Amplitude (NASDAQ:AMPL) Surprises With Q3 Sales

Radek Strnad /
2022/11/02 4:11 pm EDT

Data analytics software provider Amplitude (NASDAQ:AMPL) reported Q3 FY2022 results topping analyst expectations, with revenue up 35.4% year on year to $61.6 million. The company expects that next quarter's revenue would be around $63.5 million, which is the midpoint of the guidance range. That was in roughly line with analyst expectations. Amplitude made a GAAP loss of $22.5 million, improving on its loss of $36.5 million, in the same quarter last year.

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Amplitude (AMPL) Q3 FY2022 Highlights:

  • Revenue: $61.6 million vs analyst estimates of $60.1 million (2.36% beat)
  • EPS (non-GAAP): -$0.03 vs analyst estimates of -$0.08
  • Revenue guidance for Q4 2022 is $63.5 million at the midpoint, roughly in line with what analysts were expecting
  • Free cash flow was negative $3.88 million, down from positive free cash flow of $8.16 million in previous quarter
  • Net Revenue Retention Rate: 123%, down from 126% previous quarter
  • Customers: 1,913, up from 1,836 in previous quarter
  • Gross Margin (GAAP): 70.6%, up from 69.2% same quarter last year

“Amplitude helps companies build amazing products, drive growth, and win their categories,” 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 two years, growing from quarterly revenue of $26.3 million in Q3 FY2020, to $61.6 million.

Amplitude Total Revenue

And unsurprisingly, this was another great quarter for Amplitude with revenue up 35.4% year on year. But the growth did slow down compared to last quarter, as the revenue increased by just $3.48 million in Q3, compared to $5.06 million in Q2 2022. We'd like to see revenue increase by a greater amount each quarter, but a one-off fluctuation is usually not concerning.

Guidance for the next quarter indicates Amplitude is expecting revenue to grow 28.4% year on year to $63.5 million, slowing down from the 64.3% 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 28% over the next twelve months.

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Customer Growth

You can see below that Amplitude reported 1,913 customers at the end of the quarter, an increase of 77 on last quarter. That is a little slower customer growth than what we are used to seeing lately, suggesting that the customer acquisition momentum is slowing a little bit.

Amplitude Customers

Key Takeaways from Amplitude's Q3 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 $1.83 billion and more than $306.5 million in cash, the company has the capacity to continue to prioritise growth over profitability.

We enjoyed seeing Amplitude’s impressive revenue growth this quarter. Overall, this quarter's results seemed pretty positive and shareholders can feel optimistic. But investors might have been expecting more and the company is down 1.13% on the results and currently trades at $14.67 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.

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