Confluent (CFLT) Q2 Earnings Report Preview: What To Look For

Radek Strnad /
2022/08/02 4:19 am EDT

Data infrastructure software company, Confluent (NASDAQ:CFLT) will be announcing earnings results tomorrow afternoon. Here's what you need to know.

Last quarter Confluent reported revenues of $126.1 million, up 63.7% year on year, beating analyst revenue expectations by 6.45%. Despite the stock dropping on the results, it was a very strong quarter for the company, with an exceptional revenue growth and a solid beat of analyst estimates.

Is Confluent buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Confluent's revenue to grow 49.2% year on year to $131.8 million, slowing down from the 64% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.19 per share.

Confluent Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time since going public on average by 10.9%.

Looking at Confluent's peers in the data and analytics software segment, only Commvault Systems has so far reported results, delivering top-line growth of 7.93% year on year, and beating analyst estimates by 1.41%. The stock traded flat on the results. Read our full analysis of Commvault Systems's earnings results here.

Tech stocks have been under pressure since the end of last year and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 3.08% over the last month. Confluent is down 6.6% during the same time, and is heading into the earnings with analyst price target of $43.3, compared to share price of $25.45.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.