NASDAQ:AMPL Amplitude Q2 2024 Earnings Report $9.44 +0.06 (+0.64%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$9.34 -0.10 (-1.06%) As of 05/2/2025 06:21 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Amplitude EPS ResultsActual EPS-$0.19Consensus EPS -$0.01Beat/MissMissed by -$0.18One Year Ago EPS-$0.17Amplitude Revenue ResultsActual Revenue$73.30 millionExpected Revenue$71.98 millionBeat/MissBeat by +$1.32 millionYoY Revenue Growth+8.20%Amplitude Announcement DetailsQuarterQ2 2024Date8/8/2024TimeAfter Market ClosesConference Call DateThursday, August 8, 2024Conference Call Time5:00PM ETUpcoming EarningsAmplitude's Q1 2025 earnings is scheduled for Wednesday, May 7, 2025, with a conference call scheduled at 5:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Amplitude Q2 2024 Earnings Call TranscriptProvided by QuartrAugust 8, 2024 ShareLink copied to clipboard.There are 11 speakers on the call. Operator00:00:00Q2 2024 Earnings Conference Call. I'm Yaoqian Xu, Vice President of Investor Relations. Joining me are Spencer Skates, CEO and Co Founder of Amplitude Andrew Casey, Chief Financial Officer and Mike Dean, VP, Corporate Controller. During today's call, management will make forward looking statements, including statements regarding our financial outlook for the Q3 and full year 2024, the expected performance of our products, expected quarterly and long term growth, investments and our overall future prospects. These forward looking statements are based on current information, assumptions and expectations are subject to risks and uncertainties, some of which are beyond our control that could cause actual results to differ materially from those described in these statements. Operator00:00:42Further information on the risks that could cause actual results to differ is included in our filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward looking statements, and we assume no obligation to update these statements after today's call, except as required by law. Certain financial measures used on today's call are expressed on a non GAAP basis. We use these non GAAP financial measures internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. These non GAAP financial measures have limitations and should not be used in isolation from or as a substitute for financial information prepared in accordance with GAAP. Operator00:01:17A reconciliation between these GAAP and non GAAP financial measures is included in our earnings press release, which can be found on Investor Relations website at investors. Amplitude.com. With that, I'll hand the call over to Spencer. Speaker 100:01:32Thanks, Yao, and good afternoon, everyone. Welcome to our 2024 Q2 earnings call. I'm going to focus on 3 topics today. Q2 financial results and what we're seeing, how we're going after our market opportunity, and continued product innovation and customer stories. I'm pleased to report that we beat across all guided metrics this quarter. Speaker 100:01:58Our 2nd quarter revenue was 73,300,000 up 8% year over year. Annual recurring revenue was $290,000,000 up $5,000,000 from the end of the first quarter. We now have more than 3,200 paying customers. In Q2, customers representing $100,000 or more of ARR grew to 547, an increase of 10% year over year. We are operating responsibly and have generated $5,700,000 of free cash flow year to date. Speaker 100:02:32Before we get into the quarter's details, I want to call out that we are revising our annual guidance lower on non GAAP operating profit for the year while raising revenue. This is due to a change in Russian sanctions announced in June. Without this, operating profit guidance would have been unchanged. We'll go into more detail shortly. Our top priority at Amplitude is reaccelerating growth. Speaker 100:02:59We are making great progress. New business remained healthy in the Q2. Amplitude's value proposition continues to resonate and our win rates are strong. In spite of tight IT budgets, companies are investing in digital experiences. I would characterize the macro environment as stable quarter to quarter. Speaker 100:03:20We continue to feel great about our competitive position, particularly against point solutions and legacy players. We have a differentiated platform approach, customers find value quickly and privacy regulations are helping to drive incremental demand. As expected, churn also remained high in the Q2. This was driven by some of our most severe legacy contract resets, which we have been highlighting for several quarters. We are optimistic that the significant majority of overbought to optimization contracts of this nature are now in our rearview mirror. Speaker 100:03:59We are building momentum from the many improvements we've made in go to market. Amplitude Plus, our self serve offering, continues to gain momentum with customers of all sizes and types. Plus performance was strong in Q2. New onboarding improvements and a simplified data setup process are driving uplift and activation. Plus also continues to serve as a valuable feedback loop informing our WinSimple approach on core Amplitude. Speaker 100:04:29Our named account approach led to higher quality deals in Q2 than in prior quarters. We also saw better platform attach rates and steady improvement in enterprise land ASPs. Improved account management is letting us better align with customer initiatives and land larger customer engagements from the start. We are growing our ability to gain mind share and budget across product, marketing and data buyers. The customer expansions we are unlocking are also of higher quality. Speaker 100:05:02During the start of the pandemic, data volume increases drove many of our largest expansions. Today, customers are expanding because Amplitude is viewed as the right future proof enterprise ready platform in a world where companies win and lose based on their digital experience. I'm also very encouraged by the continued green shoots that we called out in prior quarters. Customer relationships are healthier post renewal with customers using more of our platform and attaching services. We are more aligned with our customers' current growth ambitions than we have been in the last year. Speaker 100:05:39In our top 100 customers, underlying utilization trends continue to improve quarter to quarter. Cohort health is visibly improving. For customers who have optimized with us one time, a majority of the associated ARR either renews flat or grows off of that base. For customers acquired in the second half of twenty twenty two and later, gross and net retention patterns continue to show better dynamics than those from 20202021. Pipeline signals also are encouraging for the second half of the year and into 2025, thanks to coordinated efforts across marketing, sales and partnerships. Speaker 100:06:21We are seeing particular strength in our U. S. Enterprise business. International markets, while behind the United States in terms of maturity, are demonstrating the same level of latent demand. Average deal size in our second half pipeline is up by 25% year on year and we're seeing a significant increase in large deal opportunities. Speaker 100:06:47Now, let's address the item that accounts for the change in non GAAP operating profit outlook. In April 2022, we stopped all new sales activity in Russia and Belarus. We also terminated all contracts with customers that we knew to be targeted by U. S. Sanctions, Russian government owned, Russian oligarch owned or Russian government controlled news outlets. Speaker 100:07:11We continue to serve customers who did not meet that criteria. On June 12, the U. S. Department of the Treasury increased the scope of sanctions in Russia, leaving us unable to serve any customers in Russia and highly unlikely to be able to collect from these previously unaffected customers. If not for this isolated insulin, our outlook on operating profit for the year would have been unchanged. Speaker 100:07:41While this weighs on what would have been a much stronger Q3 and exit growth rate, I would like to draw focus to the bigger picture. We are raising revenue guidance for the year despite facing material headwind in Q3. The business improvements we have put in place are starting to deliver results. We believe ARR and revenue reacceleration are both well within our reach. We expect to be free cash flow positive for the year. Speaker 100:08:06We continue to invest behind the biggest driver of long term growth for Amplitude product innovation. Next slide please. Our thesis is that analytics is the center of gravity for any workflow that touches customer and product data. Without analytics, the rest of the stack is much less useful. Session Replay is making rapid progress in its 2nd live quarter. Speaker 100:08:32There is a lot of customer pain experienced from fragmented tooling. Our platform is continuing to displace point solutions, aid in renewal discussions and offer a shorter time to value for our platform. We expect a larger unlock when we launch mobile session replay later this year. Experiment and CDP landed with marquee customers and some of our largest expansions this quarter were catalyzed by our non analytics offerings. A confluence of tight customer budgets, enhanced product maturity and improving field enablement are letting us lean in. Speaker 100:09:06Today, 21% of our annual contracted customers use more than one product, up from 15% at the same time last year. Customers who use more products retain better. Industry analysts are also recognizing our leadership. Amplitude was named as the only leader in the latest Forrester wave for feature management and experimentation. We achieved the highest possible scores across 11 criteria with particular callouts for our platform breadth, depth, user interface, pricing and vision. Speaker 100:09:44We announced the general availability of Amplitude Snowflake native offering in June. Our warehouse native approach is all about extending what has made Amplitude successful, being one of the most open, agnostic and trusted ways to access and find insights from customer data. Early interest here is encouraging. We've made other huge strides in our mission to win the enterprise. Large sophisticated enterprises have different needs and one of their top requests is for enterprise grade controls. Speaker 100:10:16That's why I'm excited to announce enterprise grade data access controls and data mutability. These advancements help to eliminate data drift, ensure compliance and reduce friction around managing data privacy. With our enterprise grade digital analytics platform, customers can keep data in sync with their data warehouse confidently control who sees what. With improved security, scalability and privacy, we're confident we can convert the most conservative Chief Data Officers into Amplitude Champions. Last quarter, I talked about radical simplicity. Speaker 100:10:54We've always been a self serve platform, but now we want to eliminate the learning curve altogether. This is one of the most ambitious projects we've taken on as a company. We've reimagined our product experience from top to bottom and we will be launching brand new Amplitude on September 10. We're offering users a single line of code to get up and running, default dashboards out of the box, auto capture and visual tagging, bundling of session replay and experiment SDKs with analytics out of the box, new navigation and user interface and a new conversational version of our AI assistant and search. Analytics today is hard. Speaker 100:11:33We are going to make it easy. All the priceless customer behavior, product and community knowledge embodied in Amplitude will be approachable to everyone. It will be radically easier to get started, get insights and get value. We want Amplitude to be a daily habit and our new platform will help get us there. I can't wait to share more. Speaker 100:11:52Turning to customers. In Q2, we landed and grew with HubSpot, Fanatics Live, Cloudflare, SketchUp, Rytr, Character AI, Volvo, Icelandair, Cook Children's Healthcare System and Farmers Business Network. A notable highlight this quarter is SketchUp, a business unit of Trimble. Globally, they are one of the largest 3 d modeling tools in the construction and industrial industry with tens of millions monthly users. With this renewal, product and data teams are drastically increasing the amount of data from their web and mobile applications in addition to going live with Amplitude CDP. Speaker 100:12:29SketchUp aims to democratize data across the business, empowering product managers with self-service insights. With Amplitude, SketchUp will be able to enact PLG best practices, everything from encouraging free to paid upgrades, keeping users engaged after the initial learning curve and identifying churn as it happens. We're excited to support SketchUp and their ongoing data centric transformation and look forward to contributing to their continued success. We also had a win with Cook Children's Healthcare System, one of the largest non profit pediatric medical centers in the U. S. Speaker 100:13:04They are migrating from Google due to data privacy and HIPAA compliance concerns. With a focus on digital transformation and optimizing the patient experience, they chose Amplitude to power user insights with their newly launched web experience. Amplitude will let them connect web and mobile patient journeys to increase patient appointment conversion and identify channel performance across marketing campaigns. Character AI has been an Amplitude customer for less than a year and is already expanding its use cases and adoption of Amplitude. They are one of the fastest growing AI companies empowering users to create and interact with various AI characters that feel alive. Speaker 100:13:43Amplitude has proven critical in tracking their users' onboarding flow and the success of new feature releases. This is especially important as they roll out their new voice feature, which allows users to hear characters speaking to them in 1 to 1 chats. They are consolidating their analytics efforts by adding our whole suite to this renewal. Another great win this quarter is with the global job search platform, which saw the potential to consolidate multiple point solutions and for Amplitude to become their single