Klaviyo, Inc. Q2 FY2025 earnings call

• Revenue grew 32% Y/Y to $293M, with over 176,000 customers. - Key themes: growth company expanding internationally and upmarket, vertically integrated AI-first approach, multiproduct B2C CRM vision. - Product innovations: major enhancements to marketing platform with RCS, WhatsApp, Omnichannel Campaign Builder, channel affinity, multi-touch attribution; service products like Helpdesk and Conversational Agent beta; analytics products with strong momentum. - International expansion: 42% Y/Y growth in international revenue, launched websites in German, Spanish, Italian, and expanded partnerships. - Go-to-market: adding enterprise experience to team, increasing strategic partner collaboration; product side adding features for large enterprises. - Leadership changes: welcomed new CIO, President retiring but staying until end of first quarter next year.

In the second quarter, Klaviyo delivered revenue of $293 million, up 32% year-on-year. International revenue grew over 42% year-on-year. The company empowers over 176,000 customers. The vertically integrated AI-driven data platform spans marketing, service, and analytics segments. Revenue contribution is from various products including marketing, service (with betas like Helpdesk and Conversational Agent), and analytics (with nearly 2,000 customers).

• Q3 revenue expected $297M - $301M, Y/Y growth 26% - 28%; non-GAAP operating income $32.5M - $35.5M, margin 11% - 12%. - Full-year guidance raised to $1.203B at midpoint from $1.195B, Y/Y growth 27% - 28%; non-GAAP operating income $144M - $150M, margin 12%.

Q: Congratulations on the quarter. Wanted to ask about progress in the mid-market, qualitative and quantitative on unit economics and sales productivity.

A: Andrew Bialecki talked about qualitative reasons like data platform and CRM stack story resonating, Amanda Whalen mentioned growth in 50,000 cohort and examples like Mejuri.

Q: Question on service suite of products, sizing opportunity and actionable across segments.

A: Andrew Bialecki said service is a major accelerant, starting with web and chat, looking to be everywhere, and not creating conflict with e-commerce partners.

Q: Talk about quantifying the opportunity in service, consumer-facing interface and conflict with e-commerce partners.

A: Andrew Bialecki said service opportunity is large, not creating conflict, collaborating with partners.

Q: Congrats on quarter, about consumer-facing interface and conflict with e-commerce partners.

A: Andrew Bialecki said no real conflict, collaborating with partners to develop technology.

Q: Talk about push and pull on gross margin, seasonality impact.

A: Amanda Whalen discussed gross margin drivers like SMS growth, infrastructure investments, new products, and seasonality impact on SMS.

Q: Congrats on quarter, net new customers and seasonality.

A: Amanda Whalen talked about net new adds driven by entrepreneur segment, improvements in conversion process and log-in page design, and growth in 50,000 cohort.

Q: As customers standardize on Klaviyo, how go-to-market motion evolves.

A: Andrew Bialecki said portfolio expansion opens more doors, conversations getting up level, multiple vectors for conversation.

Q: International strength, language rollout, and upmarket opportunity.

A: Amanda Whalen mentioned 42% Y/Y growth in international revenue, rolling out languages, and Andrew Bialecki said international unlocks enterprise opportunities.

Q: Reshuffling approach to international, AI, enterprise.

A: Andrew Bialecki said AI-first is number one opportunity, followed by enterprise and international.

Q: AI enhancements adoption by customer cohorts and message volume growth.

A: Andrew Bialecki talked about AI feature adoption by advanced users, and message volume growth is early but quality of messages increased.

Q: Stack ranking new products and MCP server feedback.

A: Andrew Bialecki ranked Conversational Agent highly, discussed Customer Hub and Helpdesk, and MCP server early feedback on data accessibility.

Q: Incumbent displacements, market opportunity.

A: Andrew Bialecki and Amanda Whalen talked about opportunities in entrepreneur/SMB, enterprise, and examples of customers switching from legacy providers.

Q: Support for new channels, customer feedback, gross margin impact.

A: Andrew Bialecki said support for RCS and WhatsApp is seeing adoption, and gross margin impact is early similar to SMS.