Informatica Inc. (INFA) Earnings Call Transcript & Summary

So let's get this started. Thanks, everybody, for joining the BofA second day of the tech conference. My name is Koji Ikeda. I'm one of the software analysts on the enterprise software team here at BofA. And absolutely thrilled we have Informatica, Amit Walia, CEO. Thanks for coming. Super, super appreciate it.

Good to be here.

Yes. Thank you. So I guess, just to kick it off, for those that are new to the story and maybe new to you, maybe a brief introduction of Amit, who you are, what's your story. You've been at Informatica for a long time. Talk about -- a little bit about your background, maybe what is Informatica and what is the opportunity that you guys are addressing.

Sure. So good to see you all. I've been with Informatica 9-plus years now, and I've actually done a variety of things there. I was the Head of Products, then I basically picked up additional responsibilities along the way, President of the company and became CEO 2.5 years ago. I joke my gift of becoming CEO was the COVID. So I became CEO Jan 2020 and it was COVID right after that. And then I'd say when I took the company public last fall and then we are staring into this bizarre world, so I think I'm prepared for anything now. But Informatica, more importantly, so look, we're a very unique company. We went public last fall. We went public again. We were a public company before. We had 25-plus years in existence. And the company actually -- so we went private in 2015 with 2 private equity investors, Permira and CPPIB. And in the last 6 years, we have a very unique private equity-led investment. It was a growth-led investment, full-blown transformation. So we were a single-product on-prem license company, very resilient by the way. We've had very big operation workloads across the largest companies in the world. But it was a big growth investment where from that, we were sub-2,000 people to where we stand today, we are basically a multiproduct platform company natively in the cloud. We basically don't sell any more in-license. We're probably the rare enterprise software company that went through that transition without impacting margins. I remind people. And obviously, we went from sub-$100 million subscription to what we guided this year, a $1 billion subscription in a $44 billion TAM. And obviously, we're growing the top line, but we're a rare company that also make money. Last fall, when we were going public, the world was very different. And I [ mistook ] out Koji and some of his colleagues, I still apologize for making money and printing cash. But we do print money. We are a mid-20s operating margin company and print a pretty healthy cash flow. And we serve the largest of the largest company, and our market is data management. So we sit in the middle with all the cloud hyperscalers, Azure, AWS, Snowflake, Databricks, anybody, helping large companies do analytics or other operational workloads to understand their digital businesses and run the business. And we'll get into use cases later. But that's what we do, and we're public back again as we speak.

Got it. Got it. Thank you. So I'm asking every management team 3 questions. Same question across the board, all 3 days. One on the macro, one on the hiring environment for Informatica and then one on compensation structure, and we'll get into that. So first question on macro. A lot of things going on in the world, Ukraine-Russia war, European macro, what's going on over there, China fears, inflation risk over here, interest rate risk, all sorts of recessionary risk. I mean, from a high level, are there any sort of impacts that you're seeing in the business? And I guess, more importantly, how do you think about positioning or any sort of changes you've done internally for Informatica to prepare for a potential recessionary future?

