Executive Summary / Key Takeaways

• Amplitude is strategically transforming from a core analytics provider to a comprehensive Digital Analytics Platform, focusing on the enterprise market and leveraging its proprietary Behavioral Graph technology to drive reacceleration.
• Recent financial results show promising signs of this shift, with Q1 2025 revenue growing 10% year-over-year to $79.95 million, ARR increasing 12% to $320 million, and a notable 18% growth in customers with over $100,000 in ARR.
• The company is seeing strong multi-product adoption within its customer base (30% of installed base, 64% of ARR) and among new enterprise lands (42% in Q1 2025), contributing to accelerating RPO growth (30% total, 72% long-term).
• Product innovation, including the successful launch of Guides and Surveys and upcoming AI Agents, is central to the platform strategy, enhancing competitive positioning against point solutions and legacy players like Google Analytics.
• Management forecasts continued revenue growth of approximately 10.5% at the midpoint for FY 2025 ($329M-$333M) and expects to achieve non-GAAP operating income ($0-$5M) and positive free cash flow for the year, signaling a focus on growth with leverage despite ongoing macro challenges and buyer scrutiny.

The Foundation: Unlocking Digital Behavior with the Behavioral Graph

In the dynamic landscape of digital business, understanding how users interact with products and services is paramount. Amplitude, Inc. ($AMPL) has built its foundation on addressing this critical need, positioning itself as a leading provider of digital analytics. At the core of its offering lies the Behavioral Graph, a proprietary, purpose-built database designed to capture, process, and analyze user actions in real-time. This technology is touted as the largest of its kind, enabling Amplitude to instantly find patterns, make recommendations, and connect customer actions along their journeys to tangible business outcomes like engagement, growth, and loyalty.

The tangible benefit of the Behavioral Graph is its ability to provide real-time product data and reconstruct user visits, offering cross-functional teams a deep understanding of what is working and what is not within their digital experiences. While specific, quantifiable performance metrics comparing the Behavioral Graph's speed or efficiency against competitors' underlying data architectures are not explicitly detailed, management emphasizes that this technology is foundational to the platform's ability to deliver rapid insights and power its various product offerings. This capability is a key differentiator in a market where timely, accurate behavioral data is crucial for competitive advantage.

Amplitude operates within a highly competitive and fragmented market. Key rivals include large, established players like Adobe (ADBE) with its comprehensive analytics suites, Alphabet (GOOGL) through its widely used Google Analytics platform, and Microsoft (MSFT) with its cloud-integrated analytics tools like Azure Application Insights. These competitors often boast greater name recognition, larger resources, and broader distribution networks. However, Amplitude strategically positions itself by focusing on the depth and specificity of behavioral analysis enabled by its core technology. While competitors may offer broader marketing or IT-centric analytics, Amplitude's strength lies in its product-centric view of user behavior, aiming to be the single source of truth for digital product teams. The company actively highlights dissatisfaction with legacy tools, particularly Google Analytics 4, citing usability and privacy issues as creating opportunities for displacement.

Historically, Amplitude has navigated the typical trajectory of a rapidly growing SaaS company, marked by significant investment in its platform and go-to-market capabilities. Following its direct listing in 2021, the company experienced periods of rapid expansion, including some customers overbuying capacity, which later contributed to churn and contract optimization challenges. This history underscores the importance of the company's current strategic pivot towards building a more resilient, enterprise-focused business model centered on its expanding platform.

Strategic Evolution: Building a Platform for the Enterprise

Recognizing the market's demand for integrated solutions and the need to move beyond being perceived solely as an analytics tool, Amplitude has embarked on a deliberate strategic evolution. The core thesis driving this shift is that analytics serves as the center of gravity for all workflows touching customer and product data. Without robust behavioral analytics, other tools for activation, experimentation, or guidance are significantly less effective.

