Amplitude Inc

Previous wording

Amplitude is a leading Digital Analytics Platform that helps businesses understand how people are using their products so they can build amazing digital experiences that increase acquisition, monetization and retention - and drive revenue growth. We work with over 3,200 paying customers of various sizes and stages of digital maturity, across many industries, including the teams behind some of the most-beloved digital products in the world. We have experienced significant growth in recent years, with over 700 employees in seven global offices.

Current wording

Amplitude is a leading Digital Analytics Platform that helps businesses understand how people are using their products so they can build amazing digital experiences that increase acquisition, monetization and retention - and drive revenue growth. We work with almost 3,500 paying customers of various sizes and stages of digital maturity, across many industries, including the teams behind some of the most-beloved digital products in the world. We have experienced significant growth in recent years, with approximately 700 employees in seven global offices.

Previous wording

Historically, we have been successful at efficiently growing our customer base and number of customers who have entered into and grown into larger subscriptions with us as evidenced by the growth of our number of paying customers and number of customers that represent greater than $100,000 in annual recurring revenue (“ARR”). As of June 30, 2024 and 2023, we had 3,224 and 2,344 paying customers, respectively, representing an increase of 38% year-over-year. Additionally, as of June 30, 2024 and 2023, we had 547 and 499 customers, respectively, that each represented greater than $100,000 in ARR, representing a 10% increase year-over-year. We believe our relationship with some of the world’s most beloved product-led companies has resulted in increased brand credibility and access to many attractive growth opportunities. As of June 30, 2024 and 2023, our dollar-based net retention rate for the trailing twelve months was 98% and 108%, respectively, for paying customers. Additionally, our ending dollar-based net retention rate for paying customers as of June 30, 2024 and 2023, was 96% and 101%, respectively.

Current wording

Historically, we have been successful at efficiently growing our customer base and number of customers who have entered into and grown into larger subscriptions with us as evidenced by the growth of our number of paying customers and number of customers that represent greater than $100,000 in annual recurring revenue (“ARR”). As of September 30, 2024 and 2023, we had 3,486 and 2,471 paying customers, respectively, representing an increase of 41% year-over-year. Additionally, as of September 30, 2024 and 2023, we had 567 and 502 customers, respectively, that each represented greater than $100,000 in ARR, representing a 13% increase year-over-year. We believe our relationship with some of the world’s most beloved product-led companies has resulted in increased brand credibility and access to many attractive growth opportunities. As of September 30, 2024 and 2023, our dollar-based net retention rate for the trailing twelve months was 97% and 105%, respectively, for paying customers. Additionally, our ending dollar-based net retention rate for paying customers as of September 30, 2024 and 2023, was 98% and 99%, respectively.

Previous wording

Our investment for growth encompasses multiple critical areas, including product expansion, our sales force, sales support, partner ecosystem, and our international presence. We continue to evolve our technology and product offerings, to ensure that we are best serving our customers’ needs. For example, in June 2024, we introduced Warehouse Native to allow customers to unlock insights directly from their data warehouse, and in October 2023, we introduced Plus to bring the full power of digital analytics to every team for less. We believe the evolution of our technology and product offerings will lead to increased retention and positive customer referrals that will continue to generate expansion opportunities within our existing installed base and from new customers. We plan to continue to invest in our research and development organization to maintain and strengthen our market leadership position, and we believe that attracting the best engineering talent will continue to be critical to our long-term success. Although we previously experienced cost savings due to our restructuring, as we continue to invest in our platform, we expect our research and development expenses, including those capitalized for internal-use software, to increase in dollar amount over time. Over the longer term, we believe these expenses as a percentage of revenue will decrease, though these expenses as a percentage of revenue could increase in the short term.

Current wording

Our investment for growth encompasses multiple critical areas, including product expansion, our sales force, sales support, partner ecosystem, and our international presence. We continue to evolve our technology and product offerings, to ensure that we are best serving our customers’ needs. For example, in September 2024, we launched Amplitude Made Easy to simplify the platform experience for customers, and in June 2024, we introduced Warehouse Native to allow customers to unlock insights directly from their data warehouse. Additionally, in October 2023, we introduced Plus to bring the full power of digital analytics to every team for less. We believe the evolution of our technology and product offerings will lead to increased retention and positive customer referrals that will continue to generate expansion opportunities within our existing installed base and from new customers. We plan to continue to invest in our research and development organization to maintain and strengthen our market leadership position, and we believe that attracting the best engineering talent will continue to be critical to our long-term success. As we continue to invest in our platform, we expect our research and development expenses, including those capitalized for internal-use software, to increase in dollar amount over time. Over the longer term, we believe these expenses as a percentage of revenue will decrease, though these expenses as a percentage of revenue could increase in the short term.

