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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 September 30, 2021
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   o   No  x
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, 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 and post 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 fileroAccelerated filero
Non-accelerated filerxSmaller 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 234,150,313 shares of Class A common stock and 44,049,523 shares of Class B-1 common stock as of December 3, 2021.


TABLE OF CONTENTS



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report (this “Report” or “report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, 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 new customers;
our ability to retain existing customers;
our ability to upsell and cross-sell within our existing customer base;
possible harm caused by customers terminating or failing to renew their subscription contracts;
possible harm caused by customers terminating or failing to renew their maintenance contracts;
possible harm caused by significant disruption of service or loss of unauthorized access to users’ data;
our ability to prevent serious errors or defects in our products and services;
our expectations and management of future growth;
our ability to transition our customers to subscription-based offerings;
the demand for our platform or data management solutions in general;
the possible harm caused by the COVID-19 pandemic and its impact on our business, our employees, and our customers;
our ability to compete successfully in competitive markets;
our ability to respond to rapid technological changes;
our future financial performance, including trends in revenue, costs of revenue, gross profit or gross margin, and operating expenses;
our ability to protect our brand;
the demand for cloud-based solutions;
our ability to attract and retain key personnel and highly qualified personnel;
our ability to effectively train and incentivize our sales force;
our ability to successfully execute our go-to-market strategy;
our ability to manage our international expansion;
our ability to build and maintain relationships with strategy partners;
our ability to maintain, protect, and enhance our intellectual property;
our ability to achieve or maintain profitability;
our ability to manage our outstanding indebtedness;
our ability to successfully identify, acquire, and integrate companies and assets;
our ability to offer high-quality customer support; and
the increased expenses associated with being a public company.
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 share and par value data)
September 30,December 31,
20212020
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$416,967 $344,004 
Short-term investments
34,799 18,729 
Accounts receivable, net of allowances of $2,844 and $4,557, respectively
256,067 408,867 
Contract assets, net
112,109 101,496 
Prepaid expenses and other current assets
99,789 92,025 
Total current assets
919,731 965,121 
Restricted cash
1,719 4,217 
Property and equipment, net
180,705 193,038 
Operating lease right-of-use-assets
76,188 71,490 
Goodwill
2,389,185 2,419,501 
Customer relationships intangible asset, net
991,675 1,122,514 
Other intangible assets, net
99,706 164,637 
Deferred tax assets
10,324 8,412 
Other assets
111,725 124,476 
Total assets
$4,780,958 $5,073,406 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$21,224 $32,960 
Accrued liabilities
60,973 86,052 
Accrued compensation and related expenses
104,156 145,087 
Current operating lease liabilities
18,545 18,453 
Current portion of long-term debt
23,457 23,775 
Income taxes payable
13,663 4,369 
Contract liabilities
481,038 549,888 
Total current liabilities
723,056 860,584 
Long-term operating lease liabilities
64,221 61,143 
Long-term contract liabilities
24,784 20,706 
Long-term debt, net
2,733,104 2,777,812 
Deferred tax liabilities
85,923 117,995 
Long-term income taxes payable
23,625 40,600 
Other liabilities
11,447 27,979 
Total liabilities
3,666,160 3,906,819 
Commitments and contingencies (Note 12)
Stockholders’ equity:
Class A common stock; $0.01 par value per share; 300,000,000 and 300,000,000 shares authorized as of September 30, 2021 and December 31, 2020, respectively; Total of 200,768,636 and 200,416,654 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively1
2,008 2,004 
Class B-1 common stock; $0.01 par value per share; 100,000,000 shares authorized, 44,049,523 shares issued and outstanding as of September 30, 2021 and December 31, 20201
440 440 
Class B-2 common stock; $0.00001 par value per share, 100,000,000 shares authorized, 44,049,523 shares issued and outstanding as of September 30, 2021 and December 31, 20201
  
Additional paid-in-capital1
2,156,010 2,145,254 
Accumulated other comprehensive income
19,498 43,295 
Accumulated deficit
(1,063,158)(1,024,406)
Total stockholders’ equity
1,114,798 1,166,587 
Total liabilities and stockholders’ equity
$4,780,958 $5,073,406 
See accompanying notes to condensed consolidated financial statements
1 Amounts for periods prior to the completion of the restructuring transactions on September 30, 2021 have been retrospectively adjusted to give effect to the restructuring transactions described in the final prospectus dated October 26, 2021 and filed with the SEC pursuant to Rule 424(b)(4) on October 27, 2021 ("Final Prospectus").
1

