KVYO

Image source: The Motley Fool. Wednesday, August 5, 2026 at 4:30 p.m. ET Vice President, Investor Relations - Brad Sills Co-Founder and Co-Chief Executive Officer - Andrew Bialecki Co-Chief Executive Officer - Luciano Fernandez Gomez Chief Financial Officer - Amanda Whalen Operator: Hello, and welcome to the Klaviyo Q2 2026 Earnings Call. [Operator Instructions] Also, as a reminder, this conference is being recorded. If you have any objections, please disconnect at this time. With that, I would like to turn the call over to Brad Sills, Vice President, Investor Relations. Brad, you may begin. Brad: Welcome, everybody. We appreciate you joining us. Joining me today are Klaviyo Co-Founder and Co-CEO, Andrew Bialecki; Co-CEO, Chano Fernandez; and CFO, Amanda Whalen. Andrew, Chano and Amanda will first share their views on the quarter, and then we'll open up the line for your questions. Our earnings press release, investor presentation, SEC filings and a replay of today's call can be found on our IR website at investors.klaviyo.com. As a reminder, our commentary today will include non-GAAP measures. Reconciliations to the most directly comparable GAAP measures can be found in today's earnings press release, our earnings release, supplemental materials, which can be found on our Investor Relations website. Additionally, some of our comments today contain forward-looking statements that are subject to risks, uncertainties and assumptions, which could change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risk factors, uncertainties and assumptions and other factors that could affect our financial results are included in our filings with the SEC. We do not undertake any responsibility to update these forward-looking statements, except as required by law. Andrew, that concludes my introductions. We're ready to begin. Andrew Bialecki: Thanks, Brad, and welcome, everyone. Let's start with the headlines. Klaviyo has scaled to nearly $1.5 billion in annualized revenue run rate, growing quarterly revenue 26% year-on-year. We signed our largest deal ever last quarter, an 8-figure multiproduct contract with one of the fastest-growing brands in e-commerce. More than 205,000 brands now rely on Klaviyo. We offer our customers an autonomous B2C CRM. We vertically integrated the data infrastructure, experience infrastructure and the AI and agents to decide which experiences to deliver each consumer to drive better engagement, revenue and growth. Our customers are proving that the right infrastructure with all of your customer context and the right agents can deliver stunning consumer experiences that stand out and turn visitors into customers and keep them coming back. We're continuing to bet on being the source of truth for a business' consumer context and embedding that real time into agents and end consumer experiences. Using the scale and volume of our consumer data points we have to tune and guide AI models and agents, and building all of this faster and with more tailored guidance to each of our customers through our internal use of LLMs and agents. Every business will have an agent that decides, delivers and autonomously optimizes the experiences their customers have. That's the promise of an autonomous B2C CRM. I'd like to take a few minutes to share some updates on both the infrastructure and agentic layers of our products. Our data infrastructure now stores more than 9 billion consumer profiles and ingests and indexes more than 0.25 trillion data points every quarter. We know context is the key for high-performing agents and experiences. We spent the past few months improving the scalability and burstability of Klaviyo's infrastructure to handle data and messaging workloads that require personalizing and powering up to 100 million marketing messages and experiences in less than 20 minutes. This helps our largest enterprise customers with massive audiences as well as AI agents that want to ask more questions and do greater personalization. Having clean data and context is important, too. And we've taken that a step further by using machine learning and AI to train models to predict consumer behavior, and this powers features like personalized send times, channel preference, audience optimization and personalized product and content recommendations. Many of these features are included as part of our data and analytics products, which includes marketing analytics, and those products are collectively growing ARR more than 100% year-on-year. Our customers are finding there is real demonstrable ROI and growth from using AI to improve the marketing and experiences they deliver to consumers. Our marketing platform and infrastructure continue to deliver. While our messaging volume continues to scale into the hundreds of billions of messages per quarter, our compliance and deliverability infrastructure are continuing to improve. Delivery and engagement rates improved year-on-year, while unsubscribed spam and bounce rates decreased. We're also seeing the flexibility and scalability of our marketing platform being leveraged by enterprises and advanced users, both human and AI. Multichannel campaigns have increased nearly 50% quarter-over-quarter and marketing flows have seen a 48% increase in the number of messages and decision point actions added to those automations. Our B2C CRM platform sets the table for agents, ones our customers have built outside of Klaviyo and those we built for our customers. In June, we launched our Composer agent to all of our customers, and the response has been very exciting. As a reminder, Composer is our purpose-built agent harness that's trained to excel at analyzing your customers and past marketing and taking those learnings to create and optimize marketing campaigns and automations. In the first month since launch, Composer already has over 95,000 users. And very encouragingly, nearly 1/4 have turned into recurring weekly Composer users. We've given all of our customers 10,000 credits to experiment and use with Composer, and the feedback has been overwhelming. We're shipping updates multiple times a day to improve Composer's performance, breadth and usability. And as recently as last week, credit consumption grew 30% week-over-week. Usage is broad from entrepreneurs to enterprise, including 27% of our mid-market and enterprise customers being Composer users and exhibiting strong repeat usage. To share 2 examples, a fashion brand used Composer to design and send 2 marketing campaigns about shoes that were back in stock. They use Composer to select the audiences and consumers those would go to, ask Composer to calculate the best time to send those campaigns, had Composer run in a loop to review, audit and optimize their campaigns, ran a test send and then schedule both campaigns, all from our agentic interface. Another enterprise U.S. retailer used Composer to audit the performance and logic of marketing flows and made adjustments that increased performance by tens of thousands of dollars, all in a matter of hours. This is real agent ROI. I want to comment here on some of the reasons Composer is gaining traction. First, we've built the ability to understand the structure of data, the ontology and semantics into Composer to improve our agents' reasoning abilities. Second, Composer understands the style of a brand, what we call their taste because it has the direct context of marketing and business decisions they've made in the past. Third, Composer is available where and how users want to work. And fourth, it has access to aggregated knowledge we've curated about what makes marketing and consumer experiences convert. Focusing on these areas, we believe there is a long runway in front of us to improve agent performance and grow usage. As an example, in just the past few weeks post launch, we improved the percentage of generated campaigns users ended up using as part of their marketing to 46%, up from 35% just a few weeks ago as a result of improvements to taste, alignment and validation. We have a long list of these types of gains in front of us. Finally, Customer Agent, which gives every business an always-on agent for their customers, covering both support and sales conversations, has seen adoption grow 40% quarter-over-quarter and weekly resolution volumes grow nearly 80% since early June. Boston Proper launched their Customer Agent and within 2 weeks, had generated 3x ROI in incremental revenue by being embedded on their website while also resolving autonomously more than half of their support tickets. Earlier this year, we built out an AI agent, which we've embedded into Composer to help brands automate the setup and ongoing optimization of their Customer Agent. We believe Customer Agents are going to be ubiquitous, but many businesses aren't versed in how to configure or improve an agent and how to measure its performance and quality. For businesses of all sizes, from entrepreneurs and SMBs to enterprises, we're leading in building agents to train the agents that understand your business and can automatically configure, experiment and optimize agents you deploy to customers that not only handle support cases, but also delight customers and drive revenue and growth. All of this has resulted in our customers generating nearly $50 billion in attributed revenue or Klaviyo Attributed Value, KAV, in the first 6 months of the year. And we've done this while building agents for ourselves, allowing us to increase ARR per Klaviyo by 28% year-over-year. We're finding ways to increase our capacity. And with that, our ambition is increasing as well. The opportunity to give every business an agent to help them grow their business and delight customers is clear. And as we announced earlier today, I'm excited to build on our results so far with the acquisition of the Agency team. I've known the founder of Agency, Elias Torres, for over a decade, and he's been on the forefront of AI agents for customer experiences and is a technologist and a builder, I deeply respect. He'll be joining Klaviyo as our Chief Product Officer, and together, we'll build on the momentum of Composer, Customer Agent and the entire B2C CRM. Before I hand it over to Chano, I'm excited to welcome Erica Smith as our next CFO. I'd also like to say a big thank you to Amanda for her leadership over the last 4-plus years, growing and scaling Klaviyo, championing our customers and furthering our mission of empowering businesses and creators to own their destiny. And with that, over to you, Chano. Luciano Fernandez Gomez: Thanks, Andrew. I'm about 2 quarters into this role, and the go-to-market changes we've made are showing up in the numbers. We strengthened sales leadership and brought up more rigor to our process. And in Q2, we saw gains in sales efficiency, both in the Americas and globally. B2C CRM is a $160 billion-plus market opportunity, and we're capturing more of it every quarter, moving upmarket, expanding internationally, cross-selling and pushing beyond retail represent a great long-term growth opportunity for us. Agents open up an entirely new layer on top of