AMPLITUDE, INC. The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our condensed consolidated
financial statements and related notes appearing elsewhere in this Quarterly
Report on Form 10-Q and our consolidated financial statements and related notes
appearing in our Annual Report on Form 10-K for the year ended
Unless the context otherwise requires, all references in this report to
"Amplitude," the "Company," "we," "our," "us," or similar terms refer to
Overview
We have built the first unified system that empowers teams to understand how digital products drive their business, thereby unleashing the full potential of product-led growth for businesses of every size, industry, and stage in their digital maturity. Our Digital Optimization System brings an entirely new depth of customer understanding with the speed of action to optimize digital experiences in the moment. We power the teams behind many of the most-beloved digital products to make the right bets, drive innovation, and maximize business outcomes.
At the core of our Digital Optimization System is our Behavioral Graph, a proprietary, purpose-built behavioral database that is the largest of its kind. Our Behavioral Graph instantly finds patterns, makes recommendations, and connects customer actions along their journeys to outcomes that drive engagement, growth, and loyalty. We have architected our Behavioral Graph to power numerous products linking data to insight to action, beginning first with our product analytics solution. G2 ranked Amplitude as the #3 best software product overall and #5 best enterprise product in their 2022 Best Software Awards. The G2 Summer 2022 Report also ranked Amplitude as the #1 product analytics solution for the eighth quarter in a row, #1 in mobile analytics for the third quarter in a row, and #3 in digital analytics for the sixth quarter in a row. We have since expanded our Digital Optimization System to include products that enable cross-functional teams to personalize the digital product experiences of their customers, including our Recommend and Experiment offerings, which were both released in 2021.
We have experienced significant growth in recent years driven by the rapid adoption of our Digital Optimization System by our diversified base of more than 1,800 paying customers globally. Our customers span across industries and sizes, from the leading digital innovators to those looking to transform and adapt their business in the new digital age.
Key Factors Affecting Our Performance
We believe that the growth and future success of our business depends on many factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations.
Customer Acquisition and Expansion
We believe that our Digital Optimization System can help businesses across industries, company size, and stages of digital maturity drive better business outcomes through optimizing the digital product experience of their customers. We are focused on continuing to acquire new customers and expanding our relationships with our existing installed base to support our long-term growth. We have invested, and expect to continue to invest, in our sales and marketing efforts to drive customer acquisition.
As of
We have been successful at efficiently growing our customer spend over time as
evidenced by our dollar-based net retention rates. As of
22
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Investments in Platform
We believe that our customers will demand additional features and capabilities beyond our current platform offerings to assist them in optimizing their digital products. We have a history of, and will continue to invest significantly in, developing and delivering innovative products, features, and functionality targeted at our core customer base. In addition, we may choose to add new products and offerings or enhance our platform capabilities through acquisitions. In 2020, we acquired ClearBrain to bolster our predictive analytics capabilities, and in 2021, we acquired Iteratively, a software company that bolsters our ability to empower developers to more quickly, easily, and accurately instrument data into our platform. Going forward, we may pursue both strategic partnerships and acquisitions that we believe will be complementary to our business, accelerate customer acquisition, increase usage of our platform, and/or expand our product offerings in our core markets.
Investing for Growth
Our investment for growth encompasses multiple critical areas, including product expansion, our sales force, sales support, partner ecosystem, and our international presence. We continue to evolve our technology to ensure that we are best serving our customers' needs. We believe this will lead to continued increased retention and positive customer referrals that will continue to generate expansion opportunities within our existing installed base and from new customers. We plan to continue to invest in our research and development organization to maintain and strengthen our market leadership position, and we believe that attracting the best engineering talent will continue to be critical to our long-term success. As we continue to invest in our platform, we expect our research and development expenses to continue to increase in dollar amount, and although we believe these expenses as a percentage of revenue will decrease over the longer term, we expect that these expenses as a percentage of revenue will increase in the short term as we invest in product innovation.