INFORMATICA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Revenues:
Subscriptions$193,690 $148,278 $517,955 $407,794 
Perpetual license2,846 13,693 19,085 37,582 
Software revenue196,536 161,971 537,040 445,376 
Maintenance and professional services165,271 165,272 500,305 501,195 
Total revenues361,807 327,243 1,037,345 946,571 
Cost of revenues:
Subscriptions20,801 12,928 57,868 38,332 
Perpetual license1,113 975 3,300 2,778 
Software costs21,914 13,903 61,168 41,110 
Maintenance and professional services40,315 38,670 120,597 120,888 
Amortization of acquired technology18,353 25,123 55,448 73,189 
Total cost of revenues80,582 77,696 237,213 235,187 
Gross profit281,225 249,547 800,132 711,384 
Operating expenses:
Research and development63,079 56,902 186,910 168,772 
Sales and marketing116,761 102,215 337,699 324,495 
General and administrative29,631 19,283 84,809 66,125 
Amortization of intangible assets43,097 47,463 129,483 141,806 
Restructuring, acquisition and other charges 15,546 128 17,816 
Total operating expenses252,568 241,409 739,029 719,014 
Income (loss) from operations28,657 8,138 61,103 (7,630)
Interest income311 1,254 845 1,996 
Interest expense(36,423)(37,108)(108,606)(112,968)
Loss on debt refinancing (1,299) (37,400)
Other income (expense), net13,965 (13,193)28,744 (10,697)
Income (loss) before income taxes6,510 (42,208)(17,914)(166,699)
Income tax (benefit) expense3,783 (9,899)15,683 (31,572)
Net income (loss)$2,727 $(32,309)$(33,597)$(135,127)
Net income (loss) per share attributable to Class A and Class B-1 common stockholders:
Basic$0.01 $(0.13)$(0.14)

$(0.55)
Diluted$0.01 $(0.13)$(0.14)$(0.55)
Weighted-average shares used in computing net income (loss) per share:2
Basic244,689 244,285 244,670 244,305 
Diluted249,311 244,285 244,670 244,305 
See accompanying notes to condensed consolidated financial statements.
2 Amounts for periods prior to the completion of the restructuring transactions on September 30, 2021 have been retrospectively adjusted to give effect to the restructuring transactions described in the Final Prospectus.
2

INFORMATICA INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net income (loss)
$2,727 $(32,309)$(33,597)$(135,127)
Other comprehensive income (loss), net of taxes:
Change in foreign currency translation adjustment, net of tax benefit (expense) of $138, $(159), $(120) and $(92)
(17,943)27,356 (34,890)15,196 
Cash flow hedges:
Change in unrealized gain (loss), net of tax benefit (expense) of $(98), $(428), $(141) and $7,664
304 1,322 436 (23,744)
Less: reclassification adjustment for amounts previously included in net loss, net of tax benefit of $1,282, $1,701, $3,463 and $3,796
3,943 5,255 10,657 11,727 
Net change, net of tax benefit (expense) of $(1,380), $(2,129), $(3,604) and $3,868
4,247 6,577 11,093 (12,017)
Total other comprehensive income (loss), net of tax effect
(13,696)33,933 (23,797)3,179 
Total comprehensive income (loss), net of tax effect
$(10,969)$1,624 $(57,394)$(131,948)
See accompanying notes to condensed consolidated financial statements.
3

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

Three Months Ended September 30, 2021
Class A Common StockClass B-1 Common StockClass B-2 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total Stockholders'
Equity
Shares
Amount
Shares
Amount
Shares
Amount
Balances, June 30, 2021
200,650 $2,006 44,050 $440 44,050 $ $2,151,544 $33,194 $(1,063,509)$1,123,675 
Stock-based compensation
— — — — — — 4,033 — — 4,033 
Repurchase of shares
(159)(1)— — — — (1,560)— (2,376)(3,937)
Payment for taxes related to net share settlement of equity awards
— — — — — — (796)— — (796)
Issuance of shares upon exercise of vested options
278 3 — — — — 2,789 — — 2,792 
Net income
— — — — — — — — 2,727 2,727 
Other comprehensive loss
— — — — — — — (13,696)— (13,696)
Balances, September 30, 2021
200,769 $2,008 44,050 $440 44,050 $ $2,156,010 $19,498 $(1,063,158)$1,114,798 

