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Confluent Certified Developer for Apache Kafka
Confluent Confluent history
Killexams : Confluent Confluent history - BingNews https://killexams.com/pass4sure/exam-detail/CCDAK Search results Killexams : Confluent Confluent history - BingNews https://killexams.com/pass4sure/exam-detail/CCDAK https://killexams.com/exam_list/Confluent Killexams : Why Confluent Stock Popped Today No result found, try new keyword!Investors drove Confluent (NASDAQ: CFLT) stock higher today after the data-streaming platform company reported second-quarter results that outpaced Wall Street's consensus estimates. The tech ... Thu, 04 Aug 2022 08:38:00 -0500 text/html https://www.nasdaq.com/articles/why-confluent-stock-popped-today Killexams : Confluent Produces Impressive Growth But Operating Losses Remain High
a business man using a computer to manage documents online document communication database and digital file storage systems/software record keeping database technology file

Sakorn Sukkasemsakorn

A Quick Take On Confluent

Confluent (NASDAQ:CFLT) went public in June 2021, raising approximately $828 million in gross proceeds from an IPO that priced at $36.00 per share.

The firm has developed a platform providing data infrastructure that speeds data communications across the enterprise.

My outlook for CFLT is on Hold until the firm can make progress in reducing its operating losses.

Confluent Overview

Mountain View, California-based Confluent was founded to create a platform enabling companies to more easily build and deploy data-driven applications for real-time use.

Management is headed by co-founder and CEO Jay Kreps, who was previously a software architect at LinkedIn and was one of the creators of Apache Kafka, which Confluent uses as the basis for its system.

Kafka is used by many companies for high-performance data streaming applications, among other uses.

The company's primary offerings include:

  • Confluent Cloud - SaaS platform

  • Confluent Platform - Self-managed system

The firm pursues relationships primarily with large and medium-sized companies through a direct sales and marketing approach.

As of March 31, 2022, Confluent had over 791 customers with $100,000 or more in annual recurring revenue across numerous industries including financial services, retail and ecommerce, manufacturing and media & entertainment.

Confluent's Market & Competition

According to a 2020 market research report by Allied Market Research, the global market for big data as a service was an estimated $5 billion in 2018 and is forecast to exceed $61 billion by 2026.

This represents a forecast of very strong CAGR of 36.9% from 2019 to 2026.

The main drivers for this expected growth are the continued transition of enterprises to cloud applications and the need to drive efficiencies across all aspects of the enterprise.

Also, as companies transition to cloud infrastructures, their systems are becoming more complex, and there is a substantial need for vendor reduction to Excellerate integration and lower complexity.

The infrastructure as a service market [IaaS] is expected to grow by $136 billion from 2021 to 2025, representing a CAGR of 27%, according to ResearchAndMarkets.

Major competitive or other industry participants include:

Confluent's recent Financial Performance

  • Total revenue by quarter has risen steadily over the past 5 quarters:

5 Quarter Total Revenue

5 Quarter Total Revenue (Seeking Alpha)

  • Gross profit by quarter has also grown considerably:

5 Quarter Gross Profit

5 Quarter Gross Profit (Seeking Alpha)

  • Selling, G&A expenses as a percentage of total revenue by quarter have remained high in recent reporting periods:

5 quarter selling, G&A % of revenue5 Quarter Selling, G&A % Of Revenue

5 Quarter Selling, G&A % Of Revenue (Seeking Alpha)

  • Operating losses by quarter have worsened in recent quarters:

5 Quarter Operating Income

5 Quarter Operating Income (Seeking Alpha)

  • Earnings per share (Diluted) have remained substantially negative, as the chart shows below:

5 Quarter Earnings Per Share

5 Quarter Earnings Per Share (Seeking Alpha)

(All data in above charts is GAAP)

In the past 12 months, CFLT's stock price has fallen 31.4% vs. the U.S. S&P 500 index' drop of around 6.6%, as the chart below indicates:

52 Week Stock Price

52 Week Stock Price (Seeking Alpha)

Valuation And Other Metrics For Confluent

Below is a table of relevant capitalization and valuation figures for the company:

Measure

Amount

Enterprise Value

$6,600,000,000

Market Capitalization

$7,470,000,000

Enterprise Value / Sales [TTM]

15.10

Revenue Growth Rate [TTM]

66.34%

Operating Cash Flow [TTM]

-$140,100,000

Earnings Per Share (Fully Diluted)

-$1.95

(Source - Seeking Alpha)

The Rule of 40 is a software industry rule of thumb that says that as long as the combined revenue growth rate and EBITDA percentage rate equal or exceed 40%, the firm is on an acceptable growth/EBITDA trajectory.

CFLT's most recent GAAP Rule of 40 calculation was negative (26%) as of Q1 2022, so the firm needs significant improvement, per the table below:

Rule of 40 - GAAP

Calculation

Recent Rev. Growth %

66%

GAAP EBITDA %

-92%

Total

-26%

(Source - Seeking Alpha)

Commentary On Confluent

While the firm is scheduled to release its Q2 2022 results on August 3 after market close, in its last earnings call (Source - Seeking Alpha), covering Q1 2022's results, management highlighted the closing of the 'largest deal with Confluent Cloud in our company's history.'

The company is seeing clients running its products across different environments, which management believes is a major trend as clients employ different environments for their particular requirements.

CEO Kreps highlighted its land and expand strategy that is focused on making it simple for prospective client developers to try out its products.

As to its financial results, total revenue rose to $126 million, a 64% year-over-year growth rate, while exceeding the top end of its previous guidance.

Overall, the company produced a net retention rate of over 130% for the fourth quarter in a row, an impressive figure indicating strong product/market fit and highly efficient sales efforts.

However, CFLT continues to produce high and increasing operating losses and negative free cash flow margin of 46.3%.

For the balance sheet, the firm finished the quarter with $2 billion in cash, equivalents and marketable securities, while using $55.9 million in free cash flow.

Looking ahead, management said it intends to accelerate margin improvement in 2023 to a negative 38% (non-GAAP).

Regarding valuation, the market is valuing CFLT at an EV/Sales multiple of around 15.1x.

The SaaS Capital Index of publicly-held SaaS software companies showed an average forward EV/Revenue multiple of around 7.5x on June 30, 2022, as the chart shows here:

SaaS Capital Index

SaaS Capital Index (SaaS Capital)

So, by comparison, CFLT is currently valued by the market at a significant premium to the SaaS Capital Index, at least as of June 30, 2022.

The primary risk to the company's outlook is a potential macroeconomic slowdown or recession, which may slow sales cycles and reduce its revenue growth estimates.

A potential upside catalyst to the stock could include an improving cost of capital environment which could increase its valuation multiple.

However, given management's lack of serious discussion about controlling costs or making a move toward operating breakeven, the market will likely continue to punish money-losing tech stocks despite their growth trajectory.

Therefore, my outlook for CFLT is on Hold until the firm can make progress in reducing its operating losses.

