phakphum patjangkata/iStock via Getty Images Sometimes I curse myself for paying too much attention to the market and not sticking to my guns on the fundamentals. The best day to buy a chunk of Klaviyo (NYSE:KVYO) would have been "Carry Trade Collapse Day" on Monday, August 5th, for around $22; Nonetheless, my average cost for Klaviyo is around $26. I first wrote about it on December 20th, extolling its strengths of integration of customer and automated marketing data, which would allow it to build a moat. ...

Financial Data and Key Metrics Changes - Revenue for Q2 2024 was $222 million, representing a 35% year-over-year growth [4][22] - Non-GAAP operating margin was reported at 15%, exceeding expectations [22] - Non-GAAP gross profit was $175 million, with a gross margin of 79%, up 140 basis points year-over-year [25] - Free cash flow for the quarter was $37 million, slightly down from the previous year [26] - Guidance for Q3 2024 revenue is projected to be between $225 million and $227 million, indicating a growth of 28% to 29% year-over-year [27] Business Line Data and Key Metrics Changes - The company added over 5,000 new customers in Q2, bringing the total to more than 151,000, a 16% increase year-over-year [22] - Dollar-based net revenue retention rate (NRR) was 112% for the quarter, reflecting a decline due to previous price increases and customer trends [23] - The SMS business continues to be a key growth driver, with significant adoption and integration into customer strategies [9][66] Market Data and Key Metrics Changes - International revenue grew 41% year-over-year, with France being the fastest-growing country, up more than 65% from Q1 [24] - EMEA revenue growth accelerated to 45% in Q2 from 43% in Q1 [24] - The company expanded SMS capabilities into Austria, Switzerland, and Spain, increasing SMS coverage to 12 countries [16] Company Strategy and Development Direction - The company is focused on investing in go-to-market efforts to capture mid-market and international opportunities [15] - Continued investment in AI features to enhance customer engagement and marketing strategies [13][14] - The company aims to expand its product offerings and improve customer retention through enhanced features and integrations [11][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the diversity of the customer base, which provides resilience in various operating environments [30] - There is an acknowledgment of macro pressures affecting customer spending, particularly in the SMB market [23] - The company is committed to driving durable growth through strategic investments and product enhancements [27][28] Other Important Information - Klaviyo was named an Inc. Best Workplace for the sixth consecutive year and recognized by Newsweek as one of America's greatest workplaces for 2024 [21] - The company launched several new features, including AI tools for marketing optimization and product analytics [12][18] Q&A Session Summary Question: What are the demand drivers underpinning the strength in growth? - Management highlighted strength in the entrepreneur segment and upper market, driven by marketing efficiency and product improvements [30] Question: What is enabling the increase in new customer adds despite a weaker SMB market? - The company is shifting resources towards SMB and mid-market, seeing benefits from product-led growth and direct marketing efforts [32] Question: How is the company addressing the bottom line and Q4 guidance? - Management indicated that reinvestment in growth areas is ongoing, with a focus on unit economics to ensure returns [34] Question: How is the company monetizing new products, particularly AI? - AI tools are expected to drive incremental usage and revenue, with plans for future monetization as adoption increases [39] Question: What is the status of SMS traction and its impact on gross margins? - The company is seeing good adoption of SMS, particularly in international markets, and is focused on enhancing SMS functionalities [66]

