Second Quarter 2025 Earnings Conference Call. I'm John Streppa, Head of Investor Relations. And 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 third 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 Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, and we assume no obligation to update these statements after today's call, except as required by law. Certain financial measures used on today's call are expressed on a non-GAAP basis. We use these non-GAAP financial measures internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. These non-GAAP financial measures have limitations and should not be used in isolation from or as a substitute for financial information prepared in accordance with GAAP. Additional information regarding these non-GAAP financial measures and a reconciliation between these GAAP and non-GAAP financial measures are included in our earnings press release and the supplemental financial information, which can be found on our Investor Relations website at investors.amplitude.com. With that, I'll hand the call over to Spenser.

Thanks, John. Good afternoon, everyone, and welcome to Amplitude's Second Quarter 2025 Earnings Call. Today, I'll cover 3 things. First, our strong Q2 results and momentum in the enterprise. Second, our platform strategy and how we are expanding through acquisition. Third, product innovation, AI developments and a spotlight on our customers. Let's start with Q2 results. Our second quarter revenue was $83.3 million, up 14% year-over-year and exceeding the high end of our guidance. Annual recurring revenue was $335 million, up 16% year-over-year and up $15 million from last quarter. We saw our highest net new ARR in 11 quarters. Non-GAAP operating loss was $1.5 million. Customers with more than $100,000 in ARR grew to 634, an increase of 16% year-over-year. In addition to these results, our multiproduct attach rates continue to grow as customers choose Amplitude as their end-to-end platform. 67% of ARR now comes from multiproduct customers, up from 64% last quarter. 2025 is the year of the platform. Every company needs 3 things: trusted data on their customers, insights on that data and ways to take action on those insights. Amplitude delivers all 3 in a single platform. In Q2, we saw dozens of new enterprise customers come on board and many existing customers expand their Amplitude footprint. We also saw more traction with marketing teams after announcing a new suite of marketing capabilities in May. We continue to win against legacy vendors and point solutions as companies look to simplify their tech stacks. This is what drove a record level of multiproduct ARR. We've been deliberately focusing on the enterprise and the progress this quarter is the result of that work. Many of the deals we closed this quarter were years in the making and required multiple steps, including hiring the right representatives, building the right named account strategy, finding the right solution fit, instrumenting value, closing the deal and driving impact for customers. Let's shift to product innovation. I have spent a lot of time transforming the Amplitude team to become AI native. Back in June, we ran a week of AI training for the product development team. Then in July, we hosted a week-long hackathon focused on building AI products. I'm going to demo some of the outputs from this shortly. We are also leveraging M&A to become AI native and expand the platform and our acquisition of Command AI late last year is a great example. We acquired the company in October of 2024, launched Guides and Surveys 4 months later. And today, it has the fastest adoption curve of any product in Amplitude's history. Command AI had a mature product backed by an exceptional team. Many individuals from that team are now leading our efforts on AI agents and other AI products. We continue to use M&A and talent acquisitions to expand our platform and bring great talent into Amplitude. Over the past 2 months, we've added 3 exceptional teams. First, we acquired Kraftful, an AI native voice of the customer start-up turning unstructured feedback such as support tickets, app reviews and customer calls into actionable insights. I've admired Yana and Kraftful for years, and I'm excited I get the opportunity to work with her and the Kraftful team to give customers a complete view of the user experience. Kraftful works with tens of thousands of product builders and many Amplitude customers have been asking for voice of the customer insights. We're integrating Kraftful's proprietary AI analysis into our platform. Second, we acquired the Inari team, an AI start-up focused on surfacing insights from unstructured data using LLMs. The founders, Frank Lee and Eric Kim, bring deep expertise in applied AI. They have joined our AI agents team and are already working to accelerate our roadmap, which I'll demo for you shortly. Finally, we acquired the founders of June, a startup that built a distinct product, brand, and a thriving community around simplifying product analytics. Two years ago, they created