Hello, everyone. Welcome to Amplitude’s Second Quarter 2024 Earnings Conference Call. I am Yaoxian Chew, Vice President of Investor Relations. Joining me here are Spenser Skates, CEO and Co-Founder of Amplitude; Andrew Casey, Chief Financial Officer; and Mike Dean, VP Corporate Controller. During today's call, management will make forward-looking statements including statements regarding our financial outlook for the second quarter and full year 2024. The expected performance of our products, our expected quarterly and long-term growth, investments and overall future prospects. These forward-looking statements are based on current information, assumptions and expectations and 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 in 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 as a 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 on our Investor Relations website at [email protected]. With that, I'll hand the call over to Spenser.

Thanks Yao, and good afternoon, everyone. Welcome to our 2024 first quarter earnings call. I'm going to focus on three topics today: Q2 financial results and what we're seeing, how we're going after our market opportunity, and continued product innovation and customer stories. I'm pleased to report that we beat across all guided metrics this quarter. Our second quarter revenue was $73.3 million, up 8% year-over-year. Annual recurring revenue was $290 million, up $5 million from the end of the first quarter. We now have more than 3,200 paying customers. In Q2, customers representing $100,000 or more of ARR grew to 547, an increase of 10% year-over-year. We are operating responsibly and have generated $5.7 million of free cash flow year-to-date. Before we get into the quarter's details, I want to call out that we are revising our annual guidance lower on non-GAAP operating profit for the year while raising revenue. This is due to a change in Russian sanctions announced in June. Without this, operating profit guidance would have been unchanged. We'll go into more detail shortly. Our top priority at Amplitude is reaccelerating growth; we are making great progress. New business remained healthy in the second quarter. Amplitude's value proposition continues to resonate, and our win rates are strong. In spite of tight IT budgets, companies are investing in digital experiences. I would characterize the macro environment as stable quarter-to-quarter. We continue to feel great about our competitive position, particularly against point solutions and legacy players. We have a differentiated platform approach. Customers find value quickly and privacy regulations are helping to drive incremental demand. As expected, churn also remained high in the second quarter. This was driven by some of our most severe legacy contract resets, which we have been highlighting for several quarters. We are optimistic that the significant majority of overbought optimization contracts of this nature are now in our rearview mirror. We are building momentum from the many improvements we've made in go-to-market. Amplitude Plus, our self-serve offering continues to gain momentum with customers of all sizes and types. Plus performance was strong in Q2. New onboarding improvements and a simplified data setup process are driving uplifts in activation. Plus also continues to serve as a valuable feedback loop informing our win-simple approach on core Amplitude. Our named account approach led to higher quality deals in Q2 than in prior quarters. We also saw better platform attach rates and steady improvement in enterprise land ASPs. Improved account management is letting us better align with customer initiatives and land larger customer engagements from the start. We are growing our ability to gain mind share and budget across product, marketing, and data buyers. The customer expansions we are unlocking are also of higher quality. During the start of the pandemic, data volume increases drove many of our largest expansions. Today, customers are expanding because Amplitude is viewed as the right future-proof enterprise-ready platform in a world where companies win and lose based on their digital experience. I'm also very encouraged by the continued green shoots that we called out in prior quarters. Customer relationships are healthier post-renewal with customers using more of our platform and attaching services. We are more aligned with our customers' current growth ambitions than we have been in the last year. In our top 100 customers, underlying utilization trends continue to improve quarter-to-quarter. Cohort health is visibly improving. For customers who have optimized with us one time, a majority of the associated ARR either renews flat or grows off of that base. For customers acquired in the second half of 2022 and later, gross and net retention patterns continue to show better dynamics than those from 2020 and 2021. Pipeline signals are also encouraging for the second half of the year and into 2025, thanks to coordinated efforts across marketing, sales, and partnerships. We are seeing particular strength in our U.S. enterprise business. International markets, while behind the United States in terms of maturity, are demonstrating the same level of latent demand. Average deal size in our second half pipeline is up by 25% year-on-year. And we're seeing a significant increase in large deal opportunities. Now let's address the item that accounts for the change in non-GAAP operating profit outlook. In April 2022, we stopped all new sales activity in Russia and Belarus. We also terminated all contracts with customers that we knew to be targeted by U.S. sanctions. We continue to serve customers who did not meet that criteria. On June 12, the U.S. Department of the Treasury increased the scope of sanctions in Russia, leaving us unable to serve any customers in Russia and highly unlikely to be able to collect from these previously unaffected customers. If not for this isolated incident, our outlook on operating profit for the year would have been unchanged. While this weighs on what would have been a much stronger Q3 and exit growth rate, I would like to draw focus to the bigger picture. We are raising revenue guidance for the year despite facing a material headwind in Q3. The business improvements we have put in place are starting to deliver results. We believe ARR and revenue reacceleration are both well within our reach. We expect to be free cash flow positive for the year. We continue to invest behind the biggest driver of long-term growth for Amplitude, product innovation. Our thesis is that analytics is a center of gravity for any workflow that touches customer and product data. Without analytics, the rest of the stack is much less useful. Session replay is making rapid progress in its second live quarter. There is a lot of customer pain experienced from fragmented tooling. Our platform is continuing to displace point solutions, aid in renewal discussions, and offer a shorter time to value for our platform. We expect a larger unlock when we launch mobile session replay later this year. Experiment and CDP landed with