Confluent Announces Fourth Quarter and Fiscal Year 2025 Financial Results

MOUNTAIN VIEW, Calif.--( BUSINESS WIRE)--Confluent, Inc. (NASDAQ: CFLT), the data streaming pioneer, today announced financial results for its fourth quarter and fiscal year 2025, ended December 31, 2025.

“Confluent delivered a strong fourth quarter to close the year, including 23% year over year growth in Confluent Cloud,” said Jay Kreps, co-founder and CEO, Confluent. “Our AI product advancements and continued innovation across our core offerings further strengthened our category leadership this quarter. We remain focused on delivering a complete data streaming platform to support our customers’ most mission-critical workloads, including emerging agentic AI applications.”

“We are pleased to finish the year strong, highlighted by solid top-line growth and continued margin expansion at scale,” said Rohan Sivaram, CFO, Confluent. “Our results reinforce the strategic value of our complete data streaming platform, and we remain focused on executing our diversified growth strategy across core streaming, DSP, AI, and the partner ecosystem.”

Fourth Quarter 2025 Financial Highlights

(In millions, except per share data and percentages)

Q4 2025

Q4 2024

Y/Y Change

Subscription Revenue

$301.6

$250.6

20%

Total Revenue

$314.8

$261.2

21%

GAAP Operating Loss

$(99.2)

$(105.8)

$6.6

Non-GAAP Operating Income

$27.6

$13.6

$14.0

GAAP Operating Margin

(31.5%)

(40.5%)

9.0 pts

Non-GAAP Operating Margin

8.8%

5.2%

3.6 pts

GAAP Net Loss Per Share

$(0.23)

$(0.27)

$0.04

Non-GAAP Net Income Per Diluted Share

$0.12

$0.09

$0.03

Net Cash Provided by Operating Activities

$42.1

$35.2

$6.9

Adjusted Free Cash Flow

$35.5

$29.1

$6.4

Fiscal Year 2025 Financial Highlights

(In millions, except per share data and percentages)

FY 2025

FY 2024

Y/Y Change

Subscription Revenue

$1,119.7

$922.1

21%

Total Revenue

$1,166.7

$963.6

21%

GAAP Operating Loss

$(380.1)

$(419.1)

$39.0

Non-GAAP Operating Income

$86.1

$27.5

$58.6

GAAP Operating Margin

(32.6%)

(43.5%)

10.9 pts

Non-GAAP Operating Margin

7.4%

2.9%

4.5 pts

GAAP Net Loss Per Share

$(0.86)

$(1.07)

$0.21

Non-GAAP Net Income Per Diluted Share

$0.42

$0.29

$0.13

Net Cash Provided by Operating Activities

$64.3

$33.5

$30.8

Adjusted Free Cash Flow

$76.0

$9.5

$66.5

Proposed Merger with International Business Machines

As announced on December 8, 2025, Confluent and International Business Machines Corporation (“IBM”) (NYSE: IBM) have entered into a definitive agreement under which IBM will acquire Confluent for $31.00 per share in cash, representing an enterprise value of $11 billion. The transaction is expected to close by the middle of 2026, subject to approval by Confluent shareholders, regulatory approvals, and other customary closing conditions.

In light of the pending transaction with IBM, Confluent will not be holding a conference call to discuss fourth quarter 2025 financial results or providing financial guidance.

Confluent uses its investor relations website and may use its X (Twitter), LinkedIn, and Facebook accounts as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Forward-Looking Statements

