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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40817

AMPLITUDE, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	45-3937349
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
201 Third Street, Suite 200 San Francisco, California	94103
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (415) 231-2353

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.00001 par value per share

AMPL

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 27, 2022, there were 68,696,343 shares of the registrant's Class A common stock and 44,443,596 shares of the registrant's Class B common stock, each with a $0.00001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	6
Item 1.	Financial Statements (Unaudited)	6
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Operations and Comprehensive Loss	7
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)	8
	Condensed Consolidated Statements of Cash Flows	10
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40
PART II.	OTHER INFORMATION	42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73
Item 3.	Defaults Upon Senior Securities	73
Item 4.	Mine Safety Disclosures	73
Item 5.	Other Information	73
Item 6.	Exhibits	74
Signatures		75

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential,” or “continue,” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to statements about:

•

our expectations regarding our revenue, expenses, and other operating results;

•

our ability to acquire new customers;

•

our ability to increase usage of our Digital Analytics Platform and upsell and cross sell additional products;

•

our ability to achieve or sustain profitability;

•

future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements;

•

the costs and success of our sales and marketing efforts, including our ability to grow and maintain our channel partners, and our ability to promote our brand;

•

the effects of the coronavirus (“COVID-19”) pandemic and other global events on our business and the global economy generally, including as a result of any new strains or variants of the virus as well as the ongoing war in Ukraine;

•

our reliance on key personnel and our ability to identify, recruit, and retain skilled personnel;

•

our ability to effectively manage our growth, including any international expansion;

•

our ability to protect our intellectual property rights and any costs associated therewith;

•

our ability to compete effectively with existing competitors and new market entrants; and

•

the increased expenses associated with being a public company.

We caution you that the foregoing list does not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations, estimates, forecasts, and projections about future events and trends that we believe may affect our business, results of operations, financial condition, and prospects. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we cannot guarantee that the future results, levels of activity, performance, events, and circumstances reflected in the forward-looking statements will be achieved or occur at all. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors discussed in Part I, Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q as well as other documents that may be filed by us from time to time with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made available. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to our most recent Annual Report on Form 10-K and this Quarterly Report on Form 10-Q, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this Quarterly Report on Form 10-Q by these cautionary statements.

SUMMARY OF RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q. The following is a summary of principal risks and uncertainties that could materially adversely affect our business, financial condition, and results of operations. This summary should be read in conjunction with the “Risk Factors” section and should not be relied upon as an exhaustive summary of the material risks and uncertainties facing our business.

•

We have a limited operating history and have been growing rapidly over the last several years, which makes it difficult to forecast our future results of operations and increases the risk of your investment.

•

We have a history of losses. As our costs increase, we may not be able to generate sufficient revenue to achieve and sustain profitability.

•

Our business depends on our current customers renewing their subscriptions and purchasing additional subscriptions from us, as well as attracting new customers. Any decline in our customer retention or expansion of our commercial relationships with existing customers or an inability to attract new customers would materially adversely affect our business, financial condition, and results of operations.

•

We expect fluctuations in our financial results, making it difficult to project future results. If we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our stock price could decline.

•

We expect to continue to focus on sales to larger organizations and may become more dependent on those relationships, which may increase the variability of our sales cycles and our results of operations.

•

We recognize revenue over the term of our customer contracts. Consequently, downturns or upturns in new sales may not be immediately reflected in our results of operations and may be difficult to discern.

•

Our stock price has been, and in the future, may be, volatile, and could decline significantly and rapidly.

•

Unfavorable conditions in our industry or the global economy, or reductions in information technology spending, could limit our ability to grow our business and materially adversely affect our business, financial condition, and results of operations.

•

If the market for SaaS applications develops more slowly than we expect or declines, our business would be adversely affected.

•

Our intellectual property rights may not protect our business or provide us with a competitive advantage, which could have a material adverse effect on our business, financial condition, and results of operations.

•

We are subject to government regulation, including import, export, economic sanctions, and anti-corruption laws and regulations, that may expose us to liability and increase our costs.

•

Complying with evolving privacy and other data-related laws as well as contractual and other requirements may be expensive and force us to make adverse changes to our business, and the failure or perceived failure to comply with such laws, contracts, and other requirements could result in adverse reputational and brand damage and significant fines and liability or otherwise materially adversely affect our business and growth prospects.

•

Our principal stockholders have the ability to influence the outcome of director elections and other matters requiring stockholder approval.

•

The dual class structure of our common stock has the effect of concentrating voting control with our existing stockholders, executive officers, directors, and their affiliates, which limits your ability to influence the outcome of important transactions and to influence corporate governance matters, such as electing directors, and to approve material mergers, acquisitions, or other business combination transactions that may not be aligned with your interests.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

AMPLITUDE, INC.

