Group 1 - Coherent (COHR) has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to Amplitude, Inc. (AMPL), which has a Zacks Rank of 4 (Sell) [3] - Value investors utilize various valuation metrics to identify undervalued stocks, including P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] - COHR has a forward P/E ratio of 19.84, significantly lower than AMPL's forward P/E of 171.38, suggesting COHR is more attractively priced [5] Group 2 - COHR's PEG ratio is 0.79, indicating a favorable valuation relative to its expected earnings growth, while AMPL's PEG ratio is 4.43, suggesting it may be overvalued [5] - COHR has a P/B ratio of 2.35, compared to AMPL's P/B of 3.94, further supporting COHR's stronger valuation metrics [6] - COHR's overall Value grade is B, while AMPL's Value grade is F, highlighting COHR as the better option for value investors [6]

Group 1 - The article discusses Amplitude (NASDAQ: AMPL) and previously assigned a buy rating based on expectations of mid-teens revenue growth, indicating a potential 20% upside if these expectations are met [1] - The author emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies to enhance the investment process [1] - The purpose of writing on Seeking Alpha is to track investment ideas' performance and connect with like-minded investors [1] Group 2 - There are no disclosed stock, option, or derivative positions in any mentioned companies, nor plans to initiate such positions within the next 72 hours [2] - The article expresses the author's personal opinions and is not compensated for it, aside from Seeking Alpha [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [3]

Amplitude (AMPL) Conference Summary Company Overview - **Company**: Amplitude - **Industry**: Digital Analytics - **CFO**: Andrew Casey - **IPO**: 2021 Key Points and Arguments Company Evolution and Product Development - Amplitude started by providing digital analytics for startups and SMBs, focusing on B2C engagements like DoorDash and PayPal [3][4] - The company has expanded its product offerings beyond product analytics to include experimentation, session replay, web analytics, and marketing analytics [4][5] - Recent acquisitions include Command AI for guides and surveys, and Craftful for voice of the customer, enhancing the platform's capabilities [5] Growth Strategy - Amplitude is shifting its focus towards enterprise clients, moving from a transactional sales model to a value-oriented approach [6][7] - The company has seen acceleration in top-line growth due to improved execution and a focus on cross-selling its platform [8][9][55] - The integration of AI into its offerings is expected to further enhance customer engagement and operational efficiency [31][32] Market Position and Competition - Amplitude is increasingly competing with Adobe and Google Analytics, with improving win rates against these competitors [27][28] - The company is positioning itself as a comprehensive solution for marketing and product analytics, appealing to CMOs and Chief Data Analysts [24][25] AI Integration and Future Outlook - The introduction of agents to assist with digital engagement is expected to lower barriers for enterprises lacking resources for data science [31][36] - The agents will facilitate real-time experimentation and personalization, enhancing customer experiences [35][36] Financial Performance and Margins - Amplitude's pricing model is based on the number of events ingested into the platform, which is expected to increase as more channels are utilized [45][46] - The company aims to improve gross and operating margins by optimizing cloud hosting costs and increasing the adoption of multiple products by customers [60][62] - Sales and marketing expenses are targeted to decrease from 43% to the low 30s, while G&A is aimed to drop below 10% [64][65] Additional Important Insights - The company is building a services business to create a partner ecosystem, which may initially act as a headwind but is expected to generate billable utilization over time [63] - Amplitude's focus on a growth with leverage framework aims to grow revenues while controlling expense growth [64] This summary encapsulates the key insights from the Amplitude conference, highlighting the company's strategic direction, market positioning, and financial outlook.