marquee customers, and some of our largest expansions this quarter were catalyzed by our non-analytics offerings. A confluence of tight customer budgets, enhanced product maturity, and improving field enablement are letting us lean in. Today, 21% of our annual contracted customers use more than one product, up from 15% at the same time last year. Customers who use more products retain better. Industry analysts are also recognizing our leadership. Amplitude was named as the only leader in the latest Forrester Wave for feature management and experimentation. We achieved the highest possible scores across 11 criteria, with particular call-outs for our platform breadth, depth, user interface, pricing, and vision. We announced the general availability of Amplitude's Snowflake native offering in June. Our warehouse-native approach is all about extending what has made Amplitude successful, being one of the most open, agnostic, and trusted ways to access and find insights from customer data. Early interest here is encouraging. We've made other huge strides in our mission to win the enterprise. Large sophisticated enterprises have different needs, and one of their top requests is for enterprise-grade controls. That's why I'm excited to announce enterprise-grade data access controls and data mutability. These advancements help to eliminate data drift, ensure compliance, and reduce friction around managing data privacy. With our enterprise-grade digital analytics platform, customers can keep data in sync with their data warehouse, confidently control who sees what. With improved security, scalability, and privacy, we're confident we can convert the most conservative chief data officers into Amplitude Champions. Last quarter, I talked about radical simplicity. We've always been a self-serve platform, but now we want to eliminate the learning curve altogether. This is one of the most ambitious projects we've taken on as a company. We've reimagined our product experience from top to bottom, and we will be launching the new Amplitude on September 10. We're offering users a single line of code to get up and running, default dashboards out of the box, auto-capture, and visual tagging, bundling of session replay and experiment SDKs with analytics out of the box, new navigation, and user interface in a new conversational version of our AI assistant and search. Analytics today is hard. We are going to make it easy. All the priceless customer behavior, product, and community knowledge embodied in Amplitude will be approachable to everyone. It will be radically easier to get started, get insights, and get value. We want Amplitude to be a daily habit and our new platform will help get us there. We can't wait to share more. Turning to customers. In Q2, we landed and grew with HubSpot, Fanatics Live, Cloudflare, SketchUp, Writer, Character AI, Volvo, Icelandair, Cook Children's Healthcare System, and Farmers Business Network. A notable highlight this quarter is SketchUp, a business unit of Trimble. Globally, they are one of the largest 3D modeling tools in the construction and industrial industry with tens of millions of monthly users. With this renewal, product and data teams are drastically increasing the amount of data from their web and mobile applications in addition to going live with Amplitude's CDP. SketchUp aims to democratize data across the business, empowering product managers with self-service insights. With Amplitude, SketchUp will be able to enact PLG best practices, everything from encouraging free-to-paid upgrades, keeping users engaged after the initial learning curve, and identifying churn as it happens. We're excited to support SketchUp in their ongoing data-centric transformation and look forward to contributing to their continued success. We also had a win with Cook Children's Healthcare System, one of the largest non-profit pediatric medical centers in the U.S. They are migrating from Google due to data privacy and HIPAA compliance concerns. With a focus on digital transformation and optimizing the patient experience, they chose Amplitude to power user insights with their newly launched web experience. Amplitude will let them connect web and mobile patient journeys to increase patient appointment conversion and identify channel performance across marketing campaigns. Character AI has been an Amplitude customer for less than a year and is already expanding its use cases and adoption of Amplitude. They are one of the fastest-growing AI companies, empowering users to create and interact with various AI characters that feel alive. Amplitude has proven critical in tracking their users' onboarding flow and the success of new feature releases. This is especially important as they roll out their new voice feature, which allows users to hear characters speaking to them in one-to-one chats. They are consolidating their analytics efforts by adding our whole suite to this renewal. Another great win this quarter is with a global job search platform, which saw the potential to consolidate multiple point solutions and for Amplitude to become their single source of truth. Before Amplitude, the team couldn't trust the results of the experiments they would run. They spent more time arguing than running tests. By moving away from Optimizely onto Amplitude, they could finally scale their experimentation program by eliminating two big blockers, a lack of data trust, and the painful overhead associated with integrations and data pipelines. This is a great example of how our Amplitude approach solves pain with unbeatable value. With our digital analytics platform, Amplitude is able to bring together product leaders, data scientists, engineers, and growth teams to make data-driven decisions, streamline workflows, and connect insights to actions at scale. Before I turn the call over, I want to thank Mike Dean for his contributions during this period of transition at Amplitude. He is one of the rock stars at this company and has done an amazing job rising to this occasion at an important time for Amplitude as interim finance leader. I'm excited to introduce our new Chief Financial Officer, Andrew Casey. Andrew has more than 25 years of battle-tested enterprise software experience. He has had senior finance roles across ServiceNow, Oracle, and HP. More recently, he took WalkMe public in his IPO and was CFO of Lacework. I've gotten to know Andrew well recently. He's a fantastic combination of strategic thinking while being able to get into the details operationally. He also has a genuine passion for the space we're in. We're both in it for the long-term, and I'm looking forward to working closely with him as we write the next chapter of growth for Amplitude. We have been up-leveling every area of our business and building momentum. We continue to see more pockets of strength and weakness. We will turn our green shoots into something more as we build a defining generational software company. Thank you for your interest in Amplitude. I'd now like to turn it over to Andrew for a brief introduction before Mike walks you through the financial results.

