Klaviyo — Q3 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue was $387.2 million, representing 25% year-over-year growth.
• Gross profit was $287.4 million with a gross margin of 74%; non-GAAP gross profit was $289.9 million with a non-GAAP gross margin of 75%.
• Operating loss was $(4.5) million with an operating margin of (1)%; non-GAAP operating income was $56.9 million with a non-GAAP operating margin of 15%.
• Non-GAAP net income per share (diluted) was $0.22.
• Cash from operating activities was $52.7 million; free cash flow was $24.8 million; adjusted free cash flow was $40.1 million.
• Deferred revenue as of September 30, 2026, was $125.8 million, up from $103.2 million as of December 31, 2025.
• Total liabilities were $428.6 million as of September 30, 2026, compared to $384.0 million as of December 31, 2025.
• Cash and cash equivalents were $705.4 million as of September 30, 2026, down from $1,064.9 million as of December 31, 2025.

Guidance and Future Outlook:

• Raised full-year 2026 revenue guidance to $1.537 billion to $1.541 billion, implying year-over-year growth of approximately 25%.
• Provided Q4 2026 revenue guidance of $421 million to $425 million, implying year-over-year growth of approximately 21%.
• Provided Q4 2026 non-GAAP operating income guidance of $66.5 million to $69.5 million.
• Provided full-year 2026 non-GAAP operating income guidance of $233 million to $236 million.
• Management expressed conviction in the runway ahead to scale profitably and execute strategy across multiple products, the enterprise, and internationally.

Business Segments and Product Lines:

• Released the latest version of Composer, described as more autonomous, proactive, and trusted, featuring connectors, skills, and artifacts.
• Announced Klaviyo Headless, enabling customers to access data from any AI system, including Claude and ChatGPT.
• Launched new embedded apps: Klaviyo in Shopify and Klaviyo in Wix, integrating the platform directly into merchant experiences.
• Customer count grew to more than 211,000.
• Large customer cohorts outpaced total company growth: customers generating over $50,000 ARR grew 33% year-over-year to 4,725; customers generating over $250,000 ARR grew 49% year-over-year to 390; customers generating over $500,000 ARR grew 57% year-over-year to 105.
• 22% of ARR came from customers using three or more products.
• International revenue growth was 32% year-over-year.
• Dollar-based net revenue retention (NRR) was 108%, driven by customer expansions, cross-sell, and strong retention.
• New customer wins and expansions included Frasers Group, Malbon Golf, and Voluspa.

Market and Competitive Landscape:

• Recognized in the 2026 Gartner® Magic Quadrant™ for Multichannel Marketing Hubs.
• Management stated AI is removing barriers in marketing and that Klaviyo is positioned at the center of the shift as agents take on more work.

Risks and Challenges:

• Forward-looking statements note risks including the ability to achieve and sustain future growth, successful execution of business strategy, and integration with third-party platforms.
• Risks include the ability to attract and retain customers, leverage AI and machine learning, and sustain strong international growth.
• Non-GAAP operating income guidance excludes stock-based compensation and related employer payroll taxes, which are difficult to predict due to timing of transactions, stock value, and hiring needs.

Management Commentary and Tone:

• Andrew Bialecki, co-founder and co-CEO, emphasized that Klaviyo provides the engine fueling customer growth by integrating data and decisioning with purpose-built agents.
• Erica Smith, CFO, described Q3 as a strong quarter with broad-based growth, noting strength in largest customer cohorts and customers landing with multiple products from day one.
• Management expressed deep conviction in the runway ahead and the strength of the strategy and intrinsic value of shares.

Other Key Points:

• The Board of Directors authorized a new $300 million share repurchase program following the completion of the prior $500 million authorization.
• During Q3 2026, the company repurchased $150.9 million of stock.
• Total estimated fully diluted shares outstanding as of September 30, 2026, were 308.0 million, including 1.4 million warrants, 22.5 million RSUs/PSUs, 1.4 million options, and 0.4 million ESPP shares.
• An investment option for 15,743,174 shares of Shopify at $88.93 per share was excluded from dilutive securities calculations as it was out of the money; it expires on July 28, 2030.
• The company hosts a conference call for investors to discuss results and outlook.