Confluent — Q4 2024 Earnings Presentation
34 slides from Confluent's earnings presentation, Feb 11, 2025
Slide 1: Investor Presentation
Investor Presentation February 11, 2025
Slide 2: Disclaimer
Disclaimer This presentation includes express and implied forward-looking statements. All statements contained in this presentation other than statements of historical facts, including expectations of Confluent, Inc. (“we,ˮ “us,ˮ “our,ˮ or “Confluentˮ) regarding our revenue, revenue mix, revenue gro
Slide 3: Confluent's Mission: Set Data in Motion
Confluentʼs Mission: Set Data in Motion Founded in 2014 by the $60B Total Addressable Market¹ Original Creators of Apache Kafka $1B Total Revenue Run Rate2 FYʼ24 Subscription Revenue $922M / 26% YoY Confluent Cloud Revenue $492M / 41% YoY Non-GAAP Operating Margin OM 2.9% / 10pts YoY Dollar-B
Slide 4: The Problems with Data at Rest and Legacy Movement Tools
The Problems with Data at Rest and Legacy Movement Tools Data at Rest Legacy Data Movement Tools Databases ETL/Data Messaging Integration Slow, daily batch processing Batch Difficult to Scale Simple, static real-time Expensive No Persistence queries Time Consuming Data Loss No Replay 4
Slide 5: Databases Bring Point-in-Time Queries to Stored Data; This Leads to a Giant Mess in Data Architecture
Databases Bring Point-in-Time Queries to Stored Data; This Leads to a Giant Mess in Data Architecture LINE OF BUSINESS 01 LINE OF BUSINESS 02 PUBLIC CLOUD 5
Slide 6: A New Paradigm for Data in Motion: Data Streaming
A New Paradigm for Data in Motion: Data Streaming To Instant Value From Data Mess To Data Products Everywhere AI/MODELING PROCESS FRAUD RECOMMENDATIONS CUSTOM APPS & PERSONALIZATIONS MICROSERVICES PAYMENTS STREAM ACCOUNTS INVENTORY CONNECT DATA SYSTEMS GOVERN
Slide 7: From Giant Mess to Central Nervous System
From Giant Mess to Central Nervous System DATA STREAMING PLATFORM 7
Slide 8: Proven Success Across Industries
Proven Success Across Industries Financial Services Technology Communications & Media Manufacturing Consumer & Retail Automotive & Transportation Healthcare Insurance 8
Slide 9: Use Cases Across All Industries
Use Cases Across All Industries Product Streaming Systems of Inventory Personalized Sentiment Retail Management Promotions Development Analysis Enterprise Scale for High & Introduction Messaging Traffic Periods Dynamic Staff Connected Data Confidentiality Integrated Proactive Real-Time Healthcare He
Slide 10: Why Confluent Wins
Why Confluent Wins Product Customer Growth Differentiation Go-To-Market Model Cloud-native: Re-imagined Kafka for the Cloud Product Led: Getting customersʼ hands on product early to qualify and deliver faster time-to value Complete: Enable developers to reliably & securely build next-gen apps faster
Slide 11: The Confluent Data Streaming Platform
Product Differentiation The Confluent Data Streaming Platform Stream + Connect + Process + Govern Data Pipelines Real-time Analytics Data Analytics Cyber-Security IoT & Telematics ML & AI Geofencing Streaming ETL Dynamic Pricing Shipment Tracking / Alerting Customer 360 and more… DATA STREAMING APPL
Slide 12: Confluent's Cloud Advantage: Kora Architecture
Product Differentiation Confluentʼs Cloud Advantage: Kora Architecture Other Confluent CUSTOMERS Cloud Services NETWORK Multi-Cloud Networking & Routing Tier METRICS & OBSERVABILITY AZ AZ AZ Metadata Cells GOVERNANCE S Real-time Durability Audits E COMPUTE Cells feedback C data Data Balancing U Cell
