Amplitude, Inc. Q1 FY2022 Earnings Call

Hello, everyone. Welcome to Amplitude's First Quarter 2022 Earnings Conference Call. I am Nicole Borsje from the Blueshirt Group. Joining me today are Spenser Skates, CEO and Co-Founder of Amplitude and Hoang Vuong, the company’s Chief Financial Officer. During today’s call, management will make forward-looking statements, including statements regarding our financial outlook for the second quarter and full year 2022, the expected performance of our products, our expected quarterly and long-term growth, accelerated investments and our overall future prospects. These forward-looking statements are based on current information, assumptions and expectations that are subject to risks and uncertainties, some of which are beyond our control that could cause actual results to differ materially from those described in these statements. Further information on the risks that could cause actual results to differ is included in our filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements and we assume no obligation to update these statements after today’s call except as required by law. Certain financial measures used on today’s call are expressed on a non-GAAP basis. We use these non-GAAP financial measures internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. These non-GAAP financial measures have limitations and should not be used in isolation from, or substitute for financial information prepared in accordance with GAAP. A reconciliation between these GAAP and non-GAAP financial measures is included in our earnings press release, which can be found in our Investor Relations website at investors.amplitude.com. With that, I will hand the call over to Spenser.

Thanks, Nicole, and good afternoon to everyone. I appreciate you joining us for our Q1 2022 earnings call. Amplitude had a strong first quarter, reflecting the market’s increasing demand for digital optimization. We closed out the quarter with $53.1 million in revenue, up 60% year-over-year. We also added more than 100 paying customers, which was up 49% annually and totaling just over 1,700. We continue to see great traction with our new products, Experiment and Recommend, and strong expanding usage of our digital optimization suite. This was further demonstrated by a dollar-based net retention rate of 126%, which increased by 800 basis points year-over-year. Amplitude’s vision is to help every company build better products through data. We are pioneering a new category of software called Digital Optimization, the next wave of digital transformation. Digital Optimization arms organizations with real-time product, app, and web data so they can make strategic decisions that accelerate innovation and increase revenue. Amplitude’s success is propelled by three mega trends, digital transformation, data-driven products, and product-led growth. Today, companies must optimize the massive investments they have made in digital transformation and digital product creation. Amplitude’s digital optimization system transforms product strategy from an intuition-based process to a data-driven one. That means organizations can use first-party data to understand every behavior and action taken in the product, which is a huge competitive differentiator for modern businesses today. Finally, the very best businesses out there are focusing on the product itself as their number one revenue driver. This gives product teams more spending power and influence within organizations. That’s why companies are turning to Amplitude to be the command center for managing, measuring, and optimizing the business value of their digital products. With our number one product analytics solution, companies of all sizes can unlock customer insights, build winning products, and drive customer growth. We have a robust product cycle planned for the year, which we executed against in the quarter. We added new capabilities to give product leaders deeper insights into what it takes for customers to convert, including new visualizations and measurement tools to show how product changes impact conversion rates. We also built a new set of experiment lifecycle features to make it easier for customers to set goals and incorporate statistical data into metrics as well as new SDK enhancements to integrate instrumentation and experimentation. And finally, to unlock advanced targeted messaging and personalization use cases, we launched support for real-time audience delivery, customizable propensity models, and up to 25% better performance for one-on-one recommendations. A key differentiator for Amplitude in our product suite is the open approach we take to helping customers move data into our digital optimization products. In Q1, we built new integrations with Google Pub/Sub, Braze, Intercom, AppsFlyer, and Qualtrics, which will enable our customers to set up more event streaming destinations