source of truth. Before Amplitude, the team couldn't trust the results of the experiments they would run. Speaker 100:14:17They spent more time arguing than running tests. By moving away from Optimizely onto Amplitude, they could finally scale their experimentation program by eliminating 2 big blockers, a lack of data trust and the painful overhead associated with integrations and data pipelines. This is a great example of how our Amplitude approach solves pain with unbeatable value. With our digital analytics platform, Amplitude is able to bring together product leaders, data scientists, engineers and growth teams to make data driven decisions, streamline workflows and connect insights to actions at scale. Before I turn the call over, I want to thank Mike Dean for his contributions during this period of transition to Amplitude. Speaker 100:15:05He is one of the rock stars at this company and has done an amazing job rising to this occasion at an important time for Amplitude as interim finance leader. I'm excited to introduce our new Chief Financial Officer, Andrew Casey. Andrew has more than 25 years of battle tested enterprise software experience. He has had senior finance roles across ServiceNow, Oracle and HP. More recently, he took WalkMe public in his IPO and was CFO of Lacework. Speaker 100:15:37I've gotten to know Andrew well recently. He has a fantastic combination of strategic thinking while being able to get into the details operationally. He also has a genuine passion for the space we're in. We're both in it for the long term and I'm looking forward to working closely with them as we write the next chapter of growth for Amplitude. We have been up leveling every area of our business and building momentum. Speaker 100:16:01Continue to see more pockets of strength and weakness. We will turn our green shoots into something more as we build a defining generational software company. Thank you for your interest in Amplitude. I'd now like to turn it over to Andrew for a brief introduction before Mike walks you through the financial results. Speaker 200:16:18Thank you, Spencer. I'm very excited to be here. I joined Amplitude because it solves a universal, critical business need with an elegant solution. I've never met a company that ever said that I want to understand my customer less or that they don't really care about their digital products. Over the last few days, I spent meeting many people across our organization and I found that there are so many great materials that have already been put in place over the last year. Speaker 200:16:43I have been most impressed by the passionate customers, the world class platform that Amplitude provides and the team that Spencer is building. I can't wait to turn the page together and have a part in leading Amplitude towards the next chapter of growth. I look forward to getting to know many of you in the coming weeks. And with that, I'll pass it over to Mike to share more details on results and outlook for the quarter. Speaker 300:17:08Thanks, Andrew and Spencer, and thanks to everyone joining us today. I'm happy to report that we beat across the board on all guided metrics this quarter. Turning to our Q2 results. As a reminder, all financial results that I will be discussing with the exception of revenue are non GAAP. Our GAAP financial results along with the reconciliation between our GAAP and non GAAP results can be found on our earnings press release and supplemental financials on our IR website. Speaker 300:17:392nd quarter revenue was $73,300,000 up 8% year over year and 1% quarter over quarter. Total ARR increased to $290,000,000 exiting Q2, an increase of 8% year over year and $5,000,000 sequentially. Here are more details on key elements of the quarter. New ARR was about 1 third land and 2 thirds expand driven. Churn was down slightly quarter to quarter as customers on multi year contracts optimized their renewals. Speaker 300:18:11Linearity on churn was better than expected, which resulted in sequential revenue growth. The total number of customers representing 100,000 or more of ARR in Q2 grew to 547, an increase of 10% year over year. Underlying utilization trends across our largest customers continue to improve quarter to quarter, which is also impacting gross margin. We believe that the worst excesses of the pandemic surge embedded in our ARR are now behind us. End period NRR was 96% and NRR on a trailing 12 month basis was 98%. Speaker 300:18:51Gross margin was 76% for the 2nd quarter, down 2 percentage points year over year and 1 percentage point quarter over quarter. Investments in enterprise related professional services, along with improving utilization caused a sequential margin downtick. Sales and marketing expenses were 48% of revenue, up 3 percentage points year over year. Here we are focusing investment around our named account approach. Increased investment in our international efforts and travel expenses were also key drivers of the year on year increase. Speaker 300:19:25G and A was 15% of revenue, up 1 percentage point year over year. There was approximately 0 $600,000 of non recurring expenses in the quarter related to executive search, severance and legal fees. Total operating expenses were $59,000,000 up 11 percentage points year on year. We continue to be judicious about hiring across the board. Operating profit was negative $3,700,000 or negative 5 percent of revenue, which represents a 4 percentage point decline on a year over year basis. Speaker 300:19:59Net loss per share was $0.00 based on $122,600,000 of basic and fully diluted shares compared to net income per share of $0.02 with 126,300,000 diluted shares a year ago. Free cash flow in the quarter was positive $6,800,000 or 9.3 percent of revenue compared to $19,300,000 or 28.5 percent of revenue a year ago. Free cash flow was impacted by lower operating profit and early timing of some payments. Now let's turn to our outlook. We are assuming that the macroeconomic environment continues to be challenging throughout the rest of the year. Speaker 300:20:39Spencer mentioned that we are seeing a greater number of larger deals in our pipeline. We believe this warrants additional conservatism as buyer scrutiny remains high. Now let me unpack how Russian sanctions affect our financials. We estimate a negative impact of $3,000,000 to full year ARR. We also estimate a negative impact to full year operating profit of $4,000,000 This is due to a combination of lost revenue and changes to expectations of our ability to collect open receivables. Speaker 300:21:10It is important to note that our full year operating income guidance would have remained unchanged without these sanctions. As a result of these factors, we are expressing heightened caution on Q3 ARR. For the Q3 of 2024, we expect Q3 revenue to be between $73,500,000 $74,500,000 representing an annual growth rate of 5% at the midpoint. We expect non GAAP operating loss to be between negative 2.2 and negative 1,200,000 and we expect non GAAP net income per share to be between 0 point 0 $0 and $0.01 assuming diluted shares outstanding of approximately 131,600,000 For the full year, we are raising our full year revenue outlook to be between $294,500,000 $296,500,000 an annual growth rate of 7% at the midpoint. We are reducing our outlook for non GAAP operating income to be between negative $5,000,000 and negative $2,000,000 We expect non GAAP net income per share to be between 0 point outstanding of approximately 131,400,000 as measured on a fully diluted basis. Speaker 300:22:29And here is more color for your modeling purposes. We continue to expect end period NRR to remain below 100% and NRR to trough in the mid-90s this year. We continue to expect year over year ARR growth to trough in Q3 of this year in the mid single digits. We continue to expect to be free cash flow positive for the full year. Our long term opportunity remains unchanged. Speaker 300:22:56We are controlling what we can control. We are delivering on free cash flow and investing appropriately against opportunities that we expect will drive long term value. We believe ARR and revenue reacceleration are both well within our reach. With that, I will open it up to Q and A. Over to you, Yao. Operator00:23:15Great. Spencer and Mike will be answering questions. Please turn your microphone and camera on and limit yourself to one question, one follow-up in the interest of time. Our first question comes from Koji Ikeda, Bank of America followed by Tyler Radke from Citi. Speaker 400:23:31Hey, guys. Thanks so much for taking the question. I wanted to dig in a little bit more about this Russia impact. I might be a little bit confused here, but I just wanted to make sure I run through these numbers properly. Okay. Speaker 400:23:45So essentially what happened was there is additional considerations for Russia business and it's affecting ARR. But just trying to understand why operating income goes down, but revenue goes up. I am trying to understand those puts and takes there of why that happens because it seems like ex Russia, the guidance would have been raised quite a bit. I am just trying to understand that a little bit more, please. Speaker 300:24:12Yes, certainly. Thanks for the question. One of the big impacts is bad debt. So there's aged receivables there. And so with that, you're going to have an OpEx impact as well as revenue. Speaker 300:24:26As talking about raising revenue for the full year though, that's because we believe that we're in a fundamentally different place as a business. And as a reminder, we've beat our expectations for the first half of the year. And so with that, naturally that's going to flow through to the full year. And so the Russia impact is a mix of both lost revenue, but there is a large bad debt component to aged receivables at that time. Speaker 400:24:56Got it. No, that makes a lot more sense. Thank you. And just maybe the follow-up there and one more if I may. Is Andrew going to be on the call too or are you holding them back for maybe the next one? Speaker 100:25:06No, no. We do have him here. I just want to make it clear. He's only been here for since Monday of this week. I got you. Speaker 400:25:14I got you. Operator00:25:15He's in Speaker 100:25:15the business. And so the representations come from me as CEO, as well as Mike as Interim Head of Finance. Speaker 400:25:21Got you. So I guess from just one quick follow-up there on the Russia impact. Is this just a second half effect or should we expect any sort of bleed through into 2025? Speaker 300:25:36So most of the impact is going to be felt in Q3, but there is a lost revenue impact as well. And so with that, there will be some impact in 2025 as well. Operator00:25:46Okay. I got you. And then maybe just Speaker 400:25:48one quick one for Andrea. I do realize that you started on Monday. Welcome to the team, super excited to be working with you. But just thinking big picture perspective, what are some of the first priorities or things that you'll be looking at maybe over the next 6 months? Speaker 300:26:02I think it's really important as a Speaker 200:26:04new leader during your organization that you spend time to really understand how the business has been run. Spencer and team have built a really vibrant business with a really great customer base. And I want to understand how we are aligning our strategic objectives, our long term growth perspective around those objectives and then see how I can lean in. As you may or may not know, I've had a lot of experience with respect to scaling businesses in my past and I spend a good amount of time meeting with customers and helping the sales teams work with our customers to drive the greatest value possible. And I figure that's probably where I'll spend some of my initial time is to understand what processes we have in place and how best I can help the teams really drive that growth. Operator00:26:43Got it. Thanks guys. Thanks for taking the questions. Thanks. Next question, Matt Prade from Citi, followed by Arjun Bhatia from Blair. Operator00:26:52Matt, go ahead please. Speaker 100:26:54Hi, team. Just one quick question on AI. Just curious if what you see in terms of event volume intensity for Gen AI use cases like Character AI? Yes, I think so first it's these are software applications 1st and foremost. Now obviously the interface is a little different and that you'll have a chat or a conversational interface versus one where you're pointing and clicking or using a touch interface. Speaker 100:27:26But at the end of the day, what we track is customer behavior. And so it ends up being the same thing underlying. Character AI has huge amount of use as you might expect. We also work with Midjourney, who has a huge amount of use as you'd expect, and they're tracking similar sort of things. What does the onboarding funnel look like? Speaker 100:27:46Where are users getting stuck? Whether the things that correlate to upsell or to long term engagement and retention? And so even though the interface with generative AI is different, the underlying idea that you're tracking a user journey and you're trying to figure out how to improve that is all Speaker 500:28:04the same. Got it. Operator00:28:04Thank you. Arjun, go ahead. Next question after Arjun, Nick Altman from Scotia. Speaker 300:28:11All right. Speaker 600:28:13Thanks guys. It's my answer. Yes. Maybe I'll start off. It's interesting to hear and encouraging to hear that you're seeing strength in the U. Speaker 600:28:23S. Enterprise business and large deals in the pipeline. I'm curious how the constitution of those enterprise customers that are evaluating Amplitude is different perhaps from what your customer base was 3, 4 years ago? What's new and what's maybe not there that was there several years ago? And then part of that question is why now, Because we do hear of macro challenges in the enterprise. Speaker 600:28:51So what's your perspective on why these businesses are looking at amplitude right now? Speaker 100:28:57Yes. So, let me hit the macro challenges piece and then I'll talk about how the composition has changed over the last few years. I think even during the worst parts of macro in the last few quarters, new business demand for Amplitude and Digital Analytics generally has always been strong. I think the growth