Amplitude Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 7, 2025

There are 13 speakers on the call.

Operator

Management will make forward looking statements, including statements regarding our financial outlook for the second quarter and full year 2025, the expected performance of our products, our expected quarterly and long term growth, investments and our overall future prospects. These forward looking statements are based on current information, assumptions and expectations and 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. Further 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 after today's call except as required by law. Certain financial measures used on today's call are expressed on a non GAAP basis.

Operator

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. Additional information regarding these non GAAP financial measures and a reconciliation between these GAAP and non GAAP financial measures are included in our earnings press release and the supplemental financial information, which can be found on our Investor Relations website at investors.amplitude.com. With that, I'll hand the call over to Spencer.

Speaker 1

Thanks, John. Good afternoon, everyone, and welcome to Amplitude's first quarter twenty twenty five earnings call. Today, I'll go through three key areas. First, our q one results and the reacceleration of our business. Second, our platform strategy and how we are winning the enterprise.

Speaker 1

And last, product innovation and customer stories. Let's start with our Q1 results. We exceeded the midpoint of our revenue and operating loss guidance. Our first quarter revenue was $80,000,000 up 10% year over year. Annual recurring revenue was $320,000,000 up 12% year over year and up $8,000,000 from last quarter.

Speaker 1

Non GAAP operating loss was 2,100,000 Customers with more than 100 ks in ARR grew to six seventeen, an increase of 18% year over year. We are reaccelerating the business. We are growing through platform deals and focus on the enterprise. We are also continuing to improve churn. 2025 is the year of the platform.

Speaker 1

Every company needs data they can trust, an understanding of their customers, and ways to take action. During q one, we saw more enterprise customers embracing our full digital analytics platform leading to stronger multiproduct attach rates, more multiyear deals, and wider usage across teams. Multiproduct customers now make up 30% of our installed base and 64% of our total ARR. We are seeing strong enterprise momentum overall. We landed new customers like Hertz and The Economist Group, and almost two thirds of our ARR base comes from enterprise customers.

Speaker 1

These deals are bigger and more likely to expand in the future. We have also created a new strategic enterprise accounts team to focus on our top 30 customers and top 30 prospects. That effort is already paying off in q one with stronger executive relationships and more multiproduct wins. We are making steady progress on churn and are past the worst of it. Our dollar based net retention reached 101% in q one, up five points from its lowest level in q two of last year.

Speaker 1

As the macro remains challenging, our priority is helping customers derive value from the Amplitude platform as quickly as possible. Moving on to product innovation. When we spoke during q four earnings, we had just launched our newest product, Guides and Surveys. Guides and Surveys helps customers deliver in product guidance and feedback that is deeply personalized, a far cry from static pop ups. It is built on our analytics foundation and is a prime example of how to move from insights to action quickly.

Speaker 1

Since then, there has been a phenomenal response. We have seen faster adoption and more incremental ARR in the first quarter than for any other new product to date, including experiment and session replay, which were very successful in their own right. We've already displaced a number of point solutions and legacy tools with guides and surveys, and it is becoming a core element of our platform story. We are getting better at adding to the Amplitude platform. In q one, we also shipped self serve data deletion, heat maps, session replay for mobile, and session replay everywhere.

Speaker 1

Now session replay is embedded across the entire Amplitude platform, including analytics, experiments, and guides and surveys. Last year, we saw the increased influence that marketing leaders had on enterprise deals. To be successful, marketers need to look at the same user data, evaluate the end to end customer journey, and leverage capabilities outside of analytics in the same platform. Legacy marketing solutions are not set up to do that. We are making two announcements next week specifically for marketers.

Speaker 1

First, on Wednesday, May 14, we are launching a series of platform updates that enable marketers to understand conversion, product adoption, and customer lifetime value and retention. Our goal is to eliminate the blind spots created by traditional marketing analytics tools. Second, we are joining Twilio at SIGNAL, their annual user conference, also on Wednesday to announce that Amplitude is now Segment's recommended analytics platform. To give you a better idea of what we're releasing, I'd like to show you our latest marketing updates in action. For this demo, I'm an ecommerce marketer looking to increase customer purchases.

Speaker 1

This screen shows my advertising performance. There are prebuilt metrics on the screen from impressions to customer acquisition cost and return on ad spend so I can best understand my my best and worst performing channels. I also see a problem. I'm getting thousands of visitors, but less than 5% of customers make purchases. Why is that?

Speaker 1

Instead of guessing or needing to switch to another point solution, I can use Amplitude's heat maps to find out more. This visual shows my website with hotspots representing customer activity. I can understand where users are engaging and where they're getting stuck. I just found out that this top banner here gets a ton of clicks. I'd like to experiment with new messaging to see if that will drive more purchases.

Speaker 1

Can do this all on the same screen in Amplitude. I highlight and click the banner, and then I can launch an experiment. What you see now is the visual editor. I can select elements like the banner, update the copy with a new promo code, and go ahead and deploy that experiment. Finally, still within Amplitude, I see my experiment results.

Speaker 1

Users who see the new banner messaging are converting at a higher rate. What you just saw is not possible with any other tool out there, only Amplitude. We want Amplitude to be the default platform for marketers everywhere. At Investor Day, we shared our vision for Amplitude AI agents. Our agents turn Amplitude into a team of experts you lead.