So it's a great question. I think any CEO sitting in their chair cannot ignore that there's a lot going on. And I think it will be naive to say that, oh, boy, it doesn't impact me. That's not true. I think the impact is of different shades of gray, if we can use that word. I think if I step back, first of all, our exposure to Europe and to Russia is very minimal. We said that in the earnings call, too. So that really doesn't impact us much. It is very miniscule. But I do think that the confluence of all the things are there. We had a very good Q1. In fact, we were ahead of the guidance. We raised that total ARR guidance for the year also. But what we did was that -- so we've guided for cloud ARR growth to be 40%. We grew 43% in Q1. We decided to be prudent and let it flow and not raise the guide for the year. And we said, look, we're still holding to our guide for the year, but we'll take the overperformance of Q1 to be thoughtful, prudent, to let the world play out as we see through Q2 and beyond. Because, again, it will be naive to sit here and say everything will be perfect. Having said that, I think this -- we just had Informatica World, which is our user conference, which was a good barometer 2 weeks ago in Vegas, oversubscribed. I spoke to many customers. TAM created is very healthy. Customers are still spending on mission-critical digital workloads. And that's something where we are very unique to the question you asked. We don't do nice-to-have what-if workloads. Our workloads are always very operational, very mission-critical to an enterprise. So even when we use the word analytics, our analytics workloads are like customers printing their 10-K, 10-Q reports. They don't stop. And so that's where it gives me comfort. Obviously, we'll finish this quarter, we'll watch next quarter. So I think our prudence in our guide has been our way of saying, look, let's watch. Now if I reflect back, we're a 25-plus year company. We've seen the dot-com bust, 9/11, 2008 crisis and also COVID. In all of those 4 times, Informatica came out bigger and stronger. So given the current market, we see this as a moment of strength. Customers are going to come towards strong companies that have broad portfolio. So we are preparing for that to make sure that the platform story sticks. We can give customers a lot more ease of use. For example, they can go from using product A on the platform to product B on the platform without having to do anything. So we are doing that. We are obviously making sure it's easy for customers to operate with us. But we feel pretty good given our history that every pickup in the economic market has made Informatica more relevant and bigger.

Got it. Got it. Got it. Thank you for that. Next question, hiring environment for Informatica. So 6 months ago, kind of the word out there in the tech world was you couldn't find the right -- I mean, I guess, every company was having a hard time hiring people. And my, how the world has changed. It sort of seems like it. So what is the hiring environment looking for you? How do you think about bringing people on? Are you seeing that it's maybe easier or similar? I mean just talk to me a little bit about how you think about hiring.

I think we are, first of all, right now standing in the middle of what I think is going to be an inflection point in hiring. No doubt the last 18 months have been very difficult hiring environment for any company across the globe. All of us. I mean, I'm part of a couple of CEO forums in the value tech CEO stack, software CEOs, and we all joke with each other. We're making the problem worse for each one of us because we're just hiring from each one of us. Obviously, there's more talent we need than the work. We all had -- we were all growing. So I do think that, that was a genuine struggle everybody was going through. Having said that, I do see that that's getting corrected very rapidly. I think all of us are seeing right now, right? And I think in that case, most of the companies have like, hey, look, like just be thoughtful. There are some kind of companies that do layoffs and companies like us that are just being thoughtful in hiring, that we don't have to hire ahead of it. Just like being prudent in our guide, just be prudent in hiring. That's what most of the companies are doing. So I do think that, that's going to change in the second half, Koji. The other one is that -- which we think is going to be to our advantage is that employees are going to work towards companies that have stability. This is a company that is there forever, makes profit, has great customers. Stable places are great places to go, and people make those decisions very quickly in a time like this. And lastly, basically, again, if you look around for us, in particular, when we were public, private, now as we go public, we have a liquid stock to give and again, a very stable stock to give. So that's how I think the market is changing and we are responding to that.

Got it. Got it. Got it. And the third question is you're alluding to it a little bit right there on the stock compensation packages out there. One of the debates we're hearing out in the investment community is how to think about that balance between cash and stock, given everything going on in the markets today. So when you look at the compensation structures of your business from a high level, how do you think about the mix of cash and stock? Is there any changes that could happen? And if there are changes, how do you think about the margin impacts to that?

Yes, I would say no changes to us. For us, what happened was actually -- so we were a private company. And to be honest, we were a private equity company, so not everybody in the company had stock candidly. And one of the big changes I made as we went public is -- and we shared that with you all on the earnings call is that we basically made stock available to pretty much everybody in the company. So coming out in Q1, you saw a onetime increase in stock-based comp. From there onwards, it's run rate. For us, actually, it was uniquely different to other companies. It became a moment of strength because now, we had a liquid stock to offer to employees to attract talent. So it became a strength for us. No -- so that was a onetime grant we made to everybody. And then from there, it becomes a regular run rate grant based on performance, based on different bands and everything. So we don't see that changing dramatically. For us, it was a change and that, we think, will be strength for us. But nothing dramatically changes. Again, as I say, what we are -- I talk to our recruiting team. What we are hearing a lot of, employees make decisions, they want to go to stable companies where the stock is going to be holding its ground based on the P&L strength that they see versus the last 18 months. I know a friend of mine also who've been going to private companies where they're like, I don't even know what it's worth anymore. That, I think, will flip.

