Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Steneveek on Bloomberg Radio. Well, very lucky to have with
Speaker 1: us this afternoon, a trio of CEOs. We're to our
Speaker 1: second right now, and it's the CEO of the enterprise
Speaker 1: cloud data management provider Informatica, the company reporting results on Wednesday.
Speaker 1: Investors and analysts, well, they really liked what they saw.
Speaker 1: Informatica boosted its adjusted operating profit guidance for the full year,
Speaker 1: the guidance beating the average analyst estimate, and matty Yesterday's
Speaker 1: shares surg to close more than sixteen percent higher and
Speaker 1: continued hire today by another one point six percent. We've
Speaker 1: got the company's CEO. I'm at Wallya joining us right
Speaker 1: now this afternoon. Good to have you with us. It's
Speaker 1: good to have you. It's good to talk to you again.
Speaker 1: It's been more than a year since since we last connected.
Speaker 1: What worked out so well for you for the quarter
Speaker 1: and what's your outlook for the year.
Speaker 2: Pleasure to be in the show, Tim, thanks for having
Speaker 2: me while we had a great quarter and a great
Speaker 2: first half. Well, I think look, we've been a company
Speaker 2: that has the flipped to the cloud business model, all
Speaker 2: led by a platform intelligent data management cloud. And what
Speaker 2: the analysts saw and they've been expecting, is that we
Speaker 2: exceeded our expectations for growth in the top line a
Speaker 2: cloud err crew thirty seven percent. And obviously in these
Speaker 2: transitions people typically lose profitability. We actually exceeded our non
Speaker 2: gap operating income and a unlivered free cash flow and
Speaker 2: we raised the guidance for that for the year.
Speaker 3: So I think growth on the top line boosting the
Speaker 3: bottom line.
Speaker 2: I think in a time like this, that's hard to
Speaker 2: do and that's what our teams accomplished.
Speaker 4: Well, that's the great news I do want to read
Speaker 4: you from Cities Take on your earnings. They described the
Speaker 4: fundamentals as still underwhelming, with aggregate growth continuing to decelerate,
Speaker 4: but having said that, they do have a great outlook
Speaker 4: on the stock. So talk to me about how you
Speaker 4: would respond to that. What would you say about the fundamentals?
Speaker 3: Thank you Madison.
Speaker 2: Well, look, I think when you're going through a cloud
Speaker 2: business transition, that's why our investors focus on a revenue
Speaker 2: always takes ahead because of the whole accounting revenue recognition,
Speaker 2: and I think this year our revenue from an accounting
Speaker 2: point of view has taken the hit because of obviously
Speaker 2: the cloud ratible recognition model.
Speaker 3: But the cloud business.
Speaker 2: That's growing very well sets up very well for as
Speaker 2: we look forward finishing this transition this year. So that's
Speaker 2: what it is. But it smooths out and look at
Speaker 2: arr it basically shows you the intrinsic business grew very handsomely.
Speaker 2: When you look at the entire cloud industry growing thirty
Speaker 2: seven percent, was ahead of the market.
Speaker 1: I mean, what are you hearing from customers right now?
Speaker 1: We talked earlier in our program about advertising companies seeing
Speaker 1: a pullback in advertising from some of the biggest tech firms.
Speaker 1: We've seen some of the biggest tech firms do a
Speaker 1: massive number of layoffs just this year. What are you
Speaker 1: hearing from your customers?
Speaker 2: Well, I think look, if you step back and look
Speaker 2: at the enterprise software market, customs are generally cautious. I
Speaker 2: think stock market has a different performer than how enterprise
Speaker 2: it budgets out. I think people are thoughtfully spending. It's
Speaker 2: still a very cautious environment. There's deal velocity is still
Speaker 2: not as it was before all.
Speaker 3: Of those things happening. But what's happening in.
Speaker 2: That is people are prioritizing, They're spent towards things that
Speaker 2: I can be creative to the top line or to
Speaker 2: the bottom line, and areas like data, data, analytics, security,
Speaker 2: those are the things that.
Speaker 3: Move up the stack, and that's what I'm hearing. And
Speaker 3: of course right now, JENNI is there.
Speaker 2: Clearly everybody's talking about it, and I think when I
Speaker 2: talk to enterprise customers, they are in the middle of
Speaker 2: so where of all the things that I can do,
Speaker 2: how do I begin?
