Summary
Klaviyo reported first quarter fiscal 2024 revenue of $210.0 million, up 34.5% from the prior-year quarter. Gross profit rose 38.1% to $165.1 million, and gross margin improved to 78.6% from 76.6%. The bottom line moved the other way. Operating income swung to an operating loss of $22.1 million, and operating margin was -10.5% against 0.6% positive a year earlier. Net income swung to a net loss of $12.9 million, and diluted EPS was -$0.05 against positive $0.02 in the prior-year quarter. Much of the GAAP loss reflects non-cash and one-time items. Non-GAAP operating income was $29.3 million at a 14.0% margin, down from 14.9%, and non-GAAP net income was $38.6 million, or $0.13 per diluted share, against $0.10 a year earlier. Stock-based compensation tied to restricted stock unit vesting and restructuring charges explain most of the gap, and those costs still dilute shareholders.
Cash flow was the strongest part of the quarter. Operating cash flow of $26.2 million was up 68.4% year over year and equaled a 12.5% operating cash flow margin. Free cash flow, a separate measure that also subtracts purchases of property and equipment and capitalized software costs, was $23.0 million, up 65%, at a 10.9% free cash flow margin. Capital expenditures were $1.3 million, up 287.4% from the prior-year quarter. Deferred revenue of $42.5 million rose 62.6%, and remaining performance obligations were $101.2 million as of March 31, 2024.
The customer base keeps shifting up market. Klaviyo ended the quarter with over 146,000 paying customers, up from over 125,000 a year earlier. Customers generating more than $50,000 of ARR reached 2,157, an increase of 69% year over year, and that group now represents 31% of ARR, up from 23%. The top 10 customers average about $1.5 million of ARR, up over 70%. Net revenue retention slipped to 114% from 119%. Management ties that decline to lapping the one-year anniversary of a September 2022 price increase. International sales were 31.6% of revenue for the quarter.
Product work centered on larger and non-English speaking accounts. Klaviyo launched the Klaviyo portfolio for global and multi-account customers. It released a French language version of the platform, the first time the product is available in a language other than English, and expanded SMS to nine countries. The quarter added or expanded accounts such as Perry Ellis International, Manucurist, Fila, and Helen of Troy's Hydro Flask, OXO and Osprey brands. Chief Technology Officer Allen Chaves will leave at the end of 2024, and Carmel Galvin joined as Chief People Officer in April 2024.
Guidance for the second quarter of fiscal 2024 points to year-over-year revenue growth of 28% to 29%, non-GAAP operating income of $19.5 million to $22.5 million and a non-GAAP operating margin of 9% to 11%. For the full fiscal year, the company guides to revenue growth of 29% to 30%, non-GAAP operating income of $97.0 million to $105.0 million and a non-GAAP operating margin of 11% to 12%. Klaviyo did not provide a reconciliation of these forward non-GAAP measures to the most directly comparable GAAP measures.
Two risks frame the rest of the year. Management expects gross margin to decline modestly near term as SMS volumes grow, with the largest impact in the fourth quarter, when holiday messaging concentrates SMS costs. The full-year non-GAAP operating margin target of 11% to 12% sits below the 14.0% posted this quarter, which implies continued spending growth across sales, marketing and research and development. About 55% of the revenue increase came from new customers and 45% from existing ones, so growth still leans on acquisition. A minimum global tax rate of 15% under OECD rules could lift the effective tax rate and cash tax payments in future years, and net revenue retention already declined year over year.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $210.0M | $201.6M | +4.2% | — | — |
| Gross profit | $165.1M | $156.6M | +5.4% | — | — |
| Gross margin | 78.6% | 77.7% | +0.9 pp | — | — |
| Research & development | $56.1M | $52.6M | +6.6% | — | — |
| Sales & marketing | $91.9M | $102.5M | -10.4% | — | — |
| General & administrative | $39.2M | $37.8M | +3.7% | — | — |
| Total operating expenses | $187.1M | $192.9M | -3.0% | — | — |
| Operating income (loss) | -$22.1M | -$36.3M | +39.2% | — | — |
| Operating margin | -10.5% | -18.0% | +7.5 pp | — | — |
| Net income (loss) | -$12.9M | -$26.3M | +51.0% | — | — |
| Net margin | -6.1% | -13.0% | +6.9 pp | — | — |
| Diluted EPS | -$0.05 | -$0.11 | +$0.06 | — | — |
| Customers | 146,000 | 143,000 | +2.1% | — | — |
| Net retention rate | 114.0% | 117.0% | -3.0 pp | — | — |
Risks
Revenue grew 34.5% to $210.0 million for the three months ended March 31, 2024, but the filing states rapid historical growth is not indicative of future growth and anticipates deceleration as the business matures and the September 2022 price increase is lapped. NRR decreased to 114% as of March 31, 2024 from 119% as of March 31, 2023, largely due to lapping that price increase.
As of December 31, 2023, approximately 77.7% of ARR was derived from customers who also use Shopify's platform, and the Shopify agreement expires in 2029. Any disruption to the Shopify integration or failure to renew on favorable terms could materially harm demand for the platform.
The filing highlights increasing use of machine learning and artificial intelligence in the industry and states Klaviyo may be unable to integrate AI features of the quality or type sought by customers or offered by competitors such as Adobe, Salesforce, Mailchimp, and Braze. Competitive products at aggressive prices could reduce demand.
The SMS offering carries higher communication sending costs, and MD&A expects gross margin to decline modestly as SMS volume increases, with the largest impact in the fourth quarter. Gross margin was 78.6% for the three months ended March 31, 2024, up 2.0 pp from 76.6% in the prior-year quarter.
As Klaviyo moves up-market, enterprise sales cycles are expected to be longer than with SMBs, and the median sales cycle was approximately 8 weeks for deals closed in the year ended December 31, 2023 and the three months ended March 31, 2024. Delays could increase the lag between sales expenses and revenue.
The business depends on retail and eCommerce customers, and weak or volatile economic conditions, inflation, or reduced marketing spend could lower demand and usage. The filing also notes significant revenue from small businesses, which may cut marketing expenses more sharply during downturns.
Headcount grew from 1,478 employees as of March 31, 2023 to 2,010 as of March 31, 2024, and the company has a large remote workforce. Competition for experienced software engineers and senior sales executives is intense, and failure to attract or retain key personnel could harm growth.
For the three months ended March 31, 2024, 36.8% of revenue came from customer accounts outside the United States, and the company has offices in the United Kingdom and Australia. International expansion exposes it to regulatory, tax, labor, currency, and compliance risks.
The dual-class structure gives holders of Series B common stock ten votes per share, and directors, executive officers, and affiliates beneficially owned 62.8% of voting power as of March 31, 2024. This concentrated control limits other stockholders' ability to influence corporate matters.
As of December 31, 2023, Klaviyo had approximately $349.2 million of federal NOLs and $245.1 million of state NOLs. Ownership changes under Section 382 or regulatory changes could limit the ability to use these NOLs to offset future taxable income.
SaaS KPIs
All quarters →Customers Generating Over $50,000 of ARR
Free Cash Flow
Free Cash Flow Margin
Non-GAAP Operating Margin
Total customers
Net Revenue Retention
Summary, forecast, risks and KPIs are extracted from Klaviyo, Inc.'s SEC filings for Q1 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.