Previous wording

Finally, we see opportunities to expand offices and headcount internationally to better service targeted international markets where we believe we have significant opportunity to accelerate existing traction and success. For the three and six months ended June 30, 2024, 40% of our revenue was generated outside the United States. As we seek to expand our business globally, we may be adversely affected by global economic and political instability. For example, as a result of the Russia-Ukraine war, we have terminated or will terminate certain relationships with customers in Russia. Some of the businesses of our customers in the impacted regions have also experienced disruptions that have affected their ability to pay for our services. See “Risk Factors–Risks Related to Our Business and Industry–Our operations are international in scope, and we plan further geographical expansion, creating a variety of operational challenges.”

Current wording

Finally, we see opportunities to expand offices and headcount internationally to better service targeted international markets where we believe we have significant opportunity to accelerate existing traction and success. For the three and nine months ended September 30, 2024, 40% of our revenue was generated outside the United States. As we seek to expand our business globally, we may be adversely affected by global economic and political instability. For example, as a result of the Russia-Ukraine war and related sanctions, we have terminated certain relationships with customers in Russia. Some of the businesses of our customers in the impacted regions have also experienced disruptions that have affected their ability to pay for our services. See “Risk Factors–Risks Related to Our Business and Industry–Our operations are international in scope, and we plan further geographical expansion, creating a variety of operational challenges.”

Previous wording

Gross profit, or revenue less cost of revenue, and gross margin, or gross profit as a percentage of revenue, has been and will continue to be affected by various factors, including the timing of our acquisition of new customers, renewals of, and follow-on sales to, existing customers, costs associated with operating our platform, and the extent to which we expand our operations and customer support organizations. In the long term, we expect our gross profit to increase in dollar amount and our gross margin to improve as we optimize our system performance and leverage ingested data for new products.

Current wording

Gross profit, or revenue less cost of revenue, and gross margin, or gross profit as a percentage of revenue, has been and will continue to be affected by various factors, including the timing of our acquisition of new customers, renewals of, and follow-on sales to existing customers, costs associated with operating our platform, and the extent to which we expand our operations and customer support organizations. In the long term, we expect our gross profit to increase in dollar amount and our gross margin to improve as we optimize our system performance and leverage ingested data for new products though the gross margin percentage may fluctuate from quarter to quarter due to potential reinvestments into the business. The extent and timing of such investments may vary.

Previous wording

Research and development expenses consist primarily of personnel and related expenses. These expenses also include product design costs prior to the application development stage, third-party services and consulting expenses, software subscriptions, and allocated overhead costs for overhead used in research and development activities. A substantial portion of our research and development efforts are focused on enhancing our software, including researching ways to add new features and functionality to our platform. Although we previously experienced cost savings due to our restructuring, we anticipate continuing to invest in innovation and technology development, and as a result, we expect research and development expenses to increase in dollar amount but to decrease as a percentage of revenue over the longer term, though the percentage may fluctuate from quarter to quarter depending on the extent and timing of product development initiatives. In the short term, research and development costs could increase as a percentage of revenue.

Current wording

Research and development expenses consist primarily of personnel and related expenses. These expenses also include product design costs prior to the application development stage, third-party services and consulting expenses, software subscriptions, and allocated overhead costs for overhead used in research and development activities. A substantial portion of our research and development efforts are focused on enhancing our software, including researching ways to add new features and functionality to our platform. We anticipate continuing to invest in innovation and technology development, and as a result, we expect research and development expenses to increase in dollar amount but to decrease as a percentage of revenue over the longer term, though the percentage may fluctuate from quarter to quarter depending on the extent and timing of product development initiatives. In the short term, research and development costs could increase as a percentage of revenue.

Previous wording

Revenue increased $5.5 million, or 8%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase in revenue was primarily due to growth of our paying customer base by 38%, partially offset by partial and full churn among existing customers which marginally outpaced our expansion of existing customers as reflected by our NRR (TTM) of 98% as of June 30, 2024.

