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 September 30, 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 j ...

Revenue and Growth - Q3 2024 revenue reached $235.1 million, representing a 34% year-over-year growth[1][7] - Raised full-year 2024 revenue guidance to a range of $923.0 million to $925.0 million, representing 32% to 33% year-over-year growth[13] - Revenue for the three months ended September 30, 2024, was $235,094 thousand, compared to $175,807 thousand in the same period in 2023[30] - Revenue for the nine months ended September 30, 2024, was $667,300 thousand, compared to $496,481 thousand in the same period in 2023[31] Profitability and Margins - Gross profit for Q3 2024 was $180.7 million with a gross margin of 77%, up from 67% in Q3 2023[7] - Non-GAAP operating income for Q3 2024 was $33.7 million, with a non-GAAP operating margin of 14%, compared to 10% in Q3 2023[9] - Non-GAAP gross margin is calculated as non-GAAP gross profit divided by total revenue, and non-GAAP operating margin is calculated as non-GAAP operating income divided by total revenue[24] - Non-GAAP gross profit for the nine months ended 2024 rose to $525,367 from $388,158 in 2023, reflecting improved profitability[39] - Non-GAAP operating income for the nine months ended 2024 reached $97,376, up from $61,901 in 2023, showing better operational efficiency[40] - Non-GAAP net income for the nine months ended 2024 was $127,631, compared to $74,255 in 2023, indicating stronger overall financial performance[41] - Non-GAAP gross margin for the nine months ended 2024 improved to 78.7% from 78.2% in 2023, indicating better cost control[39] - Non-GAAP operating margin for the nine months ended 2024 increased to 14.6% from 12.5% in 2023, showing enhanced operational efficiency[40] - Non-GAAP net income per share (diluted) for the nine months ended 2024 was $0.43, up from $0.27 in 2023, reflecting higher earnings per share[41] Cash Flow and Liquidity - Free cash flow for Q3 2024 was $34.2 million, representing a free cash flow margin of 15%[12] - Net cash provided by operating activities for the three months ended September 30, 2024, was $38,784 thousand, compared to $23,700 thousand in the same period in 2023[32] - Cash, cash equivalents, and restricted cash increased from $794,629 thousand at the beginning of the period to $827,898 thousand at the end of September 2024[32] - Net cash provided by operating activities increased to $105,866 in 2024 from $80,727 in 2023, indicating stronger cash flow generation[33] - Free cash flow for the three months ended 2024 was $34,246, up from $21,870 in 2023, demonstrating improved cash management[38] - Cash provided by operating activities grew to $105,866 in the nine months ended September 30, 2024, up from $80,727 in the same period in 2023[43] - Free Cash Flow increased to $94,268 in the nine months ended September 30, 2024, compared to $75,292 in the same period in 2023[43] - Operating Cash Flow Margin slightly decreased to 15.9% in the nine months ended September 30, 2024, from 16.3% in the same period in 2023[43] - Free Cash Flow Margin decreased to 14.1% in the nine months ended September 30, 2024, from 15.2% in the same period in 2023[43] Customer Metrics - Total customers grew to over 157,000 as of September 30, 2024, up from over 135,000 in the same period last year[4] - Customers generating over $50,000 in ARR increased by 54% year-over-year to 2,619 as of September 30, 2024[4] - Dollar-Based Net Revenue Retention Rate (NRR) was 110% as of September 30, 2024[4] International Expansion and Localization - Expanded SMS offerings to 18 countries, including Norway, Denmark, Sweden, Finland, Italy, and Portugal[3] - Launched Klaviyo in five new languages, bringing total supported languages to seven[2] Expenses and Compensation - Stock-based compensation expense is a significant recurring expense and an important part of employee compensation, impacting non-GAAP financial measures[25] - Stock-based compensation expense for the nine months ended 2024 was $100,690, down from $302,317 in 2023, reflecting reduced equity-based costs[33] - Non-GAAP Selling and Marketing expenses decreased to $214,880 in the nine months ended September 30, 2024, compared to $151,715 in the same period in 2023[42] - Non-GAAP Research and Development expenses increased to $127,279 in the nine months ended September 30, 2024, from $98,925 in the same period in 2023[42] - Non-GAAP General and Administrative expenses rose to $85,832 in the nine months ended September 30, 2024, compared to $75,617 in the same period in 2023[42] - Total Non-GAAP Operating Expenses increased to $427,991 in the nine months ended September 30, 2024, from $326,257 in the same period in 2023[42] Net Loss and Financial Position - Net loss for the three months ended September 30, 2024, was $(1,345) thousand, compared to $(297,104) thousand in the same period in 2023[30] - Net loss for the nine months ended September 30, 2024, was $(19,169) thousand, compared to $(281,938) thousand in the same period in 2023[31] - Net loss for the nine months ended 2024 improved to $(19,169) from $(281,938) in 2023, showing significant reduction in losses[33] - Klaviyo's total assets increased from $1,089,050 thousand in December 2023 to $1,193,199 thousand in September 2024[29]