Got it. Got it. Okay. Moving on from those 3 questions. You guys just had your big customer conference in Vegas, Informatica World. It sounds like it was oversubscribed. That's great. So I guess, give us the recap. What are kind of the key takeaways from your view from Informatica World?

Yes. I think, a great conference. To me, I get most excited about meeting customers, and that's what I could do in person outside my winch camera. That's a welcome change for all of us. So I oversubscribed. We had customers from all over the globe, which obviously makes you feel great. You're talking to customers across different types of directors all the way to decision-makers. The key theme for us has been like -- if I put it into 3 categories again. Huge innovation, we are a platform company. Our platform is called Intelligent Data Management Cloud. We've been industrializing our platform. We had announced a retail cloud. We announced health care and life sciences and financial services version of our platform. So that was one big thing, helping, obviously, these vertical customers to use the platform very, very rapidly. Second is many product announcements. So first of all is in the area of analytics, we have our data integration capabilities that you are very well aware of. So we announced -- and by the way, for us, we announce that with partners and then they become available to every partner, right? Making it very easy for business users, we have something called an INFACore. You can literally get started with data pipes getting created to do integration very rapidly out of the box. Leveraging ML Ops, you see we partner with Databricks where people can do the ML on the side, but how do you industrialize it? So Bank of America, you want to do risk and fraud detection. Somebody has done a great job analyzing the model, but now how do you take it across all of your securities organization? Industrializing it in a matter of few clicks than spending years to do that. Obviously, making -- loading data, we call it Data Loader, in a matter of few clicks and very importantly for us, a freemium model. It's available free. We launched it with Google BigQuery. So you can literally, as a business user, anybody in this room actually through a UI can click, connect, move data into that for analytical purposes. That -- we took our MDM and made it natively available on Azure at scale across the globe. Our data governance is definitely on a tear, again, announcing its deep integrations, Power BI with AWS and Snowflake. Those are some of the big announcements we made. On the partnership front, and I covered some over here, we basically were the UN of our market, a UN that works. We had a rare conference where we could bring all of them together, AWS, Azure, GCP, Snowflake, Databricks, and we announced a new partnership with Oracle Cloud. All of them were present at Informatica World. And with all of them, we announced deepening of the partnership. The one new partnership that we announced was with Oracle. Oracle, obviously, OCI has come a long way. We are helping them scale out their autonomous database, data warehouse, migrate workloads over there. So obviously, that was a new partnership we announced. So we're extremely excited that our partnership with each one of them has deepened and scaled out. And I will just answer one more thing not tied to Informatica World. Back in February when we came out in our first earnings call, we had held our IPO model. And at that point, I'd made one comment, which probably was a little bit harsh of a feedback we got. We added more OpEx, and we said, hey, we are seeing cloud grow. And we are adding more investment to these partnerships because we believe for the long term, we can actually take away with the market. And I said, watch for the next 3 months, our announcements back to back to back. And since then, we've announced multiple capabilities with all these partners that are going to help us for the long term. So we've delivered to what we said there. I don't think it was well-received to be very candid, but I want the investment community to understand that we -- when we say something, we absolutely deliver against it.

Got it. Got it. I want to dig in on the Informatica World kind of in 2 categories. One on products, and then the next question, a follow-up later on partnerships. So on the product side, when you're describing these new products, it sounds like, I don't know, maybe this is a layman's way of putting it. But it sounds like you're removing a lot of friction or democratizing the ability to use Informatica. Is that the right way to categorize these new products? And what does that mean when you're removing friction within the data? Is data -- is there just so much data out there that's being created that enterprises are looking for tools to just remove that friction, get that data where it needs to be so they could run their analytics on it, too?

