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Informatica Expands Its Reach

Posted on Tuesday, Jun 23rd 2009

Informatica (NASDAQ:INFA), the leading data integration enterprise, reported a very positive Q1 recently. Revenues of $109.1 million grew 5% over the year with EPS of $0.18 compared to $0.16 earned a year ago.

By segment, revenues from Licenses were flat at $44.1 million while Services revenues grew 9% over the year to $65 million. International revenues were 34% of the quarter’s revenue compared to a 33% contribution a year ago. From a vertical perspective, financial services continued to be the largest contributor, followed by high-tech communications, government and healthcare.

Going forward, the company targets Q2 revenues of $114-$120 million with EPS of $0.17-$0.19.

As part of their strategy, they have been expanding into international markets. For instance, in the quarter they added Germany-based Commerzbank, Asia-Pacific-based Nomura Bank, Brazil-based Vale mining firm and Amtrak in the US as clients, to name a few.

Informatica’s data integration product is gaining huge success in deals such as the Commerzbank and Dresdner Bank merger and the Nomura Bank and the Lehman Brothers merger. The service is not just focused on cost-effective solutions but was also rated the best data integration tool by customers for cloud computing.

The company is also going strong on inorganic growth. During the quarter, they acquired Applimation, a leader in the Information Lifecycle Management (ILM) space, to help companies manage the application data life cycle from testing to archiving. With these ILM solutions, Informatica are looking to reduce the total cost of ownership and increase and accelerate the return on investment associated with deploying and maintaining enterprise business applications.

Recently they announced the acquisition of AddressDoctor, a pioneer and leader in global address validation technology spanning more than 200 countries and territories. AddressDoctor’s capabilities include support for multiple levels of addressing such as street level, delivery point validation and geocoding. Informatica believes that the global address validation is a critical element of data quality and expect the acquisition to further advance their technology leadership in data quality by adding the preeminent address validation technology natively to their platform.

Forrester recently reported that US IT spending will no longer grow at the earlier estimate of 1.6%, but rather decrease by 3.1% in 2009. Informatica sees this as an opportunity, as they expect IT departments to have stricter budget controls and to take decisions better aligned with the overall business imperatives — thus mandating “timely, holistic and trustworthy data”. Gartner also estimates the data integration category will grow twice as fast as the overall enterprise software market. Informatica will likely benefit from such a trend.

To further advance their technology leadership, Informatica will release version 9 of its Platform Deep Dive to offer value to customers in IT business collaboration, pervasive data quality, and innovative service-oriented architecture (SOA)-based data services. Analyst tools designed for business users should enhance overall productivity in IT business collaboration, while unified pervasive data quality services should improve the trustworthiness of all data throughout the data integration process. An open SOA-based data services will enable even more types of operational data integration projects, including data virtualization and data provisioning.

Informatica surely has a favorable growth path ahead. If only Oracle realizes that and tries to acquire the company. The stock is trading at $16.90 with a market capitalization of $1.5 billion.

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Informatica is expanding and growing faster is a good news for the investors.

i7store Monday, September 14, 2009 at 3:51 AM PT