Klaviyo(US:KVYO)2025-11-05 21:13Customer Growth and Engagement - As of September 30, 2025, Klaviyo had over 183,000 customers, with a year-over-year growth of 36% in customers generating over $50,000 of ARR, increasing from 2,619 to 3,563 customers[118] - Klaviyo's land-and-expand strategy aligns revenue growth with customer success, as increased usage of the platform leads to higher subscription tiers and additional service adoption[105] - Klaviyo's KAV (Klaviyo Attributed Value) serves as a measure of the revenue generated for customers through its platform, illustrating the value provided to clients[121] Revenue Performance - Revenue for the three months ended September 30, 2025 increased by $75.8 million or 32.2%, reaching $310.9 million compared to $235.1 million for the same period in 2024[144] - Revenue for the nine months ended September 30, 2025 increased by $216.5 million or 32.4%, totaling $883.8 million compared to $667.3 million for the same period in 2024[145] - Sales to existing customers accounted for approximately 44% of the revenue increase for the three months ended September 30, 2025, while new customers contributed approximately 56%[144] - Sales to existing customers accounted for approximately 42% of the revenue increase for the nine months ended September 30, 2025, with new customers contributing approximately 58%[145] International Expansion - International sales accounted for 34.6% of total revenue for the nine months ended September 30, 2025, indicating significant growth in global markets[110] - The company has expanded its operations internationally, with new offices in Singapore and France in 2025, further enhancing its market presence[110] Product Development and Innovation - Klaviyo's platform has expanded its product offerings, including the introduction of Klaviyo B2C CRM and AI-powered solutions, enhancing customer engagement capabilities[101] - Klaviyo's investment in innovation has led to the development of advanced features in its platform, including AI capabilities for data segmentation and campaign orchestration[111] - The company aims to penetrate new industry verticals, such as education and travel, indicating a strategy for diversification beyond retail and eCommerce[114] Financial Performance and Expenses - The cost of revenue for the three months ended September 30, 2025 was $76.1 million, representing 24.5% of revenue, compared to 23.1% for the same period in 2024[143] - Gross profit for the three months ended September 30, 2025 was $234.7 million, which is 75.5% of revenue, down from 76.9% in the same period of 2024[143] - Selling and marketing expenses for the three months ended September 30, 2025 were $127.7 million, accounting for 41.1% of revenue, compared to 42.5% in the same period of 2024[143] - Research and development expenses for the three months ended September 30, 2025 were $72.7 million, representing 23.4% of revenue, slightly down from 23.7% in the same period of 2024[143] - General and administrative expenses for the three months ended September 30, 2025 were $45.3 million, which is 14.6% of revenue, down from 16.3% in the same period of 2024[143] Cash Flow and Liquidity - As of September 30, 2025, the company's principal sources of liquidity included cash, cash equivalents, and restricted cash totaling $981.0 million[164] - As of September 30, 2025, the company's total working capital increased to $882.5 million from $779.9 million as of December 31, 2024, representing a growth of approximately 13.2%[167] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $124.8 million, an increase from $105.9 million for the same period in 2024, reflecting a growth of approximately 17.8%[171][173] - Cash, cash equivalents, and restricted cash at the end of the period increased to $981.0 million as of September 30, 2025, up from $827.9 million at the end of September 30, 2024, marking an increase of approximately 18.5%[171] - The company expects continued growth in cash balances as business operations expand, indicating a positive outlook for liquidity management[178] Investment Activities - Net cash used in investing activities for the nine months ended September 30, 2025, was $24.8 million, compared to $11.6 million for the same period in 2024, indicating a significant increase in investment activities[174][176] Debt and Obligations - The company had no debt as of September 30, 2025, which eliminates potential market risk for interest expense[184] - Noncancellable lease obligations as of September 30, 2025, totaled $142.3 million, with $25.3 million payable within the next 12 months[179] Currency and Risk Management - The company has not entered into any hedging arrangements for foreign currency risk, although it may consider doing so in the future[187]