0001835830-25-000084
SEC filingKlaviyo's revenue grew 32.6% in H1 2025 as new customers and SMS expansion drove growth, partly offset by gross margin pressure from SMS costs.
For the six months ended June 30, 2025, Klaviyo reported revenue of $572.9 million, a 32.6% increase from $432.2 million in the same period of 2024. Growth was driven by new customer acquisition (58% of the increase) and expanded usage from existing customers (42%), alongside the continued ramp of the SMS channel. Gross profit rose 28.8% to $434.0 million, but gross margin declined to 75.8% from 78.0%, primarily due to higher outbound communication costs (SMS) and cloud infrastructure expenses. Operating loss widened to $55.1 million from $36.1 million, reflecting increased investment in selling and marketing (up 34.2% to $250.2 million) and research and development (up 26.8% to $141.8 million). Net loss increased to $38.4 million from $17.8 million, partly due to higher operating expenses and a $1.6 million unfavorable swing in other expense from foreign exchange. Despite the bottom-line loss, operating cash flow improved to $70.1 million from $67.1 million, supported by non-cash charges including $83.7 million in stock-based compensation.
Klaviyo operates as a single reportable segment providing a unified platform for consumer data and personalized engagement. The company continued to scale its customer base to over 176,000 paid subscriptions. A key indicator of upmarket traction was the 38% year-over-year increase in customers generating over $50,000 in annualized recurring revenue (ARR), reaching 3,291. However, dollar-based net revenue retention (NRR) softened to 108% from 112% as expansion from existing customers moderated. International revenue represented 34.2% of total revenue for the six-month period, highlighting growing geographic diversification. Management noted that SMS adoption, while boosting revenue, pressures gross margins due to higher communication costs, particularly in the fourth quarter. The launch of Klaviyo B2C CRM in February 2025 also positions the company for broader market penetration beyond retail and eCommerce.
MD&A commentary points to continued investment in innovation, international expansion, and go-to-market capabilities. Management expects selling and marketing to remain the largest operating expense in dollars but to decrease as a percentage of revenue over the longer term. Gross margin is expected to decline modestly near term due to SMS mix, with potential offsets from scale efficiencies and higher-margin product adoption. Revenue growth is anticipated to benefit from land-and-expand dynamics, new verticals, and SMS momentum. The company believes existing cash and operating cash flows are sufficient for at least the next twelve months, with no explicit quantitative guidance provided for future periods.
As of June 30, 2025, Klaviyo’s cash and cash equivalents total $935.5 million, with an additional $0.7 million in non-current restricted cash, bringing total cash, cash equivalents, and restricted cash to $936.3 million. The company holds $150.0 million in a high-yield notice deposit account requiring 31 days’ notice. Property and equipment, net, stands at $56.7 million, including $39.1 million in capitalized internal-use software. Operating lease liabilities amount to $99.2 million, split between $19.1 million current and $80.1 million non-current.
Klaviyo has $281.3 million in non-cancelable purchase commitments as of June 30, 2025, up from $225.5 million at year-end 2024. Additionally, remaining performance obligations (RPO) total $199.3 million, of which $185.6 million is expected to be recognized within twelve months and $13.7 million thereafter. The company also has $216.0 million of unrecognized marketing expense related to Shopify warrants, to be amortized over 4.08 years.
No share repurchase programs, dividends, or debt transactions are disclosed. Capital expenditures are not explicitly aggregated in the notes, but capitalized internal-use software development costs totaled $12.8 million for the six months ended June 30, 2025, compared to $6.9 million in the prior-year period. Stock-based compensation expense was $86.3 million for the first half of 2025, with $83.7 million recognized in operating expenses.
The company operates as a single operating segment. Revenue is disaggregated geographically: for the six months ended June 30, 2025, the United States contributed $349.1 million, Other Americas $27.6 million, APAC $58.5 million, and EMEA $137.8 million. Long-lived assets (property, equipment, and ROU assets) are concentrated in the U.S. ($128.6 million), with smaller amounts in the UK ($12.8 million) and APAC ($1.8 million).
Klaviyo's operating cash flow (OCF) of $70.1M in H1 2025 represents a 4.5% increase from $67.1M in H1 2024, despite a net loss of $38.4M (up from $17.8M). The divergence is driven by significant non-cash charges: stock-based compensation ($83.7M), depreciation and amortization ($8.7M), non-cash lease costs ($12.4M), and amortization of deferred costs ($13.8M and $26.4M). Working capital was a net use of cash, primarily from increases in accounts receivable ($17.3M) and deferred contract acquisition costs ($22.6M), partially offset by deferred revenue growth ($18.2M).
Capex totaled $15.0M (21.4% of OCF), more than double the $7.1M in H1 2024. This includes $4.7M for property/equipment and $10.3M for software capitalization, reflecting investment in platform development.
No share repurchases or dividends were made. Financing activities were a net use of $1.4M due to employee tax withholdings ($8.9M) partially offset by stock plan proceeds ($7.6M) and option exercises ($1.5M). Cash and equivalents grew by $53.7M to $936.3M.