Confluent (CFLT) Q4 2024 earnings summary

Executive summary

• Exceeded all guided metrics for Q4 and FY24, with strong growth in subscription and cloud revenue, and achieved positive non-GAAP profitability for the first time.

• Achieved $1B+ total revenue run rate for FY24, with Confluent Cloud revenue reaching $492M, up 41% year-over-year, and subscription revenue at $922.1M, up 26% year-over-year.

• Major strategic partnerships expanded, notably with Databricks and Jio Platforms, enhancing real-time data and AI capabilities.

• Continued innovation with new offerings like TableFlow, Freight Clusters, and WarpStream, driving adoption and customer expansion.

• 1,381 customers with $100K+ in ARR, up 12% year-over-year, reflecting strong enterprise adoption.

Financial highlights

• FY24 total revenue was $963.6M, up 24% year-over-year; Q4 total revenue was $261.2M, up 23%.

• FY24 subscription revenue grew 26% to $922.1M; Q4 subscription revenue up 24% to $250.6M, representing 96% of total revenue.

• Confluent Cloud revenue grew 41% YoY to $492M for FY24 and 38% YoY in Q4 to $137.9M.

• Non-GAAP operating margin improved 10 points YoY to 2.9% for FY24; Q4 non-GAAP margin at 5.2%.

• Free cash flow margin reached 1% for FY24 and 11.1% in Q4; FY24 free cash flow was $9.5M, a $133.8M improvement YoY.

Outlook and guidance

• FY25 subscription revenue expected at $1.117B–$1.121B, up 21–22% YoY.

• FY25 non-GAAP operating margin guided to ~6%; Q1 FY25 subscription revenue expected to grow 22–23%.

• Cloud revenue mix projected to reach 59–60% by Q4 FY25.

• One-time negative impact to free cash flow margin in Q1 FY25 due to compensation timing; adjusted FY25 FCF margin expected at ~6%.

• Focus on managing net dilution below 2% and reducing SBC as a percentage of revenue to mid-teens in the long term.