Wed, 03 Aug 2022 06:26:00 -0500 en text/html https://seekingalpha.com/article/4529205-confluent-produces-impressive-growth-operating-losses-remain-high
Killexams : Confluent Announces Second Quarter 2022 Financial Results

Confluent Announces Second Quarter 2022 Financial Results

  • Total revenue of $139 million, up 58% year over year
  • Confluent Cloud revenue of $47 million, up 139% year over year
  • Remaining performance obligations of $591 million, up 81% year over year
  • 857 customers with $100,000 or greater in ARR, up 39% year over year

Confluent, Inc. (NASDAQ: CFLT),the data streaming platform to set data in motion, today announced financial results for its second quarter of 2022, ended June 30, 2022.

“Data streaming is a requirement to create the real-time digital experiences and efficient operations that are needed to compete and win,” said Jay Kreps, co-founder and CEO, Confluent. “Our strong Q2, highlighted by 139% year-over-year Confluent Cloud revenue growth and exceeding our guidance on all metrics, underscores our leadership of this market and the critical business value we deliver to our customers.”

“Our ability to drive high growth with increased operating leverage is reflected in our 58% year-over-year revenue growth and significant margin improvements in the second quarter,” said Steffan Tomlinson, CFO, Confluent. “Customers view Confluent as a strategic platform for delivering data in motion, as evidenced by our dollar-based net retention rate of greater than 130% for the fifth consecutive quarter and the growth in our six- and seven-figure customers.”

Second Quarter 2022 Financial Highlights

(In millions, except per share data and percentages)

 

 

Q2 2022

Q2 2021

Y/Y Change

Total Revenue

$139.4

 

$88.3

 

58%

Remaining Performance Obligations

$591.3

 

$327.2

 

81%

GAAP Operating Loss

$(117.3)

 

$(86.0)

 

$(31.3)

Non-GAAP Operating Loss

$(46.8)

 

$(36.8)

 

$(10.0)

GAAP Operating Margin

(84.1%)

 

(97.4%)

 

13.3 pts

Non-GAAP Operating Margin

(33.5%)

 

(41.7%)

 

8.2 pts

GAAP Net Loss Per Share

$(0.42)

 

$(0.74)

 

$0.32

Non-GAAP Net Loss Per Share

$(0.16)

 

$(0.31)

 

$0.15

Net Cash Used in Operating Activities

$(33.5)

 

$(43.2)

 

$9.7

Free Cash Flow

$(36.9)

 

$(45.4)

 

$8.5

A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in the financial statement tables included in this press release. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section titled “Non-GAAP Financial Measures.”

Financial Outlook
For the third quarter and fiscal year 2022, Confluent expects:

 

Q3 2022 Outlook

FY 2022 Outlook

Total Revenue

$143-$145 million

$567-$571 million

Non-GAAP Operating Margin

~ (33%)

(35%)-(34%)

Non-GAAP Net Loss Per Share

$(0.19)-$(0.17)

$(0.73)-$(0.69)

A reconciliation of forward-looking non-GAAP operating margin and non-GAAP net loss per 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 expense specific to our equity compensation awards and employer payroll tax-related items on employee stock transactions 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 second quarter 2022 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 investors.confluent.io 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 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 our financial outlook, including margin improvements, target gross margin levels, achievement of positive non-GAAP operating margin exiting the fourth quarter of fiscal 2024 and impact of macro dynamics; the potential growth runway for Confluent Cloud; continued rates of Confluent Cloud consumption despite macroeconomic uncertainty; ability for Confluent Cloud to provide cost savings for users and customers; increased adoption of our platform and data streaming in general; dependence of businesses on data in motion; retention of data platforms like Confluent by organizations in times of macroeconomic uncertainty; our ability and position to capitalize on the shift to cloud; the degree of market acceptance of our products; our ability to sustain relationships and integration with cloud providers; growth in and growth rate of revenue, including Confluent Cloud revenue, customers, remaining performance obligations and dollar-based net retention rate; our market opportunity; our go-to-market strategy; our product differentiation and market acceptance of our products, including over open source alternatives; our ability to Excellerate margins, on an annual basis or at all; our ability to meet near-term and mid-term financial targets; our potential for value creation; our investment priority and philosophy; and 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, genuine results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) the impact of the ongoing COVID-19 pandemic on our business, as well as our customers, prospects, partners, and service providers, (ii) our ability to sustain and manage our rapid growth, (iii) our limited operating history, (iv) our ability to attract new customers and retain and sell additional features and services to our existing customers, (v) our ability to increase consumption of our offering, including by existing customers and through the acquisition of new customers, and successfully add new features and functionality to our offering, (vi) our ability to achieve or sustain profitability and Excellerate margins annually or at all, (vii) the estimated addressable market opportunity for our offering, (viii) our ability to compete effectively in an increasingly competitive market, including achieving market acceptance over competitors and open source alternatives, (ix) our ability to successfully execute our go-to-market strategy and initiatives, (x) our ability to attract and retain highly qualified personnel, (xi) breaches in our security measures or unauthorized access to our platform, our data, or our customers’ or other users’ personal data, (xii) our reliance on third-party cloud-based infrastructure to host Confluent Cloud, (xiii) inflationary conditions, economic uncertainty, recessionary risks, and exchange rate fluctuations, which may result in customer pullback in information technology spending, lengthening of sales cycles, reduced contract sizes, reduced consumption of Confluent Cloud or customer preference for open source alternatives and (ix) 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, 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 June 30, 2022 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, general and administrative), non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow, and 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 loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow, free cash flow margin, or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Further, free cash flow is not a substitute for cash used in operating activities. The utility of free cash flow is limited as such measure does not reflect our future contractual commitments and does 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, general and administrative), non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, and non-GAAP net loss per share as the respective GAAP balances, adjusted for, as applicable, stock-based compensation expense; employer taxes on employee stock transactions; common stock charitable donation expense; amortization of debt issuance costs; and income tax effects associated with these adjustments. 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 believe that free cash flow and 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.

Other Business Metrics

Remaining performance obligations (“RPO”) represent the amount of contracted future revenue that has not yet been recognized as of the end of each period, including both deferred revenue that has been invoiced and non-cancelable committed amounts that will be invoiced and recognized as revenue in future periods. RPO excludes pay-as-you-go arrangements. RPO may also fluctuate due to a number of factors, including the timing of renewals, average contract terms, seasonality, and dollar amount of customer contracts. RPO as a metric is not necessarily indicative of future revenue growth because it does not account for the genuine timing of customers’ consumption or future expansion.

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 the revenue customers contractually committed to over the following 12 months assuming no increases or reductions in their subscriptions. ARR excludes services and pay-as-you-go arrangements. Similar to RPO, ARR as a metric is not necessarily indicative of future revenue growth because it does not account for the genuine timing of customers’ consumption or future expansion. 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.

