Investor Presentation October 27, 2025 Disclaimer 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,ˮ "us,ˮ "our,ˮ or "Confluentˮ) regarding our revenue, revenue mix, expenses and other results of operations; net dilution; future financial performance, business strategy and plans; potential market and growth opportunities; our growth drivers; compet ...

Core Viewpoint - Confluent's stock has experienced a significant decline following its recent earnings report, yet analysts on Wall Street maintain a positive outlook on the company's long-term potential [3][13]. Company Performance - Confluent's stock dropped by 30% after the release of its second-quarter 2025 operating results, marking an 81% decrease from its peak in 2021 [3][16]. - The company reported subscription revenue of $270.8 million for the second quarter, exceeding expectations and reflecting a 21% year-over-year increase [10]. - The net revenue retention rate was 114%, indicating existing customers are spending 14% more compared to the previous year [11]. - The number of customers spending at least $100,000 annually grew by 10%, while those spending at least $1 million increased by 24% [11]. Market Outlook - Despite some large customers optimizing their spending and one AI-native customer moving away from the platform, the overall outlook remains positive, with management raising the low end of its 2025 revenue forecast by $5 million [12][13]. - Analysts covering Confluent stock are largely bullish, with 21 out of 36 recommending a buy, and an average price target of $25, suggesting a potential 45% upside [13][14]. Industry Context - Data streaming is becoming increasingly vital in various sectors, including retail and AI applications, enhancing real-time data processing capabilities [2][6]. - Confluent's platform is positioned to support businesses in creating data pipelines for AI applications, which is expected to drive significant growth as AI adoption increases [8][15]. - The company estimates its addressable market at $100 billion, indicating substantial growth potential based on current revenue levels [15]. Valuation Metrics - Confluent's price-to-sales (P/S) ratio has decreased to 5.2, the lowest since its IPO, following an 81% decline in stock price, making it more attractive for long-term investors [16].

Financial Performance - Confluent's Q2 2025 revenue reached $282.3 million, a 21% year-over-year increase[9,58] - Cloud revenue was $150.5 million, representing a 28% year-over-year growth[9,56] - The company achieved a Non-GAAP operating margin of 6.3%, a 6 percentage point increase year-over-year[9] - Adjusted Free Cash Flow Margin was 3.9%, a 3 percentage point increase year-over-year[9] - Subscription revenue for Q2 2025 was $270.8 million[54,79] Customer Growth and Retention - Net Retention Rate was 114%[9] - The number of customers contributing $100,000 or more in ARR grew by 24% year-over-year[60] - Customers with >= $1M in ARR increased by 10% YoY[60] Market and Strategy - Confluent estimates a total addressable market (TAM) of over $100 billion[46,70] - The company is focused on expanding its Data Streaming Platform (DSP) capabilities[8,21] - Confluent is transitioning to "Act 3," focusing on a complete Data Streaming Platform[8,48] Revenue Mix - In Q2 2025, US revenue accounted for 53% and International revenue accounted for 47% of the total revenue[58] - Confluent Cloud accounted for 50% of the revenue, Confluent Platform accounted for 46% and Services accounted for 4% of the total revenue in Q2 2025[58]

Industry Overview - The Internet Software and Services sector is experiencing growth due to increased IT spending on solutions that support hybrid operating environments [1] - The Internet Software industry is ranked in the top 17% of Zacks Industry Rank, indicating an expectation to outperform the market in the next three to six months [2] Company Highlights UiPath Inc. (PATH) - UiPath offers an end-to-end automation platform with a range of robotic process automation solutions [6] - The platform includes AI, ML, and NLP capabilities, enhancing decision-making and information processing [7] - Expected revenue and earnings growth rates for the current year are 8.5% and 3.8%, respectively, with a 1.9% improvement in earnings estimates over the last week [8] Five9 Inc. (FIVN) - Five9 provides intelligent cloud software for contact centers, enabling a wide range of customer service functions [11] - The platform includes AI-driven features such as virtual agents and workflow automation, benefiting from the growing adoption of AI tools [13] - Expected revenue and earnings growth rates for the current year are 9.6% and 11.7%, respectively, with a 5.7% improvement in earnings estimates over the last 60 days [14] Fastly Inc. (FSLY) - Fastly offers infrastructure software for cloud computing, security, and edge computing solutions [15] - The Fastly AI Accelerator was introduced to optimize LLM generative AI applications [15] - Expected revenue and earnings growth rates for 2025 are 8.6% and 25%, respectively, with a 10% improvement in earnings estimates over the last week [17] Calix Inc. (CALX) - Calix provides cloud and software platforms for broadband service providers [18] - The company has integrated AI into its platforms to enhance operations and service delivery [20] - Expected revenue and earnings growth rates for 2025 are 7.1% and 65.4%, respectively, with a 21.1% improvement in earnings estimates over the last 60 days [20] Confluent Inc. (CFLT) - Confluent operates a data streaming platform that allows real-time data streaming for various industries [21][22] - Expected revenue and earnings growth rates for the current year are 19% and 24.1%, respectively, with a 2.9% improvement in earnings estimates over the last 60 days [23]

Financial Performance Highlights - Q1 2025 subscription revenue reached $260.9 million, a 26% year-over-year increase[8] - Q1 2025 cloud revenue was $142.7 million, representing a 34% year-over-year growth[8] - The company achieved a non-GAAP operating margin of 4.3% in Q1 2025, a 6 percentage point increase year-over-year[8] - Adjusted free cash flow margin for Q1 2025 was 1.8%, up 16 percentage points year-over-year[8] - The net retention rate was 117%[8] Customer Growth - Confluent has been driving business success at every stage of the customer journey[29] - The number of customers with at least $100,000 in ARR increased[58] - The number of customers with at least $1 million in ARR reached 210[59] Market Opportunity and Strategy - Confluent estimates a total addressable market (TAM) exceeding $100 billion[44, 69] - The company is focused on managing net dilution, targeting a long-term goal of below 2%[67] - Confluent is positioned for growth with its complete data streaming platform[69]