Amplitude, Inc. Q4 FY2024 Earnings Call

Hello, everyone. Welcome to Amplitude's Fourth Quarter and Full Year 2024 Earnings Call. I'm John Streppa, Head of Investor Relations. Joining me today are Spenser Skates, CEO and Co-Founder of Amplitude, and Andrew Casey, Chief Financial Officer. During today's call, management will make forward-looking statements, including statements regarding our financial outlook for the first quarter and full year 2025, the expected performance of our products, our expected quarterly and long-term growth, investments, and our 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 SEC. 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 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 investors.amplitude.com. With that I'll hand the call over to Spencer.

Thanks John. Welcome to Amplitude's Q4 and full 2024 earnings call. I'm going to go through three key areas today. First, our Q4 results and the reacceleration of our business. Second, how we are going after a market opportunity, and why 2025 is the year of the platform for Amplitude? Last, product innovation, progress on winning the enterprise, and customer stories. Q4 outperformed in all key metrics. Our fourth quarter revenue was $78 million, up 9% year-over-year. Annual recurring revenue was $312 million, up $13 million from last quarter. Non-GAAP operating income was $0.2 million. Customers with more than $100,000 in ARR grew to 591, an increase of 16% year-over-year. In 2024 we exited the year with over $299 million in revenue, we grew ARR by more than 10%, and we generated almost $12 million in free cash flow for the year. Amplitude is reaccelerating. We're continuing to see progress on our strategy of win simple, win the enterprise, win the category, and win together. Customers are embracing our platform, churn is beginning to stabilize, and we see a path to accelerating our double-digit growth. I'm proud of the Amplitude team for everything they delivered in 2024. Let's look at 2025. 2025 is the year of the Amplitude platform. Every company needs data they can trust, an understanding of their customers, and ways to take action. That is exactly what Amplitude delivers. First, we help customers get trusted data into Amplitude. This is table stakes in digital analytics. Then we help companies understand what their customers are doing and why using analytics and session replay. This is what we do better than anyone else in the world. Then we enable our customers to take action based on those insights using our activation experimentation and guides and surveys products. Companies do not want standalone point solutions. Thomas and I spoke with hundreds of executives over the past year. Every single one is interested in going beyond analytics to Amplitude's platform. I want to take you through what the platform actually looks like in action. So, your product manager uses Amplitude analytics to discover that users are getting stuck at a certain point in the sign-up flow. You then use Amplitude’s Session Replay to identify the confusing part of the flow. You then use Amplitude’s feature experimentation to test which new sign-up flow works better. You realize your users need more help. So, you add an in-product guide with Amplitude guides and surveys. All these use cases are more powerful when used together in one integrated platform. Product innovation is the biggest driver of long-term growth at Amplitude. We're continuing to expand our platform with new products that work better together. I want to walk you through some of the highlights from 2024. We had two new products to market. In February, we relaunched Session Replay; customers like Questrade and TicketSwap use it to understand the user journey, identify issues, and improve in-product experiences. In October, we launched Web Experimentation; customers like RBC Life Insurance, DoubleGood, and Hard Rock Digital use it to A/B test websites with a WYSIWYG editor without needing to rely on engineering. We also made major improvements to the platform. We launched enterprise-grade features like data access controls and data mutability, building our lead as the enterprise digital analytics platform. We also launched Amplitude Made Easy to help users get started and see value in record time. This led to a 40% increase in self-service sign-ups and a 40% increase in the number of new self-service users sending data. Finally, we launched Snowflake Native Amplitude and an out-of-the-box HubSpot integration to make it easier to bring data into Amplitude. We're going to do more in 2025. Last week, we launched Guides and Surveys. We got this product to market only four months after the acquisition of Command AI. Guides and Surveys helps companies deploy in-product guides, tours, and surveys with just a few clicks. Amplitude's guides and surveys product provides a significantly better end-user experience than the average product in the market. I want to actually show you a demo of all of this now. I'm going to first start by actually showing you how terrible the average guides and surveys product is. So, with the average guides and surveys product, you get tons of annoying pop-ups. As a user, your experience is now worse, not better. We call this the pop-up party. Nobody wants this experience and it is not effective for product engagement. Now, I'm going to show you a demo of Amplitude's approach, because I want you to see how much better it is. Instead of showing every pop-up to every user by default, we customize what is shown based on what the user is doing in the product. In this demo, we can see that the user is confused; their mouse is moving all over the screen because they don't know what to do next. We detect this confusion and then we ask them what they're trying to accomplish. They let us know, and then we show them in the UI where they can complete the task. This is a tailored interaction that results in a better user experience and higher user engagement. The CEO of the European email builder, Biedfried, told us that the ability to guide users through their product in a personalized and data-driven way was the main reason for choosing Amplitude. While it's early, we are already seeing strong