Latest news with #JayKreps
Yahoo
5 days ago
- Business
- Yahoo
Confluent (NASDAQ:CFLT) Q1 Earnings: Leading The Data Infrastructure Pack
As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at data infrastructure stocks, starting with Confluent (NASDAQ:CFLT). Generating insights from system level data is an increasing priority for most businesses, but to do so requires connecting and analyzing piles of data stored and siloed in separate databases. This is the demand driver for cloud based data infrastructure software providers, who can more readily integrate, distribute and process information vs. legacy on-premise software providers. The 4 data infrastructure stocks we track reported a satisfactory Q1. As a group, revenues beat analysts' consensus estimates by 0.8% while next quarter's revenue guidance was 1.1% below. In light of this news, share prices of the companies have held steady as they are up 2.4% on average since the latest earnings results. Started in 2014 by the team of engineers at LinkedIn who originally built it as an internal tool, Confluent (NASDAQ:CFLT) provides infrastructure software for organizations that makes it easy and fast to collect and move large amounts of data between different systems. Confluent reported revenues of $271.1 million, up 24.8% year on year. This print exceeded analysts' expectations by 2.6%. Overall, it was a strong quarter for the company with EPS guidance for next quarter exceeding analysts' expectations and a solid beat of analysts' EBITDA estimates. 'Confluent started the year with solid momentum, achieving subscription revenue growth of 26% year over year,' said Jay Kreps, co-founder and CEO, Confluent. Confluent scored the biggest analyst estimates beat but had the weakest full-year guidance update of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $23.85. Is now the time to buy Confluent? Access our full analysis of the earnings results here, it's free. Founded in 2009 by enterprise software veteran Tom Seibel, (NYSE:AI) provides software that makes it easy for organizations to add artificial intelligence technology to their applications. reported revenues of $108.7 million, up 25.6% year on year, outperforming analysts' expectations by 0.8%. The business had a strong quarter with an impressive beat of analysts' EBITDA estimates and a narrow beat of analysts' billings estimates. pulled off the fastest revenue growth and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 13.9% since reporting. It currently trades at $26.25. Is now the time to buy Access our full analysis of the earnings results here, it's free. Part of point-of-sale and ATM company NCR from 1991 to 2007, Teradata (NYSE:TDC) offers a software-as-service platform that helps organizations manage and analyze their data across multiple storages. Teradata reported revenues of $418 million, down 10.1% year on year, falling short of analysts' expectations by 2.4%. It was a slower quarter as it posted EPS and revenue guidance for next quarter slightly missing analysts' expectations. Teradata delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 1.7% since the results and currently trades at $22.33. Read our full analysis of Teradata's results here. Started by Shay Banon as a search engine for his wife's growing list of recipes at Le Cordon Bleu cooking school in Paris, Elastic (NYSE:ESTC) helps companies integrate search into their products and monitor their cloud infrastructure. Elastic reported revenues of $388.4 million, up 16% year on year. This result beat analysts' expectations by 2.1%. Taking a step back, it was a satisfactory quarter as it also produced accelerating customer growth. The company added 50 enterprise customers paying more than $100,000 annually to reach a total of 1,510. The stock is down 6.6% since reporting and currently trades at $85.88. Read our full, actionable report on Elastic here, it's free. Thanks to the Fed's rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn't send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump's November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy. Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-05-2025
- Business
- Yahoo
CFLT Q1 Earnings Call: Confluent Raises Profit Outlook, Lowers Revenue Guidance Amid Cloud Optimization Trends
