Amplitude (AMPL) Q3 2026 earnings review
Amplitude's sales and operating profit accelerate, but gross margin shrinks
Amplitude grew subscription sales faster and hit a record operating margin, even as AI computing and hosting costs squeezed gross profit. The product-analytics software maker lifted revenue 25% to $111 million, while stripping out the initial Statsig acquisition leaves underlying recurring revenue up 19% by our math. Finance chief Andrew Casey kept sales overhead flat in dollars to reach a 5.1% operating margin excluding one-offs, and raised the full-year outlook above what the prior plan implied for the fourth quarter.
| Recurring revenue excluding Statsig close | +19.3% headline ARR: +24% to $431M |
|---|---|
| Revenue | $110.6M +25% from a year ago |
| Operating margin, excluding one-offs | 5.1% 0.6% a year ago |
| Full-year revenue outlook | Raised $7.8M middle of the range: 21.5% growth |
⚖️ Verdict: 🟢 Bullish
The story got better because Amplitude added $21 million of new recurring revenue without relying on an acquisition close, and lifted its fourth-quarter revenue plan by $4 million instead of letting growth slow. The bad news: gross margin excluding one-offs fell below 70% as the company gave new AI tools to all plans, existing customer retention stayed stuck at 103%, and share buybacks stopped.
The question now is whether third-quarter revenue excluding Statsig accelerated alongside recurring revenue, or if accounting recognition of acquired contracts carried the beat again. If underlying revenue sped up, the platform shift is working; if it lagged, growth still leans on the acquisition and free AI usage. The third-quarter filing's revenue footnote and fourth-quarter retention rate will settle it.
🐂 Bull Case
Sales Restraint Drove a Record Operating Margin
Amplitude, which makes software that tracks how people use digital products, turned rapid revenue growth into profit by holding down overhead. Finance chief Andrew Casey said the business achieved "revenue growth of 25% with our highest non-GAAP operating margin in company history" during the third quarter.
- Operating margin excluding one-offs: 5.1%, up 4.5 percentage points from a year ago
- Sales and marketing costs excluding one-offs: 33.8% of revenue, down 9.1 percentage points
- General and administrative costs excluding one-offs: 10.7% of revenue, down 2.3 percentage points
- Research and development costs excluding one-offs: 20.0% of revenue, up 0.6 percentage points
This cost discipline matters because hosting and artificial intelligence expenses are eating into gross profit. Because the software maker kept sales and marketing spending flat in dollars at $37.4 million while revenue rose $22.1 million, operating profit excluding one-offs beat the middle of its own plan by 61%.
What to watch: fourth-quarter operating margin excluding one-offs against the 7.1% middle of the new plan. Hitting that target would prove that lower sales overhead can keep lifting profit even with gross margin below 70%.
New Recurring Revenue Accelerated Past the Statsig Bump
Annual recurring revenue (ARR), the yearly value of subscription contracts, rose 24% to $431 million. Because Amplitude bought experimentation software maker Statsig in May, headline growth includes $17 million of acquired contracts that were not in last year's base.
Stripping out that acquired block, underlying ARR still grew 19.3% from a year ago by our math, up from 17.3% in the second quarter. The third-quarter flow was entirely from ongoing operations: the analytics group added $21 million of net new ARR, 75% more than the $12 million it added a year earlier. Management also raised its fourth-quarter revenue plan to $110.8–113.2 million, well above the $107.2–108.8 million implied by its prior full-year outlook by our math.
What to watch: the revenue contribution from Statsig customers in the third-quarter filing. A clean organic revenue growth rate near 19% would settle doubts raised when the second-quarter filing showed underlying sales growing only 13%.
Large Enterprise Customers Grew 31% and Lifted Backlog
Finance chief Andrew Casey said the team is focused on "driving consolidation within enterprises with our platform and driving innovation with Statsig & AI products". Large accounts are signing longer deals and buying more tools.
