Confluent Announces Third Quarter 2022 Financial Results

Rhea-AI Summary

Confluent, Inc. reported Q3 2022 total revenue of $152 million, marking a 48% year-over-year increase. Notably, Confluent Cloud revenue surged by 112% to $57 million. Remaining performance obligations reached $664 million, up 72%. The company's customer base expanded with 921 customers generating over $100,000 in ARR, up 39%. Despite significant growth, GAAP operating loss widened to $(118.9 million).

For Q4 2022, Confluent expects revenue between $161-$163 million and a non-GAAP net loss per share of $(0.16)-$(0.14).

Positive

• Total revenue increased by 48% year-over-year to $152 million.
• Confluent Cloud revenue grew by 112% year-over-year, reaching $57 million.
• Remaining performance obligations rose 72% year-over-year, totaling $664 million.
• Customer count with $100,000 or greater in ARR increased by 39% to 921.

Negative

• GAAP operating loss increased to $(118.9 million), up from $(94.8 million) the previous year.
• Net cash used in operating activities rose by $(41.8 million), a significant increase from $(18 million).
• Free cash flow decreased, worsening to $(45.6 million) from $(20.6 million).

• Total revenue of $152 million, up 48% year over year
• Confluent Cloud revenue of $57 million, up 112% year over year
• Remaining performance obligations of $664 million, up 72% year over year
• 921 customers with $100,000 or greater in ARR, up 39% year over year

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- Confluent, Inc. (NASDAQ: CFLT), the data streaming pioneer, today announced financial results for its third quarter of 2022, ended September 30, 2022.

“The data streaming era is here. The need for real-time data is pushing data streaming from the edges to the core of modern organizations,” said Jay Kreps, co-founder and CEO, Confluent. “This trend is reflected by the 39% year-over-year growth in customers with $100k+ ARR, while the 112% year-over-year growth in Confluent Cloud revenue underscores the strong differentiation and TCO advantage of our cloud-native platform.”

“Our ability to drive durable and efficient growth is proven once again by our strong third quarter results, with 48% revenue growth and 14-point GAAP and non-GAAP operating margin improvements year over year,” said Steffan Tomlinson, CFO, Confluent. “Customers continue to drive their digital transformation forward with Confluent, resulting in 72% year-over-year growth in RPO and greater than 130% NRR for the sixth consecutive quarter.”

Third Quarter 2022 Financial Highlights
(In millions, except per share data and percentages)
		Q3 2022		Q3 2021		Y/Y Change
Total Revenue		$151.7		$102.6		48%
Remaining Performance Obligations		$663.5		$385.0		72%
GAAP Operating Loss		$(118.9)		$(94.8)		$(24.1)
Non-GAAP Operating Loss		$(42.1)		$(42.6)		$0.5
GAAP Operating Margin		(78.4%)		(92.4%)		14.0 pts
Non-GAAP Operating Margin		(27.8%)		(41.6%)		13.8 pts
GAAP Net Loss Per Share		$(0.41)		$(0.37)		$(0.04)
Non-GAAP Net Loss Per Share		$(0.13)		$(0.17)		$0.04
Net Cash Used in Operating Activities		$(41.8)		$(18.0)		$(23.8)
Free Cash Flow		$(45.6)		$(20.6)		$(25.0)

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 fourth quarter and fiscal year 2022, Confluent expects:

		Q4 2022 Outlook		FY 2022 Outlook
Total Revenue		$161-$163 million		$578-$580 million
Non-GAAP Operating Margin		~ (28%)		~ (32%)
Non-GAAP Net Loss Per Share		$(0.16)-$(0.14)		$(0.65)-$(0.63)

