During today's call, management will make forward-looking statements, including statements regarding our financial outlook for the fourth quarter and full year 2024, 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 in 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 Investor Relations website at investors.amplitude.com With that I'll hand the call over to Spenser.

Thanks, Yao. Good afternoon, everyone. Welcome to our 2024 third quarter earnings call. I'm going to focus on three sections today. First, Q3 financial results and what we're seeing in the market. Second, how we are going after our market opportunity. Third, Command AI, continued product innovation, and customer stories. I'm pleased to report that we beat all guided metrics this quarter. Our third quarter revenue was $75.2 million, up 6% year over year. Annual recurring revenue was $298 million, up $8 million from the end of the second quarter. Non-GAAP operating income was $1.6 million or 2.1% of revenue. We now have almost 3,500 paying customers. In Q3, customers representing $100,000 or more of ARR grew to 567, an increase of 13% year-over-year. We put up a better quarter, thanks to execution. This quarter's results are especially encouraging when taking into account the unexpected headwinds from the new Russian sanctions that we discussed on last quarter's call. Here are the highlights. Our integrated platform approach is uniquely suited for this moment. Customers are looking to us to drive consolidation. Today, 23% of our annual contracted customers use more than one of our products. Our competitive position remains strong, particularly against point solutions and legacy players. One callout this quarter is Google Analytics, whose customers are dissatisfied with its persistent usability problems and unresolved privacy issues. This is creating a long tail of opportunities for Amplitude. We are building a higher-quality book of business. Last quarter, I spoke to promising signals across pipeline and attach rates. We believe the nature of larger sales is changing for the better as we make progress to win the enterprise. We are starting customer conversations differently, reaching key decision makers, and demonstrating fast value in ways we weren't before. We saw continued healthy growth…

Thank you, Spencer. And thanks to everyone joining us today. I'm happy to report that we exceeded all guided metrics this quarter. Now that I've had some time to work with the team, I'm happy to share that many of my early instincts about the business have been proven right. Amplitude has the right product focus to meet critical business needs and a customer-obsessed culture focused on solving difficult problems. Our platform is uniquely set up to win against the market backdrop of vendor consolidation and the convergence of product, marketing, and experience analytics. We haven't quite turned the corner yet, but the signs are there. Cohort health continues to improve, and we are building a higher-quality book of business, making progress on our efforts to win the enterprise. Our platform is growing with new product capabilities and our customer use cases, but there is more to do. As part of my first official earnings call with Amplitude, I'd like to share some overarching financial principles. Hopefully, none of these comes as a surprise. First, we are not a growth-at-all-costs company. We are investing appropriately to drive accelerating growth, while generating positive free cash flow. And we plan that our growth will come with leverage. There are caveats. We deal with capital allocations decisions every day, and we may adapt this approach when we have attractive opportunities that drive long-term value at the expense of short-term results. Now, turning to our third quarter results, as 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 our GAAP and non-GAAP results, can be found on our earnings press release and supplemental financials on our IR website. Third quarter revenue was $75.2 million, up 6% year-over-year and…

Great. Please turn on your microphone and camera. Limit yourself to one question and one follow up in the interest of time. Our first question comes from Koji Akeda from Bank of America, followed by Brent Bracelin from Piper. Koji, go ahead please.

Hey. Thanks, guys, This is George McGregor-Henon for Koji. I wanted to start out with kind of a bigger picture question, just about, you know, with all this talk of AI agents, and how they're becoming more powerful. And, you know, maybe we'll see one day where they become so fully functioning that they can interact with apps on their own. I kind of wanted to ask, in a world like that, how does Amplitude play in to kind of capture the interactions that the AI apps or AI agents have with apps?

Yeah, so we're talking a very different world from the one that we live in today. I'll give you kind of two different views as to how we plan. So I think first is there's always some interface between the human world and the digital world. And our thing is how do we capture all those touch points and help companies make those experiences be the best they possibly can be. So even with agents, you know, there's a point where you're asking them to go do something. If you look at any of the trends for times humans spend interfacing with digital, the stuff is just, you know, continuing to go up and to the right. And so, you know, even if you're delegating more and more tasks to agents, you know, in net, I expect humans will spend more time, more and more time interfacing with the digital world. And so that's just a great thing for us. The second opportunity I'd like to call out with respect to AI agents is a little more, you know, and this is like, you know, exactly how it's how is it going to play out, but that one of the really exciting things about our position in that world is we have this enormous repository of data of customer behavior, one of the largest in the world. And so if you think about, okay, we get to train that on not just humans, but AI agents in that world and help figure out, okay, well, how can you make an AI agent more successful in this digital experience or this digital interface versus one where you're not tracking that? And so we think of it as like, hey, we instrument a digital product journey, and whether it's a human using it or an AI using it, you want to maximize that as a company, no matter what.

