Q1 2025 Klaviyo Inc Earnings Call

It will be a question and answer session if you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad if.

If you would like to withdraw your question again press Star one.

Andrew: With that I would like to turn the call over to Andrew <unk>, Vice President of Investor Relations you may begin.

Speaker Change: Thanks, Good afternoon, and thanks for joining <unk> first quarter of 2025 earnings call our earnings press release Investor presentation.

Andrew Bialecki: Well, it's still early, but you're already seeing strong traction with marketing analytics in customers. Customers are excited to use data to power even more amazing consumer experiences.

Speaker Change: <unk> filings and a replay of today's call can be found on our IR website at investors <unk> Dot com.

www.microsoft.com.au

Andrew Bialecki: one customer who recently adopted marketing analytics. converted 31% more customers and drove 49% of revenue from repeated purchasers in the first six months of using the product. We also have several hundred customers in our customer hub limited beta. From small entrepreneurs to large, well-known global brands like K-Store. We've heard from many of our beta customers that this is a no-brainer for them because it instantly up-levels the consumer experience. We're helping drive more signed-in shoppers, which drives more personalization and less costly service interactions, delivering better outcomes for both consumers and brands. Marketing combines our messaging channels with campaigns, flows, forms, reviews, and more.

Speaker Change: Good afternoon and welcome to Klaviyo's first quarter fiscal 2025 earnings conference call.

Speaker Change: With me on the call today are Andrew Bielecki, co founder and CEO and Amanda Whalen CFO.

Speaker Change: All lines have been placed on mute to prevent any background noise .

Speaker Change: As a reminder, our commentary today will include non-GAAP measures reconciliations.

Speaker Change: After the speakers remarks, there will be a question and answer session. If you'd like to ask a question during this time, sit the press star, followed by the number one on your telephone, keep that.

Speaker Change: Reconciliations to the most directly comparable GAAP measures can be found in today's earnings press release or earnings release supplemental materials, which can be found on our investor Relations website.

Speaker Change: If you'd like to withdraw your question, press star one. Thank you. With that, I would like to turn the call over to Andrew Zilli, Vice President of Investor Relations. You may begin.

Speaker Change: Additionally, some of our comments today contain forward looking statements that are subject to risks uncertainties and assumptions, which could change.

Speaker Change: Should any of these risks materialize or should our assumptions prove to be incorrect actual company results could differ materially from these forward looking statements.

Speaker Change: A description of these risks uncertainties and assumptions and other factors that could affect our financial results are included in our SEC filings.

Speaker Change: With me on the call today, our Andrew Bialecki, co-founder and CEO , and Amanda Whalen, CFO .

Andrew Bialecki: It remains at the core of our platform, and in Q1, our team delivered several new features that leverage data and AI to make it even easier for brands to engage with their consumers across. This includes automated campaign follow-up to improve campaign reengagement, brand voice consistency for email AI to automatically capture and apply unique brand guidelines to AI-generated content, and several new form features to drive better sign-up. We also recently introduced Custom Objects, which allows brands to define their own data structure with fully customizable properties. For example, a restaurant can create an object to capture reservation occasions, allowing them to store that on the consumer profile and leverage it for future engagement.

Speaker Change: Including our most recent annual report on Form 10-K, and subsequent quarterly reports on Form 10-Q.

As a reminder, our commentary today will include non-get measures.

Speaker Change: Reconciliation to the most directly comparable GAAP measures can be found in today's earnings press release or earnings release supplemental materials which can be found on our investor relations website.

Speaker Change: Except as required by law, we do not undertake any responsibility to update these forward looking statements with that I'll now turn it over to Andrew.

Andrew Bielecki: Thanks, Kelly and thank you all for joining US today <unk> delivered a strong start to 2005 with Q1 revenue of $280 million, representing 33% year over year growth.

Speaker Change: Additionally, some of our comments today contain forward-looking statements that are subject to risks, uncertainties, and assumptions which could change.

Speaker Change: Should any of these risks materialize, or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements.

Andrew Bielecki: We now empower over 169000 customers worldwide from individual entrepreneurs to global enterprises to build smarter digital relationship.

Speaker Change: A description of these risks, uncertainties and assumptions, and other factors that could affect our financial results are included in our SEC filings, including our most recent annual report on form 10K, and subsequent quarterly reports on form 10Q. [inaudible]

Andrew Bielecki: We are a must have omnichannel platform for businesses looking to connect with their consumers in a meaningful way and drive revenue.

Andrew Bialecki: Currently in limited availability, this feature is particularly important for larger brands and customers outside of e-commerce. We also launched automated conversations for SMS, which enables our customers to drive more sales with a tailored shopping experience by integrating campaigns and flows into SMS conversations. This enables our customers to collect more information from their consumers and use that information to provide product recommendations, making the interactions more engaging and Our commitment to innovating across our platform remains core to why a diverse set of customers choose Klaviyo.

Andrew Bielecki: Our performance once again proved out three defining themes for palladium.

Andrew Bielecki: First we are a growth company and we are executing well on our strategy to deliver sustainable efficient long term growth with notable momentum growing in the mid market and above and expanding internationally.

Speaker Change: Except as required by law, we do not undertake any responsibility to update these forward-looking statements. With that, I'll now turn it over to Andrew.

Andrew: and Zilli, and thank you all for joining us today. Klaviyo delivered a strong start to 2025 with Q1 revenue of $280 million, representing 33% year-over-year growth.

Andrew Bielecki: Second our vertically integrated data first approach with a powerful embedded video data platform.

Andrew Bielecki: Fast pace of innovation are core differentiators.

Andrew Bielecki: And third is uniquely positioned to redefine the next era of consumer engagement is the only CRM built for beta fee businesses.

Andrew: We now empower over 159,000 customers worldwide from individual entrepreneurs to global enterprises to build smarter digital relationships.

Andrew Bialecki: In Q1, we signed new or expansion deals with companies of all sizes, including Quick, Burt's Bees Baby, Mark Fisher, Kendo Beauty, and BFG. We also power many of the fastest growing companies in the consumer space.

Andrew Bielecki: Future of marketing is more personalized the companies can only deliver on that if they know who their consumers are and where to best reach them.

Andrew: We are a must-have on-the-channel platform for businesses looking to connect with their consumers in a meaningful way and drive revenue.

Andrew Bielecki: With BDC CRM, we've brought together multichannel marketing automation customer service and marketing <unk> onto one AI powered data platform.

Andrew: Our performance once again proves out three defying themes for Klaviyo. [inaudible]

Andrew: First, we are a growth company and we are executing well on our strategy to deliver sustainable, efficient, long-term growth with notable momentum growing in the mid-market and above and expanding internationally.

Andrew Bialecki: Bain recently released their 2025 Insurgent Brand List, made up of companies with more than $25 million of annual revenue and growing 10 times their category average. Approximately 70% of the companies on the 2025 list are Klaviyo.

Andrew Bielecki: Allows companies to take action on their data and build long term loyal consumer relationships across every touch point.

Andrew: Second, our vertically integrated data first approach with the powerful embedded Klaviyo data platform. The fast pace of innovation or core differentiators. [inaudible]

<unk> CRM positioned <unk> to address a critical gap in the market.

Andrew Bielecki: Providing consumer brands with a system designed for their unique high volume fast paced <unk>.

Andrew Bialecki: Many companies are faced with a common challenge, the complexity brought by multiple point solutions and older legacy systems that don't integrate together and make it extremely difficult to build lasting consumer relationships. This is driving a secular shift as companies are looking to modernize and consolidate their tech stack to enable a faster and more personalized consumer experience. Our modern, vertically integrated platform positions Klaviyo well, as companies of all sizes look to consolidate onto a unified, data-powered platform.

Andrew: and third, Leggo's uniquely positioned to redefine the next era of consumer engagement as the only CRM built for B2C businesses.

Andrew Bielecki: This is a natural evolution of our journey from a leading marketing automation platform to a comprehensive solution, a unified marketing service and analytics.

Andrew: The future of marketing is more personalized but companies can only deliver on that if they know who their consumers are and where to best reach those.

Andrew Bielecki: The combination of App and platform reinforces our vision of empowering consumer brand to own their data and deliver seamless consumer journey from discovery to post purchase.

Andrew: With B2C-CRM, we brought together multi-channel marketing automation, customer service, and marketing analytics onto one AI-powered data platform.

Andrew Bielecki: Our platform combines advanced AI driven analytics.

Andrew Bielecki: Expanded marketing tools, and a new customer hub to bring service interactions further up the funnel fostering stronger relationships and higher ROI.

Andrew: This allows companies to take action on their data and build long-term, loyal consumer relationships across every touchpoint.

Andrew Bialecki: The more complex use cases that often come with larger brands play to Klaviyo's Our platform can handle the scale, security requirements, and multi-country needs of many larger customers, and our API-first design offers the flexibility to support a wide-range Our competitive position against the legacy marketing cloud has never been stronger, as evidenced by several notable new mid-market and enterprise customer wins.

Andrew: B2CCRM positions Klaviyo to address a critical gap in the market, providing consumer brands with a system designed for their unique high-volume, fast-paced needs.

Andrew Bielecki: While still early we are already seeing strong traction with marketing analytics and customer hub.

Andrew Bielecki: Customers are excited to use data to power, even more amazing consumer experiences.

Andrew: This is a natural evolution of our journey from a leading marketing automation platform to a comprehensive evolution that unifies marketing, service, and analytics.

Andrew Bielecki: One customer who recently adopted more analytics.

Andrew Bielecki: Converted 31% more customers and drove 49% of revenue from repeat purchases in the first six months of using the product.

Andrew Bialecki: One great example of this is the deal we signed in Q1 with the Hershey The team was seeking a more modern and intuitive marketing platform for email and SMS for their direct-to-consumer commerce platform. They also won a marketing analytics for their Hershey's Chocolate World destination.

Andrew Bielecki: We also have several hundred customers in our customer hub limited data.

Andrew Bielecki: From small entrepreneurs to large well known global brands like K sweat.

Andrew Bielecki: We've heard from many of our beta customers that this is a no brainer for them because it instantly up level.

Andrew Bialecki: and their ShopPurchase.com e-commerce platform and chose Klaviyo as their partner to drive this forward.

Andrew Bielecki: Consumer experience.

Andrew Bialecki: We also welcome Belkin, a leading consumer electronics brand, to Klaviyo and The amount of manual development work required by their legacy marketing cloud was slowing down the marketing Delton chose Klaviyo's marketing platform to help them improve their user experience, unlock more one-to-one personalization options, and leverage automation while reducing the time spent by the marketing team operating in the platform.

Andrew Bielecki: We're helping drive more signed and shoppers, which drives more personalization and less costly service interaction delivering better outcomes for both consumers and brands.

Andrew Bielecki: Thank Yo marketing combines our messaging channels with campaigns flows forms reviews and more.

Andrew Bielecki: It remains at the core of our platform and in Q1, our team delivered several new features that leverage data and AI to make it even easier for brands to engage with their consumers across channels.

Andrew Bialecki: And we signed a great new deal with Goryana, a Southern California-based jewelry brand that sells digitally and across retail locations in the United States. They were using a point solution vendor for email and were experiencing several pain points, like issues with geotargeting, having to use separate vendor for forms, and difficulty with reporting and analyzing. They were also going to have to use a standalone CDP to properly analyze their data. It came to Klaviyo for email, SMS, PUSH, and marketing analytics because of the combination of our built-in data platform, our extensive pre-built integration library, and our ability to simplify even their most complex issues.

Andrew Bielecki: This includes automated campaign followup to improve campaign reengagement.

Andrew Bielecki: Brand voice consistency for email AI to automatically capture and apply unique brand guidelines to AI generated content.

Andrew Bielecki: Several new foreign features to drive better sign up rate.

Andrew Bielecki: Also recently introduced custom objects, which allows brands to define their own data structure with fully customizable property. For example, a restaurant can create an object to capture reservation occasion, allowing them to store that on the consumer profile and leverage yet for future engagement opportunity.

Andrew: with more personalization and less costly service interaction, delivering better outcomes for both consumers and brands.

Andrew: Klaviyo Marketing combines our messaging channels with campaigns, flows, forms, reviews, and more.

Andrew: It remains at the core of our platform, and in Q1 our team delivered several new features that leverage data and AI to make it even easier for brands to engage with their consumers across the channel.

Andrew Bielecki: Currently in limited availability. This feature is particularly important for larger brands and customers outside of E Commerce.

Andrew Bialecki: Internationally, the investments we made in our product and go-to-market are yielding great results. Over the last several quarters, we added several new languages, expanded our SMS channel to new countries, and added more sales reps with local language capabilities, fueling continued international growth in Q1. We saw notable strength in France, Germany, and Spain, each of which delivered more than 100% year-on-year growth in new business in the quarter.

Andrew Bielecki: We also launched automated conversations for FNF, which enabled our customers to drive more sales with a tailored shopping experience by integrating campaigns inflows into SMS conversation.

Andrew: This includes automated campaign follow-up to improve campaign reengagement, brand voice consistency for email AI to automatically capture and apply unique brand guidelines to AI generated content, and several new foreign features to drive better sign-of-rate. This includes automated campaign reengagement, brand voice consistency for email AI generated content, and several new foreign features

Andrew Bielecki: This enables our customers to collect more information from their consumers and use that information to provide product recommendations, making the interactions more engaging and personalized.

Andrew: We also recently introduced Custom Object, which allows brands to define their own data structure with fully customizable properties. For example, a restaurant can create an object to capture reservation occasions, allowing them to store that on a consumer profile and leverage it for future engagement opportunities. [inaudible]

Andrew Bialecki: In Q1, we signed a new deal with Moose Knuckles, a Canadian luxury outerwear brand. They were seeking a solution to better identify and understand their customers and agility in setting up personalized communication. Without a centralized CRM, they lack the unified view of in-store and online shopping. stood out for its intuitive segmentation engine.

