Core Insights - Klaviyo, a CRM designed for B2C brands, highlights a significant collaboration gap between marketing and service teams despite shared priorities of customer retention and loyalty [1] Group 1 - New commissioned research by Forrester Consulting reveals that fewer than one in four organizations report consistent collaboration between marketing and service teams [1] - The identified divide leads to inefficiencies and wasted resources within organizations [1]

Core Insights - Klaviyo is evolving beyond its initial marketing success, aiming to unlock new levels of growth and innovation in the coming years [1] - The company's founding ethos revolves around scalability, enabling individuals and teams to reach a broader audience efficiently [2] Company Vision - The long-term vision for Klaviyo includes significant advancements in its capabilities, with expectations for growth over the next 2, 5, and 10 years [1] - The inspiration for Klaviyo originated from the founder's personal experience in managing race events, highlighting the need for efficient communication and outreach [2]

Klaviyo (NYSE:KVYO) 2025 Conference Summary Company Overview - **Company**: Klaviyo - **Ticker**: NYSE:KVYO - **Date of Conference**: September 09, 2025 Key Points Company Vision and Evolution - Klaviyo aims to empower businesses and creators to scale their operations and maintain authenticity at internet scale, evolving from a marketing tool to a comprehensive customer experience platform [4][5][6] - The company is transitioning from traditional SaaS models to an autonomy layer that automates marketing strategies and campaigns, allowing businesses to focus on approval rather than setup [7][8][9] Product Development and Features - Klaviyo is enhancing its product offerings with features like the Customer Agent, which facilitates real-time conversations and personalized experiences for consumers [10][11] - The Customer Hub product personalizes user experiences on websites and mobile apps, tailoring content based on user identity [10][11] - The company is focused on integrating AI into its platform to improve customer interactions and streamline marketing processes [12][14] Market Dynamics and Competition - The current landscape shows a consolidation trend in the SaaS market, driven by the need for unified data systems and seamless user experiences [15][17][18] - Klaviyo recognizes the rise of AI-native competitors and is positioning itself to leverage AI for enhanced customer engagement and operational efficiency [19][20][26] Customer Segmentation and Targeting - Klaviyo initially focused on B2C use cases but is expanding into B2B, recognizing the value of tailored experiences for high-value customers [30][31][32] - The company aims to serve businesses of all sizes, from small entrepreneurs to large enterprises, by simplifying complex systems and providing scalable solutions [63][66] Data Infrastructure and Technology - Klaviyo's data platform is designed to handle various data types efficiently, allowing for rapid querying and real-time insights [36][37] - The company is exploring new data storage technologies, including vector databases, to enhance its AI capabilities and support enterprise-level data modeling [72][74] Future Outlook - Klaviyo is committed to continuous innovation, particularly in AI and customer experience, to stay ahead in a rapidly evolving market [40][43] - The company is focused on building a robust developer ecosystem to encourage third-party applications that enhance its platform [51][52] Organizational Changes - Klaviyo has undergone a reduction in force to streamline operations and reinvest resources into AI and product development [54][56] - The company emphasizes the importance of hiring talent that is proactive in AI and technology, aligning with its vision for the future [57][59] Conclusion - Klaviyo is positioning itself as a leader in the marketing and customer experience space by leveraging AI, enhancing product offerings, and focusing on customer-centric solutions, while navigating a competitive landscape marked by consolidation and technological advancements [14][15][19][40]

Klaviyo (KVYO) Conference Summary - August 11, 2025 Company Overview - Klaviyo is a platform that powers digital relationships primarily for B2C businesses, acting as the customer source of record for understanding customer interactions and data [3][4] - The company was founded in 2012, focusing on unifying siloed data systems for businesses of all sizes, initially starting with email marketing [5][6] Core Business Model - Klaviyo has evolved into a multiproduct company, offering services beyond email, including SMS, push notifications, marketing automation, and analytics [12][17] - The company emphasizes a customer-centric approach, unifying the entire customer journey across various digital touchpoints [15][19] Product Development and Strategy - Klaviyo is channel agnostic, planning to integrate new communication channels as they emerge [17][18] - Currently, approximately 95% of Klaviyo's business is focused on e-commerce, with expectations to expand into broader digital relationships [19] - The company is in the early stages of launching new service products, with three initial SKUs currently in beta [17][22] Market Position and Customer Segmentation - Klaviyo initially targeted SMBs for capital efficiency and rapid adoption, but is now moving upmarket to cater to larger brands [27][28] - The sales and customer support processes differ significantly between SMBs and larger enterprises, with a focus on optimizing experiences for larger customers [39][40] AI Integration - Klaviyo is leveraging AI to enhance customer experiences and improve operational efficiency, with a focus on product-led improvements [38][40] - AI is being integrated into the platform to automate tasks such as content generation for emails and text messages, enhancing the personalization of customer journeys [42][45] International Expansion - The company is actively expanding internationally, focusing on localizing products, messaging channels, and support [50][51] - Klaviyo aims to replicate its successful partnerships with platforms like Shopify in international markets [52][54] Pricing Strategy - Klaviyo has been adjusting its pricing strategy to align with the value provided to customers, moving away from outdated pricing models [56][59] - The company emphasizes clear and simple pricing structures to enhance customer experience [59][60] Exposure to Global Markets - Klaviyo has minimal exposure to revenue from China, with less than 2% of sales calls mentioning tariffs, indicating low impact from international trade issues [61][62] Conclusion - Klaviyo is positioned as a leader in the B2C digital relationship space, with a strong focus on data integration, customer journey unification, and leveraging AI for enhanced service delivery. The company is strategically expanding its product offerings and international presence while refining its pricing strategy to maximize customer value.