This strategy is manifesting through continuous product innovation and a refined go-to-market approach targeting the enterprise. Over the past year, Amplitude has significantly expanded its platform capabilities:

• Session Replay: Re-launched in February 2024, this product allows teams to visualize user journeys and identify points of friction or confusion. Management notes rapid progress and strong customer interest, particularly for consolidating away from standalone session replay vendors.
• Warehouse Native: Introduced in June 2024, starting with Snowflake (SNOW) Native Amplitude, this initiative aims to reduce data friction by allowing customers to analyze data directly within their cloud data warehouses, leveraging existing data investments.
• Amplitude Made Easy: Launched in September 2024, this project simplified the platform experience, aiming to lower the barrier to entry and accelerate time-to-value, particularly for new and self-service users. This initiative has shown early success, leading to a 40% increase in self-service sign-ups and data sending.
• Web Experimentation: Launched in October 2024, this tool enables A/B testing on websites using a visual editor, empowering marketing and growth teams without heavy reliance on engineering resources.
• Guides and Surveys: Following the acquisition of Command AI in October 2024, this integrated product was rapidly launched in February 2025. It provides intuitive, in-product guidance and feedback collection capabilities. Management reports exceptional early adoption, exceeding that of previous new product launches like Experiment and Session Replay, and sees it as a core element of the platform story, displacing point solutions.
• AI Ambitions: Amplitude is actively incorporating machine learning and generative AI into its platform. Plans include launching a closed beta for Amplitude AI Agents in June 2025, designed to provide automated insights (e.g., root cause analysis) and automated actions (e.g., suggesting experiments, creating guides) by leveraging the company's vast behavioral data repository.

This product expansion is directly fueling a strategic shift towards the enterprise market. Amplitude has restructured its sales organization, implementing a named account approach and creating a dedicated strategic enterprise accounts team in 2025 to focus on its top 30 customers and prospects. This focus is yielding results: the number of customers with over $100,000 in ARR grew 18% year-over-year to 617 in Q1 2025. Furthermore, multi-product adoption is increasing, now representing 30% of the installed base and a significant 64% of total ARR, up from 21% of the base a year prior. Notably, 42% of new enterprise customers landed with more than one product in Q1 2025, indicating the platform story is resonating with larger buyers from the outset. This multi-product adoption is critical, as these customers tend to retain better and expand their spend, contributing to a healthier business model.

The emphasis on enterprise and platform deals is also reflected in key operational metrics. Total Remaining Performance Obligations (RPO) grew 30% year-over-year to $325.9 million as of March 31, 2025, with long-term RPO (greater than 12 months) accelerating even faster at 72% growth. This indicates customers are committing to longer contract durations, particularly for multi-product engagements, providing greater revenue predictability.

Financial Performance and Outlook: Signs of Reacceleration

Amplitude's recent financial performance provides evidence that its strategic shifts are beginning to translate into improved results, despite a challenging macroeconomic backdrop that management characterizes as stable but with persistently high buyer scrutiny.

For the first quarter ended March 31, 2025, Amplitude reported revenue of $79.95 million, a 10% increase compared to $72.62 million in the prior-year period. This growth was primarily driven by the expansion of the paying customer base. Annual Recurring Revenue (ARR) reached $320 million, up 12% year-over-year and an $8 million sequential increase from Q4 2024. This sequential ARR growth, particularly in a seasonally weaker quarter, was highlighted by management as a sign of reacceleration, attributed to a combination of strong new enterprise wins, improved multi-product attach rates, and stabilizing churn dynamics.

Gross profit for Q1 2025 was $59.75 million, resulting in a gross margin of 75%, an improvement from 74% in Q1 2024. On a non-GAAP basis, gross margin was 77%, up from 76%. This improvement reflects some optimization in the cost of revenue, although costs increased in dollar terms due to higher hosting fees and personnel expenses necessary to support the growing customer usage and platform capacity.

Operating expenses totaled $83.95 million in Q1 2025, a 7% increase year-over-year. Research and development expenses grew 3% to $23.53 million, reflecting continued investment in product innovation, partially offset by increased capitalization of internal-use software costs. Sales and marketing expenses increased 8% to $44.15 million, driven by investments in the enterprise sales force and marketing initiatives, including higher personnel costs and stock-based compensation. General and administrative expenses rose 11% to $16.27 million, reflecting increased costs associated with being a public company, consulting fees, and software subscriptions.

The company reported a net loss of $22.23 million for Q1 2025, compared to a net loss of $21.46 million in Q1 2024. Amplitude has a history of net losses as it invests for growth and continues to maintain a full valuation allowance against its U.S. deferred tax assets. However, management emphasizes a focus on achieving profitability on a non-GAAP basis and generating positive free cash flow. Non-GAAP operating loss for Q1 2025 was $2.1 million, an improvement from a non-GAAP operating loss of $2.1 million in Q1 2024.

