Now we know that they're working. But yeah, thank you guys again for attending, and thank you to everyone in the audience. If you don't know me, my name is Taylor McGinnis, and I am on the Software Equity Research team here. So with that, let's dive in. So, you know, very topical, the macro, so maybe we start there. I'd love to hear, you know, what you guys saw in terms of demand trajectories through 3Q and into 4Q. Any incremental weakness in specific verticals? Maybe you can just talk about how customer conversations are trending more broadly. Yeah. Macros continue to be a headwind. We actually haven't seen things get worse, and so there continues to be good demand for Amplitude as a product, which has been fantastic to see. I think the biggest thing that we're working through is there's a number of spend reductions from our existing customer base, who are on multi-year contracts, that we expect to continue to be a headwind now and as we go into the first half of next year. The good thing is there's a number of plays available to us that are continuing to evidence the strength of the category overall. So first, is consolidation. We've seen Amplitude do very well against a number of the point players in this space. If you look at either other competitors on the analytics side or companies in experimentation or even Session Replay, we see a lot of desire to consolidate off of those point solutions onto Amplitude as a platform. The fact that we are the first company in the space to offer this full suite of products is a huge advantage to us in this sort of environment, when there's a desire for spend consolidation among teams. The other big thing that we saw in Q3 was that our demand was more broad-based, so there wasn't any single large expansion that was driving the success of all the revenue that we brought in. There was a good mix of larger companies, smaller companies. There was a good mix of traditional companies versus digital natives. I mentioned a large sports gaming customer- Mm-hmm. that decided to go wall to wall with Amplitude in Q3, so that was fantastic to see. And, you know, while we're only partway through Q4, we see the same trends continuing as we go into Q4. Yeah. And then, so there's a lot of things that you can't control in the macro, right? But in terms of what you guys are doing to make sure that, you know, you're well positioned coming out of this, maybe you can talk a little bit about there. Like, what changes have you made within the organization off the back of this? I know you guys have been, you know, having a bigger push to expand beyond the tech vertical, right, into some of those other areas that you just mentioned, but would love to, you know, hear what you've done, on that front. So, first is actually just taking a step back. First is actually continued product innovation. Mm-hmm. And so we've been very, very aggressive about product innovation this year. It's been the year that we've done the most by far. We launched our Plus self-service plan, which was a big deal. Last month, we launched Amplitude AI. We announced early access of Warehouse Native. We're gonna be launching Session Replay very shortly. And so we've done a whole bunch of marketing analytics at the core, and so we've just continued to keep that muscle up, and that will serve us well coming out, as there are opportunities to sell new parts of the platform into our customer base. I think the second thing is making sure we're very in control of our business. We've never been a growth at all cost business, and we've been very conscious of how we allocate capital. So very happy with where we ended up this year and being free cash flow positive, which was a big deal. And so with our strength of our balance sheet, that puts us in a great position, you know, to, in the, in the years to come. And then the last thing is just continuing to improve execution- Mm-hmm ... particularly that transition, as you mentioned, from digital natives to more traditional companies. And so I've been very focused on upleveling the executive team and maturing our go-to-market motion as a business. So I brought in Thomas as our President last year to drive that on the go-to-market front. I brought in Criss earlier this year as CFO. And we actually recently announced this morning that we've added Francois, our new Chief Product Officer, who's the former Chief Product Officer and just left Tableau. So fantastic to have him as part of the team as well. And I've really built out the team to help Amplitude grow from where we are at today to $1 billion plus in revenue and win the category. Yeah. And then when we think about that longer term revenue growth trajectory, so when you think about all the different opportunities that you talked about, I'd love to, you know, hear where you guys think of more as the steady state, like, growth rate potential of this business. 