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MOUNTAIN VIEW - Confluent , Inc. (NASDAQ:CFLT) shares plunged 16% after the data streaming pioneer reported second-quarter revenue that fell short of analyst expectations and provided weaker-than-expected guidance.
The company posted Q2 revenue of $270.8 million, up 20% YoY but below the consensus estimate of $278.29 million. Subscription revenue reached $270.8 million, increasing 21% from the year-ago period. Confluent Cloud revenue grew 28% YoY to $151 million. Adjusted earnings per share came in at $0.09, slightly above analyst expectations of $0.08.
The company guided for third-quarter revenue between $281-282 million, well below the $292.5 million analysts expected. For fiscal year 2025, Confluent projects revenue of $1.105-1.11 billion, falling short of the $1.15 billion consensus estimate.
"Our second quarter was highlighted by solid top-line growth and continued margin expansion," said Rohan Sivaram, CFO at Confluent. "Our results underscore the strength and flexibility of our data streaming platform, helping customers unlock the full value of real-time data across cloud, on-premises, and BYOC environments."
Despite the revenue miss, Confluent showed improvement in profitability metrics. Non-GAAP operating income reached $17.8 million, representing a 6.3% operating margin compared to just 0.6% in the same quarter last year. The company also reported $11 million in adjusted free cash flow.
Confluent’s customer base continued to grow, with 1,439 customers contributing $100,000 or more in annual recurring revenue, up 10% YoY. The company highlighted its Flink offering as a growth driver, with Flink ARR growing approximately three times over the past two quarters.
CEO Jay Kreps emphasized the company’s strategic positioning, stating, "Our DSP monetization continues to gain traction, with Flink ARR growing approximately 3x over the past two quarters. This reinforces our complete data streaming platform strategy and our strong positioning for a future shaped by agentic, real-time AI."
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