Data infrastructure software company, Confluent (NASDAQ:CFLT) reported revenue ahead of Wall Street's expectations in Q1 CY2025, with sales up 24.8% year on year to $271.1 million. On the other hand, next quarter's revenue guidance of $267.5 million was less impressive, coming in 3.8% below analysts' estimates. Its non-GAAP profit of $0.08 per share was 16.5% above analysts' consensus estimates. Is now the time to buy CFLT? Find out in our full research report (it's free). Revenue: $271.1 million vs analyst estimates of $264.3 million (24.8% year-on-year growth, 2.6% beat) Adjusted EPS: $0.08 vs analyst estimates of $0.07 (16.5% beat) Adjusted Operating Income: $11.59 million vs analyst estimates of $8.01 million (4.3% margin, 44.6% beat) The company dropped its revenue guidance for the full year to $1.11 billion at the midpoint from $1.12 billion, a 1.3% decrease Management raised its full-year Adjusted EPS guidance to $0.36 at the midpoint, a 2.9% increase Operating Margin: -37.3%, up from -51.3% in the same quarter last year Free Cash Flow was -$32.99 million, down from $29.12 million in the previous quarter Net Revenue Retention Rate: 117%, in line with the previous quarter Billings: $267.3 million at quarter end, up 26.1% year on year Market Capitalization: $7.87 billion Confluent's first quarter results were shaped by continued demand for its data streaming platform, with management pointing to strong customer adoption across both cloud and on-premise solutions. CEO Jay Kreps emphasized the critical role Confluent plays in mission-critical applications, citing real-time workloads in sectors like financial services and retail. Kreps highlighted that the addition of 340 net new customers, the highest in three years, was driven by both product-led initiatives and the ongoing shift from open-source Kafka to Confluent's managed offerings. The company also noted that new products such as Flink and Tableflow are gaining traction, particularly among enterprise customers looking to support generative AI initiatives. Looking ahead, Confluent's leadership adopted a cautious approach to guidance, lowering full-year revenue projections while raising profit expectations. CFO Rohan Sivaram attributed this to slower consumption growth among larger cloud customers, who are prioritizing cost optimization over expanding new use cases. Sivaram stated, 'We are not assuming an immediate near-term rebound in consumption patterns,' reflecting a more prudent outlook amid macroeconomic uncertainty. Management expects expansion in hybrid and on-premise deployments to help offset cloud headwinds, while ongoing investments in product innovation and go-to-market execution remain central to Confluent's long-term growth strategy. Management attributed the quarter's outperformance to a mix of product differentiation, customer expansion, and the ability to meet diverse deployment needs. The following points capture significant drivers discussed during the call: Mission-critical use cases: Confluent's platform is increasingly powering core business processes, such as fraud detection in banking and real-time inventory in retail. Gross retention rates above 90% reflect the dependence customers have on these workloads. Open-source conversion momentum: The company highlighted continued success in converting organizations from open-source Kafka to its managed platform, referencing recent wins with and Audacy. This conversion is seen as a long-term engine for growth. Hybrid and multi-cloud flexibility: With customers looking for both on-premise and cloud-based solutions, Confluent's ability to support hybrid deployments has become a competitive advantage. The Confluent Platform business posted its strongest first-quarter growth in three years, buoyed by international OEM partnerships. Product expansion and AI integration: New offerings such as Flink (for real-time data processing) and Tableflow (for data pipeline management) are seeing early adoption. Management cited growing demand from enterprises integrating generative AI, with Confluent acting as the connective tissue for real-time data flows. Leadership update: Ryan Mac Ban was promoted to Chief Revenue Officer, consolidating global sales and customer-facing functions. His experience at UiPath and other enterprise software firms is expected to drive further go-to-market execution. Management expects a more measured growth trajectory in the coming quarters, shaped by macroeconomic factors and evolving customer behavior. Cloud consumption headwinds: Larger enterprise customers are slowing the addition of new use cases and focusing on optimizing existing cloud workloads, which is expected to temper revenue growth in the near term. Expansion of on-premise and hybrid deployments: The company anticipates that growth in on-premise and hybrid solutions, supported by OEM and international partners, will help balance softer cloud trends and provide resilience. Product innovation and AI demand: Management views new product launches—especially those supporting generative AI and real-time analytics—as potential long-term catalysts, though their near-term revenue contributions are expected to be modest as adoption ramps. Pinjalim Bora (JPMorgan): Asked about the impact of cost optimization among large cloud customers on existing versus new use cases; management said optimization