demand. During launch day last week, we had a record-breaking number of new sign-ups to Amplitude. We also had some customers buying guides and surveys in Q4 before the product was even launched. A shout-out to James, Vinay, and the entire former Command AI team for bringing this product to market so quickly. There is a lot more on the product launch horizon this year, including some exciting AI products. We're going to be sharing more details at our Investor Day in New York on March 10. We believe our pace of innovation will continue to build Amplitude's lead as the enterprise digital analytics platform. I wanted to also share what we're doing in go-to-market to win the enterprise. The biggest change for 2025 is that we've created a new strategic enterprise accounts team to focus on our top 30 customers and top 30 prospects. This team is responsible for a significant portion of our ARR. This segment allows us to focus our resources in a more concentrated way on our larger customers. In the last year, we've nurtured stronger executive relationships, which has helped drive higher gross bookings. We now have relationships with C-level and VP levels at almost every large Amplitude customer. We've developed smarter account targeting models to help land the right customers and ensure we're building pipeline specifically in the enterprise. This paid off in a big way in 2024 and in Q4 in particular. Lastly, we built out our enterprise sales, product, and professional services capacity and have fully staffed teams across the field. Our platform strategy plays a role again here. In Q4, 67% of the new land ARR in our largest targeted accounts came from multi-product deals. However, 75% of our customers still use just one Amplitude product. Our data shows that those who use a product beyond analytics drive greater value, invest more into Amplitude overall, and retain 10 percentage points higher than those who are analytics only. The potential expansion upside for us is big. On customers, we had a great quarter for new and expansion deals in the enterprise with RBC Insurance, Hard Rock Digital, Thrive Market, Western Union, AllTrails, Philip Morris, Calm, Bridge AI, Ultra Mobile, Mercado Libre, and many more. I want to talk in detail about three of our customers today. One is Mercado Libre, the company leading the shift to online commerce in Latin America. With over 60 million buyers last quarter, including 7 million new users, they needed a way to turn their first-party data into business impact. By adopting Amplitude Analytics, Mercado Libre empowers teams to move faster, make smarter decisions, and drive deeper engagement. Over 5,000 employees at Mercado Libre now actively use Amplitude, with more than half going beyond dashboards to actively query user data and uncover insights. Building on this success, Mercado Libre is now expanding into experimentation and Amplitude activation, replacing multiple internal tools with our integrated platform. This shift allows them to test and optimize new features, personal campaigns, and improve customer loyalty, all powered by the same data. With e-commerce in Latin America at 15% of total transactions, the opportunity is massive. We are proud to support Mercado Libre as they scale, driving innovation and long-term growth. We are also working with more traditional enterprise companies who are incorporating a digital experience across the customer life cycle. In Q4, we expanded our relationship with one of the world's leading automakers headquartered here in the United States. This customer is fundamentally redefining the driver experience, and Amplitude is helping power that transformation. Historically, their customer data was fragmented across multiple legacy systems, and by expanding their use of the Amplitude platform, they are now unifying insights across the entire driver lifecycle from in-car infotainment to dealership interactions to digital services. With Amplitude analytics, their teams can now see how drivers engage with digital features in real-time. With feature experimentation, they are testing and refining new in-car experiences before rolling them out at scale. And with Amplitude activation, they are delivering personalized interactions that make every drive smarter and more seamless. The result is a more connective intuitive experience for drivers and a data-driven competitive advantage for the company. Lastly, we are working with The Fork, the largest online restaurant booking and discovery platform in Europe and Australia. The Fork serves over 20 million diners monthly, and over 60,000 restaurants. The Fork was looking to combine legacy vendors and point solutions into a single platform. Amplitude worked with the team to identify opportunities and workflows across analytics, session replay, and experimentation, to reduce their data overhang and accelerate their ability to iterate on both their B2B and B2C applications. The Fork can now improve the onboarding process for restaurants, helping to increase subscriptions. It can help those restaurants improve the diner experience, boost first and repeat bookings, and drive reservation revenue. It can also identify reservation patterns and promote them across similar demographics and geographies. As a final note today, I mentioned that churn rates were stabilizing after a relatively tough 2024; a significant majority of our large COVID-era customers have right-sized their contracts. We are seeing signs that the worst of the churn is behind us, but we still have key accounts we need to watch. The macro environment also remains challenging. While we expect churn to keep improving, we anticipate continued pressure in the lower end of the market. Our team is focused on helping customers derive value from Amplitude as fast as possible. The best way to reduce churn is to make sure customers succeed. Before I hand it over to Andrew, I wanted to reiterate that I am proud of how the Amplitude team executed last year. We are still early in the digital analytics category, and we are set up to lead it. I'm looking forward to 2025 and beyond. Thank you for your interest in Amplitude. Now, over to Andrew to run through our Q4 and 2024 financials in more detail.

