Shares of Confluent, Inc. (CFLT) plummeted 28.83% in pre-market trading on Thursday, following the release of the company's second-quarter 2025 financial results. Despite beating analyst expectations for Q2, Confluent's cautious outlook for the third quarter sparked a significant sell-off.

For the second quarter, Confluent reported adjusted earnings per share of $0.09, surpassing the analyst estimate of $0.08. Revenue came in at $282.3 million, beating the expected $278.4 million. The company's adjusted operating income reached $17.8 million, with an adjusted operating margin of 6.3%, both exceeding analyst projections.

However, Confluent's guidance for Q3 fell short of investor expectations, triggering the sharp decline. The company forecasts Q3 adjusted EPS between $0.09 and $0.10, which is at the lower end of analyst expectations of $0.10. Additionally, the outlook for Q3 subscription revenue of $281-$282 million and the full-year subscription revenue forecast of $1.105-$1.11 billion were perceived as conservative by the market. This cautious outlook, combined with broader economic uncertainties, contributed to the substantial sell-off in Confluent's stock. The market's reaction was further amplified by Canaccord Genuity's decision to cut its target price for Confluent from $32 to $27, reflecting lowered expectations for the company's near-term performance.