and better understand user preferences. We also launched in the AWS Marketplace to make it easier for organizations around the world to find, test, buy, and deploy Amplitude. Now, product marketing and business leaders have a simpler pathway to using data to optimize their digital business. Beyond our own product innovations, we are actually seeing an important shift in the market. Over the next year, Google Analytics is requiring all of its Universal Analytics and Universal Analytics 360 customers to shift to GA4, a different and less sophisticated platform. Current Universal Analytics customers will lose all of their existing data. This friction-filled experience will prompt every GA customer to ask themselves a critical question: is Google Analytics still the best option? We are hearing from customers that the answer is no. This gives us a huge opportunity to convert GA users to Amplitude so they can stop relying on surface-level metrics and start understanding the entire customer journey. We are offering discounted GA migration services for enterprises ready to upgrade to Amplitude. Between the increasing urgency for product analytics and our work toward building the most comprehensive suite of digital optimization products on the market, we believe Amplitude is on track to become the system of record for the product organization. This is similar to how Salesforce has become the system of record for sales organizations, and Adobe became the system of record for marketing. We believe that this represents a $37 billion market opportunity today, and it’s only going to increase as digital expands its foothold. To realize this opportunity, we have built a team that knows how to scale our product, sales engine, and customer-centric approach. Last month, we welcomed Lambert Walsh as our first-ever Chief Customer Officer. Previously at Adobe and DocuSign, Lambert has more than 25 years of experience leading customer success, professional services, and solutions consulting teams at high-growth organizations. Lambert’s expertise in scaling and driving customer success and services organizations will help Amplitude continue to win the world’s largest organizations. We are also proud to continue our position of market leadership. The G2 Spring 2022 report, which is based on customer reviews, ranked Amplitude as the number one product analytics solution for the seventh quarter in a row, and we ranked number three in digital analytics for the fifth quarter in a row. Amplitude was also recognized in Fast Company’s Most Innovative Companies list, ranking number three in the enterprise category. And finally, Amplitude was featured in Gartner’s Market Guide for web, product, and digital experience analytics, which predicts a convergence across the digital analytics market. Gartner now recommends combining web analytics with either product or digital experience analytics. This really validates the power of product analytics and Amplitude’s opportunity to expand into the broader digital analytics space. We are also making investments for the long term in Europe, where the pressure to shift away from third-party data is particularly intense. Companies around the world are looking for privacy-centric ways to create personalized product experiences, making Amplitude the ideal partner. In Q1, we landed new customers in Europe like Luno and Infobip in London and an undisclosed company in Paris to meet rising demand in the region. We are scaling our team and have opened up new workspaces in London and Paris. Our leadership team has also been closely following the unlawful and unjustified invasion of Ukraine. We have taken several actions since February to help support our employees and give our Ukrainian customers operating flexibility. We have also evaluated and terminated customer relationships in the region that we know to be either number one targeted by U.S. sanctions, including subsidiaries of those companies or number two, Russian government or oligarch-owned. Vuong will provide additional information about the financial impact of these decisions. Amplitude took the steps to comply with sanctions and make it clear we are against the actions of the Russian government. Our business continues to grow rapidly, and we believe in the broad-based opportunity for Amplitude. This is evidenced by the strong demand for our products from organizations across various sizes, verticals, and digital maturity. In Q1, our customer base expanded by 49%. Several notable new wins in the quarter include Barnes & Noble Education, RetailMeNot, Hopper, Brinks Security, Snap Finance, and Hydro. We also had several customer expansions with Dropbox, Block (formerly Square), Venmo (part of PayPal), OkCupid, The Weather Company, Culture Amp, and several others. And we continue to make encouraging progress with the adoption of our new products, Experiment and Recommend.