'Cause I think what happened is you saw, you know, this explosion of digital activity during the pandemic, followed by macro headwinds- Totally. And you saw a lot of contraction on, like, event volumes. And I think it's fair to say some of, like, the explosion in digital activity is probably, you know, not gonna happen again unless there's, you know, another, another big event like we saw with, with COVID. But as you, like, think about, you know, some of the opportunities that, you know, you're putting the seeds in place and, you know, where we could get back up to from, like, an expansion opportunity, would love to, you know, hear how you guys think about the longer term steady state growth of this business. Yeah. So this is the multi-billion dollar question for both us and everyone else in the category. Yeah. What I'll say is that I think we saw both sides of it. So we saw incredible acceleration in 2021, where we were at 60% year-on-year growth. We're obviously seeing a lot of contraction today, where we're in the teens and, you know, we expect that to continue as we go through next year. And the first thing I'd say is it's kind of, you know, those are the extremes. It's not gonna be either of those two. Yeah. You know, I've said before, and I'll say again, that Amplitude will accelerate in terms of its growth rate long term. Mm-hmm. This is a very large category, and so, you know, excited about our ability to do that. What I'm thinking about is how do we set up Amplitude in this current environment, so that coming out the other side, we're a beneficiary of fewer players and a larger market. The other thing that I would say is that, more specifically, as we look at 2024, one of the things that we're seeing is that in the first half of the year, that's when we finally expect the last of the pandemic-fueled growth contracts to be coming up for renewal. Mm-hmm. And so as we get past those, that will make re-acceleration structurally a lot easier for us as a business, in terms of ARR, which will then translate into, into revenue. Yeah, makes sense. And maybe, like, Criss, a question for you then off the back of that. So I know you made the comment that you expect the renewal base in 4Q and the first half of next year to be roughly similar. Could you just provide a little bit more color on what you meant by that? Did you mean in terms of composition, you know, the volume of renewals? Would love to get your thoughts there in terms of how we think about, you know, the trajectory of revenue growth. Appreciate it. What I want to convey is that the absolute dollar churn levels will be consistent from what we saw in Q2 2023, what we saw in Q3, what we expect for Q4 and Q1 and Q2. Mm-hmm. The absolute dollars of churn. For Amplitude, for churn, it's both down sells and lost customers that we're measuring. When we talk about our GDR being in the mid-80's, we're, we're capturing both of those, and that the role that that plays as a percent, the absolute numbers that drive that will be consistent across those five quarters. Got it. That's what I was trying to convey. Got it. Exclusive of the renewal base that was up for renewal in any specific quarter. Got it. Makes a lot of sense. And then when we think about NRR, so NRR fell to 99%, and just as you think about, you know, where that could go, you know, I know that there's been some contraction-driven contraction that's been driving that, but maybe you can break down, you know, what has been like, the bigger drivers of that metric coming in. And then as we look, you know, over the next couple quarters, like, should we start to see, you know, that metric bottom, given, you know, that you're still working through these renewals? Could there still be, you know, additional pressure there and maybe in the second half, right, is when we can start to see that trend up? I guess, how are you thinking about that, that trajectory? So, anchored on that consistent churn number- Yeah ... It's really a function of what the new ARR in that quarter, what is the mix between land and expand? So I'll just take Q2 of 2023, where we had large expansion, so that NRR number was north of 100%. Mm-hmm. Right? Some of those expand dollars were upside for us in terms of our expectation, but they exceeded the churn, and we stayed in the low hundreds, whereas in Q3, we had a more balanced new ARR between land and expand. And then in that case, the churn eclipsed the new ARR from expand. Yeah. As we look forward, I actually think Q3 is gonna be reflective of what we see Q4, Q1, and Q2. Mm-hmm. Because we are the way we're profiling the deals in the funnel is a fairly balanced mix between land and expand. That obviously then gets mechanically easier in Q3, where we don't have that same headwind from that absolute churn number that we're expecting to come to fruition. And if we continue to produce at the same new ARR levels we've alluded to, mechanically, it'll just be easier- Yeah to have an accelerating ARR, even if we just continue to perform in new ARR the way we have been performing. Yeah. Makes tons of sense. So maybe let's move to the introduction of the $49, you know, user per month Plus Plan and, you know, also some of the initiatives that you're talking about to focus on bigger accounts. So