Customer Growth and Market Expansion - As of June 30, 2024, Klaviyo had over 151,000 customers, with a significant increase in customers generating over $50,000 of ARR, rising to 2,386 from 1,458 a year prior, representing a 64% year-over-year growth[80] - International sales accounted for 31.9% of total revenue for the six months ended June 30, 2024, indicating strong growth in global markets[73] - The company has expanded its operations internationally, opening offices in London and Sydney, and offering SMS capabilities in over 10 countries as of June 30, 2024[73] - The company anticipates continued revenue growth driven by increased customer usage and expansion into new industry verticals beyond retail and eCommerce[77] Financial Performance - Revenue for the three months ended June 30, 2024 increased by $57.6 million or 35.0%, reaching $222.2 million compared to $164.6 million for the same period in 2023[101] - Revenue for the six months ended June 30, 2024 increased by $111.5 million or 34.8%, totaling $432.2 million compared to $320.7 million for the same period in 2023[102] - Gross profit for the three months ended June 30, 2024 increased by $44.8 million or 35.3%, reaching $171.9 million compared to $127.1 million for the same period in 2023[105] - Gross profit for the six months ended June 30, 2024 increased by $90.4 million or 36.6%, to $337.0 million compared to $246.6 million for the same period in 2023[106] Cost and Expenses - Cost of revenue for the three months ended June 30, 2024 increased by $12.8 million or 34.1%, amounting to $50.3 million compared to $37.5 million for the same period in 2023[103] - Cost of revenue for the six months ended June 30, 2024 increased by $21.2 million or 28.6%, totaling $95.2 million compared to $74.1 million for the same period in 2023[103] - Selling and marketing expenses for the three months ended June 30, 2024 were $94.5 million, up from $63.4 million in the same period in 2023[96] - Selling and marketing expenses for the six months ended June 30, 2024 increased by $62.4 million or 50.3%, to $186.4 million compared to $124.0 million for the same period in 2023[108] - Research and development expenses for the three months ended June 30, 2024 were $55.7 million, compared to $33.1 million for the same period in 2023[96] - Research and development costs for the six months ended June 30, 2024 increased by $43.7 million or 64.2%, to $111.8 million compared to $68.1 million for the same period in 2023[111] - General and administrative expenses for the three months ended June 30, 2024 were $35.8 million, an increase from $23.7 million in the same period in 2023[96] - General and administrative expenses for the six months ended June 30, 2024 increased by $28.3 million or 60.6%, to $75.0 million compared to $46.7 million for the same period in 2023[113] Cash and Liquidity - As of June 30, 2024, the company had cash, cash equivalents, and restricted cash totaling $794.6 million, with $322.8 million in money market funds[119] - Total working capital increased to $740.8 million as of June 30, 2024, up from $672.9 million as of December 31, 2023, representing a growth of approximately 10.1%[121] - Net cash provided by operating activities for the six months ended June 30, 2024, was $67.1 million, compared to $57.0 million for the same period in 2023, reflecting an increase of 17.5%[123][126] - Cash and restricted cash at the end of the period reached $794.6 million, up from $439.8 million at the end of June 30, 2023, indicating a year-over-year increase of approximately 80.5%[122] - The company expects continued growth in cash balances as business operations expand, with a diversified cash management strategy to mitigate risks[129] - The company had no debt as of June 30, 2024, eliminating potential market risk for interest expense[136] Market Strategy and Innovations - Klaviyo's platform combines data and application layers with advanced machine learning and AI capabilities, enhancing customer engagement across email, SMS, and push notifications[68] - The company focuses on a land-and-expand strategy, where customer growth leads to increased usage of the platform, driving revenue expansion[68] - Klaviyo has invested in product innovation, recently launching Klaviyo AI to enhance customer engagement and campaign management[74] - Klaviyo's SMS offering, launched in 2021, has seen increased adoption, with expectations of higher communication costs impacting gross margins, particularly in the fourth quarter[76] Other Financial Metrics - Interest income for the six months ended June 30, 2024 increased by $11.2 million or 135.2%, to $19.5 million compared to $8.3 million for the same period in 2023[117] - Non-cancellable lease obligations as of June 30, 2024, totaled $49.3 million, with $13.3 million due within the next 12 months[130] - Non-cancellable obligations with marketing vendors and service providers amounted to $279.2 million as of June 30, 2024[132] - The company maintains a full valuation allowance on its U.S. federal and state net deferred tax assets, indicating uncertainty in realizing these assets[93] - The company has not experienced significant inflationary pressures, but continues to monitor and manage costs to mitigate potential impacts[137] Seasonal Trends - Seasonality impacts demand, particularly in the fourth quarter, as customers increase marketing campaigns during the holiday shopping season[84]

Klaviyo Announces Second Quarter 2024 Financial Results Second quarter revenue of $222.2 million, representing 35% year-over-year growth Raises full year 2024 revenue guidance BOSTON, August 7, 2024 — Klaviyo (NYSE: KVYO), the company that powers smarter digital relationships, today announced results for its second quarter ended June 30, 2024. "We delivered another strong quarter, as businesses of all sizes turn to our platform to power smarter digital relationships and drive revenue," said Andrew Bialecki, ...

Klaviyo, Inc. (NYSE:KVYO) Q1 2024 Earnings Conference Call May 8, 2024 4:30 PM ET Company Participants Jack Grant - Senior Director of Investor Relations and Strategic Finance Andrew Bialecki - Co-Founder and Chief Executive Officer Amanda Whalen - Chief Financial Officer Conference Call Participants Arjun Bhatia - William Blair Robert Oliver - Baird Katie Keyser - Morgan Stanley Callie Valenti - Goldman Sachs Brent Bracelin - Piper Sandler Raimo Lenschow - Barclays Scott Berg - Needham Terry Tillman - Tru ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number 001-41806 Klaviyo, Inc. (Exact name of registrant as specified in its charter) Delaware 46-0989964 (State or other juris ...