Three Months Ended September 30, 2020
Class A Common StockClass B-1 Common StockClass B-2 Common Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders’ Equity
Shares
Amount
Shares
Amount
Shares
Amount
Balances, June 30, 2020
200,227 $2,002 44,050 $440 44,050 $ $2,139,042 $(25,445)$(958,925)$1,157,114 
Stock-based compensation
— — — — — — 2,879 — — 2,879 
Repurchase of shares
(26)— — — — — (263)— (136)(399)
Payment for taxes related to net share settlement of equity awards
— — — — — — (330)— — (330)
Issuance of shares upon exercise of vested options
58 1 — — — — 382 — — 383 
Net loss
— — — — — — — — (32,309)(32,309)
Other comprehensive income
— — — — — — — 33,933 — 33,933 
Balances, September 30, 2020
200,259 $2,003 44,050 $440 44,050 $ $2,141,710 $8,488 $(991,370)$1,161,271 
4

INFORMATICA INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY—(Continued)
(In thousands)
(Unaudited)
Nine Months Ended September 30, 2021
Class A Common StockClass B-1 Common StockClass B-2 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total Stockholders'
Equity
Shares
Amount
Shares
Amount
Shares
Amount
Balances, December 31, 2020
200,417 $2,004 44,050 $440 44,050 $ $2,145,254 $43,295 $(1,024,406)$1,166,587 
Stock-based compensation
— — — — — — 9,918 — — 9,918 
Repurchase of shares
(420)(4)— — — — (4,159)— (5,155)(9,318)
Payment for taxes related to net share settlement of equity awards
— — — — — — (1,827)— — (1,827)
Issuance of shares upon exercise of vested options
772 8 — — — — 6,824 — — 6,832 
Net loss
— — — — — — — — (33,597)(33,597)
Other comprehensive loss
— — — — — — — (23,797)— (23,797)
Balances, September 30, 2021
200,769 $2,008 44,050 $440 44,050 $ $2,156,010 $19,498 $(1,063,158)$1,114,798 
Nine Months Ended September 30, 2020
Class A Common StockClass B-1 Common StockClass B-2 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total Stockholders'
Equity
SharesAmountSharesAmountSharesAmount
Balances, December 31, 2019
200,112 $2,000 44,050 $440 44,050 $ $2,141,863 $5,309 $(854,681)$1,294,931 
Cumulative effect of accounting change
— — — — — — — — (741)(741)
Stock-based compensation
— — — — — — 9,527 — — 9,527 
Repurchase of shares
(163)(1)— — — — (1,634)— (821)(2,456)
Settlement of certain vested stock options
— — — — — — (7,506)— — (7,506)
Payment for taxes related to net share settlement of equity awards
— — — — — — (2,053)— — (2,053)
Issuance of shares upon exercise of vested options
310 4 — — — — 1,513 — — 1,517 
Net loss
— — — — — — — — (135,127)(135,127)
Other comprehensive income
— — — — — — — 3,179 — 3,179 
Balances, September 30, 2020
200,259 $2,003 44,050 $440 44,050 $ $2,141,710 $8,488 $(991,370)$1,161,271 