Thank you, Spencer, and good afternoon, everyone. I'm pleased with how the team ended the year, showing progress against the plan we put in place. Our success is in our hands. We have the right team, right strategy, and right alignment in place to continue strong execution. Our land expand, retain strategy is working as we move up market into the enterprise, and we believe this trend can accelerate. As Spencer laid out, our strategy for 2025 is clear. We are focused on building an extensible platform for our customers that allows them to build mission-critical workflows on top of our solution. Our customers creating value with our platform is our number one priority, and we're focused as an organization to increase the value and speed that enterprises can realize with Amplitude. With this, we will continue to iterate on our business model to create a durable growth profile to grow shareholder value over time. When we say enterprise, we are focused on companies that have over 1,000 employees or generate over $100 million in revenue. We'll discuss more about this cohort at our investor day on March 10th, but this cohort is ripe for consolidation from point solutions. Amplitude gives enterprises the ability to have a single source of truth for their data, reducing the need to pivot from one application to another and accelerating their ability to implement business process changes quickly. Democratizing analytics within the enterprise is at the core of enterprise decision-making and uniquely positions us to be the consolidator of point product solutions. Our growth algorithm is focused on landing with enterprises, driving rapid time to value, and expanding our use cases. So many customers have deployed a variety of digital technologies to better understand their customers, drive effective marketing, or drive improvements in their digital products, only to discover the pain of managing these environments in pursuit of driving improved business outcomes. Our sellers are focused on positioning the amplitude platform to uniquely solve this customer pain. They develop deep relationships within their accounts and become strategic, valued partners within the organization. By becoming strategic partners with our customers, we believe we will drive greater attachment to our platform and create longer-term relationships. We have seen this start to take hold as our RPO continues to accelerate, up 29% year-over-year. Now, turning to our fourth 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 GAAP and non-GAAP results can be found in our earnings press release and supplemental financials on our IR website. Fourth quarter revenue was $78.1 million, up 9% year-over-year and 4% quarter-over-quarter. Total annual recurring revenue increased to $312 million exiting Q4, an increase of 11% year-over-year and $13 million sequentially. Here are more details on the key elements of the quarter. We had a strong new customer quarter focused on the enterprise. The macro environment still remains difficult for new logos. The number of customers representing $100,000 or more of ARR in Q4 grew to 591, an increase of 16% year-over-year. In-period NRR was 100%, a 2-point increase sequentially. NRR on a trailing 12-month basis was 97%. We continue to make progress on improvements in retention and expect NRR to slowly increase throughout 2025 as we drive greater expansion opportunities. Gross margin was 77% for the fourth quarter, in line with Q4 2023. Sales and marketing expenses were 44% of revenue, a slight increase year-over-year reflecting the investments we've made in enterprise coverage. We continue to focus on improving sales efficiencies, driving improvements through our changes in the processes and coverage, and moving up market towards enterprise customers. G&A was 16% of revenue, up 1 percentage point year-over-year reflecting increases in legal and acquisition-related expenses. G&A will continue to be optimized to improve as a percentage of revenue over time. R&D was 18% of revenue, up 2 percentage points sequentially, primarily due to the acquisition of Command AI. Total operating expenses were $60 million, 77% of revenue, up 2 percentage points sequentially, primarily due to the aforementioned increases in sales and marketing and our acquisition of Command AI. Operating profit was a positive $0.2 million or 0.3% of revenue, which was approximately $1 million better than our midpoint of our guidance. Net income per share was $0.02 based on 135.7 million diluted shares compared to net income per share of $0.04 with 129.2 million diluted shares a year ago. Free cash flow in the quarter was a positive $1.5 million or 2% of revenue compared to $1.5 million or 2% of revenue a year ago. Now turning to our outlook. We are assuming that the macroeconomic environment continues to be challenging in the near future. However, we are encouraged with the demonstrated progress of our strategic changes. We expect that every new logo will continue to be tough, and that buyer scrutiny has not shifted over the past six months. As we get through the larger levels of churn, we continue to address structural issues in our go-to-market motion to influence greater retention and encourage deeper adoption of our platform. We are building a durable enterprise SaaS business that will enable us to drive growth as we deliver increasing value to our customers. We plan to reinvest appropriately against our platform opportunity and will not shy away from any big bets where we see favorable outcomes. Now, for the 1st quarter of 2025, we expect revenue to be between $78.5 million and $80.5 million, representing an annual growth rate of 10% at the midpoint. We expect non-GAAP operating loss to be between negative $5.5 million and negative $3.5 million, reflecting the linearity in our business, as we begin a new year with our new product announcements, sales kickoff, and other go-to-market investments. And we expect non-GAAP net income per share to be between negative $0.3 and negative $0.1, assuming basic shares outstanding of approximately 130 million. For the full year 2025, we expect revenue to be between $325 million and $331 million, an annual growth rate of 10%, at the midpoint. Our outlook for non-GAAP operating income is expected to be between negative $3.5 million and positive $4.5 million, reflecting our focus on growth with leverage. We expect non-GAAP net income per share to be between $0.5 and $0.10, assuming shares outstanding of approximately 142.1 million, as measured on a fully diluted basis. I'm confident in our ability to build a durable growth model by aligning to the right customers, driving the right contracts, investing to drive greater innovation, and building value for our customers. Our long-term opportunity remains incredibly compelling. With increased discipline and execution, I believe we will be in a great position to capture it. With that, we'll open it up for Q&A. Over to you, John.