Current wording

Revenue increased $4.6 million, or 6%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase in revenue was primarily due to growth of our paying customer base by 41%, partially offset by partial and full churn among existing customers which marginally outpaced our expansion of existing customers as reflected by our NRR (TTM) of 97% as of September 30, 2024.

Previous wording

Cost of revenue increased $2.3 million, or 13%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily due to an increase of $1.6 million in third-party hosting costs as we increased capacity to support paying customer usage and growth of our paying customer base and $0.6 million in personnel and related expenses, including an increase in allocated overhead costs.

Current wording

Cost of revenue increased $1.5 million, or 8%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily due to an increase of $0.7 million in third-party hosting costs as we increased capacity to support paying customer usage and growth of our paying customer base and $1.0 million in personnel and related expenses, including an increase in allocated overhead costs.

Previous wording

Research and development expenses decreased $1.3 million, or 6%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This decrease was primarily due to a higher percentage of personnel being dedicated to new application development.

Current wording

Research and development expenses decreased $2.8 million, or 13%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This decrease was primarily due to a higher percentage of personnel being dedicated to new application development which are capitalized as internal use software costs in the period.

Previous wording

General and administrative expenses increased $4.2 million, or 16%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily attributable to an increase of $2.4 million in stock-based compensation expenses and related payroll taxes, and an increase of $1.6 million in personnel and related expenses, including an increase in allocated overhead costs.

Current wording

General and administrative expenses increased $2.6 million, or 18%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily attributable to an increase of $1.6 million in personnel and related expenses, including an increase in allocated overhead costs.

Previous wording

Provision for (benefit from) income taxes increased $0.03 million, or 15%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to increased foreign taxes during the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Current wording

Provision for (benefit from) income taxes increased $0.5 million, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to increased foreign taxes during the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Previous wording

Revenue increased $11.7 million, or 9%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase in revenue was primarily due to growth of our paying customer base of 38%, partially offset by partial and full churn among existing customers which marginally outpaced our expansion of existing customers as reflected by our NRR (TTM) of 98% as of June 30, 2024.

Current wording

Revenue increased $16.3 million, or 8%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase in revenue was primarily due to growth of our paying customer base of 41%, partially offset by partial and full churn among existing customers which marginally outpaced our expansion of existing customers as reflected by our NRR (TTM) of 97% as of September 30, 2024.

Previous wording

Cost of revenue increased $2.0 million, or 6%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to an increase of $2.2 million in third-party hosting costs as we increased capacity to support paying customer usage and the growth of our paying customer base.

Current wording

Cost of revenue increased $3.5 million, or 6%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily due to an increase of $2.9 million in third-party hosting costs as we increased capacity to support paying customer usage and the growth of our paying customer base.

Previous wording

Research and development expenses decreased $2.0 million, or 4%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This decrease was primarily due to a higher percentage of personnel being dedicated to new application development.

Current wording

Research and development expenses decreased $4.8 million, or 7%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This decrease was primarily due to a higher percentage of personnel being dedicated to new application development which are capitalized as internal use software costs in the period.

Previous wording

Sales and marketing expenses increased $7.5 million, or 10%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to an increase of $4.7 million in personnel and related expenses and an increase of $1.0 million in commissions as a result of higher amortization of capitalized contract acquisition costs. The increase was also attributable to an increase of $1.7 million in stock-based compensation expenses and related payroll taxes, including an increase in allocated overhead costs.

Current wording

Sales and marketing expenses increased $9.9 million, or 9%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily due to an increase of $5.7 million in personnel and related expenses, including an increase in allocated overhead costs and an increase of $2.3 million in stock-based compensation expenses and related payroll taxes. The increase was also attributable to an increase of $1.7 million in commissions and variable compensation related to an increase in the amortization of capitalized commissions in the period compared to the same period in the prior year and amounts earned in the year.

Previous wording

General and administrative expenses increased $3.2 million, or 25%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily attributable to an increase of $1.7 million in stock-based compensation expenses and related payroll taxes, and an increase of $0.9 million in personnel and related expenses, including an increase in allocated overhead costs.

