Executive Summary

Strong top-line and profitability: Revenue $279.8M (+33% YoY) and non-GAAP operating margin 12% with diluted non-GAAP EPS $0.14; both revenue and EPS beat Wall Street consensus. FY25 revenue guidance raised to $1.171B–$1.179B from $1.156B–$1.164B, and Q2 revenue guided to $276M–$280M . Revenue estimate: $267.9M*, EPS estimate: $0.12*; actuals: $279.8M and $0.14, respectively. Values retrieved from S&P Global.
Mix and investments compressed gross margin YoY (infrastructure and SMS growth) but margin improved sequentially; non-GAAP GM 77% vs 74% in Q4, driven by scale and mix normalization . Management noted the YoY GM decline chiefly reflects infrastructure expansion to support larger customers and SMS mix .
International momentum is accelerating: EMEA/APAC revenue grew 42% YoY; Q1 revenue mix 34% from EMEA+APAC; France, Germany, Spain each posted >100% YoY new business growth .
Product expansion is a key narrative driver: “Only CRM built for B2C,” with Marketing Analytics and Customer Hub (service) gaining traction; pricing changes were “immaterial” to Q1 revenue, indicating core demand strength .
Potential stock reaction catalysts: raised FY25 revenue outlook, robust international growth (>100% new business in key EU markets), sustained NRR 108%, and commentary that tariff risks have not materially impacted the business to date .

What Went Well and What Went Wrong

What Went Well

Demand and execution: “Klaviyo delivered a strong start to 2025 with Q1 revenue of $280 million, representing 33% year-over-year growth” (CEO) and non-GAAP operating margin of 11.6% (CFO) .
International acceleration: EMEA revenue +47% YoY; combined EMEA/APAC +42% YoY; notable strength in France, Germany, Spain (each >100% YoY new business) (CFO/CEO) .
Upmarket/customer metrics: 3,030 customers >$50K ARR (+40% YoY); NRR 108%; 169,000+ total customers; pricing changes were “immaterial” to Q1 revenue (CFO) .

What Went Wrong

Gross margin compression YoY: Non-GAAP GM down ~3 pts YoY “primarily due to increased infrastructure costs and the continued growth of our SMS product” (CFO) .
Free cash flow seasonality: Q1 FCF $6.6M (2.4% margin) vs $54.5M in Q4 2024; Q1 impacted by employee cash bonus payout and timing (CFO) .
Conservative near-term outlook: Q2 revenue guide ($276M–$280M) implies flat seq trend amid macro prudence; management cites tariff/consumer sentiment uncertainty, though no material business impact to date .

Financial Results

Multi-Quarter Actuals (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$235.1	$270.2	$279.8
YoY Growth (%)	34%	34%	33%
Non-GAAP Diluted EPS ($)	$0.15	$0.07	$0.14
GAAP EPS ($)	$(0.01)	$(0.10)	$(0.05)
Non-GAAP Operating Income ($M)	$33.7	$15.1	$32.4
Non-GAAP Operating Margin (%)	14%	6%	12%
Non-GAAP Gross Margin (%)	78%	74%	77%
Cash from Operations ($M)	$38.8	$60.1	$14.4
Free Cash Flow ($M)	$34.2	$54.5	$6.6

Actual vs. S&P Global Consensus (Q1 2025)

Metric	Consensus Estimate	Actual	Surprise
Revenue ($M)	$267.9*	$279.8	+$11.9 (+4.4%)*
Primary/Adj. Diluted EPS ($)	$0.12*	$0.14	+$0.02*

Values retrieved from S&P Global.

KPIs (Q1 2025, unless noted)

KPI	Q1 2025	Prior Reference
Total Customers	169,000+	167,000+ (Q4 2024)
Customers >$50K ARR	3,030	2,850 (Q4 2024)
Dollar-Based NRR	108%	108% (Q4 2024)
EMEA+APAC % of Revenue	34%	—
EMEA/APAC YoY Revenue Growth	42%	—
TTM Free Cash Flow Margin	13%	16% (FY24)

Geographic Mix (Q1 2025)

