Summary
Amplitude reported third quarter fiscal 2022 revenue of $61.6 million, up 35.5% from the prior-year quarter. Gross profit was $43.5 million, up 38.3%, and gross margin reached 70.7%, up 1.4 percentage points. Through the first nine months of fiscal 2022, revenue of $172.8 million rose 46.7%. Management credits the increase to a larger paying customer base and expansion within existing accounts, with the customer count up 35% year over year.
The bottom line is still red, but the quarterly trend improved. GAAP net loss was $22.5 million, or $0.20 per diluted share, compared with a net loss of $36.6 million, or $0.93 per diluted share, in the prior-year quarter, so the loss narrowed. The prior-year quarter carried $16.1 million of direct listing costs that did not recur. Year to date the picture runs the other way: net loss of $69.3 million widened from $53.1 million. Stock-based compensation expense and related employer payroll taxes were $18.8 million in the quarter, up from $17.9 million, driven mainly by headcount. On a non-GAAP basis, loss from operations was $4.9 million versus $2.3 million a year earlier.
Cash generation tightened. Net cash used in operating activities was $3.1 million in the quarter against $15.1 million a year earlier, and free cash flow was negative $3.9 million versus negative $15.8 million. For the nine months, net cash used in operating activities was $0.8 million, a large improvement from $20.6 million. Capital expenditures were $0.5 million in the quarter and $3.0 million year to date. Deferred revenue of $95.5 million rose 33.6% year over year, and total remaining performance obligations of $248.1 million rose 63.2%. Current remaining performance obligations, the portion expected to be recognized within 12 months, were $183.9 million, up 46%. The filing notes that RPO moves with renewal timing, purchase timing, average contract terms, and seasonality.
Customer metrics held up. Paying customers reached 1,913 as of September 30, 2022, up 35% year over year, and the dollar-based net retention rate was 123%, compared with 121% a year earlier. Chief executive Spenser Skates said new business performance was exceptional and called the quarter the highest for new land bookings in the company's history. Amplitude also hired Tifenn Dano Kwan as chief marketing officer. Revenue generated outside the United States made up 39% of revenue in the three months and 38% in the nine months.
Guidance points to a slower sequential step and continued non-GAAP losses. For the fourth quarter of 2022, the company guides to a top line of $62.5 million to $64.5 million, a non-GAAP operating margin of negative 10% to negative 11%, and non-GAAP net loss per share of $0.03 to $0.04 on 113.3 million weighted average shares. For the full fiscal year 2022, the outlook is a top line of $235 million to $237 million, a non-GAAP operating margin of negative 11% to negative 12%, and non-GAAP net loss per share of $0.21 to $0.22 on 111.6 million weighted average shares.
The risk list in the filings is long. It includes a limited operating history with rapid growth, a history of losses, the possibility that customer retention or expansion weakens, fluctuating results that are hard to project, a focus on larger organizations that can lengthen sales cycles, and unfavorable economic conditions or reductions in information technology spending. Amplitude terminated certain customer relationships in Russia after the conflict in Ukraine, and some customers in the affected regions had trouble paying. The company also flags evolving privacy and data-related laws and the chance that the SaaS market develops more slowly than expected. Management expects research and development and sales and marketing spending to keep rising in dollar terms and as a percentage of revenue in the short term.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $61.6M | $58.1M | +6.0% | $45.5M | +35.5% |
| Gross profit | $43.5M | $41.1M | +6.0% | $31.5M | +38.3% |
| Gross margin | 70.7% | 70.7% | +0.0 pp | 69.3% | +1.4 pp |
| Research & development | $21.6M | $20.3M | +6.3% | $18.5M | +16.7% |
| Sales & marketing | $32.5M | $34.1M | -4.7% | $22.2M | +46.5% |
| General & administrative | $13.6M | $11.2M | +21.4% | $27.6M | -50.6% |
| Total operating expenses | $67.7M | $65.7M | +3.2% | $68.3M | -0.8% |
| Net income (loss) | -$22.5M | -$24.6M | +8.2% | -$36.6M | +38.3% |
| Net margin | -36.6% | -42.3% | +5.7 pp | -80.4% | +43.8 pp |
| Diluted EPS | -$0.20 | — | — | — | — |
| Net retention rate | 123.0% | 126.0% | -3.0 pp | 121.0% | +2.0 pp |
Risks
Inflation and rising interest rates may constrain customer software budgets and lengthen sales cycles. MD&A notes 39% and 38% of revenue for the three and nine months ended September 30, 2022 was generated outside the U.S., and the Russia-Ukraine conflict led to terminated relationships with customers in Russia and payment disruptions in impacted regions.
Sales to larger organizations lengthen and become less predictable, increasing variability of results. During the quarter ended September 30, 2022, the average sales cycle to enterprises was four to six months compared with one to two months to non-enterprise customers, and missing or delaying expected large transactions could adversely affect results.
Revenue growth depends on customers renewing and expanding subscriptions. As of September 30, 2022, the company had 1,913 paying customers and a dollar-based net retention rate of 123%, compared with 1,417 paying customers and 121% as of September 30, 2021. Any decline in retention or expansion could materially slow revenue growth.
Commencing December 31, 2022, the company will no longer be an emerging growth company and will be a large accelerated filer. It will become subject to auditor attestation of internal control over financial reporting and additional disclosure and compensation requirements, increasing compliance costs and management effort; any material weakness could harm investor confidence.
The digital analytics market is fragmented, rapidly evolving, and highly competitive with low barriers to entry. Larger competitors with greater resources, in-house software systems, and new entrants could intensify pricing pressures and reduce sales or margins.
The platform stores and processes customers' proprietary data, including personal information. Cyberattacks, ransomware, phishing, and other breaches are prevalent, and the company has previously been a target. A breach could lead to regulatory investigations, litigation, indemnity obligations, and reputational harm.
The company expects operating expenses to continue to increase in dollar amount, with research and development and sales and marketing expenses increasing as a percentage of revenue in the short term as it invests in product innovation and sales growth. Failure to manage growth efficiently could cause margins to decline and harm brand and retention.
The company had an accumulated deficit of $249.1 million as of September 30, 2022 and has historically generated negative cash flows from operating activities. If it requires additional financing and cannot raise funds on acceptable terms, its business, results of operations, and financial condition would be adversely affected.
SaaS KPIs
All quarters →Free Cash Flow Margin
Non-GAAP Operating Margin
Paying Customers
Free Cash Flow
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 FY2022 (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.