Speaker 1

These agents are monitoring your data, looking for changes, doing a root cause analysis, watching sessions, forming high hypothesis, suggesting experiments, taking your feedback, shipping changes, monitoring the impact, and then repeating the cycle over again. On June 10, we're hosting an event in San Francisco where we'll announce the closed beta of agents. We will welcome other leading AI companies on stage with us and show some product demos of what Amplitude agents could do, including agents that automatically and iteratively use analytics and session replays for deep analysis to find the root cause of issues, agents that automatically create hundreds of variants of the same website to see which performs the best, agents that automatically create user guides to walk customers through your product. This is the first agent in the data space that is doing anything meaningful beyond code and SQL generation. Our customers are excited about it too.

Speaker 1

Agents was the top voted new product at multiple of our customer advisory boards this year. Let us know if you'd like an invitation to the June 10 event. I'd love to see you there. We had a great quarter for new and expansion deals with enterprise customers, including The Economist Group, Hertz, Atlassian, Joe and the Juice, First Horizon Bank, WHOOP, 1Password, Away, Lamond, Syngenta, Zocdoc, and Appfire. I wanna talk about three of them in more detail.

Speaker 1

The Economist Group chose Amplitude as its full platform solution to power its digital analytics and experimentation strategy. Like many media organizations, The Economist Group was navigating a complex shift from print to digital and struggling with disconnected tools and low data adoption. Its teams were stitching together insights across analytics providers, warehouses, and other point solutions. This made answering even the most basic customer journey questions time consuming and inconsistent. The Economist group adopted analytics, experiment, session replay, and guides and surveys to bring insights and actions together in one place.

Speaker 1

It now has a single platform to understand how users engage across all its digital properties. Its teams can analyze what drives subscriptions, test experiences in real time, and build smarter engagement flows. Syngenta is a global ag tech company that helps millions of farmers grow food. Their applications help farmers understand when and how to plant different foods in their local geographies to produce better yields. Syngenta adopted Amplitude in 2021.

Speaker 1

Today, almost 300 employees use our platform to understand how users differ across regions so they can tailor the experience. In q one, Syngenta added guides and surveys. Now its team will be able to gather user feedback through NPS and promote key events in a timely targeted way. This will help its team improve user engagement and increase feature adoption. Joe and Juice, the international juice bar and coffee shop chain, was facing rising demand.

Speaker 1

The team turned to digital channels and Amplitude to help grow same store sales. Joe and the Joe and the Juice can now personalize the ordering and picking up experience for each individual customer. Having all of its data in one place allows the team to move fast, iterate quickly, and increase order sizes.

Speaker 1

Before I hand it over to Andrew, I want to reiterate our continued progress in growing Amplitude. We have successfully returned to double digit revenue growth. We are the complete end to end digital analytics platform for the enterprise. Customers can now use Amplitude to replace any point solution on the market, and we continue to expand the platform's features and functionalities at scale. We have also deepened our customer relationships, improved our operational efficiency, and created a sustainable growth business.

Speaker 1

I am proud of the Amplitude team for their focus and dedication in q one. While there is always more for us to do, we will continue to execute regardless of any changes in the macro environment. Thank you for your interest in Amplitude. I'll now hand it over to Andrew to walk through our financial results.

Speaker 2

Thank you, Spencer, and good afternoon, everyone. I'm pleased with our execution in the first quarter, setting the stage for a strong year as we set out to expand our enterprise customer base and extend the reach of our platform. During our last earnings call, we shared our plans to accelerate the growth of our business, and that growth would come with greater leverage. Our first quarter results are another proof point of the improved execution of our teams are exhibiting as both revenue growth and operating income outperformed expectations. The first quarter also showed that we are becoming more strategic partners with our enterprise customers, with total RPO accelerating to 30% growth year over year and long term RPO accelerating to 72% growth year over year.

Speaker 2

We are confident in our strategy as a platform of choice for customers looking to consolidate spend across vendors and believe that we can accelerate our growth without meeting full improvement or clarity in the macro environment. As we explained in our investor day, we are focused on two levers to accelerate growth and get more leverage out of our business. First, our sellers are focused on the enterprise customer, which we define as customers with greater than 1,000 employees or over 100,000,000 in revenue. Here, we had a great quarter from both landing new accounts as well as expanding additional accounts. As Spencer highlighted in his remarks, our push to extend into the marketing persona is directly related to this goal.

Speaker 2

Enterprises are looking across teams to drive additional growth and improve their customer journey. Our platform can give marketers and product owners a single view into that customer journey and offer differentiated data that can help product owners optimize their in product experience. This gives the marketers unique insights into the behavioral aspects of their customers they've never been able to activate before. The second growth lever is to extend the reach of our platform into all of our customers. Again, this quarter was strong with 30% of our customers being on multiproduct compared to 21% last year.

Speaker 2

Our platform works better together, and we will continue to sell the platform across both our current customer base as well as new lands. In the first quarter, '40 '2 percent of our new enterprise customers landed as multiproduct, which is great progress. As we increase our enterprise customer base and expand the adoption of our platform, we are becoming more strategic partners with our customers. Contract duration is a key focus for us as it represents customers' commitments to our road map and the value they receive. As we extend the duration of our contracts, we give ourselves greater opportunity to deliver value before renewal.

Speaker 2

This also provides us greater time to earn the opportunity to expand with customers through sales of additional products. We had a strong renewal quarter, and we managed to extend our average contract duration in many of these renewals. Lastly, I want to touch on our ability to drive greater leverage within our business. I'm pleased with our outperformance in the first quarter from our initial expectation, and we will continue to look for additional opportunities to create greater efficiencies. We are focused on a profitable business model, and we'll continue to make incremental improvements each quarter.