We will continue to invest in expanding our sales force and associated sales support to pursue attractive growth opportunities and ensure customer success, particularly with larger enterprises where we have experienced significant traction to date. We also plan to invest in our channel partners, such as independent software vendors, and resellers, to extend our reach faster than we could do on our own. As we continue to invest in our sales efforts, we expect our sales and marketing expenses to continue to increase in dollar amount, and although we believe these expenses as a percentage of revenue will decrease over the longer term, we expect these expenses as a percentage of revenue will increase in the short term as we invest in sales growth.
Finally, we see opportunities to expand offices and headcount internationally to
better service targeted international markets where we believe we have
significant opportunity to accelerate existing traction and success. For the
three and six months ended
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Key Business Metrics
We review a number of operating and financial metrics, including the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. We are not aware of any uniform standards for calculating these key metrics, which may hinder comparability with other companies who may calculate similarly-titled metrics in a different way.
As of June 30,
2022 2021 YoY Growth
Paying Customers 1,836 1,280 43%
Dollar-Based Net Retention Rate 126 % 119 %
Paying Customers
We believe our ability to grow the number of paying customers on our platform provides a key indicator of the demand for our platform, growth of our business, and our future business opportunities. Increasing awareness of our platform and its broad range of capabilities, coupled with the mainstream adoption of cloud-based technology, has expanded the diversity of our customer base to include organizations of different sizes across virtually all industries.
For purposes of customer count, a customer is defined as an entity that has a unique Dunn & Bradstreet Global Ultimate ("GULT") Data Universal Numbering System ("DUNS") number and an active subscription contract as of the measurement date. The DUNS number is a global standard for business identification and tracking. We make exceptions for holding companies, government entities, and other organizations for which the GULT, in our judgment, does not accurately represent the Amplitude customer or the DUNS does not exist.
Dollar-Based Net Retention Rate
We calculate our dollar-based net retention rate to measure our ability to
retain and expand Annual Recurring Revenue ("ARR") from our customers and
believe it is an indicator of the value our platform delivers to customers and
our future business opportunities. Our dollar-based net retention rate compares
our ARR from the same set of customers across comparable periods and reflects
customer renewals, expansion, contraction, and attrition. We define ARR as the
annual recurring revenue of subscription agreements at a point in time based on
the terms of customers' contracts. ARR should be viewed independently of
revenue, and does not represent our
We calculate dollar-based net retention rate as of a period-end by starting with the ARR from the cohort of all customers as of 12 months prior to such period-end (the "Prior Period ARR"). We then calculate the ARR from these same customers as of the current period-end (the "Current Period ARR"). Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months, but excludes ARR from new customers as well as any overage charges in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time dollar-based net retention rate. We then calculate the weighted average of the trailing 12-month point-in-time dollar-based net retention rates, to arrive at the dollar-based net retention rate.
Response to COVID-19
The COVID-19 pandemic has had an adverse effect on the global economy, including the businesses of many of our customers and prospective customers and did, in the early stages of the pandemic, result in increased attrition from our smaller customers and those customers in the most impacted industries such as travel and entertainment. Overall, however, the COVID-19 pandemic has resulted in favorable trends for our business and the businesses of those customers who have been able to leverage digital optimization of their products as sales increasingly shifted online.
Although we believe the COVID-19 pandemic has largely resulted in favorable trends for our business to date, we have experienced business disruptions, including requiring us to manage a significant majority of our workforce remotely and restrictions on our ability to travel to customers. Moreover, our existing and prospective customers have experienced and may continue to experience slowdowns in their businesses, including due to ongoing worldwide supply chain disruptions, which in turn has and may result in reduced demand for our platform, lengthening of sales cycles, loss of customers, and difficulties in collections. In addition, the pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, which could limit our or our customers' ability to access capital on favorable terms or at all. The ongoing impact of the pandemic on our future business, financial condition, and results of operations depends on the pandemic's duration and severity, which are difficult to assess or predict.
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See "Risk Factors" included under Part II, Item 1A of this Quarterly Report on Form 10-Q for further discussion of the impact of the COVID-19 pandemic on our business.
