8-K/A
0001699838true00016998382021-08-052021-08-05

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K/A

(Amendment No. 1)

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 5, 2021

 

 

CONFLUENT, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-40526

47-1824387

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

 

899 W. Evelyn Avenue

 

Mountain View, California

 

94041

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (800) 439-3207

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Class A Common Stock, par value $0.00001 per share

 

CFLT

 

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

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.

 

 


Item 2.02 Results of Operations and Financial Condition.

On August 5, 2021, Confluent, Inc. (the “Company”) furnished a Current Report on Form 8-K (the “Original 8-K”) that included a press release announcing the Company’s financial results for the quarter ended June 30, 2021. This Current Report on Form 8-K/A amends the Original 8-K solely to correct the amounts shown for Non-GAAP net loss per share attributable to common stockholders, basic and diluted for the six months ended June 30, 2021 and June 30, 2020 that were included in the table titled “Reconciliation of GAAP Measures to Non-GAAP Measures” in the Company’s press release.
 

 

The following amended table reflects the corrected amounts of $(0.60) and $(0.44) for Non-GAAP net loss per share attributable to common stockholders, basic and diluted for the six months ended June 30, 2021 and June 30, 2020, respectively. Such amounts are calculated as Non-GAAP net loss divided by Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted. The Non-GAAP net loss and the Weighted-average shares remain unchanged. In addition, the GAAP net loss per share attributable to common stockholders, basic and diluted and Non-GAAP net loss per share attributable to common stockholders, basic and diluted for the three months ended June 30, 2021 and June 30, 2020, respectively, remain unchanged.

 


 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

(in thousands, except share and per share data)

 

Reconciliation of GAAP net loss to non-GAAP net loss:

 

Net loss on a GAAP basis

$

(88,170

)

 

$

(26,296

)

 

$

(132,696

)

 

$

(59,931

)

Add: Stock-based compensation expense

 

34,516

 

 

 

7,072

 

 

 

47,869

 

 

 

13,523

 

Add: Employer taxes on employee stock transactions

 

1,435

 

 

 

5

 

 

 

1,698

 

 

 

81

 

Add: Common stock charitable donation expense

 

13,290

 

 

 

-

 

 

 

13,290

 

 

 

-

 

Add: Income tax effects and adjustments

 

1,716

 

 

 

(438

)

 

 

1,045

 

 

 

(427

)

Non-GAAP net loss

$

(37,213

)

 

$

(19,657

)

 

$

(68,794

)

 

$

(46,754

)

Non-GAAP net loss per share attributable to common stockholders, basic and diluted

$

(0.31

)

 

$

(0.19

)

 

$

(0.60

)

 

$

(0.44

)

Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted

 

118,648,655

 

 

 

105,532,865

 

 

 

113,717,546

 

 

 

106,964,953

 

 

A copy of the corrected press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K/A and is incorporated herein by reference. Other than correction of the clerical error described in this Current Report on Form 8-K/A, no other changes have been made to the Original 8-K or the press release furnished therewith.

 

The information contained in this Item 2.02 and Item 9.01 of this Current Report on Form 8-K/A, including the accompanying Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.

Description

99.1

Press Release dated August 5, 2021 (corrected).

104

Cover Page Interactive Data File (formatted as Inline XBRL).

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

Confluent, Inc.

 

 

 

 

Dated:

September 2, 2021

By:

/s/ Steffan Tomlinson

 

 

 

Steffan Tomlinson
Chief Financial Officer

 


EX-99.1

 

Exhibit 99.1

Confluent Announces Second Quarter 2021 Financial Results

Total revenue of $88 million, up 64% year over year
Confluent Cloud revenue of $20 million, up 200% year over year
Remaining performance obligations of $327 million, up 72% year over year
617 customers with $100,000 or greater in ARR, up 51% year over year

MOUNTAIN VIEW, Calif. -- August 05, 2021 -- Confluent, Inc. (NASDAQ: CFLT), the platform for data in motion, today announced financial results for its second quarter 2021, ended June 30, 2021.

 

“Data within modern businesses is in constant motion, flowing across systems, environments, and applications each time a customer clicks, types or swipes,” said Jay Kreps, co-founder and CEO, Confluent. “Our strong second quarter shows our vision of helping every organization set their data in motion is resonating, reflected by the 104% year-over-year growth in total customers. Confluent is the central nervous system that connects all the applications, systems, and data layers for companies succeeding in today’s digital-first world.”

