10-Q 1 infa-20240331.htm 10-Q infa-20240331
0001868778December 312024Q1false0.5P2Y00018687782024-01-012024-03-310001868778us-gaap:CommonClassAMember2024-04-24xbrli:shares0001868778infa:CommonStockClassB1Member2024-04-2400018687782024-03-31iso4217:USD00018687782023-12-310001868778us-gaap:CustomerRelationshipsMember2024-03-310001868778us-gaap:CustomerRelationshipsMember2023-12-310001868778infa:TrademarksAndTradeNamesAndDevelopedTechnologyRightsMember2024-03-310001868778infa:TrademarksAndTradeNamesAndDevelopedTechnologyRightsMember2023-12-310001868778us-gaap:CommonClassAMember2023-12-31iso4217:USDxbrli:shares0001868778us-gaap:CommonClassAMember2024-03-310001868778infa:CommonStockClassB1Member2024-03-310001868778infa:CommonStockClassB1Member2023-12-310001868778infa:CommonStockClassB2Member2023-12-310001868778infa:CommonStockClassB2Member2024-03-310001868778infa:SubscriptionRevenuesMember2024-01-012024-03-310001868778infa:SubscriptionRevenuesMember2023-01-012023-03-310001868778infa:PerpetualLicenseMember2024-01-012024-03-310001868778infa:PerpetualLicenseMember2023-01-012023-03-310001868778us-gaap:LicenseAndServiceMember2024-01-012024-03-310001868778us-gaap:LicenseAndServiceMember2023-01-012023-03-310001868778infa:MaintenanceAndProfessionalServicesMember2024-01-012024-03-310001868778infa:MaintenanceAndProfessionalServicesMember2023-01-012023-03-3100018687782023-01-012023-03-310001868778us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-12-310001868778us-gaap:CommonStockMemberinfa:CommonStockClassB1Member2023-12-310001868778infa:CommonStockClassB2Memberus-gaap:CommonStockMember2023-12-310001868778us-gaap:AdditionalPaidInCapitalMember2023-12-310001868778us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001868778us-gaap:RetainedEarningsMember2023-12-310001868778us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001868778us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-01-012024-03-310001868778us-gaap:RetainedEarningsMember2024-01-012024-03-310001868778us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001868778us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-03-310001868778us-gaap:CommonStockMemberinfa:CommonStockClassB1Member2024-03-310001868778infa:CommonStockClassB2Memberus-gaap:CommonStockMember2024-03-310001868778us-gaap:AdditionalPaidInCapitalMember2024-03-310001868778us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001868778us-gaap:RetainedEarningsMember2024-03-310001868778us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-12-310001868778us-gaap:CommonStockMemberinfa:CommonStockClassB1Member2022-12-310001868778infa:CommonStockClassB2Memberus-gaap:CommonStockMember2022-12-310001868778us-gaap:AdditionalPaidInCapitalMember2022-12-310001868778us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001868778us-gaap:RetainedEarningsMember2022-12-3100018687782022-12-310001868778us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001868778us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-01-012023-03-310001868778us-gaap:RetainedEarningsMember2023-01-012023-03-310001868778us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001868778us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-03-310001868778us-gaap:CommonStockMemberinfa:CommonStockClassB1Member2023-03-310001868778infa:CommonStockClassB2Memberus-gaap:CommonStockMember2023-03-310001868778us-gaap:AdditionalPaidInCapitalMember2023-03-310001868778us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001868778us-gaap:RetainedEarningsMember2023-03-3100018687782023-03-31infa:segment0001868778us-gaap:BankTimeDepositsMember2024-03-310001868778us-gaap:BankTimeDepositsMember2023-12-310001868778us-gaap:CommercialPaperMember2024-03-310001868778us-gaap:CommercialPaperMember2023-12-310001868778us-gaap:CorporateDebtSecuritiesMember2024-03-310001868778us-gaap:CorporateDebtSecuritiesMember2023-12-310001868778us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2024-03-310001868778us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2023-12-310001868778us-gaap:USGovernmentDebtSecuritiesMember2024-03-310001868778us-gaap:CorporateDebtSecuritiesMember2024-03-310001868778us-gaap:CommercialPaperMember2024-03-310001868778us-gaap:USGovernmentDebtSecuritiesMember2023-12-310001868778us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001868778us-gaap:CorporateDebtSecuritiesMember2023-12-310001868778us-gaap:CommercialPaperMember2023-12-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2024-03-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:BankTimeDepositsMember2024-03-310001868778us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2024-03-310001868778us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2024-03-310001868778us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-03-310001868778us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-03-310001868778us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-03-310001868778us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:FairValueInputsLevel3Memberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentDebtSecuritiesMember2024-03-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentDebtSecuritiesMember2024-03-310001868778us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentDebtSecuritiesMember2024-03-310001868778us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentDebtSecuritiesMember2024-03-310001868778us-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-03-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2024-03-310001868778us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeContractMember2024-03-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignExchangeContractMember2024-03-310001868778us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeContractMember2024-03-310001868778us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeContractMember2024-03-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-12-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:BankTimeDepositsMember2023-12-310001868778us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-12-310001868778us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-12-310001868778us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-12-310001868778us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-12-310001868778us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-12-310001868778us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:FairValueInputsLevel3Memberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001868778us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001868778us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001868778us-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-12-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-12-310001868778us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeContractMember2023-12-310001868778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignExchangeContractMember2023-12-310001868778us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeContractMember2023-12-310001868778us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeContractMember2023-12-310001868778us-gaap:DevelopedTechnologyRightsMember2024-03-310001868778us-gaap:DevelopedTechnologyRightsMember2023-12-310001868778us-gaap:TrademarksAndTradeNamesMember2024-03-310001868778us-gaap:TrademarksAndTradeNamesMember2023-12-310001868778infa:CustomerRelationshipsAndTradeNamesAndTrademarksMember2024-03-310001868778infa:CustomerRelationshipsAndTradeNamesAndTrademarksMember2023-12-310001868778us-gaap:CostOfSalesMember2024-01-012024-03-310001868778us-gaap:CostOfSalesMember2023-01-012023-03-310001868778us-gaap:OperatingExpenseMember2024-01-012024-03-310001868778us-gaap:OperatingExpenseMember2023-01-012023-03-310001868778us-gaap:CustomerRelatedIntangibleAssetsMember2024-03-310001868778us-gaap:OtherIntangibleAssetsMember2024-03-310001868778us-gaap:MediumTermNotesMemberinfa:DollarTermLoanMember2024-03-310001868778us-gaap:MediumTermNotesMemberinfa:DollarTermLoanMember2023-12-310001868778us-gaap:MediumTermNotesMember2024-03-310001868778us-gaap:MediumTermNotesMember2023-12-310001868778us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2024-03-31xbrli:pure0001868778us-gaap:RevolvingCreditFacilityMemberinfa:SecuredOvernightFinancingRateSOFRMembersrt:MinimumMember2023-07-012023-07-010001868778us-gaap:RevolvingCreditFacilityMemberinfa:SecuredOvernightFinancingRateSOFRMembersrt:MaximumMember2023-07-012023-07-010001868778infa:SecuredOvernightFinancingRateSOFRMemberus-gaap:MediumTermNotesMemberinfa:DollarTermLoanMember2023-07-012023-07-010001868778us-gaap:BaseRateMemberus-gaap:MediumTermNotesMember2023-07-012023-07-010001868778us-gaap:MediumTermNotesMemberinfa:SecuredOvernightFinancingRateSOFRMember2023-07-012023-07-010001868778us-gaap:BaseRateMemberus-gaap:MediumTermNotesMembersrt:MinimumMember2023-07-012023-07-010001868778infa:SecuredOvernightFinancingRateSOFRMemberus-gaap:MediumTermNotesMembersrt:MinimumMember2023-07-012023-07-010001868778us-gaap:MediumTermNotesMember2023-07-010001868778us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberinfa:SecuredOvernightFinancingRateSOFRMembersrt:MaximumMember2023-07-012023-07-010001868778us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberinfa:SecuredOvernightFinancingRateSOFRMembersrt:MinimumMember2023-07-012023-07-010001868778us-gaap:LineOfCreditMemberus-gaap:BaseRateMemberus-gaap:RevolvingCreditFacilityMembersrt:MaximumMember2023-07-012023-07-010001868778us-gaap:LineOfCreditMemberus-gaap:BaseRateMemberus-gaap:RevolvingCreditFacilityMembersrt:MinimumMember2023-07-012023-07-010001868778us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2023-12-310001868778us-gaap:LineOfCreditMemberus-gaap:LetterOfCreditMember2024-03-310001868778us-gaap:LineOfCreditMemberus-gaap:LetterOfCreditMember2023-12-310001868778us-gaap:LineOfCreditMemberus-gaap:BridgeLoanMember2024-03-310001868778us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMembersrt:MaximumMember2024-01-012024-03-310001868778us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMembersrt:MinimumMember2024-01-012024-03-310001868778us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2024-01-012024-03-310001868778us-gaap:FederalFundsEffectiveSwapRateMember2023-07-012023-07-010001868778infa:CloudSubscriptionMember2024-01-012024-03-310001868778infa:CloudSubscriptionMember2023-01-012023-03-310001868778infa:SelfManagedSubscriptionLicenseMember2024-01-012024-03-310001868778infa:SelfManagedSubscriptionLicenseMember2023-01-012023-03-310001868778infa:SelfManagedSubscriptionSupportAndOtherMember2024-01-012024-03-310001868778infa:SelfManagedSubscriptionSupportAndOtherMember2023-01-012023-03-310001868778us-gaap:MaintenanceMember2024-01-012024-03-310001868778us-gaap:MaintenanceMember2023-01-012023-03-310001868778infa:ProfessionalServicesMember2024-01-012024-03-310001868778infa:ProfessionalServicesMember2023-01-012023-03-310001868778srt:NorthAmericaMember2024-01-012024-03-310001868778srt:NorthAmericaMember2023-01-012023-03-310001868778us-gaap:EMEAMember2024-01-012024-03-310001868778us-gaap:EMEAMember2023-01-012023-03-310001868778srt:AsiaPacificMember2024-01-012024-03-310001868778srt:AsiaPacificMember2023-01-012023-03-310001868778srt:LatinAmericaMember2024-01-012024-03-310001868778srt:LatinAmericaMember2023-01-012023-03-310001868778country:US2024-01-012024-03-310001868778country:US2023-01-012023-03-3100018687782024-04-012024-03-310001868778us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2024-03-310001868778us-gaap:OtherAssetsMember2024-03-310001868778infa:JanuaryRestructuringPlanMember2023-01-102023-01-10infa:employee0001868778infa:JanuaryRestructuringPlanMember2023-01-012023-12-310001868778infa:NovemberRestructuringPlanMember2023-11-012023-11-010001868778infa:NovemberRestructuringPlanMember2023-01-012023-12-310001868778infa:NovemberRestructuringPlanMember2024-01-012024-03-310001868778us-gaap:ForeignExchangeForwardMember2024-03-310001868778us-gaap:ForeignExchangeForwardMember2023-12-310001868778us-gaap:LongMemberus-gaap:ForeignExchangeContractMember2024-03-310001868778us-gaap:LongMemberus-gaap:ForeignExchangeContractMember2023-12-310001868778us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2024-03-310001868778us-gaap:AccruedLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeForwardMember2024-03-310001868778us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2023-12-310001868778us-gaap:AccruedLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeForwardMember2023-12-310001868778us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2024-03-310001868778us-gaap:AccruedLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2024-03-310001868778us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2023-12-310001868778us-gaap:AccruedLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2023-12-310001868778us-gaap:AccruedLiabilitiesMember2024-03-310001868778us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2023-12-310001868778us-gaap:AccruedLiabilitiesMember2023-12-310001868778us-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001868778us-gaap:DesignatedAsHedgingInstrumentMember2023-01-012023-03-310001868778us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeForwardMember2024-01-012024-03-310001868778us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeForwardMember2023-01-012023-03-310001868778us-gaap:ForeignExchangeForwardMember2024-01-012024-03-310001868778us-gaap:ForeignExchangeForwardMember2023-01-012023-03-310001868778us-gaap:NondesignatedMemberus-gaap:OtherNonoperatingIncomeExpenseMember2024-01-012024-03-310001868778us-gaap:NondesignatedMemberus-gaap:OtherNonoperatingIncomeExpenseMember2023-01-012023-03-31iso4217:CAD0001868778infa:A2015StockPlanMember2024-01-012024-03-310001868778infa:A2021StockPlanMember2024-03-310001868778infa:A2021StockPlanMember2021-10-310001868778infa:ServiceBasedAwardOptionsMember2023-12-310001868778infa:PerformanceBasedShareOptionsMember2023-12-3100018687782023-01-012023-12-310001868778infa:ServiceBasedAwardOptionsMember2024-01-012024-03-310001868778infa:PerformanceBasedShareOptionsMember2024-01-012024-03-310001868778infa:ServiceBasedAwardOptionsMember2024-03-310001868778infa:PerformanceBasedShareOptionsMember2024-03-310001868778us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2024-01-012024-03-310001868778us-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMember2024-01-012024-03-310001868778us-gaap:PerformanceSharesMember2024-01-012024-03-310001868778infa:RestrictedStockUnitsAndPerformanceStockUnitsMember2024-03-310001868778infa:RestrictedStockUnitsAndPerformanceStockUnitsMember2024-01-012024-03-310001868778us-gaap:EmployeeStockMember2024-03-310001868778us-gaap:EmployeeStockMember2021-10-012021-10-310001868778srt:MinimumMemberus-gaap:EmployeeStockMember2024-01-012024-03-310001868778us-gaap:EmployeeStockMembersrt:MaximumMember2024-01-012024-03-310001868778srt:MinimumMemberus-gaap:EmployeeStockMember2023-01-012023-03-310001868778us-gaap:EmployeeStockMembersrt:MaximumMember2023-01-012023-03-310001868778us-gaap:EmployeeStockMember2024-01-012024-03-310001868778us-gaap:EmployeeStockMember2023-01-012023-03-310001868778us-gaap:EmployeeStockMember2023-03-310001868778us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-03-310001868778us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310001868778us-gaap:SellingAndMarketingExpenseMember2024-01-012024-03-310001868778us-gaap:SellingAndMarketingExpenseMember2023-01-012023-03-310001868778us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-03-310001868778us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-03-310001868778us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001868778us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001868778us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001868778us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001868778us-gaap:PerformanceSharesMember2024-01-012024-03-310001868778us-gaap:PerformanceSharesMember2023-01-012023-03-310001868778us-gaap:EmployeeStockMember2024-01-012024-03-310001868778us-gaap:EmployeeStockMember2023-01-012023-03-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM 10-Q
_____________________________
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-40936
_____________________________
Informatica Inc.
_____________________________
(Exact name of registrant as specified in its charter)
Delaware61-1999534
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
2100 Seaport Boulevard
Redwood City, California
94063
(Address of Principal Executive Offices)(Zip Code)
(650) 385-5000
Registrant's telephone number, including area code
_____________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.01 par value per shareINFAThe New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes   x   No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x   No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The registrant had outstanding 255,584,319 shares of Class A common stock and 44,049,523 shares of Class B-1 common stock as of April 24, 2024.


