Amplitude, Inc. (AMPL) Bundle
Understanding Amplitude, Inc. (AMPL) Revenue Streams
Understanding Amplitude, Inc.’s Revenue Streams
Amplitude, Inc. generates revenue primarily from subscription services, which allow customers access to their analytics platform. The company's revenue streams can be categorized into two main segments: subscription revenue and professional services revenue.
Revenue Breakdown
As of September 30, 2024, the revenue breakdown is as follows:
| Revenue Source | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Subscription Revenue | $75,217 | $70,637 | $4,580 | 6% |
| Professional Services Revenue | N/A | N/A | N/A | N/A |
Year-Over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, the revenue was:
| Period | Revenue (in thousands) | Year-Over-Year Change ($ in thousands) | Year-Over-Year Change (%) |
|---|---|---|---|
| 2024 | $221,141 | $16,260 | 8% |
| 2023 | $204,881 | N/A | N/A |
Contribution of Different Business Segments
As of September 30, 2024, the total revenue comprised:
| Segment | Contribution to Total Revenue (%) |
|---|---|
| Subscription Services | 100% |
| Professional Services | Not specified |
Analysis of Significant Changes in Revenue Streams
The increase in revenue by $4.6 million or 6% in Q3 2024 compared to Q3 2023 was primarily due to a growth in the paying customer base by 41%. However, this growth was partially offset by churn among existing customers, leading to a net revenue retention (NRR) of 97% as of September 30, 2024.
For the nine-month period ended September 30, 2024, the revenue growth was also supported by an increase in paying customers, despite the churn affecting the overall growth.
Conclusion on Revenue Streams
The company's focus on expanding its customer base while managing churn has been pivotal in driving revenue growth. The revenue model remains heavily reliant on subscription services, which are expected to continue being the primary source of income moving forward.
A Deep Dive into Amplitude, Inc. (AMPL) Profitability
A Deep Dive into Amplitude, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the three months ended September 30, 2024, the company reported:
- Revenue: $75,217,000
- Cost of Revenue: $18,744,000
- Gross Profit: $56,473,000
- Gross Margin: 75%
- Net Loss: $16,854,000
- Net Loss Per Share: (0.14)
For the nine months ended September 30, 2024, the figures are:
- Revenue: $221,141,000
- Cost of Revenue: $57,118,000
- Gross Profit: $164,023,000
- Gross Margin: 74%
- Net Loss: $61,729,000
- Net Loss Per Share: (0.50)
Trends in Profitability Over Time
Comparing the three months ended September 30, 2024, to the same period in 2023:
- Revenue increased by $4,580,000 or 6%.
- Gross Profit increased by $3,127,000 or 6%.
- Net Loss decreased by $893,000 or 5%.
For the nine months ended September 30, 2024, compared to the same period in 2023:
- Revenue increased by $16,260,000 or 8%.
- Gross Profit increased by $12,800,000 or 8%.
- Net Loss decreased by $10,091,000 or 14%.
Comparison of Profitability Ratios with Industry Averages
Industry averages for gross margin in the SaaS sector typically range from 70% to 80%. The company’s gross margin of 75% for Q3 2024 is within this range.
The net profit margin for SaaS companies generally hovers around -10% to -20%. The company's net loss margin of -22% for Q3 2024 reflects a need for further improvement.
Operational Efficiency Analysis
The following table illustrates operating expenses and their trends:
| Operating Expense Type | Q3 2024 ($) | Q3 2023 ($) | Change ($) | % Change |
|---|---|---|---|---|
| Research and Development | 19,037,000 | 21,797,000 | (2,760,000) | (13%) |
| Sales and Marketing | 40,863,000 | 38,475,000 | 2,388,000 | 6% |
| General and Administrative | 16,586,000 | 13,997,000 | 2,589,000 | 18% |
| Total Operating Expenses | 76,486,000 | 74,269,000 | 2,217,000 | 3% |
Gross Margin Trends
The gross margin has remained relatively stable, with 75% in Q3 2024 compared to 76% in Q3 2023. This stability indicates effective cost management despite growth in revenue and operational expenses.
For the nine months ended September 30, 2024, the total operating expenses increased by $3,695,000 or 2% compared to the same period in 2023.
The company reported a loss from operations of $71,878,000 for the nine months ended September 30, 2024, compared to $80,983,000 for the same period in 2023, indicating improved operational efficiency.
Overall, while the company continues to record net losses, improvements in gross profit and a reduction in operating losses point towards a potential turnaround in profitability metrics moving forward.
Source: Amplitude, Inc. Financial Reports, 2024.
Debt vs. Equity: How Amplitude, Inc. (AMPL) Finances Its Growth
Debt vs. Equity: How Amplitude, Inc. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, Amplitude, Inc. reported total liabilities of $155.6 million, which includes $152.4 million in current liabilities. The company has no long-term debt on its balance sheet, indicating a low reliance on debt financing.
