Confluent (CFLT) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered solid results with total revenue of $235.0 million, up 24% year-over-year, and subscription revenue of $225 million, up 27%, driven by strong cloud adoption and record new customer additions.

• Confluent Cloud revenue grew 40% year-over-year to $117 million, now representing 50% of total revenue.

• Dollar-based net retention rate was 118%, with 1,306 customers generating $100,000+ in ARR, up 14% year-over-year.

• Operating margin and free cash flow improved, with non-GAAP operating margin at 0.6% and free cash flow margin at 1.2%.

• Strategic partnerships, product innovation in GenAI and data streaming, and a shift to a consumption-based model are fueling adoption and customer success.

Financial highlights

• Q2 2024 subscription revenue was $224.7 million, 96% of total revenue, and Confluent Cloud revenue was $117.4 million, 52% of subscription revenue.

• Gross profit for Q2 2024 was $170.0 million (gross margin 72%), up from $131.4 million (69%) in Q2 2023.

• Non-GAAP operating margin improved to 0.6%, and non-GAAP net income per share was $0.06.

• Free cash flow margin turned positive at 1.2%, with free cash flow of $2.7 million.

• Ended Q2 with $1.93 billion in cash, cash equivalents, and marketable securities.

Outlook and guidance

• Q3 2024 subscription revenue expected at $233–$234 million, up 23–24% year-over-year.

• FY2024 subscription revenue expected at ~$910 million, up 25%; non-GAAP operating and free cash flow margins to break even.

• Cloud mix for full year expected at ~53% of subscription revenue.

• Management remains focused on breakeven non-GAAP margins and continued investment in innovation and partnerships.