 

“The execution of our land and expand strategy drove accelerated top-line growth, including 72% year-over-year growth in remaining performance obligations and 64% year-over-year growth in total revenue,” said Steffan Tomlinson, CFO, Confluent. “Organizations are increasingly turning to Confluent Cloud to harness the power of data in motion. During the quarter, Confluent Cloud revenue growth accelerated to 200% year over year and revenue mix increased to 22% of total revenue.”

 

Second Quarter 2021 Financial Highlights

(In millions, except per share data)

 

Q2 2021

Q2 2020

Y/Y Change

Total Revenue

$88.3

$53.9

64%

Remaining Performance Obligations

$327.2

$190.6

72%

GAAP Operating Loss

$(86.0)

$(27.5)

$(58.5)

Non-GAAP Operating Loss

$(36.8)

$(20.4)

$(16.4)

GAAP Net Loss Per Share

$(0.74)

$(0.25)

$(0.49)

Non-GAAP Net Loss Per Share

$(0.31)

$(0.19)

$(0.12)

Net Cash Used in Operating Activities

$(43.2)

$(21.5)

$(21.7)

Free Cash Flow

$(45.4)

$(22.7)

$(22.7)

 

 


 

A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in the financial statement tables included in this press release. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section titled “Non-GAAP Financial Measures.”

 

Financial Outlook

For the third quarter and fiscal year 2021, Confluent expects:

 

Q3 2021 Outlook

Fiscal 2021 Outlook

Total Revenue

$89-$91 million

$347-$351 million

Non-GAAP Operating Loss

$(62)-$(60) million

$(199)-$(195) million

Non-GAAP Net Loss Per Share

$(0.24)-$(0.23)

$(1.07)-$(1.05)

 

A reconciliation of forward-looking non-GAAP operating loss and non-GAAP net loss per share to the most directly comparable GAAP measures is not available without unreasonable effort, as certain items cannot be reasonably predicted because of their high variability, complexity and low visibility. In particular, the measures and effects of our stock-based compensation expense specific to our equity compensation awards and employer payroll tax-related items on employee stock transactions are directly impacted by the timing of employee stock transactions and unpredictable fluctuations in our stock price, which we expect to have a significant impact on our future GAAP financial results.

 

Conference Call Information

Confluent will host a video webcast to discuss the company’s second quarter 2021 results as well as the financial outlook for its third quarter and fiscal year 2021 today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. Open to the public, investors may access the webcast, earnings press release, supplemental financial information, and investor presentation on Confluent’s investor relations website at investors.confluent.io before the commencement of the webcast. A replay of the webcast will also be accessible from Confluent’s investor relations website a few hours after the conclusion of the live event.

 

Partial Early Lock-Up Release

As previously announced, beginning at the opening of trading on Monday, August 09, 2021, Confluent’s employees (including officers), third-party contractors and consultants, directors, investors and founders are permitted, pursuant to the terms of lock-up agreements they have entered into with Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, as representatives of the underwriters for Confluent’s recent initial public offering, to sell up to 25% of their vested shares (including shares issuable upon exercise of vested options and settlement of RSUs), in addition to any shares that were eligible for sale pursuant to the initial lock-up agreement release on the date of Confluent’s initial public offering that have not yet been sold.

 

Forward-Looking Statements

This press release and the earnings call referencing this press release contain forward-looking statements including, among other things, statements regarding our GAAP and non-GAAP outlook for the third fiscal

 


 

