Confluent, Inc. (NASDAQ:CFLT) Q3 2022 Earnings Conference Call November 2, 2022 4:30 PM ET

Company Participants

Shane Xie - Investor Relations

Jay Kreps - Co-Founder & Chief Executive Officer

Steffan Tomlinson - Chief Financial Officer

Conference Call Participants

Phil Winslow - Credit Suisse

Jason Ader - William Blair

Sanjit Singh - Morgan Stanley

Rudy Kessinger - D.A. Davidson

Derrick Wood - Cowen

Michael Turrin - Wells Fargo

Nick Altmann - Scotiabank

Raimo Lenschow - Barclays

Patrick Walravens - JMP Securities

Shane Xie

Hi everyone. Welcome to the Confluent Q3 2022 Earnings Conference Call. I'm Shane Xie from Investor Relations and I'm joined by Jay Kreps, Co-Founder and CEO; and Steffan Tomlinson, CFO.

During today's call, management will make forward-looking statements regarding our business, operations, financial performance, and future prospects including statements regarding our financial outlook for the fiscal fourth quarter of 2022, fiscal year 2022, and fiscal year 2023.

These forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those anticipated by these statements. Further information on risk factors that could cause actual results to differ is included in the most recent Form 10-Q filed with the SEC. We assume no obligation to update these statements after today's call except as required by law.

As a reminder, certain financial measures used on today's call are expressed on a non-GAAP basis. We use these non-GAAP financial measures internally to facility analysis of our financial and business trends and for internal planning and forecasting purposes.

These non-GAAP financial measures have limitations and should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.

A reconciliation between these GAAP and non-GAAP financial measures is included in our earnings press release and supplemental financials, which can be found on our Investor Relations website at investors.confluent.io.

And with that I'll hand the call over to Jay.

Jay Kreps

Thanks Shane. Welcome everyone to our third quarter earnings call. I'm pleased to say that Confluent delivered another strong quarter with the results exceeding the high end of all our guided metrics.

Total revenue grew 48% year-over-year to $152 million. Confluent Cloud continued to be the fastest-growing area of our business with revenue up 112% year-over-year to $57 million. We are also continuing to increase our operating leverage with a 14-point year-over-year improvement in non-GAAP operating margins.

Despite the pressure from a more difficult macroeconomic backdrop, we think these strong and consistent results are a testament to our ability to drive durable and efficient growth.