Summary
Confluent closed fiscal 2024 with fourth quarter total revenue of $261.22 million, up 22.5% from the prior-year quarter. Fiscal year revenue reached $963.64 million, up 24.0%. Gross profit for the quarter was $193.66 million, up 24.0%, and gross margin was 74.1%, up 0.9 percentage points from 73.2%. Full-year gross profit was $706.17 million, up 29.0%, and full-year gross margin was 73.3%, up 2.8 percentage points from 70.4%. The top line kept growing at a mid-twenties pace, but GAAP profitability remained under pressure.
The company still lost money on a GAAP basis. Fourth quarter operating loss was $105.78 million, and the loss widened from $84.68 million in the prior-year quarter. Full-year operating loss was $419.15 million, which narrowed from $478.77 million. GAAP operating margin was -40.5% for the quarter, down 0.8 percentage points from -39.7%. Full-year GAAP operating margin was -43.5%, up 18.1 percentage points from -61.6%. GAAP net loss for the quarter was $88.05 million, narrowed from $94.10 million. Full-year GAAP net loss was $345.06 million, narrowed from $442.75 million. GAAP diluted loss per share for fiscal 2024 was $1.07, narrowed from $1.47 in fiscal 2023. Non-GAAP operating income was $13.6 million in the fourth quarter and $27.5 million for the full year. Non-GAAP operating margin was 5.2% for the quarter and 2.9% for the year. The gap between GAAP and non-GAAP results remains large, mostly due to stock-based compensation-related charges.
Fourth quarter operating cash flow was $35.21 million, up from $12.24 million in the prior-year quarter. Full-year operating cash flow was $33.46 million, compared with cash used in operating activities of $103.66 million in fiscal 2023. Free cash flow was $29.1 million in the quarter and $9.5 million for the year. Operating cash flow and free cash flow are different measures, and the press release reports both. Capital expenditures were $0.67 million in the quarter and $2.57 million for the year. Deferred revenue at year-end was $409.20 million, up 15.9% from $353.00 million a year earlier. Remaining performance obligations were $1.01 billion, up 9.6% from $919.90 million. These metrics suggest the company is converting more of its growth into cash, but the balance sheet still carries heavy obligations.
The company ended 2024 with 1,381 customers with $100,000 or greater in annual recurring revenue, up 12% year over year. Total customers were approximately 5,800, up 17%. Dollar-based net retention rate was 117% as of December 31, 2024. Confluent Cloud represented 51% of total revenue for fiscal 2024, up from 45% in fiscal 2023. Subscription revenue grew 24% in the fourth quarter and 26% for the full year. Confluent Cloud revenue grew 38% in the fourth quarter and 41% for the full year. The mix shift toward cloud is a key part of the story, though the company notes that Confluent Cloud carries a lower gross margin than Confluent Platform. The MD&A also points to consumption volatility from larger enterprise customers and customer focus on cloud cost controls.
For the first quarter of 2025, Confluent expects subscription revenue of $253 million to $254 million, non-GAAP operating margin of about 3%, and non-GAAP net income per diluted share of $0.06 to $0.07. For full-year 2025, the company guides to subscription revenue of $1.117 billion to $1.121 billion, non-GAAP operating margin of about 6%, and non-GAAP net income per diluted share of about $0.35. The guidance implies continued growth and margin expansion, but it is for subscription revenue and non-GAAP profitability, not GAAP profitability. Management lists several risks, including macroeconomic uncertainty, high inflation, high interest rates, geopolitical conflicts in Ukraine and the Middle East, longer sales cycles, reduced IT budgets, and increased customer scrutiny on IT spending. Consumption volatility from larger enterprise customers is a recurring theme. The company also cites competition, reliance on third-party cloud infrastructure, cybersecurity incidents, and the need to attract and retain personnel. The 10-K flags liquidity considerations, including purchase obligations and an accumulated deficit, though management believes existing resources are sufficient for near-term needs.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $261.2M | $250.2M | +4.4% | $213.2M | +22.5% |
| Gross profit | $193.7M | $186.5M | +3.8% | $156.1M | +24.0% |
| Gross margin | 74.1% | 74.5% | -0.4 pp | 73.2% | +0.9 pp |