Dollar-based net retention rate (“NRR”) as of a period end is calculated by starting with the ARR from the cohort of all customers as of 12 months prior to such period end (“Prior Period Value”). We calculate the ARR from these same customers as of the current period end (“Current Period Value”), which includes any growth in the value of subscriptions and is net of contraction or attrition over the prior 12 months. Services and pay-as-you-go arrangements are excluded from the calculation of ARR. We then divide the Current Period Value by the Prior Period Value to arrive at our dollar-based NRR. The dollar-based NRR includes the effect, on a dollar-weighted value basis, of our subscriptions that expand, renew, contract, or attrit, but excludes ARR from new customers in the current period. Our dollar-based NRR 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 Balance Sheets

(in thousands)

(unaudited)

 

June 30,

December 31,

2022

2021

ASSETS
Current assets:
Cash and cash equivalents

$

529,667

 

$

1,375,932

 

Marketable securities

 

1,427,859

 

 

640,085

 

Accounts receivable, net

 

149,394

 

 

137,491

 

Deferred contract acquisition costs

 

29,491

 

 

27,646

 

Prepaid expenses and other current assets

 

55,612

 

 

44,919

 

Total current assets

 

2,192,023

 

 

2,226,073

 

Property and equipment, net

 

21,813

 

 

14,428

 

Operating lease right-of-use assets

 

32,613

 

 

37,281

 

Deferred contract acquisition costs, non-current

 

54,661

 

 

51,178

 

Other assets, non-current

 

23,807

 

 

13,769

 

Total assets

$

2,324,917

 

$

2,342,729

 

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable

$

15,527

 

$

7,591

 

Accrued expenses and other liabilities

 

93,917

 

 

98,974

 

Operating lease liabilities

 

7,846

 

 

9,236

 

Deferred revenue

 

255,064

 

 

220,920

 

Liability for early exercise of unvested stock options

 

3,826

 

 

11,467

 

Total current liabilities

 

376,180

 

 

348,188

 

Operating lease liabilities, non-current

 

27,975

 

 

31,645

 

Deferred revenue, non-current

 

30,667

 

 

25,557

 

Convertible senior notes, net

 

1,082,583

 

 

1,080,701

 

Other liabilities, non-current

 

10,888

 

 

6,357

 

Total liabilities

 

1,528,293

 

 

1,492,448

 

Stockholders’ equity:
Preferred stock

 

-

 

 

-

 

Class A common stock

 

1

 

 

1

 

Class B common stock

 

2

 

 

2

 

Additional paid-in capital

 

1,785,640

 

 

1,599,962

 

Accumulated other comprehensive loss

 

(9,547

)

 

(830

)

Accumulated deficit

 

(979,472

)

 

(748,854

)

Total stockholders’ equity

 

796,624

 

 

850,281

 

Total liabilities and stockholders’ equity

$

2,324,917

 

$

2,342,729

 

Confluent, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 
Three Months Ended June 30, Six Months Ended June 30,

2022

2021

2022

2021

Revenue:
Subscription

$

127,018

 

$

78,516

 

$

240,938

 

$

146,508

 

Services

 

12,389

 

 

9,822

 

 

24,608

 

 

18,858

 

Total revenue

 

139,407

 

 

88,338

 

 

265,546

 

 

165,366

 

Cost of revenue:
Subscription(1)(2)

 

35,608

 

 

20,292

 

 

69,211

 

 

36,049

 

Services(1)(2)

 

13,901

 

 

9,717

 

 

26,075

 

 

17,798

 

Total cost of revenue

 

49,509

 

 

30,009

 

 

95,286

 

 

53,847

 

Gross profit

 

89,898

 

 

58,329

 

 

170,260

 

 

111,519

 

Operating expenses:
Research and development(1)(2)

 

64,472

 

 

33,225

 

 

122,133

 

 

57,538

 

Sales and marketing(1)(2)

 

112,754

 

 

73,206

 

 

219,456

 

 

131,715

 

General and administrative(1)(2)

 

29,979

 

 

37,943

 

 

57,460

 

 

53,455

 

Total operating expenses

 

207,205

 

 

144,374

 

 

399,049

 

 

242,708

 

Operating loss

 

(117,307

)

 

(86,045

)

 

(228,789

)

 

(131,189

)

Interest income

 

2,618

 

 

688

 

 

3,184

 

 

1,532

 

Other expense, net

 

(1,432

)

 

(643

)

 

(2,814

)

 

(979

)

Loss before income taxes

 

(116,121

)

 

(86,000

)

 

(228,419

)

 

(130,636

)

Provision for income taxes

 

1,510

 

 

2,170

 

 

2,199

 

 

2,060

 

Net loss

$

(117,631

)

$

(88,170

)

$

(230,618

)

$

(132,696

)

Net loss per share, basic and diluted

$

(0.42

)

$

(0.74

)

$

(0.84

)

$

(1.17

)

Weighted-average shares used to compute net loss per share, basic and diluted

 

278,268,980

 

 

118,648,655

 

 

275,593,362

 

 

113,717,546

 

(1) Includes stock-based compensation expense as follows:

Three Months Ended June 30, Six Months Ended June 30,

2022

2021

2022

2021

Cost of revenue - subscription

$

6,018

 

$

2,172

 

$

11,331

 

$

3,147

 

Cost of revenue - services

 

2,328

 

1,055

 

4,190

 

1,599

Research and development

 

25,337

 

 

8,932

 

 

45,422

 

 

12,443

 

Sales and marketing

 

24,746

 

 

11,155

 

 

45,808

 

 

16,131

 

General and administrative

 

10,437

 

 

11,202

 

 

19,484

 

 

14,549

 

Total stock-based compensation expense

$

68,866

 

$

34,516

 

$

126,235

 

$

47,869

 

(2) Includes employer taxes on employee stock transactions as follows:

Three Months Ended June 30, Six Months Ended June 30,

2022

2021

2022

2021

Cost of revenue - subscription

$

70

 

$

38

 

$

403

 

$

38

 

Cost of revenue - services

80

 

288

 

157

 

288

Research and development

 

342

 

 

277

 

 

1,381

 

 

398

 

Sales and marketing

 

1,048

 

 

610

 

 

1,728

 

 

713

 

General and administrative

 

130

 

 

222

 

 

440

 

 

261

 

Total employer taxes on employee stock transactions

$

1,670

 

$

1,435

 

$

4,109

 

$

1,698

 

Confluent, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 
Three Months Ended June 30, Six Months Ended June 30,

2022

2021

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss

$

(117,631

)

$

(88,170

)

$

(230,618

)

$

(132,696

)

Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization

 

1,810

 

 

756

 

 

3,060

 

 

1,543

 

Net (accretion) amortization of (discounts) premiums on marketable securities

 

(469

)

 

459

 

 

236

 

 

964

 

Amortization of debt issuance costs

 

947

 

 

-

 

 

1,883

 

 

-

 

Amortization of deferred contract acquisition costs

 

8,925

 

 

6,048

 

 

17,395

 

 

11,583

 

Non-cash operating lease costs

 

2,200

 

 

2,748

 

 

4,475

 

 

5,604

 

Common stock charitable donation expense

 

-

 

 

13,290

 

 

-

 

 

13,290

 

Stock-based compensation, net of amounts capitalized

 

68,866

 

 

34,516

 

 

126,235

 

 

47,869

 