Slide 13: Stronger Capabilities, With Up to 60% Lower TCO
Product Differentiation Stronger Capabilities, With Up to 60% Lower TCO HEADCOUNT INFRASTRUCTURE DEVELOPMENT & OPERATIONS SAVINGS WITH CONFLUENT SAVINGS WITH CONFLUENT SAVINGS WITH CONFLUENT Development & Higher Utilization Multi-tenancy Operations Personnel of Infrastructure Elastic Software-driven
Slide 14: Product Led Complements Enterprise Sales GTM Motion
Customer Growth GTM Product Led Complements Enterprise Sales GTM Motion Awareness Mission Critical of Solution PRODUCT LED ENTERPRISE SALES Self-Serve Signup, Master Contract, Success Pay-As-You-Go Plan / Value Realization and Evaluation TCO, Governance Production Development Central Nervous System
Slide 15: Data in Motion Journey
Customer Growth GTM Data in Motion Journey Central Nervous System 5 VALUE Mission Critical Cross-Company Platform 4 Mission Critical, But Disconnected Use Cases Early Production 3 ● Senior executive buy-in Usage CTO, CIO, CISO Experimentation ● Center of Excellence / Early Interest 2 ● Company-wid
Slide 16: Network Effects Drive Further Expansion
Network Effects Drive Further Expansion any source NoSQL Web Oracle Custom Apps Mainframes Salesforce Microservices Marketo Monitoring Twitter Analytics AWS, Azure, GCP Data Warehouse …and more any destination 16
Slide 17: Our Powerful and Differentiated Cloud Consumption Model
Customer Growth GTM Our Powerful and Differentiated Cloud Consumption Model Serve mission-critical Power revenue (frontend) Expand seamlessly in the Moving up the stack workloads in and operational (backend) cloud with strong with Flink and capitalizing data infrastructure use cases network effects
Slide 18: Competitive Landscape
Competitive Landscape Legacy Data Infrastructure Cloud Providers Relational DBs Partners & Competitors ESB & Messaging ETL On-Premises Streaming 18
Slide 19: Multiple Levers of Growth in a Large and Growing TAM
Multiple Levers of Growth in a Large and Growing TAM Expand in Easy and Frictionless Land Enterprise-Wide Expansion Underpenetrated Segments with Cloud Pay-As-You-Go via Solutions Selling (e.g. Commercial, Tech) Grow and Harness Continued Productize Use Cases our Partner Ecosystem International Expa
Slide 20: One Team, One Mission: Set Data in Motion
One Team, One Mission: Set Data in Motion Board of Directors Jay Kreps Jun Rao Erica Schultz Jay Kreps Co-Founder & CEO Co-Founder President, Field Operations Co-Founder & CEO of Confluent Neha Narkhede Co-Founder of Confluent Matt Miller Sequoia Capital Stephanie Buscemi Mike Volpi Rohan Sivaram Me
Slide 21: A New Data Category, A Large Market Opportunity
A New Data Category, A Large Market Opportunity 2022 Total Addressable Market TAM 20222025 TAM Growth (3) $60B (2) 19% CAGR Addressed by ksqlDB pull queries and Kafka Storage $100B Addressed by Kafka and Cluster Linking $9B Database Addressed by ksqlDB push queries, $10B Connect SMTs, and Analyt
Slide 22: Bottoms-up View of Our 2022 Addressable Market
Bottoms-up View of Our 2022 Addressable Market Fortune 500 Enterprise Commercial - Mid Market LTM Revenue $1B LTM Revenue: $1B Number of Companies1 500 29,000 300,000 Estimated Average ARR per Company2 $10M $1M $100K $60B 1 Source: Capital IQ. 22 2 Estimates based on evaluation o
Slide 23: Subscription Revenue
Subscription Revenue Annual Subscription Revenue Quarterly Subscription Revenue $ in millions $ in millions $250.6 $922.1 $239.9 $224.7 $202.8 $206.9 59% CAGR $729.1 $189.3 FY18FY24 $176.5 $160.6 $535.0 $347.1 $208.6 $130.2 $56.4 Q1ʼ23 Q2ʼ23 Q3ʼ23 Q4ʼ23 Q1ʼ24 Q2ʼ24 Q3ʼ24 Q4ʼ24 FYʼ18 FYʼ19 FYʼ20 FY
