Shares of Confluent, Inc. (CFLT) are experiencing a significant pre-market plunge of 10.67% on Thursday following the company's first-quarter earnings report and disappointing forward guidance. Despite beating analyst expectations for Q1, investors are focusing on the cloud data streaming platform provider's weaker-than-anticipated outlook for the second quarter and full year.

Confluent reported better-than-expected Q1 results, with revenue of $271.1 million, up 24.8% year-over-year, and adjusted earnings per share of $0.08. However, the company's Q2 revenue guidance of $267.5 million fell 3.9% below analysts' estimates, while full-year revenue guidance was lowered to $1.11 billion at the midpoint, down 1.3% from previous expectations. CEO Jay Kreps cited a slowdown in new use case additions among larger customers, impacting cloud consumption growth, as a key factor behind the conservative guidance.

Adding to the negative sentiment, several analysts have cut their price targets for Confluent following the earnings report. Canaccord Genuity lowered its target from $38 to $32, while Bernstein and Needham also reduced their price targets. The market's reaction reflects growing concerns about Confluent's growth trajectory in the face of macroeconomic uncertainties and customer optimization efforts, overshadowing the company's strong customer acquisition and traction with new offerings like WarpStream and Freight Clusters.