Andrew Bielecki: Our commitment to innovating across our platform remains core to wide diverse set of customers choose <unk>.

Andrew Bielecki: In Q1, we signed new or expansion deals with companies of all sizes, including quip.

Andrew: Currently in limited availability, this feature is particularly important for larger brands and customers outside of e-commerce.

Speaker Change: These data Mark Fisher Kendo beauty and features.

Andrew Bialecki: Seamless data ingestion from existing systems and AI-powered features built throughout the He also expanded our relationship with Bauhaus, a leading home improvement chain in Europe. They were using multiple vendors across their Nordic business without a single source of truth. They are consolidating that region onto Klaviyo, leveraging marketing automation and marketing analytics.

Andrew Bielecki: We also power many of the fastest growing companies in the consumer space.

Andrew: We also launched automated conversations for S&F, which enables our customers to drive more sales with a tailored shopping experience by integrating campaigns and flows into S&S

<unk> recently released their 2025 and surgeon brand lift made up of companies with more than $25 million of annual revenue and growing 10 times the category average.

Andrew: Disenables our customers to collect more information from their consumers and use that information to provide product recommendations, making the interactions more engaging and personalized.

Andrew Bielecki: Approximately 70% of the company's on the 2025 lists our palladium customers.

Andrew Bialecki: We're excited to further our relationship with Valhalla. We also started working with new customers like my first a leading UK baby and child brand, and expanded with existing customers like Reebok for their European business. We're also continuing our targeted marketing efforts in specific regions. including our K-Sydney event, which was held today, and our K-London event. Many of these wins were driven by our strong and growing partner ecosystem, which continues to expand our reach and functionality. Our recently announced WooCommerce partnership is already exceeding expectations with new customer adoption across diverse segments in retail, non-retail, and international.

Andrew Bielecki: Many companies are faced with a common challenge the complexity brought by multiple point solutions in older legacy systems that don't integrate together and make it extremely difficult to build lasting consumer relationships.

Andrew: Our commitment to innovating across our platform remains core to why diverse sets of customers choose Klaviyo.

Andrew: In Q1, we signed new or expansion deals with companies of all sizes, including Quip, Herz-Bee's Baby, Mark

Andrew Bielecki: This is driving a secular shift as companies are looking to modernize and consolidate their tech stack to enable a faster and more personalized consumer experience.

Andrew Bielecki: Our modern vertically integrated platform positions <unk> well at companies of all sizes look to consolidate onto a unified data power platform.

Andrew: We also power many of the fastest growing companies in the consumer space.

Andrew: They recently released their 2025 Insurgent Brands list made up of companies with more than $25 million dollars annual revenue and growing 10 times their category average.

Andrew Bielecki: The more complex use cases that often come with larger brands play to <unk> strength.

Our platform can handle the scale and security requirements and multi country needs of many larger customers and our ACI versus <unk> offers the flexibility to support a wide range of use cases.

Andrew: Approximately 70% of the companies on the 2025 list are Klaviyo customers.

Andrew Bialecki: In Q1, we also deepened our relationship with major tech platforms, like Meta and TikTok, through expanded integrations with Klaviyo. Importantly, they are seeing the value of building on the Klaviyo data platform to help their customers drive growth and build stronger, data-informed businesses. And we continue to expand the number of hospitality integrations with the availability of Punch, a loyalty vendor, or restaurant.

Andrew: Many companies are faced with a common challenge. The complexity brought by multiple point solutions and older legacy systems that don't integrate together and make it extremely difficult to build lasting consumer relationships.

Andrew Bielecki: Our competitive position against the legacy marketing cloud has never been stronger as evidenced by several notable new mid market and enterprise customer win.

Andrew: This is driving a secular shift as companies are looking to modernize and solidate their tech to enable a faster and more personalized consumer experience.

Andrew Bielecki: One Great example of it is a deal we signed in Q1 with the Hershey Company.

Andrew Bielecki: The team was seeking a more modern and intuitive marketing platform for email and SMS for their direct to consumer commerce platform.

Cladio: Our modern, Berkeley-integrated platform, Physicians Cladial Well, as companies of all sizes look to consolidate onto a unified data-powered platform.

Andrew Bialecki: Before I wrap it up and hand it over to Amanda, let me quickly touch on the current macro We've been talking with a lot of customers and have heard some consistent themes. In general, many of our customers are feeling tentative, but optimistic. Many of them have already diversified their supply chain over the last And several brands, with no exposure to China, mention they are considering going on the offensive, throwing inventory for the holiday season, and going after more markets. Klaviyo's importance in both favorable and challenging macroeconomic environments stems from the critical role our platform plays.

Andrew Bielecki: Also wanted marketing analytics, but our hershey's chocolate world destination in their shop, Hersheys Dot Com E Commerce platform.

Cladio: The more complex use cases that often come with larger brands, played clear to strength.

Andrew Bielecki: And chose <unk> as their partner to drive. This forward. We also welcomed belkin are leading consumer electronics brands <unk> in Q1 <unk>.

Cladio: Our platform can handle the scale, security requirements, and multi-country needs of many larger customers. And our APEI first design offers the flexibility to support a wide range of use cases.

Andrew Bielecki: The amount of manual development work required by their legacy marketing cloud was slowing down the marketing team's effort.

Andrew Bielecki: Delfin chose <unk> marketing platform to help them improve their user experience unlock more one to one personalization options and leverage automation, while reducing the time spent by the marketing team operating in the platform.

Cladio: Our competitive position against the legacy marketing clouds has never been stronger as evidenced by several notable new mid-market and enterprise customer wins.

Andrew Bialecki: We help companies retain and engage their existing loyal consumers. And those existing consumers are an important component of every business, regardless of economic cycle. Customers have also told us that consolidating from multiple point solutions to Klaviyo is a key consideration as it enables a single source of truth to build personalized, loyal relationships. Building those loyal relationships is absolutely essential, and Klaviyo enables our customers to do exactly that with exceptional and measurable ROI. We have a massive market opportunity ahead of us, and our data-first B2C CRM platform is a key differentiator that positions Klaviyo to redefine consumer engagement.

Cladio: One great example of this is the deal signed in Q1 with the Hershey Company.

And we signed a great new deal with Koreana, Southern California, based jewelry brands that sell digitally and across retail locations in the United States.

Cladio: The team was seeking a more modern and intuitive marketing platform for email and SMS with our director consumer commerce platform.

Andrew Bielecki: They were using a point solution vendor for email and we're experiencing several pain points like issues with geo targeting having to use separate vendor perform and difficulty with reporting and analytics.

Cladio: They also wanted marking analytics for their Hershey's chocolate world destination.

Cladio: and their shoppershees.com e-commerce platforms. It shows Klaviyo as their partner to drive this forward. We also welcome Falcon, a leading consumer electronics brand to Klaviyo in Q1. The amount of manual development work required by their legacy marketing cloud was slowing down the marketing team's efforts.

They were also going to have to use a standalone CDP to properly analyze their data.

Andrew Bielecki: <unk> E mail, SMS push and marketing analytics.

Andrew Bielecki: The combination of our built in data platform, our extensive prebuilt integration library, and our ability to simplify even their most complex use cases.

Cladio: Dalton Schoes, Klaviyo's marketing platform to help them improve their user experience unlock more one-to-one personalization options and leverage automation while reducing the time spent by the marketing team operating in the platform.

Andrew Bialecki: As we look ahead, we are focused on continuing to deliver the innovations that our customers and partners are asking for. This includes further integrating AI throughout the Klaviyo platform, adding more marketing channels, and expanding service usability. We are well-positioned to be the platform that every consumer-oriented business standardizes on, from marketing to service to analytics, enabling them to build strong, personalized relationships with each of their customers.

Andrew Bielecki: Internationally the investments we made in our product and go to market are yielding great results over.

Cladio: And we signed a great new deal with Goriana, a Southern California-based jewelry brand that sells digitally and across retail locations in the United States.

Andrew Bielecki: Over the last several quarters, we added several new languages expanded our Fms channel to new countries and added more sales reps with local language capabilities fueling continued international growth in Q1.

Cladio: They were using a point-solution vendor for email and were experiencing several pain points like issues with geo-targeting having to use separate vendor performance and difficulty with reporting and analytics.

Andrew Bielecki: We saw notable strength in France, Germany, and Spain, each of which delivered more than 100% year on year growth in new business in the quarter.

Amanda Whalen: And with that, I'd like to turn it over to. Thanks, Andrew. Klaviyo drove a strong first quarter to kick off 2025 as we continue to deliver efficient growth at scale. Revenue grew 33% year-over-year to $280 million, and we delivered a non-GAAP operating margin of 11.6%. We're really pleased with these results. Our first quarter results were continued proof of the value we deliver to customers and reflect the successful execution of our growth strategy. We are adding new customers, growing in the mid-market, expanding with existing customers, and expanding internationally. We ended Q1 with more than 169,000 customers, up 16% year over year.

Cladio: They were also going to have to use a standalone CDP to properly analyze their data.

Andrew Bielecki: In Q1, we signed a new deal with moves Knuckles are Canadian luxury outerwear brands they.

Collegio: They came to Klaviyo for email, SMS, push, and marketing analytics because of the combination of our built-in data platform, our extensive pre-built integration library, our ability to simplify even their most complex use cases.

Andrew Bielecki: They were seeking a solution to better identify and understand their customers and agility and setting up personalized communications.

Andrew Bielecki: Without a centralized CRM they lacked a unified view of in store and online shoppers.

Collegio: Internationally, the investments we made in our product and go-to-market are yielding great results.

Andrew Bielecki: So I go stood out for us intuitive segmentation engine <unk>.

Andrew Bielecki: Seamless data ingestion from existing systems and AI powered features built throughout the platform.

Collegio: Over the last several quarters, we added several new languages, expanded our FMS channel to new countries, and added more sales reps with local language capabilities, fueling continued international growth in Q1.

Andrew Bielecki: We also expanded our relationship with <unk>, a leading home improvement chain in Europe.

Andrew Bielecki: They were using multiple vendors across their Nordic business without a single source of truth.

Andrew Bielecki: They are consolidating that region, <unk>, leveraging marketing automation and marketing analytics.

Collegio: In Q1, we signed a new deal with Moose Knuckle, a Canadian luxury outerwear brand.

Andrew Bielecki: We're excited to further our relationship with <unk> in the future.

Amanda Whalen: This was better than our expectations, as our customer retention was stronger than anticipated following the pricing updates we announced during the quarter and remained consistent with prior quarters. In fact, our customer retention rates coming off the holiday season were consistent with the trends we saw in Q1 last year. Our success in attracting larger customers is evident as we ended the quarter with 3,030 customers with over $50,000 in ARR, up 40% year-over-year. And we now have more than 1,000 customers paying us more than $100,000 in ARR. We continue to see a strong trend of new lands in this cohort, demonstrating the payoff from our investments in the mid-market and above.

Andrew Bielecki: We also started working with new customers like my first years, a leading UK 80 in Chile brands and expanded with existing customers like Reebok, but our European business.

Collegio: They were seeking a solution to better identify and understand their customers and agility in setting up personalized medications.

Collegio: Without a centralized CRM, they lacked the unified view of in-store and online shoppers.

Andrew Bielecki: We're also continuing our efforts in specific regions.

Klaviyo stood out for the Included Segmentation Engine.

Andrew Bielecki: Including our <unk> event, which was held today and our K London event in June.

Collegio: Teamless Data Injection from Existing Systems, and AI Power Features Films Throughout the Platform.

Many of these wins were driven by our strong and growing partner ecosystem, which continues to expand our reach and functionality.

Collegio: He also expanded our relationship with Bauhaus, a leading home improvement chain in Europe . They were using multiple vendors across their Nordic business without a single source of truth. [inaudible]

Andrew Bielecki: Our recently announced <unk> partnership is already exceeding expectations with new customer adoption across diverse segment in retail non retail and international.

Collegio: They are consolidating that region on Klaviyo, leveraging marking automation and marking analytics. We're excited to further our relationship with Valhalla in the future.

Andrew Bielecki: In Q1, we also deepened our relationship with major tech platforms like Med Tech talk through expanded integrations with <unk> importantly, they are seeing the value of building on the radio data platform to help their customers drive growth and build stronger data informed relationship.

Collegio: We also started working with new customers like my first years, a leading UK baby and child brand and expanded with existing customers like Reebok, for their European business.

Amanda Whalen: We delivered a Q1 NRR of 108% in line with last quarter, driven by consistent gross revenue retention, improvement in email expansion, and to a lesser extent, benefit from the pricing change. While we don't forecast or guide to this number, we are pleased with the consistency we're seeing. We are continuing to drive progress in our cross-sell motion, and we're seeing more of our larger customers land on Klaviyo with multiple products. In Q1, our SMS penetration within SMB and mid-market customers increased again. We saw strong adoption of our marketing analytics application, and we are seeing a lot of interest from customers for our new customer hub service offer.

And we continue to expand the number of hospitality integration with the availability of punch a loyalty vendor for restaurants.

Collegio: We're also continuing our targeted marketing efforts in specific regions, including our K-City event which was held today and our K-1 event in June .

Andrew Bielecki: Before I wrap it up and hand, it over to Amanda Let me quickly touch on the current macro environment.

Collegio: Many of these wins were driven by our strong and growing Puerto Rico system, which continues to expand our reach and functionality. Our recently announced WooCommerce partnership is already exceeding expectations with new customer adoption across diverse segments in retail, non retail and international.

Andrew Bielecki: We've been talking with a lot of customers and have heard some consistent themes.

Andrew Bielecki: In general many of our customers are feeling tentative, but optimistic.

Andrew Bielecki: Any of them have already diversify their supply chain over the last year and several brands with no exposure to China mentioned, they are considering going on the offensive growing inventory for the holiday season, and going after more market share play.