Region	Mix
Americas	66%
EMEA	24%
APAC	10%

Notes on non-GAAP: Adjustments exclude stock-based compensation and related payroll taxes, and amortization of prepaid marketing expense (Shopify warrants), among others .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	FY25	$1,156–$1,164	$1,171–$1,179	Raised
Non-GAAP Operating Income ($M)	FY25	$130–$136	$133–$139	Raised
Non-GAAP Operating Margin (%)	FY25	11%–12%	11%–12%	Maintained
Fully Diluted Shares (M)	FY25	309	307	Lowered
Revenue ($M)	Q2 2025	—	$276–$280	New
Non-GAAP Operating Income ($M)	Q2 2025	—	$28.5–$31.5	New
Non-GAAP Operating Margin (%)	Q2 2025	—	10%–11%	New
Fully Diluted Shares (M)	Q2 2025	—	305	New

Management characterized the outlook as balancing business strength with macro uncertainty (tariffs/consumer sentiment), with prudence embedded in 2H planning .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q3 2024; Q-1: Q4 2024)	Current Period (Q1 2025)	Trend
AI/Technology roadmap	New CTO; product integrations (e.g., Canva); platform localization and SMS expansion	“Only CRM built for B2C”; AI-powered data platform; new features (automated campaign follow-up, brand voice AI, custom objects, automated SMS conversations)	Up
International expansion	Q3: 5 new languages; SMS in 18 countries	EMEA/APAC +42% YoY; >100% YoY new business in France, Germany, Spain; localized websites; field resources	Up
Pricing & retention	Profile-based pricing; ended FY24 with 167k customers; SMS penetration 18.2%	Pricing changes “immaterial” to Q1 revenue; retention better than expected post-changes	Stable/Positive
Upmarket traction	Q3 >$50k ARR customers +54% YoY	3,030 customers >$50k ARR (+40% YoY); >1,000 customers >$100k ARR; “momentum mid-market and above”	Up
Macro/tariffs	—	Tariffs/consumer sentiment monitored; “no material impact” seen; customers “tentative but optimistic”	Watch
Product expansion (Service/Analytics)	—	Marketing Analytics traction (high ROI examples); Customer Hub in beta; minimal 2025 revenue assumed; larger 2026+ opportunity	Up
Partnerships/channels	—	Deeper integrations with Meta/TikTok; lead capture/ad/shop flows; WhatsApp integration	Up

Management Commentary

Strategic positioning: “We’ve brought together multichannel marketing automation, customer service, and marketing analytics in one AI-powered data platform… the only CRM built for B2C businesses.” — Andrew Bialecki, CEO .
International and upmarket growth: “EMEA revenue grew 47% year-over-year, and total EMEA and APAC revenue grew 42% year-over-year.” — Amanda Whalen, CFO .
Profitability and guidance framing: “Non-GAAP operating margin of 11.6%… Q2 revenue of $276M to $280M (24%–26% YoY) and FY25 revenue of $1.171B to $1.179B (25%–26% YoY).” — Amanda Whalen, CFO .
Gross margin context: “Non-GAAP gross margin was 77%, down ~3 points YoY, primarily due to increased infrastructure costs and the continued growth of our SMS product.” — Amanda Whalen, CFO .

Q&A Highlights

Macro and tariffs: Customers have diversified supply chains; no material impact to Klaviyo yet; brands without China exposure may go on offense (inventory/market share) .
Guidance prudence: Extensive scenario planning; balanced back-half outlook reflects macro uncertainty; key operational metrics (sales cycles, KAV) remained consistent through April .
New products contribution: Minimal revenue baked into 2025 for Customer Hub and Marketing Analytics; strong early ROI signals and pipeline, larger contribution expected beyond 2025 .
ARPU and margin profile: Marketing Analytics provides “nice ARPU uplift” with gross margin akin to email/data (no per-message costs); Service pricing still in beta .
Platform integrations: Deeper Meta/TikTok/WhatsApp integrations to acquire subscribers and extend content (e.g., Instagram Shops reviews), broadening channel reach .

Estimates Context

Q1 beat: Revenue $279.8M vs $267.9M* consensus; EPS $0.14 vs $0.12* consensus. Values retrieved from S&P Global. Actuals from company filings .
Q2 setup: Q2 revenue guide $276M–$280M brackets the S&P Global consensus estimate of $278.7M*, implying in-line near-term growth with prudence for macro risks . Values retrieved from S&P Global.
FY25: Raised revenue guidance to $1.171B–$1.179B from $1.156B–$1.164B, signaling demand strength; consensus at $1.217B* may require modest recalibration if macro prudence persists . Values retrieved from S&P Global.