Speaker 3: Where do I begin?
Speaker 2: Which technologies do I bet on? And very worried about
Speaker 2: all the governance.
Speaker 3: Aspects of GENI. Those are some of the biggest things
Speaker 3: that I'm hearing from customers globally.
Speaker 4: One thing that I can stop thinking about too, and
Speaker 4: I can't wait to get your take on is companies
Speaker 4: that are changing up their capital allocation when it comes
Speaker 4: to their it spend to invest in AI so that
Speaker 4: they can ride the AI rally and wave here. I
Speaker 4: wonder what you're ta take is on who should not
Speaker 4: be over investing in AI right now? Are there any
Speaker 4: types of firms companies that you think shouldn't be over
Speaker 4: investing in AI and should stick to their typical it spend.
Speaker 3: Madison's a great question.
Speaker 2: I'll say, Ai or Jenny I in particular right now,
Speaker 2: tremendously overhyped in the short term, and I would say
Speaker 2: tremendously underestimated.
Speaker 3: In the lockdow what you mean by that, but I mean,
Speaker 3: like the hype.
Speaker 2: Cycle around that is so high that to the point
Speaker 2: that you were saying that people may walk into it
Speaker 2: with ice closed because it's just the shiny object to
Speaker 2: go do something, and to me, the thoughtful way to
Speaker 2: do something about.
Speaker 3: First of all, it's going to be an inflection curve.
Speaker 2: It will help customer companies both increase productivity and increase
Speaker 2: intelligence driving the entire P and L. But you need
Speaker 2: to be thoughtful about it. Where do you spend which
Speaker 2: projects are they going to drive the revenue line or
Speaker 2: the bottom line.
Speaker 3: An example for that is we have our clear gptem
Speaker 3: our own.
Speaker 2: Clear engine, which is part of our plag from the
Speaker 2: GPT version of that, where customers are in private preview
Speaker 2: working with it. Where insurance companies looking at the claims
Speaker 2: fraudulent claims that they get, can they increase the preciseness
Speaker 2: or efficiency of that from eighty eight percent.
Speaker 3: To midnineties, and that's a massive revenue. So I think
Speaker 3: companies have to figure out which use cases.
Speaker 2: Matter and don't just walk into it just because it's
Speaker 2: the right now, the shiny object.
Speaker 4: You said that it's underestimated long term, why aren't we
Speaker 4: going to start to feel the power that AI has
Speaker 4: in your view.
Speaker 3: I think we'll see it in next year.
Speaker 2: I think enterprises are always a little a step or
Speaker 2: two behind consumers. All of us have used chat GPT,
Speaker 2: My kids are using it. You and I are probably
Speaker 2: using it. It's very easy to do.
Speaker 3: It's the free.
Speaker 2: Data of the Internet that we can access. But if
Speaker 2: I'm an enterprise, it's your data. Privacy covenants are huge
Speaker 2: issues around it, so on and so forth. I know
Speaker 2: how our customers are playing with our product around GPT.
Speaker 3: You will see use cases next year where they will
Speaker 3: get tangible back be out of it.
Speaker 2: But you know, like anything, it will take a curve
Speaker 2: and I do think that the next eighteen months are
Speaker 2: going to be very, very monumental, and I think they'll
Speaker 2: be fun because we will see value coming out of it.
Speaker 1: How are you attracting and retaining talent? Just in the
Speaker 1: last forty five seconds that we have with you.
Speaker 2: I think always focus on innovating. Innovation attracts talent. We
Speaker 2: are blessed that in the world we live in data analytics,
Speaker 2: it's the hot space to be so you know, talent
Speaker 2: wants to work on those innovative projects, especially in the
Speaker 2: world of AI.
Speaker 3: There is no AI without data.
Speaker 2: So we've been benefiting by these trends that are benefiting
Speaker 2: our ability to hire good talent.
Speaker 1: All right, I think we're going to have to leave
Speaker 1: it there. I really appreciate you taking the time this afternoon,
Speaker 1: Amid Walia. Good to talk to you. Like I said,
Speaker 1: it's been over a year since we last spoke. Really
Speaker 1: appreciate you joining us and taking us through the numbers
Speaker 1: and also the outlook on AI for the remainder of
Speaker 1: the year. That's the CEO of Informatica. I'm a Walia
Speaker 1: joining us on this Friday afternoon.