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Klaviyo, Inc. (KVYO)·Q2 2025 Earnings Summary

Executive Summary

  • Strong top-line beat and margin expansion with raised FY25 guide. Revenue grew 32% YoY to $293.1M, above S&P Global consensus of $278.7M, and non-GAAP diluted EPS was $0.16 vs $0.127 consensus; non-GAAP operating margin rose to 14% from 11.6% in Q1, driven by broad-based demand and international strength . Q2 consensus figures from S&P Global marked with an asterisk in tables below (Values retrieved from S&P Global).*
  • Guidance raised: FY25 revenue to $1.195–$1.203B (from $1.171–$1.179B prior) and FY25 non-GAAP operating income to $144–$150M (from $133–$139M); Q3 revenue guided to $297–$301M and non-GAAP OI to $32.5–$35.5M .
  • KPIs remained robust: customers 176K (+17% YoY), >$50K ARR customers 3,291 (+38% YoY), NRR 108%; EMEA/APAC revenue grew ~42% YoY and geographic mix continued to diversify (EMEA 24%, APAC 10%) .
  • Catalyst: Outperformance vs estimates, guidance raise, and public beta of “Klaviyo Service” (Conversational AI agent/Customer Hub/Helpdesk) expanding the platform beyond marketing into AI-powered service, reinforcing the B2C CRM narrative .

What Went Well and What Went Wrong

  • What Went Well

    • Beat on revenue and EPS with operating leverage: $293.1M revenue (+32% YoY) and non-GAAP diluted EPS $0.16; non-GAAP operating margin improved to 14% (from 11.6% in Q1) on broad-based customer demand and strong international momentum .
    • International growth and upmarket traction: EMEA/APAC revenue +42% YoY; customers >$50K ARR grew 38% YoY to 3,291, evidencing mid-market/enterprise momentum .
    • Product velocity and AI expansion: Public beta of Klaviyo Service with a Conversational AI Agent and unified Customer Hub/Helpdesk strengthens the “only B2C CRM” positioning. CEO: “Our AI‑native platform … help brands personalize at scale—turning data into action in real time” .

  • What Went Wrong

    • GAAP profitability remained negative: GAAP operating loss of $(31.3)M and GAAP net loss of $(24.3)M as stock-based compensation, employer payroll taxes, and prepaid marketing amortization elevated GAAP expenses .
    • Gross margin down YoY given SMS/infrastructure mix: Gross margin 75.7% vs 77.4% a year ago, reflecting higher outbound SMS sending and cloud infrastructure costs as usage scales .
    • Elevated G&A tied to payroll taxes and option activity pressured GAAP Opex; management highlighted higher payroll taxes from increased option exercises as a key driver .

Financial Results

Headline results vs prior periods and estimates

MetricQ4 2024Q1 2025Q2 2025 (Actual)Q2 2025 (Consensus)*Delta vs Cons.
Revenue ($M)$270.2 $279.8 $293.1 $278.7*+$14.4
Gross Margin % (GAAP)73% 75.8% 75.7% ——
Non-GAAP Gross Margin %74% 76.6% 76.4% ——
GAAP Operating Income ($M)$(34.7) $(23.8) $(31.3) ——
Non-GAAP Operating Income ($M)$15.1 $32.4 $40.9 ——
Non-GAAP Operating Margin %6% 11.6% 14.0% ——
GAAP EPS (Diluted)$(0.10) $(0.05) $(0.09) ——
Non-GAAP EPS (Diluted)$0.07 $0.14 $0.16 $0.127*+$0.033
Operating Cash Flow ($M)$60.1 $14.4 $55.7 ——
Free Cash Flow ($M)$54.5 $6.6 $59.3 ——

Notes: Q2 2025 consensus revenue and EPS from S&P Global; asterisks denote S&P Global values. Values retrieved from S&P Global.*

Geographic revenue (Q2 YoY)

RegionQ2 2024 ($M)Q2 2025 ($M)YoY
United States$139.3 $177.2 +27%
Other Americas$11.4 $14.0 +23%
EMEA$48.9 $71.7 +47%
APAC$22.7 $30.2 +33%
Total$222.2 $293.1 +32%

Geographic mix for FY25 Q2: Americas 65%, EMEA 24%, APAC 10% .

KPIs

KPIQ4 2024Q1 2025Q2 2025
Total Customers167,000+ 169,000+ 176,000+
Customers >$50K ARR2,850 3,030 3,291
Dollar-Based NRR108% 108% 108%

Guidance Changes

MetricPeriodPrevious Guidance (5/6/25)Current Guidance (8/5/25)Change
Revenue ($M)FY25$1,171–$1,179 $1,195–$1,203 Raised
Non-GAAP Operating Income ($M)FY25$133–$139 $144–$150 Raised
Non-GAAP Operating MarginFY2511%–12% 12%–12% Maintained at ~12%
Fully Diluted Shares (M)FY25307 308 Slightly higher
Revenue ($M)Q3 FY25—$297–$301 New
Non-GAAP Operating Income ($M)Q3 FY25—$32.5–$35.5 New
Non-GAAP Operating MarginQ3 FY25—11%–12% New

Note: Company did not provide explicit OpEx, OI&E, tax rate, dividend guidance .

Earnings Call Themes & Trends

Note: The Q2 FY25 earnings call transcript could not be retrieved due to a repository error; current-period themes are drawn from the Q2 press release, slides, and 10-Q. Prior mentions reference Q4 FY24 press release and Q1 FY25 call transcript – – –.

