Confluent, Inc. (CFLT) has reported better-than-expected financial results for the fourth quarter, leading to a surge in its shares. The company’s revenue came in at $213.18 million, surpassing estimates of $205.26 million. Additionally, adjusted earnings were 9 cents per share, beating estimates of 5 cents per share.
Confluent’s strong performance was driven by a 31% increase in subscription revenues and a 46% increase in Confluent cloud revenues. The company also reported that it ended the quarter with 1,229 customers generating $100,000 or more in annual recurring revenue.
Jay Kreps, co-founder and CEO of Confluent, attributed the company’s momentum to its leadership in the data streaming platform category. He stated, “Our momentum is driven by our leadership of the data streaming platform category, which has become a requirement to deliver business-critical use cases like connected customer experiences, cloud migrations, and now real-time generative AI.”
Looking ahead, Confluent expects first-quarter revenue to be between $211 million and $212 million, with subscription revenues projected to be between $199 million and $200 million. The company anticipates a negative 4% adjusted operating margin in the first quarter, with adjusted net income per share ranging from zero to 2 cents.
Confluent also provided guidance for full-year 2024, with revenue expected to be approximately $950 million. The company foresees an approximately flat adjusted operating margin and anticipates full-year net income of approximately 17 cents per share.
Following the release of its quarterly results, several analysts made changes to their price targets on Confluent. Needham raised its price target from $30 to $35, while maintaining a Buy rating. Wells Fargo boosted its price target from $30 to $36, with an Overweight rating.
Confluent’s shares gained 3.5% to close at $24.29 on Wednesday.
In conclusion, Confluent’s better-than-expected fourth-quarter financial results have showcased its strong performance and growth potential. With its leadership in the data streaming platform category, the company is well-positioned to capitalize on the increasing demand for real-time data solutions.
