Confluent, Inc. Class A Common Stock

Company Overview

Business Model: Confluent is pioneering the Data Streaming Platform category, enabling organizations to stream, connect, process, and govern data in motion across their entire enterprise. The platform serves as an intelligent connective tissue for real-time data streams, powering real-time operations and analytics. Revenue is primarily generated from the sale of subscriptions to its Data Streaming Platform, which includes Confluent Cloud (a fully-managed, cloud-native SaaS offering), Confluent Platform (an enterprise-ready, self-managed software offering), and WarpStream (a Bring Your Own Cloud managed service offering). Confluent Cloud and WarpStream subscriptions are usage-based, while Confluent Platform revenue includes term-based licenses and post-contract customer support, maintenance, and upgrades (PCS). The company also generates revenue from professional and education services.

Market Position: Confluent operates at the convergence of three major industry trends: the maturation of open source technologies (Apache Kafka, Apache Flink, Apache Iceberg, and Delta Lake) into enterprise-ready standards; the growing need for real-time, reusable data assets for both analytics and operations; and the emergence of generative artificial intelligence (AI) and event-driven autonomous agents, which demand real-time, contextual data. Apache Kafka, originally created by Confluent's founders, is estimated to be used by over 80% of the Fortune 500. Confluent aims to become the central nervous system for modern digital enterprises. Key differentiators include its cloud-native architecture (Kora engine for Confluent Cloud, WarpStream for BYOC), the completeness of its Data Streaming Platform (including pre-built connectors, Apache Flink stream processing, and Stream Governance), and its ability to operate everywhere (multi-cloud and hybrid infrastructures).

Recent Strategic Developments:

• Acquisition of WarpStream Labs, Inc. (September 2024): Confluent acquired WarpStream Labs, Inc. for a total preliminary purchase consideration of $135.1 million (consisting of cash and Class A common stock) to integrate its Bring Your Own Cloud (BYOC) data streaming solution, allowing customers to keep raw data within their existing cloud environment.
• Acquisition of immerok GmbH (January 2023): Confluent acquired immerok GmbH, an Apache Flink stream processing managed services company, for $54.9 million in cash. This acquisition enabled the development of Confluent Cloud for Apache Flink, a serverless Flink offering, and Confluent Platform for Apache Flink.
• Product Innovation: Significant investments include re-architecting Apache Kafka with the purpose-built Kora engine for Confluent Cloud, developing Stream Governance (the industry’s only fully-managed data governance suite for Apache Kafka), and introducing Tableflow, which simplifies feeding Kafka data directly into data warehouses/lakes as materialized Apache Iceberg or Delta Lake tables.
• Consumption-Oriented Sales Model: Confluent has shifted to a consumption-oriented sales model for Confluent Cloud, leveraging free cloud trials and pay-as-you-go options to encourage adoption and expansion based on actual usage.

Geographic Footprint: Confluent serves customers in over 100 countries. For the year ended December 31, 2024, 60% of total revenue was generated from the United States, and 40% from international markets. As of December 31, 2024, 54% of Confluent's 3,060 employees were located within the United States, with 18% in India and 8% in the UK.

Financial Performance

Revenue Analysis

Profitability Metrics (2024):

• Gross Margin: 73%
• Operating Margin: -43%
• Net Margin: -36%

Investment in Growth (2024):

• R&D Expenditure: $421.2 million (44% of revenue)
• Capital Expenditures: $24.0 million (includes $2.6 million for purchases of property and equipment and $21.4 million for capitalized internal-use software costs)
• Strategic Investments:
  • Acquisition of WarpStream Labs, Inc. for $135.1 million (total preliminary purchase consideration, including $115.5 million cash paid net of cash acquired).
  • Acquisition of immerok GmbH for $54.9 million in cash.
  • Acquisition of certain assets of Noteable, Inc. for $10.0 million in cash.

Business Segment Analysis

Subscription Revenue

Financial Performance:

• Revenue: $922.1 million (+26% YoY)
• Operating Margin: 77% (Gross Margin for Subscription Revenue)
• Key Growth Drivers: The increase in subscription revenue was primarily driven by sales to existing customers, with additional growth from new customer acquisitions. The dollar-based net retention rate was 117% as of December 31, 2024.