Speaker 2

Turning to our first quarter 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 a reconciliation between GAAP and non GAAP results, can be found in our earnings press release and the supplemental financials on our IR website. First quarter revenue was $80,000,000 up 10% year over year and 2% quarter over quarter. Total ARR increased to $320,000,000 exiting the first quarter, an increase of 12% year over year and $8,000,000 sequentially.

Speaker 2

Here are more details on the key elements. We had a strong new customer quarter reflecting balance with expansions. However, macro uncertainty will continue to make every new logo challenging. The number of customers representing a hundred thousand or more of ARR in Q1 grew to 617, an increase of 18% year over year. In period NRR was 101%, a one point increase sequentially.

Speaker 2

NRR on a trailing twelve month basis was 98%. We continue to make progress on improvements in retention and continue to expect NRR will increase throughout 2025 as we drive greater expansions opportunities. Gross margin was 77% for the first quarter, in line with the last quarter. Sales and marketing expenses were 45% of revenue, a slight decrease year over year, but up slightly sequentially as we had some onetime events in the first quarter to prepare for the year, such as our sales kickoff. We continue to focus on improving sales efficiencies, driving improvements through our changes in our processes, coverage, and expansion of the enterprise customers.

Speaker 2

G and A was 15% of revenue, in line with first quarter twenty twenty four. G and A will continue to be optimized to improve as a percentage of revenue over time. R and D was 19% of revenue, up one percentage point sequentially, primarily due to the acquisition of Command dot ai. Total operating expenses were 63,000,000, 70 9 percent of revenue, up two percentage points sequentially, primarily due to the aforementioned increases in sales and marketing and our acquisition of Command dot ai. Operating loss was a negative 2,100,000.0 or 2.6% of revenue, which was approximately 2,400,000.0 better than the midpoint of our guidance.

Speaker 2

Net loss per share was zero based on a 29,700,000 basic shares compared to net income per share of $01 with 130,900,000.0 diluted shares a year ago. Free cash flow in the quarter was negative 9,200,000.0 or 12% of revenue compared to a negative 1,100,000 or 2% of revenue a year ago. This was largely driven by our annual bonus payout, which we expected during the quarter. Going forward, we will shift to a semiannual payment framework under which the first payment is expected to occur in the third quarter of twenty twenty five. Now turning to our outlook.

Speaker 2

We have built our business to be more resilient Through both our product positioning as a platform of choice when customers are looking to consolidate spend and by focusing on operational excellence, we have oriented the business for positive free cash flow and non GAAP profitability. We continue to operate our business with a focus on investing in areas that we see real return with ROI for our customers. We are not assuming a positive inflection in the macro environment and believe it will continue to be challenging in the near future. However, we are encouraged by the proof points we are seeing from the strategic changes we've made to our business. We expect that every new logo will continue to be tough and buyer scrutiny has not shifted positive over the past six months.

Speaker 2

As we get through the larger levels of churn, we continue to address structural issues in our go to market motion to influence greater retention and incent deep adoption of our platform. However, the digital channel remains an important investment as ever with companies trying to get deeper connections with their customers. We are building a durable enterprise SaaS business that is enabling us to drive growth as we deliver increasing value to our customers. For the second quarter of twenty twenty five, we expect revenues to be between $80,300,000 and $82,300,000 representing an annual growth rate of 11% at the midpoint. We expect non GAAP operating loss to be between negative 2,900,000.0 and negative 900,000.0 And we expect non GAAP net income per share to be between negative 1¢ and positive 1¢, assuming basic weighted average shares outstanding of approximately 132,000,000 and diluted weighted average shares outstanding 139,000,000, respectively.

Speaker 2

For the full year 2025, we are raising our revenue expectation due to the outperformance in the first quarter to be between $3.29 and $333,000,000, an annual growth rate of 10.5% at the midpoint. We are also increasing our outlook for non GAAP operating income to be between zero and positive $5,000,000 reflecting our focus on growth with leverage. We expect non GAAP net income per share to be between 5¢ and 10¢, assuming weighted average shares outstanding of approximately 141,000,000 as measured on a fully diluted basis. In addition, today, we announced that our board of directors has approved a $50,000,000 share repurchase program that we will use to take advantage of dislocations in our stock price as well as to help manage future dilution. In my second full quarter as the CFO, I am pleased with the early progress we've made.

Speaker 2

I'm confident in our ability to build a durable growth model by aligning to the right customers, driving the right types of contracts, investing in greater innovation, and building out value for our customers. Our long term opportunity remains incredibly compelling. With increased discipline and execution, I will be believe we will be in a great position to capture it. With that, we'll open it up for q and a. Over to you, John.

Operator

Thank you, Andrew. We will now turn to q and a. For the sake of time, please limit yourself to one question and one follow-up. Our first question will come from Scott Berg at Needham followed by Arjun Bhatia at William Blair. Scott, your line is open.

Speaker 3

Hi, everyone. Really nice quarter here, and thanks for taking my questions. I wanted to follow-up on the net new ARR metric in the quarter. It was up $8,000,000 quarter over quarter and up 100% year over year, especially in a seasonally weak quarter. You know, help us understand the outperformance a little bit, you know, from the new sales side.

Speaker 3

It sounds like your new customer acquisition was pretty good in the quarter, but retention is better as well and even your cross sell opportunity is better. Sounds like everything kinda clicking together. But relative to your expectations maybe ninety days ago, what exactly kinda maybe drove the upside there?