cycles are ongoing, with smaller customers showing steadier consumption. Matthew Hedberg (RBC): Inquired about the sequential progress of DSP (Data Streaming Platform) products like Flink and Tableflow; CEO Jay Kreps said these products are outpacing core cloud growth but are still in early adoption phases. Michael Turrin (Wells Fargo): Questioned the timeline for new product ramp and go-to-market productivity; Kreps noted that Tableflow is priced separately, with broader adoption expected as it is launched across more cloud providers. Sanjit Singh (Morgan Stanley): Sought comparison between current optimization trends and prior cycles; Kreps observed that the current base is tighter, with less unoptimized usage than in previous years, limiting downside risk. Brad Zelnick (Deutsche Bank): Asked about the durability of free cash flow goals after compensation-related changes; CFO Rohan Sivaram affirmed that no further adjustments are anticipated beyond the one-time impact already disclosed. In the quarters ahead, the StockStory team will be tracking (1) the rate of new customer additions and whether top-of-funnel momentum sustains, (2) adoption and revenue impact from recently launched products like Flink and Tableflow, and (3) the degree to which on-premise and hybrid solutions can offset moderation in cloud consumption among larger customers. The ability of management to achieve expanded profitability targets while balancing investment in product and go-to-market will also serve as a critical benchmark. Confluent currently trades at a forward price-to-sales ratio of 6.5×. At this valuation, is it a buy or sell post earnings? See for yourself in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
30-04-2025
- Business
- Business Wire
Confluent Announces First Quarter 2025 Financial Results
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- Confluent, Inc. (NASDAQ: CFLT), the data streaming pioneer, today announced financial results for its first quarter of 2025, ended March 31, 2025. 'Confluent started the year with solid momentum, achieving subscription revenue growth of 26% year over year,' said Jay Kreps, co-founder and CEO, Confluent. 'Our growth at scale amid heightened macroeconomic uncertainty demonstrates the mission-critical nature of data streaming and our significant product leadership. We remain laser-focused on enabling our customers to cost-efficiently build next-generation applications and win in the age of AI.' 'We are pleased with our robust first quarter results, demonstrating the resilience of our business and our ability to capture our market opportunity,' said Rohan Sivaram, CFO, Confluent. 'These results underscore the strength of our data streaming platform, the strategic value of our multi-cloud, multi-data destination, and multi-deployment approach, as well as the flexibility of our well-diversified growth strategy.' A reconciliation of forward-looking non-GAAP operating margin, adjusted free cash flow margin and non-GAAP net income per diluted share to the most directly comparable GAAP measures is not available without unreasonable effort, as certain items cannot be reasonably predicted because of their high variability, complexity and low visibility. In particular, the measures and effects of our stock-based compensation-related charges, which include stock-based compensation expenses, employer payroll taxes on employee stock transactions, and amortization of stock-based compensation capitalized in internal-use software, are directly impacted by the timing of employee stock transactions and unpredictable fluctuations in our stock price, which we expect to have a significant impact on our future GAAP financial results. Conference Call Information Confluent will host a video webcast to discuss the company's first quarter 2025 results as well as its financial outlook today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. Open to the public, investors may access the webcast, earnings press release, supplemental financial information, and investor presentation on Confluent's investor relations website at before the commencement of the webcast. A replay of the webcast will also be accessible from Confluent's investor relations website a few hours after the conclusion of the live event. Confluent uses its investor relations website and may use its X (Twitter), LinkedIn, and Facebook accounts as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Forward-Looking Statements This press release and the earnings call referencing this press release contain forward-looking statements including, among other things, statements regarding (i) our financial outlook, including expected subscription revenue, Confluent Cloud revenue, non-GAAP operating margin, free cash flow margin, adjusted free cash flow margin, non-GAAP net income per