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    KVYO
    Earnings call· Jun 2026(Q2 FY26)

    Klaviyo Q2 FY26 earnings call KVYO

    Aug 5, 2026 Source

    Executive summary

    Klaviyo Q2 FY26 — Strong Growth Driven by AI Agents and Enterprise Expansion

    Klaviyo delivered a strong quarter, showcasing robust growth across enterprise, international markets, and multiproduct adoption. The company is leveraging its autonomous B2C CRM platform and AI agents like Composer and Customer Agent to drive customer value and expand its market opportunity. While managing gross margin pressures from text messaging growth and carrier fees, Klaviyo continues to invest strategically in product innovation and M&A to fuel long-term expansion.

    Highlights

    5

    • Annualized revenue run rate scaled to nearly $1.5 billion, with quarterly revenue growing 26% year-on-year.

    • Signed largest deal ever: an 8-figure multiproduct contract with a fast-growing e-commerce brand.

    • Larger customers ($50,000+ ARR) grew 36% year-over-year to 4,477.

    • International revenue was up 35% year-on-year, with EMEA ex-U.K. up 41% year-on-year.

    • Composer agent launched with over 95,000 users, nearly 1/4 of whom are recurring weekly users, and credit consumption grew 30% week-over-week.

    Concerns

    3

    • Non-GAAP gross margin was 73.4%, down 3 points year-over-year, driven by strong growth in text messaging and higher carrier fees.

    • Full-year 2026 non-GAAP operating income guidance was revised down by $10 million at the midpoint to a range of $212 million to $218 million, including $10 million to $12 million in costs for the Agency acquisition and product innovation.

    • Net revenue retention (NRR) was 109% in Q2, offset by the lapping of last year's profile enforcement, which will continue to impact NRR through Q1 next year.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $1.526 billion to $1.534 billion
    high materiality
    High
    Full-year 2026 Revenue Growth
    24% year-over-year growth
    high materiality
    High
    Full-year 2026 Non-GAAP Operating Income
    $212 million to $218 million
    high materiality
    High
    Full-year 2026 Non-GAAP Operating Margin
    approximately 14%
    high materiality
    High
    Q3 Revenue
    $377 million to $381 million
    medium materiality
    High
    Q3 Revenue Growth
    approximately 21.5% to 22.5%
    medium materiality
    High
    Q3 Non-GAAP Operating Income
    $40 million to $43 million
    medium materiality
    High
    Q3 Non-GAAP Operating Margin
    10.5% to 11%
    medium materiality
    High
    Non-GAAP Gross Margin
    down slightly in Q3 versus Q2, followed by a greater-than-normal seasonal step down in Q4
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    International
    Revenue outside the Americas was up 35% year-on-year, indicating strong international expansion.
    		—35%——
    EMEA (excluding U.K.)
    EMEA revenue outside the U.K. was up 41% year-on-year, with the strongest large deal pipeline in EMEA yet.
    		—41%——

    Operational metrics

    26
    Annualized revenue run rate
    ~$1.5 billion
    Q2 FY26

    Klaviyo has scaled to nearly $1.5 billion in annualized revenue run rate.

    Klaviyo Attributed Value (KAV)
    $50 billion
    H1 FY26

    Customers generated nearly $50 billion in attributed revenue or Klaviyo Attributed Value (KAV) in the first 6 months of the year.

    ARR per Klaviyo (customer)
    28%year-over-year
    Q2 FY26

    Increased ARR per Klaviyo by 28% year-over-year.

    Consumer profiles stored
    9 billion
    Q2 FY26

    Data infrastructure now stores more than 9 billion consumer profiles.

    Data points ingested and indexed
    0.25 trillion
    quarterly

    Ingests and indexes more than 0.25 trillion data points every quarter.

    Marketing messages and experiences personalized
    100 million
    Q2 FY26

    Scalability and burstability improvements to handle data and messaging workloads that require personalizing and powering up to 100 million marketing messages and experiences in less than 20 minutes.

    Marketing analytics products ARR growth
    100%year-on-year
    Q2 FY26

    Marketing analytics products, including marketing analytics, are collectively growing ARR more than 100% year-on-year.

    Messaging volume
    hundreds of billions
    quarterly

    Messaging volume continues to scale into the hundreds of billions of messages per quarter.

    Multichannel campaigns increase
    50%quarter-over-quarter
    Q2 FY26

    Multichannel campaigns have increased nearly 50% quarter-over-quarter.

    Marketing flows messages and decision points increase
    48%
    Q2 FY26

    Marketing flows have seen a 48% increase in the number of messages and decision point actions added to those automations.

