Amplitude's Q3 2025 Earnings Call: Contradictions in AI Monetization, Market Strategy, and Macro Impact

Date of Call: November 5, 2025

Financials Results

• Revenue: $88.6M, up 18% year-over-year and up 6% sequentially
• EPS: $0.02 per diluted share (based on 143.2M diluted shares), compared to $0.03 prior year
• Gross Margin: 76%, down 1 point year-over-year, up 1 point sequentially
• Operating Margin: 0.6% of revenue (non-GAAP operating income $0.6M)

Guidance:

• Q4 revenue expected to be $89M–$91M (~15% growth at midpoint)
• Q4 non-GAAP operating income expected $3.5M–$5.5M
• Q4 non-GAAP net income per share expected $0.04–$0.05 (assumes ~142.6M diluted shares)
• Full-year 2025 revenue raised to $340.8M–$342.8M (~14% growth at midpoint)
• Full-year non-GAAP operating income expected $0.5M–$2.5M; full-year non-GAAP EPS $0.06–$0.08 (assumes ~142M diluted shares)

Business Commentary:

• Revenue and ARR Growth:
• Amplitude, Inc. reported revenue of $88.6 million for Q3 2025, up 18% year-over-year, with an increase of 16% in annual recurring revenue to $347 million.
• This growth was driven by strong performance in the enterprise segment, particularly through larger multi-year contracts and multi-product adoption.
  

Sentiment Analysis:

Overall Tone: Positive

• Management: "We delivered another strong quarter…exceeded expectations"; reported revenue $88.6M (+18% YOY) and ARR $347M (+16% YOY); RPO growth accelerated to 37%, with average contract duration ~22 months — all pointing to accelerating enterprise execution and product momentum.

• Improved Operational Efficiency:
• The company achieved non-GAAP operating income of $0.6 million, with gross margin improving to 76%.
• Operational efficiency improvements were driven by optimizing hosting costs, multi-product contracts, and monetizing services engagements.

Q&A:

• Question from Koji Ikeda (BofA Securities, Research Division): Can you break down what's driving the 37% RPO acceleration by segment, contract size and duration?
  Response: RPO growth is driven by a deliberate resegmentation toward enterprise, more multi-year/million-dollar deals and longer average contract durations (enterprise contracts exceed the 22-month company average).

• Question from Koji Ikeda (BofA Securities, Research Division): Where are enterprises investing across the build, ship, use and learn loop and how does that create opportunity for Amplitude?
  Response: Enterprises are early in investing on the 'use and learn' (analytics) side; AI will accelerate that shift and Amplitude is positioned to capture it.

• Question from Patrick Schulz (Robert W. Baird & Co. Incorporated, Research Division): Q4 guidance implies some revenue deceleration — what drove that forecast and how are you balancing growth investments versus driving profits?
  Response: Guidance reflects a conservative, execution-based view supported by RPO visibility; the company will make targeted investments while improving sales productivity to balance growth and leverage.

• Question from Patrick Schulz (Robert W. Baird & Co. Incorporated, Research Division): How have enterprise GTM improvements affected initial deal wins, sales cycles and multi-product land rates?
  Response: GTM changes produced broader multi-product adoption (71% of ARR), more multi-year and larger initial deals (five 7‑figure wins in Q3), and stronger expansion motion across customers.

• Question from Elizabeth Elliott (Morgan Stanley, Research Division): Will Agents drive a step-change in multi-product adoption, and is there seasonality in in-quarter NRR as you move upmarket?
  Response: Agents focus first on analytics/insights to drive adoption (action features follow next year) which should broaden platform use; as ARR mix shifts to enterprise, NRR should improve toward the long-term target (~115%).

• Question from Willow Miller (William Blair & Company L.L.C., Research Division): Can MCP and Agents open Amplitude to nontechnical users and expand your market opportunity?
  Response: Yes — MCP and AI Agents abstract the UI and data taxonomy, enabling nontechnical users to get insights and materially expanding TAM; management has set aggressive internal adoption targets for next year.

• Question from Claire Gerdes (UBS Investment Bank, Research Division): For new AI products (many in beta), will you prioritize free adoption or monetize early?
  Response: Priority is adoption to drive more data usage and natural upsells; management will focus on value delivery first and monetize after demonstrated customer value (company already commands a premium ASP).

• Question from Claire Gerdes (UBS Investment Bank, Research Division): How is the selling environment — are customers receptive to your AI pitch?
  Response: Customers remain cost-conscious but are highly responsive to concrete AI demos; demand is strong when AI delivers demonstrable value.

