Confluent — Q1 2023 Earnings Presentation
35 slides from Confluent's earnings presentation, May 3, 2023
Slide 1: Q1 2023 Earnings Call
Q1 2023 Earnings Call May 3, 2023
Slide 2: Forward Looking Statements and Non-GAAP Financial Measures
Forward Looking Statements and Non-GAAP Financial Measures This presentation and the accompanying oral presentation (together, the “presentation”) contain forward-looking statements including, among other things, statements regarding (i) our financial outlook, including expected revenue mix, operatin
Slide 3: June 13, 2023 | 1:00 PM ET New York City
June 13, 2023 | 1:00 PM ET New York City 3
Slide 4: Jay Kreps, Co-Founder and CEO
Jay Kreps Co-Founder and CEO 4
Slide 5: Strong First Quarter Results
Strong First Quarter Results Total Confluent Cloud Non-GAAP Revenue Revenue Operating Margin $174M $74M +18 pts +38% YoY +89% YoY YoY Note: Financials are for the period ended March 31, 2023. 5
Slide 6: Gross Retention
Gross Retention 6
Slide 7: We serve mission-critical custom software applications
We serve mission-critical custom software applications 7
Slide 8: We act as an interchange between multiple teams and applications
We act as an interchange between multiple teams and applications 8
Slide 9: We have the inherent TCO advantage of Confluent Cloud
We have the inherent TCO advantage of Confluent Cloud 9
Slide 10: The Cost Structure of Self-managed Kafka
The Cost Structure of Self-managed Kafka A. Infrastructure B. Development and Operations Personnel 10
Slide 11: Apache Kafka Average Tech Salary by Skill
Average Tech Salary by Skill | DICE.COM RANK SKILL AVERAGE SALARY CHANGE FROM 2021 1 MapReduce* $146,672 +9.3% 2 Go/Golang $145,672 +18.2% 3 Elasticsearch $143,619 +4.5% 4 Chef $143,188 +8.8% 5 Apache Kafka $142,764 +8.4% 6 Service Oriented Architecture (SOA) $142,459 +1.6% 7 Teradata $141,515 +14.7
Slide 12: Confluent's TCO Advantage
Confluent’s TCO Advantage Development & Operations Personnel Costs Infrastructure Costs Confluent Cloud Cost APACHE KAFKA CONFLUENT 12
Slide 13: Infrastructure Savings with Confluent
Infrastructure Savings with Confluent Networking and Multi-tenancy Elastic Data Balancing Replication Confluent’s large scale drives additional customer savings 13
Slide 14: Development & Operations Savings with Confluent
Development & Operations Savings with Confluent Higher Utilization Software-driven Real-time Monitoring of Infrastructure Operations & Validation 14
Slide 15: 1000x Cost Advantage in Operations
1000x Cost Advantage in Operations 15
Slide 16: Driving Far Greater OS Kafka Monetization
Driving Far Greater OS Kafka Monetization On-prem Premium SW Cloud-native Service Open Source Only Open Source Only Customers Customers 16
Slide 17: Customer Highlight: SaaS-based Billings Startup
Customer Highlight SaaS-based Billings Startup 17
Slide 18: Customer Highlight: TOP-10 US Bank
Customer Highlight TOP-10 US Bank 18
Slide 19: Steffan Tomlinson, Chief Financial Officer
Steffan Tomlinson Chief Financial Officer 19
Slide 20: Remaining Performance Obligations (RPO)
Remaining Performance Obligations (RPO) RPO Current RPO ~64% of RPO $742.6M ~$477.0M +35% YoY +44% YoY Note: Metrics are as of period ended March 31, 2023. 20 See Appendix for the definition of “Current RPO”.