Deferred income taxes

 

30

 

 

2,297

 

 

26

 

 

1,730

 

Other

 

355

 

 

209

 

 

559

 

 

648

 

Changes in operating assets and liabilities:
Accounts receivable

 

(25,244

)

 

(17,587

)

 

(12,462

)

 

(11,853

)

Deferred contract acquisition costs

 

(10,643

)

 

(15,482

)

 

(22,723

)

 

(26,348

)

Prepaid expenses and other assets

 

(12,136

)

 

(12,368

)

 

(20,121

)

 

(14,723

)

Accounts payable

 

7,275

 

 

(468

)

 

7,452

 

 

371

 

Accrued expenses and other liabilities

 

24,609

 

 

11,460

 

 

1,756

 

 

12,893

 

Operating lease liabilities

 

(2,413

)

 

(2,661

)

 

(4,910

)

 

(5,382

)

Deferred revenue

 

20,047

 

 

21,787

 

 

39,254

 

 

31,352

 

Net cash used in operating activities

 

(33,472

)

 

(43,166

)

 

(88,503

)

 

(63,155

)

CASH FLOWS FROM INVESTING ACTIVITIES
Capitalization of internal-use software costs

 

(2,256

)

 

(1,215

)

 

(4,765

)

 

(1,811

)

Purchases of marketable securities

 

(763,479

)

 

(14,283

)

 

(1,167,362

)

 

(55,971

)

Maturities of marketable securities

 

275,114

 

 

66,211

 

 

370,659

 

 

122,974

 

Purchases of property and equipment

 

(1,184

)

 

(1,030

)

 

(2,071

)

 

(1,673

)

Other

 

-

 

 

-

 

 

-

 

 

9

 

Net cash (used in) provided by investing activities

 

(491,805

)

 

49,683

 

 

(803,539

)

 

63,528

 

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from initial public offering, net of underwriting discounts and commissions

 

-

 

 

786,600

 

 

-

 

 

786,600

 

Proceeds from issuance of common stock upon exercise of vested options

 

7,947

 

 

12,490

 

 

24,383

 

 

18,705

 

Proceeds from issuance of common stock upon early exercise of unvested options

 

71

 

 

11,309

 

 

416

 

 

18,756

 

Repurchases of unvested options

 

(683

)

 

(164

)

 

(695

)

 

(213

)

Payments of deferred offering costs

 

-

 

 

(767

)

 

-

 

 

(920

)

Payments of debt issuance costs for convertible senior notes

 

-

 

 

-

 

 

(786

)

 

-

 

Proceeds from issuance of common stock under employee stock purchase plan

 

-

 

 

-

 

 

22,485

 

 

-

 

Net cash provided by financing activities

 

7,335

 

 

809,468

 

 

45,803

 

 

822,928

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

20

 

 

(2

)

 

(26

)

 

(10

)

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

(517,922

)

 

815,983

 

 

(846,265

)

 

823,291

 

Cash, cash equivalents, and restricted cash at beginning of period

 

1,048,339

 

 

45,114

 

 

1,376,682

 

 

37,806

 

Cash, cash equivalents, and restricted cash at end of period

$

530,417

 

$

861,097

 

$

530,417

 

$

861,097

 

Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown above:
Cash and cash equivalents

$

529,667

 

$

860,347

 

$

529,667

 

$

860,347

 

Restricted cash included in other assets, current and non-current

 

750

 

 

750

 

 

750

 

 

750

 

Total cash, cash equivalents, and restricted cash

$

530,417

 

$

861,097

 

$

530,417

 

$

861,097

 

Confluent, Inc.

Reconciliation of GAAP Measures to Non-GAAP Measures

(in thousands, except percentages, share and per share data)

(unaudited)

 
Three Months Ended June 30, Six Months Ended June 30,

2022

2021

2022

2021

Reconciliation of GAAP total gross profit to non-GAAP total gross profit:
Total gross profit on a GAAP basis

$

89,898

 

$

58,329

 

$

170,260

 

$

111,519

 

Total gross margin on a GAAP basis

 

64.5

%

 

66.0

%

 

64.1

%

 

67.4

%

Add: Stock-based compensation expense

 

8,346

 

 

3,227

 

 

15,521

 

 

4,746

 

Add: Employer taxes on employee stock transactions

 

150

 

 

326

 

 

560

 

 

326

 

Non-GAAP total gross profit

$

98,394

 

$

61,882

 

$

186,341

 

$

116,591

 

Non-GAAP total gross margin

 

70.6

%

 

70.1

%

 

70.2

%

 

70.5

%

 
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
Research and development operating expense on a GAAP basis

$

64,472

 

$

33,225

 

$

122,133

 

$

57,538

 

Less: Stock-based compensation expense

 

25,337

 

 

8,932

 

 

45,422

 

 

12,443

 

Less: Employer taxes on employee stock transactions

 

342

 

 

277

 

 

1,381

 

 

398

 

Non-GAAP research and development operating expense

$

38,793

 

$

24,016

 

$

75,330

 

$

44,697

 

Non-GAAP research and development operating expense as a percentage of total revenue

 

27.8

%

 

27.2

%

 

28.4

%

 

27.0

%

 
Sales and marketing operating expense on a GAAP basis

$

112,754

 

$

73,206

 

$

219,456

 

$

131,715

 

Less: Stock-based compensation expense

 

24,746

 

 

11,155

 

 

45,808

 

 

16,131

 

Less: Employer taxes on employee stock transactions

 

1,048

 

 

610

 

 

1,728

 

 

713

 

Non-GAAP sales and marketing operating expense

$

86,960

 

$

61,441

 

$

171,920

 

$

114,871

 

Non-GAAP sales and marketing operating expense as a percentage of total revenue

 

62.4

%

 

69.6

%

 

64.7

%

 

69.5

%

 
General and administrative operating expense on a GAAP basis

$

29,979

 

$

37,943

 

$

57,460

 

$

53,455

 

Less: Stock-based compensation expense

 

10,437

 

 

11,202

 

 

19,484

 

 

14,549

 

Less: Employer taxes on employee stock transactions

 

130

 

 

222

 

 

440

 

 

261

 

Less: Common stock charitable donation expense

 

-

 

 

13,290

 

 

-

 

 

13,290

 

Non-GAAP general and administrative operating expense

$

19,412

 

$

13,229

 

$

37,536

 

$

25,355

 

Non-GAAP general and administrative operating expense as a percentage of total revenue

 

13.9

%

 

15.0

%

 

14.1

%

 

15.3

%

Three Months Ended June 30, Six Months Ended June 30,

2022

2021

2022

2021

Reconciliation of GAAP operating loss to non-GAAP operating loss:
Operating loss on a GAAP basis

$

(117,307

)

$

(86,045

)

$

(228,789

)

$

(131,189

)

Add: Stock-based compensation expense

 

68,866

 

 

34,516

 

 

126,235

 

 

47,869

 

Add: Employer taxes on employee stock transactions

 

1,670

 

 

1,435

 

 

4,109

 

 

1,698

 

Add: Common stock charitable donation expense

 