Thank you, Andrew. We will now turn to Q&A. For the sake of time, please limit yourself to one question and one follow-up. Our first question will be coming from the line of Brent Bracelin from Piper Sandler, followed by Koji Ikeda from Bank of America. Brent, your line is open.

Hey, guys? Good afternoon, Andrew, maybe we'll start with you. Net new ARR on an absolute basis was the highest we've seen in two years. Can you double click into the drivers there on net new ARR? Is GR improving? Is it mostly new lands that's contributing to it? Was there a little contribution from Command AI? Just trying to understand, it's such a big increase here. We haven't seen in a couple of years what drove that?

Thank you for the question, Brent. Our primary focus has been on enhancing our enterprise coverage. We initiated changes at the beginning of 2024, and sales cycles in the enterprise generally span nine to 12 months or even longer in certain cases. What you're observing is the result of that investment, as we're beginning to realize tangible productivity in use cases and among customers where we provide significant value. Additionally, we included around $2 million in ARR from the Command AI acquisition.

Okay, perfect, helpful. And then I guess, specifically on Command AI, you guys quickly rolled out the guides and surveys product, I think in the last week or so. Maybe walk through the potential cross-sell, attach rate specifically around Command AI. What's been the early feedback? I know we're one weekend, but it seems like a very compelling incremental upsell, cross-sell opportunity; love to hear what the feedback has been with that product now live?

Thank you, Brent. It's impressive that we managed to launch the product to market in just four months. Typically, after an acquisition, it takes much longer to integrate, so credit goes to both the former Command AI team and everyone at Amplitude for their swift work. Regarding cross-selling opportunities with guides and surveys, we now offer a complete set of core products for product managers from a data perspective, which reduces the need for standalone solutions. This positions us well competitively. In terms of cross-sell potential, we anticipate an uplift of 20% to 50% on top of the analytics contract, similar to the uplift from experimentation by finalizing the full core platform. Overall, customers could see returns of 2x to 3x on what they currently invest in analytics. We recently secured a $200,000 deal for guides and surveys that was a great success, and we have larger opportunities lined up with enterprises in Q1 and Q2. It's early, but we're already seeing significant interest, which is encouraging.

Great to see, and nice to see a solid execution in Q4. Thank you.

Thanks, Brent.

Thanks, Brent.

Thank you. Our next question will come from Koji Ikeda from Bank of America, followed by Clark Wright from DA Davidson. Koji, the floor is yours.

Thank you for taking my questions. My first inquiry is regarding the enterprise sales approach. I appreciate the insights shared in the prepared remarks. However, I’ve noticed there seems to be some sales attrition within the sales organization recently. What does the current sales capacity look like today? Additionally, could you provide more details on how you plan to strategically invest in your go-to-market efforts?

Yeah. So I think last year we re-segmented the business to basically move a whole bunch sellers away from SMB, added the plus plan to do self-serve, created a whole named accounts model. This year the big change that I highlighted was the addition of the strategic account segment to increase focus there. We've built out from a capacity standpoint the right level of investment in order to successfully go after the enterprise opportunity. You saw a bunch of that come to fruition in Q4. So that was great. And we're set up from a capacity standpoint as we go through this year. Now, as a natural part of continuing to push the big business up market and continuing to evolve and mature, you'll naturally see sellers a threat as you change the team and everything else, and so I wouldn't say it's significantly beyond what you'd expect as part of a maturing enterprise business.

Yeah, maybe just add that too. I think as you start to implement an enterprise go-to-market model, there's a lot of changes that happen. You split territories, you move accounts, you try to balance things more appropriately. And as that machine starts working more and more efficiently, that's when you start to really look at the data to make sure that you're leaning in and understanding the dynamics of how efficient the sales force is working before you start making additional investments. In particular, I look at the magic number. I look at gross ARR and look at how much expense we're actually putting towards that gross ARR. And as the closer and closer we get on that result to being one, that's an early indicator that you should be making additional investments. But you also have to get dig deeper. You really have to understand the profile of your sales processes, the pipeline that you're generating, the likelihood that it's going to convert. And frankly, how well and distributed attainment is across your team. If all those things are working well, then it makes a lot of sense to start investing more and more in sales coverage to go generate and reach out to more enterprise clients.

Got it. Nope, thanks, guys. And a follow-up here may be more philosophical question; love the demo that we saw.

I'm glad it worked. Well, this is the first time we've done it on an earnings call.

But it got me thinking. Amplitude is really good at understanding what the user should be doing. So why can't that data and intelligence be utilized in an agentic AI offering? Power seems to indicate a positive outcome, right? So would this be beneficial or detrimental for Amplitude's usage?

Koji, you should become part of our product leadership team. I really appreciate your input. You are already ahead of us. This year, we plan to launch an Amplitude agent in the second half that will enable you to generate automated insights and actions. This means you can identify user groups that had either a good or bad experience with our product, create experiments for new sign-up flows to determine what works best, or develop various versions of in-product guide triggers to prompt users and test them out. The Agent functionality is particularly exciting because, as you noted, we possess one of the largest repositories of user behavior data. Unlike other areas where there are many open-source alternatives, this data is primarily proprietary, and we are among the largest providers. We are eager to extract insights and actions from this data using the Amplitude agent. While we don't have anything to showcase today, a team is actively developing it, comprising members from the Command group and others we already have at Amplitude. We expect to deliver something in the second half, and my aim is to provide a quick preview during our Investor Day in March.

All right. Thanks, guys. Thanks for taking the questions.

Thank you. Our next question will come from Clark Wright from D.A. Davidson, followed by Jackson Ader at KeyBanc.

I guess building off of Koji's question around the AI theme. I'd love to hear a little bit more about how you're seeing the role of product analytics change within the enterprise as AI is integrated into the user experience. It seems like the conundrum that you identified earlier where you see more pop-ups is only becoming more prevalent now.