Product Portfolio:

• Confluent Cloud: Contributed 53% of total subscription revenue in 2024 (up from 48% in 2023). This is a fully-managed, cloud-native SaaS offering available on Amazon Web Services, Google Cloud Platform, and Microsoft Azure, with revenue recognized on a usage basis.
• Confluent Platform: Contributed 47% of total subscription revenue in 2024 (down from 52% in 2023). This is an enterprise-ready, self-managed software offering for on-premises, private cloud, and public cloud environments, with revenue from term-based licenses and PCS.
• WarpStream: A BYOC managed service offering where raw data resides inside a customer’s own cloud environment. Revenue from WarpStream was immaterial for the year ended December 31, 2024.

Market Dynamics:

• The company observes increasing customer adoption of fully-managed cloud solutions.
• A key strategy is to expand within existing customers by addressing additional use cases, leveraging a natural network effect where the platform's value increases with more connected applications and data.
• Competition includes internal IT teams utilizing open source software (Apache Kafka, Apache Flink, Apache Iceberg) and managed streaming products offered by public cloud providers.

Services Revenue

Financial Performance:

• Revenue: $41.6 million (-13% YoY)
• Operating Margin: -18% (Gross Margin for Services Revenue)
• Key Growth Drivers: The decrease in services revenue was primarily due to a reduction in the delivery of professional services.

Product Portfolio:

• Professional Services: Provides expertise and tools to accelerate platform adoption and achieve successful business outcomes, including planning, implementation, management/monitoring, and optimization.
• Education Services: Offers training and certification guidance, technical resources, and hands-on training and certification exams.

Market Dynamics:

• Professional services are considered crucial for facilitating the adoption of Confluent's offerings, particularly with larger customers.
• The decrease in services gross margin is primarily attributed to personnel-related costs decreasing at a slower rate than the decline in services revenue.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: None for the three months ended December 31, 2024.
• Dividend Payments: Confluent has never declared or paid any cash dividends on its capital stock and does not intend to in the foreseeable future.
• Dividend Yield: Not applicable.
• Future Capital Return Commitments: No specific future capital return commitments were disclosed beyond the general intent to retain all available funds and future earnings to fund business development and expansion.

Balance Sheet Position (as of December 31, 2024):

• Cash and Equivalents: $386.0 million
• Total Debt: $1,092.1 million (Convertible senior notes, net)
• Net Cash Position: $818.5 million (Calculated as Cash and cash equivalents + marketable securities - total debt)
• Credit Rating: Not disclosed in the filing.
• Debt Maturity Profile: $1.1 billion aggregate principal amount of 0% convertible senior notes due January 15, 2027. No special interest has been paid to date.

Cash Flow Generation (Year Ended December 31, 2024):

• Operating Cash Flow: $33.5 million (compared to $(103.7) million in 2023)
• Free Cash Flow: Approximately $9.5 million (Operating Cash Flow of $33.5 million minus Capital Expenditures of $24.0 million).
• Cash Conversion Metrics: The shift from negative to positive operating cash flow indicates an improvement in cash generation from core operations.

Operational Excellence

Production & Service Model: Confluent's Data Streaming Platform is designed to stream, connect, process, and govern data in motion across various environments.

• Confluent Cloud: A fully-managed, cloud-native SaaS offering powered by the purpose-built Kora engine, which re-architected open source Apache Kafka for serverless, elastic, and resilient performance. It offers self-serve provisioning, zero downtime, autoscaling, true scale-to-zero pricing, a guaranteed 99.99% uptime SLA, multi-availability-zone replication, and enterprise-grade security features like at-rest and in-transit data encryption, SAML/SSO, and private networking.
• Confluent Platform: An enterprise-grade self-managed software offering deployable on-premises, in private cloud, or public cloud environments. It supports multiple development languages, offers over 120 pre-built connectors, includes an integrated data-in-motion database, and simplifies operations with Kubernetes container orchestration (Confluent Operator), self-balancing, and multi-region clusters.
• WarpStream: A BYOC managed service where the data plane remains within the customer's cloud environment, while the control plane runs in Confluent's managed cloud. It offers autoscaling, avoids inter-AZ networking fees by writing directly to object storage, and facilitates easy migration from Kafka-compatible sources.
• Unified Platform Capabilities: Cluster and Schema Linking enable consistent geo-replication of data, creating a seamless bridge between Confluent Platform and Confluent Cloud deployments.

