Confluent Inc.‘s stock shot up more than 21% in extended trading after the big-data company reported strong fourth-quarter financial results that blew past Wall Street’s projections and followed up with a bullish forecast for the current quarter.

Officials also said they’re expecting the company to break even for the first time in the new fiscal year. The data streaming software company reported earnings before certain costs such as stock compensation of nine cents per share, ahead of the Street’s target of five cents per share. Revenue for the period jumped 26% from a year earlier to $213 million, higher than the $205.3 million forecast by analysts.

Confluent’s overall loss narrowed too, with the company reporting a net loss of $94 million for the quarter, down from a loss of $105.8 million one year earlier.

Confluent has emerged as a key player in the big-data software industry. It’s the primary developer of the Apache Kafka open-source platform that’s used by enterprises to track data points such as sales, trades, orders and customer feedback in real time. This data is delivered in real-time streams, and companies can use Confluent’s proprietary software to analyze it instantly. Apache Kafka is used by as much as 80% of the Fortune 500.

The rapid growth Confluent is seeing is primarily thanks to its Confluent Cloud platform, which is an enterprise-grade version of Apache Kafka that runs on Amazon Web Services, Google Cloud and Microsoft Azure. It offers the advantage of being much simpler to deploy and manage than the open-source Kafka software.

During the quarter, Confluent’s subscription revenue rose 31% from a year earlier to $203 million, while Confluent Cloud revenue gained 46% to squeeze past the $100 million quarterly revenue mark for the first time. The company said it ended the quarter with 1,129 customers that generate at least $100,000 in revenue per year.

Confluent co-founder and Chief Executive Jay Kreps (pictured) said the company closed fiscal 2023 on a high note. “Our momentum is driven by our leadership of the data streaming platform category, which has become a requirement to deliver business critical use cases like connected customer experiences, cloud migrations and now real time generative AI,” he said in a statement.

Analyst Holger Mueller of Constellation Research Inc. praised Confluent for its strong quarter and full-year, saying it grew fast due to the demands of AI workloads that are fueled by ever-growing amounts of big data. “Confluent’s revenue is now growing faster than its costs base,” Mueller pointed out. “One year earlier it was losing 77 cents for every dollar in revenue it made, but now this is down to just 57 cents. There’s still work to be done, but the company’s ability to reduce its operating expenses while maintaining its investments in R&D is exactly what investors want to see, and that’s reflected in today’s stock price movements.”

Looking to the new fiscal year, Confluent is projecting first quarter revenue of between $211 million and $212 million, ahead of the Street’s forecast of $210.6 million. For fiscal 2024, the company says its revenue will grow by about 22% to around $950 million, better than the estimated $936.1 million.

Confluent Chief Financial Officer Rohan Sivaram told analysts on a conference call that the company is extremely confident that it will reach its fiscal 2024 revenue guidance, and added that the company expects to break even in terms of its adjusted operating margin and free cash flow margin.

Confluent’s stock had risen just 4% in the year to date, prior to today’s huge gains.

Photo: Confluent