TABLE OF CONTENTS



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Report” or “report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Report include, but are not limited to, statements about:
our ability to attract and retain customers;
the possible harm caused by adverse economic, industry and market conditions in the United States and globally, including due to inflationary pressures, volatility and uncertainty in the financial services industry, shifting foreign exchange rates, geopolitical disruptions, the effect of global health crises, and their impact on our business and operations;
the possible harm caused by a security breach or incident, significant disruption of service, or loss of or unauthorized access to users’ data;
our expectations and management of future growth;
the possible harm caused by customers terminating or failing to renew their subscription or maintenance contracts;
our future financial performance, including trends in revenue, costs of revenue, gross profit or gross margin, and operating expenses;
our ability to transition our customers to subscription- and cloud-based offerings;
the effect of legal and regulatory changes, including those related to data localization and transfer;
our ability to attract and retain key personnel and highly qualified personnel;
the impact of our restructurings and related charges on our business, results of operations and financial condition;
our ability to effectively train and incentivize our sales force;
our ability to respond to technological changes and evolving industry standards;
our ability to maintain, protect, and enhance our intellectual property;
our ability to successfully identify, acquire, and integrate companies and assets;
our ability to upsell and cross-sell within our existing customer base;
our ability to prevent serious errors or defects in our products and services;
the demand for our platform, cloud-based solutions or data management solutions in general;
our ability to compete successfully in competitive markets;
our ability to protect our brand;
our ability to successfully execute our go-to-market strategy;
our ability to manage our international operations;
our ability to build and maintain relationships with strategy partners;
our ability to achieve or maintain profitability;
our expectations regarding cost savings and expenses;
our ability to manage our outstanding indebtedness;
our ability to offer high-quality customer support;
plans regarding our stock repurchase authorization;


the impact of interest rate or foreign currency exchange rates upon our financial performance, operations, and cash flows;
our expectations regarding new product launch dates;
the distribution of Class A common stock by certain of our stockholders; and
the increased requirements associated with being a public company, including reporting, governance and internal controls, and related expenses.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Report.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Report. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Report to reflect events or circumstances after the date of this Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.



Part I - Financial Information
Item 1. Financial Statements
INFORMATICA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value data)
(Unaudited)
March 31,December 31,
20242023
Assets
Current assets:
Cash and cash equivalents
$855,068 $732,443 
Short-term investments
258,219 259,828 
Accounts receivable, net of allowances of $4,669 and $4,414, respectively
274,724 500,068 
Contract assets, net
85,953 79,864 
Prepaid expenses and other current assets
226,072 180,383 
Total current assets
1,700,036 1,752,586 
Property and equipment, net
147,572 149,266 
Operating lease right-of-use-assets
55,136 57,799 
Goodwill
2,349,119 2,361,643 
Customer relationships intangible asset, net
639,078 669,781 
Other intangible assets, net
13,074 17,393 
Deferred tax assets
15,322 15,237 
Other assets
165,577 178,377 
Total assets
$5,084,914 $5,202,082 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$20,084 $18,050 
Accrued liabilities
52,706 61,194 
Accrued compensation and related expenses
77,956 167,427 
Current operating lease liabilities
15,701 16,411 
Current portion of long-term debt
18,750 18,750 
Income taxes payable
2,916 4,305 
Deferred revenue
708,568 767,244 
Total current liabilities
896,681 1,053,381 
Long-term operating lease liabilities
43,255 46,003 
Long-term deferred revenue
13,502 19,482 
Long-term debt, net
1,802,033 1,805,960 
Deferred tax liabilities
21,817 22,425 
Long-term income taxes payable
37,840 37,679 
Other liabilities
6,971 4,554 
Total liabilities
2,822,099 2,989,484 
Commitments and contingencies (Note 14)
Stockholders’ equity:
Class A common stock; $0.01 par value per share; 2,000,000 and 2,000,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; 255,502 and 250,874 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
2,556 2,510 
Class B-1 common stock; $0.01 par value per share; 200,000 and 200,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; 44,050 and 44,050 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
440 440 
Class B-2 common stock; $0.00001 par value per share, 200,000 and 200,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; 44,050 and 44,050 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
  
Additional paid-in-capital
3,601,372 3,540,502 
Accumulated other comprehensive loss
(42,391)(22,370)
Accumulated deficit
(1,299,162)(1,308,484)
Total stockholders’ equity
2,262,815 2,212,598 
Total liabilities and stockholders’ equity
$5,084,914 $5,202,082 
See accompanying notes to condensed consolidated financial statements
1

INFORMATICA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
20242023
Revenues:
Subscriptions$251,977 $213,922 
Perpetual license21 806 
Software revenue251,998 214,728 
Maintenance and professional services136,609 150,703 
Total revenues388,607 365,431 
Cost of revenues:
Subscriptions46,838 35,684 
Perpetual license5 180 
Software costs46,843 35,864 
Maintenance and professional services33,878 43,159 
Amortization of acquired technology1,034 2,874 
Total cost of revenues81,755 81,897 
Gross profit306,852 283,534 
Operating expenses:
Research and development79,654 82,039 
Sales and marketing137,433 128,538 
General and administrative50,446 41,360 
Amortization of intangible assets31,739 34,291 
Restructuring4,355 27,253 
Total operating expenses303,627 313,481 
Income (loss) from operations3,225 (29,947)
Interest income13,407 7,583 
Interest expense(39,097)(35,051)
Other income, net6,335 630 
Loss before income taxes(16,130)(56,785)
Income tax (benefit) expense(25,464)59,569 
Net income (loss)$9,334 $(116,354)
Net income (loss) per share attributable to Class A and Class B-1 common stockholders:
Basic$0.03 $(0.41)
Diluted$0.03 $(0.41)
Weighted-average shares used in computing net income (loss) per share:
Basic296,897 284,886 
Diluted312,499 284,886 
See accompanying notes to condensed consolidated financial statements.