    Composer users
    95,000
    first month since launch

    Composer already has over 95,000 users in the first month since launch.

    Composer recurring weekly users
    nearly 1/4
    first month since launch

    Nearly 1/4 of Composer users have turned into recurring weekly Composer users.

    Composer credit consumption growth
    30%week-over-week
    recently

    Credit consumption grew 30% week-over-week as recently as last week.

    Composer adoption (mid-market and enterprise)
    27%
    first month since launch

    27% of mid-market and enterprise customers are Composer users.

    Composer generated campaigns used
    46%up from 35%
    recently

    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.

    Customer Agent adoption growth
    40%quarter-over-quarter
    Q2 FY26

    Customer Agent adoption grew 40% quarter-over-quarter.

    Customer Agent weekly resolution volumes growth
    80%
    since early June

    Customer Agent weekly resolution volumes grew nearly 80% since early June.

    Non-GAAP gross margin
    73.4%down 3 points year-over-year
    Q2 FY26

    Non-GAAP gross margin was 73.4%, down 3 points year-over-year, driven by strong growth in text messaging and higher carrier fees.

    Non-GAAP operating expenses as % of revenue
    60%down roughly 3 points year-on-year
    Q2 FY26

    Non-GAAP operating expenses were approximately 60% of revenue, down roughly 3 points year-on-year.

    Non-GAAP operating income
    $50.9 million
    Q2 FY26

    Non-GAAP operating income was $50.9 million in Q2.

    Non-GAAP operating margin
    13.7%
    Q2 FY26

    Non-GAAP operating margin was 13.7%.

    Rule of 40
    operating at the Rule of 40
    Q2 FY26

    Continued to drive efficient growth at scale with another quarter of operating at the Rule of 40.

    Cash balance
    $833 million
    end of Q2 FY26

    Ended the quarter with a total cash balance of $833 million.

    Share repurchases
    $240 million
    Q2 FY26

    Used approximately $240 million in cash to repurchase shares during the quarter.

    Remaining buyback authorization
    $160 million
    Q2 FY26

    Remaining $160 million in capacity under the $500 million buyback authorization announced in March.

    Non-GAAP operating margin leverage
    over 1 percentage pointyear-on-year
    FY26

    Excluding the Agency acquisition impact, the company is still driving over 1 percentage point of leverage year-on-year.

    Industry KPIs

    10
    MetricValueDetails
    Revenue growth$370.6 millionUSD
    Arr net new arr4,477customers
    Bookings billings8-figureUSD
    Customer account count205,000+brands
    Large deal new logo metrics4,477customers
    Gross retention renewal rate6 points better%
    Multi product platform attachnearly 20%%
    Operating FCF margin rule of 4013.7%%
    Ai product adoption monetization95,000users
    Net revenue net dollar retention109%%

    Product announcements

    2
    ProductTypeDetails
    Composer agentlaunch
    EU data centerexpansion

    Deals & partnerships

    7
    Fastest-growing e-commerce brand (unnamed)8-figure multiproduct contract8-figure2-year

    Signed largest deal ever, an 8-figure multiproduct contract with one of the fastest-growing brands in e-commerce and a top seller on TikTok Shop, running email, text, and marketing analytics on Klaviyo.

    Warner Music GroupSignificant new contract

    Welcomed Warner Music Group, one of the most significant new contracts to date, to help their 1,400+ artists reach their audience.

    Claire'sNew customer win, replacing legacy vendors

    Won Claire's, replacing two legacy vendors in a competitive bid across email, text, and analytics.

    San Francisco 49ersFirst NFL franchise customer

    Brought on the first NFL franchise, the San Francisco 49ers, as a customer.

    The Body ShopInternational expansion of services

    The Body Shop expanded from the U.K. into email, WhatsApp, and marketing analytics across Germany, Switzerland, Belgium, Austria, and the Netherlands.

    Country Road GroupLargest new logo deal in APAC, consolidation

    Closed one of the largest new logos deal ever in APAC with Country Road Group, consolidating five brands' fragmented stack onto one platform through a global AWS Marketplace deal.

    AgencyAcquisition of AI agent team

    Acquired the Agency team, with founder Elias Torres joining Klaviyo as Chief Product Officer, to build on the momentum of Composer, Customer Agent, and the entire B2C CRM.

    Capital programs

    1
    EU data centerunderway

    A new EU data center is coming in the second half of the year to support international growth and address security/compliance needs.

    Risks & headwinds

    3
    Gross margin pressure from text messaging and carrier feesQ2 FY26, continuing into Q3 and Q4

    Non-GAAP gross margin down 3 points year-over-year to 73.4%

    Mitigation: Updated mobile pricing in Q3 to pass higher carrier fees on to customers; expected to be neutral to 2026 revenue and gross margin, but overall positive long-term impact.