quarter and full fiscal 2021, increased adoption of our platform and growth in our remaining performance obligations and net retention rate, growth in Confluent Cloud revenue, our ability and position to capitalize on the shift to cloud and our market opportunity. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “seek,” “plan,” “project,” “target,” “looking ahead,” “look to,” “move into,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements represent our current beliefs, estimates and assumptions only as of the date of this press release and information contained in this press release should not be relied upon as representing our estimates as of any subsequent date. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) the impact of the ongoing COVID-19 pandemic on our business, as well as our customers, prospects, partners, and service providers, (ii) our ability to sustain and manage our rapid growth, (iii) our limited operating history, (iv) our ability to attract new customers and retain and sell additional features and services to our existing customers, (v) our ability to increase consumption of our offering, including by existing customers and through the acquisition of new customers, and successfully add new features and functionality to our offering, (vi) our ability to achieve or sustain profitability, (vii) the estimated addressable market opportunity for our offering, (viii) our ability to compete effectively in an increasingly competitive market, including achieving market acceptance over competitors and open source alternatives, (ix) breaches in our security measures or unauthorized access to our platform, our data, or our customers’ or other users’ personal data, (x) our reliance on third-party cloud-based infrastructure to host Confluent Cloud, and (xi) general market, political, economic, and business conditions. These risks are not exhaustive. Further information on these and other risks that could affect Confluent’s results is included in our filings with the Securities and Exchange Commission (“SEC”), including our prospectus filed with the SEC pursuant to Rule 424(b)(4), dated June 23, 2021, and our future reports that we may file from time to time with the SEC. Additional information will be made available in our Form 10-Q for the quarter ended June 30, 2021 that will be filed with the SEC, which should be read in conjunction with this press release and the financial results included herein. Confluent assumes no obligation to, and does not currently intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measures: non-GAAP operating loss, non-GAAP net loss per share and free cash flow. We use these non-GAAP financial measures and other key metrics internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. We believe these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. However, non-GAAP financial measures have limitations as an analytical tool and are presented for supplemental informational purposes only. They should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In particular, other companies, including companies in our industry, may report non-GAAP operating loss, non-GAAP net loss per share, free cash flow or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Further, free cash flow is not a substitute for cash used in operating activities.

 


 

The utility of free cash flow is limited as such measure does not reflect our future contractual commitments and does not represent the total increase or decrease in our cash balance for any given period. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, as presented below. We define non-GAAP operating loss and non-GAAP net loss per share as the respective GAAP balances, adjusted for, as applicable, stock-based compensation expense; employer taxes on employee stock transactions; common stock charitable donation expense; and income tax effects associated with these adjustments. We define free cash flow as net cash used in operating activities less capitalized internal-use software costs and capital expenditures. We believe that free cash flow is a useful indicator of liquidity that provides information to management and investors about the performance of core operations and future ability to generate cash that can be used for strategic opportunities or investing in our business.

 

Other Business Metrics

Remaining performance obligations (“RPO”) represent the amount of contracted future revenue that has not yet been recognized as of the end of each period, including both deferred revenue that has been invoiced and non-cancelable committed amounts that will be invoiced and recognized as revenue in future periods. RPO excludes pay-as-you-go arrangements. RPO may also fluctuate due to a number of factors, including the timing of renewals, average contract terms, seasonality, and dollar amount of customer contracts. RPO as a metric is not necessarily indicative of future revenue growth because it does not account for the timing of customers’ consumption or their consumption of more than their contracted capacity.

 

Customers with $100,000 or greater in annual recurring revenue (“ARR”) represent the number of customers that contributed $100,000 or more in ARR as of period end. ARR is the subscription revenue contractually expected to be received from customers over the following 12 months assuming no increases or reductions in subscriptions. ARR excludes services and pay-as-you-go arrangements. For purposes of determining our customer count, we treat all affiliated entities with the same parent organization as a single customer and include pay-as-you-go customers. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity.

 

About Confluent

Confluent is pioneering a fundamentally new category of data infrastructure focused on data in motion. Confluent’s cloud-native offering is the foundational platform for data in motion – designed to be the intelligent connective tissue enabling real-time data, from multiple sources, to constantly stream across the organization. With Confluent, organizations can meet the new business imperative of delivering rich, digital front-end customer experiences and transitioning to sophisticated, real-time, software-driven backend operations.

 

Investor Contact

Shane Xie

investors@confluent.io

 

Media Contact

 


 

Taylor Jones

pr@confluent.io

 

 

 


 

Confluent, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

June 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

860,347

 

 

$

36,789

 

Marketable securities

 

 

183,526

 

 

 

251,756

 

Accounts receivable, net of allowance

 

 

117,176

 

 

 

105,971

 

Deferred contract acquisition costs

 

 

20,516

 

 

 

14,403

 

Prepaid expenses and other current assets

 

 

32,040

 

 

 

18,775

 

Total current assets

 

 

1,213,605

 

 

 

427,694

 

Property and equipment, net

 

 

9,060

 

 

 

6,718

 

Operating lease right-of-use assets

 

 

43,482

 

 

 

48,273

 

Deferred contract acquisition costs, non-current

 

 

41,848

 

 

 

33,196

 

Other assets, non-current

 

 

9,983

 

 

 

10,238

 

Total assets

 

$

1,317,978

 

 

$

526,119

 

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,834

 

 

$

1,646

 

Accrued expenses and other liabilities

 

 

49,970

 

 

 

33,711

 

Operating lease liabilities

 

 

10,288

 

 

 

10,492

 

