as follows. We expect total revenues in the range of $1,585,000,000 to $1,605,000,000, representing approximately 10% year-over-year growth at the midpoint of the range. We expect total ARR in the range of $1,510,000,000 to $1,540,000,000, representing approximately 12% year-over-year growth at the midpoint of the range.
A range of $1.510 billion to $1 billion $540 million, representing approximately 12% year over year growth at the midpoint of the range.
We expect subscription <unk> in the range of $990 million to $1 billion 10 billion, representing approximately 25% year over year growth at the midpoint of the range. We expect cloud are are in the range of $438 million to $448 million, representing approximately 40% year over year growth.
We expect subscription ARR in the range of $990 million to $1 billion, $10 billion, representing approximately 25% year-over-year growth at the midpoint of the range.
We expect cloud ARR in the range of $438 to $448 million, representing approximately 40% year-over-year growth at the midpoint of the range. We expect non-GAAP operating income in the range of $325 million to $345 million. And we expect unlever-free cash flow after tax in the range of $323 to $343 million.
Midpoint of the range, we expect non-GAAP operating income in the range of 325 million to $345 million and we expect Unlevered free cash flow after tax in the range of $323 million to $343 million.
And by the end of 2022, we expect to further deleverage to under three times on our net debt to adjusted EBITDA ratio. In summary, 2021 was an excellent year with 40% year-over-year cloud ARR growth, a quarterly record for net new cloud ARR dollar additions, better than expected total ARR growth, and predictable cash flow generation with proven unit economics.
And by the end of 2022, we expect to further deleverage to under three times on a net debt to adjusted EBITDA ratio. In summary, 2021 was an excellent year with 40% year over year cloud Aero growth a quarterly record for net new cloud <unk> dollar additions better than expected total AOR growth and.
Predictable cash flow generation with proven unit economics, we believe we are well positioned to achieve our guidance of $1 billion in subscription IRR and $1 5 billion in total ore by the end of 2022.
We believe we are well-positioned to achieve our guidance of $1 billion in subscription ARR and $1.5 billion in total ARR by the end of 2022.
And before closing, I'd like to note an upcoming event. As Amit mentioned, we are planning to host Informatica World, our annual user conference, the week of May 23rd in person and online. If you are interested in attending, please reach out to Investor Relations.
Before closing I'd like to note an upcoming event.
Amit mentioned, we are planning to host Informatica World Our annual user conference. The week of May 23rd in person and online if you're interested in attending please reach out to Investor relations.
Thank you very much for your continued support, and operator, you may now open the line for questions.
Thank you very much for your continued support and operator, you may now open the line for questions.
Thank you we will now begin the Q&A session. Please press star followed by one on your telephone keypad. If for any reason you would like to remind the question.
Thank you. We will now begin the Q&A session. Please press star followed by one on your telephone keypad if for any reason you would like to remove a question. Please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your hands up before asking your question. We will pause here briefly if questions are generated in queue.
Please press star followed by team again to ask a question press Star one as a reminder, if you are using a speaker phone. Please remember to pick up your handset before asking your question well pause here briefly ask questions are generated in Q.
The first question is from the line of Kash Rangan with Goldman Sachs. Your line is now open.
The first question is from the line of Cash Rankin, Goldman Sachs. Your line is now open.
Hello, guys and congratulations on a really strong finish to the year is fantastic.
Hello, guys. Congratulations on a really strong finish to the year. This is fantastic to hear the cloud momentum and the cloud partnership summit. That intrigued me greatly, your comments on AWS partnership and the others. Where are we in the cycle of these partnerships and the ability of these partners to bring in Informatica and do the kind of seven-figure deals that Informatica, on its own, could generate, but obviously with the help of these partnerships. Fair cloud.
The solid momentum in the cloud partnerships.
And treat me Greg.
Your comments on AWS partnership and the others were.
Are we in the cycle of these partnerships and the ability of these partners to bring in a dramatic into the kind of <unk>.
Seven figure deals at Informatica and it's on its own could generate but obviously with the help of this partnership their club.
their warehousing is taken off. I'm curious to see.
Warehousing is taking off.
Okay.
The kind of leverage you can get from these partnerships in addition to the technical stuff, could this lead to more leverage in the business side? The second and final follow-up for me is the composition of your product family as it represents
What leverage you can get from these partnerships ambition too technical stuff could this lead to more leverage of the business out of the second and final follow up for me.
The composition of your product family as it represents new AD. So where are you seeing the changes happening with new at all.
new ARR. So where are you seeing the changes happening with new ARR and the different product segments that you have on the core IDFC platform? What is showing up increasingly? That's it for me.
And that if a product segments that you have on the core <unk> platform.
Showing up increasingly.
That's great. Thank you so much.
Well, Thanks, Kash I hope all is well.
Well, thanks, Kash. Hope all is well. To the partnerships, look, we are extremely happy about where we are with the partnerships. I think as I've said before, all of our, when we talk about the 85% of subscription here are coming from new products, all of them and all of the data warehousing and the cloud workloads are all in the context of AWS Redshift or Synapse or GCP, Snowflake, Databricks. So all of them are already creating new workloads.
Partnerships look we are extremely extremely happy about maybe either the partnerships I think as I've said before.
All of our when we talk about the 85% of subscription that are coming from new products all of them and all of the data warehousing and the cloud workloads that all in the context of AWS egg-shaped synapse on DCP Snowflake data mix. So all of them are already creating new workloads over there as you know.
As you know, customers in that case are now moving into more complex workloads. So we had done a fair bit of engineering work with these partners in the last many years to grow our business in that direction already.
Customers in that case are now moving into more complex workloads. So we had done a fair bit of engineering work with these partners in the last many years to grow our business in that direction already got walking into more complex, Bob Jordan, which is maybe a doing many many more technical work as we speak and putting migrations of power Center.
We are walking into more complex workloads and which is where we are doing many, many more technical work as we speak, including migrations of power center to cloud.
Her book clout with them and we're already seeing that traction as we go in together. So give you. An example, there are many quarterly incentives that these partners have available salespeople marketplace seamlessness customers can actually by us through their marketplaces. So all of those auditing investing in as we speak which is what I've even been asked.
with them. And we're already seeing that traction as we go in together. So give you an example. There are many co-sell incentives that these partners have for their own salespeople. Marketplace seamlessness, customers can actually buy us through their marketplaces.
So all of those are being invested in as we speak, which is what I, even when I spoke at Google Next with Thomas.
