Amplitude, Inc. Class A Common Stock Piper Sandler 5th Annual Growth Frontiers Conference

Sure. I've been with Amplitude for two years, and maybe I'll start with the two things that were going on right when I arrived was this effort to, one, sell to more enterprise clients, and two, was a postulate that our founders have about all the applications that have kind of surrounded product analytics were somewhat of a bug. They really thought that they should all be integrated in one platform. Okay, so I guess back maybe to the first question you asked, what does Amplitude really do? You got to think of Amplitude as this observation observability layer with every piece of software that gets created. Our foundations were around product analytics, where our motto was, "We help people build better products." You're getting feedback on how people are interacting with a mobile application, a website, a kiosk.

Anything that had software and a way of digitally engaging with clients is what businesses were deploying, and they were using Amplitude to get that feedback. A lot of it came in the form of, how do I make this website better? How do I make the feature get demanded more? How do I make sure that a marketing promotion is being seen and being acted upon? How do I make sure that cart abandonment isn't a big issue? Those are types of issues that every one of our clients who are using classic product analytics was trying to determine. They may also be deploying applications like Session Replay to get qualitative feedback, or using their experimentation platform to understand if they're making changes to the product, what the impact would be.

They might have used the CDP or an activation software, then take cohorts of customer information and feedback and move those into a Klaviyo or a Braze. They may have used Pendo or WalkMe for a guide and a survey to kind of point people in the right directions on how to interact with their product. All of those, as I said, were created around product analytics. They're taking their feed from the insights that the product analytics engine was providing. We decided that we should drive a strategy around building those products and adding them into a core platform in which customers could easily migrate or move between those different application environments, not have to learn a new UI, not have to have data taxonomy issues, and just drive greater and greater workflow optimizations.

I'd say over the last 2 years, we've kind of executed on those visions of, one, selling more to enterprise clients, which are increasingly trying to engage digitally with their clients, and consolidating all these other applications into a single platform.

Sure. So when I arrived at Amplitude in Q2 2024, there was a backdrop of decelerating growth. There was a lot of discussions around how many contracts actually have entitlements which were much higher than their actual utilization rates. What Amplitude had been seeing is contraction and logo churn, especially with what I would consider overselling capacity, and some really poor sales practices. In fact, one of the stories I tell is one of the largest contracts we had, I think I told you this before, but just for the audience, one of the largest contracts we had, I realized that it was a 12-month contract, and upon renewal, the customer was entitled to a 33% reduction in the rate of data that they were ingesting in the platform at the same volume.

I look at that contract and say, "Well, you need to take into consideration the likelihood that the customer would renew, and you incorporate that into your ARR." Well, that didn't happen. We were looking at a customer who was renewing. They were using the product, but we were going to get over $1 million in contraction just because they had this renewal opportunity. That's an example of a really poor selling practice that you just wouldn't do.

Today, if that were going to happen, I would tell the rep, "Well, if that's the way the customer wants to do it to make sure they're not going to have an increase in data ingestion fees in the first year where they're ramping up, that may be okay, but I'm going to pay you as if that second year does get renewed." Those are the types of the behavioral changes, the, I'd say, maturation that we drove throughout the go-to-market team. Yes, we replaced a bunch of them. Yes, we made them enterprise sellers, gave them a selling process and criteria and pipeline analytics and just really moved Amplitude more and more into what I would consider a very mature enterprise selling process, along with executing against this consolidation play we saw out there.

I think all of that culminated into the Q2 earnings announcement where we said, look, remember when we were talking for so many quarters about the churn that was happening, what the reasons were behind it. We kept using, "Hey, this is inhibiting our growth." If you would have looked back at that time in Q2 2024 and said, what was the real percentage utilization customers actually using their data versus what the entitlement was, I would tell you that was around 60%. It just pretended that there's going to be more additional churn happening.