UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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The (Nasdaq Global Select Market) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of July 29, 2021, there were
TABLE OF CONTENTS
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial condition, business strategy and plans, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” “would,” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Other sections of this Quarterly Report on Form 10-Q may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in, or implied by, any forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report or to conform these statements to actual results or to changes in our expectations. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this report with the understanding that our actual future results, levels of activity, performance, and achievements may be
1
materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Where You Can Find More Information
Investors and others should note that we may announce material business and financial information to our investors using our Investor Relations website (investors.confluent.io), our filings with the Securities and Exchange Commission (“SEC”), webcasts, press releases, public conference calls, and blogs published on our website. We use these mediums, including our website, to communicate with investors and the general public about our company, our products, and other issues. It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website.
We also use our Twitter and LinkedIn accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts, in addition to following our SEC filings, webcasts, press releases, public conference calls, and blogs published on our website. This list may be updated from time to time. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. These channels may be updated from time to time on our investor relations website.
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Confluent, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
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June 30, 2021 |
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December 31, 2020 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ |
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Marketable securities |
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Accounts receivable, net of allowance |
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Deferred contract acquisition costs |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Deferred contract acquisition costs, non-current |
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Other assets, non-current |
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Total assets |
$ |
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$ |
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LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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Current liabilities: |
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Accounts payable |
$ |
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$ |
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Accrued expenses and other liabilities |
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Operating lease liabilities |
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Deferred revenue |
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Liability for early exercise of unvested stock options |
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Total current liabilities |
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Operating lease liabilities, non-current |
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Deferred revenue, non-current |
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Other liabilities, non-current |
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Total liabilities |
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Commitments and contingencies (Note 6) |
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Redeemable convertible preferred stock, par value $ |
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3
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June 30, 2021 |
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December 31, 2020 |
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Stockholders’ equity (deficit): |
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Preferred stock, par value of $ |
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Common stock, par value of $ |
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Convertible founder stock, par value of $ |
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Class A common stock, par value of $ |
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Class B common stock, par value of $ |
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Additional paid-in capital |
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Accumulated other comprehensive (loss) income |
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Accumulated deficit |
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( |
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Total stockholders’ equity (deficit) |
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( |
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Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) |
$ |
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$ |
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See accompanying notes to the condensed consolidated financial statements.
4
Confluent, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Revenue: |
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Subscription |
$ |
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$ |
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$ |
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$ |
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Services |
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Total revenue |
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Cost of revenue: |
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Subscription |
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Services |
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Total cost of revenue |
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Gross profit |
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Operating expenses: |
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Research and development |
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Sales and marketing |
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General and administrative |
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Total operating expenses |
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Operating loss |
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( |
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( |
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Interest income |
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Other expense, net |
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( |
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( |
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( |
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( |
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Loss before income taxes |
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( |
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( |
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( |
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( |
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Provision for (benefit from) income taxes |
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( |
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Net loss |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss per share attributable to common stockholders, basic and diluted |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted |
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See accompanying notes to the condensed consolidated financial statements.
5
Confluent, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Net loss |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Other comprehensive income, net of tax: |
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Unrealized (loss) gain on marketable securities |
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( |
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( |
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Other comprehensive (loss) income |
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( |
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( |
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Total comprehensive loss |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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See accompanying notes to the condensed consolidated financial statements.
6
Confluent, Inc.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(in thousands, except share data)
(unaudited)
|
Three Months Ended June 30, 2021 |
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Accumulated |
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Total |
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Redeemable Convertible |
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Class A |
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Class B |
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Additional |
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Other |
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Stockholders’ |
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Preferred Stock |
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Convertible Founder Stock |
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Common Stock |
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Common Stock |
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Paid-In |
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Comprehensive |
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Accumulated |
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Equity |
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Shares |
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Amount |
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Shares |
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Amount |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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(Loss) Income |
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Deficit |
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(Deficit) |
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Balances as of April 1, 2021 |
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$ |
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$ |
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$ |
- |
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- |
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$ |
- |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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Conversion of redeemable convertible preferred and founder stock to common stock upon initial public offering |
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( |
) |
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( |
) |
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( |
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- |
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- |
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- |
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- |
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- |
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Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other issuance costs |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Issuance of common stock pursuant to charitable donation |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Issuance of common stock upon early exercise of unvested options, net of repurchases |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Vesting of early exercised options |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Issuance of common stock upon exercise of vested options |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Vesting of restricted stock units |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Conversion of Class B common stock to Class A common stock |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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- |
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- |
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- |
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Stock-based compensation |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Other comprehensive loss |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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( |
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Net loss |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
Balances as of June 30, 2021 |
|
- |
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$ |
- |
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- |
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$ |
- |
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$ |
- |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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7
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Three Months Ended June 30, 2020 |
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Accumulated |
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Redeemable Convertible |
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Convertible |
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Additional |
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Other |
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Total |
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Preferred Stock |
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Founder Stock |
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Common Stock |
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Paid-In |
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Comprehensive |
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Accumulated |
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Stockholders’ |
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Shares |
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Amount |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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(Loss) Income |
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Deficit |
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Deficit |
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Balances as of April 1, 2020 |
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$ |
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$ |
- |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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Issuance of Series E redeemable convertible preferred stock, net of issuance costs |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Issuance of common stock upon early exercise of unvested options, net of repurchases |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Vesting of early exercised options |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Issuance of common stock upon exercise of vested options |
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- |
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|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Other comprehensive income |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||
Net loss |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Balances as of June 30, 2020 |
|
|
|
|
$ |