deceleration that we've seen has purely been has been largely as a result of the optimization of the contracts. And now that the significant majority of those in our rearview mirror, that is a structural change to how we're going to be set up for growth. Speaker 100:29:30Even if you were to look internally at the new numbers any particular quarter, they'd be quite good. In terms of the customer base, I think the changes that Thomas has been driving over the last 2 years in our go to market enterprise motion, we're really starting to see some great impacts from that. A lot more conversations with traditional companies, like we're talking with some of the largest quick serve restaurants in the world, as an example, healthcare companies like Cook Children's Healthcare System, that was a really big win in Q2. And we didn't really see those companies, if I were to go rewind the clock 2 or 3 years ago. And so I think the strategic focus across the board with go to market, with the named account structure that we rolled out that drove more focus from marketing partnerships and sales and SDRs. Speaker 100:30:16And then with everything we're doing on the product side, like we just announced both data mutability and data access controls, which are a big deal for those traditional enterprises, has really helped show that, okay, we are a viable player and this technology is not just for digital native tech companies, but it also applies to anyone with a digital experience, including if you're a traditional company. I think now, obviously, we're still seeing a lot of great traction with tech companies and expect that to be a significant part of our customer base for some time, but it's great to see us making progress on that crossing the chasm moment to the rest of the enterprise. Speaker 600:30:53Yes, for sure. That's great to hear. And then actually Andrew, sorry to Operator00:30:57ask something. I was Speaker 200:30:57going to say just one additional thing. Speaker 300:30:59I think a lot Speaker 200:31:00of times in industry, we get a little on the soup de jure, if you will, of macro things that are going on. But digital transformation is a multi decade process. And every company is going to go through a process and steps through which they're going to digitize their methods of reaching out to customers and their business processes. And ultimately, I think Amplitude has a really great opportunity to be a lead player in that transformative event for most of those customers. So I think it's great that even though we have a macro background, which isn't great, these types of investments, these types of focuses, they take many, many, many years to evolve and it's great that we're starting to make those investments now. Speaker 100:31:41Yes. And you're going to do them regardless of the macro. As I mentioned, like this is a top priority for so many companies that we talk with, even though they're thinking through tighter budgets, more scrutiny, more questions and ROI. Speaker 600:31:56Yes, for sure. Yes, there's a secular trend there. And then the follow-up actually on the product side, Spencer, the warehouse native analytics and the work that you're doing with Snowflake, how should we think about where that impacts your customers? Is that ease of implementation? Is that cost savings? Speaker 600:32:16Is that better outcomes? What is the ROI that customers will see from that? Speaker 100:32:21Ease of implementation and access to that existing customer base from cloud data warehouse, particularly Snowflake, to become Amplitude customers more easily. So the big deal with warehouse native Amplitude is instead of having to create a data pipeline from your cloud data warehouse to an analytics product like Amplitude, you're just running SQL queries directly on top of that data. And so, if you have that data already collected on the customer journey, then you can just turn Amplitude on, on top of it and be off and running with a lot less implementation cost. And so we've already seen it come up. It's early. Speaker 100:32:57We just launched it in June. We've already seen it come up as a consideration, particularly in larger companies that have made big investments into the cloud data warehouse. I was in one conversation with a traditional company a few weeks ago where they called it the biggest differentiator we had versus everything else they were looking out on the market, because they knew that it would make it much easier to get some of their smaller teams up and running more quickly. So, our philosophically, it's we want to be data agnostic. So, as the proliferation of different ways to set up your data stack continues, we want to make sure to work with every different one. Speaker 100:33:33Warehouse native is just kind of another way to do that. And then for us, it's about how do we win the applications on top of that data. So analytics, experimentation, CDP, session replay, we'll have more to come. Speaker 600:33:45Okay. Perfect. Awesome. Congrats on the quarter. Speaker 100:33:48Thanks, Hardin. Operator00:33:49Next question, Nick Altman from Scotia followed by Rob Oliver from Baird. Nick, go ahead please. Awesome. Speaker 500:33:56Thank you. Spencer, you guys highlighted how some of the go to market adjustments are starting to bear fruit. And when you think about the historical drag on net new ARR, right, a lot of that has been macro induced and churn induced. Speaker 700:34:12But when Speaker 500:34:13we think about sort of the upswing when the macro gets better and you guys are sort of lapping this churn dynamic, How much of the improvements in go to market, how impactful can the improvements in the go to market motion sort of be as things kind of progress you get through this renewal base and hopefully we kind of get a little bit of a better demand environment here? Speaker 100:34:36Yes. So Nick, I want to be clear like the path to reacceleration as I look through the next few quarters and in 2025, we're not dependent on any improvements in We're saying, hey, macro stays as bad as it is, and we're still set up to accelerate in terms of how much net ARR we're putting up a quarter. I'd say the changes that we've been driving with the enterprise focus massive, massive improvement. I mean those customers are just stickier long term. We're talking about starting out at a 3 year contract instead of a 1 year contract. Speaker 100:35:06We're talking about doing much larger wider deployments across 100 or 1000 of people in some cases. The change that we made at the start of this year was we moved to a new named account structure that have the total number of companies we're going after. So it went from about 24,000 to about 12,000 and that focus has driven a really great execution that we're starting to see. So that shows up in the pipeline call out that I made for second half in Q4, that shows up in larger lands, that shows up in just healthier renewal rates and healthier expansions that shows up with more of the platform being landed right at the start. And so you're using those expensive human resources to where you're going to have the greatest ROI. Speaker 100:35:54So I'd say that's going without that we'd be in a much, much worse place as a business. And so that will set us for reacceleration even if the macro continues to stay bad over the next few quarters. Speaker 500:36:07Okay. Awesome. And then the second question just kind of to dovetail off that answer, right? You have customers who maybe historically speaking you won't be in discussions with, I think you said the ASPs in the pipeline are up 25%. So there's definitely sort of bigger deals in the pipeline. Speaker 500:36:29The challenge with that is maybe sales cycles can elongate and things maybe take longer to close. So I guess what have you seen maybe over the past couple of quarters with those big deals? Have they taken a little bit longer to close? Speaker 400:36:42And on the flip side of Speaker 500:36:43the equation, going forward with when you look at this pipeline with larger deals out there, are you guys sort of baking in sales cycle elongation or stuff to move around from quarter to quarter? Just any commentary around the flip side of the equation in terms of those large deals would be helpful. Thanks. Speaker 100:37:02Yes. I mean, I think one of the changes that you have to go through when you're going after that sort of business is to be having a longer term outlook versus just the quarter in front of you. And so I'd say one of the motions that I've kind of glossed over, but to your call out is very important is we're now looking at pipeline multiple quarters out. We're looking at renewals a year out from when they would versus just kind of fighting quarter to quarter to maximize that particular quarter, which is why I gave the call out on Q4 pipeline. We're already looking at renewals in 2025. Speaker 100:37:34And so that's a natural part of going up market is that you'll get those longer evaluation cycles. I will say they're not that much longer in terms of total time. There is an urgency to get like a lot of so many companies have made big investments into their data stack. And you have CEOs and product leaders and marketing leaders asking, hey, when is this actually going to get some ROI out of this? And we're such a key part of that equation because we drive that self-service. Speaker 100:38:02Otherwise, the data is all locked up and trapped within whatever their data stack is. And so there's like very much an urgency from the customer side around, hey, I want to demonstrate some quick ROI. Like I'll tell you one story where we had as meeting with a customer in Europe a few months ago, Decathlon, and they had been long time Google Analytics users. They weren't happy with a bunch of the changes with Google Analytics 4. They had actually driven their entire team to switch over to Amplitude and their goal is to complete that within 12 month period. Speaker 100:38:36So they've gone from 0 to about 600 users on Amplitude in 2 quarters. That is the fastest ramp I've ever seen for someone getting up to speed with analytics and then they have the goal to get to multiple 1,000 by the end of this year. So I was blown away by the urgency that they had to make that switch. And as we make them successful, that's going to be a great lighthouse story for other retail customers. But it really speaks to the urgency that we are seeing a lot Speaker 300:39:05of buyers have in this environment. And adding on also with your question of how it impacts our guidance, we recognize this increase in pipeline and ASPs is also against the backdrop where buyer scrutiny remains high. And so with that, that's fully baked into our guidance as well. Speaker 400:39:24Awesome. Thank you. Operator00:39:26Great. Next question, Rob Oliver from Baird followed by Taylor McGinnis from UBS. Rob, go ahead please. Speaker 800:39:33Great. Thanks guys. Appreciate it. Appreciate your time. So just one for me, Spencer, on really just a follow-up on Nick's question. Speaker 800:39:46The customers paying over 100,000 dollars grew 10% and accelerated sequentially. You called out some success on the non analytics side as well. And it sounds like most of this is self help, so very encouraging signs. I'd be curious to know what you're seeing in terms of consolidation in the market. Are we at a point now where some of those, I know you said customers that are post 'twenty two are continuing to expand with you guys. Speaker 800:40:14But are you getting a sense when you look at your pipeline that there is a significant opportunity around you guys consolidating other vendors as well? Is that part of what's happening in the market, notwithstanding the fact that there's a tough macro? Speaker 100:40:29Yes, absolutely. I think, well, first, the tough macro is actually driving the consolidation because people want fewer vendor relationships. They want to have lower total cost of ownership, never mind the advantages of having the platform be integrated. And then there's just these tools work better together and that was one of the that was the founding thesis for Amplitude, which is analytics is the core of the stack. So I cited that SketchUp moved on to our CDP. Speaker 100:40:57I cited a large global job company ended up moving from Optimizely to Amplitude. It's part of why Forrester called us out as the leader is because our vision is for the entire platform and they're hearing that from buyers, hey, I just don't want a point solution for experimentation. It's got to be integrated with the analytics and it's got to offer something more broad than that. Every single company that whenever I have a conversation with a customer, universally, it's whether it's session replay, whether it's experimentation, whether it's some of the other stuff we're planning further out in our roadmap, there is a desire to move on to the platform. So, yes, that is a huge, huge trend driving our business generally. Speaker 100:41:40And I think that's going to doing that right, doing both the creation of the platform and the suite along with the motion to get it into the hands of customers is going to be a big driver of our success in the space. That's why we had we talked about our strategy in the past, one of the pillars being win the category. So it's not just about analytics anymore, it's about how does that work with session replay and experimentation and other parts of the stack. Speaker 800:42:07Exciting. And then just a quick follow-up on international. Does the move towards named accounts, which clearly is having a positive impact on your go to market. Is that also included international? And can you talk a little bit about it? Speaker 800:42:20And one of the call out wins that you cited was international. So if you can talk a little bit about how the international sales force is structured as well? Thanks. Speaker 100:42:30Yes. Named accounts, yes, the named account approach both applies to U. S, it applies to Europe, it applies to Asia. We look at so the way we've done international is we look at we've chosen a few Tier 1 markets, for example, U. K, France, Germany, Europe, Japan, Korea and Asia. Speaker 100:42:48There's the U. S. Obviously, as well as Canada and Brazil, sharing this one in that list. But and then within those markets, we're