Speaker 1

I I think the comparison to last year, last year, we had a a lot of, overbuys and larger contract churns that we're still working through from 2021 and 2022. Now that we're in 2025, we're really past almost all of that. And so now it's more of kind of the run rate you'd expect on the churn side. So that was frankly the biggest driver. In addition to that, there's some good, enterprise wins and the focus and execution there as well as a broader platform.

Speaker 1

You know? Now we have session replay and guides and surveys that we didn't have at the same time next year, and so we're seeing a lot of customer interest in those two. And so those helped on the margin. I also wanna be clear, like, you know, 8,000,000 in net ARR, it's good progress, but it's very, very far from, you know, where where we wanna be a few years from now.

Speaker 3

Helpful. Thanks, Spencer. And then, Spencer, you commented on on initial traction of of, I think, was surveys and, guides, which was above expectations or at least above trends on another new products you've launched over the last couple years. You know, we've conducted a number of customer surveys, you know, over the last quarter and try to help better understand how well this platform, new know, kind of newer strategy is resonating with them. And we were actually kinda surprised to hear that a couple customers, even one that was a repeat buyer, wasn't as familiar with these other opportunities there.

Speaker 3

It's kind of an interesting, you know, difference relative to the the strength that you had in the quarter there. But how do you improve that market awareness around what you all are doing on the product side today to even drive further success in those expansion strategies?

Speaker 1

Yeah. I mean, Scott, that's great that you call out that problem because for the last ten years, we have been known as an analytics company. And so that is why we've made the point in saying this is the year where we go from analytics to entire platform. And so there there's there's not any magic to it other than continuing to beat the drum and get the word out there. I think the progress we've seen is on new lands.

Speaker 1

Most of most enterprise new lands will have a component outside of analytics, so that's great. The place where we still have a lot of work to do, which sounds like was consistent with what you heard, was on our existing customer base, where a lot of them, know, they're used to viewing us in the analytics box. So the easy move is just to renew every year on analytics and, you know, not worry about it and continue to grow as they grow their their data volume. And so that requires some intentional work on our part to educate them, to help them understand, hey. We have experiment.

Speaker 1

Hey. We have session replay. Hey. We have guidance surveys. Now when we do that, universally, like, I I can't think of a single customer conversation I've had where someone is not interested in those.

Speaker 1

It's just a question of timing. So we still have a bunch of work with our existing customer base to both educate them as well as get them on, and, you know, that will happen as we go through this year.

Speaker 3

Excellent. Really nice quarter. Thanks again.

Operator

Thank you, Scott. Our next question is from Arjun Bhatia from William Blair followed by Brent Brent Bracelin from Piper Sandler. Go ahead, Arjun.

Speaker 4

Perfect. Thank you guys, and, congrats on the nice start here. I was, encouraged, I guess, and and pretty excited to hear about some of the marketing products, Spencer, that you guys are are launching. It sounds like that's, maybe to come and will ramp in the back half of the year. But as you're thinking of expanding to this new persona and targeting enterprise buyers, can you maybe just compare and contrast what's different now versus, you know, some of the CDP, related products that, that that you guys had, tried to push maybe to the marketing buyer

Speaker 1

Oh, I see.

Speaker 3

Over the

Speaker 4

last couple of years, and how are you kind of you know, how will you measure progress in this? Is this a a land product? Is this an expand product? How do you think about that piece?

Speaker 1

Yeah. Marketing analytics, it's the same set of core core capabilities in that you're tracking data from users over time. It's just through a marketing lens versus through a product lens. So some of the questions you're asking are different. I I think what we see now so analytics is definitely a LEN product.

Speaker 1

And what we see now is that there are now a critical mass of customers who are willing to switch either from Google Analytics or from, you know, an enterprise legacy marketing analytics to Amplitude full on versus doing it incrementally over time and running both. And so what we've started up, we one example is we have a a Google Analytics advisory council that I actually met with a few weeks ago, and they're like, cool. We've made the switch over. And, you know, technically, you guys can do everything that can in Google Analytics, but it's not as easy because I don't get ecommerce reports out of the box or doing some of the ROI spending calculation and looking at customer cost of customer acquisition isn't as straightforward. So, you know, can you just provide those out of the box in the same way Google Analytics did?

Speaker 1

And so those are some of the things that we're coming out with this quarter and next to make that easier. So I I I'd say in prior years, we didn't have enough capability set to say, hey. I'm willing to bet my business on Amplitude as a system of record for running my marketing campaigns. Now we actually do, and we're seeing some early traction on it. And so now it's just scaling it and making it easier so more and more people are are willing to make that switch.

Speaker 1

So it's not just product people coming on to Amplitude. It's it's the marketing folks that are using Google Analytics or or other solutions as well.

Speaker 4

Perfect. That's, that's super helpful. And then, maybe the the next question, it it's more a little bit more on the financials, but, I'm curious just the the operating leverage in the back half of the year. I'm curious what the main drivers of that are because it looks like based on your Q2 guidance, we're modeling maybe roughly $4,000,000 in operating loss for the first half. That seems to flip for the full year to a positive up to $5,000,000 in income.

Speaker 4

So is that gross margin? Are there some of those M and A costs that are rolling off? What should we think about as the main drivers there?