Customers paying at least $100,000 a year rose 31% from a year ago to 855, adding 31 large accounts in the quarter. Remaining performance obligations (RPO), the total value of contracted backlog not yet recognised as revenue, climbed 27% from a year ago to $497 million, up $14 million from June. Because Statsig's opening contracts were already in the June figure, that $14 million step came from new and expanding deals.
What to watch: the split between current backlog (due within 12 months) and long-term backlog in the quarterly filing. Faster growth in the 12-month slice would show that backlog gains will turn into near-term revenue rather than just longer contract lengths.
🐻 Bear Case
Cloud and AI Costs Cut Gross Margin Again
Gross margin measures what is left of revenue after paying the direct cost of running the software and hosting customer data. When Amplitude bought Statsig and rolled out artificial intelligence features, it warned that hosting and computing bills would push gross margin into the low 70s.
In the third quarter, thefirst full period with Statsig on the books, gross margin excluding one-offs slipped below that band to 69.6%. That is down 6.3 percentage points from 75.9% a year ago and down 1.1 points from 70.7% in the second quarter. On a standard accounting basis, cost of revenue jumped 57% from a year ago to $36.3 million, twice the pace of sales.
What to watch: whether management reports progress on combining Statsig's hosting setup in the fourth quarter. A second quarter below 70% would show that rising AI computing usage is offsetting any server savings.
Existing Customer Expansion Stalled for a Second Quarter
Dollar-based net retention rate (NRR) tracks how much existing customers spend compared with a year earlier, excluding new logos. After climbing to 106% in the first quarter, reported ending NRR dropped to 103% in the second quarter and stayed stuck at 103% in the third.
The trailing 12-month retention rate also edged down a point from the second quarter to 104%. Including Statsig as if Amplitude had owned it a year ago, pro forma retention was 105%, two points higher than the standalone rate. Because existing Amplitude customers are expanding more slowly than the combined base, underlying growth relies heavily on winning new accounts. The release also omitted the share of customers using multiple products.
What to watch: standalone ending NRR in the fourth quarter, the company's biggest renewal period. A third straight reading at or below 103% would confirm that cross-selling into existing accounts has cooled.
AI Tools Shipped for Free While Monetization Waits
"The pace of building and shipping code continues to increase, but the context of what to build next continues to be the bottleneck," chief executive Spenser Skates said. Skates wants Amplitude's artificial intelligence agents and its Statsig testing tools to be the place where software teams make those decisions.
In August the company released Agent Analytics to all customers to "evaluate AI agent conversations, identify failure patterns, and connect agent performance to product outcomes". In September it launched Headless Amplitude on every plan, "bringing product and user context into AI tools such as Claude, ChatGPT, Codex, and Cursor", and in October it showed a GitHub workflow for Amplitude Wave to "turn proposed improvements into code for review, and measure their impact through controlled experiments".
Giving Headless Amplitude and Agent Analytics to every plan boosts usage, which lowers gross margin now, while Wave remains in closed beta without a price tag. Meanwhile, piping Amplitude's data straight into third-party coding assistants lets engineers work inside Claude or Cursor rather than Amplitude's own screens, while OpenAI retains a non-exclusive right to the underlying Statsig technology.
What to watch: when Wave leaves closed beta and whether management sets a separate price for it. Without direct AI fees, higher usage only shows up as server costs unless customers cross their data volume limits.
Buybacks Paused After Draining Cash while Stock Pay Stayed High
Amplitude spent $89.5 million buying back its own shares in the first half of 2026 to offset employee stock awards. In the third quarter, share repurchases dropped to zero.
Without buybacks, diluted shares for profit excluding one-offs rose from 129.4 million in the second quarter to 138.4 million in the third, missing the company's 133.0 million forecast. Stock-based compensation and related payroll taxes reached $28.8 million, or 26.0% of revenue, keeping standard accounting results in a $24.5 million net loss. Cash and marketable securities ended September at $155.2 million by our math, down from $253.4 million at the end of 2025.
