Data infrastructure software company Confluent (NASDAQ:CFLT) reported first-quarter 2024 results that exceeded Wall Street analyst expectations, with revenue up 24.6% year over year to $217.2 million. The company expects revenue to be around $229.5 million next quarter, in line with analyst estimates. It posted non-GAAP earnings of $0.05 per share, an improvement from the loss of $0.09 per share in the same quarter last year.
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Confluent (CFLT) First Quarter 2024 Highlights:
- Gain: $217.2 million vs. analyst estimates of $211.8 million (2.5% better)
- EPS (non-GAAP): $0.05 vs. analyst estimates of $0.02 ($0.03 better)
- Revenue guidance for the second quarter of 2024 is $229.5 million in the middle, about in line with what analysts expected
- Company reaffirmed its full-year revenue expectations of $957 million at the center
- Gross margin (GAAP): 71.8%, compared to 66.9% in the same quarter last year
- Free cash flow amounted to -$31.68 million, compared to $6.82 million in the previous quarter
- Customers: 1,260 customers pay more than $100,000 annually
- Market capitalization: $9.09 billion
Founded 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 disparate systems .
Data Infrastructure Generating insights from system-level data is an increasing priority for most companies, but doing so requires reams of data stored in separate databases and silos. This is the driving force behind cloud-based data infrastructure software providers, which can integrate, distribute and process information more easily than older on-premise software providers.
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Revenue Growth As you can see below, Confluent’s revenue growth has been impressive over the past three years, going from $77.03 million in the first quarter of 2021 to $217.2 million this quarter.
This quarter, Confluent’s quarterly revenue increased again by a very solid 24.6% year-over-year. However, growth did slow compared to last quarter as the company’s revenue rose by just $4.05 million in the first quarter compared to $13 million in the fourth quarter of CY2023. While we would like to see revenue increase by a larger amount each quarter, a one-time fluctuation is generally not a concern.
Guidance for next quarter shows that Confluent expects revenue to grow 21.2% year-over-year to $229.5 million, a slowdown from the 35.8% year-over-year increase seen was recorded in the same quarter last year. Looking ahead, before the earnings results were announced, analysts who follow the company expected revenue to grow 22.6% over the next twelve months.
Large Customer Growth This quarter, Confluent reported that 1,260 enterprise customers paid more than $100,000 annually, an increase of 31 from the previous quarter. That’s slightly fewer contract wins than last quarter and well below what we’ve typically seen over the last four quarters, suggesting sales momentum is slowing among major customers.
Key Takeaways from Confluent’s First Quarter Results It was good to see that Confluent exceeded analyst revenue and profit expectations this quarter. We were also pleased that full-year revenue expectations came in ahead of Wall Street estimates. Overall, this was a solid quarter for Confluent. The stock is up 8.1% after reporting and is currently trading at $30.1 per share.
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