Amplitude Announces First Quarter 2023 Financial Results

• First quarter revenue of $66.5 million, up 25% year-over-year
• Number of paying customers grew 28% year-over-year to 2,175
• Dollar-based Net Retention Rate (NRR) was 106%, with trailing twelve-month NRR of 114%

SAN FRANCISCO--(BUSINESS WIRE)-- Amplitude, Inc. (Nasdaq: AMPL), a leading digital analytics platform, today announced financial results for its first quarter ended March 31, 2023.

"Every business with a digital product needs digital analytics," said Spenser Skates, CEO and co-founder of Amplitude. “Amplitude is just scratching the surface of that opportunity, and we're systematically upleveling every part of our business to set us up for success long term. We're now better positioned to navigate the current environment while fully leaning into the opportunities ahead.”

First Quarter 2023 Financial Highlights:
(in millions, except per share and percentage amounts)
	First Quarter 2023		First Quarter 2022		Y/Y Change
Revenue	$66.5		$53.1		25%
Annual Recurring Revenue	$262		$209		25%
GAAP Loss from Operations	$(29.2)		$(22.0)		$(7.2)
Non-GAAP Loss from Operations	$(7.9)		$(7.7)		$(0.2)
GAAP Net Loss Per Share	$(0.23)		$(0.20)		$(0.03)
Non-GAAP Net Loss Per Share	$(0.04)		$(0.07)		$0.03
Net Cash Used in Operating Activities	$(5.1)		$(8.3)		$3.2
Free Cash Flow	$(5.8)		$(9.6)		$3.8
Remaining Performance Obligations	$240.4		$194.4		24%
Current Remaining Performance Obligations	$191.5		$149.6		28%

Non-GAAP loss from operations and non-GAAP net loss per share exclude expenses related to stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, and non-recurring costs. Stock-based compensation expense and related employer payroll taxes were $20.9 million in the first quarter of 2023 compared to $13.8 million in the first quarter of 2022. This increase was primarily driven by increases in employee headcount. Free cash flow is GAAP net cash used in operating activities, less cash used for purchases of property and equipment and capitalized internal-use software costs. The section titled "Non-GAAP Financial Measures" below contains a description of the non-GAAP financial measures and reconciliations between historical GAAP and non-GAAP information are contained in the tables below.

First Quarter and Recent Business Highlights:

• Number of paying customers grew 28% year-over-year to 2,175.
• Annual Recurring Revenue was $262 million, an increase of 25% year-over-year and an increase of $7 million compared to the fourth quarter of 2022.
• Dollar-based Net Retention Rate for the trailing twelve months was 114% as of March 31, 2023, compared to 126% as of March 31, 2022.
• Dollar-based Net Retention Rate was 106% as of March 31, 2023, compared to 127%, as of March 31, 2022.
• Amplitude hired Nathaniel Crook as the Company’s Chief Revenue Officer.

Financial Outlook:

The second quarter and full year 2023 outlook information provided below is based on Amplitude’s current estimates and is not a guarantee of future performance. These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” section below for information on the factors that could cause Amplitude’s actual results to differ materially from these forward-looking statements.

For the second quarter and full year 2023, the Company expects:

	Second Quarter 2023		Full Year 2023
Revenue	$66.5 - $67.2 million		$266.0 - $269.0 million
Non-GAAP Operating Loss	$(1.1) - $(0.6) million		$(8.4) - $(6.0) million
Non-GAAP Net Income Per Share	$0.01 - $0.02		$0.02 - $0.04
Weighted Average Shares Outstanding	116.5 million		117.5 million

The impact of restructuring charges, which include employee severance and termination benefits, are excluded from our non-GAAP operating income and non-GAAP net income per common share business outlook.