saying, okay, let's make sure to focus our enterprise sellers and our emerging enterprise sellers on these 12,000 named accounts. And then anything else goes into our velocity bucket. Speaker 100:43:07So, we actually we made an announcement. We just hired a new leader in Europe, Lee Edwards, who's going to be running the sales team out there. So very, very excited. We have a lot of great accounts there. I mentioned Decathlon earlier, we have Lamond, we have a lot of other great enterprises and it's about how do you bring the same success that we've had in the U. Speaker 100:43:24S. There. I think the important thing to recognize is just the market's early all over, no matter where you go. And so we want to make sure to invest appropriately against that opportunity and that's why we have field teams and all the geos that I mentioned. Speaker 800:43:39Great. Awesome. Well, appreciate it. Thanks, Spencer. And Andrew, look forward to working with you as well. Speaker 800:43:45Thanks, guys. Speaker 100:43:46Of course. Operator00:43:47Next question, Clare Goodes from UBS, followed by Jackson Ader from KeyBanc. Clare, go ahead please. Speaker 900:44:03Sorry about that. No, thanks for taking the question here for on for Taylor McGinnis. Yes, I just wanted to ask about the launch of the new Amplitude in September, the new platform. Exciting to hear about that. It sounds like it will lower some of the barriers to getting started. Speaker 900:44:19So I guess what kind of new opportunities are you expecting to that will open up and just any kind of like pricing changes or anything we should be mindful of? Thanks. Speaker 100:44:29So we're not doing any pricing changes as part of the launch. The launch is very focused on thinking about what is amplitude what is not just amplitude, what is analytics going to look like in the future. And so if you talk to any team trying to implement self-service analytics at the company, you will get all these stories about how painful and long the process is. You have to create a tracking plan, you have to get the engineering team to implement hundreds of lines of code, you have to get data flowing in, you got to train your team on it, you got to learn the semantics of what does a chart mean, how do you do a funnel analysis and so on. And the goal is to cut as much of that out as possible. Speaker 100:45:09So you're only doing one line of code. You're getting a whole bunch of dashboards out of the box. And then you're getting on that train of analytics value as quickly as possible. So I expect that to a few different things. 1, it's going to bring analytics to a whole new set of companies that have wanted it, but have really struggled with the cumbersome and long implementation processes that analytics currently takes. Speaker 100:45:34And then 2, that will get them to value that much quicker and start to get on that train. If I think out 5 or 10 years from now about how what the winning company in this space is going to look like, there is no way that it is going to be as difficult as it is today. So we've been putting in a lot of work on the product development team over the last few months in preparation for this launch about all the different areas that I outlined. And yes, we're going to be excited to launch that September 10th and we think that's going to open up a whole new segment of customers that's going to accelerate more companies landing, that's going to get them up to speed and faster. Speaker 1000:46:14Awesome. Thank you. Speaker 100:46:15For sure. Operator00:46:17Next question, Jackson from KeyBanc followed by JR from Piper. Jackson, go ahead please. Speaker 400:46:23Thanks, Yale. Hi, guys. First question on the Operator00:46:28sales marketing motion. How much Speaker 400:46:30of your sales marketing expenses are split between net new go get versus renewals? Speaker 100:46:39So what we're trying to do is obviously minimize the amount that's on renewals at the end of the day. So you're really focusing the sales efforts on both net new customers as well as expanding existing customers and that's really where you're spending the cycle. And the goal is when you're up and running, you kind of minimize that cost. One of the changes we've made is introducing a premium services package that helps attach specifically just to, okay, let's make sure you're implemented, let's make sure you're getting value, let's make sure you renew. And so that helps separate out some of the costs. Speaker 100:47:13Mike, I don't know if we have a breakdown on any of that stuff or any way to characterize it? Speaker 300:47:17No, we don't share that publicly, but everything that you've highlighted is there. The other thing that I'd highlight, is that we're investing in the enterprise. And so professional services related to that is impacting the gross margin specifically and that's what's happening there. But that's all an investment to better the customer base and the enterprise. Speaker 400:47:42And I guess a quick follow-up along a similar line, but I just think if you're leaning into some of the product led growth on the lower end, is there going to be an opportunity to kind of structurally reshape some of these expense lines, maybe shifting some sales Speaker 500:48:01and marketing away and into R and Speaker 400:48:03D like should we Yes. Can we just talk Speaker 100:48:06a little bit about how the structural changes of Speaker 400:48:08the expenses might look in Speaker 100:48:10the next couple of years? Yes. So we're so I want to be careful about giving any explicit guidance. Obviously, that's something as Andrew comes on board that we're going to be looking to shape together as we think about it. Let me give some high level points on it though. Speaker 100:48:25First is that you're right on. I think the key is putting the expensive human resources onto the enterprise accounts where you see, call it, dollars 300,000, dollars 500,000,000 plus opportunity. And then anything below that line, if you're thinking about sub-one hundred thousand, you're really getting you're automating that more and more. So there's always going to be a need, especially when you talk about digital analytics deployment at scale for human interaction, you need to coordinate stakeholders. There's work to make all of them successful. Speaker 100:48:57And then at the low end, like you mentioned, automating more and more of the motion. I think the other benefit of PLG, as you mentioned, is that it makes it much easier. So you don't even need all those human resources for all the implementation. So I think absolutely that's long term one of the aspirations where you're getting more of the enterprise customer base coming through the PLG motion. We've seen a few early successes there. Speaker 100:49:21I mentioned like a railway company last quarter as well as one of the large chip companies out there that came in actually through the Plus motion and that made that obviously makes the cost of sale and getting them up and running much, much cheaper. So that's absolutely a lever that we're going to be using to reduce cost overall expense to acquire customers over time. We are fundamentally a product company, a product led company. And so starting with great product and winning with great product is the core of Amplitude. And so on a relative basis, yes, investing more over there over time is directionally where we're going. Speaker 800:49:59Okay. Thank you, guys. Operator00:50:02J. R. From Piper, followed by Elizabeth Porter from Morgan Stanley. Speaker 700:50:08Great. Thanks for taking the question. I'd love to go back to Spectrum replay for a moment. What's been the competitive response since eyeing the product earlier this year? And curious if you've seen pricing turn more aggressive there? Speaker 700:50:20And just in general, any views on competition this quarter would be helpful? Speaker 100:50:24Yes. So session replay, that has been so we just launched in Q1 and it has been the fastest ramp we've seen in terms of additional products outside of analytics. Every single company that we talk to that already uses our analytics and has another third party vendor for session replay is interested in consolidating. I don't think I've talked to one that says, oh no, we're happy with our standalone one. It just it makes so much sense because, you can do have a lower total cost of ownership. Speaker 100:50:55And then the integration and workflows is actually already really key to One of the great use cases with using session replay and analytics is that you can look at say, users that encountered a bug or encountered an issue in error and then watch the sessions to see where they ran into that and what caused it and then go back and fix that. We've already used that. We've seen a lot of our customers use that and it's not something you can do if you have a session replay provider standalone. So we're seeing a lot of pull from that end. In terms of the cost, like, yes, that is the point. Speaker 100:51:28We're reducing. We are going to give price pressure to these other players in the market and we can offer something like I'd say half the cost, but that's accretive to us, saves the customer money, drives more overall values, just a win on all fronts. And so in a lot of ways, we are kind of the lower cost provider, because you're coming on to our platform. Speaker 700:51:50Perfect. Makes sense. Thank you. Speaker 100:51:52For sure. Operator00:51:53Next question, Elizabeth Porter Morgan Stanley followed by, Clark Wright, D. A. Davidson. Elizabeth, go ahead please. Speaker 1000:51:59Great. Thanks so much. I actually have a follow-up to Claire's question on the new product rollout. I was curious if you've had prior new platform rollouts and what those any sort of changes in KPIs you may have seen in the past as it relates to improvements in retention or engagement? And I'm just looking to any historical precedence that we can look to kind of inform our people on the new opportunity? Speaker 100:52:24We haven't done one like that since we've been public. I think the last change that we made in this was probably 6 or 7 years ago. Operator00:52:31So this Speaker 100:52:33is the biggest that we've done since that point in time. So there isn't there isn't ton of precedent. What I will say on just some of the quick stats, we're seeing about somewhere between a 40% 50% increase in data activation. So of the percentage of people that sign up, how many actually end up getting data. We're seeing a lot more engagement from new customers on session replay and on experimentation. Speaker 100:52:59So that's been a real positive as well. My expectation is this will lead to us getting more customers as well as having the customers that do come in be more likely to be successful in activating kind of get through the whole funnel. Now it is our first salvo at this and so we're going to kind of continue iterate and beat the drum past September 10 on this because we want to be the leaders here and so that there's no reason to choose anyone else over Amplitude. And so I'm excited to see and reporting the results once we get to the other side of the launch. Speaker 1000:53:35Great. And then just as a follow-up quickly on NRR. It was modest contraction because as expected, would just love to unpack some of the drivers between absolute churn, down sell and up sell, kind of any areas that you call out that actually saw a little bit of better improvement, what maybe got a little bit worse? Speaker 300:53:53Yes. So we've said that we're going to trough in the mid-90s this year and that's where we are right now. The big impact is obviously the optimizations for the multi year contracts that happened. And then we're going to have a headwind in Q3 with Russia as well. Absent that, we believe we're in a fundamentally different place to reaccelerate growth and that's well within our reach. Speaker 1000:54:20Thank you. Operator00:54:22Awesome. Last question, Clyde Wright, Davidson. Go ahead please, Clyde. So we think in 2nd quarter Sorry, Clyde, we can't hear you from the audio. Much better, much better. Speaker 100:54:34Good. Okay, perfect. So we have seen consecutive quarters accelerating customer account growth and would love to understand where these companies are starting at and how do you plan to drive these new logos to your 50 ks plus cohort, whether it's through incremental product adoption or CDADs? Yes. So I want to be clear on customer count. Speaker 100:54:53We continue to disclose that as we have historically, but it lumps in the Plus customers as well, which only started at the end of last year. So the year on year comparisons are not apples to apples. And so part of the reason why we disclosed the 100 ks customer plus is because those are like you can think of those as real or larger enterprise customers. And so I'd focus more on that. With that said, you do see it is great to see so many companies coming on to Plus for the first time and those are great feeding ground to where those companies will upgrade to larger plans, use more of Amplitude over time. Speaker 100:55:29They're starting to be a small revenue contribution to the quarter as well. So it's all good. But yes, it's not quite an apples to apples comparison with if you were to look a year ago. So we don't emphasize it quite as much. Operator00:55:48Awesome. Great. Thank you for that. Last question. With that, I'm seeing no further questions in queue. Operator00:55:53We will be at the Citigroup Global Tech Conference and Piper Sandler's Growth Frontiers Conference in September. Details will be posted on our IR website. Thank you very much for attending our 2Q earnings conference call. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallAmplitude Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Amplitude Earnings Headlines3 Reasons to Sell AMPL and 1 Stock to Buy InsteadApril 28, 2025 | msn.comAmplitude Insiders Recover Some Losses, Which Stand At US$48kApril 27, 2025 | finance.yahoo.comTrump’s Bitcoin Reserve is No Accident…Bryce Paul believes this is the #1 coin to buy right now The catalyst behind this surge is a massive new blockchain development…May 4, 2025 | Crypto 101 Media (Ad)Amplitude (NASDAQ:AMPL) Price Target Cut to $14.00 by Analysts at Piper SandlerApril 26, 2025 | americanbankingnews.comScotiabank Cuts Amplitude (NASDAQ:AMPL) Price Target to $10.00April 26, 2025 | americanbankingnews.comAmplitude's (AMPL) Buy Rating Reiterated at Needham & Company LLCApril 26, 2025 | americanbankingnews.comSee More Amplitude Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Amplitude? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Amplitude and other key companies, straight to your email. Email Address About AmplitudeAmplitude (NASDAQ:AMPL), together with its subsidiaries, provides a digital analytics platform that analyzes customer behavior in the United States and internationally. It offers Amplitude Analytics, which provides real-time product data and reconstructed user visits; Amplitude Experiment, a solution that allows teams to test new capabilities and safely roll out new features; Amplitude CDP, an insight-driven solution that encompasses the data infrastructure, audience management, and data streaming capabilities; and Amplitude Session Replay used by product, marketing, and data teams to understand user behavior, diagnose product issues, and improve product outcomes. The company also provides customer support services related to initial implementation setup, ongoing support, and application training. It delivers its application over the Internet as a subscription service using a software-as-a-service model. The company was formerly known as Sonalight, Inc. and changed its name to Amplitude, Inc. in December 2014. 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There are 11 speakers on the call. Operator00:00:00Q2 2024 Earnings Conference Call. I'm Yaoqian Xu, Vice President of Investor Relations. Joining me are Spencer Skates, CEO and Co Founder of Amplitude Andrew Casey, Chief Financial Officer and Mike Dean, VP, Corporate Controller. During today's call, management will make forward looking statements, including statements regarding our financial outlook for the Q3 and full year 2024, the expected performance of our products, expected quarterly and long term growth, investments and our overall future prospects. These forward looking statements are based on current information, assumptions and expectations are subject to risks and uncertainties, some of which are beyond our control that could cause actual results to differ materially from those described in these statements. Operator00:00:42Further information on the risks that could cause actual results to differ is included in our filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward looking statements, and we assume no obligation to update these statements after today's call, except as required by law. Certain financial measures used on today's call are expressed on a non GAAP basis. We use these non GAAP financial measures internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. These non GAAP financial measures have limitations and should not be used in isolation from or as a substitute for financial information prepared in accordance with GAAP. Operator00:01:17A reconciliation between these GAAP and non GAAP financial measures is included in our earnings press release, which can be found on Investor Relations website at investors. Amplitude.com. With that, I'll hand the call over to Spencer. Speaker 100:01:32Thanks, Yao, and good afternoon, everyone. Welcome to our 2024 Q2 earnings call. I'm going to focus on 3 topics today. Q2 financial results and what we're seeing, how we're going after our market opportunity, and continued product innovation and customer stories. I'm pleased to report that we beat across all guided metrics this quarter. Speaker 100:01:58Our 2nd quarter revenue was 73,300,000 up 8% year over year. Annual recurring revenue was $290,000,000 up $5,000,000 from the end of the first quarter. We now have more than 3,200 paying customers. In Q2, customers representing $100,000 or more of ARR grew to 547, an increase of 10% year over year. We are operating responsibly and have generated $5,700,000 of free cash flow year to date. Speaker 100:02:32Before we get into the quarter's details, I want to call out that we are revising our annual guidance lower on non GAAP operating profit for the year while raising revenue. This is due to a change in Russian sanctions announced in June. Without this, operating profit guidance would have been unchanged. We'll go into more detail shortly. Our top priority at Amplitude is reaccelerating growth. Speaker 100:02:59We are making great progress. New business remained healthy in the Q2. Amplitude's value proposition continues to resonate and our win rates are strong. In spite of tight IT budgets, companies are investing in digital experiences. I would characterize the macro environment as stable quarter to quarter. Speaker 100:03:20We continue to feel great about our competitive position, particularly against point solutions and legacy players. We have a differentiated platform approach, customers find value quickly and privacy regulations are helping to drive incremental demand. As expected, churn also remained high in the Q2. This was driven by some of our most severe legacy contract resets, which we have been highlighting for several quarters. We are optimistic that the significant majority of overbought to optimization contracts of this nature are now in our rearview mirror. Speaker 100:03:59We are building momentum from the many improvements we've made in go to market. Amplitude Plus, our self serve offering, continues to gain momentum with customers of all sizes and types. Plus performance was strong in Q2. New onboarding improvements and a simplified data setup process are driving uplift and activation. Plus also continues to serve as a valuable feedback loop informing our WinSimple approach on core Amplitude. Speaker 100:04:29Our named account approach led to higher quality deals in Q2 than in prior quarters. We also saw better platform attach rates and steady improvement in enterprise land ASPs. Improved account management is letting us better align with customer initiatives and land larger customer engagements from the start. We are growing our ability to gain mind share and budget across product, marketing and data buyers. The customer expansions we are unlocking are also of higher quality. Speaker 100:05:02During the start of the pandemic, data volume increases drove many of our largest expansions. Today, customers are expanding because Amplitude is viewed as the right future proof enterprise ready platform in a world where companies win and lose based on their digital experience. I'm also very encouraged by the continued green shoots that we called out in prior quarters. Customer relationships are healthier post renewal with customers using more of our platform and attaching services. We are more aligned with our customers' current growth ambitions than we have been in the last year. Speaker 100:05:39In our top 100 customers, underlying utilization trends continue to improve quarter to quarter. Cohort health is visibly improving. For customers who have optimized with us one time, a majority of the associated ARR either renews flat or grows off of that base. For customers acquired in the second half of twenty twenty two and later, gross and net retention patterns continue to show better dynamics than those from 20202021. Pipeline signals also are encouraging for the second half of the year and into 2025, thanks to coordinated efforts across marketing, sales and partnerships. Speaker 100:06:21We are seeing particular strength in our U. S. Enterprise business. International markets, while behind the United States in terms of maturity, are demonstrating the same level of latent demand. Average deal size in our second half pipeline is up by 25% year on year and we're seeing a significant increase in large deal opportunities. Speaker 100:06:47Now, let's address the item that accounts for the change in non GAAP operating profit outlook. In April 2022, we stopped all new sales activity in Russia and Belarus. We also terminated all contracts with customers that we knew to be targeted by U. S. Sanctions, Russian government owned, Russian oligarch owned or Russian government controlled news outlets. Speaker 100:07:11We continue to serve customers who did not meet that criteria. On June 12, the U. S. Department of the Treasury increased the scope of sanctions in Russia, leaving us unable to serve any customers in Russia and highly unlikely to be able to collect from these previously unaffected customers. If not for this isolated insulin, our outlook on operating profit for the year would have been unchanged. Speaker 100:07:41While this weighs on what would have been a much stronger Q3 and exit growth rate, I would like to draw focus to the bigger picture. We are raising revenue guidance for the year despite facing material headwind in Q3. The business improvements we have put in place are starting to deliver results. We believe ARR and revenue reacceleration are both well within our reach. We expect to be free cash flow positive for the year. Speaker 100:08:06We continue to invest behind the biggest driver of long term growth for Amplitude product innovation. Next slide please. Our thesis is that analytics is the center of gravity for any workflow that touches customer and product data. Without analytics, the rest of the stack is much less useful. Session Replay is making rapid progress in its 2nd live quarter. Speaker 100:08:32There is a lot of customer pain experienced from fragmented tooling. Our platform is continuing to displace point solutions, aid in renewal discussions and offer a shorter time to value for our platform. We expect a larger unlock when we launch mobile session replay later this year. Experiment and CDP landed with marquee customers and some of our largest expansions this quarter were catalyzed by our non analytics offerings. A confluence of tight customer budgets, enhanced product maturity and improving field enablement are letting us lean in. Speaker 100:09:06Today, 21% of our annual contracted customers use more than one product, up from 15% at the same time last year. Customers who use more products retain better. Industry analysts are also recognizing our leadership. Amplitude was named as the only leader in the latest Forrester wave for feature management and experimentation. We achieved the highest possible scores across 11 criteria with particular callouts for our platform breadth, depth, user interface, pricing and vision. Speaker 100:09:44We announced the general availability of Amplitude Snowflake native offering in June. Our warehouse native approach is all about extending what has made Amplitude successful, being one of the most open, agnostic and trusted ways to access and find insights from customer data. Early interest here is encouraging. We've made other huge strides in our mission to win the enterprise. Large sophisticated enterprises have different needs and one of their top requests is for enterprise grade controls. Speaker 100:10:16That's why I'm excited to announce enterprise grade data access controls and data mutability. These advancements help to eliminate data drift, ensure compliance and reduce friction around managing data privacy. With our enterprise grade digital analytics platform, customers can keep data in sync with their data warehouse confidently control who sees what. With improved security, scalability and privacy, we're confident we can convert the most conservative Chief Data Officers into Amplitude Champions. Last quarter, I talked about radical simplicity. Speaker 100:10:54We've always been a self serve platform, but now we want to eliminate the learning curve altogether. This is one of the most ambitious projects we've taken on as a company. We've reimagined our product experience from top to bottom and we will be launching brand new Amplitude on September 10. We're offering users a single line of code to get up and running, default dashboards out of the box, auto capture and visual tagging, bundling of session replay and experiment SDKs with analytics out of the box, new navigation and user interface and a new conversational version of our AI assistant and search. Analytics today is hard. Speaker 100:11:33We are going to make it easy. All the priceless customer behavior, product and community knowledge embodied in Amplitude will be approachable to everyone. It will be radically easier to get started, get insights and get value. We want Amplitude to be a daily habit and our new platform will help get us there. I can't wait to share more. Speaker 100:11:52Turning to customers. In Q2, we landed and grew with HubSpot, Fanatics Live, Cloudflare, SketchUp, Rytr, Character AI, Volvo, Icelandair, Cook Children's Healthcare System and Farmers Business Network. A notable highlight this quarter is SketchUp, a business unit of Trimble. Globally, they are one of the largest 3 d modeling tools in the construction and industrial industry with tens of millions monthly users. With this renewal, product and data teams are drastically increasing the amount of data from their web and mobile applications in addition to going live with Amplitude CDP. Speaker 100:12:29SketchUp aims to democratize data across the business, empowering product managers with self-service insights. With Amplitude, SketchUp will be able to enact PLG best practices, everything from encouraging free to paid upgrades, keeping users engaged after the initial learning curve and identifying churn as it happens. We're excited to support SketchUp and their ongoing data centric transformation and look forward to contributing to their continued success. We also had a win with Cook Children's Healthcare System, one of the largest non profit pediatric medical centers in the U. S. Speaker 100:13:04They are migrating from Google due to data privacy and HIPAA compliance concerns. With a focus on digital transformation and optimizing the patient experience, they chose Amplitude to power user insights with their newly launched web experience. Amplitude will let them connect web and mobile patient journeys to increase patient appointment conversion and identify channel performance across marketing campaigns. Character AI has been an Amplitude customer for less than a year and is already expanding its use cases and adoption of Amplitude. They are one of the fastest growing AI companies empowering users to