At Google next with Thomas and as you as we work towards Informatica why do you expect to see many many more of these announcements coming out both on the product and hold them architect what we are seeing that tailwind and then some of the optimal examples I mentioned with each of these ecosystem partners was involved with us and again as you know in the context of cloud assumptions one.
And as we walk towards the Informatica world, you expect to see many, many more of these announcements coming out, both on the product and Google market side. So we are seeing that tailwind. And in some of the optimal examples I mentioned where each of these ecosystem partners was involved in that.
And again, as you know, in the context of cloud and consumptions, once we land, then the expansion naturally takes over. So you may begin, we already shared with you how the ESP has grown and it has natural tailwinds to grow from there onwards.
The lines of the expansion naturally pixel or so you may begin you already we already shared with you how the ESP has grown and it does naturally tailwind to our growth from there onwards.
On the mix.
On the mix, I'll have very concept about thematically say, look, we talk about three journeys, data warehousing and data lakes, data governance and privacy, and business 360. In fact, this year, we've added a fourth journey, which is all around app modernization and hyper-automation. When I look at the other three journeys, it's, like I said, even in the roadshow process, 50% on the data warehousing and data lakes, and the remaining is the other 50%, both MDM and data governance combined, all of them.
Antibiotic domestically say look we'd talk about key journeys data warehousing and data links.
Data governance and privacy as does the 360 in fact this year, we've added a fourth journey, which is all around.
At modernization and hyper automation when I look at that other three journeys.
And like I said, even in the roadshow process, 50% on the data <unk> analytics and the remaining is the other 50% bought MDM and data governance combined.
All of them on a point you saw so many examples I'll data governance deals MDM deals and DW does indeed have a VC daily wins around all of them.
You saw so many examples of data governance deals, MDM deals, and data warehouse and data rate deals. We see tailwinds around all of them.
In regards, Cash, to your question about the product family trajectory, and again, I'll reference this, the high growers relative to the overall subscription ARR growth rate of 32%. So, the callout for the product family is growing well above that, that 32% year-over-year in terms of sub-ARR.
Yeah in regards cash to your question about the product family trajectory.
And again I'll referenced us for high growers relative to the overall subscription are a growth rate of 32%. So the call out for the product family is growing well above that 32% year over year in terms of terms of sub IRR would be data quality and EDC Thomas.
would be data quality and EDC. To Amit's point, any journey that one undertakes requires data quality in general, as well as cataloging. And so we continue to see really strong growth from the DQ and EDC family. And MDM was also very strong for us in the quarter as well. So those would be the three product family call-outs.
<unk> point any journey that one undertakes requires data quality in general as well as cataloging and so we continue to see really strong growth from the <unk> and EDC family and MDM is also was also very strong for us in the quarter as well so those would be the three product family calls.
Brilliant thank you so much.
Thank you Mr Rocca.
The next question is from the line of Mark Murphy with JP Morgan. Your line is now open.
The next question is from the line of Mark Murphy with Jpmorgan. Your line is now open.
Thank you very much and I'll add my congrats on the heels of a of cashless comments.
Thank you very much, and I'll add my congrats on the heels of Kash's comments. So, Amit, we've heard from some infrastructure software companies that they're mentioning a little slower consumption at year end.
So I mean, we've heard from some infrastructure software companies.
They are mentioning a little slower consumption at year end and.
You're kind of tying that in with more companies being shut down around the holidays, more vacation, more company shutdowns. Did you find a way to buck that trend or is consumption still too early for you to really
Kind of tying that in with more companies being shut down around the holidays more vacation where company shutdowns did you find a way to to Buck that trend or is consumption still too early for you to to really be noticeable.
Great question. I think, as Eric mentioned, we saw tremendous growth in consumption-based pricing this year. You see the progress that we made. I think to build on that, the beauty for us in consumption is because we have these seven big product families sitting on the IBM seed portfolio, we provide customers the flexibility to not only use consumption for a particular use case where they may begin, but naturally grow from a use case to another use case very seamlessly.
Great question, I think as Eric mentioned, we thought tremendous growth in Colombia. These pricing here, you'll see the progress that you've made.
To build on that the beauty for us and consumption is because we have these seven big product families taking on the IBM portfolio, we provide customers the flexibility to not only use consumption, Florida in particular used case, where they may begin, but naturally grow from a use case to another use case any seamlessly so that would give customers the peace of mind that they.
So that's what gives customers the peace of mind that they can, you know, a lot of times we find customers begin with a use case and discover that they want to do B, C, or they may want to do C more than A than what they thought initially. And that's what we saw, so we didn't see any.
Can you get a lot of time defined customers begin with a use case and discovered that they won't move BC or they want to see more than even what we had thought initially and that's what we thought so we didn't see any slowdown per se to be honest in Q4 on anything related to that if anything it just gave IV. The feedback you've kept getting is that customers love the language.
slowdown per se, to be honest, in Q4 on anything related to that. If anything, it just gave RV the feedback you kept hearing is that customers loved it, they liked the transparency, they liked the flexibility, and more importantly, they loved the ability that it brings down the barriers across all of the capabilities on the platform across which they can use. And we continue to see a very healthy pipeline around cloud and consumption-based pricing in particular.
They like the flexibility and more importantly, they loved the ability that it brings down the value of across all of the capabilities and the platform across which they can use <unk> and.
And the fact, you're going to see a very healthy pipeline cloud and consumption based pricing in particular, yes.
Yeah, the thing that I would add on, one of the operational metrics that we've provided, the number of total, you know, I didn't see platform transactions, transactions per month. And so we noted a 65% increase year over year. And I think that's one of the highest year over year increases we've seen. So into the year and we see accelerated use of our platform.
The other thing that I would add on what are the operational metrics that we provide is the number of your total item C platform transactions or transactions per month, and so we noted a 65% increase year over year and I think that's one of the highest year over year increases we've seen so into the year and we see accelerated use of our platform.
Okay. Okay. So it sounds like Youre completely.
Okay, okay, so it sounds like you completely bucked that trend in every way possible. So Eric, the question I wanted to ask you on the financials
Buck that trend in every way possible.
Eric.
The question I wanted to ask you on the financials is what would you say is the dynamic that is causing I believe a slightly higher expense load in in 2022, while at the same time, you're you're you're guiding above or at least above our model.
is, what would you say is the dynamic that is causing
I believe a slightly higher expense load in 2022, while at the same time, you're guiding above, at least above our model on the unlevered free cash flow, especially with, you mentioned higher cash taxes.