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 third 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 operating margins and margin improvements, target gross and operating margin levels, achievement of positive non-GAAP operating margin exiting the fourth quarter of fiscal 2024 and impact of macro dynamics such as increased scrutiny on deal approvals; ability to invest with discipline and drive durable and efficient growth; the potential growth runway for Confluent Cloud; continued rates of Confluent Cloud consumption despite macroeconomic uncertainty; customer growth, retention and engagement; ability for Confluent Cloud to provide cost savings for users and customers; increased adoption of our platform and fully managed solutions for data streaming in general; dependence of businesses on data in motion; demand for and retention of data streaming 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 ability to increase engagement of customers for Confluent and expand customer cohorts; 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 improve 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, 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 attract new customers and retain and sell additional features and services to our existing customers, (iv) 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, (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 improve 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) the impact of the ongoing COVID-19 pandemic on our business, as well as our customers, prospects, partners, and service providers and (xiv) 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 June 30, 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 September 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 actual 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 actual 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)
		September 30,				December 31,
		2022				2021
ASSETS
Current assets:
Cash and cash equivalents		$	503,406			$	1,375,932
Marketable securities			1,436,313				640,085
Accounts receivable, net			143,026				137,491
Deferred contract acquisition costs			32,666				27,646
Prepaid expenses and other current assets			59,144				44,919
Total current assets			2,174,555				2,226,073
Property and equipment, net			25,650				14,428
Operating lease right-of-use assets			31,470				37,281
Deferred contract acquisition costs, non-current			61,182				51,178
Other assets, non-current			20,772				13,769
Total assets		$	2,313,629			$	2,342,729
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	14,243			$	7,591
Accrued expenses and other liabilities			94,374				98,974
Operating lease liabilities			7,758				9,236
Deferred revenue			258,853				220,920
Liability for early exercise of unvested stock options			3,418				11,467
Total current liabilities			378,646				348,188
Operating lease liabilities, non-current			27,023				31,645
Deferred revenue, non-current			31,065				25,557
Convertible senior notes, net			1,083,541				1,080,701
Other liabilities, non-current			9,456				6,357
Total liabilities			1,529,731				1,492,448
Stockholders’ equity:
Preferred stock			-				-
Class A common stock			2				1
Class B common stock			1				2
Additional paid-in capital			1,892,474				1,599,962
Accumulated other comprehensive loss			(13,058	)			(830	)
Accumulated deficit			(1,095,521	)			(748,854	)
Total stockholders’ equity			783,898				850,281
Total liabilities and stockholders’ equity		$	2,313,629			$	2,342,729

Confluent, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Revenue:
Subscription		$	138,730			$	92,400			$	379,668			$	238,908
Services			13,002				10,170				37,610				29,028
Total revenue			151,732				102,570				417,278				267,936
Cost of revenue:
Subscription(1)(2)			38,417				25,489				107,628				61,538
Services(1)(2)			14,763				11,810				40,838				29,608
Total cost of revenue			53,180				37,299				148,466				91,146
Gross profit			98,552				65,271				268,812				176,790
Operating expenses:
Research and development(1)(2)			70,099				47,701				192,232				105,239
Sales and marketing(1)(2)			114,312				86,991				333,768				218,706
General and administrative(1)(2)			33,041				25,330				90,501				78,785
Total operating expenses			217,452				160,022				616,501				402,730
Operating loss			(118,900	)			(94,751	)			(347,689	)			(225,940	)
Interest income			3,147				299				6,331				1,831
Other income (expense), net			1,572				(530	)			(1,242	)			(1,509	)
Loss before income taxes			(114,181	)			(94,982	)			(342,600	)			(225,618	)
Provision for income taxes			1,868				684				4,067				2,744
Net loss		$	(116,049	)		$	(95,666	)		$	(346,667	)		$	(228,362	)
Net loss per share, basic and diluted		$	(0.41	)		$	(0.37	)		$	(1.25	)		$	(1.40	)
Weighted-average shares used to compute net loss per share, basic and diluted			282,267,230				259,152,303				277,840,258				162,728,527

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

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Cost of revenue - subscription		$	6,313			$	3,945			$	17,644			$	7,092
Cost of revenue - services			2,684				1,790				6,874				3,389
Research and development			27,692				16,310				73,114				28,753
Sales and marketing			26,712				18,516				72,520				34,647
General and administrative			11,992				9,122				31,476				23,671
Total stock-based compensation expense		$	75,393			$	49,683			$	201,628			$	97,552

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

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Cost of revenue - subscription		$	82			$	117			$	485			$	155
Cost of revenue - services			62				49				219				337
Research and development			496				601				1,877				999
Sales and marketing			580				1,236				2,308				1,949
General and administrative			149				436				589				697
Total employer taxes on employee stock transactions		$	1,369			$	2,439			$	5,478			$	4,137

 