share, revenue mix, including Confluent Cloud subscription revenue mix, revenue run rates, Confluent Cloud and data streaming platform growth, adoption and traction, operating margins and margin improvements, targeted or anticipated gross and operating margin levels, earnings per share levels and improvements, in-product optimizations of Confluent Cloud, continued business momentum, and expected revenue, (ii) our market and category leadership position, (iii) our expectations and trends relating to growth of our Data Streaming Platform products, (iv) rates of Confluent Cloud consumption and demand for and retention of data streaming platforms like Confluent, (v) customer growth, retention and engagement, and expansion of customers into new use cases, (vi) ability for Confluent Cloud to provide cost savings for users and customers, including lower total cost of ownership, and our ability to drive return-on-investment-based expansions for our customers and capture the open-source conversion opportunity, (vii) increased adoption of our offerings and fully managed solutions for data streaming in general, including from customers building generative AI applications, (viii) dependence of businesses on data in motion, (ix) growth in and growth rate of revenue, customers, dollar-based net retention rate, and gross retention rate, (x) our ability to increase engagement of customers for Confluent and expand customer cohorts, (xi) our market opportunity and our ability to capture our market opportunity, (xii) the resilience of our business, (xiii) our go-to-market strategy, (xiv) our product differentiation and market acceptance of our products, (xv) our strategy and expected results and market acceptance for our Flink offering, Tableflow, Freight Clusters, and our other Data Streaming Platform offerings, (xvi) our expectations for market acceptance, direction and growth of stream processing, its potential to accelerate adoption of our platform and growth of our business, and our ability and positioning to capture this market, (xvii) our expectations of meeting near-term and mid-term financial targets, (xviii) our expectations regarding the generative AI landscape and our offerings, (xix) our expectations of relevance of certain key financial and operating metrics, (xx) our ability to drive long-term growth, (xxi) our expectations regarding the impact of our offerings, including WarpStream and Freight Clusters, (xxii) our expectations regarding our growth strategies and our partner ecosystem, including our Confluent OEM Program, (xxiii) our ability to offer pricing and packaging that fit the full range of Kafka use cases, and (xxiv) our overall future prospects. The words 'believe,' 'may,' 'will,' 'estimate,' 'continue,' 'anticipate,' 'intend,' 'expect,' 'seek,' 'plan,' 'project,' 'target,' 'looking ahead,' 'look to,' 'move into,' and similar expressions are intended to identify forward-looking statements. Forward-looking statements represent our current beliefs, estimates and assumptions only as of the date of this press release and information contained in this press release should not be relied upon as representing our estimates as of any subsequent date. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) our limited operating history, including in uncertain macroeconomic environments, (ii) our ability to sustain and manage our rapid growth, (iii) our ability to increase consumption of our offerings, including by existing customers and through the acquisition of new customers, including by addressing customer consumption preferences, successfully adding new features and functionality to our offerings, and partnering with our customers to help them realize increased value in Confluent in an efficient and sustainable manner, (iv) our ability to successfully execute our go-to-market strategy and initiatives, (v) our ability to attract new customers and successfully ramp their consumption of our offerings, as well as retain and sell additional features and services to our existing customers, (vi) uncertain macroeconomic conditions, including high inflation, high interest rates, bank failures, global tariffs, taxes on multinational companies, geopolitical events, recessionary risks, and exchange rate fluctuations, (vii) our ability to achieve profitability and improve margins annually, by our expected timelines or at all, (viii) the estimated addressable market opportunity for our Data Streaming Platform, and our ability to capture our share of that market opportunity, (ix) shifts in certain customers' data streaming strategies, (x) our ability to compete effectively in an increasingly competitive market, (xi) our ability to attract, ramp, and retain highly qualified personnel, and the impacts of attrition and related challenges, (xii) breaches in our security measures, intentional