Confluent, Inc. (CFLT): A Bull Case Theory

 We came across a bullish thesis on Confluent, Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on CFLT. Confluent, Inc.’s share was trading at $21.87 as of December 1st. CFLT’s forward P/E was 45.45 according to Yahoo Finance.

Confluent (CFLT) delivered a strong Q3 2025 performance with $298.5 million in revenue, up 19.3% year over year and ahead of estimates, driven by robust subscription growth and operational efficiency. Subscription revenue reached $286.3 million, comprising 96% of total revenue, while Confluent Cloud remained the main growth engine, rising 24% to $161 million.

Confluent Platform grew 14% to $125.4 million, supported by demand from regulated industries and hybrid deployments. International revenue surged 29% to $126.4 million, expanding its share to 42% of total revenue. Non-GAAP operating margin rose 340 bps to 9.7%, free cash flow margin improved to 8.2%, and EPS of $0.13 beat expectations by 30%. RPO climbed 43% to $1.26 billion, marking the fourth consecutive quarter of acceleration, while large customer momentum continued with 1,487 clients above $100K ARR and 234 above $1M ARR.

Flink and WarpStream were notable standouts, posting 70% sequential ARR growth and 8× consumption growth, respectively, validating Confluent’s expanding data streaming platform (DSP). The company’s differentiated position as the real-time “data context layer” for AI drove adoption among 100+ AI-native customers, while partner contributions from AWS and MongoDB accounted for 25% of new business.

Management acknowledged a minor Q4 headwind from an AI-native client shifting workloads on-prem but maintained raised full-year guidance with FY25 revenue expected at $1.113–$1.114 billion and 7% operating margins. With healthy pipeline growth, rising profitability, and strategic momentum in AI and streaming analytics, Confluent continues to strengthen its position as a key player in the data infrastructure ecosystem.

Previously we covered a bullish thesis on GitLab Inc. (GTLB) by Compounding Your Wealth in April 2025, which highlighted the company’s strong enterprise momentum, AI-led DevSecOps differentiation, and expanding profitability. The company’s stock price has depreciated by 12.44% since our coverage as the thesis hasn’t played out yet. The thesis still stands as GitLab continues to scale responsibly. Sergey shares a similar but emphasizes on Confluent’s leadership in AI-driven data infrastructure and streaming analytics.

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Disclosure: None.