The main issue preventing users from getting value out of Amplitude or any digital analytics today is the need for manual input and knowledge about what to query and extract for insights. Although it's significantly simpler than using SQL, requiring only some familiarity with the data, the real value lies in having artificial intelligence analyze the data continuously. This AI can alert users to trends, such as spikes in feature usage or bugs in releases, providing insights that human analysts might miss by only examining portions of the data. Regarding pop-ups, it's amusing that we seem to be returning to a situation reminiscent of the late '90s when web ads were rampant. Back then, it became clear that excessive advertising led to a poor user experience, prompting the development of technology to block such ads. Now, as we see more in-app pop-ups, they may initially boost engagement, but if they clutter the overall user experience, they can be counterproductive. Users are starting to experience pop-up fatigue. A significant benefit of integrating guides and surveys with analytics data is the ability to customize interventions. For instance, if a user appears confused, companies can react accordingly, or if a power user enjoys a particular feature, they can receive timely updates about it. This allows for more personalized guidance at the right moment, resulting in engagement rates for customized pop-ups being two to ten times higher than typical spammy communications from average guides and surveys solutions.

Thanks for that color. And then, Andrew, a quick one for you. In terms of the linearity or I guess, maybe the delta between ARR growth and revenue growth for 2025, how should we be thinking about some of the drivers of that as we kind of see the acceleration continue in ARR growth going forward?

Well, I'd tell you, first, we're really pleased with the progress we are making and a lot of the levers we're pulling are really showing up, whether you think about that in terms of coverage or changes in segmentation, we're working on changes in our pricing model where contract duration is increasing. All those things are instrumentation we put in place to really emphasize the enterprise model and focus. And so we'll be talking a lot more about on our Investor Day and how those show up and just increasing disclosures we're going to have. But I would tell you that it's been a journey throughout 2024. We made investments to really position ourselves to see the growth that we have. And I certainly expect that if we continue to execute, we'll see continued progress.

Awesome. Thank you.

Thank you. Our next question will come from Jackson Ader from KeyBanc, followed by Nick Altmann of Scotiabank. I believe Kyle is on for Jackson. Kyle, the floor is yours.

Thanks, everyone. Kyle here in place of Jackson. I have a quick question regarding our expectations for revenue growth over the year. As the focus shifts more towards the enterprise segment, should we anticipate that the fourth quarter will represent a significant growth period compared to the third quarter? Additionally, you mentioned that the macro environment remains somewhat uncertain for some customers. Can you provide any insights on the differences between international and North American revenue? Thank you.

So I'll start.

Yes, go for it, Andrew.

So first, I think it's absolutely right. The more and more we see a percentage of our ARR moving more towards enterprise, we're exhibiting a model that is very classic for enterprise software companies and those that are on a calendar year-end where you see the strongest performance in Q4. It's very typical that we have annual sales plans with annual quotas and people are working towards that, whereas the beginning of the year is where we're making investments, we're retraining the sales team, we're changing territories, potentially rolling out new products like we did in this year. And so that tends to be a period under which we'll see the lightest level of growth. So that linearity very classically from enterprise software is where you should start thinking about it from our perspective. Now, having said that, I think the investments we made last year are starting to show up in our pipelines in a meaningful way. A year ago, you'd probably say our enterprise business in pipeline for pipeline was 30% to 40%. Now it's upwards of 80% representing enterprise clients. So we certainly think that the levers we've pulled, although they have a lagging impact of the sales cycles, they are showing up in a material way, and they are the underpinnings of the reason why we're a little bit more positive about the forward guidance.

One other point I want to mention is that, due to new revenues and increasing concentration in enterprise clients, there will be significant variability from quarter to quarter. We had a strong Q4 relative to previous periods, so it's hard to predict exactly how Q1 will compare to Q2 or Q3; variability is expected. In line with what Andrew said, it’s likely that Q4 will have a slightly higher impact, while Q1 may be less significant. The greater concern is the variability from quarter to quarter as deals may close in one quarter rather than another. Thus, while we believe we are on the path to reaccelerating the business, as demonstrated in Q4, the way this unfolds from quarter to quarter may vary.

Yeah. And I think just maybe to add to that too. You saw that in Q3 where we had a number of really large expansions in Q3, not as much new logo, not as many new lands. Q4 was actually one where we had a record number of new enterprise lands, and not the same number of expansions that we saw in Q3. At least the size of it. So it was much more broad-based and sets us up very well for expanding those customers in the future. What was – sorry, what was the second part of the question? I forgot.

Yeah, just around. If there was anything meaningful to call out, if you saw any bifurcation between strength in North America versus international?

I don't think so. Andrew, did you want to?

No, there's nothing specific I want to highlight. While there have been some changes in foreign exchange that others are discussing, I want to clarify that Amplitude conducts the majority of its transactions in US dollars. Although there might be some challenges related to foreign currency translations affecting deal discounting, we do not anticipate any significant impact on our growth.

Yeah. Q4 was pretty broad-based in terms of achievement. Kudos to both. I actually want to call out our both our EMEA teams and our APJ teams for putting up great results. So it was good across the board.