that. Let me walk through where growth is coming from and what's next. Enterprise momentum is where these changes are showing up first. Many of the enterprise conversations we are having start with the same problem, a business looking to replace a legacy system because it can no longer keep up. In Q2, our larger customers, those with $50,000-plus ARR grew 36% year-over-year to 4,477. This group now represents approximately 40% of total ARR. Our $1 million-plus ARR customers continue to outpace growth of the overall customer base. This quarter, we were thrilled to welcome Warner Music Group, one of our most significant new contracts to date. They have over 1,400 artists and millions of fans, and every artist needs to reach their audience in their own voice. Our platform makes that possible by consolidating everything a business knows about its customers in one place so that every relevant team can act on it real time. Their Head of e-commerce and Merchandising recently shared that Klaviyo's tools are second to none and will be integral to supercharge the e-commerce business they are building. We also won Claire's, replacing 2 legacy vendors in a competitive bid across e-mail, text and analytics. That's our enterprise motion working as designed. We're building champions inside the brand, educating executives on the value of consolidation and clearing procurement and CIO approval. We're also selling deeper into the existing customer base with a strong expansion led by text messaging. We're also winning down market as can be seen with strong net adds, which were up 29% year-on-year. And we're seeing more multiyear commitments and more products being sold across our base as our 205,000-plus customers increasingly use Klaviyo as a full complete platform, which brings me to our second growth lever, multiproduct adoption. In Q2, nearly 20% of ARR came from customers using 3 or more products. This is important because of our multiproduct customers retain more than 6 points better on gross retention than single product customers. Our largest ever omnichannel deal closed this quarter, an 8-figure 2-year agreement with one of the fastest-growing brands in e-commerce and a top seller on TikTok Shop. They're running their entire program on Klaviyo, e-mail, text and marketing analytics because of the value of unifying one data-powered platform. We're also extending Klaviyo's relevance beyond traditional e-commerce. This quarter brought our first NFL franchise, the San Francisco 49ers plus hospitality names like [ SuiteHost ]. Every business that wants a direct personalized relationship with its customers is a business we can serve, and that keeps widening the market in front of us. That brings me to our third growth lever, international. Revenue outside the Americas was up 35% year-on-year. With the go-to-market and product investments we've made to internationalize Klaviyo, the runway ahead remains significant. EMEA revenue outside the U.K. was up 41% year-on-year, and we moved into Q3 with our strongest large deal pipeline in EMEA yet. K:London drew more than 1,000 attendees and our Paris and Berlin events were at capacity. We are backing that momentum with a new France office and an EU data center coming in the second half of the year. In EMEA, The Body Shop expanded from the U.K. into e-mail, WhatsApp and marketing analytics across Germany, Switzerland, Belgium, Austria and the Netherlands. And in APAC, we closed one of our largest new logos deal ever in the region with Country Road Group. I was in the region and met with their team, so I heard firsthand what choosing Klaviyo meant for them. It was a competitive multistage RFP win that consolidated 5 brand's fragmented stack onto one platform sourced through our first global AWS Marketplace deal. The focus is to get the same big deal motion and country-by-country expansion moving at the pace EMEA is moving at today. In the Americas, we're focusing resources where we see the biggest opportunities, enterprise, a stronger cross-sell motion and new verticals. We're also investing in product specialist roles so our teams can go deeper with customers as they adopt more of the platform. Before I close, echoing Andrew's note, Amanda, thank you for everything you built here. We're grateful you will stay on an advisory role through November, and we're thrilled to welcome Erica Smith as our next CFO on September 1. She brings deep software experience at the scale we are heading into, and the handoff is going to be seamless. With that, I'll turn it over to Amanda. Amanda Whalen: Thanks, Chano and AB. The growth we're building for the long term is broad-based as we expand across enterprise, international and multiproduct and make advancements with our agentic solutions. Q2 was a strong quarter with revenue of $370.6 million, up 26% year-over-year and ahead of our guidance, driven by notable strength in text messaging, WhatsApp and growth in marketing analytics. It was a strong quarter for new business, driven by sizable enterprise deals and cross-sell momentum across the base. This is proof that customers of all sizes are increasingly valuing Klaviyo as their B2C CRM platform. As Chano mentioned, in the enterprise, we're winning new customers from larger legacy vendors. The pipeline in this segment is growing, and we have the team and the platform to serve this market at scale. The value that customers realize from our platform continues to expand. Our attributed revenue or KAV per message continues to grow, driven by increasing personalization powered by automation. Our customers continue to shift their messaging volumes towards automated flows, which generate 10x more revenue per message compared to static campaigns. Because our usage-based model is directly aligned with customer success, as customers realize more value, they grow and expand, and we grow alongside them. Net revenue retention was 109% in Q2, reflecting strengthening gross retention, increasing text messaging expansion and our strongest quarter of cross-sell since our IPO. These were offset by the lapping of last year's profile enforcement, which will continue to impact NRR through Q1. It's important to remember that NRR is a trailing 12-month metric and the leading indicators of our business are strong. Customers are staying with us, expanding with us and buying more products from us. Turning to the P&L. Non-GAAP gross margin was 73.4%, down 3 points year-over-year, driven by strong growth in text messaging, along with higher carrier fees, which we chose to fully absorb in prior quarters. In Q3, we updated our mobile pricing to pass the higher carrier fees on to customers going forward, along with other changes to reduce friction in our mobile pricing mechanics. The new pricing will start to flow through gradually as we cycle through renewals. Due to timing and various puts and takes, this will be neutral to 2026 revenue and gross margin, but an overall positive impact for our customers and for the business. While growth in the text business impacts gross margin, it's an important channel for Klaviyo. Text has strong unit economics, driven by its lower cost of acquisition and higher rates of expansion. It also positions us as our customers' omnichannel platform of choice, driving higher retention and enabling a long runway to cross-sell other products with higher margins over time. Non-GAAP operating expenses were approximately 60% of revenue, down roughly 3 points year-on-year. Relative to last year, we saw leverage in sales and marketing and G&A, while R&D as a percentage of revenue increased slightly from investments we're making behind product innovation to drive our next phase of growth. The results of these investments can be seen in our increased pace of product launches in the quarter, including the important advances with Composer and Customer Agent. Non-GAAP operating income was $50.9 million in Q2, representing a 13.7% non-GAAP operating margin. We continue to drive efficient growth at scale with another quarter of operating at the Rule of 40. Turning to the balance sheet. We generated $83 million of cash and ended the quarter with a total cash balance of $833 million. We used approximately $240 million in cash to repurchase shares during the quarter, leaving us with $160 million in capacity under the $500 million buyback authorization we announced in March. We've remained active in the market and expect to continue repurchasing our stock under this program as we believe our current valuation represents an attractive opportunity. Our strong cash position provides us with the flexibility to also continue investing in growth and pursuing M&A that accelerates our road map, as Andrew noted earlier, with our acquisition of Agency. Turning to our outlook. Based on the Q2 outperformance and the broad momentum we're seeing, we are raising our full year 2026 revenue guidance by $12 million at the midpoint, higher than our beat this quarter. We now project 2026 revenue between $1.526 billion and $1.534 billion, representing 24% year-over-year growth. We are revising our full year 2026 non-GAAP operating income guidance down to a range of $212 million to $218 million, with non-GAAP operating margin of approximately 14%. This amounts to a $10 million reduction from the midpoint of our prior outlook and includes $10 million to $12 million in costs associated with our Agency acquisition as well as continued investment behind product innovation. For Q3, we expect revenue in the range of $377 million to $381 million, representing growth of approximately 21.5% to 22.5%. We expect non-GAAP operating income of $40 million to $43 million or a non-GAAP operating margin of 10.5% to 11%. We expect non-GAAP gross margin to be down slightly in Q3 versus Q2, followed by a greater-than-normal seasonal step down in Q4 as we continue to see text growth outpace total company. To close, this was a strong quarter as customers increasingly lean into Klaviyo as a platform solution. Our business model is built for the long term with compounding growth across enterprise, international and multiproduct adoption. With agents, we're at the very start of our next S-curve. The B2C CRM market is large and the opportunity ahead for Klaviyo is significant. On a personal note, this is my last earnings call as CFO of Klaviyo. I still remember my first whiteboarding session with Andrew. I left that conversation convinced of the power of the model, the size of the opportunity and the strength of the team. Everything since has reinforced it. It's been a privilege to build this business alongside you, Andrew and Chano and this entire team. I'm grateful to all of you on the line as well. I leave with confidence in the business and confidence knowing it is in strong hands with Erica as she steps in. Thank you. And with that, we'll open the call for questions. Operator: [Operator Instructions] Our first question comes from Elizabeth Porter from Morgan Stanley. Elizabeth Elliott: And Amanda, I just want to say it's been great to work with you and wishing you the best of luck in the next chapter. My