Thank you, Spencer. I'm very excited to be here. I joined Amplitude because it solves a universal critical business need with an elegant solution. I've never been in a company that ever said that I want to understand my customer less or that they don't really care about their digital products. Over the last few days, I've spent with many people across our organization, and I found that there are so many great materials that have already been put in place over the last year. I have been most impressed by the passionate customers, the world-class platform that Amplitude provides, and the team that Spencer is building. I can't wait to turn the page together and have a part in leading Amplitude towards the next chapter of growth. I look forward to getting to know many of you in the coming weeks. And with that, I'll pass it over to Mike to share more details on results and outlook for the quarter.

Thanks, Andrew and Spencer, and thanks to everyone joining us today. I'm happy to report that we beat across the board on all guided metrics this quarter. Turning to our second quarter results. As a reminder, all financial results that I will be discussing, with the exception of revenue, are non-GAAP. Our GAAP financial results, along with a reconciliation between our GAAP and non-GAAP results can be found on our earnings press release and supplemental financials on our IR website. Second quarter revenue was $73.3 million, up 8% year-over-year and 1% quarter-over-quarter. Total ARR increased to $290 million exiting Q2, an increase of 8% year-over-year and $5 million sequentially. Here are more details on key elements of the quarter. New ARR was about one-third land and two-thirds expand driven. Churn was down slightly quarter-to-quarter as customers on multiyear contracts optimize their renewals. Linearity on churn was better than expected, which resulted in sequential revenue growth. The total number of customers representing $100,000 or more of ARR in Q2 grew to 547, an increase of 10% year-over-year. Underlying utilization trends across our largest customers continue to improve quarter-to-quarter, which is also impacting gross margin. We believe that the worst excesses of the pandemic surge embedded in our ARR are now behind us. In-period NRR was 96%, and NRR on a trailing 12-month basis was 98%. Gross margin was 76% for the second quarter, down 2 percentage points year-over-year and 1 percentage point quarter-over-quarter. Investments in enterprise-related professional services, along with improving utilization caused the sequential margin downtick. Sales and marketing expenses were 48% of revenue, up 3 percentage points year-over-year. Here, we are focusing on investment around our named account approach. Increased investment in our international efforts and travel expenses were also key drivers of the year-on-year increase. G&A was 15% of revenue, up 1 percentage point year-over-year. There was approximately $0.6 million of non-recurring expenses in the quarter related to executive search, severance, and legal fees. Total operating expenses were $59 million, up 11 percentage points year-over-year. We continue to be judicious about hiring across the board. Operating profit was negative $3.7 million or negative 5% of revenue, which represents a 4 percentage point decline on a year-over-year basis. Net loss per share was $0.00 based on $122.6 million of basic and fully diluted shares compared to net income per share of $0.02 with 126.3 million diluted shares a year ago. Free cash flow in the quarter was positive $6.8 million, or 9.3% of revenue, compared to $19.3 million, or 28.5% of revenue, a year ago. Free cash flow was impacted by lower operating profit and early timing of some payments. Now let's turn to our outlook. We are assuming that the macroeconomic environment continues to be challenging throughout the rest of the year. Spencer mentioned that we are seeing a greater number of larger deals in our pipeline. We believe this warrants additional conservatism as buyer scrutiny remains high. Now let me unpack how Russian sanctions affect our financials. We estimate a negative impact of $3 million to full-year ARR. We also estimate a negative impact to full-year operating profit of $4 million. This is due to a combination of lost revenue and changes to our expectations of our ability to collect open receivables. It is important to note that our full-year operating income guidance would have remained unchanged without these sanctions. As a result of these factors, we are expressing heightened caution on Q3 ARR. For the third quarter of 2024, we expect Q3 revenue to be between $73.5 million and $74.5 million, representing an annual growth rate of 5% at the midpoint. We expect non-GAAP operating loss to be between negative $2.2 million and negative $1.2 million. And we expect non-GAAP net income per share to be between $0.00 and $0.01 cent, assuming diluted shares outstanding of approximately 131.6 million. For the full year, we are raising our full-year revenue outlook to be between $294.5 million and $296.5 million, an annual growth rate of 7% at the midpoint. We are reducing our outlook for non-GAAP operating income to be between negative $5 million and negative $2 million. We expect non-GAAP net income per share to be between $0.05 and $0.08, assuming shares outstanding of approximately $131.4 million as measured on a fully diluted basis. And here's more color for your modeling purposes. We continue to expect end-period NRR to remain below 100% and NRR to trough in the mid-90s this year. We continue to expect year-over-year ARR growth to trough in Q3 of this year in the mid-single digits. We continue to expect to be free cash flow positive for the full year. Our long-term opportunity remains unchanged. We are controlling what we can control. We are delivering on free cash flow and investing appropriately against opportunities that we expect will drive long-term value. We believe ARR and revenue reacceleration are both well within our reach. With that, I'll open it up to Q&A. Over to you, Yao.