one, I guess, you know, what led to some of these decisions, and how should we think about, you know, those growth opportunities materializing? And then, Criss, I'd love. So first part, Spenser, and then for Criss, I'd love to hear how you think about the impact to margins from that. Like, as you make, you know, some of those shifts, being more efficient at the lower end, putting dollars at the higher end, like, could you actually start to see more leverage and upside to margins as we get into next year? The whole goal of the Plus Plan was to meet customers where they're at. One of the most common complaints we got from our customer base was the jump from the free to the first paid plan- Mm-hmm ... was really big. So you'd often start out using us for free, getting to a certain level, and then wanting to upgrade, but then having to talk, go through a full sales process, spend $30,000, $40,000, $50,000 right out the gate. And so to go from $0- 50K, that's a really big leap. And so what we wanted to do was say, "Okay, how can we make that journey smoother, so that customers can get started paying with a small amount and then potentially grow into larger and larger amounts?" And it all ties back to the theme of winning simple. So how do we win with our customers in as an easy way as possible for them? Number of other benefits, price transparency also allows customers to be more confident in starting out on the free plan because they know how much they're gonna pay when they grow. Mm-hmm. The last big change that we drove as part of it was offering a free version of our non-analytics products, which is significant. So we offered a free version of experimentation, we offered a free version of CDP, and we're gonna be offering a free version of Session Replay when we launch that early next year. And so that's a really big deal, to be able to get started with the full suite right out of the gate from free, then to credit card, and then eventually talking to a salesperson. We've already seen conversions from that, that Plus Plan to our Growth and Enterprise annual contracted plans. Mm-hmm. Although it's only been out for a little over a month right now, it's a really promising channel in terms of new acquisition. So that's the biggest by far. The other part of it, and Criss will talk a little bit more to this, is that it allows us to be much more efficient on the motion. So obviously, we talk a lot about product-led growth and Amplitude, and so being able to drive that instead of having to have a sales team, a salesperson that's coming in to sell a $30K contract, is much more efficient at the low end of the market. Particularly if the long-term potential of those accounts is not very large. And that allows us to take those dollars and then deploy it to the enterprise segment. But I'll let you say more to that. Yep, no, you said it. One of the things that we've really been focused on building over the last couple quarters is to differentiate that prospect that is gonna land at 30,000. Yeah. Right? If it's gonna land at 30 and it's only gonna get to 35, we shouldn't be in a people selling motion to that customer. It should be a product-led, self-serve motion. Yeah. That's an effective, efficient, right, customer acquisition model for it. But if that prospect is gonna land at $30 and can grow to $200 or $500 or $1 million, that's worth being a people-selling motion, even if the first transaction's only $30,000. We put a lot of effort into how we profile to differentiate between those two prospects. And having done that, now we've been realigning, or Thomas has been realigning his team- Yeah ... in a much more named account structure, to go after that second one. It's, it's, it's worth prioritizing, because we recognize their digital footprint and how meaningful they can be for us. So that obviously should unlock a lot of leverage within our sales and marketing spend, directly as a function of being much more effective, much more efficient in that customer acquisition, obviously, customer retention profile that we have. So with that, and I'm gonna say anchored in being free cash flow positive- Mm-hmm ... and that nothing I'm about to say should signify anything of grow at all costs. Anchored in a free cash flow positive, Spenser and I recognize this is still very early market. Yeah. We're still early in the potential that's ahead of us, and our ability to reinvest for growth will best serve us for the long term. Yeah. That we recognize that there always needs to be a balance between growth and profitability, but again, anchored on being free cash flow positive, we look forward to being able to take that overachievement, take that over the effectiveness that we're drawing out of the go-to-market motions and reinvest both into it as well as into product. On G&A, I very much expect to drive economies of scale. Yeah. And Criss, on your comment about realignment in the sales force, could you maybe talk about... and Spenser, this is gonna also be a question for you, too, but just the overhaul of, or the magnitude, I guess, of the changes