Confluent, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(116,049	)		$	(95,666	)		$	(346,667	)		$	(228,362	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization			2,075				897				5,135				2,440
Net (accretion) amortization of (discounts) premiums on marketable securities			(3,105	)			536				(2,869	)			1,500
Amortization of debt issuance costs			958				-				2,841				-
Amortization of deferred contract acquisition costs			9,658				6,739				27,053				18,322
Non-cash operating lease costs			2,142				2,962				6,617				8,566
Common stock charitable donation expense			-				-				-				13,290
Stock-based compensation, net of amounts capitalized			75,393				49,683				201,628				97,552
Deferred income taxes			20				(1	)			46				1,729
Other			321				1,023				880				1,671
Changes in operating assets and liabilities:
Accounts receivable			6,047				979				(6,415	)			(10,874	)
Deferred contract acquisition costs			(19,354	)			(11,244	)			(42,077	)			(37,592	)
Prepaid expenses and other assets			(977	)			(2,616	)			(21,098	)			(17,339	)
Accounts payable			(1,004	)			1,366				6,448				1,737
Accrued expenses and other liabilities			(35	)			18,597				1,721				31,490
Operating lease liabilities			(2,029	)			(2,834	)			(6,939	)			(8,216	)
Deferred revenue			4,187				11,550				43,441				42,902
Net cash used in operating activities			(41,752	)			(18,029	)			(130,255	)			(81,184	)
CASH FLOWS FROM INVESTING ACTIVITIES
Capitalization of internal-use software costs			(2,788	)			(2,052	)			(7,553	)			(3,863	)
Purchases of marketable securities			(355,886	)			(322,941	)			(1,523,248	)			(378,912	)
Maturities of marketable securities			347,000				57,693				717,659				180,667
Purchases of property and equipment			(1,044	)			(563	)			(3,115	)			(2,236	)
Other			-				3				-				12
Net cash used in investing activities			(12,718	)			(267,860	)			(816,257	)			(204,332	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from initial public offering, net of underwriting discounts and commissions			-				-				-				786,600
Proceeds from issuance of common stock upon exercise of vested options			9,749				10,421				34,132				29,126
Proceeds from issuance of common stock upon early exercise of unvested options			-				186				416				18,942
Repurchases of unvested options			(14	)			(162	)			(709	)			(375	)
Payments of deferred offering costs			-				(2,205	)			-				(3,125	)
Payments of debt issuance costs for convertible senior notes			-				-				(786	)			-
Proceeds from issuance of common stock under employee stock purchase plan			18,454				-				40,939				-
Net cash provided by financing activities			28,189				8,240				73,992				831,168
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			20				(1	)			(6	)			(11	)
Net (decrease) increase in cash, cash equivalents, and restricted cash			(26,261	)			(277,650	)			(872,526	)			545,641
Cash, cash equivalents, and restricted cash at beginning of period			530,417				861,097				1,376,682				37,806
Cash, cash equivalents, and restricted cash at end of period		$	504,156			$	583,447			$	504,156			$	583,447
Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown above:
Cash and cash equivalents		$	503,406			$	582,697			$	503,406			$	582,697
Restricted cash included in other assets, current and non-current			750				750				750				750
Total cash, cash equivalents, and restricted cash		$	504,156			$	583,447			$	504,156			$	583,447

 