Make sense. Could I ask one, too, just in terms of, where are you guys, could you give a little bit more color perhaps on where you guys are seeing room for incremental investments, kind of what's giving confidence there, just kind of in regards to revenue guide going up and reform operating income guide going down a bit.

Yeah, so obviously we did the command AI acquisition, which is driving the bulk of the change and guidance on operating income side. As we go into next year, I'd say the biggest place we want to continue to invest is in product innovation. And so that means continuing to build the teams, continuing to so that we can ship a lot of stuff and be on the bleeding edge there. There are tons of things customers are asking us for. That's why, a big part of why we did the Command AI acquisition is because customers were asking us for this sort of functionality and we wanted to be able to deliver it. I expect us to continue to be very aggressive with getting new products and innovation out to market and we'll grow the team. On the go-to-market side, we've made the investment that we need to make, and so what we're going to be looking to do is drive re-acceleration through Q4 and 2025 with roughly the level of investment and the headcount that we have. The places that will make adjustment is we'll continue refocusing that motion more and more upmarket to the enterprise side over time, while automating the low end of the market with self-service and either fully or semi-automated ways.

Great. Thank you. Next question Brent Bracelin from Piper, followed by Matt Pryde from Citi. Brent, go ahead, please.

Thank you, guys. Quick question here for me. First one is going to be around the Command AI. Could you talk a little bit about - it sounds like you had an integration with them existing. How much overlap, customer overlap, was there with that platform? And could you just quantify the revenue opportunity there? Typical customer might spend $85,000 in Amplitude. Could it provide if you bundle both, could it provide a 10%? 20%? 50% uplift? Would love to better understand the overlap in economics and one quick follow up for you, Andrew.

Yeah, so I think Command AI gives us two big new opportunities from a product standpoint. And then one additional thing on the AI front. So first is guides and the second is surveys and so doing those in the forms of interacting back with your customers is very valuable to tie with our analytics. And, you know, I think I expect over the long term, yeah, majority of our accounts could use this sort of functionality with the analytics. Now, in terms of uplift, it's early to say, but, you know, you could easily see 20%, 50%, potentially more depending on the criticality of that functionality to your business. The other thing I'll call out on the Command AI side is actually their user assistant product, which we're really excited about, which is basically an end user, like a, it's an agent that exists to help the end users of our customers. So you have this thing that pops up on the website that says, hey, what do you want to do? And then it figures out how to guide you through the experience and you can interact with it in different ways to help you get things done on the product. And they've actually, so even though that's a new product for them in the last year, they've actually seen the most growth from that new product. So I expect, you know, this is going to be a big part of our offering in the same way that, you know, we expect Experiment and Session Replay and a whole bunch of our other stuff to be as well.

Maybe just to add on to that, the Command AI acquisition was really one that brought great product capabilities and a great team. There was very little revenue overlap, and it's a very small company, but they had such a great offering that when we did our analysis, it was very clear that it was much better for us to bring them on as part of the team than try to go build that ourselves. So it will absolutely be a better together story.

Certainly makes sense. And then just for you, Andrew, if you think about net new ARR, pretty healthy in light of some of the headwinds you had relative to some of the Russia contract changes there, the distributor. You mentioned it was mostly on the expansion side. Why now? Why do you think you saw some big expansions? I mean, the last time I think we talked, you were a little more nervous around renewals and downsizing, and we've seen that kind of pressure on NRR for the better part of the last couple of years. What changed?

I think this is where Spenser was talking about earlier. We made investments early on this year about moving more and more of our sales coverage to enterprise clients. We're introducing more and more product capabilities, and that better together, value for the money, driving greater efficiencies in their operations, really made sense to a number of our existing clients, and they trusted us, and we earned the right to have those expansions. Now, I think that we need to have more of that. We need to be broader with our customers. We need to see more of customers who are recognizing Amplitude as the consolidator in the market. So we've got our work cut out for us, you know, but definitely is very positive in that respect. It's just got to be broader.