create and interact with various AI characters that feel alive. Speaker 100:13:43Amplitude has proven critical in tracking their users' onboarding flow and the success of new feature releases. This is especially important as they roll out their new voice feature, which allows users to hear characters speaking to them in 1 to 1 chats. They are consolidating their analytics efforts by adding our whole suite to this renewal. Another great win this quarter is with the global job search platform, which saw the potential to consolidate multiple point solutions and for Amplitude to become their single source of truth. Before Amplitude, the team couldn't trust the results of the experiments they would run. Speaker 100:14:17They spent more time arguing than running tests. By moving away from Optimizely onto Amplitude, they could finally scale their experimentation program by eliminating 2 big blockers, a lack of data trust and the painful overhead associated with integrations and data pipelines. This is a great example of how our Amplitude approach solves pain with unbeatable value. With our digital analytics platform, Amplitude is able to bring together product leaders, data scientists, engineers and growth teams to make data driven decisions, streamline workflows and connect insights to actions at scale. Before I turn the call over, I want to thank Mike Dean for his contributions during this period of transition to Amplitude. Speaker 100:15:05He is one of the rock stars at this company and has done an amazing job rising to this occasion at an important time for Amplitude as interim finance leader. I'm excited to introduce our new Chief Financial Officer, Andrew Casey. Andrew has more than 25 years of battle tested enterprise software experience. He has had senior finance roles across ServiceNow, Oracle and HP. More recently, he took WalkMe public in his IPO and was CFO of Lacework. Speaker 100:15:37I've gotten to know Andrew well recently. He has a fantastic combination of strategic thinking while being able to get into the details operationally. He also has a genuine passion for the space we're in. We're both in it for the long term and I'm looking forward to working closely with them as we write the next chapter of growth for Amplitude. We have been up leveling every area of our business and building momentum. Speaker 100:16:01Continue to see more pockets of strength and weakness. We will turn our green shoots into something more as we build a defining generational software company. Thank you for your interest in Amplitude. I'd now like to turn it over to Andrew for a brief introduction before Mike walks you through the financial results. Speaker 200:16:18Thank you, Spencer. I'm very excited to be here. I joined Amplitude because it solves a universal, critical business need with an elegant solution. I've never met a company that ever said that I want to understand my customer less or that they don't really care about their digital products. Over the last few days, I spent meeting many people across our organization and I found that there are so many great materials that have already been put in place over the last year. Speaker 200:16:43I have been most impressed by the passionate customers, the world class platform that Amplitude provides and the team that Spencer is building. I can't wait to turn the page together and have a part in leading Amplitude towards the next chapter of growth. I look forward to getting to know many of you in the coming weeks. And with that, I'll pass it over to Mike to share more details on results and outlook for the quarter. Speaker 300:17:08Thanks, Andrew and Spencer, and thanks to everyone joining us today. I'm happy to report that we beat across the board on all guided metrics this quarter. Turning to our Q2 results. As a reminder, all financial results that I will be discussing with the exception of revenue are non GAAP. Our GAAP financial results along with the reconciliation between our GAAP and non GAAP results can be found on our earnings press release and supplemental financials on our IR website. Speaker 300:17:392nd quarter revenue was $73,300,000 up 8% year over year and 1% quarter over quarter. Total ARR increased to $290,000,000 exiting Q2, an increase of 8% year over year and $5,000,000 sequentially. Here are more details on key elements of the quarter. New ARR was about 1 third land and 2 thirds expand driven. Churn was down slightly quarter to quarter as customers on multi year contracts optimized their renewals. Speaker 300:18:11Linearity on churn was better than expected, which resulted in sequential revenue growth. The total number of customers representing 100,000 or more of ARR in Q2 grew to 547, an increase of 10% year over year. Underlying utilization trends across our largest customers continue to improve quarter to quarter, which is also impacting gross margin. We believe that the worst excesses of the pandemic surge embedded in our ARR are now behind us. End period NRR was 96% and NRR on a trailing 12 month basis was 98%. Speaker 300:18:51Gross margin was 76% for the 2nd quarter, down 2 percentage points year over year and 1 percentage point quarter over quarter. Investments in enterprise related professional services, along with improving utilization caused a sequential margin downtick. Sales and marketing expenses were 48% of revenue, up 3 percentage points year over year. Here we are focusing investment around our named account approach. Increased investment in our international efforts and travel expenses were also key drivers of the year on year increase. Speaker 300:19:25G and A was 15% of revenue, up 1 percentage point year over year. There was approximately 0 $600,000 of non recurring expenses in the quarter related to executive search, severance and legal fees. Total operating expenses were $59,000,000 up 11 percentage points year on year. We continue to be judicious about hiring across the board. Operating profit was negative $3,700,000 or negative 5 percent of revenue, which represents a 4 percentage point decline on a year over year basis. Speaker 300:19:59Net loss per share was $0.00 based on $122,600,000 of basic and fully diluted shares compared to net income per share of $0.02 with 126,300,000 diluted shares a year ago. Free cash flow in the quarter was positive $6,800,000 or 9.3 percent of revenue compared to $19,300,000 or 28.5 percent of revenue a year ago. Free cash flow was impacted by lower operating profit and early timing of some payments. Now let's turn to our outlook. We are assuming that the macroeconomic environment continues to be challenging throughout the rest of the year. Speaker 300:20:39Spencer mentioned that we are seeing a greater number of larger deals in our pipeline. We believe this warrants additional conservatism as buyer scrutiny remains high. Now let me unpack how Russian sanctions affect our financials. We estimate a negative impact of $3,000,000 to full year ARR. We also estimate a negative impact to full year operating profit of $4,000,000 This is due to a combination of lost revenue and changes to expectations of our ability to collect open receivables. Speaker 300:21:10It is important to note that our full year operating income guidance would have remained unchanged without these sanctions. As a result of these factors, we are expressing heightened caution on Q3 ARR. For the Q3 of 2024, we expect Q3 revenue to be between $73,500,000 $74,500,000 representing an annual growth rate of 5% at the midpoint. We expect non GAAP operating loss to be between negative 2.2 and negative 1,200,000 and we expect non GAAP net income per share to be between 0 point 0 $0 and $0.01 assuming diluted shares outstanding of approximately 131,600,000 For the full year, we are raising our full year revenue outlook to be between $294,500,000 $296,500,000 an annual growth rate of 7% at the midpoint. We are reducing our outlook for non GAAP operating income to be between negative $5,000,000 and negative $2,000,000 We expect non GAAP net income per share to be between 0 point outstanding of approximately 131,400,000 as measured on a fully diluted basis. Speaker 300:22:29And here is more color for your modeling purposes. We continue to expect end period NRR to remain below 100% and NRR to trough in the mid-90s this year. We continue to expect year over year ARR growth to trough in Q3 of this year in the mid single digits. We continue to expect to be free cash flow positive for the full year. Our long term opportunity remains unchanged. Speaker 300:22:56We are controlling what we can control. We are delivering on free cash flow and investing appropriately against opportunities that we expect will drive long term value. We believe ARR and revenue reacceleration are both well within our reach. With that, I will open it up to Q and A. Over to you, Yao. Operator00:23:15Great. Spencer and Mike will be answering questions. Please turn your microphone and camera on and limit yourself to one question, one follow-up in the interest of time. Our first question comes from Koji Ikeda, Bank of America followed by Tyler Radke from Citi. Speaker 400:23:31Hey, guys. Thanks so much for taking the question. I wanted to dig in a little bit more about this Russia impact. I might be a little bit confused here, but I just wanted to make sure I run through these numbers properly. Okay. Speaker 400:23:45So essentially what happened was there is additional considerations for Russia business and it's affecting ARR. But just trying to understand why operating income goes down, but revenue goes up. I am trying to understand those puts and takes there of why that happens because it seems like ex Russia, the guidance would have been raised quite a bit. I am just trying to understand that a little bit more, please. Speaker 300:24:12Yes, certainly. Thanks for the question. One of the big impacts is bad debt. So there's aged receivables there. And so with that, you're going to have an OpEx impact as well as revenue. Speaker 300:24:26As talking about raising revenue for the full year though, that's because we believe that we're in a fundamentally different place as a business. And as a reminder, we've beat our expectations for the first half of the year. And so with that, naturally that's going to flow through to the full year. And so the Russia impact is a mix of both lost revenue, but there is a large bad debt component to aged receivables at that time. Speaker 400:24:56Got it. No, that makes a lot more sense. Thank you. And just maybe the follow-up there and one more if I may. Is Andrew going to be on the call too or are you holding them back for maybe the next one? Speaker 100:25:06No, no. We do have him here. I just want to make it clear. He's only been here for since Monday of this week. I got you. Speaker 400:25:14I got you. Operator00:25:15He's in Speaker 100:25:15the business. And so the representations come from me as CEO, as well as Mike as Interim Head of Finance. Speaker 400:25:21Got you. So I guess from just one quick follow-up there on the Russia impact. Is this just a second half effect or should we expect any sort of bleed through into 2025? Speaker 300:25:36So most of the impact is going to be felt in Q3, but there is a lost revenue impact as well. And so with that, there will be some impact in 2025 as well. Operator00:25:46Okay. I got you. And then maybe just Speaker 400:25:48one quick one for Andrea. I do realize that you started on Monday. Welcome to the team, super excited to be working with you. But just thinking big picture perspective, what are some of the first priorities or things that you'll be looking at maybe over the next 6 months? Speaker 300:26:02I think it's really important as a Speaker 200:26:04new leader during your organization that you spend time to really understand how the business has been run. Spencer and team have built a really vibrant business with a really great customer base. And I want to understand how we are aligning our strategic objectives, our long term growth perspective around those objectives and then see how I can lean in. As you may or may not know, I've had a lot of experience with respect to scaling businesses in my past and I spend a good amount of time meeting with customers and helping the sales teams work with our customers to drive the greatest value possible. And I figure that's probably where I'll spend some of my initial time is to understand what processes we have in place and how best I can help the teams really drive that growth. Operator00:26:43Got it. Thanks guys. Thanks for taking the questions. Thanks. Next question, Matt Prade from Citi, followed by Arjun Bhatia from Blair. Operator00:26:52Matt, go ahead please. Speaker 100:26:54Hi, team. Just one quick question on AI. Just curious if what you see in terms of event volume intensity for Gen AI use cases like Character AI? Yes, I think so first it's these are software applications 1st and foremost. Now obviously the interface is a little different and that you'll have a chat or a conversational interface versus one where you're pointing and clicking or using a touch interface. Speaker 100:27:26But at the end of the day, what we track is customer behavior. And so it ends up being the same thing underlying. Character AI has huge amount of use as you might expect. We also work with Midjourney, who has a huge amount of use as you'd expect, and they're tracking similar sort of things. What does the onboarding funnel look like? Speaker 100:27:46Where are users getting stuck? Whether the things that correlate to upsell or to long term engagement and retention? And so even though the interface with generative AI is different, the underlying idea that you're tracking a user journey and you're trying to figure out how to improve that is all Speaker 500:28:04the same. Got it. Operator00:28:04Thank you. Arjun, go ahead. Next question after Arjun, Nick Altman from Scotia. Speaker 300:28:11All right. Speaker 600:28:13Thanks guys. It's my answer. Yes. Maybe I'll start off. It's interesting to hear and encouraging to hear that you're seeing strength in the U. Speaker 600:28:23S. Enterprise business and large deals in the pipeline. I'm curious how the constitution of those enterprise customers that are evaluating Amplitude is different perhaps from what your customer base was 3, 4 years