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what it is
Confluent sells the pipes that move company data in real time, so apps, analytics, and AI tools are not working off stale information.
how it gets paid
FY2025 revenue was about $1.17B (+21% vs. prior year). Confluent Cloud was about $624M of that (+27% vs. prior year); the rest is largely subscription outside Cloud plus services.
why it's growing
Streaming consumption and subscription revenue kept growth around 20%+ at the company level; Cloud outpaced the broader subscription line. The pending IBM deal means Confluent is not issuing forward financial guidance.
what just happened
Q4 2025 revenue about $314.8M (+21% vs. prior year). GAAP net loss $(0.23) per share; non-GAAP diluted EPS $0.12. FY2025 GAAP net loss $(0.86) per share; non-GAAP diluted EPS $0.42.
At a glance
B+ balance sheet — decent shape, but not bulletproof
20/100 earnings predictability — expect surprises
GAAP net loss FY2025 $(0.86) / sh — trailing P/E not meaningful
non-GAAP diluted EPS FY2025 $0.42 — adjusted profitability ex SBC-heavy GAAP
no forward guidance — pending IBM acquisition
xvary composite: 45/100 — below average
What they do
Confluent sells the pipes that move company data in real time, so apps, analytics, and AI tools are not working off stale information.
Confluent sits on top of Apache Kafka, then monetizes managed cloud and enterprise subscriptions. FY2025 non-GAAP total gross margin was about 74.3% in company materials — strong software economics — while GAAP operating margin was still negative on a full-year basis after heavy S&M and R&D. Kafka’s openness helps adoption; the paid managed layer is the monetization bet.
How they make money
~$1.17B
FY2025 total revenue · +21% vs. prior year (year ended Dec 31, 2025)
Confluent Cloud
~$624M
+27% vs. prior year
other subscription (platform, private cloud, etc.)
~$496M
+~15% vs. prior year
services
~$47M
+~13% vs. prior year
The products that matter
managed cloud service
Confluent Cloud
~$624M FY · Q4 ~$169M
FY2025 cloud revenue grew 27% vs. prior year; Q4 cloud ~$169M (+23% vs. prior year). This is the consumption engine inside the subscription base.
+27% FY
self-managed software
Confluent Platform (non-Cloud subscription)
~$496M implied FY
Remaining subscription revenue after Cloud — enterprise self-managed and related lines. Grows with migrations and renewals; Cloud has been the faster line item.
core license mix
training and professional services
Services
~$47M FY
Small versus subscription revenue — helps land and expand, but the equity story is subscription and cloud consumption, not services dollars.
supporting role
Key numbers
$31
cash buyout
IBM agreed to pay $31 per share in cash, so your near-term return math is now merger math, not software-multiple fantasy.
~74.3%
non-GAAP gross margin FY25
From the company’s GAAP→non-GAAP reconciliation — shows underlying subscription economics before stock-based comp and related adjustments.
(32.6%)
GAAP operating margin FY25
Still a GAAP operating loss at scale; non-GAAP operating margin was 7.4% for FY2025 per the release.
$0.42
non-GAAP diluted EPS FY25
GAAP diluted net loss was $(0.86) per share for FY2025 — do not mix the two without labeling.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 4 — safer than 20% of stocks
- price stability 5 / 100
- convertible notes ~$681M net (Dec 31, 2025) — material liability on balance sheet
- GAAP net result FY25 net loss — not a positive net margin year
- adjusted free cash flow FY25 $76M per Q4/FY2025 release
B+ — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for CFLT right now.
source: institutional data · return history unavailable
What just happened
Q4 / FY2025
Q4 2025 revenue ~$314.8M (+21% vs. prior year). FY2025 total revenue ~$1.17B (+21%).
GAAP: Q4 net loss $(0.23)/sh; FY net loss $(0.86)/sh; FY GAAP operating margin (32.6%). Non-GAAP: Q4 diluted EPS $0.12; FY diluted EPS $0.42; FY non-GAAP operating margin 7.4%. Confluent did not hold an earnings call and is not providing guidance while the IBM merger is pending.