2

INFORMATICA INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
Three Months Ended March 31,
20242023
Net income (loss)
$9,334 $(116,354)
Other comprehensive (loss) income, net of taxes:
Change in foreign currency translation adjustment, net of tax benefit of $206 and $228
(19,980)11,750 
Available-for-sale debt securities:
Change in unrealized (loss) gain, net of tax benefit (expense) of $26 and $(24)
(81)74 
Cash flow hedges:
Change in unrealized gain, net of tax expense of $88 and $308
269 941 
Less: reclassification adjustment for amounts included in net income (loss), net of tax (expense) benefit of $(75) and $286
(229)874 
Cash flow hedges, net change
40 1,815 
Total other comprehensive (loss) income, net of tax effect
(20,021)13,639 
Total comprehensive loss, net of tax effect
$(10,687)$(102,715)
See accompanying notes to condensed consolidated financial statements.
3

INFORMATICA INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)

Three Months Ended March 31, 2024
Class A Common StockClass B-1 Common StockClass B-2 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total Stockholders'
Equity
Shares
Amount
Shares
Amount
Shares
Amount
Balances, December 31, 2023
250,874 $2,510 44,050 $440 44,050 $ $3,540,502 $(22,370)$(1,308,484)$2,212,598 
Stock-based compensation— — — — — — 64,101 — — 64,101 
Issuance of shares under employee stock purchase plan936 9 — — — — 13,788 — — 13,797 
Shares withheld related to net share settlement of equity awards(1,350)(14)— — — — (45,829)— — (45,843)
Issuance of shares under equity plans5,042 51 — — — — 28,810 — — 28,861 
Payments for dividends related to Class B-2 shares— — — — — — — — (12)(12)
Net income— — — — — — — — 9,334 9,334 
Other comprehensive loss— — — — — — — (20,021)— (20,021)
Balances, March 31, 2024
255,502 $2,556 44,050 $440 44,050 $ $3,601,372 $(42,391)$(1,299,162)$2,262,815 

Three Months Ended March 31, 2023
Class A Common Stock
Class B-1 Common Stock
Class B-2 Common Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
Stockholders’ Equity
Shares
Amount
Shares
Amount
Shares
Amount
Balances, December 31, 2022
239,749 $2,398 44,050 $440 44,050 $ $3,282,383 $(47,671)$(1,183,189)$2,054,361 
Stock-based compensation— — — — — — 50,342 — — 50,342 
Issuance of shares under employee stock purchase plan1,112 11 — — — — 16,120 — — 16,131 
Issuance of shares under equity plans1,361 14 — — — — 3,467 — — 3,481 
Payments for dividends related to Class B-2 shares— — — — — — — — (12)(12)
Net loss— — — — — — — — (116,354)(116,354)
Other comprehensive income— — — — — — — 13,639 — 13,639 
Balances, March 31, 2023
242,222 $2,423 44,050 $440 44,050 $ $3,352,312 $(34,032)$(1,299,555)$2,021,588 




See accompanying notes to condensed consolidated financial statements.


4

INFORMATICA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
20242023
Operating activities:
Net income (loss)$9,334 $(116,354)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization2,193 4,198 
Non-cash operating lease costs3,902 5,350 
Stock-based compensation64,101 50,342 
Deferred income taxes(831)11,477 
Amortization of intangible assets and acquired technology32,773 37,165 
Amortization of debt issuance costs887 847 
Amortization of investment discount, net of premium(1,440)(851)
Changes in operating assets and liabilities:
Accounts receivable220,708 197,579 
Prepaid expenses and other assets(233)10,983 
Accounts payable and accrued liabilities(97,023)(118,076)
Income taxes payable(43,507)22,184 
Deferred revenue(59,222)(34,962)
Net cash provided by operating activities131,642 69,882 
Investing activities:
Purchases of property and equipment(390)(1,224)
Purchases of investments(146,997)(30,297)
Maturities of investments149,939 80,500 
Other1,878  
Net cash provided by investing activities4,430 48,979 
Financing activities:
Payment of debt(4,688)(4,688)
Proceeds from issuance of common stock under employee stock purchase plan13,797 16,131 
Payments for dividends related to Class B-2 shares(12)(12)
Payments for taxes related to net share settlement of equity awards(45,843) 
Proceeds from issuance of shares under equity plans28,861 3,481 
Net cash (used in) / provided by financing activities(7,885)14,912 
Effect of foreign exchange rate changes on cash and cash equivalents(5,562)1,255 
Net increase in cash and cash equivalents122,625 135,028 
Cash and cash equivalents at beginning of period732,443 497,879 
Cash and cash equivalents at end of period$855,068 $632,907 
Supplemental disclosures:
Cash paid for interest$37,782 $34,482 
Cash paid for income taxes, net of refunds$18,873 $25,907 
Non-cash investing and financing activities:
Purchases of property and equipment recorded in accounts payable and accrued liabilities$875 $1,273 
See accompanying notes to condensed consolidated financial statements.
5


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Description of Business
Informatica Inc. (the “Company” or “Informatica”) delivers data management products powered by an artificial intelligence ("AI") platform that connects, manages, and unifies data across multi-vendor, multi-cloud, hybrid systems at enterprise scale. The platform enables the Company’s customers to accurately track and understand their data, allowing them to create 360-degree customer experiences, automate data operations across enterprise-wide business processes, and pursue holistic data-driven digital strategies by guiding workload migrations to the cloud. The Company’s platform includes a suite of interoperable data management products that leverage the shared services and metadata of the underlying platform, including products for Data Catalog, Data Integration & Engineering, API & Application Integration, Data Quality and Observability, Master Data Management, Customer and Business 360 Applications, Governance and Privacy, and Data Marketplace. The Company was incorporated as a Delaware corporation on June 4, 2021.
Note 2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements include those of the Company and its subsidiaries, after elimination of all intercompany accounts and transactions. The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”).
In management’s opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include recurring adjustments necessary for the fair statement of the Company’s financial position as of March 31, 2024 and the results of operations for the three months ended March 31, 2024. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual period.
Segment Reporting
The Company manages, monitors and reports its operating results and financial position as a single operating segment. The Company’s chief operating decision-maker (“CODM”) is its Chief Executive Officer who makes operating decisions, assesses financial performance and allocates resources based on consolidated financial information. As such, the Company has determined that it operates in one reportable segment.
Use of Estimates
The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP, which require management to make certain estimates, judgments, and assumptions in determination of performance obligations and standalone selling price used in revenue recognition, the realizability of deferred tax assets, uncertain tax positions, and stock-based compensation. Management believes the estimates, judgments, and assumptions upon which it relies are reasonable based on information available at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. Any material differences between these estimates and actual results will impact the Company’s unaudited condensed consolidated financial statements. The Company assesses these estimates on a regular basis, however actual results could differ from estimates due to risks and uncertainties.
Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in “Note 2. Basis of Presentation and Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 22, 2024. There have been no material changes to these policies during the three months ended March 31, 2024.
6


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Recent Accounting Pronouncements Not Yet Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-09.
Note 3. Cash, Cash Equivalents, and Investments
The following table summarizes the Company’s cash, cash equivalents and investments as of March 31, 2024 and December 31, 2023 (in thousands).
March 31,December 31,
20242023
Cash
$176,516 $185,498 
Cash equivalents:
Time deposits
201,558 72,302 
Money market funds
476,994 474,643 
Total cash equivalents
678,552 546,945 
Total cash and cash equivalents
$855,068 $732,443 
Short-term investments:
Time deposits
150,805 153,550 
Commercial paper74,519 73,767 
Corporate debt securities3,986 3,964 
U.S. government and agency securities28,909 28,547 
Total short-term investments
$258,219 $259,828 
Total cash, cash equivalents and investments
$1,113,287 $992,271 

See Note 5. Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements of this Report for further information regarding the fair value of the Company’s financial instruments.
7


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 4. Available-For-Sale Debt Securities
The following table summarizes the Company’s available-for-sale debt securities as of March 31, 2024 (in thousands).

March 31, 2024
Amortized CostUnrealized GainsUnrealized LossesFair Value
U.S. government securities
$28,914 $ $(5)$28,909 
Corporate debt securities
3,987  (1)3,986 
Commercial paper
74,551 14 (46)74,519 
Total
$107,452 $14 $(52)$107,414 

The following table summarizes the Company’s available-for-sale debt securities as of December 31, 2023 (in thousands).

December 31, 2023
Amortized CostUnrealized GainsUnrealized LossesFair Value
U.S. government securities
$18,596 $5 $ $18,601 
U.S. government agency securities
9,949  (3)9,946 
Corporate debt securities
3,963 1  3,964 
Commercial paper
73,701 76 (10)73,767 
Total
$106,209 $82 $(13)$106,278 


There were no realized gains or losses related to available-for-sale debt securities for the three months ended March 31, 2024. As of March 31, 2024, the fair value of the Company’s available-for-sale debt securities with contractual maturity of one year or less from the condensed consolidated balance sheet date was $107.4 million.
As of March 31, 2024, the gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months were less than $0.1 million, which were related to $77.2 million of available-for-sale debt securities. There were no gross unrealized losses that have been in a continuous unrealized loss position for more than 12 months.
The Company did not recognize any credit losses related to the Company’s debt securities during the three months ended March 31, 2024. Unrealized losses related to available-for-sale debt securities are due to interest rate fluctuations as opposed to credit quality. The Company does not intend to sell these investments. In addition, it is more likely than not that the Company will not be required to sell them before recovery of the amortized cost basis, which may be at maturity.
Note 5. Fair Value Measurements
The Company uses a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on whether the inputs to those valuation techniques are observable or unobservable. The three levels of fair value hierarchy are set forth below. The Company’s assessment of the hierarchy level of the assets or liabilities measured at fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Level 1 Quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in
8


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities. The Company does not have any assets or liabilities classified as Level 3.
Fair Value Measurement of Financial Assets and Liabilities on a Recurring Basis
The following table presents information about the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis as of March 31, 2024 and indicates the fair value hierarchy of the valuation (in thousands):
Total
Quoted Prices in
Active Markets
for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Time deposits
$352,363 $352,363 $ $ 
Money market funds
476,994 476,994   
Commercial paper74,519  74,519  
Corporate debt securities3,986  3,986  
U.S. government securities
28,909  28,909  
Total cash equivalents and investments
936,771 829,357 107,414  
Foreign currency derivatives
434  434  
Total assets$937,205 $829,357 $107,848 $ 
Liabilities:
Foreign currency derivatives
$13 $ $13 $ 
Total liabilities$13 $ $13 $ 
There were no transfers between Level 1, Level 2 and Level 3 categories during the three months ended March 31, 2024.