Deferred revenue

 

 

172,671

 

 

 

142,901

 

Liability for early exercise of unvested stock options

 

 

14,217

 

 

 

5,049

 

Total current liabilities

 

 

248,980

 

 

 

193,799

 

Operating lease liabilities, non-current

 

 

35,912

 

 

 

40,440

 

Deferred revenue, non-current

 

 

17,873

 

 

 

16,292

 

Other liabilities, non-current

 

 

11,668

 

 

 

7,203

 

Total liabilities

 

 

314,433

 

 

 

257,734

 

Redeemable convertible preferred stock

 

 

-

 

 

 

574,634

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

Preferred stock

 

 

-

 

 

 

-

 

Common stock

 

 

-

 

 

 

1

 

Convertible founder stock

 

 

-

 

 

 

-

 

Class A common stock

 

 

-

 

 

 

-

 

Class B common stock

 

 

2

 

 

 

-

 

Additional paid-in capital

 

 

1,542,338

 

 

 

99,575

 

Accumulated other comprehensive (loss) income

 

 

(46

)

 

 

228

 

Accumulated deficit

 

 

(538,749

)

 

 

(406,053

)

Total stockholders’ equity (deficit)

 

 

1,003,545

 

 

 

(306,249

)

Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)

 

$

1,317,978

 

 

$

526,119

 

 

 


 

Confluent, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Subscription

$

78,516

 

 

$

46,973

 

 

$

146,508

 

 

$

90,916

 

Services

 

9,822

 

 

 

6,879

 

 

 

18,858

 

 

 

13,840

 

Total revenue

 

88,338

 

 

 

53,852

 

 

 

165,366

 

 

 

104,756

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

Subscription(1)(2)

 

20,292

 

 

 

11,734

 

 

 

36,049

 

 

 

22,748

 

Services(1)(2)

 

9,717

 

 

 

5,956

 

 

 

17,798

 

 

 

12,755

 

Total cost of revenue

 

30,009

 

 

 

17,690

 

 

 

53,847

 

 

 

35,503

 

Gross profit

 

58,329

 

 

 

36,162

 

 

 

111,519

 

 

 

69,253

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development(1)(2)

 

33,225

 

 

 

18,875

 

 

 

57,538

 

 

 

38,617

 

Sales and marketing(1)(2)

 

73,206

 

 

 

36,447

 

 

 

131,715

 

 

 

74,764

 

General and administrative(1)(2)

 

37,943

 

 

 

8,334

 

 

 

53,455

 

 

 

16,749

 

Total operating expenses

 

144,374

 

 

 

63,656

 

 

 

242,708

 

 

 

130,130

 

Operating loss

 

(86,045

)

 

 

(27,494

)

 

 

(131,189

)

 

 

(60,877

)

Interest income

 

688

 

 

 

1,303

 

 

 

1,532

 

 

 

1,746

 

Other expense, net

 

(643

)

 

 

(211

)

 

 

(979

)

 

 

(518

)

Loss before income taxes

 

(86,000

)

 

 

(26,402

)

 

 

(130,636

)

 

 

(59,649

)

Provision for (benefit from) income taxes

 

2,170

 

 

 

(106

)

 

 

2,060

 

 

 

282

 

Net loss

$

(88,170

)

 

$

(26,296

)

 

$

(132,696

)

 

$

(59,931

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.74

)

 

$

(0.25

)

 

$

(1.17

)

 

$

(0.56

)

Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted

 

118,648,655

 

 

 

105,532,865

 

 

 

113,717,546

 

 

 

106,964,953

 

 

(1) Includes stock-based compensation expense as follows:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Cost of revenue - subscription

$

2,172

 

 

$

524

 

 

$

3,147

 

 

$

986

 

Cost of revenue - services

 

1,055

 

 

 

312

 

 

 

1,599

 

 

 

662

 

Research and development

 

8,932

 

 

 

2,250

 

 

 

12,443

 

 

 

4,296

 

Sales and marketing

 

11,155

 

 

 

2,735

 

 

 

16,131

 

 

 

5,108

 

General and administrative

 

11,202

 

 

 

1,251

 

 

 

14,549

 

 

 

2,471

 

Total stock-based compensation expense

$

34,516

 

 

$

7,072

 

 

$

47,869

 

 

$

13,523

 

 

(2) Includes employer taxes on employee stock transactions as follows:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Cost of revenue - subscription

$

38

 

 

$

-

 

 

$

38

 

 

$

1

 

Cost of revenue - services

 

