Q4 2023 Informatica Inc Earnings Call

February 14, 2024

Tia: www.informatica.com Zellnick, Kasthuri Rangan, Matthew Hedberg, Andrew Nowinski, Pinjalim Bora, Tyler Radke, www.informatica.com Good afternoon, ladies and gentlemen. Thank you for joining today's Informatica Fourth Quarter 2023 Earnings Conference Call. My name is Tia, and I will be your moderator for today's call.

Okay.

Good afternoon, ladies and gentlemen.

Thank you for joining today's Informatica fourth quarter 2023 earnings conference call My.

My name is Tia and I'll be your moderator for today's call.

Operator: All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. It is now my pleasure to introduce your host, Victoria Hyde-Dunn, Vice President of Investor Relations. Please proceed.

All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.

If you would like to ask a question. Please press star one on your telephone keypad.

It is now my pleasure to introduce your host Victoria Hyde Dunn, Vice President of Investor Relations. Please proceed.

Thank you good afternoon, and thank you for joining informatica, its fourth quarter and full year 2023 earnings conference call.

Victoria Hyde-Dunn: Thank you. Good afternoon, and thank you for joining Informatica's fourth quarter and full year 2023 earnings conference call. Joining me today are Amit Walia, Chief Executive Officer, and Mike McLaughlin, Chief Financial Officer. Before we begin, we have a couple of reminders.

Joining me today are Amit <unk>, Chief Executive Officer, and Mike Mclaughlin, 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 Dot Informatica dotcom, our prepared remarks will be posted on the IR website. After the conference call concludes.

Victoria Hyde-Dunn: Our earnings press release and slide presentation are available on our investor relations website at investors.informatica.com. Our prepared remarks will be posted on the IR website after the conference call concludes. During the call, we'll be making comments of a forward-looking nature. However, actual results may differ materially from those expressed or implied as a result of various risks and uncertainties.

During the call, we'll be making comments of a forward looking nature actual results may differ 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 titled Risk factors included in our most recent 10.

Victoria Hyde-Dunn: 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 10-K filing for the full year 2023. 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.

Q and 10-K filing for the full year 2023. 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. A reconciliation of these items to the nearest U S. GAAP measure can be found in this afternoon's press release, and our slide presentation available on it.

Amit Walia: A reconciliation of these items to the nearest U.S. GAAP measure can be found in this afternoon's press release and on our slide presentation available on Informatica's Investor Relations website. Now, it is my pleasure to turn the call over to Amit. Well, thank you, Victoria, and thank you everyone for joining us today. I will start today's call by summarizing three key points. First, Informatica closed an outstanding fiscal 2023, outperforming all the top and bottom line guidance metrics for the fourth quarter and the full year. This was driven by a relentless focus on executing a cloud-only, consumption-driven strategy and strong customer momentum. These results are a testament to the power of the AI-powered IDMC platform and category leadership in data management as a mission-critical component of the modern data stack.

<unk> Investor Relations website. It is my pleasure to turn the call over to Amit well. Thank you Victoria.

Thank you everyone for joining us today I will start todays call by summarizing three key points.

He was promoted to close an outstanding fiscal 2023 outperforming all of the top and bottom line guidance metrics for the fourth quarter and the full year. This was driven by a relentless focus on executing our cloud only consumption driven strategy and strong customer momentum.

These results are a testament to the powered by AI powered Ibm's it platform and category leadership in data management as a mission critical component of the modern data stack.

Second at our December Investor Day, we shared Informatica innovation journey to deliver the best date amount of good products on the industry's only AI powered data management platform and a multi vendor multi cloud hybrid approach.

Amit Walia: Second, at December Investor Day, we shared Informatica's innovation journey to deliver the best data management products on the industry's only AI-powered data management platform in a multi-vendor, multi-cloud hybrid. Last year, we executed very strongly against that strategy, and I believe we are entering Informatica's most exciting era yet. And third, our cloud-only consumption-driven strategy has multiple growth, ongoing digital transformation, on-premise migration to the cloud, and Gen-AI to fuel cloud growth and drive long-term value creation. Now, let's discuss these topics in more detail.

Last year, we executed very strongly against that strategy and I believe we are entering informatic us most exciting yet.

And third our cloud only consumption driven strategy is multiple growth and ongoing.

Ongoing digital transformation.

Premise migration to cloud and journey.

Cloud growth and drive long term value creation.

Now, let's discuss these topics in more detail.

Amit Walia: Turning to results, we exceeded the high end of all our guidance. In the fourth quarter, cloud subscription ARR grew 37% year-over-year to $617 million. Subscription ARR increased 14% year-over-year to $1.1 billion, and total ARR rose 7% year-over-year to $1.6 billion. For the full year, total revenue grew 6% year-over-year to $1.6 billion. Non-GAAP operating income increased 32% year-over-year to $462 million.

Turning to results.

We exceeded the high end of all our guidance metrics in the fourth quarter cloud subscription <unk> grew 37% year over year to 617 million subscriptions increased 40% year over year to $1 1 billion and total ore rose, 7% year over year to $1 6 billion.

For the full year total revenue grew 6% year over year to $1 6 billion non-GAAP operating income increased 32% year over year to $462 million and adjusted Unlevered free cash flow after tax was 56% year over year to 450 microglia.

Amit Walia: And adjusted unlevered free cash flow after tax rose 56% year-over-year to $451 million. We are pleased to have delivered a net debt leverage ratio of less than two times, which is ahead of our IPO commitment by one full year. We also achieved two new annual milestones. We grew subscription revenues to $1 billion and cloud subscription revenue to half a billion. At our disseminar yesterday, we shared early thoughts on our 2024 guidance.

We're pleased to have delivered a net debt leverage ratio of less than two times, which is ahead of our IPO commitment by one full year.

We also achieved two new annual milestones.

Grew subscription revenues to $1 billion and cloud subscription revenue how are you.

At our December Investor Day, we shared early thoughts on 2024 guidance.

We are raising full year non-GAAP operating income.

Amit Walia: We are raising full-year non-GAAP operating income margin expectations and reaffirming all remaining metrics, including that we should expect cloud subscription ERR growth of 35% for the full year of 2024. Our level of engagement with enterprise customers is stronger than ever, supported by a growing partner ecosystem, customer success initiatives, and a healthy cloud pipeline. In the full year, approximately 75% of new cloud bookings came from new cloud workloads and the expansion of existing cloud engagement. We are attracting new customers, expanding opportunities within existing customers, and driving new workloads in G2K markets to our industry sales, enablement teams, enablement teams, and partners. Customer spending more than 1 million in subscription ERR increased 17% year-over-year to 240 customers.

Operating income margin expectations, and reaffirming all remaining metrics, including that we should expect cloud subscription growth of 35% for the full year of 2024.

Our level of engagement with enterprise customers is stronger than ever supported by our growing partner ecosystem customer success initiatives and healthy cloud pipeline.

In the full year, approximately 75% of cloud new bookings came from new cloud workloads and the expansion of existing cloud engagements, we are attracting new customers.

Pending opportunities within existing customers and driving new workloads in Q2 key markets through our industry sales and enable team enablement team and partners.

Customer spending more than $1 million in subscription there are increased 17% year over year to $2 40 customers.

Amit Walia: We had a record number of customers spending more than 5 million in subscription ARR, which grew 57% year-over-year. We pride ourselves on being the Switzerland of data and have accelerated ecosystem co-selling with Microsoft Azure, AWS, GCP, Snowflake, and Databricks and announced a new strategic partnership with MongoDB. We launched a Canada point of delivery on Microsoft Azure, which enables access to IDMC as an Azure native service purchased through Azure Marketplace. At Microsoft Ignite, as one of the first ISV design partners for Microsoft Fabric, we announced a new native app for Microsoft Fabric to seamlessly deliver data quality, data observability, and data integration, as well as multiple new connectors for Microsoft Fabric.

We had a record number of customers spending more than $5 billion in subscription.

Which grew 57% year over year.

We pride ourselves of being the Switzerland of data and have accelerated ecosystem co selling with Microsoft Azure, AWS, GCB, Snowflake and data bricks and announced a new strategic partnership with Mongo DB.

We launched our Canada point of delivery on Microsoft Azure, which enables access to IBM Z as in Azure Native service purchased to Azure marketplace.

At Microsoft Ignite as one of the first ISP design partners for Microsoft fabric, we announced a new native app for Microsoft fabric to seamlessly deliver data quality data operability and data integration as well as multiple new connectors for Microsoft fabric.

Amit Walia: At AWS reInvent, we announced certification of our AWS Health Lake integrations, including health care and life sciences specific data connectivity and format support, as well as master data management accelerators for provider and payer. We are a launch partner for Amazon S3 access grants, delivering scalable permission management for S3 data lakes for our cloud data marketplace and data access management capabilities, leveraging our recent Privatar acquisition. With both Microsoft and AWS, we showcased Geniax solutions with Microsoft Azure OpenAI and Amazon Bedrock, demonstrating how a trusted data foundation with IDMC enables customers to deliver enterprise-grade Geniax conversational apps. With Snowflake, we announced the general availability of SuperPipe for Snowflake, integrating complex ERP and CRM data up to 3.5x faster than previous approaches, and a public preview of our first Snowflake With Databricks, we enhance Databricks Verified Unity catalog support for our cloud data integration and cloud data integration free service.

At AWS re invent we announced certification of our AWS health like integrations, including healthcare and life Sciences specific data connectivity and format support as well as master data management accelerators put provider and payer we had a launch partner for Amazon as three access clients delivering scalable permission management for <unk>.

But our cloud data marketplace and data access management capabilities, leveraging our recent <unk> acquisition.

With both Microsoft and AWS, we showcased Jenny <unk> solutions with Microsoft Azure opening.

Amazon bedrock, demonstrating our prostate data foundation with Ibm's enables customers to deliver enterprise grade Jenny I conversational apps.

With Snowflake, we announced the general availability of Super Viper Snowflake integrating complex ERP and CRM data up to three five X faster than previous approaches and the public preview of our first snowflake native App the enterprise data integrator, enabling users to use super by seamlessly from within.

The smokeless product experience.

With data breaks we enhanced data break solidified unity catalog support for our cloud data integration and cloud data integration free services.

Lastly, we formed a new strategic partnership with Mongo DB to deliver modern cloud native trusted data driven apps across financial services insurance and healthcare verticals.

Amit Walia: Lastly, we formed a new strategic partnership with MongoDB to deliver modern cloud-native trusted data-driven apps across financial services, insurance, and healthcare verticals. This partnership combines the benefits of MongoDB Atlas with our MDM SaaS solution. GSIs continue to expand their data and AI practices by enabling practitioners at scale on IDMC. They also showed strong interest in taking solutions to market with IDMC. Last week, Deloitte announced that it has partnered with Informatica and Workiva to launch a simplified ESG compliance offering by combining Informatica's AI-powered IDMC, Workiva's cloud-based regulatory reporting offering, and Deloitte's technology, operational, and domain experience.

This partnership combines the benefits of Mongo DB Atlas with our MDM SaaS solution.

GSI has continued to expand their data and AI practices by enabling the practitioner that scale on IBM seat.

They also showed strong interest in taking solutions to market with <unk>.

Lastly, Deloitte amount that we have partnered with Informatica, where chemo to launch a simplified ESG compliance offering by combining informatica AI power IBM scene, where keep us cloud based regulatory reporting offering and Deloitte technology operational and domain experience.

Sourced wins, where partners bring informatica and two new opportunities increased to 31% of new business in 2023, as more partners double down and build that data and he has acted as on Informatica cross selling into more mindshare and partners recommending informatica more awesome.

Amit Walia: Source twins, where partners bring Informatica into new opportunities, increased to 31% of new business in 2023, as more partners double down and build their data and AI practices on Informatica, crossing into more mindshare and partners recommending Informatica more often. Our partner Migration Factory Program continues to perform strongly to continue to accelerate our modernization strategy. We now have over 50 partners, including eight of our GSI certified as part of our program, and strong interest in PowerCenter Cloud Edition. We also launched an MDM modernization program and began training the first partners during the quarter. In Q4, we added many new product innovations to our ideas. I'll just try to summarize a few, otherwise we'll run out of time.

Our partnered migration factory program continues to perform strongly to continue to accelerate our modernization strategy. We now have over 50 partners, including eight of our GSI certified as part of our program and strong interest in flowers into cloud edition.

We also launched an MDM modernization program and began trading the first partners during the quarter.

In Q4, we added many new product innovations to IBM see I'll just try to summarize a few on how things will run out of time.

In Master data management, and 360 apps, we enhanced intelligent data matching capabilities to deliver better matched outcomes and expanded our trust framework very important for our enterprise customers.

Amit Walia: In master data management and 360 apps, we enhanced intelligent data matching capabilities to deliver better matched outcomes and expanded our trust framework, very important for enterprise customers, and released a new connector for high volume data extraction. MDM extension for SAP enables customers to migrate to the cloud by creating a reliable version of supply data, reducing risk, and accelerating the move to SAP S4 HANA. Lastly, we added a location master extension that helps optimize the supply chain and engage more effectively with customers. Cloud Data Governance and Catalog now supports easy use of custom workflows and UI customization. We also introduced a new web browser extension called Quick Look for sharing information and providing data intelligence insights. Our advanced scanner connectivity now includes Oracle, Qlik Cloud, and TIPCO Spotfire with increased depth of Microsoft Power BI scanning and understanding of data workflows.

