Klaviyo(KVYO) - 2025 Q2 - Quarterly Results

Financial & Business Highlights 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] - 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] - International revenue growth was strong, with a 42% year-over-year increase in the EMEA and APAC regions[5] - The Dollar-Based Net Revenue Retention Rate (NRR) was 108% as of June 30, 2025, indicating healthy expansion within the existing customer base[5] - Klaviyo announced the public beta of Klaviyo Service, an AI-powered tool suite designed to enhance customer service experiences[5] Financial Outlook 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 This section details a significant executive leadership change and provides information on the company's dilutive securities Executive Leadership Update 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] - Mr. Rowland will serve as a strategic advisor until March 31, 2026, to support the transition[10] - During his time at Klaviyo, the company's revenue run rate grew significantly from $660 million to $1.1 billion[11] Dilutive Securities 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] Financial Statements (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 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 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 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 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 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 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 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 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][15] - 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] Forward-Looking Statements 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] - 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][22]