Why Confluent Stock Is Plummeting Today

Core Viewpoint - Confluent's stock is experiencing a significant decline despite reporting strong quarterly results, primarily due to disappointing forward guidance from management [1][2]. Financial Performance - Confluent reported Q1 sales of $271.1 million, exceeding Wall Street's expectations of $264.39 million, and adjusted earnings per share of $0.08, surpassing the estimate of $0.07 [3]. - The company's revenue grew 24.8% year over year, with subscription revenue increasing by 26% to $261 million, and Confluent Cloud revenue rising 34% year over year to $143 million [4]. - Adjusted earnings per share increased by 60% year over year in the quarter [4]. Growth Outlook - For Q2, Confluent expects subscription sales to be between $267 million and $268 million, indicating a growth rate of approximately 19% at the midpoint [5]. - The full-year subscription revenue projection is between $1.1 billion and $1.11 billion, reflecting an annual growth rate of 19.5% at the midpoint [6]. - The company attributes its softer growth outlook to uncertainties regarding spending from large customers, raising concerns among investors about potential macroeconomic headwinds affecting expansion [6].