ago? What's new and what's maybe not there that was there several years ago? And then part of that question is why now, Because we do hear of macro challenges in the enterprise. Speaker 600:28:51So what's your perspective on why these businesses are looking at amplitude right now? Speaker 100:28:57Yes. So, let me hit the macro challenges piece and then I'll talk about how the composition has changed over the last few years. I think even during the worst parts of macro in the last few quarters, new business demand for Amplitude and Digital Analytics generally has always been strong. I think the growth deceleration that we've seen has purely been has been largely as a result of the optimization of the contracts. And now that the significant majority of those in our rearview mirror, that is a structural change to how we're going to be set up for growth. Speaker 100:29:30Even if you were to look internally at the new numbers any particular quarter, they'd be quite good. In terms of the customer base, I think the changes that Thomas has been driving over the last 2 years in our go to market enterprise motion, we're really starting to see some great impacts from that. A lot more conversations with traditional companies, like we're talking with some of the largest quick serve restaurants in the world, as an example, healthcare companies like Cook Children's Healthcare System, that was a really big win in Q2. And we didn't really see those companies, if I were to go rewind the clock 2 or 3 years ago. And so I think the strategic focus across the board with go to market, with the named account structure that we rolled out that drove more focus from marketing partnerships and sales and SDRs. Speaker 100:30:16And then with everything we're doing on the product side, like we just announced both data mutability and data access controls, which are a big deal for those traditional enterprises, has really helped show that, okay, we are a viable player and this technology is not just for digital native tech companies, but it also applies to anyone with a digital experience, including if you're a traditional company. I think now, obviously, we're still seeing a lot of great traction with tech companies and expect that to be a significant part of our customer base for some time, but it's great to see us making progress on that crossing the chasm moment to the rest of the enterprise. Speaker 600:30:53Yes, for sure. That's great to hear. And then actually Andrew, sorry to Operator00:30:57ask something. I was Speaker 200:30:57going to say just one additional thing. Speaker 300:30:59I think a lot Speaker 200:31:00of times in industry, we get a little on the soup de jure, if you will, of macro things that are going on. But digital transformation is a multi decade process. And every company is going to go through a process and steps through which they're going to digitize their methods of reaching out to customers and their business processes. And ultimately, I think Amplitude has a really great opportunity to be a lead player in that transformative event for most of those customers. So I think it's great that even though we have a macro background, which isn't great, these types of investments, these types of focuses, they take many, many, many years to evolve and it's great that we're starting to make those investments now. Speaker 100:31:41Yes. And you're going to do them regardless of the macro. As I mentioned, like this is a top priority for so many companies that we talk with, even though they're thinking through tighter budgets, more scrutiny, more questions and ROI. Speaker 600:31:56Yes, for sure. Yes, there's a secular trend there. And then the follow-up actually on the product side, Spencer, the warehouse native analytics and the work that you're doing with Snowflake, how should we think about where that impacts your customers? Is that ease of implementation? Is that cost savings? Speaker 600:32:16Is that better outcomes? What is the ROI that customers will see from that? Speaker 100:32:21Ease of implementation and access to that existing customer base from cloud data warehouse, particularly Snowflake, to become Amplitude customers more easily. So the big deal with warehouse native Amplitude is instead of having to create a data pipeline from your cloud data warehouse to an analytics product like Amplitude, you're just running SQL queries directly on top of that data. And so, if you have that data already collected on the customer journey, then you can just turn Amplitude on, on top of it and be off and running with a lot less implementation cost. And so we've already seen it come up. It's early. Speaker 100:32:57We just launched it in June. We've already seen it come up as a consideration, particularly in larger companies that have made big investments into the cloud data warehouse. I was in one conversation with a traditional company a few weeks ago where they called it the biggest differentiator we had versus everything else they were looking out on the market, because they knew that it would make it much easier to get some of their smaller teams up and running more quickly. So, our philosophically, it's we want to be data agnostic. So, as the proliferation of different ways to set up your data stack continues, we want to make sure to work with every different one. Speaker 100:33:33Warehouse native is just kind of another way to do that. And then for us, it's about how do we win the applications on top of that data. So analytics, experimentation, CDP, session replay, we'll have more to come. Speaker 600:33:45Okay. Perfect. Awesome. Congrats on the quarter. Speaker 100:33:48Thanks, Hardin. Operator00:33:49Next question, Nick Altman from Scotia followed by Rob Oliver from Baird. Nick, go ahead please. Awesome. Speaker 500:33:56Thank you. Spencer, you guys highlighted how some of the go to market adjustments are starting to bear fruit. And when you think about the historical drag on net new ARR, right, a lot of that has been macro induced and churn induced. Speaker 700:34:12But when Speaker 500:34:13we think about sort of the upswing when the macro gets better and you guys are sort of lapping this churn dynamic, How much of the improvements in go to market, how impactful can the improvements in the go to market motion sort of be as things kind of progress you get through this renewal base and hopefully we kind of get a little bit of a better demand environment here? Speaker 100:34:36Yes. So Nick, I want to be clear like the path to reacceleration as I look through the next few quarters and in 2025, we're not dependent on any improvements in We're saying, hey, macro stays as bad as it is, and we're still set up to accelerate in terms of how much net ARR we're putting up a quarter. I'd say the changes that we've been driving with the enterprise focus massive, massive improvement. I mean those customers are just stickier long term. We're talking about starting out at a 3 year contract instead of a 1 year contract. Speaker 100:35:06We're talking about doing much larger wider deployments across 100 or 1000 of people in some cases. The change that we made at the start of this year was we moved to a new named account structure that have the total number of companies we're going after. So it went from about 24,000 to about 12,000 and that focus has driven a really great execution that we're starting to see. So that shows up in the pipeline call out that I made for second half in Q4, that shows up in larger lands, that shows up in just healthier renewal rates and healthier expansions that shows up with more of the platform being landed right at the start. And so you're using those expensive human resources to where you're going to have the greatest ROI. Speaker 100:35:54So I'd say that's going without that we'd be in a much, much worse place as a business. And so that will set us for reacceleration even if the macro continues to stay bad over the next few quarters. Speaker 500:36:07Okay. Awesome. And then the second question just kind of to dovetail off that answer, right? You have customers who maybe historically speaking you won't be in discussions with, I think you said the ASPs in the pipeline are up 25%. So there's definitely sort of bigger deals in the pipeline. Speaker 500:36:29The challenge with that is maybe sales cycles can elongate and things maybe take longer to close. So I guess what have you seen maybe over the past couple of quarters with those big deals? Have they taken a little bit longer to close? Speaker 400:36:42And on the flip side of Speaker 500:36:43the equation, going forward with when you look at this pipeline with larger deals out there, are you guys sort of baking in sales cycle elongation or stuff to move around from quarter to quarter? Just any commentary around the flip side of the equation in terms of those large deals would be helpful. Thanks. Speaker 100:37:02Yes. I mean, I think one of the changes that you have to go through when you're going after that sort of business is to be having a longer term outlook versus just the quarter in front of you. And so I'd say one of the motions that I've kind of glossed over, but to your call out is very important is we're now looking at pipeline multiple quarters out. We're looking at renewals a year out from when they would versus just kind of fighting quarter to quarter to maximize that particular quarter, which is why I gave the call out on Q4 pipeline. We're already looking at renewals in 2025. Speaker 100:37:34And so that's a natural part of going up market is that you'll get those longer evaluation cycles. I will say they're not that much longer in terms of total time. There is an urgency to get like a lot of so many companies have made big investments into their data stack. And you have CEOs and product leaders and marketing leaders asking, hey, when is this actually going to get some ROI out of this? And we're such a key part of that equation because we drive that self-service. Speaker 100:38:02Otherwise, the data is all locked up and trapped within whatever their data stack is. And so there's like very much an urgency from the customer side around, hey, I want to demonstrate some quick ROI. Like I'll tell you one story where we had as meeting with a customer in Europe a few months ago, Decathlon, and they had been long time Google Analytics users. They weren't happy with a bunch of the changes with Google Analytics 4. They had actually driven their entire team to switch over to Amplitude and their goal is to complete that within 12 month period. Speaker 100:38:36So they've gone from 0 to about 600 users on Amplitude in 2 quarters. That is the fastest ramp I've ever seen for someone getting up to speed with analytics and then they have the goal to get to multiple 1,000 by the end of this year. So I was blown away by the urgency that they had to make that switch. And as we make them successful, that's going to be a great lighthouse story for other retail customers. But it really speaks to the urgency that we are seeing a lot Speaker 300:39:05of buyers have in this environment. And adding on also with your question of how it impacts our guidance, we recognize this increase in pipeline and ASPs is also against the backdrop where buyer scrutiny remains high. And so with that, that's fully baked into our guidance as well. Speaker 400:39:24Awesome. Thank you. Operator00:39:26Great. Next question, Rob Oliver from Baird followed by Taylor McGinnis from UBS. Rob, go ahead please. Speaker 800:39:33Great. Thanks guys. Appreciate it. Appreciate your time. So just one for me, Spencer, on really just a follow-up on Nick's question. Speaker 800:39:46The customers paying over 100,000 dollars grew 10% and accelerated sequentially. You called out some success on the non analytics side as well. And it sounds like most of this is self help, so very encouraging signs. I'd be curious to know what you're seeing in terms of consolidation in the market. Are we at a point now where some of those, I know you said customers that are post 'twenty two are continuing to expand with you guys. Speaker 800:40:14But are you getting a sense when you look at your pipeline that there is a significant opportunity around you guys consolidating other vendors as well? Is that part of what's happening in the market, notwithstanding the fact that there's a tough macro? Speaker 100:40:29Yes, absolutely. I think, well, first, the tough macro is actually driving the consolidation because people want fewer vendor relationships. They want to have lower total cost of ownership, never mind the advantages of having the platform be integrated. And then there's just these tools work better together and that was one of the that was the founding thesis for Amplitude, which is analytics is the core of the stack. So I cited that SketchUp moved on to our CDP. Speaker 100:40:57I cited a large global job company ended up moving from Optimizely to Amplitude. It's part of why Forrester called us out as the leader is because our vision is for the entire platform and they're hearing that from buyers, hey, I just don't want a point solution for experimentation. It's got to be integrated with the analytics and it's got to offer something more broad than that. Every single company that whenever I have a conversation with a customer, universally, it's whether it's session replay, whether it's experimentation, whether it's some of the other stuff we're planning further out in our roadmap, there is a desire to move on to the platform. So, yes, that is a huge, huge trend driving our business generally. Speaker 100:41:40And I think that's going to doing that right, doing both the creation of the platform and the suite along with the motion to get it into the hands of customers is going to be a big driver of our success in the space. That's why we had we talked about our strategy in the past, one of the pillars being win the category. So it's not just about analytics anymore, it's about how does that work with session replay and experimentation and other parts of the stack. Speaker 800:42:07Exciting. And then just a quick follow-up on international. Does the move towards named accounts, which clearly is having a positive impact on your go to market. Is that also included international? And can you talk a little bit about it? Speaker 800:42:20And one