Summary
Klaviyo's first quarter of fiscal 2026 showed sharp top-line growth and a swing to GAAP profitability. Revenue reached $358.0 million, up 27.9% from the prior-year quarter. Gross profit was $268.9 million, up 26.8%. Operating income was $1.7 million, up from an operating loss in the prior-year quarter. Net income was $9.0 million, also a swing to a profit. Diluted EPS was $0.03, up from a loss per share in the prior-year quarter. Operating margin was 0.5%, up 9.0 percentage points. Gross margin was 75.1%, down 0.7 percentage points. On a non-GAAP basis, operating income was $58.6 million and operating margin was 16%. Non-GAAP net income per diluted share was $0.22. Free cash flow was $18.6 million. Operating cash flow was $34.3 million, up 138.7%. Capital expenditures were $11.7 million, up 334.5%. Deferred revenue was $111.5 million, up 46.3%. Remaining performance obligations were $275.8 million, up 59.3%.
The customer base continued to expand. Klaviyo ended the quarter with more than 196,000 customers. Customers generating over $50,000 of ARR reached 4,175, up 38% year over year. Net revenue retention was 110%, up two percentage points year over year. International momentum was strong. Revenue outside the Americas grew 39%, and EMEA excluding the UK grew 51%. Revenue per full-time employee rose to more than $600,000, up over 25% year over year. Management attributed the revenue increase to new business, geographic expansion, expanded platform usage, and new offerings. Sales to existing customers accounted for approximately 44% of the revenue increase, while new customers accounted for approximately 56%. International sales outside the Americas represented 36.6% of revenue for the three months ended March 31, 2026. Product updates included the private preview of Composer, enhancements to Customer Agent with Custom Skills and more channels, and new integrations across ChatGPT, Claude, Canva, and Google. New and expanded customer accounts included ALICE + OLIVIA, AllSaints, Cuyana, Legends Global, and Weber Grills.
Guidance points to continued growth. For the second quarter of fiscal 2026, Klaviyo guided revenue to $359 million to $363 million, or year-over-year growth of 23% to 24%. For the full fiscal year 2026, revenue guidance is $1.514 billion to $1.522 billion, or year-over-year growth of 23%. Second quarter non-GAAP operating income guidance is $47.5 million to $50.5 million, with a non-GAAP operating margin of 13.0% to 14.0%. Full fiscal year 2026 non-GAAP operating income guidance is $222 million to $228 million, with a non-GAAP operating margin of 14.5% to 15.0%. The company did not provide a reconciliation of non-GAAP operating income guidance to the most directly comparable GAAP measures. Klaviyo also authorized a $500 million share repurchase program and completed an initial $100 million accelerated share repurchase in April. As of March 31, 2026, approximately $400 million remained available under the program. Amanda Whalen will step down as CFO after serving through August 21, 2026, and will move into an advisory role through November.