Unlevered free cash flow.
Especially with you mentioned higher cash taxes.
which would seem to make that tougher to accomplish. So is it possible to unpack that for us a little?
Which would seem to make that tougher to accomplish so is it possible to unpack that for us a little.
Sure I'll start with cash flow. So we first of all we came off a really good two.
Sure, I'll start with cash flow. So we, first of all, we came up with a really good.
2021. So we noted, you know, just over 35% growth in operating cash flow, you know, year-over-year, so that's clearly well ahead of ARR growth and, you know, revenue growth, et cetera. So the overall mechanics of the business are doing well.
<unk> 2020, once we noted just over 35% growth in operating cash flow year over year. So that's clearly well ahead of our growth and revenue growth et cetera. So the.
The overall mechanics of the business are doing well, we have completely moved to a ratable model and we've maintained very high renewal rates in fact, our maintenance renewal rates continue to be higher than our own internal expectations. For example in subscription is in line as well so cash flow in general is working out quite well as we had planned.
We've completely moved to a radical model and we've maintained.
very high renewal rates. In fact, your maintenance renewal rates continue to be higher than our own internal expectations, for example, and subscription is.
in line as well. So cash flow in general is working out quite well as we had planned. Against that, for 2022, Amit noted the areas where we're going to have increased spend. So it's a go-to-market.
Against that for 2022.
Amit noted the areas, where we're going to have increased spend so it is the go to market specific industry verticals Asian is a good example, there and even more investment and the partner ecosystem and that's going to take the form of go to market investments.
specific industry verticalization is a good example there, and even more investment in the partner ecosystem. That's gonna take the form of go-to-market investments and potentially also some R&D investments to bring us closer. So it all orients around the IDMC advantage. And so despite the higher cash spending that we're expecting in 2022, we're doing well enough in the mechanics of the business to have the good opening guide on 2022 on lever-free cash flow. Okay, well said.
And potentially also some R&D investments to bring us closer so it all oriented around the IBM Z.
Advantage and so despite the higher cash spending that we're expecting in 2022, we're doing well enough on the mechanics of the business to to have that the good opening guide on 2022, Unlevered free cash flow.
Okay, well said and we were very clear thank you for that.
Thank you Mr Murphy.
Thank you, Mr. Murphy.
The next question is from the line of Alex Zukin with Wolfe Research. Your line is now open.
The next question is from the line of Alex Zuckin with Wolf Research. Your line is now open.
Thanks operator and congrats on a great quarter guys. I guess maybe just the first one for me is I want to ask about the cloud consumption dynamics specifically it was pretty impressive to hear there was 40% of cloud of new bookings for cloud coming from that motion in Q4. I guess I want to ask what do you anticipate that percentage being for fiscal 22?
Thanks.
Operator, and congrats on a great quarter guys I guess, maybe just the first one for me is I wanted to ask about the cloud consumption dynamics, specifically it was pretty impressive to hear there was 40% of cloud of new bookings for cloud coming from that motion in Q4, I guess I wanted to ask what do you anticipate that percentage.
Being.
For fiscal 'twenty two.
And of the cloud business, specifically and maybe exiting that year as well and if you think about how much of that usage will be driven by net new customers versus migrations.
and of the cloud business specifically, and maybe exiting that year as well. And if you think about how much of that usage will be driven by new customers versus migration.
So let me let me Alex.
So let me, Alex, I'm going to talk to you again. Let me give you some color or new, existing, and then Eric will go through some of the more detailed numbers for you. Look, we are, you saw 55% of our subscription customers are net new.
Talk to you again, let me give you some color on new existing and then I think we'll go through some of the.
More detailed numbers for you look we are you saw 55% of our subscription customer that they are focused on both vessels.
We are focused on existing customers, where we have landed to grow more, or existing customers who are, you know, using our maintenance legacy products to use our new subscription products, as well as net new customers. And you saw the examples we gave you. So we are equally focused on.
We are focused on existing customers via blinded to grow more on existing customers, who are using our maintenance legacy products to use our new subscription products as well as net new customers and you saw the examples to give you. So we are equally focused on one.
One of the beauties of our stack is the renewal rates that I talked about is that once we land, it's a very sticky product. We basically drive a lot of operational workflows, so we are focused on.
One of the beauties of lot stack is.
All right that Eric talked about is that once the line.
The key product, we basically drive a lot of operational workflows. So we are focused on both white space as well as existing customers. So we'll package to go you will see us talk about book.
white space as well as existing continents. So we'll continue to go, you'll see us talk.
And then I'll, let Eric talk about some of the details on the Nexium group over there.
And then I'll let Eric talk about some of the details on the net new growth over there in cloud.
Okay.
Yeah, I would say that if, and again, Q4 is obviously, you know, a very active quarter in terms of overall net new bookings. And so, you know, we had 43% of the cloud new bookings in the form of IPUs, and again, it's the highest quarter ever. We also noted that the overall cloud ARR for the full year is about 20% IPUs, so that's like the average stat.
Yes, I would say that and again Q4 is obviously.
A very active quarter in terms of overall net new bookings and so we had 43% of the cloud new bookings in the form of IP use when it gets the highest quarter ever.
You also noted that the overall cloud.
For the full year is about 20% Ips, it's less like the average stat.
I would expect, you know, we'll see a quarter, you know, in the near future where, you know, IPUs are well north of 50%. It's really resonating with, you know, with customers.
I would expect you will see a quarter in the near future, where you'll ipos are well north of 50%.
It's really resonating with with customers.
But I wouldn't try to estimate an overall average, you know, 2022 stat for IPs relative to total ARR. So I'll pass on that, but clearly we want to drive as much.
But I wouldn't try to estimate an overall average 2022 staff for IP is relative to the total IRR.
So I'll pass on that but clearly we want to drive as much.
cloud sales to IPUs over time because we think the flexibility is really, really resonating. And the 43% stat is something we wanted to share with this group so you can understand kind of the upward inflection in this key cloud trend.
Cloud sales to <unk> over time, because we think the flexibility is really really resonating and the 43% stat is something that we wanted to share with this group. So you can understand kind of the upward inflection in this key cloud trend.
Super Super Helpful. I guess, just the the other one for me would be around <unk>.
Super helpful. I guess just the other one for me would be around DB&E.
Clearly sequentially, a solid number but a little bit lower and then you mentioned the volatility that can jump around between quarters.
Clearly, sequentially, you know, a solid number, but a little bit lower, and then you mentioned the volatility that that can jump around between quarters.