-

 

 

13,290

 

 

-

 

 

13,290

 

Non-GAAP operating loss

$

(46,771

)

$

(36,804

)

$

(98,445

)

$

(68,332

)

Non-GAAP operating margin

 

(33.5

%)

 

(41.7

%)

 

(37.1

%)

 

(41.3

%)

 
Reconciliation of GAAP net loss to non-GAAP net loss:
Net loss on a GAAP basis

$

(117,631

)

$

(88,170

)

$

(230,618

)

$

(132,696

)

Add: Stock-based compensation expense

 

68,866

 

 

34,516

 

 

126,235

 

 

47,869

 

Add: Employer taxes on employee stock transactions

 

1,670

 

 

1,435

 

 

4,109

 

 

1,698

 

Add: Common stock charitable donation expense

 

-

 

 

13,290

 

 

-

 

 

13,290

 

Add: Amortization of debt issuance costs

 

946

 

 

-

 

 

1,882

 

 

-

 

Add: Income tax effects and adjustments

 

669

 

 

1,716

 

 

682

 

 

1,045

 

Non-GAAP net loss

$

(45,480

)

$

(37,213

)

$

(97,710

)

$

(68,794

)

Non-GAAP net loss per share, basic and diluted

$

(0.16

)

$

(0.31

)

$

(0.35

)

$

(0.60

)

Weighted-average shares used to compute net loss per share, basic and diluted

 

278,268,980

 

 

118,648,655

 

 

275,593,362

 

 

113,717,546

 

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):

Three Months Ended June 30, Six Months Ended June 30,

2022

2021

2022

2021

Net cash used in operating activities

$

(33,472

)

$

(43,166

)

$

(88,503

)

$

(63,155

)

Capitalized internal-use software costs

 

(2,256

)

 

(1,215

)

 

(4,765

)

 

(1,811

)

Capital expenditures

 

(1,184

)

 

(1,030

)

 

(2,071

)

 

(1,673

)

Free cash flow

$

(36,912

)

$

(45,411

)

$

(95,339

)

$

(66,639

)

Free cash flow margin

 

(26.5

%)

 

(51.4

%)

 

(35.9

%)

 

(40.3

%)

Net cash (used in) provided by investing activities

$

(491,805

)

$

49,683

 

$

(803,539

)

$

63,528

 

Net cash provided by financing activities

$

7,335

 

$

809,468

 

$

45,803

 

$

822,928

 

 

Investor Contact
Shane Xie
investors@confluent.io

Media Contact
Taylor Jones
pr@confluent.io

View source version on businesswire.com: https://www.businesswire.com/news/home/20220802006177/en/

Wed, 03 Aug 2022 08:10:00 -0500 en text/html https://www.morningstar.com/news/business-wire/20220802006177/confluent-announces-second-quarter-2022-financial-results
Killexams : Data in motion is a major new paradigm, says Confluent CEO

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Jay Kreps, Confluent CEO, joins 'TechCheck' to discuss the company's quarterly earnings results, the number of customers and how he is managing increasing competition for talent.

Thu, 04 Aug 2022 04:11:00 -0500 en text/html https://www.cnbc.com/video/2022/08/04/data-in-motion-is-a-major-new-paradigm-around-data-says-confluent-ceo.html
Killexams : Confluent Announces Second Quarter 2022 Financial Results
  • Total revenue of $139 million, up 58% year over year

  • Confluent Cloud revenue of $47 million, up 139% year over year

  • Remaining performance obligations of $591 million, up 81% year over year

  • 857 customers with $100,000 or greater in ARR, up 39% year over year

MOUNTAIN VIEW, Calif., August 03, 2022--(BUSINESS WIRE)--Confluent, Inc. (NASDAQ: CFLT), the data streaming platform to set data in motion, today announced financial results for its second quarter of 2022, ended June 30, 2022.

"Data streaming is a requirement to create the real-time digital experiences and efficient operations that are needed to compete and win," said Jay Kreps, co-founder and CEO, Confluent. "Our strong Q2, highlighted by 139% year-over-year Confluent Cloud revenue growth and exceeding our guidance on all metrics, underscores our leadership of this market and the critical business value we deliver to our customers."

"Our ability to drive high growth with increased operating leverage is reflected in our 58% year-over-year revenue growth and significant margin improvements in the second quarter," said Steffan Tomlinson, CFO, Confluent. "Customers view Confluent as a strategic platform for delivering data in motion, as evidenced by our dollar-based net retention rate of greater than 130% for the fifth consecutive quarter and the growth in our six- and seven-figure customers."

Second Quarter 2022 Financial Highlights

(In millions, except per share data and percentages)

Q2 2022

Q2 2021

Y/Y Change

Total Revenue

$139.4

$88.3

58%

Remaining Performance Obligations

$591.3

$327.2

81%

GAAP Operating Loss

$(117.3)

$(86.0)

$(31.3)

Non-GAAP Operating Loss

$(46.8)

$(36.8)

$(10.0)

GAAP Operating Margin

(84.1%)

(97.4%)

13.3 pts

Non-GAAP Operating Margin

(33.5%)

(41.7%)

8.2 pts

GAAP Net Loss Per Share

$(0.42)

$(0.74)

$0.32

Non-GAAP Net Loss Per Share

$(0.16)

$(0.31)

$0.15

Net Cash Used in Operating Activities

$(33.5)

$(43.2)

$9.7

Free Cash Flow

$(36.9)

$(45.4)

$8.5

A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in the financial statement tables included in this press release. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section titled "Non-GAAP Financial Measures."

Financial Outlook
For the third quarter and fiscal year 2022, Confluent expects:

Q3 2022 Outlook

FY 2022 Outlook

Total Revenue

$143-$145 million

$567-$571 million

Non-GAAP Operating Margin

~ (33%)

(35%)-(34%)

Non-GAAP Net Loss Per Share

$(0.19)-$(0.17)

$(0.73)-$(0.69)

