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Confluent Inc Cl A(CFLT-Q)
NASDAQ

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Why Confluent Stock Crushed the Market Today

Motley Fool - Thu Aug 3, 2023

What happened

Business processing and analysis company Confluent(NASDAQ: CFLT) has been doing some solid business lately, and on Thursday shareholders rewarded it handsomely. They collectively traded its stock price up by more than 16%, in sharp contrast to the 0.3% slump of the S&P 500 index. The reason for the stock's leap on the day was Confluent's latest earnings release.

So what

In its second quarter, Confluent earned $189 million in revenue. This was up a very strong 36% year over year and comfortably exceeded the average analyst estimate of just over $182 million.

On the bottom line it flipped to a non-GAAP (adjusted) net profit of $58,000 ($0.00 per share), versus the more than $45 million loss it posted in the same quarter a year ago. Prognosticators had been modeling a $0.06 per-share deficit.

Confluent said it is benefiting from a right time and place situation just now, as it operates in a data streaming market it says is currently worth $60 billion. The company was aided by a notable rise in its Confluent Cloud service; this product's revenue grew by 78% year over year during the quarter.

Now what

In addition to beating on trailing estimates, Confluent is also well ahead of the game as far as full-year 2023 is concerned. The company proffered guidance for the period of $767 million to $772 million in revenue, well above the consensus analyst projection of $693 million. As for adjusted net loss, this should be $0.02 to $0.05 per share; those prognosticators are estimating a much deeper shortfall of $0.15.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Confluent. The Motley Fool has a disclosure policy.

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