"We executed well in the first quarter to set up a strong start to 2024." said Amanda Whalen, CFO of Klaviyo. "We delivered $210 million in revenue in the first quarter, driving growth of 35% year-over-year, while growing our operating cash flow 68% and our free cash flow 65% year-over-year in the first quarter. We're continuing to invest behind our strategic initiatives to drive efficient and durable growth." ● Launched Klaviyo portfolio to solve complex needs for global and multi-account customers. ● Anno ...

Financial Performance - Revenue for the year ended December 31, 2023, was $698.1 million, representing a growth rate of 47.7% compared to $472.7 million in 2022[105] - The company incurred net losses of $308.2 million, $49.2 million, and $79.4 million for the years ended December 31, 2023, 2022, and 2021, respectively[135] - The company expects to continue increasing operating expenses in the future, which may affect profitability[135] - A significant portion of revenue is derived from small businesses, which may be adversely affected by economic downturns[135] - The company anticipates a deceleration in revenue growth due to factors such as business maturation and the anniversary of a price increase implemented in September 2022[105] Customer Growth and Retention - The number of customers increased from approximately 61,000 on December 31, 2022, to approximately 76,000 on December 31, 2023[109] - Approximately 77.7% of annual recurring revenue (ARR) was derived from customers using Shopify's platform as of December 31, 2023[121] - The company relies on attracting new customers and retaining existing ones to sustain demand for its products[132] - The company anticipates that moving up-market will result in longer sales cycles with enterprise customers[138] Employee and Organizational Growth - Employee headcount grew from 1,544 as of December 31, 2022, to 1,815 as of December 31, 2023[109] - The complexity of the organizational structure has increased, necessitating improvements in operational, financial, and management controls[110] - The company may experience difficulties in hiring and retaining skilled personnel, impacting operations[144] - The company’s ability to attract and retain skilled employees is influenced by the perceived value of stock awards[145] International Operations - The company plans to continue expanding its international operations, having opened offices in the UK and Australia in recent years[109] - The company derived 36.5% of its revenue from international customers in 2023, up from 35.0% in 2022 and 32.1% in 2021[147] - The company plans to open additional international offices to expand its customer base and access technical talent[148] - The company faces significant risks in international operations, including political, economic, and regulatory challenges[149] Competition and Market Position - The company faces competition from established firms like Adobe and Salesforce, which may have greater resources[115] - The company’s brand recognition is crucial for expanding its customer base and sales, especially in a competitive market[146] - The company may experience quarterly fluctuations in results due to various factors, making future performance difficult to predict[153] Technology and Infrastructure - The company plans to invest in technology infrastructure, platform development, and international expansion[136] - The company may face challenges in adapting to technological changes and evolving customer preferences, impacting competitiveness[142] - The company relies on a third-party cloud infrastructure provider, and any disruption could adversely affect its business and financial condition[159] Legal and Regulatory Risks - The company is subject to various legal obligations related to privacy and data security, which could result in significant liabilities if not complied with[202] - The company faces risks from potential litigation that could divert management resources and incur substantial costs[192] - The company is exposed to anti-corruption laws, and non-compliance could lead to severe penalties and reputational damage[196] - The company must maintain compliance with industry standards and certifications, such as ISO 27001, to retain customer confidence and avoid adverse effects on revenue[241] Security and Data Protection - The company experienced a security incident in July 2022 where an unauthorized third party accessed internal systems, compromising employee credentials and customer information, including names, email addresses, and phone numbers[229] - Security incidents could result in legal claims and regulatory investigations, impacting the company's reputation and demand for its products[231] - Unauthorized disclosure of customer data could lead to severe reputational damage and significant liabilities for the company[228] Financial and Market Risks - The company is exposed to market risks primarily from fluctuations in interest rates and inflation, which may affect its financial position and future earnings[443] - The company may require additional capital to support business growth, which might not be available on acceptable terms[189] - The company has funded operations primarily through equity financings and cash generated from subscription sales, with uncertainty about future cash generation[189] Stock and Ownership Structure - The company’s Series A common stock has experienced volatility since its IPO in September 2023, influenced by various external factors including market conditions and company performance[264] - The dual series structure of the company's common stock concentrates voting control among certain stockholders, limiting the influence of other shareholders on corporate matters[270] - The company may issue additional capital stock in the future, which could dilute existing stockholders' ownership interests[281] Future Outlook and Challenges - The company anticipates increased operational and development expenses related to the evolving legal and regulatory framework surrounding AI technology[261] - The COVID-19 pandemic has negatively impacted operations, with ongoing effects such as supply shortages and economic instability[198] - The company recognizes the potential long-term impacts of climate change on its operations, including increased frequency of extreme weather events that could disrupt business activities[302]