first question, I wanted to dig in a bit on Composer. It was really great to hear about some of the adoption metrics. And historically, we think about the number of campaigns a brand could run really being constrained by just that available marketing headcount and production capacity. So as Composer removes some of that bottleneck, what have you seen from the early adopters in terms of that campaign creation velocity and how that's translating to potentially higher customer contract volumes and incremental platform usage? Andrew Bialecki: Yes. Thanks, Elizabeth. So we're obviously a month out from launch, and the results have been, I think, really great. So like you said, let me frame it up for folks. The way we think about Composer is it helps with really, like, let's say, 3 different things. One is doing the research that sort of comes before actually building a marketing campaign or automation actually then generating that campaign or marketing flow. And then the third is actually helping like verify, make sure that it's right, that it's optimized and ongoing optimization. So we've actually spent a lot of time on those first 2 categories of helping customers do the research, figure out which customers might be interested in which products or services, where there are opportunities and then also with the actual like creative generation. And yes, we've been very excited to see the number of campaigns we were building. We talked about some examples, something that's become pretty common for these weekly active users is people coming in, building either prompts with Composer to kind of figure out what they want to do or bringing prompts that they've integrated from other places, maybe from another document or another chat that they've had and then generating that. And what's great is oftentimes those briefs, they've got an idea of what they want to do. But like I shared in the example, they may say things like, well, I'm not actually sure what the right time to send this is or who exactly is the right audience. And what's great is they can use all of the information they have stored in Klaviyo, all of the historical data to basically allow Composer to pick that. And then when we think to -- a little bit of question on like how does that flow through into incremental usage. One thing we've definitely seen is that customers, they're rate limited by the ideas they have and then how fast they can execute. So we are seeing folks that use Composer. They actually do -- they're using more of Klaviyo. Now because our core pricing axis is that -- is the profile, what we're finding is that's driving more engagement per profile and therefore, more Klaviyo attributed value, more attributed revenue. And that's why we're going to -- we're watching that. That's why we're seeing a lot of folks use Composer. We think some of that will flow through and help -- for instance, we see some folks sending more text messages because Composer is creating those campaigns. But we actually think a lot of the value is going to come from that increased attributed revenue. And ultimately, people are going to spend on Composer credits to help them do that ideation and generation, knowing that it's going to drive that incremental revenue and sales. Operator: Our next question is from Raimo Lenschow from Barclays. Okay. Our next question comes from Arjun Bhatia from William Blair & Co. Arjun Bhatia: I'm curious maybe 2-parter, just on SMS, it seems like that's seeing a lot of solid traction. I'm curious if there's been an inflection there or it's just maybe a factor of Klaviyo moving further up market and seeing enterprise success. And then the follow-up for Amanda, I'm curious on the gross margin front, what the pass-through of the carrier fees, how much of that is weighing on gross margin this quarter? If there's any way we can quantify that to just help us with our models, that would be super helpful. Andrew Bialecki: Thanks for the question. So I'll take the first part on text. And yes, that's the right read. We've definitely seen really great growth from text and now also WhatsApp as a channel. And we've seen those messaging channels grow. And the basic -- what customers are telling us what I'm hearing them is, hey, we want to put all these messaging channels in one platform. We know Klaviyo has that centralized profile. I can use all the same personalization. I can use it across channels. I can coordinate across channels. So we shared the stat that we're actually seeing a pretty dramatic increase. I think it's 50% quarter-on-quarter of people building multichannel campaigns. So this idea from maybe a couple of years ago that like you run these channels independently, we're seeing a lot of our customers say that doesn't work for them. And that's part of our vision around like what is the B2C, the consumer CRM -- and then yes, we are definitely seeing a lot of larger enterprises also choose to consolidate. They might start with Klaviyo for e-mail, but now they're switching over -- moving over to text messaging and WhatsApp. They're then using our marketing analytics product for personalization and then obviously using like Composer to stitch all of that together. That's a very common pattern we're seeing when it comes to people consolidating the marketing tech stack. Amanda Whalen: And to your question on gross margin, Arjun, the way that I would think about that is that there were 3 primary drivers that were happening during the quarter. Those were carrier fee impacts, investments we are making in infrastructure and the increasing presence of text in our business. On carrier fees, as we mentioned, we made a change in Q3, and we are now pricing our [ T-Mobile ] business to pass through the carrier fee increases that we have seen to our customers. As you look out over the balance of the year, we would expect that to be neutral, both to gross margin and to revenue just due to the timing of how it flows through renewals as contracts come up for renewal. On infrastructure, we're making investments to drive product innovation and to drive growth. And I think the track record that you have seen from us over time is that we make these investments from time to time. And then we've got a strong track record of having them deliver leverage as we continue to grow. And the team is very focused on that going forward. And then the last is text and the increasing portion of text that's making up of our business. As Andrew just said, we're seeing tremendous success there. And that is a strategic choice that we're making. Text for us is a really strong business because it's got good stand-alone unit economics and it plays an important strategic role in the broader portfolio. So on a stand-alone basis, it comes with a lower CAC because it's primarily cross-sold and it comes with higher expansion because as customers get accustomed to using it, they continue to grow their expansion and grow their usage at a pretty rapid pace. And then strategically, having a multiproduct customer really positions us as those customers' broader B2C CRM platform, their omnichannel platform and partner of choice. That drives stronger retention, as Chano mentioned, over 6 points higher for customers who are multiproduct and it drives the runway and the potential for us to cross-sell more higher-margin products in there over time. So bottom line is that gross margin was driven by this combination of different strategic choices. Carrier fees are now being passed through. And the strategic choices that we're making with the growth in text drives positive benefits for the business over the long term. Operator: Our next question is from Tyler Radke from Citi. Tyler Radke: Amanda, again, echoing the pleasure in working with you. Can you just dive in a little bit more on the op margin side of the equation? And I understand there's some dynamics with mix and SMS, but strategically, how are you thinking about the right framework for investing in growth? And anything we should read into that in terms of margin expansion beyond 2026? Amanda Whalen: Yes. Thanks so much, Tyler, and thank you so much for the kind words. It's been wonderful working with you as well. On operating margin, the way that I think about operating margin this year is that we are making some very deliberate choices to make investments behind our acquisition of agency, so driving strategic growth and importantly, behind product innovation and building the capabilities that are really going to drive growth over the long term. In the back half of the year, what you see is that investment in product innovation. It shows up in this infrastructure investment that we just made. It's showing up in our R&D, and it is driving great results. We're really pleased with the pace of innovation, the way that it's picking up, the results that Andrew talked about on the call with customer agent adoption up 40% quarter-on-quarter. Over 1/4 of our mid-market and enterprise customers using Composer and the great traction that we're seeing in enterprise with some of the big strong lands like Warner Music Group and Claire's and the 49ers, all of which are enabled by the investments that we've made in our scale and burstability, just as Andrew referred to earlier. And so those investments are really showing strong early results and helping us drive this potential growth over the long term. Now Agency did impact, as we mentioned on the call, about $10 million to $12 million of P&L impact this year. That's included in the outlook that we shared. And as you think about leverage over the long term, I would focus on the fact that if you exclude that from our numbers this year, we're still driving over 1 percentage point of leverage year-on-year. So this is a business that can continue to grow strong, make these investments in innovation and drive leverage over time. Operator: Our next question is from Samad Samana from Jefferies. Samad Samana: Maybe let's dig into the agency acquisition, especially given that Elias will be the Chief Product Officer going forward as well, especially as I think about that in the context of AB with the co-CEO model focusing more on the product side. So maybe help us understand what Agency brings more specifically and the decision to add a Chief Product Officer with AB's focus as well, just because we think that, obviously, there's a lot going on with AI. So it's great to bolster the bench, but help us think about what the division of labor will look like. Andrew Bialecki: Yes, that's great. Yes. I mean that was kind of the headline for us when I talked with Elias about this. It really is that like, hey, how do we attack on -- or build on more dimensions at once. So first, I mean, Elias is somebody I've known for over 10 years. We've built and scaled companies together. So somebody I know well, we work really well together. And what was interesting was we got to talking about what we believe about the future about agents, and we both are strong believers that every business is going to have an agent, an agent that can both help them grow and run their