Estimated Average ARR per Company(2) 28 | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|---------------------------------------------------|-------|-------|-------|-------|-------|-----------------------------------------------------------------------|-------| | 47% | Fully managed, cloud-native Rev Rec: Consumption | | | | | | Confluent Platform \nSelf-managed software Rev Rec: Upfront & ratable | | | | | | | | | | VM | | | | | | | | | | | | | 5% | Services | | | | | | | | 29 | --- | --- | ...

Confluent, Inc. (CFLT) will release fourth-quarter 2023 results on Feb 7, 2024, after the bell.The company has had an impressive earnings surprise history. It outperformed the Zacks Consensus Estimate in three of the trailing four quarters and matched once, delivering an earnings surprise of 108.9% on average.Q4 ExpectationsThe Zacks Consensus Estimate for the top line in the to-be-reported quarter is currently pegged at $204.6 million, indicating 21.3% growth from the year-ago reported quarter. The top lin ...

Wall Street analysts expect Confluent (CFLT) to post quarterly earnings of $0.05 per share in its upcoming report, which indicates a year-over-year increase of 155.6%. Revenues are expected to be $204.62 million, up 21.3% from the year-ago quarter.The consensus EPS estimate for the quarter has undergone an upward revision of 1.4% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.Before a ...

The market expects Confluent (CFLT) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2023. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released ...

Confluent, Inc. (NASDAQ:CFLT) Q3 2023 Results Conference Call November 1, 2023 4:30 PM ET Company Participants Shane Xie - IR Jay Kreps - Co-Founder and CEO Rohan Sivaram - CFO Conference Call Participants Sanjit Singh - Morgan Stanley Brad Zelnick - Deutsche Kash Rangan - Goldman Sachs Michael Turrin - Wells Fargo Pinjalim Bora - JPMorgan Brad Sills - Bank of America Jason Ader - William Blair Derrick Wood - TD Cowen Raimo Lenschow - Barclays Shane Xie Hi, everyone. Welcome to the Confluent Q3 2023 Earning ...

Revenue Growth - Subscription revenue increased by $50.5 million during Q3 2023 compared to Q3 2022, with a dollar-based net retention rate of just under 130% as of September 30, 2023[104]. - Confluent Cloud revenue represented 46% of total revenue for Q3 2023, up from 38% in Q3 2022, indicating a growing contribution to subscription revenue[85]. - Total revenue for Q3 2023 was composed of 95% subscription revenue and 5% services revenue, compared to 91% and 9% respectively in Q3 2022[102]. - Subscription revenue increased by $146.7 million (39%) during the nine months ended September 30, 2023, compared to the same period in 2022, reaching $526.3 million[114][142]. - Total revenue for the nine months ended September 30, 2023, was $563.8 million, a 35% increase from $417.3 million in the same period in 2022[142]. Profitability and Margins - Gross profit margin improved to 72% in Q3 2023 from 65% in Q3 2022, reflecting better cost management[102]. - Gross profit for the nine months ended September 30, 2023, was $391.2 million, reflecting a 46% increase compared to $268.8 million in 2022[144]. - Operating loss narrowed to $54 million in Q3 2023 from $78 million in Q3 2022, indicating improved operational efficiency[102]. Expenses - Research and development expenses increased by $21.1 million in Q3 2023, primarily due to higher personnel-related costs and stock-based compensation[108]. - Sales and marketing expenses were $128.6 million in Q3 2023, representing 64% of total revenue, down from 75% in Q3 2022[109]. - Research and development expenses rose by $69.6 million (95%) during the nine months ended September 30, 2023, driven by increased personnel-related costs and stock-based compensation[147]. - Sales and marketing expenses increased by $51.3 million (66%) during the nine months ended September 30, 2023, mainly due to higher personnel-related costs and stock-based compensation[148]. - General and administrative expenses increased by $13.1 million for the nine months ended September 30, 2023, primarily due to a $10.4 million rise in personnel-related costs and allocated overhead costs[149]. Other Income and Charges - Other income increased by $12.8 million in Q3 2023, primarily due to higher yields on marketable securities[112]. - Other income increased significantly by $45.2 million (889%) during the nine months ended September 30, 2023, reaching $50.3 million[122]. - Restructuring and other related charges amounted to $34.9 million, representing 6% of revenue for the nine months ended September 30, 2023[122]. Cash Flow and Liquidity - Cash, cash equivalents, and marketable securities totaled $1,872.8 million as of September 30, 2023, indicating strong liquidity for operational needs[151]. - The net loss for the nine months ended September 30, 2023, was $348.7 million, with cash used in operating activities amounting to $115.9 million[154]. - Cash provided by financing activities was $91.4 million for the nine months ended September 30, 2023, mainly from stock option exercises and employee stock purchase plan[157]. - Cash used in investing activities was $816.3 million for the nine months ended September 30, 2022, primarily due to marketable securities purchases[156]. - The company believes existing cash and marketable securities will be sufficient to fund both short-term and long-term operating and capital needs[151]. Market and Business Model - The company expects greater negative impacts on consumption growth rates in the coming quarters due to macroeconomic factors and customer preferences shifting towards consumption-based models[83]. - Confluent's business model relies on customer renewals and increasing existing customer consumption, with significant opportunities for revenue growth as customers migrate more data to the public cloud[87]. Tax and Other Financial Metrics - The effective tax rate for the three months ended September 30, 2023, was (1.7)%, slightly higher than (1.6)% in the same period of 2022[113]. - Non-cash charges included $261.0 million of stock-based compensation expense for the nine months ended September 30, 2023[154]. Risk Management - The company established a hedging program in December 2022 to mitigate foreign currency fluctuations[190]. - The fair value of the $1.1 billion convertible senior notes issued in December 2021 is subject to market risk due to the conversion feature[189].