the first product analytics tool to integrate LLMs for generating insights in natural language. The founders, Enzo Avigo and Ferruccio Balestreri, bring a product-first philosophy that inspired our thinking for Amplitude Made Easy last year. Now that we're working together, we're excited to leverage their expertise to simplify digital analytics while developing the next generation of agent-driven experiences. Now let me share with you what we're building. On June 10, we announced the beta program for Amplitude's AI agents. With our agents, what once took teams weeks can now take 1 person minutes. That changes how product, marketing, and data teams build, ship, and learn. LLMs allow AI agents to quickly combine taxonomy data, watch thousands of session replays, generate insights, and then make suggestions for product changes on your behalf. That makes them excellent product analysts. The potential benefits of agents are huge. As an example, it normally takes Amplitude about a month to optimize a website conversion workflow from idea generation and experimentation to engineering and launch. With an Amplitude AI agent, the same workflow now takes less than 1 day. I want to show you Amplitude AI agents in action with a demo. When we launch later this year, our customers will be able to leverage ready-to-use templates focused on popular use cases like optimizing conversion flows and analyzing session replays. The first agent I want to show you is focused on optimizing website conversions. I'm going to select an event for the agent to optimize. I'm going to choose CTA clicked and then create the agent. The agent will then think and come up with a plan on improving CTAs clicked. As part of this, the agent is identifying which pages are highly correlated with CTAs clicks and is then presenting them as different options. I went ahead and selected the pricing page since it's one of our highest converting pages. The agent is now analyzing recent events and session replays tied to the pricing page. The agent has identified that buyers are running into dead clicks while interacting with pricing plan headers. The agent takes that learning, contextualizes it with Amplitude events and best practices, and brainstorms 3 new strategies for immediate review. One of the strategies the agent recommends is making the pricing plan headers animated and clickable based on the session replay learning. So let's go ahead and explore that strategy. The agent is creating new variants based on this strategy and is now live generating code for potential strategies we can preview in our experiment visual editor. Let me go ahead and take a look at this first variant here. In this, the agent added a hover effect to the pricing plan sections and made them clickable, which optimizes for CTAs clicked. I can review, edit and approve this variant before deploying a new experiment. To summarize, our agent identified issues with pricing page conversion, recommended a strategy for solving it and then created a new page that improves the experience. In addition, we're also building agents that focus on insights. These are always-on analysts that perform hundreds of analyses and automatically surface insights with minimal human work. To do this, let's go ahead and create a dashboard monitoring agent. With the dashboard monitoring agent, customers can select a few dashboards they've created on Amplitude and have the agent surface top themes on a weekly basis and then run root cause analysis that explains major changes. I've created the agent and it analyzes every chart across each dashboard that I've assigned to it and then surfaces the top insights. In one of these takeaways, if you look at the second one here on the page, the agent identified 71% of testers create agents, 60% generate strategies and new variants, while only 6% have directly deployed an action. With the dashboard agent, customers have unlimited resources to monitor analytics. This saves analysts tons of time and uncovers lots of insights they wouldn't have found otherwise. Since our announcement in June, we have received a huge amount of customer interest. Customers in the beta have been blown away by what our agents can do. On an onboarding call, the product analytics lead at Hostinger stopped us mid-demo and said, 'this actually runs an experiment, wow, that is amazing.' The co-founder of ResMed called our Session Replay agent a home run, and the product owner at Global Radio said his team was already meeting about how to put our agents' recommendations into action. We believe Amplitude is the only company in digital analytics doing anything meaningful with AI today. We have the most complete digital analytics platform, and we are out-executing everyone else with elite talent. I want to show you one more example. We are also helping companies with AI transformation in other ways. Companies want to know how they rank on LLMs. So we're building LLM brand analytics to answer this question. I'm going to show you a demo of how this works. With Amplitude, customers will be able to