Core Insights - Amplitude is experiencing accelerating revenue growth, reporting its third consecutive quarter of growth driven by its platform strategy and new product features [2][3] - The company achieved a 16% increase in annual recurring revenue (ARR) to $335 million and a net-new ARR of $15 million, indicating strong business momentum [3][5] - Amplitude's dollar-based net retention rate reached 104%, the highest in six quarters, suggesting recovery from previous churn issues [3] Financial Performance - Revenue for the quarter rose 14% year over year to $83.3 million, exceeding the consensus estimate of $81.3 million [5] - The number of customers with an ARR of $100,000 or more increased by 16% to 634 [5] - Adjusted profit was reported at $0.01 per share, up from breakeven a year ago, and free cash flow nearly tripled from $6.8 million to $18.2 million [5] AI Strategy - Amplitude has made several acquisitions to enhance its platform and launch a suite of AI agents, including Command AI, June, Kraftful, and Inari [6][7] - The AI agents, currently in beta testing, are expected to be commercially available later this year, with promising features like Experiment and Insight Generation [8][9] - Customer feedback on the AI agents has been positive, indicating potential for significant value addition [9] Market Position - Amplitude received validation from Forester, being rated highest in the strength of offering in its first digital analytics solutions report [10] - The company’s third-quarter guidance projects revenue of $85 million to $87 million, reflecting a 17.3% increase [11] - With a market cap of $1.6 billion, Amplitude is positioned to compete against legacy providers like Google Analytics and Adobe Analytics, with its growth trajectory potentially enhanced by the new AI agents [12]

Core Insights - Amplitude, Inc. reported revenue of $83.27 million for the quarter ended June 2025, reflecting a year-over-year increase of 13.6% and a surprise of +2.58% over the Zacks Consensus Estimate of $81.17 million [1] - The company's EPS was $0.01, compared to $0 in the same quarter last year, indicating no EPS surprise against the consensus estimate of $0 [1] Financial Performance Metrics - Dollar-based Net Retention Rate was 104%, exceeding the average estimate of 100.4% from three analysts [4] - The number of Paying Customers stood at 4,300, slightly below the average estimate of 4,379 from three analysts [4] - Annual Recurring Revenue (ARR) reached $335 million, surpassing the two-analyst average estimate of $326.08 million [4] - Remaining Performance Obligations (RPO) for less than or equal to 12 months were reported at $248,520, exceeding the two-analyst average estimate of $239,427.50 [4] Stock Performance - Over the past month, Amplitude's shares have returned -8.1%, contrasting with the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Amplitude, Inc.'s unaudited financial statements detail asset and liability changes, revenue growth, and net loss for the period ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show total assets and liabilities increased by June 30, 2025, while total stockholders' equity decreased, reflecting the period's net loss Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$456,610** | **$445,911** | | Cash and cash equivalents | $119,656 | $171,678 | | Total current assets | $286,792 | $303,631 | | **Total Liabilities** | **$177,106** | **$149,355** | | Deferred revenue | $136,659 | $109,671 | | Total current liabilities | $171,476 | $144,513 | | **Total Stockholders' Equity** | **$279,504** | **$296,556** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three and six months ended June 30, 2025, revenue increased, but net loss widened for both periods Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $83,270 | $73,300 | $163,223 | $145,924 | | Gross Profit | $60,458 | $53,815 | $120,207 | $107,550 | | Total Operating Expenses | $87,552 | $80,975 | $171,499 | $159,415 | | Net Loss | $(24,668) | $(23,415) | $(46,899) | $(44,875) | | Net Loss Per Share | $(0.19) | $(0.19) | $(0.36) | $(0.37) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased for the six months ended June 30, 2025, while investing and financing activities used more cash Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $12,032 | $9,180 | | Net cash provided by (used in) investing activities | $(44,995) | $35,671 | | Net cash provided by (used in) financing activities | $(19,052) | $(10,997) | | **Net decrease in cash, cash equivalents, and restricted cash** | **$(52,015)** | **$33,854** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, a significant increase in remaining performance obligations, a share repurchase program, and a subsequent acquisition - The company's business model is