Klaviyo, Inc.

Previous wording

We founded Klaviyo in 2012 to provide businesses of all sizes with powerful technology that captures, stores, analyzes, and predictively uses their own data to drive measurable, high-value outcomes. Today, Klaviyo enables over 169,000 businesses around the globe to efficiently drive revenue growth by making it easy to bring their first-party data together and use it to create and deliver highly personalized, omnichannel consumer experiences at scale. Our platform combines our proprietary data and application layers into one vertically-integrated solution with advanced machine learning and artificial intelligence capabilities and over 350 integrations.

Current wording

We founded Klaviyo in 2012 to provide businesses of all sizes with powerful technology that captures, stores, analyzes, and predictively uses their own data to drive measurable, high-value outcomes. Today, Klaviyo enables over 176,000 businesses around the globe to efficiently drive revenue growth by making it easy to bring their first-party data together and use it to create and deliver highly personalized, omnichannel consumer experiences at scale. Our platform combines our proprietary data and application layers into one vertically-integrated solution with advanced machine learning and artificial intelligence capabilities and over 350 integrations.

Previous wording

Today, our customers primarily operate within the retail and eCommerce vertical. Due to the flexibility and adaptability of our technology, we also see organic growth from customers in other verticals, such as education, events and entertainment, restaurants, and travel, as well as from business-to-business (“B2B”) companies. As of March 31, 2025, our platform had efficiently scaled to over 169,000 customers. See the section titled “Key Performance Metrics – Customers” for additional information on how we define customers.

Current wording

Today, our customers primarily operate within the retail and eCommerce vertical. Due to the flexibility and adaptability of our technology, we also see organic growth from customers in other verticals, such as education, events and entertainment, restaurants, and travel, as well as from business-to-business (“B2B”) companies. As of June 30, 2025, our platform had efficiently scaled to over 176,000 customers. See the section titled “Key Performance Metrics – Customers” for additional information on how we define customers.

Previous wording

We believe we have significant expansion opportunities in international markets. We started by serving customers in North America and, in 2019, we expanded our operations to London, England to penetrate the European region. In 2022, we opened our office in Sydney, Australia to capitalize on the opportunities in Asia Pacific. In 2024, we expanded our presence in the European region by adding operations in Dublin, Ireland. We have already experienced significant growth with international sales outside of the Americas accounting for 33.7% of our revenue for the three months ended March 31, 2025. We also continue to expand our product offerings to better serve the international market. As of the date of this Quarterly Report on Form 10-Q, we offer SMS capabilities in more than 15 countries, and we offer our platform in

Current wording

We believe we have significant expansion opportunities in international markets. We started by serving customers in North America and, in 2019, we expanded our operations to London, England to penetrate the European region. In 2022, we opened our office in Sydney, Australia to capitalize on the opportunities in Asia Pacific. In 2024, we expanded our presence in the European region by adding operations in Dublin, Ireland. In 2025, we expanded our presence in the Asia Pacific region by adding operations in Singapore. We have already experienced significant growth with international sales outside of the Americas accounting for 34.2% of our revenue for the six months ended June 30, 2025. We also continue to expand our product offerings to better serve the international market. As of the date of this Quarterly Report on Form 10-Q, we offer SMS capabilities in more than 20 countries, and we offer our platform in English, French, German, Portuguese, Korean, Spanish and Italian. We believe that the introduction of additional languages to our platform increases our efficacy and ease of use in other regions. We also currently only bill in U.S. Dollars, and we believe that adding additional currencies to our platform will help us further our international expansion efforts.

Previous wording

As of March 31, 2025, we had 3,030 customers generating over $50,000 of ARR, compared to 2,157 customers generating over $50,000 of ARR as of March 31, 2024, representing growth of 40% year-over-year.

Current wording

As of June 30, 2025, we had 3,291 customers generating over $50,000 of ARR, compared to 2,386 customers generating over $50,000 of ARR as of June 30, 2024, representing growth of 38% year-over-year.

Previous wording

As of March 31, 2025 and 2024, our NRR was 108% and 114%, respectively. The decrease in this metric from March 31, 2024 to March 31, 2025 was largely driven by relatively lower comparable expansion of existing customer plans.

Current wording

As of June 30, 2025 and 2024, our NRR was 108% and 112%, respectively. The decrease in this metric from June 30, 2024 to June 30, 2025 was largely driven by relatively lower comparable expansion of existing customer plans.