Non-GAAP Financial Measures
The following table presents certain non-GAAP financial measures, along with the
most directly comparable
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
(in thousands, except percentages)
Gross Profit $ 41,070 $ 27,119 $ 78,072 $ 49,974
Non-GAAP Gross Profit $ 43,233 $ 27,795 $ 81,646 $ 51,108
Gross Margin 71 % 69 % 70 % 69 %
Non-GAAP Gross Margin 74 % 71 % 73 % 71 %
Loss from Operations $ (24,583 ) $ (9,747 ) $ (46,574 ) $ (15,896 )
Non-GAAP Loss from Operations
Loss from Operations Margin (42 )% (25 )% (42 )% (22 )% Non-GAAP Loss from Operations Margin (15 )% (11 )% (15 )% (10 )% Net Cash Provided by (Used in) Operating Activities$ 10,642 $ (5,061 ) $ 2,353 $ (5,523 ) Free Cash Flow$ 8,161 $ (5,816 ) $ (1,435 ) $ (6,909 ) Net Cash Provided by (Used in) Operating Activities Margin 18 % (13 )% 2 % (8 )% Free Cash Flow Margin 14 % (15 )% (1 )% (10 )%
Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Loss from Operations, and Non-GAAP Loss from Operations Margin
We define non-GAAP gross profit and non-GAAP gross margin as
We define non-GAAP loss from operations and non-GAAP loss from operations margin
as
We exclude stock-based compensation expense and related employer payroll taxes, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. We exclude amortization of intangible assets, which is a non-cash expense, related to business combinations from certain of our non-GAAP financial measures because such expenses are related to business combinations and have no direct correlation to the operation of our business. Although we exclude these expenses from certain non-GAAP financial measures, the revenue from acquired companies subsequent to the date of acquisition is reflected in these measures and the acquired intangible assets contribute to our revenue generation. We exclude non-recurring costs from certain of our non-GAAP financial measures because such expenses do not repeat period over period and are not reflective of the ongoing operation of our business.
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We use non-GAAP gross margin and non-GAAP loss from operations margin in
conjunction with traditional
Free Cash Flow and Free Cash Flow Margin
We define free cash flow as net cash used in operating activities, less cash used for purchases of property and equipment and capitalized internal-use software costs. Free cash flow margin is calculated as free cash flow divided by total revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide information to management and investors, even if negative, about the amount of cash used in our operations other than that used for investments in property and equipment and capitalized internal-use software costs.
Limitations and Reconciliations of Non-GAAP Financial Measures
Non-GAAP financial measures are presented for supplemental informational
purposes only. Non-GAAP financial measures have limitations as analytical tools
and should not be considered in isolation or as substitutes for financial
information presented under
The following tables reconcile the most directly comparable
Non-GAAP Gross Profit and Gross Margin
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
(in thousands, except percentages)
Gross profit $ 41,070 $ 27,119 $ 78,072 $ 49,974
Add:
Stock-based compensation expense(1)
$ 43,233 $ 27,795 $ 81,646 $ 51,108 Non-GAAP Gross Margin 74 % 71 % 73 % 71 %
(1)
Stock-based compensation expense-related charges include employer payroll tax-related expenses on employee stock transactions.
Non-GAAP Loss From Operations and Loss From Operations Margin
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
(in thousands, except percentages)
Loss from operations $ (24,583 ) $ (9,747 ) $ (46,574 ) $ (15,896 )
Add:
Stock-based compensation
expense(1) $ 15,090 $ 3,086 $ 28,866 $ 5,714
Acquired intangible assets
amortization $ 494 $ 429 $ 983 $ 651
Direct listing expenses $ - $ 2,086 $ - $ 2,139
Non-GAAP Loss from Operations $ (8,999 ) $ (4,146 ) $ (16,725 ) $ (7,392 )
Non-GAAP Loss from Operations
Margin (15 )% (11 )% (15 )% (10 )%
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(1)
Stock-based compensation expense-related charges include employer payroll tax-related expenses on employee stock transactions.