quickly understand how AI is talking about their brand. They can understand the types of queries and prompts that lead to being mentioned by LLMs. If you look here, the bar on the right indicates what percentage of queries Amplitude shows up in. Here, we can see that we rank well in behavioral analytics and digital product analytics and go deeper by looking at more specific prompts. Let's take a look at analytics for marketers. You can see what percentage of the time we show up for each prompt and what our rank is in the prompt on the right. For example, when prompting for alternatives for Google Analytics for advanced marketing insights, Amplitude shows up 100% of the time with an average rank of 4.2. We also get the exact ranking per model in this drop-down. For example, we ranked #8 in GPT-4.1 mini and #2 in Gemini 2.5 Flashlight. Customers can also track mentions across various LLM platforms and focus their attention across different models. We can see here that Amplitude ranks quite well with Claude, but we have opportunities for improvement with ChatGPT. We are going to continue to aggressively innovate. This has been a breakout quarter with industry analysts. Last week, the 2025 Forrester Wave for Digital Analytics Solutions was published for the first time. Of the 10 vendors evaluated, Amplitude was named both a leader and a customer favorite. We received the highest current offering score of any vendor in the report and the highest score possible across 21 criteria. The Forrester report showed that Amplitude is ideal for product-led organizations where product and marketing teams need close alignment and ease of use as a priority. It also recognized our Agentic AI capabilities, intuitive interface and compelling roadmap. Most importantly, the Forrester evaluation showed that customers praise Amplitude's collaborative partner-like approach. We are not just a better analytics tool. We're invested in our customers' long-term success. This is a testament to our platform strategy and the momentum we're seeing as a business. Amplitude also ranked #1 in 8 categories in G2's Summer 2025 report, including the top spot in product analytics for the 20th quarter in a row. This recognition positions Amplitude as a clear market leader, setting us apart from legacy vendors and point solutions. We had a great quarter for new and expansion deals with enterprise customers, including Microsoft, Twilio, Redis, Telenor Denmark, Viator, Chess.com, GoFundMe, Landmark Group, and MUSINSA. I'm going to highlight a few. Viator, a Tripadvisor company for booking travel experiences, partnered with Amplitude to accelerate product innovation and foster a culture of data-driven decision-making. With Amplitude, Viator has increased its speed to insight and pace of experimentation. Amplitude's self-service analytics has enabled the Viator team to quickly optimize experiences, surface bugs faster, and improve interface performance, unlocking a 15x ROI in just 1 year. Now Viator is expanding with Session Replay, combining behavioral data with visual context to further reduce friction in the traveler journey. With the Amplitude platform at its center, Viator is building faster, smarter, and more personalized experiences to help travelers around the world plan unforgettable trips. Telenor Denmark, part of one of the Nordic's largest telecom groups, turned to Amplitude to power a full transformation of its marketing analytics stack. Replacing a legacy tool set, Telenor chose Amplitude for the unified platform approach and the ability to blend both web analytics with activation capabilities. Telenor's investment in Amplitude is part of its long-term vision to consolidate analytics, experimentation, and activation within a single ecosystem. Centered on behavioral analytics and the capability to scale, Telenor is working on modernizing its marketing ecosystem to drive greater personalization. Lastly, we are now working with a leading North American title insurance provider as they transform how digital products are built for consumers and brokers. Facing a patchwork of disparate tools and siloed teams, they turn to Amplitude to help unify their approach. Today, they're using Analytics, Experiment, Guides and Surveys and section replay to give product teams shared visibility and control. By consolidating onto the Amplitude platform, they can now analyze behavior, test improvements, and drive revenue through better usability, accelerating innovation within a traditionally slow-moving industry. Q2 was a strong quarter for Amplitude. It reflects our years of work refocusing the company on the enterprise and on our strategy to expand the platform. We believe our most recent efforts to re-architect Amplitude to be AI native will accelerate the strategy and drive success in the years ahead. While I'm proud of the team's achievements, we are just at the start. We are still early in our opportunity, and we will continue to execute against the plan we've laid out. I'd now like to turn it over to Andrew to walk you through the financials.