or accidental cybersecurity incidents or unauthorized access to our platform, our data, or our customers' or other users' personal data, (xiii) our reliance on third-party cloud-based infrastructure to host Confluent Cloud, (xiv) public sector budgetary cycles and funding reductions or delays, or shifts in procurement strategies, (xv) our ability to accurately forecast our future performance, business and growth, and (xvi) general market, political, economic, and business conditions. These risks are not exhaustive. Further information on these and other risks that could affect Confluent's results is included in our filings with the Securities and Exchange Commission ('SEC'), including our Annual Report on Form 10-K for the year ended December 31, 2024, and our future reports that we may file from time to time with the SEC. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 that will be filed with the SEC, which should be read in conjunction with this press release and the financial results included herein. Confluent assumes no obligation to, and does not currently intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Non-GAAP Financial Measures This press release includes the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing, and general and administrative), non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share, free cash flow, free cash flow margin, adjusted free cash flow, and adjusted free cash flow margin. 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 financial performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. However, non-GAAP financial measures have limitations as an analytical tool and are presented for supplemental informational purposes only. They should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In particular, other companies, including companies in our industry, may report non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing, general and administrative), non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share, free cash flow, free cash flow margin, adjusted free cash flow, adjusted free cash flow margin, or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Further, free cash flow and adjusted free cash flow are not substitutes for cash used in operating activities. The utility of free cash flow and adjusted free cash flow are limited as such measures do not reflect our future contractual commitments and do not represent the total increase or decrease in our cash balance for any given period. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, as presented below. We define non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing, and general and administrative), non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income, and non-GAAP net income per share as the respective GAAP measures, adjusted for, as applicable, stock-based compensation-related charges which include stock-based compensation expense, employer taxes on employee stock transactions and amortization of stock-based compensation capitalized in internal-use software; amortization of acquired intangibles; acquisition-related expenses; amortization of debt issuance costs; and income tax effects associated with these adjustments as well as the non-recurring income tax expense or benefit associated with acquisitions and income tax benefit from the release of a valuation allowance on certain deferred tax assets. Non-GAAP gross margin and non-GAAP operating margin are defined as non-GAAP gross profit and non-GAAP operating income (loss) as a percentage of revenue, respectively. We define free cash flow as net cash used in operating activities less capitalized internal-use software costs and capital expenditures and free cash flow margin as free cash flow as a percentage of revenue. We define adjusted free cash flow as free cash flow excluding the non-recurring impact from a change to timing of certain cash compensation payments and adjusted free cash flow margin as adjusted free cash flow as a percentage of revenue. We believe that free cash flow, free cash flow margin, adjusted free cash flow, and adjusted free cash flow margin are useful indicators of liquidity that provide information to management and investors about the performance of core operations and future ability to generate cash that can be used for strategic opportunities or investing in our business. Definition Customers with $100,000 or greater in annual recurring revenue ('ARR') represent the number of customers that contributed $100,000 or more in ARR as of period end. We define ARR as (1) with respect to Confluent Platform customers, the amount of revenue to which our customers are contractually committed over the following 12 months assuming no increases or reductions in their subscriptions, and (2) with respect to Confluent Cloud and WarpStream customers, the amount of revenue that we expect to recognize from such customers over the following 12 months, calculated by annualizing actual consumption of Confluent Cloud and WarpStream in the last three months of the applicable period, assuming no increases or reductions in usage rate. Services arrangements are excluded from the calculation of ARR. For purposes of determining our customer count, we treat all affiliated entities with the same parent organization as a single customer and include pay-as-you-go customers. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity. About Confluent Confluent is the data streaming platform that is pioneering a fundamentally new category of data infrastructure that sets data in motion. Confluent's cloud-native offering is the foundational platform for data in motion – designed to be the intelligent connective tissue enabling real-time data, from multiple sources, to constantly stream across the organization. With Confluent, organizations can meet the new business imperative of delivering rich, digital front-end customer experiences and transitioning to sophisticated, real-time, software-driven backend operations. Confluent, Inc. Condensed Consolidated Statements of Operations (in thousands, except share and per share data) (unaudited) Three Months Ended March 31, 2025 2024 Revenue: Subscription $ 260,910 $ 206,902 Services 10,210 10,335 Total revenue 271,120 217,237 Cost of revenue: Subscription (1) 56,847 48,355 Services (1) 12,271 12,866 Total cost of revenue 69,118 61,221 Gross profit 202,002 156,016 Operating expenses: Research and development (1) 116,801 97,571 Sales and marketing (1) 146,259 131,352 General and administrative (1) 40,120 38,444 Total operating expenses 303,180 267,367 Operating loss (101,178 ) (111,351 ) Other income, net 20,410 20,850 Loss before income taxes (80,768 ) (90,501 ) Provision for (benefit from) income taxes (13,194 ) 2,466 Net loss $ (67,574 ) $ (92,967 ) Net loss per share, basic and diluted $ (0.20 ) $ (0.30 ) Weighted-average shares used to compute net loss per share, basic and diluted 335,755,902 314,203,181 (1) Includes stock-based compensation-related charges as follows: Three Months Ended March 31, 2025 2024 Cost of revenue - subscription $ 8,708 $ 7,905 Cost of revenue - services 1,867 2,718 Research and development 43,835 41,424 Sales and marketing 32,757 35,780 General and administrative 14,410 15,158 Total stock-based compensation-related charges $ 101,577 $ 102,985 Expand Confluent, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended March 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (67,574 ) $ (92,967 ) Adjustments to reconcile net loss to cash used in operating activities: Depreciation and amortization 6,605 4,311 Net accretion of discounts on marketable securities (6,847 ) (10,396 ) Amortization of debt issuance costs 945 953 Amortization of deferred contract acquisition costs 13,931 12,762 Non-cash operating lease costs 1,075 885 Stock-based compensation, net of amounts capitalized 92,575 95,322 Deferred income taxes (17,338 ) 615 Other 454 849 Changes in operating assets and liabilities, net of effects of business combinations: Accounts receivable 15,414 29,360 Deferred contract acquisition costs (10,410 ) (9,732 ) Prepaid expenses and other assets 1,515 (1,929 ) Accounts payable (1,274 ) (4,932 ) Accrued expenses and other liabilities (49,828 ) (43,752 ) Operating lease liabilities (2,177 ) (1,935 ) Deferred revenue (3,820 ) (5,368 ) Net cash used in operating activities (26,754 ) (25,954 ) CASH FLOWS FROM INVESTING ACTIVITIES Capitalization of internal-use software costs (4,806 ) (5,539 ) Purchases of marketable securities (405,235 ) (443,307 ) Maturities of marketable securities 299,467 432,267 Purchases of property and equipment (1,429 ) (186 ) Net cash used in investing activities (112,003 ) (16,765 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock upon exercise of vested options 16,606 14,401 Proceeds from issuance of common stock under employee stock purchase plan 14,195 15,603 Net cash provided by financing activities 30,801 30,004 Effect of exchange rate changes on cash and cash equivalents 537 (673 ) Net decrease in cash and cash equivalents (107,419 ) (13,388 ) Cash and cash equivalents at beginning of period 385,980 349,761 Cash and cash equivalents at end of period $ 278,561 $ 336,373 Expand Confluent, Inc. Reconciliation of GAAP Measures to Non-GAAP Measures (in thousands, except percentages, share and per share data) (unaudited) Three Months Ended March 31, 2025 2024 Reconciliation of GAAP total gross profit to non-GAAP total gross profit: Total gross profit on a GAAP basis $ 202,002 $ 156,016 Total gross margin on a GAAP basis 74.5 % 71.8 % Add: Stock-based compensation-related charges 10,575 10,623 Add: Amortization of