分组1 - Klaviyo, Inc. reported quarterly earnings of $0.16 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, and showing an earnings surprise of +23.08% [1] - The company achieved revenues of $293.12 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.45%, compared to $222.21 million in the same quarter last year [2] - Klaviyo has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] 分组2 - The stock has underperformed, losing about 25.9% since the beginning of the year, while the S&P 500 has gained 7.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $290.76 million, and for the current fiscal year, it is $0.57 on revenues of $1.17 billion [7] - The Zacks Industry Rank for Internet - Software is in the top 32% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

Financial Data and Key Metrics Changes - Revenue for the second quarter reached $293 million, representing a 32% year-over-year increase [5][29] - Non-GAAP operating margin was 14%, with free cash flow of $59 million [29][33] - Non-GAAP gross margin was 76%, down approximately two points year-over-year due to increased infrastructure costs and SMS product growth [32][33] Business Line Data and Key Metrics Changes - The company ended the quarter with over 176,000 customers, a 17% year-over-year increase [30] - The number of customers with over $50,000 in ARR grew by 38% year-over-year, reaching 3,291 [31] - The marketing analytics product gained nearly 2,000 customers, demonstrating strong early adoption [30][16] Market Data and Key Metrics Changes - International revenue grew over 42% year-over-year, with notable growth in EMEA (47%) and APAC [31][24] - Specific countries like Norway, Germany, and Spain saw new ARR growth exceeding 90% year-over-year [92] Company Strategy and Development Direction - The company is focused on sustainable, efficient long-term growth, expanding internationally and moving upmarket [6][36] - Klaviyo aims to unify marketing, service, and analytics into a single platform, enhancing customer engagement and operational efficiency [8][17] - The introduction of AI-driven products is expected to enhance customer experiences and drive revenue growth [12][17] Management's Comments on Operating Environment and Future Outlook - Management noted that Klaviyo is more critical than ever for customers' growth, with no significant impact from the macroeconomic environment during the quarter [32][36] - The company is optimistic about future growth, raising full-year guidance based on strong first-half performance and customer demand [35][36] Other Important Information - The company announced leadership changes, including the appointment of a new Chief Information Officer and the retirement of the President [27][28] - Klaviyo is expanding its product offerings, including the launch of a help desk and conversational agents, which are currently in beta [12][47] Q&A Session Summary Question: Progress in the mid-market - Management highlighted strong unit economics and customer interest in the mid-market, with a focus on consolidating marketing and service [39][41] Question: Service suite opportunity sizing - Management believes the service suite could be as large as the marketing automation category, with significant interest from both SMBs and enterprises [47][49] Question: Gross margin dynamics - Management discussed the impact of SMS growth and infrastructure investments on gross margin, indicating a positive outlook for new products over time [68][70] Question: International growth and language rollout - International growth was strong, with ongoing language rollouts and improvements in product experience for global customers [92][94] Question: Evolving go-to-market strategy - The expansion of the product portfolio is leading to higher-level discussions with decision-makers beyond just marketing [80][82]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $293 million, representing a 32% year-over-year increase [4][27] - Non-GAAP operating margin was 14%, with free cash flow of $59 million [27][30] - Non-GAAP gross margin was 76%, down approximately two points year-over-year due to increased infrastructure costs and SMS product growth [30][34] Business Line Data and Key Metrics Changes - The company ended Q2 with over 176,000 customers, a 17% year-over-year increase [28] - The number of customers with over $50,000 in ARR grew by 38% year-over-year, reaching 3,291 [29] - The marketing analytics product gained nearly 2,000 customers, demonstrating strong early adoption [13][28] Market Data and Key Metrics Changes - International revenue grew by over 42% year-over-year, with notable growth in EMEA (47%) and APAC [21][29] - New ARR in Norway, Germany, and Spain grew over 90% year-over-year [90] Company Strategy and Development Direction - The company is focused on sustainable, efficient long-term growth, expanding internationally and moving upmarket [5][35] - Klaviyo aims to unify marketing and service through an integrated data platform, addressing market gaps in consumer brand interactions [6][12] - The introduction of AI-driven products is a key part of the strategy, with a focus on enhancing customer experiences and operational efficiencies [14][18] Management's Comments on Operating Environment and Future Outlook - Management noted that Klaviyo is more critical than ever for driving customer growth, with no significant impact from the macroeconomic environment in Q2 [30] - The company is optimistic about future growth, raising full-year guidance based on strong first-half performance and customer demand [34][35] Other Important Information - The company announced leadership changes, including the appointment of a new Chief Information Officer and the retirement of the President [24][25] - Klaviyo is recognized as a leader in AI-enabled marketing platforms, highlighting its competitive positioning in the market [15] Q&A Session Summary Question: Progress in the mid-market - Management highlighted strong customer interest in Klaviyo's integrated data platform and the trend towards autonomous CRM solutions [39][40] Question: Service suite opportunity sizing - Management believes the service suite market is comparable in size to marketing automation and is seeing interest across all customer segments [45][46] Question: Revenue capture from cross-selling - Management indicated that the service products could lead to significant revenue expansion, with a focus on delivering better customer engagement [53][54] Question: International growth and language rollout - Management confirmed ongoing language rollouts and highlighted strong growth in specific international markets [90][91] Question: Evolving go-to-market strategy - Management noted that the expanded product portfolio is opening new conversations with senior decision-makers across organizations [78][80]

Q2 2025 Investor Presentation Lifetime Data Retention Streaming Architecture High-Performance Indexing 08.05.2025 Forward-Looking Statements and Disclaimer This presentation includes certain "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Other than statements of historical facts, all statements contained in this presentation and accompanying oral commentary, including, but not limited to, statements about Kla ...

