Confluent shares surge10% as cloud revenue growth accelerates in Q3

MOUNTAIN VIEW - Confluent, Inc. (NASDAQ:CFLT) shares surged 10% after the data streaming pioneer reported third-quarter results that exceeded analyst expectations, driven by accelerating cloud revenue growth and improved profitability metrics.

The company posted adjusted earnings of $0.13 per share for the third quarter, beating the analyst consensus of $0.10. Revenue reached $298.5 million, up 19% YoY and above the consensus estimate of $292.56 million. Confluent Cloud revenue was particularly strong at $161 million, growing 24% YoY, showing acceleration in the company’s strategic cloud business.

"We’re seeing accelerating adoption of the DSP components of our platform, particularly Flink," said Jay Kreps, co-founder and CEO of Confluent. "This foundation uniquely positions Confluent to provide the real-time context AI systems need."

The company’s subscription revenue, which represents the bulk of its business, grew 19% YoY to $286.3 million. Confluent also reported 1,487 customers with $100,000 or greater in annual recurring revenue, representing a 10% increase from the same period last year.

Profitability metrics showed significant improvement, with non-GAAP operating margin expanding to 9.7%, up from 6.3% in the year-ago quarter. The company generated $24.6 million in adjusted free cash flow, more than doubling the $9.3 million from Q3 2024.

For the fourth quarter, Confluent expects subscription revenue between $295.5 million and $296.5 million. The company raised its full-year adjusted earnings guidance to $0.39-$0.40 per share, above the analyst consensus of $0.36, while projecting full-year subscription revenue of $1.113-$1.114 billion.

"Our robust top-line growth, stabilized dollar-based net retention rate, and continued margin expansion are a testament to our ability to drive durable, profitable growth over the long term," said Rohan Sivaram, CFO of Confluent.

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