providing a Digital Analytics Platform as a subscription service (SaaS)[33](index=33&type=chunk) Remaining Performance Obligations (in thousands) | Period | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Less than or equal to 12 months | $248,520 | $223,320 | | Greater than 12 months | $109,574 | $85,315 | | **Total** | **$358,094** | **$308,635** | - On May 6, 2025, the Board approved a share repurchase program authorizing up to **$50.0 million** of the company's Class A common stock[83](index=83&type=chunk) - Subsequent to the quarter end, on July 3, 2025, the company acquired Kraftful, Inc. for an aggregate purchase price of **$3.7 million**[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 revenue increase, ARR growth, stable gross margin, increased operating expenses, and the company's solid liquidity position Key Business Metrics as of June 30, | Metric | 2025 | 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | Annual Recurring Revenue (ARR) | $335 million | $290 million | 16% | | Dollar-Based Net Retention Rate (TTM) | 99% | 98% | 1 ppt | | Paying Customers with ARR > $100k | 634 | 547 | 16% | - The company focuses on customer acquisition, AI-led platform investments, and international growth, with recent innovations including Amplitude AI Agents and new marketing capabilities[110](index=110&type=chunk)[112](index=112&type=chunk)[114](index=114&type=chunk) Q2 2025 vs Q2 2024 Results (in thousands) | Metric | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $83,270 | $73,300 | $9,970 | 14% | | Cost of Revenue | $22,812 | $19,485 | $3,327 | 17% | | Total Operating Expenses | $87,552 | $80,975 | $6,577 | 8% | - As of June 30, 2025, principal liquidity sources were **$119.7 million** in cash and equivalents and **$167.9 million** in marketable securities, deemed sufficient for the next 12 months[171](index=171&type=chunk)[172](index=172&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company assesses market risks from interest rates and foreign currency, concluding that a hypothetical **10%** change would not materially affect financial results - The company's investments are exposed to interest rate fluctuations, but an immediate **10%** change in rates is not expected to have a material effect on portfolio fair value[188](index=188&type=chunk) - Operating expenses include foreign currency denominations, but exchange rate fluctuations have not been material, with a hypothetical **10%** change in the U.S. dollar not expected to have a material effect[189](index=189&type=chunk) - Management believes inflation has not had a material effect on the business, financial condition, or results of operations[190](index=190&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were effective as of the period end[191](index=191&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[192](index=192&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 9 for details on legal proceedings, including dismissed securities class actions and ongoing privacy-related class actions - For details on legal proceedings, the report directs readers to Note 9 of the financial statements[195](index=195&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks including a history of net losses, intense competition, reliance on third-party infrastructure, evolving privacy regulations, and concentrated voting power - The company has a history of net losses, reporting **$46.9 million** for the six months ended June 30, 2025, and an accumulated deficit of **$504.7 million**, with profitability not guaranteed[201](index=201&type=chunk) - The digital analytics market is highly competitive, posing risks of reduced sales, lower margins, or financial losses from large companies, in-house systems, and new entrants[216](index=216&type=chunk)[217](index=217&type=chunk) - A dual-class stock structure concentrates voting control with existing stockholders, executive officers, and directors, limiting Class A stockholders' influence on corporate matters[326](index=326&type=chunk) - The business is subject to evolving privacy laws like GDPR and CCPA, with non-compliance potentially leading to significant fines, reputational damage, and other liabilities[297](index=297&type=chunk)[298](index=298&type=chunk)[301](index=301&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=104&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In May 2025, the company repurchased Class A common shares and authorized a new share repurchase program Company Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | — | $— | | May 2025 | 203,921 | $12.44 | | June 2025 | — | $— | | **Total** | **203,921** | **$12.44** | - A new repurchase program for up to **$50 million** was authorized on May 7, 2025, with no shares repurchased under it as of June 30, 2025[363](index=363&type=chunk) [Item 3. Defaults Upon Senior Securities](index=104&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None [Item 4. Mine Safety Disclosures](index=104&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not Applicable [Item 5. Other Information](index=104&type=section&id=Item%205.