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides Klaviyo's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents Klaviyo, Inc.'s unaudited condensed consolidated financial statements, including the Balance Sheets, Statements of Operations and Comprehensive Loss, Statements of Changes in Stockholders' Equity, and Statements of Cash Flows, along with their accompanying notes [Condensed Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) The Condensed Consolidated Balance Sheets show Klaviyo's financial position, with total assets increasing to $1.40 billion as of June 30, 2025, from $1.27 billion at December 31, 2024 Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | Total Assets | $1,397,882 | $1,273,308 | +$124,574 | | Total Liabilities | $301,130 | $239,321 | +$61,809 | | Total Stockholders' Equity | $1,096,752 | $1,033,987 | +$62,765 | | Cash and cash equivalents | $935,516 | $881,473 | +$54,043 | | Accounts receivable, net | $58,843 | $43,095 | +$15,748 | | Deferred revenue | $82,711 | $64,497 | +$18,214 | [Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(Unaudited)) Klaviyo reported significant revenue growth for both the three and six months ended June 30, 2025, with increases of 31.9% and 32.6% year-over-year, respectively, though net losses also widened considerably Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenue | $293,117 | $222,213 | $572,944 | $432,206 | | Cost of revenue | $71,236 | $50,271 | $138,936 | $95,209 | | Gross profit | $221,881 | $171,942 | $434,008 | $336,997 | | Operating loss | $(31,326) | $(14,053) | $(55,076) | $(36,145) | | Net loss | $(24,281) | $(4,942) | $(38,370) | $(17,824) | | Net loss per share, basic and diluted | $(0.09) | $(0.02) | $(0.14) | $(0.07) | - Revenue increased by **31.9%** for the three months ended June 30, 2025, and by **32.6%** for the six months ended June 30, 2025, compared to the respective prior year periods[22](index=22&type=chunk) - Net loss significantly increased to **$(24.3) million** for the three months ended June 30, 2025, from **$(4.9) million** in the prior year, and to **$(38.4) million** for the six months ended June 30, 2025, from **$(17.8) million**[22](index=22&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Unaudited)) This statement outlines the movements in Klaviyo's stockholders' equity, showing an increase in total equity to $1.10 billion as of June 30, 2025, from $1.03 billion at December 31, 2024 Condensed Consolidated Statements of Changes in Stockholders' Equity | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Total Stockholders' Equity | $1,096,752 | $1,033,987 | | Series A Common Stock (shares) | 116,877,930 | 88,956,301 | | Series B Common Stock (shares) | 182,757,254 | 183,801,332 | | Additional Paid-In Capital | $1,980,007 | $1,878,899 | | Accumulated Deficit | $(883,555) | $(845,185) | - Additional paid-in capital increased by **$101.1 million** from December 31, 2024, to June 30, 2025, primarily due to stock-based compensation expense and proceeds from employee stock purchase plans and option exercises[21](index=21&type=chunk)[24](index=24&type=chunk)[26](index=26&type=chunk) - The accumulated deficit increased by **$38.4 million**, reflecting the net loss incurred during the six months ended June 30, 2025[21](index=21&type=chunk)[24](index=24&type=chunk)[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Klaviyo generated **$70.1 million** in net cash from operating activities for the six months ended June 30, 2025, an increase from **$67.1 million** in the prior year, resulting in a net increase in cash, cash equivalents, and restricted cash of **$53.7 million** Condensed Consolidated Statements of Cash Flows | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $70,087 | $67,082 | | Net cash used in investing activities | $(15,048) | $(7,060) | | Net cash used in financing activities | $(1,372) | $(5,050) | | Net increase in cash, cash equivalents, and restricted cash | $53,667 | $54,972 | | Cash, cash equivalents, and restricted cash, end of period | $936,254 | $794,629 | - Operating cash flow was primarily driven by non-cash adjustments to net loss, including **$83.7 million** in stock-based compensation expense and **$26.4 million** in prepaid marketing expense amortization[28](index=28&type=chunk)[157](index=157&type=chunk) - Investing activities included **$10.3 million** in capitalized software development costs and **$4.7 million** in property and equipment acquisitions[28](index=28&type=chunk)[161](index=161&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes provide essential context and detailed breakdowns for the condensed consolidated financial statements, covering business model, accounting policies, revenue, fair value, property, expenses, commitments, leases, taxes, equity, stock-based compensation, loss per share, segment reporting, and subsequent events [1. Organization and Business Description](index=14&type=section&id=1.%20Organization%20and%20Business%20Description) Klaviyo, Inc. provides a modern, vertically integrated software-as-a-service (SaaS) platform for consumer-focused businesses to capture, store, analyze, and predictively use their own data to drive measurable, high-value outcomes - Klaviyo, Inc. provides a modern, vertically integrated software-as-a-service (SaaS) platform for consumer-focused businesses to capture, store, analyze, and predictively use their own data to drive measurable, high-value outcomes[29](index=29&type=chunk) - The platform combines proprietary data and application layers with machine learning and artificial intelligence capabilities, offering solutions like Klaviyo Marketing (email, SMS, Mobile Push, Reviews), Klaviyo Service, Klaviyo Analytics, and Advanced KDP[29](index=29&type=chunk) - Revenue is generated through subscriptions tiered based on the number of consumer profiles stored and the volume of emails and SMS messages sent[30](index=30&type=chunk) [2. Summary of Significant Accounting Policies](index=14&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) The unaudited condensed consolidated financial statements are prepared in conformity with GAAP and SEC rules, with no material changes to significant accounting policies since December 31, 2024 - The unaudited condensed consolidated financial statements are prepared in conformity with GAAP and SEC rules, with no material changes to significant accounting policies since December 31, 2024[31](index=31&type=chunk)[33](index=33&type=chunk)[36](index=36&type=chunk) - The collaboration agreement with Shopify is accounted for as a services contract where Klaviyo receives marketing services, with fees recognized as a component of selling and marketing expense[38](index=38&type=chunk) - Prepaid marketing expense related to vested warrants issued to Shopify was **$143.1 million** as of June 30, 2025, with **$26.4 million** amortized as marketing expense for the six months ended June 30, 2025[39](index=39&type=chunk) [3. Revenue Recognition](index=16&type=section&id=3.%20Revenue%20Recognition) Remaining performance obligations totaled $199.3 million as of June 30, 2025, with $185.6 million expected to be recognized within the next twelve months Deferred Revenue and Billings | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :----------------------------- | | Deferred Revenue (end of period) | $82,711 | $46,782 | | Billings during the six months | $591,158 | $438,888 | | Revenue recognized from beginning balance (6 months) | $61,000 | $37,900 | - Remaining performance obligations totaled **$199.3 million** as of June 30, 2025, with **$185.6 million** expected to be recognized within the next twelve months[49](index=49&type=chunk) [4. Fair Value Measurements](index=17&type=section&id=4.%20Fair%20Value%20Measurements) The company's investments in money market funds are classified within Level 1 of the fair value hierarchy, valued using quoted market prices in active markets Fair Value Measurements of Money Market Funds | Asset Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------- | :----------------------------- | :------------------------------- | | Money market funds | $319,275 | $278,235 | | Total | $319,275 | $278,235 | - The company's investments in money market funds are classified within Level 1 of the fair value hierarchy, valued using quoted market prices in active markets[51](index=51&type=chunk) [5. Property and Equipment, Net](index=18&type=section&id=5.