Can you walk through kind of what maybe specifically was the tougher compare or anything else that kind of drove that number in the quarter? And how should we expect it to trend maybe into Q1 and maybe first half of the year?
Can you walk through kind of what maybe specifically well was was the tougher compare or or or.
Anything else that that kind of drove that number in the quarter and how should we expect it to trend maybe into Q1 and and maybe first half of the year.
I want to make sure I understand the question, you said DVD, where you're referring to.
I want to make sure I understand the question. You said D, B, and E, but you're referring to, could you?
<unk>.
And our.
Sure, yeah, no, no, it's it's fine. So it was a great question. So, you know, 114% is what we had in this year. Q4 is basically identical to what we had in Q4 a year ago.
Sure.
Yeah No no. It's fine so it's a great question. So 114% is what we had in this year in Q4 is basically identical to what we had in Q4 a year ago.
And one of the things that is important to understand about NRR.
And.
One of the things that is important to understand about NR are is that we don't have a precise model to know in any given quarter. How much of the net new bookings are going to come from an existing customer which would be additive to at RR or whether the booking comes from our brand brand new net new logo because in that case for example in <unk>.
is that, you know, we don't have a precise model to know in any given quarter how much of the net new bookings are going to come from an existing customer, which would be additive to NRR.
or whether the booking comes from a brand-new, net-new logo. Because in that case, for example, in cloud migrations where customers have been maintenance-only, you know, they take on subscription for the first time, they make no contribution to the NRR staff for a full year.
Good migrations, where customers have been maintenance only take on subscription for the first time. They made no contribution to the NR staff for a full year and so I think that for US is really more of a mix of bookings from existing customers versus net new we called out. The fact that you had a significant increase in.
And so I think that for us, it's really more of a mix of bookings from existing customers versus net new. We called out the fact that we had a significant increase in new logo TCV, you know, up 29% year over year. And so I think, in effect, what we're doing is more business with net new logos. And unfortunately, they don't add to the NRR stat in the current period. We have to wait 12 months.
New logo GCB up 29% year over year, and so I think in effect what were doing is more business with net new logos and unfortunately, they don't add to the NR stat in the current period, we have to wait 12 months.
Understood perfect. Thank you guys.
Thank you Mr. Zhang.
The next question is from the line of Koji Ikeda with Bank of America. Your line is now open.
The next question is from the line of Koji Ikeda with Bank of America. Your line is now open.
Yes.
Hi, This is Lori law.
Hi, this is Lori Luo for Koji. So just actually a follow-up on NRR. You guys have mentioned this ICBM, the Cloud Data Marketplace as a new product, and it's categorized as data as service. So I was wondering if that has any contribution to the decline of NRR.
Or would you.
Just actually a follow up on MLR.
First of all mention this ICT and the cloud data market.
As a new product and is categorized as data as a service.
And so I was wondering if that has any contribution to the decline of NR.
So let me clarify, data as a service is different from cloud marketplace, totally different. So data as a service is a separate product category that, yes, you're right, we've talked about that, has a lower renewal rate, so it's always net dilutive to our NRR number. And we've always said that as the cloud business grows, that's one of those things that will stay constant, and naturally the NRR dynamics will grow. So but data as a service and the data marketplace are two fundamentally very different things.
So let me clarify a data as a service is different from cloud marketplace totally different so data as a service as a separate product category that gets you right. We've talked about that has a lot of deliveries to resolve all of these net dilutive to whether or not our number and we've always said that as the cloud business grows that's available.
That estate Austin and naturally the dynamics with growth so by data as a service out of the data my fifth two fundamentally very different things data marketplace is a very strategic product that we launched are very excited about it. It actually is it offering that builds on top of our data governance axon offering allows large enterprises to have one day's worth.
Data Marketplace is a very strategic product that we launched. We're very excited about it. It actually is an offering that builds on top of our data governance axon offering, allows large enterprises to have one place where, in a very shopping cart experience, go fetch data for any kind of user, adhering to all kinds of governance and access policies of an enterprise. And that definitely has been very well received. But two very different products and very different dynamics.
And have any shopping cognex physical fetch data for any kind of user adhering to all kinds of governance and access policies up in enterprise and that definitely has been very well received by two very different products and very different dynamics.
Great. Thanks for clarifying that.
Great, thanks for clarifying that. I'll just follow up on that. So that is leveraging the AI, the clear, that's my understanding. And how can customers leveraging, like use other alternatives for democratized data or it's a kind of a synergy to use the platform that you offer here?
Follow up on that.
So that is leveraging the AI.
Claire.
Danny Powell, Ken Ken Petsmart.
Leveraging <unk>.
Are there alternative or democratize data or yes that kind of what's the net synergy to that platform that you offer.
Yes.
Absolutely. So Clinton is embedded in every product and in the context of a market just to give you. A example of our care does so if you were to user lets say you want access to a particular data and go to the marketplace and like an Amazon shopping Cognex Ddos you drag and drop the datasets you want that you don't have access to a clear plan automatic ignore that if you don't have access to.
And in the context of a marketplace, to give you an example of what Clare does, so if you are a user, let's say you want access to a particular data and you go to the marketplace and like in an Amazon shopping cart experience, you drag and drop the data sets you want and you don't have access to it, Clare automatically knows that you don't have access to it, automatically knows under the cover who's the owner of that data, in an automatic way runs a workflow where it goes to the owner of the data to give you access or not, and comes back to you and completes a workflow. Things like that that could have never been done before.
It automatically nose under the double who's the owner of that data.
I think the breadth of it goes to the owner of that he never give you access a lot of that was back to you with a piece of work towards things like that that could have never been done before and it integrates obviously with all kinds of governance access management policies that exist within enterprise. So it obviously.
And it integrates, obviously, with all kinds of governance, access management policies that exist within an enterprise. So it obviously, in a very big way,
I don't know of any big way of automates the process in terms of that working with other providers look our goal is that is used by achieved it officer as a holistic <unk>.
In terms of that, working with other providers, look, our goal is that is used by a chief data officer as a holistic capability on top of every place where the data sits. It could be sitting in a Snowflake data store, it could be sitting in any Azure, it could be sitting in anything on-prem. They need that on top of that because data is dispersed and they don't want wrong people to get access to wrong data, causing them challenges. So that's how the value comes to bear. Thank you.
<unk> ability on top of every place where the need is it could be sitting in a snowflake data store it could be sitting in AR.