Supply Chain Architecture:

• Key Suppliers & Partners:
  • Cloud Infrastructure Providers: Amazon Web Services, Microsoft Azure, and Google Cloud host Confluent Cloud.
  • Technology Partners: Companies like MongoDB, Elastic, SAP, Snowflake, and Databricks develop native integrations with Confluent.
  • Open Source Projects: Apache Kafka, Apache Flink, and Apache Iceberg form the foundational technologies of the platform.

Facility Network:

• Headquarters: Mountain View, California, where Confluent leases approximately 75,475 square feet until 2026.
• Other Offices: Leases offices in London, England; Bengaluru, India; Dubai, United Arab Emirates; and Singapore, along with numerous office service memberships globally.
• Research & Development: Significant investments are made in engineering capabilities, including the Kora engine, serverless Apache Flink, Stream Governance, and Tableflow.

Operational Metrics:

• Confluent Cloud offers a guaranteed 99.99% uptime SLA. No other specific operational efficiency or quality metrics were quantitatively disclosed.

Market Access & Customer Relationships

Go-to-Market Strategy: Confluent employs a "consumption-oriented" go-to-market model, aligning its success with customers' actual usage and value realization from its products.

• Distribution Channels:
  • Direct Sales: Utilizes an enterprise sales force to guide customers from initial interest and pilot projects to full production use cases and enterprise-wide platform integration.
  • Channel Partners: Engages with a powerful partner ecosystem including major cloud providers (Amazon Web Services, Microsoft, Google Cloud), global and regional systems integrators (Accenture, Infosys, Tata Consultancy Services, Deloitte), OEMs (Alibaba, Jio, Infosys, Mindgate Solutions), and Independent Software Vendors (ISVs) such as MongoDB, Elastic, SAP, Snowflake, and Databricks. These partnerships facilitate distribution, integration, and support globally, including through cloud marketplaces.
  • Digital Platforms: Offers a self-service motion through free cloud trials and pay-as-you-go arrangements for Confluent Cloud, and community downloads for its open source components, to encourage developer adoption.

Customer Portfolio:

• Total Customers: Approximately 5,800 as of December 31, 2024, representing a 17% year-over-year growth from 4,960 customers as of December 31, 2023. This count includes pay-as-you-go customers and treats affiliated entities with the same parent organization as a single customer.
• Enterprise Customers: As of December 31, 2024, Confluent had 1,381 customers with $100,000 or greater in Annual Recurring Revenue (ARR), an increase from 1,229 in 2023. These large customers represent significant opportunities for scale and operating leverage.
• Customer Concentration: No single customer accounted for 10% or more of total revenue for the years ended December 31, 2024, 2023, and 2022. Similarly, no customer represented 10% or more of gross accounts receivable as of December 31, 2024 and 2023.

Geographic Revenue Distribution (Year Ended December 31, 2024):

• United States: 60% of total revenue
• International: 40% of total revenue
• Growth Markets: Confluent plans to continue making significant investments to support growth in existing international markets and to penetrate additional ones.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The market for Confluent's offerings is highly competitive and characterized by rapid technological change, evolving customer needs, and frequent introductions of new offerings. The data infrastructure market is large and growing rapidly, driven by the increasing demand for real-time data and the emergence of technologies like generative AI and event-driven autonomous agents.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Open Source Kafka and Flink: Internal IT teams attempting "do it yourself" implementations using open source software. Confluent differentiates by offering enterprise-ready features and managed services that extend beyond the open source tools.
• Cloud Service Provider Alternatives: Well-established public cloud providers such as Amazon Web Services, Microsoft, and Google Cloud, which offer their own fully-managed data ingestion and streaming products (e.g., Azure Event Hubs, Amazon Managed Streaming for Apache Kafka, Amazon Kinesis, Google Cloud Pub/Sub).
• Competing Technologies and Legacy Vendors: Includes vendors with legacy products that have pivoted into the data streaming space, such as TIBCO Streaming, Cloudera Dataflow, Red Hat (IBM) AMQ Streams, and Oracle Cloud Infrastructure Streaming.