that you're making within the sales force. You know, how much needed to be done in order to, you know, get the sales force in a position to really go after those big opportunities? And the reason why I ask is because, you know, anytime a software company tinkers with the sales force, there's always risk of, you know, near-term disruption. So would just love to hear, you know, how you guys are working through some of those changes. Yeah. What I'd say is, this is a natural part of maturing as a company- Mm-hmm ... from a company that's been focused on digital natives, where customers have kind of pulled you in, to now we're going to traditional companies, where you need to go out and actually sell the software- Yeah ... figure out how to navigate the organization, figure out how to get to the right executive buyer. And so we have some folks like that today, but there's a lot where we need to do, where we need to bring in the right talent. And so as part of bringing in Thomas last year and then Nate, our new CRO, in April, that's what they've been focused on. And that's not a, you know, I think that's a, just a very natural part of transitioning from $100 million to trying to get to that multi-hundred million and to a $1 billion part. And so I think of it, the core motion is still the same. It's a sales motion. It's how do we convince a digital leader to adopt Amplitude to drive self-service in their organization? All of that, it's not like the motion is radically different, but you're looking to mature and improve the caliber of the go-to-market team that is executing against that. Got it. So I think this segmentation helps if I'm an investor and I hear- Yeah ... sales changes, right? The enterprise motion hasn't changed. Mm-hmm. It is our account executives selling in a cross-functional way, both in a digital native enterprise and a traditional company. We're just maturing how we do that and getting more effective in communicating value and others. Not really changes- Yeah ...maturation. But below that, right, what we would have called commercial or SMB- Mm-hmm ... we'll call it emerging enterprises for now, because there are customers with less than 100 employees that are million-dollar plus accounts for us. Right. It's us being able to allow our sales reps, our account executives, to go pursue those in motions that they do really well, but we've enabled them to enable taking the noise away from them. Yeah. Back to that 30,000 account that can only get to 35, that's noise. We shouldn't be putting that shiny object out there for them to chase. Yeah. We should be going, "No, go pursue the other one that can start at 30 and grow and grow and grow. Run the motion you know how. Run the motion you know how to differentiate." So, so much of the changes maturation have just been about taking the noise out of the system. Yeah. Moving the noise, and I hate that derogatory term, but I'm just trying to convey a sentiment of- Yeah That's a great audience for our Starter plan, and our Plus Plan, and our self-serve PLG. Us being more enabling of a go-to-market to focus on those differences, that's the big change. Perfect. I appreciate all of that color. That's really helpful. Maybe moving to AI. So I know this past summer you introduced Amplitude AI. You have products out there, like data assistants and, and more. I would love to hear about how you guys approach GenAI. You know, how do you think about the impact that that could have to Amplitude over the next several years? And then as you think about, you know, the ways that Amplitude can monetize AI, would love to hear, you know, your, your high-level thoughts there, too. Yeah, so first is Amplitude has always been a beneficiary of new waves of disruption. Yeah. And so we get our start focused on the shift from desktop to mobile. We grew a lot with the growth of SaaS, the way crypto, AR, VR, a lot of the largest and most bleeding-edge companies in those spaces are big Amplitude customers, and we've seen that with AI as well. So we just announced Midjourney as a customer. Fantastic to see, you know, they're going big with Amplitude, using both analytics and experimentation. Before that, they weren't using anything to understand the user journey. So they're literally looking at feedback in their Discord channel, and that's how they decide to prioritize what to work on. And so new ways... We've seen a lot of other AI companies in addition to them, Character AI, and Chai, and among others, and become Amplitude customers. So new waves of technology disruption, always fantastic for us because we are, in a lot of ways, like, very a concentrated bet on digital as the new revenue channel. Mm-hmm. and so whenever you get a new set of companies coming onto that, that's great for us. The second part of AI is that I think it has the ability to make workflows around the data an order of magnitude or more, more straightforward. And so one of the biggest challenges with operationalizing self-service data across an organization is: how do you sort through what is what? How do I know what the right