And released a new connector for high volume data extraction.

MDM extension for ACP enables customers to migrate to the cloud by creating a reliable version of supplier data, reducing risk and accelerating the multiple SAP four hana.

Lastly, we added a location Matson extension that helps optimize the supply chain and engage more effectively with customers.

Cloud data governance of Gaslog now supports easy use of custom workflows and UI customization.

We also introduced a new web browser extension, Paul quick look for sharing information and providing data intelligence insights our advanced scanner connectivity now towards Oracle click cloud spot fire with increased depth of Microsoft power bi scanning and understanding of data workflows.

Amit Walia: In Genii, the Clare Metadata Foundation enables collecting and preparing high-quality metadata from each organization. Let me remind you that IDMC is the metadata system of record for enterprises. We added autocataloging, making it seamless for an organization's data management metadata to be autocataloged in the central metadata inventory. This will help care GPT and co-pilot to work from a very rich base of prepared metadata, enabling data teams and business users to work with data more effectively. Clare Copilot now has masking recommendations for auto-classified sensitive columns, and Clare-based auto mapping recommendations for no code users in Infocom.

And Jenny I declare metadata foundation enables collecting and preparing high quality metadata from each organization, let me remind <unk> the metadata system of record for enterprises.

We added auto cataloging, making it seamless for an organization's data management metadata to be auto gaslog in the central metadata inventory.

This will help get GPT and copilot to work from a very rich base of prepared metadata, enabling data teams and business users to work with data more effectively plan.

<unk> Copilot now has masking recommendations for auto classifieds sensitive columns and clear based auto mapping recommendations for no code users Infocorp. These.

These updates help gather high quality metadata for AI.

Amit Walia: These updates help gather high-quality metadata for AI, streamline the process of protecting sensitive data, and create complex data pipes. And lastly, and I know you are anxious to hear about Privatar, we are on track to integrate Privatar's data access management capabilities into IDMC, including using IPOs to consume Privatar capabilities. We're excited about these capabilities and look forward to broad availability later this month. Now, that innovation always translates into great customer stories. Let me share with you a few.

Streamline the process of protecting sensitive data and create complex data pipelines.

And lastly, and I know you are anxious to hear about <unk>. We are on track to integrate with US did access management capabilities imply DMC, including using IPO to consume product capabilities. We are excited about these capabilities and look forward to proud availability later this month.

Now that innovation always profits to great customer story, So let me share a few.

An outstanding new customers, all Caribbean group, a leader in the vacation cruise line industry offering cruises throughout the world as a part of system wide modernization effort that investing in new financial loyalty and reservation systems, which requires a modern master data management solution to ensure success.

Amit Walia: An outstanding new customer is Oil Caribbean Group, a leader in the vacation cruise line industry offering cruises throughout the world. As a part of a system-wide modernization effort, they're investing in new financial, loyalty, and reservation systems, which require a modern map-to-data management solution to ensure success. We have selected our MDM SaaS to support the modern MDM strategy to support superior guest experiences and customer loyalty with the power of high-quality data. Pella Operations is a window and door manufacturing company with operations across the United States and select regions of Canada.

We have selected our MDM SaaS to support the modern MDM strategy to support superior guest experiences and customer loyalty with the power of high quality data.

Operation as a window and door manufacturing company with operations across the United States and select regions of Canada.

Amit Walia: In partnership with Microsoft, Pella selected our MDM SaaS and cloud data quality to manage and ensure the quality of their product, customer, and supplier data to optimize their supply chain and inventory operations across the enterprise. Engen is a leading global health tech company that offers a full suite of products and services across the entire healthcare value chain. They chose to partner with us, with our MDM and broader IDMC solutions to centralize the customer and provide master data, which will drive more administrative efficiencies and better health outcomes through care delivery and customer care. Now, a great customer expansion story is in Australia, the University of Sydney, Australia's oldest university and home to approximately 75,000 students. The university has been a longstanding Informatica power center and MDM customer for over two years, and it has successfully undergone cloud migration projects in both areas.

In partnership with Microsoft Pella selected our <unk>, SaaS and cloud data quality to manage and ensure the quality of the product customer and supplier data to optimize their supply chain and inventory at operations across the enterprise.

Engine is a leading global health Tech company that offers a full suite of products and services across the entire health care value chain that chose to partner with us without MDM and broader ibm's solutions to centralize the customer and provide master data.

Which will drive more administrative efficiencies and better health outcomes through care delivery and customer care.

Now a great customer expansion story.

Is it is in Australia that you don't see a Sydney Australia's oldest university and home to approximately 75000 students.

The University has been a longstanding informatica power center in MGM customer for over two years.

And have successfully undergone cloud migration projects for both areas. The recent purchases for cloud Master data management data governance data integration and data quality solutions reflect a platform expansion across the enterprise to further enable data sharing enhance the university experience for their students and faculty and prepared the data foundation to effectively.

Amit Walia: Their recent purchases for cloud master data management, data governance, data integration, and data quality solutions reflect a platform expansion across the enterprise to further enable data sharing, enhance the university experience for their students and faculty, and prepare their data foundation to effectively leverage AI. We are leaders in our core markets, and our commitment to product differentiation and innovation continues to earn us formal recognition from industrialists. Informatica is a leader in the 2023 Gartner Magic Quadrant for Data Integration Tools report. This marks the 18th consecutive time we have been positioned highest on the ability to execute access and furthest on the completeness of vision access.

Yeah.

We are leaders in our core markets.

Our commitment to product differentiation and innovation continues to honest partnered recognition from industry analysts.

<unk> is a leader in the 2023 Gartner Magic quadrant for data integration tools support. This marks the 18th consecutive time, we have been positioned highest on the ability to execute axis and furthest on the complete this efficient axis.

Amit Walia: We also received a strong rating in the product service and technology methodology categories for the 2023 Gartner Vendor Rating Report, being the only data management provider that Gartner covers in that. In research published by Forrester, Informatica received a leader rating in the inaugural Forrester Wave Cloud Data Pipelines Q4 2023 report and a leader rating in the Forrester Ways Product Information Management Q4 2023. This happens by building great products that help customers solve real, mission-critical business problems, creating value for them. Now, during Investor Day in December, we presented three reasons illustrating how we at Informatica are the data management choice for enterprises. As a reminder, we first built the best data management product picture. Second, we have the only AI-powered data management platform in the market called IDMC, which is powered by our AI player.

We also received a strong rating in the product service and technology methodology categories for the 2023 card November reaching record being the only data management provider that Gartner covers in that report.

In research published by Forrester Informatica received a leader rating in the inaugural Forrester wave cloud data pipelines Q4 2023 report.

And a leader in the Forrester wave product information management Q4, 2020 treatable.

This happens by building great products that help customers solve real mission critical business problems, creating value for them.

Now.

During Investor Day in December we presented three reasons illustrating how we at Informatica or their data management choice for enterprises. As a reminder, we firstly built the best data management products.

Second we are the only AI power data management platform in the market called <unk>, which is powered by <unk> and.

Amit Walia: And third, we support extremely difficult mission-critical workloads that are multi-vendor, multi-cloud, and hybrid on one IDMC platform. Last year, we executed very strongly against a cloud-only strategy, and I believe we're entering Informatica's most exciting era. Our unwavering focus is to deliver profitable, accelerated growth while executing a cloud-only consumption-driven go-to-market strategy and enhancing our AI-powered IBM C platform capability. That platform, IDMC, processed 86 trillion mission-critical cloud transactions in December, growing a whopping 62% year-over-year. We have a unique and differentiated AI-powered platform helping enterprises with automation, data intelligence, and increased efficiency to drive more workloads and many, many more useful. As I look ahead to 2024, we will fuel cloud growth in three ways. The first is through ongoing digital transformation. We are not done there yet across the globe within enterprise.

And third we support extremely difficult mission critical workloads that are multi vendor multi cloud and hybrid to one IBM Z platform.

Last year, we executed very strongly against a cloud only strategy and I believe we are entering informatic us most exciting at all yet.

Our unwavering focus is to deliver profitable accelerated growth, while executing a cloud only consumption driven go to market strategy and enhancing our AI powered ibm's platform capabilities.

That platform IMC process.

<unk> six trillion mission critical cloud transactions in December growing a whopping, 62% year over year.

We have a unique and differentiated AI powered platform, helping enterprises automation data intelligence and increased efficiency to drive more workloads and many many use cases.

As I look ahead to 2024, we will fuel cloud growth in <unk>.

The first is through ongoing digital transformation, we're not done there yet across the globe within enterprises gender.

Amit Walia: Generative AI, hyperautomation, data democratization, building and deploying modern digital apps, cloud databases, and analytics are some of the fundamental technology initiatives driving innovation, efficiency, and success in this digital era. However, there is a tremendous amount of work still to be done to help customers become innovative digital companies, including vendor consolidation. Enterprises need to move away from bespoke tactical tools and adopt an end-to-end data management platform that treats data strategically to drive digital transformation.

Generative AI hyper automation in a democratization raising and deploying modern digital apps cloud databases and analytics are some of the fundamental technology initiatives driving innovation efficiency and success in this digital era that is a tremendous amount of work still to be done to help customers become innovative digital companies, including <unk>.

The consolidation.

Enterprises need to move away from dispose tactically tools and adapted end to end data management platform that treats data strategically to drive digital transformation.

Amit Walia: Second, we are unique in having a billion dollars of on-prem maintenance and self-managed ERR. Migrating customers to the cloud is a very important priority. Approximately 25% of cloud new bookings in full year 2023 came from migration. In the full year, we closed over 110 cloud modernization deals, which grew 35% year-over-year. Now, as a reminder, we introduced Power Center Cloud Edition in August of last year to significantly lower the time to modernize from on-premises Power Center to IDMC.

Second we are unique to have a $1 billion of on Prem maintenance and self managed DIR migrating customers to the cloud is a very important priority.

Approximately 25% of cloud new bookings and full year 2023 came from migrations and the full year, we closed over 110 cloud monetization, which grew 35% year over year now as a reminder, we introduced power Center cloud edition in August of last year to a significant two significant.

We lowered the time to modernize from on Prem Power Center to IBM seat in Q4 Power Center Cloud edition, we're 60% plus of our modernization views.

Amit Walia: In Q4, Power Center Cloud Edition was 60% plus of our modernization. And lastly, at very early stages, there is Gen AI, which is opening access to new customer opportunities. There is no Gen AI without data. And for data to have value, it needs core data management, such as holistic data, clean data, governed data, and accessible data.

And lastly.

Its very early stages as Jenny I, which is opening access to new customer opportunities that has no Jenny I without data and.

And for data to have value it needs core data management, such as holistic data clean data governance data accessible data guests, while all of that is data management driven by IBM seat.

Amit Walia: All of that is data management driven by IDMC. And CLAIRE RAI Engine is embedded in all our solutions, leveraging ML algorithms and MLP on metadata to drive intelligence and productivity, leveraging and accessing our 50,000-plus metadata aware connections, and now leveraging 40 terabytes of active metadata in the cloud. Claire, the co-pilot, is live today.

And declared our AI engine is embedded in all of our solutions leveraging MLR go to them and MLP on metadata to drive intelligent that productivity, leveraging and accessing our 50000, plus metadata where connections and now leveraging 40 petabytes of active metadata in the cloud.

Copilot is like today.

Amit Walia: Clare GPT is in private preview with 300+ customers already signed up, and we plan to expand the preview to select partners by the end of this month. Today, private preview customers use Clare GPT for data discovery, metadata exploration cases, finding the right data sets for analytics, and AI. We are making significant progress towards an expected launch in the second quarter. In summary, our strong results demonstrate that Informatica, with its AI-powered IDMC platform and category leadership in data management, is a mission-critical component of the modern data stack. We are firing on all cylinders in a $62 billion-plus cloud market opportunity. Informatica has built the best data management products on the industry's only AI-powered data management platform, IDMC, powered by AI Clare, solving complex, mission-critical workloads that are multi-cloud, multi-vendor, and hybrid, while delivering significant value to our customers.

<unk> is in private preview with 300, plus customers already signed up and we plan to expand the preview to select partners by the end of this month.

So David private preview customers use <unk> discovery metadata exploration cases, finding the right data sets for analytics and AI.

We're making significant progress towards an expected launch in the second quarter.

In summary.

Strong results demonstrate that informatica with our AI powered <unk> platform and category leadership in data management is a mission critical component of the modern data stack.

We're firing on all cylinders, and a 62 billion plus cloud market opportunity in.

<unk> has been the best data management products.

On the industry's only high power data management platform <unk> powered by AI cloud.

Solving complex mission critical workloads that are multi cloud multi vendor and hybrid while delivering significant value to our customers.

It's also a special time for the company.

Amit Walia: It's also a special time for the company, as we celebrate our 30 years of heritage. Driven by innovation and customer centricity, I'm incredibly proud of our accomplishments and very excited about the opportunities ahead on our cloud-only consumption-driven journey. Informatica is a very special company. I completed 10 years at Informatica last year myself.