Collegio: In Q1, we also deepen our relationship with major tech platforms, like meta and tech talks, through expanded integrations with Klaviyo. Importantly, they are seeing the value of building on the Klaviyo data platform to help their customers drive growth and build stronger data-informed relationships.

Andrew Bielecki: <unk> is important in both favorable and challenging macroeconomic environment stems from the critical role our platform plays we help companies retain and engage their existing loyal consumers and those existing consumers are an important component of every business regardless of the economic cycle.

Amanda Whalen: As you heard from Andrew, our investments made towards expanding internationally on both the go-to-market and product fronts are delivering returns as our strong international growth continued in the first quarter. EMEA revenue grew 47% year-over-year, and total EMEA and APAC revenue grew 42% year-over-year. Our Q1 revenue overperformance was driven by broad-based strength. Consistent with our expectations, the pricing updates that went live in February contributed an immaterial amount to first quarter revenue. We continue to believe that the pricing changes will have a minimal impact on full year growth rates, and we will only provide further updates if our views change.

Collegio: and we continue to expand the number of hospitality integrations with the availability of punch, a loyalty vendor for restaurants.

Andrew Bielecki: Customers have also told us that consolidated from multiple point solutions.

Andrew Bielecki: <unk> is a key consideration as it enabled a single source of truth to build personalized loyal relationships.

Collegio: We've been talking with a lot of customers and have heard some consistent themes. In general, many of our customers are feeling

Andrew Bielecki: Building those loyal relationship is absolutely essential and <unk> enabled our customers to do exactly that with exceptional and measurable ROI.

We have a massive market opportunity ahead of us and our data first BDC CRM platform is a key differentiator that positions <unk> to redefine consumer engagement.

Collegio: Klaviyo's importance in both favorable and challenging macroeconomic environments stems from the critical role our platform plays. We help companies retain and engage their existing loyal consumers, and those existing consumers are an important component of every business regardless of economic cycle.

Amanda Whalen: Moving on, first quarter non-GAAP gross margin was 77 percent, down approximately three points year over year, primarily due to increased infrastructure costs and the continued growth of our SMS product. A portion of the incremental infrastructure costs supported the expansion of important feature capabilities for larger customers and new verticals, and our ongoing commitment to provide infrastructure to serve businesses of all sizes.

Andrew Bielecki: As we look ahead, we are focused on continuing to deliver the innovations that our customers and partners are asking for this.

Andrew Bielecki: This includes further integrating AI throughout the play Youll platform, adding more marketing channels and expanding service use cases, we.

Collegio: Professors have also told us that consolidating from multiple coin solutions to Klaviyo is a key consideration as it enables a single source of truth to build personalized loyal relationships.

Andrew Bielecki: We are well positioned to be the platform that every consumer oriented business standardizes on for marketing to service to analytics, enabling them to build strong personalized relationships with each of their consumers.

Collegio: Eilding those loyal relationships is absolutely essential. In Klaviyo enable our customers to do exactly that with exceptional and measurable ROI.

Amanda Whalen: And with that I'd like to turn it over to Amanda.

Amanda Whalen: Turning to non-GAAP operating expenses. As a reminder, in Q1, we began accruing for our employee cash bonus program on a quarterly basis, resulting in an increase in each line item year over year. DNA as a percentage of revenue declined year over year as a result of smaller one-time items compared to last year. R&D as a percentage of revenue also declined due to an increase in capitalized volume. Sales and marketing as a percentage of revenue increased year over year as a result of timing of marketing program spend and incremental investments for B2C CRM. For the first quarter, our non-GAAP operating income was $32 million, representing a non-GAAP operating margin of 11.6%.

Amanda Whalen: Thanks, Andrew.

Amanda Whalen: <unk> drove our strong first quarter to kick off 2025, as we continue to deliver efficient growth at scale.

Collegio: We have a massive market opportunity ahead of us, and our data first B2CCRM platform is a key differentiator that positions Klaviyo to redefine consumer engagement.

Amanda Whalen: Revenue grew 33% year over year to $280 million and we delivered a non-GAAP operating margin of 11, 6%. We're really pleased with these results are.

Collegio: As you look ahead, we are focused on continuing to deliver the innovations that our customers and partners are asking for. This includes further integrating AI throughout the Plagueo platform, adding more marketing channels and expanding service use cases.

Amanda Whalen: Our first quarter results were continued proof of the value, we deliver to customers and reflect the successful execution of our growth strategy.

Collegio: We are well-juditioned to be the plow that every humoromer and creative business can have an eye on on. From marketing to service to analytics, enabling them to build strong, personalized relationships with each of their consumers.

Amanda Whalen: We are adding new customers growing in the mid market expanding with existing customers and expanding internationally.

Amanda Whalen: We ended Q1 with more than 169000 customers up 16% year over year.

Collegio: And with that, I'd like to carry over to Amanda.

Amanda Whalen: Thanks, Andrew. Klaviyo drove a strong first quarter to kick off 2025 as we continue to deliver efficient growth at scale. Revenue grew 33% year-over-year to $280 million, and we delivered a non-GAAP operating margin of 11.6%.

Amanda Whalen: This was better than our expectations as our customer retention was stronger than anticipated following the pricing updates we announced during the quarter and remained consistent with prior quarters.

Amanda Whalen: This came in better than our guidance, primarily as a result of the revenue upside we saw in the quarter. We generated free cash flow of $6.6 million during the quarter, which was better than expected due to the higher collections and timing of payments. As a reminder, we paid out our employee cash bonus program in Q1, which impacted free cash flow.

Amanda Whalen: In fact, our customer retention rates coming off the holiday season were consistent with the trends we saw in Q1 last year.

We're really pleased with these results.

Amanda Whalen: Our first quarter results were continued proof of the value we deliver to customers and reflect the successful execution of our growth strategy.

Amanda Whalen: Our success in attracting larger customers is evident as we ended the quarter with 3030 customers with over $50000 in the IRR up 40% year over year.

Amanda Whalen: Before turning to guidance, let me briefly discuss the macro environment. While potential tariffs and consumer sentiment are top of mind for our customers and for Klaviyo, thus far we have not seen a material impact on our business. Klaviyo drives revenue for our customers from their existing consumers, which is typically a highly efficient and profitable growth channel. Should they need to scale back, many customers have told us that retention would be one of the last areas where they would reduce spending. Instead, they would be more likely to pull back on new consumer acquisition costs, such as ad spending.

Amanda Whalen: We are adding new customers, growing in the mid-market, expanding with existing customers, and expanding internationally.

Amanda Whalen: And we now have more than 1000 customers paying us more than $100000 and IRR.

Amanda Whalen: We continue to see a strong trend as new lands in this cohort demonstrating the payoff from our investments in the mid market and above.

Amanda Whalen: This was better than our expectations as our customer retention was stronger than anticipated following the pricing updates we announced during the quarter and remained consistent with prior quarters.

Amanda Whalen: We delivered a Q1 <unk> of 108% in line with last quarter, driven by consistent gross revenue retention improvement in email expansion.

Amanda Whalen: In fact, our customer retention rates coming off the holiday season were consistent with the trends we saw in Q1 last year.

Amanda Whalen: And to a lesser extent benefit from the pricing changes.

Amanda Whalen: Klaviyo's position as a high ROI, must-have revenue generator for brands of all sizes, gives us greater stability through a range of economic cycles. Our business performed well in Q1 and remains strong. However, we are also paying close attention to the macro environment and the impact it may have on our business. As a result, our guidance reflects a balance between the strength of our business and the uncertainty of the macroenvironment. We believe this is a prudent approach as it factors in some potential economic risk.

Amanda Whalen: We don't forecast or guide to this number we are pleased with the consistency we're seeing.

Amanda Whalen: Our success in attracting larger customers is evident as we ended the quarter with 3,030 customers with over $50,000 in ARR, up 40% year-over-year.

Amanda Whalen: We are continuing to drive progress in our cross sell motion and we're seeing more of our larger customers land enclave with multiple products and.

Amanda Whalen: We now have more than 1000 customers paying us more than $100,000 in ARR. We now have more than $100,000 in ARR.

In Q1, our SMS penetration within SMB and mid market customers increased again, we saw strong adoption of our marketing analytics application and we are seeing a lot of interest from customers for our new customer hub service offering.

Amanda Whalen: We continue to see a strong trend of new lands in this cohort, demonstrating the payoff from our investments in the mid-market and above.

Amanda Whalen: We delivered a Q1 NRR of 108% in line with last quarter, driven by consistent, gross revenue retention, improvement in email expansion, and to a lesser extent benefit from the pricing changes.

Amanda Whalen: As you heard from Andrew our investments made towards expanding internationally on both the go to market and product fronts are delivering returns as our strong international growth continued in the first quarter.

Amanda Whalen: As we look ahead, we remain optimistic about 2025 and beyond. For Q2, we expect revenue of $276 to $280 million, representing year-over-year growth of 24% to 26%. driven by continued strength up market and international We expect second quarter non-GAAP operating income of $28.5 to $31.5 million, representing a non-GAAP operating margin of $10 to $11.3 million.

Amanda Whalen: <unk> revenue grew 47% year over year, and total EMEA and APAC revenue grew 42% year over year.

Amanda Whalen: While we don't forecast or guide to this number, we are pleased with the consistency we're seeing.

Amanda Whalen: We are continuing to drive progress in our cross-cell motion and we're seeing more of our larger customers land on Klaviyo with multiple products.

Amanda Whalen: Our Q1 revenue over performance was driven by broad based strength.

Amanda Whalen: Consistent with our expectations the pricing updates that went live in February contributed material amount in the first quarter revenue.

Amanda Whalen: In Q1, our SMS penetration within SMB and mid-market customers increased again. We saw strong adoption of our marketing analytics application, and we are seeing a lot of interest from customers for our new customer hub service offering. [inaudible]

Amanda Whalen: We continue to believe that the pricing changes will have a minimal impact on full year growth rates and we will only provide further updates if our view changes.

Amanda Whalen: For the full year 2025, we are raising revenue guidance to $1.171 billion to $1.179 billion. for year-over-year growth of 25 to 26 percent. We expect non-GAAP operating income of $133 to $139 million, representing a non-GAAP operating margin of $11 to $12 billion.

Amanda Whalen: As you've heard from Andrew, our investments made towards expanding internationally on both the go-to-market and product fronts are delivering returns as our strong international growth continued in the first quarter.

Amanda Whalen: Moving on first quarter non-GAAP gross margin was 77% down approximately three points year over year, primarily due to increased infrastructure costs and the continued growth of our SaaS products.

Amanda Whalen: Emea revenue grew 47% year-over-year, and total Emea and APAC revenue grew 42% year-over-year.

Amanda Whalen: A portion of the incremental infrastructure cost reported the expansion of important feature capabilities for larger customers and new verticals and our ongoing commitment to provide infrastructure to serve businesses of all sizes.

RQ-1 Revenue Over Performance, was driven by broad-based strength.

Amanda Whalen: In closing, we are off to a strong start this year and our growth strategy is bearing fruit as we're delivering balanced top and bottom line growth efficiently and at scale. Our position in the market continues to strengthen.

Amanda Whalen: Concession with our expectations, the pricing updates that went live in February contributed an immaterial amount to first quarter revenue.

Amanda Whalen: Turning to non-GAAP operating expenses.

As a reminder, in Q1, we began accruing for our employee cash bonus program on a quarterly basis, resulting in an increase in each line item year over year.

Amanda Whalen: We continue to believe that the pricing changes will have a minimal impact on full-year growth rates and we will only provide further updates if our view changes.

Amanda Whalen: We are the only CRM for consumer brands that can power personalized engagement with our marketing automation, customer service, and marketing This vertically integrated offering is establishing a foundation of sustainable growth for both Klaviyo and our customers.

Amanda Whalen: G&A as a percentage of revenue declined year over year as a result of smaller onetime items compared to last year.

Amanda Whalen: Moving on, first quarter non-GAAP gross margin was 77%, down approximately 3 points year over year, primarily due to increased infrastructure costs and the continued growth of our SMS product.

Amanda Whalen: R&D as a percentage of revenue also declined due to an increase in capitalized software.

Amanda Whalen: Sales and marketing as a percentage of revenue increased year over year as a result of timing of marketing program spend and incremental investments for BDC CRM.

Amanda Whalen: A portion of the incremental infrastructure costs supported the expansion of important feature capabilities for larger customers and new verticals and our ongoing commitment to provide infrastructure to serve businesses of all sizes.

Operator: And with that, I'll open the call up for Q&A. Operator? Thank you.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.

Amanda Whalen: For the first quarter, our non-GAAP operating income was $32 million, representing a non-GAAP operating margin of 11, 6%.

Turning to non-GAAP operating expenses

Operator: We ask that you please limit yourself to one question before returning to the queue.

Amanda Whalen: As a reminder, in Q1, we began accruing for our employee cash bonus program on a quarterly basis, resulting in an increase in each line item year over year.

Amanda Whalen: This came in better than our guidance, primarily as a result of the revenue upside we saw in the quarter.

Raimo Lenschow: Your first question comes from the line of Raimo Lenschow from Barclays. Your line is open. Perfect. Thank you. And congrats for me. A simple question, you addressed it on the call already a little bit, like if you think about uncertain times, AD, like, and Amanda, what have you seen before? Like, you know, we've just had like 2022, 2023, where it was a little bit more uncertain. Can you compare kind of what you saw there and customer behavior at the moment that you're seeing? Thank you. And congrats for me again.

Amanda Whalen: We generated free cash flow of $6 6 million during the quarter, which was better than expected due to the higher collections and timing of payments.

Amanda Whalen: GNA as a percentage of revenue declined year over year as a result of smaller one-time items compared to last year.

Amanda Whalen: As a reminder, we paid out our employee cash bonus program in Q1, which impacted free cash flow.

Amanda Whalen: R&D as a percentage of revenue also declined due to an increase in capitalized software.

