Summary
Klaviyo reported first-quarter fiscal 2025 revenue of $279.8 million, up 33.3% from the prior-year quarter. Gross profit rose 28.5% to $212.1 million. Gross margin was 75.8%, down 2.8 percentage points. The company still posted an operating loss of $23.8 million, which widened 7.5%, and a net loss of $14.1 million, which widened 9.4%. Diluted EPS was flat at negative $0.05. Operating margin was negative 8.5%, up 2.0 percentage points, so the loss was smaller as a share of revenue even as the absolute loss grew. On a non-GAAP basis, operating income was $32.4 million, and non-GAAP operating margin was 12%.
Cash generation slowed. Operating cash flow was $14.4 million, down 45.1% from the prior-year quarter. Capital expenditures were $2.68 million, up 113.3%. Free cash flow was $6.6 million. Deferred revenue rose 79.2% to $76.19 million, and remaining performance obligations rose 71.0% to $173.10 million. Those backlog measures suggest billings and contracted work grew faster than revenue. The balance sheet held $889.2 million in cash, cash equivalents, and restricted cash as of March 31, 2025. Working capital was $814.4 million. Lease obligations were $130.5 million, with $18.8 million payable within 12 months, and other noncancellable obligations were $196.1 million.
Customer metrics showed continued upmarket progress. Klaviyo ended the quarter with over 169,000 customers, compared with over 146,000 a year earlier. Customers generating more than $50,000 of ARR reached 3,030, up 40% year-over-year from 2,157. Net revenue retention was 108% as of March 31, 2025, down from 114% a year earlier. Management attributed the decline largely to relatively lower comparable expansion of existing customer plans. International sales outside the Americas accounted for 33.7% of revenue for the three months ended March 31, 2025. The company announced Klaviyo B2C CRM in February 2025, adding Marketing Analytics and Customer Hub, and closed new or expanded accounts with The Hershey Company, Belkin, Moose Knuckles, and Bauhaus. The platform had over 350 integrations.
Guidance points to slower growth but still healthy expansion. For the second quarter of fiscal 2025, management guided revenue to $276.0 million to $280.0 million, with year-over-year growth of 24% to 26%. For the full fiscal year 2025, management raised revenue guidance to $1.171 billion to $1.179 billion, for year-over-year growth of 25% to 26%. Non-GAAP operating income guidance was $28.5 million to $31.5 million for the second quarter and $133.0 million to $139.0 million for the full fiscal year. Non-GAAP operating margin guidance was 10% to 11% for the second quarter and 11% to 12% for the full fiscal year. Risks include the company's ability to sustain growth, execute its business strategy, integrate third-party platforms, maintain relationships with partners, attract new customers, retain revenue, increase sales, leverage artificial intelligence and machine learning, sustain international growth, and manage public company costs. Macroeconomic factors, including tariffs, also pose risks. Management expects gross margin to decline modestly as SMS volume rises and cloud infrastructure and outbound communication costs increase. Seasonality is another factor, with demand and SMS usage concentrated in the fourth quarter.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $279.8M | $270.2M | +3.6% | $210.0M | +33.3% |
| Gross profit | $212.1M | $198.4M | +6.9% | $165.1M | +28.5% |
| Gross margin | 75.8% | 73.5% | +2.4 pp | 78.6% | -2.8 pp |
| Research & development | $69.3M | $70.9M | -2.1% | $56.1M | +23.6% |
| Sales & marketing | $123.5M | $117.8M | +4.8% | $91.9M | +34.5% |
| General & administrative | $43.0M | $44.4M | -3.1% | $39.2M | +9.7% |
| Total operating expenses | $235.9M | $233.1M | +1.2% | $187.1M | +26.0% |
| Operating income (loss) | -$23.8M | -$34.7M | +31.5% | -$22.1M | -7.5% |
| Operating margin | -8.5% | -12.8% | +4.3 pp | -10.5% | +2.0 pp |
| Net income (loss) | -$14.1M | -$27.0M | +47.8% | -$12.9M | -9.4% |
| Net margin | -5.0% | -10.0% | +5.0 pp | -6.1% | +1.1 pp |
| Diluted EPS | -$0.05 | -$0.10 | +$0.05 | -$0.05 | ±$0.00 |
| Customers | 169,000 | 167,000 | +1.2% | 146,000 | +15.8% |
| Net retention rate | 108.0% | 108.0% | ±0.0 pp | 114.0% | -6.0 pp |
Risks
As of December 31, 2024, approximately 77.7% of ARR was derived from customers who also use Shopify's platform, while only approximately 9.4% of new ARR in 2024 came through the Shopify app store. The Shopify agreement expires in 2029, and any disruption to the integration or relationship could materially harm demand for Klaviyo's platform.
Gross margin was 75.8% in Q1 2025, down 2.8 percentage points from 78.6% in Q1 2024. MD&A expects gross margin to decline modestly as SMS volume increases, with the impact most pronounced in Q4 due to holiday seasonality.
NRR decreased to 108% as of March 31, 2025 from 114% as of March 31, 2024, largely driven by relatively lower comparable expansion of existing customer plans. Most customer subscriptions are month-to-month, so customers have no obligation to renew or maintain usage levels.
The market is subject to rapid technological change, and competitors may incorporate AI Technology into their products more quickly or more successfully than Klaviyo. Klaviyo must continue developing AI and machine learning features, which may require significant engineering, sales, and marketing resources.
Klaviyo's results depend on retail and eCommerce customers, and tariffs, weak economic conditions, or reduced marketing spend could cause customers to request discounts, delay purchasing decisions, or reduce platform usage. Small business customers may be especially likely to cut marketing expenses during downturns.
As Klaviyo moves up-market, enterprise sales cycles are expected to be longer and more unpredictable than with small and mid-size businesses. This may increase the time between incurring selling expenses and generating corresponding revenue, and may require additional sales and customer support investment.
For Q1 2025, 38.6% of revenue came from customer accounts outside the United States. Klaviyo's expansion in the UK, Australia, and Ireland exposes it to regulatory, tax, labor, and currency risks, and it currently bills only in U.S. Dollars.
Klaviyo depends on senior management, including co-founder and CEO Andrew Bialecki, and competition for experienced software engineers and senior sales executives is intense. A portion of the workforce is remote, adding complexity to hiring and retention.
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
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from Klaviyo, Inc.'s SEC filings for Q1 FY2025 (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 1, 2026.