%20Other%20Information) On May 15, 2025, President Thomas Hansen adopted a Rule 10b5-1 trading plan for the potential sale of Class A common shares - Thomas Hansen, President of the Company, adopted a Rule 10b5-1 trading plan on May 15, 2025, for the sale of up to **210,000** shares of Class A common stock[366](index=366&type=chunk) [Item 6. Exhibits](index=105&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications

Financial Data and Key Metrics Changes - The second quarter revenue was $83.3 million, up 14% year over year, exceeding guidance [4][40] - Annual recurring revenue (ARR) reached $335 million, up 16% year over year, with the highest net new ARR addition in eleven quarters [4][40] - Non-GAAP operating loss was $1.5 million, with a gross margin of 75%, down one point from the previous year [5][41] - Free cash flow margin increased to 22%, generating $8.9 million in free cash flow for the first half of 2025, compared to $5.7 million in the same period last year [34][44] Business Line Data and Key Metrics Changes - Customers with more than $100,000 in ARR grew to 634, a 16% increase year over year [5][41] - 67% of ARR now comes from multiproduct customers, up from 64% last quarter [5][36] - The growth of data being ingested into the platform increased by 20% year over year [36] Market Data and Key Metrics Changes - The company was recognized as a leader in the 2025 Forrester Wave for digital analytics solutions, receiving the highest current offering score [26] - Amplitude ranked number one in eight categories in the G2 Summer 2025 report, including product analytics for the twentieth consecutive quarter [28] Company Strategy and Development Direction - The company is focusing on becoming AI native and expanding its platform through acquisitions, such as Command AI, Craftful, and Inari [8][10][11] - The strategy emphasizes consolidating analytics, experimentation, and activation within a single ecosystem to drive greater personalization [30] - The company aims to build a more durable business by increasing visibility into future revenue streams and focusing on operational excellence [36][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy to accelerate growth, particularly through enterprise customer focus and platform expansion [34][46] - The company expects revenue for Q3 2025 to be between $85 million and $87 million, representing an annual growth rate of 14% at the midpoint [46] - Long-term aspirations for net revenue retention (NRR) are above 115%, driven by continued progress in selling the platform [96] Other Important Information - The company is actively working to improve sales efficiency and has shifted to a value-oriented sales model [60][68] - Management highlighted the importance of educating existing customers about the full suite of capabilities available on the platform [90][92] Q&A Session Summary Question: How do recent acquisitions help accelerate Amplitude's efforts in AI? - Management indicated that while the AI agents are in closed beta, they provide significant leverage for customers to derive value from Amplitude [55] Question: What is the outlook for sales efficiency? - Management noted improvements in sales efficiency through better territory assignments and a shift to a value-oriented sales model [60][68] Question: How much of the NRR improvement is due to churn dynamics versus upselling? - Management stated that both factors contribute, with strong platform sales driving NRR improvements [64][66] Question: What is the progress on sales enablement since the new leadership? - Management emphasized a change in mentality towards enterprise sales and refining funnel dynamics to improve sales outputs [68] Question: How is the company addressing the competition for talent in AI? - Management highlighted the alignment of new talent with the company's long-term mission and the importance of integrating AI across the product [80][84]

Financial Highlights - Revenue reached $83.3 million, a 14% year-over-year increase[12, 44] - Annual Recurring Revenue (ARR) grew to $335 million, up 16% year-over-year[12, 44] - The company's Net Retention Rate was 104%, compared to 96% in Q2 2024[12, 44] - Free Cash Flow was $18.2 million, compared to $6.8 million in Q2 2024[12, 44] - Non-GAAP Operating Loss was reduced to $(1.5) million, compared to $(3.7) million in Q2 2024[12, 44] - Cash and investments totaled $288 million[12, 44] Customer Base - The company has 634 customers with ARR greater than or equal to $100,000, a 16% year-over-year increase[13, 44] - Enterprise customers contribute 65% of the company's ARR[13] - 34% of customers are using more than one product[13] Guidance - The company projects Q3 2025 revenue to be between $85 million and $87 million, representing a 13% to 16% year-over-year growth[61] - The company projects full year 2025 revenue to be between $335.2 million and $338.2 million, representing a 12% to 13% year-over-year growth[61]

