0001835830-25-000084
SEC filingRevenue growth of 32.6% YoY driven by new customers and SMS expansion, with gross margin declining to 75.8%.
For the six months ended June 30, 2025, Klaviyo reported revenue of $572.9 million, a 32.6% increase compared to $432.2 million in the same period of 2024. The growth was attributed to new customer acquisition, expanded usage of the platform, and the continued adoption of the SMS channel. New customers contributed approximately 58% of the revenue increase, while existing customers accounted for 42%. Gross profit rose 28.8% to $434.0 million, but gross margin declined to 75.8% from 78.0% in the prior year, pressured by higher outbound communication sending costs (up $15.9 million) and cloud infrastructure costs (up $20.7 million) associated with increased SMS usage. Operating loss widened to $55.1 million from $36.1 million, reflecting higher operating expenses across all functions. Net loss increased to $38.4 million from $17.8 million, driven by the operating loss and a $0.5 million decrease in interest income.
Klaviyo operates as a single reportable segment. Revenue growth was broad-based, with new customers and SMS channel expansion as primary drivers. The company highlighted that customers generating over $50,000 in annual recurring revenue (ARR) grew 38% year-over-year to 3,291, indicating successful up-market penetration. Dollar-Based Net Revenue Retention (NRR) decreased to 108% from 112%, reflecting relatively lower expansion from existing customer plans. International revenue accounted for 34.2% of total revenue in H1 2025, underscoring geographic diversification. The company continues to invest in product innovation, including Klaviyo AI and the recently launched Klaviyo B2C CRM, positioning itself as a comprehensive consumer engagement platform.
Management expects cost of revenue to increase in dollar terms as the company invests in infrastructure and supports customer growth. Gross margin is expected to decline modestly in the near term due to higher SMS volume, partially offset by scale efficiencies and higher-margin product adoption. Selling and marketing expenses are expected to remain the largest operating expense, increasing in dollar amount but decreasing as a percentage of revenue over the longer term. Research and development costs are expected to increase in dollar amount but remain consistent as a percentage of revenue. General and administrative expenses are expected to increase in dollar amount but decrease as a percentage of revenue over time. The company believes its operating cash flows provide sufficient liquidity for at least the next twelve months, with $936.3 million in cash, cash equivalents, and restricted cash as of June 30, 2025.
As of June 30, 2025, Klaviyo held $935.5 million in cash and cash equivalents, including $319.3 million in money market funds. The company has no debt, with total lease liabilities of $99.2 million (including $19.1 million current). Stockholders' equity stood at $1.1 billion, driven by additional paid-in capital of $1.98 billion offset by an accumulated deficit of $883.6 million. The company's strong cash position provides ample liquidity for operations and strategic initiatives.
Klaviyo has $281.3 million in non-cancelable purchase commitments as of June 30, 2025, up from $225.5 million at year-end. Additionally, operating lease obligations total $125.3 million undiscounted, with $99.2 million recognized on the balance sheet. The lease portfolio was significantly extended during Q1 2025 when Klaviyo amended its Boston headquarters lease, extending the term to March 2033 and adding $30.9 million in future payments for newly leased premises.
The company does not have a buyback program or pay dividends. Capital expenditures totaled $15.0 million in the first half of 2025, consisting of $4.7 million for property and equipment and $10.3 million for capitalized software development costs. This represents 2.6% of revenue. The company also invested $16.2 million in prepaid marketing via warrant issuances to Shopify, which will be amortized over 4.08 years.
Klaviyo operates as a single segment. Revenue for the six months ended June 30, 2025 was $572.9 million, with 60.9% from the United States, 24.0% from EMEA, 10.2% from APAC, and 4.8% from other Americas. The company's long-lived assets are concentrated in the U.S. ($128.6 million) and the United Kingdom ($12.8 million). No other significant segment-level disclosures are provided.
Despite a net loss of $38.4M, operating cash flow was positive at $70.1M, driven largely by non-cash charges: stock-based compensation of $83.7M, depreciation and amortization of $8.7M, and amortization of deferred contract acquisition costs ($13.8M) and prepaid marketing ($26.4M). Working capital changes used cash: accounts receivable increased $17.3M, deferred contract acquisition costs grew $22.6M, and accrued expenses fell $9.5M, partially offset by a $18.2M increase in deferred revenue.
Capital expenditure (capex) totaled $15.0M, including $10.3M in software development costs and $4.7M in property and equipment. This represents a capex intensity (capex/CFO) of 21.4%, up from 10.5% in the prior period.
There were no share repurchases or dividends. The company generated strong positive operating cash flow, but significant stock-based compensation and working capital outflows are notable. Free cash flow, if computed as CFO minus capex, would be $55.0M, though not explicitly stated.