TopicPrevious Mentions (Q4 FY24, Q1 FY25)Current Period (Q2 FY25)Trend
AI/Technology initiativesB2C CRM launch; AI features expanding across marketing; strong interest in Marketing Analytics; early Customer Hub beta Public beta of Klaviyo Service: Conversational AI Agent, Customer Hub, Helpdesk to unify marketing + service Expanding scope beyond marketing
Supply chain/Tariffs/MacroCustomers diversifying supply chains; cautious but optimistic; Klaviyo indexed to digital relationships vs GMV No material impact noted in Q2 filings; continued efficient growth Stable, monitored
Product performanceSMS attach rising; strong ROI use cases; consolidation away from legacy stacks Continued SMS/infrastructure usage mix noted; gross margin modestly lower YoY; strong international wins – Scaling with mix impact
Regional trendsEMEA/APAC +42% YoY in Q4; new language/localization investments EMEA/APAC +42% YoY; mix shift to EMEA 24%, APAC 10% Sustained international momentum
Regulatory/LegalNo material proceedings No material proceedings reported Unchanged
R&D executionCapitalized software increased; AI-native product dev Continued R&D with capitalized software; infra costs supporting larger customers/new verticals Investing efficiently

Management Commentary

  • CEO Andrew Bialecki: “Klaviyo delivered another standout quarter, with revenue growing 32% year-over-year to $293 million, underscoring the vital role our B2C CRM platform plays for over 176,000 customers globally… Our AI-native platform is built to help brands personalize at scale—turning data into action in real time” .
  • CFO Amanda Whalen: “Revenue increased 32% year-over-year to $293 million and we delivered more than $55 million in operating cash flow… driven by broad-based strength across customers and significant international growth” .
  • Product leadership on AI Service: “With Klaviyo’s Conversational AI Agent and the rest of our Service suite, we’re giving every brand the ability to offer self-serve experiences that feel as helpful as your best in‑store associate” .

Q&A Highlights

Note: The Q2 FY25 earnings call transcript was unavailable due to a retrieval error. Below are top themes from the Q1 FY25 Q&A that management emphasized and carried forward through Q2 materials.

  • Macro/tariffs exposure and resilience: Customers had diversified supply chains; Klaviyo’s model indexes to digital relationships rather than GMV, reducing volatility; customers lean into retention in uncertain times .
  • New products revenue contribution: Minimal 2025 revenue embedded for Service/Analytics to ensure product-market fit, with expectation of contribution growing in 2026+ .
  • SMS ROI and budgets: As long as ROI remains strong, customers sustain investment in owned-channel engagement (email/SMS) .
  • International traction: Localization and sales investments accelerated EMEA momentum; France/Germany/Spain new business >100% YoY in Q1 .
  • Pricing/retention: Post-pricing updates, retention was better than expected; profile-based pricing anchors future monetization of analytics .

Estimates Context

  • Q2 2025 beat: Revenue $293.1M vs $278.7M consensus (+$14.4M), non-GAAP diluted EPS $0.16 vs $0.127 consensus (+$0.033). Consensus from S&P Global.*
  • Q3 2025 setup: Company guides revenue to $297–$301M; S&P Global consensus revenue is ~$299.8M, implying midpoint roughly in line; S&P EPS consensus is ~$0.139 (company does not guide EPS). Values retrieved from S&P Global.*
  • FY25 guide raised: To $1.195–$1.203B revenue and non-GAAP OI $144–$150M, reflecting momentum in international and upmarket segments; expect estimate revisions upward on revenue and operating income .

Key Takeaways for Investors

  • Durable outperformance: Broad-based strength (particularly EMEA) drove a sizable top-line/EPS beat and a guidance raise; beat quality was underscored by strong FCF ($59.3M) and improved non-GAAP operating margin to 14% .
  • Mix effects manageable: Gross margin compression vs last year reflects SMS and infra mix as usage scales; management continues to invest in infrastructure for larger customers/verticals –.
  • Platform expansion is a second engine: Public beta of Klaviyo Service adds AI-native service capabilities to the core marketing/analytics stack, reinforcing the “only B2C CRM” narrative and cross-sell potential .
  • International runway: EMEA/APAC +42% YoY with mix shifting toward EMEA (24%) provides diversification and incremental growth vectors .
  • Guidance alignment: Q3 revenue guide brackets consensus and FY25 was raised, positioning shares for estimate revisions if execution remains consistent; watch non-GAAP OI delivery vs raised targets .
  • Watch items: GAAP losses (SBC/payroll taxes), and continued SMS/infra cost mix on gross margin; nonetheless, operating leverage is progressing on a non-GAAP basis .
  • Tactical setup: Near term, catalysts include continued upmarket wins, international expansion, and early monetization/attach of Service and Analytics; monitor attach rates and ARPU uplift .

Appendix: Additional Data

Q2 2025 vs Guidance (from Q1 issuance)

MetricQ2 Guidance (5/6/25)Q2 Actual
Revenue ($M)$276–$280 $293.1
Non-GAAP Operating Income ($M)$28.5–$31.5 $40.9

Non-GAAP/GAAP reconciliations and cash flow highlights (Q2)

  • Non-GAAP operating income $40.9M; GAAP operating loss $(31.3)M, adjustments include SBC, employer payroll taxes, Shopify prepaid marketing amortization .
  • Operating cash flow $55.7M; free cash flow $59.3M; TTM FCF margin ~14% .

All citations:

  • Q2 FY25 8-K press release and exhibits –
  • Q2 FY25 10-Q –
  • Q2 FY25 earnings slides –
  • Q1 FY25 8-K (guidance prior) –
  • Q1 FY25 call transcript –
  • Q4 FY24 8-K –
  • PR: AI Shopping Assistant / Klaviyo Service beta –

Estimates disclaimer: Asterisked consensus and estimate values are from S&P Global (Capital IQ). Values retrieved from S&P Global.*