Klaviyo, Inc. (KVYO) Business Profile

What it does

Klaviyo sells software that helps consumer-facing businesses understand and communicate with their customers. Founded in 2012 and headquartered in Boston, it is led by co-chief executive officers Andrew Bialecki and Luciano Fernandez Gomez.

Its platform brings together information a business collects about its customers, such as purchases, browsing activity, preferences and support interactions. It combines those records into profiles that businesses can use to divide customers into groups, personalize messages and respond to customer actions. More than 350 integrations connect Klaviyo with other systems that hold customer information.

Businesses use the platform to run marketing campaigns across email, text, WhatsApp and push notifications. They can also set up automated sequences: for example, a message can be triggered when a shopper abandons a cart. Analytics tools help businesses examine purchase behavior and estimate measures such as customer lifetime value or churn risk.

Klaviyo also sells customer service tools. Customer Hub gives shoppers a place to track orders and get support, while Helpdesk helps service teams manage conversations. Customer Agent can answer questions and help shoppers with purchases. In June 2026, Klaviyo launched Composer to all customers; the agent analyzes customer and marketing information and helps create and optimize campaigns and automations.

The platform serves businesses ranging from entrepreneurs and small companies to larger enterprises. Retail and eCommerce are its established customer markets, but it also serves businesses in industries such as travel, restaurants and entertainment.

How it makes money

Klaviyo operates in one reportable segment, providing software that brings consumer data together for use across digital channels. It generates revenue primarily by selling subscriptions to its platform. The vast majority of its subscription plans are monthly.

Plans are tiered by the number of active consumer profiles stored and by the number of emails, text messages and WhatsApp messages sent. Klaviyo Service pricing also takes account of customer tickets and conversations. An active profile is an identified person who can be reached through at least one enabled marketing channel; profiles suppressed because consent was revoked or messages could not be delivered do not count as active. Klaviyo does not price its core subscriptions by the number of employee seats.

Customers can start on a free tier or sign up for a paid plan. As a customer stores more active profiles or sends more messages, it can move into a higher subscription tier. Klaviyo also sells additional channels and use cases, including analytics, advanced data features and AI agents, and can expand to a customer’s other brands, business units or geographies.

Klaviyo uses a credit-based model for Composer. For Customer Agent, customers pay when the AI independently resolves a conversation. These pricing methods sit alongside the subscription model rather than replacing it.

Revenue was $1,234.0 million in 2025 and $370.6 million in Q2 2026. Revenue grew 31.6% year-over-year in 2025 and 26% year-over-year in Q2 2026. Net revenue retention was 109% in Q2, reflecting revenue from an existing customer group over a trailing period, including changes from expansion and customers leaving or reducing use.

Customers and how it sells

Klaviyo serves businesses of different sizes, from entrepreneurs and small and medium-sized businesses to mid-market companies and enterprises. Its customers primarily operate in retail and eCommerce, although it also has customers in education, events and entertainment, restaurants, travel and business-to-business markets.

More than 205,000 brands used Klaviyo in Q2 2026. Customers with $50,000-plus ARR grew 36% year-over-year to 4,477 in the quarter and represented approximately 40% of total ARR. Annual recurring revenue, or ARR, measures recurring revenue on an annualized basis.

Customers can sign up through Klaviyo’s website without involving a salesperson. The company also attracts customers through word-of-mouth, commerce-platform relationships and agency partnerships. Its sales organization includes teams focused on new customers, mid-market and enterprise accounts, and growth within existing accounts.

The sales organization covers the Americas, Europe, the Middle East and Africa, and Asia Pacific. Sales outside the Americas accounted for 35.1% of revenue for the year ended December 31, 2025. Klaviyo currently bills customers in U.S. dollars.

Klaviyo’s named customers include Warner Music Group and Claire’s. In Europe, The Body Shop expanded its use from the U.K. into email, WhatsApp and marketing analytics across several other countries. In Asia Pacific, Country Road Group selected Klaviyo to consolidate its brands onto one platform.

Suppliers and costs

Klaviyo provides cloud-based software rather than describing a physical manufacturing operation. It stores its data in the cloud and uses computing, load-balancing and storage services to run the platform. Its primary cash needs include personnel, selling and marketing, third-party cloud infrastructure and the cost of sending outbound communications. It also uses contractors and consultants alongside its employees.

The company had 2,368 employees as of December 31, 2025, with the substantial majority in the United States. Its spending priorities include platform development, AI and machine learning, infrastructure, international expansion, and sales and marketing.