Thank you, Spenser, and good afternoon, everyone. The second quarter was another quarter of focused execution, ARR growth acceleration and building on our strategy. Over the past 2 years, we've created a comprehensive platform, improved our internal workflows, and driven growth with leverage. We believe we are on the right track. The work is not finished. We have made progress, and it gives us confidence in our goal for future acceleration. In Q2, we grew our ending ARR 16% year-over-year compared to 12% last quarter and 8% a year ago. We've increased our dollar-based net retention to 104% compared to 101% last quarter and a low in the second quarter last year of 96%. We increased our free cash flow margin to 22% for the quarter and have generated $8.9 million in free cash flow during the 6 months ended June 30, 2025, compared to $5.7 million over the same 6 months last year. In March, we shared our path to acceleration, emphasizing our focus on enterprise customers and expanding our platform capabilities. In the second quarter, we continued to deliver on these goals by increasing sales productivity and with the introduction of new products to our platform. On the go-to-market side, we believe we continue to improve our enterprise land, expand and retain motion. We had a strong quarter of expansions, which was largely driven by our platform deals in the enterprise. This drove our dollar-based net retention up 3 points sequentially. Turning to our platform. Customers with more than one product accounted for 67% of our total ARR, up from 64% last quarter and 55% in the second quarter last year. Our ability to expand our contracts over the past 3 quarters has largely been driven by platform upsells, while we overcame headwinds from contract downsells based on volume. However, the growth of data being ingested into our platform has grown 20% year-over-year. And as we get past the headwind of rightsizing our contracts, we believe we can monetize both upsell and cross-sell opportunities to drive further acceleration. We're creating a more durable business. This is evidenced by creating greater visibility into our future revenue streams and building it in a profitable way. As of June 30, 2025, our RPO growth accelerated to 31% year-over-year compared to 11% in the same quarter last year. Our current RPO is now growing 20% year-over-year, up from only 8% in the second quarter last year. We believe this is the culmination of the work putting focus on the right customers with the right alignment to value. As we work towards building a more durable revenue stream, we believe innovation is the base of our future growth. Over the past 2 years, we have invested in tying our platform together to create more value when used together. We will continue to invest in our platform approach where customers can create their own workflows on top of our platform and become the center of how our customers understand and interact with their customers. We're confident in our strategy as a platform of choice for customers looking to consolidate spend across vendors and believe that we're in a good position to accelerate our growth without meaningful improvement or clarity in the macro environment. Now 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 GAAP and non-GAAP results can be found in our earnings press release and supplemental financials on the Investor Relations page. Second quarter revenue was $83.3 million, up 14% year-over-year and 4% quarter-over-quarter. Total ARR increased to $335 million exiting the second quarter, an increase of 16% year-over-year and $15 million sequentially, the highest net new ARR add we've had in 11 quarters. Now here are more details on the elements for the quarter. We had a strong platform expansion sale, especially replacing legacy point solutions. The number of customers representing $100,000 or more of ARR in Q2 grew to 634, an increase of 16% year-over-year and up 17% since the first quarter. In-period NRR was 104%, a 3 point increase sequentially, led by large cross-sell expansions. We expect to make continued improvement in retention and enterprise expansions, which should drive sequential improvements in the second half of 2025. Gross margin was 75% for the second quarter, down 1 point from the second quarter of 2024. Gross margin was impacted by increased data ingestion costs, higher amortization of software development costs, and investment in professional services. Investment in professional services is the foundation to build our long-term partner strategy and will act as an offset of future potential services expenses as we accelerate ARR. We believe increased data ingestion and professional services costs are pivotal to future revenues, so there is no change to our long-term focus on increasing gross margins. Sales and marketing expenses were 44% of revenue, a decrease of 4 points from the second quarter last year, but up sequentially on a dollar basis. We continue to focus on improving sales efficiencies, driving improvement through our changes in process, coverage and expansion of our enterprise customers. G&A was 14% of revenue, down 1 point from the second quarter of 2024. We expect G&A to improve as a percentage of revenue over time. R&D was 18% of revenue, up 1 point from the second quarter of 2024. We expect to continue to invest in the talent and capabilities of our team to drive greater innovation in the future. We expect to continue to attract talent through both recruiting as well as opportunistic corporate activity, similar to what we did with Kraftful, June and Inari. Total operating expenses were $64 million, 76% of revenue, down 3 points sequentially. Operating loss was a negative $1.5 million or 1.8% of revenue. Net income per share was $0.01 based upon 140.2 million diluted shares compared to a net loss per share of $0.00 with 122.6 million basic shares a year ago. Free cash flow in the quarter was $18.2 million or 22% of revenue compared to $6.8 million or 9% of revenue during the same period last year. In the second quarter, we managed our cash collections very well and made meaningful progress on shifting to contracts with annual payments in advance. Now turning to our outlook. While we believe we continue to accelerate our business, we will look for ways to be even more efficient in the future. We have built our business to be more resilient. We believe through both our product positioning as a platform of choice when customers are looking to consolidate spend and by focusing on operational excellence, we have oriented the business for positive free cash flow and non-GAAP profitability. We continue to operate our business with a focus on investing in areas that we see real return with ROI for our customers. We built our guidance based on what we believe is achievable from our actions and positioning in an evolving market. We believe we will continue to make progress attracting new enterprise customers. As we begin to lap our churn and downsell cohorts, we believe we'll continue to expand through both upsell and cross-sell. While we showed strength on net new ARR in the second quarter, we expect third quarter to be down slightly from a net new perspective, but our year-over-year growth rate should continue to accelerate slightly. Lastly, we are building a durable growth business that will balance incremental investment with the opportunity to create future growth opportunities. So for the third quarter 2025, we expect revenue to be between $85 million and $87 million, representing an annual growth rate of 14% at the midpoint. We expect non-GAAP operating income to be between a negative $2 million and positive $1 million. And we expect non-GAAP net income per share to be between negative $0.00 and positive $0.02, assuming basic weighted average shares outstanding of approximately 133.4 million and diluted weighted average shares outstanding of 144.3 million, respectively. For the full year of 2025, we are raising our revenue expectation due to the quarter's positive performance. We expect full year revenue to be between $335.2 million and $338.2 million, an annual growth rate of 12.5% at the midpoint. We are adjusting our full-year range for our full year non-GAAP operating income to be between negative $2 million and positive $3 million, reflecting growth of investments and taking into account the recent acquisitions we mentioned. We expect non-GAAP net income per share to be between $0.04 and $0.08, assuming weighted average shares outstanding of approximately 142.8 million as measured on a fully diluted basis. In closing, I want to reflect on the journey we've been on. In Q2 2024, Amplitude growth rates were declining. Net revenue retention was below 100% and our strategies to reaccelerate growth were still taking shape. We highlighted that we expected the second quarter of 2024 to be the low point, but many were skeptical. A year later, our platform is driving consolidation, and we're increasingly winning new enterprise customers against competitors. Our growth has accelerated, and we see a continued path towards improved growth with leverage. This has only occurred through the focused execution of our employees and a relentless drive towards creating value for our customers. With that, we'll open it up for Q&A.

