Klaviyo, Inc. (KVYO)·Q3 2025 Earnings Summary

Executive Summary

• Q3 FY25 revenue was $310.9M, up 32% YoY; non-GAAP diluted EPS was $0.18, with non-GAAP operating margin of 14.5%. International revenue grew 43% YoY, and NRR rose to 109% .
• Results beat Wall Street consensus: revenue beat by ~$11.0M (+3.7%) and EPS beat by ~$0.04; EBITDA came in below consensus on SPGI’s definition. Management raised FY25 guidance, citing broad-based strength and AI tailwinds . Values retrieved from S&P Global.*
• Guidance raised: FY25 revenue to $1.215–$1.219B (+30% YoY) and FY25 non-GAAP operating income to $161.8–$164.8M; Q4 FY25 revenue guided to $331–$335M and non-GAAP operating income $43.5–$46.5M .
• Strategic catalysts: rapid adoption of Klaviyo Service (Customer Hub, Customer Agent, Helpdesk), launch of Marketing Agent, and continued momentum in mid-market/enterprise (3,563 customers >$50k ARR, +36% YoY) .

What Went Well and What Went Wrong

What Went Well

• AI-driven product momentum: Marketing Agent and Service GA with fastest adoption of any product, enabling autonomous campaign creation and personalized service; “agentic AI is a force multiplier” for growth .
• International acceleration: EMEA/APAC revenue up 43% YoY; EMEA up 48%; >35% of total revenue now outside the Americas .
• Large customer expansion and NRR: record net adds into >$50k ARR cohort (3,563, +36% YoY) and NRR at 109%, evidencing strong multi-product expansion and retention .

What Went Wrong

• GAAP profitability remains a headwind: GAAP operating loss of $(10.8)M and GAAP net loss of $(0.4)M despite non-GAAP profitability; heavy stock-based compensation continues to be a significant recurring expense .
• Gross margin seasonality expected: management flagged typical Q4 non-GAAP gross margin pressure from elevated messaging volumes; implies near-term margin headwinds despite scale benefits .
• EBITDA (SPGI-defined) underperformed consensus and was negative on an “actual” basis for Q3 despite non-GAAP operating income beat, highlighting definitional differences and cost mix (e.g., messaging and infrastructure) *. Values retrieved from S&P Global.

Financial Results

Q3 FY25 headline vs consensus

Note: Values retrieved from S&P Global.*

Quarterly trend (prior two quarters to current)

Year-over-year comparison (Q3 FY24 vs Q3 FY25)

KPIs and mix

Guidance Changes

Management also introduced a preliminary FY26 outlook of at least 21%–22% revenue growth and +1ppt non-GAAP operating margin vs updated FY25 guidance .

Earnings Call Themes & Trends

Management Commentary

• “We had an outstanding third quarter… revenue of $311 million, up 32%… AI is reshaping the quality, speed, and creativity of customer engagement” — Andrew Bialecki, CEO .
• “Our growth engines are delivering, and AI is a force multiplier… Rule of 40 performance was nearly 47%, our highest in four quarters” — Amanda Whalen, CFO .
• “We view Klaviyo Service as a long-term revenue engine with the potential to rival and exceed our marketing products as it scales” — Amanda Whalen, CFO .
• “We expect to deliver at least 21%–22% revenue growth next year… and increase non-GAAP operating margin by at least 1 percentage point” — Amanda Whalen, CFO .
• Product context: Public beta and features for the Conversational AI Agent and Service suite supporting personalized, revenue-driving interactions (pre-Q3 press releases) .

Q&A Highlights

• Replatforming and AI cycle: Growing enterprise conversations around agentic workflows; Klaviyo’s closed-loop architecture (data → action → attribution) seen as a differentiator .
• Ecosystem/Platforms (Shopify/OpenAI/Chat interfaces): AI commerce via protocols (ACP/AP2) and leveraging ChatGPT/Claude to design and analyze campaigns; benefits for discovery and conversion .
• Service suite attachment: Customer Hub/Agent generating incremental revenue and offloading support; Helpdesk modernization with AI context handoff .
• FY26 baseline and monetization pilots: Limited near-term revenue assumed from new AI launches; marketing agent pricing pilots forthcoming; upside as adoption scales .
• International durability: Continued product localization, partner expansion (PrestaShop, Shopware), and infrastructure investments (new data centers) to sustain acceleration .

Estimates Context

• Q3 FY25 beat: Revenue +3.7% vs consensus and EPS +$0.041 vs consensus; indicates stronger-than-expected top-line and operating leverage. EBITDA missed SPGI consensus due to cost mix and definitional differences (GAAP operating loss and messaging/infrastructure costs) *. Values retrieved from S&P Global.
• Outlook: Q4 FY25 consensus revenue ($333.7M*) broadly aligns with guidance ($331–$335M), implying limited estimate volatility near-term; FY25 guidance raise suggests upward estimate revisions for revenue and non-GAAP operating income . Values retrieved from S&P Global.*

Key Takeaways for Investors

• Broad-based beat with raised FY25 guidance; international and enterprise momentum plus AI product adoption are credible drivers of sustained growth .
• Non-GAAP profitability intact (14.5% margin), but GAAP loss persists; watch messaging seasonality’s impact on Q4 gross margin and any cost inflation in infrastructure .
• Klaviyo Service and Marketing Agent expand TAM and monetization vectors; early traction suggests incremental ARR and improved retention over 2026 as pricing rolls out .
• Profile enforcement is reducing seasonal revenue swings, aiding smoother QoQ trajectories; this should help forecasting and investor confidence in Q4/Q1 cadence .
• Enterprise replatforming cycle and agentic workflows are tailwinds; Klaviyo’s vertically integrated data+apps+intelligence stack is a competitive advantage vs legacy clouds .
• International mix (>35%) and localization/partners should continue to de-risk growth concentration and support multi-year acceleration .
• Near term: focus on revenue durability through holiday season and margin resilience; medium term: monitor pricing pilots, Service attach rates, and FY26 margin expansion .

*Values retrieved from S&P Global.