Summary
Klaviyo's second quarter of fiscal 2024 delivered strong revenue growth but a sharp swing to GAAP operating and net losses. Revenue was $222.2 million, up 35.0% from the prior-year quarter. Gross profit was $171.9 million, up 35.3%, and gross margin was 77.4%, up 0.1 percentage points. The top line benefited from new business, expanded use of the platform, and growth of the SMS channel. For the six months ended June 30, 2024, revenue was $432.2 million, up 34.8% from the prior-year period.
Profitability moved in the opposite direction. The company reported an operating loss of $14.1 million, a swing from operating income in the prior-year quarter. Operating margin was -6.3%, down 10.6 percentage points. Net loss was $4.9 million, a swing from net income in the prior-year quarter. Diluted EPS was -$0.02, down from positive diluted EPS in the prior-year quarter. The loss reflects higher operating expenses, including stock-based compensation and headcount growth, though the company also reported non-GAAP operating income of $34.3 million and a non-GAAP operating margin of 15.4%. Non-GAAP net income was $43.4 million, and non-GAAP diluted EPS was $0.15.
Cash generation remained positive. Operating cash flow was $40.9 million, down 1.4% from the prior-year quarter. For the six months ended June 30, 2024, operating cash flow was $67.1 million, up 17.6%. Capital expenditures were $0.8 million, up 73.2%. Free cash flow, a non-GAAP measure, was $37.1 million, with a free cash flow margin of 16.7%. Deferred revenue was $46.8 million, up 60.4% from the prior-year quarter, and remaining performance obligations were $115.5 million.
Operational metrics point to continued upmarket progress. Klaviyo ended the quarter with over 151,000 customers, compared with over 130,000 a year earlier. Customers generating more than $50,000 of ARR reached 2,386, up 64% from 1,458. Net revenue retention was 112% as of June 30, 2024, compared with 119% as of June 30, 2023. The company attributed the decline largely to lapping the September 2022 price increase. International sales outside the Americas accounted for 31.9% of revenue for the six months ended June 30, 2024. Product and partnership moves included expanding SMS to 12 countries, new integrations with Toast, BazaarVoice, TikTok, and Pinterest, and more than 350 third-party integrations. New and expansion deals included Samsonite, Herschel Supply Company, and Barstool Sports.
Guidance points to continued growth but decelerating year-over-year rates. For the third quarter of fiscal 2024, Klaviyo guides revenue to $225.0 million to $227.0 million, or 28% to 29% growth. Non-GAAP operating income is guided to $21.5 million to $24.5 million, with a non-GAAP operating margin of 10% to 11%. For the full fiscal year 2024, revenue guidance is $910.0 million to $918.0 million, or 30% to 31% growth. Full-year non-GAAP operating income guidance is $103.0 million to $111.0 million, with a non-GAAP operating margin of 11% to 12%. The company has not provided a reconciliation of non-GAAP operating income guidance to GAAP because certain items cannot be reasonably calculated or predicted at this time.
Risks include the potential for gross margin to decline modestly as SMS volume increases, especially in the fourth quarter due to holiday seasonality. The company also faces execution risks around sustaining growth, integrating third-party platforms, maintaining partner relationships, attracting and retaining customers, and increasing sales from new and existing customers. Public company costs and a competitive, rapidly changing environment add pressure. Stock-based compensation remains a significant recurring expense, and the company maintains a full valuation allowance on U.S. federal and state net deferred tax assets. The NRR decline from 119% to 112% shows that expansion is moderating after the price increase anniversary.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $222.2M | $210.0M | +5.8% | — | — |
| Gross profit | $171.9M | $165.1M | +4.2% | — | — |
| Gross margin | 77.4% | 78.6% | -1.2 pp | — | — |
| Research & development | $55.7M | $56.1M | -0.6% | — | — |
| Sales & marketing | $94.5M | $91.9M | +2.9% | — | — |
| General & administrative | $35.8M | $39.2M | -8.8% | — | — |
| Total operating expenses | $186.0M | $187.1M | -0.6% | — | — |
| Operating income (loss) | -$14.1M | -$22.1M | +36.4% | — | — |
| Operating margin | -6.3% | -10.5% | +4.2 pp | — | — |
| Net income (loss) | -$4.9M | -$12.9M | +61.6% | — | — |
| Net margin | -2.2% | -6.1% | +3.9 pp | — | — |
| Diluted EPS | -$0.02 | -$0.05 | +$0.03 | — | — |
| Customers | 151,000 | 146,000 | +3.4% | — | — |
| Net retention rate | 112.0% | 114.0% | -2.0 pp | — | — |
Risks
Klaviyo's revenue grew 34.8% for the six months ended June 30, 2024, but the filing states its revenue growth rate will decelerate and NRR decreased to 112% as of June 30, 2024 from 119% as of June 30, 2023, largely due to lapping the September 2022 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, non-renewal, or removal from the Shopify app store could materially harm demand.
Klaviyo reported a net loss of $4.9 million for the quarter and $17.8 million for the six months ended June 30, 2024, and operating income swung to a loss of $14.1 million for the quarter; it expects costs and expenses to increase in future periods.
Klaviyo faces competition from Adobe, Salesforce, Mailchimp, and Braze, and some competitors separate SMS carrier fees from product fees, which may make their offerings appear more attractive; competitors may have greater resources.
The vast majority of revenue comes from retail and eCommerce customers, including small businesses, so weak economic conditions, inflation, or geopolitical events could reduce customer marketing spend and ability to pay.
As Klaviyo moves up-market, enterprise sales cycles are expected to be longer than SMB cycles; median sales cycle was approximately 8 weeks for deals closed in 2023 and the six months ended June 30, 2024, and delays can increase time between expenses and revenue.
SMS has higher communication sending costs, and MD&A expects gross margin to decline modestly as SMS volume increases, with the impact most pronounced in the fourth quarter holiday season.
Klaviyo must integrate machine learning and AI features of the quality sought by customers; if competitors deliver AI solutions more efficiently or at aggressive prices, demand for Klaviyo's platform may decline.
Klaviyo depends on co-founder and CEO Andrew Bialecki and other key employees, has a large remote workforce, and faces intense competition for software engineers and senior sales executives; it does not maintain key person life insurance.
Klaviyo relies on third-party cloud infrastructure and third-party delivery providers for email, SMS, and push notifications; any disruption or capacity limitation could interrupt access, cause customer dissatisfaction, and harm results.
Changes in tax law, including the OECD Pillar Two 15% global minimum tax, could increase Klaviyo's effective tax rate and cash tax payments in future years.
Demand and SMS usage are concentrated in the fourth quarter holiday season, which may cause quarterly fluctuations and the most significant gross margin impact in that quarter.
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 Q2 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 1, 2026.