A reconciliation of forward-looking non-GAAP operating margin and non-GAAP net loss per 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 expense specific to our equity compensation awards and employer payroll tax-related items on employee stock transactions 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 second quarter 2022 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 investors.confluent.io 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 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 our financial outlook, including margin improvements, target gross margin levels, achievement of positive non-GAAP operating margin exiting the fourth quarter of fiscal 2024 and impact of macro dynamics; the potential growth runway for Confluent Cloud; continued rates of Confluent Cloud consumption despite macroeconomic uncertainty; ability for Confluent Cloud to provide cost savings for users and customers; increased adoption of our platform and data streaming in general; dependence of businesses on data in motion; retention of data platforms like Confluent by organizations in times of macroeconomic uncertainty; our ability and position to capitalize on the shift to cloud; the degree of market acceptance of our products; our ability to sustain relationships and integration with cloud providers; growth in and growth rate of revenue, including Confluent Cloud revenue, customers, remaining performance obligations and dollar-based net retention rate; our market opportunity; our go-to-market strategy; our product differentiation and market acceptance of our products, including over open source alternatives; our ability to Excellerate margins, on an annual basis or at all; our ability to meet near-term and mid-term financial targets; our potential for value creation; our investment priority and philosophy; and 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, genuine results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) the impact of the ongoing COVID-19 pandemic on our business, as well as our customers, prospects, partners, and service providers, (ii) our ability to sustain and manage our rapid growth, (iii) our limited operating history, (iv) our ability to attract new customers and retain and sell additional features and services to our existing customers, (v) our ability to increase consumption of our offering, including by existing customers and through the acquisition of new customers, and successfully add new features and functionality to our offering, (vi) our ability to achieve or sustain profitability and Excellerate margins annually or at all, (vii) the estimated addressable market opportunity for our offering, (viii) our ability to compete effectively in an increasingly competitive market, including achieving market acceptance over competitors and open source alternatives, (ix) our ability to successfully execute our go-to-market strategy and initiatives, (x) our ability to attract and retain highly qualified personnel, (xi) breaches in our security measures or unauthorized access to our platform, our data, or our customers’ or other users’ personal data, (xii) our reliance on third-party cloud-based infrastructure to host Confluent Cloud, (xiii) inflationary conditions, economic uncertainty, recessionary risks, and exchange rate fluctuations, which may result in customer pullback in information technology spending, lengthening of sales cycles, reduced contract sizes, reduced consumption of Confluent Cloud or customer preference for open source alternatives and (ix) 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, 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 June 30, 2022 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, general and administrative), non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow, and 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 loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow, free cash flow margin, or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Further, free cash flow is not a substitute for cash used in operating activities. The utility of free cash flow is limited as such measure does not reflect our future contractual commitments and does 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, general and administrative), non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, and non-GAAP net loss per share as the respective GAAP balances, adjusted for, as applicable, stock-based compensation expense; employer taxes on employee stock transactions; common stock charitable donation expense; amortization of debt issuance costs; and income tax effects associated with these adjustments. 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 believe that free cash flow and 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.

Other Business Metrics

Remaining performance obligations ("RPO") represent the amount of contracted future revenue that has not yet been recognized as of the end of each period, including both deferred revenue that has been invoiced and non-cancelable committed amounts that will be invoiced and recognized as revenue in future periods. RPO excludes pay-as-you-go arrangements. RPO may also fluctuate due to a number of factors, including the timing of renewals, average contract terms, seasonality, and dollar amount of customer contracts. RPO as a metric is not necessarily indicative of future revenue growth because it does not account for the genuine timing of customers’ consumption or future expansion.

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 the revenue customers contractually committed to over the following 12 months assuming no increases or reductions in their subscriptions. ARR excludes services and pay-as-you-go arrangements. Similar to RPO, ARR as a metric is not necessarily indicative of future revenue growth because it does not account for the genuine timing of customers’ consumption or future expansion. 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.

Dollar-based net retention rate ("NRR") as of a period end is calculated by starting with the ARR from the cohort of all customers as of 12 months prior to such period end ("Prior Period Value"). We calculate the ARR from these same customers as of the current period end ("Current Period Value"), which includes any growth in the value of subscriptions and is net of contraction or attrition over the prior 12 months. Services and pay-as-you-go arrangements are excluded from the calculation of ARR. We then divide the Current Period Value by the Prior Period Value to arrive at our dollar-based NRR. The dollar-based NRR includes the effect, on a dollar-weighted value basis, of our subscriptions that expand, renew, contract, or attrit, but excludes ARR from new customers in the current period. Our dollar-based NRR 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 Balance Sheets

(in thousands)

(unaudited)

June 30,

December 31,

2022

2021

ASSETS

Current assets:

Cash and cash equivalents

$

529,667

$

1,375,932

Marketable securities

1,427,859

640,085

Accounts receivable, net

149,394

137,491

Deferred contract acquisition costs

29,491

27,646

Prepaid expenses and other current assets

55,612

44,919

Total current assets

2,192,023

2,226,073

Property and equipment, net

21,813

14,428

Operating lease right-of-use assets

32,613

37,281

Deferred contract acquisition costs, non-current

54,661

51,178

Other assets, non-current

23,807

13,769

Total assets

$

2,324,917

$

2,342,729

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

15,527

$

7,591

Accrued expenses and other liabilities

93,917

98,974

Operating lease liabilities

7,846

9,236

Deferred revenue

255,064

220,920

Liability for early exercise of unvested stock options

3,826

11,467

Total current liabilities

376,180

348,188

Operating lease liabilities, non-current

27,975

31,645

Deferred revenue, non-current

30,667

25,557

Convertible senior notes, net

1,082,583

1,080,701

Other liabilities, non-current

10,888

6,357

Total liabilities

1,528,293

1,492,448

Stockholders’ equity:

Preferred stock

-

-

Class A common stock

1

1

Class B common stock

2

2

Additional paid-in capital

1,785,640

1,599,962

Accumulated other comprehensive loss

(9,547

)

(830

)

Accumulated deficit

(979,472

)

(748,854

)

Total stockholders’ equity

796,624

850,281

Total liabilities and stockholders’ equity

$

2,324,917

$

2,342,729

Confluent, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Revenue:

Subscription

$

127,018

$

78,516

$

240,938

$

146,508

Services

12,389

9,822

24,608

18,858

Total revenue

139,407

88,338

265,546

165,366

Cost of revenue:

Subscription(1)(2)

35,608

20,292

69,211

36,049

Services(1)(2)

13,901

9,717

26,075

17,798

Total cost of revenue

49,509

30,009

95,286

53,847

Gross profit

89,898

58,329

170,260

111,519

Operating expenses:

Research and development(1)(2)

64,472

33,225

122,133

57,538

Sales and marketing(1)(2)

112,754

73,206

219,456

131,715

General and administrative(1)(2)

29,979

37,943

57,460

53,455

Total operating expenses

207,205

144,374

399,049

242,708

Operating loss

(117,307

)

(86,045

)

(228,789

)

(131,189

)

Interest income

2,618

688

3,184

1,532

Other expense, net

(1,432

)

(643

)

(2,814

)

(979

)

Loss before income taxes

(116,121

)

(86,000

)

(228,419

)

(130,636

)

Provision for income taxes

1,510

2,170

2,199

2,060

Net loss

$

(117,631

)

$

(88,170

)

$

(230,618

)

$

(132,696

)

Net loss per share, basic and diluted

$

(0.42

)

$

(0.74

)

$

(0.84

)

$

(1.17

)

Weighted-average shares used to compute net loss per share, basic and diluted

278,268,980

118,648,655

275,593,362

113,717,546

(1) Includes stock-based compensation expense as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Cost of revenue - subscription

$

6,018

$

2,172

$

11,331

$

3,147

Cost of revenue - services

2,328

1,055

4,190

1,599

Research and development

25,337

8,932

45,422

12,443

Sales and marketing

24,746

11,155

45,808

16,131

General and administrative

10,437

11,202

19,484

14,549

Total stock-based compensation expense

$

68,866

$

34,516

$

126,235

$

47,869

(2) Includes employer taxes on employee stock transactions as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Cost of revenue - subscription

