Informatica (NYSE:INFA) saw its shares collapse over 30% intra-day today after reporting a significant fourth-quarter revenue shortfall, despite exceeding earnings expectations.
For Q4, the cloud data management firm posted adjusted earnings per share of $0.41, surpassing the $0.38 consensus forecast. However, revenue came in at $428.3 million, well below analyst expectations of $456.86 million, representing a 3.8% year-over-year decline.
The revenue miss was attributed to lower renewal rates and a shift toward shorter-duration self-managed subscriptions, which reduced upfront revenue recognition by approximately $46 million compared to the prior year.
Despite these headwinds, Cloud Subscription Annual Recurring Revenue (ARR) increased 34% year-over-year to $827.3 million. However, the figure fell $8.7 million short of company guidance due to weaker cloud renewals and softer net new bookings.
For the full year 2024, Informatica reported total revenue growth of 2.8% to $1.64 billion. Looking ahead, the company expects 2025 revenue between $1.67 billion and $1.72 billion, reflecting midpoint growth of 3.4%, which failed to reassure investors amid concerns over slowing momentum in cloud subscriptions.
With unexpected Q4 challenges and a modest 2025 growth outlook, Informatica faces pressure to regain investor confidence and prove its ability to scale cloud-based revenues in the coming year.