Text and WhatsApp messages have higher associated communication-sending costs. Klaviyo expects growing use of those channels to lower gross margin modestly, with the effect particularly pronounced in the fourth quarter because of holiday messaging. It also expects infrastructure efficiency, scale and greater use of higher-margin products to offset some of that effect.

Non-GAAP gross margin was 73.4% in Q2 2026. Klaviyo attributed the decline from the prior year to growth in text messaging and higher carrier fees. It updated mobile pricing in Q3 to pass higher carrier fees to customers, with the changes flowing through as contracts renew.

Competitive position

Klaviyo competes with marketing providers Mailchimp and Braze, and with larger marketing automation providers Adobe and Salesforce. It also competes with data-focused vendors, including providers of cloud data warehouses and operational databases. Those vendors can supply data infrastructure, while Klaviyo combines that infrastructure with applications for marketing and customer service.

Klaviyo identifies ease of use, integrations, data quality, product breadth, reliability and the ability to support multiple use cases among the factors on which it competes. AI capabilities are also increasingly important to competitive positioning. Some competitors may have larger customer bases, greater brand awareness, larger budgets or more resources for product development.

Klaviyo’s platform combines data, predictive intelligence and tools for acting on that data. Customer interactions can produce additional information that feeds the platform’s intelligence layer. Its integrations and agency relationships also help customers connect their systems and find support. Shopify recommends Klaviyo as an email solution for Shopify Plus merchants.

Our reading: The integrated data and application stack provides a potential switching barrier because customers can run several activities on the same consumer profiles, although the evidence does not establish how difficult switching is for a particular customer. Our reading: Integrations and partner referrals support distribution, but competitors can also have established partnerships and larger customer bases. Our reading: The accumulated interaction data may help improve Klaviyo’s tools, but continued AI development remains important in a changing market.

Growth opportunities

Klaviyo’s growth strategy centers on adding customers, expanding use within existing accounts and selling to larger businesses. It aims to increase adoption across marketing, service and analytics, as well as across more channels, brands and geographies. Customers can increase spending as their profiles and message volumes grow or as they add products.

The company is investing in sales capacity and platform capabilities for mid-market and enterprise customers. In Q2 2026, it added Warner Music Group and won Claire’s across email, text and analytics. It also signed an 8-figure 2-year agreement with an unnamed eCommerce brand covering email, text and marketing analytics.

International expansion is another focus. Klaviyo is investing in localization, infrastructure and sales capabilities, and it plans to add an EU data center in the second half of 2026. The company also intends to pursue customers beyond its established retail and eCommerce base.

AI agents are part of its plan to increase usage and add new ways to monetize the platform. Composer helps customers analyze information and build marketing campaigns, while Customer Agent handles customer conversations. Klaviyo expects automation to increase platform use as customers run more interactions and adopt additional use cases.

Klaviyo sizes the B2C CRM opportunity at a $160 billion-plus market. Revenue outside the Americas grew 35% year-on-year in Q2 2026, and its data and analytics products collectively grew ARR more than 100% year-on-year.

Structural risks

• Customer acquisition and retention: Klaviyo’s growth depends on attracting and retaining customers, expanding existing subscriptions and moving customers to higher-priced tiers. Customer dissatisfaction or higher churn could lead customers to cancel, reduce subscriptions or stop referring others.

• Competition and technology: The market is competitive and changing. Klaviyo must keep pace with competitors and developments in AI and machine learning, while some rivals have greater resources and customer reach.

• Security, availability and privacy: Outages, security breaches or problems with platform reliability, integrity or privacy could affect customers’ use of the service. Klaviyo is also subject to evolving and sometimes inconsistently interpreted privacy and data-protection laws.

• Costs and margins: More text and WhatsApp usage brings higher sending costs. Carrier fees, infrastructure spending and a greater proportion of text messaging affected gross margin in Q2 2026; the effect of updated pricing will flow through renewals gradually.

• Execution and expansion: Growth depends in part on selling in new industries and markets outside the United States, adapting products for larger customers, and scaling operating systems and internal controls. The company may not sustain its historical revenue growth rate.

Bottom line

Our reading

Klaviyo is a subscription software business built around using consumer data to run marketing and service interactions. Our reading: Its opportunity to expand within accounts rests on customers adopting more channels and tools, while its exposure includes competition, customer retention and the higher costs associated with messaging. Its push into larger accounts and AI agents adds ways to grow, but also depends on continued product and infrastructure investment.