This press release contains forward-looking statements including, among other things, statements regarding (i) our focus on delivering a complete data streaming platform, (ii) our market and category leadership position, (iii) execution of our growth strategy, (iv) our overall future prospects, and (v) the proposed merger with IBM, including the expected timing of the closing. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “seek,” “plan,” “project,” “target,” “looking ahead,” “look to,” “move into,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements represent our current beliefs, estimates and assumptions only as of the date of this press release and information contained in this press release should not be relied upon as representing our estimates as of any subsequent date. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) our limited operating history, including in uncertain macroeconomic environments, (ii) our ability to sustain and manage our recent growth, (iii) our ability to increase consumption of our offerings, (iv) our ability to successfully execute our go-to-market strategy and initiatives, (v) our ability to attract new customers and successfully ramp their consumption of our offerings, as well as retain and sell additional features and services to our existing customers, (vi) uncertain macroeconomic conditions, (vii) the estimated addressable market opportunity for our Data Streaming Platform, and our ability to capture our share of that market opportunity, (viii) our ability to compete effectively in an increasingly competitive market, (ix) our ability to attract, ramp, and retain highly qualified personnel, and the impacts of attrition and related challenges, (x) breaches in our security measures, intentional or accidental cybersecurity incidents or unauthorized access to our platform, our data, or our customers’ or other users’ personal data, (xi) our reliance on third-party cloud-based infrastructure to host Confluent Cloud and our other cloud-based offerings, (xii) our ability to accurately forecast our future performance, business and growth, (xiii) the possibility that the conditions to the closing of the proposed merger with IBM are not satisfied, including the risk that required approvals from Confluent’s stockholders or required regulatory approvals are not obtained, on a timely basis or at all, (xiv) the occurrence of any event, change or other circumstance that could give rise to a right to terminate the proposed merger with IBM, including circumstances requiring Confluent to pay a termination fee, and (xv) uncertainty as to timing of completion of the proposed merger and the ability of each party to complete the proposed merger. These risks are not exhaustive. Further information on these and other risks that could affect Confluent’s results is included in our filings with the Securities and Exchange Commission (“SEC”), including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, and our future reports that we may file from time to time with the SEC. Additional information will be made available in our Annual Report on Form 10-K for the year ended December 31, 2025 that will be filed with the SEC, which should be read in conjunction with this press release and the financial results included herein. Confluent assumes no obligation to, and does not currently intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing, and general and administrative), non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share, free cash flow, free cash flow margin, adjusted free cash flow, and adjusted free cash flow margin. We use these non-GAAP financial measures and other key metrics internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. We believe these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance by excluding certain items that may not be indicative of our business or results of operations. However, non-GAAP financial measures have limitations as an analytical tool and are presented for supplemental informational purposes only. They should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In particular, other companies, including companies in our industry, may report non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing, general and administrative), non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share, free cash flow, free cash flow margin, adjusted free cash flow, adjusted free cash flow margin, or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Further, free cash flow and adjusted free cash flow are not substitutes for cash used in operating activities. The utility of free cash flow and adjusted free cash flow are limited as such measures do not reflect our future contractual commitments and do not represent the total increase or decrease in our cash balance for any given period. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, as presented below.

We define non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (research and development, sales and marketing, and general and administrative), non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP net income per share as the respective GAAP measures, adjusted for, as applicable, stock-based compensation-related charges which include stock-based compensation expense, employer taxes on employee stock transactions and amortization of stock-based compensation capitalized in internal-use software; amortization of acquired intangibles; acquisition-related expenses; amortization of debt issuance costs; and income tax effects associated with these adjustments as well as the non-recurring income tax expense or benefit associated with acquisitions and income tax benefit from the release of a valuation allowance on certain deferred tax assets. Non-GAAP gross margin and non-GAAP operating margin are defined as non-GAAP gross profit and non-GAAP operating income as a percentage of revenue, respectively.

We define free cash flow as net cash provided by (used in) operating activities less capitalized internal-use software costs and capital expenditures and free cash flow margin as free cash flow as a percentage of revenue. We define adjusted free cash flow as free cash flow excluding the non-recurring impact from a change to timing of certain cash compensation payments and adjusted free cash flow margin as adjusted free cash flow as a percentage of revenue. We believe that free cash flow, free cash flow margin, adjusted free cash flow, and adjusted free cash flow margin are useful indicators of liquidity that provide information to management and investors about the performance of core operations and future ability to generate cash that can be used for strategic opportunities or investing in our business.

