Summary
Klaviyo closed fiscal 2025 with fourth quarter revenue of $350.2 million, up 29.6% from $270.2 million in the prior year quarter. Full year revenue reached $1.23 billion, up 31.6% from $937.5 million. Gross profit was $252.8 million in the quarter, up 27.4%, and $921.5 million for the year, up 28.7%. Gross margin slipped to 72.2% in the quarter from 73.4%, and to 74.7% for the year from 76.4%. The company reported an operating loss of $1.8 million in the quarter, a narrowing from a $34.7 million loss a year earlier. Full year operating loss was $67.8 million, narrowed from $84.1 million. Net income was $7.0 million in the quarter, a swing from a $27.0 million net loss in the prior year quarter. Full year net loss was $31.8 million, narrowed from $46.1 million. Diluted EPS for the full year was a loss of $0.11, narrowed from a loss of $0.17.
Operating cash flow was $93.2 million in the quarter, up 55.0% from $60.1 million. Full year operating cash flow was $218.0 million, up 31.4% from $166.0 million. Capital expenditures were $2.5 million in the quarter, up 5.1% from $2.3 million, and $9.5 million for the year, up 60.2% from $5.9 million. Free cash flow, a non-GAAP measure, was $87.4 million in the quarter and $200.4 million for the year. Deferred revenue was $103.2 million at December 31, 2025, up 60.1% from $64.5 million a year earlier. Remaining performance obligations were $253.7 million, up 64.2% from $154.5 million.
Klaviyo ended fiscal 2025 with over 193,000 customers, compared with over 167,000 at the end of fiscal 2024. Customers generating more than $50,000 of ARR grew 37% to 3,912 from 2,850. The number of customers generating more than $1 million of ARR doubled year over year. Net revenue retention was 110% as of December 31, 2025, up from 108% a year earlier. The share of SMB+ customers using text messaging and WhatsApp rose to 29.6% from 26.1%. Revenue outside the Americas grew 42% year over year in fiscal 2025, and international sales represented 35.1% of revenue for the year. The company expanded its AI platform integrations, including the Klaviyo App in ChatGPT, and closed new or expanded accounts with Bayer, KIKO Milano, Nine West, and TaylorMade.
Management issued guidance for the first quarter of fiscal 2026 and the full fiscal year 2026. First quarter revenue is expected between $346 million and $350 million, representing 23.5% to 25.0% year-over-year growth. Full year 2026 revenue is guided to $1,501 million to $1,509 million, or 21.5% to 22.5% growth. Non-GAAP operating income is projected at $50 million to $53 million for the first quarter and $218 million to $224 million for the full year. Non-GAAP operating margin is expected at 14.5% to 15.0% for both periods. The company did not provide a reconciliation of non-GAAP operating income guidance to GAAP because certain items cannot be reasonably calculated or predicted at this time.