Great. Thank you, guys.

Thank you. Our next question will come from Nick Altmann from Scotiabank, followed by Taylor McGinnis from UBS.

That sounds great. Thank you very much. You mentioned the record number of new enterprise clients acquired this quarter, which clearly indicates a strategy focused on larger customers moving forward. Could you discuss how the average selling prices for those land deals, particularly at the enterprise level, are trending? Additionally, how do you foresee the pace of expansion with these customers in the future? I understand you've noted that some of your more recent customer groups are showing healthier expansion. So, could you provide insights on the average selling prices for enterprise land as well as any forecasts regarding the expansion efforts with these customers? Thank you.

There hasn't been a significant change in the average sales prices for land, particularly since many of these still begin with analytics. I would gladly take a G2 landing at 100K with the opportunity for twentyfold expansion. What's becoming increasingly interesting is that we are observing more customers landing with multiple products. They grasp the story and the value we offer. Some may have plans for a long-term rollout of all our capabilities, and they are ready to invest in Amplitude because they recognize the innovation we are fostering. We need to consider how these factors will affect our net revenue retention and the potential for expansions in each account. I'll share more details on Investor Day regarding our strategy to engage traditional G2K customers. Currently, there is some give and take happening. We are definitely focusing on enterprise clients and providing them with a comprehensive set of capabilities that we historically did not offer. So, there is this dynamic at play. One trend I wanted to highlight that I didn't mention earlier is that we are experiencing quicker replacements of outdated MarTech and enterprise analytics solutions. In some cases, we have completely taken over these systems. Three to five years ago, we would typically work alongside these solutions, but now we are seeing more direct replacements where customers are deciding to discontinue their old enterprise MarTech solutions in favor of Amplitude. This can happen right away or might require a year or two of initially starting small before transitioning completely. Ultimately, whether we land the deal immediately or not, as long as the customer transitions to using Amplitude as their primary digital analytics system, we consider that a success. We’ve witnessed several instances of this in the past year, which did not occur previously, and we aim to accelerate this trend this year.

Great. Thank you.

Thank you, Nick. Our next question will come from Taylor McGinnis from UBS, followed by Tyler Radke from Citi. Go ahead, Taylor.

Yes, thank you for taking the time tonight. I would like to hear how your customer conversations are developing. Are you seeing signs of improved net upsells in the pipeline? If so, is this being driven by a return to volume growth or more cross-selling? I ask this because it appears your improvements so far have largely stemmed from reduced churn. As we consider when those net upsells might lead to a significant increase in net revenue retention or new annual recurring revenue, any insights from your customer base would be appreciated.

I want to clarify a few points. The primary shift in our upsell strategy is that a significant portion is now derived from cross-selling the platform. Unlike 2021, when upsells were mainly about volume, today, the platform constitutes the majority of those upsells. We are seeing growth in areas like experiments, activation (previously known as CDP), guides, surveys, and session replay. This is a positive trend because it indicates that customers perceive greater value in purchasing more services rather than simply increasing their data volume, which might not necessarily instill confidence in their purchasing decisions. Last year, this dynamic contributed significantly to our growth. I noted in my prepared remarks that 75% of our customers currently utilize only analytics, so we see substantial opportunities for expansion in the coming years. On the other hand, we must address churn in analytics, primarily caused by two factors. The first is the rightsizing of large contracts, which has always posed some risk. However, we are now past most of those challenges. Previously, we faced three to four high-risk contracts per quarter, but now it's reduced to about one or two per quarter. There's always some risk associated with multimillion-dollar contracts in tech, particularly when companies look to cut expenses. This year, we are experiencing a more stable situation compared to last year, which was more challenging. Another area where we still need to see improvement is the lower end of the market. We continue to experience churn, especially with tech startups and companies that are shutting down. Our strategy is to concentrate on the enterprise market, thereby increasing the proportion of Annual Recurring Revenue from there. As this transition unfolds and the challenges in the lower market diminish, it should reduce the headwinds to our growth. I anticipate improvements in this area as we progress through the year.

Perfect thanks for that, and then maybe just a follow-up. Andrew, I know there's probably uncertainty in terms of how ARR can trend throughout the year, and how net new ARR can trend. But can you help us like, can you maybe add a little bit more color on 1Q. Anything we can take away from the trends that we saw in 4Q, and how that might fall into the quarter.

I think you always have a situation from Q4 to Q1 where you reset in our business like I said before is, is very much calendar-based. And we're making changes, territory setup, changes in our product, positioning segmentation. So all that takes a little time. So I think you ought to think in terms of Q4 is going to be our strongest period from an ARR perspective. And Q1 will show, quarter-over-quarter, likely a decline in the total amount. Because you're doing that reset. You're taking time to get comp plans out and everything set up the right way for the full year. Having said that we're incredibly optimistic about the pipelines we have, the sales teams getting settled, focusing on selling the platform, all the new capabilities we're introducing. So I think you'll see a pattern that exhibits us ramping throughout the year. Yes.

Thank you. Our next question comes from Tyler Radke from Citi, followed by Arjun Bhatia from William Blair. Believe Ashley Kim's on for Tyler. So, Ashley, the floor is yours.