As we celebrate our could be years of heritage driven by innovation and customer Centricity.

Credibly proud of our accomplishments and very excited about the opportunities ahead on a cloud only consumption driven journey and for medical is a very special company.

I completed 10 years last year myself.

Amit Walia: We are innovators, customer-centric, and we stay true to our values and our data. We look forward to sharing more product innovation at Informatica World in May and invite you to join us there. Thank you to all our employees across the globe, our customers across the globe, and our partners across the globe for making it a remarkable year. With that, I will hand the call over to Mike. Mike, please take it away.

That innovators.

<unk> centric and we stay true to our values and our data.

We look forward to sharing more product innovation at Informatica World and me and invite you to join us over there. Thank.

Thank you to all our employees across the globe, our customers across the globe and our partners across the globe for making it a remarkable year with that let me hand, the call over to Mike Mike. Please take it away.

Michael I. McLaughlin: Thank you, Amit, and good afternoon, everyone. Q4 was another solid financial quarter across the board, with key growth and profitability metrics exceeding our expectations, delivering a strong close to 2023. I'll begin the review of our Q4 results by reminding everyone how to best understand Informatica's ARR and GAAP revenues. Our ARR and revenue fall into three major categories: cloud subscriptions, which delivered 37% ARR growth in FY23, self-managed subscriptions, which we no longer actively sell and are therefore gradually declining, and maintenance on on-premise perpetual licenses, which is also gradually declining. As I discussed at our December Investor Day, the trajectories of these three categories of ARR and revenue, that is, the strong growth of our cloud business and the gradual decline of our self-managed subscriptions and maintenance, are the direct result of our cloud-only strategy, and we expect more of the same in FY24 and beyond.

Thank you Amit and good afternoon, everyone Q4 was another solid financial quarter across the board with key growth and profitability metrics exceeding our expectations delivering a strong close to 2023.

I'll begin the review of our Q4 results by reminding everyone how to best understand Informatica and GAAP revenues are earned revenue fall into three major categories cloud subscriptions, which delivered 37% <unk> growth in FY2023 self managed subscriptions, which we no longer actively sell and are therefore gradually declining and.

Maintenance on on premise perpetual licenses, which is also in gradual decline.

As I discussed at our December Investor Day, the trajectories of these three categories of <unk> and revenue that is the strong growth of our cloud business and the gradual decline of our self managed subscriptions and maintenance are the direct result of a cloud only strategy and we expect more of the same in FY 'twenty four and beyond.

With that in mind, let's start with total IRR, which was $1 63 billion in Q4, an increase of 7% over the prior year.

Michael I. McLaughlin: With that in mind, let's start with total ARR, which was 1.63 billion in Q4, an increase of 7% over the prior year. This was driven primarily by new cloud workloads, strong net expansion with existing customers, and steady renewal rates. We added $109 million in net new total ARR versus the prior year. Foreign exchange negatively impacted total ARR by $7 million on a year-over-year basis.

This was driven primarily.

Baidu cloud workloads strong net expansion with existing customers and steady renewal rates, we added $109 million and net new total <unk> versus the prior year foreign exchange negatively impacted total IRR by $7 million on a year over year basis.

Michael I. McLaughlin: Cloud subscription ARR at the end of Q4 was $617 million, a 37% increase year-over-year, and $8 million above the midpoint of our November guidance. Cloud subscription ARR now represents 38% of our total ARR, up from 30% a year ago, for an exchange negatively impacted cloud subscription revenue by approximately 2.3 million on a year-over-year basis. New cloud workloads, strong net expansion with existing customers, and steady cloud renewal rates drove cloud subscription net new ARR of $166 million year-over-year and $67 million quarter-over-quarter. Approximately 75% of Fiscal 2023's cloud subscription net new ARR came from new cloud workloads and expansion of existing cloud engagements, with the remaining 25% coming from on-premise customer migration. Our cloud subscription net retention rate at the end-user level was 119 percent in the fourth quarter, up two percentage points year-over-year and up one percentage point versus last quarter.

Cloud subscription <unk> at the end of Q4 was 617, billion% to 37% increase year over year and $8 million above the midpoint of our November guidance cloud subscription and <unk> now represents 38% of our total <unk> up from 30% a year ago.

Foreign exchange negatively impacted cloud subscription <unk> by approximately $2 3 million on a year over year basis.

New cloud workloads strong net expansion with existing customers and steady cloud renewal rates drove cloud subscription net new <unk> $166 million year over year, and 67 million quarter over quarter.

Approximately 75% of fiscal 2020 threes cloud net new <unk> came from new cloud workloads and expansion of existing cloud engagements with the remaining 25% coming from on premise customer migrations.

Our cloud subscription net retention rate at the end user level was 119% in the fourth quarter up two percentage points year over year and up one percentage point versus last quarter as we discussed at our December Investor Day. This metric defines the customer cohort for <unk> at the beginning of the year ago period at the end user customer level.

Michael I. McLaughlin: As we discussed at our December Investor Day, this metric defines the customer cohort for NRR at the beginning of the year-ago period at the end-user customer level. If we instead define the measurement cohort at the global parent level, our Q4 NRR was 125 percent, up two percentage points year-over-year and one percent sequential. Self-managed subscription ARR declined in the quarter, as expected, to 516 million.

If we instead define the measurement cohort at the global parent level. Our Q4, <unk> was 125% up two percentage points year over year and 1% sequentially.

Self managed subscription <unk> declined in the quarter as expected to 516 million. This was down 2% sequentially and down 5% year over year. This was a slightly slower decline than we forecast in November.

Michael I. McLaughlin: This was down 2% sequentially and down 5% year-over-year. This was a slightly slower decline than we forecast in November. Subscription ARR, which is simply the sum of cloud ARR and self-managed ARR, grew by 14% year-over-year to $1.13 billion, which was $25 million above the midpoint of our November guidance. Foreign exchange negatively impacted subscription ARR by approximately $5.6 million on a year-over

Subscription <unk>, which is simply the sum of cloud <unk> and self managed IRR grew by 14% year over year to $1, <unk> 3 billion, which was $25 million above the midpoint of our November guidance foreign exchange negatively impacted subscription air or by approximately $5 6 million on a year over year basis, we saw good growth at our average subscription.

Michael I. McLaughlin: We saw good growth in our average subscription ARR per customer, which reached over $298,000 in Q4, a 13% increase year-over-year. The third component of total ARR is maintenance for on-premise perpetual licenses sold in the past, which now represents about 30% of total ARR. Maintenance ARR was down approximately 6% year-over-year to $494 million, in line with expectations.

<unk> per customer, which reached over $298000 in Q4, a 13% increase year over year.

The third component of total <unk> maintenance for on premise perpetual licenses sold in the past, which now represents about 30% of total error maintenance.

Maintenance IRR was down approximately 6% year over year to $494 million in line with expectations.

As I discuss the migration of our unpromising customer base to <unk> and the cloud is a large opportunity for us the introduction of power Center Cloud edition in Q3 of last year has helped accelerate the volume of signed migrations of our power center maintenance space.

Michael I. McLaughlin: As Amit discussed, the migration of our on-premise customer base to IDMC in the cloud is a large opportunity for us. The introduction of PowerCenter Cloud Edition in Q3 of last year helped accelerate the volume of signed migrations in our PowerCenter maintenance space. We're also seeing momentum from our self-managed space migrating to our cloud, and our on-premise MDM customers are beginning to migrate their on-premise solution. So, as a result, we are updating our migration reporting metric to include our entire on-prem base, not just maintenance. As of the end of Q4, we have migrated 4.8% of our maintenance and self-managed ARR base to the cloud, up from 3.7% last quarter. We have a life-to-date average 2-to-1 ARR uplift ratio on these migrations, including Power Center and MDM.

We're also seeing momentum from our self managed space migrating to our cloud and our on premise MDM customers are beginning to migrate their on Prem solutions.

So.

As a result, we are updating our migrating migration reporting metric to include our entire on Prem based not just make us as at the end of Q4, we have migrated for 8% of our maintenance and self managed <unk> base to cloud up from three 7% last quarter.

We have a life to date average two to one <unk> uplift ratio on these migrations, including power Center and MDM.

Michael I. McLaughlin: Including only maintenance migration, as we have historically reported, our migrated base in Q4 was 6.5%, up from 5% last quarter. These three ARR components summed to 7.2% total ARR growth year-over-year. Cloud subscription ARR growth of 37% drove this increase, offset by gradual declines in self-managed subscription and maintenance ARR. We expect similar trends to continue in 2024 as a direct and intentional result of our cloud-only consumption-driven strategy. Now, I'd like to review our revenue results for the fourth quarter. Gap's total revenues were $445 million, an increase of 12% year-over-year. This exceeded the midpoint of our November guidance range by $15 million, due primarily to a slower-than-expected decline in self-managed revenue. However, revenue from our Privatar acquisition was not material in the quarter.

Including only maintenance migration as we have historically reported are migrated base in Q4 was six 5% up from 5% last quarter.

These three are our components summed to seven 2% total IRR growth year over year cloud subscription <unk> growth of 37% drove this increase offset by gradual declines in self managed subscription and maintenance IRR. We expect similar trends to continue in 2024 is a direct and intentional result of our cloud only consumption driven.

<unk> strategy.

Now I'd like to review our revenue results for the fourth quarter GAAP total revenues were $445 million, an increase of 12% year over year. This exceeded the midpoint of our November guidance range by $15 million due primarily to a slower than expected decline in self managed revenue revenue from our <unk> acquisition was not material in the quarter foreign.

Michael I. McLaughlin: Foreign exchange positively impacted total revenues by approximately $2.6 million on a year-over-year basis. However, as we have previously discussed, the accounting impact of our mixed shift to cloud subscription sales and away from self-managed on-premises sales creates a headwind for gap revenues. If our cloud versus self-managed new bookings mix were the same this quarter as it was in Q4 of last year, total revenues would have been approximately $28 million higher than we reported. For the full year, revenues would have been $72 million higher.

Foreign exchange positively impacted total revenues by approximately $2 6 million on a year over year basis.

As we have previously discussed the accounting impact of our mix shift to cloud subscription sales and away from self managed on premises sales creates a headwind to GAAP revenues, if our cloud versus self managed new bookings mix were the same this quarter as it was in Q4 of last year total revenues would have been approximately $28 million higher than we reported.

<unk> for the full year revenue would have been $72 million higher.

Michael I. McLaughlin: Subscription revenue increased 26% year-over-year to $300 million, representing 67% of total revenue compared to 60% a year ago. Our quarterly subscription renewal rate was approximately 89%, down 3.7 percentage points year-over-year due to lower self-managed subscription renewal rates offset by higher cloud subscription renewal rates. For the full year, our subscription renewal rate was 92%. Maintenance and professional services revenues were $143 million, representing 32% of total revenue in Q4, in line with expectations. Maintenance revenue represented 27% of total revenue for the quarter.

Subscription revenue increased 26% year over year to $300 million, representing 67% of total revenue compared to 60% a year ago.

Our quarterly subscription renewal rate was approximately 89% down three seven percentage points year over year due to lower self managed subscription renewal rates offset by higher cloud subscription renewal rates.

For the full year, our subscription renewal rate was 92%.

Maintenance and professional services revenues were $143 million, representing 32% of total revenue in Q4 in line with expectations maintenance revenue represented 27% of total revenue for the quarter.

Michael I. McLaughlin: Our maintenance renewal rate in the quarter was 95%, in line with the prior period. Implementation, consulting, and education revenues comprise the remainder of this category, down $7 million year-over-year, consistent with last quarter. And I have one additional call out related to revenue. Starting this quarter, we will be disclosing GAAP revenue from cloud subscriptions in our quarterly reports. In Q4, cloud subscription revenue was $140 million, or 47% of subscription revenues, growing 39% year-over-year. For the full year, cloud subscription revenue was $500 million, also growing 39% year-over-year. As a reminder, due to the timing differences between revenue and ARR recognition, the relative growth rates of these two metrics will differ from period to period. Turning to the geographic distribution of our business, U.S. revenue grew 7% year-over-year to $279 million, representing 63% of total revenue, while international revenue grew 21% to $166 million. Using exchange rates from Q4 last year, international revenue would have been approximately $7 million lower in the quarter, representing international revenue growth of 16% year-over-year.

Our maintenance renewal rate in the quarter was 95% in line with prior periods implementation consulting and education revenues comprised the remainder of this category down $7 million year over year consistent with last quarter.

And I have one additional callout to revenue starting this quarter, we will be disclosing GAAP revenue from cloud subscriptions in our quarterly reports in Q4 cloud subscription revenue was $140 million or 47% of subscription revenues growing 39% year over year for the full year cloud subscription revenue was 500.

<unk> also growing 39% year over year as a reminder, due to the timing differences between revenue and our recognition the relative growth rates of these two metrics will differ from period to period.

Turning to the geographic distribution of our business U S revenue grew 7% year over year to $279 million, representing 63% of total revenue while international revenue grew 21% to $166 million using exchange rates from Q4 last year International revenue would have been approximately $7 million lower in the quarter.

