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Amplitude Inc. topped expectations with its latest revenue and earnings Wednesday, but the software company’s shares took a big hit in aftermarket trading as its revenue forecast came up shy of expectations.
The company makes software for what it refers to as “digital optimization,” or the process of helping companies figure out more about how their customers engage with digital experiences. Amplitude’s
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technology provides various insights into how consumers interact with apps and other digital platforms, allowing companies to determine which features are resonating with customers and which elements might be confusing.
Amplitude’s fourth-quarter revenue rose to $49.4 million from $30.1 million and came in ahead of the FactSet consensus, which was for $47.0 million. Helping fuel that growth was expansion in Amplitude’s customer count, which rose to 1,597 from 1,417 a quarter earlier, as well as increased adoption of the company’s newer products.
While Amplitude’s main offering consists of product-analytics tools, the company launched two new offerings in the middle of 2021. One, a recommendation tool, allows companies to send customized suggestions to their users depending on their past behaviors, and another, meant for experimentation, lets companies run A/B tests and otherwise create different user experiences.
Chief Executive Spenser Skates told MarketWatch that more than 100 customers were paying for newer products by the end of the fourth quarter, helping prove out the value of Amplitude’s multiproduct strategy, which he said that other software companies might not opt for until later in their journeys.
“It gives me confidence as CEO that we can do this and should continue to make more bets like this,” he said of the early adoption for Amplitude’s newer offerings.
Though Amplitude beat expectations with its fourth-quarter revenue, the company fell short with the top-line forecasts it offered for both the first quarter and the whole of 2022. Amplitude expects $50 million to $51 million in first-quarter revenue, whereas analysts had been expecting $51.3 million, and it projects $226 million to $234 million in full-year revenue, while analysts were anticipating $235.8 million.
“As we provide guidance for this year, we want to make sure we’re setting something we feel great about delivering on,” Skates told MarketWatch. He said that the company remains focused on “the long-term potential” of its software suite.
Shares were off about 37% in after-hours trading Wednesday.
Skates likened Amplitude’s offering to a “religion” in that it requires companies to rethink dramatically how they build their products.
“This is a really evangelical sale,” he said. “It’s not just ripping and replacing.”
While Amplitude’s customers previously might have stitched together various offerings from other companies to get insights on user behavior, Amplitude’s package encourages “a new way of building product” through “data-driven decisions,” he said.
Amplitude posted a fourth-quarter net loss of $21.9 million, or 20 cents a share, compared with a loss of $5.4 million, or 21 cents a share, in the year-earlier quarter. On an adjusted basis, Amplitude lost 5 cents a share, compared with 2 cents a share in the year-prior period, while analysts tracked by FactSet were expecting an 8-cent adjusted loss per share.
The company expects a first-quarter adjusted loss per share of 9 cents to 10 cents, while analysts were expecting a 12-cent adjusted loss per share. For the full year, Amplitude anticipates a 42-cent to 44-cent adjusted loss per share, whereas the FactSet consensus was for a 44-cent loss per share.
Amplitude went public through a September direct listing.