Q2 2023 Earnings Call August 2, 2023 2 As a reminder, certain financial measures we use on our call today and in the presentation are expressed on a non-GAAP basis. We use these non-GAAP financial measures and other key metrics internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. We believe these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past f ...

Confluent, Inc. (NASDAQ:CFLT) Q2 2023 Earnings Conference Call August 2, 2023 4:30 PM ET Company Participants Shane Xie - Investor Relations Jay Kreps - Co-Founder and Chief Executive Officer Steffan Tomlinson - Chief Financial Officer Rohan Sivaram - Incoming Chief Financial Officer Conference Call Participants Jason Ader - William Blair Kash Rangan - Goldman Sachs Raimo Lenschow - Barclays Brad Zelnik - Deutsche Bank Rob Owens - Piper Sandler Gregg Moskowitz - Mizuho Michael Cikos - Needham Bradley Sil ...

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (unaudited)](index=5&type=section&id=ITEM%201.%20Financial%20Statements%20(unaudited)) Confluent's unaudited financial statements as of June 30, 2023, show **$2.33 billion** total assets, a **$256.0 million** net loss, and **$106.8 million** net cash used in operations for the six months ended Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $2,139,658 | $2,198,125 | | **Total assets** | $2,327,640 | $2,344,849 | | **Total current liabilities** | $423,358 | $424,330 | | **Total liabilities** | $1,566,254 | $1,575,372 | | **Total stockholders' equity** | $761,386 | $769,477 | Condensed Consolidated Statements of Operations Data (in thousands, except per share data) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | **Total revenue** | $363,587 | $265,546 | | **Gross profit** | $247,523 | $170,260 | | **Operating loss** | $(285,461) | $(228,789) | | **Net loss** | $(255,980) | $(230,618) | | **Net loss per share, basic and diluted** | $(0.87) | $(0.84) | Condensed Consolidated Statements of Cash Flows Data (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(106,832) | $(88,503) | | **Net cash used in investing activities** | $(81,424) | $(803,539) | | **Net cash provided by financing activities** | $65,221 | $45,803 | - In January 2023, the company acquired Immerok GmbH for **$54.9 million** in cash, resulting in **$43.5 million** of goodwill and a **$2.6 million** developed technology intangible asset[98](index=98&type=chunk)[125](index=125&type=chunk) - The company recorded restructuring charges of **$34.3 million** for the six months ended June 30, 2023, primarily related to an **8%** workforce reduction and lease abandonment charges[204](index=204&type=chunk)[135](index=135&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Confluent's revenue grew **37%** to **$363.6 million** for the six months ended June 30, 2023, driven by Confluent Cloud, while focusing on efficiency and maintaining strong customer metrics despite net losses Revenue Performance (Six Months Ended June 30) | Metric | 2023 (in thousands) | 2022 (in thousands) | YoY Growth | | :--- | :--- | :--- | :--- | | **Subscription Revenue** | $337,055 | $240,938 | 40% | | **Services Revenue** | $26,532 | $24,608 | 8% | | **Total Revenue** | $363,587 | $265,546 | 37% | - Confluent Cloud's contribution to total revenue increased to **43%** for the six months ended June 30, 2023, up from **32%** in the same period of 2022, highlighting the strategic shift towards its fully-managed SaaS offering[217](index=217&type=chunk) Key Business Metrics Comparison (as of June 30) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Total Customers** | ~4,830 | ~4,120 | | **Customers with >$100k ARR** | 1,144 | 862 | | **Remaining Performance Obligations (RPO)** | $791.4M | $591.3M | | **Dollar-Based Net Retention Rate (NRR)** | >130% | Not specified, but over 130% in 2023 | - In response to macroeconomic uncertainty, Confluent implemented a restructuring plan in January 2023, which included an **8%** workforce reduction, to adjust its cost structure and improve operating efficiency[187](index=187&type=chunk)[204](index=204&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=50&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are interest rate fluctuations affecting its **$1.85 billion** in cash and foreign currency risk from operating expenses, partially mitigated by a hedging program - As of June 30, 2023, the company held **$1.85 billion** in cash, cash equivalents, and marketable securities, which are subject to interest rate risk[496](index=496&type=chunk) - The company is exposed to foreign currency risk as a portion of its operating expenses are denominated in foreign currencies. To mitigate this, a hedging program was initiated in December 2022[335](index=335&type=chunk)[316](index=316&type=chunk) - The fair value of the company's **$1.1 billion** convertible senior notes is subject to market risk, primarily linked to the price of its Class A common stock, but this does not impact the financial statements as the notes are carried at face value less unamortized costs[334](index=334&type=chunk) [Controls and Procedures](index=51&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls, acknowledging inherent limitations of any control system - Management, including the CEO and CFO, concluded that as of June 30, 2023, the company's disclosure controls and procedures were effective at the reasonable assurance level[318](index=318&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[319](index=319&type=chunk) - The company acknowledges that due to inherent limitations, no control system can provide absolute assurance or prevent all errors and fraud[1](index=1&type=chunk) [PART II. Other Information](index=52&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=52&type=section&id=ITEM%201.