Hey, Spencer and Andrew. Thanks for the question. Just wanted to ask about some of the momentum for the newer products at Amplitude, and how much it's baked into the guidance for this year.

So certainly, I would tell you our guidance is more reflective of the broader set of investments and actions we're taking from an enterprise perspective. Any one product, frankly, is not important as the total platform and value we're delivering to our clients. But having said that our new products are driving incremental opportunities, they are driving greater value for our customers and equally for us. So I wouldn't break down our guidance by product line in particular, but it's not having them would be very detrimental to our growth. Having our products is really the fuel through which we will drive greater and greater growth.

Got it and maybe if I could squeeze in one more question, I think during the call you mentioned some key accounts that you're watching for potential churn. Just want to ask if you could provide a bit more color on those accounts. And what you're doing to mitigate any risks.

I want to clarify two terms: churn and contraction. In key accounts, about 90% of my concerns relate to contraction. These customers will remain Amplitude users and will continue to derive value from us. The focus is on managing their renewal process each year based on their spending preferences. We are monitoring this closely and have observed a significant decrease in associated risks. We believe that most of these customers are appropriately sized, but we will continue to keep an eye on the situation quarterly. We're not particularly worried about any major accounts leaving, but we aim to ensure that their spending remains stable rather than fluctuating.

Thank you.

Thank you. Our next question is from Arjun Bhatia from William Blair, followed by Rob Oliver from R.W. Baird.

Thank you, and congrats on the nice Q4 here. Spenser, maybe one for you. Just as we're thinking about movement into the enterprise. From a product perspective, is there anything that needs to change in terms of integrations that you have or systems that these larger customers will have that are different that you have to integrate with or interface with on a more regular basis? And how do you think about kind of the R&D or the development that's still left to be done there as you move up market?

Yes, there's not just one major change needed. There is always an ongoing list of compliance, data, and integration requirements. One significant improvement we made last year is data access controls, which ensures that different users on the platform can access specific data. This means that only authorized individuals can view sensitive information like revenue data or personal identifiable information. This capability is crucial, especially for larger enterprises. We're also developing role-based access controls, which will allow customization of user roles and the functions they can access. This feature is on our roadmap for this year and is essential for several of our enterprise clients. From a data perspective, particularly in larger enterprises, data is often scattered across various locations such as data warehouses like Snowflake or Databricks, or in their own cloud or internal data stores. This requires more customization to link to these data sources. One significant update we delivered recently is data mutability, which addresses how to keep the Amplitude data store synchronized with ever-changing datasets. For example, if a user requests a refund, we need to ensure that is reflected accurately on the Amplitude side. We launched the first version of this feature a month or two ago, and we anticipate more requirements will arise, such as pulling data from specific sources like Oracle Data Cloud. These updates are manageable for us and are a natural part of our progression in the enterprise market, and we'll focus on those with the best short-term return on investment.

Okay. Perfect. Super helpful. And then one for Andrew. I know this might be your first time providing guidance at Amplitude. Can you help us understand your guidance philosophy for the full year and what you're including in your initial outlook for 2025? It seems like the macro environment is still a challenge and hasn't improved yet. Please give us an idea of the conservatism and execution buffer you're incorporating.

Well, I’ll tell you, the guidance is the guidance. But what I can tell you is I'm rooted in what we can control. We use a lens of execution, not betting on future macro improvements to establish the basis of our guidance. And what I mean by that is the things that we're doing around our coverage model, our pricing and packaging, our products that we're introducing, those things are things that we will be able to go and focus on to drive value for our clients. And that shows up in pipeline. That pipeline has general dynamics around conversion rates and progress and how we operate is really the underpinnings of the guidance itself. And so, in Q3, I talked about a philosophy of having growth with leverage. You'll see that throughout the pattern of 2025 and the guidance is predicated on that. In Q1, we've got what I will call some non-recurring expenses associated with the kickoff of the year, at least for the fiscal period. And that in itself are investments, if you will, on making sales teams more effective, making our marketing programs convert at a higher rate, getting better data and understanding of targeting the right customers. All those things are kickoff investments for the year, and then they should enable us to drive greater and greater scale as we move forward and grow the business.

All right, perfect. Thank you.

Thank you. Our last question will come from Rob Oliver from Baird. And then with our last question will be Elizabeth Porter from Morgan Stanley. Rob, the floor is yours.

Yes, great. Hey, guys. Thanks. Can you hear me okay?

Yes, very clear. Good to hear you.

Okay. Perfect. My background is hiding the fact that I'm in the car, so I apologize for that. So yes, a couple of questions. One, Spenser, you've called out that you guys have seen really nice traction from the Google Analytics end of life and some of those accounts. And given all the investment you guys have made in the product and in the platform, generative AI, I'd be curious to hear, it must be a pretty stunning juxtaposition for those that are now in the market. So I'm just curious to know what those conversations are. Is the big bulge behind us now or are there still customers here throughout 2025 that you will expect to migrate over? And then I had a follow-up for Andrew.

