Confluent : Q1'24 Investor Presentation

Investor Presentation

May 7, 2024

Disclaimer

This presentation includes express and implied forward-looking statements. All statements contained in this presentation other than statements of historical facts, including expectations of Confluent, Inc. ("we," "us," "our," or "Confluent") regarding our revenue, revenue mix, revenue growth, expenses and other results of operations; operating margins and margin improvements, targeted or anticipated margin levels; future financial performance, business strategy and plans; potential market and growth opportunities; competitive position; technological or market trends; addressable market opportunity; and our objectives for future operations, are forward-looking statements. 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. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. 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) our limited operating history, including in uncertain macroeconomic environments, (ii) our ability to sustain and manage our rapid growth, (iii) our ability to increase consumption of our offering, including by existing customers and through the acquisition of new customers, including by addressing customer consumption preferences, and successfully add new features and functionality to our offering, (iv) our ability to successfully execute our go-to-market strategy and initiatives, including as we reorient our go-to-market strategy and model around customer consumption, (v) our ability to attract new customers and retain and sell additional features and services to our existing customers, (vi) uncertain macroeconomic conditions, including high inflation, high interest rates, bank failures, supply chain challenges, geopolitical events, recessionary risks, and exchange rate fluctuations, which have resulted and may continue to result in customer pullback in information technology spending, lengthening of sales cycles, reduced contract sizes, reduced consumption of Confluent Cloud or customer preference for open source alternatives, as well as the potential need for cost efficiency measures, (vii) our ability to achieve profitability and improve margins annually, by our expected timelines or at all, (viii) the estimated addressable market opportunity for our offering, including our Flink offering and stream processing, and our ability to capture our share of that market opportunity, (ix) our ability to compete effectively in an increasingly competitive market, (x) our ability to attract and retain highly qualified personnel, including as we reorient our go-to-market strategy and model around customer consumption, (xi) breaches in our security measures, intentional or accidental cybersecurity incidents or unauthorized access to our platform, our data, or our customers' or other users' personal data, (xii) our reliance on third-partycloud-based infrastructure to host Confluent Cloud, (xiii) public sector budgetary cycles and funding reductions or delays, (xiv) our ability to accurately forecast our future performance, business and growth, and (xv) general market, political, economic, and business conditions. These risks are not exhaustive. It is not possible for our management to predict all risks, 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 materially from those contained in any forward-looking statements we may make. You should not rely upon the forward-looking statements as predictions of future events. The future events and trends discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. Except to the extent required by law, we do not undertake to update any of these forward-looking statements after the date of this presentation to conform these statements to actual results or revised expectations. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this presentation. While we believe such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

This presentation also contains statistical data, estimates and forecasts made by independent parties and by us relating to market size and growth, as well as other data about our industry and business. These data involve a number of assumptions and limitations, and we have not independently verified the accuracy or completeness of these data. Neither we nor any other person makes any representation as to the accuracy or completeness of such data or undertakes any obligation to update such data after the date of this presentation. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk. The Gartner content described herein (the "Gartner Content") represents research opinions or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. The Gartner Content speaks as of its original publication date (and not as of the date of this presentation), and the opinions expressed in the Gartner Content are subject to change without notice.

This presentation includes certain non-GAAP financial measures as defined by Securities and Exchange Commission ("SEC") rules. Because not all companies calculate non-GAAP financial information identically (or at all), the presentations herein may not be comparable to other similarly titled measures used by other companies. Further, such non-GAAP financial information of Confluent should be considered in addition to, and not as superior to or as a substitute for, the historical consolidated financial statements of Confluent prepared in accordance with GAAP. Refer

to the slides in the section titled "GAAP to Non-GAAP Reconciliations" at the end of this presentation for a reconciliation of our non-GAAP financial metrics to the most directly comparable GAAP2 financial metrics.

Confluent Momentum-at-a-Glance

Founded in 2014 by the	~$60B Total Addressable Market¹
Original Creators of Apache Kafka

	Q1'24
Subscription Revenue	$207M / +29% YoY
Confluent Cloud Revenue	$107M / +45% YoY
Non-GAAP Operating Margin (OM)	(1.5%) / +22pts YoY
Dollar-Based Net Retention Rate	120%-125%
Customers with ≥ $100K in ARR	1,260 / +17% YoY

• TAM calculations performed by Confluent; source: Gartner, Forecast: Enterprise Infrastructure Software, Worldwide, 2020-2026, 2Q22 Update, June 2022; source: Gartner, Forecast: Enterprise Application Software, Worldwide, August 2022.

Note: Financials and metrics other than TAM data are as of or for stated period ended March 31, 2024.

Refer to the slides in the section titled "Definitions & GAAP to Non-GAAP Reconciliations" at the end of this presentation for a reconciliation of our non-GAAP financial metrics to the most directly comparable GAAP financial metrics. See Appendix for definitions for "Dollar-BasedNet Retention Rate" and "Customers with $100,000 or greater in ARR."

3

Confluent is on a mission to set data in motion

4

The Problems with Data at Rest

and Legacy Movement Tools

Data at Rest

Databases

Slow, daily batch processing

Simple, static real-time queries

Legacy Data Movement Tools

ETL/Data	Messaging
Integration
Batch	Difficult to Scale
Expensive	No Persistence
Time Consuming	Data Loss
	No Replay

5

Databases Bring Point-in-Time Queries to Stored Data;

This Leads to a Giant Mess in Data Architecture

LINE OF BUSINESS 01

LINE OF BUSINESS 02

PUBLIC CLOUD

6

A New Paradigm for Data in Motion: Data Streaming

From Data Mess	To Data Products	To Instant Value
Everywhere

PROCESS	AI/MODELING
	FRAUD
	RECOMMENDATIONS	CUSTOM APPS &
	PERSONALIZATIONS	MICROSERVICES
	PAYMENTS
STREAM	ACCOUNTS

INVENTORY

CONNECT

DATA SYSTEMS

GOVERN

From Giant Mess to Central Nervous System

DATA STREAMING PLATFORM

8

Proven Success Across Industries

Financial Services

Technology

Communications & Media

Manufacturing

Consumer & Retail

Automotive & Transportation

Healthcare

Insurance

9

Customer Expansion Journey Case Studies

ARR $ in millions

Global Telco

Leader

16x$5.9

$2.4

$0.4 $0.6

Q4'19 Q1'21 Q1'22 Q4'23

Built out an event portal to

support 5G network

monetization, billing, sales, security events, and more

Payment

Card Provider

$6.5

43x

$1.5

$1.0

$0.2

Q2'17 Q4'19 Q1'21 Q4'23

Secured the ability to continue doing business throughout the globe unlocked by Confluent with use cases including GDPR and mandate processing

Global Online

Job Site

$13.5

276x

$5.3

$0.05 $0.6

Q3'20 Q1'21 Q1'22 Q4'23

Created a unified, real-time data

layer across the organization, enabling employer campaigns, sponsored jobs, and targeted searches

Fortune 50

Bank

$14.3

12x

$7.9

$4.8

$1.2

Q2'18

Q2'19

Q2'21

Q4'23

Improved banking relationship management, accelerated client onboarding, and enabled customized marketing programs for customers

Note: The expansion multiple is calculated based on the land ARR and the Q4'23 ending ARR, using actual unrounded numbers.	10
The customer examples shown on this slide are illustrative only and may not be representative of growth of other customers within the same vertical(s).