So yes. And let me kind of explain that further. So I think there is this -- there is more data, period. That's a statement. And I think that's going to be the case for the next 10, 20 years. I think the issue is that there is a lot more heterogeneity and complexity. What do I mean by that? And I'll just give you like 2 or 3 examples. There is no world where customers are just going to one platform. I know that question. Everything is going to platform A or everything is going to platform B in terms of where data sits as a database or a data warehouse or a data lake. No. No. I'll repeat that time. No. Every large customer is going to be in a multi-cloud world. The struggle customers have is, but how do I manage it? I put my [ set web ] customer data in -- and I'm not going to pick names, in this data lake. I picked some of my transaction data and put it in that data warehouse. But I want to understand customers' churn analysis, connect the 2. None of these guys have an incentive to move from here. Everybody says, move it to move. What does the customer do? You pay twice the money. Where we come in and this is the beauty of what customers ask us, we connect the dots. You can leave it there, leave it there, we'll bring it together to help you make sense of it. Now in that context, I'll put a very simple 2 by 2. There are technically savvy customers, users and there are technically non-savvy users. We've always been very good in helping technically non-savvy -- technically savvy customers to operate because that's industrial-grade use cases. But everybody wants to use data, like you and I'm sure your team says, I just want to understand what trading data is happening quickly. Can I get -- bring it from 4 sources, and I want to visualize it in your favorite BI tool. That's what we are doing now with the help of our cloud. That's what the democratization is that now with Data Loader or this INFACore, you can just click UI. You don't have to do anything. It automatically -- CLAIRE does the work behind the scenes. CLAIRE is our AI engine. And the other beauty of the platform is -- but when you and your users want to do that, your CIO or CDOs like -- but I don't know if somebody is going to get bad access to data is going to become a red flag. Our data governance through CLAIRE under the covers flags whether you have access to it or not or whether you're getting wrong access to it or not. But if you want access, go ask the right person. So we create that frictionless -- that's what we've invested in the last 12 months. Frictionless, governed democratization of data. And we see that as an additional vector of continuous growth for us.

When you think about the volumes of data that's being created out there, clearly exponential growth. And you do -- the largest enterprises or the customers that you're selling into, I mean, I guess, they must understand this issue. But is it the democratization plus the governance that is really driving adoption tools like Informatica? It's really figuring out where that data needs to go but also making sure it's done in the right manner.

So you're right. Those are definitely vectors of demand for us. Can I move data quickly, can I move data that makes sense quickly? How do I manage the governance and compliance of this data? All of those become important. Think of a use case. I get web churn data. A lot of it is junk. I put it in my favorite repository. I just paid a s*** load of money. Now I want to move it from here to this warehouse to do a lift, so I move all of it. No. With our data quality, we basically don't want to move. In fact, 90% of it don't move. So to that more expensive data warehouse will help customers only the relevant amount. Beauty of the platform comes in, right? Now when you're moving it, put governance on top of it. Because now suddenly, it goes from junk data to good data, which will get access to it. That's how the use cases start evolving very quickly and then start -- customers start benefiting from it. Today, I see customers spending so much money in just moving and putting data in these data stores. There's no value. So you're right. The other issue is the worry about -- governance is a big issue, not just for compliance purposes, brand purposes. Somebody gets access to wrong data, somebody has done something wrong with it, it becomes a brand issue if I'm a retailer. As you saw in health care, it could be a compliance issue. But for some other customers, it could be a brand issue, right? Somebody works -- we have RSS going on. I've been in the security world before. Security is a very complex problem. Through our care, we help you understand very sensitive data and who has access to it. Customers are using that to solve their security problems in their data layer. So basically, by the way, going back to security, when you get hacked, typically, it takes us 3 to 6 months to understand a hack has happened. But the hacker has always gone to the -- your most precious data already. So reacting to that, actually, we can tell you whether it's sensitive data. So governments actually has many layers of use cases for our customers.