Previous wording

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

Current wording

Three and Six Months Ended June 30, 2025 Compared to the Three and Six Months Ended June 30, 2024

Previous wording

Revenue for the three months ended March 31, 2025 increased by $69.8 million or 33.3%, to $279.8 million compared to $210.0 million for the three months ended March 31, 2024. The increase was due to new business, expanded usage of our platform, and growth of our SMS channel. For the three months ended March 31, 2025, sales to existing customers accounted for approximately 40% of the increase in revenue while approximately 60% of the increase in revenue was related to new customers. Sales to new customers represent the revenue recognized from new customers acquired in the 12 months prior to the period end.

Current wording

Revenue for the three months ended June 30, 2025 increased by $70.9 million or 31.9%, to $293.1 million compared to $222.2 million for the three months ended June 30, 2024. The increase was due to new business, expanded usage of our platform, and growth of our SMS channel. For the three months ended June 30, 2025, sales to existing customers accounted for approximately 44% of the increase in revenue while approximately 56% of the increase in revenue was related to new customers. Sales to new customers represent the revenue recognized from new customers acquired in the 12 months prior to the period end.

Previous wording

Cost of revenue for the three months ended March 31, 2025 increased by $22.8 million or 50.7%, to $67.7 million compared to $44.9 million for the three months ended March 31, 2024. This was primarily due to an increase of approximately $13.4 million in cloud-based infrastructure costs, $7.1 million in outbound communication sending costs on behalf of our customers due to increased usage, and $1.7 million in salaries and personnel expenses as a result of increases in headcount.

Current wording

Cost of revenue for the six months ended June 30, 2025 increased by $43.7 million or 45.9%, to $138.9 million compared to $95.2 million for the six months ended June 30, 2024. This was primarily due to an increase of approximately $20.7 million in cloud-based infrastructure costs, $15.9 million in outbound communication sending costs on behalf of our customers due to increased SMS usage, $4.5 million in technology expenses, and $2.5 million in salaries and personnel expenses as a result of increases in headcount.

Previous wording

Gross profit for the three months ended March 31, 2025 increased by $47.1 million or 28.5%, to $212.1 million compared to $165.1 million for the three months ended March 31, 2024. This increase was primarily due to revenue growth offset by an increase in cost of revenue due to increased usage.

Current wording

Gross profit for the three months ended June 30, 2025 increased by $49.9 million or 29.0%, to $221.9 million compared to $171.9 million for the three months ended June 30, 2024. This increase was primarily due to revenue growth offset by an increase in cost of revenue due to increased usage.

Previous wording

Selling and marketing expenses for the three months ended March 31, 2025 increased by $31.7 million or 34.5%, to $123.5 million compared to $91.9 million for the three months ended March 31, 2024. This increase was primarily due to an increase of approximately $14.6 million in salaries and related personnel expenses as a result of increases in headcount and the introduction of a company-wide bonus program, $9.3 million in marketing expenses associated with our advertising campaigns across multiple channels of media, $3.2 million in partnership-related expenses across our ecosystem, $3.0 million in professional services, and $1.1 million in technology expenses.

Current wording

Selling and marketing expenses for the three months ended June 30, 2025 increased by $32.1 million or 34.0%, to $126.6 million compared to $94.5 million for the three months ended June 30, 2024. This increase was primarily due to an increase of approximately $14.2 million in salaries and related personnel expenses as a result of increases in headcount and the introduction of a company-wide bonus program, $4.6 million in marketing expenses associated with our advertising campaigns across multiple channels of media, $4.4 million in professional services, $4.2 million in stock-based compensation due to the vesting of restricted stock units (“RSUs”), $3.3 million in partnership-related expenses across our ecosystem, and $1.2 million in technology expenses.

Previous wording

General and administrative expenses for the three months ended March 31, 2025 increased by $3.8 million or 9.7%, to $43.0 million compared to $39.2 million for the three months ended March 31, 2024. This increase was primarily due to an increase of approximately $2.3 million in payment processing fees related to an increase in customer transactions and $1.6 million in salaries and related personnel expenses as a result of increases in headcount and the introduction of a company-wide bonus program.

Current wording

General and administrative expenses for the three months ended June 30, 2025 increased by $18.4 million or 51.3%, to $54.1 million compared to $35.8 million for the three months ended June 30, 2024. This increase was primarily due to an increase of approximately $11.6 million in salaries and related personnel expenses as a result of payroll taxes from increased option exercises, $2.8 million in stock-based compensation due to the vesting of RSUs, $2.3 million in payment processing fees related to an increase in customer transactions, and $1.0 million in technology expenses.