Definition

Customers with $100,000 or greater in annual recurring revenue (“ARR”) represent the number of customers that contributed $100,000 or more in ARR as of period end. We define ARR as (1) with respect to Confluent Platform and Confluent Private Cloud customers, the amount of revenue to which our customers are contractually committed over the following 12 months assuming no increases or reductions in their subscriptions, and (2) with respect to Confluent Cloud and Confluent WarpStream customers, the amount of revenue that we expect to recognize from such customers over the following 12 months, calculated by annualizing actual consumption of Confluent Cloud and Confluent WarpStream in the last three months of the applicable period, assuming no increases or reductions in usage rate. Services arrangements are excluded from the calculation of ARR. For purposes of determining our customer count, we treat all affiliated entities with the same parent organization as a single customer and include pay-as-you-go customers. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity.

About Confluent

Confluent is the data streaming platform that is pioneering a fundamentally new category of data infrastructure that sets data in motion. Confluent’s cloud-native offering is the foundational platform for data in motion – designed to be the intelligent connective tissue enabling real-time data, from multiple sources, to constantly stream across the organization. With Confluent, organizations can meet the new business imperative of delivering rich, digital front-end customer experiences and transitioning to sophisticated, real-time, software-driven backend operations.

Confluent, Inc.

Consolidated Balance Sheets

(in thousands)

December 31, 2025

December 31, 2024

347,210

385,980

1,706,762

1,524,583

390,752

314,306

54,545

47,271

107,744

79,179

2,607,013

2,351,319

93,179

78,680

4,936

8,818

164,406

6,054

7,924

77,737

71,468

31,945

12,296

2,985,270

2,694,911

20,708

7,531

182,735

194,250

8,178

8,694

468,984

378,771

680,605

589,246

1,205

9,138

29,655

30,430

1,095,988

1,092,149

8,678

12,722

1,816,131

1,733,685

—

3,447,970

2,953,080

5,656

(2,641

)

(2,284,491

)

(1,989,216

)

1,169,139

961,226

2,985,270

2,694,911

Confluent, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

2025

2024

2025

2024

301,645

250,636

1,119,724

922,091

13,174

10,584

47,024

41,551

314,819

261,220

1,166,748

963,642

65,423

55,220

245,355

208,600

14,239

12,345

54,554

48,870

79,662

67,565

299,909

257,470

235,157

193,655

866,839

706,172

121,926

114,886

481,706

421,237

159,807

145,194

592,519

547,379

52,598

39,359

172,716

156,703

334,331

299,439

1,246,941

1,125,319

(99,174

)

(105,784

)

(380,102

)

(419,147

)

19,534

19,288

79,414

84,486

(79,640

)

(86,496

)

(300,688

)

(334,661

)

(393

)

1,558

(5,413

)

10,404

(79,247

)

(88,054

)

(295,275

)

(345,065

)

(0.23

)

(0.27

)

(0.86

)

(1.07

)

351,880

329,407

343,800

321,863

(1)

Includes stock-based compensation-related charges as follows:

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

10,443

9,242

39,085

35,438

1,318

2,384

6,965

9,781

50,692

45,938

193,345

171,487

30,476

35,178

127,654

139,929

13,749

14,837

54,959

60,466

106,678

107,579

422,008

417,101

Confluent, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

(79,247

)

(88,054

)

(295,275

)

(345,065

)

7,786

6,234

29,556

22,089

(4,441

)

(8,205

)

(22,300

)

(37,766

)

969

966

3,839

3,836

14,848

14,213

58,310

54,258

1,090

1,172

4,300

3,966

101,625

102,924

397,325

395,660

(1,848

)

(18,699

)

277

1,100

1,675

5,686

3,370

(35,102

)

(36,327

)

(79,718

)

(86,562

)

(26,768

)

(15,974

)

(71,853

)

(53,246

)

4,292

1,205

(25,394

)

844

8,893

(8,159

)

13,466

127

27,861

32,861

(15,512

)

