Summary
Klaviyo closed the September 2025 quarter with revenue of $310.9 million, up 32.2% from the prior-year quarter. Year-to-date revenue reached $883.8 million, up 32.4%. Management attributed the increase to new business, geographic expansion, expanded usage of the platform, and growth in text messaging and WhatsApp channels. Sales to existing customers accounted for roughly 44% of the quarterly revenue increase, while new customers contributed about 56%. International sales outside the Americas made up 34.6% of revenue for the nine months ended September 30, 2025.
The quarter brought several product launches. Klaviyo moved K Service into general availability, an AI-powered customer service platform, and announced Marketing Agent, an autonomous teammate that builds marketing plans with campaigns, flows, and forms. The company hosted its flagship customer event with more than 1,400 attendees and added or expanded accounts including Rhone, Proper Hotels, and UrbanStems. Customer counts kept climbing. Klaviyo ended the quarter with over 183,000 customers, up from over 157,000 a year earlier. Customers generating more than $50,000 of ARR totaled 3,563, up 36% from 2,619. Net revenue retention was 109%, down from 110%, which management tied to relatively lower comparable expansion of existing customer plans. Revenue in EMEA and APAC grew 43% year over year.
Profitability improved at the operating line for the quarter but stayed negative. Gross profit was $234.7 million, up 29.9%, while gross margin slipped to 75.5% from 76.9%. Year-to-date gross margin was 75.7%, down from 77.6%. The operating loss narrowed to $10.8 million from $13.3 million, and operating margin improved to -3.5% from -5.6%. Net loss narrowed to $0.4 million from $1.3 million, and diluted EPS came in at $0.00 versus -$0.01. The year-to-date picture is weaker: operating loss widened to $65.9 million from $49.4 million, net loss widened to $38.8 million from $19.2 million, and diluted EPS fell to -$0.14 from -$0.07. On a non-GAAP basis, operating income was $45.0 million.
Cash generation stayed solid. Operating cash flow was $54.8 million for the quarter, up 41.2%, and $124.8 million year to date, up 17.9%. Free cash flow, a non-GAAP measure, was $47.1 million. Capital expenditures were $2.3 million in the quarter, up 47.0%, and $7.0 million year to date, up 96.3%. Deferred revenue rose 66.1% to $87.9 million, and remaining performance obligations rose 70.4% to $215.7 million.
Guidance points to slower growth ahead. For the fourth quarter of fiscal 2025, Klaviyo guided revenue to $331 million to $335 million, or 23% to 24% growth, and non-GAAP operating income of $43.5 million to $46.5 million at a 13% to 14% margin. For the full fiscal year 2025, revenue guidance is $1.215 billion to $1.219 billion, or 30% growth, with non-GAAP operating income of $161.8 million to $164.8 million at a 13% to 14% margin. The main risks are margin and demand related. Management expects gross margin to decline modestly in the near term as text message and WhatsApp volumes rise, since those channels carry higher sending costs. SMS usage is concentrated in the fourth quarter because of holiday shopping, so the margin impact should be heaviest then. Klaviyo also flagged competition, its ability to attract new customers and retain revenue from existing ones, the success of its AI and machine learning products, international expansion execution, and macroeconomic factors including tariffs.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $310.9M | $293.1M | +6.1% | $235.1M | +32.2% |
| Gross profit | $234.7M | $221.9M | +5.8% | $180.7M | +29.9% |
| Gross margin | 75.5% | 75.7% | -0.2 pp | 76.9% | -1.4 pp |
| Research & development | $72.7M | $72.5M | +0.3% | $55.8M | +30.3% |
| Sales & marketing | $127.7M | $126.6M | +0.8% | $100.0M | +27.6% |
| General & administrative | $45.3M | $54.1M | -16.4% | $38.2M | +18.4% |
| Total operating expenses | $245.6M | $253.2M | -3.0% | $194.0M | +26.6% |
| Operating income (loss) | -$10.8M | -$31.3M | +65.4% | -$13.3M | +18.4% |
| Operating margin | -3.5% | -10.7% | +7.2 pp | -5.7% | +2.2 pp |
| Net income (loss) | -$426.0K | -$24.3M | +98.2% | -$1.3M | +68.3% |
| Net margin | -0.1% | -8.3% | +8.1 pp | -0.6% | +0.4 pp |
| Diluted EPS | $0.00 | -$0.09 | +$0.09 | -$0.01 | +$0.01 |
| Customers | 183,000 | 176,000 | +4.0% | 157,000 | +16.6% |
| Net retention rate | 109.0% | 108.0% | +1.0 pp | 110.0% | -1.0 pp |
Risks
The integration and adoption of AI technology is rapidly changing the competitive dynamics of Klaviyo's industry, and competitors with superior AI capabilities or third-party platforms that embed AI-driven features could reduce demand. MD&A highlights the September 2025 launch of Marketing Agent and Customer Agent as part of an AI-first B2C CRM, making failure to innovate at a competitive pace a material risk.
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, non-renewal, or degradation of the integration could cause data synchronization delays and customer losses.
Gross margin was 75.5% in FY2025 Q3, down 1.4 percentage points from 76.9% in FY2024 Q3, and FY2025 year-to-date gross margin was 75.7%, down 1.9 percentage points from 77.6%. MD&A expects gross margin to decline modestly near term as text message and WhatsApp volumes increase, with the impact most concentrated in the Q4 holiday season.
As Klaviyo moves up-market, enterprise sales cycles are expected to be longer and less predictable, requiring increased selling, marketing, and customer support expenses before revenue is recognized. MD&A identifies growth with larger customers as a key factor, and any delays could increase the lag between expenses and corresponding revenue.
Klaviyo's customers primarily operate in retail and eCommerce, and a significant portion are small businesses, making demand sensitive to weak economic conditions, inflation, tariffs, and trade disruptions that could reduce marketing spend. The risk factor also notes customers may request discounts or delay purchasing decisions in response to tariff rates.
Klaviyo is expanding internationally, adding operations in Singapore and France in 2025, and derived 34.6% of revenue outside the Americas for the nine months ended September 30, 2025. International operations subject the company to regulatory, labor, tax, currency, and localization risks that could increase costs and impede growth.
Revenue grew 32.4% year to date in FY2025, but the risk factors state rapid historical growth is not indicative of future growth and the growth rate is expected to decelerate over time. NRR decreased to 109% as of September 30, 2025 from 110% as of September 30, 2024, largely due to lower comparable expansion of existing customer plans.
Klaviyo depends on co-founder and CEO Andrew Bialecki and other key employees, and competition for experienced software engineers and senior sales executives is intense. Headcount grew from 2,081 employees as of September 30, 2024 to 2,437 as of September 30, 2025, increasing the challenge of retaining and integrating skilled personnel.
Research and development expense for the three and nine months ended September 30, 2025 included $4.2 million of restructuring expense. The risk factors note prior workforce reductions and potential future cost-cutting measures that could disrupt operations, reduce morale, or fail to realize expected savings.
The OECD is coordinating implementation of a minimum global effective tax rate of 15%, which does not currently apply to Klaviyo but could increase its effective tax rate and cash tax payments as additional jurisdictions enact legislation. International tax compliance and filings in multiple jurisdictions also increased G&A expense.
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 Q3 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 2, 2026.