288

 

 

 

-

 

 

 

288

 

 

 

-

 

Research and development

 

277

 

 

 

-

 

 

 

398

 

 

 

9

 

Sales and marketing

 

610

 

 

 

-

 

 

 

713

 

 

 

22

 

General and administrative

 

222

 

 

 

5

 

 

 

261

 

 

 

49

 

Total employer taxes on employee stock transactions

$

1,435

 

 

$

5

 

 

$

1,698

 

 

$

81

 

 

 


 

Confluent, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(88,170

)

 

$

(26,296

)

 

$

(132,696

)

 

$

(59,931

)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

756

 

 

 

434

 

 

 

1,543

 

 

 

699

 

Net amortization of premiums or discounts on marketable securities

 

459

 

 

 

365

 

 

 

964

 

 

 

342

 

Amortization of deferred contract acquisition costs

 

6,048

 

 

 

3,254

 

 

 

11,583

 

 

 

6,128

 

Non-cash operating lease costs

 

2,748

 

 

 

2,996

 

 

 

5,604

 

 

 

6,102

 

Common stock charitable donation expense

 

13,290

 

 

 

-

 

 

 

13,290

 

 

 

-

 

Stock-based compensation, net of amounts capitalized

 

34,516

 

 

 

7,072

 

 

 

47,869

 

 

 

13,523

 

Deferred income taxes

 

2,297

 

 

 

(134

)

 

 

1,730

 

 

 

(132

)

Other

 

209

 

 

 

67

 

 

 

648

 

 

 

269

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(17,587

)

 

 

(16,259

)

 

 

(11,853

)

 

 

(25,337

)

Deferred contract acquisition costs

 

(15,482

)

 

 

(8,419

)

 

 

(26,348

)

 

 

(13,927

)

Prepaid expenses and other assets

 

(12,368

)

 

 

(917

)

 

 

(14,723

)

 

 

(148

)

Accounts payable

 

(468

)

 

 

63

 

 

 

371

 

 

 

(1,635

)

Accrued expenses and other liabilities

 

11,460

 

 

 

5,541

 

 

 

12,893

 

 

 

2,284

 

Operating lease liabilities

 

(2,661

)

 

 

(2,823

)

 

 

(5,382

)

 

 

(5,767

)

Deferred revenue

 

21,787

 

 

 

13,600

 

 

 

31,352

 

 

 

25,043

 

Net cash used in operating activities

 

(43,166

)

 

 

(21,456

)

 

 

(63,155

)

 

 

(52,487

)

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

Capitalization of internal-use software costs

 

(1,215

)

 

 

(1,105

)

 

 

(1,811

)

 

 

(2,097

)

Purchases of marketable securities

 

(14,283

)

 

 

(191,977

)

 

 

(55,971

)

 

 

(230,690

)

Sales of marketable securities

 

-

 

 

 

-

 

 

 

-

 

 

 

4,988

 

Maturities of marketable securities

 

66,211

 

 

 

16,743

 

 

 

122,974

 

 

 

36,760

 

Purchases of property and equipment

 

(1,030

)

 

 

(138

)

 

 

(1,673

)

 

 

(484

)

Other

 

-

 

 

 

-

 

 

 

9

 

 

 

-

 

Net cash provided by (used in) investing activities

 

49,683

 

 

 

(176,477

)

 

 

63,528

 

 

 

(191,523

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

Proceeds from initial public offering, net of underwriting discounts and commissions

 

786,600

 

 

 

-

 

 

 

786,600

 

 

 

-

 

Proceeds from issuance of common stock upon exercise of vested options

 

12,490

 

 

 

931

 

 

 

18,705

 

 

 

2,587

 

Proceeds from issuance of common stock upon early exercise of unvested options, net of repurchases

 

11,145

 

 

 

469

 

 

 

18,543

 

 

 

838

 

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs

 

-

 

 

 

24,865

 

 

 

-

 

 

 

249,865

 

Payments of deferred offering costs

 

(767

)

 

 

-

 

 

 

(920

)

 

 

-

 

Net cash provided by financing activities

 

809,468

 

 

 

26,265

 

 

 

822,928

 

 

 

253,290

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(2

)

 

 

14

 

 

 

(10

)

 

 

(33

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

815,983

 

 

 

(171,654

)

 

 

823,291

 

 

 

9,247

 

Cash, cash equivalents, and restricted cash at beginning of period

 

45,114

 

 

 

200,872

 

 

 

37,806

 

 

 

19,971

 

Cash, cash equivalents, and restricted cash at end of period

$

861,097

 

 

$

29,218

 

 

$

861,097

 

 

$

29,218

 

Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown above:

 

Cash and cash equivalents

$

860,347

 

 

$

28,201

 

 

$

860,347

 

 

$

28,201

 

Restricted cash included in other assets, non-current

 

750

 

 

 

1,017

 

 

 

750

 

 

 

1,017

 

Total cash, cash equivalents, and restricted cash

$

861,097

 

 

$

29,218

 

 

$

861,097

 

 

$

29,218

 

 

 


 

 

Confluent, Inc.

