Revenue Growth - Confluent reported revenue of $298.5 million for the three months ended September 30, 2025, representing a year-over-year growth of 19% compared to $250.2 million in the same period of 2024[118]. - For the nine months ended September 30, 2025, revenue was $851.9 million, a 21% increase from $702.4 million in the same period of 2024[118]. - Subscription revenue for the three months ended September 30, 2025, was $286.3 million, a 19% increase from $239.9 million in the same period of 2024[147]. - Subscription revenue increased by $146.6 million (22%) to $818.1 million for the nine months ended September 30, 2025, compared to $671.5 million in the same period of 2024[158]. - Total revenue for the nine months ended September 30, 2025, was $851.9 million, reflecting a $149.5 million (21%) increase from $702.4 million in 2024[158]. Customer Metrics - The number of customers contributing $100,000 or greater in Annual Recurring Revenue (ARR) increased to 1,487 as of September 30, 2025, from 1,346 in the same period of 2024[128]. - The dollar-based net retention rate (NRR) was 114% as of September 30, 2025, indicating strong expansion within existing customers[129]. - The dollar-based net retention rate was 114% as of September 30, 2025, indicating strong revenue expansion from existing customers[158]. Product and Market Strategy - Confluent Cloud revenue accounted for 54% of total revenue for the three months ended September 30, 2025, up from 52% in the same period of 2024[122]. - The company aims to grow its customer base through self-service cloud adoption and free trials, facilitating a shift to a consumption-oriented sales model[123]. - Confluent's Data Streaming Platform is designed to connect, process, and govern data in motion, establishing itself as a strategic component of modern technology stacks[114]. - The company expects continued growth in customer adoption and usage of its Data Streaming Platform products, despite current volatility in consumption trends[121]. Financial Performance - Gross profit for the three months ended September 30, 2025, was $221.6 million, resulting in a gross margin of 74%[145]. - Operating loss for the three months ended September 30, 2025, was $83.3 million, compared to a loss of $93.7 million in the same period of 2024[145]. - Gross profit for the nine months ended September 30, 2025, was $631.7 million, a $119.2 million (23%) increase from $512.5 million in 2024[160]. - The company's loss before income taxes for the nine months ended September 30, 2025, was $221.0 million, a decrease of 11% from a loss of $248.2 million in the same period of 2024[167]. Expenses and Costs - Research and development expenses for the three months ended September 30, 2025, were $121.8 million, an increase from $102.7 million in 2024[145]. - Research and development expenses increased by $53.4 million (17%) to $306.4 million for the nine months ended September 30, 2025, compared to $359.8 million in 2024[163]. - Sales and marketing expenses increased by $30.5 million (8%) to $402.2 million for the nine months ended September 30, 2025, compared to $432.7 million in 2024[164]. - Total cost of revenue increased by $30.3 million (16%) to $220.2 million for the nine months ended September 30, 2025, compared to $189.9 million in 2024[160]. Cash Flow and Liquidity - As of September 30, 2025, the company's liquidity sources included cash, cash equivalents, and marketable securities totaling $1,989.8 million[170]. - The company generated $22.2 million in cash from operating activities for the nine months ended September 30, 2025, compared to a cash outflow of $1.8 million in the same period of 2024[172][175]. - Cash used in investing activities for the nine months ended September 30, 2025, was $167.2 million, primarily due to purchases of marketable securities totaling $1,286.2 million[176]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $56.6 million, driven by $32.7 million from stock option exercises and $23.9 million from the employee stock purchase plan[178]. Tax and Regulatory - The provision for income taxes included a benefit of $5.0 million for the nine months ended September 30, 2025, compared to a provision of $8.8 million in 2024[144]. - The effective tax rate for the three months ended September 30, 2025, was (2.4)%, compared to (4.2)% in 2024[157]. - The income tax benefit for the nine months ended September 30, 2025, was $5.0 million, primarily due to a $16.4 million release of the valuation allowance of U.K. deferred tax assets[167]. Strategic Outlook - The company expects fluctuations in total revenue based on new subscriptions, customer renewals, and consumption trends[134]. - The company expects to experience seasonality in cash flows, with the fourth quarter historically being the strongest for sales due to large enterprise buying patterns[173]. - The company may require additional capital resources to execute strategic initiatives for growth, depending on factors such as growth rate and market acceptance of its services[171]. - The company has established a hedging program to mitigate foreign currency risk, although the majority of its sales contracts are denominated in U.S. dollars[186][187].