Gross margin pressure remains a theme. Klaviyo expects gross margin to decline modestly in the near term as text messaging and WhatsApp volumes increase, and the fourth quarter carries the heaviest impact because of holiday seasonality. The company also faces risks tied to its ability to sustain growth, execute its business strategy, integrate with third-party platforms, attract and retain mid-market and enterprise customers, expand internationally, and leverage artificial intelligence and machine learning. Macroeconomic factors, including tariffs, and a competitive, rapidly changing environment add uncertainty. Operating margin was negative 0.5% in the quarter, an improvement from negative 12.8% a year earlier, and negative 5.5% for the full year, an improvement from negative 9.0%. Non-GAAP operating income was $51.0 million in the quarter and $169.2 million for the year, with non-GAAP operating margin of 14.6% in the quarter and 13.7% for the year.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $350.2M | $310.9M | +12.6% | $270.2M | +29.6% |
| Gross profit | $252.8M | $234.7M | +7.7% | $198.4M | +27.4% |
| Gross margin | 72.2% | 75.5% | -3.3 pp | 73.5% | -1.3 pp |
| Research & development | $76.7M | $72.7M | +5.6% | $70.9M | +8.3% |
| Sales & marketing | $128.4M | $127.7M | +0.6% | $117.8M | +9.0% |
| General & administrative | $49.4M | $45.3M | +9.2% | $44.4M | +11.4% |
| Total operating expenses | $254.6M | $245.6M | +3.7% | $233.1M | +9.2% |
| Operating income (loss) | -$1.8M | -$10.8M | +83.0% | -$34.7M | +94.7% |
| Operating margin | -0.5% | -3.5% | +3.0 pp | -12.8% | +12.3 pp |
| Net income (loss) | $7.0M | -$426.0K | +1749.8% | -$27.0M | +126.1% |
| Net margin | 2.0% | -0.1% | +2.1 pp | -10.0% | +12.0 pp |
| Diluted EPS | $0.02 | $0.00 | +$0.02 | -$0.10 | +$0.12 |
| Customers | 193,000 | 183,000 | +5.5% | 167,000 | +15.6% |
| Net retention rate | 110.0% | 109.0% | +1.0 pp | 108.0% | +2.0 pp |
Risks
As of December 31, 2025, approximately 77.9% of ARR was derived from customers who also use Shopify's platform, while only 7.4% of new ARR in 2025 came through the Shopify app store. The Shopify agreement expires in 2029, and any disruption, non-renewal, or reduced integration could materially reduce demand and data access.
Competitors with superior AI capabilities, larger datasets, or more advanced autonomous agents may offer more effective solutions, and third-party platforms may deploy their own AI features that reduce demand for Klaviyo. Klaviyo must keep pace with generative AI and autonomous agent development to maintain its market position.
MD&A states gross margin declined to 74.7% for FY2025 from 76.4% for FY2024, and Q4 gross margin declined to 72.2% from 73.4%, due to higher text messaging and WhatsApp sending costs. The company expects gross margin to decline modestly as these channels grow, with the largest impact in the Q4 holiday season.
As Klaviyo moves up-market, enterprise sales cycles are expected to be longer than with small and mid-size businesses, increasing the time between sales expenses and revenue and requiring more sales and customer support investment. Delays may cause quarterly results to fluctuate.
Revenue depends on retail and eCommerce marketing spend, and weak economic conditions, tariffs, inflation, or trade conflicts could reduce customer usage, delay purchasing decisions, or increase collection risk, especially among small business customers.
For FY2025, 39.9% of revenue was from customer accounts outside the U.S., compared with 37.6% in FY2024, and Klaviyo added operations in Singapore and France in 2025. International expansion exposes it to regulatory, labor, currency, tax, and compliance risks.
Competition for experienced software engineers, AI and machine learning personnel, and senior sales executives is intense, and the loss of co-CEOs or key employees could disrupt the business. Klaviyo does not maintain key person life insurance on any employees.
Headcount reached 2,368 employees as of December 31, 2025, and the platform served over 193,000 customers. Rapid growth strains operational infrastructure, financial resources, and management, requiring further scaling of systems, controls, and reporting.
Klaviyo relies on third-party cloud infrastructure and message delivery providers for email, text, and WhatsApp messages. Disruptions, capacity limits, or cybersecurity events at these providers could interrupt platform access and harm customer experience.
International and U.S. operations are subject to privacy, data security, telecom, anti-corruption, export control, and tax regulations, including GDPR, TCPA, and CAN-SPAM. Compliance burdens and taxes targeting U.S. service providers could increase costs and affect operations.
Stock-based compensation expense was $166.4 million for FY2025, up from $138.8 million for FY2024, and RSU expense was $160.6 million. Future equity grants will increase expense and dilute stockholders.
Series B common stock has ten votes per share, and directors, executive officers, and affiliates held 65.1% of voting power as of December 31, 2025. The co-founders held 68.9% of Series B common stock, concentrating control and limiting 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
Net Revenue Retention
Summary, forecast, risks and KPIs are extracted from Klaviyo, Inc.'s SEC filings for Q4 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 1, 2026.