Thanks, Spenser, and thanks again to everyone joining us today. Our team delivered a strong quarter overcoming a couple of headwinds. First, I want to discuss a large customer churn in Q1, Twitter, because of their massive user activity and monetization of those activities, decided it made sense to build a tailored internal solution, combined with the fact that they acquired in Tirana, a product analytics company in 2020. We believe this is an isolated case. The conflict in Ukraine has also been a headwind. We made the right decision to show our support by seizing new business and ending our relationship with certain customers in the region. But those decisions will have an impact on the results of this year. I will elaborate on those impacts in a moment. Despite this, we saw robust growth in new customers, had the second largest expansion quarter in company history, which translated to strengthening our net retention rate, saw fantastic growth in RPO, and had our best quarter ever with Amplitude Experiment. These results support our confidence in the long-term opportunity for Amplitude and the market for digital optimization. For Q1, revenue came in at $53.1 million, representing 60% annual growth. We ended the quarter with 1,701 paying customers, an increase of 49% year-over-year. We saw customers expanding usage of our platform to drive product-led growth, which is reflected in our dollar-based net retention rate, or NRR, which increased 300 basis points sequentially and 800 basis points year-over-year to 126%. Strength in NRR was driven by strong expansion, the second largest quarter in the number of million-plus deals, and total expansion dollar value. NRR also benefited as quarters with COVID-related churn dropped off. Our strong NRR reflects the long-term underlying expansion opportunity of our business as our customers embraced product-led growth. We expect to see ongoing fluctuations in NRR in the quarters ahead as we digest the timing of large expansions and customer churn. From a geographic standpoint, revenue from the U.S. increased 59% year-over-year in Q1 to $33.5 million, and international revenue increased 62% to $19.5 million. The U.S. accounted for 63% of total revenue versus 37% for international, consistent with the prior year. As a result of the action we took related to the Ukraine conflict, combined with churn due to associated collection risks, we estimate about a $1 million decrease in quarterly revenue impact beginning in Q2 and a decrease in FY '22 customer count by about 2% to 3%. Turning to remaining performance obligation, or RPO, in Q1, total RPO increased to $194.4 million, up 84% year-over-year. Current RPO also increased by $149.6 million, up 62% year-over-year, representing approximately 77% of total RPO. The strength in RPO growth is driven by expansion coupled with early renewals and longer-term contracts, reflecting customers’ increasing confidence in the value of our digital optimization services. I will be discussing non-GAAP results going forward. As a reminder, our GAAP financial results, along with a reconciliation between GAAP and non-GAAP results, can be found in our earnings press release and supplemental financials on our IR website. Gross margin improved to 72% compared to 70% in Q1 2021. We are excited about progress toward our long-term goal of 75% as we continue to scale the business. Moving now to operating expenses. For Q1, sales and marketing expense was $24.9 million compared to $15.9 million last year and represented 47% of revenue compared to 48% of revenue in Q1 2021. R&D expense in Q1 was $12 million compared to $6.1 million last year. This represented approximately 23% of revenue compared to 18% of revenue in Q1 2021. As planned, we caught up on our investments in product development so that we can extend our leadership in product analytics and build additional solutions to serve to the Chief Product Officer role. G&A expense was $9.2 million for the first quarter compared to $4.6 million in the first quarter of last year. G&A was 17% of revenue versus 14% of revenue last year due to incremental costs of operating as a public company. As a result, loss from operations in the first quarter was $7.7 million compared to a loss of $3.2 million last year. Operating margin was negative 15% compared to negative 10% in the same period last year. Net loss was $8 million compared to $3.5 million in the first quarter of 2021. Net loss per share was $0.07 based on 109.6 million shares compared to a loss of $0.13 in the first quarter of 2021 with 27.9 million shares. Turning to free cash flow, free cash flow was negative $9.6 million or negative 18% of revenue compared to negative $1.1 million or negative 3% of revenue in the first quarter of 2021. Turning to our balance sheet, our cash and cash equivalents were $300.4 million at the end of Q1, down from $307.4 million at the end of the prior quarter. Before turning to guidance, I wanted to offer some high-level perspective on our strategy for balancing growth and profitability long-term. Our top priority is still growth, but because of our favorable unit economics, we are committed to improving operating margins every year as we target breakeven non-GAAP operating margins and positive 10% free cash flow in the medium term. Moving to guidance, for the second quarter of 2022, we expect revenue to be between $54.5 million and $55.5 million representing an annual growth rate of 40% at the midpoint. This takes into account about a $2 million negative impact from actions in Ukraine and Twitter. We expect non-GAAP operating margin loss of 23% to 24%. We expect operating loss to be the widest in Q2 due to our Amplify event, which is being held in person in Las Vegas. This also incorporates higher expenses from travel and return to office. We expect non-GAAP net loss per share to be between $0.11 and $0.12, assuming shares outstanding of approximately 111.6 million. For the full year 2022, we expect revenue to be between $229 million and $235 million, representing an annual growth rate of 37% to 40%. Given our strong Q1 performance, we raised the midpoint of our range by $2 million. We expect non-GAAP operating margin loss between 19% and 20%, an improvement from our previous expectation of negative 20% to 22%, and we expect non-GAAP net loss per share to be between $0.39 and $0.41, assuming shares outstanding of approximately 112.6 million. We had some unexpected headwinds in Q1, where our team responded with strong execution, delivered a very successful Q1 on a number of fronts. We believe that we are well positioned to drive attractive revenue growth as we help companies build better products upon the foundation of our digital optimization system. We are looking forward to continuing our discussion with all of you over the coming months and are excited about Amplitude's market opportunity. With that, I will open the call for your questions.

