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Data streaming is becoming a critical technology for a growing number of businesses. Confluent (CFLT 2.01%) is a leading developer of data streaming technologies that power many of our online experiences. Stock brokerage platforms use it to feed live pricing data directly to clients, and e-commerce websites use it to provide real-time inventory information to shoppers. As more of our everyday lives migrate into the digital age, the demand for data streaming will only grow. Confluent just reported its financ ...

Financial Data and Key Metrics Changes - Subscription revenue grew 27% to $224.7 million, exceeding guidance and representing 96% of total revenue [16][4] - Confluent Cloud revenue increased 40% to $117.4 million, accounting for 52% of subscription revenue compared to 47% in the previous year [17][4] - Non-GAAP operating margin improved by approximately 10 percentage points, reaching 0.6% [18][4] - Free cash flow margin turned positive at 1.2%, improving by approximately 20 percentage points [18][4] - Total customer count reached approximately 5,440, with a sequential increase of 320 customers, the largest in two years [18][4] Business Line Data and Key Metrics Changes - Confluent Platform revenue grew 16% to $107.3 million, accounting for 48% of subscription revenue [16][4] - Subscription gross margin was 80.8%, up 170 basis points, driven by strong performance in the Confluent platform and improving unit economics of Confluent Cloud [17][18] Market Data and Key Metrics Changes - Revenue from the US grew 26% to $143.2 million, while revenue from outside the US grew 22% to $91.7 million [17][18] - Net Revenue Retention (NRR) for Q2 was 118%, below the target range of 120% to 125% due to consumption volatility among large digital-native customers [19][18] Company Strategy and Development Direction - The company is focused on a consumption-oriented business model, aiming to attract more customers who can drive value from the data streaming platform [15][5] - The strategic position is reinforced by innovations in the data streaming platform, enabling the capture of the full lifecycle of data in motion [6][5] - The rise of GenAI is seen as a significant opportunity, with data streaming playing a critical role in fueling AI applications [11][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth prospects despite a volatile macro environment, emphasizing the importance of data streaming technology [4][5] - The company anticipates continued adoption of its data streaming platform, with expectations for substantial growth in the data streaming market [22][5] - Guidance for Q3 2024 expects subscription revenue in the range of $233 million to $234 million, representing growth of approximately 23% to 24% [21][22] Other Important Information - The company has made significant strides in its partner ecosystem, with over 40 technology and partner-built integrations, enhancing its market reach [10][5] - The company was recognized as Partners of the Year by both Google and Microsoft, highlighting strong relationships with cloud partners [10][5] Q&A Session Summary Question: Customer logo growth and expansion potential - Management noted that the increase in customer logos implies potential for faster expansion as they advance with the platform [25][26] Question: Trends in digital-native customer behavior - Management indicated that while there was some slowness in June, they observed stabilization in July, with a focus on cost efficiencies among digital-native customers [27][28] Question: Go-to-market transformation and workload quality - Management emphasized the importance of ensuring quality workloads while increasing customer acquisition, focusing on high propensity accounts [30][26] Question: International growth and sales attrition - Management clarified that the growth rates between international and US markets are often influenced by the timing of large deals, with no significant trends in sales attrition [52][51] Question: Impact of pricing changes on revenue - Management confirmed that pricing changes were factored into guidance, with expectations for a net positive impact over time [83][82]

For the quarter ended June 2024, Confluent (CFLT) reported revenue of $234.99 million, up 24.1% over the same period last year. EPS came in at $0.06, compared to $0.00 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $229.49 million, representing a surprise of +2.39%. The company delivered an EPS surprise of +20.00%, with the consensus EPS estimate being $0.05. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Stree ...

Investor Presentation July 31, 2024 Disclaimer 2 This presentation includes express and implied forward-looking statements. All statements contained in this presentation other than statements of historical facts, including expectations of Confluent, Inc. ("we," "us," "our," or "Confluent") regarding our revenue, revenue mix, revenue growth, expenses and other results of operations; total customers; net dilution; operating margins and margin improvements, targeted or anticipated margin levels; future financi ...