chart to look at? How do I know, among the millions of data points that I have access to, which is the most important? And this is where AI- Mm-hmm ... can play huge leverage for Amplitude in particular. The thing that we have is we have one of the largest data sets of customer behavior out there, and so we have all this context of the sort of charts and insights you're gonna wanna look at. If you're a retail app, or if you're a media app, or if you're a financial services application, you know, here's the set of insights that you need. And so one of the things we've done is deploy automated suggestions for different charts you should look at, for how you should name your charts, for taxonomy changes you should make, for suggested formulas, and that's really helped speed up the process that was very manual before. So you'd have to, like, understand the interface, you'd have to click on a few different dropdowns. Now we're just suggesting it right out of the box, and we've already seen hundreds of customers. It's early, but we've seen hundreds of customers adopt it. We're now experimenting with more advanced ways to use AI, so we have Ask Amplitude Assistant. Mm-hmm. A lot of people have asked me, "Hey, are chatbots just gonna replace you and all these other tools in the data stack? Yeah. Because you can just have them write SQL for you and come out with all these insights for you." And it's actually, no, it's the other way around. Chatbots by default don't have any context on the meaning behind that data, but we do. And so... Oops. Mm-hmm. And so that's a huge advantage for us. Yeah Because we can then take that context and serve you a bunch of insights directly on the platform. And so I think the advantages actually accrue to the vertically specific players, like in Amplitude, that are focused on solving a particular problem, 'cause we have a lot more context and knowledge on how to do that, and AI is an accelerant to allowing many more customers to adopt it. Yeah, that makes tons of sense. And then on some of your other products, you also have, you know, Experiment and Recommend. I'd love an update in terms of the traction and the adoption that you're seeing there. I don't know if there's any statistics or any high-level color you can provide in terms of how, you know, those are trending or deal sizes related to the analytics offering, but would love to hear your thoughts on that. Yeah. Both, so Recommend, quick point of clarification, Recommend is now part of our CDP product. Mm-hmm. And so our products are Analytics, CDP, and Experimentation, and then we'll soon have Session Replay. What we've... I'll share back in, what was it? Three Qs, yeah, third quarter of last year, those two new products represented just over $10 million in ARR. As of second quarter of this year, so nine months later, they now represent over $20 million in ARR. So very fast growth, doubling in nine months, particularly, you know, in this sort of macro environment. And so, still small relative to the, you know, $270 million-plus revenue base that Amplitude is overall, so less, still less than 10%, but growing quite quickly. I'm very, very excited and bullish in both Experiment and CDP, and we think Session Replay is gonna perform similarly well, if not better. Yeah. And then on, like, staying on, you know, growth opportunities, I know that you flagged this earlier, but just in terms of the traction that you're seeing, like, outside of digital native, can you comment on that a little bit more? Like, like, you know, what is, like, the, the level of growth? I don't know if you can comment on, like maybe to the extent that you've looked at this, how NRR could compare with the, you know, tech vertical versus the non-tech vertical, and how some of those trends are, materializing. I think it'd be interesting to, you know, hear where you guys are in terms of penetrating that other part of the, the market. ... So doing it from memory a little bit, the spread between on NRR is about 5-7 points, where the traditional company is the higher of the two, reflective of the pressure that the Digital Natives have had. Yeah. And then from a growth rate perspective, we called it out in the last earnings call, that 11 of the last 12 quarters, the traditional company grew at 24%+ or greater- Right on a year-over-year basis. It was only this last quarter where they had dropped below that. And, yeah, they've been still a relatively, you know, greater than 10, less than 50% of our, of our ARR base. Yeah. But yeah, they've been, we've been moving along at a nice pace in that space. Yeah. Yeah. My expectation is, you know, that will make up, will continue to grow. So digital natives and tech companies, those will continue to grow, but that will grow faster and will make up more and more of our revenue growth as we continue to get towards $1 billion. I think we've just seen it where you get every year, there's, like, a new set of verticals that adopt Amplitude. So, like, one of the really interesting ones this year has been a lot of sports leagues. So we got one of the largest sports leagues in the U.S.