Thanks, Vuong. Our first question today will come from Tyler Radke with Citi, followed by Arjun Bhatia with William Blair. Tyler, go ahead.

Hey, thanks a lot for taking the questions and appreciate all the disclosure on the moving pieces in the forecast, Vuong. Spenser, I wanted to start with a kind of a broader question for you. So, you talked a little bit about the convergence of some of these analytics categories. Obviously, the Google product change too, just how are you thinking about the broader opportunity in that lens? I mean, clearly your roots are in product analytics; you have some interesting traction in Experiment and Recommend, but how do you go after that broader opportunity without kind of staying focused on kind of the traditional strength of Amplitude? Thanks.

Yes, for sure, Tyler. Happy to answer that question. I think there is – the first thing to understand is that what we are seeing in the market is that customers don’t really think about themselves differently whether they are in the marketing experience versus if they are in the product experience; it’s just one end-to-end journey about customer experience. And so one of the big reasons that we talk about digital optimization as opposed to product optimization or product data is that from a customer standpoint, it doesn’t really matter. And so when you are building a marketing experience for your customers or building the product experience, you want all of those to be seamlessly integrated; you want to understand how signing up and doing the free trial impacts your long-term usage of your product. And so we believe that all of those things are going to be converging over time. And that’s a huge opportunity for us. Historically, you have seen marketing and product be quite separate: separate functions, separate teams, separate infrastructure stacks, but we see those converging over time. I think the updates that Gartner’s market guide provided, where they said marketing analytics is going to converge with product analytics/digital analytics, is just another sign, and often with analysts, they are really just playing catch-up to what they see in the market. We are already seeing this. I mean, one of the craziest things that I have seen in a lot of tech companies is that CMOs will actually have a product background. Facebook’s CMO has that. There are a bunch of other companies that have that case. From a data perspective, that means you just need one platform to unify it all. And so things that were built for just a marketing analytics world, like Google Analytics, are no longer going to be enough to serve that end-to-end product journey. The last thing I think I will close out with is our strength has been, and it’s always been, product. It’s been our focus. And our product is product analytics, but we expect that to continue to remain true while we branch out into other areas of digital marketing or whatever analytics.

Great. And if I could ask a follow-up for Vuong; so appreciate the help on the moving pieces. I guess, if we look at current RPO growth in the quarter, does that include some of those headwinds? I mean, that grew 62% year-over-year, I think accelerated a little bit from Q4. Yet obviously the revenue guidance is about, I think, 15-20 points lower here for Q2. So, just help us understand if those headwinds aren’t in current RPO guidance and what will kind of explain that slowdown in revenue if they are? Thank you.

Yes, Tyler, absolutely. We gave that additional color just to mainly try to connect those points. The headwinds in terms of like, whether it’s the churn we may have taken related to Ukraine or Twitter, are reflected obviously in your CRPO. But the main thing is most of those are the same. They were already running through most of what was already in remaining performance obligations. So you are already coming down to a quarter of balance; now it’s zero. So you are just not adding any new ones for the renewals, right. Now, the reason RPO and CRPO is growing at a faster rate, obviously, it’s growing 62% year-over-year, but the annualized quarterly growth rate, CRPO was up 42%. Obviously, it’s still a great number. But that does factor in, obviously, as companies we mentioned – as new companies are more and more saying, hey, we want to bet on Amplitude, we trust it. And so we are seeing also longer-term contracts. And so you have a longer-term contract; the movement from long-term or RPO to CRPO is actually causing a little bit of that increase in CRPO year-over-year. And that’s why you are also seeing RPO outpace CRPO.

Alright. Thank you.

Thanks, Tyler. Next, we will take Arjun Bhatia with William Blair. Following Arjun, we will take Koji Ikeda with BofA.

Thank you, Vuong. I'd like to start with you. I want to continue the discussion we had last quarter about the uncertainty regarding the timing of expansions. I'm interested in how your insight into that expansion timeline has evolved now that we are three months into the year. Also, I wonder if Twitter was one of the customers you had in mind when we were discussing uncertainty and expansion last quarter. Now that it's behind us, is there any update?

