By Mackenzie Tatananni

Informatica stock tumbled in premarket trading Friday after the data management platform issued soft first-quarter and full-year guidance, and reported quarterly revenue that missed expectations.

The software company said it anticipates first-quarter revenue between $380 million and $400 million. Analysts polled by FactSet expected $412 million. For the full year, Informatica forecast total revenue in the range of $1.67 billion to $1.72 billion, which was below analysts' expectations for $1.72 billion at the midpoint.

Shares plunged 36% to $16.21 in premarket trading.

The software company reported fourth-quarter earnings of 41 cents a share, beating analysts' calls for 37 cents, according to FactSet. However, total revenue of $428.3 million sharply missed the $456.7 million Wall Street was expecting and marked a 4.1% decrease from the previous year when adjusted for foreign currency exchange rates.

Aside from FX-related headwinds, the company pointed to a handful of factors including lower renewal rates and shorter durations of self-managed subscriptions. Management also noted a decline in professional services, which occurred "as a direct result of our strategy to shift more of our customers' implementation and support work to our professional service partners."

In a research note Thursday, Guggenheim analysts led by Howard Ma said Informatica was "worth defending" as they reiterated a Buy rating and lowered their price target on the shares to $27 from $37.

"The optics of the revised guide, which we believe is conservative, obfuscates what was minimal change to the fundamental business," the analysts wrote.

While they acknowledged the below-consensus guidance and fourth-quarter miss, the analysts noted that new logo annual recurring revenue -- a measure of the total ARR generated from acquiring new customers -- was in line with management's expectations.

"According to management, there was no statistical pattern to the elevated churn that was comprised of both hard churn and downsell," the analysts wrote, noting that "corrective actions" already had been taken.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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February 14, 2025 07:39 ET (12:39 GMT)

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