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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 March 31, 2023


☐	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

N/A

(Former name, former address and former fiscal year, if changed since last report)

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 May 5, 2023, there were 79,859,254 shares of the registrant's Class A common stock and 36,186,078 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 Stockholders’ Equity	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	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION	36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 3.	Defaults Upon Senior Securities	66
Item 4.	Mine Safety Disclosures	66
Item 5.	Other Information	67
Item 6.	Exhibits	68
Signatures		69

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, including as a result of any new strains or variants of the virus, and other global events, such as the ongoing war in Ukraine, on our business and the global economy generally;

•

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

•

anticipated savings or operational efficiencies and charges in connection with our recently announced restructuring plan;

•

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, the trading price of our Class A common stock 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.

•

The trading price of our Class A common stock 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 software spending, could limit our ability to grow our business and materially adversely affect our business, financial condition, and results of operations.

•

Our recent restructuring plan may not result in anticipated savings or operational efficiencies and could result in total costs and expenses that are greater than expected, which could 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 March 31, 2023			As of December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	214,062		$	218,494
Marketable securities, current		53,232			11,971
Accounts receivable, net of allowance for doubtful accounts of $798 and $690 as of March 31, 2023 and December 31, 2022, respectively		30,581			22,716
Prepaid expenses and other current assets		17,476			20,335
Deferred commissions, current		11,275			10,918
Total current assets		326,626			284,434
Marketable securities, noncurrent		30,878			71,217
Property and equipment, net		9,838			9,408
Intangible assets, net		1,557			2,022
Goodwill		4,073			4,073
Restricted cash, noncurrent		858			855
Deferred commissions, noncurrent		25,129			25,799
Operating lease right-of-use assets		8,690			9,593
Other noncurrent assets		4,882			6,354
Total assets	$	412,531		$	413,755
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	3,699		$	490
Accrued expenses		19,634			18,699
Deferred revenue		89,348			89,993
Total current liabilities		112,681			109,182
Operating lease liabilities, noncurrent		6,109			7,093
Noncurrent liabilities		2,521			2,511
Total liabilities		121,311			118,786
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.00001 par value per share; 20,000 shares authorized as of March 31, 2023 and December 31, 2022; zero shares issued and outstanding as of March 31, 2023 and December 31, 2022		—			—
Class A common stock, $0.00001 par value per share; 600,000 shares authorized as of March 31, 2023 and December 31, 2022, 79,260 and 76,351 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		1			1
Class B common stock, $0.00001 par value per share; 600,000 shares authorized as of March 31, 2023 and December 31, 2022; 36,322 and 37,848 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		—			—
Additional paid-in capital		591,183			568,889
Accumulated other comprehensive loss		(482	)		(754	)
Accumulated deficit		(299,482	)		(273,167	)
Total stockholders’ equity		291,220			294,969
Total liabilities and stockholders’ equity	$	412,531		$	413,755

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 March 31,
	2023			2022

Revenue	$	66,477		$	53,065
Cost of revenue		19,187			16,063
Gross profit		47,290			37,002
Operating expenses:
Research and development		23,708			16,501
Sales and marketing		39,133			28,130
General and administrative		13,622			14,362
Total operating expenses		76,463			58,993
Other income (expense), net		3,138			86
Loss before provision for (benefit from) income taxes		(26,035	)		(21,905	)
Provision for (benefit from) income taxes		280			315
Net loss	$	(26,315	)	$	(22,220	)
Net loss per share attributable to Class A and Class B common stockholders:
Basic and diluted	$	(0.23	)	$	(0.20	)
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders:
Basic and diluted		114,369			109,553

Other comprehensive loss
Net unrealized gains (losses) on marketable securities	$	272		$	—
Comprehensive loss	$	(26,043	)	$	(22,220	)

See accompanying notes to condensed consolidated financial statements.

AMPLITUDE, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

(unaudited)


	Class A and Class B common stock							Additional paid-in			Accumulated other comprehensive				Accumulated				Total stockholders’
	Shares				Amount			capital			loss				deficit				equity
Balance at December 31, 2022		114,199		$		1	$		568,889	$		(754	)	$		(273,167	)	$		294,969
Stock-based compensation expense		—				—			20,409			—				—				20,409
Exercise of stock options		554				—			1,687			—				—				1,687
Vesting of early exercised stock options		—				—			198			—				—				198
Vesting of restricted stock units		875				—						—				—				—
Repurchase of unvested stock options		(46	)			—						—				—				—
Net loss		—				—						—				(26,315	)			(26,315	)
Other comprehensive income (loss), net		—				—			—			272				—				272
Balance at March 31, 2023		115,582		$		1	$		591,183	$		(482	)	$		(299,482	)	$		291,220

AMPLITUDE, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

(unaudited)


	Class A and Class B common stock							Additional paid-in			Accumulated other comprehensive			Accumulated				Total stockholders’
	Shares				Amount			capital			loss			deficit				equity
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				—			—			—			—				—
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

See accompanying notes to condensed consolidated financial statements.