And any azure it could be sitting in anything on prem they need that on top of that because it is dispersed that they bought one wrong people to get access to all data, causing them challenges. So that's how the value comes to ban.
Great Thanks for that.
Right.
Thank you.
Thank you.
Thank you.
Just as a reminder, please limit your questions to one per participant. Our next question is from the line of Matt Hedberg with RBC capital markets. Your line is now open.
Just as a reminder, please limit your questions to one per participant. Our next question is from the line of Matt Hippert with RBC Capital Markets. Your line is now open.
Oh, hey guys, thanks for taking my question. I'll keep it to one here. You guys just delivered 40% cloud ARR growth and you're guiding to 40% this year. So, you know, with no implied deceleration there, I guess I'm wondering what kind of visibility do you have to that business? And maybe as sort of a...
Oh, Hey, guys. Thanks for taking my question I'll keep it to one here.
You guys, just deliver 40% cloud AOR growth and you're guiding to 40%. This year, so with no implied deceleration there I guess I'm wondering what kind of visibility do you have to that business and maybe is sort of a.
A question in conjunction with that what sort of maintenance conversion.
a question in conjunction with that. What sort of maintenance convergence does your guidance assume? Obviously, you saw 1.9x uplift this quarter. I believe that's even better than the 1.8 that you've seen previously, but just sort of wondering what sort of assumptions you've made there for cloud AR growth.
<unk> does your guidance assume obviously you saw one nine ex uplift this quarter I believe that's even better than the $1 eight previously, but just sort of wondering what sort of assumptions you've made there.
For cloud era of growth.
Matt Thanks for the question, hopefully, you're getting a warmer weather or not.
Matt, thanks for the question. Hopefully, you're getting warmer weather now, where you are. We actually are seeing acceleration. I think the one thing that is a great question, because I'd like to put it to this group. We may have a 40% ARR growth rate, but our underlying.
You are.
We actually are seeing acceleration I think the one.
Tim that's a great question, because I'd like to put a decided to this.
This group <unk>.
We may have a 40% growth rate, but underlying number is growing every quarter. So it builds an accelerating number we are not seeing that the number was small so the growth rate is high and when the number gets baked the growth rate goes down we are saying, we're going to keep the same growth rate even as the.
So it is an accelerating number. We are not saying that the number was small so the growth rate is high. And when the number gets big, the growth rate goes down. We are saying we're gonna keep the same growth rate.
even as the underlying cloud ERR number is growing in size.
Underlying cloud <unk> number is growing in size, so as Eric mentioned, many guiding towards cloudy around number for this year, you're guiding below 40, but the number of a much bigger base than where we closed out 2020 months. So from where we sit we are absolutely accelerating growth because we are scaling to a much much bigger number I'll, let eric add onto one of that yes.
So as Eric mentioned, when he guided to a cloud ARR number for this year, he's guiding to a 40% number of a much bigger base than where we closed out 2021. So from where we sit, we are absolutely accelerating growth because we are scaling to a much, much bigger number.
I'll let Erika add on to more of that. Yeah, maybe just put three numbers against that. So, you know, the following numbers, $60 million, $90 million, and approximately $125 million. So what does that represent? That's the net new ARR additions in 2020 actual, $60 million.
Maybe just put three numbers against that so the following numbers $60 million $90 million and approximately $125 million. So what does that represent the net new <unk> additions in 2020 actual $60 million.
$90 million 2021, actual and 125 is where we're expecting to add so if you take our midpoint guide cloud IRR subtract that from Indiana IRR than a 2021 actual that's the 125 million. So the Omics point, we're accelerating plus 60, plus 90 plus 125.
90 million is 2021 actual, and 125 is what we're expecting to add. So if you take our midpoint guide, Cloud ARR, subtract that from ending ARR, the end of 2021 actual, that's 125 million. So to Ahmed's point, we're accelerating, you know, plus 60, plus 90, plus 125.
And then the other question also I come back to that on migration listen not migration look we've always said that.
And then to your other question also, I come back to that on migration versus not migration. Look, we've always said that, you heard me talk about, we are fundamentally focused on driving Cloud AR growth from both NetVue workloads and migration.
You heard me talk about we are fundamentally focused on driving cloudy on our group from both net new workloads and migration workers and Youll see that all of our subscription growth all of our cloud growth is 100% from Nike workers, none of the 85% of the workloads of subscription out.
And you see that all of our subscription growth, all of our cloud growth has come 100% from net new workloads. None of the 85% of the workloads of subscription ARR are coming from new workloads. None of them is tied to the old legacy data warehousing.
From new workloads onto them as type of the old legacy.
<unk> muscle if I may.
So we've been maniacally focused on driving new workloads to make sure we get a piece of that pie wherever customer is going to the cloud.
So we've been maniacally focused on driving new workloads to make sure we get a piece of that pie available customers linked to.
To the cloud and migrations early evening, you saw I think last year, we talked about 1% of maintenance and magnetic now 2% it might be it's a big number of course maintenance they'll all have $1 billion, we expect to see more and more momentum than you saw I talked about more and more automation modern what GSI leveraging migration factories going together with the ecosystem.
And migrations, early innings, you saw, I think last year we talked about 1% of maintenance has migrated. Now 2% has migrated. It's a big number, of course, maintenance, overall half a billion dollars. We expect to see more and more momentum there. You saw, I talked about more and more automation, more and more GSIs leveraging migration factory, going together with the ecosystem players. Expect that to grow also. We're going to drive both, to drive cloud DRR growth.
Expect that to grow so we had to go to drive.
To drive Claudia.
Thanks, guys.
Thank you Mr Hedberg.
The next question is from the line of Andrew Nowinski with Wells Fargo. Your line is now open.
The next question is from the line of Andrew Nowinski with Wells Fargo. Your line is now open.
Alright. Thank you good afternoon I just had a question on your fed ramp certification.
All right, thank you. Good afternoon. I just had a question on your FedRAMP certification that you mentioned. I was just wondering if you could provide any color on maybe the federal contribution in 2021 and what you're assuming or what kind of contribution you think the Fed could have as it relates to your guidance for 2022 now that you have that high-level certification. Thanks.
Certification that mentioned.
I was just wondering if you could provide any color around maybe the federal contribution in 2021, and what you're assuming or what kind of contribution.
The fund could have as it relates to your guidance for 2022 now that you have that high level of certification.
