Prospectus Summary
PROSPECTUS SUMMARY This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, the terms “Informatica,” “the company,” “we,” “us” and “our” in this prospectus refer to (i) Ithacalux Topco S.C.A. and its consolidated subsidiaries for the periods prior to the completion of the Restructuring Transactions described in the section titled “Restructuring Transactions” and (ii) Informatica Inc. and its consolidated subsidiaries for the periods subsequent to the completion of the Restructuring Transactions. The term “Permira Funds” refers to EvomLux S.à r.l. and the affiliated investment entities that own an interest in EvomLux S.à r.l. and the term “Permira” refers to the global investment firm that advises the Permira Funds. The term “CPP Investments” refers to Canada Pension Plan Investment Board. The term “Sponsors” refers collectively to Permira and CPP Investments, together with the Permira Funds.Informatica Inc.
Overview
We have pioneered a new category of software, the Intelligent Data Management Cloud, or IDMC. IDMC is our AI-powered platform that connects, manages, and unifies data across any multi-cloud, hybrid system, empowering enterprises to modernize and advance their data strategies.
Data is foundational to how digital enterprises run their businesses and make strategic decisions, including, creating new offerings, serving their customers and driving operational efficiency. Our platform enables enterprises to create a single source of truth for their data, allowing them to create compelling 360-degree customer experiences, automate data operations across enterprise-wide business processes like supply chain management, financial planning and operations, and provide governed and secure data access to their employees. It also enables our customers to pursue holistic data-driven digital strategies by accelerating workload migrations to the cloud, thus enabling all the advantages of cloud analytics.
As enterprises embrace data to modernize their business, data fragmentation has proliferated across a myriad of systems, including cloud and on-premise data warehouses, data lakes, databases and applications. This fragmentation is compounded by the increasing number of data consumers who require access to data from these heterogeneous data systems to perform their jobs. Legacy approaches to data management were simply not built to address the growing complexity and scale of the digital enterprise.
To address these challenges, we have pioneered a new way for businesses to accurately track where their data resides, understand what relationships exist across their different data repositories, and understand who is accessing the data and how it is being used – all at enterprise scale. Our cloud-native platform continuously scans our customers’ data to create rich and highly contextualized metadata to create and manage a metadata system of record that acts as a single source of truth about their data. This allows our AI engine, CLAIRE, to help customers access better data faster, make contextual recommendations about data relationships, uncover novel insights about their business and automate previously manual tasks.
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Our platform also consists of a wide range of interoperable data management products, including data integration, API and application integration, data quality, master data management, customer and business 360, data catalog and governance and privacy. These products leverage our platform’s shared services and can be consumed from our SaaS-based cloud offering, which is run on AWS, Microsoft Azure, and Google Cloud Platform, and can also be deployed as a self-managed service in our customers’ cloud, hybrid, or on-premise environments.
CLAIRE benefits from powerful network effects. As more customers adopt our platform, CLAIRE continuously analyzes new transactions, configurations, rules, and decisions and uses this increased intelligence to drive further automation and deliver better insights to our customers. We believe CLAIRE’s network effects will continue to accelerate the adoption of our platform as it drives efficiency, productivity, and intelligence gains for both existing and prospective customers, leading to better business outcomes.
In 2015, we set out an ambitious strategy to transform from an on-premise software company to a cloud-based company. As part of our transformation strategy, we undertook an innovation-led approach to build a novel and comprehensive cloud-native data management platform and develop new products to solve a growing set of data management challenges. Additionally, we re-engineered existing products to integrate with our cloud-native platform, creating interoperable data management capabilities that leverage the shared services and metadata of the underlying platform. The growth and adoption of our cloud platform has led to the number of cloud transactions on our platform, which is a measure of data processed, increasing from 0.2 trillion per month in 2015, to 17.0 trillion per month in 2020 and to 21.6 trillion per month as of June 30, 2021. Our cloud annual recurring revenue (ARR) as of June 30, 2021 was $264 million, compared to $189 million as of June 30, 2020, representing year-over-year growth of 39%.