Current wording

General and administrative expenses increased $6.8 million, or 17%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily attributable to an increase of $3.2 million in personnel and related expenses, including an increase in allocated overhead costs and an increase of $2.6 million in stock-based compensation expenses and related payroll taxes.

Previous wording

Restructuring and other related charges related to employee transition, severance payments, employee benefits, and stock-based compensation were $8.2 million during the three months ended June 30, 2023, with no costs incurred in the three months ended June 30, 2024.

Current wording

Restructuring and other related charges related to employee transition, severance payments, employee benefits, and stock-based compensation were $8.2 million during the nine months ended September 30, 2023, with no costs incurred in the nine months ended September 30, 2024.

Previous wording

Provision for (benefit from) income taxes increased $0.2 million, or 38%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to increased foreign taxes during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

Provision for (benefit from) income taxes increased $0.6 million, or 89%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to increased foreign taxes during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Previous wording

Since inception, we have financed operations primarily through the net proceeds we have received from the sales of our preferred stock and common stock as well as cash generated from the sale of subscriptions to our platform. We have generated losses from our operations as reflected in our accumulated deficit of $408.4 million as of June 30, 2024. We generated positive cash flows from operating activities for the six months ended June 30, 2024 and for the year ended December 31, 2023; however, we have historically generated negative cash flows from operating activities. Our future capital requirements will depend on many factors, including revenue growth and costs incurred to support our platform, including growth in our customer base and customer usage, increased research and development expenses to support the growth of our business and related infrastructure, and increased general and administrative expenses to support being a publicly-traded company.

Current wording

Since inception, we have financed operations primarily through the net proceeds we have received from the sales of our preferred stock and common stock as well as cash generated from the sale of subscriptions to our platform. We have generated losses from our operations as reflected in our accumulated deficit of $425.3 million as of September 30, 2024. We generated positive cash flows from operating activities for the nine months ended September 30, 2024 and for the year ended December 31, 2023; however, we have historically generated negative cash flows from operating activities. Our future capital requirements will depend on many factors, including revenue growth and costs incurred to support our platform, including growth in our customer base and customer usage, increased research and development expenses to support the growth of our business and related infrastructure, and increased general and administrative expenses to support being a publicly-traded company.

Previous wording

As of June 30, 2024, our principal sources of liquidity were cash and cash equivalents of $282.3 million and restricted cash of $0.9 million. We also had $36.0 million in marketable securities that provide additional capital resources. Additionally, a substantial source of our cash provided by operating activities is our deferred revenue, which is included on our condensed consolidated balance sheets as a liability. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is recorded as revenue over the term of the subscription agreement. As of June 30, 2024, we had $124.4 million of deferred revenue, all of which was recorded as a current liability. This deferred revenue will be recognized as revenue when or as the related performance obligations are met.

Current wording

As of September 30, 2024, our principal sources of liquidity were cash and cash equivalents of $317.4 million and restricted cash of $0.9 million. We also had $2.5 million in marketable securities that provide additional capital resources. Additionally, a substantial source of our cash provided by operating activities is our deferred revenue, which is included on our condensed consolidated balance sheets as a liability. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is recorded as revenue over the term of the subscription agreement. As of September 30, 2024, we had $114.9 million of deferred revenue, all of which was recorded as a current liability. This deferred revenue will be recognized as revenue when or as the related performance obligations are met.

Previous wording

Net cash provided by operating activities of $9.2 million for the six months ended June 30, 2024 reflects our net loss of $44.9 million, adjusted by non-cash items such as stock-based compensation expense of $43.8 million, depreciation and amortization of $2.8 million, and non-cash operating lease costs of $2.0 million as well as net cash provided by changes in our operating assets and liabilities of $6.2 million. The net cash provided by changes in operating assets and liabilities primarily consisted of collections outpacing revenue recognized as evidenced through the net increase in cash of $16.3 million from changes in accounts receivable and deferred revenue and a net increase in accrued expenses and accounts payable of $2.1 million. These changes were primarily offset by an increase in prepaid expenses and other current and noncurrent assets of $10.0 million.