Confluent, Inc.
Reconciliation of GAAP Measures to Non-GAAP Measures
(in thousands, except percentages, share and per share data)
(unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Reconciliation of GAAP total gross profit to non-GAAP total gross profit:
Total gross profit on a GAAP basis		$	98,552			$	65,271			$	268,812			$	176,790
Total gross margin on a GAAP basis			65.0	%			63.6	%			64.4	%			66.0	%
Add: Stock-based compensation expense			8,997				5,735				24,518				10,481
Add: Employer taxes on employee stock transactions			144				166				704				492
Non-GAAP total gross profit		$	107,693			$	71,172			$	294,034			$	187,763
Non-GAAP total gross margin			71.0	%			69.4	%			70.5	%			70.1	%
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
Research and development operating expense on a GAAP basis		$	70,099			$	47,701			$	192,232			$	105,239
Less: Stock-based compensation expense			27,692				16,310				73,114				28,753
Less: Employer taxes on employee stock transactions			496				601				1,877				999
Non-GAAP research and development operating expense		$	41,911			$	30,790			$	117,241			$	75,487
Non-GAAP research and development operating expense as a percentage of total revenue			27.6	%			30.0	%			28.1	%			28.2	%
Sales and marketing operating expense on a GAAP basis		$	114,312			$	86,991			$	333,768			$	218,706
Less: Stock-based compensation expense			26,712				18,516				72,520				34,647
Less: Employer taxes on employee stock transactions			580				1,236				2,308				1,949
Non-GAAP sales and marketing operating expense		$	87,020			$	67,239			$	258,940			$	182,110
Non-GAAP sales and marketing operating expense as a percentage of total revenue			57.4	%			65.6	%			62.1	%			68.0	%
General and administrative operating expense on a GAAP basis		$	33,041			$	25,330			$	90,501			$	78,785
Less: Stock-based compensation expense			11,992				9,122				31,476				23,671
Less: Employer taxes on employee stock transactions			149				436				589				697
Less: Common stock charitable donation expense			-				-				-				13,290
Non-GAAP general and administrative operating expense		$	20,900			$	15,772			$	58,436			$	41,127
Non-GAAP general and administrative operating expense as a percentage of total revenue			13.8	%			15.4	%			14.0	%			15.3	%
		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Reconciliation of GAAP operating loss to non-GAAP operating loss:
Operating loss on a GAAP basis		$	(118,900	)		$	(94,751	)		$	(347,689	)		$	(225,940	)
Add: Stock-based compensation expense			75,393				49,683				201,628				97,552
Add: Employer taxes on employee stock transactions			1,369				2,439				5,478				4,137
Add: Common stock charitable donation expense			-				-				-				13,290
Non-GAAP operating loss		$	(42,138	)		$	(42,629	)		$	(140,583	)		$	(110,961	)
Non-GAAP operating margin			(27.8	%)			(41.6	%)			(33.7	%)			(41.4	%)
Reconciliation of GAAP net loss to non-GAAP net loss:
Net loss on a GAAP basis		$	(116,049	)		$	(95,666	)		$	(346,667	)		$	(228,362	)
Add: Stock-based compensation expense			75,393				49,683				201,628				97,552
Add: Employer taxes on employee stock transactions			1,369				2,439				5,478				4,137
Add: Common stock charitable donation expense			-				-				-				13,290
Add: Amortization of debt issuance costs			958				-				2,841				-
Add: Income tax effects and adjustments			293				(20	)			975				1,025
Non-GAAP net loss		$	(38,036	)		$	(43,564	)		($	135,745	)		$	(112,358	)
Non-GAAP net loss per share, basic and diluted		$	(0.13	)		$	(0.17	)		$	(0.49	)		$	(0.69	)
Weighted-average shares used to compute net loss per share, basic and diluted			282,267,230				259,152,303				277,840,258				162,728,527

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 September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Net cash used in operating activities		$	(41,752	)		$	(18,029	)		$	(130,255	)		$	(81,184	)
Capitalized internal-use software costs			(2,788	)			(2,052	)			(7,553	)			(3,863	)
Capital expenditures			(1,044	)			(563	)			(3,115	)			(2,236	)
Free cash flow		$	(45,584	)		$	(20,644	)		$	(140,923	)		$	(87,283	)
Free cash flow margin			(30.0	%)			(20.1	%)			(33.8	%)			(32.6	%)
Net cash used in investing activities		$	(12,718	)		$	(267,860	)		$	(816,257	)		$	(204,332	)
Net cash provided by financing activities		$	28,189			$	8,240			$	73,992			$	831,168

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221101006326/en/

Investor Contact

Shane Xie

investors@confluent.io



Media Contact

Taylor Jones

pr@confluent.io

Source: Confluent, Inc.

FAQ

What were the financial results for Confluent (CFLT) in Q3 2022?

In Q3 2022, Confluent reported total revenue of $152 million, a 48% increase year-over-year, with Confluent Cloud revenue rising 112%.

How did Confluent's remaining performance obligations change in Q3 2022?

Remaining performance obligations grew by 72% year-over-year, totaling $664 million in Q3 2022.

What are Confluent's earnings projections for Q4 2022?

Confluent expects Q4 2022 revenue between $161-$163 million and a non-GAAP net loss per share of $(0.16)-$(0.14).

What is the growth rate of customers generating over $100,000 in ARR for Confluent?

Confluent saw a 39% increase in customers with $100,000 or greater in ARR, totaling 921 customers.