Company Performance - Klaviyo, Inc. (KVYO) shares have increased by 10.9% over the past month and reached a new 52-week high of $39.77 [1] - The stock has gained 40.5% since the beginning of the year, outperforming the Zacks Business Services sector (17.1%) and the Zacks Technology Services industry (36.7%) [1] Earnings and Revenue - Klaviyo has a strong record of positive earnings surprises, beating earnings consensus estimates in the last four quarters [2] - In the latest earnings report on August 7, 2024, Klaviyo reported EPS of $0.15, exceeding the consensus estimate of $0.09, and beat the revenue estimate by 4.78% [2] - For the current fiscal year, Klaviyo is expected to post earnings of $0.49 per share on revenues of $915.97 million, reflecting a 36.11% change in EPS and a 31.21% change in revenues [3] - For the next fiscal year, earnings are projected to be $0.58 per share on $1.15 billion in revenues, indicating year-over-year changes of 19.64% and 25.74%, respectively [3] Valuation Metrics - Klaviyo has a Value Score of F, while its Growth and Momentum Scores are A and B, respectively, resulting in a VGM Score of B [6] - The stock trades at 80.3X current fiscal year EPS estimates, which is a premium compared to the peer industry average of 24.9X [6] - On a trailing cash flow basis, Klaviyo trades at 5X versus the peer group's average of 11.9X [6] Zacks Rank - Klaviyo currently holds a Zacks Rank of 2 (Buy) due to rising earnings estimates [7] - The recommendation is to select stocks with Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, indicating potential for Klaviyo shares in the near future [7] Industry Context - The Technology Services industry is positioned in the top 25% of all industries, suggesting favorable conditions for both Klaviyo and its peers [10]

Klaviyo, Inc. (KVYO) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnin ...

Shares of Klaviyo Inc KVYO have soared more than 40% year to date.Stifel says the company is positioned to capture market share in the "sizable digital marketing space in the coming years.”Analyst Parker Lane initiated coverage of Klaviyo with a Buy rating and price target of $45.The Klaviyo Thesis: The company has a large TAM (total addressable market). It offers "ample opportunity for both net new customer acquisition and expansion," Lane said in the initiation note.Check out other analyst stock ratings.K ...

Investors interested in Business Services stocks should always be looking to find the best-performing companies in the group. Klaviyo, Inc. (KVYO) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.Klaviyo, Inc. is one of 312 companies in the Business Services group. The Business Services group currently sits at #5 within the Zacks Sector Rank. T ...

After reaching an important support level, Klaviyo, Inc. (KVYO) could be a good stock pick from a technical perspective. KVYO recently experienced a "golden cross" event, which saw its 50-day simple moving average breaking out above its 200-day simple moving average. A golden cross is a technical chart pattern that can signify a potential bullish breakout. It's formed from a crossover involving a security's short-term moving average breaking above a longer-term moving average, with the most common moving av ...

Klaviyo, Inc. (KVYO) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company. The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends i ...

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]