Emerging Competitive Threats: New market entrants, disruptive technologies, and alternative solutions are expected. Public cloud providers pose a significant threat due to their ability to embed innovations, bundle competing products, offer unfavorable pricing, and leverage existing customer relationships.

Competitive Response Strategy: Confluent's strategy includes continuous product leadership and innovation, focusing on an end-to-end operationalized customer journey, supporting mission-critical use cases at scale, and providing cloud-native, complete, and ubiquitous offerings with flexible pricing. The company also invests in the open source community and expands its partner ecosystem to maintain its competitive advantage.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: Confluent's business is significantly impacted by macroeconomic uncertainty, including high inflation, high interest rates, and geopolitical events. These conditions have led to longer sales cycles, reduced IT budgets, slowdowns in customer consumption expansion, and increased scrutiny on IT spending. The market for its offerings, particularly in emerging areas like Generative AI, may develop more slowly or differently than expected. Technology Disruption: The market is subject to rapid technological change, evolving industry standards, and changing customer needs. Failure to adapt to new technologies, enhance existing offerings, or integrate with evolving third-party platforms could impair competitiveness. The increasing prominence of AI may require significant resource commitment for new product development, with uncertain customer adoption rates. Customer Concentration: While no single customer accounts for a material portion of revenue, the business relies heavily on existing customers renewing subscriptions, expanding usage, and adopting additional use cases. Volatility in consumption from larger enterprise customers, driven by cloud cost controls and strategic reprioritizations, poses a risk to growth rates and net retention.

Operational & Execution Risks

Supply Chain Vulnerabilities: Confluent Cloud's infrastructure is entirely outsourced to third-party cloud providers (Amazon Web Services, Microsoft Azure, Google Cloud). Disruptions, capacity limitations, or unfavorable pricing from these providers could adversely affect service delivery, customer satisfaction, and financial results. Capacity Constraints: Managing rapid growth requires continuous investment in improving offerings, scaling internal operations, and expanding the services organization. Failure to effectively scale could lead to impaired product performance, reduced customer satisfaction, and inefficiencies. Product Quality: The complexity of Confluent's offerings means they may contain undetected defects or errors. Any actual or perceived errors, or incorrect implementation/use by customers, could damage reputation, lead to customer loss, and result in significant liability.

Financial & Regulatory Risks

Market & Financial Risks: Confluent has a history of operating losses and may not achieve or sustain profitability. Financial results and key metrics are subject to fluctuations due to revenue mix shifts, usage-based pricing volatility, customer retention rates, and macroeconomic conditions. The company may require additional capital, which might not be available on acceptable terms. Foreign Exchange: A strengthening U.S. dollar could increase the real cost of offerings for international customers, potentially affecting results. A portion of operating expenses are incurred in foreign currencies, exposing the company to exchange rate fluctuations, despite hedging programs. Regulatory & Compliance Risks: Subject to increasingly stringent U.S. and foreign data privacy and security laws (e.g., CCPA, EU GDPR, UK GDPR), cross-border data transfer restrictions, and regulations concerning Generative AI. Non-compliance could lead to regulatory actions, litigation, fines, and reputational harm. The company is also subject to governmental export and import controls and anti-corruption laws (e.g., FCPA, UK Bribery Act).

Geopolitical & External Risks

Geopolitical Exposure: International operations expose Confluent to risks from political or economic instability, changes in trade relations, differing labor regulations, and currency fluctuations. Ongoing conflicts (e.g., Russia/Ukraine, Middle East) have impacted and may continue to impact customer consumption and operations. Catastrophic Events: The business is vulnerable to disruptions from catastrophic events such as natural disasters, power outages, cyber-attacks, or pandemics, which could interrupt operations, harm reputation, and delay product development.

Innovation & Technology Leadership

Research & Development Focus: Confluent's R&D efforts are concentrated on enhancing its Data Streaming Platform's features and functionalities, expanding service offerings, and increasing market penetration. The company continuously incorporates feedback and new use cases from its community and customers.