Our first question will come from the line of Rob Oliver at R.W. Baird, followed by Clark Wright from D.A. Davidson.

Great. Can you guys hear me okay?

Loud and clear.

I have 2. Spenser, one for you to start. Going back to the Command AI acquisition and through the recent acquisitions you made, it’s evident in the demo and then with the announcement that you guys had on AI agents about 1.5 months ago, a tremendous amount of progress on the Agentic AI front. I was wondering if you could help frame for us how much the recent acquisitions and the integrations you guys have done helps accelerate Amplitude's efforts in this regard and how we should think about that starting to get towards monetizable outcomes for you guys? And then I had a quick follow-up for Andrew.

Yes, absolutely. Regarding the AI agents, I want to emphasize that we're still in the early stages. You saw some impressive demonstrations today, but we are currently in a closed beta and aiming to launch this later this year. The critical aspect of these agents is that they provide every Amplitude customer with significant leverage to derive value from our platform. They continuously analyze your data to uncover insights, suggest strategies and ideas for experimentation, and identify issues through session replays. That's already a significant advantage. When it comes to monetization, I want to clarify that we're not focused on that aspect just yet. Amplitude as a whole has a strong ability to set high prices. With $335 million in annual recurring revenue and over 40 customers contributing $1 million or more, we have always been able to command a premium. I'm confident that as long as we're delivering value, we'll find a way to capture it, whether that involves charging directly for the agents or using other methods. However, we are not at that point of figuring out the monetization strategy yet. The priority right now is to ensure that these agents are valuable for our customers and generate significant results. In contrast, many other SaaS companies tend to add superficial AI capabilities to existing workflows to justify raising prices, which doesn’t seem to make sense to me.

Got it. Very helpful. Exciting stuff. And then, Andrew, for you, a lot of progress clearly in your time at the company. I guess, I would focus in on the sales efficiency side that was evident in the numbers this last quarter. Talk about what sort of continued progress or opportunity you have there on the sales efficiency side while also balancing that need to invest, which I know is reflected in part in the back half of the year, but great progress.

Thank you, Rob. I think it's always when we're looking at the territories you've built, how you're assigning the right reps to those territories where we're seeing progress on the pipeline builds that you make. The processes have evolved quite a bit in the sales methodologies. I mean, we shifted much more from a transactional model to a value-oriented sales model. And that's very evident with some of the big deals we've seen that are sold on a platform basis where customers are making multiyear bets with Amplitude to go drive huge efficiencies in their operations. So it's kind of an iterative thing. You continually look at it and really make sure you're making the right investments in the right territories to generate the right coverage and pipeline and constantly looking at your conversion rates. It's something that a lot of enterprise software companies is a mature they go through, and Amplitude has done a great job at coming up that curve. And I'm very pleased with how well the investments we've made in the strategic segments have really started to pay off.

Our next question will come from Clark Wright at D.A. Davidson, followed by Brent Bracelin at Piper Sandler.

It's great to see improvement in the retention metrics. I love to kind of understand if you can quantify how much of that improvement is related to the churn dynamic versus how much is momentum in the upselling motion?

I can address that. We have made significant progress with our platform sales, and we're seeing an increasing number of customers appreciating all the components we've integrated. At Amplitude, we believe that the value of our platform extends far beyond individual components. The strong cross-sell results are positively impacting our net revenue retention. Additionally, our teams have effectively navigated some challenging volumetric contract structures in the first half, and we are also seeing positive developments in gross retention. Both the improved sales strategy for the platform and enhancements made by our development team are contributing to our growth.

Got it. And then a follow-up, if I could here. In terms of just sales enablement, that was a key objective. Andrew since you've gotten to the firm. I'd love to kind of understand maybe a progress report on where you've started versus where you are today.

Look, I think it's really about a change in mentality that started with moving into the enterprise and how the enterprise sales process works. It's refining our funnel dynamics where we're making investments so that there's adequate coverage. It's about understanding as opportunities go through the funnel, inspecting that the opportunities are actually progressing towards the close dates that are forecasted and reiterating that we expect to see a ramp in productivity associated with the investments we're making in specific territories. So all those things, I think you just kind of bring together with a little bit of rigor and you get better and better outputs. And I think that, that's also one of the reasons why we continue to lean and invest in territories where we see progress. When you see that you're getting more pipeline than the reps that can handle in any given 1 territory, you start to add more reps. That's your early signal that things are going well.

