Big-data company Confluent Inc. is on a roll, posting strong financial results today, beating Wall Street’s expectations in its second earnings report since going public earlier this year.

The company reported a third-quarter loss before certain costs such as stock compensation of 17 cents per share on revenue of $102.6 million, up a stunning 66% year-over-year.

Such strong growth ensured Confluent easily beat expectations, surpassing Wall Street’s forecast of a 23-cent loss on revenue of just $90.7 million.

Investors cheered in the hours after the report, sending Confluent’s stock up more than 16% in extended trading. That means Confluent’s stock is now worth about 80% more than what it was when it burst onto the public markets in June.

Confluent co-founder and Chief Executive Jay Kreps (pictured) said the company’s growth was thanks to the realization of its customers that harnessing data-in-motion is key to success in the modern area. “This imperative, combined with massive cross-industry migration to the public cloud, has driven acceleration to 245% year-over-year growth for Confluent Cloud,” he said.

Confluent is the company behind the open-source event streaming software Apache Kafka, which is used by enterprises to track data points such as sales, trades, orders and customer responses in real time. The data is made accessible via real-time streams, and it’s believed that as much as 80% of Fortune 500 firms have the software deployed in some capacity.

While Apache Kafka is open-source and free to use, Confluent sells a commercial version called Confluent Cloud that’s available on public cloud platforms such as Amazon Web Services, Microsoft Azure and Google Cloud, providing all of the benefits with none of the management hassles. Confluent Platform, meanwhile, is a fully managed on-premises version of the software.

Confluent has been successful in persuading more companies to get their wallets out and pay for the value-added service it provides. At the end of the quarter, it had 664 customers that generated $100,000 or more in annual recurring revenue, up 48% from one year ago. ARR is a key metric for software-as-a-service businesses because it shows how much recurring revenue the company can expect to receive based on its customers’ yearly subscriptions.

Confluent also reported a strong dollar-based net retention rate of 130%. NRR represents how much revenue growth or churn a company had over time from its existing pool of customers, giving investors clues as to the overall health and growth potential of the business.

“Our strong dollar-based net retention rate is a testament to the power of our data-in-motion platform and the strength of our go-to-market model,” Confluent Chief Financial Officer Steffan Tomlinson said.

Holger Mueller of Constellation Research Inc. told SiliconANGLE Confluence is riding high on its data-in-motion value proposition, as its event streaming capabilities help facilitate enterprises’ move to the cloud.

“Growth of 60%-plus is rare even for a booming offering like Confluent Cloud, and the team also deserves congratulations for passing the $100 million quarterly revenue mark for the first time, as that’s always a big milestone,” he said.

One of the main concerns investors may have about Confluent is that the company is still unprofitable. Making money is a tough ask for any open-source software company, with the likes of MongoDB Inc. and Elastic N.V notably still bleeding cash several years after making their public debuts. Still, Confluent is showing some signs that it might be able to stem its losses sooner.

“Confluent has done some cost control, and deserves applause for keeping its general and administrative expenses in check,” Mueller said. “The almost zero growth on the research and development side helps the balance sheet but may hurt the company going forward. Sales and marketing expenses increased faster than revenue growth, however. Looking ahead, the question now is: When can Confluence break the $500 million revenue mark on a running quarter basis?”

During the quarter, Confluent announced a new cloud-based toolkit called Stream Governance that’s designed to help enterprises analyze real-time data from their systems and ensure it complies with data regulations and internal policies.

Perhaps the best news for investors is that Confluent’s rapid growth shows no signs of abating in the near-term. For the fourth quarter, the company provided a confident forecast of revenue of between $108 million and $110 million, some way ahead of Wall Street’s estimate of $95 million.

Photo: Confluent