Amplitude's AI-Powered Q4 2025 Results Highlight Growth Amid Lingering Profitability Risks

What happened

Amplitude announced its Q4 and fiscal year 2025 financial results, with CEO Spenser Skates touting an 'agentic' new era of AI analytics that promises to automate product monitoring and free up teams for innovation. The DeepValue report indicates the company has reaccelerated ARR growth to 16% with NRR recovering to 102-104%, supporting a base case of mid-teens expansion driven by enterprise and multi-product adoption. However, behind this AI-driven narrative, filings reveal persistent GAAP losses of -$24.0 million in Q3 2025, fueled by heavy R&D and acquisition spend on AI tooling, which has compressed cash flows and eroded margins. Market sentiment frames Amplitude as an AI-native turnaround, but the lack of disclosed AI-specific KPIs and competitive pressures from rivals like Mixpanel raise doubts about monetization and sustainable growth. Overall, Amplitude remains a high-risk investment where AI upside is optional, and success hinges on balancing growth investments with a path to profitability.

Implication

The Q4 results reinforce Amplitude's strategic pivot to AI, but investors must demand concrete evidence that AI features are driving incremental revenue or higher retention, not just narrative. Key monitors include ARR growth maintaining at least 15%, NRR staying above 100%, and non-GAAP operating margins avoiding negative territory for consecutive quarters to prevent thesis breakdown. Despite a net cash position of ~$166 million, aggressive AI spending could erode the balance sheet if unmatched by growth, increasing risks of equity dilution or capital impairment in a downturn. Competition from AI platforms and aggressive pricing by rivals adds pressure, making it crucial for Amplitude to demonstrate unique value through enterprise multi-product adoption and AI integration metrics. Position sizing should remain cautious, with the thesis dependent on the company executing its growth plan while managing costs to achieve sustainable profitability over the next 6-12 months.

Thesis delta

The announcement of Q4 and FY2025 results aligns with the base case in the DeepValue report, where ARR growth is in the mid-teens and NRR is stable, reinforcing the potential buy rating but not shifting the core thesis. Investors should await detailed financials to confirm if AI investments are translating into measurable growth drivers, such as higher attach rates or pricing uplift, rather than merely supporting the narrative. No major thesis shift is warranted yet, but any deviation in ARR growth below 15% or NRR dipping under 100% would necessitate a reassessment toward the bear case.