Amanda Whalen: Before turning to guidance, let me briefly discuss the macro environment, while potential tariffs and consumer sentiment are top of mind for our customers and for <unk>.

Amanda Whalen: Sales and marketing as a percentage of revenue increased year-over-year as a result of timing of marketing program spend and incremental investments for B2C CRM.

Andrew Bialecki: Yeah, thanks for that question, Raimo.

Amanda Whalen: Thus far we have not seen a material impact on our business.

Amanda Whalen: For the first quarter, our non-GAAP operating income was $32 million, representing a non-GAAP operating margin of 11.6%.

Andrew Bialecki: So, you know, the first thing we'll say is that we're very happy about the quarter. Thanks to our customers, to Klaviyo's for making it all possible. And because Klaviyo's mission critical, the businesses that we work with, you know, we're a revenue engine for these businesses, and we help connect them to their most important asset, which is their customers and their existing customers. So I think when the economic environment is a little more uncertain, as I've talked to customers in the last few weeks, the last few months, they're doubling down on existing consumer relationships. They know there's very high ROI from our products.

Speaker Change: Clay do you drive revenues for our customers from their existing consumers, which is typically a highly efficient and profitable growth channel.

Amanda Whalen: This came in better than our guidance, primarily as a result of the revenue upside we saw in the quarter.

Speaker Change: Should they need to scale back many customers have told us that retention would be one of the last areas, where they would reduce spending instead, they would be more likely to pull back on new consumer acquisition costs, such as AD spending.

Amanda Whalen: We generated free cash flow of $6.6 million during the quarter which was better than expected due to the higher collections and timing of payments.

Amanda Whalen: As a reminder, we paid out our Employee Cash Bonus Program in Q1, which impacted free cash flow.

Speaker Change: <unk> position as a high ROI must have revenue generator for brands of all sizes gives us greater stability through a range of economic cycles.

Before turning to guidance, let me briefly discuss the macroenvironment. [inaudible]

Amanda Whalen: While potential tariffs and consumer sentiment are top of mind for our customers and for Klaviyo, thus far we have not seen a material impact on our business.

Speaker Change: Our business performed well in Q1 and remained strong.

Amanda Whalen: They're leaned into that. And as the economic cycle kind of waxes and wanes, we built Klaviyo to really be an all-weather company and all-weather product. So when businesses are growing, a number of customers, new customers, we can help with acquisition. And on the flip side, when it's more challenging, I think a lot of businesses turn back to focusing on their existing customers and those relationships that they already have, and Klaviyo is the source of truth for all that. So I think we're happy with where we are. Also, as we've talked to our customers, we mentioned in the opening remarks, our customers are cautious, but they're optimistic because of those relationships they have with their customers, their ability to grow off of that.

Speaker Change: However, we are also paying close attention to the macro environment and the impact it may have on our business.

Amanda Whalen: Klaviyo drives revenue for our customers from their existing consumers, which is typically a highly efficient and profitable growth channel.

Speaker Change: As a result, our guidance reflects the balance between the strength of our business and the uncertainty of the macro environment.

Amanda Whalen: Should they need to scale back? Many customers have told us that retention would be one of the last areas where they would reduce spending. Instead, they would be more likely to pull back on new consumer acquisition costs such as ad spending.

Speaker Change: We believe this is a premium approach as it factors in some potential economic risk as we look ahead, we remain optimistic about 2025 and beyond.

For Q2, we expect revenue of $276 million to $280 million, representing year over year growth of 24% to 26% driven by continued strength up market and internationally.

Amanda Whalen: <unk> position as a high ROI must have revenue generator for brands of all sizes gives us greater stability to a range of economic cycles.

Amanda Whalen: Our business performed well in Q1 and remained strong.

Speaker Change: We expect second quarter non-GAAP operating income of 28, five to $31 $5 million, representing a non-GAAP operating margin of 10% to 11%.

Amanda Whalen: And we've also talked to a lot of businesses, and they're very resilient. Our customer base is very diverse. There's a variety of folks with different business models, different supply chains. And collectively, I think we've been there to support them, and we think that they've been working through this cautiously, but I think they're optimistic about what's ahead.

Amanda Whalen: However, we are also paying close attention to the macro environment and the impact it may have on our business.

Amanda Whalen: As a result, our guidance reflects a balance between the strength of our business and the uncertainty of the macro environment.

Speaker Change: For the full year 2025, we are raising revenue guidance to one $1 71 billion to $1 179 billion.

Amanda Whalen: We believe this is a prudent approach as it factors in some potential economic risk as we look ahead, we remain optimistic about 2025 and beyond.

Speaker Change: For year over year growth of 25% to 26%.

Amanda Whalen: And just to add a couple of points to what AB had to say there, you know, first, as we shared, we're really pleased with the ongoing strength and resilience that we've seen not only in our business, but in our customers as well. We are closely monitoring the key metrics in our business like customer sales cycle, which remains stable, and KAV, which is continuing to grow. And as we think about Klaviyo over multiple economic cycles, it's important to remember that we index to digital relationships, those profiles and relationships that a brand has with their consumers, and not to GMV.

Speaker Change: We expect non-GAAP operating income of $133 million to $139 million.

Amanda Whalen: For Q2, we expect revenue of $276 million to $280 million, representing year over year growth of 24% to 26% driven by continued strength up market and internationally.

Speaker Change: Representing a non-GAAP operating margin of 11% to 12%.

Speaker Change: In closing we are off to a strong start this year and our growth strategy is bearing fruit as we are delivering balanced top and bottom line growth efficiently and at scale.

Amanda Whalen: We expect second quarter non-GAAP operating income of 28, five to $31 $5 million, representing a non-GAAP operating margin of 10% to 11%.

Speaker Change: Position in the market continues to strengthen we are the only CRM for consumer brands that can power personalized engagement with our marketing automation customer service and marketing analytics applications built on top of the <unk> data platform.

Amanda Whalen: For the full year 2025, we are raising revenue guidance to 117 1 billion to $1 179 billion.

Amanda Whalen: So our business tends to experience less volatility, both in good times and in bad. That's illustrated recently by the trends that we're seeing of KAV growth outpacing GMV growth as our customers focus down, as AB said, on those loyal existing customer relationships. And then from our business perspective, we are focused on controlling the things that we can control and leaning into the strengths that have long defined Klaviyo. And this includes just like AB was talking about, staying close to our customers, investing in strategic growth priorities and operating the business prudently, just as we always have.

Amanda Whalen: For year over year growth of 25% to 26%.

Speaker Change: As a vertically integrated offering is establishing a foundation of sustainable growth for both <unk> and our customers and with that I'll open the call up for Q&A operator.

Amanda Whalen: We expect non-GAAP operating income of $133 million to $139 million representing.

Amanda Whalen: Representing a non-GAAP operating margin of 11% to 12%.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw your question can be press star. One again, we ask that you. Please limit yourself to one question before returning to the queue.

Amanda Whalen: In closing we are off to a strong start this year and our growth strategy is bearing fruit as we're delivering balanced top and bottom line growth efficiently and at scale.

Our position in the market continues to strengthen we are the only CRM for consumer brands that can power personalized engagement with our marketing automation and customer service and marketing analytics application.

Speaker Change: Our first question comes from the line of Raimo <unk> from Barclays. Your line is open.

Raimo Lenschow: Very clear. That's very helpful. Thank you.

Speaker Change: Perfect. Thank you.

Speaker Change: Thats from me.

Jackson Ader: Your next question comes from a line of Jackson Ader from KeyBank Capital Markets. Your line is open. Great. Thanks for taking our questions, guys.

Speaker Change: Two quick questions addressed it on the call over to you a little bit like if you think about uncertain times.

Built on top of the <unk> data platform.

Speaker Change: I'd like.

Amanda Whalen: This vertically integrated offering is establishing a foundation of sustainable growth for both <unk> and our customers and with that I'll open the call up for Q&A operator.

Speaker Change: What have you seen before like we just had like 2022.

Jackson Ader: First one is, can you just give us a sense for maybe your your overall exposure or end customers exposure to either China or other tariff countries in terms of the goods that they sell on their platform that run through Slavio? Sure. Thanks for the question, Jackson. There are many different ways to be exposed to China, especially with a customer base that's as large and diverse as ours, so it's a bit of a complex situation. But as A.B. mentioned, we've been having many conversations with our customers over the last month. As you might imagine, our customer base sells many diverse products, and because of that, their supply chains are very diverse as well.

Great.

It was a little bit more uncertain.

Speaker Change: Can you compare kind of what you saw there.

Speaker Change: Customer behavior at the moment that you're seeing there. Thank you and congrats from me again.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw your question simply press Star. One again, we ask that you. Please limit yourself to one question before returning to the queue. Your first question comes from the line of Raimo <unk> from Barclays. Your line is open.

Speaker Change: Yeah. Thanks for the question Raimo So yes.

Speaker Change: The first thing we will say is.

Speaker Change: We're very happy about a quarter.

Speaker Change: For our customers to <unk>, making it all possible.

Speaker Change: Because clearly with mission critical the businesses that we work with.

Speaker Change: We're a revenue engine these businesses and we help connect them to their most important.

Speaker Change: Perfect. Thank you and congrats from me.

Speaker Change: Similar question you addressed it on the call over to you a little bit like if you think about uncertain times.

Yet, which is their customers and their existing customers. So I think when <unk>.

Speaker Change: And Amanda what have you seen before like we've just had like 2022 23.

Speaker Change: Economic environment is a little more uncertain.

I've talked to customers in the last few weeks last few months.

Andrew Bialecki: We've heard from many of them that they've been already diversifying their supply chain away from China over the last several quarters as tariff potential started to emerge. And then we've also heard from some brands who have no exposure to China, and they're viewing this point in time as an opportunity, where they're thinking about doubling down, acquiring increased inventory, and even potentially going on the offensive to win market share. Overall, what they're telling us, as we said earlier, is that they're tentative, but they're really optimistic in this dynamic environment. And from our business perspective, we're very confident that we drive high ROI for our customers, and we're essential for both their growth and their retention, which makes us an incredibly important partner to them in both good and challenging macro times.

Speaker Change: There's a little bit more on Kirby can.

Speaker Change: They are doubling down on existing consumer relationships. They know, there's very high ROI from our product <unk>.

Speaker Change: Can you compare kind of what you saw there.

Speaker Change: Customer behavior at the moment that you're seeing thank you one quick comment from me again.

Speaker Change: <unk> leaned into that.

Speaker Change: Yeah. Thanks for the question Raimo So yes.

Speaker Change: As the economic cycle, what kind of.

Speaker Change: The first thing I'll say is.

Speaker Change: Waxes and wanes, we built plagued us really be an all weather company in all weathers in a product so when when business or growing the number of customers new customers, we can help with acquisition.

Speaker Change: <unk>.

Speaker Change: About a quarter.

Speaker Change: So our customers to <unk> make it all possible.

Speaker Change: Because clearly those mission critical the businesses that we work with.

Speaker Change: And on the flip side was more challenging I think a lot of this has turned back to focusing on their existing customers.

Speaker Change: We are a revenue engine for these businesses and we help connect them to their most important.

Speaker Change: And those relationships that already have clearly is the source of truth for all that.

Speaker Change: <unk>, which is their customers and their existing customers.

Speaker Change: So I think when.

Speaker Change: So I think we're very.

Speaker Change: The economic environment is a little more uncertain as I've talked to customers in the last few weeks last few months.

Speaker Change: We're happy with where we are also as we talk to more customers. We mentioned in the opening remarks.

Speaker Change: Our customers are cautious, but there are optimistic.

Speaker Change: They are doubling down on existing consumer relationships. They know, there's very high ROI from our products.

Andrew Bialecki: Okay, great, that's helpful.

Jackson Ader: And then a quick follow-up.

Speaker Change: Because of those relationships they have with their customers the ability to grow off of that.

Amanda Whalen: If we think about all the new... All the new products that have been launched, whether it's CRM or customer hub or service, what kind of growth or expectation for contribution from those new products are baked into 2025 at this point? Thank you.

Speaker Change: <unk> leaned into that.

Speaker Change: And we've also talked to a lot of businesses and they are very very resilient.

Speaker Change: As the economic cycle kind of waxes and wanes, we don't plan to go to really be an all weather.

Speaker Change: Our customer base is very diverse there is a variety of folks that.

Speaker Change: Being an all weather as a product so when when business or growing the number of customers new customers, we can help with acquisition.

Speaker Change: With different business models different supply chains, and I think as collectively I think we've been there to support them and we think that theyre going to.

Amanda Whalen: Yeah, I can take that. So the first is we haven't baked in a lot of revenue into our guidance and our projections for this year to give ourselves time to tune those products and make sure we've really got them right for customers before we scale them out.

Speaker Change: Flip side was more challenging I think a lot of business turned back to focusing on their existing customers.

Speaker Change: They've been working through this.

Speaker Change: Cautiously, but I think they are optimistic about com.

Speaker Change: And those relationships have already had quite a bit as the source of truth for all that.

Speaker Change: What's that.

Speaker Change: And then just to add a couple of points to what <unk> has to stay there first as we shared we're really pleased with the ongoing strength and resilience that we've seen not only in our business, but in our customers as well we are closely monitoring the key metrics in our business my customer sales cycle, which remains stable and <unk>, which is continuing to grow.

Speaker Change: So I think we're very.

Speaker Change: We're happy with where we are also as we've talked to more customers you mentioned in your opening remarks.

Amanda Whalen: But I'll tell you, since the launch in February, you know, we broadened out Klaviyo's vision from just, you know, marketing and email and SMS to well beyond that, to say, hey, you know, what are all the aspects of the customer experience that Klaviyo can help with? And I think most importantly, just like our marketing products, we're able to tie back actual, you know, attributed revenue, additional sales that customers are seeing from those, you know, consumers, those website visitors that are taking advantage of this new functionality. And that's the tune of – I've talked to a couple of brands where it's generating, you know, these are small, mean-sized businesses that are generating incremental tens of thousands of dollars in sales.