See accompanying notes to condensed consolidated financial statements.
5

INFORMATICA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
20212020
Operating activities:
Net loss
$(33,597)$(135,127)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
18,763 19,352 
Non-cash operating lease costs
11,985 13,357 
Stock-based compensation
9,918 9,527 
Deferred income taxes
(35,938)(50,745)
Amortization of intangible assets and acquired technology
184,931 214,995 
Gain on sale of investment in equity interest
(110)(147)
Amortization of debt issuance costs
4,376 4,774 
Loss on debt refinancing
 25,891 
Unrealized loss (gain) on remeasurement of debt
(31,320)37,400 
Changes in operating assets and liabilities:
Accounts receivable
147,730 159,933 
Prepaid expenses and other assets
(19,972)(12,003)
Accounts payable and accrued liabilities
(65,389)(90,480)
Income taxes payable
2,425 (5,734)
Contract liabilities
(51,409)(101,782)
Net cash provided by operating activities
142,393 89,211 
Investing activities:
Purchases of property and equipment
(6,015)(9,061)
Purchases of investments
(64,114)(18,720)
Maturities of investments
47,764 5,130 
Business acquisitions, net of cash acquired
 (21,439)
Net cash used in investing activities
(22,365)(44,090)
Financing activities:
Payments for share repurchases
(9,318)(2,456)
Payment of debt
(17,766)(820,073)
Payment of debt issuance costs
 (32,211)
Proceeds from issuance of debt
 949,965 
Payment for settlement of vested stock options
 (7,506)
Payments for taxes related to net share settlement of equity awards
(1,497)(2,053)
Payment of deferred and contingent consideration
(10,705)(6,013)
Net activity from derivatives with an other-than-insignificant financing element
(14,162)(3,394)
Proceeds from issuance of shares
6,775 1,517 
Net cash (used in)/ provided by financing activities
(46,673)77,776 
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash
(2,890)(8,870)
Net increase in cash, cash equivalents, and restricted cash
70,465 114,027 
Cash, cash equivalents, and restricted cash at beginning of period
348,221 176,391 
Cash, cash equivalents, and restricted cash at end of period
$418,686 $290,418 
Supplemental disclosures:
Cash paid for interest
$84,911 $114,869 
Cash paid for income taxes, net of refunds
$49,203 $25,363 
Non-cash investing and financing activities:
Purchases of property and equipment recorded in accounts payable and accrued liabilities
$2,305 $1,552 
See accompanying notes to condensed consolidated financial statements.
6


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Description of Business

Informatica Inc. (the “Company”) was incorporated as a Delaware corporation on June 4, 2021. The Company was formed as part of a series of restructuring transactions, which collectively had the net effect of reorganizing the corporate structure of Ithacalux Topco S.C.A.3 (“Ithacalux”), resulting in Informatica Inc. being the top-tier entity in that corporate structure rather than Ithacalux, a Luxembourg société en commandite par actions. On September 30, 2021, the Company completed these restructuring transactions, resulting in the Company becoming the owner of Ithacalux and its property, assets, debts and obligation. As Informatica Inc. did not have any previous operations, Ithacalux is viewed as the predecessor to Informatica Inc. and its consolidated subsidiaries. Accordingly, these condensed consolidated financial statements include certain historical condensed consolidated financial and other data for Ithacalux for periods prior to the completion of the business combination. Unless the context otherwise requires, references to “Informatica”, “we,” “us,” “our” and the “Company” mean Informatica Inc. and its consolidated subsidiaries for all periods presented.
As a result of the restructuring transactions, the shareholders of Ithacalux contributed their interests in Ithacalux to Informatica in exchange for an aggregate of 288,867,682 shares of Informatica’s common stock. 200,768,636 shares of Informatica’s common stock was designated Class A common stock, and 44,049,523 shares of the common stock was designated Class B-1 common stock, with an equal number (44,049,523 shares of the common stock) designated Class B-2 common stock. The number of shares of Class A common stock and Class B-1 and Class B-2 common stock issued was determined in accordance with the applicable provisions of the contribution agreement. Amounts for periods presented in the Report prior to the completion of the restructuring transactions on September 30, 2021 have been retrospectively adjusted to give effect to the restructuring transactions described in the final prospectus dated October 26, 2021 and filed with the SEC pursuant to Rule 424(b)(4) on October 27, 2021 ("Final Prospectus").

On October 29, 2021, the Company completed its initial public offering (the “IPO”), in which the Company issued and sold 29,000,000 shares of its Class A common stock at $29.00 per share. On November 10, 2021, the Company issued and sold an additional 4,350,000 shares of Class A common stock in connection with a full exercise of the underwriters’ option to purchase additional shares granted in the IPO. The Company received net proceeds from the IPO of $915.7 million after deducting the underwriters’ discounts and commission.
The Company has developed an AI-powered software platform that connects, manages, and unifies data across 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 Integration, API & Application Integration, Data Quality, Master Data Management, Customer and Business 360, Data Catalog and Governance and Privacy.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all disclosures normally required in annual consolidated financial
3 Ithacalux Topco S.C.A. was a Luxembourg partnership limited by shares (société en commandite par actions) formed on May 27, 2015. In 2015, a subsidiary of Ithacalux was merged with and into Informatica LLC (f/k/a Informatica Corporation) which was taken private in a transaction with two leading private equity sponsors, the Canada Pension Plan Investment Board (“CPP Investments”) and Permira Funds (“Permira” together with CPP Investments, the “Sponsors”) (the “2015 Privatization Transaction”).
7


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
statements prepared in accordance with U.S. GAAP. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes
included in the Company’s Final Prospectus.