Yes. I think when we talked about last quarter, our visibility into large expansions stays the same. I think what we were factoring in last quarter when we were looking at some of the macroeconomic conditions is we were confident that these customers will expand; it’s just a question of like is the exact timing of when. I think what we saw in Q1, both kind of the fact that we hit a 126% net retention rate, the fact that we had our second largest expansion ever, is we actually saw customers going, ‘No, we really do believe product-led growth is very critical, and we are going to move on and we are going to keep doing it.’ And so we actually saw really large, substantial expansion happening in Q1, which is where our timing was a little bit uncertain as to whether they were going to exactly happen. So, we wanted to make sure we were being smart about our forecasts. But I think we executed extremely well and the team really delivered on that front. I think as far as Twitter goes, the churn in Twitter obviously, we don’t ever want to lose any count. I think at the beginning of the quarter, we thought we were going to be able to save the count; it wasn’t necessarily an expansion, but it was going to be something that was saved. I think I mentioned in my prepared remarks just given the unique circumstances that were actually happening and there is a lot happening in Twitter. And so when you think about that, combined with just the amount of data they have and the monetization of that data, along with the fact that they did acquire in Tirana, they made a decision towards the end that they were going to obviously build something internally. And so that was not something that we expected.

Okay. Understood. Spenser, based on your notes, it appears you are receiving industry recognition, the category is progressing, and customer investments are on the rise. When you consider Experiment and Recommend, you provided some excellent examples of current users. Should we view this as an ongoing expansion opportunity for discussions with customers and further investments? Are they contemplating any specific challenges?

Yes. So, we definitely have a few cases of where customers have landed with Experiment, and that’s been a big part of the deal. But both in the case of Dropbox and IBM, and most of our largest Experiment customers, those tend to be expansions on top of the core analytics. I think what makes me really excited is – I was close to both the Dropbox and IBM deals and use cases. What was exciting about those from my standpoint was that they had decided in both cases to move away from an internal system of doing experimentation onto Amplitude. That was partly driven by cost savings because they just had so many engineers that were running it. In IBM’s case, it was really driven by the goal of just running more experiments. They were at like 5 or 6 experiments a quarter and they wanted to increase the number of experiments they could execute to 30 or 40. Both those customers had already been very successful customers on the analytics front and gotten a ton of value out of there. I think it was a breakout quarter for the Experiment product from my standpoint, because I think before we saw mainly commercial SMB teams, maybe an enterprise using it for a side use case here and there. In both of those cases, it was like, ‘Hey, we are going to move our main experimentation muscle onto Amplitude Experiment.’ I think that gives me a lot of confidence over the long term that we will continue to see more enterprise customers like that. And as we get into 2023 and beyond, I think Experiment can be a big driver from a revenue perspective on the expansion side.

Thank you very much.

Great. And our next question will come from Koji Ikeda with BofA. Following Koji, we will take Shrenik Kothari with Baird.

Hey, Spencer. Hey, Hoang. Thanks for taking my questions. I wanted to ask you guys a question on a recent press release. I saw you announced you are now in the AWS Marketplace as of March. I guess, can you talk a little bit about how this could potentially increase the adoption of the platform, maybe from an awareness perspective, or also from maybe removing friction of the adoption of the platform being available in the marketplace? And also, could you please remind us, are you available in the Azure Marketplace or GCP marketplaces right now?

Yes. So, we are not available in Azure, or GCP. AWS is the first one that we have gotten into. I think the really big deal there is folks can use either credits or committed revenue from AWS on Amplitude as a product. We just got that agreement in place. Unlocking that is just another channel from a partnerships angle that has the potential to be big over time. As you know, any SaaS company, as you get towards the billion in ARR mark, a lot of revenue comes through the channel as opposed to direct, which is the vast majority of the business today. Our expectation is that will happen over time. They really want to – in terms of any channel partner, it’s like they want to see that you can drive business for them. So, it’s not until your business is sufficiently big that they care and send you stuff. But the fact that we set it up on AWS is a really huge deal and allows us to work with a broader spectrum of customers that we might otherwise. And so yes, really pleased that we got that out the door in Q1.

Got it. And then just one follow-up for me here too, actually digging in a little bit more on the partner channel strategy. I just quickly went to the website, noticed you had about 23 solution partners worldwide. How do we think about this channel expanding, really kind of thinking about expanding or partnering up with some of the regional SIs, or maybe even the GSIs over time? And I guess I should ask, how do we think about the partners from a technology and integration partner from here?

