0001835830-26-000027
SEC filingKlaviyo's Q1 2026 revenue grew 27.9% YoY, driven by new customers and platform expansion, while achieving operating profitability.
For the three months ended March 31, 2026, Klaviyo reported revenue of $358.0 million, a 27.9% increase from $279.8 million in the same period last year. The growth was attributed to new customer acquisitions, geographic expansion, increased usage of the platform—particularly text messaging and WhatsApp messaging channels—and new offerings. Sales to existing customers contributed approximately 44% of the revenue increase, while new customers accounted for 56%.
Gross profit grew 26.8% to $268.9 million, but gross margin contracted to 75.1% from 75.8% in the prior year. The decline was driven by higher outbound communication sending costs (up $11.7 million) due to increased text message and WhatsApp usage, along with increased cloud infrastructure costs.
Operating expenses rose to $267.1 million from $235.9 million, but as a percentage of revenue, they improved to 74.6% from 84.3%. Selling and marketing expenses grew 8.5% to $134.1 million but decreased as a percentage of revenue (37.4% vs. 44.1%). Research and development expenses increased 15.4% to $80.0 million, and general and administrative expenses rose 23.4% to $53.1 million.
Klaviyo achieved operating income of $1.7 million, a significant turnaround from an operating loss of $23.8 million in Q1 2025. Net income was $9.0 million, compared to a net loss of $14.1 million in the prior-year period. Interest income was flat at $9.4 million.
Klaviyo operates as a single reportable segment. However, the MD&A highlights strong momentum with larger customers. The number of customers generating over $50,000 in annual recurring revenue (ARR) grew 38% year-over-year to 4,175, up from 3,030. Dollar-based net revenue retention (NRR) improved to 110%, up from 108%, driven by expansion of existing customer plans and cross-selling of offerings like Customer Agent and Marketing Agent. International revenue accounted for 36.6% of total revenue for the quarter, reflecting successful geographic expansion.
The company provided no explicit quantitative guidance for future periods. Management expects cost of revenue to increase in dollar amount as investment in infrastructure and support continues. Gross margin is expected to decline modestly in the near term due to the growing mix of text messaging and WhatsApp messaging, which have higher associated communication costs. However, this impact may be partially offset by scale leverage, higher-margin product usage, and infrastructure efficiency efforts. Selling and marketing is expected to remain the largest operating expense and increase in dollar amount, particularly from go-to-market headcount growth and partnership fees. Research and development costs should continue to increase in dollar amount but remain consistent as a percentage of revenue. General and administrative expenses will increase in dollar amount but decrease as a percentage of revenue over the longer term. In February 2025, the company announced Klaviyo B2C CRM, and in September 2025, launched Marketing Agent and Customer Agent, positioning itself as an AI-first B2C CRM. The Board authorized a $500 million share repurchase program, with $400 million remaining available as of March 31, 2026.
As of March 31, 2026, Klaviyo held $984.6M in cash and cash equivalents, including $150.0M in a high-yield notice deposit account requiring 31 days' notice. Restricted cash was $0.7M. Total assets stood at $1.52B, with stockholders' equity of $1.15B. The company has no debt, with only lease liabilities of $117.2M.
Klaviyo disclosed total non-cancelable purchase commitments of $875.2M as of March 31, 2026, down from $929.2M at year-end 2025. The commitments are with various service providers. No detailed timing or category breakdown was provided in the Notes.
On March 2, 2026, the Board authorized a $500M share repurchase program. Under an accelerated share repurchase (ASR) agreement, Klaviyo paid $100M and received 4.3M shares at $18.87 per share, with final settlement expected in Q2 2026. Approximately $400M remains authorized. No dividends were declared. Capital expenditures for Q1 2026 were $15.7M, comprising $11.7M for property and equipment and $3.6M for capitalized software development costs.
The company operates as a single segment. Revenue for Q1 2026 was $358.0M, up from $279.8M in Q1 2025. Geographic breakdown: United States $209.5M (58.5%), Other Americas $17.4M, APAC $37.1M, United Kingdom $35.9M, and Other EMEA $58.1M. No individual country outside the US exceeded 10% of total revenue.
Klaviyo's operating cash flow (CFO) of $34.3M for Q1 2026 significantly exceeded the prior year's $14.4M, reflecting a 138% year-over-year increase. This improvement is largely attributable to a swing to net income of $9.0M (from a net loss of $14.1M in Q1 2025). Non-cash charges, particularly stock-based compensation of $41.8M and deferred cost amortization ($9.6M), provided substantial add-backs. Working capital was a net use of cash, primarily due to growth in accounts receivable (-$12.2M) and deferred contract acquisition costs (-$21.0M), partially offset by deferred revenue growth of $8.2M.
Capital intensity increased markedly, with total capex (property & equipment plus capitalized software) at $15.2M, nearly double the $7.7M spent in the prior year. Net cash flow generation after capex was $18.6M, well below the $80.3M net decline in cash (driven by financing activities).
Financing cash flow was heavily negative at -$98.8M, dominated by a $100M accelerated share repurchase, partly offset by employee stock plan proceeds. The company's balance sheet remains strong with $985.3M in cash, cash equivalents, and restricted cash as of March 31, 2026. A notable non-cash item is the $813K accrued excise tax on share repurchases, and cash paid for income taxes was $2.7M, up from $73K in the prior year, reflecting the profitable quarter.