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

(unaudited)


	As of September 30, 2022			As of December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	247,248		$	307,445
Accounts receivable, net of allowance for doubtful accounts of $466 and $85 as of September 30, 2022 and December 31, 2021, respectively		31,384			20,444
Prepaid expenses and other current assets		19,909			19,116
Deferred commissions, current		10,526			8,112
Total current assets		309,067			355,117
Marketable securities, noncurrent		59,348			—
Property and equipment, net		8,773			4,832
Intangible assets, net		2,595			3,554
Goodwill		4,073			4,073
Restricted cash, noncurrent		852			850
Deferred commissions, noncurrent		25,747			20,573
Operating lease right-of-use assets		10,053			—
Other noncurrent assets		7,753			11,389
Total assets	$	428,261		$	400,388
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	2,493		$	3,363
Accrued expenses		25,571			17,936
Deferred revenue		95,460			69,294
Total current liabilities		123,524			90,593
Operating lease liabilities, noncurrent		7,741			—
Noncurrent liabilities		1,960			3,247
Total liabilities		133,225			93,840
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.00001 par value per share; 20,000 shares authorized as of September 30, 2022 and December 31, 2021; zero shares issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Class A common stock, $0.00001 par value per share; 600,000 shares authorized as of September 30, 2022 and December 31, 2021; 68,497 and 58,725 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		1			1
Class B common stock, $0.00001 par value per share; 600,000 shares authorized as of September 30, 2022 and December 31, 2021; 44,608 and 51,151 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		—			—
Additional paid-in capital		544,738			486,354
Accumulated other comprehensive loss		(580	)		—
Accumulated deficit		(249,123	)		(179,807	)
Total stockholders’ equity		295,036			306,548
Total liabilities and stockholders’ equity	$	428,261		$	400,388

See accompanying notes to condensed consolidated financial statements.

AMPLITUDE, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share amounts)

(unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021

Revenue	$	61,614		$	45,473		$	172,809		$	117,837
Cost of revenue		18,076			13,982			51,199			36,372
Gross profit		43,538			31,491			121,610			81,465
Operating expenses:
Research and development		21,590			18,493			58,397			34,022
Sales and marketing		32,528			22,199			94,793			59,009
General and administrative		13,610			27,567			39,184			41,098
Total operating expenses		67,728			68,259			192,374			134,129
Other income, net		1,442			123			1,821			143
Loss before provision for (benefit from) income taxes		(22,748	)		(36,645	)		(68,943	)		(52,521	)
Provision for (benefit from) income taxes		(204	)		(86	)		389			560
Net loss	$	(22,544	)	$	(36,559	)	$	(69,332	)	$	(53,081	)
Net loss per share attributable to Class A and Class B common stockholders:
Basic and diluted	$	(0.20	)	$	(0.93	)	$	(0.63	)	$	(1.64	)
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders:
Basic and diluted		112,016			39,301			110,876			32,362

Other comprehensive loss
Net unrealized losses on marketable securities	$	(580	)	$	—		$	(580	)	$	—
Comprehensive loss	$	(23,124	)	$	(36,559	)	$	(69,912	)	$	(53,081	)

See accompanying notes to condensed consolidated financial statements.

AMPLITUDE, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands)

(unaudited)


	Redeemable convertible preferred stock					Class A and Class B common stock							Additional paid-in			Accumulated other comprehensive				Accumulated				Total stockholders’
	Shares			Amount		Shares				Amount			capital			loss				deficit				equity (deficit)
Balance at December 31, 2021		—			—		109,876		$		1	$		486,354	$		—		$		(179,807	)	$		306,548
Stock-based compensation expense		—			—		—				—			13,785			—				—				13,785
Exercise of stock options		—			—		1,603				—			3,977			—				—				3,977
Vesting of early exercised stock options		—			—		—				—			743			—				—				743
Vesting of restricted stock units		—			—		31				—			—			—				—				—
Donation of common stock and repurchase of unvested stock options		—			—		(3	)			—			—			—				—				—
Cumulative impact of Topic 842 adoption		—			—		—				—			—			—				17				17
Net loss		—			—		—				—			—			—				(22,220	)			(22,220	)
Balance at March 31, 2022		—	$		—		111,507		$		1	$		504,859	$		—		$		(202,011	)	$		302,849
Stock-based compensation expense		—			—		—				—			15,155			—				—				15,155
Exercise of stock options		—			—		329				—			1,176			—				—				1,176
Issuance of common stock under employee stock purchase plan		—			—		176				—			2,553			—				—				2,553
Vesting of early exercised stock options		—			—		—				—			889			—				—				889
Vesting of restricted stock units		—			—		286				—			—			—				—				—
Donation of common stock and repurchase of unvested stock options		—			—		(4	)			—			—			—				—				—
Net loss		—			—		—				—			—			—				(24,568	)			(24,568	)
Balance at June 30, 2022		—	$		—		112,294		$		1	$		524,632	$		—		$		(226,579	)	$		298,054
Stock-based compensation expense		—			—		—				—			18,701			—				—				18,701
Exercise of stock options		—			—		307				—			1,044			—				—				1,044
Vesting of early exercised stock options		—			—		—				—			361			—				—				361
Vesting of restricted stock units		—			—		504				—			—			—				—				—
Net loss		—			—		—				—			—			—				(22,544	)			(22,544	)
Other comprehensive loss, net		—			—		—				—			—			(580	)			—				(580	)
Balance at September 30, 2022		—	$		—		113,105		$		1	$		544,738	$		(580	)	$		(249,123	)	$		295,036

AMPLITUDE, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands)

(unaudited)

Redeemable convertible
preferred stock

Class A and Class B common stock

Additional
paid-in

Accumulated

Total
stockholders’

Shares

Amount