Big-data company Confluent Inc. posted fiscal first-quarter earnings and revenue today that topped expectations and offered strong guidance, but even that wasn’t enough to prevent its stock crashing on what was an awful day for the market all round.

The company reported a loss before certain costs such as stock compensation of 19 cents per share on revenue of $126.1 million, up 64% from a year ago. Confluent’s net loss for the period came to $112.9 million.

It was a better-than-expected performance, with analysts modeling a wider loss of 21 cents per share on revenue of just $118.5 million. But on what was the worst day for technology stocks in more than two years, not even that could prevent Confluent from crashing. The stock lost more than 8% of its value in after-hours trading, after sliding 15% earlier in the day.

Earlier, U.S. financial markets suffered their biggest meltdown since 2020, with tech companies taking a harder hit than most. While the Dow Jones Industrial Average fell 3.1%, its biggest drop since October, the tech-heavy Nasdaq Composite index lost 5%, hitting its lowest point since November 2020 in what was one of the biggest single-day declines seen since the outset of the COVID-19 pandemic.

Given that Confluent really couldn’t have done anything about the wider market forces, its co-founder and Chief Executive Jay Kreps (pictured) chose to focus on the company’s future prospects.

“Data streaming is gaining momentum and adoption as a foundational component to delivering real-time customer experiences and optimized operations,” he said. “With a best-in-class product and differentiated customer go-to-market model, Confluent continues to become the de facto way organizations start and scale their data-in-motion journey.”

Confluent is an emerging player in the future of the big-data business. It’s the primary developer of the popular 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 many as 80% of Fortune 500 firms have the software deployed in some capacity.

Although 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 the benefits with fewer management hassles. Confluent Platform, meanwhile, is a fully managed on-premises version of the software.

Although Confluent Platform drives the bulk of the company’s revenue, the company has high hopes for the fast-growing Confluent Cloud in future. It drove sales of $39 million in the quarter, up 180% from the same quarter one year ago.

Confluent’s other metrics look healthy too, with remaining performance obligations nearly doubling over a year ago, to $511 million. In addition, the company reported it ended the period with 791 customers that generate annual recurring revenue of $100,000 or more, up 41% from a year earlier.

Analyst Holger Mueller of Constellation Research Inc. said Confluent was the victim of incredibly bad timing, delivering over 60% revenue growth only to see its stock crash, when on a normal day that would have certainly given it a boost. That said, Mueller pointed out investors do have reason to be concerned about Confluent’s gross margin, which declined during the quarter.

“For the coming quarter and full year all eyes will be on if Confluent can improve its margin, which needs to be done,” Mueller said. “A -38% gross margin could give a lot of investors cold feet if it’s not improved.”

For the current quarter, Confluent offered a fairly upbeat forecast, saying it expects a loss ranging from 19 to 21 cents per share on revenue in a narrow range from $130 million to $132 million. Wall Street is looking for a 20-cent loss on slightly lower sales of $127.6 million.

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