Several risks and pressures sit alongside the strong quarter. Management expects gross margin to decline modestly in the near term as text messaging and WhatsApp messaging volumes increase. Those channels carry higher communication sending costs, and the impact is expected to be most pronounced in the fourth quarter because of holiday shopping seasonality. The company also cited risks tied to sustaining growth, attracting and retaining customers, integrating with third-party platforms, expanding internationally, leveraging artificial intelligence and machine learning, executing marketing and sales strategies, public company costs, and macroeconomic factors including tariffs. The CFO transition adds a leadership change to watch. Competition remains intense in a rapidly changing environment. Klaviyo's non-GAAP measures exclude stock-based compensation, employer payroll taxes on employee stock transactions, and amortization of prepaid marketing expense, so GAAP and non-GAAP results differ materially.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $358.0M | $350.2M | +2.2% | $279.8M | +27.9% |
| Gross profit | $268.9M | $252.8M | +6.4% | $212.1M | +26.8% |
| Gross margin | 75.1% | 72.2% | +2.9 pp | 75.8% | -0.7 pp |
| Research & development | $80.0M | $76.7M | +4.3% | $69.3M | +15.4% |
| Sales & marketing | $134.1M | $128.4M | +4.4% | $123.5M | +8.5% |
| General & administrative | $53.1M | $49.4M | +7.3% | $43.0M | +23.4% |
| Total operating expenses | $267.1M | $254.6M | +4.9% | $235.9M | +13.3% |
| Operating income (loss) | $1.7M | -$1.8M | +194.5% | -$23.8M | +107.3% |
| Operating margin | 0.5% | -0.5% | +1.0 pp | -8.5% | +9.0 pp |
| Net income (loss) | $9.0M | $7.0M | +28.6% | -$14.1M | +164.1% |
| Net margin | 2.5% | 2.0% | +0.5 pp | -5.0% | +7.6 pp |
| Diluted EPS | $0.03 | $0.02 | +$0.01 | -$0.05 | +$0.08 |
| Customers | 196,000 | 193,000 | +1.6% | 169,000 | +16.0% |
| Net retention rate | 110.0% | 110.0% | ±0.0 pp | 108.0% | +2.0 pp |
Risks
The filing materially expands AI competition risk, warning that competitors with superior AI capabilities, larger or higher quality training datasets, more advanced models, or autonomous agents may offer more effective solutions. MD&A positions Klaviyo as an AI-first B2C CRM with Marketing Agent and Customer Agent, making failure to keep pace with AI features a direct growth risk.
As of December 31, 2025, approximately 77.9% of ARR was derived from customers who also use Shopify's platform, while only approximately 7.4% of new ARR in 2025 came through the Shopify app store. The Shopify agreement expires in 2029, and any disruption to the integration or renewal could materially harm demand.
MD&A states gross margin is expected to decline modestly as text messaging and WhatsApp messaging volumes increase because those channels have higher communication sending costs, with the impact most concentrated in Q4. Gross margin was 75.1% in FY2026 Q1, down 0.7 pp from 75.8% in FY2025 Q1.
As Klaviyo moves up-market, enterprise sales cycles are expected to be longer than SMB cycles, requiring more sales and support investment and making revenue timing harder to predict. MD&A highlights growth with larger customers and 4,175 customers over $50,000 ARR as of March 31, 2026, up 38% year over year.
Results depend heavily on retail and eCommerce customers, and the filing warns that weak economic conditions, tariffs, trade conflicts, and reduced marketing spend could lower demand. It also notes significant revenue from small businesses, which may cut marketing expenses more sharply in downturns.
For the three months ended March 31, 2026, 41.5% of revenue came from customer accounts outside the United States, and Klaviyo continues expanding offices and operations internationally. This exposes it to foreign regulatory, tax, labor, currency, and geopolitical risks, including tariffs and trade conflicts.
The filing emphasizes intense competition for experienced software engineers, AI and machine learning personnel, and senior sales executives, and notes dependence on co-CEOs Andrew Bialecki and Chano Fernández. It also warns that stock award value changes can affect recruitment and retention.
Klaviyo relies on a third-party cloud infrastructure provider and third-party services to deliver emails, text messages, and WhatsApp messages. Any disruption, cybersecurity event, or mobile operating system change affecting these providers could cause customer dissatisfaction, breach customer agreements, and harm results.
Most customer subscriptions are month-to-month, so customers have no obligation to renew or maintain usage. The filing notes past non-renewals and difficulty predicting long-term retention, which could pressure revenue growth if churn increases or customers renew on less favorable terms.
The new $500.0 million Share Repurchase Program, including a $100.0 million accelerated share repurchase, may reduce public float and further concentrate ownership among directors, executive officers, and affiliates, who held 64.6% of voting power as of March 31, 2026. This could increase trading volatility and limit other stockholders' influence.
SaaS KPIs
All quarters →Customers Generating Over $50,000 of ARR
Free Cash Flow
Free Cash Flow Margin
Non-GAAP Operating Margin
Total customers
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from Klaviyo, Inc.'s SEC filings for Q1 FY2026 (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.