| Research & development | $114.9M | $102.7M | +11.8% | $86.9M | +32.1% |
| Sales & marketing | $145.2M | $138.0M | +5.2% | $119.9M | +21.1% |
| General & administrative | $39.4M | $39.5M | -0.3% | $33.9M | +15.9% |
| Total operating expenses | $299.4M | $280.2M | +6.9% | $240.8M | +24.3% |
| Operating income (loss) | -$105.8M | -$93.7M | -12.9% | -$84.7M | -24.9% |
| Operating margin | -40.5% | -37.4% | -3.1 pp | -39.7% | -0.8 pp |
| Net income (loss) | -$88.1M | -$74.1M | -18.8% | -$94.1M | +6.4% |
| Net margin | -33.7% | -29.6% | -4.1 pp | -44.1% | +10.4 pp |
| Diluted EPS | -$0.27 | -$0.23 | -$0.04 | -$0.31 | +$0.04 |
| Net retention rate | 117.0% | 117.0% | ±0.0 pp | 125.0% | -8.0 pp |
Risks
Macroeconomic uncertainty and geopolitical conflicts have caused longer sales cycles, reduced IT budgets, and slowdowns in customer consumption expansion, including lower consumption from larger enterprise customers. MD&A states these dynamics may persist and negatively impact revenue and results.
The shift to a consumption-oriented sales model for Confluent Cloud has led to new customers acquired in 2024 having lower initial consumption, negatively impacting revenue, growth rates, and consumption forecasts. Dollar-based NRR was 117% as of December 31, 2024 and is expected to be tempered by consumption volatility.
Public cloud providers AWS, Azure, and GCP are both partners and primary competitors; they could embed competing capabilities, bundle products, or provide unfavorable pricing. Open source alternatives like Apache Kafka also reduce differentiation.
Attrition in the sales organization has adversely impacted and may continue to adversely impact the ability to meet sales, consumption, and revenue forecasts, cause delays in the sales cycle, and increase costs. MD&A notes sales and marketing expenses increased 8% in FY2024 and the shift to consumption-oriented commissions raises upfront expense recognition.
Reduced consumption by, or the loss or expected loss of, certain larger enterprise customers has negatively impacted and may continue to negatively impact growth and forecasts, due to IT spending scrutiny, reorganizations, or strategic reprioritizations.
Historical rapid growth may not be indicative of future growth; the revenue growth rate has declined and may continue to decline due to focus on operating efficiency, macroeconomic challenges, competition, and changes to technology. FY2024 revenue grew 24% year over year, but the company expects its revenue growth rate to decline in future periods.
Confluent Cloud operates on third-party public cloud infrastructure, and costs and gross margins are significantly influenced by prices negotiated with public cloud providers, which are also competitors. As Confluent Cloud revenue mix increased to 51% of total revenue in FY2024 from 45% in FY2023, increased cloud costs negatively impact gross margins.
The acquisition of WarpStream in September 2024 and its BYOC offering pose integration challenges, may divert management attention, and may not achieve expected synergies or market adoption.
Failure to obtain FedRAMP authorization for Confluent Cloud could prevent sales to certain federal and public sector customers and harm the competitive position against larger enterprises whose offerings are FedRAMP authorized.
Confluent has operations and customers in Israel, and the Middle East conflict has negatively impacted certain customers and their consumption of offerings. Further escalation could harm growth and results.
The increasing prominence of AI and GenAI may require significant resources to develop new products and features, and customer adoption may lag investments as customers scrutinize spend. Markets for generative AI applications may not develop as anticipated.
Competitors, many larger with greater financial resources, may lower prices to attract customers, requiring Confluent to respond in kind and negatively impacting existing customer relationships and new customer acquisition.
ARR methodology annualizes the last three months of Confluent Cloud consumption, which may not reflect future fluctuations. NRR volatility is expected as Confluent Cloud mix increases and customers focus on IT spend and usage efficiencies.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Total Customers
Customers with $100,000 or Greater in ARR
Confluent Cloud Revenue
Dollar-Based Net Retention Rate (NRR)
Summary, forecast, risks and KPIs are extracted from Confluent, Inc.'s SEC filings for Q4 FY2024 (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.