Our customers are cautious, but they're optimistic.

Speaker Change: Because of those relationships they have with their customers the ability to grow off of that.

Speaker Change: And we've also talked a lot of businesses and they're very very resilient.

Speaker Change: And as we think about played you over multiple economic cycles. It is important to remember that we index to digital relationships theres profiles and relationships.

Speaker Change: Our customer base is very diverse theres.

Speaker Change: Theres a variety of folks that.

Speaker Change: With different business models, agile supply chain and I think as collectively I think we've been there to support them and we think that theyre going on they.

Speaker Change: Brand has with their consumers and not <unk>. So our business tends to experienced last volatility both in good times and in bad.

<unk> been working through this.

Speaker Change: Cautiously, but I think they are optimistic about.

Speaker Change: With that.

Speaker Change: Where that's illustrated recently by the trends that we're seeing a cave growth outpacing GMB growth as our customers focus to Allen.

And just to add a couple of points to what <unk> had to stay there first as we shared we're really pleased with the ongoing strength and resilience that we've seen not only in our business, but in our customers as well we are closely monitoring the key metrics in our business like customer sales cycle, which remains stable in K, a V which is continuing to grow.

Speaker Change: Said on those loyal existing customer relationships and then from our business perspective, we are focused on controlling the things that we can control and leaning into the strengths that have long defined <unk> and this includes just like AP was talking about staying close to our customers investing in strategic growth priorities and operating the business prudently.

Speaker Change: And as we think about Cleo over multiple economic cycles. It is important to remember that we index to digital relationships theres profiles and relationships.

Speaker Change: Just as we always have.

Speaker Change: Okay very clear that's very helpful. Thank you.

Speaker Change: Brand has with their consumers and not to <unk>. So our business tends to experienced last volatility.

Speaker Change: Your next question comes from the line of Jackson Ader from Keybanc capital markets. Your line is open.

Amanda Whalen: So, they can see the ROI from these new products.

Speaker Change: Both in good times and in bad.

Amanda Whalen: And, you know, what we're excited about is marketing and service. We think about those as the, you know, proactive and reactive sides of the customer experience. We're excited to bring those together and show that service can be more than just, you know, answering questions, but can actually drive a better – better engagement, so much that it leads to additional sales. So, we're off to a good start there.

Speaker Change: Great.

Speaker Change: Where that's illustrated recently by the trends that we're seeing a K a V growth outpacing GMB growth as our customers focus to Allen as a b said on those loyal existing customer relationships and then from our business perspective, we are focused on controlling the things that we can control and leaning into the strengths that have long defined.

Speaker Change: Thanks for taking our questions guys. First one is can you just give us a sense for maybe your overall exposure or end customers exposure to either China or other tariff countries in terms of the goods that they sell on their platform that run through Flavia.

Amanda Whalen: They'll be, you know, we're working on pricing and packaging for that. But, critically, the feedback has been really strong.

Speaker Change: Yeah and this includes just like AP was talking about staying close to our customers investing in strategic growth priorities and operating the business prudently just as we always have.

Alright. Thanks for the question Jackson, there are many different ways to be exposed to China, especially with our customer base is large and diverse as ours. So it's a bit of a complex situation, but as Dave mentioned, we've been having many conversations with our customers over the last month.

Amanda Whalen: And then, on the analytics side, you know, we launched a marketing analytics product, SKU, in February. And that was based on talking to customers and realizing that, you know, the analytics that Colivia was providing as part of our – formerly our CDP product, It's actually applicable to a lot more businesses that we're excited to use some of our RFM analysis, some of our funnel analysis to help them figure out which customers were at what stage of the life cycle and connect that directly back into marketing. And again, to drive incremental revenue, right? And it makes the overall ROI of Klaviyo, their investment in Klaviyo higher.

Speaker Change: Okay very clear that's very helpful. Thank you.

Speaker Change: Your next question comes from the line of Jackson Ader from Keybanc capital markets. Your line is open.

Speaker Change: As you might imagine our customer base those many diverse products and because of that their supply chains are very diverse as well we've heard from many of them that they have been already diversifying their supply chain away from China over the last several quarters as tariff.

Speaker Change: Great. Thanks.

Jackson Ader: Thanks for taking our questions guys. First one is can you just give us a sense for maybe your your overall exposure or end customers exposure to either China or other tariff countries in terms of the goods that they sell on their platform that run through <unk>.

Speaker Change: Potential starting to emerge and then we've also heard from some brands who have no exposure to China and Theyre viewing at this point in time as an opportunity where they're thinking about doubling down acquiring increased inventory and even potentially going on the offensive to win market share.

Amanda Whalen: We realized that wasn't just something for larger enterprise brands, but actually our entrepreneurs, our smaller SMBs, our SMBs also benefit from that. So we're very happy with the progress we've made and the sales we've seen for that product in Q1. And we expect that that's going to be a revenue driver as well.

Jackson Ader: Sure. Thanks for the question Jackson, there are many different ways to be exposed to China, especially with a customer base that is large and diverse as ours. So it's a bit of a complex situation, but as Andy mentioned, we've been having many conversations with our customers over the last month.

Speaker Change: Overall, what they're telling us as we said earlier is that there are tentative, but theyre really optimistic in this dynamic environment and from our business perspective, we're very confident that we drive higher ROI for our customers and we are essential for both their growth and their retention, which makes us an incredibly important partnership M. In both good.

Amanda Whalen: So we didn't bake a lot of revenue expectation into the year from those new products, but we're excited about the potential they're going to have in 2026 and future years. And one thing we're particularly excited about with marketing analytics is just as A.B. said, the power of the results that it drives for our customers.

Jackson Ader: As you might imagine our customer base, so many diverse products and because of that their supply chains are very diverse as well and we've heard from many of them that they've been already diversifying their supply chain away from China over the last several quarters there's tariff.

Speaker Change: In challenging macro times.

Speaker Change: Okay, great that's.

Speaker Change: That's helpful and then a quick follow up.

Speaker Change: If we think about all the new.

Jackson Ader: Potential started to emerge and then we've also heard from some brands who have no exposure to China and they're viewing this point in time as an opportunity where they're thinking about doubling down acquiring increased inventory and even potentially going on the offensive to win market share.

Amanda Whalen: One of my favorite stories from the quarter was Caracara, a growing D2C brand, longtime Klaviyo email customer. They recently consolidated their tech stack onto Klaviyo, adding SMS and marketing analytics because they wanted to get new insight into which messaging was resonating with which customers. And by using this really data multi-channel approach, they were able to achieve 170x ROI in just three months. And over 48% of their Klaviyo revenue came from repeat purchaser segments who they identified using that RFM modeling in a marketing analytics. That's great. Really thorough.

All the new products have been launched whether it's CRM or customer Halliburton.

Speaker Change: What kind of growth or expectation for contribution from those new products are baked into 2025 at this point. Thank you.

Jackson Ader: Overall, what they're telling us as we said earlier is that their tentative, but theyre really optimistic in this dynamic environment and from our business perspective, we're very confident that we drive higher ROI for our customers and were essential for both their growth and their retention, which makes us an incredibly important partnership them in both good.

Speaker Change: Yes, I can take that so.

Speaker Change: The first is we haven't baked in a lot of revenue.

Speaker Change: Into our into our guidance.

Speaker Change: And our projections for this year.

Speaker Change: There are some times to those projects really got them right for customers before we scale now, but I'll tell you since the launch in February.

Jackson Ader: In challenging macro times.

Okay great.

We broadened out clear vision from just marketing E mail and SMS.

Jackson Ader: Helpful and then a quick follow up.

Amanda Whalen: Thank you very much.

Jackson Ader: You think about all the new rules.

Speaker Change: Well beyond that to say hey, with all of the aspects of the customer experience to help with and we believe the core three apps for the consumer the bdcs here in stack, our marketing service and analytics I can tell you that like we launched the first product.

Jackson Ader: All the new products that have been launched whether it's CRM or customer Halliburton.

Gabriela Borges: Your next question comes from a line of Gabriela Borges from Goldman Sachs. Your line is open. Hey, good afternoon. Thank you.

Jackson Ader: What kind of growth or expectation for contribution from those new products are baked into 2025 at this point. Thank you.

Amanda Whalen: Amanda, just on Jackson's earlier question, is there a way to think about the relative sizing of those two cohorts that you mentioned, the cautiously optimistic diversifying cohort versus the offensive cohort? And if you looked at the second half of the year, you mentioned taking into account macroeconomic risk. Maybe just a little bit on your forecasting approach there. When we calculate the math, it feels like the second half, where I'm a new guy, is about the same as it was before. So just a little bit on how you thought about that. Thank you. Yeah, great question.

Jackson Ader: Yes, I can take that so.

Speaker Change: In the.

Speaker Change: Within our service.

Jackson Ader: The first is we haven't baked in a lot of revenue.

Speaker Change: Portfolio customer hub and that has been in beta for the last few months, we've got hundreds of businesses using it.

Intuit into our into our guidance.

Jackson Ader: And our projections for this year.

It's a way to extend.

Jackson Ader: At all times to those price initially really got them right Berkoff first before we scale now, but I will tell you since the launch in February.

Speaker Change: Onshore website customer experience allow people to log in and get help with past orders get recommendation guest service right. So that's correct.

Jackson Ader: <unk> broadened out <unk> vision from just marketing and E mail and SMS.

Speaker Change: Answered.

Speaker Change: In the feedback there has been really strong and I think most importantly, just like our marketing products, we're able to tie back actual attributed revenue additional sales the customers are seeing from those consumers because unless I do there is they are taking advantage of this new functionality.

Amanda Whalen: So as we said, there's an incredible amount of diversity across our customer base, and so therefore, you know, not sizing the specifics. But as you think about the revenue guidance and the outlook that we've built in, we raised the revenue guidance on the back of strong Q1 performance, as well as robust customer demand signals that we're seeing. And these conversations that we're having with our customers indicate that they are very clearly focused on retention and growth with their loyal consumers, as well as focused on efficiency, which is exactly where our platform helps them to deliver value.

Jackson Ader: To well beyond that to say Hey, you know what with all of the aspects of the customer experience. If you can help with and we believe the core three apps for the consumer the Bdc's your own stack, our marketing service and analytics I can tell you that like we launched the first product.

Speaker Change: And ask that you know that I've talked to a couple of brands, where it's generating.

Jackson Ader: Within the.

Speaker Change: Small midsized businesses that are generating incremental tens of thousands of dollars in sales. So they can see the ROI from these new products and we're excited about is marketing and served as we think about those as the proactive and reactive sides of the customer experience.

Jackson Ader: Within our service.

Jackson Ader: Portfolio customer hub and that's been in beta for the last few months, we've got hundreds of businesses using it.

Jackson Ader: It's a way to extend our entre website customer experience allow people to log in and get help with past orders get recommendations get guest service right you answered that question to answer.

Amanda Whalen: As we looked at the back half of the year, we undertook extensive scenario planning and a deep analysis of our business, just given the macro backdrop, and that includes looking closely at trends in operational metrics, like customer KAD trends, looking at sales cycle length, all of which have remained consistent through the end of April. Overall, we've got a lot of confidence in the trajectory of the business. And while it remains healthy, we're mindful of the current macro environment. And so we built a healthy dose of prudence into the guidance for the back half of the year that gives us flexibility to adjust for unforeseen risks throughout the year.

Speaker Change: We're excited to bring those together and show that service can be more than just.

Speaker Change: Answering questions, but can actually drive a better and better.

Jackson Ader: And the feedback there has been really strong and I think most importantly, just like our marketing products, we're able to tie back actual.

Speaker Change: Engagement socially Alicia additional sales so we're off to a good start there there'll be we're working on pricing packaging for that but critically the feedback has been really strong.

Jackson Ader: <unk> revenue additional sale the customers are seeing from those consumers because last night. There is they are taking advantage of this new functionality.

Speaker Change: And then on the analytic side.

Speaker Change: Lots of marketing analytics product SKU.

Speaker Change: In February and that was based on talking to customers and realizing that the analytics that <unk> was providing as part of our formerly our CDP product.

Jackson Ader: And after that I've talked to a couple of brands, where it's generating you know these are.

Jackson Ader: Small means that benefit that are generating incremental tens of thousands of dollars in sales. So they can see the ROI from these new products.

Speaker Change: It's actually applicable to a lot more businesses and we're excited to use from our R&M analysis from our final analysis.

Jackson Ader: And we're excited about is marketing and served as we think about those as the proactive and reactive size of the customer experience.

Amanda Whalen: So as we look forward, we will continue to monitor the macro environment, and we will remain agile in responding to any changes that we see out there. We are going to plan to continue to invest behind our growth strategy, because we've seen great returns from those investments thus far.

Speaker Change: Help them figure out, which customers were and what stage of the lifecycle.

Jackson Ader: We're excited to bring those together and show that service can be more than just.

Speaker Change: Connect that directly back into marketing.

Speaker Change: And again to drive incremental revenue right.

Jackson Ader: Answering questions, but can actually drive a better and better.

Speaker Change: The overall ROI of the <unk>.

Jackson Ader: Our engagement so much that it leads to additional sales.

Speaker Change: <unk> investment in <unk> higher.

Amanda Whalen: And we're confident that our platform's value proposition, combined with disciplined approach to execution, positions us really well for continued success. Thank you very much.

Jackson Ader: We're off to a good start there there'll be we're working on pricing and packaging for that but critically the feedback has been really strong.

Speaker Change: We realize that wasn't just something for a larger enterprise brands, but actually our entrepreneurs our smaller smbs are smbs also does it not.

Jackson Ader: And then on the analytic side.

Jackson Ader: <unk> launched a marketing analytics product SKU.

Speaker Change: So we're very happy with the progress we've made in the sales we've seen for that product in Q1, and we expect that that's going to be a revenue driver as well so.

