Amplitude (AMPL) Stock Forecast & Price Target

Amplitude Inc. demonstrates a positive outlook due to its significant growth in deferred revenue, which has increased by 7% year-over-year, totaling $109.7 million. The company has also shown strong performance in its large enterprise segment, with 42 customers now spending over $1 million in annual recurring revenue (ARR), marking an 8% increase year-over-year, along with the total count of high-value customers rising by 16%. Additionally, Amplitude has achieved a net revenue retention rate of 100%, coupled with an increase in the adoption of its platform-centric strategy, as the percentage of customers utilizing multiple products grew from 14% to 25% within a single quarter.

The analysis indicates a concerning financial outlook for Amplitude Inc, with FY25 revenue guidance suggesting a substantial 30% decline in New Net Annual Recurring Revenue (NNARR), alongside a 25% organic drop, despite improvements in gross and net retention and sales productivity. Additionally, the company is experiencing challenges with customer contracts linked to usage metrics, leading to significant down-selling upon renewal as marketing budgets tighten, which is projected to hinder growth and maintain high sales and marketing expenses in the near term. Finally, the expected decrease in free cash flow margin to 3.7% in CY25, coupled with an anticipated reduction in sales and marketing spending as a percentage of revenue, highlights underlying inefficiencies that may limit Amplitude's ability to capitalize on market opportunities.