Hey Andrew, how are you? I mean, we don't guide to a particular mix breakup by how big is Fed. But I can tell you that Fed and the whole public sector is a big area of focus for us across the globe. U.S. Fed business obviously so much to spend. Our goal was to make sure FedRAMP was a very critical part.
Hey, Andrew how are you I mean, we don't guide to a particular mixed BRCA by public biggest state, but I can tell you that fed in the public sector is a big area of focus for us across the Globe U S. U S spec business, obviously, so much to spend onboard to make short background with a very critical part to make sure. Our federal customers will want to go to the cloud all of them had existing customers. They wanted to.
to make sure our FedRAMP customers who want to go to the cloud, a lot of them are existing customers, they want to start new workloads, and you see a lot of modernization in very early in there, they needed that for them to be comfortable. And you know, we serve the data layer, which becomes extremely important. So I fully expect FedRAMP to be a great tailwind for us for this year. And obviously, we'll continue to put all of our portfolio over there. So that should drive more and more. So we are expecting more from their natural area for us to invest with many customers.
Start with workloads and Youll see a lot of modernization in video, meaning that they needed that for them to be comfortable.
We felt that Italia, which becomes extremely important so I fully expect better and to be a great tailwind for us this year and and obviously with a new report part of our portfolio, whether it's electric drive module.
We are expecting more from their natural area for us to invest with many customers and you know we also have many flavors.
And we also have many flavors in this FedRAMP overall. And then each state has different flavors. So for example, the state of Texas has a flavor of FedRAMP that we got certified. California has another one. All of those states have big spend, and we're expecting that to come from a select point of view as well this year.
This fed drop overall in that each of these type of flavors.
For example, the state of Texas has a favorite effect around that we've gotten certified California had another one all of those states have big spending you're expecting.
<unk> point of view as well this year.
Okay got it thank you.
Thank you Mr. Lindsay.
The next question is from Karl Keirstead with UBS. Your line is now open.
The next question is from Carl Kirstead with UPS. Your line is now open.
uh... thank you maybe to eric eric i'd love to press on your your guidance for ten percent revenue growth in calendar twenty-two it's it's not that different than the nine percent you just put up in twenty one
Hello, Thank you maybe to Eric Eric I'd Love to press on your guidance for 10% revenue growth in calendar 'twenty, two it's not that different than the 9% you just put up in 'twenty one.
despite the progress you've made on diversifying the portfolio, despite the makeshift to higher growth subscription, despite the fact that you're lapping the decline in perpetual license sales. So clearly, there's an offset. My guess is that maybe the maintenance roll-off is accelerating in 2022. But maybe you could unpack that for us. Thank you.
Despite the progress you've made on diversifying the portfolio. Despite the mix shift to higher growth subscription. Despite the fact that you are lapping the decline in perpetual license sales. So clearly there was an offset my guess is that maybe the maintenance roll off is accelerating in 2022, but.
Maybe you could unpack that for us. Thank you.
Yeah, no. It's a great question and yes maintenance as part of it. So we have as of Q4 2021, we have achieved what I'll call peak maintenance right. So with.
Yeah, no, it's a great question. And yeah, maintenance is part of it. So we have, as of Q4 2021, we have achieved what I'll call peak maintenance.
So, with the level of perpetual license that we have, next year, 2022, is the first year where we're going to have kind of a flat, so we've arrested the client of perpetual, we've hit the bottom, and as a result, there's not enough net new ads of new maintenance to
The level of perpetual license that we have.
Next year 2022 is the first year, where we're going to have kind of a flat. So we've arrested the decline of perpetual we've hit the bottom and as a result, theres not enough net new adds of new maintenance to keep maintenance flat. So.
keep maintenance flat. So that's what we gave the total ARR guide metric for the first time, so you can very explicitly see the maintenance ARR assumption of about 525 at the midpoint. So with that decline there.
That's why we gave the total air our guide metric for the first time. So you could very explicitly see the maintenance are our assumption of about 525 at the mid point, so with that decline there.
You know, it drives a decline in overall, you know, gap revenue as well. And the other thing, too, of course, is that we're expecting a higher relative mix of our net new bookings.
It drives the decline of our overall GAAP revenue as well.
The other thing too of course is that we're expecting a higher relative mix of our net new bookings in cloud versus self managed and again as we all know the self managed gifts that 606 revenue acceleration so with more net new business going into rental cloud versus self managed and now the expected decline past peak.
in cloud versus self-managed. And again, as we all know, the self-managed gets that 606 revenue acceleration.
So with more net new business going into radical cloud versus self-managed, and now the expected decline past peak maintenance, those are what causes the gap revenue growth.
And those are what causes the GAAP revenue growth year over year to be at that.
year over year to be at that, you know, 10% level.
10% level.
Got it and then just as a follow up to that I would imagine that.
Got it. Just as a follow up to that, I would imagine that as these trends continue into the following years and your mix of cloud goes up, that we should see this at least modest growth acceleration continue beyond 22. Are you willing to go there, Eric?
As these trends continue into the following years and your mix of.
Cloud goes up that we should see this at least modest growth acceleration continue beyond 'twenty. Two are you willing to go there Eric.
Yes, the fullness of time over several years, we expect GAAP revenue to eventually catch up to a pure ratable cloud model. It's just that you have to flush through the decline you have to plan to Nashville bottom in perpetual and then you have to kind of complete your mix shift are net new to cloud away.
gap revenue to eventually catch up to a pure Radical cloud model. It's just that you have to flush through the decline, you have to find the natural bottom in perpetual. And then you have to kind of complete your makeshift on net new to cloud away from 606, and so we've completed the first. We're still, again, increasing year-over-year our expected ads of cloud versus self-managed. Once we get through that, then.
From 606, and so we've completed the first we're still again increasing year over year, our expected ads of cloud versus versus self managed once we get through that then.
You know, the gap revenue year-over-year growth, we believe, can accelerate from where it is. I won't be specific, but it can be north of 10% year-over-year. Yeah. Okay.
The GAAP revenue year over year growth, we believe can accelerate from where it is so I won't be specific but it can be north of 10% year over year.
Yes, Okay, great answer thanks, a lot Eric.
Thank you Mr. Kirsten.
Thank you, Mr. Kirstead. The next question is from the line of Patrick Colville with Deutsche Bank. Your line is now open.
The next question is from the line of Patrick Colville with Deutsche Bank. Your line is now open.
Hey, Thank you so much for taking my question actually if you want to do a little follow on calls just then because as I crunch the numbers.
