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