Amplitude (NASDAQ:AMPL) reported third-quarter revenue of $111 million, up 25% from a year earlier, and raised its full-year outlook as enterprise customers adopted more of its analytics and experimentation products.
The company recorded non-GAAP operating income of $5.7 million, its highest quarterly level, even as costs associated with artificial intelligence and data usage weighed on gross margin. Revenue exceeded the high end of management’s expectations, Chief Financial Officer Andrew Casey said on the earnings call.
Annual recurring revenue, or ARR, reached $431 million at the end of the quarter, up 24% year over year and $21 million sequentially. Amplitude had 855 customers with more than $100,000 in ARR, an increase of 31% from a year earlier.
AI products and enterprise expansion
CEO and Chairman Spenser Skates said Amplitude is positioning its platform to help businesses determine what to build and measure whether new features work. Its offerings include analytics, Statsig’s experimentation tools and new AI products.
Agent Analytics, which evaluates AI-agent conversations and connects them to customer behavior, launched to all customers in August. More than 125 customers were using it in just over a month, Skates said.
Amplitude plans to launch Wave, an AI product-development tool, the week after the call. Skates said Wave identifies potential improvements using customer data, proposes changes and measures their impact. In one example, he said a Wave-recommended change to Amplitude’s blog produced 45 additional user sign-ups per week.
Skates cautioned that Wave is not fully automated and requires setup. Rather than immediately offering it broadly, Amplitude plans to work closely with a smaller number of customers. “The bottleneck is how fast can a customer adopt,” he said, noting that integrating Wave into existing workflows requires more hands-on assistance than Agent Analytics.
Casey said half of Amplitude’s customers now use multiple products, and that group accounts for 81% of ARR. More than 29% of ARR comes from customers using at least five products. He said cross-selling was the largest contributor to growth in the Amplitude portion of net new ARR, with upselling also contributing.
Of the $21 million sequential increase in ARR, management estimated that $15 million came from Amplitude and $6 million from Statsig. Casey said those amounts will become harder to separate as the company combines customer solutions and develops products using Statsig’s intellectual property.
Margins and customer retention
Third-quarter non-GAAP gross margin was 70%, down about six percentage points from a year earlier and one point from the preceding quarter. Casey attributed the decline to increased data ingestion, AI inference costs and the integration of Statsig’s hosting environment.
Casey said Amplitude is working on hosting and engineering efficiencies, including through a long-term Google hosting contract for the Statsig environment. He also said rising utilization could support future expansion: data ingestion was above 90% of customers’ contractual entitlements.
Non-GAAP sales and marketing expenses fell to 34% of revenue from 43% a year earlier, while total operating expenses declined to 65% of revenue from 75%. Non-GAAP net income was 4 cents per diluted share, compared with 2 cents a year earlier. Free cash flow rose to $5.8 million from $3.4 million.
In-period net dollar retention was 105% on a pro forma basis that includes both Amplitude and Statsig customers. Casey said the figure was affected by a focus on renewing Statsig customers rather than immediately selling them more products. He added that expansions among customers who joined less than a year ago had not yet been reflected in the retention measure.
Outlook and pricing changes
For the fourth quarter, Amplitude forecast revenue of $110.8 million to $113.2 million and non-GAAP operating income of $7 million to $9 million. It expects non-GAAP earnings of 5 to 6 cents per diluted share.
For 2026, the company raised its revenue outlook to $415.8 million to $418.2 million, representing 21% annual growth at the midpoint. It also raised its non-GAAP operating income forecast to $8.9 million to $10.9 million and expects non-GAAP earnings of 7 to 9 cents per diluted share.
Casey said more than 90% of third-quarter transactions, including new business and renewals, used Amplitude’s new pricing and packaging. Those arrangements represented 38% of total ARR, a figure the company expects to exceed 50% by year-end. He said customers on the new model are showing higher average selling prices, greater multi-product adoption and longer contract durations.
As Amplitude plans for 2027, Casey said it is considering adding sales capacity in key markets where current investment is not meeting demand. The company has increasingly focused on enterprise customers, which he said tend to adopt more products and have stronger retention than smaller customers.
About Amplitude (NASDAQ:AMPL)
Amplitude, Inc is a software company that provides digital analytics and product experience solutions. Its platform helps organizations collect, analyze and act on user behavior data across websites, mobile applications and other digital products.
The company’s offerings include Amplitude Analytics, which enables teams to measure user engagement, retention and conversion; experimentation tools for testing product changes; session replay capabilities for reviewing user interactions; and data management and governance features.
