Informatica Eyes $1 Billion Subscription ARR In 2022

Just months after its successful IPO, the data management tech developer reported 32 percent growth in subscription annual recurring revenue in the recently completed fourth quarter of 2021, including 40 percent growth in cloud ARR.

Informatica is aiming to reach $1 billion in subscription annualized recurring revenue (ARR) in 2022, a milestone for cloud software developers.

The $1 billion subscription ARR forecast was part of Informatica’s preview of its Wednesday report of its 2021 fourth-quarter and full-year financial results – the company’s first since the enterprise data management platform vendor went public Oct. 27.

“This is going to be a milestone year for us,” said Informatica CEO Amit Walia (pictured) in an interview with CRN on Tuesday in a preview of the financial report. “This is the year subscription annual recurring revenue will be $1 billion. There are a handful of billion-dollar ARR subscription companies across the globe. That’s where we will be by the end of this year.”

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Informatica develops a number of software products for data integration, data governance, data quality and master data management. Informatica’s Intelligent Data Management Cloud, which combines many of those capabilities in a single cloud platform, has become the company’s flagship offering.

Previously a public company, Informatica, based in Redwood City, Calif., was acquired and taken private in 2015 by the Canadian Pension Plan Investment Board and private equity firm Permira in a $5.3 billion deal.

The October IPO, in which 29 million shares were sold, made Informatica a publicly traded company once again. The $841 million in IPO proceeds went toward paying down the company’s debt.

Walia said that Informatica, which was founded in 1993, essentially re-created itself during the six years it was privately held and developed many of the products that make up its data management portfolio today and account for 85 percent of revenue.

“All of our products are the leaders in the markets they compete in,” the CEO said, citing Gartner Magic Quadrant reports and other sources.

Walia said the IPO has little impact on the company’s operations and go-to-market strategy. He said the company has strong cash flow and the reduced debt “gives us more freedom to execute.”

Informatica reported its complete financial results for all of 2021 and the fourth quarter Wednesday. The company said that in the fourth quarter (ended Dec. 31, 2021) Informatica reported revenue of $406.7 million, up 8 percent from the fourth quarter of 2020. For all of 2021 the big data company reported revenue of $1.4 billion, up 9 percent year over year from 2020.

Informatica shares closed Wednesday at $28.15, up 67 cents (2.44 percent) for the day.

The company reported that as of the end of 2021 it had 1,660 customers that spend more than $100,000 in subscription ARR, up 22 percent year over year.

Informatica has completed a transition to selling its software on a subscription basis. In the fourth quarter subscription ARR was up 32 percent year over year to $802 million. And cloud ARR grew 40 percent year over year to $317 million.

Informatica is forecasting that for all of 2022 total revenue will be in the range of $1.585 billion to $1.605 billion, representing approximately 10 percent growth at the midpoint of the range.

Subscription ARR is expected to be in the range of $990 million to $1.01 billion, a gain of approximately 25 percent year over year, according to the company. Cloud ARR is expected to grow approximately 40 percent to between $438 million and $448 million.

Walia said that customers are buying Informatica’s data management software primarily for four use cases: modern data analytics; data governance and privacy; gaining a 360-degree view of customers, suppliers and other aspects of a business; and initiatives to integrate and automate applications and workloads using a data management platform.

A major driver of customer adoption of Informatica’s technology is what Walia calls the “fragmentation of the data landscape” – data that is increasingly distributed across cloud and on-premises applications, databases and other systems. Disbursed data increases the complexity of data management and governance, the CEO said, and makes it difficult to leverage data for competitive gain.

Informatica sells its software for use in on-premises and in private, hybrid and public cloud implementations. While the company takes a “cloud-first” approach to sales, Walia said many large enterprise customers operate hybrid cloud IT systems.

Informatica works with global systems integrators, cloud service providers and channel resellers, the latter internationally and to reach customers in specific vertical industries and the public sector. “Across the board we have invested very heavily in the partner ecosystem,” Walia said.

The company also has stepped up its partnerships with other software developers, including recently expanding an alliance with Databricks to integrate Informatica’s data management software with the Databricks Lakehouse Platform. Informatica also recently expanded a strategic partnership with Google Cloud, including launching a joint cloud migration program to help customers move on-premises data warehouse systems to Google BigQuery.