Yeah. Brent, just to give you one example, The realtor contract that we did, typically in the past, that would have taken us a few years to get that point. Because we built relationships with the Chief Marketing Officer, Chief Product Officer, and Head of Data at Realtor, we were able to accelerate that from a few quarters from the first trial deployment to a full end-to-end deployment across multiple products. And so, you know, I attribute that back to the focus on when the enterprise and the execution there and the great things that Thomas and folks across the Board and go to market have been doing to be able to drive that expansion to do the one with the global Sports League to do a lot of the very larger ones that we did this past quarter. Now, as Andrew said, we certainly have our work cut out for us in terms of replicating and scaling that as we go into Q4 in 2025 but some great early fruit points.

Very helpful. Thank you.

Great. Next question Matt Pryde from Citi, followed by Arjun Bhatia from Blair. Matt, go ahead please.

Hey, guys. Thanks so much. I was wondering if we could just dig into the increase in operating loss expectations and if that should be a normal cadence like heading into next year.

Matt, I'll take this one. Matt, I would tell you that what really colored our guidance change on op loss was related to assuming the operating expenses associated with Command AI, the deal-related expenses, and some of the ongoing legal expenses we have with outstanding lawsuits. That's really the predominance of the change.

Got it. And last quarter, you mentioned that your average deal size in the pipeline was up about 25%. I guess in terms of the size of the deals, has that changed at all in the most recent quarter? In terms of the size of deals that you're seeing in the pipeline?

Well, I would tell you that we talked about the number of deals that we saw that were over seven figures in the quarter. So that should tell you that when we've seen that earned right to expand with clients, they're rewarding us with those larger deal sizes. So I think that that speaks to the potential of our ability to execute in a broader sense with our customers and drive those big deal sizes.

Got it. Thank you.

Great. Next from Arjun Bhatia from Blair, followed by Nick Altmann with Scotia. Arjun, go ahead please.

Hi, this is Willow Ahn for Arjun Bhatia. Thanks for taking our question. So, I'm going to start off with the self-service A/B testing and Web Experimentation announcement. How are you monetizing this product, and how has early customer reception been?

It's very similar to our other products out there. We're directly selling it. We've already seen some deals that have been closed, even though Web Experiment's only been out for about a month at this point. I think the key thing with Web Experimentation is it's very friendly for marketers and growth teams. And so teams that might not have access to engineering resources to make coding changes, where they can just point and click on a website in order to run an A/B test. So we've already monetized it in a few of our enterprise deals, and I think it's a great combination with our traditional server-side experimentation and feature flagging.

Thank you. And then one last question if I many. Can you comment on the competitive environment? Has there been changes? Are you seeing new players you haven't traditionally seen, like marketing players, for example?

It's been - so I'd repeat the themes that I've been talking about the last few quarters, which is that both versus the legacy MarTech players as well as versus the point solutions, there is a drive towards consolidation and a drive towards buying the next generation stack. And so we - part of the reason that we're being so aggressive with launching these other products, Web Experimentation, the Command AI Acquisition, we're going to be getting out Mobile Session Replay soon, is because there's a lot of asks for consolidation from our customer base where they want to use all the same provider and they want to standardize on whoever they've chosen for analytics, which is us. And so I think the one call-out I'd say that's a little bit more interesting this quarter is we see a lot of increased dissatisfaction with Google Analytics 4, where a lot of their enterprise customers have been forced to use that for the first time for the last quarter in Q3, and they're realizing the lack of depth as well as a whole bunch of issues around the privacy side makes it so that they have to go find something else, and that's where they ended up talking to us.

Thanks for taking our questions.

Great. For sure, Willow.

Next question from Jackson Ader from KeyBanc, followed by Elizabeth Porter from Morgan Stanley. Jackson, go ahead please.

Hey guys, this is Jack Nichols on for Jackson Ader. I wanted to touch on if you guys could talk about how contract renewals are coming in relative to your expectations.

I think so we are past the significant majority of the optimization from 2021 and 2022, so that's been great, and we expect to, you know, there's still a tail of them, but that's continuing to reduce as we go into Q4 and 2025 as far as the visibility we have. I think newer cohorts also tend to be healthier, both on growth and net dollar retention, so that's good. But I would caveat that overall with we are not happy with where renewal rates are at and need to continue to make progress as we go through 2025. And as we do, that will naturally lead to acceleration of business. One, a big part of our like me talking a lot about when the enterprise is to focus away from SMB and mid-market customers where you have a lot of tech startups that frankly are not doing well and so the renewal rates are adversely impacted.

Great, that makes sense. Maybe as a follow-up, can you talk about kind of the levers that you can pull to increase the sales efficiency that you guys are talking about early on the call?

I think it - so I think it as I was saying on an earlier question, I think it will naturally as a result of like we've built out the team that we need to and then as we go into Q4 in 2025 an acceleration on the top line will naturally lead to a whole bunch of metrics there improving. Do you want to comment on that as well.