Financial Performance - Confluent reported revenue of $235.0 million for Q2 2024, a 24% increase from $189.3 million in Q2 2023[93]. - Total revenue for the three months ended June 30, 2024, was $235.0 million, compared to $189.3 million for the same period in 2023, reflecting a 24.2% growth[115]. - Subscription revenue for the three months ended June 30, 2024, was $224.7 million, up from $176.5 million for the same period in 2023, representing a 27.3% increase[115]. - Subscription revenue increased by $48.2 million (27%) to $224.7 million for the three months ended June 30, 2024, compared to $176.5 million for the same period in 2023[120]. - Total revenue for the six months ended June 30, 2024, was $452.2 million, reflecting an $88.6 million (24%) increase from $363.6 million in the prior year[130]. - Revenue for the year ended December 31, 2023, was $777.0 million, up from $585.9 million in 2022 and $387.9 million in 2021[167]. Customer Growth and Retention - The company had approximately 5,440 customers as of June 30, 2024, representing a year-over-year growth of 13% from 4,830 customers in 2023[93]. - The number of customers contributing $100,000 or greater in Annual Recurring Revenue (ARR) increased to 1,306 in June 2024 from 1,144 in June 2023[103]. - The dollar-based Net Retention Rate (NRR) was 118% as of June 30, 2024, indicating strong expansion within existing customers[104]. - The company relies on existing customers renewing subscriptions and expanding usage, which is critical for maintaining revenue growth[165]. Investment and Development - Confluent has made significant investments in product development, including the re-architecture of technologies like Apache Kafka and the acquisition of immerok GmbH[96]. - The company expects to continue investing in product development and international expansion, although these investments may not guarantee increased revenue[170]. - The company plans to continue significant investments in Confluent Cloud to drive market adoption and consumption, shifting to a consumption-oriented sales model[167]. Operating Expenses and Losses - Operating loss for the three months ended June 30, 2024, was $(108.3) million, an improvement from $(119.4) million in the same period of 2023[115]. - Net loss for the three months ended June 30, 2024, was $(89.9) million, compared to $(103.4) million in the same period of 2023[115]. - The company has experienced net losses in the first half of 2024 amounting to $182.9 million and $256.0 million for the same period in 2023[171]. - Research and development expenses for the three months ended June 30, 2024, were $106.1 million, compared to $85.7 million in the same period of 2023, marking a 23.7% increase[115]. Market Conditions and Challenges - Macroeconomic conditions, including high inflation and interest rates, have led to longer sales cycles and increased scrutiny on IT spending, impacting customer consumption patterns[94]. - The company faces risks related to macroeconomic uncertainty, which may impact sales cycles and customer IT budgets, particularly due to ongoing global conflicts[163]. - The company has faced challenges in customer acquisition and retention, particularly in uncertain economic environments, which may hinder revenue growth[172]. - The competitive landscape includes established public cloud providers like AWS, Azure, and GCP, which pose significant risks to Confluent's market position[183]. Strategic Focus and Future Outlook - Confluent aims to streamline operating expenses while investing in growth, including a workforce reduction in January 2023[94]. - The company expects continued growth in Confluent Cloud's contribution to revenue as organizations seek fully-managed offerings for data in motion[97]. - The company anticipates ongoing challenges in differentiating its offerings from open source alternatives, particularly Apache Kafka, which could limit growth and revenue[185]. - The company’s growth prospects are heavily dependent on the market acceptance of its data-in-motion offering compared to competitors, including open-source alternatives[176]. Compliance and Regulatory Risks - The company is subject to various contractual obligations related to data privacy and security, which may increase legal liability and compliance costs if not met[213]. - Compliance with evolving U.S. and foreign data privacy laws, such as the California Consumer Privacy Act (CCPA), could result in penalties of up to $7,500 per violation, increasing operational costs and complexity[211]. - The company faces risks related to compliance with anti-corruption and anti-bribery laws as it increases international sales, which may divert management's resources and attention[252]. Cybersecurity and Operational Risks - Cybersecurity risks are heightened due to reliance on third-party service providers, which could introduce vulnerabilities and potential security incidents[205]. - The company has experienced a significant security incident related to a third-party vendor, Codecov, which may have impacted its operations and reputation[205]. - The company faces potential legal liabilities and reputational harm from security incidents, which could disrupt operations and affect financial performance[207]. International Operations - International customers contributed 40% of total revenue for both the six months ended June 30, 2024, and the year ended December 31, 2023[245]. - As of June 30, 2024, approximately 43% of full-time employees were located outside the United States, with 16% in India and 8% in the UK[245]. - The company is expanding its international operations, which may subject it to greater than anticipated tax liabilities due to varying tax laws and potential challenges from taxing authorities[254]. Stockholder and Capital Structure - As of June 30, 2024, stockholders holding Class B common stock control approximately 74.4% of the voting power of the company's outstanding capital stock[263]. - The company does not intend to pay dividends for the foreseeable future, relying on stock price appreciation for returns[269]. - The company expects to issue additional capital stock in the future, which will result in dilution for existing stockholders[269].

Exhibit 99.1 Confluent Announces Second Quarter 2024 Financial Results • Subscription revenue of $225 million, up 27% year over year • Confluent Cloud revenue of $117 million, up 40% year over year • 1,306 customers with $100,000 or greater in ARR, up 14% year over year MOUNTAIN VIEW, Calif. -- July 31, 2024 -- Confluent, Inc. (NASDAQ: CFLT), the data streaming pioneer, today announced financial results for its second quarter of 2024, ended June 30, 2024. "Confluent had a solid second quarter, demonstrated ...

The U.S. stock market has seen significant volatility in the past few years, swinging sharply between bull and bear phases. In an uncertain market environment, it becomes essential for retail investors to find stocks that can grow in bull markets and demonstrate stability in bear markets. Palantir Growth for the company's core U.S. government business has also started reaccelerating with revenue up 8% year over year (versus 3% in the previous quarter). The company secured a $178.4 million direct contract fr ...

Let's see why investors cheered Confluent's latest results. Confluent swings to a profit and beats analysts' expectations Confluent's Q1 revenue increased 25% year over year to $217 million, and it posted a non-GAAP (adjusted) profit of $0.05 per share as compared to a loss of $0.09 per share in the prior-year period. The numbers exceeded Wall Street's expectations, as consensus estimates were modeling an adjusted profit of $0.02 per share on $211.6 million in revenue. More importantly, Confluent topped its ...