AMPLITUDE, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)


	Three Months Ended March 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(26,315	)	$	(22,220	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,349			901
Stock-based compensation expense		19,957			13,503
Other		(245	)		118
Non-cash operating lease costs		985			809
Changes in operating assets and liabilities:
Accounts receivable		(8,145	)		(2,905	)
Prepaid expenses and other current assets		2,753			(2,460	)
Deferred commissions		312			(2,391	)
Other noncurrent assets		1,472			(836	)
Accounts payable		3,122			(1,328	)
Accrued expenses		1,043			2,946
Deferred revenue		(645	)		5,843
Operating lease liabilities		(704	)		(269	)
Net cash used in operating activities		(5,061	)		(8,289	)
Cash flows from investing activities:
Purchase of property and equipment		(329	)		(713	)
Capitalization of internal-use software costs		(448	)		(594	)
Net cash used in investing activities		(777	)		(1,307	)
Cash flows from financing activities:
Proceeds from the exercise of stock options		1,687			3,989
Cash received for tax withholding obligations on equity award settlements		6,325			7,342
Cash paid for tax withholding obligations on equity award settlements		(5,955	)		(8,758	)
Repurchase of unvested stock options		(648	)		—
Net cash provided by financing activities		1,409			2,573
Net increase (decrease) in cash, cash equivalents, and restricted cash		(4,429	)		(7,023	)
Cash, cash equivalents, and restricted cash at beginning of period		219,349			308,295
Cash, cash equivalents, and restricted cash at end of period	$	214,920		$	301,272
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	172		$	112
Non-cash investing and financing activities:
Vesting of early exercised options	$	198		$	743
Purchases of property and equipment included in liabilities	$	96		$	225
Stock-based compensation capitalized as internal-use software costs	$	452		$	282

See accompanying notes to condensed consolidated financial statements.

AMPLITUDE, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(1)

Summary of Business and Significant Accounting Policies

Description of Business

Amplitude, Inc. (the “Company”) was incorporated in the state of Delaware in 2011 and is headquartered in San Francisco, California. The Company provides a Digital Analytics Platform that helps companies analyze their customer behavior within digital products. The Company delivers its application over the Internet as a subscription service using a software-as-a-service (“SaaS”) model. The Company’s arrangements with customers do not provide the customer with the right to take possession of the software supporting the cloud-based application service at any time. The Company also offers customer support related to initial implementation setup, ongoing support services, and application training.

Segment Information

The Company has a single operating and reportable segment. The Company’s chief operating decision maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. Long-lived assets outside of the United States are immaterial. For information regarding the Company’s revenue by geographic area, see Note 2 below.

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”) and include the accounts of Amplitude, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The reporting currency of the Company is the United States dollar. The functional currency of the Company’s foreign subsidiaries is also the United States dollar.

The unaudited condensed consolidated balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by U.S. GAAP on an annual reporting basis. In management's opinion, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to state fairly the balance sheet, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”).

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates are based on information available as of the date of the financial statements and may involve subjective or significant judgment by the Company; therefore, actual results could differ from the Company’s estimates. Items subject to such estimates and assumptions include, but are not limited to the:

•

expected period of benefit for deferred commissions;

•

useful lives of long-lived assets;

•

valuation of goodwill and intangible assets;

•

recognition, measurement, and valuation of deferred tax assets and income tax uncertainties; and

•

incremental borrowing rates used for operating leases.

Risks and Uncertainties

While the duration and extent of the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the extent and effectiveness of containment actions, it has already had an adverse effect on the global economy and the lasting effects of the pandemic continue to be unknown. The Company may experience customer losses, including due to bankruptcy or customers ceasing operations, which may result in delays in collections or an inability to collect accounts receivable from these customers. The extent to which COVID-19 may continue to impact the Company’s financial condition, results of operations, or liquidity continues to remain uncertain, and as of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or an adjustment to the carrying value of the Company’s assets or liabilities. These estimates may change, as new events occur and additional information is obtained, which will be recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s financial statements.

Concentration of Risk and Significant Customers

Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable securities, and accounts receivable. Although the Company deposits its cash with high-quality, credit-rated financial institutions, the deposits, at times, may exceed federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents.

No customer accounted for 10% or more of total revenue for the three months ended March 31, 2023 and 2022. As of the quarter ended March 31, 2023 and the year ended December 31, 2022, no customer represented 10% or more of accounts receivable.

Significant Accounting Policies

The Company's significant accounting policies are described in the 2022 Form 10-K. There have been no significant changes to these policies that have had a material impact on the Company's condensed consolidated financial statements and related notes for the three months ended March 31, 2023.

(2)

Revenue from Contracts with Customers

Deferred Revenue and Remaining Performance Obligations

The amount of revenue recognized in the three months ended March 31, 2023 that was included in deferred revenue as of December 31, 2022 was $49.1 million.

As of March 31, 2023 and December 31, 2022, unrecognized transaction price related to remaining performance obligations was $240.4 million and $248.2 million, respectively. The Company’s remaining performance obligations as of March 31, 2023 and December 31, 2022 are expected to be recognized as follows (in thousands):


	As of March 31, 2023		As of December 31, 2022
Less than or equal to 12 months	$	191,548	$	190,595
Greater than 12 months		48,810		57,581
Total remaining performance obligations	$	240,358	$	248,176

Disaggregation of Revenue

The following table shows the Company’s disaggregation of revenue by geographic areas, as determined based on the billing address of its customers (in thousands):


	Three Months Ended March 31,
	2023		2022
United States	$	40,435	$	33,521
International		26,042		19,544
Total revenue	$	66,477	$	53,065

Deferred Commissions

Commissions paid upon the initial acquisition of a contract are deferred and then amortized on a straight-line basis over a period of benefit, determined to be five years. The following table represents a roll forward of the Company’s deferred commissions for the three months ended March 31, 2023 and 2022 (in thousands):


		Three Months Ended March 31,
		2023				2022