Klaviyo Q2 Earnings Call Highlights

Key Points

• Strong quarterly performance: Klaviyo’s Q2 revenue rose 26% year over year to $370.6 million, prompting the company to raise its full-year 2026 revenue outlook to $1.526 billion–$1.534 billion. However, it reduced its operating-income forecast because of Agency acquisition costs and continued product investment.
• AI adoption is accelerating: Klaviyo’s Composer AI agent surpassed 95,000 users in its first month, while Customer Agent adoption rose 40% quarter over quarter. The planned Agency acquisition is intended to speed development of these AI offerings.
• Enterprise growth faces margin pressure: Customers generating at least $50,000 in annual recurring revenue grew 36%, and international revenue rose 35%, but gross margin fell to 73.4% as text-messaging usage, carrier fees and infrastructure investments increased costs.

Klaviyo NYSE: KVYO reported second-quarter revenue of $370.6 million, up 26% from a year earlier, as the customer relationship management software provider cited growth in enterprise sales, international markets, text messaging and multi-product adoption.

Co-founder and Co-CEO Andrew Bialecki said the company had reached nearly $1.5 billion in annualized revenue run rate and now serves more than 205,000 brands. Klaviyo also signed its largest contract to date during the quarter: an eight-figure, two-year agreement covering multiple products with a fast-growing e-commerce brand and TikTok Shop seller.

The company raised its full-year revenue outlook following its second-quarter outperformance. Klaviyo now expects 2026 revenue of $1.526 billion to $1.534 billion, representing 24% year-over-year growth. However, it lowered its full-year non-GAAP operating income forecast to $212 million to $218 million, citing costs related to its acquisition of Agency and continued product investment.

AI products gain early adoption

Klaviyo emphasized its efforts to build what management calls an “autonomous B2C CRM,” combining customer data, marketing infrastructure and AI agents. Its data platform now stores more than 9 billion consumer profiles and processes more than a quarter-trillion data points each quarter, according to Bialecki.

In June, the company launched Composer, an AI agent designed to help users analyze customer data, create marketing campaigns and automations, and optimize those efforts. Bialecki said Composer surpassed 95,000 users during its first month of availability, with nearly one-quarter becoming recurring weekly users. Credit consumption increased 30% week over week as recently as the week before the call.

Management said 27% of Klaviyo’s mid-market and enterprise customers are using Composer. The percentage of AI-generated campaigns that users incorporated into their marketing increased to 46%, from 35% a few weeks earlier, according to Bialecki.

The company also pointed to growth in its Customer Agent product, which handles support and sales conversations. Adoption increased 40% quarter over quarter, while weekly resolution volumes rose nearly 80% since early June. Bialecki said Boston Proper generated a reported three-times return on investment in incremental revenue within two weeks of launching Customer Agent, while the agent autonomously resolved more than half of the retailer’s support tickets.

Klaviyo plans to expand its AI product capabilities through the acquisition of Agency. Agency founder Elias Torres will join Klaviyo as chief product officer. Bialecki said the acquisition is intended to help the company develop its agent offerings faster, including Composer and Customer Agent.

Enterprise and international expansion

Co-CEO Chano Fernández said the company’s revised go-to-market approach is beginning to show results, particularly among larger customers. Customers with annual recurring revenue of at least $50,000 increased 36% year over year to 4,477 and represented about 40% of total ARR.

Klaviyo added Warner Music Group as a major new customer during the quarter and won Claire’s in a competitive process that replaced two legacy vendors across email, text and analytics. The company also added its first NFL franchise, the San Francisco 49ers, and hospitality customer SweatHouz.

Fernández said larger businesses are increasingly seeking to consolidate fragmented marketing technology systems on a single platform. He described the enterprise sales motion as a longer-term transition from more transactional sales to consultative engagements involving multiple decision-makers and larger business cases.

• Revenue outside the Americas increased 35% year over year.
• EMEA revenue excluding the U.K. rose 41% year over year.
• Klaviyo plans to open a France office and launch an EU data center in the second half of the year.
• Country Road Group became one of Klaviyo’s largest new logos in Asia-Pacific, consolidating five brands onto the platform through the company’s first global AWS Marketplace deal.

Fernández said the company is focusing international expansion particularly on Europe, while also identifying opportunities in markets including Southeast Asia, Singapore and Japan. He added that WhatsApp has helped Klaviyo expand its appeal in markets where the channel is widely used.

Text messaging mix weighs on gross margin

CFO Amanda Whalen said second-quarter growth was supported by strength in text messaging, WhatsApp and Marketing Analytics. Klaviyo’s data and analytics products collectively grew ARR by more than 100% year over year, Bialecki said.

Net revenue retention was 109% in the second quarter. Whalen said strengthening gross retention, text messaging expansion and the company’s strongest cross-sell quarter since its initial public offering were partially offset by the continued effect of last year’s profile enforcement. Because net revenue retention is a trailing 12-month measure, she said that impact will continue through the first quarter of next year.

Non-GAAP gross margin was 73.4%, down three percentage points from a year earlier. Whalen attributed the decline to text messaging growth, higher carrier fees that Klaviyo had previously absorbed, and infrastructure investments. The company updated mobile pricing in the third quarter to pass higher carrier fees to customers as contracts renew. Whalen said the change is expected to be neutral to 2026 revenue and gross margin because of timing.

Non-GAAP operating income totaled $50.9 million, or a 13.7% operating margin. Klaviyo generated $83 million in cash during the quarter and ended the period with $833 million in cash. It also used about $240 million for share repurchases, leaving $160 million available under its $500 million authorization.

For the third quarter, Klaviyo forecast revenue of $377 million to $381 million, representing approximately 21.5% to 22.5% growth, and non-GAAP operating income of $40 million to $43 million.

Whalen said she is leaving the CFO role after more than four years, remaining in an advisory role through November. Erica Smith is scheduled to become Klaviyo’s next CFO on Sept. 1.

About Klaviyo (NYSE:KVYO)

Klaviyo, Inc is a cloud-based marketing automation platform that enables businesses to leverage customer data for targeted email and SMS campaigns. The company's platform centralizes first-party data from various sources—including e-commerce storefronts, websites, and CRM systems—to help organizations deliver personalized marketing across the customer lifecycle. Klaviyo's core offerings include segmented email marketing, automated messaging workflows, and performance analytics designed to drive customer engagement and revenue growth.

The platform provides a suite of tools for campaign creation and management, including drag-and-drop email and SMS builders, dynamic content rendering, and A/B testing capabilities.

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