Summary
Klaviyo reported third quarter fiscal 2024 revenue of $235.1 million, up 33.7% year over year. Gross profit was $180.7 million, up 54.5%, and gross margin was 76.9%, up 10.3 percentage points. The company still posted an operating loss of $13.3 million, with the loss narrowing by $288.9 million. Operating margin was -5.6%, up 166.2 percentage points. Net loss was $1.3 million, or -$0.01 per diluted share, with the loss narrowing by $295.8 million. On a non-GAAP basis, operating income was $33.7 million and net income was $45.6 million, or $0.15 per diluted share.
For the first nine months of fiscal 2024, revenue was $667.3 million, up 34.4% year over year. Gross profit was $517.7 million, up 42.4%, and gross margin was 77.6%, up 4.3 percentage points. The year-to-date operating loss was $49.4 million, with the loss narrowing by $244.9 million. The year-to-date net loss was $19.2 million, with the loss narrowing by $262.8 million. Diluted EPS for the nine months was -$0.07, an improvement of $1.12. Operating margin for the nine months was -7.4%, up 51.9 percentage points. Non-GAAP operating income for the nine months was $97.4 million, and non-GAAP net income was $127.6 million.
Cash generation improved. Third quarter operating cash flow was $38.8 million, up 63.6% year over year. Free cash flow was $34.2 million. Capital expenditures were $1.5 million, up 2764.8%. Deferred revenue was $52.9 million, up 61.1%. Remaining performance obligations were $126.6 million, up 102.6%. For the nine months, operating cash flow was $105.9 million, up 31.1%, and capital expenditures were $3.6 million, up 334.4%.
Operational metrics show expansion. Klaviyo had over 157,000 customers as of September 30, 2024, compared with over 135,000 a year earlier. Customers generating over $50,000 of ARR reached 2,619, up 54% from 1,699. Net revenue retention was 110%, down from 119%. International sales outside the Americas accounted for 32.2% of revenue for the nine months. The company launched Klaviyo in five new languages and now supports seven languages. It expanded SMS to 18 countries and announced a Canva integration. New and expansion deals included Authentic Brands Group, Lulus, Rag Bone, and The Body Shop. Klaviyo also hired Surabhi Gupta as chief technology officer and added Adil Wali as chief product officer.
Guidance points to continued growth but also cost pressure. For the fourth quarter of fiscal 2024, Klaviyo guides revenue to $256.0 million to $258.0 million, or 27% to 28% growth. For the full fiscal year 2024, it guides revenue to $923.0 million to $925.0 million, or 32% to 33% growth. Fourth quarter non-GAAP operating income is guided to $7.0 million to $9.0 million, or 3% margin. Full year non-GAAP operating income is guided to $104.0 million to $106.0 million, or 11% margin. The fourth quarter guidance includes an expense expected to be in the low-teens millions of dollars for a new employee cash bonus program. Management expects gross margin to decline modestly as SMS usage grows, especially in the fourth quarter holiday season. Other risks include competition, the ability to attract new customers, retain revenue, expand with existing customers, integrate third-party platforms, and manage partner relationships. The company also faces public company costs and general economic uncertainty. The Shopify investment option for 15,743,174 shares at $88.93 was out of the money as of September 30, 2024, and expires on July 28, 2030.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $235.1M | $222.2M | +5.8% | $175.8M | +33.7% |
| Gross profit | $180.7M | $171.9M | +5.1% | $117.0M | +54.5% |
| Gross margin | 76.9% | 77.4% | -0.5 pp | 66.5% | +10.3 pp |
| Research & development | $55.8M | $55.7M | +0.1% | $141.5M | -60.6% |
| Sales & marketing | $100.0M | $94.5M | +5.8% | $167.9M | -40.4% |
| General & administrative | $38.2M | $35.8M | +6.9% | $109.9M | -65.2% |
| Total operating expenses | $194.0M | $186.0M | +4.3% | $419.2M | -53.7% |
| Operating income (loss) | -$13.3M | -$14.1M | +5.5% | -$302.2M | +95.6% |
| Operating margin | -5.7% | -6.3% | +0.7 pp | -171.9% | +166.2 pp |
| Net income (loss) | -$1.3M | -$4.9M | +72.8% | -$297.1M | +99.5% |
| Net margin | -0.6% | -2.2% | +1.7 pp | -169.0% | +168.4 pp |
| Diluted EPS | -$0.01 | -$0.02 | +$0.01 | -$1.24 | +$1.23 |
| Customers | 157,000 | 151,000 | +4.0% | 135,000 | +16.3% |
| Net retention rate | 110.0% | 112.0% | -2.0 pp | 119.0% | -9.0 pp |
Risks
A large majority of ARR depends on customers who also use Shopify. As of December 31, 2023, approximately 77.7% of ARR came from customers who also use Shopify's platform, while only 9.4% of new ARR came through the Shopify app store. The Shopify agreement expires in 2029 and any disruption or non-renewal could materially harm demand.
Revenue growth may decelerate and NRR has declined. NRR decreased to 110% as of September 30, 2024 from 119% as of September 30, 2023, largely due to lapping the September 2022 price increase. Nine-month revenue grew 34.4% to $667.3 million, but the company says historical growth is not indicative of future growth.
SMS adoption carries higher communication sending costs, and management expects gross margin to decline modestly as SMS volume increases, with the largest impact in the fourth quarter due to holiday seasonality. This could offset current gross margin gains.
Competition is intense and AI capabilities are increasingly important. The company faces competitors such as Adobe, Salesforce, Mailchimp, and Braze, and may fail to integrate machine learning and AI features of the quality sought by customers or offered by competitors.
As Klaviyo moves up-market, enterprise sales cycles are longer and harder to predict. Median sales cycle increased to approximately 9 weeks in the nine months ended September 30, 2024 from approximately 8 weeks in the year ended December 31, 2023, which may delay revenue relative to expenses.
Revenue depends heavily on retail and eCommerce customers, including small businesses. Weak or volatile economic conditions, inflation, geopolitical conflicts, or reduced marketing spend could lower demand and increase collection risk.
International expansion exposes Klaviyo to regulatory, economic, and operational risks. For the three and nine months ended September 30, 2024, 37.7% and 37.3% of revenue came from customer accounts outside the United States, and the company plans further international growth.
The company depends on senior management and highly skilled personnel, including co-founder and CEO Andrew Bialecki, and has a large remote workforce. Competition for software engineers and senior sales executives is intense, and stock award value affects retention.
The business is subject to privacy, marketing, and tax regulations across jurisdictions, including TCPA, CAN-SPAM, EU GDPR, and global minimum tax developments. Compliance burdens and changes in tax law could increase costs or affect operations.
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 Q3 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.