Speaker 2

It's really across the board, Arjun. I mean, when we put our plan together, we plan for optimizations on every aspect, whether it's through gross margins and the engineering team continually enhancing how our platform runs within our hosting environments through the sales team, adding more and more capabilities through and and, learning how to sell the platform more effectively. So more new logos, more expansions. You know, sales productivity typically falls from q four to q one, but then starts to ramp up through the year as they as most of the sales reps get adjusted to the new territories, understand how to sell the new products. So the sales and marketing line, we'll see continual efficiencies around.

Speaker 2

And then g and a, I would say, it's it's just a factor of, you know, we're getting greater leverage out of a constant or pretty well constant level of spend within it. And D is the one area where we'll continue to invest when we see opportunities. And so I would tell you, we've targeted 18 to 20% of R and D, spend as a percentage of revenue, and I expect we'll be within that range.

Speaker 4

Okay. Perfect. Thank you, guys.

Operator

Thank you, Art. Our next question is from Brent Bracelin from Piper Sandler followed by Jackson Ader from KeyBanc. Brent, go ahead.

Speaker 5

Thank you. Good afternoon. Great to see, three quarters here of accelerating ARR growth. The, the new product strategy seems to be, working here. Maybe, Andrew, starting with with you, CRPO accelerated it to look like 19% growth this year, this quarter.

Speaker 5

It's the highest in almost two years. You flagged enterprise, being, almost now two thirds of of of ARR. Is that the big driver of of the CRPO? Love to have any color on what what drove that metric.

Operator

It looked like that stood out to me as an anomaly. So walk walk me through what drove that.

Speaker 2

Certainly, focus on enterprise is one that's helping to drive longer term contract duration with our clients as they come up for either renewal or selling new new products into clients. And it's especially profound with those customers who have multiproduct because they think about implementing a multiproduct over not just a twelve month period, but over a multiyear period to really get the advantages of of scale and efficiency that they often, purchase Amplitude to go do. So it's it's certainly one of greater focus on in the enterprise customer. But I'd also tell you that we made shifts in our go to market where most of our enterprise account executives have full responsibility for all the commercial transactions within their territories. And that means that, you know, we put Centive frameworks together and get them focused on driving those multiyear agreements.

Speaker 2

You know? They oftentimes, when they have conversations with clients, clients, especially enterprise clients, they'll want cost predictability over that project period, and they're willing to agree to a longer term contract duration, which, as you know, gives us that growth in RPO, gives us greater revenue predictability. And, frankly, it'll help us drive greater sales efficiencies because we're not having to renew, you know, all of those contracts every year.

Speaker 5

Makes sense. And then, Spencer, guides and surveys. Sounds like you're off to a a strong start. My question here for you is is really on what's resonating and and and motivating these customers to switch from a competitor, or are they even switching? Is this price lever, a a feature lever?

Speaker 5

Just trying to better understand why you're seeing such strong adoption early on, guidance surveys. On

Speaker 1

so let me do the comparison of guides and surveys to prior products, and then I'll I'll talk about what's resonating on it specifically. It's it's a more mature product. Obviously, before the acquisition, the command team had spent tons of, you know, many years building this out, and so we weren't starting from zero. It was just a question of porting the the existing product to the platform, and we did that in four months and got it out there. And we pretty much have every almost everything someone on a competitive point solution would want.

Speaker 1

The one exception is is mobile guides and surveys, but we're literally gonna be coming out with that this quarter. And then there's there's kinda no really real real reason to use a competitor. Whereas session replay and and experimentation, those were both built in house, and so, you know, the maturity takes a little longer to to get to the same level. So that that's, I think, the biggest thing. It's also the sweet product if you caught my demo last time.

Speaker 1

So that that always helps too. In terms of the displacement, so it is largely competitive displacements. There's a number of things that are attractive. I think, first, obviously, the the the consolidated price is is a big deal in that, you know, yeah, you can, yeah, you can pay us much less by coming on to that than you can pay someone else, and, you know, it's a win win for all sides. But the other part of it that's not to be underrated is being able to do the guides and surveys in analytics from your analytics platform and having that data connect is matters a lot.

Speaker 1

So last time I showed a demo of us detecting user confusion, and we can do that because we track a bunch of analytics data that another point solution and guidance surveys can't have. So it allows you to have all these kind of bells and whistles and advanced functionality that is quite valuable and that you don't have if you're just going with something stand alone.

Operator

Makes sense. Thank you. Thank you, Brent. Our next question is from Jackson Ader from KeyBanc followed by Koji Ikeda from Bank of America. Go ahead, Jackson.

Speaker 6

Thanks, John. Hey, guys. Thanks for taking our question.

Operator

Let's see. I think, Spencer, probably first for you. On the marketing side

Speaker 6

and specifically the partnership that you signed with with Twilio, what makes Twilio the right partner for this to be, you know, the relationship going forward?

Speaker 1

I I think our well so so let me talk about our strategy, and then I'll answer your question. Our strategy as a whole is we're agnostic to wherever your data sets. So if it's in a CDP, whether it's Segment or something else, if it's in a, you know, your own system or your own data warehouse, if you're sending us directly, like, we're agnostic, and we'll work with wherever your data sits. In terms of Twilio and and Segment in particular, I I think in turn they've just had the greatest overlap with us in terms of number of customers. Just very candidly, I think for a number of years, we were a little more competitive than we were collaborative because we had come out with a CDP that some of the same functionalities.

Speaker 1

But then we changed that messaging this year and been really clear. Hey. Look. Our goal is not to go on the CDP space. We want, you know, you guys to go be successful there, and we'd much rather partner, and we think of ourselves as the applications on top of that.