We also transformed from a primarily perpetual license and maintenance revenue model to a primarily subscription-based revenue model supported by our new cloud products. As a result of this strategy and our efforts to rapidly expand our product offerings, we increased our addressable market significantly and scaled our subscription revenue from $118 million in 2016, to $594 million in 2020 and to $324 million for the six months ended June 30, 2021. Over this period, our subscription revenue has grown from 31% of our total software revenue in 2016, to 90% in 2020 and to 95% during the six months ended June 30, 2021. Our subscription ARR has correspondingly scaled from $99 million at December 31, 2015, to $139 million at December 31, 2016, to $607 million at December 31, 2020 and to $686 million at June 30, 2021, representing a compound annual growth rate (CAGR) of 42% over this time frame. To underscore the expansion of our business via growth in new products, as of June 30, 2021, $581 million in subscription ARR, or approximately 85% of our total subscription ARR, was derived from products other than our traditional PowerCenter offering. This $581 million in subscription ARR from new products at June 30, 2021 represented year-over-year growth of 36%.
As of June 30, 2021, we had approximately 5,700 customers1 in over 100 countries and territories worldwide. Such customers include 9 of the Fortune 10, 84 of the Fortune 100, and 923 of the Global 2000, which customers collectively accounted for approximately half of our revenue in 2020 and are representative of our overall customer base. As our customers generate more data, they typically increase their usage of our platform by adding new use cases, adopting more products, or adding more
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users. Our ability to expand within our customer base has been demonstrated by our subscription net retention rate, which was 114% for the quarter ended December 31, 2020 and 116% for the quarter ended June 30, 2021.
We are a strategic partner to our customers in their modernization and digital transformation initiatives, which we believe is reflected by the number of customers that spend more than $1 million in subscription ARR with us, which has increased from 27 to 66 to 104 to 116 as of December 31, 2018, 2019, 2020 and June 30, 2021, respectively. Customers matter to us. We have an overall customer rating of 4.5 out of 5 in the 2021 Gartner’s Peer Insights ‘Voice of Customer’: Data Integration Tools report.
We go to market through a combination of our global direct sales team and a network of strategic partners. Our strategic partners, including cloud hyperscalers, cloud data platforms, global system integrators and value-added resellers, help extend our sales presence and accelerate the adoption of our platform. We collaborate with cloud hyperscalers and cloud data platforms to help our shared customers accelerate their migration to the cloud and modernize their data and analytics strategies.
For the years ended December 31, 2018, 2019 and 2020, revenue was $1,228 million, $1,307 million, and $1,323 million, respectively, representing year-over-year growth of 6% and 1%. For the six months ended June 30, 2020 and 2021, revenue was $619 million and $676 million, respectively, representing year-over-year growth of 9%. Total ARR, which consists of subscription ARR plus maintenance ARR, was $906 million, $1,021 million and $1,160 million at December 31, 2018, 2019 and 2020, respectively, representing year-over-year growth of 13% at December 31, 2019 and 14% at December 31, 2020. Total ARR was $1,070 million and $1,240 million as of June 30, 2020 and 2021, respectively, representing year-over-year growth of 16% at June 30, 2021. Subscription ARR was $310 million, $446 million, $607 million, $510 million, and $686 million as of December 31, 2018, 2019 and 2020 and June 30, 2020 and 2021, respectively, representing year-over-year growth in subscription ARR of 44% at December 31, 2019, 36% at December 31, 2020, and 34% at June 30, 2021. Maintenance ARR was $596 million, $575 million, and $553 million, $560 million and $554 million as of December 31, 2018, 2019 and 2020 and June 30, 2020 and 2021, respectively.
For the years ended December 31, 2018, 2019 and 2020, net loss was $168 million, $183 million, and $168 million, respectively, and Adjusted EBITDA was $337 million, $335 million, and $400 million, respectively. For the six months ended June 30, 2020 and 2021, net loss was $103 million and $36 million, respectively, and Adjusted EBITDA was $168 million and $175 million, respectively. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measure” for a description of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the United States (GAAP).