An outlook for GAAP loss from operations, GAAP operating margin, GAAP net income, GAAP income per share and a reconciliation of expected non-GAAP loss from operations to GAAP loss from operations, expected non-GAAP operating margin to GAAP operating margin, expected non-GAAP net income to GAAP net income, and expected non-GAAP net income per share to GAAP net income per share have not been provided as the quantification of certain items included in the calculation of GAAP loss from operations, GAAP operating margin, GAAP net income and GAAP net income per share cannot be reasonably calculated or predicted at this time without unreasonable efforts. For example, the non-GAAP adjustment for stock-based compensation expense requires additional inputs such as the number and value of awards granted that are not currently ascertainable, and the non-GAAP adjustment for amortization of acquired intangible assets depends on the timing and value of intangible assets acquired that cannot be accurately forecasted.

Conference Call Information:

Amplitude will host a live video webcast to discuss its financial results for its first quarter ended March 31, 2023, as well as the financial outlook for its second quarter and full year 2023 today at 2:00 PM Pacific Time / 5:00 PM Eastern Time. Interested parties may access the webcast, earnings press release, and investor presentation on the events section of Amplitude’s investor relations website at investors.amplitude.com. A replay will be available in the same location a few hours after the conclusion of the live webcast.

Forward-Looking Statements:

This press release contains express and implied "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s financial outlook for the second quarter and full year 2023, the Company’s growth strategy and business aspirations and its market position and market opportunity. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” and “outlook,” or the negative version of those words or phrases or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not statements of historical fact, and are based on current expectations, estimates, and projections about the Company’s industry as well as certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. These statements are subject to numerous uncertainties and risks that could cause actual results, performance, or achievement to differ materially and adversely from those anticipated or implied in the statements, including risks related to: the Company’s limited operating history and rapid growth over the last several years, which makes it difficult to forecast the Company’s future results of operations; the Company’s history of losses; any decline in the Company’s customer retention or expansion of its commercial relationships with existing customers or an inability to attract new customers; expected fluctuations in the Company’s financial results, making it difficult to project future results; the Company’s focus on sales to larger organizations and potentially increased dependency on those relationships, which may increase the variability of the Company’s sales cycles and results of operations; downturns or upturns in new sales, which may not be immediately reflected in the Company’s results of operations and may be difficult to discern; unfavorable conditions in the Company’s industry or the global economy, or reductions in information technology spending, which could limit the Company’s ability to grow its business; the Company’s recent restructuring plan, which may not result in anticipated savings or operational efficiencies and could result in total costs and expenses that are greater than expected; the market for SaaS applications, which may develop more slowly than the Company expects or decline; the Company’s intellectual property rights, which may not protect its business or provide the Company with a competitive advantage; and evolving privacy and other data-related laws. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are or will be included under the caption "Risk Factors" and elsewhere in the reports and other documents that the Company files with the Securities and Exchange Commission (the “SEC”) from time to time, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 16, 2023, and the Company’s Quarterly Report on Form 10-Q, which is being filed with the SEC at or around the date hereof. The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. The Company undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

Non-GAAP Financial Measures:

This press release includes financial information that has not been prepared in accordance with GAAP. The Company uses non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating the Company’s ongoing operational performance. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial results with other companies in the industry, many of which present similar non-GAAP financial measures to investors. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under GAAP. For example, other companies in the Company’s industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. In addition, free cash flow does not reflect the Company’s future contractual commitments and the total increase or decrease of its cash balance for a given period.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the Company’s non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures below.

Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Loss from Operations, Non-GAAP Operating Margin, Non-GAAP Net Loss, and Non-GAAP Net Loss per Share.

The Company defines these non-GAAP financial measures as their respective GAAP measures, excluding expenses related to stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, and non-recurring costs. The Company excludes stock-based compensation expense and related employer payroll taxes, which is a non-cash expense, from certain of its non-GAAP financial measures because it believes that excluding this item provides meaningful supplemental information regarding operational performance. The Company excludes amortization of intangible assets, which is a non-cash expense, related to business combinations from certain of its non-GAAP financial measures because such expenses are related to business combinations and have no direct correlation to the operation of the Company’s business. Although the Company excludes these expenses from certain non-GAAP financial measures, the revenue from acquired companies subsequent to the date of acquisition is reflected in these measures and the acquired intangible assets contribute to the Company’s revenue generation. The Company excludes non-recurring costs from certain of its non-GAAP financial measures because such expenses do not repeat period over period and are not reflective of the ongoing operation of the Company’s business.