Hey, thank you so much for taking my question. I actually just want to do a little follow-on from Carl's just then, because as I crunched the numbers for the quarter and then also for the guide, I guess where I lifted estimates most in my model was maintenance ARR. And where I didn't lift estimates quite as much was kind of a subscription ARR piece, inclusive of the cloud ARR bit. So I guess, could you unpack?
For the quarter and then also for the guide I guess, what I lifted estimates most in my model was maintenance, a URL and why Didnt lift estimates quite as much was kind of a subscription arlp's.
Inclusive of the cloud era.
So I guess could you unpack.
that for us? Because, you know, the comments you just made just now kind of suggest that Fiscal 21 would kind of peak maintenance, but as I unpack the guidance, to me it looks like actually maintenance kind of holds up pretty strong versus, you know, what we were maybe expecting three months ago in Fiscal 22.
That for US because you know the comments you just made just now kind of suggest that fiscal 'twenty, one kind of peak maintenance, but around the guidance to me it looks like actually maintenance kind of holds up pretty strong versus what we would.
Maybe expecting three months ago in fiscal 'twenty two.
Yes, I think it's a question of who just give you a few numbers. So we just posted maintenance IRR of approximately 550.
Yeah, I think it's a question of, let me just give you two numbers. So we just posted, you know, maintenance ARR of approximately $558 million. And at the midpoint of the full year guidance for year end 2022, maintenance ARR is approximately $525 million.
$58 million and at the midpoint of the full year guidance for year end 2022 maintenance there are it's approximately $525 million and so.
And so, is that basically the decline that we're calling? And again, we're giving you the midpoint for Q1 at 530, a little bit of variability, obviously. So the midpoint is meaningful, but as is the range there, since it's a large number that we're working off of the...
But basically the decline that were network calling.
And again, we're giving you the midpoint for Q1 and.
At $5 30, a little bit of variability obviously, so the midpoint is meaningful but as is the range there since.
This.
It's a large large number that we're working off of a year for.
the 558. So, again, the point is we're at the point where it's going to decline. We've clearly articulated that with the goal post of 525. And, you know, beyond that, you've got Q1, and then you'll just have to kind of fill in the other assumptions for Q2 and Q3. We would emphasize, of course, you know, we're expecting flat perpetual license earlier. And so I just want to make sure you have that point. There's obviously no additional
The $5 58, so again the point is we're at the point, where it's going to decline.
Clearly articulated that with the goalpost of $5 45.
Beyond that <unk> got Q1, and then you'll just have to kind of fill in the other assumptions for for Q2 and Q3.
We would emphasize of course, we're expecting flat perpetual license year over year, and so I just want to make sure you have that point.
Obviously no additional.
Maintenance, first you're going to offset the expected maintenance decline.
Maintenance first Utica weighted to offset that we expected maintenance decline.
Okay.
And can I just, I mean, just very quickly, I mean, is this an area where there might be upside risk in fiscal 22 or not really, in maintenance, that is? We're very comfortable with the 525 midpoint of maintenance at the end of the year.
Can you just I mean, just very quickly I mean, it is an area, where there might be upside risk in fiscal 'twenty, two or or not really.
And maintenance studies.
We're very comfortable with the 525 midpoint of maintenance at the end of the year.
Great. Thank you so much.
Thank you Mr Covid.
The next question is from the line of Bill Winslow with Credit Suisse. Your line is open. Hey, thanks for taking my question. I just wanted to unpack the net retention number, the 114, obviously, that's jumped around between, you know, 114 and 116. But why don't you talk through just the gross retention trends that you've seen within that in terms of, and then also in just terms of upsell. Is there anything that you've seen a trend in terms of contribution there over the past year that's driving the upsell component of that, and then how you think about that into the coming year? Thanks.
The next question is from the line of Phil Winslow with Credit Suisse. Your line is open.
Hey, Thanks, guys, taking my question I, just wanted to unpack the net retention number the 114, obviously that's jumped around between a 100 fortune 116, but wonder if you can talk through just the gross retention trends.
Have you seen that in terms of and then also in terms of upsell is there anything that you've seen a trend in terms of contribution there over the past year.
What's driving the upsell component of that and then how you think about that in the coming year.
Yeah, again, I just want to kind of emphasize a really important point. You know, the NRR statistic is, you know, very dependent upon, very sensitive to, the bookings mix of, you know, net new versus existing customers.
Yes, again, I just want to kind of emphasize a really important point.
The <unk>.
A statistic.
As you know.
Very dependent upon very sensitive to.
The bookings mix of net new versus existing customers and one of the things. We are very clearly called out was the fact that in Q4 2021 of our overall net new bookings much more came from brand new customers, new logos and those zip.
And one of the things we were very clearly called out was the fact that in Q4 2021 of our overall net new bookings, much more came from brand new customers, new logos.
and those make zero contribution to the NRR statistics.
Zero contribution to the MLR statistic and so as we look back over the trend lines, we had 100.
And so, as we look back over the trend lines, we had 114% in Q4 last year, 114% in Q4 this year. Q4, as you know, seasonally, in terms of net new bookings, A, it's the most activity for net new. And so, therefore, it's going to have the most variability in terms of the mix of Q4 activity that comes from new customers versus existing subs customers, which would be additive.
2014.
Percentage in Q4 last year.
114% in Q4 this year.
Q4 is seasonally in terms of like net new bookings that's the most activity for likelihood of net new and so therefore, it's going to have the most variability.
In terms of the mix of Q4 activity comes from new customers versus existing subs customers, which would.
<unk> be additive to MLR.
Thank you, Mr. Winslow. The next question.
Thank you Mr. Winslow.
The next question is from Tyler Radke with.
Citi. Your line is open.
Hey, Thanks for taking my question I wanted to ask you just about kind of your new logo performance I know you've talked about.
Hey, thanks for taking my question. I wanted to ask you just about kind of your new logo performance. I know you've talked about some of the strength there, particularly on ACV, but could you just give us a total customer number, how that's trending, and how should we just think about the pace of kind of new logos versus maybe some real old legacy, you know, MeetLinks customers moving off, just the dynamic that impacts total customer count. Thank you.
Some of the strength, there, particularly on an ACB, but.
Could you just give us.
Total customer number how thats trending and how should we just think about the pace of signing new logos versus maybe some some real legacy maintenance customers moving off just the dynamic that impacts total customer. Thank you.
Yeah, I'll, maybe take the first first part of that and then pass the dominant <unk>.
