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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

OR

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.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

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

 

2


 

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.

3


 

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.

4


 

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.

 

5


 

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.

6


 

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.

7


 

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

 

 

8


 

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.

9


 

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.

10


 

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.

 

11


 

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

 

 

 

12


 

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):