%20Property%20and%20Equipment,%20Net) Capitalized internal-use software development costs increased to $12.8 million for the six months ended June 30, 2025, from $6.9 million in the prior year period Property and Equipment, Net | Asset Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------- | :----------------------------- | :------------------------------- | | Total property and equipment, net | $56,677 | $48,200 | | Capitalized internal-use software | $39,086 | $26,698 | | Leasehold improvements | $46,750 | $46,062 | - Capitalized internal-use software development costs increased to **$12.8 million** for the six months ended June 30, 2025, from **$6.9 million** in the prior year period[54](index=54&type=chunk) - An amendment to the corporate headquarters lease extended the term to March 2033, resulting in a **$2.4 million** reduction in depreciation expense for the six months ended June 30, 2025, due to a change in the estimated useful life of leasehold improvements[53](index=53&type=chunk) [6. Accrued Expenses](index=19&type=section&id=6.%20Accrued%20Expenses) Total accrued expenses decreased to $89.6 million as of June 30, 2025, from $99.8 million at December 31, 2024 Accrued Expenses Breakdown | Accrued Expense Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------- | :----------------------------- | :------------------------------- | | Total accrued expenses | $89,563 | $99,828 | | Accrued compensation and employee related costs | $45,460 | $53,652 | | Accrued cost of revenue | $20,194 | $18,216 | [7. Commitments and Contingencies](index=19&type=section&id=7.%20Commitments%20and%20Contingencies) Future minimum payments under non-cancelable purchase commitments increased to $281.3 million as of June 30, 2025, from $225.5 million at December 31, 2024 - Future minimum payments under non-cancelable purchase commitments increased to **$281.3 million** as of June 30, 2025, from **$225.5 million** at December 31, 2024[57](index=57&type=chunk) - The company is not currently subject to any material pending or threatened legal proceedings[58](index=58&type=chunk) [8. Leases](index=20&type=section&id=8.%20Leases) An amendment to the corporate headquarters lease on January 31, 2025, extended the term to March 2033 and expanded leased premises, leading to a significant increase in ROU assets and lease liabilities Operating Lease Metrics | Lease Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Operating lease ROU assets | $86,592 | $42,917 | | Total lease liabilities | $99,187 | $53,438 | | Weighted average remaining lease term | 6.7 years | 2.8 years | | Weighted average discount rate | 6.67% | 5.13% | - An amendment to the corporate headquarters lease on January 31, 2025, extended the term to March 2033 and expanded leased premises, leading to a significant increase in ROU assets and lease liabilities[62](index=62&type=chunk) - ROU assets recognized for new leases and amendments (non-cash) totaled **$51.6 million** for the six months ended June 30, 2025[60](index=60&type=chunk) [9. Income Taxes](index=21&type=section&id=9.%20Income%20Taxes) The effective tax rate for the six months ended June 30, 2025, was (2.0)%, compared to (7.6)% for the same period in 2024, primarily due to increased profits in international entities - The effective tax rate for the six months ended June 30, 2025, was **(2.0)%**, compared to **(7.6)%** for the same period in 2024, primarily due to increased profits in international entities, partially offset by excess tax benefits from stock-based compensation[63](index=63&type=chunk) - The company maintains a valuation allowance against its U.S. deferred tax assets, and due to executive option exercises, anticipates a significant increase in net operating losses fully offset by a related valuation allowance[64](index=64&type=chunk) [10. Common Stock and Stockholders' Equity](index=21&type=section&id=10.%20Common%20Stock%20and%20Stockholders'%20Equity) During the six months ended June 30, 2025, 688,764 warrants vested and were exercised, reducing the total outstanding warrants Warrants Outstanding | Metric | January 1, 2025 | June 30, 2025 | | :-------------------------------- | :-------------- | :-------------- | | Warrants outstanding (shares) | 3,788,204 | 3,099,440 | | Weighted Average Exercise Price | $0.01 | $0.01 | | Weighted Average Remaining Life (years) | 7.58 | 7.08 | - During the six months ended June 30, 2025, **688,764 warrants** vested and were exercised, reducing the total outstanding warrants[69](index=69&type=chunk) [11. Stock-Based Compensation](index=23&type=section&id=11.%20Stock-Based%20Compensation) Total stock-based compensation expense increased by 29.9% for the six months ended June 30, 2025, compared to the prior year, primarily due to the vesting of Restricted Stock Units (RSUs) and a company-wide bonus program Stock-Based Compensation Expense | Expense Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total stock-based compensation expense | $46,884 | $35,316 | $86,318 | $71,070 | | Selling and marketing | $14,329 | $10,175 | $26,426 | $21,459 | | Research and development | $18,643 | $13,053 | $34,831 | $26,174 | | General and administrative | $10,477 | $7,657 | $18,762 | $16,501 | - Total stock-based compensation expense increased by **29.9%** for the six months ended June 30, 2025, compared to the prior year, primarily due to the vesting of Restricted Stock Units (RSUs) and a company-wide bonus program[77](index=77&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk) - The company granted RSUs under the 2023 Plan, generally vesting quarterly over 3 or 4 years, and issued **275,800 shares** under the Employee Stock Purchase Plan (ESPP) during the three and six months ended June 30, 2025[72](index=72&type=chunk)[74](index=74&type=chunk) [12. Loss Per Share](index=25&type=section&id=12.%20Loss%20Per%20Share) Potential common shares, including warrants, investment options, RSUs, stock options, and ESPP shares, were excluded from diluted EPS calculations as their effect was antidilutive due to the net loss Net Loss Per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net loss per share attributable to Series A and Series B common stockholders, basic and diluted | $(0.09) | $(0.02) | $(0.14) | $(0.07) | | Weighted average common shares outstanding, basic and diluted | 284,928,388 | 265,293,214 | 279,674,052 | 263,319,667 | - Potential common shares, including warrants, investment options, RSUs, stock options, and ESPP shares, were excluded from diluted EPS calculations as their effect was antidilutive due to the net loss[78](index=78&type=chunk)[80](index=80&type=chunk) [13. Segment Information and Geographic Data](index=25&type=section&id=13.%20Segment%20Information%20and%20Geographic%20Data) Klaviyo operates in one operating and one reportable segment, with revenue from outside the United States accounting for 39.1% of total revenue for the six months ended June 30, 2025 - Klaviyo operates in one operating and one reportable segment, with the CEO reviewing financial information on a consolidated basis[81](index=81&type=chunk) Geographic Revenue Breakdown | Geographic Region | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Americas (ex-US) | $14,007 | $11,395 | $27,602 | $22,397 | | APAC | $30,211 | $22,665 | $58,473 | $44,057 | | EMEA | $71,679 | $48,855 | $137,750 | $93,719 | | Total Non-US Revenue | $115,897 | $82,915 | $223,825 | $160,173 | | Total Revenue | $293,117 | $222,213 | $572,944 | $432,206 | - Revenue from outside the United States accounted for **39.1% of total revenue** for the six months ended June 30, 2025, an increase from **34.2%** in the prior year period[83](index=83&type=chunk)[97](index=97&type=chunk) [14. Subsequent Events](index=26&type=section&id=14.