Yeah, I'll maybe take the first part of that and then pass it down for comments. So, we reported the number of sub-era customers greater than a million. So, 153 versus 104 in Q4 last year. So, that's an excellent growth rate in large enterprise customers. Just as important and as interesting is the breadth of the greater than 100k sub-era customers. So, we have 1,660.
So yeah, we reported the number of some of your customers greater than $1 billion. So 153 versus 104 in Q4 last year. So.
That's an excellent growth rate in the large enterprise customers.
Just as important and as interesting is the breadth of the greater than 100 case of era customers. So we have 1660 <unk>.
greater than 100K sub-ARR customers as of the end of Q4 2021 compared to 1,361 a year ago. And then also, you know, the average ARR per customer is, again, up very nicely year over year to 221,000 versus 183,000. So what we're seeing is...
Greater than 100 case of Aero customers as of the end of Q4 2021 compared to 1361, a year ago and then also the average <unk> per customer is again up very nicely year over year to 221000 versus 183000. So what we're seeing is great success with.
great success with very large customers, you know, continuing to purchase either, you know, more as an existing customer or, you know, we're adding, you know, new $1 million sub-customers as well, but the breadth of participation as well. So the cohort behavior is very good as evidenced by, you know, that band of greater than 100K in the average ARR stat.
Very large customers continuing to purchase either or is an existing customer or where we're adding new $1 billion so customers as well.
But the breadth of participation as well so the cohort behavior is very good as evidenced by that band of greater than 100 kv average IRR step.
I think I'll just build on what Eric said. Look, our goal has been to continue to drive the penetration of our IDMC platform. And as much as important it is for us, existing customers expanding, which we are maniacally focused on, we talk about our renewal rates, our focus on customer success. But you know, all the new selling motions we've done, you know, high-velocity selling, going to broader than the top end of the enterprise, allows us to penetrate new customers also. This is equally very important.
And I think there's just been normal genetics and look our goal has been.
Can you drive the penetration of IBM Z platform and as much as importantly, ctesiphon us existing customers expanding which we are maniacally focused on we've talked about on an oil rates a focus on customer success and you know all of the new selling motions, we've done high velocity selling going to broader than the top end of the enterprise allow us to penetrate new customers also.
It is equally very important and we're going to stay focused on both because we again I go back to what I said before we know our products solid dividend.
and we're going to stay focused on both because we, again, I go back to what I said before, we know our products solve very high value operational use cases, very sticky, very high renewal rates. We land, we naturally expand. So we're going to go focused on new customers as much as existing customers.
<unk> operational use cases, very sticky very high renewal rates, we land, we naturally expect so we're going to go focus on new customers as much as existing customer expansion.
Great. Thank you.
Great. Thank you. And I guess just as you think about the planning process for 2022, are there any tweaks you're making to the go-to-market organization, either from a structure or incentive perspective, to accelerate cloud?
I guess just on as you think about.
The planning process for 2022 are there any tweaks youre, making to the go to market.
Organization, either from a structure or incentives perspective to accelerate cloud.
Yes.
Yeah, no, I think I mentioned that, look, we're at.
I mentioned that look.
Yeah.
From what people are doing already but adding industry motion. So we are absolutely going to focus down in terms of focused on key industry verticals content around that go to market motions and so that's definitely media. They are investing and we didn't get new leaders in Atlanta. The other one is for us high velocity selling you know obviously cloud.
From what we were doing already, we're adding industry motion. So we are absolutely gonna go focus down in terms of focused on key industry verticals, content around that, go-to-market motions. And so that's definitely an area that we're investing and we're bringing in new leaders as well.
The other one is for us, high-velocity selling. You know, obviously cloud allows us the ability to now start small, very easy for departmental buyers, business buyers who want to buy small. And in fact, as Jim comes on, has come on board, his experiences are going to help us accelerate.
The ability to now start small and easy for departmental buyers business buyers will provide small and in fact as Jim comes out has come onboard as <unk>. That's another will help us accelerate that.
And lastly, tying the industry also with our GSIs and our hyperscalers partners. And you see a lot of industry-related discussions happening, like Accenture, or Deloitte, or Azure, or Snowflake, bringing it all together. And then, of course, lastly is continuing to make sure we can make the whole migration of our maintenance base to the cloud a lot more seamless, bringing in more and more GSI partners in the mix so they can take that over with our customers. So those are the areas where we are investing and doing more
And lastly, tying the industry also.
Without a G is highest and in our Hyperscale partners and you'll see a lot of industry related discussions happenings within Accenture and Deloitte.
Agile or a snowflake, bringing it all together and then of course lastly is continuing to make sure. We can make the whole migration of our maintenance base to the cloud a lot more seamless and bringing in more and more GSI partners in the mix. So they can take that will work with our customers. So those are the areas, where we are investing in doing more this year.
Thank you.
Thank you Mr Ritchie.
There are no additional questions waiting at this time. I will now turn the conference over to Amit for any additional remarks.
There are no additional questions waiting at this time I will now turn the conference over to Amit for any additional remarks.
Thank you well.
Thank you. Well, thank you all for joining today. We, as you can hear from us, we're very excited about the future of informatics.
Thank you all for joining today, we as you can hear from US we are very excited about the future of informatics.
We have an opportunity and we are delivering on our commitments and also we are differentiating ourselves in the marketplace with our IDMC platform.
We have an opportunity and we are delivering on our commitments and also we are differentiating ourselves in the marketplace without ibm's platform.
our best-of-breed products, our upmarket enterprise focus, and these multiple growth opportunities that I talked about in a $44 billion TAM.
Best of breed products upmarket enterprise focused and these multiple growth opportunities that I talked about $44 billion Tam, but a unique company you know how to run a business at scale, we're talking about $1 billion of subscription yet this year with great unit economics, great cash flow great profitability, we know what running up this next scale it across the globe.
We're a unique company. We know how to run a business at scale. We're talking about a billion dollar of subscription ARR this year with great unit economics, great cash flows, and great profitability. We know what running a business at scale is across the globe.
And again I am extremely thankful Dwight employees across the globe, our customers partners and shareholders for their continued support so while if you have a great afternoon. Thank you very much.
And again, I'm extremely thankful to our employees across the globe, our customers, our partners, and our shareholders for their continued support. So all of you have a great afternoon.
That concludes the Informatica fourth quarter and full year 2021 earnings conference call. Thank you for your participation you may now disconnect your lines.
That concludes the Informatica's fourth quarter and full year 2021 earnings conference call. Thank you for your participation. You may now disconnect your line.
You
Okay.
Yes.