25,639

(2,321

)

(4,191

)

(8,894

)

(10,140

)

23,375

34,825

89,437

56,173

42,112

35,211

64,274

33,460

(6,152

)

(5,420

)

(22,558

)

(21,404

)

(352,708

)

(367,357

)

(1,638,898

)

(1,539,716

)

—

2,567

6,144

15,311

341,540

381,127

1,474,654

1,591,164

—

(750

)

(2,250

)

(442

)

(669

)

(3,597

)

(2,567

)

—

(115,516

)

(17,762

)

10,248

(185,005

)

(74,978

)

24,551

19,504

57,260

55,836

—

23,926

23,970

24,551

19,504

81,186

79,806

(228

)

(1,589

)

775

(2,069

)

48,673

63,374

(38,770

)

36,219

298,537

322,606

385,980

349,761

347,210

385,980

347,210

385,980

Confluent, Inc.

Reconciliation of GAAP Measures to Non-GAAP Measures

(in thousands, except percentages and per share data)

(unaudited)

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

235,157

193,655

866,839

706,172

74.7

74.1

74.3

73.3

11,761

11,626

46,050

45,219

471

780

1,870

2,368

247,389

206,061

914,759

753,759

78.6

78.9

78.4

78.2

121,926

114,886

481,706

421,237

38.7

44.0

41.3

43.7

50,692

45,938

193,345

171,487

7,115

10,046

29,797

24,750

64,119

58,902

258,564

225,000

20.4

22.5

22.2

23.3

159,807

145,194

592,519

547,379

50.8

55.6

50.8

56.8

30,476

35,178

127,654

139,929

—

717

—

717

129,331

109,299

464,865

406,733

41.1

41.8

39.8

42.2

52,598

39,359

172,716

156,703

16.7

15.1

14.8

16.3

13,749

14,837

54,959

60,466

12,514

302

12,528

1,702

26,335

24,220

105,229

94,535

8.4

9.3

9.0

9.8

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

(99,174

)

(105,784

)

(380,102

)

(419,147

)

(31.5

(40.5

(32.6

(43.5

106,678

107,579

422,008

417,101

471

780

1,870

2,368

19,629

11,065

42,325

27,169

27,604

13,640

86,101

27,491

8.8

5.2

7.4

2.9

(79,247

)

(88,054

)

(295,275

)

(345,065

)

106,678

107,579

422,008

417,101

471

780

1,870

2,368

19,629

11,065

42,325

27,169

969

966

3,839

3,836

(2,720

)

(1,272

)

(18,291

)

(3,236

)

45,780

31,064

156,476

102,173

0.13

0.09

0.46

0.32

0.12

0.09

0.42

0.29

351,880

329,407

343,800

321,863

378,754

362,150

371,160

355,067

(1)

Income tax effects and adjustments for the year ended December 31, 2025 includes an adjustment for the income tax benefit from the release of a valuation allowance on certain deferred tax assets.

The following table presents a reconciliation of free cash flow and adjusted free cash flow to net cash provided by operating activities, the most directly comparable GAAP measure, as well as free cash flow margin and adjusted free cash flow margin to net cash provided by operating activities as a percentage of total revenue, the most directly comparable GAAP measure, for each of the periods indicated (unaudited, in thousands, except percentages):

Three Months Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

42,112

35,211

64,274

33,460

(6,152

)

(5,420

)

(22,558

)

(21,404

)

(442

)

(669

)

(3,597

)

(2,567

)

35,518

29,122

38,119

9,489

—

37,930

—

35,518

29,122

76,049

9,489

13.4

13.5

5.5

3.5

11.3

11.1

3.3

1.0

11.3

11.1

6.5

1.0

(17,762

)

10,248

(185,005

)

(74,978

)

24,551

19,504

81,186

79,806

(1)

Represents an adjustment to reflect the non-recurring impact in the first quarter of 2025 from the change to timing of cash compensation payments for most of our non go-to-market employees implemented at the start of 2025.