Free Cash Flow and Free Cash Flow Margin
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
(in thousands, except percentages)
Net cash provided by (used in)
investing activities $ (2,481 ) $ 970 $ (3,788 ) $ 339
Net cash provided by financing
activities 1,442 177,295 4,015 179,313
Net cash provided by (used in)
operating activities 10,642 (5,061 ) 2,353 (5,523 )
Less:
Purchase of property and equipment$ (1,812 ) $ (405 ) $ (2,525 ) $ (655 ) Capitalization of internal-use software costs$ (669 ) $ (350 ) $ (1,263 ) $ (731 ) Free Cash Flow$ 8,161 $ (5,816 ) $ (1,435 ) $ (6,909 ) Free Cash Flow Margin 14 % (15 )% (1 )% (10 )%
Components of Results of Operations
Revenue
We generate revenue primarily from sales of subscription services for customers to access our platform. Revenue is driven primarily by the number of paying customers and the level of subscription plan. We generally recognize revenue ratably over the related contractual term beginning on the date that the platform is made available to a customer. Revenue from professional services have primarily been attributed to implementation and training services. We recognize professional services revenue as services are delivered.
Cost of Revenue
Cost of revenue consists primarily of the cost of providing our platform to our customers and consists of third-party hosting fees, personnel-related expenses for our operations and support personnel, and amortization of our capitalized internal-use software and acquired developed software. As we acquire new customers and existing customers increase their use of our platform, we expect that our cost of revenue will continue to increase in dollar amount.
Gross Profit and Gross Margin
Gross profit, or revenue less cost of revenue, and gross margin, or gross profit as a percentage of revenue, has been and will continue to be affected by various factors, including the timing of our acquisition of new customers, renewals of, and follow-on sales to, existing customers, costs associated with operating our platform, and the extent to which we expand our operations and customer support organizations. In the long term, we expect our gross profit to increase in dollar amount and our gross margin to improve as we optimize our system performance and leverage ingested data for new products.
Operating Expenses
Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel-related expenses are the most significant component of operating expenses and consist of salaries, benefits, stock-based compensation expense, and, in the case of sales and marketing expenses, sales commissions. Operating expenses also include an allocation of overhead costs for facilities and shared IT-related expenses. As we continue to invest in our business, we expect our operating expenses to continue to increase in dollar amount, and although we believe our operating expenses as a percentage of revenue will decrease over the longer term, we expect operating expenses as a percentage of revenue will increase in the short term as we invest in product innovation and sales growth and incur additional professional services and compliance costs as we operate as a public company.
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Research and Development
Research and development expenses consist primarily of personnel-related expenses. These expenses also include product design costs prior to the application development stage, third-party services and consulting expenses, software subscriptions, and allocated overhead costs for overhead used in research and development activities. A substantial portion of our research and development efforts are focused on enhancing our software, including researching ways to add new features and functionality to our platform. We anticipate continuing to invest in innovation and technology development, and as a result, we expect research and development expenses to continue to increase in dollar amount but to decrease as a percentage of revenue over the longer term, although the percentage may fluctuate from quarter to quarter depending on the extent and timing of product development initiatives. In the short term, we expect research and development costs to increase as a percentage of revenue as we invest in product innovation. We also anticipate additional stock-based compensation expense in future periods due to planned increases in headcount and associated new hire grants.
Sales and Marketing
Sales and marketing expenses consist primarily of personnel-related expenses and expenses for performance marketing and lead generation, and brand marketing. These expenses also include allocated overhead costs and travel-related expenses. Sales commissions earned by our sales force that are considered incremental and recoverable costs of obtaining a subscription with a customer are deferred and amortized on a straight-line basis over the expected period of benefit of five years.
We continue to make investments in our sales and marketing organization, and we expect sales and marketing expenses to remain our largest operating expense in dollar amount. We expect our sales and marketing expenses to continue to increase in dollar amount but to decrease as a percentage of revenue over the longer term, although the percentage may fluctuate from quarter to quarter depending on the extent and timing of our marketing initiatives. In the short term, we expect sales and marketing costs to increase as a percentage of revenue as we invest in product sales growth. We also anticipate additional stock-based compensation expense in future periods due to planned increases in headcount and associated new hire grants.
General and Administrative
General and administrative expenses consist primarily of personnel-related expenses for our finance, human resources, information technology, and legal organizations. These expenses also include non-personnel costs, such as outside legal, accounting, and other professional fees, software subscriptions, as well as certain tax, license, and insurance-related expenses, and allocated overhead costs.