Current wording

Net cash provided by operating activities of $15.3 million for the nine months ended September 30, 2024 reflects our net loss of $61.7 million, adjusted by non-cash items such as stock-based compensation expense of $64.9 million, depreciation and amortization of $4.1 million, and non-cash operating lease costs of $2.9 million as well as net cash provided by changes in our operating assets and liabilities of $5.1 million. The net cash provided by changes in operating assets and liabilities primarily consisted of collections outpacing revenue recognized as evidenced through the net increase in cash of $11.6 million from changes in accounts receivable and deferred revenue. These changes were primarily offset by $2.2 million driven by additional payments related to deferred commissions during the period.

Previous wording

Net cash provided by operating activities of $15.3 million for the six months ended June 30, 2023 reflects our net loss of $54.1 million, adjusted by non-cash items such as stock-based compensation expense of $41.9 million, depreciation and amortization of $2.8 million, and non-cash operating lease costs of $2.0 million as well as net cash provided by changes in our operating assets and liabilities of $23.3 million. The net cash provided by changes in operating assets and liabilities primarily consisted of collections outpacing revenue recognized as evidenced through the net increase in cash of $11.5 million from changes in accounts receivable and deferred revenue. Additionally, decreases in prepaid expenses and other current and noncurrent assets of $6.4 million and an increase in accounts payable and accrued expenses of $8.5 million, also increased operating cash flows during the period.

Current wording

Net cash provided by operating activities of $23.3 million for the nine months ended September 30, 2023 reflects our net loss of $71.8 million, adjusted by non-cash items such as stock-based compensation expense of $65.0 million, depreciation and amortization of $4.2 million, and non-cash operating lease costs of $2.9 million as well as net cash provided by changes in our operating assets and liabilities of $23.9 million. The net cash provided by changes in operating assets and liabilities primarily consisted of collections outpacing revenue recognized as evidenced through the net increase in cash of $8.3 million from changes in accounts receivable and deferred revenue. Additionally, decreases in prepaid expenses and other current and noncurrent assets of $2.4 million and an increase in accounts payable and accrued expenses of $16.8 million, also increased operating cash flows during the period.

Previous wording

Net cash provided by investing activities of $35.7 million for the six months ended June 30, 2024 consisted of $57.5 million of cash received from the maturities of marketable securities, offset by $18.4 million of purchases of marketable securities, $2.5 million in capitalized internal-use software development costs, and $1.0 million in purchases of property and equipment.

Current wording

Net cash provided by investing activities of $67.7 million for the nine months ended September 30, 2024 consisted of $91.3 million of cash received from the maturities of marketable securities, offset by $18.4 million of purchases of marketable securities, $4.2 million in capitalized internal-use software development costs, and $1.0 million in purchases of property and equipment.

Previous wording

Net cash used in investing activities of $1.9 million for the six months ended June 30, 2023 consisted of $0.9 million of capitalized internal-use software development costs and $1.0 million in purchases of property and equipment.

Current wording

Net cash used in investing activities of $2.3 million for the nine months ended September 30, 2023 consisted of $1.3 million in capitalized internal-use software development costs and $1.0 million in purchases of property and equipment.

Previous wording

Net cash used in financing activities of $11.0 million for the six months ended June 30, 2024 consisted of $14.3 million in net tax remittance on equity awards related to the vesting of RSU awards under a withhold-to-cover method, partially offset by $3.3 million in proceeds from the exercise of stock options.

Current wording

Net cash used in financing activities of $14.1 million for the nine months ended September 30, 2024 consisted of $19.7 million in net tax remittance on equity awards related to the vesting of RSU awards under a withhold-to-cover method, partially offset by $5.6 million in proceeds from the exercise of stock options.

Previous wording

During the six months ended June 30, 2024, there were no material changes in our contractual obligations and other commitments outside of those disclosed in the 2023 Form 10-K. For further information on our commitments and contingencies, refer to Note 9 in the consolidated financial statements contained within the 2023 Form 10-K.

Current wording

During the nine months ended September 30, 2024, there were no material changes in our contractual obligations and other commitments outside of those disclosed in the 2023 Form 10-K. For further information on our commitments and contingencies, refer to Note 9 in the consolidated financial statements contained within the 2023 Form 10-K.

Previous wording

Our unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. There have been no changes to our critical accounting policies and estimates, during the six months ended June 30, 2024 as compared to those disclosed in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the 2023 Form 10-K.

Current wording

Our unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. There have been no changes to our critical accounting policies and estimates, during the nine months ended September 30, 2024 as compared to those disclosed in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the 2023 Form 10-K.