Our next question will come from the line of Brent Bracelin from Piper Sandler, followed by Elizabeth Porter from Morgan Stanley.

Lots of signals. Things are going well there here for the team. I guess, Andrew, for you, as we think about 6 consecutive quarters of accelerating CRPO growth, great to see that back to 20%. How much of that is driven by platform attach rates? You talked about 55% going to 67% relative to customers with one or more products. But I know in the past, renewals were being downsized. You do have a data consumption component. I wondered if that might also start to be either flattening or becoming less of a drag going forward. So how much of that improvement in CRPO is tied to platform attach versus actually the consumption trends starting to reverse?

So great question. And I would tell you, it's kind of a bit of both. We see both. We have really strong platform upsells and the sales team understanding and showing customers what their journey is going to be on the Amplitude platform, how they get more value and customers leaning in and making those investments over multiple years. I think we've talked in the past about how increasingly what enterprise customers want when they're making these big transformations, maybe in cases of multiple products that they've had to stitch together, they want a longer-term value-oriented relationship with their partners. And that's allowed us to increase our contract duration, which right now, it's about 21 months on a dollar-based average. And frankly, I would love for that to get closer above the 30 months average. And so our sales team knows that. They're continuing to go have those conversations with enterprise customers. And the one area I think we need to do a little bit better is on renewals. Historically, those accounts, those implementations weren't on multiyear contracts. And so we're really pivoting more and more to focus on how do we make sure the renewals are going there as well. So it's increasing contract duration. But as you said, and we expect that as we get through some of these big headwinds associated with volumetric contracts that we're equally going to see customers wanting to do more and more ingestion into the platform so they can get greater and greater value. And that's certainly what our posture was with the acquisition of Kraftful. It's another data element that customers can bring together, which increases the level of data ingestion, which over the long term, certainly should drive upsells at a much larger basis than they have in the past.

Helpful. And as a follow-up for Spenser here, battle for talent. This is one of the quadrants that we're watching here closely. I think it's going to dictate between the winners and losers in AI here. You've been able to attract talent here, Command AI, Kraftful, Inari. What's resonating with these founders to kind of join the Amplitude mission? You're doing something right there. I would love to just double-click into what's resonating with some of these founders that are joining the team.

In all of these situations, we are seeking teams that share our long-term vision. We're considering how to utilize data in various ways to assist companies in creating excellent products. Command is a perfect example, as they excelled in the Guides and Surveys sector. We appreciated their approach, and they expressed a desire to join the Amplitude team, contributing to a larger platform. As the leader in digital analytics, we offer an appealing opportunity for teams who have dedicated years of effort to access our customer base and make a significant impact. Working alongside individuals who are equally passionate about the same mission is also valuable. I realize this may sound straightforward, but attracting enough of such people here is crucial. I believe it was James from the Command team who played a key role in introducing us to Kraftful, Inari, and June. We want to collaborate with exceptional individuals. Additionally, I want to highlight an important aspect of the talent competition; we are now a larger company with around 800 employees. Many larger companies mistakenly think they can just set up a separate AI team for innovation. However, as AI transforms every category and aspect of products, it's essential to rethink your product's core. For instance, with the rise of LLM analytics, customers are shifting their focus from traditional SEO to how to rank well on LLMs. One of our engineers led this initiative, which was made possible through our AI Week and AI Hackathon, where we retrained our existing team on new tools. It’s vital to invest in talent development for both current team members and new hires. If done correctly, this can lead to successful business transformation, although it is quite challenging to execute effectively.

Our next question will come from Elizabeth Porter from Morgan Stanley, followed by Scott Berg from Needham.

So at your agent launch event in San Francisco recently, I talked to a couple of customers. And the customers were saying, look, it's like a no-brainer to be adding on some of these new products like Surveys or Session Replays next analytics. There was this long list of one-off solutions they can move over. So 2 questions. One, it seems that many were still just learning about the broader portfolio. So I wanted to better understand how you've seen your portfolio awareness evolve and what are the steps you're taking to accelerate that? And then second, how much more of the incremental wallet do you think you can start to address particularly as you add into the fold some of the capabilities from recent acquisitions?

