Summary
Klaviyo closed fiscal 2023 with fourth-quarter revenue of $201.6 million, up 38.8% year over year. Full-year revenue reached $698.1 million, up 47.7%. Gross profit was $156.6 million in the quarter, up 45.1%, and $520.2 million for the year, up 50.9%. Gross margin improved to 77.7% in the quarter, up 3.4 percentage points, and to 74.5% for the year, up 1.6 percentage points. The top line and gross profit growth show the platform continues to scale.
Profitability remains the main pressure point. Fourth-quarter operating loss widened to $36.3 million, and operating margin was negative 18.0%, down 15.2 percentage points. Full-year operating loss widened to $330.6 million, with operating margin at negative 47.4%, down 35.7 percentage points. Net loss widened to $26.3 million in the quarter and to $308.2 million for the year. Full-year diluted EPS was negative $1.27, and that loss widened. The gap between gross profit and operating results reflects heavy investment in selling, marketing, research, and public company costs.
Operational metrics point to a larger and more engaged customer base. Klaviyo ended 2023 with over 143,000 customers, up from over 119,000 at the end of 2022. Customers generating more than $50,000 of ARR reached 1,958, compared with 1,085 a year earlier, an increase of 80%. Net revenue retention was 117% as of December 31, 2023, down from 119% a year earlier. SMS adoption rose to 16.0% of customers from 13.7%. The company powered well over $50 billion in Klaviyo Attributed Value in 2023. During Black Friday Cyber Monday, its systems delivered over 11.6 million messages per minute at peak times and 14.7 billion messages across the weekend. Klaviyo also launched Klaviyo AI, which combines Segments AI, Email AI, and Forms AI.
Cash generation improved sharply. Fourth-quarter operating cash flow was $38.6 million, up 84.8%. Full-year operating cash flow was $119.4 million, up 606.8%. Capital expenditures were $2.8 million in the quarter, up 98.0%, and $3.7 million for the year, down 76.9%. Deferred revenue was $40.1 million, up 59.7% from the prior-year quarter. Remaining performance obligations stood at $83.3 million. Free cash flow was $34.7 million in the quarter and $110.0 million for the year. Non-GAAP operating income was $16.2 million in the quarter, with a non-GAAP operating margin of 8.0%, and $78.1 million for the year, with a non-GAAP operating margin of 11.2%.
Guidance points to continued growth with modest non-GAAP profitability. For the next quarter, Klaviyo guided non-GAAP operating income of $22.5 million to $25.5 million and a non-GAAP operating margin of 11% to 13%. For the full fiscal year 2024, it guided non-GAAP operating income of $94.0 million to $102.0 million and a non-GAAP operating margin of 11%. Management also guided next-quarter revenue growth of 29% to 30% and full-year 2024 revenue growth of 27% to 28%. Risks include the ability to sustain growth, execute the business strategy, integrate with third-party platforms, maintain partner relationships, attract new customers, retain revenue, increase sales, and manage public company costs. The company expects gross margin to decline modestly in the near term as SMS volume rises, and seasonality remains a factor because holiday demand concentrates in the fourth quarter. Competition in a rapidly changing environment adds further uncertainty.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $201.6M | $175.8M | +14.7% | — | — |
| Gross profit | $156.6M | $117.0M | +33.9% | — | — |
| Gross margin | 77.7% | 66.5% | +11.1 pp | — | — |
| Research & development | $52.6M | $141.5M | -62.8% | — | — |
| Sales & marketing | $102.5M | $167.9M | -38.9% | — | — |
| General & administrative | $37.8M | $109.9M | -65.6% | — | — |
| Total operating expenses | $192.9M | $419.2M | -54.0% | — | — |
| Operating income (loss) | -$36.3M | -$302.2M | +88.0% | — | — |
| Operating margin | -18.0% | -171.9% | +153.9 pp | — | — |
| Net income (loss) | -$26.3M | -$297.1M | +91.1% | — | — |
| Net margin | -13.0% | -169.0% | +156.0 pp | — | — |
| Diluted EPS | -$0.11 | -$1.24 | +$1.13 | — | — |
| Customers | 143,000 | 135,000 | +5.9% | — | — |
| Net retention rate | 117.0% | 119.0% | -2.0 pp | — | — |
Risks
Klaviyo's rapid historical revenue growth may not be sustained, and management expects the revenue growth rate to decelerate. The September 2022 price increase positively affected 2022 growth, but after its one-year anniversary, related measures such as NRR decreased to 117% as of December 31, 2023 from 119% as of December 31, 2022.
As of December 31, 2023, approximately 77.7% of ARR was derived from customers who also use Shopify's platform, while only approximately 9.4% of new ARR came through the Shopify app store. The Shopify agreement expires in 2029, and any disruption to the integration or removal from the app store could materially harm demand and customer experience.
Klaviyo incurred a net loss of $308.2 million for the year ended December 31, 2023, and the loss widened from $49.2 million for the year ended December 31, 2022. Stock-based compensation expense was $342.1 million for 2023, largely due to IPO-related RSU vesting, and the company expects operating expenses to increase.
The SMS offering carries higher communication sending costs, and management expects gross margin to decline modestly as SMS volume increases, with the impact most concentrated in the fourth quarter due to holiday seasonality. This could offset gross profit gains even as overall gross profit dollars increase.
As Klaviyo moves up-market to enterprise customers, it expects longer and less predictable sales cycles than with small and mid-size businesses. For deals closed in 2023 and 2022, the median sales cycle was approximately 8 weeks, excluding self-serve channels, and delays could increase the lag between sales expenses and revenue.
Klaviyo faces competition from companies including Adobe, Salesforce, Mailchimp, and Braze, and the use of machine learning and artificial intelligence is increasingly prevalent. If Klaviyo cannot efficiently integrate AI features or competitors deliver more competitive products, demand for its platform could decline.
Klaviyo derived 36.5% of revenue for the year ended December 31, 2023 from customer accounts outside the United States, and its platform is currently only available in English and US Dollars. International expansion requires significant resources and exposes it to regulatory, economic, and political risks.
Klaviyo's results depend on demand from retail and eCommerce customers, and it generates a significant portion of revenue from small businesses that may reduce marketing spending during economic downturns. Weak or volatile economic conditions, inflation, and geopolitical developments could reduce customer usage and delay adoption.
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 Q4 FY2023 (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.