In management’s opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial consolidated statements and reflect all adjustments, which include recurring adjustments necessary for the fair statement of the Company’s financial position as of September 30, 2021 and the results of operations for the three and nine months ended September 30, 2021. The results of operations for the three and nine ended September 30, 2021 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 its operations and allocates resources as a single operating segment. Further, the Company manages, monitors and reports its operating results and financial position as a single reporting 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 preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the periods covered by the financial statements and accompanying notes. Such estimates include, but are not limited to, revenue recognition, stock-based compensation including estimation of the grant date fair value of the common stock, the assessment of the recoverability of long-lived assets (goodwill, and identified intangible assets), tax provision, and contingencies. The Company bases its estimates on historical experience and on assumptions that it believes are reasonable. The Company assesses these estimates on a regular basis; however, actual results could materially differ from these estimates.
Revenue Recognition
The Company derives its revenue from sales of 1) cloud subscriptions, representing access to the Company’s software via Company-hosted cloud applications, 2) on-premise subscription licenses, representing a term license to on-premise software, 3) subscription support, representing support for on-premise subscription licenses, 4) perpetual software licenses, and 5) maintenance and professional services, consisting of maintenance on perpetual software licenses, and professional services, consisting of consulting and education services. The Company recognizes revenue net of applicable sales taxes, financing charges it has absorbed, and amounts retained by its partners (including resellers and distributors), if any. The Company does not act as an agent in any of its revenue arrangements.
Revenue is recognized and recorded in accordance with Accounting Standards Codification 606, Revenue From Contracts with Customers (“ASC 606”) which generally requires the Company to recognize revenue when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred or services provided to its customers in an amount that reflects the consideration the Company expects to receive from its customers and partners in exchange for those products. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied.
Performance obligations contained in a contract are identified based on the goods or services that will be transferred to the customer that are both (i) capable of being distinct, and the customer can benefit from the goods or services either on their own or together with other resources that are readily available from third parties or from the Company, and (ii) distinct in the context of the contract, and the transfer of the goods or
8


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
services is separate from other promises in the contract. To the extent a contract includes multiple promised goods or services, the Company applies its judgment to determine whether the promised goods or services are capable of being distinct, and distinct in the context of the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to use and obtain the benefit of the product.
Performance ObligationWhen Performance Obligation is Typically Satisfied
Subscription:
Cloud services and subscription supportOver Time: Ratably over the contractual term; commencing upon the later of when access to the service is made available or the contractual term commences
On-Premise subscription licensePoint in Time: Upon the later of when the software license is made available or the contractual term commences
Perpetual licensePoint in Time: When the software license is made available
MaintenanceOver Time: Ratably over the contractual term
Professional ServicesOver Time: As services are provided
Software revenue
Software revenue is comprised of 1) cloud services, 2) on-premise subscription licenses and related subscription support offerings, and 3) perpetual license revenue.
Cloud and subscription support offerings consist of revenue from customers and partners contracted to use the related services during a subscription period ranging from one to three years, are generally billed annually in advance, and are non-cancelable.
On-premise subscription license revenue primarily consists of revenue from customers and partners contracted to use software during a subscription term with terms ranging from one to three years. These arrangements are generally billed annually in advance during such multi-year terms and are generally non-cancelable.
Cloud services revenues include revenues from Informatica Cloud Services offerings, which deliver applications and infrastructure technologies via cloud-based deployment models for which we develop functionality, provide unspecified updates and enhancements, host, manage, upgrade, and support, and that customers access by entering into a subscription agreement with us for a stated period.
On-premise subscription license support revenues are generated through the sale of license support contracts sold together with the on-premise subscription license purchased by our customer. Subscription license support contracts provide customers with rights to unspecified software product upgrades, maintenance releases and patches released during the term of the support period and include internet access to technical content, as well as internet and telephone access to technical support personnel. Our subscription software licenses have significant standalone functionalities and capabilities. Accordingly, these subscription software licenses are distinct from the support services as the customer can benefit from the software without the services and the services are separately identifiable within the contract.
Perpetual license revenue consists of revenue from customers and partners for sales of perpetual software licenses, are generally billed upfront along with the associated maintenance, and are non-cancelable. The maintenance associated with perpetual licenses is classified within Maintenance and Professional Services.
Maintenance and Professional Services
Maintenance and professional services are comprised of maintenance, consulting, and education services. Maintenance contracts, which consists of ongoing support and software updates, if and when
9


INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
available, under perpetual software license arrangements, are typically one year in duration. Our perpetual software licenses have significant standalone functionalities and capabilities. Accordingly, these perpetual software licenses are distinct from the support services as the customer can benefit from the software without the services and the services are separately identifiable within the contract. Maintenance contracts are generally billed annually in advance and are generally non-cancelable. 
Consulting services are primarily related to configuration, installation, and implementation of the Company’s products, and are generally performed on a time-and-materials basis. Revenue for fixed fee contracts are generally recognized as services are performed, applying input methods to estimate progress to completion. If uncertainty exists about the Company’s ability to complete the project, its ability to collect the amounts due, or in the case of fixed-fee consulting arrangements, its ability to estimate the remaining costs to be incurred to complete the project, revenue is deferred until the uncertainty is resolved. Consulting services are generally either billed in advance or monthly as services are rendered. 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 services consist of classes offered at the Company’s headquarters, sales and training offices, customer locations, and on-line. Revenue is recognized as the classes are delivered. Education services are generally either billed in advance or as services are rendered.
Contracts with multiple performance obligations
Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis and revenue is recognized when (or as) the Company satisfies each performance obligation by transferring control of the promised goods or services to the customer.
The determination of SSP requires judgement and is established for performance obligations that are routinely sold separately, such as support and maintenance on the Company’s core offerings. In connection with its cloud services, on-premise subscription licenses, and on-premise perpetual licenses, the Company is unable to establish SSP based on observable prices given the products and services are sold for a broad range of amounts (that is, the price is highly variable), and a representative SSP is not discernible from past transactions or other observable evidence. As a result, the SSP for cloud services offerings, on-premise subscription licenses, and on-premise perpetual licenses, included in a contract with multiple performance obligations, is determined by applying a residual approach whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSPs, with any residual amount of transaction price allocated to cloud services, on-premise subscription licenses, and on-premise perpetual licenses.
Accounts receivable
The timing of revenue recognition may differ from the timing of invoicing customers. Accounts receivables as reported on the condensed consolidated balance sheets, includes the unconditional amounts owed from customers comprising amounts invoiced, net of an allowance for doubtful accounts. A receivable is recognized in the period products are delivered or services are provided, or when the right to payment is unconditional. Payment terms on invoiced amounts are typically between 30 and 60 days, therefore the contracts do not include a significant financing component. Also, they typically do not involve a significant amount of variable consideration as they represent stated prices.
Unbilled receivables
Contract assets represent reported revenues attributable to performance obligations that have been delivered, but such amounts remain unbilled due to certain remaining conditions under the contract not yet met.
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INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Contract assets are primarily driven by sales of on-premise subscription licenses with 2-3 year subscription terms, but the related fees are generally invoiced annually. There were immaterial impairment losses associated with contracts with customers for the nine months ended September 30, 2021. The balance of unbilled receivables as of September 30, 2021 (unaudited) is presented in the accompanying condensed consolidated balance sheets.
Contract Liabilities
Contract liabilities consist of deferred revenue and customer deposit liabilities and represent cash payments received or due in advance of fulfilling our performance obligations. In arrangements where the Company has an obligation to transfer goods or services to the customer and fees are invoiced or amounts are received ahead of revenue being recognized under non-cancelable contracts, deferred revenue is recorded. Customer deposits represent billings or cash payments received under cancellable contracts. Deferred revenue and customer deposit liabilities will be recognized as revenue in future periods. As of September 30, 2021, deferred revenue and customer deposit liabilities were $500.0 million and $5.8 million, respectively. As of December 31, 2020, deferred revenue and customer deposit liabilities were $554.1 million and $16.5 million, respectively.
The current portion of contract liabilities represents the amounts that are expected to be recognized as revenue within one year of the condensed consolidated balance sheet date. Contract liabilities were approximately $505.8 million as of September 30, 2021, of which the Company expects to recognize $481.0 million over the next 12 months, and the remainder thereafter. Contract liabilities were approximately $570.6 million as of December 31, 2020, of which the Company expects to recognize $549.9 million over the next 12 months, and the remaining thereafter. The amount of revenues recognized during the three and nine months ended September 30, 2021 that were included in the opening contract liabilities balance as of January 1, 2021 was approximately $130.2 million and $476.0 million, respectively. The amount of revenues recognized during the three and nine months ended September 30, 2020 that were included in the opening contract liabilities balance as of January 1, 2020 was approximately $119.5 million and $445.3 million, respectively. Revenues recognized from performance obligations satisfied in prior periods were immaterial during the three and nine months ended September 30, 2021 and 2020.
Remaining Performance Obligations from Customer Contracts
Remaining performance obligations represent contracted revenues that have not yet been recognized (including contract liabilities) and amounts that will be invoiced and recognized as revenues in future periods. The volumes and amounts of customer contracts that the Company records and total revenues that it recognizes are impacted by a variety of seasonal factors. In each fiscal year, the amounts and volumes of contracting activity and its total revenues are typically highest in its fourth fiscal quarter and lowest in its first fiscal quarter. These seasonal impacts influence how its remaining performance obligations change over time, and, combined with foreign exchange rate fluctuations and other factors, influence the amount of remaining performance obligations that the Company reports at a point in time. As of September 30, 2021 and December 31, 2020, the Company’s remaining performance obligations were $1,005.6 million and $984.8 million, respectively, which does not include customer deposit liabilities. The Company expects to recognize approximately 69% and 70% of its remaining performance obligations at September 30, 2021 and December 31, 2020, respectively, as revenues over the next twelve months and the remainder over the next two to three years.
Concentrations of Credit Risk and Credit Evaluations
Financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash and cash equivalents, short term investments, derivatives and trade receivables. The Company’s cash and cash equivalents are generally held with large, diverse financial institutions worldwide to reduce the amount of exposure to any single financial institution. The majority of cash equivalents consists of money market funds, that primarily invest in U.S. government securities.
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INFORMATICA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company makes judgments as to its ability to collect outstanding receivables and provide allowances for the portion of receivables when collection becomes doubtful. Further, the Company maintains an allowance for expected credit losses. It estimates expected credit trends for the allowance for credit losses for receivables and contract assets based upon its assessment of various factors, including historical experience, the age of the receivable balances, credit rating of its customers, current economic conditions, and other factors that may affect its ability to collect from customers. Expected credit losses are recorded as general and administrative expense.