Yes, absolutely. Elizabeth, while I've been discussing the platform aspect for years and designated 2025 as the year of the platform, the reality is that many customers are just beginning to realize that they can integrate Session Replay, Analytics, Experiment, Guides, and Surveys all on the same platform. I often speak with long-time customers who are unaware of the various functionalities we can offer, as demonstrated during the agents launch. This is a key reason why we've highlighted 2025 as the year of the platform—we want everyone in our industry to continue educating both new and existing customers about these capabilities. We have seen great success with new customers, such as a title insurance company that adopted the entire platform right from the start, which was fantastic. However, we still need to work on existing customers who have known us for many years primarily as an analytics company and are not fully aware of our other offerings. The agents launch is beneficial as it showcases how these workflows integrate, and utilizing these additional tools is essential for success. We still have some progress to make, with 67% of our annual recurring revenue, but less than 50% of our customer base currently uses multiple products. Particularly among smaller customers, there is still a lack of awareness regarding our full range of solutions. Therefore, there is no substitute for engaging in conversations, explaining the value of these offerings, and training our team to confidently demonstrate and position our ability to replace point solutions with Amplitude. Regarding wallet share, I've noticed that once a customer moves from only using the analytics component to adopting the full platform, their total spending increases by roughly 2 to 3 times compared to just using analytics. The exact attribution can differ by customer—for example, they might pay an additional 25% for Experiment or 50% for Session Replay. However, when you consider the total across the board, the increase is generally around 2 to 3 times what they spend solely on analytics.

Great. And then just as a follow-up, maybe for Andrew. Really helpful and great to hear about the continued progress in NRR quarter-over-quarter for the back half of the year. Where do you think it should kind of settle out kind of near term? Any thoughts that we can have in mind as we kind of look beyond kind of the back half of the year?

I would say that our long-term goal is to achieve over 15% in net revenue retention. This requires ongoing efforts and execution from our sales team in promoting the platform and demonstrating the value of the various products we offer. We have assessed our pipeline and understand the opportunities available to us, and I am confident that we will continue to make progress. Additionally, the Forrester report, which recognizes us as the top player in the market, will enhance our visibility.

Our next question will come from Scott Berg from Needham, followed by Koji Ikeda from Bank of America.

Really nice quarter here. And I guess 2 questions for me. Let's start with sales in the quarter. Your NRR or at least net new ARR in the quarter kind of crushed it versus our expectations. Are the sales improvements being driven more towards volumes of deals or just value and size of transactions? I think the outperformance was so significantly large, just trying to understand where you're benefiting from the most.

All right. What was the distinction you just made, Scott? I just want to make sure I understand that.

Volume of deals, the number of transactions or the size of the transactions.

I hesitate to say it's both. If you take a look at it, we had a record expansion deal that was a significant factor. However, we also experienced broad success across various sectors, including companies like Telenor Denmark and the title insurance company I mentioned, as well as first-time customers like Viator and Twilio. The success was widespread, not just a few large volume expansions; these companies were expressing a desire to deploy Amplitude in a much broader capacity than before instead of merely increasing their volume.

Helpful there. And then if I go back to your prescripted remarks, Spenser, one of the comments you made is you're seeing new traction with marketing teams after the launch of several new solutions here in the spring. When you look at that marketing analytics space, I assume that's the functionality, at least that you were mentioning. How are those transactions comparing to the analytics space? I know your product journey is still newer there relative to product analytics. But what are you seeing for pricing and sizing there because that market has a significant amount of existing spend out there today?

Yes, absolutely. To draw a comparison, the platform side has significantly contributed to our growth. If you examine net new ARR or attach rate or any other metric, it shows consistency. In contrast, the marketing aspect is much earlier in its development. Two years ago, very few organizations were using us as a substitute for legacy marketing tools; they typically brought Amplitude in alongside Google Analytics. Recently, we have observed that in the past few quarters, companies are considering us as a complete replacement for those tools, but that segment is still relatively small. As you noted, these other businesses have a much larger customer base and are significantly bigger than us. We are still in the early stages of capturing this opportunity, and there is considerable work ahead. As we make progress, this will serve as an excellent growth driver for us in the coming years.

Our next question will come from the line of Koji Ikeda from Bank of America, followed by Tyler Radke from Citi.

George McGreen on behalf of Koji. I wanted to inquire about the continued strong momentum we're observing in the RPO sector, particularly on the long-term side. I'm interested in understanding how the discussions are progressing in those strategic deals. Clearly, you have enhanced the platform's value and brought in new team members with expertise in enterprise strategic deals. How do the current conversations compare to those from a year ago, and what key points frequently arise in these discussions?