We have also incurred certain expenses as part of operating as a publicly-traded
company, including professional fees and other expenses. We expect to continue
to incur additional expenses as a result of operating as a public company,
including costs to comply with the rules and regulations applicable to companies
listed on the
Other Income, Net
Other income, net consists primarily of interest income on our cash holdings offset by foreign currency transaction gains and losses.
Provision for Income Taxes
Provision for income taxes consists primarily of income taxes in certain foreign
jurisdictions in which we conduct business. To date, we have not recorded any
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Results of Operations
The following tables set forth our results of operations for the periods presented and as a percentage of our revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
(in thousands)
Revenue $ 58,130 $ 39,254 $ 111,195 $ 72,364
Cost of revenue(1) 17,060 12,135 33,123 22,390
Gross profit 41,070 27,119 78,072 49,974
Operating expenses:
Research and development(1) 20,306 8,544 36,807 15,529
Sales and marketing(1) 34,135 20,040 62,265 36,810
General and administrative(1) 11,212 8,282 25,574 13,531
Total operating expenses 65,653 36,866 124,646 65,870
Loss from operations (24,583 ) (9,747 ) (46,574 ) (15,896 )
Other income, net 293 32 379 20
Loss before provision for
income taxes (24,290 ) (9,715 ) (46,195 ) (15,876 )
Provision for income taxes 278 368 593 646
Net loss $ (24,568 ) $ (10,083 ) $ (46,788 ) $ (16,522 )
(1)Amounts include stock-based compensation expense as follows:
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
(in thousands)
Cost of revenue $ 1,669 $ 247 $ 2,592 $ 483
Research and development 7,383 1,154 11,667 2,063
Sales and marketing 3,206 866 6,445 1,689
General and administrative 2,578 752 7,635 1,361
Total stock-based compensation expense
The following table sets forth the components of our condensed consolidated
statements of operations data, for each of the periods presented, as a
percentage of revenue.
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
Revenue 100% 100% 100% 100%
Cost of revenue 29% 31% 30% 31%
Gross margin 71% 69% 70% 69%
Operating expenses:
Research and development 35% 22% 33% 21%
Sales and marketing 59% 51% 56% 51%
General and administrative 19% 21% 23% 19%Total operating expenses 113% 94% 112% 91% Loss from operations
(42)% (25)% (42)% (22)%
Other income, net 1% * * *
Loss before provision for income
taxes (42)% (25)% (42)% (22)%
Provision for income taxes * 1% 1% 1%
Net loss (42)% (26)% (42)% (23)%
* Less than 1%
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Note: Certain figures may not sum due to rounding
Comparison of Three Months EndedJune 30, 2022 to Three Months EndedJune 30, 2021 Revenue Three Months Ended June 30, 2022 2021 $ Change % Change (in thousands, except percentages) Revenue$ 58,130 $ 39,254 $ 18,876 48%
Revenue increased
Cost of Revenue and Gross Margin
Three Months Ended
June 30,
2022 2021 $ Change % Change
(in thousands, except percentages)
Cost of revenue $ 17,060 $ 12,135 $ 4,925 41%
Gross margin 71 % 69 % N/A N/A
Cost of revenue increased
Our gross margin increased during the three months ended
Operating Expenses
Three Months Ended
June 30,
2022 2021 $ Change % Change
(in thousands, except percentages)
Research and development $ 20,306 $ 8,544 $ 11,762 138%
Sales and marketing 34,135 20,040 14,095 70%
General and administrative 11,212 8,282 2,930 35%
Total operating expenses $ 65,653 $ 36,866 $ 28,787 78%
Research and Development
Research and development expenses increased
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Sales and Marketing
Sales and marketing expenses increased
General and Administrative
General and administrative expenses increased
Other Income, net
Three Months Ended
June 30,
2022 2021 $ Change % Change
(in thousands, except percentages)
Other income, net $ 293 $ 32 $ 261 *
* Not meaningful
Other income, net increased
Provision for Income Taxes
Three Months Ended
June 30,
2022 2021 $ Change % Change
(in thousands, except percentages)
Provision for income taxes $ 278 $ 368 $ (90 ) (24)%
Provision for income taxes decreased
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Comparison of Six Months Ended
Revenue
Six Months Ended
June 30,
2022 2021 $ Change % Change
(in thousands, except percentages)
Revenue $ 111,195 $ 72,364 $ 38,831 54%
Revenue increased
Cost of Revenue and Gross Margin
Six Months Ended
June 30,
2022 2021 $ Change % Change
(in thousands, except percentages)
Cost of revenue $ 33,123 $ 22,390 $ 10,733 48%
Gross margin 70 % 69 % N/A N/A
Cost of revenue increased
Our gross margin increased during the six months ended
Operating Expenses
Six Months Ended
June 30,
2022 2021 $ Change % Change
(in thousands, except percentages)
Research and development $ 36,807 $ 15,529 $ 21,278 137%