acquired intangibles 461 502 Non-GAAP total gross profit $ 213,038 $ 167,141 Non-GAAP total gross margin 78.6 % 76.9 % Reconciliation of GAAP operating expenses to non-GAAP operating expenses: Research and development operating expense on a GAAP basis $ 116,801 $ 97,571 Research and development operating expense as a percentage of total revenue on a GAAP basis 43.1 % 44.9 % Less: Stock-based compensation-related charges 43,835 41,424 Less: Acquisition-related expenses 9,641 4,362 Non-GAAP research and development operating expense $ 63,325 $ 51,785 Non-GAAP research and development operating expense as a percentage of total revenue 23.4 % 23.8 % Sales and marketing operating expense on a GAAP basis $ 146,259 $ 131,352 Sales and marketing operating expense as a percentage of total revenue on a GAAP basis 53.9 % 60.5 % Less: Stock-based compensation-related charges 32,757 35,780 Less: Acquisition-related expenses 1,076 - Non-GAAP sales and marketing operating expense $ 112,426 $ 95,572 Non-GAAP sales and marketing operating expense as a percentage of total revenue 41.5 % 44.0 % General and administrative operating expense on a GAAP basis $ 40,120 $ 38,444 General and administrative operating expense as a percentage of total revenue on a GAAP basis 14.8 % 17.7 % Less: Stock-based compensation-related charges 14,410 15,158 Less: Acquisition-related expenses 14 225 Non-GAAP general and administrative operating expense $ 25,696 $ 23,061 Non-GAAP general and administrative operating expense as a percentage of total revenue 9.5 % 10.6 % Three Months Ended March 31, 2025 2024 Reconciliation of GAAP operating loss to non-GAAP operating income (loss): Operating loss on a GAAP basis $ (101,178 ) $ (111,351 ) GAAP operating margin (37.3 %) (51.3 %) Add: Stock-based compensation-related charges 101,577 102,985 Add: Amortization of acquired intangibles 461 502 Add: Acquisition-related expenses 10,731 4,587 Non-GAAP operating income (loss) $ 11,591 $ (3,277 ) Non-GAAP operating margin 4.3 % (1.5 %) Reconciliation of GAAP net loss to non-GAAP net income: Net loss on a GAAP basis $ (67,574 ) $ (92,967 ) Add: Stock-based compensation-related charges 101,577 102,985 Add: Amortization of acquired intangibles 461 502 Add: Acquisition-related expenses 10,731 4,587 Add: Amortization of debt issuance costs 945 953 Add: Income tax effects and adjustments (1) (17,156 ) (260 ) Non-GAAP net income $ 28,984 $ 15,800 Non-GAAP net income per share, basic $ 0.09 $ 0.05 Non-GAAP net income per share, diluted $ 0.08 $ 0.05 Weighted-average shares used to compute non-GAAP net income per share, basic 335,755,902 314,203,181 Weighted-average shares used to compute non-GAAP net income per share, diluted 367,802,218 350,195,868 (1) Income tax effects and adjustments for the three months ended March 31, 2025 includes an adjustment for the income tax benefit from the release of a valuation allowance on certain deferred tax assets. Expand The following table presents a reconciliation of free cash flow to net cash used in operating activities, the most directly comparable GAAP measure, for each of the periods indicated (unaudited, in thousands, except percentages): Three Months Ended March 31, 2025 2024 Net cash used in operating activities $ (26,754 ) $ (25,954 ) Capitalized internal-use software costs (4,806 ) (5,539 ) Capital expenditures (1,429 ) (186 ) Free cash flow $ (32,989 ) $ (31,679 ) Impact from compensation payments adjustment (1) 37,930 - Adjusted free cash flow $ 4,941 $ (31,679 ) Net cash used in operating activities as a percentage of total revenue (9.9 %) (11.9 %) Free cash flow margin (12.2 %) (14.6 %) Adjusted free cash flow margin 1.8 % (14.6 %) Net cash used in investing activities $ (112,003 ) $ (16,765 ) Net cash provided by financing activities $ 30,801 $ 30,004 (1) Represents an adjustment to reflect the non-recurring impact in the first quarter of 2025 from the change to timing of cash compensation payments for most of our non go-to-market employees implemented at the start of 2025. Expand
Yahoo
30-04-2025
- Business
- Yahoo
Confluent (NASDAQ:CFLT) Surprises With Q1 Sales But Stock Drops 10.2%