Wow. Wow. Follow-up question kind of on Informatica World. The partnerships. Let's focus on the Oracle partnership first. That seems to be the newest one. So I guess, kind of walk us through the genesis of that partnership, why now? Why didn't it happen before? What does it mean for the future?

Yes. So look, each of these partnerships take multi-years because these are product partnerships that then become go-to-market partnerships. So obviously, I think everybody knows Oracle has been on a mission to build out OCI. So obviously -- I think we spoke to them 2 years ago, and they were in the early stages. And then we spoke to them a year ago, and they've progressed and the willingness was on both sides to partner. But it wasn't ready yet to do something with it, right? And then we also look to hear from our customers where their demand cycle is, right? So about 9 months ago, we felt like they were getting there, and they're basically very clear to us that they want to partner with us. They see us as the industrial-grade data management player. And then that's when the discussion became serious. And obviously, a lot of product work happened, which culminated to opening to this. And I think when I look at the $44 billion TAM, it unlocks a portion of that TAM that is tied to Oracle. There's a bunch of workloads that are going to go to Oracle Cloud. I mean, by the way, just so you all know, if you heard my announcement with Andy Mendelsohn, who by the way is a long-time database guy there, they are also partnering with Azure. So we're helping Azure, Oracle workloads to be very -- so now the idea is that, hey, starting new workloads on autonomous data warehouse, migrating Oracle and our joint [ focus ] on sitting on Oracle data warehouse to autonomous data warehouse, we are the preferred partner and it's not just an integration partnership. It's also governance, those kind of things. So that, we believe, is a very strategic and a very deep partnership. And you all know Oracle workloads are real operational workloads. They have real mission-critical workloads. And we, by the way, internally have worked with all of these ecosystems. We are an Oracle ERP in the cloud vendor. So we know how to migrate that kind of stuff, so that's something we're really excited about.

Wanted to ask you a question on kind of multi-cloud. We hear this more and more and more with enterprises going towards a multi-cloud strategy. When we think about the hyperscalers out there, Amazon, Azure, GCP, the big ones out there, even with the [ local ] in their OCI initiative, right? So is -- are these partnerships that you have with all these big players out there an admission by these large players that multi-cloud is the future? Even though they're talking about their own platforms, but it's, "Hey, we need -- we know this is where it's going. We need to make sure that we help our customers get there with their different strategies that they're using."

Very well said. I'll just accentuate and say, every enterprise in the world will be multi-cloud, period. See, I mean, without getting too philosophical, technologies change, some things don't change. In the client server days, we were in a heterogeneous world. Cloud came in a heterogenous world. Customers are going to pick -- by the way, customers are already in a heterogenous world. We just kind of don't go through that clutter of the noise we get caught in. Look at the apps market, hundreds of apps customers use today, right? So the world will be fragmented and will -- in fact, I would say, the world in the cloud will be more fragmented than before. So it has to be there, and that's what you are seeing. When we think of a partnership, I begin first with where our customers are going. So our lens has always been where will the customers be and hence, we need to get there. So we know our large customers -- when I talk to them, they're going to be a multi-cloud world. Same way, people pigeonhole in 2, data will be of type A or type B. No, data will be of type A and type B. There is an and, not an or. And that's our goal. We want to help our customers solve the and, and, and, and, and. And then not like your data is batch or streaming, data is cloud or ground, data is AWS or Snowflake. It has an and. Glad we solved that problem.

Thank you. Thank you. Okay. So Informatica, been around for 20-plus years, was public once, went private. What you were known for, public round #1, was PowerCenter, still very strong in the market today, mission-critical workloads. But you've built an entire new platform today, IDMC powered by CLAIRE AI. Can you tell -- I guess, talk a little bit about this platform. And how many different modules are there? How do you think about the growth strategy? And where I'm going with this is a lot of the times when I'm talking about the Informatica story with investors is I get the question, isn't that just the ETL company? But I know you're much more than that, so I want to give you the opportunity to kind of talk about this new platform.