business, make great decisions and then also an agent that can personalize and deliver experiences to every single one of those customers. We think this is just -- this is going to be ubiquitous, as I said in the opening. The question is just how do we get there faster? So that was the entire intent. And then when it comes to dividing things up, we work really well together. We're both engineers. We both love working with customers. I mean one of the things that Chano and I have talked a lot about is as we continue to do more in enterprise, I'm spending a lot of time with customers, helping figure out what we need to build for them, make sure that we can serve a lot of some of the like very high scale but very unique needs they have. But when it comes to agents, I think both across Composer, Customer agent, we have a lot of surface area, a lot of ambition, and this is going to help us just go faster. Operator: Our next question is from Raimo Lenschow from Barclays. Raimo Lenschow: And it's more bringing Chano in as well. If you think about the -- in a way, the setup is much broader with -- if you have customer agent Composer agents because it's just more a full set CRM, how does it help you in your conversation on the enterprise? You mentioned some legacy replacements as well. Just talk a little bit about how that broader vision from Klaviyo is just helping you engaging with larger customers. And all the best for Amanda. Luciano Fernandez Gomez: Thank you, Raimo, for your question. Well, the trend that we're seeing in enterprise is a consolidation. That is one area. The second area is an innovation play, and that comes all together with a better together story. So the enterprise companies are looking for someone that bring kind of the innovative play on one single platform, they understand much more the value of the one single data in terms of the context and what that provides for the outcomes that the agents will provide. So we're bringing that value altogether is definitely a significant plus in terms of the conversations we're having -- happening in terms of how many platforms we can replace. You take someone like Claire's, we replaced 2 legacy platforms, you take someone like Warner Music, it was even more, you turn someone like Country Road. It was kind of a few number of platforms and legacy as well that we are taking over. And clearly, what they want to see is we do have a vision as well in terms of how AI is going to be basically helping them to drive much more Klaviyo attributed value and much more revenue. So Composer and customer agent are definitely 2 very strategic components, right? I mean in most of the cases, it is rip and replace most on the enterprise, and they are looking for someone that can bring the strategic vision and can bring basically the full power of the better together story because it provides a much better TCO with great outcomes in terms of value. So it's of tremendous help. And it's a very key reason why we win jointly with the architecture and the infrastructure and certainly some of the improvements that we've done and the investments that we're doing, the stack around 100 million messages in less than 20 minutes is quite staggering and quite significant for many of our enterprise customers in terms of the reliability and basically the volume at which we can operate. And as they grow, that gives them as well peace of mind that we can support them on the journey going forward. Andrew Bialecki: Yes. Let me give you just one example of what we're seeing. Actually, Composer adoption we've seen is actually faster with our larger customers. in enterprise. And the reason for that is not only are they using it to create net new marketing campaigns and content because they just have such a large volume. But also, we found that like for larger enterprises, they have such a complexity in terms of the automations they want to run, the number of campaigns they use. They have more data, so they're doing more personalization. So they're using our marketing analytics, AI models to better personalize content. So a very common pattern for Composer we've seen is folks will use that and run it on some cadence, weekly or every couple of weeks to understand, first of all, like what do they have built. I actually, I've talked to some customers where somebody is new to the business, like they said it just got hired. And they use Composer to actually explore how that brand is doing marketing and ramp up. And then they can make changes with more confidence from Composer because we talked about not only does it create, it also validates the work. So we've seen a lot of these kind of review and audit use cases. So it's early. It's only been 30 days. I'd say like 2 things we're seeing with Composer is in the enterprise, there's already a lot of usage and adoption because it takes away a lot of -- it helps people wrangle the complexity and allows them to do more. And also, we're also seeing like a lot of new customers who are brand new using Composer to just get started. They really don't know anything about marketing. That's obviously for our entrepreneurs. Luciano Fernandez Gomez: Maybe, Raimo, to give you one concrete example, right, I was with Country Road that I mentioned in the script, and I asked the CIO, why do we win, right? And we were competing with the typical suspects in terms of large markets, right? And his answer was like you won, we decided for you because of your AI vision and openings, your interoperability, especially as well with some of the forward players like the Anthropics and Open AIs and the connections that you bring. And because of the robustness of your infrastructure, those were the reasons why you guys won. Operator: Our next question is from Matt VanVliet from Cantor. Matthew VanVliet: I guess when you look at the rate of adoption you're seeing on agent -- on the various agents and Composer that you have now, how should we think about the monetization of that over the next year or 2? How much uplift are you getting at existing customers as they use the platform more? And any customers you've had land with those products, how is the average ARR for those customers trending versus similar cohorts without agents fully deployed? Andrew Bialecki: Yes, sure. So let me -- first, I'll get -- I'll speak a little bit to the monetization, and I can explain where that's built in or how that's we're ending up with that guidance. So for Composer, we think of it as like it's intelligence to help you run and grow your business. So it's a credit-based model. And actually, when we released Composer, we gave everybody about $100, 10,000 credits to use over 90 days to start to experiment. And we think that's a very good model. Klaviyo has always been focused on how do we help our customers, our businesses grow faster. We measure that through Klaviyo attributed value attributed revenue. And one of the things we're able to do is show folks that like, hey, if you use more of our Composer intelligence and models, literally, you'll get better results either because we're helping them generate net new marketing or customer experiences that they didn't have time, they couldn't think of, right? They didn't know about or they didn't have time to create or we're helping make their existing marketing better. So there's real ROI. So we've already seen a number of customers start to pay for Composer, even though we're still in this kind of this 90-day trial period. And I expect we'll see that grow over time. And our ultimate goal is we want to be the intelligence that our customers rely on and then obviously tightly coupled and integrated into our marketing and data infrastructure, but it's what they use to understand who their customers are, decide what marketing, what experiences to deliver and then constantly optimize those. And we think that's a very, very large market. When I talk to our customers, they constantly feel like they don't have enough time to understand and execute various analyses or build new marketing. And if they had AI to help them do this and it's revenue accretive, that's something that they want to use. Then for Customer Agent, the pricing model is a little different. That is outcome-based and resolution-based -- so for our customer agent, our customers pay every time our AI resolves a conversation on its own. If it proxies back to another contact center or help desk software, like our customers don't pay for that. And what's driving growth there is really 2 things. The first is, as Chano mentioned, we're doing a lot more. We're doing a lot more building a lot more pipeline with enterprise, and that's both for marketing, but as well for service and for customer agent. And what's really cool is we're starting to see a lot of use cases for customer agent where people want to use them together. They're using customer agent to collect information that they're going to leverage in marketing and vice versa. So those tend to -- one thing we really believe in is just how do we automate and make it a great customer experience. So we've done a lot of work to build out not only an agent builder to make it easier to build agents. A lot of folks don't have experience with that. But even we've invested in the last couple of months in an agent that will train other agents. And we think this is the future of how customer agents are going to be built and deployed, not only the first time that you kind of configure them and set them up, but also how you ongoing optimize them or teach them new things. And what that's led to is a big increase in what we measure resolution rates. So we've seen since we deployed that, we've had one customer, a large enterprise business went from a 52% resolution rate to a 79% resolution rate in 7 days. And that didn't require extra engineering effort. It's because of our agent that's helping them understand where the gaps are, allowing them to input, share the information, connect the tools and data sets they need and get smarter and faster. So as we drive up that resolution rate, that drives up more volume. It also means that it's easier for us to run these kind of proof of concepts and pilots with enterprise customers. And then the last thing I'd say is that we're also aiming for -- we want everybody to have a customer agent. We know even smaller businesses, they still get a lot of customer questions that they don't have the time and the bandwidth to answer, and they need a customer agent to represent them. And so with that, because we have now this agent that can help you build an agent, even if you're not particularly technical or aren't up to speed on all the latest and greatest on agent tech and nomenclature, because you can do that, we're seeing a lot more customers deploy agents as a result when they start to use our agent trainer. So it's still growing. Composer is only 30 days out. But I think we're all very excited about the progress we've seen even in the last couple of weeks for both of those products. And we do think there'll be large revenue drivers over time. Luciano Fernandez Gomez: Let