Klaviyo raises 2025 revenue outlook to $1.203B while advancing AI-first CRM vision
Aug. 06, 2025 1:01 PM ET
AI-Generated Earnings Calls Insights
Earnings Call Insights: Klaviyo, Inc. (KVYO) Q2 2025
Management View- Andrew Bialecki, CEO, highlighted revenue of $293 million for the quarter, marking 32% year-on-year growth and the addition of over 176,000 customers. He emphasized, “We are a growth company and continue to execute on our strategic priorities to deliver sustainable, efficient, long-term growth. We are expanding internationally, and we're investing and making progress with our move upmarket.”
- Bialecki detailed significant product innovations, including major enhancements unveiled at Klaviyo London, such as native support for RCS and WhatsApp, the Omnichannel Campaign Builder, channel affinity powered by Klaviyo AI, and multi-touch attribution. He described the service suite’s expansion, noting private betas for Helpdesk and Conversational Agent and the broader multiproduct B2C CRM strategy.
- Announced new partnerships with Guesty and vivenu, strengthening reach into hospitality and entertainment. Noted notable customer wins including Winston Flowers and Princess Polly, with consolidation trends accelerating among mid-market and enterprise clients.
- Announced leadership changes: Archana Rao joined as Chief Information Officer in June. President Steve Rowland will retire after Q1 next year, having grown the revenue run rate from $660 million to over $1.1 billion.
- Amanda Whalen, CFO, stated, “Revenue grew 32% year-over-year to $293 million. Non-GAAP operating margin was 14%, and free cash flow was $59 million. These results demonstrate another quarter of strong, consistent top and bottom line performance.”
Outlook- Whalen provided guidance for Q3 revenue of $297 million to $301 million, targeting 26% to 28% year-over-year growth, and Q3 non-GAAP operating income of $32.5 million to $35.5 million with a margin of 11% to 12%.
- Raised full-year revenue guidance to $1.203 billion at the midpoint, representing 27% to 28% growth, with non-GAAP operating income guidance of $144 million to $150 million and a 12% margin. Management explained, “This guidance reflects our confidence in the resilience of our business and the value that we provide to our customers, who continue to rely on our platform to drive results even in uncertain times.”
- Noted a reduction in incremental prudence in guidance due to strong Q2 performance, though not removing it entirely given ongoing macro uncertainty.
Financial Results- Reported revenue of $293 million for Q2, up 32% year-over-year, free cash flow of $59 million, and non-GAAP operating margin of 14%.
- Ended Q2 with over 176,000 customers, up 17% year-over-year and 7,000 sequentially. Net revenue retention was 108%, consistent with the last two quarters.
- Q2 non-GAAP gross margin was 76%, down approximately 2 points year-over-year, attributed to increased infrastructure costs and SMS product growth. Non-GAAP operating income was $41 million.
- EMEA revenue grew 47% year-over-year, with APAC revenue growth accelerating for the second quarter in a row. International revenue grew over 42% year-on-year.
Q&A- Gabriela Borges, Goldman Sachs: Asked about mid-market progress and sales productivity. Bialecki explained that the Klaviyo data platform and consolidation of marketing and service are resonating with enterprises, and Whalen added, “You saw the growth in the 50,000 cohort, 14% year-over-year growth this quarter in average revenue per customer.”
- Terrell Tillman, Truist: Inquired about the service suite opportunity and market sizing. Bialecki described the conversational category as critical, stating it could be as large as marketing and expects acceleration across all customer segments.
- Brent Bracelin, Piper Sandler: Questioned revenue capture from cross-sell of service and AI-first products. Bialecki said the opportunity in service is potentially larger than marketing, noting, “If we can deliver better LTV to our customers... that gives us the ability to share in that upside.”
- Jackson Ader, KeyBanc: Sought clarity on gross margin dynamics amid new product launches. Whalen discussed infrastructure investment benefits and positive future gross margin impacts from analytics and service, but cautioned not to expect meaningful shifts this year.
- Elizabeth Porter, Morgan Stanley: Asked about go-to-market motion as the product portfolio expands. Bialecki noted conversations are increasingly elevated to Chief Digital Officers and CIOs, reflecting a company-wide approach.
Sentiment Analysis- Analysts demonstrated a positive tone, focusing on growth metrics, product innovation, and mid-market traction. They raised forward-looking questions about cross-sell, international expansion, and gross margin dynamics.
- Management’s tone remained confident and occasionally emphasized their AI-first vision and international momentum. Phrases like “we are very excited about the trend in the unit economics” and “we are delivering efficient growth at scale” signaled optimism.
- Compared to the previous quarter, the sentiment from both analysts and management is slightly more bullish, buoyed by raised guidance and successful execution on strategic initiatives.
Quarter-over-Quarter Comparison- Guidance was raised for both Q3 and FY2025, with revenue targets moving from a $1.179 billion midpoint last quarter to $1.203 billion, and the operating income range also increased.
- Strategic focus shifted further toward AI-driven product innovation, multiproduct CRM, and international expansion. Large customer cohort growth accelerated (3,291 customers over $50,000 in ARR vs. 3,030 last quarter).
- Analysts’ questions evolved from macro risk management and new product adoption to quantifying cross-sell and AI-driven revenue opportunities.
- Management’s tone is more assertive on the AI-first approach and the consolidation theme.
Risks and Concerns- Management reiterated that gross margin remains pressured by infrastructure costs and SMS growth, but expects future efficiencies.
- Whalen explained, “We incorporated some additional prudence in our guidance due to the uncertain macro environment,” and noted the environment remains dynamic despite strong Q2 results.
- Analyst questions about product adoption, pricing, and margin improvement signaled ongoing monitoring of execution risks.
Final Takeaway
Klaviyo’s management presented a confident outlook, underpinned by robust Q2 results, strong customer growth, and ongoing product innovation. The company raised its full-year revenue guidance to $1.203 billion, pointing to sustained demand for its unified, AI-first CRM platform and traction across international and enterprise markets. Management emphasized the importance of further scaling new products, cross-sell opportunities, and driving efficiencies, while maintaining awareness of macroeconomic uncertainties and margin pressures.
Read the full Earnings Call Transcript |