Financial Performance - Q3'25 subscription revenue reached $286337000, a 19% year-over-year increase[8] - Q3'25 cloud revenue was $161000000, representing a 24% year-over-year growth[8] - The company achieved a non-GAAP operating margin of 97% in Q3'25, a 34 percentage point increase year-over-year[8] - Adjusted free cash flow margin was 82% in Q3'25, up 45 percentage points year-over-year[8] - The dollar-based net retention rate was 114%[8] Customer Growth - The number of customers with at least $20000 in ARR increased by 7% year-over-year[63] - Customers contributing $100000 or more in ARR increased by 10% year-over-year[63] - The number of customers with at least $1000000 in ARR increased by 27% year-over-year[63] Market and Strategy - The company estimates a total addressable market (TAM) exceeding $100 billion[48, 74] - The company is focused on managing net dilution to below 2% long-term[69, 72] - The company is creating a data streaming platform[74]

Exhibit 99.1 Confluent Announces Third Quarter 2025 Financial Results MOUNTAIN VIEW, Calif. -- October 27, 2025 -- Confluent, Inc. (NASDAQ: CFLT), the data streaming pioneer, today announced financial results for its third quarter of 2025, ended September 30, 2025. "Confluent delivered a strong quarter, with 24% year-over-year growth in Confluent Cloud revenue and 43% year-over-year growth acceleration in remaining performance obligations, reflecting strong consumption growth and the deepening commitment of ...

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Core Insights - Confluent, Inc. is a significant player in the data streaming industry, offering solutions for real-time data processing [1][4] - The consensus price target for Confluent's stock has fluctuated, with a recent increase to $24 from $22, indicating a shift in analyst sentiment [1][5] - Confluent has a substantial addressable market of $100 billion and serves blue-chip customers, enhancing its business model [4] Price Target and Analyst Sentiment - The average price target for Confluent's stock was $24 last month, up from $22 in the previous quarter, but down from $27.63 a year ago [1][5] - Analyst Rudy Kessinger from D.A. Davidson has set a price target of $44 for Confluent, reflecting a positive outlook despite recent fluctuations [2] Stock Performance and Market Conditions - Confluent's stock saw a 7.6% increase in its price during the last trading session, driven by higher-than-average trading volume [3][5] - Current trends in earnings estimate revisions may not support a continued upward trajectory in the near term, suggesting caution for investors [3] Financial Position and Valuation - Confluent holds nearly $2 billion in cash reserves, indicating a strong financial position [4][5] - The company trades at low enterprise value to revenue multiples of 5.2x for fiscal year 2025 and 4.4x for fiscal year 2026, making it an attractive investment opportunity [4]

Core Insights - Confluent Inc. is a key player in the data streaming industry, competing with Apache Kafka and Amazon Kinesis [1] - The company is set to report quarterly earnings on October 27, 2025, with an expected EPS of $0.10 and revenue of approximately $292.9 million [1][2] Financial Performance - The anticipated EPS of $0.10 is consistent with the same period last year, which is important for maintaining investor sentiment [2] - Projected revenue of $292.9 million represents a 16.7% increase year-over-year, indicating positive growth momentum for Confluent [2][6] Valuation Metrics - Confluent's price-to-sales ratio is 7.40, suggesting that investors are willing to pay a premium for each dollar of sales, reflecting confidence in future growth prospects [3][6] - The enterprise value to sales ratio stands at 8.17, further emphasizing the company's valuation relative to its revenue [3] - The enterprise value to operating cash flow ratio is notably high at 206.16, indicating a premium valuation compared to cash flow [4] Debt and Financial Stability - The debt-to-equity ratio of 1.04 indicates a manageable level of debt relative to equity [5] - Confluent's current ratio of 3.98 demonstrates a strong ability to meet short-term liabilities with short-term assets, ensuring financial stability [5]

