Klaviyo, Inc. Q4 FY2025 earnings call

• AI is a key driver: AI is making it easier to deliver high-quality, personalized experiences, improving experience quality, and making experiences more accessible. Klaviyo's autonomous B2C CRM acts as the central nervous system for AI-driven consumer engagement. • Enterprise and international momentum: Enterprises are rethinking customer engagement and relying on Klaviyo for unified platforms. International revenue outside the Americas represents over one-third of the business. Q4 saw wins like Kiko Milano and expansions like Taylor Made. • Service category growth: Service is the fastest-growing product launch with high ROI personalization and real-time action resonating at all scales. For example, Half Magic drove a five times increase in repeat purchase and 110% growth in automation revenue. • Infrastructure strength: The database and data infrastructure are built for real-time consumer data handling, indexing, and serving, which is crucial for delivering personalized experiences in real-time.

For the full year 2025, Klaviyo, Inc. achieved revenue of $1.234 billion, a 32% year-over-year growth. International revenue growth accelerated to 42%. The largest customers, those contributing more than $50,000 of ARR, grew over 37%. The new service category was the fastest-growing product launch in the company's history. In Q4, revenue was $350 million, up 30% year over year, driving the annualized revenue run rate to $1.4 billion. NRR (Net Revenue Retention) was 110%, a year-over-year expansion of more than 200 basis points. 60% of ARR comes from multiproduct customers, and over 15% of ARR comes from customers adopting at least three products.

• Full-year 2026 revenue projection: $1.501 billion to $1.509 billion, representing 21.5% to 22.5% year-on-year growth. • Full-year 2026 non-GAAP operating income projection: $218 million to $224 million, a non-GAAP operating margin of approximately 14.5% to 15%. • Q1 2026 revenue expectation: $346 million to $350 million, growth of 23.5% to 25%, and non-GAAP operating income of $50 million to $53 million, with a non-GAAP operating margin of 14.5% to 15%. The guidance is derisked, assuming minimal revenue contribution from new AI and service products.

Actual company results could differ materially from forward-looking statements due to various risks, uncertainties, and assumptions. A description of these risk factors, uncertainties, and assumptions, and others that could affect financial results are included in the company's filings with the SEC. The company does not undertake any responsibility to update these forward-looking statements except as required by law.

Q: How are you structuring and incentivizing go-to-market this year?

A: There are changes to improve execution, rigor, and discipline in go-to-market. The focus is on aligning with customer outcomes and Klaviyo-attributed value. Investments in go-to-market are made with a strong focus on unit economics, and the changes are expected to show up in increased win ratios over time.

Q: How much of large customer ads is cross-sell versus new customers?

A: Most large customer ads are net new land. The company is focusing on leading indicators, pipeline qualification, and strength, and is working with partners like Accenture to drive net new customer wins in the large customer segment.