Jackson Ader: In February and that was based on talking to customers and realizing that the analytics at Toledo was providing as part of our formerly our CDP product.

Parker Lane: Your next question comes from the line of Parker Lane from Stiefel. Your line is open. Hi guys, thanks for taking the question.

Speaker Change: We haven't we didn't bake a lot of revenue expectation into the year.

Amanda Whalen: Amanda, maybe just to stay on the same theme of the pertinent guidance in light of the uncertainty out there, when you look at things like FMS attach, international traction, messaging volume, are there any particular areas you feel like would be most sensitive or have been accounted for greater sensitivity in light of what we're seeing out there? Yeah, it's a great question. You know, in this type of environment, where you're seeing lots of uncertainty, we looked at multiple different scenarios, you know, what might happen under multiple, you know, different views of the economy, how customers might respond.

Jackson Ader: It's actually applicable to a lot more businesses that we're excited to use of our R&M analysis from our funnel analysis.

Speaker Change: From those new products, but we're excited about.

Speaker Change: Potentially going to have in 2026 and future years, and one thing, we're particularly excited about with marketing analytics is just as you said the <unk>.

Jackson Ader: Help them figure out which customers were at what stage of the lifecycle.

Jackson Ader: Connect that directly back into marketing.

Jackson Ader: And again to drive incremental revenue right and it makes the overall ROI of the.

Speaker Change: Power of the results that it drives for our customers one of my favorite stories from the quarter was powered horror growing DTC brand longtime <unk> E mail customer they've recently consolidated their tech stack, <unk>, adding SMS and marketing analytics, because they wanted to get new insight into which messaging with <unk>.

Jackson Ader: The other investment in radio higher.

Jackson Ader: We realize that wasn't just something for a larger enterprise brands, but actually our entrepreneurs. Our smaller smbs are F&B is also does it not.

Jackson Ader: So we're very happy with the progress we've made in sales we've seen for that product in Q1, and we expect that that's going to be a revenue driver as well so.

Amanda Whalen: If anyone has a crystal ball out there, it's fairly challenging to see, but we wanted to make that we are prepared for a variety of different scenarios. And so, you know, as we've mentioned before, what we've seen in the past in our business is that because we index to digital relationships, as opposed to GMV, we tend to have less volatility, both on the upside and the downside. And that gives us some confidence in what we expect to see in the backup. And I think that also gives us some confidence. Got it. Appreciate the feedback.

Speaker Change: Resonating with which customers and by using this really data driven multichannel approach they were able to achieve 170 apps ROI in just three months and over 48%. If there <unk> revenue came from repeat purchasers segments do they identified using that RFA modeling in.

Jackson Ader: We haven't baked we didn't bake a lot of revenue expectation into the year.

Jackson Ader: From those new products, but we're excited.

Jackson Ader: About potentially going to have in 2026.

Jackson Ader: And one thing, we're particularly excited about with marketing analytics is just as <unk> said the power of the results that it drives for our customers. One of my favorite stories from the quarter was caracara growing DTC brand longtime Cleo email customer they've recently consolidated their tech stack onto claim you're adding.

Speaker Change: Marketing analytics.

Speaker Change: That's great really thorough thank you very much.

Speaker Change: Your next question comes from the line of Gabriela Borges from Goldman Sachs. Your line is open.

Gabriela Borges: Hey, good afternoon. Thank you Amanda just contact center earlier question is there a way to think about the relative sizing of the two cohorts that you've mentioned the cautiously optimistic diversifying cohort by cohort.

Jackson Ader: <unk> and marketing analytics, because they wanted to get new insight into which messaging was resonating with which customers and by using this really data driven multichannel approach. They were able to achieve 170 ask Roy in just three months and over 48% of their claim via revenue.

Gabriela Borges: And as you looked at the second half of the year, you mentioned taking into account.

Speaker Change: And I'll, let Chris maybe just a little bit on your forecasting approach there when we calculate the math it feels like the second half revenue guide. It's about the same as what is the process just a little bit on how you thought about that thank you.

Jackson Ader: Came from repeat purchasers segments, you de identified using that RF and modeling in a marketing analytics.

Speaker Change: Yeah, Great question. So as we said theres, an incredible amount of diversity across our customer base and so therefore, not sizing the specifics, but as you think about the revenue guidance and the outlook that we've built in we raised the revenue guidance on the back of strong Q1 performance as well as robust customer demand.

Jackson Ader: That's great really thorough thank you very much.

Speaker Change: Your next question comes from the line of Gabriela Borges from Goldman Sachs. Your line is open.

Speaker Change: Hey, good afternoon. Thank you Amanda just can't Jackson's earlier question is there a way to think about the relative sizing of the two cohorts that you mentioned the cautiously optimistic diversifying cohort recipe offensive cohort.

Speaker Change: And signals that we're seeing in these conversations that we're having with our customers indicate that they are very clearly focused on retention and growth with their loyal consumers as well as focus on efficiency, which is exactly where our platform helps them to deliver value as.

Speaker Change: He looked at the second half of the year, you mentioned taking into account.

Brent Bracelin: Your next question comes from the line of Brent Bracelin from Piper Sandler. Your line is open. Thank you. Good afternoon.

Speaker Change: Macroeconomic risks, maybe just a little bit on your forecasting approach there when we calculate the math it feels like the second half revenue guide is about the same as the last before I start just a little bit on how you thought about that thank you.

Speaker Change: As we look through the back half of the year, we undertook extensive scenario planning and a deep analysis of our business just given the macro backdrop and that includes looking closely at trends and operational metrics like customer pay these trends looking at sales cycle length, all of which have remained consistent through the end of April.

Andrew Bialecki: I wanted to go back to the new service and analytics products. A, B, what's the sweet spot relative to size of customer that is responding most favorably to the new products? And then Amanda, could you maybe frame the potential ARPU uplift as you see some early customers consolidate the tech stacks, the 10%, maybe 20%, more than 20% uplift for ARPU?

Speaker Change: Yeah. Great question. So you know as we said theres, an incredible amount of diversity across our customer base and so therefore, not sizing the specifics, but as you think about the revenue guidance and the outlook that we've built and we raised the revenue guidance on the back of strong Q1 performance as well as robust customer demand.

Speaker Change: We're all we've got a lot of confidence in the trajectory of the business.

Speaker Change: And while it remains healthy we're mindful of the current macro environment and so we built a healthy dose of prudent into the guidance for the back half of the year and it gives us flexibility to adjust for unforeseen risks throughout the year.

Amanda Whalen: Just love to hear those two things. Any color there would be helpful. Thanks. Yeah.

Speaker Change: Most that we're seeing in these conversations that we're having with our customers indicate that they are very clearly focused on retention and growth with their loyal consumers as well as focus on efficiency, which is exactly where our platform helps them to deliver value.

Andrew Bialecki: So, I'll touch on each of the two, you know, new product categories. So, let's take analytics first. You know, as we mentioned, we actually think that is wide applicability. I mean, there's maybe some subset of our smallest, you know, the operators that are just starting out, they don't have enough data mass to use our marketing analytics product. But for the vast majority of collegiate customers, we actually think it's a great, it's an easy add-on, it's an easy attach product. So, we think that will apply to the vast majority of our customers. And then for service, you know, it's interesting, Customer Hub, we actually think is applicable to all businesses.

Speaker Change: As we look forward, we will continue to monitor the macro environment and.

And we will remain agile in responding to energy any changes that we see out there we are going to plan to continue to invest behind our growth strategy, because we've seen great returns from those investments thus far.

Speaker Change: As we look to the back half of the year, we undertook extensive scenario planning and a deep analysis of our business just given the macro backdrop in that inquiries looking closely at trends and operational metrics like customer K D trends looking at sales cycle length, all of which have remained consistent through the end of April.

And we're confident that our platform's value proposition combined with disciplined approach to execution positions us really well for continued success.

Speaker Change: Overall, we've got a lot of confidence in the trajectory of the business.

Speaker Change: Thank you very much.

Speaker Change: And while it remains healthy we're mindful of the current macro environment and so we built a healthy dose of prudent into the guidance for the back half of the year and it gives us flexibility to adjust for unforeseen risks throughout the year. So as we look forward, we will continue to monitor the macro environment.

Speaker Change: Your next question comes from the line of Parker Lane from Stifel. Your line is open.

Andrew Bialecki: It's a way to extend the personalization and use the data that's already in your, you know, Klaviyo data platform, a way to use that now extended onto your website. So, that also applies to all market segments. We designed, you know, it's interesting, we started service really focused on, let's work with, you know, SMBs and make sure the, you know, the product market fit is really good there. I think based on, you know, as Amanda talked about, some of the You know, some of the opportunities that we're seeing in the mid-market enterprise, that's making us think harder about how we can make sure that our service products scale to the enterprise more quickly.

Speaker Change: Hi, guys. Thanks for taking the question maybe just to stay on the same theme of the prudent guidance in light of the uncertainty out there. When you look at things like SMS attached international traction messaging volume are there any particular areas you feel like would be most sensitive or have been accounted for a greater sensitivity in light of what we're seeing out there.

Speaker Change: And we will remain agile in responding to entertain any changes that we see out there we are going to plan to continue to invest behind our growth strategy, because we have seen great returns from those investments thus far.

Speaker Change: Yeah, It's a great question.

Speaker Change: In this type of environment, where youre seeing lots of uncertainty we looked at multiple different scenarios.

Speaker Change: And we're confident that our platform's value proposition combined with disciplined approach to execution.

Speaker Change: <unk> is really well for continued success.

Speaker Change: What might happen under multiple different views of the economy, how customers might respond if anyone has a crystal ball out there is fairly challenging.

Andrew Bialecki: We think there's a moment right now with service where, you know, obviously there's a big focus on automation and how to do more with that. You know, using AI and obviously using the Klaviyo data that backs that and, you know, combining that with AI is very powerful. So, we're really thinking about how we can bring that to a larger swath of our customers faster than just our SMBs. And the last thing I'll say is like the story of, hey, all of the entire consumer experience, you want one brain, one Klaviyo data platform, one data platform that undergirds all that, you want all of the applications that interface with your end consumers, you know, our customers' customers, you want all that driven, you know, from one comprehensive platform, that resonates a ton with SMBs and actually more than, you know, more than we expected.

Speaker Change: Thank you very much.

Speaker Change: Your next question comes from the line of Parker Lane from Stifel. Your line is open.

Speaker Change: To see but we wanted to make sure that we are prepared for a variety of different scenarios.

Parker Lane: Hi, guys. Thanks for taking the question maybe just to stay on the same theme of the prudent guidance in light of the uncertainty out there. When you look at things like SMS attach international traction messaging volume are there any particular areas you feel it would be most sensitive or have been accounted for greater sensitivity in light of what we're seeing out there.

Speaker Change: So you know as we've mentioned before what we've seen in the past in our business is that because we index to digital relationships as opposed to <unk>, we tend to have less volatility both on the upside and the downside.

Speaker Change: Yeah, It's a great question.

Speaker Change: And that gives us some confidence in what we expect to see in the back half year.

Speaker Change: In this type of environment, where youre seeing lots of uncertainty we looked at multiple different scenarios.

I'll add one other thing.

I mean, I talked about the ROI of our products.

Speaker Change: What might happen under multiple different views of the economy, how customers might respond if anyone has a crystal ball out there it's fairly challenging.

Speaker Change: Even with SMS, where there is a slightly higher cost basis to our customers. We're able to show the ROI of SMS campaigns, obviously as well as email campaigns all involves marketing directly to <unk> and as long as that ROI continues to be very positive.

Andrew Bialecki: It resonates a lot with enterprise. So, we're very much leaning into that opportunity.

Speaker Change: To see but we wanted to make sure that we are prepared for a variety of different scenarios and.

Amanda Whalen: And yeah, I'm going to talk a little bit about some of the, you know, ARPU. In terms of the ARPU uplift, you know, service, as A.B. mentioned, is early days. We are still in beta, so more to come on service and service pricing, both as we approach GA later this year and also as we continue to build out the suite of offerings related to service. Marketing analytics has a nice ARPU uplift associated with it. It's a portion of email, so it's not necessarily the same ARPU uplift that you would see from a product like SMS, but also one of the wonderful things about both marketing analytics and service is that they are leveraging the same underlying data, the same consumer relationships, in other words, largely the same cost structure associated with our email and data platform.

Speaker Change: So you know as we've mentioned before what we've seen in the past in our business is that because we index to digital relationships as opposed to <unk>, we tend to have less volatility both on the upside and the downside.

Speaker Change: Even if the even if there is a little bit of merit to that is so good that we find and I talked to businesses.

Speaker Change: Not constraining by them, so long as theyre seeing that performance.

Speaker Change: Yes, that's one of the things that gives us confidence about.

Speaker Change: Could you going forward as we have said, we would be kind of it's not marketing to customers you don't know and have to acquire the customers you already know and are getting to come back and that obviously helps the ROI, but also means that sort of the.

Speaker Change: And that gives us some confidence in what we expect to see in the back half of the year.

Speaker Change: Hey, maybe I'll add one other thing.

Speaker Change: As a minute talking about the ROI of our products.

Speaker Change: Even with SMS, where there's a slightly higher cost basis to our customers.

The budgeted marketing that you can deploy is already somewhat known it's already in your <unk> account.

Speaker Change: We're able to show the ROI of SMS campaigns, obviously as well as email campaigns, all evolves marketing directly to <unk> and as long as that ROI continues to be very positive.

Speaker Change: And I think that also gives us some some comments.

Speaker Change: Got it I appreciate the feedback.

Speaker Change: Yeah.

Your next question comes from the line of French Brazenly from Piper Sandler Your line is open.

Amanda Whalen: They don't necessarily come with the same per-message sending cost that a product like SMS does, and therefore, they also come with a nice gross margin profile that's more akin to what we see in our email plus data product. Helpful color, thank you.