The following table presents information about the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis as of December 31, 2023 and indicates the fair value hierarchy of the valuation (in thousands):
Total
Quoted Prices in
Active Markets
for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Time deposits
$225,852 $225,852 $ $ 
Money market funds
474,643 474,643   
Commercial paper73,767  73,767  
Corporate debt securities3,964  3,964  
U.S. government and U.S. government agency securities28,547  28,547  
Total cash equivalents and investments
806,773 700,495 106,278  
Foreign currency derivatives
486  486  
Total assets
$807,259 $700,495 $106,764 $ 
Liabilities:
 
 
 
Foreign currency derivatives
$44 $ $44 $ 
Total liabilities
$44 $ $44 $ 

9


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 6. Goodwill and Intangible Assets
Goodwill
The following table presents the changes in the carrying amount of the goodwill for the three months ended March 31, 2024 (in thousands):
Amount
Ending balance as of December 31, 2023
$2,361,643 
Foreign currency translation adjustment
(12,524)
Ending Balance as of March 31, 2024
$2,349,119 
Goodwill represents the excess of consideration paid over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations.
Intangible Assets
The carrying amounts of the intangible assets other than goodwill as of March 31, 2024 and December 31, 2023 are as follows (in thousands):
March 31, 2024December 31, 2023
Cost
Accumulated
Amortization
NetCost
Accumulated
Amortization
Net
Acquired developed and core technology
$880,694 $(872,119)$8,575 $880,758 $(871,085)$9,673 
Other intangible assets:
Customer relationships
2,157,036 (1,517,958)639,078 2,159,179 (1,489,398)669,781 
Trade names and trademark
81,609 (77,110)4,499 81,651 (73,931)7,720 
Total other intangible assets
2,238,645 (1,595,068)643,577 2,240,830 (1,563,329)677,501 
Total intangible assets, net
$3,119,339 $(2,467,187)$652,152 $3,121,588 $(2,434,414)$687,174 
The Company amortizes its intangible assets over their remaining estimated useful life using cash flow projections, revenue projections, or the straight-line method. Total amortization expense related to intangible assets was $32.8 million and $37.2 million for the three months ended March 31, 2024 and 2023, respectively.
10


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The allocation of the amortization of intangible assets for the periods indicated below is as follows (in thousands):

Three Months Ended March 31,
20242023
Cost of revenues$1,034 $2,874 
Operating expenses31,739 34,291 
Total amortization of intangible assets$32,773 $37,165 
Certain intangible assets are recorded in foreign currencies; and therefore, the gross carrying amount and accumulated amortization are subject to foreign currency translation adjustments.
As of March 31, 2024, the amortization expense related to identifiable intangible assets in future periods is expected to be as follows (in thousands):
Customer Relationships Intangible Asset
Other
Intangible
Assets
Total
Intangible
Assets
Remaining 2024
$85,563 $7,367 $92,930 
202599,611 2,127 101,738 
202686,608 1,427 88,035 
202775,156 686 75,842 
202865,300 530 65,830 
Thereafter
226,840 937 227,777 
Total expected amortization expense
$639,078 $13,074 $652,152 
Note 7. Borrowings
Long-term debt consists of the following (in thousands):
March 31, 2024December 31, 2023
Dollar term loan
$1,837,500 $1,842,188 
Less: Discount on term loan
(6,161)(6,441)
Less: Debt issuance costs
(10,556)(11,037)
Total debt, net of discount and debt issuance costs
1,820,783 1,824,710 
Less: Current portion of long-term debt
(18,750)(18,750)
Long-term debt, net of current portion
$1,802,033 $1,805,960 
As of March 31, 2024 and December 31, 2023, the aggregate fair value of the Company’s dollar term loan, based on Level 2 inputs related to fair market value, was $1,841.2 million and $1,848.3 million, respectively.
Credit Facilities
The Company has a credit agreement with JPMorgan Chase Bank, N.A., as agent, for a syndicate of lenders (the “Credit Agreement”). Under the Credit Agreement, the Company borrowed $1.9 billion of dollar term loans (the “Term Facility”) and obtained $250.0 million of commitments under a revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Credit Facilities”).
11


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Term Facility matures on October 29, 2028 and is repayable in quarterly installments of 0.25% of the initial principal amount thereof, with the remaining amount due at maturity. The Revolving Facility matures on October 29, 2026.
The Company may prepay all or part of the Credit Facilities at any time. Subject to certain exceptions and limitations, the Company is required to prepay the Term Facility with the net proceeds of certain occurrences, such as the incurrences of indebtedness not permitted to be incurred under the Credit Agreement, credit sale and leaseback transactions and asset sales. The agreement also requires mandatory prepayments of the Term Facility with excess cash flow as specified in the terms of the Credit Agreement.
Effective July 1, 2023, the borrowings under the Term Facility bear interest, at the Company’s option, either at (i) Term SOFR1 with a credit adjustment of 0.11448% to 0.71513% depending on the interest period selected (“Adjusted Term SOFR”) plus 2.75% or (ii) the base rate plus 1.75%. The base rate is defined as the highest of (a) the Federal Funds Rate plus one half of 1%, (b) the rate of interest in effect for such day as published by the Wall Street Journal as the “prime rate,” and (c) Adjusted Term SOFR Rate for a one-month interest period plus 1.00%; provided that the base rate shall not be less than 1.00% per annum. Term SOFR is subject to a “floor” of 0% per annum. The Term Facility was issued with 0.125% of original issue discount.
Effective July 1, 2023, the Revolving Facility accrues interest at a per annum rate based on either, at the Company’s election, (i) Term SOFR plus the applicable margin for Term SOFR loans ranging between 2.50% and 2.00% based on the Company’s total net first lien leverage ratio or (ii) the base rate plus an applicable margin ranging between 1.50% and 1.00% based on the Company’s total net first lien leverage ratio.
No amounts were outstanding under the Revolving Facility as of March 31, 2024 and December 31, 2023. There were $1.6 million and $1.6 million of utilized letters of credit under the Revolving Facility at March 31, 2024 and December 31, 2023, respectively.
The Company guarantees the obligations under the Credit Agreement. All obligations under the Credit Agreement are secured by a perfected lien or security interest in substantially all of the Company’s and the guarantors’ tangible and intangible assets. The Credit Agreement also provides for a borrowing facility of $15.0 million, which is available on a same day basis and a letter of credit facility of $30.0 million. The Credit Agreement also includes an uncommitted incremental facility subject to compliance with certain leverage tests and borrowing limits.
Accrued interest is payable (i) quarterly in arrears with respect to base rate loans, (ii) at the end of each interest rate period (or at each three-month interval in the case of loans with interest periods greater than 3 months) with respect to Term SOFR loans, (iii) the date of any repayment or prepayment, and (iv) at maturity (whether by acceleration or otherwise). The Company is also obligated to pay other customary closing fees, arrangement fees, administrative fees, commitment fees, and letter of credit fees. Under the Credit Agreement, a commitment fee is payable on the daily unutilized amount under the Revolving Facility at a per annum rate ranging from 0.35% to 0.25% depending on the Company’s total net first lien leverage ratio.
The Credit Agreement requires that, as of the last day of any fiscal quarter if on such date the aggregate principal amount of all (a) revolving loans, (b) swingline loans, and (c) letter of credit obligations (in excess of $15 million) exceed 35% of the revolving loan commitments, the total net first lien leverage ratio cannot exceed 6.25 to 1.00. The occurrence of an event of default could result in the acceleration of the obligations under the Credit Agreement. Under certain circumstances, a default interest rate equal to 2.00% above the then-applicable interest rate will apply during the existence of an event of default under the Credit Agreement. The Company was in compliance with all covenants under the Credit Agreement as of March 31, 2024.
The Credit Agreement, among other things, limits the ability of the Company and its restricted subsidiaries to incur or guarantee additional indebtedness; pay dividends or make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase certain subordinated debt; make certain loans or investments; create liens; merge or consolidate with another company or transfer or sell assets; enter into restrictions affecting the ability of certain restricted subsidiaries to make distributions, loans or advances to the Company or its restricted subsidiaries; and engage in transactions with affiliates. These covenants are subject to a number of important limitations and exceptions, which are described in the Credit Agreement.
1 Term SOFR is SOFR based on the interest period selected
12


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Future minimum principal payments
Future minimum principal payments on the Term Facility as of March 31, 2024 are as follows (in thousands):

Remaining 2024
$14,062 
202518,750 
202618,750 
202718,750 
20281,767,188 
Total
$1,837,500 
Note 8. Disaggregation of Revenue, Deferred Revenue, Remaining Performance Obligations, Credit Risk and Capitalized Costs to Obtain a Contract
The following table presents the disaggregation of revenue by revenue type, consistent with how the Company evaluates its financial performance, for the three months ended March 31, 2024 and 2023 (in thousands):
Three Months Ended March 31,
20242023
Revenues:
Cloud subscription
$151,438 $111,778 
Self-managed subscription license
51,948 50,549 
Self-managed subscription support and other48,591 51,595 
Subscription revenues
251,977 213,922 
Perpetual license
21 806 
Software revenue
251,998 214,728 
Maintenance
117,678 125,375 
Professional services
18,931 25,328 
Maintenance and professional services revenue
136,609 150,703 
Total revenues
$388,607 $365,431 
Revenue by geographic location for the three months ended March 31, 2024 and 2023 (in thousands):
Three Months Ended March 31,
20242023
North America
$258,055 $251,037 
EMEA
86,710 77,002 
Asia Pacific
32,980 29,596 
Latin America
10,862 7,796 
Total revenues
$388,607 $365,431 
In the three months ended March 31, 2024 and 2023, the Company’s revenue from customers in the United States was $242.0 million and $233.3 million, respectively. No foreign country represented 10% or more of the Company’s total revenue during the three months ended March 31, 2024 and 2023, respectively.
Deferred Revenue
As of March 31, 2024 and December 31, 2023, deferred revenue was $722.1 million and $786.7 million, respectively.
13


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The amount of revenues recognized during the three months ended March 31, 2024 that were included in the opening deferred revenue balance as of January 1, 2024 was approximately $295.3 million. The amount of revenues recognized during the three months ended March 31, 2023 that were included in the opening deferred revenue balance as of January 1, 2023 was approximately $251.6 million.
Remaining Performance Obligations from Customer Contracts
As of March 31, 2024, the Company’s remaining performance obligations were $1.5 billion. The Company expects to recognize approximately 66% of its remaining performance obligations at March 31, 2024 as revenues over the next twelve months and the remainder over the next two to three years.
Concentrations of Credit Risk and Credit Evaluations
No customer accounted for more than 10% of revenue during the three months ended March 31, 2024 and 2023. At March 31, 2024 and December 31, 2023, no customer accounted for more than 10% of the accounts receivable balance.
Capitalized Costs to Obtain a Contract
Capitalized costs to obtain contracts consist of sales commissions and related payroll taxes (together “deferred commissions”). The changes in the capitalized costs to obtain a contract for the three months ended March 31, 2024 (in thousands):
Amount
Ending balance as of December 31, 2023
$237,991 
Additions, net11,583 
Commissions amortized (20,453)
Revaluation (1,746)
Ending balance as of March 31, 2024
$227,375 
As of March 31, 2024, $77.0 million of deferred commissions balance was included in prepaid expense and other current assets and $150.4 million of deferred commissions balance was included in other assets in the condensed consolidated balance sheet.
Note 9. Restructuring
On January 10, 2023, the Company announced a plan to reduce its workforce by approximately 450 employees, representing approximately 7% of the Company’s then-current global workforce, and a closure of an office in Israel (the “January Plan”). The January Plan was intended to better align the Company’s global workforce and cost base with its cloud-only, consumption-driven ("CoCd") strategy and related business needs. As of December 31, 2023, the Company recorded $28.2 million of restructuring expenses in relation to the January Plan, including $1.1 million related to the right-of-use assets impairment charge for the office closure. These costs were paid as of December 31, 2023.