Yes. So, let me take the technology one and then I will leave it to Hoang for the GSIs and the solutions partners. I think the big thing from a tech standpoint is that product data lives in so many different places in companies. It could live in your own, it could live in a Kafka queue, it could live in your Snowflake data warehouse, it could live in GCP, it could live in a million different places. The more places you integrate with and make accessible, the more surface area you have to be able to work with customers that have product data in those places. It’s a big contrast with what I think of as kind of the previous generation, where most of the closed ecosystems don’t have the builtin integrations we have. It makes it tough to keep up with all the different use cases and applications for product data that are out there. We are thinking about getting a constant steady stream of every single time we see a customer that has data in a new place, we want to unlock that as a use case. We will actually be announcing the product around that at Amplify in a few weeks, which I am excited about. Obviously, we had GCP last quarter; we had Snowflake the quarter before that we announced. We expect to continue to announce more integrations with more ways to get data into and out of Amplitude. That will just further cement our differentiation versus the previous generation of the analytics players.

Yes. Thanks. I will touch on the solutions side. Early on, we saw that there were a bunch of companies outside of tech that were interested in going into product and setting up their data infrastructure or their growth stack, and they would go to a regional kind of solution partner to help with that. We started partnering with both, because they would come in and say, ‘Hey, we want to be part of that solution.’ As we look out, we kind of see that as being a huge opportunity. There is a ton of work out there for the right partner who has the right relationship with those clients. We think there is a compelling part even once you have it going; companies need help and resources to understand data, make recommendations off the data, and how to really instrument and implement some of those recommendations. We will continue building it out, and you will start to see dividends coming from that.

Got it. Thanks, guys. I will hop back in the queue. Thanks so much.

Great. Thanks. And we will take our next question from Shrenik Kothari with Baird. Following Shrenik, we will take Michael Turits with KeyBank.

Hey. Thanks for taking my question. So, the number of big customers is still growing pretty nicely, 49%. You highlighted the integrations with a bunch of players Braze, Qualtrics and the GA migration services, conversion from Google Analytics. I believe it’s been over a quarter now since you launched the Adobe extension, which is kind of similar GA conversions from Adobe. So, if you can offer some color there, how is that progressing? How much, if at all, is it contributing to the land motion? And just the go-to-market learnings from that as you embark on this bigger Google opportunity with the big migration catalysts that you talked about?

Yes. For sure, happy to answer that, Shrenik. So, I think Google Analytics has always been a great source of leads. It’s pretty ubiquitous on the website, and so it’s a very common starter product for most companies out there. We have consistently quarter-in, quarter-out gotten a huge number of customers that have migrated or upgraded off of Google Analytics onto Amplitude. I think this recent forced move from Universal Analytics to GA4 is just going to accelerate that. We just put out a campaign last week to really target current Universal Analytics customers who are very unhappy. What was really interesting is if you hear the party line from Google, they say, ‘Hey, everyone is happy on this migration.’ But their customers and partners are anything but. I think we will continue to see more customers landing and having switched off of Google Analytics to Amplitude. On the Adobe front, it’s a little earlier for us. Adobe is very entrenched in the ecosystem, and they have a lot of customers who have built out massive stacks on them. There’s a few that we are working with actively to have them look at Amplitude as a potential alternative. But it’s really early there. In those cases, we actually play pretty well alongside Adobe, in terms of Adobe customers being able to get great product analytics from Amplitude and vice versa. I think in the long-term, we do see, as I mentioned, as the Gartner report suggested, and I mentioned in a previous answer, we do see those spaces converging. We will continue to build out more capabilities there, but it’s still pretty early days for that.

Got it. Thanks a lot, Spenser. Just a quick follow-up on the net retention. The curve inflected higher from last time and the previous quarter. So, you highlighted the second-largest expansion, the best experiment, and quarter Dropbox, and other growths. I know you kind of discussed a bit, but just trying to unpack these contributions a bit; was like core product analytics, still the main driver for expansion within departments, cross-department, as you have stated that you sit at the periphery of core skills still in these Fortune 500 companies? Are these examples from Recommend and Experiment also moving the needle now in a meaningful way when it comes to expansion?