Sure. I think it's a natural evolution of how a sales force, when increasingly focused on an enterprise motion, invariably those sales cycles are longer, so you have to be a little bit more focused on delivering and proving out your value over a period of time. We're also introducing a lot of new product capabilities that are augmenting an increasingly stronger value proposition in a better-together platform story. And the sales team is getting more and more adept at demonstrating that to new and existing clients who maybe didn't think about Amplitude to solve some of those really complex problems in the past. So I think this is one where we have to be diligent, we have to be focused, and we have to be wanting to have a little bit of patience as we get better and better at that execution.

Actually, just to be really clear on that, one of the big drivers that we're going to focus on in 2025 is adoption of the full platform. We are at 23% multiple product adoption, which, you know, great progress, but we need, I want to get that to 100% because we see those customers are much stickier in terms of their renewal rates, they buy way more, they get to much higher ASPs, there's just a lot more value created from buying the whole platform, so that's going to be a really big focus of ours.

Thank you guys for answering.

Great. Next question is Elizabeth Porter from Morgan Stanley, followed by Clark Wright from DA Davidson. Elizabeth, go ahead please.

Great. Thank you so much. I wanted to ask on the Command AI acquisition. It sounds like there has been a lot of disruption in the space also with a WalkMe kind of taken out. So I just wanted to get your view on how bright this market is for consolidation and what the go-to-market process looks like there.

Yeah. Very, very right for consolidation. The reason we did this acquisition is because our customers have been asking us for a consolidated solution. It makes no sense to run a standalone tool, whether that be WalkMe or something else. They'd much rather integrate it all on one platform, not just because there's lower cost of ownership, but because you can target users a lot better. So if you have the analytics data, you know when and where to send a nudge or a pop-up to the user, as opposed to just kind of blanket spamming your entire customer base. So yeah, I think we're going to see quite a bit of adoption of it as we launch it next year.

Great. And then just as a follow-up, I wanted to touch on the pipeline. Understanding there's still two months left in the year, how would you characterize the pipeline thus far heading into 2025 relative to the year-or-no period?

It's early to call it out for 2025. I'd say Q4 we're entering with strong pipelines, so that's good to see. Obviously a bunch of work on the execution front to convert it. And the early signals that we see in Q1 and Q2 are similar, but it's early to say exactly where we'll land. I do want to call out, from a pipeline standpoint, we are in a much better spot than we were a year or two ago in terms of the repeatability of our processes. And also in terms of the enterprise out, I think before, we were kind of bucketing everything all in the same where you know, you have SMB and midmarket pipeline be like, oh, we hit our pipeline number when actually, you know, not high enough percentage of it is quality enterprise pipeline. We've since changed that. And so there's a much, much stronger enterprise pipeline.

Great. Thank you.

Great. Last question, Clark Wright from DA Davidson. Go ahead please. Clark.

So, quick question in terms of the long-term RPO number, accelerated to 49% year-over-year. That's pretty astonishing, given kind of the buying environments and what you're talking about. I'd love to kind of maybe dig into that, what you're seeing, if it's more of the long-term commitments by the enterprises or if it's directly an outcome of your enterprise go-to-market motion changes. Is there anything to call it there? And then I'll have one follow-up.

So I can take that one, Spencer. It absolutely is a result of the focus we've had on building stronger, deeper relationships with clients, aligning our contracts to how customers view their value accretion over a period of time. Enterprises buy in very different ways than SMB and mid-market do. They don't consider a new vendor or an existing vendor for those types of contracts without having really understood how best to partner with them to drive that long-term value. And for us, it's one that we want to do that as well with our clients because it enables us to have, as you surmise, a much better view on the long-term revenue. It gives us greater predictability, and I think it gives us a lot of confidence that we're doing things in the right way, especially since most of those contracts, those customers, have bought into the full platform.

Got it. And then just following up, are you assuming anything in terms of 4Q from IT budget flushes, or does that represent potential upside?

I wouldn't say we've geared our guidance based upon any form of expectations on budget flushes.

Got it. Thank you.

Great. With that, I'm seeing no further questions in queue. Thank you very much. We know it's a very busy night for earnings. We appreciate so many of you joining the call today. Will be in RBC Capital Markets Global TMT Conference in November and at the UBS Global Technology and AI Conference and the Scotiabank Global Technology Conference in December. Details will be posted on our IR website. Thank you very much for attending our Q3 earnings conference call. You may now disconnect.