The Company uses non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP loss from operations, non-GAAP operating margin, non-GAAP net loss, and non-GAAP net loss per share in conjunction with its traditional GAAP measures to evaluate the Company’s financial performance. The Company believes that these measures provide its management, board of directors, and investors consistency and comparability with its past financial performance and facilitates period-to-period comparisons of operations.

Free Cash Flow and Free Cash Flow Margin. The Company defines free cash flow as net cash used in operating activities, less cash used for purchases of property and equipment and capitalized internal-use software costs. Free cash flow margin is calculated as free cash flow divided by total revenue. The Company believes that free cash flow and free cash flow margin are useful indicators of liquidity that provides its management, board of directors, and investors with information about its future ability to generate or use cash to enhance the strength of its balance sheet and further invest in its business and pursue potential strategic initiatives.

Definitions of Business Metrics:

Annual Recurring Revenue

The Company defines Annual Recurring Revenue (“ARR”) as the annual recurring revenue of subscription agreements, including certain premium professional services that are subject to contractual subscription terms, at a point in time based on the terms of customers’ contracts. ARR should be viewed independently of revenue, and does not represent the Company’s GAAP revenue on an annualized basis, as it is an operating metric that can be impacted by contract start and end dates and renewal rates. ARR is also not intended to be a forecast of revenue.

Dollar-based net retention rate

The Company calculates dollar-based net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period-end (the “Prior Period ARR”). The Company then calculates the ARR from these same customers as of the current period-end (the “Current Period ARR”). Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months, but excludes ARR from new customers as well as any overage charges in the current period. The Company then divides the total Current Period ARR by the total Prior Period ARR to arrive at the dollar-based net retention rate ("NRR"). The Company then calculates the weighted average of the trailing 12-month dollar-based net retention rates, to arrive at the dollar-based net retention rate (“NRR (TTM)”).

About Amplitude

Amplitude is a leading digital analytics platform that helps companies unlock the power of their products. Almost 2,200 customers, including Atlassian, Jersey Mike’s, NBCUniversal, Shopify, and Under Armour, rely on Amplitude to gain self-service visibility into the entire customer journey. Amplitude guides companies every step of the way as they capture data they can trust, uncover clear insights about customer behavior, and take faster action. When teams understand how people are using their products, they can deliver better product experiences that drive growth. Amplitude is the best-in-class analytics solution for product, data, and marketing teams, ranked #1 in multiple categories in G2’s 2023 Spring Report. Learn how to optimize your digital products and business at amplitude.com.

AMPLITUDE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
		March 31, 2023				December 31, 2022
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	214,062			$	218,494
Marketable securities, current			53,232				11,971
Accounts receivable, net			30,581				22,716
Prepaid expenses and other current assets			17,476				20,335
Deferred commissions, current			11,275				10,918
Total current assets			326,626				284,434
Marketable securities, noncurrent			30,878				71,217
Property and equipment, net			9,838				9,408
Intangible assets, net			1,557				2,022
Goodwill			4,073				4,073
Deferred commissions, noncurrent			25,129				25,799
Restricted cash, noncurrent			858				855
Operating lease right-of-use assets			8,690				9,593
Other noncurrent assets			4,882				6,354
Total assets		$	412,531			$	413,755
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	3,699			$	490
Accrued expenses			19,634				18,699
Deferred revenue			89,348				89,993
Total current liabilities			112,681				109,182
Operating lease liabilities, noncurrent			6,109				7,093
Noncurrent liabilities			2,521				2,511
Total liabilities			121,311				118,786
Stockholders’ equity:
Common stock			1				1
Additional paid-in capital			591,183				568,889
Accumulated other comprehensive loss			(482	)			(754	)
Accumulated deficit			(299,482	)			(273,167	)
Total stockholders’ equity			291,220				294,969
Total liabilities and stockholders’ equity		$	412,531			$	413,755

AMPLITUDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
				Three Months Ended March 31,
				2023				2022
				(unaudited)				(unaudited)
		Revenue		$	66,477			$	53,065
		Cost of revenue (1)			19,187				16,063
		Gross profit			47,290				37,002
		Operating expenses:
		Research and development (1)			23,708				16,501
		Sales and marketing (1)			39,133				28,130
		General and administrative (1)			13,622				14,362
		Total operating expenses			76,463				58,993
		Loss from operations			(29,173	)			(21,991	)
		Other income (expense), net			3,138				86
		Loss before provision for (benefit from) income taxes			(26,035	)			(21,905	)
		Provision for (benefit from) income taxes			280				315
		Net loss		$	(26,315	)		$	(22,220	)
		Net loss per share
		Basic and diluted		$	(0.23	)		$	(0.20	)
		Weighted-average shares used in calculating net loss per share:
		Basic and diluted			114,369				109,553
(1)		Amounts include stock-based compensation expense as follows:
				Three Months Ended March 31,
				2023				2022
		Cost of revenue		$	1,792			$	922
		Research and development			8,579				4,284
		Sales and marketing			6,368				3,240
		General and administrative			3,218				5,057
		Total stock-based compensation expense		$	19,957			$	13,503

AMPLITUDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
		Three Months Ended March 31,
		2023				2022
		(unaudited)				(unaudited)
Cash flows from operating activities:
Net loss		$	(26,315	)		$	(22,220	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization			1,349				901
Stock-based compensation expense			19,957				13,503
Other			(245	)			118
Non-cash operating lease costs			985				809
Changes in operating assets and liabilities:
Accounts receivable			(8,145	)			(2,905	)
Prepaid expenses and other current assets			2,753				(2,460	)
Deferred commissions			312				(2,391	)
Other noncurrent assets			1,472				(836	)
Accounts payable			3,122				(1,328	)
Accrued expenses			1,043				2,946
Deferred revenue			(645	)			5,843
Operating lease liabilities			(704	)			(269	)
Net cash used in operating activities			(5,061	)			(8,289	)
Cash flows from investing activities:
Purchase of property and equipment			(329	)			(713	)
Capitalization of internal-use software costs			(448	)			(594	)
Net cash used in investing activities			(777	)			(1,307	)
Cash flows from financing activities:
Proceeds from the exercise of stock options			1,687				3,989
Cash received for tax withholding obligations on equity award settlements			6,325				7,342
Cash paid for tax withholding obligations on equity award settlements			(5,955	)			(8,758	)
Repurchase of unvested stock options			(648	)			—
Net cash provided by financing activities			1,409				2,573
Net increase (decrease) in cash, cash equivalents, and restricted cash			(4,429	)			(7,023	)
Cash, cash equivalents, and restricted cash at beginning of the period			219,349				308,295
Cash, cash equivalents, and restricted cash at end of the period		$	214,920			$	301,272