<unk>, representing international revenue growth of 16% year over year.

Michael I. McLaughlin: Turning to consumption-based IPUs, approximately 45% of fourth-quarter cloud new bookings were IPU-based deals. IPUs now represent 47% of cloud subscription ARR, up two percentage points sequentially. The remainder of our Q4 cloud bookings were primarily for customer or supplier records for our MDM products, which is also a multi-year committed consumption-based pricing model. Now, I'd like to move on to our profitability metrics. Please note that I will discuss non-GAAP results unless otherwise stated. In Q4, our gross margin was 83%, up one percentage point year over year, and operating expenses were consistent with expectations. As part of our November 2023 restructuring plan, we incurred non-recurring restructuring charges of approximately $32 million in the fourth quarter of 2023. We expect approximately $3 to $5 million of restructuring expenses to be incurred in the first quarter of 2024, consistent with the range we provided in November.

Turning to consumption based IP use approximately 45% of fourth quarter cloud, new bookings, where ICU based deals ICU is now represent 47% of cloud subscription and <unk>.

Up two percentage points sequentially. The remainder of our Q4 cloud bookings were primarily for customer or supplier records for our MDM products, which is also a multiyear committed consumption based pricing model.

Now I'd like to move on to our profitability metrics. Please note that I will discuss non-GAAP results unless otherwise stated.

In Q4, our gross margin was 83% up one percentage point year over year and operating expenses were consistent with expectations.

As part of our November 2023 restructuring plan, we incurred nonrecurring restructuring charges of approximately $32 million in the fourth quarter of 2023, we expect approximately $3 million to $5 million of restructuring expenses to be incurred in the first quarter of 2024 consistent with the range. We provided in November we continue to estimate the.

Michael I. McLaughlin: We continue to estimate the cost savings benefit of these restructuring actions in 2024 will be approximately $84 million on a gap basis and approximately $70 million on a non-gap basis. Operating income was $162 million in the fourth quarter, growing 42 percent year over year and exceeding the midpoint of our November guidance range by $22 million. Operating margin was 36.4 percent, an eight percentage point improvement from a year ago. Adjusted EBITDA was $166 million, and net income was $97 million. Net income per diluted share was $0.32 based on approximately 305 million outstanding diluted shares.

Cost savings benefit of these restructuring actions in 2024 will be approximately $84 million on a GAAP basis, and approximately $70 million on a non-GAAP basis.

Operating income was $162 million in the fourth quarter growing 42% year over year and exceeding the midpoint of our November guidance range by $22 million operating margin was 36, 4% an eight percentage point improvement from a year ago, adjusted EBITDA was $166 million and net income.

$97 million net.

Net income per diluted share was 32.

Based on approximately $305 million outstanding diluted shares basic share count was approximately 293 million shares and please note that we did not repurchase any class a common stock as part of the $200 million share repurchase authorization, we announced in November.

Michael I. McLaughlin: The basic share count was approximately 293 million shares. And please note that we did not repurchase any Class A common stock as part of the $200 million share repurchase authorization we announced in November. Fourth quarter adjusted unleveraged free cash flow after tax was $155 million, $31 million better than expectations, due to higher operating income performance and cash collection. Adjusted unlevered free cash flow after tax margin was 35% and grew about 12 percentage points year over year. Cash paid for interest in the quarter was $38 million, in line with expectations.

Fourth quarter adjusted Unlevered free cash flow after tax was $155 million $31 million better than expectations due to higher operating income performance and cash collections adjusted Unlevered free cash flow. After tax margin was 35% and grew about 12 percentage points year over year.

Cash paid for interest in the quarter was $38 million in line with expectations.

We ended the fourth quarter and a strong cash position with cash plus short term investments of $992 million, an increase of $276 million year over year net.

Net debt was $850 million and trailing 12 months of adjusted EBITDA was $479 million.

Michael I. McLaughlin: We ended the fourth quarter in a strong cash position with cash plus short-term investments of $992 million, an increase of $276 million year-over-year. Net debt was $850 million, and the trailing 12 months of adjusted EBITDA was $479 million. This resulted in a net leverage ratio of 1.8 times at the end of December. I'm pleased to share that we delivered on our IPO deleveraging commitment of less than two times one year earlier. Turning now to 2024 Guidance, we are reaffirming the 2024 pre-guidance we shared at our December Investor Day. We expect our cloud subscription ARR to grow by 35% year-over-year in 2024, off of a higher base than we expected in early December. We expect total ARR and GAAP total revenue growth to inflect in 2024 and grow faster than in 2023, also off of a higher base than originally forecast.

This resulted in a net leverage ratio of one eight times at the end of December I am pleased to share that we delivered on our IPO deleveraging commitment of less than two times one year early.

Turning now to 2024 guidance we.

We are reaffirming the 2024 pre guidance, we shared at our December Investor Day, We expect our cloud subscription <unk> to grow by 35% year over year in 2024 off of a higher base than we'd expected in early December we.

We expect total <unk> and GAAP total revenue growth to inflect in 2024 and grow faster than in 2023 also off of a higher base than originally forecast.

And we expect to grow our non-GAAP operating income margin by 420 basis points from our FY2023 guidance margin of 27, 8%, which is a 300 basis point increase from our actual full year 2023 margin of 29%.

Michael I. McLaughlin: And we expect to grow our non-GAAP operating income margin by 420 basis points from our FY23 guidance margin of 27.8 percent, which is a 300 basis point increase from our actual full year 2023 margin of 29 percent. Taking all this into account, we are establishing the following guidance for the full year ending December 31st, 2024. Note that all growth rates refer to the midpoint of the guidance range.

Taking all this into account we are establishing the following guidance for the full year ending December 31, 2024 note that all growth rates refer to the midpoint of the guidance range.

We expect GAAP total revenues to be in the range of $1 685 billion to 175 billion, representing approximately six 3% year over year growth.

We expect total <unk> to be in the range of $1 $71 8 billion to $1 772 billion, representing approximately seven 3% year over year growth.

Michael I. McLaughlin: We expect GAAP total revenues to be in the range of $1.685 billion to $1.705 billion, representing approximately 6.3% year-over-year growth. We expect total ARR to be in the range of 1.718 billion to 1.772 billion, representing approximately 7.3% year-over-year growth. We expect subscription ARR to be in the range of $1.261 billion to $1.295 billion, representing approximately 12.8% year-over-year growth. We expect cloud subscription ARR to be in the range of $826 million to $840 million, representing approximately 35.1% year-over-year growth. We expect non-GAAP operating income to be in the range of $533 million to $553 million, representing approximately 17.5% year-over-year growth. And we expect unadjusted, unlevered free cash flow after tax to be in the range of $535 million to $555 million, representing approximately 20.8% year-over-year growth. Our guidance for the first quarter ending March 31st, 2024 is as follows. We expect total revenues to be in the range of $375 million to $395 million, representing approximately 5.4 percent year-over-year growth.

We expect subscription IRR to be in the range of one to six 1 billion to $1 $2 95 billion, representing approximately 12, 8% year over year growth.

We expect cloud subscription <unk> to be in the range of 826 million to $840 million, representing approximately 35, 1% year over year growth.

We expect non-GAAP operating income to be in the range of 533 million to $553 million, representing approximately 17, 5% year over year growth.

We expect unadjusted unlevered free cash flow after tax to be in the range of 535 million to $555 million representing approximately.

Proximately, 28% year over year growth.

Our guidance for the first quarter ending March 31, 2024 is as follows.

We expect GAAP total revenues to be in the range of 375 million to $395 million, representing approximately five 4% year over year growth.

We expect subscription IRR to be in the range of $1 $103 5 billion to 1.155 billion, representing approximately 12, 2% year over year growth.

We expect cloud subscription IRR to be in the range of $645 million to $655 million, representing approximately 34, 5% year over year growth. We expect non-GAAP operating income to be in the range of 97 million to $117 million, representing approximately 26, 2% year over year growth.

Now for modeling purposes, I'd like to provide a few more pieces of additional information first we expect adjusted Unlevered free cash flow after tax for the first quarter to be in the range of $102 million to $122 million, we expect quarterly free cash flow linearity in FY 'twenty four to be similar to FY2023.

Michael I. McLaughlin: We expect subscription ARR to be in the range of $1.135 billion to $1.155 billion, representing approximately 12.2 percent year-over-year growth. We expect cloud subscription ARR to be in the range of $645 million to $655 million, representing approximately 34.5% year-over-year growth. We expect non-GAAP operating income to be in the range of $97 million to $117 million, representing approximately 26.2% year-over-year growth. Now, for modeling purposes, I'd like to provide a few more pieces of additional information. First, we expect adjusted unlevered free cash flow after tax for the first quarter to be in the range of $102 to $122 million. We expect quarterly free cash flow linearity in FY24 to be similar to FY23. Second, we estimate cash paid for interest will be approximately $39 million in the first quarter and approximately $144 million for the full year, using forward interest rates based on one month so far.

Second we estimate cash paid for interest will be approximately 39 million in the first quarter and approximately $144 million for the full year using forward interest rates based on one month, so far for <unk>.

Tax rates, we reported as of 2023 and non-GAAP tax rate of 23% and we expect that rate to continue for fiscal 2024.

At fiscal 2025, and beyond we expect a long term steady state non-GAAP tax rate of 24%, which reflects where we expect cash taxes to eventually settle based on our structure and geographic distribution of operational activity cash taxes in 2024 are expected to be consistent with 2023.

Lastly, our share count assumptions.

For the first quarter of 2024, we expect basic weighted average shares outstanding to be approximately 297 million shares and diluted weighted average shares outstanding to be approximately 310 million shares.

For the full year of 2024, we expect basic weighted average shares outstanding to be approximately 302 million and diluted weighted average shares outstanding to be approximately $315 million.

Michael I. McLaughlin: For tax rates, we reported a 2023 non-GAAP tax rate of 23%, and we expect that rate to continue for fiscal 2024. Looking at fiscal 2025 and beyond, we expect a long-term steady-state non-GAAP tax rate of 24%, which reflects where we expect cash taxes to eventually settle based on our structure and geographic distribution of operational activity. Cash taxes in 2024 are expected to be consistent with 2023. Lastly, our share accounts. For the first quarter of 2024, we expect basic weighted average shares outstanding to be approximately 297 million shares and diluted weighted average shares outstanding to be approximately 310 million shares. For the full year of 2024, we expect basic weighted average shares outstanding to be approximately $302 million and diluted weighted average shares outstanding to be approximately $315 million.

In summary, we are very pleased with our strong performance in 2023, we successfully transitioned to our cloud only consumption driven strategy and solidify the foundation upon which we will deliver accelerating <unk> growth in 2024 and beyond.

Operator, you can now open the line for questions. Thank you.

We will now begin the Q&A session.

If you would like to ask a question. Please press star followed by one of your touch turnkey pad.

If for any reason you all like to remove that question. Please press star followed by two.

Again to ask a question star one.

Again, if you would like to ask a question. Please press star one.

Well a policy I'm very pleased to allow questions to generate in Q.

The first question comes from the lot of Matt Hedberg with RBC capital markets. Please proceed.

Great guys. Thanks for taking my questions Congrats on a really strong.

End of the year and a great outlook for 'twenty for a lot of things to digest here I guess, maybe to start with you made comments on <unk>.

Growth in new cloud workload is really exciting to hear and it feels like it's sort of powering a lot of people that you guys included I guess I'm wondering could you double click on that a little bit more where are you seeing that growth in workload is that particular customer segment is it digitally native customers is it more mainstream any more color on sort of.

Michael I. McLaughlin: In summary, we are very pleased with our strong performance in 2023. We successfully transitioned to our cloud-only consumption-driven strategy and solidified the foundation upon which we will deliver accelerating total growth in 2024 and beyond. Operator, you can now open the line for questions.

I don't know if theres any like Jenny I focus on some of the new workloads, but any additional color there would be helpful.

Victoria you are now into the call.

Hi, everybody I think we're back with you. Our operator you can go ahead and open the lines of the call to the questions.

Absolutely we will.

Operator: Thank you. We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your touchtone keypad. If, for any reason, you would like to remove that question, please press star followed by 2.

Now begin the Q&A session. If you would like to ask a question. Please press star followed by one or your Touchtone keypad.

If for any reason you would like to remove that question. Please press star followed by Tam.

Operator: Again, to ask a question, press star 1. Again, if you would like to ask a question, please press star 1. We will pause here briefly to allow questions to generate in queue. The first question comes from the line of Matt Hedberg with RBC Capital Market. Please proceed.

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.

The first question comes from the line of Matt Hedberg with RBC capital markets. Please proceed.

Matthew George Hedberg: Great, guys. Thanks for taking my questions. Congrats on a really strong end to the year and a great outlook for 24.

Hey, guys.

I think I already asked a question, but maybe we lost you guys in that.

Well done on the quarter and the guide really good to see.

Amit Walia: A lot of things to digest here. I guess maybe to start with, you've made comments on growth and new cloud workloads, which is really exciting to hear. And I feel like it's sort of powering a lot of people, but you guys included, I guess I'm wondering, could you double-click on that a little bit more? Where are you seeing that growth and workload? Is it a particular customer segment? Is it, you know, some digitally native customers? Is it more mainstream?

