Confluent's Q1 2025: Unpacking Contradictions in DSP Growth, Customer Dynamics, and Cloud Revenue

DSP offerings and growth expectations, customer optimization and consumption dynamics, customer consumption and optimization dynamics, product expansion and customer growth, digital native customer behavior and cloud revenue impact, are the key contradictions discussed in Confluent's latest 2025Q1 earnings call.



Revenue and Subscription Growth:
- Confluent reported subscription revenue growth of 26% to $261 million in Q1. Confluent Cloud revenue grew 34% to $143 million.
- The resilience was driven by the mission-critical nature of data streaming use cases, supporting over 90% gross retention rates.

Customer Growth:
- The company added 340 net new customers in Q1, the highest in three years.
- The customer base is diversified across industries and geographies, contributing to resilience and durability.

Platform and Product Strategy:
- Confluent Platform business saw 18% year-over-year growth, driven by strong momentum in collaborations with OEM partners.
- The company's hybrid business model and cost-efficient platform expansion contributed to growth.

DSP and AI Integration:
- The Data Streaming Platform, inclusive of Flink and Tableflow, significantly outgrew the core cloud business.
- The integration of DSP components supports generative AI adoption, enhancing Confluent's role in AI execution.