%20Subsequent%20Events) The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, and Klaviyo is currently evaluating its impact on its consolidated financial statements - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, and Klaviyo is currently evaluating its impact on its consolidated financial statements[85](index=85&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Klaviyo's financial performance and condition, highlighting strong revenue growth driven by new and existing customers, particularly through its expanding platform and SMS channel [Overview](index=27&type=section&id=Overview) Klaviyo provides a vertically-integrated SaaS platform that helps over 176,000 businesses globally drive revenue growth by unifying first-party data and delivering personalized, omnichannel consumer experiences at scale - Klaviyo provides a vertically-integrated SaaS platform that helps over **176,000 businesses** globally drive revenue growth by unifying first-party data and delivering personalized, omnichannel consumer experiences at scale[87](index=87&type=chunk)[90](index=90&type=chunk) - The platform, built on the Klaviyo Data Platform (KDP), has expanded from marketing automation (email, SMS, Reviews, AI-powered tools) to a unified B2C CRM solution, combining Klaviyo Marketing, Service, and Analytics[88](index=88&type=chunk) - Revenue is generated from subscriptions tiered by the number of active consumer profiles and the volume of emails and SMS messages sent, supporting a 'land-and-expand' strategy[91](index=91&type=chunk)[93](index=93&type=chunk) [Factors Affecting Our Future Performance](index=28&type=section&id=Factors%20Affecting%20Our%20Future%20Performance) Future performance depends on attracting new customers, expanding revenue from existing customers, international expansion, and continued investment in innovation and product development - Future performance depends on attracting new customers, expanding revenue from existing customers through increased platform usage and cross-selling additional offerings (e.g., SMS, Reviews, Advanced KDP), and moving up-market to address enterprise customers[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - International expansion is a key opportunity, with operations in London, Sydney, Dublin, and Singapore, and SMS capabilities in over **20 countries**, with plans to add more billing currencies[97](index=97&type=chunk)[98](index=98&type=chunk) - Continued investment in innovation and product development, including AI-powered tools, is crucial for sustained success, alongside expanding into new industry verticals beyond retail and eCommerce[99](index=99&type=chunk)[100](index=100&type=chunk)[102](index=102&type=chunk) [Key Performance Metrics](index=29&type=section&id=Key%20Performance%20Metrics) As of June 30, 2025, Klaviyo had over 176,000 customers, with a decrease in Dollar-Based Net Revenue Retention (NRR) from 112% to 108% - As of June 30, 2025, Klaviyo had over **176,000 customers**, defined as distinct paid subscriptions to its platform[90](index=90&type=chunk)[103](index=103&type=chunk) Key Customer Metrics | Metric | June 30, 2025 | June 30, 2024 | YoY Growth | | :----------------------------------- | :------------ | :------------ | :--------- | | Customers generating over $50,000 ARR | 3,291 | 2,386 | 38% | | Dollar-Based Net Revenue Retention (NRR) | 108% | 112% | -4 percentage points | - The decrease in NRR from **112%** to **108%** was largely driven by relatively lower comparable expansion of existing customer plans[108](index=108&type=chunk) [Seasonality](index=30&type=section&id=Seasonality) Demand for Klaviyo's services, particularly the SMS offering, increases during the fourth quarter due to the holiday shopping season, leading to historically stronger sequential revenue growth in that period - Demand for Klaviyo's services, particularly the SMS offering, increases during the fourth quarter due to the holiday shopping season, leading to historically stronger sequential revenue growth in that period[110](index=110&type=chunk)[111](index=111&type=chunk) - Increased SMS usage during holidays is expected to modestly decline gross margin in Q4, though overall gross profit dollars are anticipated to increase[101](index=101&type=chunk)[111](index=111&type=chunk) [Components of Results of Operations](index=31&type=section&id=Components%20of%20Results%20of%20Operations) Revenue is primarily derived from cloud-based software subscriptions, with operating expenses expected to increase in dollar amount due to investments in growth, headcount, and public company costs - Revenue is primarily derived from cloud-based software subscriptions, with pricing based on consumer profiles and message volume[112](index=112&type=chunk) - Cost of revenue includes cloud infrastructure, outbound communication sending costs (expected to increase with SMS usage), and employee-related costs[113](index=113&type=chunk)[116](index=116&type=chunk) - Operating expenses (selling and marketing, R&D, G&A) are expected to increase in dollar amount due to investments in growth, headcount, and public company costs, with selling and marketing and G&A decreasing as a percentage of revenue over the longer term, while R&D remains consistent[118](index=118&type=chunk)[120](index=120&type=chunk)[122](index=122&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Klaviyo experienced significant revenue growth of 31.9% (QoQ) and 32.6% (YoY), but also saw increased cost of revenue and operating expenses, leading to wider net losses Consolidated Results of Operations | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenue | $293,117 | $222,213 | $572,944 | $432,206 | | Cost of revenue | $71,236 | $50,271 | $138,936 | $95,209 | | Gross profit | $221,881 | $171,942 | $434,008 | $336,997 | | Selling and marketing | $126,632 | $94,501 | $250,159 | $186,359 | | Research and development | $72,459 | $55,735 | $141,808 | $111,832 | | General and administrative | $54,116 | $35,759 | $97,117 | $74,951 | | Operating loss | $(31,326) | $(14,053) | $(55,076) | $(36,145) | | Net loss | $(24,281) | $(4,942) | $(38,370) | $(17,824) | - Revenue increased by **31.9% (QoQ)** and **32.6% (YoY)**, with new customers accounting for **56%** and **58%** of the increase for the three and six months, respectively[130](index=130&type=chunk)[131](index=131&type=chunk) - Cost of revenue increased by **41.7% (QoQ)** and **45.9% (YoY)**, primarily due to higher outbound communication sending costs (SMS usage) and cloud-based infrastructure costs[132](index=132&type=chunk)[133](index=133&type=chunk) - Operating expenses increased across all categories, driven by higher headcount, a company-wide bonus program, increased marketing campaigns, and stock-based compensation[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, Klaviyo's principal sources of liquidity included $936.3 million in cash, cash equivalents, and restricted cash, with operating cash flows providing sufficient liquidity for at least the next twelve months - As of June 30, 2025, Klaviyo's principal sources of liquidity included **$936.3 million** in cash, cash equivalents, and restricted cash, with **$319.3 million** held in money market funds[150](index=150&type=chunk) - Net cash provided by operating activities was **$70.1 million** for the six months ended June 30, 2025, compared to **$67.1 million** for the same period in 2024[156](index=156&type=chunk) - The company believes its operating cash flows provide sufficient liquidity for at least the next twelve months, but future capital needs may arise for growth investments or acquisitions[152](index=152&type=chunk)[261](index=261&type=chunk) Working Capital Components | Working Capital Component | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------------------------- | :----------------------------- | :------------------------------- | | Total Working Capital | $846,832 | $779,856 | | Cash | $935,516 | $881,473 | | Accounts payable | $22,879 | $14,579 | | Accrued expenses | $89,563 | $99,828 | | Deferred revenue | $82,711 | $64,497 | [Critical Accounting Policies and Estimates](index=42&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) There have been no significant changes in Klaviyo's critical accounting policies and estimates during the six months ended June 30, 2025 - There have been no significant changes in Klaviyo's critical accounting policies and estimates during the six months ended June 30, 2025, compared to those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[168](index=168&type=chunk) [Recent Accounting Pronouncements](index=42&type=section&id=Recent%20Accounting%20Pronouncements) The company is evaluating the impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Disaggregation of Income Statement