No. So that's the biggest misconception. I'll first begin with a sense of scale, and I'll get to answer that question. We were a single product, PowerCenter, on-premise, 100% license revenue company. And when we went private, we had a nascent subscription business, sub-$100 million, behind a version of the cloud that we had that time at those numbers. 6 years later, we went IPO last year, and we've guided this year to a $1 billion of subscription, all coming from the new products we've built in the last 6 years. Our handicap is that we carry a $0.5 billion of maintenance business, so the average of the 2 reduces the growth rate. But if I ask everybody in this room, tell me in the last 6 years, how many software companies have gone from -- if I said $100 million to $1 billion, let's say, $0 to $900 million. Walk me through how many software companies have created $0 to $900 million of ARR. 3. Not more than that. And I think that's the story that we are telling everybody. And because -- why? Not because we want to tell the story because our customers start with us. So what did we do? We made a very big decision that we are not going to reformat our product. We have loved and adored PowerCenter, but we started building out a cloud-native platform. We went from one product to the number of modules. We have 7 product categories on this platform, all on one platform: the ETL in the cloud, app integration in the cloud, MDM in the cloud, governance in the cloud, quality in the cloud, catalog in the cloud and data privacy in the cloud. But all on one native platform. We also bet big with our CLAIRE, our AI, 3 years ago when nobody was talking yet. And we have 50,000-plus metadata web connectors to suck data out of anywhere of any type. Running this platform that we built in 20 -- started building in 2016 was around 0.2 trillion transactions a month. This now runs 32 trillion transactions a month. Just look at the scale at which it's grown. That's what we have built. And basically, we go to customers in the context of not the product but 4 journeys, 4 use cases. One is all-around analytics, which is where data warehouses, data lakes, all those come into play, modern analytics, where we partner with Snowflake and Azure and all of those guys. Second is application integration. Hundreds of applications are fragmented to the cloud, bringing that data together in the context of analytics or whatever it is. Third is what we call Business 360, all the MDM use cases, Customer 360, Supplier 360. By the way, Unilever's entire supply chain runs through us. The FDA runs their drug process through us. That's the use cases we're talking about. And the last is data governance and privacy, where a PayPal or a Mastercard are running their governance through us. Those are the use cases. In every customer, all 4 use cases happen. It depends. You start from one, go to the other, do 2 together, all 4 happen in every customer. And the beauty is that all of the product key platform capabilities solve all 4 use cases. So that's the platform, the 7 product categories, the 4 use cases with which we go to market. Every enterprise is solving all 4 use cases.

Wow. Wow. Congratulations on building such a big platform over the past 6 -- 7 years, 7 years now. So when I think about the business, right, been around for a long time. You've built out a fully scaled go-to-market organization. And you went into the private markets. You had -- I mean, you had that organization already there. How much of an advantage or how difficult do you think it will be to replicate the go-to-market organization that you have now if I were to start with a business today?

You mean scaling it going forward?

Yes. I guess said another way, how long would it take me if I were to start an Informatica competitor and go after the same market? But scale -- trying to scale up my sales [indiscernible]

I think the question you're asking is of moat. And I put it in 2 categories. There's go-to-market and product. So first of all, there is not a single competitor of ours that goes beyond 1, at best, 2 product categories. None, 0. There is no competitor of ours that has a platform. There's no competitor of ours that has even the concept of an AI. Now that's a fact because you can look at the Magic Quadrants, you can look at their websites. That's nothing that I am interpreting, so that's a massive moat for us. Because we know that enterprises are -- and by the way, we have consumption-based pricing on our platform. We know enterprises will ultimately want to leverage things very seamlessly. You see a platform from Azure, you see a platform from AWS. That's the beauty of it. On the go-to-market side, there's a Venn diagram. The use cases we solve are highly operational, very sticky. By the way, our renewal rates are always mid-90s, close renewal rates. PowerCenter had that. Our new cloud product had something similar. So the moat is that once we go out and in the go-to-market, not only do we have our reps leading directly with those relationships we've built with a history of proving but also these partnerships. By the way, we talked about hyperscalers. The big GSIs like Accenture and Deloitte, we've invested a lot in them. They have dedicated Informatica practices, have tens of thousands of trained developers who go out and implement on these projects. And by the way, most of these cases, we'll do a trifecta. We'll be an Azure, Accenture and us going into a project together. Those just become massive moats so -- to scale and grow from a position of strength.

