Klaviyo Upgrades 2025 Revenue Forecast to $1.2B as It Drives AI-First CRM Strategy

Key Highlights from Klaviyo’s Q2 2025 Earnings Call

Klaviyo, Inc. (KVYO) delivered a strong performance in the second quarter of 2025, with revenue reaching $293 million, reflecting a 32% year-over-year growth. The company added over 176,000 customers during the period, demonstrating continued momentum in its expansion efforts. CEO Andrew Bialecki emphasized that the company remains focused on sustainable and efficient long-term growth, highlighting international expansion and a strategic move upmarket.

Bialecki also detailed significant product innovations introduced at Klaviyo London, including native support for RCS and WhatsApp, the Omnichannel Campaign Builder, channel affinity powered by Klaviyo AI, and multi-touch attribution. These advancements are part of the company's broader multiproduct B2C CRM strategy, which includes private betas for Helpdesk and Conversational Agent. New partnerships with Guesty and vivenu further strengthen Klaviyo’s presence in hospitality and entertainment sectors.

Notable customer wins include Winston Flowers and Princess Polly, with consolidation trends accelerating among mid-market and enterprise clients. Additionally, leadership changes were announced, with Archana Rao joining as Chief Information Officer in June. President Steve Rowland will retire after Q1 next year, having significantly contributed to the company’s growth.

Financial Performance and Outlook

The CFO, Amanda Whalen, reported that revenue grew 32% year-over-year to $293 million, with non-GAAP operating margin at 14% and free cash flow of $59 million. This reflects consistent top and bottom line performance. For the third quarter, Klaviyo provided guidance for revenue between $297 million and $301 million, targeting 26% to 28% year-over-year growth. Non-GAAP operating income is expected to range from $32.5 million to $35.5 million, with a margin of 11% to 12%.

Full-year revenue guidance was raised to $1.203 billion at the midpoint, representing 27% to 28% growth. Non-GAAP operating income guidance now stands at $144 million to $150 million, with a 12% margin. Management expressed confidence in the business’s resilience and value proposition, even amid macroeconomic uncertainty.

International Growth and Strategic Focus

International revenue saw significant growth, with EMEA revenue rising 47% year-over-year and APAC revenue growth accelerating for the second consecutive quarter. International revenue overall grew over 42% year-over-year, underscoring the company’s expanding global footprint.

Strategic focus has shifted toward AI-driven product innovation, multiproduct CRM, and international expansion. Large customer cohort growth accelerated, with 3,291 customers generating over $50,000 in annual recurring revenue (ARR), compared to 3,030 in the previous quarter.

Analyst Questions and Market Sentiment

Analysts raised forward-looking questions about cross-sell opportunities, international expansion, and gross margin dynamics. Management remained confident, emphasizing the importance of AI-first initiatives and the consolidation theme. Phrases like “we are very excited about the trend in the unit economics” and “we are delivering efficient growth at scale” reflected optimism.

Compared to the previous quarter, sentiment from both analysts and management is slightly more bullish, buoyed by raised guidance and successful execution on strategic initiatives. However, risks remain, particularly regarding gross margin pressures from infrastructure costs and SMS growth. Whalen noted that while some prudence was incorporated into guidance due to macroeconomic uncertainty, the environment remains dynamic.

Final Takeaway

Klaviyo’s Q2 results underscore its strong performance, driven by robust customer growth, product innovation, and strategic expansion. The company’s full-year revenue guidance of $1.203 billion highlights sustained demand for its unified, AI-first CRM platform. Management continues to emphasize scaling new products, cross-sell opportunities, and driving efficiencies while remaining vigilant about macroeconomic challenges and margin pressures.