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A winner of the AI revolution

Confluent is a company that specializes in data streaming. In this article, we explain what data streaming is, how Confluent supports companies in this and what the future of the company looks like, based on the latest financial report.

What is data streaming?

In the past, companies relied on data processing through batch processing. This means that information was collected and analyzed in large chunks, often at the end of the day. This can be slow and does not provide real-time insights.

Data streaming is different. It processes data as it is generationi.e. companies can react to information much faster. This is useful in many situations, e.g:

Fraud detectionBanks can recognize suspicious activity and block transactions immediately.

Personalized recommendationsOnline stores can recommend products to customers in real time based on their browsing habits.

Real-time stock market pricesFinancial institutions can track the ever-changing stock market.

How does Confluent help?

Confluent offers a data streaming platform that helps companies to collect, store and analyze data streams. The platform is based on Apache Kafka, an open source technology for data streaming. They are the developers of the Apache Kafka technology. Confluent also offers cloud-based solutions and professional services.

Confluent's dynamics

Confluent is a fast-growing company with a bright future. Here are some highlights from the latest financial report:

The total addressable market is estimated at around 60 billion and is expected to grow to 100 billion US dollars by 2025.
Revenue increased by 33% in 2023 compared to the previous year.
Cloud revenue increased by an incredible 65% compared to the previous year.
The company has a strong customer base, including many Fortune 500 companies.

Outlook

Confluent is well positioned to capitalize on the growing demand for data streaming solutions. The company has a strong product, large market opportunities and a growing customer base.

The AI hype is forcing companies to create smarter and faster real-time solutions. This is often difficult and very development-intensive. Confluent is solving a critical problem.

To the computer scientists: Have you used Kafka or even Confluent's solutions?

Source: https://investors.confluent.io/static-files/3298d979-3fd5-4850-a462-8553517f1e02

Krush82@Krush82

10Mes

Is it really "the winner" or just one of many who are benefiting from all the AI hype? I don't know if it will be the winner by definition. Both cloud revenue and subscription revenue are falling in YoY comparison and not rising. They should grow faster in relation to the current revenue and the reference to the TAM. The share is also not really cheaply valued at 12 x revenue. The performance of the shares does not seem to reflect the supposed potential either

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Vic@Vic1

@Krush82 yes you are right, it should rather be "A winner of ..." if you work in computer science you know for sure that Kafka will be the gateway to a new era of event-based architecture. If you want to be part of that, I think it's a good pure play. But the company is not cheap. The cloud hasn't been around for very long, so we'll only see how it develops over the next 1-2 years.

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@Vic1 As is well known, the greatest relative growth is at the beginning and not at the end, or there is still a lot of future in the "music" that no one has on the screen yet

@Krush82 Yes, we will see in the next quarter. If the company continues to grow at 30-40% YoY as projected by management, I see a bright future for the company. I believe that the use of real-time systems will increase exorbitantly. But that's a bet on the increasing digitalization of business processes and real-time systems themselves. You can take a look at the customers and the use cases and think for yourself where the potential lies https://www.confluent.io/de-de/customers/