    Impact of profile enforcement on Net Revenue Retention (NRR)Through Q1 FY27

    NRR at 109% in Q2, offset by lapping of last year's profile enforcement

    Mitigation: Leading indicators (strengthening gross retention, increasing text messaging expansion, strong cross-sell) are strong, suggesting NRR will improve as the impact winds down.

    Increased costs from Agency acquisition and product innovationFull-year 2026

    $10 million to $12 million in costs

    Mitigation: Strategic investment to drive long-term growth and build capabilities; company expects to drive over 1 percentage point of operating leverage year-on-year excluding this impact.

    What to watch in Q3 FY26

    5

    Composer credit consumption growth

    Next quarter
    Current30% week-over-week
    TargetContinued strong growth

    Why it matters

    Indicates adoption and potential monetization of AI agents, crucial for future revenue drivers.

    Usage is broad from entrepreneurs to enterprise, including 27% of our mid-market and enterprise customers being Composer users and exhibiting strong repeat usage. As recently as last week, credit consumption grew 30% week-over-week.

    Q&A highlights

    10

    How does Composer, by removing marketing headcount constraints, translate to higher campaign creation velocity, increased customer contract volumes, and incremental platform usage for early adopters?

    Composer helps with research, campaign generation, and optimization. Early adopters are using Composer to create more campaigns and are using more of Klaviyo's platform, driving more engagement per profile and higher Klaviyo Attributed Value. Customers are willing to pay for Composer credits due to the incremental revenue and sales it generates.

    “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.”

    asked by Elizabeth Porter · answered by Andrew Bialecki

    2 min read6 chapters

    Detailed Narrative

    01

    AI Agent Momentum and Adoption

    Klaviyo launched its Composer agent to all customers in June, seeing rapid adoption with over 95,000 users in the first month, and nearly a quarter becoming recurring weekly users. Credit consumption for Composer grew 30% week-over-week, with 27% of mid-market and enterprise customers using it. The Customer Agent also saw significant growth, with adoption up 40% quarter-over-quarter and weekly resolution volumes growing nearly 80% since early June, demonstrating real ROI for customers like Boston Proper, which generated 3x incremental revenue.

    02

    Enterprise Expansion and Strategic Wins

    The company's go-to-market changes are driving enterprise momentum, with larger customers ($50,000+ ARR) growing 36% year-over-year. Key new contracts include Warner Music Group, Claire's (replacing two legacy vendors), and the San Francisco 49ers. These wins highlight Klaviyo's ability to consolidate fragmented tech stacks and serve complex needs, with the enterprise pipeline growing and the team equipped to scale.

    03

    International Growth and Market Penetration

    International revenue increased 35% year-over-year, with EMEA revenue outside the U.K. up 41%. Klaviyo is backing this momentum with a new France office and an EU data center coming in the second half of the year. Notable international wins include The Body Shop expanding across multiple European countries and Country Road Group in APAC, consolidating five brands onto Klaviyo's platform. The company sees significant long-term growth opportunities in international markets, aiming for the majority of revenue to come from outside North America.

    04

    Product Innovation and Infrastructure Scalability

    Klaviyo's data infrastructure now stores over 9 billion consumer profiles and ingests more than 0.25 trillion data points quarterly, capable of personalizing up to 100 million marketing messages in under 20 minutes. Investments in machine learning and AI power features like personalized send times and product recommendations, with marketing analytics products growing ARR over 100% year-on-year. The platform's flexibility is also evidenced by a nearly 50% quarter-over-quarter increase in multichannel campaigns.

    05

    Strategic Acquisitions and Leadership Transitions

    Klaviyo announced the acquisition of the Agency team, with founder Elias Torres joining as Chief Product Officer to build on the momentum of Composer and Customer Agent. This move aims to accelerate product development in AI agents. Additionally, Erica Smith will join as the new CFO on September 1, succeeding Amanda Whalen, who will transition to an advisory role through November, ensuring a seamless leadership handover.

    06

    Text Messaging and Multiproduct Adoption

    Text messaging and WhatsApp continue to drive strong growth, with customers increasingly consolidating messaging channels onto Klaviyo's platform. Multiproduct adoption is a key growth lever, with nearly 20% of ARR from customers using three or more products. These multiproduct customers demonstrate significantly higher retention, retaining more than 6 points better on gross retention than single-product customers, reinforcing Klaviyo's position as an omnichannel platform of choice.

    AI-generated summary of the company’s earnings call. Not investment advice.