Yes. That’s a great question. I think absolutely, product analytics was still the main product and the main source of our expansion. You got to remember both Experiment and Recommend were in our third quarter; we are extremely pleased with the progress in the last quarter. We reported that we had over 100 customers using both products. Now we just talked about some really large expansion at IBM and Dropbox around Experiment, and you are starting to see continued pickup. But it’s still in the early days of both of those new products, and they don’t make up a material portion of either the expansion or the net retention rate yet. Given their progress and momentum, we hope to see that soon.

Alright. Thanks, Hoang. Thanks, Spenser. I will go back to the queue.

Thanks, Shrenik.

Okay. Thanks. And we will take our next question from Michael Turits with KeyBanc. Following Michael, we will take Claire Gerdes with UBS.

Hi, this is Michael for Michael Turits and thanks for giving...

So, you look like Michael Turits.

So, thanks for getting the clarity on the Russia commentary. But are you seeing any extension of that to Western Europe or any broader impacts from the ongoing war?

Yes. I would actually say we have not. Our Europe growth continues to be strong. As we mentioned, international growth actually outpaced domestic growth by a little bit in Q1. We had a lot of great lands, I mentioned earlier in the prepared remarks, Luno and Infobip in London, and an unnamed company in Paris. We are continuing to grow and invest our team in the region, opening workspaces in both London and Paris. Now that we are starting to get to the other side of the pandemic, we are continuing to scale our investment. Just huge shout out to the team in Europe for continuing to deliver in spite of what’s going on with Russia and Ukraine. In the short term, we will obviously have that one-time hit that Hoang mentioned from moving out a bunch of Russian customers. Growth from everywhere else in the region is very strong.

Great. I appreciate that. And then just a quick follow-up; last quarter you talked about challenges with customers being either slower to expand or building in-house solutions. You are being more of an evangelical. I guess are you doing anything to combat that, or any changes you are making internally against that motion?

Yes. I mean that that’s a top focus of the team. I think it’s also we added it because we had a really strong expansion quarter in Q1. That was driven by a lot of focus and execution by the folks on the ground, so really proud of the team’s work there as we focused on getting more repeatability and predictability in the expansions. I think to be clear, I think we haven’t seen that factor change. I think when we see us land quite consistently, and then it’s really that first expansion to a core product or to a suite of products we become standardized on Amplitude; that can add variability and timing because that depends on when different executives are bought into product-led growth and data-driven products that depends on proving out that success in the first product. There are a bunch of different factors in play for that. In terms of what we are doing about it, I think there are two things I think about: the air war and the ground war. The air war is really just continuing to educate and to evangelize what it is that we do, and why product data is so incredibly important. We are actually really excited about our Amplify Conference. We wouldn't know if we would be able to get a lot of people to turn up in person. But we already have over 1,000 folks registered for the conference, and that’s going to be a huge part of driving the idea of this is the way to do it. And that’s a long-term play there. On the ground war side, this is where I think we have a good foundation with some of our customer-facing teams. We are always looking to mature there. I mentioned we brought in Lambert Walsh as Chief Customer Officer, so I am really excited about the leadership he is going to be able to provide in bringing us to the next level of maturity with helping teams out with customized services, things around training and implementation that we might not have been able to do before. Those will help accelerate that. I have confidence that the combination of these things over the long term will make that motion much more predictable and repeatable. To be clear, it is a repeatable motion, and we see all the signs; it’s just the precise timing can vary. That’s what we are looking at improving as we go throughout this year.

Great. Really appreciate that. Thanks.

Great. And our final question will come from Claire Gerdes with UBS.

Great. Thanks for taking the question. So, I just wanted to follow up a little bit on the full-year guide. You, of course, mentioned the impact from the conflict in Ukraine. But is there anything else to call out that you are either seeing in the environment or you have touched on expansion activity so far, but anything to call out that’s influencing your outlook for the rest of the year? Thanks.

Yes. No, I think we raised the midpoint of the range by $2 million while we are narrowing it. I think that just shows that not only did we have a great Q1, but we actually have more confidence given where the net retention rate is and where the new products are trending. We feel really confident in the market, and that’s what’s in the guidance.

Well, as we close things out here, I just wanted to make a quick plug for Amplify in Las Vegas. So, come join us on May 24 to 26. I promise that if you come join us, I will go hang out with you in person. We would love to see folks there.