Yes. So on Google Analytics, you guys got to understand, it's like 50% of websites are on this thing, okay? So it's not like most of them aren't paying, of course, but it's a huge ocean of potential customers. And so as we continue building our leadership versus Google Analytics, we're going to continue to see more and more come from that. I think the way I think about it is kind of Google Analytics is almost the starter digital analytics application that every product or marketing person starts out with. And what we think about is how do you create a smooth, easy upgrade path to Amplitude over time where someone looks at it, and it's like, oh, duh, like this is going to be way better. So I think that's going to continue to be a tailwind. We're actually going to be doing quite a bit on marketing analytics, specifically within digital that will help improve that. And we'll announce a bunch on that in Q2. So I expect that to be relevant for the next decade for us.

Got it, that's helpful. Thanks. Andrew, this could be for you or Spenser as well. It seems like you both have done great work aligning with the strategic accounts team, really focusing on these customers at a time when you have much more to offer them. Spenser, in your prepared remarks, you noted that while we see strong returns from these customers and they find value, 75% of that is still centered around one product. I'm curious, Andrew, from your perspective after being in your role for a few quarters and with the strategic accounts team now established for three or four quarters, what changes have you seen in terms of traction and pipeline generation at the enterprise level? Additionally, while I understand that the number of customers potentially renewing each quarter is decreasing, how does this help to mitigate that risk? I would think that with your larger customers, this team would play a key role in addressing that downside risk. Thank you both very much.

There's a couple of good questions in there. So let me start with first, when we deployed the investment of the sales teams on these strategic accounts, there was both existing customers and high-value prospects because every customer is out there trying to figure out how they can better digitally engage with their customers and they're doing it in lots of different ways but they really don't know that they're effective unless they're understanding the data elements that are being captured by those engagements and adjusting their needs. So, this team was set up to really go after the largest D2Ks in the world that are struggling, try to figure out how to digitally engage with their clients in a more effective way and deliver services or products to those clients in a more effective way. And so we recognize this and having a classic enterprise-focused sales team that understands the customer's problems and understands how we can be uniquely positioned to solve those problems is one that is increasingly getting more and more effective. It gets more effective because we're innovating. The product itself is not just an analytics product; it's a product under which you can derive a lot of different services around the analytics and insights that are being generated. And so the more we are effective at driving multi-product engagements with clients, the greater value they get. The more that those clients see Amplitude as a critical part of their capability to generate revenue and engage with our clients, the more they will reward us with greater and greater purchases of Amplitude. And we earn the right to get to that point by delivering extreme value to our clients. And what happens in that is you see contract durations increase, which gives us a growth in our RPO and greater visibility into our revenue. Gross retention rates improve because now we're really essential to the customer's operations. And so, all these activities that we've invested around the enterprise and creating great products to fulfill those needs are the underpinnings of our growth strategy and frankly, the reduction of concerned long-term.

Super helpful. Thanks, guys. Appreciate it.

Thank you. And our last question will come from the line of Elizabeth Porter at Morgan Stanley. Go ahead.

Hi. Thanks so much. I wanted to double click on that opportunity to better cross-sell the base of 75 customers that are only using one Amplitude product. So can you just help us understand, what the biggest hurdles have been for that multi-product adoption? Because it seems like the portfolio you're putting together really makes a lot of sense together and just kind of related, what's the go-to-market strategy really drive that unlock? Is it kind of more education that's needed? Is there something that we could do on pricing and bundling?

Yes, great question, Elizabeth. I think we have done well in helping new customers understand that we are a platform. Last quarter, 67% of our larger accounts involved multiple products, which is encouraging. As new customers represent a larger share of our user base, we anticipate this trend will continue. However, we did not perform as well with existing customer renewals last year. The uptake of additional products during renewals has been quite low, around 10% to 20%. We've realized that once customers are using us for analytics, they tend to remain focused on that specific use case and may not explore other options. This year, we have implemented specific incentives and training aimed at encouraging multi-product renewals, which we hadn’t done in the past. Getting our existing renewal customers to adopt multiple products presents a significant opportunity for us.

Got it. And then, just as a follow-up on the margin side, understand, there's a lot of investment this year, particularly around the go-to-market. I was curious to get any sort of better visibility towards the mid-term model or just philosophically, how we should think about top-line upside potentially flowing through to margin or just given the opportunity is it more likely that we're going to see you guys push the gas on that investment.

I think we talked about in 2024, we made a lot of investments that were not quite at the productivity curve, we expect. And I would tell you that certainly sales and marketing, G&A. They were areas I had in Q3. And I would say again, in Q4, we're not where we want them to be as far as an efficiency perspective is. And earlier in the call, I was talking about, what are the indicators that would suggest that we'd invest more in sales and marketing? Given that that productivity is increased to a point where the data is telling you it's time to go do that. We're not there yet. And so I would tell you the amount of growth that we're thinking we're going to be doing throughout 2025. And we're certainly expecting that that's going to come with leverage.

Thank you so much.

Thank you. And that will conclude our four quarter earnings call. Thank you for your time and interest. We are excited to host our investor day on March 10th in New York City, at the NASDAQ market site, starting at 2:30 PM Eastern Time. We do have limited capacity, but if you would like to attend in person, please reach out to me at ir@amplitude.com. In addition to our Investor Day, we will be attending a number of conferences this quarter, including those hosted by Baird, Morgan Stanley, JMP, Keybank, and Cantor Fitzgerald. Thank you and take care.

Thank you all.

Thank you.