me add a little bit of color, for example, on customer agent and what we are doing with some of our enterprise customers. And as I mentioned, there were significant improvements that were brought on customer agents, the customer agent making certainly a much more robust and viable product for our enterprise customers. And we went and discussed with our top 40 enterprise customers to start with in terms of let us prove you that we have a great agent that can provide much better results than the ones that you're using today. So we engaged in the conversations with them. We then follow up with a proof of concept, and we're now in the high single digits on some of those kind of conversations on that journey. And that certainly will keep increasing during the course of the next few weeks. They are testing it. We're helping them to fine-tune during a month or so. And then once we sees the outcome, we -- expectation is that some of those customers will start converting -- of course, I don't want to make here any forecast, but clearly, some of those customers are very large in the numbers of millions of conversations on a yearly basis. And certainly, we believe that solution is ready and we can drive that value. Amanda Whalen: And then to your question on -- if we want to say just quickly on the uplift, it's meaningful. It's a meaningful uplift to their total average ARR for customers. And as normal for products like this, there's a wide variety depending on the adoption because it's outcome-based, and it depends on how frequently customers are using it and how much they're relying on it. But we are definitely seeing a meaningful contribution there in terms of the customers who have adopted it. Operator: Our next question is from Terry Tillman from Truist. Terrell Tillman: That's exciting. Glad it worked this time. So AB, Chano and Ryan, and welcome aboard, Brad and Erica and Amanda, good luck with whatever you do next. That's been great working with you. My question is going to be on the enterprise business. I'd like to double-click on that. It's good hearing about an 8-figure. I think it was a 2-year deal. I think last quarter, you had like a mid-7-figure transaction. So those are sizable. I think, Chano, you said that you've got some newer sales leadership there. What about actually the sales capacity? Do you have all the right people on the field? Are you still building out that sales team? And also, I think last year in Boston, when you had the customer conference, I think you had -- it was a division of Accenture that was actually going to start partnering with you all like maybe agencies are helping you. And just lastly, on this enterprise side, is there anything missing product market fit? Or do you feel like you have everything at this point? Luciano Fernandez Gomez: Great questions, Terry. Thank you so much. So first, let me start with sales leadership. As you know, we brought in a new CRO, a new Head of Americas. These guys have worked with me before, and they really know enterprise business quite well. They've been helping out with attracting and bringing in great talent on board as well in terms of sales leaders across the board. As you rightly say, yes, we -- last quarter, we have a really very large deal. I mean, this quarter, we have our first ever 8-figure deal that is a 2-year. We also have inside basically our largest transaction ever in EMEA and our large pipeline ever year-to-date as well that we are looking, especially in our international business. So those are all good early indicators. Let me remind you that, as I always say, this enterprise business is going to be a journey, right? We are moving a sales basically go-to-market motion from being very transactional to trying of being much more sales consultative. We are moving from a single stakeholder to a multi-stakeholder relationship. We're moving them from less senior people to much more senior people that they need to liaise with much more kind of business case driven. And that takes time, right? So all the early signals and all the progress that we are making and when I look at the number of deals that we do have, it doesn't matter how you're cutting over $500,000, $1 million, again, which is outpacing our regular business in terms of growth. All is looking great even in terms of the pipeline, what is looking good in terms of the journey, but it will be a journey, right? So in terms of the sales capacity, we do have the sales capacity we need. I am not someone that likes to just add feet on the street with our productivity. So I can also tell you that we remain flat, but definitely, our productivity per head is much higher than it was kind of a year ago. And that is what -- how likely to be and how we want it to be because what I want the sales teams to do is make sure that they do qualify deals properly. And a good outcome is we win 3 out of 4, which we participate because these cycles are expensive, right? So we're going through that process where we are training, we are educating, we are learning, but we do have the right leadership in place. We do have the right sales capacity in place. Certainly, we're a growth company, Terry. So when we feel like we are producing more of the right yields and we get to the productivities per head that are maximum, as we see more territories and more opportunities for expansion when that will come, we will have to invest. And we will invest in order to gain and win those opportunities. But overall, we do have the pieces of the puzzle in place, right? We're also working with new agency partners. I mean you heard our partnership, it doesn't matter with Accenture, but there are also some key agencies in the marketing business that are working with much larger customers that we didn't have relationship with. So we're also expanding, obviously, our ecosystem. And at the same time, we're doing our investments in infrastructure, right? Those are some of the volume investments that we talked before, that is our EU data center in EMEA and a much better guardrails in terms of security, safety, compliance, especially in terms of some of the requests that come more from some of the largest companies. So it is a journey as well there, and it will take a bit of time. Early signals and early data and early facts are good and are solid. But if you think about it, this opportunity is massive for us. and we're just in the early innings. So I can only be excited for the long-term opportunity that this provides to Klaviyo, and I like how the team is performing, but I expect that we will be getting much better over time as we really engage in many more sales cycles and understand better how we win. Operator: Our next question is from DJ Hynes from Canaccord Genuity. David Hynes: Amanda, I wanted to ask about net revenue retention. Look, I realize it's early for Composer customer agent to contribute. But everything else I'm hearing, right, improving gross retention, SMS strength, multiproduct customers would make me think that NRR could start to gradually inflect up. So I guess the questions are like, a, how much is profile enforcement overhanging on that metric? B, does the intra-quarter picture tell us something different than the trailing 12-month metric? And c, I know it's not a metric you guide to, but like is it right to think that growth -- that net revenue retention should go up from here? Amanda Whalen: Yes. Thanks, DJ, and it's a great question. On NRR, just as you said, we're seeing strength and we're seeing strong performance and improvement in the metrics that for us are the ones that matter for the long-term health of the business. That's improving gross retention, strength in text expansion and customers' usage of text and cross-sell, which has been particularly strong and increasing over time. This quarter, those benefits were offset by the lapping of profile enforcement. And as you think about NRR going forward, I would think about that impact of profile enforcement gradually winding out of the metric since it's trailing 12 months through Q1 of next year. But as we think about the business going forward and back to how do we think about long-term outlook here, what we feel very positive on is the fact that customers are staying with us. They are expanding their business with us and their usage of our product, and they are buying more products for us. And I think those are the ones that are really going to drive NRR over the longer term. Operator: Our next question is from Derrick Wood from TD Cowen. James Wood: Great. I guess this is for AB. I mean international continues to be a really bright spot. And over the last couple of years, we've heard from you about your journey with expanding languages and local support and sales teams in various countries. Can you just talk about what the next phases are on the international front, just as we're thinking about both the product and the go-to-market sides to sustain this momentum? Andrew Bialecki: Yes, absolutely. So that's one big area where we see there's a lot of market share out there, and our share is relatively small. So international continues to grow really nicely, about 35% year-on-year. And a couple of things. I'll talk a little bit about the product side and then a little bit of what we're doing on the go-to-market side. On the product side, we've been very invested in -- one of the things we find with a lot of international businesses is not only are we helping them transact in different currencies, but also they're working across many markets. So we've done a lot of work to help businesses that are working across multiple markets, multiple regions, manage things like -- their product catalogs across those regions. Oftentimes, they have different rules or different strategies and sometimes even different teams that manage those different businesses. So for instance, we recently -- with Klaviyo organizations, we went further in allowing folks to understand whether you're multi-brand or multi-market, understand all of your customers, even leverage that data across region to understand how different regions are performing. Some of the things we've done around scale, we're expanding our footprint of our data centers where we house data and run our software, expanding that into Europe. Chano mentioned some of the great marketing, and we've always loved putting on user conferences, both for our existing customers and partners and users, but also for folks that are thinking about Klaviyo. We expanded that this year to cover all of Europe. We've added some sales headcount, some Klaviyos that are now in France and Germany. And I'd say like internationally, our main focus right now is probably more in Europe than it is in Asia, although we see opportunities all over the world. And maybe the last thing I'll mention that just has kind of, been another maybe bright spot is when we launched WhatsApp, we knew that, that was going to have a lot of pull in Europe, but we found that, that has even opened up some new markets. I was just talking with the team last week, and we closed a major deal that has