So I wanted to talk a little bit about the cloud part, the cloud ARR growth trajectory of the business. I think on the last earning calls, and I think pretty much since the IPO process, you've been committing to a very strong cloud revenue growth over a multiyear period, 40%. What are you seeing out there from an end market perspective or conversations that you're having with big customers? Maybe it's the partnerships. And maybe it's all put together. How do you think about kind of the metrics out there or demand that's giving you all this confidence to kind of put that stamp of 40% cloud growth for the next several years?

Sure. So again, if you look at that question, I think one has to just -- I'd only add one thing to it. Remember, we are a very unique IPO. We're not a $100 million ARR company that just went IPO. And a $5 million swing is like a 30% swing to your like -- we're not. We're like $1.5 billion in revenue, $1 billion in subscription ARR. A 5% swing on me is $50 million. It's not trivial. So we've been very clear about when we guide, we guide to the midpoint. And we are very clear that at our scale, it's not like you're not going to get massive swings. But we are very clear about holding to our commitment. And you can see in Q1 of this year, we were ahead of our commitment. We guided to our commitment, so that's a very important thing for us to know. We have been very clear about we are a very scaled company, and we guide like a scaled company. We just -- we went IPO last year, but we're not like a $100 million, $200 million company that just went IPO first time. Now to your question. Because of the breadth of the products we have, the breadth of the use cases we have, the breadth of the partnership we have, the breadth of the industries we serve and the breadth of the geography we serve, we feel very resilient. And look, 25 years of existence have taught us many things. As I said, each of the -- we have seen 4 crises. We had 9/11, we've seen the dot-com bust, 9/11, 2008, and COVID also. But the COVID is an interesting use case because it happened in front of me. During COVID year, we added $60 million of net new cloud ARR, net new cloud ARR. 2020, we added that much. And I remember very well, in April of 2020, we closed the deal with American Airlines. They were, by the way, one of the innovation award winners this year at Informatica World. And I was shocked. And I rang that customer to know why did they buy. And here's the answer, which is exactly what I tell everybody. So you are solving an operational use case for me, business doesn't stop. It's not a nice-to-have. I got to have an understanding of my customer churn and put governance on top of it whenever the business comes back. And they won an innovation award with that. So that gives me the comfort. That gives me the history. That gives me the scale to feel like we have enough hedge in different things to be able to continue to predict that.

Got it. Got it. Got it. Got it. So PowerCenter, your legacy product, been around for a long time, best-in-class ETL product. A question I get a lot is about the pace of conversions or how to think about converting PowerCenter customers to your new IDMC platform. How do you guys think about that conversion process?