Previous wording

Other (expense) income, net, for the three months ended March 31, 2025 increased by $0.7 million or 1076.5% to $(0.7) million compared to $0.1 million for the three months ended March 31, 2024. This increase was primarily due to unfavorable foreign exchange fluctuations.

Current wording

Other (expense) income, net, for the three months ended June 30, 2025 increased by $0.9 million to $(0.9) million compared to $0.0 million for the three months ended June 30, 2024. This increase was primarily due to unfavorable foreign exchange fluctuations.

Previous wording

The Company recorded an income tax benefit of $1.1 million for the three months ended March 31, 2025 compared to income tax expense of $0.4 million for the three months ended March 31, 2024 representing a change of $1.5 million. This was primarily due to stock based compensation windfalls.

Current wording

The Company recorded income tax expense of $0.7 million for the six months ended June 30, 2025 compared to income tax expense of $1.3 million for the six months ended June 30, 2024 representing a decrease of $0.5 million. This was primarily due to greater stock based compensation windfalls in 2025.

Previous wording

Since our inception through March 31, 2025, we have financed our operations primarily through payments received from our customers and sales of equity securities, including the completion of our initial public offering in September 2023. As of March 31, 2025, our principal sources of liquidity included cash, cash equivalents, and restricted cash totaling $889.2 million, with such amounts held for working capital purposes. Our cash equivalents were comprised of $281.2 million in money market funds.

Current wording

Since our inception through June 30, 2025, we have financed our operations primarily through payments received from our customers and sales of equity securities, including the completion of our initial public offering in September 2023. As of June 30, 2025, our principal sources of liquidity included cash, cash equivalents, and restricted cash totaling $936.3 million, with such amounts held for working capital purposes. Our cash equivalents were comprised of $319.3 million in money market funds.

Previous wording

Net cash provided by operating activities of $14.4 million for the three months ended March 31, 2025 was primarily attributable to a net loss of $14.1 million adjusted for non-cash charges of $70.4 million and net cash outflows of $41.9 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $38.3 million of stock-based compensation expense, $13.2 million of prepaid marketing expense amortization, $6.6 million of amortization related to deferred contract acquisition costs, $5.8 million of operating lease costs, and $4.8 million of depreciation and amortization expense. Net cash outflows from changes in operating assets and liabilities primarily consisted of a $18.1 million decrease in accrued expenses and accounts payable due to timing of payments, a $12.6 million increase in accounts receivable due to an increase in customer billings, a $11.0 million increase in deferred contract acquisition costs related to increase in sales commissions resulting from the increase in revenues, a $5.9 million increase in prepaid expenses and other assets, and a $5.4 million decrease in operating lease liabilities due to payments related to our operating lease obligations. The cash outflow was offset by cash inflows primarily from a $11.7 million increase in deferred revenue resulting from increased billings for subscriptions.

Current wording

Net cash provided by operating activities of $70.1 million for the six months ended June 30, 2025 was primarily attributable to a net loss of $38.4 million adjusted for non-cash charges of $146.5 million and net cash outflows of $38.0 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $83.7 million of stock-based compensation expense, $26.4 million of prepaid marketing expense amortization, $13.8 million of amortization related to deferred contract acquisition costs, $12.4 million of operating lease costs, $8.7 million of depreciation and amortization expense and $1.5 million of bad debt expense. Net cash outflows from changes in operating assets and liabilities primarily consisted of a $22.6 million increase in deferred contract acquisition costs related to increase in sales commissions resulting from the increase in revenues, a $17.3 million increase in accounts receivable due to an increase in customer billings, a $11.3 million decrease in operating lease liabilities due to payments related to our operating lease obligations, a $4.5 million increase in prepaid expenses and other assets, and a $0.3 million decrease in accrued expenses and accounts payable due to timing of payments. The cash outflow was offset by cash inflows primarily from a $18.2 million increase in deferred revenue resulting from increased billings for subscriptions.

Previous wording

Net cash provided by operating activities of $26.2 million for the three months ended March 31, 2024 was primarily attributable to a net loss of $12.9 million adjusted for non-cash charges of $59.8 million and net cash outflows of $20.7 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $35.6 million of stock-based compensation expense, $13.2 million of prepaid marketing expense amortization, $4.0 million of depreciation and amortization expense, $3.9 million of amortization related to deferred contract acquisition costs, and $3.1 million of operating lease costs. Net cash outflows from changes in operating assets and liabilities primarily consisted of a $7.2 million increase in deferred contract acquisition costs related to increase in sales commissions resulting from the increase in revenues, a $6.8 million increase in prepaid expenses due to prepayments for cloud infrastructure and hosting costs, a $5.3 million increase in accrued expenses and accounts payable due to timing of payments, and a $3.9 million decrease in operating lease liabilities due to payments related to our operating lease obligations. The cash outflow was offset by cash inflows primarily from a $2.4 million increase in deferred revenue resulting from increased billings for subscriptions.