Such a strong exit rate in a lot of opportunities in 'twenty four.

A lot of things to think about on the call you guys talked about growth in new cloud workload, which is really good to hear I'm wondering if you could double click on that like where is that coming from is it particular verticals is it anything driving that comment that's really exciting to see just from an overall industry perspective, and certainly feels like you guys are well positioned to monetize that.

Hey, Matt Thanks for the question sorry, we lost the call we're back.

But look I think here's what I think I saw in the as we exited the year towards the second half of the year I mean look there.

Amit Walia: Any more color on sort of, you know, and I don't know if there's any like gen AI focus on some of the new workloads, but any additional color there would be. Victoria, you are now into the call. Hi everybody. I think we're back with you. Operator, you can go ahead and open the line for the calls to the, Absolutely. We will now begin the QA session. If you would like to ask a question, please press star followed by one on your touchtone keypad. If, for any reason, you would like to remove that question, please press star followed by 2.

Yeah.

Digital transformation is not done and the beauty of that district transformation transitioning Virginia observation is all bleeding over and what we're seeing is our top markets.

Enterprise customers have come back by the lead in a lot more.

Defense mode are back into while efficiency automation, both things have not gone away, but they are basically going back into funding transformational initiatives and they all become data initiatives. So for example, and I talked about some of the customers in this call.

Operator: Again, to ask a question, press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. The first question comes from the line of Matt Hedberg with RBC Capital Market. Please proceed. Great, guys. I think I already asked a question, but maybe we lost you guys in that. Well done on the quarter and the guide. Really good, and a lot of opportunities in 24.

Again, our growth how do you create customer loyalty programs. How do you think about making sure you can create better supply chain. So those transformational initiatives that I would say our U I would argue that when we ended last year 2022 was somewhat of a back whenever people a lot more detail come back on the offense and guests team investments in those.

Got it that's helpful. And then the launch of power Center Cloud and August felt like a real.

Inflection point, I guess I'd say for the company in terms of really modernizing the pace and I think.

Matthew George Hedberg: A lot of things to think about on the call. You guys talked about growth in new cloud workloads, which is really good to hear. I'm wondering if you could double-click on that.

And maybe Mike you pointed out, but I think you said.

60% of cloud modernization deals were driven by power Center cloud I'm wondering is that an uplift to customer spend.

Matthew George Hedberg: Where is that coming from? Is it particular verticals? Is there anything driving that comment? Because that's really exciting to see just from an overall industry perspective. And certainly feels like you guys are well-positioned to monetize that. Hey, Matt, thanks for the question. Sorry, we lost the call.

When they migrate to that just sort of curious on the kind of the economics of that because I got the another.

Another big opportunity given your large base.

Yes, so my Baltic over to the uplift the uplifted postpaid consistent think of it this way increasing the velocity so that powers. The cloud edition the time to migrate workloads actually accelerates dramatically.

Amit Walia: We're back. But look, I think this is what I think I saw as we exited the year and during the second half of the year. I mean, look, the Digital transformation is not done. And the beauty is that digital transformation, transitioning to Gen-AI transformation, is all bleeding over. And what we are seeing is our top markets, enterprise customers have come back where they were in a lot more defense mode, are back into efficiency, automation, those things have not gone away, but they are basically going back into funding transformation initiatives, and they all become data initiatives. So, for example, when I talked about some of the customers on this call, they were figuring out growth. How do you create customer loyalty programs?

And with that also the customer can do that a lot more data on pace to be risks that migration, which allows more customers to endure that migration journey with a lot less risk and a lot higher velocity, so that increases the velocity and conversions.

It stayed pretty consistent for us so I would not look at it that uplift modern increasing the velocity of Derisking that program and just to be Super clear every migration, whether it's the prior style migration that.

Sure.

Two years in some cases or power center cloud edition, which dramatically shortens out six months or.

There is an uplift for every one of those migrations regardless of the time, we've historically seen about two to one uplift between the migration and IRR that we had been earning in the cloud are ROE earned after the migration.

Amit Walia: How do you think about making sure you can create a better supply chain? So those transformation initiatives that I would say argue, I would argue that when we ended last year, 2022, was somewhat on the back burner where people were a lot more on defense, they've come back on the offense, and they're seeing investment. Got it.

And that's consistent so far with.

With power Center cloud edition.

Got it thanks guys.

Thanks, Brian.

Thank you.

The next question comes from the line of Brad Zelnick with Deutsche Bank. Please proceed.

Great. Thanks, so much for taking my questions and I'll Echo my congrats too for a strong finish to the year.

Amit Walia: That's helpful. And then, you know, the launch of Power Center Cloud in August felt like a real, uh, inflection point, I guess I'd say for the company in terms of really modernizing the base, and I think you, maybe Mike, or I don't know, you pointed out that I think you said, 60% of cloud modernization deals were driven by Power Center Cloud. I'm wondering, is that an uplift to customer spend when they migrate to that?

And then I wanted to ask about go to market coming out of a sales kickoff what were the key themes in the playbook for 2020 for this year and maybe specific just following Matt's question around around power Center Cloud edition, what specifically are you doing to incentivize both direct sales and partners to sell that product because it just seems like such a.

There's tremendous opportunity to unlock and modernize the existing on Prem base.

Amit Walia: Just sort of curious about the kind of economics of that because it feels like that's another big opportunity given your large base. Yeah, so Matt, don't think of it as an uplift. The uplift has stayed consistent. Think of it this way, increasing the velocity.

Great. Thanks for the question I Couldnt agree more it's a great opportunity I'll tell you. The two awards that <unk> focus and execution I mean in some ways the pivot to cloud really consumption driven that we started last year as you see went very well and this year. There is no change in strategy. We have to just kind of continue to scale, which is focused on execution and so I think.

Amit Walia: So with Power Center Cloud Edition, the time to migrate the workloads actually accelerates dramatically. And with that, also, the customer can do that a lot more at their own pace. So it de-risks their migration, which allows more customers to enter their migration journeys with a lot less risk and a lot higher velocity. So that increases the speed and conversions.

But those are the two words.

People are pretty excited and what we've done is first of all on migration volatile. The cloud edition is that tremendous accelerant everybody is super excited about that one of course as you know we talked about the numbers in Q4, but you can imagine the pipeline build that's happening at all at the momentum of that one we continue to incent, our reps more than a normal.

Amit Walia: Uplifts have stayed pretty consistent for us. So I would not look at it as an uplift, more as increasing the velocity and de-risking that program. And just to be super clear, every migration, whether it's prior style migration or this, there's an uplift for every migration. We've seen the uplift, and that's consistent with Power Center Flow. Got it.

A volatile part of our migration because it takes a little bit of extra work. So thats always thats always an extra incentive product and currently all the hard work we've done with partners.

Brad Alan Zelnick: Thanks, guys. Thanks. Thank you. The next question comes from the line of Brad Zelnick with Deutsche Bank. Please proceed.

Being off now pretty much every migration deeds goes to partners, we talked about our migration factory program all of the large partners have created by debate migration factories within their informatica practices to basically big use migration Atlantic with their factories in November for them migration is one step to a larger end.

Amit Walia: Great, thanks so much for taking my questions, and I'll echo my congratulations for a strong finish to the year. Amit, I wanted to ask about go-to-market, you know, coming out of sales kickoff, what were the key themes in the playbook for 2024 this year? And maybe more specifically, just following Matt's question about PowerCenter Cloud Edition, what specifically are you doing to incentivize both direct sales and partners to sell that product? Because it just seems like such a tremendous opportunity to unlock and modernize the existing on-prem base. Thanks for the question. I couldn't agree more. It's a great opportunity. I'll tell you the two words I used that I took off were focus and execution.

Duane modernization journey. They can have in the factors that give them a higher multiple on that migration Diana Classic software project. So all of those things are basically are bearing fruit right now.

Thanks for that and then maybe just as a follow up I want to pull on that partner thread a lot of new and exciting and expanded partnerships you've talked about but specific to the ESI. I think you said it was 33% of new bookings sourced from as high as I could have that wrong is it unreasonable to think that we could get to 50% maybe even this year than we are.

Amit Walia: I mean, in some ways, the pivot to cloud-only consumption driven that we started last year, as you see, went very well. And this year, there is no change in strategy. We have to just kind of continue to scale, which is focus and execution. And so I think that for those two words, I think people are pretty excited. And what we've done is, first of all, on migration. PowerCenter Cloud Edition is a tremendous accelerant. Everybody's super excited about that one.

It kind of commitments do you have from the largest that side in terms of investing and certifications and capacity building even more around informatica. Thank you.

I think that's about 31% is a very good number it was 31% and I think we I think they are in a good ZIP code I think of a display we have lot larger numbers.

Amit Walia: Of course, as you know, we talked about the numbers in Q4, but you can imagine the pipeline build that's happening is all the momentum of that. We continue to incent our reps more than a normal deal for migration because it takes a little bit of extra work. So that's always an extra incentive for our reps. And thirdly, all the hard work we've done with partners has started paying off now. Pretty much every migration deal goes to partners.

I look at it like that the players that I'd point to is and what makes me really excited is that all the large size pretty much. If you look at where the growth is coming from them data and AI practices for them are pretty much driving growth and when you think of anybody's data and the practice they pretty much have.

Amit Walia: We talked about our migration factory program. All of the large partners have built, by the way, migration factories within their Informatica practices to basically take these migrations and run them through their factories. And remember, for them, migration is one step to a larger end-to-end modernization journey they can have in their practice. It gives them a higher multiple on that migration than a classic software project. So all of those things are basically bearing fruit. Thanks for that, Amit. Maybe just as a follow-up, I want to pull on that partner thread, a lot of new and exciting and expanded partnerships you talked about, but specific to the SIs, I think you said, I think with 33% of new booking sources from SIs, I could have that wrong. Is it unreasonable to think that we could get to 50% maybe even this year?

Largely five or six partners they end up being the three hyperscale.

The <unk> data that I wasn't readily company than us and uniquely we're the only one that works with all of them because in the words that customers are they would be using one or two of those five at the end up using our data management and we work with all of them. So that makes it very unique and our platform being all of the products best products makes it very easy for the GSI is to not have to <unk>.

Those are a lot of hard work will be a part of their reference architecture that momentum is bearing fruit and large transformational projects customers one somebody at scale like us best product platform and the ability to drive customer success and value creation for customers and let me just clarify the data a little bit at that 31% is deals that were brought.

To us by the partner so there were sourced.

If you look at the amount of our bookings that are co sold with or where we're side by side with a partner in selling the deal regardless of who source that that's roughly 770% a little more than 70% as we disclosed in our Investor day in December So the partners.

Brad Alan Zelnick: And what kind of commitments do you have from the largest SIs in terms of investing in certifications and capacity building or even more around Informatica? Thanks. I think, first of all, 31% is a very good number. It was 31%. And I think they're in a good zip code.

Amit Walia: Think of it this way; we have a lot of larger numbers. So I think I should look at it like that. The thing I'd point to is that what makes me very excited is that all the large SIs pretty much, if you look at where the growth is coming from, data and AI practices for them are pretty much driving growth. And when you think of anybody's data and AI practice, they pretty much have... largely, five or six partners. They end up being the three hyperscalers, the two data warehouse and data lake companies, and us. And uniquely, we are the only one that works with all of them because, in the world where customers are, they would be using one or two of those five, but they end up using us for data management, and we work with all of them. So that makes it very unique.

Source, a lot of business for us and more than a majority.

Shoulder to shoulder with delivery.

Delivery and selling it in the field.

Thanks for that Mike and thank you guys great job.

Thank you.

The next question comes from the line of Alex Zuckerman with Wolfe Research. Please proceed.

Hey, guys. Thanks for taking the question.

The large deal activity customers over 1 million really stood out this quarter can you maybe talk about.

Did you see evidence of some sort of a budget flush.

Competitive displacements or are you seeing kind of now a return to a more normalized buying environment.

And then I've got a quick follow up.

Sure Alex Thanks.

I would say that the buying environment I would say we've seen the theme.

Michael I. McLaughlin: And our platform being all the products, the best products, makes it very easy for the GSIs to not have to go through a lot of hard work. So we are part of the reference architecture. That momentum is bearing fruit and large transformational projects. Customers want somebody at scale like us, the best products, a platform, and the ability to drive customer success and value creation. And let me just clarify to Dana a little bit that 31% are deals that were brought to us by the partner, so they were sourced.

For the last couple of months I would not say that the buying environment is probably dramatically changed in a meaningful way early days I would say that what's happening is I'll put them into couple of categories. Alex for you number one is the COPD strategy of having all the data management best products on one platform or consumption based pricing mix.

Very easy for customers to make a separate decision of actually consolidating a lot of the bespoke do we spending we're doing because that creates more risk in fact, we had more spend for them.

Michael I. McLaughlin: If you look at the amount of our bookings that are co-sold with or where we're side-by-side with a partner in selling the deal, regardless of who sourced it, that's roughly 70%, a little more than 70%, as we disclosed to our investor today in December. So the partners source a lot of business for us. And more than the majority of the time, we're shoulder to shoulder with them, delivering and selling it. Thanks for that, Mike. And thank you, guys. Great job.