a big WhatsApp component down in Brazil. So that's opened up more of the Americas to us as well. So I think there's a lot of room to go there. And obviously, when Chano and I joined up. One of the thing we both believe in is we believe we should be able to get Klaviyo to a point where the majority of our revenue comes ex North America. And I think we're very much on that track. Luciano Fernandez Gomez: Yes. I would add that, again, the opportunity in international is very exciting. I think it's the very early innings as well. There are some large markets like Germany, even in Spain and Italy, where we're doing well. But when you look at the market share because we didn't have any teams in the ground in some places like Germany, we do have now, the opportunity is significantly larger. When you go in APAC, definitely, Australia is a great market for us. Outside of Australia, we're making some leadership changes that I think that will pay down the road in terms of producing much more growth in places like Southeast Asia and Singapore and potentially other places like Japan that have been recently visiting. So that's very exciting. So while it's great to see kind of the growth that international is producing, when I think about long term, the opportunity that international represents is definitely much larger than what we're seeing today. Operator: Our final question is from Brett Huff from Stephens Inc. Brett Huff: AB and Chano. And welcome, Erica and good luck Amanda. I'm asking another -- the AI question from a little bit different angle as the market, as you all know, continues to litigate the potential for disruption, especially within the SMB and maybe just medium-sized customers. The stats you gave on Composer adoption being really good in enterprise was interesting, but we still get a lot of questions just more philosophically on are we seeing any compelling data points, anecdotal or more systematic about how your smaller customers are choosing AI from you versus another vendor, be it an LLM or et cetera. So any update on that? Andrew Bialecki: Yes, absolutely. So I'll give you kind of a stat or some data on that. Like we've been watching in the last month, customers new sign-ups, right? Folks that are trying out Klaviyo for the first time. And a lot of those are smaller businesses, right, entrepreneurs that are just getting started. And probably not surprisingly, those that are using Composer are the ones that end up being more successful with Klaviyo, literally in the first few weeks and end up converting to paid customers. So it's still -- this is still early, and we're weaving Composer into more of the UI of Klaviyo. But intuitively, we think this makes a lot of sense. What we found when I talk to some of these entrepreneur SMB customers, a lot of them like they're not even sure they know they need to do marketing or they need to set up a customer agent for customer support, but they're not sure what to do or where to start. And we talked about some of the benefits that Composer has over a general purpose model. This fact that we organize a business' data, so we understand the products or services they sell, we understand who their customers are. We have all of this data about like past orders, transactions, customer preferences. And our model has organized that and can reason about that. The fact that we have an understanding of what that business likes from past marketing they've done. And obviously, if somebody is brand new, we also can help them define what their brand looks like. And then finally, like we've actually even only recently in the last 2 weeks, we've upgraded the system behind the scenes that provides kind of the Klaviyo proprietary knowledge about what works in marketing. And we're finding a lot of customers, they're querying into that to understand from Composer. I mentioned things like what's the best time to send, who should I send to, all these things that maybe questions they didn't know to ask or they don't know the answers to, and we just have a better data set. So we're actually -- I mean one of the things we're quite bullish on is that for SMBs and these like smaller businesses, they're actually going to look for more domain or task-specific AI. And obviously, we want to offer that with Composer. And embedding in Klaviyo is great because it means that they get a software interface that kind of feels both Agentic but also has that kind of point and click element if they want to drag and drop and design. But we've also opened up Composer where it integrates into other agents and other systems that they use. And we think there, it's just now we're going to drive Composer usage just because we're just -- if you think about our agent as the expert at understanding your customers and the expert in marketing. And so that's one of the things we said. It doesn't really matter where you want to work. You're still going to be able to get value out of Composer. So I think I'm also very excited about what we're seeing from our entrepreneurs and SMBs. I think for them, a lot of it is just educating them on even what's possible with AI. But I think we have an advantage there because there -- a lot of them are actually used to using our interface. And we've kind of merged the 2, our agents and our kind of more traditional interface together. Operator: That was our final question. I will now hand back to management for closing remarks. Andrew Bialecki: All right. Thanks, everybody, for joining us today. Amanda, thank you for helping us continue to grow Klaviyo. And as we'd like to say, we're 1% done. Look forward to seeing everybody next quarter. Operator: This concludes today's call. Thank you for joining us. You may now disconnect. Before you buy stock in Klaviyo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Klaviyo wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Klaviyo (KVYO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Klaviyo, Inc.? Here are five stocks we like better. Strong quarterly performance: Klaviyo’s Q2 revenue rose 26% year over year to $370.6 million, prompting the company to raise its full-year 2026 revenue outlook to $1.526 billion–$1.534 billion. However, it reduced its operating-income forecast because of Agency acquisition costs and continued product investment. AI adoption is accelerating: Klaviyo’s Composer AI agent surpassed 95,000 users in its first month, while Customer Agent adoption rose 40% quarter over quarter. The planned Agency acquisition is intended to speed development of these AI offerings. Enterprise growth faces margin pressure: Customers generating at least $50,000 in annual recurring revenue grew 36%, and international revenue rose 35%, but gross margin fell to 73.4% as text-messaging usage, carrier fees and infrastructure investments increased costs. 3 Unique AI Software Plays With Strong Analyst Support Klaviyo (NYSE:KVYO) reported second-quarter revenue of $370.6 million, up 26% from a year earlier, as the customer relationship management software provider cited growth in enterprise sales, international markets, text messaging and multi-product adoption. Co-founder and Co-CEO Andrew Bialecki said the company had reached nearly $1.5 billion in annualized revenue run rate and now serves more than 205,000 brands. Klaviyo also signed its largest contract to date during the quarter: an eight-figure, two-year agreement covering multiple products with a fast-growing e-commerce brand and TikTok Shop seller. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Is New IPO Instacart Already Hitting Speed Bumps? The company raised its full-year revenue outlook following its second-quarter outperformance. Klaviyo now expects 2026 revenue of $1.526 billion to $1.534 billion, representing 24% year-over-year growth. However, it lowered its full-year non-GAAP operating income forecast to $212 million to $218 million, citing costs related to its acquisition of Agency and continued product investment. Klaviyo emphasized its efforts to build what management calls an “autonomous B2C CRM,” combining customer data, marketing infrastructure and AI agents. Its data platform now stores more than 9 billion consumer profiles and processes more than a quarter-trillion data points each quarter, according to Bialecki. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High In June, the company launched Composer, an AI agent designed to help users analyze customer data, create marketing campaigns and automations, and optimize those efforts. Bialecki said Composer surpassed 95,000 users during its first month of availability, with nearly one-quarter becoming recurring weekly users. Credit consumption increased 30% week over week as recently as the week before the call. Management said 27% of Klaviyo’s mid-market and enterprise customers are using Composer. The percentage of AI-generated campaigns that users incorporated into their marketing increased to 46%, from 35% a few weeks earlier, according to Bialecki. → No Hangover: Revisiting Microsoft One Week After Earnings The company also pointed to growth in its Customer Agent product, which handles support and sales conversations. Adoption increased 40% quarter over quarter, while weekly resolution volumes rose nearly 80% since early June. Bialecki said Boston Proper generated a reported three-times return on investment in incremental revenue within two weeks of launching Customer Agent, while the agent autonomously resolved more than half of the retailer’s support tickets. Klaviyo plans to expand its AI product capabilities through the acquisition of Agency. Agency founder Elias Torres will join Klaviyo as chief product officer. Bialecki said the acquisition is intended to help the company develop its agent offerings faster, including Composer and Customer Agent. Co-CEO Chano Fernández said the company’s revised go-to-market approach is beginning to show results, particularly among larger customers. Customers with annual recurring revenue of at least $50,000 increased 36% year over year to 4,477 and represented about 40% of total ARR. Klaviyo added Warner Music Group as a major new customer during the quarter and won Claire’s in a competitive process that replaced two legacy vendors across email, text and analytics. The company also added its first NFL franchise, the San Francisco 49ers, and hospitality customer SweatHouz. Fernández said larger businesses are increasingly seeking to consolidate fragmented marketing technology systems on a single platform. He described the enterprise sales motion as a longer-term transition from more transactional sales to consultative engagements involving multiple decision-makers and larger business cases. Revenue outside the Americas increased 35% year over year. EMEA revenue excluding the U.K. rose 41% year over year. Klaviyo plans to open a France office and launch an EU data center in the second half of the year. Country Road Group became one of Klaviyo’s largest new logos in Asia-Pacific, consolidating five brands onto the platform through the company’s first global AWS Marketplace deal. Fernández said the