Confluent, Inc. (NASDAQ:CFLT) Q2 2023 Earnings Call Transcript

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That can move actually a very large setup, you know in a couple months even though there may be hundreds of applications, there’s other you know, areas where that will take longer. It really depends on the setup with customers. The nice thing about these additional DSP components the rest of the data streaming platforms is it has a very strong attach to Kafka And so the initial adoption need not be you know, new customers coming from the streets. It need not even be new use cases. It can kind of drive direct attach off what you’re doing already with Kafka. And so it kind of pulls in and starts with our existing customers and the nature of these consumption models. You know this is their biggest strength, right there’s obviously a ton of complexity with consumption.

You know it’s very friendly to the customers and customers like it especially in this kind of environment. But one of the superpowers that I think AWS really proved is that ability to expand in a low friction way to other components. And particularly in the streaming space where the core stream of data is the thing that everything else hooks on to, it’s the thing you need governance for, it’s the thing that connectors produce, it’s the thing that the Flink is processing that kind of draws in those other components. And so that’s the first target for us is get that attach rate with the existing customer base up before we’re kind of going out and trying to convert existing Flink users.

Rob Owens: Great, thanks. And then for Steffan, I appreciate the commentary around where we’re at in the economy and some of the challenges that are out there. But maybe you could speak to us just about top of funnel and what you guys are seeing from that perspective, from a velocity perspective? Thanks.

Steffan Tomlinson: Sure, thanks. Our pipeline, we had a really strong pipeline quarter last quarter, which is a good leading indicator. And we also are measuring a number of sign-ups that we have for our pay-as-you-go business. And those continue to be robust. But as we’ve mentioned over the last three or four earnings calls, the progression of stages from top of funnel, all the way through committed contracts and then ultimately through expansion, et cetera. just some of that business has just slowed down, and we’ve been factoring that into how we not only forecast our business on the top line, but we’ve also been making operational changes around how we’re investing in the business. And we come at this from the lens of ensuring that we’re driving that top line growth as high as we can, but also delivering the profitability that we’ve communicated in the street, and we’ve been able to do that.

So, the top of funnel metrics actually looked pretty good, but it’s — we’re trying to increase the deal velocity and the conversion rates and those are the things that our team has been working on. And I think about it like what Erica and Stephanie and Jay and other folks in the organization are spending their time on it, it’s the conversion rates, it’s the deal velocity, and we’re making progress there. And as I also mentioned in the prepared remarks, to the extent that the economy improves, we should benefit from that just like other companies would. But in the meantime, it’s like we’re navigating through and ensuring that we’re delivering on our commitments.

Rob Owens: All right, thank you.

Steffan Tomlinson: Thank you.

Shane Xie: All right. We take our next question from Gregg Moskowitz with Mizuho followed by Needham.

Gregg Moskowitz: All right. Thanks Shane, and Steffan we’ll certainly miss you being a part of Confluent, but congrats to Rohan on a very well deserved promotion. Jay, can you speak to the monetization opportunity for screen sharing, both in terms of landing more customers and driving more interconnect between organizations. How are you expecting that this is going to evolve?

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