On November 1, 2023, the Company announced a plan to reduce its workforce by approximately 500 employees, representing approximately 10% of the Company’s then-current global workforce, and reduce its global real estate footprint (the “November Plan”). The November Plan was intended to further streamline the Company’s cost structure as a direct result of the CoCd strategy announced in January 2023. For the year-ended December 31, 2023, the Company recorded $31.6 million of restructuring expenses in relation to the November Plan, including $0.4 million related to the right-of-use assets impairment charge for the reduction in office space. For the three months ended March 31, 2024, the Company recorded $4.3 million of restructuring expenses in relation to the November Plan, including $0.5 million related to the right-of-use assets impairment charge for the reduction in office space. Of the total charges incurred under the November Plan, $29.9 million was paid as of March 31, 2024 and the Company expects to substantially pay the remaining amount in 2024.

14


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 10. Derivative Financial Instruments
The Company’s earnings and cash flows are subject to market risks as a result of foreign currency exchange rate and interest rate fluctuations. The Company uses derivative financial instruments to manage its exposure to foreign currency exchange rate which is inherent to its ongoing business operations. The Company and its subsidiaries do not enter into derivative contracts for speculative purposes.
Foreign Exchange Forward Contracts
The Company enters into foreign exchange forward contracts in an attempt to reduce the impact of foreign currency exchange rate fluctuations and designates these contracts as cash flow hedges at inception. The objective is to reduce the volatility of forecasted cash flows and expenses caused by movements in foreign currency exchange rates, in particular the Indian rupee. The Company is currently using foreign exchange forward contracts to hedge the anticipated foreign currency expenses of its subsidiary in India.
The Company recognizes in earnings amounts related to its designated cash flow hedges accumulated in other comprehensive income during the same period in which the corresponding underlying hedged transaction affects earnings. As of March 31, 2024, a net unrealized gain of approximately $0.3 million accumulated in other comprehensive income (loss) is expected to be reclassified into earnings within the next twelve months.
The Company has forecasted the amount of its anticipated foreign currency expenses based on its historical performance and projected financial plan. As of March 31, 2024, the remaining open foreign exchange contracts, carried at fair value, are hedging Indian rupee expenses and have a maturity of approximately twelve months or less. These foreign exchange contracts mature monthly as the foreign currency denominated expenses are paid and any gain or loss is offset against operating expense. Once the hedged item is recognized, the cash flow hedge is de-designated and subsequent changes in value are recognized in other income (expense), net, to offset changes in the value of the resulting non-functional currency monetary assets or liabilities.
The notional amounts of these foreign exchange forward contracts in U.S. dollar equivalents were to buy $93.9 million and $109.6 million of Indian rupees as of March 31, 2024 and December 31, 2023, respectively.
Balance Sheet Hedges
Balance Sheet hedges consist of cash flow hedge contracts that have been de-designated and non-designated balance sheet hedges. These foreign exchange contracts are carried at fair value and either did not or no longer qualify for hedge accounting treatment and are not designated as hedging instruments. Changes in the value of the foreign exchange contracts are recognized in other income, net and offset the foreign currency gain or loss on the underlying net monetary assets or liabilities. The notional amounts of foreign currency purchase contracts open in U.S. dollar equivalents were to buy $10.9 million and $12.2 million of Indian rupees at March 31, 2024 and December 31, 2023, respectively. There were no open foreign currency contracts to sell at March 31, 2024 and December 31, 2023, respectively.
The following table reflects the fair value amounts for designated and non-designated hedging instruments at March 31, 2024 and December 31, 2023 (in thousands):
March 31, 2024December 31, 2023
Fair Value
Derivative
Assets(i)
Fair Value
Derivative
Liabilities(ii)
Fair Value
Derivative
Assets(i)
Fair Value
Derivative
Liabilities(ii)
Designated hedging instruments
Foreign currency forward contracts
$348 $13 $340 $44 
Non-designated hedging instruments
Foreign currency forward contracts
86  146  
Total fair value of hedging instruments
$434 $13 $486 $44 
_____________
(i)Included in prepaid expenses and other current assets on the condensed consolidated balance sheets.
(ii)Included in accrued liabilities on the condensed consolidated balance sheets.
15


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company presents its derivative assets and derivative liabilities at gross fair values in the condensed consolidated balance sheets. However, under the master netting agreements with the respective counterparties of the foreign exchange contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same currency with a single net amount payable by one party to the other. The derivatives held by the Company are not subject to any credit contingent features negotiated with its counterparties. The Company is not required to pledge nor is entitled to receive cash collateral related to the above contracts. As of March 31, 2024 and December 31, 2023, there were no derivative assets or liabilities that were net settled under the master netting agreements.
The Company evaluates prospectively as well as retrospectively the effectiveness of its hedge programs using statistical analysis.
The before-tax effects of derivative instruments designated as cash flow hedges on the accumulated other comprehensive loss and condensed consolidated statements of operations for the periods indicated below are as follows (in thousands):
Three Months Ended March 31,
20242023
Amount of gain recognized in other comprehensive income (loss)(i)
$357 $1,249 
Amount of gain (loss) related to foreign exchange forward contracts reclassified from accumulated other comprehensive income (loss) into income(ii)
$304 $(1,160)
_____________
(i)The before-tax gain of $357 related to foreign exchange forward contracts was recognized in other comprehensive loss during the three months ended March 31, 2024. The before-tax gain of $1,249 related to foreign exchange forward contracts was recognized in other comprehensive loss during the three months ended March 31, 2023.
(ii)For the three months ended March 31, 2024, the before-tax gain of $73 and $231 were included in cost of service revenues and operating expenses, primarily research and development expense, respectively, on the condensed consolidated statements of operations. For the three months ended March 31, 2023, the before-tax loss of $(226) and $(934) were included in cost of service revenues and operating expenses, primarily research and development expense, respectively, on the condensed consolidated statements of operations.
The before-tax (loss) gain recognized in other income, net for non-designated foreign currency forward contracts for the periods indicated below are as follows (in thousands):
Three Months Ended March 31,
20242023
(Loss) gain recognized in other income, net
$(25)$65 
See Note 5. Fair Value Measurements, and Note 14. Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements of this Report for a further discussion.
Note 11. Stockholders Equity
Common and Preferred Stock
The rights of the holders of Class A common stock and Class B-1 common stock are identical in all respects, except that Class B-1 common stock will not vote on the election or removal of directors. The holders of Class B-2 common stock have no participating rights (voting or otherwise), except for the right to vote on the election or removal of directors and will be entitled to a nominal annual dividend of CAD$15,000 in the aggregate.
Equity Incentive Plans
The Company’s equity incentive plans are administered by the Compensation Committee. The Company adopted the 2015 Equity Incentive Plan (the “2015 Plan”) and most recently amended and restated the 2015 Plan in October 2021.
16


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Under the 2015 Plan, the Company issued equity awards in the form of options to acquire shares of the Company. The options are not intended to qualify as incentive stock options within the meaning of Section 422 of the Internal Revenue Code. The term of the options granted under this plan is ten years with a vesting requirement of continued employment through the applicable vesting date, and in certain cases attainment of performance criteria (“performance-based options”). In connection with the adoption of the 2021 Plan (as defined below), the 2015 Plan was terminated with respect to future awards. The 2015 Plan continues to govern awards that were granted prior to the effectiveness of the 2021 Plan.
In October 2021, the Company’s Compensation Committee adopted, and its stockholders approved, the 2021 Equity Incentive Plan (the "2021 Plan"), which became effective in connection with the IPO. As of March 31, 2024, a total of approximately 78.7 million shares of the Company’s Class A common stock has been reserved for issuance under the 2021 Plan. In addition, the shares reserved for issuance under the 2021 Plan includes any shares subject to awards granted under the 2015 Plan that, after the date the 2015 Plan was terminated, are cancelled, expire or otherwise terminate without having been exercised in full, are tendered to or withheld by the Company for payment of an exercise price or for tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest (provided that the maximum number of shares that may be added to the 2021 Plan pursuant to this provision is 26,288,211 shares).
Option Awards
The following table summarizes the option award activity for the three months ended March 31, 2024 (in thousands, except share price, fair value and term):
Number of OptionsWeighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (in
years)
Aggregate
Intrinsic
Value (in
thousands)
TotalService
based
Performance-
based
Outstanding at December 31, 202317,004 11,278 5,726 $17.27 5.59$189,134 
Exercised(1,775)(1,544)(231)$16.26 
Forfeited or expired(29)(23)(6)$18.00 
Outstanding at March 31, 202415,200 9,711 5,489 $17.38 5.47$267,748 
As of March 31, 2024, total unrecognized stock-based compensation expense related to unvested options was $4.7 million and is expected to be recognized over the remaining weighted-average vesting period of 2.91 years.
Restricted Stock Units ("RSUs") and Performance Stock Units (“PSUs”)
The Company issues RSUs to employees and directors under the 2021 Plan. RSUs vest upon the satisfaction of a service-based vesting condition only. The service-based condition for the majority of the employee awards is generally satisfied pro-rata over two to four years.
The Company also issues PSUs to employees under the 2021 Plan. PSUs that are granted are subject to vesting conditions based on certain performance metrics or on attainment of specified stock prices, measured over the performance period. The PSU awards granted to employees under the 2021 Plan typically vest over 3 years and are subject to forfeiture in whole if employment terminates, or in whole or in part, if specified vesting conditions are not satisfied in each case prior to vesting. PSUs are not considered issued or outstanding common stock until they vest.
17


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes RSU and PSU activity and related information during the three months ended March 31, 2024 under the 2021 Plan (in thousands, except share price):
Number of Shares
Weighted-Average Grant Date Fair Value
Unvested and outstanding as of December 31, 2023
21,063 $20.81 
Granted
4,165 32.37 
Vested
(3,268)20.20 
Forfeited
(417)20.18 
Unvested and outstanding as of March 31, 2024
21,543 $23.15 
As of March 31, 2024, the total unrecognized stock-based compensation expense related to the RSUs and PSUs and PSUs outstanding was $443.3 million and is expected to be recognized over the remaining weighted-average vesting period of 1.90 years.
Employee Stock Purchase Plan (“ESPP”)
In October 2021, the Company’s Compensation Committee approved the ESPP, which became effective in connection with the IPO. The ESPP authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. As of March 31, 2024, a total of 14.0 million shares of the Company’s Class A common stock has been reserved for issuance under the ESPP.
Under the ESPP, eligible employees are able to acquire shares of Class A common stock by accumulating funds through payroll deductions. Offering periods are generally twelve months long and begin on March 1 and September 1 of each year. The purchase price for shares of the Company’s Class A common stock purchased under the ESPP is 85% of the lesser of the fair market value of the Company’s Class A common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of each purchase period in the applicable offering period. The ESPP also includes a reset provision for the purchase price if the stock price on the purchase date is less than the stock price on the first date of the offering period.
As of March 31, 2024, the total unrecognized stock-based compensation expense related to the ESPP was $8.5 million and is expected to be recognized over the remaining offering period.
Summary of Assumptions for ESPP
The following table summarizes the weighted-average assumptions used in estimating the fair value of the ESPP for the offering periods during the three months ended March 31, 2024 and 2023 using the Black-Scholes pricing model:

