Klaviyo (NYSE:KVYO) outlined what executives repeatedly described as a “breakout” year in 2025, pairing strong revenue growth with expanding profitability as the company leans into artificial intelligence-driven product development across marketing and customer service.
2025 results: growth, margins, and cash flow
Co-founder and Co-CEO Andrew Bialecki said Klaviyo grew 2025 revenue 32% to $1.2 billion and delivered a 14% non-GAAP operating margin, calling the year “defined by rapid transformation.” The company ended the year with more than 193,000 customers across more than 100 countries, with management citing momentum in enterprise and international markets.
For the fourth quarter, Whalen said revenue was $350 million, up 30% year over year, pushing the annualized revenue run rate to $1.4 billion. Non-GAAP operating income was $51 million, representing a 15% non-GAAP operating margin and a 900-basis-point expansion year over year (or 400 basis points excluding the impact of the prior year’s bonus implementation). Non-GAAP gross margin was 73%, which Whalen said reflected the expected seasonal mix shift toward higher text messaging and WhatsApp volumes.
Whalen also highlighted free cash flow of $87 million in Q4, up 61% year over year, driven by flow-through from operating income and “record collections.” For the full year, she said non-GAAP operating income totaled $169 million (14% non-GAAP operating margin), free cash flow margin was 16%, and the company surpassed $1 billion in cash on hand for the first time.
Strategy: “autonomous” customer experiences and AI agents
Bialecki framed the company’s long-term thesis around “autonomous customer experiences,” arguing that AI will increasingly define and deliver individualized interactions across marketing, service, and other channels. He said Klaviyo’s approach combines its real-time customer data infrastructure with messaging delivery and a growing layer of agents, including a Marketing Agent and Customer Agent.
Management emphasized scale and data as key advantages. Bialecki said Klaviyo processed half a trillion customer interactions last year across 8 billion consumer profiles, translating into 3.7 billion daily signals. He also said the platform is designed to be open, allowing customers to use Klaviyo’s agents or bring their own models, referencing examples such as Claude interacting through an MCP server or ChatGPT through the Klaviyo app.
On product usage, Bialecki said more than half of campaigns created by customers using Marketing Agent are now generated by AI, with many agent-generated campaigns performing as well as or better than manually created campaigns while taking less time to launch. He cited Adore Beauty as an example, saying open rates increased by 50% and revenue per campaign rose by 40% after using Marketing Agent, while enabling the team to run more campaigns without adding headcount.
For service, he said Customer Agent is live and handling customer conversations such as answering questions, resolving issues, and recommending products. He stated that since launch, resolution rates have increased by 20 points and monthly resolution volume has increased by more than 50% since Black Friday/Cyber Monday. He highlighted LifeStraw, saying the company saw a 111% increase in AI-generated sales from agent recommendations, an over 100% increase in average order value, and a 75% resolution rate over the last 90 days.
Management said it is expanding agent capabilities into additional channels, with email and WhatsApp in beta and voice “coming soon,” along with “more skills and more control.”
Enterprise and international momentum, plus partner expansion
New Co-CEO Chano Fernandez, who joined the call for the first time in his role, said he sees a “B2C CRM category transition” underway and described enterprises as seeking a single platform to unify data, decisioning, and execution. He argued that fragmentation across systems can reduce “yield” and leave revenue on the table, positioning consolidation as an opportunity for Klaviyo.
Fernandez pointed to customer examples including Cymbiotika, which he said reduced email volume 31% year over year while increasing total revenue 44% during the holiday season, and Proper Hotels, which he said saw overall CRM revenue grow more than 200% year over year after migrating to Klaviyo in October.
He also said Klaviyo has its “largest enterprise pipeline ever,” spanning verticals and geographies, and that the number of customers generating at least $1 million of ARR doubled last year. In addition, Fernandez said the company has added more structure to large-deal execution and continues to expand its partner network.
One highlighted addition was a partnership with Accenture. Fernandez said Accenture is building services around “marketing reinvention and service reinvention” and sees Klaviyo as a partner to help solve customer engagement fragmentation. Bialecki added that the AI era will require new skills and services, and he expects new work for agencies and systems integrators tied to agent-driven marketing and service workflows.
Internationally, Fernandez said revenue outside the Americas represented more than one-third of the business at the end of Q4. He referenced a partnership with KIKO Milano, which operates more than 1,300 retail stores across over 70 markets, as part of the company’s international momentum.
Whalen added that international revenue outside the Americas grew 41% year over year in Q4, citing strength in Italy, Spain, and Portugal, alongside traction with global brands such as Bayer and KIKO Milano.
NRR drivers, messaging trends, and operating efficiency
During Q&A, Whalen said three primary factors drove NRR: growing usage across email and SMS products, cross-sell of text messaging and newer products (including marketing analytics and service), and a smaller contribution from a “profile enforcement” change implemented in February.
On messaging, Bialecki said SMS was “very strong” and discussed an industry transition from SMS to RCS, which he said allows richer experiences such as branded accounts and embedded media. He also noted the general availability launch of WhatsApp “in the last few months,” describing similar benefits, particularly for international usage. Bialecki added that Customer Agent now integrates directly into text messaging and WhatsApp, and said he is seeing consumers normalize the idea of having conversations with businesses in these channels.
Executives also addressed internal productivity. Bialecki described an “AI-first” initiative inside the company since last fall and said AI is enabling faster development cycles. Whalen said the company remains focused on expanding margins, adding that it expects to continue expanding operating margins by 100 basis points or more over the coming year.
2026 guidance raised; service contribution described as minimal in outlook
Whalen said the company is raising its full-year 2026 guidance, projecting revenue between $1.501 billion and $1.509 billion, representing 21.5% to 22.5% year-over-year growth. The company expects non-GAAP operating income of $218 million to $224 million, translating to a non-GAAP operating margin of approximately 14.5% to 15%.
For Q1, Klaviyo forecast revenue of $346 million to $350 million (23.5% to 25% growth) and non-GAAP operating income of $50 million to $53 million (14.5% to 15% margin). Whalen said the company expects a similar seasonal pattern to 2025, with revenue weighted toward the second half of the year.
Importantly, Whalen said the 2026 outlook assumes “minimal” revenue contribution from the newest AI and service products, describing them as “embedded upside” as the company remains early in the service adoption cycle.
About Klaviyo (NYSE:KVYO)
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.