• Core Technology Areas:
  • Data in Motion Platform: Significant investment in the Kora engine, which re-architected open source Apache Kafka to power Confluent Cloud as a fully-managed, cloud-native service with enhanced performance.
  • Stream Processing: Development of Confluent Cloud for Apache Flink (a serverless Flink offering) and Confluent Platform for Apache Flink, following the acquisition of immerok GmbH.
  • Data Governance: Creation of Stream Governance, a fully-managed data governance suite purpose-built for Apache Kafka, providing schemas, metadata, data quality rules, cataloging, and lineage.
  • Data Integration: Offers over 80 fully managed connectors and supports custom connectors, with the "Connect with Confluent" program driving direct integration with partner systems.
  • Data Materialization: Developed Tableflow to simplify feeding Kafka data directly into data warehouses, data lakes, or analytics engines as materialized Apache Iceberg or Delta Lake tables.
  • AI/ML Support: Positioning its Data Streaming Platform to support next-generation AI applications by enabling real-time, event-driven architectures for coordinating autonomous agents.

Intellectual Property Portfolio:

• Patent Strategy: As of December 31, 2024, Confluent holds 10 U.S. patents and has 23 pending patent applications in the U.S. and internationally, with patents scheduled to expire in 2044. The company relies on a combination of patents, trademarks, trade secrets, copyrights, and contractual protections.
• Trademark Strategy: Owns five registered trademarks in the United States, one pending U.S. trademark application, 41 registered trademarks in various non-U.S. jurisdictions, and three pending non-U.S. trademark applications.
• Open Source Strategy: The platform is built on open source technologies like Apache Kafka, Apache Flink, and Apache Iceberg. Confluent actively contributes code to these projects and makes some of its own features available under the Confluent Community License, fostering a robust developer community.

Technology Partnerships:

• Strategic Alliances: Includes major cloud providers (Amazon Web Services, Microsoft, Google Cloud) and Independent Software Vendors (ISVs) such as MongoDB, Elastic, SAP, Snowflake, and Databricks, with whom Confluent develops native integrations.
• Research Collaborations: Not explicitly detailed in the provided text, but engagement with the open source community implies collaborative development.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: Executive officers and certain other key employees are generally employed on an at-will basis. The company invests in leadership development programs and conducts annual talent reviews and succession planning.

Board Composition: The board of directors' audit committee is responsible for overseeing Confluent's cybersecurity risk management processes, including the oversight and mitigation of risks from cybersecurity threats.

Human Capital Strategy

Workforce Composition (as of December 31, 2024):

• Total Employees: 3,060
• Geographic Distribution: 54% of employees are located within the United States, 18% in India, and 8% in the UK, with the remainder distributed across 27 countries.
• Skill Mix: The company emphasizes attracting and retaining highly qualified personnel, particularly engineers experienced in designing and developing cloud-based infrastructure products and experienced sales professionals.

Talent Management:

• Acquisition & Retention: Confluent operates as a remote-first work culture, offering flexibility and broader access to talent. Compensation packages include both cash and equity components for most roles. The company provides a robust suite of benefits, including medical, dental, vision, retirement, mental wellbeing resources, family building benefits, and a comprehensive paid leave program.
• Retention Metrics: The company has experienced attrition, and increased attrition and related challenges have negatively impacted growth.
• Employee Value Proposition: Guided by five core values (Earn Our Customers’ Love, Be Smart, Humble, and Empathetic, Be Fired Up and Get Stuff Done, Be Tasteful, Not Wasteful, One Team) and leadership principles (People Matter, Seek the Truth, Prioritize Ruthlessly, Inspire Excellence, Optimize for ROI, Be Open and Honest, Think Long Term, Lead with Courage and Honor).

Diversity & Development:

• Development Programs: Offers leadership development programs, coaching for managers, professional and life skills coaching, ongoing training, and on-demand e-learning platforms. Employees receive guidance and feedback through a robust objectives and key results planning process and periodic performance reviews.
• Culture & Engagement: Fosters engagement through regular all-hands meetings, anonymous engagement surveys, "Experience Ambassadors" for in-person and virtual activities, and "FlexDesk" for on-demand professional meeting spaces.
• Fairness & Belonging: Committed to principles of fairness, belonging, and equal opportunity, aiming to build a global environment where every employee can grow and thrive.

Environmental & Social Impact

Environmental Commitments:

• Climate Strategy: Confluent publishes an annual ESG Report that details the measurement of its greenhouse gas emissions and its efforts to achieve carbon neutrality.
• Supply Chain Sustainability: Not explicitly detailed in the provided text.