Great. Spencer and Mike will be answering questions. Operator Instructions. Our first question comes from Koji Ikeda, Bank of America, followed by Tyler Maki from Citi.

Hey, guys. Thanks so much for taking the question. I wanted to dig in a little bit more about this Russia impact. I might be a little bit confused here, but I just wanted to make sure I run through these numbers properly. Okay. So essentially what happened was there are additional considerations for Russia business and it's affecting ARR, but just trying to understand why operating income goes down, but revenue goes up, I'm trying to understand those puts and takes there of why that happens because it seems like ex-Russia, the guidance would have been raised quite a bit. I'm just trying to understand that a little bit more, please?

Yeah, certainly. Thanks for the question. One of the big impacts is bad debt. So there's aged receivables there. And so with that, you're going to have an OpEx impact, as well as revenue. Talking about raising revenue for the full year, that's because we believe that we're in a fundamentally different place as a business. And as a reminder, we've beaten our expectations for the first half of the year. And so with that, naturally, that's going to flow through to the full year. And so the Russia impact is a mix of both lost revenue, but there is a large bad debt component to aged receivables at that time.

Got it. No, that makes a lot more sense. Thank you. And just maybe the follow-up there. Is Andrew going to be on the call too? Or are you holding him back for maybe the next one?

No, we do have him here. He's only been here since Monday of this week, and so…

I got you. I got you.

...and so the representations come from me as the CEO, as well as Mike as Interim Head of Finance.

Got you. So I guess from just one quick follow-up there on the Russia impact. Is this just a second half effect? Or should we expect any sort of bleed-through into 2025?

So most of the impact is going to be felt in Q3, but there is a lost revenue impact as well. And so with that, there will be some impact into 2025 as well.

Okay. I got you. And then maybe just one quick one for Andrew, I do realize that you started on Monday. Welcome to the team. Super excited to be working with you. But just picking a big picture perspective, what are some of the first priorities or things that you'd be looking at maybe over the next six months?

I think it's really important as a new leader joining an organization that you spend time to really understand how the business has been run. Spencer and the team have built a really vibrant business with a really great customer base. And I want to understand how we are aligning our strategic objectives, our long-term growth perspectives around those objectives, and then see how I can lean in. As you may or may not know, I've had a lot of experience with respect to scaling businesses in my past, and I spend a good amount of time meeting with customers and helping the sales teams work with our customers to drive the greatest value possible. And I figure that's probably where I'll spend some of my initial times I understand what processes we have in place and how best I can help the teams really drive that growth.

Got it. Thanks guys. Thanks for taking the questions.

Thanks. Next question, Matt Pry from Citi, followed by Arjun Bhatia from Blair. Matt, go ahead, please.

Hi, team. Just one quick question on AI. Just curious if what you see in terms of event volume intensity for GenAI use cases like Character AI?

