UPDATED 22:07 EST / MAY 09 2023


Amplitude stock drops on lower-than-expected revenue outlook

Amplitude Inc. fell in after-hours trading today after the behavior-tracking firm said its second-quarter revenue would be lower than what analysts expected.

For its first quarter that ended March 31, Amplitude reported a loss before costs such as stock compensation of four cents per share, down from a loss of seven cents per share in the first quarter of 2022. Revenue rose 25% year-over-year, to $66.5 million. Analysts had expected a loss of six cents per share on revenue of $65.25 million.

“I think what we’re seeing is that it’s a reset year for a lot of our customers,” said Spenser Skates, Amplitude’s co-founder and chief executive officer, in an interview with SiliconANGLE shortly before results were posted. “The first-quarter macro was significantly worse than what it was in Q4 and so that’s hitting us an expansion and sharing all of those fronts.”

On the plus side, Amplitude saw its number of paying customers grow 28% year-over-year, to 2,175, with its annual recurring revenue increasing 25% to $262 million. The company’s dollar-based retention rate as of the end of March was 106%, down from 127% as of March 2022.

“We’re continuing to improve our win rates versus Adobe and Google Analytics and a lot of the other players in the space,” Skates said. However, “because of our volume-based pricing, we’re more exposed to the swings in the macro [economic environment]. That led to a massive acceleration in 2021 and it means more severe right sizing for us now in 2023.”

Amplitude noted that its stock-based compensation expenses and related employer payroll taxes were $20.9 million in the first quarter, up from $13.8 million a year ago. That’s despite the fact that the company laid off 13% of its workforce early last month.

“It’s something we tried hard to avoid, but we realized we needed to accelerate where we’re going to on a profitability basis,” Skates said. Amplitude is now “profitable on a run rate basis and we’re much more in control of our own long-term destiny, much less beholden to investors or public markets,” he said.

“We have $300 million of cash in the bank and we’re in a fantastic position with no debt,” the CEO said. “We don’t have to raise any outside capital going forward. That allows us to navigate this period of macro deterioration much, much better.”

For the quarter ahead, Amplitude expects adjusted earnings of one to two cents per share on revenue of $66.5 million. For the full year, the company expects an adjusted profit of two to four cents on revenue of $266 million to $269 million.

For the full year, the earnings outlook was a strong beat, since analysts had expected a loss of nine cents per share, but Amplitude fell short on revenue, as analysts were expecting an outlook of $286 million. The lower-than-expected outlook caused Amplitude shares to drop nearly 7% in late trading.

Paul Gillin contributed to this report.

Photo: Amplitude

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