of the call out wins that you cited was international. So if you can talk a little bit about how the international sales force is structured as well? Thanks. Speaker 100:42:30Yes. Named accounts, yes, the named account approach both applies to U. S, it applies to Europe, it applies to Asia. We look at so the way we've done international is we look at we've chosen a few Tier 1 markets, for example, U. K, France, Germany, Europe, Japan, Korea and Asia. Speaker 100:42:48There's the U. S. Obviously, as well as Canada and Brazil, sharing this one in that list. But and then within those markets, we're saying, okay, let's make sure to focus our enterprise sellers and our emerging enterprise sellers on these 12,000 named accounts. And then anything else goes into our velocity bucket. Speaker 100:43:07So, we actually we made an announcement. We just hired a new leader in Europe, Lee Edwards, who's going to be running the sales team out there. So very, very excited. We have a lot of great accounts there. I mentioned Decathlon earlier, we have Lamond, we have a lot of other great enterprises and it's about how do you bring the same success that we've had in the U. Speaker 100:43:24S. There. I think the important thing to recognize is just the market's early all over, no matter where you go. And so we want to make sure to invest appropriately against that opportunity and that's why we have field teams and all the geos that I mentioned. Speaker 800:43:39Great. Awesome. Well, appreciate it. Thanks, Spencer. And Andrew, look forward to working with you as well. Speaker 800:43:45Thanks, guys. Speaker 100:43:46Of course. Operator00:43:47Next question, Clare Goodes from UBS, followed by Jackson Ader from KeyBanc. Clare, go ahead please. Speaker 900:44:03Sorry about that. No, thanks for taking the question here for on for Taylor McGinnis. Yes, I just wanted to ask about the launch of the new Amplitude in September, the new platform. Exciting to hear about that. It sounds like it will lower some of the barriers to getting started. Speaker 900:44:19So I guess what kind of new opportunities are you expecting to that will open up and just any kind of like pricing changes or anything we should be mindful of? Thanks. Speaker 100:44:29So we're not doing any pricing changes as part of the launch. The launch is very focused on thinking about what is amplitude what is not just amplitude, what is analytics going to look like in the future. And so if you talk to any team trying to implement self-service analytics at the company, you will get all these stories about how painful and long the process is. You have to create a tracking plan, you have to get the engineering team to implement hundreds of lines of code, you have to get data flowing in, you got to train your team on it, you got to learn the semantics of what does a chart mean, how do you do a funnel analysis and so on. And the goal is to cut as much of that out as possible. Speaker 100:45:09So you're only doing one line of code. You're getting a whole bunch of dashboards out of the box. And then you're getting on that train of analytics value as quickly as possible. So I expect that to a few different things. 1, it's going to bring analytics to a whole new set of companies that have wanted it, but have really struggled with the cumbersome and long implementation processes that analytics currently takes. Speaker 100:45:34And then 2, that will get them to value that much quicker and start to get on that train. If I think out 5 or 10 years from now about how what the winning company in this space is going to look like, there is no way that it is going to be as difficult as it is today. So we've been putting in a lot of work on the product development team over the last few months in preparation for this launch about all the different areas that I outlined. And yes, we're going to be excited to launch that September 10th and we think that's going to open up a whole new segment of customers that's going to accelerate more companies landing, that's going to get them up to speed and faster. Speaker 1000:46:14Awesome. Thank you. Speaker 100:46:15For sure. Operator00:46:17Next question, Jackson from KeyBanc followed by JR from Piper. Jackson, go ahead please. Speaker 400:46:23Thanks, Yale. Hi, guys. First question on the Operator00:46:28sales marketing motion. How much Speaker 400:46:30of your sales marketing expenses are split between net new go get versus renewals? Speaker 100:46:39So what we're trying to do is obviously minimize the amount that's on renewals at the end of the day. So you're really focusing the sales efforts on both net new customers as well as expanding existing customers and that's really where you're spending the cycle. And the goal is when you're up and running, you kind of minimize that cost. One of the changes we've made is introducing a premium services package that helps attach specifically just to, okay, let's make sure you're implemented, let's make sure you're getting value, let's make sure you renew. And so that helps separate out some of the costs. Speaker 100:47:13Mike, I don't know if we have a breakdown on any of that stuff or any way to characterize it? Speaker 300:47:17No, we don't share that publicly, but everything that you've highlighted is there. The other thing that I'd highlight, is that we're investing in the enterprise. And so professional services related to that is impacting the gross margin specifically and that's what's happening there. But that's all an investment to better the customer base and the enterprise. Speaker 400:47:42And I guess a quick follow-up along a similar line, but I just think if you're leaning into some of the product led growth on the lower end, is there going to be an opportunity to kind of structurally reshape some of these expense lines, maybe shifting some sales Speaker 500:48:01and marketing away and into R and Speaker 400:48:03D like should we Yes. Can we just talk Speaker 100:48:06a little bit about how the structural changes of Speaker 400:48:08the expenses might look in Speaker 100:48:10the next couple of years? Yes. So we're so I want to be careful about giving any explicit guidance. Obviously, that's something as Andrew comes on board that we're going to be looking to shape together as we think about it. Let me give some high level points on it though. Speaker 100:48:25First is that you're right on. I think the key is putting the expensive human resources onto the enterprise accounts where you see, call it, dollars 300,000, dollars 500,000,000 plus opportunity. And then anything below that line, if you're thinking about sub-one hundred thousand, you're really getting you're automating that more and more. So there's always going to be a need, especially when you talk about digital analytics deployment at scale for human interaction, you need to coordinate stakeholders. There's work to make all of them successful. Speaker 100:48:57And then at the low end, like you mentioned, automating more and more of the motion. I think the other benefit of PLG, as you mentioned, is that it makes it much easier. So you don't even need all those human resources for all the implementation. So I think absolutely that's long term one of the aspirations where you're getting more of the enterprise customer base coming through the PLG motion. We've seen a few early successes there. Speaker 100:49:21I mentioned like a railway company last quarter as well as one of the large chip companies out there that came in actually through the Plus motion and that made that obviously makes the cost of sale and getting them up and running much, much cheaper. So that's absolutely a lever that we're going to be using to reduce cost overall expense to acquire customers over time. We are fundamentally a product company, a product led company. And so starting with great product and winning with great product is the core of Amplitude. And so on a relative basis, yes, investing more over there over time is directionally where we're going. Speaker 800:49:59Okay. Thank you, guys. Operator00:50:02J. R. From Piper, followed by Elizabeth Porter from Morgan Stanley. Speaker 700:50:08Great. Thanks for taking the question. I'd love to go back to Spectrum replay for a moment. What's been the competitive response since eyeing the product earlier this year? And curious if you've seen pricing turn more aggressive there? Speaker 700:50:20And just in general, any views on competition this quarter would be helpful? Speaker 100:50:24Yes. So session replay, that has been so we just launched in Q1 and it has been the fastest ramp we've seen in terms of additional products outside of analytics. Every single company that we talk to that already uses our analytics and has another third party vendor for session replay is interested in consolidating. I don't think I've talked to one that says, oh no, we're happy with our standalone one. It just it makes so much sense because, you can do have a lower total cost of ownership. Speaker 100:50:55And then the integration and workflows is actually already really key to One of the great use cases with using session replay and analytics is that you can look at say, users that encountered a bug or encountered an issue in error and then watch the sessions to see where they ran into that and what caused it and then go back and fix that. We've already used that. We've seen a lot of our customers use that and it's not something you can do if you have a session replay provider standalone. So we're seeing a lot of pull from that end. In terms of the cost, like, yes, that is the point. Speaker 100:51:28We're reducing. We are going to give price pressure to these other players in the market and we can offer something like I'd say half the cost, but that's accretive to us, saves the customer money, drives more overall values, just a win on all fronts. And so in a lot of ways, we are kind of the lower cost provider, because you're coming on to our platform. Speaker 700:51:50Perfect. Makes sense. Thank you. Speaker 100:51:52For sure. Operator00:51:53Next question, Elizabeth Porter Morgan Stanley followed by, Clark Wright, D. A. Davidson. Elizabeth, go ahead please. Speaker 1000:51:59Great. Thanks so much. I actually have a follow-up to Claire's question on the new product rollout. I was curious if you've had prior new platform rollouts and what those any sort of changes in KPIs you may have seen in the past as it relates to improvements in retention or engagement? And I'm just looking to any historical precedence that we can look to kind of inform our people on the new opportunity? Speaker 100:52:24We haven't done one like that since we've been public. I think the last change that we made in this was probably 6 or 7 years ago. Operator00:52:31So this Speaker 100:52:33is the biggest that we've done since that point in time. So there isn't there isn't ton of precedent. What I will say on just some of the quick stats, we're seeing about somewhere between a 40% 50% increase in data activation. So of the percentage of people that sign up, how many actually end up getting data. We're seeing a lot more engagement from new customers on session replay and on experimentation. Speaker 100:52:59So that's been a real positive as well. My expectation is this will lead to us getting more customers as well as having the customers that do come in be more likely to be successful in activating kind of get through the whole funnel. Now it is our first salvo at this and so we're going to kind of continue iterate and beat the drum past September 10 on this because we want to be the leaders here and so that there's no reason to choose anyone else over Amplitude. And so I'm excited to see and reporting the results once we get to the other side of the launch. Speaker 1000:53:35Great. And then just as a follow-up quickly on NRR. It was modest contraction because as expected, would just love to unpack some of the drivers between absolute churn, down sell and up sell, kind of any areas that you call out that actually saw a little bit of better improvement, what maybe got a little bit worse? Speaker 300:53:53Yes. So we've said that we're going to trough in the mid-90s this year and that's where we are right now. The big impact is obviously the optimizations for the multi year contracts that happened. And then we're going to have a headwind in Q3 with Russia as well. Absent that, we believe we're in a fundamentally different place to reaccelerate growth and that's well within our reach. Speaker 1000:54:20Thank you. Operator00:54:22Awesome. Last question, Clyde Wright, Davidson. Go ahead please, Clyde. So we think in 2nd quarter Sorry, Clyde, we can't hear you from the audio. Much better, much better. Speaker 100:54:34Good. Okay, perfect. So we have seen consecutive quarters accelerating customer account growth and would love to understand where these companies are starting at and how do you plan to drive these new logos to your 50 ks plus cohort, whether it's through incremental product adoption or CDADs? Yes. So I want to be clear on customer count. Speaker 100:54:53We continue to disclose that as we have historically, but it lumps in the Plus customers as well, which only started at the end of last year. So the year on year comparisons are not apples to apples. And so part of the reason why we disclosed the 100 ks customer plus is because those are like you can think of those as real or larger enterprise customers. And so I'd focus more on that. With that said, you do see it is great to see so many companies coming on to Plus for the first time and those are great feeding ground to where those companies will upgrade to larger plans, use more of Amplitude over time. Speaker 100:55:29They're starting to be a small revenue contribution to the quarter as well. So it's all good. But yes, it's not quite an apples to apples comparison with if you were to look a year ago. So we don't emphasize it quite as much. Operator00:55:48Awesome. Great. Thank you for that. Last question. With that, I'm seeing no further questions in queue. Operator00:55:53We will be at the Citigroup Global Tech Conference and Piper Sandler's Growth Frontiers Conference in September. Details will be posted on our IR website. Thank you very much for attending our 2Q earnings conference call. You may now disconnect.Read morePowered by