Sales and marketing 62,265 36,810 25,455 69%
General and administrative 25,574 13,531 12,043 89%
Total operating expenses $ 124,646 $ 65,870 $ 58,776 89%
Research and Development
Research and development expenses increased
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Sales and Marketing
Sales and marketing expenses increased
General and Administrative
General and administrative expenses increased
Other Income, net
Six Months Ended
June 30,
2022 2021 $ Change % Change
(in thousands, except percentages)
Other income, net $ 379 $ 20 $ 359 *
* Not meaningful
Other income, net increased
Provision for Income Taxes
Six Months Ended
June 30,
2022 2021 $ Change % Change
(in thousands, except percentages)
Provision for income taxes $ 593 $ 646 $ (53 ) (8)%
Provision for income taxes decreased
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Liquidity and Capital Resources
Since inception, we have financed operations primarily through the net proceeds
we have received from the sales of our preferred stock and common stock as well
as cash generated from the sale of subscriptions to our platform. We have
generated losses from our operations as reflected in our accumulated deficit of
As of
We assess our liquidity primarily through our cash on hand as well as the projected timing of billings under contract with our paying customers and related collection cycles. We believe our current cash and cash equivalents on hand will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months. In the event that additional financing is required from outside sources, we may seek to raise additional funds at any time through equity, equity-linked arrangements, and debt. If we are unable to raise additional funds when desired and at reasonable rates, our business, results of operations, and financial condition would be adversely affected. See "Risk Factors-Risks Related to Our Business and Industry-We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all."
Cash Flows
The following table shows a summary of our cash flows for the periods presented:
Six Months Ended
June 30,
2022 2021
(in thousands)
Net cash provided by (used in) operating activities
$ 4,015 $ 179,313 Operating Activities
Our largest source of operating cash is cash collection from sales of subscriptions to our paying customers. Our primary uses of cash from operating activities are for personnel-related expenses, marketing expenses, and third-party hosting-related and software expenses. In the last several years, we have generated negative cash flows from operating activities and have supplemented working capital requirements through net proceeds from the sale of preferred stock and common stock.
Net cash provided by operating activities of
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Net cash used in operating activities of
Investing Activities
Net cash used in investing activities of
Net cash provided by investing activities of
Financing Activities
Net cash provided by financing activities of
Net cash provided by financing activities of
Remaining Performance Obligations
Remaining performance obligations ("RPO") as of
As of June 30,
2022 2021 % Change
(in thousands, except percentages)
Less than or equal to 12 months $ 170,173 $ 116,922 46%
Greater than 12 months 57,413 21,955 162%
Total remaining performance obligations
Our RPO represents the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancellable contracted amounts that will be invoiced and recognized as revenue in future periods. RPO excludes performance obligations from overages. RPO is influenced by a number of factors, including the timing of renewals, the timing of purchases, average contract terms, and seasonality. Due to these factors, it is important to review RPO in conjunction with product revenue and other financial metrics disclosed elsewhere in this Quarterly Report on Form 10-Q.
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Contractual Obligations and Commitments
During the six months ended
Indemnification Agreements
In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties. Additionally, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No demands have been made upon us to provide indemnification under such agreements, and there are no claims that we are aware of that could reasonably be expected to have a material effect on our financial position, results of operations, or cash flows.
Off-Balance Sheet Arrangements
For all periods presented in this Quarterly Report on Form 10-Q, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Critical Accounting Policies and Estimates
Our unaudited condensed consolidated financial statements are prepared in
accordance with
Recent Accounting Pronouncements
See Note 1 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding recent accounting pronouncements.
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