Expenses), effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively - The company is evaluating the impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Disaggregation of Income Statement Expenses), effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively[44](index=44&type=chunk)[45](index=45&type=chunk)[169](index=169&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Klaviyo is exposed to market risks primarily from fluctuations in interest rates and foreign currency exchange rates, but does not use derivative financial instruments for speculative purposes - Klaviyo's primary market risks are interest rate fluctuations on its cash holdings (**$936.3 million** as of June 30, 2025) and foreign currency exchange rate fluctuations due to international operations, although all sales are U.S. dollar denominated[170](index=170&type=chunk)[171](index=171&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - The company does not use derivative financial instruments for hedging and believes inflation has not had a material effect on its business[170](index=170&type=chunk)[172](index=172&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Klaviyo's management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance for timely and accurate financial reporting, with no material changes in internal control over financial reporting during the quarter - As of June 30, 2025, Klaviyo's disclosure controls and procedures were deemed effective to provide reasonable assurance that required information is recorded, processed, summarized, and reported within SEC specified time periods[175](index=175&type=chunk)[176](index=176&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[177](index=177&type=chunk) - Management acknowledges that the effectiveness of any internal control system is subject to inherent limitations and can only provide reasonable, not absolute, assurance[178](index=178&type=chunk) [PART II. OTHER INFORMATION](index=44&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section details legal proceedings, risk factors, equity security sales, and other disclosures relevant to Klaviyo's operations [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) Klaviyo is not currently involved in any material legal proceedings or governmental inquiries that are reasonably possible to have a material adverse effect on its financial condition or results of operations - The company is not a party to any material legal proceedings, nor is its property subject to any, that are currently believed to have a material adverse effect on its financial condition or results of operations[180](index=180&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section outlines numerous risks and uncertainties that could materially affect Klaviyo's business, financial condition, and results of operations, spanning business, privacy, intellectual property, and stock ownership [Risks Relating to Our Business and Industry](index=44&type=section&id=Risks%20Relating%20to%20Our%20Business%20and%20Industry) Klaviyo's rapid historical revenue growth may not be sustainable, facing challenges in customer acquisition, retention, product innovation, market expansion, and managing increased headcount and international operations in a highly competitive industry - Klaviyo's rapid historical revenue growth (**32.6%** for six months ended June 30, 2025) may not be sustainable, and future growth depends on customer acquisition, retention, product innovation, and market expansion[182](index=182&type=chunk)[183](index=183&type=chunk) - Rapid growth has increased headcount (**2,435 employees** as of June 30, 2025, up from **2,035 YoY**) and international operations (**98,000 international customers**, up from **81,000 YoY**), posing challenges for effective management and scaling of infrastructure[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - The company operates in a highly competitive industry, facing established companies and new entrants, and its success relies on effective integration with third-party platforms like Shopify (**77.7% of ARR** from Shopify users as of Dec 31, 2024)[191](index=191&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk) - Klaviyo has a history of net losses and anticipates increasing operating expenses due to investments in technology, international expansion, sales and marketing, and public company costs, making future profitability uncertain[210](index=210&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk) - Moving up-market to enterprise customers is expected to lengthen sales cycles and require significant scaling of sales efforts and platform adaptation[214](index=214&type=chunk) - Reliance on a third-party cloud infrastructure provider and third-party communication services (email, SMS) means any disruptions could adversely affect business operations and customer engagement[234](index=234&type=chunk)[237](index=237&type=chunk) [Risks Relating to Privacy, Data Security, and Data Protection Laws](index=64&type=section&id=Risks%20Relating%20to%20Privacy,%20Data%20Security,%20and%20Data%20Protection%20Laws) Klaviyo collects and processes personal information, subjecting it to stringent and evolving global privacy and data protection laws, with non-compliance potentially leading to significant fines, lawsuits, and reputational harm - Klaviyo collects and processes personal information, subjecting it to stringent and evolving global privacy and data protection laws (e.g., GDPR, CCPA, CPRA, PIPEDA), with non-compliance potentially leading to significant fines, lawsuits, and reputational harm[272](index=272&type=chunk)[273](index=273&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk)[291](index=291&type=chunk)[297](index=297&type=chunk) - Cybersecurity incidents, data breaches, or unauthorized access to customer data or the platform could result in significant liabilities, reputational damage, reduced demand, and costly remediation efforts, as experienced in past incidents (July 2022, October 2024)[276](index=276&type=chunk)[278](index=278&type=chunk)[283](index=283&type=chunk) - The company's direct marketing activities (email, SMS) are regulated by laws like CAN-SPAM and TCPA, with potential for substantial fines and class-action lawsuits for non-compliance, and evolving regulations could limit marketing effectiveness[303](index=303&type=chunk)[304](index=304&type=chunk)[306](index=306&type=chunk) - Failure to comply with industry standards or regulations for data handling, or issues with email deliverability due to inbox service provider policies (e.g., Google/Yahoo's new sender requirements), could harm business and customer retention[309](index=309&type=chunk)[316](index=316&type=chunk) [Risks Relating to Our Intellectual Property](index=73&type=section&id=Risks%20Relating%20to%20Our%20Intellectual%20Property) Failure to protect proprietary technology and intellectual property rights could harm business, expose the company to infringement claims, and the use of open-source software or AI technology introduces additional risks - Failure to protect proprietary technology and intellectual property rights (trademarks, trade secrets, patents, copyrights) could harm business, especially in foreign jurisdictions with weaker protections, and expose the company to theft or unauthorized reverse engineering[317](index=317&type=chunk)[318](index=318&type=chunk) - Klaviyo may face intellectual property infringement claims from competitors, which are costly, time-consuming, and could result in significant damages or require changes to products[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) - The use of open-source software in products carries risks of license non-compliance, potential litigation, and requirements to release proprietary source code, or re-engineer products[324](index=324&type=chunk)[325](index=325&type=chunk) - Incorporating AI technology into products introduces risks such as inaccurate or biased output, reputational damage, new regulatory burdens (e.g., EU's AI Act, state laws), increased intellectual property risks, and potential cybersecurity