Speaker 1

And so it was a great opportunity. You know, we had already done a lot of work with Segment and the Twilio team in the past. And, you know, in terms of CDPs, they have the the most overlap with our buyer set. So, you know, technology companies, more enterprise similar, you know, product or marketer buying profile. And so it just it made a ton of sense to to announce a a more formalized partnership that we're doing next week.

Speaker 6

Got it. Okay. And then quick follow-up on on geo. It seems like rest of the world lagging. Right?

Speaker 6

Like, just kind of so I'm curious what you guys are seeing there. Is it more macro pressure outside The US, or is there something you know, what can you do to kinda get that segment to be, like, you know, an engine a growth driver rather than a laggard?

Speaker 1

I wanna be clear. You'll you'll see variation quarter to quarter, but everywhere is early and everywhere it's growing. US is, you know, the most mature, but we're still in, you know, ending one or two of nine in this market. I'd say within APJ, we're more concentrated in, like, tech and startups and SMBs. In Europe, it's kinda in between the two.

Speaker 1

I'm actually gonna be going out to Australia and Korea and and doing a tour on on some of our APJ customers, and we're just starting to break in the enterprise in in a bunch of places there. And so that's that's good to see, but it's just earlier. So you'll see variance quarter to quarter, and it's know, I I wouldn't read anything into it.

Speaker 6

Alright. Thank you.

Operator

Thank you, Jackson. Our next question comes from the line of Koji Ikeda from Bank of America, followed by Taylor McGinnis from UBS. Go ahead.

Speaker 7

Hey. This is George on for Appreciate it. Appreciate you taking our questions here. I I kinda had one just as it relates to, you know, the buyback announcement and and kind of how how you think of capital allocation, whether it be buybacks or, you know, comparing that to, internal investments and kind of what what the philosophy is there, if you could Sure. You know, kinda touch on that.

Speaker 2

Sure. So so one of the things that that I've done since arriving as a CFO is really take a look at our core processes and and how we were managing Amplitude, we're really updating ourselves to for scale. And this is just one of those tools that we thought we lacked in order to manage both dilution effectively and to take advantage of dislocations in the market that may be happening. And it's certainly been the case over the last few weeks that we've seen those types of of volatile movements that at at those low, low prices made a lot of sense for us to to invest in our own stock. Now having said that, there's nothing earmarked.

Speaker 2

It's pretty it's a pretty broad program. And so I look at it just as a tool for us to use as we go forward and when those when those times occur.

Operator

Thank you. Thanks, George. Our next question comes from the line of Taylor McGinnis at UBS, followed by Clark Wright at D. A. Davidson.

Operator

Taylor, the floor is yours.

Speaker 8

Yeah. Hey, guys. Thanks so much, for the time this evening, and congrats on the results. Maybe on first one. So, Spencer, there's a lot of concerns out there on the macro and to the extent that we could see a deterioration.

Speaker 8

So I'd love for you to just comment on what you're hearing from your customers. And as a follow-up to that question, when we think about how Amplitude and its customer base might differ today versus the last slowdown in 2022, I guess, customer is leaner today. There's been a lot of rightsizing and optimization over the last couple of years. So is it possible that risk could be less? And, you know, how are you guys, I guess, better equipped to handle any, potential headwinds we could see?

Speaker 1

Yeah. I I think what made 2022 so damaging for us in particular was just there was a lot of overexuberance 2021. Now, you know, if I look at the last few years, there hasn't been that. So I think we've just been in a in a harder honestly, even that hard compared to historicals, but a harder macro on a relative basis. I I think from in terms of the tariffs specific impact, we haven't candidly, we haven't seen any or it's been very minimal.

Speaker 1

It hasn't changed any of the buying patterns that we've seen from our customers at all. We're obviously watching it really carefully because we wanna make sure that we're set up. I I I kinda say two things about it in terms of what we're doing. One is, like, we've been talking a lot about operating with leverage no matter the environment and setting up with Amplitude to accelerate. And so, you know, good, bad, ugly, you know, whatever on the macro, like, we're gonna we all of that is within our control from all of this this stuff to both accelerate the business and drive leverage is within our control.

Speaker 1

So we're gonna focus on that. The second thing I'd say is that even in the worst times, being able to make your digital channel successful and having a great foundation of data has is a top priority of the executives that I talk to. And so even if, you know, let's say, AI bubble pops or people cut back on spend even more or what have you, like, we're, you know, we're we think we're we're we're very well positioned, in that.

Speaker 8

Perfect. And then, Andrew, maybe, on just a similar note and a similar topic. It seems like you guys are on a great path to accelerate closer to mid teens in the future. So I guess when we think about the potential to see incremental headwinds, is there enough low hanging fruit type growth drivers that give you comfort that we could even see that acceleration support in like to the extent like the macro gets worse? Or how are you kind of thinking about those different scenarios and the levers that you guys have?

Speaker 2

It's a great question. And I would tell you, we spent a lot of time as we were building out our guidance looking forward into our pipelines, how well our our sales team is setting up customers for future expansions, you know, the level of interest we're seeing some from our new products. And so those are the things that that Spencer was really referring to. We feel very confident in the levers we're pulling to go real add real value to clients even in a period where there's difficult, trade offs and there's more macro pressure. We think we can offer our customers a value for the money solution that really drives greater value for them through consolidation of existing point products and open their eyes up into how they can drive greater cost efficiency of some of our new new products that are coming out very soon.