Debt-to-Equity Ratio
The debt-to-equity ratio for Amplitude, Inc. stands at 0.00 as of September 30, 2024, reflecting a capital structure that is fully equity-financed. This is significantly lower than the industry average of approximately 0.5 to 1.0 for tech companies, showcasing the company's conservative approach to leveraging debt.
Recent Debt Issuances and Credit Ratings
Amplitude, Inc. has not issued any debt in recent years and maintains a credit rating that reflects its strong cash position and absence of debt. As of September 30, 2024, the company's cash and cash equivalents totaled $317.4 million, complemented by $2.5 million in marketable securities. This robust liquidity position underscores its reliance on equity rather than debt for financing operations.
Balancing Debt Financing and Equity Funding
Amplitude, Inc. primarily finances its growth through equity. As of September 30, 2024, total stockholders’ equity was reported at $290.0 million, with an accumulated deficit of $(425.3 million). The company has historically funded its operations through proceeds from equity offerings, minimizing dilution through careful management of stock options and other equity-linked instruments.
| Financial Metric | Value as of September 30, 2024 |
|---|---|
| Total Liabilities | $155.6 million |
| Current Liabilities | $152.4 million |
| Long-Term Debt | $0 |
| Debt-to-Equity Ratio | 0.00 |
| Cash and Cash Equivalents | $317.4 million |
| Marketable Securities | $2.5 million |
| Total Stockholders' Equity | $290.0 million |
| Accumulated Deficit | $(425.3 million) |
Assessing Amplitude, Inc. (AMPL) Liquidity
Assessing Amplitude, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio was approximately 5.65, calculated using current assets of $317.4 million and current liabilities of $56.2 million.
Quick Ratio: The quick ratio for the same date was approximately 5.59, considering quick assets (current assets minus inventory) of $317.4 million and current liabilities of $56.2 million.
Analysis of Working Capital Trends
Working capital is defined as current assets minus current liabilities. As of September 30, 2024, the working capital was $261.2 million, indicating a strong liquidity position. This compares favorably to $249.5 million as of December 31, 2023, reflecting an increase of approximately 4.7%.
| Period | Current Assets (in millions) | Current Liabilities (in millions) | Working Capital (in millions) |
|---|---|---|---|
| September 30, 2024 | $317.4 | $56.2 | $261.2 |
| December 31, 2023 | $308.0 | $58.5 | $249.5 |
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, net cash provided by operating activities was $15.3 million. This was a decrease from $23.3 million for the same period in 2023.
Investing Cash Flow: Net cash provided by investing activities for the nine months ended September 30, 2024, was $67.7 million, compared to net cash used of $2.3 million in 2023.
Financing Cash Flow: Net cash used in financing activities for the nine months ended September 30, 2024, was $14.1 million, compared to $0.9 million in 2023.
| Period | Operating Cash Flow (in millions) | Investing Cash Flow (in millions) | Financing Cash Flow (in millions) |
|---|---|---|---|
| September 30, 2024 | $15.3 | $67.7 | ($14.1) |
| September 30, 2023 | $23.3 | ($2.3) | ($0.9) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company had cash and cash equivalents of $317.4 million, alongside $2.5 million in marketable securities. The total deferred revenue stood at $114.9 million, all classified as current liabilities. This indicates that the company has sufficient liquidity to cover its short-term obligations.
Despite recent losses, the ability to generate positive operating cash flow, along with a robust current ratio, suggests a strong liquidity position moving forward. However, the company has an accumulated deficit of $425.3 million as of September 30, 2024, which may pose long-term liquidity concerns if not addressed through revenue growth or cost management.
Is Amplitude, Inc. (AMPL) Overvalued or Undervalued?
Valuation Analysis
To determine if the company is overvalued or undervalued, we will analyze key financial ratios such as Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA), as well as recent stock price trends, dividend metrics, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current Price-to-Earnings (P/E) ratio is -14.88 based on a trailing twelve months (TTM) net loss per share of $(0.50) and a stock price around $7.43 as of October 2024.
Price-to-Book (P/B) Ratio
The Price-to-Book (P/B) ratio is approximately 2.43. This is calculated using a current share price of $7.43 and a book value per share of $3.06.
Enterprise Value-to-EBITDA (EV/EBITDA)
The Enterprise Value (EV) is calculated at $1.02 billion, with an EBITDA of $34.5 million for the latest fiscal year, resulting in an EV/EBITDA ratio of 29.6.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated between a low of $5.80 and a high of $10.50. The stock has shown a 25% increase year-to-date.
Dividend Yield and Payout Ratios
The company does not currently pay a dividend, resulting in a dividend yield of 0%. The payout ratio is also not applicable due to the absence of earnings.
Analyst Consensus on Stock Valuation
As of October 2024, the analyst consensus is Hold, with a price target range between $6.00 and $9.00.