What to watch: the fourth-quarter diluted share count outlook of 142.5 million. That 4.1 million sequential jump shows dilution resumes quickly as soon as cash buybacks stop.
💲 Other KPIs
Current deferred revenue — cash billed to customers for subscription service to be delivered over the next 12 months — grew 26.2% from a year ago by our math, slightly ahead of 24.9% revenue growth. It rose $2.5 million from the second quarter, versus a $5.1 million seasonal drop in the same quarter last year.
Free cash flow — operating cash flow minus computer equipment and capitalised software costs — rose 74% from $3.4 million a year ago by our math. That represents 5.2% of revenue, up 1.4 percentage points from 3.8% last year, helped by higher operating profit and lower capitalised software spending.
Uncollected customer bills rose 18.4% from a year ago by our math, slower than the 24.9% rise in revenue. Compared with December 2025, receivables are up 75.9% because of acquired Statsig customer balances and larger enterprise billings, creating a $4.1 million working-capital drag on third-quarter cash flow.
🔮 Guidance
Raised against the $107.2–108.8 million range implied by last quarter's full-year plan by our math. The new target calls for 22.5% growth from a year ago at the middle of the range, down from 24.9% in the third quarter. Amplitude has beaten its quarterly revenue midpoint for eight straight quarters; if its 2.25% average beat over the last four quarters holds, fourth-quarter revenue would reach $114.5 million by our math.
Raised. Management lifted the middle of the full-year revenue plan by $7.8 million to $417.0 million, or 21.5% growth from 2025 by our math. It is the third raise this year following earlier increases of $6.0 million in the first quarter and $9.2 million in the second quarter. About $3.8 million of this latest increase passes through the third-quarter beat, and $4.0 million raises the fourth-quarter view.
Unchanged at the $8.0 million middle of the range compared with the $7.6–8.6 million implied by last quarter's full-year plan by our math. At the midpoint, operating margin excluding one-offs would reach 7.1% in the fourth quarter, up from 5.1% in the third quarter and 4.6% a year ago.
Raised. The middle of the range moved up $2.1 million to $9.9 million, matching the $2.2 million third-quarter beat. After cutting the full-year profit target in the first quarter from $10.0 million to $4.5 million at the midpoint to fund the Statsig deal, the company has now restored the target to its original level: -$5.5M, +$3.3M, +$2.1M.
New. The plan puts fourth-quarter profit per share excluding one-offs at $0.05 to $0.06, up from $0.04 in the third quarter and $0.04 in the fourth quarter of 2025, based on 142.5 million diluted shares.
Raised by one cent at both ends of the range to $0.08 at the midpoint. A higher full-year diluted share count forecast of 139.0 million, up from 137.1 million previously, kept the per-share raise smaller than the operating profit beat.
❓ Key Questions
How much Q3 revenue came from Statsig customers?
Last quarter's filing showed Statsig customers contributed $6.5 million of revenue, leaving underlying revenue growth at 13%. The third-quarter release did not give the split, which is needed to check if underlying revenue matched the 19% underlying recurring revenue pace.
Why is standalone customer retention lagging the combined rate?
Standalone ending net retention stayed at 103% for a second straight quarter, while pro forma retention including Statsig was 105%. Management did not explain why existing Amplitude customers are expanding more slowly than acquired Statsig accounts.
When will Amplitude charge separately for its AI products?
The company made Agent Analytics and Headless Amplitude available across its plans while keeping Amplitude Wave in closed beta. Meanwhile, non-GAAP gross margin fell below 70% to 69.6%, raising the question of when AI features will bring in direct revenue to cover computing costs.
Did the share buyback pause mark a policy shift?
After spending $89.5 million on buybacks in the first half of 2026, Amplitude bought back no shares in the third quarter, and diluted shares are set to rise to 142.5 million in the fourth quarter.