Amplitude Inc Class A ((AMPL)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Amplitude Inc. recently held its earnings call, presenting a generally positive outlook characterized by strong revenue growth, significant customer expansions, and impressive product innovation, particularly in the field of AI. Despite these positive notes, the company acknowledged some challenges, including a decline in gross margins and expectations of a slight decline in net new ARR for the upcoming quarter.
Strong Q2 Revenue and ARR Growth
Amplitude reported a robust second quarter, with revenue reaching $83.3 million, marking a 14% increase year-over-year. The annual recurring revenue (ARR) also saw a significant rise, hitting $335 million, which is a 16% increase compared to the previous year. This growth was highlighted by the highest net new ARR in 11 quarters, showcasing the company’s strong market position.
Record Expansion Deals and Customer Growth
The company experienced notable customer growth, with the number of customers generating more than $100,000 in ARR increasing to 634, a 16% rise year-over-year. Additionally, Amplitude successfully closed a record expansion deal with a major technology company, further solidifying its market presence.
Platform Expansion and Product Innovation
Amplitude’s platform expansion and product innovation efforts have paid off, with 67% of ARR now coming from multiproduct customers, up from 64% in the previous quarter. The company has made significant progress with AI agents and other AI-driven product innovations, positioning itself as a leader in the digital analytics space.
Recognition and Market Leadership
Amplitude’s leadership in the market was recognized as it was named a leader in the 2025 Forrester Wave for Digital Analytics Solutions. The company also ranked #1 in eight categories in G2’s Summer 2025 report, underscoring its strong market position and customer satisfaction.
Improved Sales Efficiency and Cash Flow
The company reported an increase in free cash flow margin to 22% for the quarter, generating $18.2 million in free cash flow compared to $6.8 million last year. This improvement highlights Amplitude’s enhanced sales efficiency and financial health.
Gross Margin Decline
Despite the positive financial performance, Amplitude experienced a decline in gross margin, which stood at 75% for the second quarter, down 1 point from the previous year. This decline was attributed to increased data ingestion costs and higher amortization of software development costs.
Expected Third Quarter Net New ARR Decline
While the second quarter saw strong net new ARR, the company anticipates a slight decline in net new ARR for the third quarter. This expectation reflects the company’s cautious outlook amid ongoing market dynamics.
Forward-Looking Guidance
Looking ahead, Amplitude’s management provided guidance for the third quarter and full year 2025, emphasizing strong financial momentum and strategic growth initiatives. The company raised its full-year revenue guidance to between $335.2 million and $338.2 million, with a non-GAAP net income per share expectation of $0.04 to $0.08. For the third quarter, Amplitude anticipates revenue between $85 million and $87 million, with a non-GAAP net income per share between -$0.00 and $0.02.
In summary, Amplitude’s earnings call reflected a positive sentiment with strong revenue growth and significant customer expansions. The company’s commitment to product innovation, particularly in AI, and its strategic growth initiatives position it well for future success. However, challenges such as declining gross margins and expected net new ARR decline in the next quarter highlight areas for improvement. Overall, Amplitude’s financial health and market leadership remain robust, promising continued growth and innovation.