Core Insights - Confluent (CFLT) stock has experienced significant volatility in 2025, reaching a high of $37.90 in February and dropping to a low of $15.60 in August due to cloud growth concerns [1][4] - A recent rally in the stock is attributed to reports of Confluent exploring a potential sale after attracting acquisition interest, indicating strong demand for data infrastructure companies [2] - Confluent's total addressable market (TAM) is estimated to be $100 billion as of 2025, highlighting the company's growth potential [3] Financial Performance - For Q2 2025, Confluent reported subscription revenue of $271 million, reflecting a 21% year-on-year increase, while cloud revenue grew by 28% [4] - Despite the positive revenue growth, the growth rate for subscription revenue in Q2 2025 was the lowest compared to the previous eight quarters, raising concerns about the company's growth momentum [5] - Confluent reported an operating-level loss of $198 million for the first half of 2025, although losses have narrowed relative to previous periods [6] Market Dynamics - The company generates 60% of its revenue from the United States and 40% from international markets, with U.S. revenue contribution slightly decreasing to 58% in Q2 2025 [6] - The demand for data streaming platforms remains high, which could provide a favorable environment for Confluent amidst its current challenges [2]

Group 1: Confluent Overview - Confluent (CFLT) shares increased by 7.6% to $22.3 in the last trading session, with a higher-than-average trading volume, compared to a 3.9% gain over the past four weeks [1] - The company is experiencing strong adoption of its data streaming platform, particularly with Flink's exponential growth and increasing multiyear customer commitments [1] Group 2: Earnings Expectations - Confluent is expected to report quarterly earnings of $0.10 per share, unchanged from the same quarter last year, with revenues projected at $292.05 million, reflecting a 16.7% increase year-over-year [2] - The consensus EPS estimate for Confluent has remained stable over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] Group 3: Industry Context - Confluent operates within the Zacks Internet - Software industry, which includes other companies like SEMrush Holdings, Inc. (SEMR) [3] - SEMrush's consensus EPS estimate for its upcoming report is $0.08, representing a 33.3% increase from the previous year, with SEMrush also holding a Zacks Rank of 3 (Hold) [4]

Core Viewpoint - Confluent is exploring a potential sale after attracting interest from private equity firms and technology companies, leading to a significant rally in its stock price [1][5]. Company Overview - Confluent is a data streaming technology company that integrates AI and data analytics, primarily serving as a backend application provider [2][3]. - The company has faced challenges, including a 38% decline in stock price over the last three years and an 18.5% drop year-to-date [3]. Financial Performance - Confluent reported a significant operating loss of approximately $1.3 billion on sales of around $1 billion last year, with no profits recorded in the past decade [6]. - The company has high R&D and selling, general, and administrative (SG&A) expenses, which contribute to its financial struggles [6][9]. - Despite these challenges, Confluent holds about $1.95 billion in cash, representing approximately 27% of its market capitalization of around $7.2 billion [10]. Market Dynamics - The competitive landscape includes major players like Snowflake, DataDog, Elastic, and MongoDB, which poses challenges for Confluent in terms of scalability and customer base [9][13]. - The recent loss of a significant AI-native customer led to a 30% drop in stock price, highlighting the volatility and risks associated with customer retention [4][13]. Investment Interest - The announcement of exploring a sale has sparked interest from institutional investors and private equity, indicating potential for operational streamlining and cost-cutting [5][11]. - The current environment suggests a trend towards consolidation within the data infrastructure sector, making Confluent's situation noteworthy [8][12].

Key Points Reuters reported that Confluent is exploring a potential sale. No deal has been made, and it's possible the company won't be sold. Today's jump adds to the stock's recent volatility. 10 stocks we like better than Confluent › The share price of Confluent (NASDAQ: CFLT), a data-streaming software company, rocketed higher today after Reuters reported that it may be exploring a sale. Technology companies are looking for any angle they can get in the expanding artificial intelligence (AI) s ...