$314.8M
Q4 revenue
$(0.23)
Q4 GAAP EPS
$0.12
Q4 non-GAAP EPS
the number that mattered
For holders now, the $31.00 IBM cash price and closing conditions matter as much as the quarter — but Cloud hitting ~$624M FY (+27%) shows why strategic buyers paid up.
-
confluent has agreed to be acquired by international business machines corporation (ibm).Under the agreement, IBM will acquire Confluent for $31.00 per share in cash, representing an enterprise value of about $11B. Closing is expected by mid-2026, subject to shareholder and regulatory approvals and other conditions.
-
revenues have increased, thanks to an uptick in sales to existing and new customers.management has announced the release of confluent intelligence, a new product that provides everything organizations need to launch and scale event-driven ai systems. this offering continuously streams and processes historical and real-time data, delivering this context directly into ai applications for more reliable and secure ai workloads.
-
leadership has also announced the launch of real-time context engine, a fully managed service.this service delivers real-time structured data and accurate, relevant context to any ai agent, copilot, or large language model (llm)-powered application.
-
FY2025 total revenue was about $1.17B; subscription revenue about $1.12B (+21% vs. prior year).
-
Confluent is not providing financial guidance while the IBM transaction is pending.
source: Confluent Q4/FY2025 earnings release (Feb 11, 2026)
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What could go wrong
The #1 risk is IBM deal break risk. Once a stock trades a few cents below a fixed cash offer, almost everything else becomes secondary.
med
IBM acquisition fails
The $31 cash deal still needs approvals. If it breaks, the stock stops being a merger stub and goes back to being judged on a business with about a (32.6%) FY2025 GAAP operating margin.
The current setup offers roughly 1.5% gross upside to the cash price, versus a stated 35% premium embedded in the deal.
med
approval or timing slippage
The deal is expected to close by mid-2026. If that timeline slips, the annualized return on the spread gets worse fast, even if the deal still closes.
When your upside is measured in cents, time is not a footnote. It is the thesis.
med
standalone business is still unfinished
~74% non-GAAP gross margin is what you want from software economics; a deeply negative GAAP operating margin is what you get while SBC-heavy spend runs hot. If the deal disappears, GAAP profitability matters again.
The market would have to re-underwrite Confluent as an independent company instead of a pending payout.
med
open-source advantage cuts both ways
Kafka adoption helps Confluent because customers already know the technology. It also limits how proprietary the moat can become because the standard itself is not locked inside Confluent.
If customers stop paying for the managed layer, the high gross-margin story loses its point.
At $30.53 versus a $31 cash offer, you are being paid about 1.5% to believe the deal closes on schedule. That is a very small reward for taking event risk.
source: institutional data · regulatory filings · risk analysis
Pay attention to
deal spread
the gap between $30.53 and $31
That $0.47 spread is the whole near-term math. If it widens, the market is telling you closing risk just went up.
calendar
mid-2026 closing window
Management says the transaction should close by the middle of 2026. A routine close keeps the spread boring. A delayed close makes the annualized return less attractive.
approvals
regulatory and shareholder sign-off
This is a cash deal, so the documents matter more than the product demo. Watch for any sign that approvals stop looking routine.
standalone trend
cloud growth versus operating losses
If the deal drags, the market will care again about cloud growth (~27% FY), ~74% non-GAAP gross margin, and GAAP operating losses.
Analyst rankings
xvary composite
45 / 100
Below average overall. In human-speak, the stock does not offer much edge when the best-case near-term outcome is already pinned near a fixed $31 cash price.
risk rank
4
Safer than 20% of stocks. Translation: this is not a low-risk software name, and a pending acquisition does not erase that history.
price stability
5 / 100
Very low stability. The irony is that a cash deal can calm the quote while the underlying business was never calm to begin with.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 207 buyers vs. 197 sellers in 3q2025. total institutional holdings: 0.3B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$16
$63
$30.53
last quote · IBM cash offer $31.00
$40
target midpoint · +31% from current · 3-5yr high: $40 (+30% · 9% ann'l return)
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