AMPLITUDE, INC.
Reconciliation of GAAP to Non-GAAP Data
(In thousands, except percentages and per share amounts)
(unaudited)
	Three Months Ended March 31,
	2023				2022
Reconciliation of gross profit and gross margin
GAAP gross profit	$	47,290			$	37,002
Plus: stock-based compensation expense and related employer payroll taxes		1,792				922
Plus: amortization of acquired intangible assets		422				489
Non-GAAP gross profit	$	49,504			$	38,413
GAAP gross margin		71.1	%			69.7	%
Non-GAAP adjustments		3.3	%			2.7	%
Non-GAAP gross margin		74.5	%			72.4	%
Reconciliation of operating expenses
GAAP research and development		23,708			$	16,501
Less: stock-based compensation expense and related employer payroll taxes		(9,033	)			(4,482	)
Non-GAAP research and development	$	14,675			$	12,019
GAAP research and development as percentage of revenue		35.7	%			31.1	%
Non-GAAP research and development as percentage of revenue		22.1	%			22.6	%
GAAP sales and marketing	$	39,133			$	28,130
Less: stock-based compensation expense and related employer payroll taxes		(6,681	)			(3,233	)
Non-GAAP sales and marketing	$	32,452			$	24,897
GAAP sales and marketing as percentage of revenue		58.9	%			53.0	%
Non-GAAP sales and marketing as percentage of revenue		48.8	%			46.9	%
GAAP general and administrative	$	13,622			$	14,362
Less: stock-based compensation expense and related employer payroll taxes		(3,348	)			(5,140	)
Non-GAAP general and administrative	$	10,274			$	9,222
GAAP general and administrative as percentage of revenue		20.5	%			27.1	%
Non-GAAP general and administrative as percentage of revenue		15.5	%			17.4	%
Reconciliation of operating loss and operating margin
GAAP loss from operations	$	(29,173	)		$	(21,991	)
Plus: stock-based compensation expense and related employer payroll taxes		20,854				13,776
Plus: amortization of acquired intangible assets		422				489
Non-GAAP loss from operations	$	(7,897	)		$	(7,726	)
GAAP operating margin		(43.9	%)			(41.4	%)
Non-GAAP adjustments		32.0	%			26.9	%
Non-GAAP operating margin		(11.9	%)			(14.6	%)
Reconciliation of net loss
GAAP net loss	$	(26,315	)		$	(22,220	)
Plus: stock-based compensation expense and related employer payroll taxes		20,854				13,776
Plus: amortization of acquired intangible assets		422				489
Non-GAAP net loss	$	(5,039	)		$	(7,955	)
Reconciliation of net loss per share
GAAP net loss per share, basic and diluted	$	(0.23	)		$	(0.20	)
Non-GAAP adjustments to net loss		0.19				0.13
Non-GAAP net loss per share, basic and diluted	$	(0.04	)		$	(0.07	)
Weighted-average shares used in GAAP and non-GAAP per share calculation, basic and diluted		114,369				109,553
Note: Certain figures may not sum due to rounding

AMPLITUDE, INC.
Reconciliation of GAAP Cash Flows from Operations to Free Cash Flow
(In thousands, except for percentages)
(unaudited)
		Three Months Ended March 31,
		2023				2022
Net cash used in operating activities		$	(5,061	)		$	(8,289	)
Less:
Purchases of property and equipment			(329	)			(713	)
Capitalization of internal-use software costs			(448	)			(594	)
Free cash flow		$	(5,838	)		$	(9,596	)
Net cash used in operating activities margin			(7.6	%)			(15.6	%)
Non-GAAP adjustments			(1.2	%)			(2.5	%)
Free cash flow margin			(8.8	%)			(18.1	%)
Note: Certain figures may not sum due to rounding

AMPLITUDE, INC.
Historicals - Key Business Metrics
(In millions, except for percentages)
(unaudited)
		Three Months Ended
		March 31, 2021				June 30, 2021				September 30, 2021				December 31, 2021				March 31, 2022				June 30, 2022				September 30, 2022				December 31, 2022				March 31, 2023
Annual Recurring Revenue (ARR)		$	137			$	161			$	179			$	197			$	209			$	227			$	243			$	255			$	262
Dollar-based Net Retention Rate (NRR)			118	%			128	%			128	%			130	%			127	%			118	%			113	%			110	%			106	%
Dollar-based Net Retention Rate (NRR TTM)			118	%			119	%			121	%			123	%			126	%			126	%			123	%			119	%			114	%

 

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Investor Relations

Yaoxian Chew

ir@amplitude.com

Communications

Darah Easton

press@amplitude.com

Source: Amplitude, Inc.