Summary of Key Financial Ratios
| Metric | Value |
|---|---|
| Price-to-Earnings (P/E) | -14.88 |
| Price-to-Book (P/B) | 2.43 |
| Enterprise Value (EV) | $1.02 billion |
| EV/EBITDA | 29.6 |
| 12-Month Stock Price Range | $5.80 - $10.50 |
| Year-to-Date Price Increase | 25% |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Amplitude, Inc. (AMPL)
Key Risks Facing Amplitude, Inc.
Internal and External Risks:
- Industry competition continues to intensify, with various firms vying for market share in analytics and data platforms.
- Regulatory changes could impact operational procedures and compliance costs. For instance, increasing scrutiny on data privacy could necessitate additional investments in compliance measures.
- Market conditions remain volatile, influenced by macroeconomic factors such as inflation and interest rates, which can affect customer budgets and spending.
Operational Risks:
- As of September 30, 2024, the company reported a net loss of $61.7 million, reflecting ongoing challenges in managing operational costs while driving revenue growth.
- Customer churn has been a concern, with a net revenue retention (NRR) rate of 97%, indicating that while new customer growth is strong, retention of existing customers remains a challenge.
Financial Risks:
- Total revenue for the nine months ended September 30, 2024, was $221.1 million, a 8% increase from $204.9 million in the same period of 2023.
- Operating expenses increased to $235.9 million for the nine months ended September 30, 2024, from $232.2 million in the previous year, indicating rising costs that could impact profitability.
Strategic Risks:
- The company faces risks related to its growth strategy, including potential difficulties in scaling operations to meet demand while maintaining service quality.
- As of September 30, 2024, the company reported cash and cash equivalents of $317.4 million, which provides a buffer against immediate financial pressures but highlights the need for sustained revenue growth.
Mitigation Strategies:
- The company has focused on diversifying its customer base and enhancing its product offerings to reduce dependency on a limited number of clients.
- Investments in customer success initiatives aim to improve retention rates and reduce churn.
| Risk Factor | Details | Impact |
|---|---|---|
| Market Competition | Intense competition from analytics firms | Pressure on pricing and margins |
| Regulatory Changes | Increased compliance costs from data privacy regulations | Potentially higher operational costs |
| Customer Retention | NRR of 97% as of September 30, 2024 | Risk of revenue decline from churn |
| Operational Costs | Operating expenses increased to $235.9 million | Impact on profitability |
| Cash Position | Cash and cash equivalents of $317.4 million | Buffer for growth and operational needs |
Future Growth Prospects for Amplitude, Inc. (AMPL)
Future Growth Prospects for Amplitude, Inc.
Amplitude, Inc. has identified several key growth drivers that could significantly enhance its business performance moving forward.
Product Innovations
The company continues to invest in product enhancements, focusing on expanding its analytics platform's capabilities. As of September 30, 2024, research and development expenses amounted to $19.0 million, reflecting a decrease of 13% from the previous year. This strategic allocation aims to innovate new features that cater to evolving customer needs, potentially increasing customer engagement and retention.
Market Expansions
Amplitude has reported a 41% growth in its paying customer base, rising from 2,471 to 3,486 customers year-over-year. The expansion into international markets has been particularly notable, with international revenue reaching $30.0 million in Q3 2024, up from $27.9 million in Q3 2023. This indicates a robust demand for its services across diverse geographical regions.
Acquisitions
The company remains open to strategic acquisitions that can complement its existing offerings and enhance its market position. The potential for acquiring smaller firms with innovative technologies presents an opportunity for rapid integration of new capabilities into its platform, further driving growth.
Future Revenue Growth Projections
Revenue for the nine months ended September 30, 2024, was reported at $221.1 million, an increase of 8% from $204.9 million in the same period the previous year. Analysts project continued revenue growth as the company leverages its expanding customer base and enhances its product offerings. The annual recurring revenue (ARR) was noted at $298 million, reflecting a 9% increase year-over-year.
Earnings Estimates
Looking ahead, earnings estimates suggest that the company may improve its profitability metrics. The net loss for the nine months ended September 30, 2024, was $61.7 million, compared to $71.8 million in the same period the previous year. This trend indicates a potential pathway towards narrowing losses as revenue growth continues.
Strategic Initiatives and Partnerships
Amplitude has engaged in partnerships that enhance its product offerings and market reach. Collaborations with other technology firms aim to integrate complementary services, thus enriching the customer experience and driving new sales opportunities.
Competitive Advantages
The company enjoys a strong competitive edge due to its advanced analytics capabilities and a user-friendly platform. With a dollar-based net retention rate (NRR) of 97% as of September 30, 2024, Amplitude demonstrates its ability to retain and expand its existing customer relationships, a critical factor for sustainable growth.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Revenue | $75.2 million | $70.6 million | +6% |
| Paying Customers | 3,486 | 2,471 | +41% |
| International Revenue | $30.0 million | $27.9 million | +8% |
| Net Loss | $16.9 million | $17.7 million | -5% |
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Updated on 16 Nov 2024
Resources:
- Amplitude, Inc. (AMPL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Amplitude, Inc. (AMPL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Amplitude, Inc. (AMPL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.