Reconciliation of GAAP Measures to Non-GAAP Measures

(in thousands, except percentages, share and per share data)

(unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Reconciliation of GAAP total gross profit to non-GAAP total gross profit:

 

Total gross profit on a GAAP basis

$

58,329

 

 

$

36,162

 

 

$

111,519

 

 

$

69,253

 

Total gross margin on a GAAP basis

66.0%

 

 

67.2%

 

 

67.4%

 

 

66.1%

 

Add: Stock-based compensation expense

 

3,227

 

 

 

836

 

 

 

4,746

 

 

 

1,648

 

Add: Employer taxes on employee stock transactions

 

326

 

 

 

-

 

 

 

326

 

 

 

1

 

Non-GAAP total gross profit

$

61,882

 

 

$

36,998

 

 

$

116,591

 

 

$

70,902

 

Non-GAAP total gross margin

70.1%

 

 

68.7%

 

 

70.5%

 

 

67.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP operating expenses to non-GAAP operating expenses:

 

Research and development operating expense on a GAAP basis

$

33,225

 

 

$

18,875

 

 

$

57,538

 

 

$

38,617

 

Less: Stock-based compensation expense

 

8,932

 

 

 

2,250

 

 

 

12,443

 

 

 

4,296

 

Less: Employer taxes on employee stock transactions

 

277

 

 

 

-

 

 

 

398

 

 

 

9

 

Non-GAAP research and development operating expense

$

24,016

 

 

$

16,625

 

 

$

44,697

 

 

$

34,312

 

Non-GAAP research and development operating expense as a percentage of total revenue

27.2%

 

 

30.9%

 

 

27.0%

 

 

32.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing operating expense on a GAAP basis

$

73,206

 

 

$

36,447

 

 

$

131,715

 

 

$

74,764

 

Less: Stock-based compensation expense

 

11,155

 

 

 

2,735

 

 

 

16,131

 

 

 

5,108

 

Less: Employer taxes on employee stock transactions

 

610

 

 

 

-

 

 

 

713

 

 

 

22

 

Non-GAAP sales and marketing operating expense

$

61,441

 

 

$

33,712

 

 

$

114,871

 

 

$

69,634

 

Non-GAAP sales and marketing operating expense as a percentage of total revenue

69.6%

 

 

62.6%

 

 

69.5%

 

 

66.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative operating expense on a GAAP basis

$

37,943

 

 

$

8,334

 

 

$

53,455

 

 

$

16,749

 

Less: Stock-based compensation expense

 

11,202

 

 

 

1,251

 

 

 

14,549

 

 

 

2,471

 

Less: Employer taxes on employee stock transactions

 

222

 

 

 

5

 

 

 

261

 

 

 

49

 

Less: Common stock charitable donation expense

 

13,290

 

 

 

-

 

 

 

13,290

 

 

 

-

 

Non-GAAP general and administrative operating expense

$

13,229

 

 

$

7,078

 

 

$

25,355

 

 

$

14,229

 

Non-GAAP general and administrative operating expense as a percentage of total revenue

15.0%

 

 

13.1%

 

 

15.3%

 

 

13.6%

 

 

 

 


 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Reconciliation of GAAP operating loss to non-GAAP operating loss:

 

Operating loss on a GAAP basis

$

(86,045

)

 

$

(27,494

)

 

$

(131,189

)

 

$

(60,877

)

Add: Stock-based compensation expense

 

34,516

 

 

 

7,072

 

 

 

47,869

 

 

 

13,523

 

Add: Employer taxes on employee stock transactions

 

1,435

 

 

 

5

 

 

 

1,698

 

 

 

81

 

Add: Common stock charitable donation expense

 

13,290

 

 

 

-

 

 

 

13,290

 

 

 

-

 

Non-GAAP operating loss

$

(36,804

)

 

$

(20,417

)

 

$

(68,332

)

 

$