Amplitude (NASDAQ:AMPL) Q2 Sales Beat Estimates, Next Quarter Growth Looks Optimistic

Radek Strnad /
2022/08/03 4:40 pm EDT

Data analytics software provider Amplitude (NASDAQ:AMPL) beat analyst expectations in Q2 FY2022 quarter, with revenue up 48% year on year to $58.1 million. The company expects that next quarter's revenue would be around $60 million, which is the midpoint of the guidance range. That was in roughly line with analyst expectations. Amplitude made a GAAP loss of $24.5 million, down on its loss of $10 million, in the same quarter last year.

Is now the time to buy Amplitude? Access our full analysis of the earnings results here, it's free.

Amplitude (AMPL) Q2 FY2022 Highlights:

  • Revenue: $58.1 million vs analyst estimates of $55.1 million (5.34% beat)
  • EPS (non-GAAP): -$0.08 vs analyst estimates of -$0.12
  • Revenue guidance for Q3 2022 is $60 million at the midpoint, above analyst estimates of $59.4 million
  • The company reconfirmed revenue guidance for the full year, at $234 million at the midpoint
  • Free cash flow of $8.16 million, up from negative free cash flow of $9.59 million in previous quarter
  • Net Revenue Retention Rate: 126%, in line with previous quarter
  • Customers: 1,836, up from 1,701 in previous quarter
  • Gross Margin (GAAP): 70.6%, up from 69% same quarter last year

"We want to help every company build better products through data,” said Spenser Skates, CEO and co-founder of Amplitude.

Born out of a failed voice recognition startup by founder Spenser Skates, Amplitude (NASDAQ:AMPL) is data analytics software helping companies improve and optimize their digital products.

Organizations generate a lot of data that is stored in silos, often in incompatible formats, making it slow and costly to extract actionable insights, which in turn drives demand for modern cloud-based data analysis platforms that can efficiently analyze the silo-ed data.

Sales Growth

As you can see below, Amplitude's revenue growth has been exceptional over the last year, growing from quarterly revenue of $39.2 million, to $58.1 million.

Amplitude Total Revenue

And unsurprisingly, this was another great quarter for Amplitude with revenue up 48% year on year. On top of that, revenue increased $5.06 million quarter on quarter, a very strong improvement on the $3.64 million increase in Q1 2022, and a sign of acceleration of growth.

Guidance for the next quarter indicates Amplitude is expecting revenue to grow 31.9% year on year to $60 million, slowing down from the 72.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 29.7% over the next twelve months.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Customer Growth

You can see below that Amplitude reported 1,836 customers at the end of the quarter, an increase of 135 on last quarter. That is a fair bit better customer growth than last quarter and in line with what we have seen in previous quarters, demonstrating the company has the sales momentum required to drive continued growth. We've no doubt shareholders will take this as an indication that the company's go-to-market strategy is running smoothly.

Amplitude Customers

Key Takeaways from Amplitude's Q2 Results

Since it has still been burning cash over the last twelve months it is worth keeping an eye on Amplitude’s balance sheet, but we note that with a market capitalization of $1.65 billion and more than $310 million in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by the exceptional revenue growth Amplitude delivered this quarter. And we were also excited to see the company produce free cash flow. Overall, we think this was a really good quarter, that should leave shareholders feeling very positive. The company is up 3.34% on the results and currently trades at $16.7 per share.

Should you invest in Amplitude right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.