Yes, I think first and foremost, these are software applications. The interface may differ in that it involves a chat or conversational format rather than the traditional point-and-click or touch interface, but ultimately, we focus on customer behavior, which remains constant. Character AI is being widely utilized, as expected. We also collaborate with Midjourney, which is experiencing significant usage as well. They are monitoring similar metrics, such as the onboarding process, user obstacles, and correlations with upselling or long-term user engagement and retention. Even though the generative AI interface is distinct, the core concept of tracking user journeys and finding ways to enhance that experience is the same.

Got it. Thank you.

Arjun, go ahead. Next question after Arjun, Nick Altmann from Scotia.

Thanks, everyone. Spenser, it's great to hear about the strength in the US enterprise business and the large deals in the pipeline. I'm interested in understanding how the profile of the enterprise customers evaluating Amplitude now differs from your customer base three to four years ago. What new elements are present, and what aspects are missing compared to several years ago? Additionally, I'd like to know why now is the right time for these businesses to consider Amplitude, especially in light of the macro challenges in the enterprise sector.

Certainly. Let me address the macro challenges first, then I'll discuss the changes in our customer composition over the past few years. Even during the toughest economic times in recent quarters, demand for Amplitude and digital analytics has remained robust. The observed slowdown in growth is primarily due to contract optimization, and with most of those adjustments behind us, we are poised for structural growth. Internally, our quarterly numbers are showing strong performance. Regarding our customer base, the changes Thomas has implemented in our go-to-market strategy over the last two years are starting to yield significant results, leading to more engagements with traditional companies. For instance, we are now collaborating with some of the world's largest quick-service restaurants and healthcare organizations like Children's Healthcare System, which was a major accomplishment in Q2. In the past couple of years, such partnerships were not on the radar. Our strategic focus on a named account structure has resulted in better alignment among marketing, partnerships, sales, and STRs. Additionally, our recent product announcements, including data mutability and data access controls, have resonated with traditional enterprises, demonstrating that our technology is applicable not only to digital-native companies but also to those with a digital presence. While we continue to see strong traction with tech companies, it's encouraging to note our progress in engaging a broader range of enterprises.

Yes, for sure. No, that's great to hear. And actually…

Andrew, you have something.

I was just going to say just one additional thing. I think a lot of times in the industry, we get a little focused on the macro things that are going on. But digital transformation is a multi-decade process. And every company is going to go through a process and steps through which they're going to digitize their methods of reaching out to customers and their business processes. And ultimately, I think Amplitude has a really great opportunity to be a lead player in that transformative event for most of those customers. So I think it's great that even though we have a macro background, which isn't great, these types of investments, these types of focuses, they take many, many, many years to evolve. And it's great that we're starting to make those investments now.

And you're going to do them regardless of the macro, as I mentioned, like this is a top priority for so many companies that we talk with, even though they're thinking through tighter budgets, more scrutiny, more questions, and ROI.

Yes, for sure, yes. There's a secular trend there. And then the follow-up actually on the product side, Spenser, the warehouse native analytics and the work that you're doing with Snowflake, how should we think about where that impacts your customers? Is that ease of implementation? Is that cost savings? Is that better outcomes? What is the ROI that the customers will see from that?

The ease of implementation and access to the existing customer base from cloud data warehouses, particularly Snowflake, enables a smoother transition to Amplitude for customers. The significant advantage with Amplitude's warehousing is that instead of creating a data pipeline between our cloud data warehouse and an analytics product like Amplitude, users can run SQL queries directly on the data. If the data on the customer journey is already collected, businesses can easily turn on Amplitude, significantly reducing implementation costs. We've observed this interest arise, especially among larger companies that have heavily invested in cloud data warehouses. In a recent conversation with a traditional company, they identified our solution as the biggest differentiator compared to others in the market because it facilitates quicker setup for smaller teams. Our philosophy is to remain data-agnostic; as more options for data stack setups emerge, we aim to collaborate with all of them. The warehouse-native approach is simply one method to achieve this. Ultimately, our focus is on how we can enhance applications utilizing that data, including analytics, experimentation, and session replay, with more developments on the horizon.

All right. Perfect. Congrats on the quarter.

Thanks, Arjun.

Next question, Nick Altmann from Scotia followed by Rob Oliver from Baird. Nick, go ahead please.

Awesome. Thank you. Spenser, you guys highlighted how some of the go-to-market adjustments are starting to bear fruit. And when you think about the historical drag on net new ARR, right, a lot of that has been macro-induced and churn-induced. But when we think about sort of the upswing when the macro gets better and you guys are sort of lapping this churn dynamic, how much of the improvements in go-to-market? How impactful can the improvements in the go-to-market motion sort of be as things kind of progress you get through this renewal base? And hopefully, we kind of get a little bit of a better demand environment here.

