Amplitude's (NASDAQ:AMPL) Posts Q3 Sales In Line With Estimates, Provides Encouraging Quarterly Guidance
Data analytics software provider Amplitude (NASDAQ:AMPL) reported results in line with analysts' expectations in Q3 FY2023, with revenue up 14.6% year on year to $70.6 million. The company expects next quarter's revenue to be around $71.6 million, above analysts' estimates. Turning to EPS, Amplitude made a GAAP loss of $0.15 per share, improving from its loss of $0.20 per share in the same quarter last year.
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Amplitude (AMPL) Q3 FY2023 Highlights:
Revenue: $70.6 million vs analyst estimates of $70.1 million (0.8% beat)
EPS (non-GAAP): $0.05 vs analyst estimates of $0.03 ($0.02 beat)
Revenue Guidance for Q4 2023 is $71.6 million at the midpoint, above analyst estimates of $70.4 million
Free Cash Flow of $7.5 million, down 61.2% from the previous quarter
Net Revenue Retention Rate: 105%, down from 108% in the previous quarter
Customers: 2,471, up from 2,344 in the previous quarter
Gross Margin (GAAP): 75.5%, up from 70.7% in the same quarter last year
“New ARR was more broad-based this quarter,” said Spenser Skates, CEO and co-founder of Amplitude.
Born out of a failed voice recognition startup by founder Spenser Skates, Amplitude (NASDAQ:AMPL) is data analytics software helping companies improve and optimize their digital products.
Data Analytics
Organizations generate a lot of data that is stored in silos, often in incompatible formats, making it slow and costly to extract actionable insights, which in turn drives demand for modern cloud-based data analysis platforms that can efficiently analyze the silo-ed data.
Sales Growth
As you can see below, Amplitude's revenue growth has been very strong over the last two years, growing from $45.5 million in Q3 FY2021 to $70.6 million this quarter.
This quarter, Amplitude's quarterly revenue was once again up 14.6% year on year. We can see that Amplitude's revenue increased by $2.9 million quarter on quarter, which is a solid improvement from the $1.3 million increase in Q2 2023. Shareholders should applaud the re-acceleration of growth.
Next quarter's guidance suggests that Amplitude is expecting revenue to grow 9.7% year on year to $71.6 million, slowing down from the 32% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 8.7% over the next 12 months before the earnings results announcement.
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Customer Growth
Amplitude reported 2,471 customers at the end of the quarter, an increase of 127 from the previous quarter. That's a fair bit slower customer growth than last quarter but in line with what we've observed in past quarters, suggesting that the company still has decent sales momentum.
Key Takeaways from Amplitude's Q3 Results
Sporting a market capitalization of $1.2 billion, Amplitude is among smaller companies, but its more than $321.5 million in cash on hand and positive free cash flow over the last 12 months puts it in an attractive position to invest in growth.
It was good to see Amplitude's strong revenue guidance for next quarter, which topped analysts' expectations. We were also glad its gross margin improved and the company turned free cash flow positive. On the other hand, its net revenue retention declined and its customer growth decelerated slightly. Overall, the results were mixed, but decent - showing the company is stay on track. The stock is flat after reporting and currently trades at $11.15 per share.
So should you invest in Amplitude right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
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The author has no position in any of the stocks mentioned in this report.