I would say that a few years ago, we were not engaging in the right level of discussions, often getting stuck at the manager or director level within many accounts. Now, we are consistently having conversations with VP and C-level executives in all our major accounts. This shift allows us to discuss how we fit into their vision for their data stack and how we can provide significant value. For instance, one former customer who had been with us for years on a one-year contract recently signed a three-year contract after aligning with the head of data. This is encouraging because it indicates a strong commitment from them, which reduces risk for us. We're committed to investing in making Amplitude successful for them. Additionally, our strategic accounts team is dedicated to our top 30 existing customers and top 30 prospects, employing sellers and support tailored to have senior-level discussions about their data strategy. When customer spending exceeds a million dollars, it becomes a serious budget item, requiring a strategic approach. Looking back, we were not having those critical conversations two or three years ago, but now we are, though there's still much work ahead to ensure these accounts are well-supported. We're in a much better situation compared to a few years ago.

Our next question will come from Tyler Radke at Citi, followed by our last question by Arjun Bhatia from William Blair.

Nice net new ARR in the quarter. I wanted to just touch on that. So you talked about the record expand deal. I was curious if you could elaborate a little bit more on the size of the contract and scope. And then also just talk about what you're seeing among kind of your AI native customers, how those usage trends are going? I know, for instance, Cursor is a customer. And are you seeing your growth sort of scale with the growth of those types of businesses as well?

Yes, we cannot disclose specific details about the customer, but they were already using our technology in smaller areas of their business and decided to invest significantly in one of their core platforms. This resulted in a substantial multimillion-dollar deal, marking a record expansion for us in several ways. While we need to demonstrate the value and execute the work ahead of us, it's encouraging to see that this company is willing to make such a significant commitment to Amplitude. Regarding AI companies, they still represent a small portion of our overall customer base. We do have notable clients like Cursor and Midjourney, among others, and while their growth is beneficial, it does not significantly impact our overall customer dynamics quarter-to-quarter.

Great. Following up on gross margins, you mentioned some factors leading to compression this quarter. How should we consider it seems like a mini-investment cycle before seeing returns from either the Agentic side or new products? Where do you see the low point for these investments, and what is the timeline for them to start generating revenue and driving expansion again?

So I'll address that. Good point, Tyler. Regarding the services side, we've made investments to ensure we can expand our partner ecosystem. We believe that long-term, our partners could generate between 20% to 40% of our demand. Building this capability now will help us drive billable utilization for resources involved in implementation services and support long-term growth. The process involves hiring new consultants, who will take time to ramp up before they start engaging with customers, which in turn drives billable utilization. Although we may not achieve high margins from services, we'd prefer our partners to handle those implementation services. This is a necessary cycle where we invest to ensure our enterprise clients are successful and to initiate that flywheel effect. On the hosting side, increasing data ingestion into our platform is beneficial in the long run. We monetize Amplitude service delivery via subscriptions in two ways: through data ingested into the platform and the applications used. The increased data brought in by customers allows us to drive upselling opportunities, and importantly, reflects that customers gain more value from integrating more data sets, enhancing their ability to use the system effectively for their outcomes. While it's frustrating to see short-term investments not immediately reflecting in revenue, sometimes these investments are necessary with the expectation of returns over time. Our focus on improving gross margins remains unchanged, and we will continue prioritizing it. This quarter, we find ourselves at the start of that investment cycle.

And our last question will come from the line of Arjun Bhatia from William Blair.

I'm Willow Miller on for Arjun Bhatia. Asking a follow-up question to the go-to-market questions asked earlier. Can you remind us where you're at in your go-to-market evolution? And is it fair to think about this as more of a continuous evolution? And maybe you can comment on how the sales force is responding to the changes.

Yes, we have definitely continued to evolve. If I reflect on three years ago, before Thomas and some of the current team joined on the go-to-market side, we weren't fully prepared for the scale of enterprise deals we are now managing. Currently, we are engaged in deals exceeding $1 million, which requires a different level of commitment than what we were equipped for at that time. For the most part, I would say we are there now. However, as you mentioned, it is an ongoing evolution. This year, we established the strategic accounts team, and we plan to implement more changes next year, focusing on successful strategies from that team and adapting them across the business. I am genuinely pleased with how the Amplitude team has embraced this change. Many of our most successful sellers, as well as professionals in customer success and marketing, have actively participated in this transition. A key cultural value at Amplitude is a growth mindset, which emphasizes that roles are always evolving. This means employees must adapt and discover how to create an impact in the future, acknowledging that their responsibilities will differ from their previous experiences.

That will conclude our second quarter earnings call. Thank you for your time and interest. We look forward to seeing you this quarter on the road as we attend conferences hosted by KeyBanc, Citi and Piper Sandler. Thank you.

Thank you all.

Thank you.