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Dec 31, 2024
Confluent Q4 2024 Earnings Report
Key Takeaways
Confluent reported a strong Q4 2024, with total revenue growing 23% year-over-year to $261.2 million, driven by 24% growth in subscription revenue. The company also achieved a non-GAAP operating income of $13.6 million, while GAAP operating loss widened. Confluent Cloud revenue saw a significant 38% increase. Free cash flow improved notably to $29.1 million, compared to $6.8 million in Q4 2023.
Confluent
Confluent
Confluent Revenue by Segment
Revenue by Segment
Services Revenue
CapyFin.com Forward Guidance
Confluent expects continued revenue growth in Q1 and FY 2025, with subscription revenue projected between $253-$254 million in Q1 and $1.117-$1.121 billion for the full year. The company anticipates maintaining profitability improvements with a non-GAAP operating margin of ~3% in Q1 and ~6% for the full year.
Positive Outlook
- Strong growth in Confluent Cloud revenue, up 38% YoY.
- Continued subscription revenue expansion, up 24% YoY.
- Improving free cash flow margin, reaching 11.1%.
- Sustained growth in high-value customers with $100K+ ARR.
- Projected non-GAAP profitability improvements in FY 2025.
Challenges Ahead
- GAAP operating losses remain significant at $105.8 million.
- Non-GAAP operating margin slightly decreased by 0.1 percentage points.
- Stock-based compensation expenses continue to weigh on profitability.
- Uncertainty in macroeconomic conditions affecting enterprise spending.
- Potential risks in maintaining high growth rates in cloud revenue.