Klaviyo, Inc. (KVYO) Earnings & Analysis

Latest quarter

Klaviyo reported Q2 FY2026 revenue of $370.6 million, up 26.4% from $293.1 million a year earlier and above the $361.5 million consensus. Adjusted EPS of $0.19 matched the consensus. Revenue also came in above the company’s own guidance of $359.0 million–$363.0 million.

The 10-Q attributed revenue growth to new customers, geographic expansion, greater platform usage and new offerings. It said approximately 42% of the revenue increase came from existing customers and approximately 58% from new customers. The filing reported 4,477 customers generating over $50,000 of annual recurring revenue at June 30, 2026, up from 3,291 a year earlier.

Klaviyo’s gross margin fell to 72.6% from 75.7%; the filing cited higher communication sending and cloud infrastructure costs among the increases in cost of revenue. Operating margin improved to −4.04% from −10.7%, while diluted EPS was −$0.03, compared with −$0.09 a year earlier. The company reported free cash flow of $82.9 million, up from $48.4 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Co-CEO Luciano Fernandez Gomez said enterprise customers were looking to consolidate marketing systems, and that Klaviyo had replaced legacy platforms at Claire’s. He said nearly 20% of Q2 annual recurring revenue came from customers using three or more products, while revenue outside the Americas grew 35% year over year.

Co-CEO Andrew Bialecki said Composer, an agent for creating and optimizing marketing, had over 95,000 users in its first month after its June launch. He said 27% of mid-market and enterprise customers used it, and Customer Agent adoption grew 40% quarter over quarter. In response to a question about how Composer usage translates into revenue, Bialecki said users were engaging more per customer profile and that some were sending more text messages. He said customers would ultimately spend on Composer credits for campaign ideation and generation.

CFO Amanda Whalen said Q2 net revenue retention was 109%, reflecting improvements in gross retention, text expansion and cross-selling, offset by the comparison with last year’s profile enforcement. Asked about the metric, she said that comparison would gradually wind out through Q1 of the following year.

On gross margin, Whalen identified carrier fees, infrastructure investment and a growing share of text messaging as factors. She said Klaviyo changed mobile pricing in Q3 to pass higher carrier fees to customers as contracts renew, with a neutral effect on 2026 revenue and gross margin. Whalen said investment in infrastructure and research and development supported product innovation, and that the outlook included costs from the Agency acquisition.

Asked about enterprise Customer Agent adoption, Fernandez Gomez said Klaviyo was testing the product with customers but declined to forecast conversions. For Q3, Whalen said Klaviyo expected revenue of $377 million to $381 million and non-GAAP operating income of $40 million to $43 million. She expected non-GAAP gross margin to decline slightly from Q2, followed by a greater-than-normal seasonal decline in Q4 as text growth outpaces the company overall.

Guidance

Klaviyo raised its FY2026 revenue forecast to $1.526 billion to $1.534 billion from $1.514 billion to $1.522 billion. CFO Amanda Whalen lowered the full-year non-GAAP operating income outlook to $212 million to $218 million from $222 million to $228 million, with a margin of approximately 14% rather than approximately 14.5% to 15%. She said the revised outlook included $10 million to $12 million in costs associated with the Agency acquisition and continued product innovation investment.