Speaker 2

So certainly, there's a little trepidation with the level of uncertainty in the market. I mean, if if, you know, uncertainty rains, then invariably that will have a negative impact on the broader macroeconomic scenario. But we want to use the lens of execution when we set up our guidance, and we feel very confident the things that we're doing are resonating with customers and that we can continue to drive that growth.

Speaker 8

Awesome. Thank you so much.

Operator

Great. Thank you, Taylor. Our next question comes from the line of Clark Wright from D. A. Davidson followed by Elizabeth Porter from Morgan Stanley.

Operator

Clark, go ahead.

Speaker 9

Awesome. Thank you. Can you maybe talk Andrew, can you talk about the budget scrutiny comments that you mentioned and where you're potentially seeing the source of funds to unlock some of the cross selling opportunities that you guys have, definitely been been seeing some positive benefits from this quarter?

Speaker 2

You know what? The the peer CFOs that I speak to every day, especially in the larger deals that we get involved with, they're all asking the basic premise of what is the return on investment that I'm gonna get from the investment in Amplitude. And that's a logical question for them to ask. And and, typically, what we go through is both, you know, where can we help them reduce license expenses and operating expenses associated with a broad set of technologies they've implemented to solve this problem? And then how can we show them through better leverage of Amplitude that they can gain even greater efficiencies and drive greater revenue.

Speaker 2

So that that scrutiny, I think, just gets harder and harder the more that companies are taxed in ways that like, through tariffs or higher interest rates or anytime when there are increasing expenses, your CFOs, CIOs, chief product officers, chief digital officers, they're all asking the question, how can I get more or less? And, I think we're offering a great solution to do that. So our sales team is getting better and better at selling the platform. The platform itself shows great, ability to drive efficiencies within within companies. And so that's where that comment come from is that we we just never take our eye off the fact that driving customer value is the most important thing.

Speaker 2

And I expect that it is gonna continue to challenge us. You know, the reality is is some of these smaller point product solutions, they start gaining speed and losing altitude, and they're gonna get desperate. So we have to be on our game showing customer value.

Speaker 9

Got it. Appreciate that clarity. And then in terms of NRR, during the Investor Day, you guys mentioned that some of the expansion in recent quarters really hasn't been driven by higher data volumes. Was that the case in in this quarter? And are you assuming no uplift then from from data volumes of what that could mean on NRR going forward through year end?

Speaker 2

One of the most important things that, we've alluded to both in the investor day and as we've introduced new products is the importance of us trying to, create a a framework under which the marginal incremental cost of data goes down. And that comes from customers increasingly using a broader set of the platform. So you're gonna increasingly see us focus more on selling additional capabilities within the platform and and and really going after new enterprise customers. In q one, I would tell you it was really balanced. We had a we had a great new, logo quarter, and, you know, we had a good expansion quarter as well, but you didn't see the big multimillion dollar expansions.

Speaker 2

And the progression that you'll see in both, you know, our ARR as a percentage of of enterprise customers as well as that NRR percentage comes when you see those big expansions. And so we certainly think that we can go drive those. We certainly believe that, churn, you know, it's it's down to the lowest level in two years. We think that we can continue to drive the the strategic changes, and that that will result in a progressive improvement in NRR.

Speaker 9

Awesome. Thank you.

Operator

Thank you, Clark. Our next question comes from the line of Elizabeth Porter from Morgan Stanley, followed by Nick Altman from Scotiabank. Go ahead, Elizabeth.

Speaker 10

Great. Thank you very much. I think in the past, we've talked about Martech stacks coming up to replacement faster and kind of what that opportunity means for Amplitude. And just given some of the macro uncertainty, sometimes we think that businesses are less likely to do big moves just given the trepidation. But on the other hand, there's a big opportunity to save costs.

Speaker 10

So just curious how you think that this current cycle kinda may play out and what that means for kind of a faster replacement and opportunity to look at Amplitude.

Speaker 1

I think what I'm seeing just candidly, at least in the accounts I'm in, is they're actually more willing to do big moves in order to do spend replacement. So, you know, great example. I was talking with the head of data at Atlassian last quarter, and they were very, very interested in, one, how do we make the our costs on the data side scale way better than they have been? And then two, is there an opportunity to consolidate down a whole bunch of the other vendors and get that within, you know, the single platform because it's cheaper and it's more effective on a whole bunch of fronts? And so when we had that conversation, that changed that that changed their mentality from one of, like, okay.

Speaker 1

Let me just reduce spend overall to, hey. I'm willing to make a move, and consolidate a bunch of other items onto Amplitude.

Speaker 10

Great. And then as a follow-up on the NRR side, great to see that additional improvement. Sounds like gross retention has been improving for a while. Just given kind of the opportunity with cross sell, upsell, this consolidation, When can we when do you expect to see some of that layer into the NRR and maybe some of the puts and takes that keep that balanced?

Speaker 2

I I think that we're gonna see a progressive improvement quarter to quarter. I think that's what our plan was. And and as you, may recall, we talked about the the first quarter of our fiscal twenty five is one that would reflect the lowest from a linearity perspective in in in ARR. And so you continue to see that as our as our sales team ramps, you'll see more and more new ARR. We're doing a better and better job at reducing, both contraction and and logo churn.