Yes. So, Nick, I want to be clear; like the path to reacceleration as I look through the next few quarters and in 2025, we're not dependent on any improvements in macro. We're saying, hey, macro stays as bad as it is, and we're still set up to accelerate in terms of how much net ARR we're putting up a quarter. I'd say the changes that we've been driving with the enterprise focus, massive, massive improvement. I mean, those customers are just stickier long-term. We're talking about starting out at a three-year contract instead of a one-year contract. We're talking about doing much larger, wider deployments across hundreds or thousands of people in some cases. The change that we made at the start of this year was we moved to a new named account structure that have the total number of companies we're going after. So, it went from about 24,000 to about 12,000 and that focus has driven a really great execution that we're starting to see. So, that shows up in the pipeline callout that I made for second half in Q4. That shows up in larger lands, that shows up in just healthier renewal rates and healthier expansions that shows up with more of the platform being landed right at the start. And so you're using those expensive human resources to where you're going to have the greatest ROI. So, I'd say that's going without that, we'd be in a much, much worse place as a business. And so that will set us up for reacceleration even if the macro continues to stay bad over the next few quarters.

Okay. Awesome. The second question is related to your previous answer. You have customers that you may not have engaged with historically. I believe you mentioned that the average selling prices in the pipeline have increased by 25%. This indicates that there are indeed larger deals in the pipeline. However, a potential challenge is that these sales cycles may extend, leading to longer closing times. I'm curious about what you've observed over the past few quarters regarding these large deals. Have they taken longer to finalize? As you look ahead at this pipeline with more substantial deals, are you anticipating elongated sales cycles or adjustments from quarter to quarter? Any insights on the challenges associated with these large deals would be appreciated. Thanks.

Yes. I mean I think one of the changes that you have to go through when you're going after that sort of business is to be having a longer-term outlook versus just the quarter in front of you. And so I'd say one of the motions that I've kind of glossed over but to your call out is very important is we're now looking at pipeline multiple quarters out. We're looking at renewals a year out from when they would versus just kind of fighting quarter-to-quarter to maximize that particular quarter, which is why I gave the call out on Q4 pipeline. We're already looking at renewals in 2025. And so that's a natural part of going upmarket is that you'll get those longer evaluation cycles. I will say they're not that much longer in terms of total time. There is an urgency to get like a lot of so many companies have made big investments into their data stack. And you have CEOs and product leaders and marketing leaders asking, 'Hey, when is this actually going to get some ROI out of this?' and we're such a key part of that equation because we drive that self-service. Otherwise, the data is all locked up and trapped within whatever their data stack is. And so there's very much an urgency from the customer side around, 'Hey, I want to demonstrate some quick ROI. Like I'll tell you one story where we had a meeting with a customer in Europe a few months ago to Catalan. And they had been longtime Google Analytics users; they weren't happy with a bunch of the changes with Google Analytics 4. They had actually driven their entire team to switch over to Amplitude, and their goal is to complete that within a 12-month period. So they've gone from zero to about 600 users on Amplitude in two quarters. That is the fastest ramp I've ever seen for someone getting up to speed with analytics, and then they have the goal to get to multiple thousands by the end of this year. So I was blown away by the urgency that they had to make that switch. And as we make them successful, that's going to be a great health story for other retail customers. But it really speaks to the urgency that we are seeing a lot of buyers have in this environment.

And adding on also with your question of how it impacts our guidance, we recognize this increase in pipeline and ASPs is also against the backdrop where buyer scrutiny remains high. And so with that, that's fully baked into our guidance as well.

Great. Next question Rob Oliver from Baird followed by Taylor McGinnis from UBS. Rob, go ahead, please.

Thank you, everyone. I appreciate your time. I have a follow-up question for Spencer regarding Nick's earlier point. The number of customers paying over $100,000 increased by 10% and accelerated sequentially. You mentioned some success in the non-analytics sector as well, which is promising. I'm interested to know your thoughts on market consolidation. Are we seeing a situation where, despite the tough macro conditions, there are significant opportunities for us to consolidate other vendors? Are the customers from after 2022 continuing to expand with you?

Yes, absolutely. The challenging macro environment is actually driving consolidation as companies seek to reduce the number of vendor relationships and lower their total cost of ownership, along with the benefits of an integrated platform. These tools are more effective together, which was the foundational idea for Amplitude: that analytics is at the core of the stack. For example, SketchUp transitioned to our Customer Data Platform, and a major global job company shifted from Optimizely to Amplitude. This is part of why Forrester recognized us as a leader—our vision encompasses the entire platform, and buyers are expressing a desire for more than just a point solution for experimentation. It needs to be integrated with analytics and provide a broader offering. Every time I speak with a customer, there is a clear desire to adopt our platform, whether it's for session replay, experimentation, or other future developments on our roadmap. This trend is significantly driving our business. Successfully creating and delivering the platform while ensuring it reaches customers will be key to our success. That's why we previously discussed our strategy, with one of the pillars focusing on this category. It's not solely about analytics anymore; it's about how it integrates with session replay, experimentation, and other components of the stack.