Speaker Change: Even if the even if there is a little bit of variance of that it's so good that we find you as I talked to businesses.

Thank you good afternoon I wanted to go back to the new service and analytics products.

Speaker Change: They are not constraining budget, so long as theyre seeing that performance.

Speaker Change: What's the sweet spot relative to size of customer that responding most favorably to the new products and then Amanda could you maybe frame the potential <unk> uplift as you see some early customers consolidate the tech stacks, just a 10% maybe 20% more than <unk>.

Speaker Change: That's one of the thing that gives us confidence about.

Speaker Change: Clearly going forward is I mean, it sounds like because it's not marketing to customers you don't know and have to acquire the customers you already know and are going to come back and that obviously helps the ROI, but also means that sort of be.

Arjun Bhatia: Your next question comes from a line of Arjun Bhatia from William Blair, your line is open. Thank you. And maybe I'll stick to the same theme. In terms of the new solutions, obviously, a pretty exciting kind of add-on to the core platform here. But when you're thinking about the service solution, AVM, I'm curious, does this – for customers, does it necessitate the replacement of some sort of an incumbent solution? You know, maybe I'm thinking of like a Zendesk that might be in there, or given where you're positioned, can it sit alongside for now? Like, how are you thinking about those dynamics?

Speaker Change: The budgeted marketing that you can deploy is already somewhat no. It's already in your Canadian cow.

Speaker Change: 80% uplift to <unk>, just love to hear.

Speaker Change: Those two things any color there would be helpful. Thanks.

Speaker Change: And I think that also gives us some confidence.

Speaker Change: Yes.

Speaker Change: Got it.

Speaker Change: So I'll touch on each of the two new new product categories.

Speaker Change: The feedback.

Speaker Change: Okay.

Speaker Change: Your next question comes from the line of branch bracelet from Piper Sandler Your line is open.

Speaker Change: So let's take analytics first.

Speaker Change: We mentioned that we actually think that has wide applicability I mean, theres, maybe some subset of our smallest.

Speaker Change: Thank you good afternoon wanted to go back to the new service and analytics products.

Speaker Change: They're just starting out they don't have enough data masked to use our marketing product, but for the vast majority of your customers and I think it's a great is it easy.

Speaker Change: What's the sweet spot relative to size of customer that is responding most favorably to the new products and then Amanda could you maybe frame the potential <unk> uplift as you see some early customers consolidate the tech stacks, just a 10% maybe 20% more than 20.

Andrew Bialecki: And then similarly on the go-to-market side, should we expect this to be a little bit more of a higher-touch go-to-market motion, or can you sell these solutions through the low-touch and self-serve type of approach as well? Thank you. Yeah, great.

Speaker Change: An easy add on its easy attach products.

Speaker Change: So we think that that will apply to the vast majority of our customers and then for service, finishing customer hub, we actually think it's applicable all businesses.

Speaker Change: <unk> percent uplift to <unk>, just love to hear those two things any color there would be helpful. Thanks.

Speaker Change: It's a way to extend the personalization and use the data is already in your <unk>.

Andrew Bialecki: Happy to comment on both. So, when talking about service, like let's break it into, you know, a couple of different, you know, products, piece of, you know, functionality that we're building into our case service product group. So, the Customer Hub that we've released, we actually just think is novel and new. It's a new experience, you know, embedded on a business's website. It makes it easy for, you know, consumers to log in to see, you know, past purchases, past orders, and then, you know, get recommendations. There's a marketing element to it as well as then get, you know, ask questions, right?

Speaker Change: Data platform, but we do use that now extended onshore websites. So that also applies to all market segments.

Speaker Change: Yeah.

Speaker Change: So I'll touch on each of the two new.

Speaker Change: New product categories.

We've designed essentially we started service really focus on okay, let's work with Smbs and make sure the.

Speaker Change: So with lets say the analytics first.

Speaker Change: We actually think that has wide applicability I mean, theres, maybe some subset of our smallest.

Speaker Change: The product market fit is really good there I think based on what you may have talked about some of the.

Speaker Change: Further just starting out they don't have enough data mass to use our Martin you always Brian but for the vast majority of your customers. We actually think it's a great. If it easy if any of the add on it's an easy attach product.

Speaker Change: Some of the opportunities that we're seeing in the mid market enterprise, that's making us think harder about how we can make sure that our service products scale to the enterprise more.

Speaker Change: So we think that that will apply to the vast majority of our customers and then for service, particularly in customer hub, we actually think is applicable to all businesses.

Speaker Change: More quickly.

Speaker Change: There's a moment right now with service, where obviously the big focus on automation and how to do more with that.

Andrew Bialecki: Get help. And interestingly, that help could be more service. Hey, I have questions about the thing I bought. It could also just be more of a marketing, you know, sales use case of, hey, you know, I'm curious, you know, what size should I buy of this thing that I'm in? That, we think, is totally novel, and that can fit alongside existing service products. The second thing that we're really focused on is this idea of, hey, automating more of those conversations, we'll say. I think that, as you look at it, that is a product category. It's obviously been around for a few years, but it's really leveled up because of AI-native solutions.

Speaker Change: It's a way to extend the personalization and use the data is already in your <unk>.

Speaker Change: Using AI and obviously using the claims data that backs that and combine that with AI is very powerful.

Speaker Change: Data platform a way to use that now extended onto your web sites that also applies to all market segments.

Speaker Change: So we're really talking about how we can bring that to a larger swath of our customers faster than just our smbs.

Speaker Change: We designed that actually we started service really focused on okay, let's work with Smbs and make sure the.

Speaker Change: And I'll ask okay.

Speaker Change: The story of all of the entire consumer experience you want one brain one radio data platform one data platform that Undergirds. All of that you won all of the obligations that interface with your end consumers or customers customers you want all of that driven for one comprehensive platform.

Speaker Change: The product market fit is really good there I think.

Speaker Change: Based on units May have talked about some of the.

Speaker Change: Some of the opportunities that we're seeing in the mid market enterprise, that's making us think harder about how we can make sure that that <unk>.

Andrew Bialecki: And this is where I think, you know, with Klaviyo, we're happy if you want to plug into our customer hub, if you want to use something you've already have, adopt our customer hub first, that's great. But we think we have the ability, you know, because of our ability to build, you know, really usable products, really scalable products, as well as the fact that we have the source of truth about your customer and giving that context to our service, you know, kind of AI chat agents, that that's going to make our product really compelling. So, in that case, I think there may be a little bit of like running side by side, taking things off, but I think we're, a lot of, you know, the customers I've talked to said, hey, look, if you can consolidate all this together so that there's one consumer experience that ditches, you know, that spans marketing, service, helps you know who my customers are with, you know, your analytics product, that sounds great.

Speaker Change: Our service products scale to the enterprise more.

Speaker Change: That revenue is not timed with smbs and actually more than more than we expected.

Speaker Change: More quickly.

Speaker Change: There's a moment right now a service where there's a big focus on automation and how to do more with that.

Speaker Change: Revenue a lot with enterprise.

Speaker Change: So we're very much leaning into that opportunity.

Speaker Change: Using AI and obviously using the claim could you have data on at Baxter and combine that with AI is very powerful.

Speaker Change: Yes.

Speaker Change: I'll close out some of the <unk>.

Speaker Change: Uplift that we're thinking about in terms of the <unk> service as Andy mentioned is early days, we're still in beta so more to come on service and service pricing both as we approach <unk> later this year and also as we continue to build out the suite of offerings related to service.

Speaker Change: So we're really thinking about how we can bring that to a larger swath of our customers faster than just our F&B.

Speaker Change: And I'll ask I'll say, it's like the B story.

Speaker Change: All of the entire consumer experience you want one brain one <unk> data platform one data platform that Undergirds all that you want all of the application the interface with your end consumers are our customers' customers you want all that driven for wind that comprehensive platform that resonate in a time with <unk>.

Speaker Change: Marketing analytics has a nice uplift associated with it it's a portion of email. So it's not necessarily the same RPM uplift that you would see from a product like SMS, but also one of the wonderful things about both marketing analytics and services that they are leveraging the same underlying data the same consumer relate.

Andrew Bialecki: And so, I think that, I think, our customers are looking for this unified set of applications.

Speaker Change: <unk> and actually more than more than we expected is running a lot with enterprise.

Speaker Change: So we're very much leaning into that opportunity.

Andrew Bialecki: The second thing around, like, hey, is this going to be higher touch or not? You know, for service, I think for our SMB customers, again, we take a lot of pride in the quality of the products we build and how, you know, adoptable they are without needing to necessarily talk to somebody on the Klaviyo end. So I expect a lot of SMBs who are designing, you know, workflows and pathing such that they can adopt these all on their own. One of the great parts about our Customer Hub product is it's literally to, you know, after you kind of review the design of it, since it's embedded on your website, it's one click to turn on.

Speaker Change: <unk> ships in other words, largely the same cost structure associated with our email and data platform that don't necessarily come with the same.

Speaker Change: Yes.

Speaker Change: Talk about some of the <unk>.

Speaker Change: Uplift there were data in terms of the RPM uplift to service as Avi mentioned is early days, we are still in beta so more to come on service and service pricing both as we approach <unk> later this year and also as we continue to build out the suite of offerings related to service that.

Speaker Change: Her message sending cost in a product like SMS does.

Speaker Change: And therefore, they also come with a nice gross margin profile, that's more akin to what we see in our E mail plus data products.

Speaker Change: Helpful color. Thank you.

Speaker Change: Your next question comes from the line of Arjun Bhatia from William Blair. Your line is open.

Speaker Change: Marketing analytics has a nice uplift associated with it it's a portion of email. So it's not necessarily the same RPM uplift that you would see from a product like SMS, but also one of the wonderful things about both marketing analytics and services that they are leveraging the same underlying data the same consumer.

Andrew Bialecki: It's so fast. It doesn't require any, you know, engineering, any coding. It's just easy to turn on right away. And I think our, you know, our service agent will be similar. Now, we expect, similar with marketing, there will be customers that have more questions, you know, that have more complex, you know, implementation data feeds they want to pull in. And we're excited to do that. We're – obviously, we know how to do that with, you know, with marketing and all the marketing channels we support, and we'll provide the exact same great experience, you know, for, you know, mid-market enterprise customers or for both.

Speaker Change: Alright. Thanks.

Arjun Bhatia: Thank you and maybe I'll stick to the same thing in <unk>.

Speaker Change: So the new solutions obviously.

Arjun Bhatia: Pretty exciting kind of add onto the core platform here.

Speaker Change: But when you when youre thinking about the service solution Avi Im curious does this.

Speaker Change: <unk> ships in other words, largely the same cost structure associated with our email and data platform. They don't necessarily come with the same.

Speaker Change: For customers as it necessitates the replacement of some sort of an incumbent solution I'm thinking of like that might be in there or given where your position is.

Speaker Change: Her message sending cost in a product like SMS does.

Speaker Change: And therefore, they also come with a nice gross margin profile, that's more akin to what we see in our email plus data product.

Sit alongside for now is how are you thinking about.

Speaker Change: Those dynamics are.

Speaker Change: Helpful color. Thank you.

Andrew Bialecki: Very helpful. Thank you.

Terry Tillman: Congrats on the nice start here. Your next question comes from a line of Terry Tillman from Truist. Your line is open. Yeah, thanks. Hi, Aby, Amanda and Zilli. So, congrats on the international attraction. It's a single question, but multi-parter.

Speaker Change: Similarly on the go to market side.

Speaker Change: Your next question comes from the line of Arjun Bhatia from William Blair. Your line is open.

Speaker Change: Should we expect this to be a little bit more of a higher touch go.

Speaker Change: Go to market motion or can you sell these solutions.

Speaker Change: Alright.

Speaker Change: <unk> Hello, Todd.

Speaker Change: And maybe I'll stick to the same thing.

Speaker Change: That's all serve type of approach as well thank you.

Speaker Change: In terms of the new solutions obviously.

Andrew Bialecki: What are you seeing in terms of the international attraction in terms of when you're signing new customers, are they kind of similar personas as how your business has been in the US and or are they buying kind of multiple products at one time? And the second part of this is, where are you in actually kind of field sales reps or kind of outbound investments versus harvesting those investments? Thank you. Yeah, yeah, I'm happy to take this one. Yeah, Terrence, I think that's spot on. Like, I think what we found as we've expanded to internationally, and especially in Europe, very proud of, you know, over 40% growth year on year in Europe.

Speaker Change: Yes, great I'm happy to happy to comment on wood.

Speaker Change: A pretty exciting and you kind of add onto the core platform here.

Speaker Change: We're talking about.

Speaker Change: Like what those break it into a couple of different products piece of functionality that we're building into our case service.

Speaker Change: But when you when you're thinking about the service solution Amy I'm curious does this.

Speaker Change: For customers as it necessitates the replacement of some sort of an incumbent solution I'm thinking of like.

Speaker Change: So the cost per hub that we released yesterday, just think is novel and new it's a new experience embedded on our businesses website.

Speaker Change: So it might be in there or given where your position.

Speaker Change: Sit alongside for now like how are you thinking about.

Speaker Change: It makes it easy for.

Speaker Change: <unk> has to log in to see past purchases.

Speaker Change: Those dynamics and then similarly on the go to market side.

Speaker Change: Task orders.

Speaker Change: Should we expect this to be a little bit more of a higher touch go to market motion or or can you sell these solutions.

Speaker Change: And then getting recommendations, there's a marketing element to it as well as then get ask questions right.

Andrew Bialecki: Europe's now over 34%, or internationally, about 34% of our total business. Yeah, what we're finding is, is as we've expanded, added language capabilities, we've added SMS, we've added, you know, support in Klaviyos that are, you know, speak people's native tongue, you know, native languages, that's made it a lot easier to enter some of those large European markets. France, Germany, Spain, all of which we talked about having, you know, growing at over 100% year on year. The persona's pretty similar. It started out largely as, you know, SMBs, and so we're very excited about that progress.