%20Legal%20Proceedings) Confluent is not currently involved in any legal proceedings that would materially and adversely affect its business, financial condition, or operations - Confluent is not presently a party to any legal proceedings that would materially and adversely affect its business, results of operations, financial condition, or cash flows[3](index=3&type=chunk) [Risk Factors](index=53&type=section&id=ITEM%201A.%20Risk%20Factors) Confluent faces significant risks including a history of operating losses, dependence on its data-in-motion offering, intense competition, dual-class stock structure, and cybersecurity threats - The company has a history of operating losses and may not achieve or sustain profitability, having incurred a net loss of **$256.0 million** for the six months ended June 30, 2023[7](index=7&type=chunk)[26](index=26&type=chunk) - Substantially all revenue is derived from the data-in-motion offering. Failure of this offering to satisfy customer demand or compete with alternatives would harm the business[9](index=9&type=chunk)[341](index=341&type=chunk) - The company faces intense competition from internal IT teams using open-source software, major public cloud providers (AWS, Azure, GCP) who are also partners, and other legacy vendors[29](index=29&type=chunk)[359](index=359&type=chunk)[348](index=348&type=chunk) - The dual-class stock structure concentrates approximately **81.1%** of voting power with pre-IPO stockholders (as of June 30, 2023), limiting the influence of Class A stockholders on corporate matters[17](index=17&type=chunk)[632](index=632&type=chunk) - The business is exposed to significant cybersecurity risks, including data breaches. A past incident involving a third-party vendor (Codecov) resulted in unauthorized access to source code[14](index=14&type=chunk)[403](index=403&type=chunk)[407](index=407&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=102&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities and no material change in the planned use of proceeds from its Initial Public Offering - There were no unregistered sales of equity securities during the reporting period[686](index=686&type=chunk) - There has been no material change in the planned use of proceeds from the company's IPO, which was declared effective on June 23, 2021[535](index=535&type=chunk) [Defaults Upon Senior Securities](index=102&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period covered by this report - The company reports "None" regarding any defaults upon senior securities[687](index=687&type=chunk) [Mine Safety Disclosures](index=102&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable to Confluent[536](index=536&type=chunk) [Other Information](index=103&type=section&id=ITEM%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2023 - During the three months ended June 30, 2023, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[673](index=673&type=chunk) [Exhibits](index=104&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents and Sarbanes-Oxley Act certifications - The report includes certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Act Sections 302 and 906[691](index=691&type=chunk)[692](index=692&type=chunk) - Exhibits filed include corporate governance documents and interactive data files (Inline XBRL)[691](index=691&type=chunk) [Signatures](index=105&type=section&id=Signatures) [Signatures](index=105&type=section&id=Signatures) The Quarterly Report on Form 10-Q was signed on August 2, 2023, by Confluent, Inc.'s Principal Executive, Financial, and Accounting Officers - The report is signed by the company's Principal Executive Officer (Edward Jay Kreps), Principal Financial Officer (Steffan Tomlinson), and Principal Accounting Officer (Ying Christina Liu)[694](index=694&type=chunk) - The report was signed on August 2, 2023[541](index=541&type=chunk)

Confluent, Inc. (NASDAQ:CFLT) Q1 2023 Earnings Conference Call May 3, 2023 4:30 PM ET Company Participants Shane Xie - Investor Relations Jay Kreps - Co-Founder and Chief Executive Officer Steffan Tomlinson - Chief Financial Officer Conference Call Participants Sanjit Singh - Morgan Stanley Michael Turrin - Wells Fargo Rob Owens - Piper Sandler Derrick Wood - TD Cowen Howard Ma - Guggenheim Securities Raimo Lenschow - Barclays Gregg Moskowitz - Mizuho Securities Eric Heath - KeyBanc Rudy Kessinger - D.A. Da ...