Industry Overview: The Data-Driven Digital Enterprise
Challenges Facing Data-Driven Digital Enterprises
Businesses face a number of challenges in their drive to become data-driven digital enterprises. These include:
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Limitations of Existing Approaches to Data Management
Historically, companies have utilized existing approaches to data management for tactical and discrete use cases, which only addressed a limited part of the data management lifecycle. These existing approaches to data management include the following:
These existing approaches to data management suffer from some or all of the below limitations:
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enterprises generating and utilizing large volumes of disconnected, disorganized semi-structured and unstructured data, created by many users globally, enterprises struggle to scale and support their data management.
The Need for an Intelligent Data Management Cloud
Data has become one of the most valuable assets for enterprises. As data has become more mission-critical, the explosion of data volumes has led to massive complexity and fragmentation, creating challenges for enterprises that are looking to extend the use of data within their business as they drive their digital strategies.
In order for organizations to successfully become data-driven digital enterprises, we believe they must manage this growing scale, complexity and proliferation of data from a single platform that serves as a central data management layer that leverages AI and machine learning to unify data management across their ever-expanding number of clouds and enterprise systems. To address these challenges, we have pioneered the industry’s first AI-powered Intelligent Data Management Cloud (IDMC).
Our Platform: The Intelligent Data Management Cloud
Our platform is a new layer in the enterprise stack that allows our customers to connect, manage, unify, govern, and secure data across multi-cloud, hybrid environments. We offer our platform as a SaaS offering deployed on all major public cloud platforms (AWS, Microsoft Azure, and Google Cloud Platform) and also sell our products that customers deploy in their own self-managed private and public cloud environments.
Our platform is deployed across the enterprise data landscape to create a unified system of record of metadata, which is highly rich and contextualized information about enterprise data. Our -5- platform leverages AI-powered algorithms to help customers utilize their data faster, make contextual recommendations about data relationships, uncover novel insights about their data and automate previously manual tasks. This helps our customers modernize and scale their data and analytics strategies, migrate their mission critical workloads to the cloud, create 360-degree business profiles across their customers and supply chains, and democratize data access to everyone in a secure and governed way.
Our platform consists of a series of shared services combined with a wide range of interoperable data management products and is designed to be extensible to avoid vendor and technology lock-in.
IDMC Platform Services
IDMC Platform Products
Our platform includes a comprehensive suite of interoperable data management products that leverage the shared services and metadata of the underlying platform.
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Key Benefits to Our Customers
Our platform enables our customers to:
Our Competitive Strengths
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database, data source, or third-party application. We believe this provides us with a sustainable competitive advantage in a world where almost every company is embracing a multi-cloud, hybrid strategy and where data fragmentation is a significant barrier to bringing together the breadth of an enterprise’s data to make intelligent decisions.
Our Opportunity
Over the last five years, we have significantly expanded our addressable market by investing in our platform and launching several new products. Our products address the markets for Analytics Data Management and Integration Platforms, which IDC estimates at a value of $31 billion by the end of 2021 and $56 billion by the end of 2025, which represents a CAGR of 16%.
We estimate that our current global market opportunity is approximately $44 billion by estimating the 90th percentile of potential Informatica ARR per company and multiplying by the number of companies worldwide across all industries.
Our Growth Strategies
We are pursuing our large market opportunity with growth strategies that include:
Preliminary Estimated Financial Results for the Three Months ended September 30, 2021
The data presented below reflects our preliminary estimated financial results for the three months ended September 30, 2021 based upon information available to us as of the date of this prospectus. This data is not a comprehensive statement of our financial results for the three months ended September 30, 2021. The preliminary results of operations are subject to revision as we prepare our financial statements and related disclosures for the three months ended September 30, 2021; however, such revisions are not expected to be significant.
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While we currently expect our results for the three months ended September 30, 2021 to be within the ranges set forth below, the review of our financial statements for the three months ended September 30, 2021 has not been completed. During the course of the preparation and review of our financial statements and related notes for the three months ended September 30, 2021, additional adjustments to the preliminary estimated financial results presented below may be identified. Our independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to this preliminary financial data and, accordingly, does not express an opinion or any other form of assurance with respect thereto. We caution you that such preliminary estimates are not guarantees of future performance or outcomes and that actual results may differ materially from the estimates described below. See “Risk Factors,” “Special Note Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information regarding factors that could result in differences between the preliminary estimated ranges of certain of our financial results presented below and the actual financial results and other information we will report for the three months ended September 30, 2021. These estimates are not necessarily indicative of the results to be achieved for the remainder of fiscal 2021 or any future period.
