Amplitude is reporting after closing today, Feb 16. I’ve found it good practice to document my expectations in advance, so I know how to quickly react to earnings. Price action is often swift, so I want to take advantage of after hours trading. Posting it here in case anyone finds it helpful or has meaningful disagreement and rationale around why my expectations may be off base. I like to track and predict the metrics that the company include in the press release as “important” numbers. For Amplitude this is Revenue Growth, Free Cash Flow (FCF), and Customers count.
Amplitude is a relatively new company in the public markets, so we don’t have an extensive track record to base our expectations. Guidance was conservative going into the quarter, but I think expectations have to be continued sequential revenue growth in the 11-16% range. We’ve seen DBNRR tick upwards and it would be nice for that trend to continue. Customer counts also need to show continued growth. This is really a make or break report to see if Amplitude is deserving of a spot in my portfolio.
Keeping score, here’s how we’re doing this quarter, IMHO:
DataDog: Exceeded expectations!
Cloudflare: Met expectations.
ZoomInfo: Met expectations. Please see Chris' post for a great summary: [https://discussion.fool.com/zoominfo-q421-my-thoughts-35053384.a...](https://discussion.fool.com/zoominfo-q421-my-thoughts-35053384.aspx)
Upstart: Exceeded expectations!
Amplitude: TBD
-The Guidance of $51 million was the most painful part. That would be an increase of about 42% YoY, even with sandbagging they probably wouldn’t hit 50%.
-So they went from 73% to 64% to probably less than 50% revenue growth next quarter. What a disaster! Glad I was only in at 5%
-RPO was up 60% and DBNRR was up to 123% and Customers were up 54% to 1,597 but it didn’t help much.
Hey Jeff, what revenue number do you have for Q1 2021? I have $33.1 million so $51 million in guidance would be 54% growth. With a small beat that they did this quarter, that would be over 60% YoY.
Not saying it was a good quarter but I don’t think they are decelerating as fast you say.
With a similar beat next Q as they just had, it would make 2 Q’s in a row of under 40% annualized QoQ growth. As Jeff said, looking like a BIIIIIIG deceleration.
1.The CEO. He is a rookie. That’s on the company page to the CEO:
“He previously worked as an algorithmic trader at DRW Trading Group and studied Bioengineering at MIT where he won Battlecode, MIT’s largest programming competition, twice”
How many customers really need this solution? How many companies have Apps with enough revenues too afford such a solution?
What comes next? They are a one trick pony. That’s a big difference to Datadog or Crowdstrike, which develope new modules to sell each year.
Amplitude? Nothing changed. Same product offering.
Daws, I really like your earnings expectations format.
My 2 cents post carnage…
I had a 3% position heading into this ER. In fact, this was initiated this afternoon (yikes). I felt confident with the earlier price drop and recent Snowflake partnership. Too early apparently.
The impression I got was an issue of timing and product placement. The CEO mentioned about selling the religion. In other words, selling the need. This reminds me of an older TMF darling stock with a low code service, that CEO said his biggest challenge was to explain to potential customers how they could help. Digital optimization is maybe a bit of an art due to customizing to each customer’s need and therefore not an easy sell? With a DBNRR of 123% it’s sticky once in the door.
We know there is a large shift to digitalization. Just a thought, maybe Amplitude is too early to their market. This isn’t a CRWD situation with law of large numbers further down the S curve, perhaps instead stumbling at the starting block of the S curve. Budgets are deep into spending on digital transformation, but how many businesses have their digital transformation plumbing completed and able to commit to optimizing? They are adding customers but are lumped into one category as ‘paying customers’. Not several tiers: >100K, etc. So yeah, it’s early, maybe too early yet to see a sweet spot.
Like the gross margins & DBNRR. Such a small position now, I may sit on it.
-RPO was up 60% and DBNRR was up to 123% and Customers were up 54% to 1,597 but it didn’t help much.
Hi Jeff - this probably wouldn’t change your thinking but I thought I saw “Current RPO” up 60% but total RPO was actually up 78& at $170m so >3x coverage of latest quarterly revenues.
Your pre-ER posts lately have been truly insightful and helpful.
Given your expectations above, it would seem that Amplitude fell short on revenue, SQoQ, and FCF. However, above expectations on DBNRR, and nearly above on customers.
I decided to trim AH in my Roth IRA, from 8.5% to 4.3%, given the somewhat mixed results (tilting toward negative).
I admit to some curiosity about what your reaction was.
Your pre-ER posts lately have been truly insightful and helpful.
Given your expectations above, it would seem that Amplitude fell short on revenue, SQoQ, and FCF. However, above expectations on DBNRR, and nearly above on customers.
I decided to trim AH in my Roth IRA, from 8.5% to 4.3%, given the somewhat mixed results (tilting toward negative).
I admit to some curiosity about what your reaction was.
My immediate reaction was this did not meet expectations and I put a limit order in for the price I saw at the time ($32) to sell half my position. Unfortunately the limit order didn’t hit and the price continued to drop very quickly to a point where I decided I wouldn’t act in after hours as I believe the 40% drop was an over-reaction. So I’ll sit on my now smaller position for the time being until I’ve got a clear plan on where to reallocate. If there’s a bounce back tomorrow above $30, I’m likely to divest and just reallocate to higher conviction positions. But I think Bear stated it accurately when he said we’re now basically priced for the worst case scenario going forward.
It’s never fun to see an earnings report that doesn’t meet expectations, but documenting expectations is making my decision making much easier and faster (and I’m less surprised by the way the market reacts).