Speaker 2

In fact, I would tell you that the the big improvement year over year was in contraction. Recall that churn we had a lot of churn that was related to overcapacity buying or customers contracting for more than they could use. Well, as we rightsize those contracts, the base becomes smaller and smaller, thus contraction becomes smaller and smaller. So all those factors are working towards driving improving, NRR and GRR. And but I think if the big movements, as I mentioned earlier, will be will come when you see those big multimillion expansions in the enterprise space, that's when you see the NRR move more dramatically.

Speaker 10

Great. Thank you.

Operator

Thank you, Elizabeth. Our next question will come from Nick Altman at Scotiabank followed by the from the line of Tyler Radke at Citi. Go ahead, Nick.

Speaker 11

Awesome. Thank you so much. Andrew, can you just comment on the contribution from Command AI to both ARR and revenue? And then historically, you guys have kinda talked about aspirations to reaccelerate that business. And and now that you're, you know, two quarters, I guess, removed from from doing that acquisition, can you kinda give us some updated thoughts there on on the path to re you know, kind of organically reaccelerating, Command AI?

Speaker 2

I I think that, we're very, very pleased with how well customers have adopted our product. I think it's as Spencer mentioned earlier, it's a testimony to the product itself and how well the team's integrated so rapidly. Our our sales team picking up the value proposition very quickly in an integrated environment. And so you should you should think that the the the amount of ARR we're generating now from the guidance service well eclipsed what, the company had done on its own, and we're certainly expecting that we have a lot of opportunity going forward for that product.

Speaker 11

And then, it it it's great to see, you know, these longer term commitments from your customers that's showing up nicely in in RPO. I I guess, can you maybe just talk about since you guys have started leaning into these longer term commitments, longer duration contracts with your customers, how have sales cycles changed? And I guess the the reason I ask is we're in a dynamic macro. It it it seems like it could maybe add some variability in the mix as, you know, maybe there's a little bit more hesitancy on on doing multiyear commitments. So first question, maybe just kinda comment on on how the sales cycles have trended as you guys have leaned into that strategy.

Speaker 11

And then on the flip side of the equation, if we kinda do get into a a choppier macro, do you guys sort of revert to kinda more annual deals? Just just maybe kinda touch on the, the longer duration focus here. Thanks.

Speaker 2

I think the first thing was it's it's somewhat grounded in selling to the enterprise and what the enterprise really values. And they enterprise values cost predictability more than trying to stack up their unit economics that you might find in SMB, mid market, or digital native. The other thing that happens is and it kind depends on the type of customer engagement you have, whether it's a new logo or that it's an expansion. And in logos, what is usually you're finding is trepidation associated with really getting in to understand and get value from the full extent of the platform. There's not that clear understanding.

Speaker 2

So we've been able to work with the sales team, not only educating them about how best to run constructs with multiyear in mind, but also to really drive almost a milestone understanding of how the customer is gonna get value and has the perception that they're getting that value in advance of what they're paying for. And so deal constructs really matter, and that was an area where sales is increasingly adopting some of the the core frameworks that most of us who've worked in in enterprise selling have adopted and used over many, many years. With existing customers in an expansion, that's another option that the customer often views as as an ability to execute on a long term road map as they're implementing multiple aspects of your platform. And so that cost predictability really matters to them, and they they have the perception they're gonna be able to excise extreme value over what they're paying for. So it kinda depends on the situation, but it it doesn't work unless your sales team understands and grounds on customer value and your customer has the perception that they're getting that value in advance of what they're paying for.

Speaker 11

Great. Thanks, guys.

Operator

Thanks, Nick. And our last question for the call will come from the line of Tyler Radke from Citi. I believe Ashley Kim is on. Ashley, please go ahead.

Speaker 12

Hey, Spencer and Andrew. Thank you for the time. I just want to say that it was, like, a very strong quarter for the 100 k, ARR customer adds. But in terms of the total customer ads, it looked a little bit softer. So just wanted to ask if you're seeing any changes in the top of funnel or trends among different customer segments, you'd call out just given the more uncertain macro environment, Ren.

Speaker 1

Part of the reason we highlight the hundred k customer ads is because the total customer ads is a little deceptive. It includes plus customers, and so it's not really that great of a representation. And so we're obviously building this business around our enterprise segment, and that's what we expect to grow to, you know, billion plus over time. And so we're not you know? Yeah.

Speaker 1

We're just we still report it because we have in the past, but we're not we're not particularly focused on it.

Speaker 12

Got it. Thank you.

Operator

Thank you, Ashley. That will conclude our first quarter earnings call. Thank you for your time and interest. We are looking forward to connecting with you live over the next couple of weeks at conferences hosted by Needham, Bank of America, Baird and D. A.

Operator

Davidson. Thank you for your interest, and take care.

Powered by Quartr

Key Takeaways

  • Amplitude delivered $80M Q1 revenue, up 10% year-over-year, and grew ARR to $320M, exceeding the midpoint of guidance.
  • Enterprise momentum accelerated as multiproduct customers now make up 30% of the base and 64% of total ARR, with new wins at Hertz, The Economist Group and others.
  • Dollar-based net retention reached 101% in Q1—up five points from its low—reflecting reduced churn and stronger expansion.
  • The newly launched Guides and Surveys product achieved record early adoption, displacing point solutions, while session replay is now embedded across the entire platform.
  • Management raised full-year revenue guidance to $329M–$333M, gave Q2 revenue targets of $80.3M–$82.3M, and approved a $50M share buyback program.
AI Generated. May Contain Errors.
Earnings Conference Call
Amplitude Q1 2025
00:00 / 00:00