company is focusing international expansion particularly on Europe, while also identifying opportunities in markets including Southeast Asia, Singapore and Japan. He added that WhatsApp has helped Klaviyo expand its appeal in markets where the channel is widely used. CFO Amanda Whalen said second-quarter growth was supported by strength in text messaging, WhatsApp and Marketing Analytics. Klaviyo’s data and analytics products collectively grew ARR by more than 100% year over year, Bialecki said. Net revenue retention was 109% in the second quarter. Whalen said strengthening gross retention, text messaging expansion and the company’s strongest cross-sell quarter since its initial public offering were partially offset by the continued effect of last year’s profile enforcement. Because net revenue retention is a trailing 12-month measure, she said that impact will continue through the first quarter of next year. Non-GAAP gross margin was 73.4%, down three percentage points from a year earlier. Whalen attributed the decline to text messaging growth, higher carrier fees that Klaviyo had previously absorbed, and infrastructure investments. The company updated mobile pricing in the third quarter to pass higher carrier fees to customers as contracts renew. Whalen said the change is expected to be neutral to 2026 revenue and gross margin because of timing. Non-GAAP operating income totaled $50.9 million, or a 13.7% operating margin. Klaviyo generated $83 million in cash during the quarter and ended the period with $833 million in cash. It also used about $240 million for share repurchases, leaving $160 million available under its $500 million authorization. For the third quarter, Klaviyo forecast revenue of $377 million to $381 million, representing approximately 21.5% to 22.5% growth, and non-GAAP operating income of $40 million to $43 million. Whalen said she is leaving the CFO role after more than four years, remaining in an advisory role through November. Erica Smith is scheduled to become Klaviyo’s next CFO on Sept. 1. Klaviyo, Inc is a cloud-based marketing automation platform that enables businesses to leverage customer data for targeted email and SMS campaigns. The company's platform centralizes first-party data from various sources—including e-commerce storefronts, websites, and CRM systems—to help organizations deliver personalized marketing across the customer lifecycle. Klaviyo's core offerings include segmented email marketing, automated messaging workflows, and performance analytics designed to drive customer engagement and revenue growth. The platform provides a suite of tools for campaign creation and management, including drag-and-drop email and SMS builders, dynamic content rendering, and A/B testing capabilities. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Klaviyo Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved 26% year-over-year revenue growth, reaching a $1.5 billion annualized run rate, fueled by a shift toward becoming an autonomous B2C CRM. Enterprise momentum accelerated with customers over $50,000 ARR growing 36% year-over-year, now representing approximately 40% of total ARR. Successfully closed the largest deal in company history, an 8-figure multi-product contract, signaling a successful move upmarket and displacement of legacy vendors. Multi-product adoption emerged as a key retention driver, with customers using three or more products exhibiting gross retention rates over 6 points higher than single-product users. International expansion remains a high-growth lever, with revenue outside the Americas increasing 35% year-over-year, led by strong performance in EMEA. Operational efficiency improved as ARR per employee increased 28% year-over-year, attributed to the internal use of AI agents to increase organizational capacity. Full-year 2026 revenue guidance was raised to $1.526 billion–$1.534 billion, reflecting broad momentum across enterprise and international segments. Operating margin guidance for 2026 was revised to approximately 14% to account for $10 million–$12 million in costs related to the Agency acquisition and continued R&D investment. The acquisition of Agency and the appointment of Elias Torres as Chief Product Officer are intended to accelerate the roadmap for agentic AI features like Composer and Customer Agent. Gross margins are expected to face a greater-than-normal seasonal step down in Q4 as lower-margin text messaging growth continues to outpace total company growth. Management expects the impact of 'profile enforcement' to continue weighing on net revenue retention (NRR) metrics through Q1 of the next fiscal year. Updated mobile pricing in Q3 to pass higher carrier fees directly to customers, a move expected to be neutral to 2026 revenue and gross margin due to renewal timing. Non-GAAP gross margin declined 3 points year-over-year to 73.4%, primarily driven by the rapid growth of the text messaging business and unabsorbed carrier fees. Announced a leadership transition with Erica Smith succeeding Amanda Whalen as CFO effective September 1, 2026. The company utilized $240 million in cash for share repurchases during the quarter, with $160 million in remaining capacity under the current authorization. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Composer uses a credit-based model where customers pay for intelligence to generate and optimize campaigns, while Customer Agent uses an outcome-based, resolution-fee model. Management noted that early adoption is driving meaningful ARR uplift, with one enterprise customer increasing resolution rates from 52% to 79% within seven days of deployment. Wins against legacy vendors are increasingly driven by Klaviyo's AI vision, interoperability with LLMs like Anthropic and OpenAI, and infrastructure capable of sending 100 million messages in 20 minutes. The sales strategy is shifting from transactional to consultative, focusing on multi-stakeholder relationships and business-case-driven procurement. Early data indicates that new SMB sign-ups who use the Composer agent are more likely to convert to paid customers and see faster initial success. Management believes domain-specific AI trained on proprietary customer data provides a significant advantage over general-purpose LLMs for small business marketing.

Klaviyo, Inc. (KVYO) came out with quarterly earnings of $0.19 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.16 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this company would post earnings of $0.19 per share when it actually produced earnings of $0.22, delivering a surprise of +15.79%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Klaviyo, Inc., which belongs to the Zacks Internet - Software industry, posted revenues of $370.58 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.50%. This compares to year-ago revenues of $293.12 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Klaviyo, Inc. shares have lost about 41.2% since the beginning of the year versus the S&P 500's gain of 13%. While Klaviyo, Inc. has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Klaviyo, Inc. was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.21 on $378.44 million in revenues for the coming quarter and $0.86 on $1.52 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Bullish (BLSH), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 13. This company is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of +280%. The consensus EPS estimate for the quarter has been revised 16.7% lower over the last 30 days to the current level. Bullish's revenues are expected to be $90.02 million, up 57.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Klaviyo, Inc. (KVYO) : Free Stock Analysis Report Bullish (BLSH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: $370.6 million, up 26% year-over-year. Full-Year 2026 Revenue Guidance: Raised to $1.526 billion to $1.534 billion, representing 24% year-over-year growth. Q3 2026 Revenue Guidance: $377 million to $381 million, representing growth of approximately 21.5% to 22.5%. Non-GAAP Gross Margin: 73.4%, down 3 points year-over-year. Non-GAAP Operating Expenses: Approximately 60% of revenue, down roughly 3 points year-on-year. Non-GAAP Operating Income: $50.9 million, representing a 13.7% non-GAAP operating margin. Full-Year 2026 Non-GAAP Operating Income Guidance: Revised down to $212 million to $218 million, with a non-GAAP operating margin of approximately 14%. Q3 2026 Non-GAAP Operating Income Guidance: $40 million to $43 million, or a non-GAAP operating margin of 10.5% to 11%. Cash Flow: Generated $83 million of cash in Q2. Cash Balance: Ended the quarter with a total cash balance of $833 million. Share Repurchases: Used approximately $240 million in cash to repurchase shares during the quarter, leaving $160 million in capacity under the $500 million buyback authorization. Net Revenue Retention (NRR): 109% in Q2. Customer Count: More than 205,000 brands now rely on Klaviyo. Enterprise Customers ($50,000+ ARR): Grew 36% year-over-year to 4,477, representing approximately 40% of total ARR. International Revenue: Revenue outside the Americas was up 35% year-on-year; EMEA revenue outside the U.K. was up 41% year-on-year. Multiproduct Adoption: Nearly 20% of ARR came from customers using 3 or more products. Data Infrastructure: Stores more than 9 billion consumer profiles and ingests and indexes more than 0.25 trillion data points every quarter. Attributed Revenue (KV): Customers generated nearly $50 billion in attributed revenue in the first 6 months of the year. ARR per Klaviyo: Increased 28% year-over-year. Warning! GuruFocus has detected 3 Warning Signs with SNDK. Is KVYO fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Klaviyo Inc (NYSE:KVYO) delivered strong Q2 2026 results with revenue of $370.6 million, up 26% year-over-year, and raised its full-year revenue guidance by $12 million at the midpoint. The company's enterprise momentum is accelerating, evidenced by its largest-ever deal (an 8-figure multiproduct contract) and a 36% year-over-year growth in customers with $50,000+ ARR, which now represents approximately 40% of total ARR. Adoption of its AI-powered Composer agent is off to a strong start, with over 95,000 users in the first month, nearly a quarter of whom are recurring weekly users, and credit consumption growing 30% week-over-week. International expansion is a key growth driver, with revenue outside the Americas up 35% year-over-year and EMEA revenue up 41%, supported by new offices, an upcoming EU data center, and a strong large-deal pipeline. The company is seeing strong cross-sell momentum, with nearly 20% of ARR coming from customers using 3 or more products, and these multiproduct customers retain more than 6 points better on gross retention than single-product customers. Klaviyo Inc (NYSE:KVYO) is investing in its future with the acquisition of Agency, bringing on founder Elias Torres as Chief Product Officer to accelerate its agentic roadmap, and is also strengthening its leadership team with a new CFO. The company's customer agent product is gaining traction, with