Social Impact Initiatives:

• Community Investment: Not explicitly detailed in the provided text.
• Product Impact: Not explicitly detailed in the provided text.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Confluent historically experiences seasonality in new customer bookings, with a higher percentage of subscriptions to new customers and renewal subscriptions with existing customers occurring in the fourth quarter of the year. This pattern is attributed to the procurement, budgeting, and deployment cycles of many customers, particularly large enterprise clients, and is expected to continue.
• Economic Sensitivity: The company's business and financial condition are impacted by adverse and uncertain macroeconomic conditions, including high inflation, high interest rates, and geopolitical events. These factors have led to longer sales cycles, reduced IT budgets, and slowdowns in customer consumption expansion.
• Industry Cycles: Not explicitly detailed in the provided text beyond general economic sensitivity.

Planning & Forecasting: Confluent's ability to accurately forecast future results of operations is limited due to its relatively short operating history and the rapidly changing market environment. Management monitors key business metrics, establishes budgets, and makes strategic decisions, but past results may not be indicative of future performance.

Regulatory Environment & Compliance

Regulatory Framework:

• Industry-Specific Regulations: Confluent markets and sells its offerings to customers in heavily regulated industry verticals, such as banking and financial services, which subjects it to additional regulatory scrutiny and compliance burdens.
• International Compliance: The company is subject to increasingly stringent and evolving foreign and domestic laws and requirements related to data privacy and security, including the California Consumer Privacy Act (CCPA), the General Data Protection Regulation (EU GDPR), and the UK GDPR. These laws impose obligations related to data collection, use, sharing, and cross-border data transfers, with potential for significant fines for non-compliance.
• Emerging Technologies: The use of Generative AI technologies by employees and personnel is subject to various data privacy and security laws and obligations, with new regulations (e.g., Colorado’s Consumer Protections for Artificial Intelligence law, EU’s AI Act) expected to be adopted.

Trade & Export Controls:

• Export Restrictions: Confluent's offerings are subject to U.S. export controls, including the Export Administration Regulations, and incorporate encryption technology, requiring specific export authorizations.
• Sanctions Compliance: The company must comply with economic and trade sanctions laws and regulations administered by governments where its offerings are provided, including the U.S. government (e.g., OFAC, U.S. Department of State), which restrict shipments to embargoed jurisdictions or sanctioned parties.
• International Regulations: Various countries regulate the import and export of encryption and other technology, potentially limiting the company's ability to distribute or its customers' ability to deploy offerings internationally.

Legal Proceedings: Confluent is subject to legal proceedings and claims arising in the ordinary course of business, including intellectual property and employment claims. As of December 31, 2024, the company was not a party to any legal proceedings that would individually or collectively have a material adverse effect on its business, results of operations, financial condition, or cash flows.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: Confluent's effective tax rate was -3.1% for the year ended December 31, 2024, compared to -8.9% in 2023.
• Geographic Tax Planning: The company is subject to income taxes in the United States and various foreign jurisdictions. The determination of its worldwide provision for income taxes requires significant judgment, and the effective tax rate can fluctuate based on the mix of earnings between jurisdictions with differing statutory tax rates.
• Tax Reform Impact: The European Union and other countries are enacting or have committed to the Organisation for Economic Co-operation and Development/G20 Framework’s Pillar Two 15% global minimum tax, which may increase tax expense in future years.

Net Operating Losses (as of December 31, 2024):

• Federal NOL carryforwards: $1,403.6 million, carried forward indefinitely but limited to 80% of annual taxable income.
• State NOL carryforwards: $560.8 million, which will begin to expire in 2025.
• Foreign NOL carryforwards: $58.9 million, with an indefinite life.
• Valuation Allowance: Confluent maintains a full valuation allowance of $671.7 million against its U.S. and U.K. deferred tax assets due to a history of losses, indicating that it is more likely than not that these assets will not be realized.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Confluent maintains commercial general liability insurance and product liability insurance to offset certain potential liabilities.
• Risk Transfer Mechanisms: The company enters into indemnification provisions in its agreements with customers, business partners, landlords, and certain third-party vendors. It also indemnifies its officers, directors, and certain key employees. As of December 31, 2024, no material costs had been incurred related to these indemnification agreements.