Summary
Confluent closed fiscal 2021 with strong top-line growth and a much wider bottom-line loss. Fourth-quarter revenue rose to $119.9 million from $70.3 million a year earlier, an increase of 70.5%. Full-year revenue reached $387.9 million, up 63.9% from $236.6 million. Fourth-quarter gross profit was $73.8 million, up from $49.4 million, and full-year gross profit was $250.6 million, up from $161.1 million. Gross margin weakened as the business scaled. Fourth-quarter gross margin fell to 61.5% from 70.3%, and full-year gross margin declined to 64.6% from 68.1%.
Operating leverage did not follow revenue. GAAP operating loss widened to $113.7 million for the quarter from $32.3 million, and full-year operating loss widened to $339.6 million from $233.2 million. GAAP net loss widened to $114.4 million for the quarter from $31.8 million, and full-year net loss widened to $342.8 million from $229.8 million. Full-year diluted loss per share was $1.82, compared with $2.21, so the per-share loss narrowed. Operating margin for the quarter was negative 94.8%, down from negative 45.9%. Full-year operating margin improved to negative 87.6% from negative 98.6%.
Cash generation remained negative. Net cash used in operating activities was $23.9 million in the fourth quarter, compared with $20.4 million a year earlier, and full-year net cash used in operating activities was $105.1 million, compared with $82.1 million. Capital expenditures rose to $1.4 million for the quarter from $0.35 million, and full-year capital expenditures were $3.6 million, up from $1.0 million. Deferred revenue ended the year at $246.5 million, up 54.8% from $159.2 million a year earlier. RPO was $500.6 million at December 31, 2021, and the company said RPO grew 91% year over year.
Management framed demand as strong. Confluent Cloud produced fourth-quarter revenue of $34 million, up 211% year over year, and full-year revenue of $94 million, up 200%. Confluent Cloud made up 27% of subscription revenue for the year, up from 15% in 2020. The company ended 2021 with 734 customers generating at least $100,000 in annual recurring revenue, up 43% year over year, and about 3,470 total customers, up from 2,100 at the end of 2020. Dollar-based net retention rate exceeded 130% for the third consecutive quarter. Revenue outside the United States was 36% of total revenue for the year, up from 34% in 2020.
Guidance points to continued growth but no near-term profitability. For the first quarter of 2022, Confluent expects a non-GAAP operating margin of about negative 50% and a non-GAAP net loss per share of $(0.23) to $(0.21). For the full fiscal year 2022, the company guides to a non-GAAP operating margin of negative 39% to negative 40% and a non-GAAP net loss per share of $(0.82) to $(0.74). Those targets are non-GAAP and exclude stock-based compensation and related items, and the company said a reconciliation to the closest GAAP measures is not available without unreasonable effort. The company also flagged risks including the COVID-19 pandemic, its limited operating history, competition from other vendors and open source alternatives, reliance on third-party cloud infrastructure, security breaches, and general market conditions. It said it expects expenses for travel, in-person events, real estate and facilities to increase in 2022. Purchase obligations were $471.3 million at year-end, with $71.0 million expected to be paid within 12 months, and in January 2022 it amended a third-party cloud infrastructure agreement with a non-cancelable commitment of $150.0 million over the next five years through January 2027. Confluent ended the year with $2,016.0 million in cash, cash equivalents, and marketable securities, and it issued $1.1 billion of 0% convertible senior notes due 2027 in December 2021.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $119.9M | $102.6M | +16.9% | — | — |
| Gross profit | $73.8M | $65.3M | +13.0% | — | — |
| Gross margin | 61.5% | 63.6% | -2.1 pp | — | — |
| Research & development | $56.7M | $47.7M | +18.8% | — | — |
| Sales & marketing | $100.6M | $87.0M | +15.7% | — | — |
| General & administrative | $30.2M | $25.3M | +19.0% | — | — |
| Total operating expenses | $187.5M | $160.0M | +17.1% | — | — |
| Operating income (loss) | -$113.7M | -$94.8M | -20.0% | — | — |
| Operating margin | -94.8% | -92.4% | -2.4 pp | — | — |
| Net income (loss) | -$114.4M | -$95.7M | -19.6% | — | — |
| Net margin | -95.4% | -93.3% | -2.2 pp | — | — |
| Customers | 734 | 3,020 | -75.7% | — | — |
| Net retention rate | 130.0% | 130.0% | ±0.0 pp | — | — |
Risks
Revenue grew 64% year over year to $387.9M for FY2021, but the company expects its revenue growth rate to decline in the future and cautions that prior growth is not indicative of future performance.
Net loss widened to $342.8M for FY2021 and accumulated deficit reached $748.9M as of December 31, 2021; the company expects to continue incurring operating losses and negative cash flows.
Confluent Cloud revenue grew 200% to $94.2M for FY2021, but the company has less experience marketing and pricing it, and lower average prices could cause near-term financial fluctuations.
Public cloud providers AWS, Azure, and GCP are both partners and competitors; they could embed innovations, bundle competing products, or provide unfavorable pricing to Confluent.
Apache Kafka is open source with few barriers to entry; customers may use free versions, develop in-house solutions, or choose open source alternatives, reducing demand for Confluent's offering.
Total gross margin decreased from 68.1% to 64.6% for FY2021 and Q4 gross margin fell to 61.5% from 70.3% a year earlier, due to higher cloud infrastructure costs and revenue mix.
The business depends on customer renewals and expansion; dollar-based net retention rate was over 130% as of December 31, 2021, but failure to retain or expand could harm results.
Risk factor states that proprietary data and source code 'could be, and has in the past been, exfiltrated' in a security breach, indicating a past incident and ongoing vulnerability.
The company issued $1.1B of 0% convertible senior notes due 2027 in December 2021 and may not have funds to settle conversions or repurchase notes upon a fundamental change.
Confluent Cloud relies on third-party cloud infrastructure (AWS, Azure, GCP) with purchase obligations of $471.3M as of December 31, 2021; disruptions or unfavorable terms could harm operations.
Sales and marketing expenses increased 92% to $319.3M for FY2021; the company must effectively expand its sales force and reduce ramp time to achieve growth.
The company typically sells a higher percentage of new and renewal subscriptions in Q4, causing seasonality in RPO and bookings that may become more pronounced.
COVID-19 pandemic has lengthened sales cycles and reduced travel; while digital transformation accelerated, future waves or variants could disrupt operations and customer spending.
Confluent Platform contributed 73% of subscription revenue for FY2021, down from 85% in FY2020; loss of market acceptance would harm business.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Total Customers
Confluent Cloud Revenue
Dollar-Based Net Retention Rate (NRR)
Free Cash Flow
Remaining Performance Obligations (RPO)
Summary, forecast, risks and KPIs are extracted from Confluent, Inc.'s SEC filings for Q4 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.