adoption up 40% quarter-over-quarter and weekly resolution volumes growing nearly 80% since early June, demonstrating strong ROI for customers. Klaviyo Inc (NYSE:KVYO) continues to generate strong cash flow, ending the quarter with $833 million in cash and repurchasing $240 million in shares, reflecting confidence in its long-term value. The company's data infrastructure is a key competitive advantage, now storing over 9 billion consumer profiles and capable of powering up to 100 million personalized messages in under 20 minutes, which is crucial for enterprise clients. Klaviyo Inc (NYSE:KVYO) is seeing strong growth in its data and analytics products, which are growing ARR more than 100% year-over-year, as customers find demonstrable ROI from using AI to improve marketing performance. Klaviyo Inc (NYSE:KVYO)'s net revenue retention (NRR) was 109% in Q2, which was negatively impacted by the lapping of last year's profile enforcement, a headwind that is expected to continue through Q1 of next year. Non-GAAP gross margin declined 3 points year-over-year to 73.4%, driven by strong growth in lower-margin text messaging and higher carrier fees, which the company chose to absorb in the quarter. The company revised its full-year 2026 non-GAAP operating income guidance down by $10 million at the midpoint, partly due to $10-12 million in costs associated with the Agency acquisition and continued investment in product innovation. The company's Q3 2026 revenue growth guidance of approximately 21.5-22.5% represents a deceleration from the 26% growth seen in Q2, indicating a potential slowdown in the near term. Klaviyo Inc (NYSE:KVYO) expects non-GAAP gross margin to decline further in Q3 and see a greater-than-normal seasonal step down in Q4, as text messaging growth continues to outpace the overall company growth. The company's operating margin is expected to be pressured in the near term, with Q3 guidance implying a non-GAAP operating margin of only 10.5-11%, down from 13.7% in Q2, due to strategic investments. The transition to passing through higher carrier fees to customers for text messaging will be neutral to 2026 revenue and gross margin, but it may create friction with customers as they see price increases. While the company is making progress in enterprise, the go-to-market motion is still a journey, moving from a transactional to a more consultative approach, which takes time and may lead to uneven results. The company's heavy investment in AI and product innovation, while promising, has not yet translated into significant revenue contributions from new products like Composer and Customer Agent, which are still in early adoption phases. Klaviyo Inc (NYSE:KVYO) faces the risk of disruption in the SMB market from general-purpose AI models, and while it sees advantages, it must continuously educate customers on the value of its domain-specific AI solutions. Q: How is Composer adoption impacting campaign creation velocity and translating into incremental platform usage for customers?A: Andrew Bialecki (Co-CEO) noted that Composer, launched in June, has over 95,000 users, with nearly a quarter becoming recurring weekly users. It helps with research, campaign generation, and optimization. Customers using Composer are engaging more with Klaviyo, driving higher attributed revenue. The percentage of generated campaigns used by customers improved to 46% from 35% in just a few weeks post-launch. Q: What is driving the strength in SMS and WhatsApp, and how are carrier fees impacting gross margin?A: Andrew Bialecki (Co-CEO) highlighted that customers want to consolidate all messaging channels into one platform, with multichannel campaigns up nearly 50% quarter-over-quarter. Amanda Whalen (CFO) explained that gross margin was impacted by carrier fee increases, infrastructure investments, and the growing mix of text messaging. The company updated mobile pricing in Q3 to pass through higher carrier fees, which will be neutral to 2026 revenue and gross margin. Q: How should we think about the operating margin framework and investments for growth beyond 2026?A: Amanda Whalen (CFO) stated that the company is making deliberate investments in product innovation and the Agency acquisition ($10-12 million impact). Excluding Agency costs, the company is still driving over 1 percentage point of operating margin leverage year-over-year. The investments are showing strong early results in enterprise wins and agent adoption. Q: What does the Agency acquisition bring, and how will responsibilities be divided with the new Chief Product Officer?A: Andrew Bialecki (Co-CEO) explained that Agency's founder, Elias Torres, shares the vision that every business will have an agent. He will join as Chief Product Officer to accelerate the roadmap for Composer and customer agents. Bialecki will continue focusing on enterprise customers and product strategy, working closely with Torres on agentic initiatives. Q: How is the broader vision of Klaviyo as a B2C CRM helping in enterprise conversations and legacy replacements?A: Chano Fernandez (Co-CEO) noted that enterprise customers are looking for consolidation and innovation on a single platform. The company is winning deals by replacing legacy vendors, such as with Warner Music Group and Country Road Group, due to its AI vision, interoperability, and robust infrastructure. The ability to handle 100 million messages in under 20 minutes is a key differentiator. Q: How should we think about monetization of agents like Composer and customer agent over the next 1-2 years?A: Andrew Bialecki (Co-CEO) explained that Composer uses a credit-based model, with customers already starting to pay despite the 90-day trial. Customer agent uses an outcome-based, resolution-based pricing model. The company is seeing meaningful ARR uplift from customers adopting these products, with a wide variety depending on usage and adoption. Q: What is the status of enterprise sales capacity and product-market fit?A: Chano Fernandez (Co-CEO) stated that the company has the right sales leadership and capacity in place, with productivity per head improving. The enterprise motion is a journey, moving from transactional to consultative sales. The company is also expanding its ecosystem with new agency partners and investing in infrastructure like an EU data center to meet enterprise requirements. Q: How much is profile enforcement impacting net revenue retention (NRR), and should NRR improve from here?A: Amanda Whalen (CFO) noted that NRR was 109% in Q2, with benefits from improving gross retention, text expansion, and cross-sell offset by the lapping of profile enforcement. The impact will gradually wind out through Q1 of next year. The company is positive on long-term NRR driven by customers staying, expanding, and buying more products. Q: What are the next phases for international growth on both product and go-to-market sides?A: Andrew Bialecki (Co-CEO) highlighted investments in multi-market capabilities, expanding data center footprint into Europe, and adding sales headcount in France and Germany. WhatsApp has opened new markets like Brazil. Chano Fernandez (Co-CEO) added that markets like Germany, Spain, Italy, and APAC (beyond Australia) represent significant long-term opportunities. Q: Are smaller customers choosing Klaviyo's AI over other vendors, and what data points support this?A: Andrew Bialecki (Co-CEO) observed that new sign-ups using Composer are more successful and converting to paid customers. Composer's domain-specific knowledge, understanding of customer data, and brand taste give it an advantage over general-purpose models. The company is bullish on SMB adoption as it educates customers on AI possibilities. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Flywire (FLYW) came out with quarterly earnings of $0.04 per share, missing the Zacks Consensus Estimate of $0.09 per share. This compares to a loss of $0.09 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -55.56%. A quarter ago, it was expected that this payments company would post earnings of $0.03 per share when it actually produced earnings of $0.1, delivering a surprise of +233.33%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Flywire, which belongs to the Zacks Internet - Software industry, posted revenues of $163.8 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 6.19%. This compares to year-ago revenues of $127.5 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Flywire shares have added about 17.4% since the beginning of the year versus the S&P 500's gain of 11%. While Flywire has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Flywire was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.49 on $225.83 million in revenues for the coming quarter and $0.92 on $738.13 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Klaviyo, Inc. (KVYO), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This company is expected to post quarterly earnings of $0.19 per share in its upcoming report, which represents a year-over-year change of +18.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Klaviyo, Inc.'s revenues are expected to be $361.53 million, up 23.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flywire Corporation (FLYW) : Free Stock Analysis Report Klaviyo, Inc. (KVYO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

NEW YORK, June 25, 2026 /PRNewswire/ -- Fred Alger Management, LLC ("Alger"), a privately held growth equity investment manager, today announced the quarterly rebalancing of the Alger Russell Innovation Index ("Index"). Following the close of trading on Friday, June 26, 2026, the Index will be rebalanced, and the following changes will be effective. For additional information, please visit www.lseg.com. Unlock Your Growth Potential with AlgerFounded in 1964, Alger is recognized as a pioneer of growth-style investment management. Privately-owned and headquartered in New York City, Alger can help "Unlock Your Growth Potential" through a suite of growth equity separate accounts, mutual funds, ETFs, and privately offered investment vehicles. Alger's investment philosophy, discovering companies undergoing Positive Dynamic Change, has been in place for more than 60 years. For more information, please visit www.alger.com. Risk Disclosures: Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies' earnings and may be more sensitive to market, political, and economic developments. This material is not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities. Alger pays compensation to third party marketers to sell various strategies to prospective investors. London Stock Exchange Group plc and its group undertakings (collectively, the "LSE Group"). © LSE Group 2026. FTSE Russell is a trading name of certain of the LSE Group companies. "FTSE®" "Russell®", "FTSE Russell®" are trade marks of the relevant LSE Group companies and are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication. View original content to download multimedia:https://www.prnewswire.com/news-releases/alger-russell-innovation-index-updates-for-second-quarter-2026-302811004.html