$

70

$

38

$

403

$

38

Cost of revenue - services

80

288

157

288

Research and development

342

277

1,381

398

Sales and marketing

1,048

610

1,728

713

General and administrative

130

222

440

261

Total employer taxes on employee stock transactions

$

1,670

$

1,435

$

4,109

$

1,698

Confluent, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$

(117,631

)

$

(88,170

)

$

(230,618

)

$

(132,696

)

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation and amortization

1,810

756

3,060

1,543

Net (accretion) amortization of (discounts) premiums on marketable securities

(469

)

459

236

964

Amortization of debt issuance costs

947

-

1,883

-

Amortization of deferred contract acquisition costs

8,925

6,048

17,395

11,583

Non-cash operating lease costs

2,200

2,748

4,475

5,604

Common stock charitable donation expense

-

13,290

-

13,290

Stock-based compensation, net of amounts capitalized

68,866

34,516

126,235

47,869

Deferred income taxes

30

2,297

26

1,730

Other

355

209

559

648

Changes in operating assets and liabilities:

Accounts receivable

(25,244

)

(17,587

)

(12,462

)

(11,853

)

Deferred contract acquisition costs

(10,643

)

(15,482

)

(22,723

)

(26,348

)

Prepaid expenses and other assets

(12,136

)

(12,368

)

(20,121

)

(14,723

)

Accounts payable

7,275

(468

)

7,452

371

Accrued expenses and other liabilities

24,609

11,460

...

Wed, 03 Aug 2022 08:25:00 -0500 en-AU text/html https://au.news.yahoo.com/confluent-announces-second-quarter-2022-200300434.html
Killexams : Confluent Announces Second Quarter 2022 Financial Results
  • Total revenue of $139 million, up 58% year over year

  • Confluent Cloud revenue of $47 million, up 139% year over year

  • Remaining performance obligations of $591 million, up 81% year over year

  • 857 customers with $100,000 or greater in ARR, up 39% year over year

MOUNTAIN VIEW, Calif., August 03, 2022--(BUSINESS WIRE)--Confluent, Inc. (NASDAQ: CFLT), the data streaming platform to set data in motion, today announced financial results for its second quarter of 2022, ended June 30, 2022.

"Data streaming is a requirement to create the real-time digital experiences and efficient operations that are needed to compete and win," said Jay Kreps, co-founder and CEO, Confluent. "Our strong Q2, highlighted by 139% year-over-year Confluent Cloud revenue growth and exceeding our guidance on all metrics, underscores our leadership of this market and the critical business value we deliver to our customers."

"Our ability to drive high growth with increased operating leverage is reflected in our 58% year-over-year revenue growth and significant margin improvements in the second quarter," said Steffan Tomlinson, CFO, Confluent. "Customers view Confluent as a strategic platform for delivering data in motion, as evidenced by our dollar-based net retention rate of greater than 130% for the fifth consecutive quarter and the growth in our six- and seven-figure customers."

Second Quarter 2022 Financial Highlights

(In millions, except per share data and percentages)

Q2 2022

Q2 2021

Y/Y Change

Total Revenue

$139.4

$88.3

58%

Remaining Performance Obligations

$591.3

$327.2

81%

GAAP Operating Loss

$(117.3)

$(86.0)

$(31.3)

Non-GAAP Operating Loss

$(46.8)

$(36.8)

$(10.0)

GAAP Operating Margin

(84.1%)

(97.4%)

13.3 pts

Non-GAAP Operating Margin

(33.5%)

(41.7%)

8.2 pts

GAAP Net Loss Per Share

$(0.42)

$(0.74)

$0.32

Non-GAAP Net Loss Per Share

$(0.16)

$(0.31)

$0.15

Net Cash Used in Operating Activities

$(33.5)

$(43.2)

$9.7

Free Cash Flow

$(36.9)

$(45.4)

$8.5

A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in the financial statement tables included in this press release. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section titled "Non-GAAP Financial Measures."

Financial Outlook
For the third quarter and fiscal year 2022, Confluent expects:

Q3 2022 Outlook

FY 2022 Outlook

Total Revenue

$143-$145 million

$567-$571 million

Non-GAAP Operating Margin

~ (33%)

(35%)-(34%)

Non-GAAP Net Loss Per Share

$(0.19)-$(0.17)

$(0.73)-$(0.69)

A reconciliation of forward-looking non-GAAP operating margin and non-GAAP net loss per 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 expense specific to our equity compensation awards and employer payroll tax-related items on employee stock transactions 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 second quarter 2022 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 investors.confluent.io 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 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 our financial outlook, including margin improvements, target gross margin levels, achievement of positive non-GAAP operating margin exiting the fourth quarter of fiscal 2024 and impact of macro dynamics; the potential growth runway for Confluent Cloud; continued rates of Confluent Cloud consumption despite macroeconomic uncertainty; ability for Confluent Cloud to provide cost savings for users and customers; increased adoption of our platform and data streaming in general; dependence of businesses on data in motion; retention of data platforms like Confluent by organizations in times of macroeconomic uncertainty; our ability and position to capitalize on the shift to cloud; the degree of market acceptance of our products; our ability to sustain relationships and integration with cloud providers; growth in and growth rate of revenue, including Confluent Cloud revenue, customers, remaining performance obligations and dollar-based net retention rate; our market opportunity; our go-to-market strategy; our product differentiation and market acceptance of our products, including over open source alternatives; our ability to Excellerate margins, on an annual basis or at all; our ability to meet near-term and mid-term financial targets; our potential for value creation; our investment priority and philosophy; and 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, genuine results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) the impact of the ongoing COVID-19 pandemic on our business, as well as our customers, prospects, partners, and service providers, (ii) our ability to sustain and manage our rapid growth, (iii) our limited operating history, (iv) our ability to attract new customers and retain and sell additional features and services to our existing customers, (v) our ability to increase consumption of our offering, including by existing customers and through the acquisition of new customers, and successfully add new features and functionality to our offering, (vi) our ability to achieve or sustain profitability and Excellerate margins annually or at all, (vii) the estimated addressable market opportunity for our offering, (viii) our ability to compete effectively in an increasingly competitive market, including achieving market acceptance over competitors and open source alternatives, (ix) our ability to successfully execute our go-to-market strategy and initiatives, (x) our ability to attract and retain highly qualified personnel, (xi) breaches in our security measures or unauthorized access to our platform, our data, or our customers’ or other users’ personal data, (xii) our reliance on third-party cloud-based infrastructure to host Confluent Cloud, (xiii) inflationary conditions, economic uncertainty, recessionary risks, and exchange rate fluctuations, which may result in customer pullback in information technology spending, lengthening of sales cycles, reduced contract sizes, reduced consumption of Confluent Cloud or customer preference for open source alternatives and (ix) 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, 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 June 30, 2022 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, general and administrative), non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow, and 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 loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow, free cash flow margin, or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Further, free cash flow is not a substitute for cash used in operating activities. The utility of free cash flow is limited as such measure does not reflect our future contractual commitments and does 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, general and administrative), non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, and non-GAAP net loss per share as the respective GAAP balances, adjusted for, as applicable, stock-based compensation expense; employer taxes on employee stock transactions; common stock charitable donation expense; amortization of debt issuance costs; and income tax effects associated with these adjustments. 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 believe that free cash flow and 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.