Three Months Ended March 31,
20242023
ESPP:
Expected term (in years)
      0.5 - 1.0
0.5 - 1.0
Expected volatility
40.3% - 43.5%
42.4% - 48.5%
Risk-free interest rate
4.9% - 5.3%
5.2% - 5.1%
Expected dividend yield
 % %
Fair value of common stock
$32.46
$17.06
18


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Stock Compensation
The stock-based compensation for all equity awards for the periods indicated below are as follows (in thousands):
Three Months Ended March 31,
20242023
Cost of revenues
$8,153 $7,366 
Research and development
18,236 13,252 
Sales and marketing
18,942 14,453 
General and administrative
18,770 15,271 
Total stock-based compensation
$64,101 $50,342 
Note 12. Income Taxes
The Company computes its income tax provision for interim periods by applying the estimated annual effective tax rate to year-to-date pre-tax income or loss from recurring operations and adjusting for discrete tax items arising in that quarter. The Company's income tax benefit was $25.5 million on pretax losses of $16.1 million for the three months ended March 31, 2024, which resulted in a positive effective tax rate of 158%. The Company’s effective tax rate differs from the U.S. statutory rate of 21% primarily due to an increase in its valuation allowance and to a lesser extent from foreign income taxed at different rates and non-deductible stock-based compensation.
The Company's income tax expense was $59.6 million on pretax losses of $56.8 million for the three months ended March 31, 2023, which resulted in a negative effective tax rate of 105%. The Company’s effective tax rate differs from the U.S. statutory rate of 21% primarily due to an increase in its valuation allowance and to a lesser extent from foreign income taxed at different rates and non-deductible stock-based compensation.
ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. In assessing the need for any additional valuation allowance as of March 31, 2024, the Company considered all available evidence both positive and negative, including potential for prudent and feasible tax planning strategies. As a result of this analysis for the three months ended March 31, 2024, management believes it is more likely than not that the Company’s deferred tax assets, after recorded valuation allowances for partial U.S. Federal and State deferred tax assets, and operating loss carryforwards in certain non-U.S. jurisdictions, will be realized.

Note 13. Net Income (Loss) Per Share
The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data):
Three Months Ended March 31,
20242023
Net income (loss)
$9,334 $(116,354)
Weighted-average shares in computing net income (loss) per share:
Basic296,897 284,886 
Effect of dilutive securities
15,602  
Diluted312,499 284,886 
Net income (loss) per share attributable to Class A and Class B-1 common stockholders:
Basic$0.03 $(0.41)
Diluted$0.03 $(0.41)
19


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following potentially dilutive securities were excluded from the computation of diluted net income (loss) per share calculations for the periods presented because the impact of including them would have been anti-dilutive (in thousands):
Three Months Ended March 31,
20242023
Stock options outstanding
 2,776 
RSUs9 711 
PSUs 170 
ESPP52 89 
Note 14. Commitments and Contingencies
Long-Term Purchase Obligations
As of March 31, 2024, the Company had long-term purchase obligations of approximately $135.4 million, primarily related to multi-year contracts with third party vendors for cloud services related to its subscription services and software as a service commitments. The expected payments under these commitments total approximately $91.9 million and $43.5 million over the next 1 year and 1-3 years, respectively.
Warranties
The Company generally provides product warranties. These are not separate performance obligations and are outside the scope of ASC 606. To date, the Company’s product warranty expense and obligations have not been material.
The Company’s customer agreements generally include certain provisions for indemnifying the customer against losses, expenses, liabilities, and damages that may be awarded against the customer in the event the Company’s product is found to infringe upon a patent, copyright, trademark, or other proprietary right of a third party. The agreements generally limit the scope of and remedies for such indemnification obligations in a variety of industry-standard respects, including but not limited to certain time and scope limitations and a right to replace an infringing product with a non-infringing product.
The Company believes its internal development processes and other policies and practices limit its exposure related to these indemnification provisions. In addition, the Company requires its employees to sign a proprietary information and inventions agreement, which assigns the rights to its employees’ development work to the Company. To date, the Company has not had to reimburse any of its customers for any losses related to these indemnification provisions, and no material claims against the Company are outstanding as of March 31, 2024 and December 31, 2023. The Company cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions due to the limited and infrequent history of prior indemnification claims.
As permitted under Delaware law, the Company has agreements whereby the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was serving, at the Company’s request, in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has director and officer insurance coverage that reduces the Company’s exposure and enables the Company to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.
The Company accrues for loss contingencies when available information indicates that it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated.
20


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Litigation
The Company is a party to various legal proceedings and claims arising from the normal course of its business activities, including proceedings and claims related to employment and intellectual property related matters.
The Company reviews the status of each matter and records a provision for a liability when it is considered both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed quarterly and adjusted as additional information becomes available. If both of the criteria are not met, the Company assesses whether there is at least a reasonable possibility that a loss, or additional losses, may be incurred. If there is a reasonable possibility that a material loss may be incurred, the Company discloses the estimate of the possible loss, range of loss, or a statement that such an estimate cannot be made.
Litigation is subject to inherent uncertainties. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position and results of operation for the period in which the unfavorable outcome occurred, and potentially in future periods.
21

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Report and our audited consolidated financial statements and the related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the year ended December 31, 2023 included in the Annual Report on Form 10-K for the year ended December 31, 2023 and filed with the SEC on February 22, 2024. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled “Risk Factors” and “Information Regarding Forward-Looking Statements” included elsewhere in this Report.
Overview
We have pioneered a new category of software, the Intelligent Data Management Cloud (“IDMC”). IDMC is our artificial intelligence (“AI”) powered platform that connects, manages, and unifies data across any public cloud or hybrid cloud environment, empowering enterprises to modernize and advance their data strategies.
We generate revenues from the sale of subscriptions for our software products, maintenance agreements supporting perpetual licenses mainly sold in prior periods, and professional services. Substantially all of our software revenue consists of fees generated from our subscription-based products. We have grown our subscription revenue to $252.0 million and $213.9 million for the three months ended March 31, 2024 and 2023, respectively.
Our products can be subscribed to as individually distinct product families or together as a tightly integrated platform to support complex data management needs and mission critical workloads. Our products are subscribed through contracts primarily with a one-, two- or three-year term, with an average contract term of approximately two years for the first quarter of 2024. Substantially all of our subscription customers pay us annual fees in advance at the start of each contract year. We recognize revenue from our cloud subscription on a ratable basis over the contract term. We generally recognize the majority of the revenue from our self-managed subscription-based licenses at the start of the contract term. The remaining portion of self-managed subscription fees attributable to related support services are generally recognized on a ratable basis over the contract term.

We use a consumption-based pricing model to provide customers greater flexibility regarding use and consumption of a broad array of our cloud subscription offerings. The consumption-based pricing model is based on Master Data Management (“MDM”) records or Informatica Processing Units ("IPUs") which is an innovative way to measure the consumption of our cloud-based services. Under the IPU model, customers pre-purchase a maximum number of IPUs to be consumed per month over the subscription term.

In the first quarter of 2023, we introduced a variation of the IPU consumption-based pricing model called Flex IPUs. Under this new model, customers pre-purchase a number of Flex IPUs to be consumed per year of the subscription term. Additional fees are charged for incremental IPUs consumed above the annual maximum, if the customer’s usage requires it.
We previously generated additional software revenue from the sale of perpetual licenses. However, consistent with our business transformation strategy and focus on subscription revenue, our perpetual license revenue as a percentage of our total revenues represented a de minimis value for both the three months ended March 31, 2024 and 2023.
Our maintenance revenues consist of recurring maintenance fees related to perpetual licenses mainly sold in prior periods. Our recurring maintenance fees grant our customers access to software updates and support for our perpetual license products. We generate professional services revenues through one-time fees associated with implementation, education, and consulting services related to our software products. We recognized $136.6 million and $150.7 million of maintenance and professional services revenues during the three months ended March 31, 2024 and 2023, respectively.
22

We market and sell our subscription products primarily through our global direct sales team, which is enhanced by our relationships and collaboration with our partners that include global system integrators such as Deloitte and Accenture, hyperscale cloud platform providers such as AWS, Microsoft Azure, Google Cloud and Oracle Cloud, and other channel partners such as value added resellers and distributors. Our sales organization consists of marketing, sales development, inside sales, and field sales personnel. It is generally organized by region, customer size and certain industry verticals. Cloud hyperscalers help us amplify our commercial reach when we jointly engage in cloud modernization efforts. In addition, our global system integrator partners provide implementation services for our products for customers as part of their support of broader, overall cloud modernization initiatives.
Historically, we have focused our selling efforts on executives such as chief information officers (“CIO”) and chief data officers (“CDO”) who are often making decisions to subscribe to our products for their most important business initiatives. CIOs adopt our platform as part of their analytics and AI projects, cloud migration journey, application modernization efforts, and business 360 initiatives. CDOs utilize our products as part of their overall data governance, access, and security strategies in order to democratize data access for everyone across the company. We are expanding our go-to-market efforts to focus more on industry-specific market segments, departmental lines of business and small and medium sized enterprise customers.
We employ a “land and expand” model to increase sales to our existing customer base. Once customers have purchased a subscription to one of our products—for example, Data Integration—they often identify additional use cases for our software and expand their use of our products accordingly. For example, as a customer seeks to expand the distribution of data-centric reports powered by our data integration solutions to a broader set of internal or external users, enhanced levels of data quality and control may be required, prompting subscription to our Data Quality and Data Governance families of products. We also market our cloud subscription to our large installed base of perpetual license maintenance and self-managed subscription license customers, enabling them to advance their cloud modernization efforts to migrate existing processes and net new workloads from costly-to-maintain on-premises IT infrastructure to lower-cost elastic cloud architecture. In 2023, we released PowerCenter Cloud Edition to accelerate and automate much of the migration effort associated with modernizing from on-premises PowerCenter to IDMC.
Purchasing patterns for our products have followed quarterly and seasonal trends that we expect to continue. We typically sell a substantial portion of our cloud services in the last month of each quarter, and demand for our products and professional services are generally highest in the fourth quarter and lowest in the first quarter of each year.
Factors Affecting Our Performance
We believe that the growth of our business and our future success are dependent upon many factors, including those described below. While each of these factors presents significant opportunities for us, these factors also pose important challenges that we must successfully address in order to sustain the growth of our business and improve our results of operations.
Continued Adoption of our Cloud Subscription Offerings.    Our success will largely depend on customers’ continued uptake of our cloud subscription offerings. Our success will also largely depend on the value businesses place on data management as part of their overall digital transformation initiatives and the timing and willingness of businesses to move their data and workloads to the cloud. As companies from all industries continue to shift to cloud-based services, we believe demand for our platform and cloud subscription offerings will increase. A large majority of our subscription products were architected to be deployed natively in public, private, or hybrid cloud environments. In addition, we assist our customers with migrations of their Informatica self-managed data integration, data quality and MDM installations to our corresponding cloud solutions. For the period starting in our fourth fiscal quarter of 2020 and ended March 31, 2024, we have entered into agreements to migrate a total of approximately $54.6 million of maintenance and self-managed ARR. Our future growth will depend in part on our ability to develop new market-leading cloud subscription offerings to expand the offerings in our platform.
New Customer Acquisition.    Our future growth depends in part on our ability to acquire new customers. Our ability to acquire new customers is demonstrated by the fact that 54% of our subscription customers as of March 31, 2024 did not have a prior perpetual license maintenance contract with us. In addition, our ability to attract new customers will depend in part on our ability to continue to compete effectively
23