Key Business Metrics and Non-GAAP Financial Measure
The following are our key business metrics and Non-GAAP financial measure for the three months ended September 30, 2020 and preliminary estimated key performance indicators and Non-GAAP financial measure for the three months ended September 30, 2021.
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Adjusted EBITDA
The following table provides a reconciliation of Adjusted EBITDA to net loss for the three months ended September 30, 2020 and estimated net loss to estimated Adjusted EBITDA for the three months ended September 30, 2021:
We believe adjusted EBITDA is an important metric for understanding our business to assess our relative profitability adjusted for balance sheet debt levels. For more information regarding why we believe the non-GAAP financial measures to be beneficial, please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures.”
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Revenues
The following table sets forth our revenues for the three months ended September 30, 2020 and preliminary estimated revenues for the three months ended September 30, 2021:
Risk Factors Summary
Our business is subject to numerous risks and uncertainties that you should consider before investing in our company. These risks are described more fully in the section titled “Risk Factors” immediately following this prospectus summary. These risks include, but are not limited to, the following:
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Channels for Disclosure of Information
Investors, the media and others should note that, following the completion of this offering, we intend to announce material information to the public through filings with the Securities and Exchange Commission, or the SEC, the investor relations page on our website, press releases, public conference calls, and webcasts.
The information disclosed through the foregoing channels could be deemed to be material information. As such, we encourage investors, the media and others to follow the channels listed above and to review the information disclosed through such channels.
Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.
Our Sponsors
Permira is a leading global investment firm founded in 1985 that invests in successful businesses with growth ambitions. The firm advises the Permira Funds with total committed capital of approximately US$50 billion (€44 billion) and makes long-term majority and minority investments. The Permira Funds have made over 250 private equity investments in four key sectors: Technology, Consumer, Services and Healthcare. The Permira Funds have an extensive track record in tech investing, having invested US$13.4 billion in 52 companies across enterprise cloud, SaaS, fintech and online marketplaces. The Permira Funds have previously backed and helped scale some of the largest and fastest-growing internet and technology businesses globally, including Informatica, Genesys, G2, Klarna, Legalzoom, Allegro, Teamviewer and Zwift. Permira employs over 350 people in 15 offices across Europe, North America, and Asia.
Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the amounts transferred by the Canada Pension Plan (CPP) in the best interest of the more than 20 million contributors and beneficiaries of the CPP. In order to build diversified portfolios of assets, investments are made around the world in private equities, public equities, real estate, infrastructure and fixed income. At June 30, 2021, the fund totaled CAD$519.6 billion. In addition to Informatica, current and previous technology investments include Asurion, BGL Holdings, GlobalLogic, IMS Healthcare, Lytx, Refinitiv, Sportradar, Suddenlink, UKG, Unity Technologies, Virtusa, Waymo and Waystar.
Summary of the Restructuring Transactions
Prior to the completion of this offering, we have participated in certain transactions, which collectively had the net effect of reorganizing our corporate structure so that the top-tier entity in our -12- corporate structure—the entity that is offering Class A common stock to the public in this offering—is a Delaware corporation rather than a Luxembourg société en commandite par actions.
We previously operated as a Luxembourg société en commandite par actions under the name Ithacalux Topco S.C.A. (Ithacalux). Following the Restructuring Transactions, Informatica Inc. became the owner of Ithacalux and Informatica Inc. indirectly holds all the property and assets of Ithacalux and assumes all the debts and obligations of Ithacalux. Except as otherwise noted herein, the consolidated financial statements included elsewhere in this prospectus are those of Ithacalux and its consolidated subsidiaries. The Restructuring Transactions did not have a material effect on the results of our operations. In this prospectus, we refer to these transactions as the “Restructuring Transactions.” For more information regarding the reorganization of our corporate structure, please see the section titled “Restructuring Transactions.”