Other Business Metrics

Remaining performance obligations ("RPO") represent the amount of contracted future revenue that has not yet been recognized as of the end of each period, including both deferred revenue that has been invoiced and non-cancelable committed amounts that will be invoiced and recognized as revenue in future periods. RPO excludes pay-as-you-go arrangements. RPO may also fluctuate due to a number of factors, including the timing of renewals, average contract terms, seasonality, and dollar amount of customer contracts. RPO as a metric is not necessarily indicative of future revenue growth because it does not account for the genuine timing of customers’ consumption or future expansion.

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 the revenue customers contractually committed to over the following 12 months assuming no increases or reductions in their subscriptions. ARR excludes services and pay-as-you-go arrangements. Similar to RPO, ARR as a metric is not necessarily indicative of future revenue growth because it does not account for the genuine timing of customers’ consumption or future expansion. 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.

Dollar-based net retention rate ("NRR") as of a period end is calculated by starting with the ARR from the cohort of all customers as of 12 months prior to such period end ("Prior Period Value"). We calculate the ARR from these same customers as of the current period end ("Current Period Value"), which includes any growth in the value of subscriptions and is net of contraction or attrition over the prior 12 months. Services and pay-as-you-go arrangements are excluded from the calculation of ARR. We then divide the Current Period Value by the Prior Period Value to arrive at our dollar-based NRR. The dollar-based NRR includes the effect, on a dollar-weighted value basis, of our subscriptions that expand, renew, contract, or attrit, but excludes ARR from new customers in the current period. Our dollar-based NRR 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 Balance Sheets

(in thousands)

(unaudited)

June 30,

December 31,

2022

2021

ASSETS

Current assets:

Cash and cash equivalents

$

529,667

$

1,375,932

Marketable securities

1,427,859

640,085

Accounts receivable, net

149,394

137,491

Deferred contract acquisition costs

29,491

27,646

Prepaid expenses and other current assets

55,612

44,919

Total current assets

2,192,023

2,226,073

Property and equipment, net

21,813

14,428

Operating lease right-of-use assets

32,613

37,281

Deferred contract acquisition costs, non-current

54,661

51,178

Other assets, non-current

23,807

13,769

Total assets

$

2,324,917

$

2,342,729

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

15,527

$

7,591

Accrued expenses and other liabilities

93,917

98,974

Operating lease liabilities

7,846

9,236

Deferred revenue

255,064

220,920

Liability for early exercise of unvested stock options

3,826

11,467

Total current liabilities

376,180

348,188

Operating lease liabilities, non-current

27,975

31,645

Deferred revenue, non-current

30,667

25,557

Convertible senior notes, net

1,082,583

1,080,701

Other liabilities, non-current

10,888

6,357

Total liabilities

1,528,293

1,492,448

Stockholders’ equity:

Preferred stock

-

-

Class A common stock

1

1

Class B common stock

2

2

Additional paid-in capital

1,785,640

1,599,962

Accumulated other comprehensive loss

(9,547

)

(830

)

Accumulated deficit

(979,472

)

(748,854

)

Total stockholders’ equity

796,624

850,281

Total liabilities and stockholders’ equity

$

2,324,917

$

2,342,729

Confluent, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Revenue:

Subscription

$

127,018

$

78,516

$

240,938

$

146,508

Services

12,389

9,822

24,608

18,858

Total revenue

139,407

88,338

265,546

165,366

Cost of revenue:

Subscription(1)(2)

35,608

20,292

69,211

36,049

Services(1)(2)

13,901

9,717

26,075

17,798

Total cost of revenue

49,509

30,009

95,286

53,847

Gross profit

89,898

58,329

170,260

111,519

Operating expenses:

Research and development(1)(2)

64,472

33,225

122,133

57,538

Sales and marketing(1)(2)

112,754

73,206

219,456

131,715

General and administrative(1)(2)

29,979

37,943

57,460

53,455

Total operating expenses

207,205

144,374

399,049

242,708

Operating loss

(117,307

)

(86,045

)

(228,789

)

(131,189

)

Interest income

2,618

688

3,184

1,532

Other expense, net

(1,432

)

(643

)

(2,814

)

(979

)

Loss before income taxes

(116,121

)

(86,000

)

(228,419

)

(130,636

)

Provision for income taxes

1,510

2,170

2,199

2,060

Net loss

$

(117,631

)

$

(88,170

)

$

(230,618

)

$

(132,696

)

Net loss per share, basic and diluted

$

(0.42

)

$

(0.74

)

$

(0.84

)

$

(1.17

)

Weighted-average shares used to compute net loss per share, basic and diluted

278,268,980

118,648,655

275,593,362

113,717,546

(1) Includes stock-based compensation expense as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Cost of revenue - subscription

$

6,018

$

2,172

$

11,331

$

3,147

Cost of revenue - services

2,328

1,055

4,190

1,599

Research and development

25,337

8,932

45,422

12,443

Sales and marketing

24,746

11,155

45,808

16,131

General and administrative

10,437

11,202

19,484

14,549

Total stock-based compensation expense

$

68,866

$

34,516

$

126,235

$

47,869

(2) Includes employer taxes on employee stock transactions as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Cost of revenue - subscription

$

70

$

38

$

403

$

38

Cost of revenue - services

80

288

157

288

Research and development

342

277

1,381

398

Sales and marketing

1,048

610

1,728

713

General and administrative

130

222

440

261

Total employer taxes on employee stock transactions

$

1,670

$

1,435

$

4,109

$

1,698

Confluent, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$

(117,631

)

$

(88,170

)

$

(230,618

)

$

(132,696

)

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation and amortization

1,810

756

3,060

1,543

Net (accretion) amortization of (discounts) premiums on marketable securities

(469

)

459

236

964

Amortization of debt issuance costs

947

-

1,883

-

Amortization of deferred contract acquisition costs

8,925

6,048

17,395

11,583

Non-cash operating lease costs

2,200

2,748

4,475

5,604

Common stock charitable donation expense

-

13,290

-

13,290

Stock-based compensation, net of amounts capitalized

68,866

34,516

126,235

47,869

Deferred income taxes

30

2,297

26

1,730

Other

355

209

559

648

Changes in operating assets and liabilities:

Accounts receivable

(25,244

)

(17,587

)

(12,462

)

(11,853

)

Deferred contract acquisition costs

(10,643

)

(15,482

)

(22,723

)

(26,348

)

Prepaid expenses and other assets

(12,136

)

(12,368

)

(20,121

)

(14,723

)

Accounts payable

7,275

(468

)

7,452

371

Accrued expenses and other liabilities

24,609

11,460

...

Wed, 03 Aug 2022 08:25:00 -0500 en-GB text/html https://uk.movies.yahoo.com/confluent-announces-second-quarter-2022-200300434.html
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