Very important to us. So the 3 very important things to know from this is, first of all, PowerCenter runs operational workloads. I'll keep repeating about operation workloads, like printing our 10-K, 10-Q for a CFO. So you don't just do this and say, I'm going to the cloud. If it works 60%, good enough, I'm fine. A couple of us will go to jail if that happens, right? So that's one thing very important to know. Second is there is -- in terms of having a conversation with customers to migrate to the cloud, every rep of ours is extra incented to have that conversation in terms of comp plans, and we are having many with conversations with our customers. There is many deals in the hopper that are migration deals. No lack of demand over there. And we've closed -- 2021 was the first full year where we had a full year of doing migration deals. And for every $1 of maintenance, we get $2 on cloud on the other side, by the way. I said that in the modeling exercise to you all, at $1.30, we are gross margin-neutral, Eric and I will be happy. But we're getting more. We'll take it. Now there is a lag between when we close a deal and when we convert it fully to cloud. Because these are operational workloads, it takes 9 to 12 months for a customer to do the work with us to move. So while we've closed many deals, you -- we have not been able to report the full conversion because we're in the middle of those migrations. And you should continue to expect that, that will continue to grow from us. No doubt about that one. But the -- so that's the answer to that. But at the same time, I will remind also everybody is that if the -- today, only 2% of my cloud ARR comes from migrations, roughly in that range, 2%, 3%, whatever that is. We've grown net new workloads. If informatica was a story of only converting my on-prem to cloud, then you would argue with me that you really are relevant in the new workloads. We'll be driving net new workloads with a Snowflake, with an AWS, with an Azure with my captive maintenance base that I will take to cloud. And there's a lot of learning in that base also. We are also learning to give it to partners. We want Accenture and Deloitte to learn, so we have to teach them also. All of those things are going as we speak. So make no mistake, as a company, we are extremely motivated to get migrations to happen even more and faster. But net new workloads are not slowing down or whatever. They are a lion's share, and I'm both excited. If I get a net new workload and then I can migrate later, great. If I get migration, then I can give them an empty workload. So it's a win-win on both sides.

Okay. Okay. So I wanted to kind of shift back to IDMC, kind of that's the future story of the business, and the ARR growth there. Great ARR growth. But when you bifurcate it, you got your SaaS, your cloud version, and then you got your self-managed. So I wanted to kind of poke your brain in thinking about the customers' brain of how they think about adopting one or the other. What goes through their mind before they click the button of purchasing SaaS versus self-managed?

Yes, that's a very good question because it becomes a strategic choice for our customer. So first of all, majority of the customers, especially the large enterprises, are hybrid. Whenever we say -- to the question that, Koji, you asked, when we say self-managed and SaaS, it's the same IDMC products. Customers can buy multi-tenant from us or they can take the same product and say, I'm going to run it in my version of cloud, not my multi -- same product, but obviously, unfortunately then, it becomes ASC 606 or 605, we all know the nuances of that and which -- trust me, I hate it. But we have to just suck it up and go with it. Customers make the choice like this. By the way, everybody is getting more to cloud now. But if I'm a -- and I'll just, for the sake of analogy, pick a large bank. Let's take a bank like yours. And you say, look, I want to index all my metadata in that catalog. I'm not going to put it in the cloud tomorrow. I'm worried about that for a lot of reasons. That, I'm going to put on my instance of my private cloud. But you know what, I want to understand my Reference 360. Reference data, which is not necessarily very sensitive, that I'm very willing to go to multi-tenant cloud. But allow me that if I do this on self-managed, that you have a road map that I can move it to the cloud. Same product, we can go to the cloud. That's how customers make trade-offs. And the more and more and more they get comfortable with the cloud, the more and more say, "Okay, I'll begin with the cloud," which is, by the way, we saw since IPO also. When we said, hey, look, we are seeing the revenue issues because we're seeing more cloud has rev rec issues for us. Customers are like -- who was 9 months ago, I do more self-managed. I'm like, no, I'm actually a little bit more comfortable. I'll do it for your cloud. Or the proportion of cloud will increase. We're absolutely seeing that. But different industries are moving at different rates. Financial services is a great example. You all have been almost 0 to cloud. And now suddenly, everybody is like very comfortable with cloud. So the comfort level has changed I've seen in the last 12 months. So that's how it is. So for us, I actually don't care. I want it to be cloud. But at the end of the day, I want to own a customer whichever way they want to go because I know that I can get them to cloud when they're ready. So it will be one of those things where I want to win the workload, I want to win their use case. Because we can get them on this side or this side, whichever way the customer feels comfortable. Definitely, we are seeing more cloud. But again, as I said, if somebody wants to say, no, I change my mind. I can take this on self-managed. I'll be okay with that. Okay. Okay. Because I want to have, again, a large customer for life because I know my renewal rates are always mid-90s. Once I get a customer, I get a customer for life.

Got it. Got it. Amit, we are all out of time. Thank you so much for doing this. Super appreciate it.

Well, thank you for the time. We appreciate it.

Thank you so much.