Macro Environment and Customer Trends
Q: Has there been any change in SMS seasonality or macro trends?
A: Amanda Whalen stated that SMS seasonality remains consistent, with peaks during holiday shopping periods like Q4, Black Friday, and Cyber Monday. She mentioned that the macro environment is steady, "not getting better, but it's also not getting worse". Customer behavior trends are consistent and stable, with customers' GMV growth being stable and their KAV (Klaviyo Attributed Value) growing faster than GMV.

Net Revenue Retention Trends
Q: Can you discuss customer expansion and NRR trends?
A: Amanda Whalen explained that they feel positive about NRR at 114%. They expected NRR to tick down due to lapping the price increase and consistent customer behavior trends. NRR may decline a few more points over the coming quarters. Landing larger customers who make bigger upfront purchases affects NRR expansion. Their gross retention is considered best-in-class for their business size.

Revenue Upside Drivers
Q: What drove the revenue upside this quarter?
A: Andrew Bialecki attributed growth to adding more customers, with strong adoption in SMB and mid-market as customers move off older platforms to Klaviyo. There's increased adoption of SMS and other products. They see strong growth in the mid-market and internationally, recently launching Klaviyo in the French language. They are very bullish about future growth.

AI Strategy and Impact
Q: How are customers using your AI functionality?
A: Andrew Bialecki described their AI strategy in three parts: productivity, optimization of marketing strategies, and expanding marketing strategies. They've shipped the most products in productivity and are seeing significant adoption. AI helps customers get more done, run more experiments, and optimize campaigns, leading to increased customer engagement and revenue.

Mid-market Expansion and Large Wins
Q: Tell us about your large win with the online fashion brand.
A: Andrew Bialecki explained that the customer, previously on Klaviyo, thought they had outgrown them but returned due to Klaviyo's scalability. Many mid-market and enterprise customers use older tech lacking back-end customer databases, limiting personalization. Klaviyo's tight integration, ease of use, and data access for personalization were key factors in winning the customer back.

International Growth and Europe Performance
Q: How is Europe performing, given concerns in that market?
A: Amanda Whalen reported strength in Europe, with European business up over 40% in revenue year-over-year. They see particular strength in France, Netherlands, Germany, and the UK. They are early in their penetration in Europe and are investing by adding new languages, like recently launching in French .

Opportunity with Shopify Plus
Q: What's the opportunity in the Shopify Plus installed base?
A: Andrew Bialecki expressed enthusiasm about their partnership with Shopify, noting they have strong market share but still see room to grow. They continue to invest in existing partnerships and platforms and see opportunities in adding customers and expanding the use of data from Shopify in their customer database.

Go-to-market Focus and Investments
Q: Where are you focusing go-to-market investments?
A: Andrew Bialecki stated they're increasing sales capacity in three areas: mid-market, internationally, and through their customer growth team. In marketing, they're investing in brand recognition, especially in mid-market and international markets, and educating the market about all their products, including newer ones. They maintain strong unit economics while experimenting and staying disciplined.

SMB Spend Insulation
Q: How is Klaviyo insulated from SMB spend slowdowns?
A: Andrew Bialecki noted that Klaviyo is a must-have product because it drives revenue for customers. With built-in attribution and measurable results, customers rely on Klaviyo as it directly impacts their top line. They focus on personalization and integrate AI to help businesses increase customer engagement and revenue.

AI Unlocking Mid-market Opportunities
Q: What's unlocking potential in mid-market customers?
A: Andrew Bialecki emphasized that their CDP (Customer Data Platform) is key for mid-market customers who need a central source of truth for customer data. The CDP allows for data governance, federation, and advanced analytics to discover new marketing ideas. Layering on productivity and AI optimizations provides a complete solution. Mid-market and enterprise customers seek a comprehensive stack to drive personalized consumer experiences.