Liquidity remains sound, with cash and cash equivalents of $131.17 million and marketable securities of $151.86 million as of March 31, 2025, totaling over $283 million. Net cash provided by operating activities was $8.02 million in Q1 2025, a significant improvement from a minimal cash usage in the prior year period, despite a negative free cash flow of $9.23 million in the quarter, largely attributed to the timing of annual bonus payouts. The company believes its current liquidity is sufficient for at least the next 12 months and recently authorized a $50 million share repurchase program to manage dilution and capitalize on potential stock price dislocations.

Looking ahead, management provided encouraging guidance for both the second quarter and the full year 2025. For Q2 2025, revenue is expected to be between $80.3 million and $82.3 million, representing approximately 11% annual growth at the midpoint. The non-GAAP operating loss is projected to be between $2.9 million and $0.9 million. For the full year 2025, Amplitude raised its revenue outlook to between $329 million and $333 million, implying approximately 10.5% annual growth at the midpoint, citing the Q1 outperformance. Crucially, the outlook for full-year non-GAAP operating income was also increased to between $0 and positive $5 million, signaling a clear path to profitability on this basis. Management reiterated expectations for Net Retention Rate (NRR) to increase throughout 2025 as churn stabilizes and expansion opportunities materialize, and for the company to be free cash flow positive for the full year.

Compared to larger competitors like Adobe, Google, and Microsoft, Amplitude's growth rate in Q1 2025 (10%) is competitive, although its scale is significantly smaller. Its gross margins (75% GAAP, 77% non-GAAP) are lower than Adobe's (~87%) and Microsoft's (~70%), reflecting differences in business models and scale. However, Amplitude's focus on improving operational efficiency is evident in its trajectory towards non-GAAP operating profitability, contrasting with historical losses. While direct quantitative comparisons of niche product performance metrics against all competitors are not readily available, Amplitude's reported success in displacing point solutions and achieving higher multi-product attach rates suggests its platform is gaining traction and differentiating effectively in the market.

Risks and Challenges

Despite the positive momentum and strategic progress, Amplitude faces notable risks and challenges that could impact its trajectory. The macroeconomic environment, while stable quarter-to-quarter, remains challenging with high buyer scrutiny, particularly for new logos and larger enterprise deals. This could lead to longer sales cycles and unpredictable deal closures. The company also faces ongoing pressure in the lower end of the market, where digital natives and startups may experience greater financial instability, contributing to churn.

While management believes the significant majority of overbought contracts have been addressed, there is still a tail of potential churn and contraction among existing customers that requires careful management. Competition remains intense from both large, well-resourced players and niche point solutions. Amplitude must continue to innovate rapidly and demonstrate clear ROI to win against rivals who may have broader ecosystems or lower-cost offerings (like Google Analytics' freemium tier).

Evolving regulatory landscapes, particularly around data privacy (GDPR, CCPA, etc.) and the emerging framework for AI technologies, pose compliance challenges and potential liabilities. Security breaches or platform disruptions could damage reputation and lead to financial penalties or loss of customers. The success of new product launches, including the critical AI Agents initiative, is not guaranteed and requires continued investment and market acceptance. Finally, as a company with a history of losses, achieving and sustaining profitability depends on successfully executing its growth-with-leverage strategy amidst these external and internal pressures.

Conclusion

Amplitude is executing a clear and focused strategy to evolve into a comprehensive Digital Analytics Platform and establish itself as the leader in the enterprise market. The core investment thesis hinges on the company's ability to leverage its differentiated Behavioral Graph technology and expanding product suite (Analytics, Experimentation, Activation, Session Replay, Guides/Surveys, and future AI Agents) to displace fragmented point solutions and legacy systems.

Recent financial results, particularly the 10% revenue growth, 12% ARR growth, and 18% increase in $100k+ customers in Q1 2025, coupled with accelerating RPO growth and improving NRR dynamics, suggest that this strategy is gaining traction and driving reacceleration. The strong multi-product adoption, especially within the enterprise, indicates that customers are embracing the platform vision and finding value in integrated workflows.

While macro headwinds, buyer scrutiny, and competitive intensity persist, Amplitude's focus on operational efficiency and profitable growth, as reflected in the outlook for non-GAAP operating income and positive free cash flow in FY 2025, positions the company to navigate these challenges. The success of ongoing product innovation, particularly in AI and the continued penetration of the enterprise market, will be critical factors to watch as Amplitude seeks to solidify its competitive position and capture the significant long-term opportunity in digital analytics. The path ahead requires continued diligent execution, but the recent performance provides a compelling narrative of a company beginning to unlock its platform's full potential.