Confluent, Inc. (CFLT): A Bull Case Theory

Core Thesis - Confluent, Inc. is experiencing strong growth in its data streaming platform, with a bullish outlook supported by recent financial performance and market positioning [1][8] Financial Performance - As of January 28th, Confluent's share price was $30.53, with a forward P/E ratio of 62.50 [1] - In Q3 2025, Confluent reported subscription revenue of $286 million, a 19% increase year-over-year, exceeding consensus estimates by 2% [3] - Confluent Cloud revenue grew 24% year-over-year to $161 million, also beating expectations by 2% [3] - Operating margins reached 9.7%, significantly above the 7.1% consensus, reflecting effective sales and marketing strategies [4] - Management raised guidance for Q4 2025, projecting total revenue of $296 million (up 18% year-over-year) and Confluent Cloud revenue of $165 million (up 20%) [4] Competitive Positioning - Confluent maintains a strong competitive position, achieving deal win rates above 90% against cloud service provider offerings, with average deal sizes doubling over the past two quarters [5] - Usage across multi-tenant Freight clusters, Enterprise clusters, and WarpStream has quadrupled over the last three quarters, indicating robust demand [5] Partner Ecosystem - The partner ecosystem contributed 25% of new business in Q3 2025, with key partners including Databricks, Microsoft, Google Cloud, AWS, and MongoDB [6] - The improving fundamentals and strong growth in cloud consumption position Confluent for continued momentum in revenue growth and margin expansion [6]