Exciting. And then just a quick follow-up on international. Does the move towards named account which clearly is having a positive impact on your go-to-market. Does that also include international? And can you talk a little bit about one of the call-out wins that you cited was international. So if you could talk a little bit about how the international sales force is structured as well? Thanks.

Yes, the named account strategy applies to the US, Europe, and Asia. We have selected several key markets for our international approach, including the UK, France, Germany, Japan, Korea, as well as Canada and Brazil. Within these markets, we are focusing our enterprise sellers and emerging enterprise sellers on 12,000 named accounts, with other opportunities placed into our velocity bucket. We recently announced the hiring of a new leader, Edwards, for our sales team in Europe, which is very exciting. We have numerous significant accounts there, such as Decathlon and Le Monde, and our goal is to replicate the success we've experienced in the US. It's important to note that the market is still developing across the board, and we need to invest wisely to capitalize on this opportunity, which is why we have field teams in all the mentioned regions.

Great. Awesome. Well, I appreciate it. Thanks, Spencer. Andrew, I look forward to working with you as well. Thanks, guys.

Of course.

Next question Claire Gerdes from USB, followed by Jackson Ader from KeyBanc. Claire, go ahead, please. Sorry, Claire, your audio is not working. Can you give another try?

Is that better? I apologize for that. Thank you for the question. This is Taylor McGinnis. I wanted to ask about the launch of the new Amplitude in September. It's exciting to hear about that. It seems like it will reduce some of the barriers to getting started. What new opportunities do you expect to open up? Also, are there any pricing changes or anything we should be aware of? Thank you.

We're not implementing any pricing changes with the launch. This launch is focused on defining what Amplitude is and envisioning the future of analytics. When you speak to teams trying to establish self-service analytics, you'll hear numerous stories about the challenges and time-consuming nature of the current process. It involves creating a tracking plan, engaging the engineering team to implement extensive coding, ensuring data flow, training the team, and understanding chart semantics and funnel analyses. Our goal is to simplify this process significantly so that it only requires one line of code, provides multiple dashboards out of the box, and enables quick access to analytics value. I expect this to accomplish a couple of things: first, it will make analytics accessible to a broader range of companies that have faced difficulties with the lengthy current implementation processes; second, it will help them realize value much more quickly. Looking ahead five to ten years, I believe that the leading company in this field will not have the same level of difficulty as it does today. We've put considerable effort into product development in preparation for this launch. We're excited to roll it out on September 10th, and we believe it will attract a new segment of customers, accelerating the onboarding process for more companies.

Awesome. Thank you.

Appreciate it.

Next question, Jackson from KeyBanc followed by J.R. from Piper. Jackson, go ahead please.

Thank you. Hey guys. First question on the sales and marketing motion, how much of your sales and marketing expenses are split between net new go-get versus renewals?

So what we're trying to do is obviously minimize the amount that's on renewals at the end of the day. So you're really focusing the sales efforts on both net new customers as well as expanding existing customers, and that's really where you're spending the cycle. And the goal is when you're up and running, you kind of minimize that cost. One of the changes we've made is introducing a premium services package that helps attach specifically just, okay, let's make sure you're implemented; let's make sure you're getting values, and make sure you renew, and so that helps separate out some of the costs. Mike, I don't know if we have a breakdown on any of that stuff or any way to characterize it?

No. We don't share that publicly, but everything that you've highlighted is there. The other thing that I'd highlight is that we're investing in the enterprise, and so professional services related to that. This impacting the gross margin specifically, and that's what's happening there. But that's all investment to better the customer base in the enterprise.

And then I guess a quick follow-up along a similar line, but I just think if you're leaning into some of the product-led growth on the lower end, is there going to be an opportunity to kind of structurally reshape some of these expense lines, maybe shifting sales and marketing away and into like we …

Always.

Yeah. Can we just talk a little bit about how the structural changes of the expenses might look in the next couple of years?