Slide 21: Dollar-Based Net Retention Rate (NRR)
Dollar-Based Net Retention Rate (NRR) Total Gross Other NRR Retention NRR >130% >90% Hybrid & Cloud: >Total NRR__ Cloud: The Highest NRR Note: Metrics are as of period ended March 31, 2023. Commencing with the first quarter of 2023, we updated our methodology for calculating ARR using a consumption-b
Slide 22: Customers
Customers Total Customers with Customers with Customers ≥ $100K in ARR ≥ $1M in ARR ~4,690 1,075 135 +14% YoY +34% YoY +53% YoY +160 QoQ +60 QoQ +8 QoQ Note: Metrics are as of period ended March 31, 2023. Commencing with the first quarter of 2023, we updated our methodology for calculating ARR using
Slide 23: Revenue
Revenue Total Subscription Revenue Revenue $174.3M $160.6M +38% YoY +41% YoY 92% of Total Revenue Note: Financials are for the quarter ended March 31, 2023. 23
Slide 24: Revenue by Product
Revenue by Product Confluent Platform Confluent Cloud % Confluent Cloud Revenue New ACV Bookings Revenue $86.9M >50% $73.6M +16% YoY +89% YoY 50% of Total Revenue Greater Than 50% for the 6th 42% of Total Revenue Consecutive Quarter +$5.3M Q/Q Note: Financials are for the quarter ended March 31, 2023.
Slide 25: Revenue by Geography
Revenue by Geography Revenue Revenue From the U.S. From Outside the U.S. $103.9M $70.4M +32% YoY +49% YoY 60% of Total Revenue 40% of Total Revenue Note: Financials are for the quarter ended March 31, 2023. 25
Slide 26: Non-GAAP Gross Margins
Non-GAAP Gross Margins Total Subscription Gross Margin Gross Margin 72.2% 77.5% +250 bps YoY +200 bps YoY Note: Financials are for the quarter ended March 31, 2023. Refer to the slides in the section titled “GAAP to Non-GAAP Reconciliations” in the Appendix, for a reconciliation of our non-GAAP finan
Slide 27: Other Financial Summary
Other Financial Summary Q1’23 Non-GAAP Operating Margin (23.1%), +18 pts YoY ($0.09), +$0.10 YoY Non-GAAP Net Loss Per Share Using 291.9 million basic and diluted WASO Fully Diluted Shares Outstanding 350.1 million Free Cash Flow Margin (47.5%), -1 pts YoY Cash, Cash Equivalents, and Marketable Secu
Slide 28: Guidance
Guidance Q2’23 FY’23 $181M-$183M $760M-$765M Total Revenue 30%-31% YoY 30%-31% YoY Non-GAAP Operating Margin ~ (16%) (14%) - (13%) Non-GAAP Net Loss Per Share $(0.08)-$(0.06) $(0.20)-$(0.14) Weighted-Average Shares Outstanding ~ 297M shares ~ 300M shares Other ● Q2’23 cloud sequential revenue add to
Slide 29: Thank You
/ ae Thank You @) CONFLUENT
Slide 30: Appendix
Appendix 30
Slide 31: Definitions
Definitions Current Remaining Performance Obligations (Current RPO): Represents the estimated amount of contracted future revenue expected to be recognized as revenue over the next 12 months. Annual Recurring Revenue (ARR): We define ARR as (1) with respect to Confluent Platform customers, the amount o
Slide 32: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (in thousands, except percentages) Q1’22 Q1’23 Total revenue $126,139 $174,302 Total gross profit on a GAAP basis $80,362 $116,158 Add: Stock-based compensation expense 7,175 9,105 Add: Employer taxes on employee stock transactions 410 411 Add: Amortization of acquire
Slide 33: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (in thousands, except percentages) Q1’22 Q1’23 Total revenue $126,139 $174,302 Operating loss on a GAAP basis $(111,482) $(166,093) Add: Stock-based compensation expense 57,369 79,289 Add: Employer taxes on employee stock transactions 2,439 3,663 Add: Amortization of
Slide 34: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (in thousands, except percentages, share and per share data) Q1’22 Q1’23 Net loss on a GAAP basis $(112,987) $(152,555) Add: Stock-based compensation expense 57,369 79,289 Add: Employer taxes on employee stock transactions 2,439 3,663 Add: Amortization of acquired in
Slide 35: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (in thousands, except percentages) Q1’22 Q1’23 Total revenue $126,139 $174,302 Net cash used in operating activities $(55,031) $(77,772) Add: Capitalized internal-use software costs (2,509) (4,556) Add: Capital expenditures (887) (546) Free cash flow $(58,427) $(82,87