Goldman Sachs Communacopia + Tech Conf 2025: Confluent Leadership on Real-Time Data Streaming, AI Integration, & Growth Strat
Key Takeaways
TL;DR: CFLT mgmt highlighted accelerating momentum in real-time data streaming—esp. cloud, Flink stream processing, and broader DSP—w/ AI adoption as a major secular growth catalyst. Cloud now >50% of biz; managed Flink rev +3x YoY in 1H25, driven by AI/analytics use cases. NRR faces near-term headwinds from recent consumption trends, but mgmt sees multiple expanding growth drivers (Flink, WarpStream, pipeline conversion, cloud migration) supporting LT upside. Strategic focus: platform breadth (not just point solutions), Databricks-style end-to-end capabilities, and aggressive managed cloud/operational efficiency—forecasting a structural industry shift in enterprise AI data usage.
Key Investment-Significant Discussion Points
1. AI Adoption & Real-Time Data Streaming as Secular Growth Drivers
- AI = major catalyst, shifting from batch to real-time data arch. CFLT positioned at center of next-gen enterprise data stacks.
- CFLT’s focus: operationalizing enterprise data for AI (not core model building). Enables co’s to connect own data to off-the-shelf models for unique, timely, high-ROI decisioning.
- Key AI-driven use cases: customer support (e.g. large online travel co), insurance claims, banking workflows—high ROI, co-specific, operationally embedded.
2. Product Platform Momentum: Cloud, Flink, DSP
- Cloud now >50% of total biz, "very prevalent."
- Managed Flink rev +3x in 1H25.
- “Hundreds of co’s w/ early use cases,” several >$1mn annual Flink spend, major batch-to-streaming conversions.
- DSP moving from ~13% few Qs ago, “growing very fast.”
- Platform: managed Kafka, Flink, governance, integration w/ open formats (Iceberg, Delta).
- Mgmt likens roadmap to Databricks: from core engine to full end-to-end, multi-product platform ("broader value prop…central nervous system across data").
- Strategic investment: deep integration w/ analytics/lakehouse ecosystems—collaborative (not competitive) w/ Databricks, increasing platform lock-in for streaming + historical data use cases.
3. Customer & Adoption Trends
- Shift from early adopters (“tech co’s that move fastest”) to mainstream verticals (insurance, healthcare, banking).
- Consumption pipeline: "up 10x YoY." Mgmt tracks as a “needle mover” in accounts.
- Latent demand in Kafka ecosystem: 150K+ orgs use open-source Kafka, only ~5% monetized for >$1bn run rate. Large room for cross-sell, upsell, migration to managed/cloud.
4. Go-to-Market Execution & Op Leverage