Summary
Amplitude reported third-quarter fiscal 2021 revenue of $45.5 million, up 72.5% from $26.4 million in the same quarter a year earlier. Gross profit rose 69.3% to $31.5 million. For the nine months ended September 30, 2021, revenue was $117.8 million, up 62.8%, and gross profit was $81.5 million, up 59.4%. Paying customers reached 1,417, up 54% year over year, and the dollar-based net retention rate was 121%, compared with 119% a year earlier.
Margins slipped as the business scaled. Gross margin was 69.3% for the quarter, down from 70.5%, and 69.1% for the nine months, down from 70.6%. Management tied the decline to higher amortization of acquired intangible assets and stock-based compensation. On a non-GAAP basis, gross margin was 71.3% for the quarter, versus 71.2% a year earlier.
The bottom line deteriorated far more than the top line. The quarterly net loss was $36.6 million, or $0.93 per diluted share, against a $2.6 million loss a year earlier. The nine-month net loss widened to $53.1 million from $19.2 million, and the diluted loss per share was $1.64. Direct listing costs of $16.1 million, which the company strips out of its non-GAAP results, drove much of the swing, along with a jump in stock-based compensation. Non-GAAP loss from operations was $2.3 million for the quarter.
Cash flow is still negative. Operating cash flow was negative $15.1 million for the quarter. Over the nine months it was negative $20.6 million, down from negative $7.4 million in the same period of 2020. Free cash flow, a non-GAAP measure defined as operating cash flow less purchases of property and equipment and capitalized internal-use software costs, was negative $15.8 million for the quarter. Capital expenditures were $0.3 million in the quarter and $0.96 million for the nine months, up 100.2% from $0.48 million a year earlier.
The balance sheet ended September 30, 2021 with $317.8 million of cash and cash equivalents plus $1.9 million of restricted cash. Deferred revenue was $71.5 million, all of it recorded as a current liability, and total remaining performance obligations were $152.0 million, with $125.9 million expected to be recognized within twelve months.
Guidance covers the fourth quarter and the full year. Management expects a non-GAAP loss from operations of $9.2 million to $8.2 million for the fourth quarter and $18.5 million to $17.5 million for the full year 2021. No reconciliation of expected non-GAAP loss from operations to GAAP loss from operations was provided. The company says the items involved cannot be predicted without unreasonable effort.
The filing lists a long set of risks. Amplitude has a limited operating history and a history of losses, which makes forecasting difficult. Revenue depends on retaining customers and getting them to expand their spending, so weaker retention would slow growth. The push into larger enterprise accounts adds variability to sales cycles. A slowdown in information technology spending, a SaaS market that develops more slowly than expected, COVID-19 disruptions such as supply chain problems, and evolving privacy and data laws are also flagged.
International expansion adds another layer, with 35% of third-quarter revenue and 36% of nine-month revenue generated outside the United States. The quarter also brought the direct listing of the Class A common stock on the Nasdaq Capital Market on September 28, 2021, and the appointment of Jim Whitehurst to the board. Amplitude added Iteratively in 2021, after ClearBrain in 2020.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2021 | Q2 FY2021 | QoQ | Q3 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $45.5M | — | — | — | — |
| Gross profit | $31.5M | — | — | — | — |
| Gross margin | 69.3% | — | — | — | — |
| Research & development | $18.5M | — | — | — | — |
| Sales & marketing | $22.2M | — | — | — | — |
| General & administrative | $27.6M | — | — | — | — |
| Total operating expenses | $68.3M | — | — | — | — |
| Net income (loss) | -$36.6M | — | — | — | — |
| Net margin | -80.4% | — | — | — | — |
| Net retention rate | 121.0% | — | — | — | — |
Risks
Net loss widened to $36.56 million for FY2021 Q3 from $2.57 million in FY2020 Q3, and FY2021 year-to-date net loss widened to $53.08 million from $19.20 million. Accumulated deficit was $157.9 million as of September 30, 2021, and the company expects costs and expenses to increase as it invests in the platform, sales, marketing, and public company compliance.
Sales to larger organizations have a longer, less predictable cycle; during the quarter ended September 30, 2021, the average enterprise sales cycle was four to six months versus one to two months for non-enterprise customers. Delays or failure to close expected large transactions could adversely affect results for that period and future periods.
Growth depends on customer renewals and expansion; dollar-based net retention rate was 121% as of September 30, 2021, and paying customers increased 54% year-over-year to over 1,400, but customers have no obligation to renew and may not renew on similar terms.
The digital optimization market is fragmented, rapidly evolving, and highly competitive with relatively low barriers to entry; competitors include large companies with greater resources, and pricing pressures could reduce sales and margins.
Substantially all revenue is derived from the Amplitude Analytics product, although Amplitude Recommend and Amplitude Experiment were released in 2021. Failure to maintain demand for Amplitude Analytics could materially harm results.
The platform stores, transmits, and processes customer proprietary data; a breach or unauthorized access could cause data loss, regulatory investigations, litigation, indemnity obligations, and reputational harm.
COVID-19 and the Delta variant may cause customer slowdowns, lengthen sales cycles, reduce demand, and create collection difficulties; the company also cites supply chain disruptions and uncertainty around vaccine-related workplace policies.
36% of revenue was generated outside the United States for the year ended December 31, 2020 and the nine months ended September 30, 2021; international expansion requires significant management attention and exposes the company to regulatory, labor, currency, and compliance risks.
Research and development expenses were 29% of revenue for the nine months ended September 30, 2021, compared with 27% for the nine months ended September 30, 2020; if R&D investments do not translate into new or enhanced products, business and results could be harmed.
The platform relies on third-party public cloud infrastructure, particularly AWS; outages, defects, or capacity constraints could cause failure to meet service level commitments, require credits or refunds, and harm customer relationships.
Competition for highly skilled engineers and sales professionals in the San Francisco Bay Area is intense, and the perceived value of equity awards affects recruiting and retention; loss of key employees could disrupt the business.
General and administrative expenses increased 604% for the quarter ended September 30, 2021, primarily due to direct listing and public company preparation costs; Section 404 compliance will require substantial expense and management effort.
A portion of revenue is generated through channel partners; if partners are unsuccessful, devote resources to competitive offerings, or cannot be retained, expansion into certain geographies, sectors, and industries could be limited.
Evolving privacy and data protection laws, including the EU GDPR, and laws affecting internet use could increase compliance costs and reduce demand for the Digital Optimization System.
The company may require additional capital to support growth; if financing is unavailable on acceptable terms, it may be unable to invest in growth opportunities, and debt or equity issuance could restrict operations or dilute stockholders.
As of September 30, 2021, 23,613,293 options and 1,231,873 RSU awards were outstanding; future equity issuances and the absence of lock-up agreements could dilute stockholders and cause the Class A common stock price to decline.
The company has pursued and may continue to pursue acquisitions; integration challenges, inability to retain key personnel or customers, and dilutive issuances could harm the business and results.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Paying Customers
Remaining Performance Obligations
Dollar-Based Net Retention Rate
Current Remaining Performance Obligations
Summary, forecast, risks and KPIs are extracted from Amplitude, Inc.'s SEC filings for Q3 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.