So that is definitely playing to our favor secondly, you talked about partnerships most of the transformational deals and big deals are you talking about like I said.

Tumors are definitely pivoting towards defense to more often innovated you're still trying to conserve cash.

By automating efficiency, but they are funding when our core growth initiatives and in those transformation initiatives, our partnerships going hand to hand, with the GSI order hyperscale out on us.

Brad Alan Zelnick: Thank you. The next question comes from the line of Alex Zucman with Wolf Research. Please proceed.

This large auto company in UK massive EV project. It was literally one hyperscale one ecosystem player one GSI in us because they needed that scale to give them the confidence that that come into our coming to our benefit and Tokyo, which is a very uniqueness of our platform that we can do a traditional distributor.

Alex Zucman: Hey guys, thanks for taking the question. The large deal activity customers over a million really stood out this quarter. Can you maybe talk about, you know, did you see evidence of some sort of a budget flush, competitive displacements? Are you seeing kind of a return to, you know, a more normalized buying environment? And then I've got a quick question. Sure, Alex.

Installation project by project the same product in the same platform allowed them to do journey II project. So they can find their journey our initiatives on the same platform using <unk> and they can get going and experimenting and starting on that and not having to do different things. So those are all playing to what advantage.

Amit Walia: I think the way I would say that the buying environment, I would say we've seen the same for the last couple of months. I would not say that the buying environment has probably dramatically changed in a meaningful way since the early days. I would say that what's happening is, I'll put them into a couple of categories, Alex, for you.

Amit Walia: Number one is the COCD strategy of having all the data management best products on one platform with consumption-based pricing makes it very easy for customers to make a very simple decision of actually consolidating a lot of the bespoke tools they were doing because that creates more risk. In fact, it creates more spend for them. So that is definitely playing to our favor. Second, we talked about...

Perfect and then maybe tie into that I guess.

Maybe a little bit. Our last question is are you seeing the Gen II initiative funding.

Kind of migrate from the experimentation phase to the production phase yet if not how many quarters.

Do you think that that takes when customers are ready to do that and how durable are sustainable is this.

Amit Walia: Most of the transformation deals, and the big deals we're talking about, like I said, customers are definitely pivoting towards defense to more offense in a way that they're still trying to conserve cost by automating efficiency, but they are funding what I call growth initiatives. And in those transformation initiatives, our partnerships going hand-to-hand with the GSI or a hyperscaler and us, this large auto company in the UK, massive EV project, it was literally one hyperscaler, one ecosystem player, one GSI, and us, because they needed that scale to give them confidence. That is coming to our benefit.

I would say bump that a lot of companies are getting when we're partnering with one of the hyperscale and being able to offer customers multiple ways to retire their core consumption credits with those hyperscale or is on a plethora of services, how durable is that trend as well.

So two different questions Alex I'll go through the second one first I think I don't look at it from a durability point of view of the thing is that that was excess capacity sold by the hyper scalar that customers have to drawdown in arc is they need the stuff that we bring to them. Because these are mission critical workloads. So they were able to allocate those dollars over here.

Alex Zucman: And thirdly, which is a very unique feature of our platform, that we can do a traditional digital transformation project. The same product and the same platform allow them to do Gen-AI. So they can fund their GEN-AI initiatives on the same platform using IPUs, and they can get going and experimenting and starting on that end, not having to do two different things. So those are all playing toward it. Perfect. And then maybe tying that in, I guess, maybe a little bit on Matt's question is, are you seeing the Gen-AI initiative funding kind of migrate from the experimentation phase to the, you know, kind of production phase yet? If not, how many quarters do you think that it takes when customers are ready to do that?

We end up always being in mission critical must have workloads. So the customers over a period of time always end up with us.

Doing things that they want to do and have to do it must do which is why you've seen we've never gone penny upper value down they've been very steady. So I would look at it like that I don't look at it is.

It's something that would go away or we don't see anything like that you should not think of our our growth of ourselves as being driven to any material degree by.

Excess commenced at the Hyperscale or is that the customers have to spend and therefore, they figure, let's just spend it on informatica, even though we don't need it yes, that's not what's driving and <unk>.

Alex Zucman: And how durable or sustainable is this, I would say, bump that a lot of companies are experiencing when partnering with one of the hyperscalers and being able to offer customers multiple ways to retire their core consumption credits with those hyperscalers on a plethora of services? How durable is that trend as well? So, two different questions, Alex, so I'll go through the second one first. I don't think I should look at it from a durability point of view.

First question on Jennie I look I think this is a year, where I would say more in the second half you will see the workload studying to first production go lives to some extent and I can remember when I say production go lives for <unk> customer deal will not be that non material very critical go lives. It's not like you can just run a beta Heinz experiment and if it goes wrong it goes wrong.

That's how I define our production go like I do expect those to happen I think a lot of work is happening right now.

Amit Walia: The thing is that that was excess capacity sold by the hyperscalers that customers had to draw down. In our case, they need the stuff we bring to them because these are mission-critical workloads. So they were able to allocate those dollars over here.

Focused experimenting on a small scale and trying to take into a bigger scale and trying to make sure you can truly run it without eliminations wrong influences you can if you're running it gives you a running again.

Amit Walia: We end up always being in mission-critical, must-have workloads. So the customers, over a period of time, always end up with us doing things that they want to do and have to do and must do, which is why, look, you've seen we've never gone belly up or belly down. We've been very steady, so I would look at it like that. I don't look at it as it's something that'll go away over a period of time.

Customer sat in environment, you can't get that wrong. So I do see some of them going into production in the second half of this year and of course as it goes over their customers start thinking about the governance and other things that become very important, especially for the regulated industries. So we see that.

Not a lot of work going on in that area with our customers I see that plus GBT private preview of the kind of stuff we are doing feel pretty good about it.

Amit Walia: We don't see anything like that. Yeah, you should not think of our growth or our sales as being driven to any material degree by access commits at the hyperscalers that the customers have to spend, and therefore, they figure, let's just spend it on Informatica even though we don't need it. Yeah, that's not what I meant. And then for your first question on Gen-AI, look, I think this is a year where, in the second half, you will see the workloads turning into first production go-lives to some extent. And I can remember when I say production go-live for G2K kind of customers, these are non-material, very critical go-lives. It's not like you can just run a data science experiment and if it goes wrong, it goes wrong. That's how I define a production go-live. I do expect that these things to happen.

Thank you guys congrats.

Thanks, Alex.

Hello.

Thank you.

The next question comes from the line of cash Horizon with Goldman Sachs. Please proceed.

So Taylor made.

It's so difficult to go after as Delek US okay, because they are such good questions, but I'm going to try and get it right.

So first of all congrats.

The quarter on the finish of the year.

It is tough to go after the delicate.

But I'm going to try so when you look at the cloud business, but you are on track to finishing up close to a billion dollars run rate somewhere in calendar 'twenty for early 2005 and.

And you got there in a relatively short period of time, whereas the on Prem quadrant remember the founding of Kalydeco 90, 94, I'm sitting with.

Amit Walia: I think a lot of work is happening right now, first experimenting on a small scale, then trying to take it to a bigger scale, then trying to make sure you can truly run it without hallucinations or wrong inferences. You can't, if you're running it in, you know, a customer service kind of environment, you can't get that wrong. So I do see some of them going into production in the second half of this year. And, of course, as it goes over there, customers start thinking about governance and other things that become very important, especially for regulated industries. So we see a lot of work going on in that area with our customers. I see that in Claire's GPT private preview, the kind of stuff they're doing feels pretty good. Thank you guys, congrats. Williams.

So congratulations on your 30 <unk> anniversary. It took 30 years to get the Ocwen business to a certain scale right now when you look at the cloud.

If the cloud does extend the growth path.

A greater level of durability longer.

All of growth.

First is the Aqua, which took 30 years to get here.

One of the things that will enable the cloud.

Cloud journey to be a longer journey.

If you could offer some proof points, Amit and mic.

Why you are if you are under.

Kasthuri Gopalan Rangan: Thank you. The next question comes from the line of Kasthuri Rangan with Goldman Sachs. Please proceed. It's so difficult to go after Zelnick and Zucchin because they ask such good questions, but I'm going to try. I'm going to try. So first of all, congratulations on the quarter and the finish of the year. Yeah, it is tough to go after Zelnick and Zucchin, yes.

Represented with respect to your cloud wallet share as you began this journey that'd be great and then finally not to be out there.

As you look at the <unk>.

Essentially the risks of this category not the company.

How do you think about framing the risk.

Just by the cloud data warehousing of companies that have their own native ETR towards or in a word that promises maybe to be ETS.

Amit Walia: But I'm going to try. So when you look at the cloud business, I mean, you're on track to finishing up close to a billion dollar run rate somewhere in calendar 24, early 25. And you got there in a relatively short period of time, whereas the on-prem, I fondly remember the founding of Informatica in 1994. I'm sitting with Daya. So congratulations on your 30th anniversary.

No E tail or ATM artisan.

Artisan thematic that's driving that thank you so much once again congratulations.

Thanks, Kash I think I think I'll comment on the first one first I couldn't agree more I said that at the Investor day about this.

The pace of innovation to get us to $1 billion of subscription and now getting towards a blend on a cloud it has happened in.

Amit Walia: It took 30 years to get the on-prem business to a certain scale, right? Now, when you look at the cloud, if the cloud does extend the growth path to a greater level of durability, a longer level of growth versus on-prem, which took 30 years to get here, what are the things that will enable the cloud journey to be a longer journey? And if you could offer some two points, Amit and Mike, on why you are, if you are underrepresented with respect to your cloud wallet share as you begin this journey, that'd be great. And then, not to be outdone, as you look at the existential risks of this category, not of the company, how do you think about framing the risk posed by the cloud data warehousing companies that have their own native E no ETL or ETL-like. How does Informatica thrive on that? Thank you so much once again, and congratulations.

Less than that and part of the timeframe that the company to reach a $1 billion of license revenues are going to be more Nigeria, we're definitely firing on all cylinders in the platform strategy is working in.

And the second question I'll break it into a couple of facts first of all our cash I will.

Respectfully remind everybody that informatics is not any deal only company I think I think this goes back at the end of the question that would be I think we'll have to maybe continue to remain a very small component of what we do.

We have seven product categories data integration and data engineering, Peter quantity App integration and API management data catalog MDM App data governance data marketplace in data integration six.

Amit Walia: Thanks, Kash. I think I'll comment on the first one. First, I couldn't agree more. I said that at investor day that this pace of innovation to get us to a billion dollars in subscription revenue and now getting towards a billion dollars in the cloud has happened in less than less than a third of the timeframe that the company took to reach a billion dollars in license revenue. So I couldn't agree more that we are definitely fighting on all cylinders, and the platform strategy is working. Your second question, I'll break it into a couple of parts.

EPL ELT mass ingestion I can go on and on and on actually <unk> at a very very small component of the world and in fact, when we gave out our fleet services, we actually genuinely believe that deep small companies, who came out with just ingestion only capabilities will basically run out of business. We are not in EPL.

Company anymore.

Amit Walia: First of all, Akash, I will respectfully remind everybody that Informatica is not an ETL-only company. I think this goes back again to the question that I think we'll have to maybe continue to remind ourselves that ETL is a very small component of what we do.

Larger data management.

In which new data warehouse by the way all the data you can have 10 connectors, which creates a simpler etfs, but when you think of the meta data. When you think of quality. When you think of governance. When you think of the broader elastic when you think of <unk> push down performance. When you talk about S&P. When you talk about this complex.

Amit Walia: We have seven product categories: data integration and data engineering, data quality, app integration and API management, data catalog, MDM apps, data governance, data marketplace. In data integration, there are ETL, ELT, mass ingestion. I can go on and on and on.

As a whole different world. We just don't see that that part is where informatica values and grows I would eto is in <unk>.

Amit Walia: Actually, ETL is a very, very small component of the world. And in fact, when we gave out the free services, we actually genuinely believed that the small companies who came out with just ingestion only capabilities would basically run out of business. We are not an ETL company anymore. We do larger data management, in which no data warehouse, by the way, all those data, you can have 10 connectors, which creates a simple ETL. But when you think of metadata, when you think of quality, when you think of governance, when you think of the broader elastic, when you think of ELT at scale, pushing down performance, when you talk about SAP, when you talk about those complex systems, it's a whole different world. We just don't see that. That part is where Informatica thrives and grows. ETL is immaterial to Informatica's growth today and has zero bearing on how we will grow tomorrow.

Growth today and have zero bearing on how we will grow tomorrow, we have moved.

Beyond that in a significant way so I think I'll just kind of almost.

And call that for the larger group of new that's not what I worry about bed informatica isn't items Martina is going.

I'll circle back to the first part of your question, where you talked about wallet share and so forth.

The data management market is still very fragmented and if you remember back to Investor Day, we showed the IDC Tam.

Growing at 27% through 2027.

Getting to north of $60 billion and our cloud right now on a revenue basis is only $500 million as we disclosed for the first time in our release today.