- Yeah -to move off their legacy martech provider and standardize a bunch of analytics and other products onto Amplitude, and so that was a huge win. We've also seen a few other players in adjacent categories make the same sort of move. And so, you know, we're... I think we've done well in media, we've done well in quick service restaurants. You know, we're gonna continue to add more verticals within traditional companies over time. Yeah, that's helpful. And then I know historically, when you guys just given the early nature of the category, I know part of the hurdle was wanting to make sure that you had all the integration points right in order to, like, seamlessly get the data into the platform. And I think that was described in the past as a reason why NRR, you know, might not be higher than it is today. Now, I know you guys have done tons of initiatives to, like, ease a lot of the integration, and given the macro, the NRR is obviously muddled by some of the headwinds on that front. So can you just talk about, now that you have those initiatives in place, like, what are you seeing in terms of, you know, seamless expansion, opportunity, you know, how that has been trending with customers? Just 'cause it's a little bit hard for us to tell, given, like, the pressures that we've seen on NRR from the macro. Yeah, for sure. I think there's obviously been a big uptick in resizings and downgradings, where customers aren't getting as far along in using the capacity that they had bought, and so that's that headwind is hard to tell with this other stuff. Yeah. I think it's been much more straightforward than we've expected to be able to cross-sell new products into the existing customer base. So, Experiment has been very, very successful, as I talked about, and then Session Replay. You know, my president even told me, which he's like: "Oh, yeah, I think this is gonna be an even easier ramp into the customer base than experimentation. Mm-hmm. And so I think that's gonna be a significant contributor to NRR. And then as more... secondly, as we work our way through the macro stuff, and then thirdly, as more of our customer base is both larger companies and more traditional companies that display better NRR characteristics over time. Perfect. And then maybe in the last, like, minute and a half or so, we can touch on margins quickly. I know we commented about it a little bit earlier on the sales side. But maybe starting on the gross margin side, you've seen nice improvements there, getting, you know, well into the high 70s%. So when you think about the trajectory from here, I know this is more of a compute-intensive business, like, is it possible that you could be, you know, more durable in the 80s%? Like, I guess, how do you guys think about the levers on the gross margin side and what that could look like over time? So we've guided for people's models to continue at the 77%-78%. Yeah. Reflective of the fact that we have technical account managers, pro services, and customer success, which obviously those people-intensive are a drag on our overall margin. Very advanced usage. We did, obviously, in Q3, outperform kind of that range, and it was a function of where we can have swings in any quarter reflecting the kind of compute and events that happen relative to the subscription, but we kind of driving everybody back in their models to the 77-78. Now, with that said, yes, we are gonna continue to try to be more efficient in how we utilize our services teams. We're gonna continue to drive unit hosting cost margin out of our solution set with Amazon, but we haven't provided anything beyond kind of staying in that 77-78. Yeah. And then one last one, for you, Criss. So tremendous, like, margin improvement this year, right? You've talked about this is a big opportunity, right? So you guys wanna make sure, you know, you're investing for that. How should we think about, you know, the growth to profitability balance as we, as we look ahead? I would imagine, you know, once you start to see signs of inflection in the environment, there probably will be incremental investments on that front, but, would love to hear about how you think about the framework in the medium term. Well, so, again, anchored in free cash flow. Yeah ... Spenser and I are gonna continue to default back to, we recognize what's ahead of us. Mm-hmm. Maybe our current report card. There's a meaningful gap between how we're reporting on that card versus what we know we're putting in motion to achieve. As that stuff starts to come to fruition, which we know it will, we're gonna lean back into investing for growth. Perfect. That's where we are philosophically aligned. Yeah. I think we're early in the market. There's a huge amount of opportunity ahead of us. We wanna make sure to capture that, and do really well. And so I think, yeah, it's very much focused on how do we make sure to win it? Perfect. Awesome. Well, Spenser, Criss, thank you guys so much for your time, and thank you to everyone in the audience for listening in. Appreciate it. Perfect.