Klaviyo, Inc. (NYSE:KVYO) Q4 2023 Earnings Call Transcript February 27, 2024 4:30 PM ET Company Participants Jack Grant - Senior Director of IR and Strategic Finance. Andrew Bialecki - Co-Founder and CEO Amanda Whalen - CFO Conference Call Participants Raimo Lenschow - Barclays Keith Weiss - Morgan Stanley Gabriela Borges - Goldman Sachs Brent Bracelin - Piper Sandler Arjun Bhatia - William Blair Tyler Radke - Citi Rob Oliver - Baird DJ Hynes - Canaccord Terry Tillman - Truist Securities Siti Panigrahi - Mi ...

Revenue Growth - Fourth quarter revenue of $201.6 million, representing 39% year-over-year growth[1] - Increased revenue by 48% in 2023, generating $119.4 million in cash from operating activities and $110.0 million in free cash flow[4] - Total revenue of $698.1 million in fiscal year 2023, representing annual growth of 48%[8] - Revenue for Q4 2023 increased to $201.6 million, up from $145.2 million in Q4 2022, representing a 38.8% year-over-year growth[31] - Full-year revenue for 2023 reached $698.1 million, a 47.7% increase compared to $472.7 million in 2022[33] - FY24-Q1 revenue guidance of $201.0 million to $203.0 million, representing year-over-year growth of 29% to 30%[10] - FY24 revenue guidance of $889.0 million to $897.0 million, representing year-over-year growth of 27% to 28%[10] Customer Metrics - Helped customers generate well over $50 billion in Klaviyo Attributed Value during all of 2023[2] - Over 143,000 customers using Klaviyo as of fiscal year end 2023, compared to over 119,000 customers at the end of fiscal year 2022[5] - 1,958 customers generating over $50,000 of ARR, an increase of 80% year over year[5] Profitability and Margins - Non-GAAP gross profit of $159.8 million, representing a non-GAAP gross margin of 79% in Q4 2023[6] - Non-GAAP operating income of $78.1 million, representing non-GAAP operating margin of 11% in fiscal year 2023[8] - Gross profit for Q4 2023 was $156.6 million, with a gross margin of 77.7%, compared to $107.9 million and a 74.3% margin in Q4 2022[31] - Gross profit for the year ended December 31, 2023, was $520.2 million, with a gross margin of 74.5%, compared to $344.7 million and 72.9% in 2022[49] - Non-GAAP gross profit for the year ended December 31, 2023, was $547.9 million, with a non-GAAP gross margin of 78.5%, compared to $344.9 million and 72.9% in 2022[49] - Non-GAAP operating income for the year ended December 31, 2023, was $78.1 million, compared to a non-GAAP operating loss of $26.2 million in 2022[51] - Non-GAAP net income for the year ended December 31, 2023, was $100.5 million, compared to a net loss of $308.2 million on a GAAP basis[53] Operating Performance - Operating loss for Q4 2023 was $36.3 million, compared to $4.1 million in Q4 2022, driven by increased operating expenses[31] - Operating loss for the year ended December 31, 2023, was $330.6 million, compared to an operating loss of $55.0 million in 2022[51] - Total operating expenses for the year ended December 31, 2023, were $850.8 million, compared to $399.8 million in 2022[55] Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2023, stood at $738.6 million, up from $385.8 million at the end of 2022[29] - Net cash provided by operating activities for the year ended December 31, 2023, was $119.4 million, compared to net cash used in operating activities of $23.6 million in 2022[37] - Free cash flow for Q4 2023 was $38.6 million, compared to $20.9 million in Q4 2022[35] - Free cash flow for the year ended December 31, 2023, was $110.0 million, compared to negative free cash flow of $41.8 million in 2022[57] Net Loss and Expenses - Net loss for Q4 2023 was $26.3 million, compared to a net loss of $755,000 in Q4 2022[31] - Net loss for the year ended December 31, 2023, was $308.2 million, compared to a net loss of $49.2 million in 2022[37] - Research and development expenses for Q4 2023 increased to $52.6 million, up from $28.7 million in Q4 2022, reflecting investment in innovation[31] - Stock-based compensation expense for Q4 2023 was $38.5 million, significantly higher than $557,000 in Q4 2022[35] - Stock-based compensation expense for the year ended December 31, 2023, was $340.8 million, compared to $6.8 million in 2022[37] Total Assets - Total assets as of December 31, 2023, were $1.09 billion, compared to $629.1 million at the end of 2022[29]