Amplitude, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual filing; it does not provide standalone Q4 financial results. Amplitude sells a SaaS digital analytics platform, primarily through subscriptions.
Financial and operating performance
| Metric | FY2023 / Dec. 31, 2023 | FY2022 / Dec. 31, 2022 |
|---|---|---|
| Revenue | $276.3 million | $238.1 million |
| Gross profit / gross margin | $204.4 million / 74% | $167.6 million / 70% |
| Operating loss | $102.5 million | $96.6 million |
| Net loss | $90.4 million | $93.4 million |
| Net cash from operating activities | $25.6 million | $(5.4) million |
| Free cash flow | $22.4 million | $(11.2) million |
| Cash and cash equivalents | $248.5 million | $218.5 million |
| Marketable securities | $73.9 million | $83.2 million |
- Revenue grew 16%; subscription revenue accounted for 97% of FY2023 revenue. International revenue was 39%, versus 38% in FY2022.
- Paying customers increased 37% to 2,723. ARR rose 10% to $281 million.
- Trailing-twelve-month dollar-based net retention fell to 101% from 119%; ending net retention was 98%, versus 110%.
- Customers above $100,000 ARR increased to 511 from 480; customers above $1 million ARR rose to 39 from 30.
- Current liabilities were $132.3 million and current assets were $380.0 million. Deferred revenue was $102.6 million. The filing reports no borrowings; lease liabilities and other obligations remain.
- Operating loss margin was (37)% versus (41)%. Net loss margin improved to (33)% from (39)%. Non-GAAP operating loss narrowed to $3.5 million from $26.2 million; non-GAAP operating margin improved to (1)% from (11)%. These non-GAAP measures exclude, among other items, stock-based compensation and restructuring charges.
Material changes and unusual items
- Gross margin improved four percentage points, primarily due to lower hosting costs as a share of revenue and reduced personnel costs following restructuring.
- Operating expenses increased 16% to $306.9 million. Sales and marketing rose 18% and R&D rose 12%; stock-based compensation expense increased to $88.3 million from $67.2 million.
- FY2023 included $8.1 million of restructuring charges following an April 2023 plan to reduce the global workforce by approximately 13%. The company said it did not expect significant additional plan expenses.
- Other income increased to $13.4 million, primarily due to higher interest income. Operating cash flow turned positive, aided in part by non-cash stock compensation and working-capital movements, including deferred revenue and accrued expenses.
- Remaining performance obligations declined 4% to $239.4 million; amounts expected within 12 months declined 1% to $188.5 million.
Outlook, risks and contingencies
- No specific revenue or earnings guidance is provided. Management expects investment-driven operating expenses to rise in dollars, with expense ratios expected to decline over the longer term but potentially increase in the short term. It believes available liquidity is sufficient for working capital and capital expenditures for at least 12 months.
- Management identifies retention and customer expansion as key uncertainties: net retention weakened substantially even as customer counts grew. Other principal risks include competition, macroeconomic pressure on software spending, long enterprise sales cycles, dependence on Amplitude Analytics for substantially all revenue, and execution of the restructuring plan.
- Privacy and data-protection regulation, cybersecurity, service availability, and dependence on AWS are material operating risks. The company reported no known cybersecurity threats that had materially affected or were reasonably likely to materially affect it.
- As of December 31, 2023, contractual obligations totaled $186.3 million, including $177.0 million of purchase commitments. These include a five-year AWS hosting agreement requiring at least $267 million of spend; $174 million remained under that commitment at year-end.
- A putative securities class action was filed on February 14, 2024, concerning alleged statements about business and financial outlook during September 21, 2021–February 16, 2022. The company intends to defend the case; damages sought are unspecified. Management said it could not estimate a range of reasonably possible losses for matters where applicable.
- Class A shares carry one vote and Class B shares five votes, concentrating voting control. The company does not expect to pay dividends in the foreseeable future.
Important facts for investors to verify
- Whether net retention stabilizes or falls further, and whether customer growth translates into renewed and expanded subscriptions.
- Progress toward sustainable profitability and whether positive cash flow persists without relying on working-capital timing or non-cash adjustments.
- Stock-based compensation, share dilution, and the effect of the restructuring on costs, execution, and employee retention.
- Revenue momentum and RPO trends, including the timing and conversion of contracted obligations into recognized revenue.
- The remaining AWS commitment, related hosting economics, and the effect of customer usage on costs.
- Developments in the securities class action and any other material litigation or regulatory exposure.
Audit note: KPMG issued unqualified opinions on the financial statements and internal control over financial reporting. The auditor identified revenue arrangements with non-standard contract terms as a critical audit matter.