Amplitude Second Quarter 2025 Financial Results [Q2 2025 Financial and Business Highlights](index=1&type=section&id=Q2%202025%20Financial%20and%20Business%20Highlights) Amplitude achieved its highest net-new ARR in nearly three years, with double-digit revenue and ARR growth, alongside significant improvements in cash flow and operational recognition Q2 2025 Financial Highlights | Financial Metric | Q2 2025 | Q2 2024 | Y/Y Change | | :--- | :--- | :--- | :--- | | Annual Recurring Revenue ($M) | $335M | $290M | 16% | | Revenue ($M) | $83.3M | $73.3M | 14% | | GAAP Loss from Operations ($M) | $(27.1)M | $(27.2)M | +$0.1M | | Non-GAAP Income (Loss) from Operations ($M) | $(1.5)M | $(3.7)M | +$2.2M | | GAAP Net Loss Per Share ($) | $(0.19) | $(0.19) | $0.00 | | Non-GAAP Net Income Per Share ($) | $0.01 | $(0.00) | +$0.01 | | Net Cash Provided by Operating Activities ($M) | $20.1M | $9.2M | +$10.9M | | Free Cash Flow ($M) | $18.2M | $6.8M | +$11.4M | - The company delivered its **highest net-new ARR** in nearly three years, reflecting a deliberate focus on enterprise and platform expansion[3](index=3&type=chunk) - Remaining performance obligations (RPO) grew to **$358.1 million**, up **31% year-over-year**, indicating strong future revenue visibility[5](index=5&type=chunk) - Amplitude was recognized as a Leader in The Forrester Wave™ for Digital Analytics Solutions and ranked **1 in Product Analytics by G2** for the 20th consecutive quarter[6](index=6&type=chunk) - The company announced the beta launch of Amplitude AI Agents, designed to automate product management tasks, and welcomed teams from Kraftful, Inari, and June to accelerate AI innovation[6](index=6&type=chunk)[9](index=9&type=chunk) - The number of customers with **$100,000 or greater in ARR** increased by **16% year-over-year** to **634**[9](index=9&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Amplitude projects continued revenue growth and anticipates achieving non-GAAP profitability for Q3 and full year 2025 Financial Guidance | Metric | Third Quarter 2025 Guidance | Full Year 2025 Guidance | | :--- | :--- | :--- | | Revenue ($M) | $85.0M - $87.0M | $335.2M - $338.2M | | Non-GAAP Operating Income (Loss) ($M) | $(2.0)M - $1.0M | $(2.0)M - $3.0M | | Non-GAAP Net Income (Loss) Per Share ($) | $(0.00) - $0.02 | $0.04 - $0.08 | - An outlook for GAAP measures was not provided because certain items, such as stock-based compensation expense and amortization of acquired intangible assets, cannot be reasonably predicted without unreasonable efforts[7](index=7&type=chunk) [Detailed Financial Statements](index=6&type=section&id=Detailed%20Financial%20Statements) This section provides a comprehensive view of Amplitude's financial position, performance, and cash flows, highlighting asset growth and improved operating cash [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$456.6 million** by June 30, 2025, driven by marketable securities, while liabilities rose due to deferred revenue Balance Sheet Summary | Balance Sheet Item | June 30, 2025 (in thousands $) | December 31, 2024 (in thousands $) | | :--- | :--- | :--- | | Total current assets | $286,792 | $303,631 | | Total assets | $456,610 | $445,911 | | Total current liabilities | $171,476 | $144,513 | | Total liabilities | $177,106 | $149,355 | | Total stockholders' equity | $279,504 | $296,556 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenue grew **14%** to **$83.3 million**, but increased operating expenses resulted in a GAAP operating loss of **$(27.1) million** Income Statement Summary (Q2) | Income Statement Item (Q2) | 2025 (in thousands $) | 2024 (in thousands $) | | :--- | :--- | :--- | | Revenue | $83,270 | $73,300 | | Gross Profit | $60,458 | $53,815 | | Total Operating Expenses | $87,552 | $80,975 | | Loss from Operations | $(27,094) | $(27,160) | | Net Loss | $(24,668) | $(23,415) | | Net Loss Per Share (Basic & Diluted) | $(0.19) | $(0.19) | - Stock-based compensation expense for Q2 2025 was **$24.5 million**, a significant non-cash expense contributing to the GAAP net loss[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$20.1 million** in Q2 2025, driven by non-cash adjustments and working capital changes Cash Flow Summary (Q2) | Cash Flow Item (Q2) | 2025 (in thousands $) | 2024 (in