Amplitude, Inc. (AMPL) stock intrinsic value fair value estimate & owner earnings analysis

Amplitude sells subscription software that shows companies how people use their websites and apps. Amplitude Analytics still produces substantially all revenue; around it the company has added Session Replay, Feature and Web Experimentation, Audience Activation, Guides and Surveys and a set of AI agent tools. Revenue reached $343.2 million in 2025 (up 15%) and $194.4 million in the first half of 2026 (up 19%). Annual recurring revenue was $366 million at the end of 2025 (up 17%), customers kept 104% of their prior-year spending (up from 97%), and contracted but not yet recognized revenue rose from $308.6 million at the end of 2024 to $417.7 million at the end of 2025 and $483.0 million by June 30, 2026. The company has no borrowings. How we measure earnings. We start from operating cash flow and remove short-term swings in working capital, including the growth in customer prepayments. We subtract stock-based compensation, which we treat as a real cost, and subtract the capital spending and capitalized software needed to keep the platform running. Operating lease payments stay in as rent. We also strip out the roughly $11-15 million a year of interest earned on the company's cash, because we count that cash separately below. On this basis Amplitude has never produced positive owner earnings. Losses were about $101 million in 2023, $110 million in 2024 and $93 million in 2025. The cause is stock pay: $88 million, $100 million and $92 million in those years, or 27% of 2025 revenue. Before stock pay, the operating business roughly breaks even, losing between $1 million and $13 million a year. The stock pay is not free to shareholders. The weighted share count rose from 117 million in 2023 to 132 million in 2025. Holding it down cost cash: $42.7 million of withheld employee taxes in 2025, plus $30.7 million of buybacks in 2025 and $89.5 million in the first half of 2026. Starting point. We use 2023-2025, the period since operating cash flow turned positive and growth settled into the teens. Earlier years reflect a pre-listing, hyper-growth business. The median is a loss of about $101 million a year, or $0.78 per share on today's 129.4 million shares. 2025 improved by roughly 15% on 2024. We do not carry that improvement forward, because the first half of 2026 went the other way: the operating loss widened to $59.3 million from $51.3 million, gross margin fell to 70.7% from 73.6%, and stock pay rose to $46.8 million from $45.1 million. The base case therefore assumes no improvement in year one, which is below 2025's rate. What we credited and what we left out. The revenue growth backed by the contracted backlog is real. But the business only breaks even before stock pay, so more revenue at today's margins adds no owner earnings. We did not credit wider margins, lower stock pay or new AI products, because none has yet shown up in results. Past year ten we assume nothing in any case. Base case: losses of about $101 million a year for ten years. That puts the operating business at about negative $745 million. It owes nothing. Cash and investments were $161.4 million at June 30, 2026; after keeping $25 million for day-to-day needs, excess cash is about $136 million. Net value is about negative $608 million, or -$4.70 per share. Bear case: 2024's loss of $110 million, plus about $10 million a year from the gross-margin squeeze seen in 2026, for a loss of $120 million a year. The business is worth about negative $883 million; with no debt and $136 million of excess cash, that is about negative $747 million, or -$5.77 per share. Bull case: the best year so far, 2025's loss of $93 million, holds for ten years. The business is worth about negative $687 million; with $136 million of excess cash, that is about negative $550 million, or -$4.25 per share. What the negative figures mean. They do not come from debt: Amplitude owes nothing and holds cash. They mean that, on its record so far, the company pays employees in stock worth far more than the business earns. Current owners bear that cost through dilution, or through cash spent buying back the new shares, at roughly $0.70-0.95 per share a year. At that pace the cost uses up the equivalent of all its excess cash in less than two years. The main thing that would prove this wrong is stock pay staying near $92 million while revenue keeps growing and the margin before stock pay widens. Each lasting $10 million improvement in annual owner earnings adds about $0.57 per share to every case. The margin-of-safety price applies only once owner earnings turn positive for a full year. At that point the shares would be worth at least the roughly $1.05 per share of excess cash, and the margin-of-safety price is set at about half of that because the result would still be new and unproven.