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Confluent Inc Cl A(CFLT-Q)

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Why Confluent Stock Climbed Higher Today

Motley Fool - Thu Nov 3, 2022

What happened

Investors flocked to the data streaming company Confluent(NASDAQ: CFLT) today after the company reported third-quarter results that were better than expected.

Not only did the company outpace Wall Street's expectations, but Confluent's management also issued strong guidance for the fourth quarter and raised its earnings and revenue outlook for the year.

Unsurprisingly, investors loved the combination of all of those things and pushed Confluent's share price up by 5% as of 1:43 p.m. ET.

So what

Confluent reported a non-GAAP (adjusted) loss per share of $0.13 in the third quarter, which was an improvement over the company's loss of $0.17 in the year-ago quarter and ahead of analysts' average estimate of a loss of $0.17.

A person looking at a computer.

Image source: Getty Images.

The company's revenue also surpassed expectations, with total sales increasing 48% to $151.7 million, much better than Wall Street's consensus estimate of $144.8 million.

Confluent said in a press release that its cloud revenue soared 112% to $57 million and that it now has 921 customers with $100,000 or more in annual recurring revenue, which is an increase of 39% from the year-ago quarter.

But that wasn't the end of the good news. Confluent's management also said that its fourth-quarter loss will be in the range of $0.16 to $0.14, which is better than analysts' consensus estimate of a loss of $0.17 per share.

The company also expects revenue between $161 million to $163 million, which is ahead of Wall Street's estimate of $160.3 million.

Now what

"The data streaming era is here," Confluent's co-founder and CEO Jay Kreps said in a statement. "The need for real-time data is pushing data streaming from the edges to the core of modern organizations."

That optimism continued as the company's management raised its 2022 earnings guidance from the previous range of between a loss of between $0.73 and $0.69, to the revised range of a loss of between $0.65 and $0.63.

The company also raised its 2022 revenue outlook to $579 million, up from the previous $569 million, both at the midpoint of guidance.

With better-than-expected third-quarter results, strong fourth-quarter guidance, and an improved outlook for the year, it's no wonder why Confluent's share price popped today.

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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Confluent, Inc. The Motley Fool has a disclosure policy.

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