thousands $) | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,054 | $9,228 | | Net cash provided by (used in) investing activities | $(18,606) | $12,613 | | Net cash provided by (used in) financing activities | $(12,962) | $(5,204) | | Net (decrease) increase in cash | $(11,514) | $16,637 | [Supplementary Information](index=9&type=section&id=Supplementary%20Information) This section provides GAAP to non-GAAP reconciliations and historical key business metrics, showing positive momentum in ARR and NRR [Reconciliation of GAAP to Non-GAAP Data](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Data) Reconciliations detail adjustments, primarily **$25.3 million** for stock-based compensation, converting GAAP losses to non-GAAP operating loss of **$(1.5) million** and net income of **$1.0 million** Reconciliation of Operating Loss (Q2 2025) | Reconciliation of Operating Loss (Q2 2025, in thousands $) | Amount (in thousands $) | | :--- | :--- | | GAAP loss from operations | $(27,094) | | Plus: Stock-based compensation expense | $25,307 | | Plus: Amortization of acquired intangible assets | $312 | | **Non-GAAP income (loss) from operations** | **$(1,475)** | Reconciliation of Free Cash Flow (Q2 2025) | Reconciliation of Free Cash Flow (Q2 2025, in thousands $) | Amount (in thousands $) | | :--- | :--- | | Net cash provided by operating activities | $20,054 | | Less: Purchases of property and equipment | $(538) | | Less: Capitalization of internal-use software costs | $(1,348) | | **Free cash flow** | **$18,168** | [Historical Key Business Metrics](index=11&type=section&id=Historical%20Key%20Business%20Metrics) Key business metrics show consistent growth, with ARR reaching **$335 million** and NRR recovering to **104%** in Q2 2025 Annual Recurring Revenue (ARR) | Quarter Ended | Annual Recurring Revenue (ARR) ($M) | | :--- | :--- | | Mar 31, 2024 | $285 | | Jun 30, 2024 | $290 | | Sep 30, 2024 | $298 | | Dec 31, 2024 | $312 | | Mar 31, 2025 | $320 | | Jun 30, 2025 | $335 | Dollar-based Net Retention Rate (NRR) | Quarter Ended | Dollar-based Net Retention Rate (NRR) (%) | | :--- | :--- | | Mar 31, 2024 | 97% | | Jun 30, 2024 | 96% | | Sep 30, 2024 | 98% | | Dec 31, 2024 | 100% | | Mar 31, 2025 | 101% | | Jun 30, 2025 | 104% |

Core Viewpoint - Morgan Stanley's recent report indicates stability in the North American SaaS industry for Q2, but limited potential for upward guidance revisions, which restricts sentiment recovery in the sector [1] SaaS Industry Overview - SaaS stocks have significantly underperformed compared to the broader software industry year-to-date, primarily due to market concerns over AI substitution risks and structural growth slowdown [1] - The EV/S multiple for the next 12 months has compressed by approximately 29%, from 5.8x to 4.5x, while revenue expectations for the next 12 months have only been adjusted down by about 2% [1] - Market expectations for Q2 earnings reports in the SaaS sector are low, and seasonal weakness lacks positive catalysts, making it difficult to overturn bearish sentiment [1][2] CIO Survey Insights - CIO confidence in overall IT budgets has weakened, with the ratio of CIOs expecting to increase budgets dropping to 0.7 from 0.8 in Q1, indicating potential downward risks for enterprise IT budgets in 2025 [2] - Despite macro uncertainties, the survey shows that cyclical pressures on front-end SaaS spending are easing, and investments in generative AI are increasing [2] - The only catalyst that could overturn negative expectations regarding generative AI's impact on software spending during Q2 earnings releases would be upward guidance revisions [2] Company-Specific Insights - **Wix.com**: Valuation is not high, with a conservative outlook for H2; however, accelerated new user growth and new product cycles (Wix Studio, AI integration) are positive factors. Rating: "Overweight," Target Price: $207, representing a 34% upside from the July 21 closing price of $153.96 [3] - **HubSpot**: Channel surveys indicate Q2 performance similar to Q1; despite valuation compression, several growth levers could drive mid-term growth. Rating: "Overweight," Target Price: $752, indicating a 38% upside from the July 21 closing price of $546.64 [3] - **Klaviyo**: Conservative Q2 guidance, but healthy e-commerce demand and small business spending data suggest potential for exceeding market expectations. Rating: "Hold," Target Price: $40, reflecting a 23% upside from the July 21 closing price of $32.51 [3] - **Amplitude**: Expansion of product offerings is expected to enhance market share, and generative AI may accelerate digital product creation, potentially improving market exposure. Rating: "Hold," Target Price: $12, indicating a 5% downside from the July 21 closing price of $12.62 [4]