So we don't have a big share of that Tam, although we are the leading provider.

Amit Walia: We have moved beyond that in a significant way. So I think I'll just kind of almost echo that for the larger group and you. That's not what I worry about. And I'll circle back to the first part of your question where you were talking a little bit about WalletShare and so forth.

We think that because we have the best data management products delivered on the industry's only platform.

<unk> multi vendor multi cloud and hybrid workloads.

Least we'll maintain our market share and we think we're going to grow it in the buildup to the 35% growth.

Michael I. McLaughlin: The data management market is still very fragile. And if you remember back to yesterday, we showed the IDC TAM growing at 27% through 2027 and getting to north of $60 billion. And our cloud right now on a revenue basis is only $500 million, as we disclosed for the first time in our release today. So we don't have a big share of that, Tim, although we are the leading provider. But we think that because we have the best data management products delivered on the industry's only platform that serves multi-vendor, multi-cloud, and hybrid workloads, we at least will maintain our market share. And we think we're going to grow it and build up to the 35% growth that we think we're going to deliver in 2024. Between, Net new customers and expansion of existing workloads and migrations is just not heroic based on what the Terrific, guys. Thank you so much.

I think we're going to deliver in 'twenty four between.

Net new expansion net new customers and expansion of existing workloads and migrations as just.

It is just.

Not.

It's just not heroic based on what the Tam is growing by our share of that Tam.

Terrific. Thank you so much.

Thank you.

The next question comes from the line.

Patrick Colville with Scotiabank. Please proceed.

Alright. Thank you so much for taking my question.

I want to go back to generative AI I mean, you touched on that in the <unk>.

<unk> remarks, and you touched on it in the Q&A, but can you just give us I guess the 101 is like how does informatica benefit from generic debate.

Hi.

And when do you see this.

SJI benefit hitting the financial model.

Yes, So I think two part question. So I think think about display what is NII. So first of all in the Jennie O of oil and we all know right now the models are being put out there and everybody knows that wanted to train the model to do something of value very simplistic and I think in that world. There is there is no value in the model without good.

Patrick Colville: Thank you. The next question comes from the line of Patrick Colville with Scotiabank; please proceed. All right. Thank you so much for taking my question. I want to go back to generative AI.

Amit Walia: I mean, you touched on it in the prepared remarks, and you touched on it in the Q&A, but can you just give us, I guess, the 101s? Like, how does Informatica benefit from generative AI? And when do you see this Gen AI benefit hitting the financial model? Yeah, so I think, a two-part question. So I think, think about this way: what is GEN-AI? So first of all, in the GEN-AI world, as we all know, right now, the models are being put out there, and everybody wants to train the models to do something of value. It is very simple.

Data in and would influence coming up a little bit like you all live in the world of Excel and excel by itself doesn't deliver any value. When you basically create a good model and put good data in that excel model and this conversation you get data from us.

<unk> put out a big influence.

The biggest opportunity in front of us and we are seeing that is that customers have been in fact data management of data is becoming a business process in itself they need to make sure that we have good data holistic data cleaning data. They all understand the context of that data because lineage. They understand the governance of that data. They can make sure that in that context democratization happens in a very much.

Amit Walia: And I think in that world, there is no value in the model without good data going in and good inference coming out. A little bit like you all live in the world of Excel, and Excel by itself doesn't deliver any value.

Amit Walia: When you basically create a good model and put good data in that Excel model, in this conversation, you get data from us, and it gives you a big insight. The biggest opportunity in front of us, and we are seeing that, is that customers have realized that, in fact, data management or data is becoming a business process in itself. They need to make sure that they have good data, holistic data, clean data, and they understand the context of that data, which is lineage. They understand the governance of that data. They can make sure that, in that context, democratization happens in a very much more controlled way.

Currently all of those things are basically what we do and we see that that is happening as we speak the new stack, everybody and don't want to get that in order.

The experiments on the side become more and more and more operationally.

A lot of other stuff that's happening within the Internet data that's different and you have to use your company data to do all that.

You talked about that and Thats, where we are in fact declared CPD EBITDA going on with it and the great new customers. The data discovery classified data automating data quality VC.

Classification improved by 60%.

Amit Walia: All of those things are basically what we do, and we see that it is happening as we speak. The new everybody wants to get that in order as the experiments on the side become more and more and more operational. There's a lot of other stuff that's happening using internet data that's different. When you have to use your company data to do all that stuff we talked about, and that's where we are. In fact, in the CLAIRE GPT preview that's going on, we see some great things.

Data.

Quality, albeit improving by 100 and things of that is what is automation.

<unk> been able to do that's where we come into play and the other one is that it's a complex part of the data that Gordon you think customers don't want to have when do bespoke doing it. Because then you can figure out what's happening with basically consolidating it on our platform, but again give them consumption with five makes it easier.

Amit Walia: Customer data discovery, classifying data, and automating data quality. We see classification improved by 60%. You know, data, It's kind of baked into our model. And I think I can see that basically, in the next few years, digital transformation will become nothing else but JNNI-driven digital transformation. Yeah, exciting times.

What we are seeing a lot of value and I think this year, we are going to see the early stages.

That is kind of baked into our model and I think I do see that basically the next speaker Mr. Transformational become I think is a journey I driven digital transformation.

Yeah.

Very exciting times, and Lee and I guess, the clat AI GPT.

Patrick Colville: And the and I guess the Clare AI GPT, the kind of, you know, your Informatica co-pilot, is that a charged product that Informatica charges for? Or will that be kind of part of the core product offering? Part of the core product offering is IPU consumption. So we want, they are basically driving more IPU consumption; there are no separate SKUs out there. Basically, it is going to be part and parcel of what the individual products are and what customers are going to do with them, and they will basically draw down IPU usage and increase IPU consumption. Terrific.

Hi, Mike.

If America co pilot.

Is that a charged.

The amount of charges for or will that be kind of part of the call.

Product offering.

Part of the core product offering its IPO consumption. So we werent. They are basically driving more ICU consumption north north separate skus out there basically it is going to be part and part and parcel of what individual products are and what customers are going to do with them and they will basically drawdown IBU usage and <unk>.

<unk>.

Terrific exciting times with America. Thank you.

Amit Walia: Exciting times for Informatica. Thank you. Thank you.

Koji Ikeda: We would like to remind our participants to limit themselves to one question. Our next question comes from the line of Koji Ikeda with Bank of America. Please go ahead.

Thanks, Matt.

Thank you.

We would like to remind our participants to limit yourself to one question. Our next question comes from the line of Coty.

Data with Bank of America. Please go ahead.

Amit Walia: Hey, guys, thanks for taking the question. When I think about Informatica and take it back to the IPO, and the results and the execution, you know, since then, the IPO, it really seems like it's just been business as usual, you know, good execution as usual, but maybe not platform as usual. And what I mean by that is the platform, the offering, IBM C, has definitely gotten bigger and better since the IPO.

Hey, guys. Thanks for taking the question.

When I think about Informatica and taken it back to the IPO.

And the results and the execution since then the IPO it really seems like it has been.

As usual good execution as usual.

But maybe not platform as usual and what I mean by that is the platform. The offering <unk> has definitely gotten bigger and better since the IPO a lot of new announcements over the past year Clare GPT ICU pricing model I mean, a lot has been announced so I guess the question here is.

Amit Walia: A lot of new announcements over the past year, you know, Clare GPT, IP pricing model, I mean, a lot has been announced. So yeah, I guess the question is here is, what are you most excited for within all the announcements over the past years as growth drivers over the medium? Damn, Koji, what a tough question. You're asking me to pick my, my, my favorite kid in all? I'll attempt.

What are you most excited for within all the announcements over the past years is as growth drivers over the medium term.

Dan what are tough question, you're asking do you want me to pick them.

My most favorite cadent all this stuff.

I'll, let him look.

Amit Walia: Well, look, I'll go back and put it in. It's not one, because it's always the power of things that come together. One is the innovation strategy. We not only bet on the platform because we knew that, as Mike said, it's a very fragmented market. There are hundreds of bespoke tools running around, and we knew that, by the way, not all of them were best of breed, also, as much as they said that.

Go back and put it in three things.

One because it's always a power of things that come together one is the innovation strategy lead not only back on the platform because we knew that as Mike said, it's a very fragmented market.

There are hundreds of bespoke was running around and we knew that by the way not all of them are best of breed also as much as the setback we had best of breed products on one platform. So the consolidation.

Amit Walia: We had the best of breed products on one platform. So the consolidation and de-risking of customer strategy to basically go with one vendor with the best products on the only platform has worked, and that allows customers to manage their hybrid multi-vendor landscape, which is true for every enterprise. Second, IP pricing is killer. This is the whole selling cycle of talking about so many different pricing models that exist and makes the conversation strategic and value-driven. You go and drive value, Mr.

King of customer strategy.

Basically go with one vendor.

With the best product in the new platform, as well and that allowing customers to manage their hybrid multi vendor landscape. It just to for every enterprise.

Secondly, the ICU pricing is killer.

Use of the words selling cycle are talking about so many different pricing models that exist.

The conversation strategic and value driven Hugo drive value Mister customer. If that's what you can go lower you can go high in fact more often than not customer wants to then say Oh jeez I know I'm going to do this mission critical workload I wanted to do this more with your Europe. So we have a very strategic part one is.

Amit Walia: Customer, guess what? You can go low; you can go high. In fact, more often than not, the customer wants to then say, oh, geez, I know I'm going to do this mission-critical workload. I want to do this more with you. Beautiful.

Amit Walia: So we have a very strategic solution. The third one is the whole strategic partner ecosystem that we have built with the hyperscalers, the Snowflakes, the Databricks, and the GSI. It's very important because large G2K transformation projects basically do not happen with one tool doing a small corner project. That happens with scale vendors going in and helping customers drive. The trifecta of this is what it is. Thank you so much.

The whole strategic partner ecosystem that we have built with the hyperscale the snowflakes in the database and the GSI, it's very important because large GTK transformational projects basically do not happen by one pool doing a small corner project that happens with key vendors going in and helping customers drive value the Pac Bell.

This is what is bearing fruit.

Okay.

Thank you so much.

Thank you.

Howard Ma: Thank you. Our next question comes from the line of Howard Ma with Guggenheim. Please go ahead.

Our next question comes from the line of Howard MA with Guggenheim. Please go ahead.

Amit Walia: Great, thank you. I also want to add my congratulations on a strong finish to the year that had no lack of challenges. So, Ahmed, I wanted to ask you about the expanded cloud technology partnerships that you had called out. You know, I'm talking specifically about Microsoft Fabric and the SuperPipe with Snowflake, Databricks' Unity Catalog, and the integration of MDM with MongoDB.

Great. Thank you I also want to add my congratulations on a strong finish to the year that had no lack of challenges.

Amit I wanted to ask you about expanded cloud technology partnerships that you had called out.

Some targeted specifically at Microsoft fabric and the Super pipe with Snowflake data breakthroughs unity catalog.

The integration of <unk> with Mongo DB can you give us a sense of.

Amit Walia: Can you give us a sense of the organizational alignment that it takes to establish these partnerships? And how much of a barrier to entry do you think it is to competitors? So, that's one part.

The organizational alignment that it takes to establish these partnerships and and how much of a barrier to entry or do you think it is to competitors and so that's one part and then the second part of.

Amit Walia: And then the second part is, if we were to think about the data and the amount of revenue that Informatica generates from these partnerships across hyperscale or Snowflake, Databricks, MongoDB, versus other data sources and destinations, is that former group going to approach 100% at some point in the near term? Thank you. Sure, Robert.

If we didn't think about the data and the amount of revenue that informatica generates from from these partnerships, So cross hyperscale or snowflake data Briggs <unk> <unk>.

First as other data sources and destinations is that former group is that going to approach, 100% at some point in the near term.

Thank you.

Sure Robert So I think our first question look Rome wasn't built in a deep these partnerships for us have not they didn't start yesterday in fact, we many many years ago. We started working with Azure. We started working by the way we built the partnered launch partners with direct ship and retrofitting update of U S and the GCB when liquidity came out and with Snowflake very very early.

Amit Walia: So I think our first question, look, Rome wasn't built in a day. These partnerships, for us, have not, they didn't start yesterday. In fact, many, many years ago, we started working with Azure. We started working, by the way, we were the launch partners with Redshift when Redshift came out on AWS, and with GCP, when BigQuery came out, and with Snowflake, in the very, very early days of

Thats no Blake, so and data so we've been working with them from very early days and I think while it is becoming a lot more visible now every time something new conducted via design partners, we want the design partner with AWS.

Amit Walia: So we've been working with them from the very early days, and I think while it is becoming a lot more visible now, every time something new comes out, we are design partners. We won the design of the year award with AWS. We have been working with them for so many years. We are the design partner for Microsoft Fabric.

We've been working with them for so many years with a design partner for Microsoft fabric. So you can see.

Amit Walia: So you can see, we are there at the table with them when they're conceiving new technologies because our joint customers want that. So these partnerships have come from a long time, and they have built technology trust, go-to-market trust. So it comes from that place, and hence they multiply, and today we are seeing the snowball effect.

