Klaviyo Q3 Revenue Rises 25% as Larger-Customer Base Expands

Klaviyo Inc. (NYSE: KVYO) reported 25% year-over-year revenue growth for the third quarter of fiscal 2026, supported by expansion among larger customers and a growing international business. The customer-relationship-management software company also forecast roughly 25% revenue growth for the full year, while maintaining double-digit non-GAAP operating profitability and cash generation.

Revenue reached $387.2 million for the quarter ended September 30, up from $310.9 million a year earlier. Trailing-12-month revenue increased 27% to $1.47 billion, and the company reported an annualized revenue run rate above $1.5 billion.

Non-GAAP operating income rose to $56.9 million from $45.0 million, while the corresponding margin increased to 14.7% from 14.5%. Non-GAAP gross profit was $289.9 million, representing a 74.9% margin, compared with 76.3% in the prior-year quarter.

Non-GAAP operating expenses equaled 60.2% of revenue, down from 61.8% a year earlier. Klaviyo attributed its general and administrative and sales and marketing leverage to scale, operational efficiencies and headcount discipline, while continuing to invest in product development and enterprise readiness.

Larger customers and international sales expand

Klaviyo had more than 211,000 customers across over 100 countries at quarter-end. The number of customers generating more than $50,000 in annual recurring revenue increased 33% year over year to 4,725. Customers above $250,000 in ARR rose 49% to 390, while those exceeding $500,000 grew 57% to 105.

The company’s trailing-12-month dollar-based net revenue retention rate was 108%. That measure reflects expansion, price increases, contraction and attrition among existing customers while excluding revenue from newly added customers.

Revenue from Europe, the Middle East and Africa and the Asia-Pacific region climbed 32% to $145 million from $110 million. Those markets accounted for 37% of total revenue, up from 35% in the third quarter of fiscal 2025.

Klaviyo generated $24.8 million of free cash flow in the quarter, equivalent to a 6.4% margin. Adjusted free cash flow, which adds back cash paid for asset acquisitions and related costs, was $40.1 million, or 10.4% of revenue. On a trailing-12-month basis, adjusted free cash flow rose to $229 million from $167 million, with the margin increasing to 16% from 15%.

AI and multi-product strategy remain investment priorities

Management identified multi-product adoption, international expansion and further penetration of mid-market and enterprise accounts as its main growth priorities. The company said its usage-based pricing model allows revenue to scale as customers increase their activity on the platform.

Klaviyo is also positioning its data platform as the foundation for AI-enabled marketing and customer-service tools. Its strategy includes Composer, an agent designed to build campaigns, workflows and audits using natural-language instructions, and Customer Agent, which uses customer information such as orders, loyalty status and preferences when responding to consumers. The presentation characterized agents as an additional opportunity but did not quantify their expected revenue contribution.

As of September 30, the platform held more than 9 billion consumer profiles and processed an average of more than 4.2 billion events daily. Klaviyo said its infrastructure includes more than 400 integrations and can support email, text, WhatsApp, web and other customer-interaction channels.

Fiscal 2026 outlook

For the fourth quarter, Klaviyo expects revenue of $421 million to $425 million, representing approximately 21% year-over-year growth. Non-GAAP operating income is projected at $66.5 million to $69.5 million.

For fiscal 2026, management expects revenue of $1.537 billion to $1.541 billion, or about 25% growth, and non-GAAP operating income of $233 million to $236 million.

The outlook remains subject to risks including Klaviyo’s ability to sustain growth, attract and retain larger customers, expand internationally, execute its product and AI strategy, and maintain third-party platform and partner relationships. The company also cited competitive and industry conditions, tariffs and other macroeconomic factors as potential sources of uncertainty. Klaviyo noted that stock-based compensation remains a significant recurring expense excluded from its non-GAAP results.