against a variety of different vendors who offer existing data management products, as well as our ability to convert companies into paying customers who are using custom-built solutions. Additionally, we will continue to rely on our sales and marketing team to effectively and efficiently identify and engage with prospective customers, increase brand awareness, and drive adoption of our products. We also have a business development team for our go-to-market strategy that is focused on growing adoption of our products by targeting key business personnel adjacent to technical roles, as well as small- and mid-market organizations, which represents a new addressable customer base for us. We will continue to make strategic investments in sales to grow our total customer base, with a focus on targeting these new buyers.
Expansion Within our Customer Base.    Our business depends, in part, on our ability to expand within our large existing customer base by adding new products, addressing cloud modernization initiatives, and growing with our customers’ overall data footprint. We have successfully expanded our existing customers’ adoption of our platform through upselling and cross-selling, as evidenced by our Cloud Subscription NRR (as defined below in Key Business Metrics), which was 124% and 124% at the Global Parent Level (as defined below in Key Business Metrics) and 119% and 118% at the End-user Level for the three months ended March 31, 2024 and 2023, respectively. We increased the average Subscription ARR (as defined below in Key Business Metrics) per subscription customer from March 31, 2023 to March 31, 2024, from $270 thousand to $310 thousand, respectively. We continuously focus on increasing the value our customers derive from our platform and often become a strategic vendor to them in the process. For example, as of March 31, 2024 and 2023, we had 258 and 208 customers individually with over $1 million in Subscription ARR each, respectively.
Retention of Existing Customers.    Our business also depends, in part, on our ability to retain our existing customer base. We typically enjoy a high customer renewal rate, which we attribute to the fact that our products are embedded in mission-critical applications, as well as the fact that we have an expansive product portfolio and world-class customer success organization. For example, for the three months ended March 31, 2024 and 2023, our subscription renewal rate1 was 91% and 93%, respectively, and our maintenance renewal rate2 was 94% and 96%, respectively. We intend to continue investing in our products and customer success organization to maintain these favorable retention rates.
Investment in Partner Go-to-Market Efforts.    Our business and results of operations will also be significantly affected by our success in strengthening our relationships with strategic partners, including cloud hyperscalers; cloud partners; global system integrators (“GSI”); and other channel partners such as regional system integrators, value-added resellers and distributors. We believe further developing these key strategic relationships will help us scale and enhance co-selling of our products and services with these partners. Many of our GSI partners have built Centers of Excellence inside their Data and AI practices and have staffed them with Informatica IDMC skilled resources and many have also built solutions which include Informatica in the standard architecture. These developments have helped to expand our footprint with our largest partners and to be recommended more often and in more customer accounts. We plan to continue to strengthen and expand our network of strategic partners to increase sales to both new and existing customers and offer new and existing products on partner marketplaces. We believe that investing in sales enablement and co-selling efforts with our strategic partners will broaden our distribution footprint globally and extend and improve our engagement with a broad set of prospective customers.
Global Macroeconomic Factors. Uncertainty in the macroeconomic environment, including elevated inflation concerns, global supply chain concerns, rising interest rates, fluctuation in foreign exchange rates, volatility and uncertainty in the financial services industry, geopolitical pressures, including the war in Ukraine and the conflict in the Middle East, and associated global economic conditions have resulted in volatility in credit, equity, and foreign currency markets. These macroeconomic conditions have and are likely to continue to adversely affect the buying patterns of our customers and prospective customers, including the length of sales cycles, our overall pipeline and pipeline conversion rates, and our revenue growth expectations. For example,
1 We compute the subscription renewal rate by assessing the annual value of subscription contracts that expire or have an anniversary date within the current quarter (denominator) and compare this to the annual renewed value or amount not cancelled for that set of expiring contracts, including price uplifts, if any, realized on renewed contracts (numerator). We typically allow for a grace period of up to six months past the original contract expiration quarter during which we engage in the renewal process before we report the contract as lost/inactive. This grace-period renewal amount has been an immaterial portion over the last three years. If there is an actual cancellation for a subscription contract, we count that amount as removed from the numerator in that period.

2 We compute the maintenance renewal rate by assessing the annual value of maintenance contracts for perpetual licenses that expire or have an anniversary date within the current quarter (denominator) and compare this to the annual renewed value or amount not cancelled for that set of contracts, including price uplifts, if any, realized on renewed contracts (numerator). We typically allow for a grace period of up to six months past the original contract expiration quarter during which we engage in the renewal process before we report the contract as lost/inactive. This grace-period renewal amount has been an immaterial portion over the last three years. If there is an actual cancellation for a maintenance contract, we count that amount as removed from the numerator in that period. If a customer cancels a maintenance contract and migrates the underlying product to one of our cloud subscription, this loss of maintenance would be counted as a cancellation and reduce our maintenance renewal rate.
24

beginning in the second quarter of 2022, and continuing through 2024, we have experienced an impact from the current macroeconomic environment as prospective and existing customers applied elevated levels of scrutiny to purchasing decisions that adversely impacted the ability to close new business. We experienced these headwinds at an increasing magnitude beginning in the third quarter of 2022, and we expect some or all of the global macroeconomic factors will continue to impact our operations.
Refer to the section titled “Risk Factors” for further discussion of the possible impact of the global macroeconomic factors on our business.
Key Business Metrics and Non-GAAP Financial Measure
We review a number of operating and financial metrics, including the following unaudited key business metrics and non-GAAP financial measure to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.
March 31,
20242023
(in thousands, except percentages)
Cloud Subscription Annual Recurring Revenue$652,545 $483,294 
Self-managed Subscription Annual Recurring Revenue505,148 537,612 
Subscription Annual Recurring Revenue1,157,693 1,020,906 
Maintenance Annual Recurring Revenue478,801 512,497 
Total Annual Recurring Revenue$1,636,494 $1,533,403 
Subscription Net Retention Rate (End-user level)105 %110 %
Cloud Subscription Net Retention Rate (End-user level)119 %118 %
Cloud Subscription Net Retention Rate (Global Parent level)124 %124 %
Key Business Metrics
Annual Recurring Revenue
Annual Recurring Revenue (“ARR”) represents the expected annual billing amounts from all active maintenance and subscription agreements. ARR is calculated based on the contract Monthly Recurring Revenue (“MRR”) multiplied by 12. MRR is calculated based on the accounting adjusted total contract value divided by the number of months of the agreement based on the start and end dates of each contracted line item. The aggregate ARR calculated at the end of each reported period represents the value of all contracts that are active as of the end of the period, including those contracts that have expired but are still under negotiation for renewal. We typically allow for a grace period of up to 6 months past the original contract expiration quarter during which we engage in the renewal process before we report the contract as lost /inactive. This grace-period ARR amount has been less than 2% of the reported ARR in each period presented. If there is an actual cancellation of an ARR contract, we remove that ARR value at that time.
We believe ARR is an important metric for understanding our business since it tracks the annualized cash value collected over a 12-month period for all of our recurring contracts, irrespective of whether it is a maintenance contract on a perpetual license, a ratable cloud contract, or a self-managed term-based subscription license. ARR should be viewed independently of total revenue and deferred revenue related to our software and services contracts and is not intended to be combined with or to replace either of those items.
Cloud Subscription Annual Recurring Revenue
Cloud Subscription Annual Recurring Revenue (“Cloud Subscription ARR”) represents the portion of ARR that is attributable to our hosted cloud contracts.
We believe that Cloud Subscription ARR is a helpful metric for understanding our business since it represents the approximate annualized cash value collected over a 12-month period for all of our recurring Cloud contracts. Cloud Subscription ARR is a subset of our overall Subscription ARR, and by providing this breakdown of Cloud Subscription ARR, it provides visibility on the size and growth rate of our Cloud Subscription ARR within our overall Subscription ARR (as defined below). Cloud Subscription ARR should be
25

viewed independently of subscription revenue and deferred revenue related to our subscription contracts and is not intended to be combined with or to replace either of those items.
Subscription Annual Recurring Revenue
Subscription Annual Recurring Revenue (“Subscription ARR”) represents the portion of ARR only attributable to our subscription contracts. Subscription ARR includes Cloud Subscription ARR and Self-managed Subscription Annual Recurring Revenue.
We believe that Subscription ARR is a helpful metric for understanding our business since it represents the approximate annualized cash value collected over a 12-month period for all of our recurring subscription contracts. Subscription ARR excludes maintenance contracts on our perpetual licenses. Subscription ARR should be viewed independently of subscription revenue and deferred revenue related to our subscription contracts and is not intended to be combined with or to replace either of those items.
Maintenance Annual Recurring Revenue
Maintenance Annual Recurring Revenue (“Maintenance ARR”) represents the portion of ARR only attributable to our maintenance contracts.

We believe that Maintenance ARR is a helpful metric for understanding our business since it represents the approximate annualized cash value collected over a 12-month period for all our maintenance contracts. Maintenance ARR includes maintenance contracts supporting our perpetual licenses. Maintenance ARR should be viewed independently of maintenance revenue and deferred revenue related to our maintenance contracts and is not intended to be combined with or to replace either of those items. As we continue to shift our focus from perpetual to cloud, we expect Maintenance ARR will decrease in future quarters.
Cloud Subscription Net Retention Rate
Cloud Subscription Net Retention Rate (“Cloud Subscription NRR”) compares the contract value for Cloud Subscription ARR from the same set of customers at the end of a period compared to the prior year. We treat divisions, segments or subsidiaries inside companies as separate customers when defining the End-user level. We treat divisions, segments, or subsidiaries of a company as one customer when defining the Global Parent level. Global Parent customers are determined using Dun & Bradstreet GDUNS identifiers. To calculate our Cloud Subscription NRR for a particular period, we first establish the Cloud Subscription ARR value at the end of the prior year period. We subsequently measure the Cloud Subscription ARR value at the end of the current period from the same cohort of customers. Cloud Subscription NRR is then calculated by dividing the aggregate Cloud Subscription ARR in the current period by the prior year period. An increase in the Cloud Subscription NRR occurs as a result of price increases on existing contracts, higher consumption of existing products, and sales of additional new subscription products to existing customers exceeding losses from subscription contracts due to price decreases, usage decreases and cancellations. We believe Cloud Subscription NRR is an important metric for understanding our business since it measures the rate at which we are able to sell additional products into our cloud subscription customer base.