We are via data at the table with them to get conceiving, the new technologies, because our joint customers wind back. So these partnerships have come from a long time and have built technology Trust Global market Trust customer Trust. So it comes from that place, hence they multiply and today, we are seeing the snowball effect of that one and so.

Amit Walia: So that's what we're doing. Secondly, I think you should look at the 100% comment we shared at our investor day. And the way to think about that is, clearly, the new workloads are... But when you think of an enterprise, the reason why I hesitate on the 100% thing is that if you look at a data warehousing project in an enterprise, right? Data is still coming from old sources and new sources, right? So in that context, IDMC is pulling data from the old mainframe, but also from the new Microsoft or the new MongoDB database, or the new Snowflake, so on and so forth. So it's gonna be both.

The way to think about it.

Secondly, I think look the 100% comedy shared at our Investor day.

The way to think about that is clearly the new workloads are going.

But when you think of an enterprise the reason by the data on 100% thing. If you look at the DW housing project in an enterprise data is still coming from all sources and new sources right. So in that context, <unk> pulling data from the old mainframe, but also from the new Microsoft are the new Mongo DB database or the new snowflakes, one and so forth. So it is going to be.

Both of course, the latter will continue to grow bigger in size as more and more data gets houses there as an example, but then but.

Amit Walia: Of course, the latter will continue to grow bigger in size as more and more data gets housed there, as an example. But the old ones will not become zero because data is still sitting over there. As that stuff gets retired, naturally, it won't matter to us.

The old ones will not become geological data still sitting over there as that stuff gets retired naturally it won't matter to us our job is to bring mix. So that we can connect and manage the entirety of the landscape of the enterprise, hence I hesitate to talk about the zero sum game, but of course, all our growth in all of our investment as you can see it's pivoted towards the future and Thats what we.

Amit Walia: Our job is to make sure that we can connect and manage the entire data landscape. Thank you. Our next question comes from the line of Fred Kavemeyer with Macquarie. Please go ahead.

Investor.

Okay. Thank you.

Sure.

Thank you.

Our next question comes from the line of Fred <unk>.

Meyer with Macquarie. Please go ahead.

Tyler Maverick Radke: Thank you very much and congratulations to the team for a really strong quarter here. I wanted to ask about the transactions that you're seeing flowing through the cloud. I mean, 62% year-over-year growth in transactions is really impressive. And as you're ramping up, of course, or rather, continuing to grow your cloud business, how should we think about this overall cloud metric? Is this something illustrative here, just in general, showing that you have a tremendous increase in usage? Or is this something that we should be considering as like a proxy related to IPUs?

Thank you very much and congratulations to the team for a really strong quarter here.

Wanted to ask about the transactions that youre seeing flowing through cloud I mean, 62% year over year growth in transactions is really impressive and as you're ramping of course.

Continuing to grow cloud how should we think about this overall the cloud metric is it something illustrative here just in general showing that you have a tremendous increase in usage or is it something that we should be considering as like that perhaps.

Proxy related to IP years. Thank you.

Amit Walia: Thank you. So think about it as usage. I would not correlate it to AR and all.

So think about it is the usage so I would not correlated I don't know.

Amit Walia: The best indicator of that is that it means there is more activity, more usage of our products on our IPU cloud through IPUs on our platform. So obviously, customers are doing more and more and more work. And I look at it. That's what it is. That's why we track that very, very closely. We see exactly what action is happening.

The best indicative of that is that it is it means that as more active would be more usage of our products are not IBU cloud two ideas on our platform. So obviously customers are doing more and more and more work and I look at it that's what it is.

We track that very very closely.

Exactly what action is happening so that that it's a directional sensitive heavy activity, which means that we don't have products sitting on shelf people go use it.

Amit Walia: So it's a directional sense to say heavy activity, which means that we don't have products sitting on shelves. People go and use them. And that covers a broad swath of usage. It could be governance usage. It could be master data management usage. It could be ELT usage.

And that covers a broad swath of usage it could be governance usage it could be.

Master data management usage, it could be <unk>, it could be pure data quality using all of those kind of things are baked into this transaction.

Amit Walia: It could be pure data quality usage. All of those kinds of things are baked into this trend. www.informatica.com. Thank you. Our next question comes from the line of Tyler Radke with Citi. Please go ahead.

A metric that we share.

Okay.

Thank you.

Our next question comes from the line of Tyler.

<unk> with Citi. Please go ahead.

Tyler Maverick Radke: Yeah, thanks for taking the question. You talked about how you're seeing kind of a greater appetite from customers to do transformations. And, you know, earlier this week, we heard from Teradata some pressure on some large customer losses. And it does seem like as IT budgets are picking up, you know, the move to the cloud is accelerating. I'm wondering, I guess, first, if I look at your non-cloud business, the on-prem subscription ARR and maintenance, those were a bit stronger than expected. So, could you just unpack again? What was driving that?

Yeah.

Yes, thanks for taking the question.

You talked about how you're seeing kind of a greater appetite from customers to do transformations.

And earlier this week, we heard from carrier data some some pressure on some some large customer losses.

It does seem like is it budgets are picking up the <unk>.

Move to the cloud is accelerating.

Wondering I guess first.

Look at your non cloud business.

To on Prem subscription and.

And maintenance those were.

Bit stronger than expected so.

Could you just unpack again, what was driving that and then secondly, if we are seeing this broader shift to the cloud how do you kind of think about the timing of when that happens to your on Prem base as it is it tied to these these large core system migrations or is it completely independent events. Thank you.

Michael I. McLaughlin: And then secondly, if we are seeing this broader shift to the cloud, how do you kind of think about the timing of when that happens to your on-premises base? Is it tied to these large core system migrations, or is it, you know, a completely independent event? Thank you. Hey Tyler.

Hey, Tyler so youre right. The self managed subscription portion of our three buckets of revenue did outperform our extra to expectations for 2023 maintenance was pretty close to in line and cloud outperformed also as you could see base.

Michael I. McLaughlin: So you're right. The self-managed subscription portion of our three buckets of ARR and revenue did outperform our expectations for 2023. Maintenance was pretty close to in line, and cloud outperformed also, as you can see, based on the results versus the guide. But the self-managed did end up higher than we thought. And it turns out that there are a meaningful number of customers out there that are federal government, that are agencies that have difficulty moving to the cloud in the short term. We have tertiary geographies that are not cloud ready.

Based on the results versus the guide, but the self managed did end.

End up higher than we thought and it turns out that there are.

A meaningful number of customers out there that are there.

Our government that are <unk>.

Agencies that have difficulty moving to the cloud in the short term we have tertiary geographies that are not cloud ready.

Michael I. McLaughlin: And those customers still need our products and still get a tremendous amount of value out of our products. So much of the outperformance was some of those customers adding on to their existing implementations because they need more, not because they don't want to go to the cloud eventually, but they just can't. Now it's a small number, so forecasting has a pretty high standard deviation around it. And it just ended up that it landed higher than we thought.

And those customers.

We'll need our product and still get a tremendous amount of Io product.

So much of the outperformance was some of those customers, adding on to their existing implementation because they need more.

Not because they don't want to go to the cloud eventually, but they just now.

Now, it's a small number so forecasting it has a pretty high standard deviation around it.

And just ended up that landed higher than we thought.

Tyler Maverick Radke: We still do not emphasize it. We don't actively sell it because it is an end-of-sale product, and, you know, frankly, we're happy with it because it means we have a lot of happy customers that wanna stay with us as a company and as a brand, and those will eventually become cloud customers for us in the future. Now, with respect to, you know, the pace of that migration, I think that was a second-party question. You know, it is accelerating, and you can see it in the year-over-year comparison of 22 to 23, and you can see it in the quarterly progression of Q3 and Q4 after we introduced PowerCenter Cloud Edition. So we do expect an accelerated pace in 2024. The majority of our cloud growth will continue to be, you know, the strong majority of our cloud growth will continue to be new customers and expansions of existing cloud workloads, not migrations, but migrations are accelerating too, and we'll have a somewhat greater contribution to our total growth in 2024. Thank you. Our last question comes from the line of Stefan Schwartz with Wells Fargo; please go ahead. Hey, I'm on for Andrew Nowinski.

We still do.

Did not emphasize that we don't actively sell it is.

Because of the sale.

And frankly, we're happy with it because it means we have a lot of happy customers that want to stay with us as a company and as a brand and those will eventually become cloud customers for us.

The future now with respect to the pace of that migration.

The second part of your question.

It is accelerating and you can see it in the year over year compare of 22 to 23 and you can see it on the quarterly progression Q3 and Q4. After we introduced Cloud addition.

So we do expect an accelerated pace in 2024.

The majority of our cloud growth will continue to be the that the strong majority of our cargo through the new.

New customers and expansions of existing cloud workload, not migration, but migrations are accelerating too and we will have a somewhat greater contribution of arc home growth in 2024.

Okay. Thank you.

Our last question comes from the line of Stefan Schwartz with Wells Fargo. Please go ahead.

Hey, I'm on for Andy Nowinski, Thanks for fitting me in.

Stefan Schwartz: Thanks for fitting me in. Wanted to ask, relative to your commentary on cloud workloads, this past quarter, the hyperscalers talked about cost optimization coming to an end. Are you seeing similar trends in your cloud ARR pipeline for this upcoming year? Maybe a similar kind of inflection?

Wanted to ask relative to your commentary on.

Cloud workloads.

Past quarter to Hyperscale or has talked about cost optimization coming to an end.

Are you seeing similar trends in your cloud pipeline for this upcoming year, maybe it's similar kind of inflection.

Amit Walia: I wish we had optimizations in our business where we went belly up, so we wouldn't have to be worried about going belly down. Look. I mean, look. We've always been focused on the mission. We didn't see the results you see during those times when our performance has been very steady. We didn't see any significant, getting ahead in sf capacity, to be very honest. When we sell IPOs, we are maniacal about selling them against mission critical workloads, and our customer success team makes sure that customers get into business value creation ASAP. So I think that we haven't run into those, to be very honest. And Gordolf Prostockel.

Okay.

I wish we had optimizations in our business. So we went belly up so we have to be worried about bringing value down look.

<unk>, sorry, I Didnt look we've always been focused on mission critical workloads.

We didn't see as you see during those times, where our performance has been very steady we didn't see significant.

We're getting ahead in terms of selling excess capacity to be very honest.

<unk>, we are maniacal about selling it against mission critical workloads on our customer success team make sure that customers get into business value creation Seb.

So I think that the.

We haven't we haven't seen.

We didn't run into those to be really honest, if I could use that word of cost optimizations for US yes, we do see for on the other hand, what is happening towards the end that I see.

Amit Walia: Yes, we do see, on the other hand, what is happening towards there and that. We've been very steady in terms of selling to mission-critical workloads across our platform, and hence we've been in some mode. Solid growth, but steady. And part of that is the fact that, unlike some of those companies that suffered from optimization in 2023 and 2022, we have multi-year committed contracts with our customers. So they pay us a year in advance, they're multi-year commitments, they're not month-to-month, and your bill changes based upon how much you use. So, to that extent. Simply structurally, we're not as subject to the swings of optimization versus the, Very helpful.

We've been very steady in terms of selling to mission critical workloads across our platform and hence we've been in somewhat.

<unk> growth, but steady growth and part of that is the fact that unlike some of those companies that.

Suffered from optimization in 'twenty.

23, and 2022, we have multi year committed contracts with our customers. So they pay us a year in advance they're multi year commitments, they're not month to month.

Your bill changes based upon how much you use.

To that extent.

Simply structurally we're not as subject to the swings of optimization versus expansion.

Very helpful. Thank you.

Amit Walia: Thank you. Thank you. There are no additional questions waiting at this time.

Thank you.

There are no additional questions waiting at this time I would like to pass the conference back to the management team for any closing remarks.

Amit Walia: I would like to pass the conference back to the management team for any closing remarks. Thanks, operator. Well, look, I know we are a little bit over time.

Well. Thanks, operator will look I know, we had a little bit over time and thank you for staying back but look I think as you can see we're pretty excited about where we are with our cloud only consumption of its strategy yielded one of that was obviously executed very well that youre doing with the stage basically like I said, it's all about continuing to maintain our focus and execution. We are a great place in the market ongoing digital transformation.

Amit Walia: Thank you for staying back. Well, look, I think, as you can see, we're pretty excited about where we are with our cloud-only consumption strategy. Year one of that was obviously executed very well. We're into year two. And at this stage, basically, like I said, it's all about continuing to maintain our focus and execution. We have a great place in the market. Ongoing digital transformation, migrations, and, of course, now Gen AI continue with the three vectors driving our growth. We look forward to continuing our execution this year. And for a lot of you, hopefully, you'll see what Informatica will do in May this year.

Formation migrations and of course now journey.

Continuing with the three vectors driving our growth we look forward to continuing.

Our execution this year and for a lot of you hopefully we'll see you at the dramatic all work in May this year. Thank you.

Operator: Thank you. That concludes today's conference call. I hope you all enjoy the rest of your day. You may now disconnect your line.

That concludes today's conference call I Hope you all enjoy the rest of your day you may now disconnect your lines.

Q4 2023 Informatica Inc Earnings Call

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