Current wording

Net cash provided by operating activities of $67.1 million for the six months ended June 30, 2024 was primarily attributable to a net loss of $17.8 million adjusted for non-cash charges of $118.8 million and net cash outflows of $33.9 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $69.1 million of stock-based compensation expense, $26.4 million of prepaid marketing expense amortization, $8.4 million of amortization related to deferred contract acquisition costs, $8.2 million of depreciation and amortization expense, and $6.3 million of operating lease costs. Net cash outflows from changes in operating assets and liabilities primarily consisted of a $14.7 million increase in deferred contract acquisition costs related to increase in sales commissions resulting from the increase in revenues, a $7.8 million decrease in operating lease liabilities due to payments related to our operating lease obligations, a $7.3 million increase in prepaid expenses due to prepayments for cloud infrastructure and hosting costs, and a $4.7 million decrease in accrued expenses and accounts payable due to timing of payments. The cash outflow was offset by cash inflows primarily from a $6.7 million increase in deferred revenue resulting from increased billings for subscriptions.

Previous wording

Net cash used in investing activities of $7.7 million for the three months ended March 31, 2025 consisted of $5.1 million of capitalized software development costs and $2.7 million purchases of property and equipment.

Current wording

Net cash used in investing activities of $15.0 million for the six months ended June 30, 2025 consisted of $10.3 million of capitalized software development costs and $4.7 million purchases of property and equipment.

Previous wording

Net cash used in investing activities of $3.2 million for the three months ended March 31, 2024 consisted of $2.0 million of capitalized software development costs and $1.3 million purchases of property and equipment.

Current wording

Net cash used in investing activities of $7.1 million for the six months ended June 30, 2024 consisted of $5.0 million of capitalized software development costs and $2.0 million purchases of property and equipment.

Previous wording

Net cash used in financing activities was immaterial for the three months ended March 31, 2025 and primarily consisted of approximately $3.5 million of proceeds from our employee stock purchase plan and $0.9 million of proceeds from the exercise of stock options offset by $4.4 million used for the payment of employee tax obligations related to the net share settlement of stock-based compensation awards upon vesting.

Current wording

Net cash used in financing activities was $1.4 million for the six months ended June 30, 2025 and primarily consisted of approximately $6.1 million of proceeds from our employee stock purchase plan and $1.5 million of proceeds from the exercise of stock options offset by $8.9 million used for the payment of employee tax obligations related to the net share settlement of stock-based compensation awards upon vesting.

Previous wording

Net cash used in financing activities of $5.7 million for the three months ended March 31, 2024 primarily consisted of approximately $3.6 million of proceeds from the exercise of stock options and $2.5 million of proceeds from our employee stock purchase plan offset by $11.9 million used for the payment of employee tax obligations related to the net share settlement of stock-based compensation awards upon vesting.

Current wording

Net cash used in financing activities of $5.1 million for the six months ended June 30, 2024 primarily consisted of approximately $4.4 million of proceeds from our employee stock purchase plan and $4.3 million of proceeds from the exercise of stock options offset by $13.8 million used for the payment of employee tax obligations related to the net share settlement of stock-based compensation awards upon vesting.

Previous wording

We enter into various noncancellable lease agreements for certain office space and equipment used in the normal course of business. Our noncancellable lease obligations as of March 31, 2025 were $130.5 million, with $18.8 million payable within 12 months.

Current wording

We enter into various noncancellable lease agreements for certain office space and equipment used in the normal course of business. Our noncancellable lease obligations as of June 30, 2025 were $125.3 million, with $19.8 million payable within 12 months.

Previous wording

We enter into various noncancellable agreements with marketing vendors and various service providers. Our noncancellable obligations as of March 31, 2025 were $196.1 million.

Current wording

We enter into various noncancellable agreements with marketing vendors and various service providers. Our noncancellable obligations as of June 30, 2025 were $281.3 million.

Previous wording

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2025 as compared to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 19, 2025.

Current wording

There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2025 as compared to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 19, 2025.