I want to be cautious about providing any specific guidance. As Andrew joins us, we will be working together to shape our approach. However, I can share some high-level insights. You are correct that the priority is to allocate our expensive human resources to enterprise accounts with significant opportunities, such as those worth $300,000 to $500,000 or more. For accounts under $100,000, we are increasingly focusing on automation. There will always be a need for human interaction, especially for large-scale digital analytics deployments, as we must coordinate among stakeholders to ensure their success. Nonetheless, as we've discussed, we are automating more of the lower-end processes. The advantage of our product-led growth strategy is that it simplifies implementation, reducing the need for extensive human resources. This is one of our long-term goals: to attract more enterprise customers through this approach. We have noticed early successes, such as a railway company and a major chip manufacturer that engaged with us through the PLG method, which significantly lowers the cost of acquiring and onboarding customers. We are fundamentally a product company, and focusing on delivering a great product is at the core of Amplitude. Therefore, we are directionally aiming to increase our investments in this area over time.

Thank you, guys.

from Piper followed by Elizabeth Porter from Morgan Stanley.

Great. Thanks for taking the question. I'd love to go back to session replay for a moment. What's been the competitive response since kind of product earlier this year? And curious if you've seen pricing turn more aggressive there? And just in general, any views on competition quarter would be helpful.

Yes. We just launched session replay in Q1, and it has experienced the fastest ramp we've seen for products outside of analytics. Every company we speak with that uses our analytics and employs another vendor for session replay is interested in consolidating. I haven't encountered any that prefer sticking with their standalone option. It makes a lot of sense because it results in a lower total cost of ownership. The integration and workflows are also key. A great use case for combining session replay and analytics is analyzing users who faced a bug or issue, allowing us to watch their sessions to identify the causes and make necessary fixes. Our customers have already found success with this approach, which isn't feasible with a standalone session replay provider. We're seeing significant demand in this area. Regarding costs, we will put price pressure on other market players, and we can offer a solution at around half the cost, which benefits us while saving customers money and providing greater overall value. Essentially, we're positioned as the lower cost provider as customers join our platform.

Perfect. Thanks, Spenser. Thank you.

Appreciate it.

Thank you for the follow-up on Claire's question regarding the new product rollout. I would like to know if you have experience with previous platform rollouts and any changes in key performance indicators you may have noticed in the past, particularly concerning improvements in retention or engagement. I'm interested in any historical examples that could help inform our understanding of this new opportunity.

We haven't done one like that since we've been public. I think the last change that we made in this was probably six or seven years ago. So this is the biggest that we've done since that point in time. So there is a ton of precedent. What I will say on just some of the quick stats, we're seeing about somewhere between a 40% and 50% increase in data activation. So, of the percentage of people that sign up, how many actually end up getting data. We're seeing a lot more engagement from new customers on session replay and on experimentation. So that's been a real positive as well. My expectation is this will lead to us getting more customers as well as having the customers that do come in, be more likely to be successful in activating, kind of get through the whole funnel. It is our first sale at this, and so we're going to kind of continue iterate and beat the drum past September 10 on this, because we want to be the leaders here, and so that there's no reason to choose anyone else over amplitude. And so I'm excited to see and reporting the results once we get to the shadow launch.

Great. And then just as a follow-up, quickly on NRR. There was modest contraction to as expected. Would just love to unpack some of the drivers between absolute churn, downsell, and upsell, kind of any areas that you could call out that actually saw a little bit of better improvement and what maybe the down the worst?

Yes. So we've said that we're going to trough in the mid-90s this year, and that's where we are right now. The big impact is obviously the optimizations for the multiyear contracts that happened. And then we're going to have a headwind in Q3 with Russia as well. Absent that, we believe we're in a fundamentally different place to reaccelerate growth, and that's well within our reach.

Awesome. Last question, Clark Wright, DA Davidson. Go ahead please, Clark.

Thanks Yaoxian. So, we've seen consecutive quarters.

Sorry, Clark. We can’t hear you on the audio.

Much better?

Much better.

Okay. Correct. So we have seen consecutive quarters of accelerating customer count growth. And would love to understand where these companies are starting at? And how do you plan to drive these new logos to your 50k-plus cohort, whether it's through incremental product adoption or feature ads?

Yes, I want to clarify our customer count. We continue to report this metric as we have in the past, but it includes Plus customers, which only began at the end of last year. Therefore, the year-on-year comparisons are not entirely straightforward. We pointed out the 100k Plus customers because these can be regarded as more significant or larger enterprise customers, and I suggest focusing on this aspect. That said, it's encouraging to see many companies adopting Plus for the first time, as these customers often upgrade to larger plans and utilize more of Amplitude over time. They are starting to contribute modestly to revenue for the quarter too, which is promising. However, I want to emphasize that the comparison to last year isn't entirely direct, so we don't highlight it as much.

Awesome. Great. Thank you for that last question. With that, I'm seeing no further questions in queue. We will be at the Citigroup Global Tech Conference and Piper Sandler's Growth Frontiers conference in September. Details will be posted on our IR website. Thank you very much for attending our 2Q earnings conference call. You may now disconnect.

Thank you, everyone.

Thank you.