Subscription Net Retention Rate

Subscription Net Retention Rate (“Subscription NRR”) compares the contract value for Subscription ARR from the same set of customers at the end of a period compared to the prior year. We treat divisions, segments or subsidiaries inside companies as separate customers when defining the End-user level. To calculate our Subscription NRR for a particular period, we first establish the Subscription ARR value at the end of the prior year period. We subsequently measure the Subscription ARR value at the end of the current period from the same cohort of customers. The net retention rate is then calculated by dividing the aggregate Subscription ARR in the current period by the prior year period. An increase in the Subscription NRR occurs as a result of price increases on existing contracts, higher consumption of existing products, and sales of additional new subscription products to existing customers exceeding losses from subscription contracts due to price decreases, usage decreases and cancellations. Our Cloud Subscription NRR continues to outpace total Subscription NRR as self-managed subscription customers are moving to cloud offerings which is net neutral to Subscription NRR but will be additive to Cloud Subscription NRR for the same cohort of customers. We believe
26

Subscription NRR is a helpful metric for understanding our business since it measures the rate at which we are able to sell additional products into our subscription customer base.

Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP in the United States, we believe the following non-GAAP measure is useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measure as tools for comparison. A reconciliation is provided below for our non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure, and not to rely on any single financial measure to evaluate our business.
Adjusted EBITDA
We define adjusted EBITDA as GAAP net income (loss) as adjusted for income tax benefit (expense), interest income, interest expense, loss on debt refinancing, other income (expense) net, stock-based compensation, amortization of intangibles, restructuring, expenses associated with acquisitions, and depreciation. We believe adjusted EBITDA is an important metric for understanding our business to assess our relative profitability adjusted for balance sheet debt levels.
 Three Months Ended March 31,
 20242023
 (in thousands)
GAAP net income (loss)
$9,334 $(116,354)
Income tax benefit (expense)
(25,464)59,569 
Interest income
(13,407)(7,583)
Interest expense
39,097 35,051 
Other income, net
(6,335)(630)
Stock-based compensation
64,101 50,342 
Amortization of intangibles
32,773 37,165 
Restructuring
4,355 27,253 
Acquisition related costs
4,802 — 
Depreciation
2,218 4,200 
Adjusted EBITDA
$111,474 $89,013 
Components of Results of Operations
Software Revenues
Subscription Revenues.    Subscription revenues consist of revenues from customers from cloud subscription, self-managed subscription licenses, and self-managed subscription support and other. Revenues from our cloud subscription are recognized over time on a ratable basis over the contract term beginning on the date that the service is made available to the customer or on the date the contractual term commences, if later. The Company’s cloud subscription include cloud functionalities and, for most products, also a secure agent that is installed on a customer’s premises. The secure agent performs tasks and enables secure communication behind a customer’s firewall with the cloud functionalities. For these products, customers are not able to use
27

either the cloud functionalities or secure agent for their intended purpose on their own without use of the other component. The cloud functionalities and secure agent are accounted for together as a single performance obligation because we have concluded that the cloud functionalities and secure agent are highly interdependent and interrelated based on the significant two-way dependency between the components. The majority of the revenues expected over the term of our self-managed subscription licenses is recognized at a point in time upon transfer of control of the license to the customer. Support and other services sold with self-managed subscription licenses are recognized over time on a ratable basis over the contract term beginning on the date the service is made available to the customer. In general, new subscription contracts are typically one to three years in length, with an average contract duration of approximately two years. Our subscription software fees are typically billed annually in advance in equal installments across the term of the contracts for both cloud and self-managed subscriptions.
Perpetual License Revenues.    Perpetual license revenues are revenues from customers and partners for sales of our software under on-premises perpetual licenses. Revenue from our perpetual license products is generally recognized at a point in time upon transfer of control of the license to the customer, which is typically upon making the software available to our customers. We expect revenue from perpetual licenses to be less than 1% of total revenues going forward, as we focus the majority of our product development spending on our cloud products and our go-to-market efforts on subscription-based licensing for software sales.
Service Revenues
Maintenance Revenues.    Maintenance revenue, which consists of fees for ongoing support and product updates mainly for our previously sold perpetual licenses, is recognized ratably over the term of the contract, typically one year. Maintenance contracts are generally billed annually in advance. We expect our maintenance revenues to gradually decrease over time as we have ceased actively selling new perpetual licenses and our customers are expected to transition over time to our subscription-based licensing model and adopt our cloud subscription offerings.
Professional Services Revenues.    Professional services revenues consist of non-recurring fees associated with implementation, education, and consulting services related to our software products. Consulting revenues are primarily related to configuration, installation, and implementation of our products. These services are generally performed on a time-and-materials basis and, accordingly, revenues are recognized as the services are performed. Consulting services, if included as part of the software arrangement, generally do not entail significant modification or customization of the software and hence, such services are not considered essential to the functionality of the software. Education service revenues are generated from classes offered at our headquarters, sales and training offices, customer locations, and online. Revenues are recognized as the classes are delivered or when the subscription period ends. We expect professional services revenues to decrease slightly in 2024.
Cost of Revenues
Cost of Software Revenues.    Our cost of software revenues is a combination of costs of subscription revenues and perpetual licenses. Cost of subscription revenues consists primarily of fees paid to third-party vendors for cloud services related to our subscription services, fees paid to third parties for software used by us to deliver, monitor and secure our subscription products, internal personnel-related expenses, including stock-based compensation, to operate and secure our hosting infrastructure; royalties paid to postal authorities for address data and other vendors that provide content for our data-as-a-service offerings. In addition, these expenses include costs which are personnel-related expenses from our IT, Facilities and Procurement functions and expenses related to occupancy and enterprise systems allocated based on headcount (“Shared Costs”). Cost of perpetual license revenues consists primarily of software royalties payable to third parties.
Cost of Maintenance and Professional Services Revenues.    Our cost of service revenues is a combination of costs of maintenance, consulting and education services revenues. Our cost of maintenance revenues consists primarily of costs associated with customer service personnel-related expenses including stock-based compensation and royalty fees for maintenance related to third-party software providers. Cost of consulting revenues consists primarily of personnel-related expenses, including employee costs, stock-based compensation, subcontractor costs and travel, entertainment, Shared Costs, and other expenses. Cost of
28

education services revenues consists primarily of the costs of providing education classes and materials at our headquarters, sales and training offices and customer locations.
Amortization of Acquired Technology.    Amortization of acquired technology is the amortization of technologies recorded primarily as a result of the 2015 transaction where the Company was taken private by our Sponsors (the “2015 Privatization Transaction”) and, to a lesser extent, from business acquisitions and acquired technology licenses.
Operating Expenses
Research and Development
Our research and development expenses consist primarily of salaries and other personnel-related expenses, including stock-based compensation, outside services, travel expenses, Shared Costs, software expenses associated with the development of new products, enhancement and localization of existing products, and quality assurance and development of documentation for our products. All software development costs for software intended to be marketed to customers have been expensed in the period incurred since the costs incurred subsequent to the establishment of technological feasibility have not been significant. With our cloud-only, consumption-driven strategy, we intend to further focus our research and development efforts on our cloud subscription offerings. We expect this to lead to cost savings in research and development expense as a percentage of total revenues.
Sales and Marketing
Our sales and marketing expenses consist primarily of personnel-related expenses, including commissions and bonuses, as well as stock-based compensation, costs of public relations, seminars, marketing programs, lead generation, travel and entertainment, trade shows, software expenses, outside services and Shared Costs. With our cloud-only, consumption-driven strategy, we intend to further focus our go-to-market efforts on our cloud subscription offerings. We expect this to lead to cost savings in sales and marketing expense as a percentage of total revenues.
General and Administrative
Our general and administrative expenses consist primarily of personnel-related expenses, including stock-based compensation, for finance, human resources, legal, and general management, as well as professional service expenses associated with recruiting, legal, tax and accounting services, travel expenses and Shared Costs. We expect our general and administrative expenses to continue to increase in absolute dollars for the foreseeable future but may vary as a percentage of total revenues.
Amortization of Intangible Assets
Amortization of intangible assets is the amortization of customer relationships, and trade names and trademarks recorded as a result of the 2015 Privatization Transaction and, to a lesser extent, acquired through business acquisitions.
Restructuring
Restructuring charges include our reorganization activities. On January 10, 2023, we announced a plan to reduce our workforce by approximately 450 employees, representing approximately 7% of the then-current global workforce, and a closure of an office in Israel (the “January Plan”). On November 1, 2023, we announced a plan to reduce our workforce by approximately 500 employees, representing approximately 10% of the then-current global workforce, and reduce our global real estate footprint (the “November Plan”).
Interest Income (Expense) and Other Income, Net
Interest income (expense) and other income, net consists primarily of interest expense, interest income earned on our cash, cash equivalents, investments, unrealized foreign exchange gain and loss on monetary assets and liabilities, foreign exchange transaction gains and losses and rental income.
29

Income Taxes
We use the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes. Under this method, income tax expense or benefit is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the Company’s condensed consolidated financial statements or tax returns. The measurement of current and deferred tax assets and liabilities is based on provisions of currently enacted tax laws. We evaluate the realization of deferred tax assets based on all available evidence and establish a valuation allowance to reduce deferred tax assets when it is more likely than not that they will not be realized.
Results of Operations
The following table sets forth our condensed consolidated statement of operations data for the periods indicated (in thousands):
Three Months Ended March 31,
20242023
Revenues:
Subscriptions$251,977 $213,922 
Perpetual license21 806 
Software revenue251,998 214,728 
Maintenance and professional services136,609 150,703 
Total revenues388,607 365,431 
Cost of revenues:
Subscriptions46,838 35,684 
Perpetual license180 
Software costs46,843 35,864 
Maintenance and professional services33,878 43,159 
Amortization of acquired technology1,034 2,874 
Total cost of revenues81,755 81,897 
Gross profit306,852 283,534 
Operating expenses:
Research and development79,654 82,039 
Sales and marketing137,433 128,538 
General and administrative50,446 41,360 
Amortization of intangible assets31,739 34,291 
Restructuring4,355 27,253 
Total operating expenses303,627 313,481 
Income (loss) from operations3,225 (29,947)
Interest income13,407 7,583 
Interest expense(39,097)(35,051)
Other income, net6,335 630 
Loss before income taxes(16,130)(56,785)
Income tax (benefit) expense(25,464)59,569