Slide 24: Confluent Cloud Revenue
Confluent Cloud Revenue Annual Cloud Revenue Quarterly Cloud Revenue $ in millions $ in millions $491.9 $137.9 $129.8 $117.4 $106.8 $348.8 $100.0 $91.6 140% $83.6 CAGR $73.6 FY18FY24 $211.2 $94.2 Q/Q $ $9.9 $8.0 $8.4 $10.5 $12.4 $5.3 $6.8 $8.1 $31.4 Add $14.4 $2.6 Q1ʼ23 Q2ʼ23 Q3ʼ23 Q4ʼ23 Q1ʼ24 Q2ʼ
Slide 25: Revenue Mix by Geography and Offering
Revenue Mix by Geography and Offering Revenue Mix by Geography Revenue Mix by Offering $ in millions $ in millions $777.0 $963.6 $213.2 $261.2 $777.0 $963.6 $213.2 $261.2 6% 4% 5% 4% 40% 40% 40% 41% 45% 51% 47% 53% 60% 60% 60% 59% 49% 45% 48% 43% FYʼ23 FYʼ24 Q4ʼ23 Q4ʼ24 FYʼ23 FYʼ24 Q4ʼ23 Q4ʼ24 US In
Slide 26: Customers
Customers Total Customers with Customers with Customers 17% y/y ≥ $100K in ARR ≥ $1M in ARR 12% y/y 23% y/y growth growth growth 5,680 5,800 194 5,440 1,381 184 1,306 1,346 177 5,120 4,960 1,229 1,260 168 158 Q4ʼ23 Q1ʼ24 Q2ʼ24 Q3ʼ24 Q4ʼ24 Q4ʼ23 Q1ʼ24 Q2ʼ24 Q3ʼ24 Q4ʼ24 Q4ʼ23 Q1ʼ24 Q2ʼ24 Q3ʼ24 Q4ʼ24 C
Slide 27: Non-GAAP Subscription Gross Margin
Non-GAAP Subscription Gross Margin Non-GAAP Margin Drivers Subscription Gross Margin 81.5% 82.0% 81.1% 79.6% Healthy margins for Confluent Platform Revenue Growing Confluent Cloud revenue mix Improving Cloud hosting costs due to scale and optimization FYʼ23 FYʼ24 Q4ʼ23 Q4ʼ24 Note: Refer to the slide
Slide 28: Driving Efficient Growth
Driving Efficient Growth Non-GAAP Operating Expenses Non-GAAP as % of Revenue Operating Margin % FYʼ23 FYʼ24 Q4ʼ23 Q4ʼ24 11% 10% 10% 9% 3% 5% 5% 24% 23% 22% 23% 7% 48% 42% 41% 42% FYʼ23 FYʼ24 Q4ʼ23 Q4ʼ24 S&M R&D G&A Note: Refer to the slides in the section titled "GAAP to Non-GAAP Reconciliationsˮ
Slide 29: Focus on Managing Net Dilution
Focus on Managing Net Dilution Net dilution Calculation SBC % of Revenue Net Dilution • Shares granted - shares forfeited) / WASO 41% Drivers • SBC is a lagging indicator • Final tranches of pre-IPO 25% options recognized in SBC through 1H FY25 Mid-Teens 3% 3% • Focus managing net dilution LT be
Slide 30: Key Takeaways
Key Takeaways Category Creating $60 Billion Strong Growth Company Founded by Total Addressable and Long-Term the Creators of Kafka Market1 Margin Profile Expansion Positioned to Capitalize Seasoned Management Driven by on the Large and Team with Track Record Network Effects Growing Shift to Cloud o
Slide 31: Definitions
Definitions Annual Recurring Revenue ARR We define ARR as 1) with respect to Confluent Platform customers, the amount of revenue to which our customers are contractually committed over the following 12 months assuming no increases or reductions in their subscriptions, and 2) with respect to Con
Slide 32: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (in thousands, except percentages) FYʼ23 FYʼ24 Q4ʼ23 Q4ʼ24 Subscription revenue $729,112 $922,091 $202,787 $250,636 Subscription gross profit on a GAAP basis $553,108 $713,491 $157,980 $195,416 Subscription gross margin on a GAAP basis 75.9% 77.4% 77.9% 78.0% Add: St
Slide 33: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (in thousands, except percentages) FYʼ23 FYʼ24 Q4ʼ23 Q4ʼ24 Total revenue $776,952 $963,642 $213,184 $261,220 General and administrative G&A) expense on a GAAP basis $137,520 $156,703 $33,948 $39,359 G&A expense as a % of total revenue on a GAAP basis 17.7% 16.3% 15.
Slide 34: Confluent
@) CONFLUENT