Data infrastructure software company, Confluent (NASDAQ:CFLT) reported Q1 CY2025 results topping the market's revenue expectations , with sales up 24.8% year on year to $271.1 million. On the other hand, next quarter's revenue guidance of $267.5 million was less impressive, coming in 3.9% below analysts' estimates. Its non-GAAP profit of $0.08 per share was 18.3% above analysts' consensus estimates. Is now the time to buy Confluent? Find out in our full research report. Revenue: $271.1 million vs analyst estimates of $264.3 million (24.8% year-on-year growth, 2.6% beat) Adjusted EPS: $0.08 vs analyst estimates of $0.07 (18.3% beat) Adjusted Operating Income: $11.59 billion vs analyst estimates of $8.01 million (4,275% margin, significant beat) The company dropped its revenue guidance for the full year to $1.11 billion at the midpoint from $1.12 billion, a 1.3% decrease Management raised its full-year Adjusted EPS guidance to $0.36 at the midpoint, a 2.9% increase Operating Margin: -37.3%, up from -51.3% in the same quarter last year Free Cash Flow was -$32.99 million, down from $29.12 million in the previous quarter Market Capitalization: $8.18 billion 'Confluent started the year with solid momentum, achieving subscription revenue growth of 26% year over year,' said Jay Kreps, co-founder and CEO, Confluent. Started in 2014 by the team of engineers at LinkedIn who originally built it as an internal tool, Confluent (NASDAQ:CFLT) provides infrastructure software for organizations that makes it easy and fast to collect and move large amounts of data between different systems. Examining a company's long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Confluent grew its sales at an excellent 32.5% compounded annual growth rate. Its growth beat the average software company and shows its offerings resonate with customers, a helpful starting point for our analysis. This quarter, Confluent reported robust year-on-year revenue growth of 24.8%, and its $271.1 million of revenue topped Wall Street estimates by 2.6%. Company management is currently guiding for a 13.8% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 19.8% over the next 12 months, a deceleration versus the last three years. Still, this projection is noteworthy and implies the market sees success for its products and services. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments. Confluent does a decent job acquiring new customers, and its CAC payback period checked in at 43.9 months this quarter. The company's relatively fast recovery of its customer acquisition costs gives it the option to accelerate growth by increasing its sales and marketing investments. We were impressed by Confluent's optimistic EPS guidance for next quarter, which blew past analysts' expectations. We were also glad its full-year EPS guidance exceeded Wall Street's estimates. On the other hand, its full-year revenue guidance missed significantly and its revenue guidance for next quarter fell short of Wall Street's estimates. Zooming out, we think the weak guidance will weight on shares. The stock traded down 11.2% to $21.10 immediately after reporting. Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
Yahoo
09-03-2025
- Business
- Yahoo
Why Confluent Stock Is Sinking Today
Confluent (NASDAQ: CFLT) stock is seeing a big valuation pullback Friday. The company's share price was down 7.9% as of 2:30 p.m. ET, and had been down as much as 11% earlier in trading. Confluent is moving lower today following a significant insider selling disclosure. The company submitted a filing to the Securities and Exchange Commission (SEC) revealing that co-founder and CEO Jay Kreps planned to sell a substantial amount of company stock. In a filing with the SEC yesterday, Confluent disclosed that CEO Jay Kreps planned to sell 465,000 shares of company common stock. The value of the stock to be sold was put at roughly $14.97 million in the filing, and yesterday was listed as the approximate date on which the shares would be sold. Prior to the new stock sale, Kreps had sold 232,500 shares over the preceding three months. While there are many reasons that an executive may move to sell company stock, stock sales by principal company leadership are often viewed as a bearish indicator by investors. On the heels of today's pullback, Confluent stock is now down roughly 4% across 2025's trading. Confluent is guiding for sales to come in between $1.117 billion and $1.121 billion this year -- representing annual growth of approximately 16% at the midpoint of the target. The company also guided for non-GAAP (generally accepted accounting principles) adjusted earnings per share of roughly $0.35 -- suggesting growth of roughly 21%. Despite recent valuation volatility, Confluent's business looks poised for solid momentum this year -- and the company's recently announced partnership and software integration with Databricks could open up significant long-term growth opportunities. Before you buy stock in Confluent, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Confluent wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $677,631!* Now, it's worth noting Stock Advisor's total average return is 822% — a market-crushing outperformance compared to 166% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of March 3, 2025 Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Confluent. The Motley Fool has a disclosure policy. Why Confluent Stock Is Sinking Today was originally published by The Motley Fool Sign in to access your portfolio