The Company’s derivative contracts are transacted with various financial institutions with high credit ratings. The Company evaluates its counterparties associated with the Company’s foreign exchange forward contracts and interest rate swap contracts at least quarterly. Since all these counterparties are large credit-worthy banking institutions, the Company does not consider counterparty non-performance to be a material risk. The Company may enter into master netting arrangements to mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty.
No customer accounted for more than 10% of revenue during the three and nine months ended September 30, 2021. At September 30, 2021 and December 31, 2020, no customer accounted for more than 10% of the accounts receivable balance.
Recent Accounting Pronouncements Not Yet Adopted
In March 2020, the Financial Accounting Standards Board (FASB) issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions to contract modifications and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. The standard is effective upon issuance through December 31, 2022 and may be applied at the beginning of the interim period that includes March 12, 2020 or any date thereafter. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.
Note 3. Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments
The following table summarizes the Company’s cash, cash equivalents, restricted cash and short-term investments as of September 30, 2021 and December 31, 2020 (in thousands). There were no marketable securities held at September 30, 2021 and December 31, 2020.
September 30,December 31,
20212020
Cash
$232,958 $201,732 
Cash equivalents:
Time deposits
4,095 8,270 
Money market funds
179,914 134,002 
Total cash equivalents
184,009 142,272 
Total cash and cash equivalents
$416,967 $344,004 
Restricted cash
1,719 4,217 
Total cash, cash equivalents, and restricted cash
$418,686 $348,221