vulnerabilities[329](index=329&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk) [Risks Relating to Ownership of Our Series A Common Stock](index=77&type=section&id=Risks%20Relating%20to%20Ownership%20of%20Our%20Series%20A%20Common%20Stock) The trading price of Klaviyo's Series A common stock may be volatile due to its limited public market history, small public float, and concentrated ownership, with a dual series common stock structure limiting Series A stockholders' influence - The trading price of Klaviyo's Series A common stock may be volatile due to its limited public market history, small public float, concentrated ownership, and macroeconomic factors, potentially leading to declines regardless of operating performance[334](index=334&type=chunk)[335](index=335&type=chunk) - The dual series common stock structure concentrates voting control with Series B holders (directors, executive officers, and affiliates own **64.3% of voting power** as of June 30, 2025), limiting Series A stockholders' influence on corporate matters[338](index=338&type=chunk) - Exclusion from certain stock indices due to the dual series structure could depress the trading price of Series A common stock[341](index=341&type=chunk) - Future sales of substantial amounts of Series A common stock by insiders or through equity issuances (e.g., stock incentive plans) could cause dilution and a decline in the stock price[343](index=343&type=chunk)[347](index=347&type=chunk) - Klaviyo does not intend to pay dividends in the foreseeable future, meaning stockholders must rely on stock price appreciation for returns[348](index=348&type=chunk) [General Risk Factors](index=82&type=section&id=General%20Risk%20Factors) Operating as a public company incurs increased costs and requires substantial management time for compliance, while adverse developments in the financial services industry, natural catastrophic events, and climate change pose additional risks - Operating as a public company incurs increased costs and requires substantial management time for compliance with SEC, Sarbanes-Oxley Act, and stock exchange requirements[357](index=357&type=chunk) - Adverse developments in the financial services industry, such as liquidity issues or defaults by financial institutions, could impair Klaviyo's access to funding, impact its ability to meet obligations, and affect customer/supplier relationships[361](index=361&type=chunk)[362](index=362&type=chunk) - The business is exposed to risks from natural catastrophic events (earthquakes, fires, floods) and man-made problems (power disruptions, cyberattacks, terrorism), which could disrupt operations and cause reputational harm[365](index=365&type=chunk)[366](index=366&type=chunk) - Climate change, including extreme weather events, may have long-term impacts on business operations, employees, and critical infrastructure, potentially leading to higher attrition and costs[367](index=367&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on unregistered sales of equity securities and the use of proceeds from the company's initial public offering, noting Shopify's partial exercise of warrants for Series B common stock - On April 28, 2025, Shopify partially exercised warrants for **344,382 shares** of Series B common stock at **$0.01 per share**, totaling **$3,443.82**, exempt from registration under Section 4(a)(2) of the Securities Act[368](index=368&type=chunk) - There has been no material change in the use of proceeds from the initial public offering (IPO) as described in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023[369](index=369&type=chunk) [Item 3. Defaults Upon Senior Securities](index=85&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Klaviyo reported no defaults upon senior securities during the period - There were no defaults upon senior securities[370](index=370&type=chunk) [Item 4. Mine Safety Disclosures](index=85&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Klaviyo, Inc - Mine Safety Disclosures are not applicable to the registrant[371](index=371&type=chunk) [Item 5. Other Information](index=86&type=section&id=Item%205.%20Other%20Information) This section discloses the adoption of Rule 10b5-1 trading plans by certain directors and executive officers during the three months ended June 30, 2025, for the sale of company securities Rule 10b5-1 Trading Plans | Name | Position | Adoption Date | Earliest Trade Date | Total Shares Subject to Trading Arrangement | Expiration Date | | :--------------- | :-------------------------------------- | :------------ | :------------------ | :------------------------------------------ | :-------------- | | Andrew Bialecki | CEO, Co-Founder, Chairperson | May 20, 2025 | August 26, 2025 | 8,000,000 | May 29, 2026 | | Susan St. Ledger | Director | June 11, 2025 | September 10, 2025 | 12,745 | June 15, 2026 | | Ed Hallen | Chief Strategy Officer, Co-Founder, Director | June 12, 2025 | September 15, 2025 | 990,000 | June 30, 2026 | - These plans were adopted to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act for the sale of company securities[372](index=372&type=chunk) [Item 6. Exhibits](index=87&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, common stock certificates, various agreements, and certifications required by SEC rules - The exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, specimen common stock certificates, various warrant and stock purchase agreements with Shopify, and certifications from the Principal Executive Officer and Principal Financial Officer[375](index=375&type=chunk) [Signatures](index=88&type=section&id=Signatures) The report is signed by Andrew Bialecki, Chief Executive Officer, and Amanda Whalen, Chief Financial Officer, on behalf of Klaviyo, Inc., certifying its submission - The report was signed by Andrew Bialecki, Chief Executive Officer, and Amanda Whalen, Chief Financial Officer, on August 5, 2025[379](index=379&type=chunk)

[Financial & Business Highlights](index=1&type=section&id=Financial%20%26%20Business%20Highlights) Klaviyo reported strong Q2 2025 results with revenue growing 32% year-over-year to $293.1 million, driven by broad-based customer growth and significant international expansion Q2 2025 Financial Highlights ($ in millions, except per share amounts) | Metric | Q2 FY25 | YoY Growth | | :--- | :--- | :--- | | Revenue | $293.1 | 32% | | Gross Profit | $221.9 | - | | Non-GAAP Operating Income | $40.9 | - | | Operating Loss | $(31.3) | - | | Net loss per share, diluted | $(0.09) | - | | Non-GAAP net income per share, diluted | $0.16 | - | | Cash from Operating Activities | $55.7 | - | | Free Cash Flow | $59.3 | - | - The total number of customers grew to over **176,000** as of June 30, 2025, up from over **151,000** in the prior year[5](index=5&type=chunk) - The number of large customers, those generating over **$50,000** of Annual Recurring Revenue (ARR), increased by **38%** year-over-year to **3,291**[5](index=5&type=chunk) - International revenue growth was strong, with a **42%** year-over-year increase in the EMEA and APAC regions[5](index=5&type=chunk) - The Dollar-Based Net Revenue Retention Rate (NRR) was **108%** as of June 30, 2025, indicating healthy expansion within the existing customer base[5](index=5&type=chunk) - Klaviyo announced the public beta of Klaviyo Service, an AI-powered tool suite designed to enhance customer service experiences[5](index=5&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Klaviyo raised its full-year 2025 revenue guidance to $1.195 - $1.203 billion, projecting 27% to 28% year-over-year growth Q3 & Full Year 2025 Guidance ($ in millions) | Metric | Q3 FY25 Guidance | FY25 Guidance | | :--- | :--- | :--- | | Revenue | $297.0 - $301.0 | $1,195.0 - $1,203.0 | | YoY Growth Rate | 26% - 28% | 27% - 28% | | Non-GAAP Operating Income | $32.5 - $35.5 | $144.0 - $150.0 | | Non-GAAP Operating Margin | 11% - 12% | 12% | [Corporate Updates](index=3&type=section&id=Corporate%20Updates) This section details a significant executive leadership change and provides information on