Shares in Confluent Inc. plunged more than 26% in late trading today after the data streaming software provider reported earnings and revenue beats in its fiscal second quarter but fell short with its outlook for the third quarter and full year.

For the quarter that ended on June 30, Confluent reported adjusted earnings per share of nine cents, up from six cents in the same quarter of 2024, on revenue of $282.3 million, up 20% year-over-year. Both figures came in ahead of the eight cents per share and revenue of $278.92 million expected by analysts.

Confluent’s strong revenue figure was driven by customer growth, with the company now having 2,497 customers with annual recurring revenue of $20,000 or more, up 8% year-over-year; 1,439 customers spending $100,000 or more, up 10% year-over-year; and 219 customers with annual recurring revenue of $1 million or more, up an impressive 24% year-over-year.

Subscription revenue in the quarter came in at $271 million, and Confluent Cloud revenue rose 28% year-over-year, to $151 million.

Business highlights in the quarter included the Confluent’s late April release of a Statement Advisor feature for Confluent Cloud for Apache Flink. The feature provides real‑time warnings when submitted Flink SQL queries may trigger operational issues, cost overruns or inefficiencies, such as mismatched keys or improper window aggregations. The same month, the company also introduced support for the new Consumer Rebalance Protocol for Kafka consumers running on Confluent Cloud.

In May, Confluent unveiled a feature called Snapshot Queries in Confluent Cloud for Apache Flink that assists with unified batch‑and‑stream processing by allowing users to interactively query both Kafka topics and Tableflow‑managed Iceberg or Delta Lake data using Flink SQL.

June saw Confluent introducing new tools to improve developer experience and system visibility, including launching a redesigned logging interface for Confluent Cloud connectors, making it easier to troubleshoot issues during data integration.

“Confluent delivered a solid quarter, led by 28% year-over-year growth in Confluent Cloud revenue,” co-founder and Chief Executive Jay Kreps said in the company’s earnings release. “Our DSP monetization continues to gain traction, with Flink ARR growing approximately 3x over the past two quarters. This reinforces our complete data streaming platform strategy and our strong positioning for a future shaped by agentic, real-time AI.”

For its fiscal third quarter, Confluence expects adjusted earnings per share of nine cents to 10 cents on revenue of $281 million to $282 million. Analysts were expecting nine cents per share but notably, also $292.5 million in revenue.

For the full year, the company expects adjusted earnings of about 35 cents per share on revenue of $1.105 billion to $1.11 billion. The revenue outlook fell short of an expected $1.15 billion.

The two revenue outlook misses were enough to raise concerns among investors that Confluent’s growth is slowing, despite otherwise solid quarterly results.

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