Shares of Confluent, Inc. (CFLT) plummeted 18.18% in after-hours trading on Wednesday following the release of its second-quarter 2025 financial results. Despite beating analyst estimates for the quarter, the company's outlook for the third quarter appears to have fallen short of investor expectations.

Confluent reported adjusted earnings per share of $0.09 for Q2, slightly above the IBES estimate of $0.08. Revenue came in at $282.3 million, surpassing the expected $278.4 million. The company's adjusted operating income reached $17.8 million, significantly higher than the estimated $14.4 million, resulting in an adjusted operating margin of 6.3%.

However, the company's guidance for the third quarter seems to have spooked investors. Confluent projects 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 may have been perceived as conservative by the market. This cautious outlook, combined with the broader economic uncertainties, likely contributed to the sharp sell-off in Confluent's stock during extended trading.