the company's dilutive securities [Executive Leadership Update](index=3&type=section&id=Executive%20Leadership%20Update) President Steve Rowland announced his intention to retire, effective December 31, 2025, after which he will serve as a strategic advisor to ensure a smooth transition - Steve Rowland, President, announced his intention to retire from his position, effective December 31, 2025[10](index=10&type=chunk) - Mr. Rowland will serve as a strategic advisor until March 31, 2026, to support the transition[10](index=10&type=chunk) - During his time at Klaviyo, the company's revenue run rate grew significantly from **$660 million to $1.1 billion**[11](index=11&type=chunk) [Dilutive Securities](index=2&type=section&id=Dilutive%20Securities) As of June 30, 2025, Klaviyo's total estimated fully diluted shares stood at 323.7 million, excluding the out-of-the-money Shopify investment option Estimated Fully Diluted Shares as of June 30, 2025 (in millions) | Security Type | Shares | | :--- | :--- | | Common stock outstanding | 299.6 | | Warrants outstanding | 3.1 | | RSUs outstanding | 18.4 | | Options outstanding | 2.6 | | **Total estimated fully diluted shares** | **323.7** | - The Shopify investment option of **15,743,174 shares** at **$88.93 per share** was excluded from the fully diluted share count as it was out of the money[9](index=9&type=chunk) [Financial Statements (Unaudited)](index=8&type=section&id=Financial%20Statements%20(Unaudited)) The unaudited financial statements for the period ended June 30, 2025, show a growing business with increased revenue and assets, but also widening GAAP net losses due to higher operating expenses [Condensed Consolidated Balance Sheet](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of June 30, 2025, Klaviyo's balance sheet strengthened, with total assets increasing to approximately **$1.4 billion** from **$1.27 billion** at year-end 2024, primarily driven by a rise in cash and cash equivalents Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $935,516 | $881,473 | | Total current assets | $1,061,071 | $979,749 | | Total assets | $1,397,882 | $1,273,308 | | Total current liabilities | $214,239 | $199,893 | | Total liabilities | $301,130 | $239,321 | | Total stockholders' equity | $1,096,752 | $1,033,987 | [Condensed Consolidated GAAP Statement of Operations](index=9&type=section&id=Condensed%20Consolidated%20GAAP%20Statement%20of%20Operations) For Q2 2025, revenue grew **32% YoY to $293.1 million**, but GAAP operating loss widened to **$(31.3) million** from **$(14.1) million** in Q2 2024, reflecting increased investments Q2 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $293,117 | $222,213 | | Gross Profit | $221,881 | $171,942 | | Operating Loss | $(31,326) | $(14,053) | | Net Loss | $(24,281) | $(4,942) | | Net Loss Per Share | $(0.09) | $(0.02) | Six Months Ended June 30 Statement of Operations Highlights (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $572,944 | $432,206 | | Operating Loss | $(55,076) | $(36,145) | | Net Loss | $(38,370) | $(17,824) | [Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Klaviyo demonstrated strong cash generation, with net cash provided by operating activities increasing to **$55.7 million** for Q2 2025, up from **$40.9 million** in the prior-year quarter Q2 Statement of Cash Flows Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $55,725 | $40,900 | | Net cash used in investing activities | $(7,307) | $(3,835) | | Net cash (used in) provided by financing activities | $(1,335) | $687 | | Net increase in cash | $47,083 | $37,752 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, primarily by excluding stock-based compensation, related employer payroll taxes, and amortization of prepaid marketing expenses [Reconciliation for Three Months Ended June 30](index=13&type=section&id=Reconciliation%20for%20Three%20Months%20Ended%20June%2030) For the second quarter of 2025, Klaviyo's GAAP operating loss of **$(31.3) million** was reconciled to a non-GAAP operating income of **$40.9 million**, with free cash flow at **$59.3 million** Q2 Reconciliation of Operating Loss to Non-GAAP Operating Income (in thousands) | Description | Q2 2025 | | :--- | :--- | | Operating loss (GAAP) | $(31,326) | | Stock-based compensation | $45,404 | | Employer payroll tax on employee stock transactions | $13,591 | | Amortization of prepaid marketing | $13,225 | | **Non-GAAP operating income** | **$40,894** | Q2 Reconciliation of Net Loss to Non-GAAP Net Income (in thousands) | Description | Q2 2025 | | :--- | :--- | | Net loss (GAAP) | $(24,281) | | Stock-based compensation | $45,404 | | Employer payroll tax on employee stock transactions | $13,591 | | Amortization of prepaid marketing | $13,225 | | **Non-GAAP net income** | **$47,939** | Q2 Reconciliation to Free Cash Flow (in thousands) | Description | Q2 2025 | | :--- | :--- | | Cash provided by operating activities | $55,725 | | Less: Acquisition of property and equipment | $(2,060) | | Less: Capitalization of software development costs | $(5,247) | | Add: Employer taxes for executive option exercises | $10,833 | | **Free cash flow** | **$59,251** | [Reconciliation for Six Months Ended June 30](index=16&type=section&id=Reconciliation%20for%20Six%20Months%20Ended%20June%2030) For the six months ended June 30, 2025, the GAAP operating loss of **$(55.1) million** was reconciled to a non-GAAP operating income of **$73.3 million**, with free cash flow at **$65.9 million** H1 Reconciliation of Operating Loss to Non-GAAP Operating Income (in thousands) | Description | H1 2025 | | :--- | :--- | | Operating loss (GAAP) | $(55,076) | | Stock-based compensation | $83,731 | | Employer payroll tax on employee stock transactions | $18,201 | | Amortization of prepaid marketing | $26,449 | | **Non-GAAP operating income** | **$73,305** | H1 Reconciliation of Net Loss to Non-GAAP Net Income (in thousands) | Description | H1 2025 | | :--- | :--- | | Net loss (GAAP) | $(38,370) | | Stock-based compensation | $83,731 | | Employer payroll tax on employee stock transactions | $18,201 | | Amortization of prepaid marketing | $26,449 | | **Non-GAAP net income** | **$90,011** | H1 Reconciliation to Free Cash Flow (in thousands) | Description | H1 2025 | | :--- | :--- | | Cash provided by operating activities | $70,087 | | Less: Acquisition of property and equipment | $(4,745) | | Less: Capitalization of software development costs | $(10,303) | | Add: Employer taxes for executive option exercises | $10,833 | | **Free cash flow** | **$65,872** | [Appendix](index=3&type=section&id=Appendix) The appendix provides definitions for key performance metrics used throughout the report and includes standard forward-looking statements and disclaimers regarding non-GAAP financial measures [Select Defined Terms](index=3&type=section&id=Select%20Defined%20Terms) This section defines key business metrics used in the report, including 'Customer' and 'Dollar-Based Net Revenue Retention Rate (NRR)', which tracks revenue expansion from existing customers - A customer is defined as a distinct paid subscription to the platform, excluding free trial users[14](index=14&type=chunk)[15](index=15&type=chunk) - Dollar-Based Net Revenue Retention Rate (NRR) is calculated to measure the expansion in usage of the platform by existing customers over a trailing twelve-month period[17](index=17&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains the standard safe harbor statement, cautioning that the press release includes forward-looking statements concerning financial outlooks and business strategies, which are subject to various risks and uncertainties - The press release contains forward-looking statements regarding financial outlook, business strategies, and potential growth, which are not guarantees of future performance[20](index=20&type=chunk) - These statements are subject to risks and uncertainties, including the ability to sustain growth, execute strategy, and macroeconomic factors, as detailed in SEC filings[21](index=21&type=chunk)[22](index=22&type=chunk)