• Question from Jackson Ader (KeyBanc Capital Markets Inc., Research Division): What product capabilities are customers asking for into 2026 to compound growth?
  Response: Beyond enterprise execution and platform breadth, customers want AI-driven analytics that generate actionable recommendations; management expects AI to reshape the category and accelerate growth.

• Question from Clark Wright (D.A. Davidson & Co., Research Division): How do you decide between building versus buying to sustain product innovation?
  Response: They do both pragmatically: acquire when it accelerates time-to-market (e.g., Kraftful/AI Feedback), build when internal execution is faster; pairing long-tenured Amplitude teams with acquired AI founders accelerates innovation.

Contradiction Point 1

AI Agents and Monetization Strategy

It involves the approach to monetizing AI products, which is crucial for understanding the company's revenue growth strategy.

How are you balancing adoption and monetization for new AI products? - Claire Gerdes(UBS Investment Bank)

2025Q3: Our focus is on adoption to drive value and upsells. Amplitude already commands high price points, and we're focused on delivering consistent value to maintain current high ASPs. - Spenser Skates(CEO)

How have recent acquisitions and integrations accelerated Amplitude’s AI efforts, and how will they translate to monetizable outcomes? - Robert Cooney Oliver(R.W. Baird)

2025Q2: AI agents are in closed beta, enhancing customer leverage by finding insights, proposing strategies, and identifying problems. Monetization is not the focus yet, as the emphasis is on creating value for customers. - Spenser Skates(CEO)

Contradiction Point 2

Impact of AI Native Customers on Growth

It addresses the influence of AI native customers on the company's growth, which is important for assessing the impact of strategic investments in AI.

How will AI functionalities like MCP and Agents expand Amplitude's market opportunity by enabling non-technical users to access the platform? - Willow Miller(William Blair)

2025Q3: AI functionalities like MCP and Agents make Amplitude accessible to non-technical users, leveraging data and offering insights without learning the Amplitude interface. This expands our market opportunity by removing barriers to adoption and making analytics more accessible. - Spenser Skates(CEO)

Can you detail the expansion agreement and the impact of AI-native customers on growth? - Tyler Maverick Radke(Citi)

2025Q2: AI native customers, though small in number, contribute to growth, but not significantly impacting quarter-to-quarter results. - Spenser Skates(CEO)

Contradiction Point 3

Impact of Macro Environment on Growth

This contradiction highlights differing perspectives on how the macroeconomic environment affects the company's growth trajectory and customer behavior.

Why does Q4 guidance suggest revenue growth is slowing, and how are you balancing growth with profit? - Patrick Schulz (R.W. Baird & Co.)

2025Q3: There has not been significant macro effect, and the company focuses on operating with leverage regardless of conditions. - Spenser Skates(CEO)

How does macro uncertainty affect MarTech stack replacement opportunities? - Elizabeth Porter (Morgan Stanley)

2025Q1: Macro uncertainty increases the likelihood of consolidation and cost savings, driving more significant moves towards comprehensive platforms like Amplitude. - Andrew Casey(CFO)

Contradiction Point 4

Market Strategy Focus

It involves a shift in strategic focus from mid-market to enterprise, which could impact revenue growth and market positioning.

Can you break down the 37% RPO growth by enterprise, mid-market, vertical, contract size, and duration? - Koji Ikeda (BofA Securities)

2025Q3: The company's focus has been on enterprise clients with 1000 employees or $100 million in revenue. - Andrew Casey(CFO)

Can you provide more details on your sales capacity and strategic investments in enterprise go-to-market? - Koji Ikeda (Bank of America)

2024Q4: Our sales execution has been particularly strong in mid-market. And the investments we've made in enterprise and sales execution have been going into this specific segment. - Andrew Casey(CFO)

Contradiction Point 5

AI Product Adoption and Monetization

It highlights differing perspectives on the approach to monetizing new AI products and their impact on adoption and revenue growth.

What is the monetization strategy for new AI products—prioritizing adoption or monetization? - Claire Gerdes (UBS Investment Bank)

2025Q3: Our focus is on adoption to drive value and upsells. Amplitude already commands high price points, and we're focused on delivering consistent value to maintain current high ASPs. - Spenser Skates(CEO)

What is the cross-sell or attach rate potential for Command AI post-launch and early customer feedback? - Brent Bracelin (Piper Sandler)

2024Q4: With Command AI, we have the complete set of core products for product managers. We expect a 20% to 50% uplift on analytics contracts. We've seen strong interest and closed a $200,000 deal for guides and surveys just yesterday. - Spenser Skates(CEO)