Speaker Change: Interestingly that help could be more service Hey, a question one other thing I bought you can also just be more of a marketing sales use cases.

Speaker Change: Sure.

Speaker Change: Low touch self serve type of approach as well thank you.

Speaker Change: Yes, great I'm happy to have you comment on both so we're talking about.

Speaker Change: I'm curious whats high should I buy this thing that initiative.

Speaker Change: Service like what those break it into a couple of different products piece of functionality that we're building into our case service.

Speaker Change: That was a totally novel in that can fit a long side existing.

Speaker Change: Service product the second thing that we're really focused on is this idea of PE automating more of those conversations look like right.

Speaker Change: Programmatic so the cost per hub that we've released we actually just think is novel and new it's a new experience embedded on our businesses website.

Speaker Change: I think that as you look at it.

Speaker Change: As a product category, it's obviously been around for a few years, but it's really leveled up.

Speaker Change: It makes it easy for.

Speaker Change: Consumers to log in to see past purchases.

Andrew Bialecki: And actually, we think that, you know, if you look at, if you kind of compare it to our growth, say, in the US, where we also started with SMBs, and then, you know, they've grown into mid-market and now enterprise, I think we have the opportunity to do the exact same thing in Europe, but just on a faster timeline. So, we've started, this year, we made some decisions to make some investments in local, you know, sales teams, and starting to test that. We also launched, you know, just last week, you know, the full Klaviyo website and experience in German, in Spanish, in Italian, in addition to France, which we launched last year, French.

Speaker Change: Cause of.

Speaker Change: AI native solutions.

Speaker Change: Past orders.

Speaker Change: And then get recommendations, there's a marketing element to it as well and then get ask questions right.

Speaker Change: And this is where I think we.

Speaker Change: With <unk>, we're happy if you want to plug into our customer hub. If you want to use some of you have already or have a doctor customer. Our first that's great. But we think we have the ability because of our ability to build really useful usable product really scalable product as well as the fact that you have the source of truth about your customer and giving that context too.

Speaker Change: Interestingly that help could be more service Hey, a question. The other thing I bought you can also just be more of a marketing sales use cases.

Speaker Change: I'm curious what size should I buy this thing that I'm interested that.

Speaker Change: That we think is totally novel in that can fit as long side you know existing.

Our service kind of AI.

Speaker Change: <unk> service products. The second thing that we're really focused on is this idea hey, automating more of those conversations will say alright.

Speaker Change: Chat agents.

Speaker Change: That's going to make our product really compelling so in that case I think there may be a little bit of like running side by side, taking things off and I think were a lot of copper as I talked to you said, Hey look if you can consolidate all of this together so that there's one consumer experience.

Andrew Bialecki: So, we think that that is going to lay the groundwork for more growth there. And I think we'll continue to see that in SMB, and I actually think we'll see that even, you know, sort of a faster acceleration into the mid-market than maybe, if you look at, like, Klaviyo's overall growth, you know, where we were same time period here in the US.

Speaker Change: I think that if you look at that as a as a product category. It's obviously been around for a few years, but it's really leveled up.

Speaker Change: Yeah.

Speaker Change: AI native solutions.

Speaker Change: As you know.

Speaker Change: It spans marketing service.

Speaker Change: And this is where I think we.

Speaker Change: My customers are within your analytics product that sounds great and so I think that I think our customers are looking for this unified.

Speaker Change: With <unk>, we're happy if you want to plug into our customer halves do you want to use I mean, you've already or have a doctor coming out first that's great. But we think we have the ability because of our ability to build really useful usable product with scalable product as well as the fact that we have the source of truth about your customer and in giving that context too.

Rob Oliver: Thank you. Your next question comes from the line of Rob Oliver from Baird. Your line is open. Great. Thanks, guys. I appreciate it. I had to A B for you.

Speaker Change: Applications.

Speaker Change: The second thing.

Speaker Change: Mike Hey, this can be higher touch or not.

For starters I think for our F&B customers again, we take a lot of pride in the quality of the products, we build and how adaptable. They are without meeting to necessarily talk to somebody on the radio and so I expect a lot of Smbs, we're designing workflows and having such that they can adopt these on their own.

Andrew Bialecki: I was wondering if you could give us or frame for us a little bit where we are with the meta and TikTok integrations on the platform. They both seem like, you know, potentially meaningful opportunities, particularly as you continue to fill out the product portfolio at the low to mid range.

Speaker Change: Our service kind of AI.

Speaker Change: <unk> agents.

Speaker Change: That's going to make our product really compelling so in that case I think there may be a little bit of like running side by side, taking things off but I think where a lot of customers I talk to say Hey look if you can consolidate all this together so that there's one consumer experience.

Speaker Change: Great parts of our customer Hot product is it's literally too after you kind of review the design of it since it's embedded on your website is one click to turn on it. So fast it doesn't require any engineering any coding could just easy to turn on right away and I think our service.

Amanda Whalen: And then, Amanda, just a follow up for you. You know, you had mentioned how you saw better than expected retention off of the price increases, you know, in the wake of the price increases, clearly very encouraging. I was wondering if you could just comment, you know, relative to kind of why you thought that was and what sort of confidence that gives you guys relative to appetite, not just for additional price increases down the road, but receptivity of additional products from Klaviyo and additional value from Klaviyo. Thanks. Yep. Okay, great. So, on Meta and TikTok, if you think about Klaviyo marketing, you know, obviously, our primary focus has been on the direct channels between a business and its end customers, consumers.

Speaker Change: As you know.

Speaker Change: That spans marketing service.

Speaker Change: With my customers are with you and your analytics product that sounds great and so I think thats I think the Arco summers are looking for that unified.

Speaker Change: Service agent will be similar.

Speaker Change: We expect similar with marketing there will be customers that have more questions.

Speaker Change: Set of applications.

Speaker Change: The second the second thing.

Speaker Change: Around like Hey, this can be higher touch or not.

Speaker Change: More complex implementation data feeds they want to plan.

Speaker Change: For <unk> I think for our SMB customers again, we take a lot of pride in the quality of the products, we build and how adaptable they are.

Speaker Change: And we're excited to do that obviously, we know how to do that with with marketing and other market channels, we support and we'll provide the exact same great experience for those more mid market enterprise customers offer for posting unit.

Speaker Change: Without needing to necessarily talk to somebody on the radio and so I expect a lot of Smbs, we're designing workflows and having such that they can adopt these on their own.

Speaker Change: The great parts of our customer Hot product is it's literally too after you kind of review the design of it since it's embedded on your website is one click to turn on it so fast it doesn't require any engineering any coding it just easy to turn on right away and I think our our service agent will be similar.

Speaker Change: Alright very helpful. Thank you congrats on the nice start here.

Speaker Change: Your next question comes from the line of Terry Tillman from Truest. Your line is open.

Andrew Bialecki: So, email, SMS, things where the business has, you know, kind of complete control and direct connection. We're obviously putting a lot of product and engineering investment towards the team to build out other channels there. You know, we've launched support for mobile applications, also, you know, owned and operated by a business. But now, you know, the last 12 months, we've taken a look at, hey, what are other, you know, places, you know, digital places on the internet that businesses and consumers are meeting? And obviously, a big part of that is social platforms, Meta and TikTok. So, a couple of things that we're doing there, you know, what we've launched in the last few months is better, tighter integrations into the ad networks and some of the shopping capabilities of those platforms. So, for example, with Meta, you know, on Instagram shops, you can now take some of the reviews and the content that you're collecting from customers, and you can use that not just as, you know, social proof in email, in SMS, on your website, you can actually also use that inside Meta.

Terry Tillman: Yes. Thanks.

Speaker Change: Amanda.

Speaker Change: So congrats on the international traction as the single question, but.

Multi part or what are you seeing in terms of the international traction in terms of when you are signing new customers are they kind of similar personna. How your business has been in the U S and or are they buying multiple products at one time and the second part of this is where are you in actually kind of field sales reps or kind of outbound investments versus harvesting those investments. Thank you.

Speaker Change: We expect similar with marketing there will be customers that have more questions you.

Speaker Change: They have more complex.

Speaker Change: Limitations data feeds they want to plan.

Speaker Change: And we're excited to do that obviously, we know how to do that with with marketing and all the market channels, we support and we will provide the exact same great experience.

Speaker Change: For those more mid market enterprise customers offer for posting unit.

Speaker Change: Yes happy to take this one.

Speaker Change: Yes.

Speaker Change: I think they are just spot on I think what we found as we expand into internationally, especially in Europe very proud of over 40% growth year on year in Europe, Europe's now over 34% for international at 34% of our total business.

Speaker Change: Alright very helpful. Thank you congrats on the nice start here.

Speaker Change: Your next question comes from the line of Terry Tillman from Truest. Your line is open.

Terry Tillman: Yes. Thanks.

Amanda Whalen: Amanda in Delhi.

Congrats on the international traction, it's a single question, but a multi parter.

Speaker Change: Yes, what we're finding is as we've expanded added language capabilities, you've got an SMS.

Amanda Whalen: What are you seeing in terms of the international traction in terms of when you are signing new customers are they kind of similar personas is how your business has been in the U S and or are they buying multiple products at one time and the second part of this is where are you in actually kind of field sales reps or kind of outbound investments versus harvesting those investments. Thank you.

Speaker Change: We've added.

Speaker Change: Support and <unk>.

Speaker Change: Speed People's need a tongue.

Andrew Bialecki: So it's deepening this, you know, the connection between Klaviyo and these platforms, and so that's a way you can look at our reviews, products, functionality, and, you know, leveraging those app sets beyond just email, SMS, mobile. And for TikTok, that's one where, you know, we're excited for every, you know, for every social network, you know, they often have a variety of different ad units, and one of the things that we're excited about is a lot of those, you know, advertising networks have a way to not just drive click-through traffic, but actually collect some information about who that, you know, end consumer is.

Speaker Change: That made a lot easier to enter some of those large European markets, France, Germany, Spain, all of which we talked about having growing at over 100% year on year.

Speaker Change: Persona is pretty similar it start out largely as SME.

Amanda Whalen: Yes.

Amanda Whalen: Yes happy to take us one.

Speaker Change: Smbs.

Amanda Whalen: Yeah.

Speaker Change: And so we're very excited about our progress and actually we think that if you look if you kind of compare it to our growth say in the U S where we also started with Smbs and then.

Speaker Change: I think they are just spot on Mike I think what we found as we expand into internationally, especially in Europe very proud of over 40% growth year on year and Europe, Europe's now over 34% for international now 34% of our total business.

Speaker Change: They are growing to mid market enterprise.

We have the opportunity to exact same thing in Europe.

Speaker Change: On a faster timeline.

Andrew Bialecki: So for TikTok, you know, they have lead ad units that allow somebody, rather than just acquiring clicks for traffic, you can actually also, you know, acquire somebody's, you know, name, phone number, email address, and obviously that inside of Klaviyo is very powerful. It basically gives them a way to collect more subscribers directly from those other platforms. So we're going to continue to invest in these, you know, social networks, you know, other, you know, major internet applications. We're doing, obviously, some work with WhatsApp, building a tighter integration there. So I think, Klaviyo, our primary focus is still on these, you know, kind of owned and operated channels like email, SMS, mobile, but I think we're going to try to round out our entire marketing portfolio with some of these other channels that we know are important for brands.

Speaker Change: Yes, well, we're finding is as we've expanded added language capabilities you got an SMS.

Speaker Change: So we've started this year, we made some decisions to make some investments in.

Speaker Change: Local.

Speaker Change: Got it.

Speaker Change: Support and <unk>.

Speaker Change: Our sales teams on it.

Speaker Change: <unk> People's need a tongue.

Starting to test that we also launched just last week for the pulpwood your website experience in German and Spanish and Italian.

Speaker Change: That made a lot easier to enter some of those large European markets, France, Germany, Spain, although if you're talking about having growing at over 100% year on year.

Speaker Change: France, which we launched last year.

Speaker Change: The persona is pretty similar it start out largely as you know.

Speaker Change: So we think that that is that is going to lay the groundwork for more growth there and I think we'll continue to see on F&B and I actually think we'll see that even.

Speaker Change: S M DS.

Speaker Change: And so we're very excited about that progress and actually we think that you know if you look at you kind of compare it to our growth say in the U S where we also started with Smbs and then.

Speaker Change: Sort of as a faster acceleration into the mid market and maybe if you looked at my quick as overall growth, where we were same time period you have here in the U S.

Speaker Change: Growing mid market <unk> enterprise I think we have opportunity the exact same thing in Europe, but just on a faster timeline.

Speaker Change: Thank you.

Speaker Change: So we've started this year, we made some decisions to make some investments in.

Amanda Whalen: And to your question on pricing, thank you so much. We were very pleased by the higher than expected retention rates that we saw following the February pricing changes because it validates the important role that we play as a must-have revenue-driving platform for brands who are serious about their growth and serious about their retention. And the key difference that we saw from pilot into GA was that our team took and applied the learnings from the pilot to get out ahead of and mitigate the churn risks as we moved into GA. We went out and very proactively communicated with customers about the tools and the resources that we had put in place to help them clean up their active profiles, which allows them to more effectively target the right customers and drive high ROI from those highly engaged profiles who remain.

Speaker Change: Your next question comes from the line of Rob Oliver from Baird. Your line is open.

Speaker Change: Local.

Rob Oliver: Great. Thanks, guys I appreciate it I had two for you I was wondering if you could give us a frame for us a little bit.

Speaker Change: Sales teams.

Speaker Change: And starting to test out we also launched just last week for the bulk of your website experience in German and Spanish and Italian.

Speaker Change: We are with the matter.

Rob Oliver: Tick tock integrations on the platform they both seem like.

Speaker Change: In addition of France, which we launched last year.

Rob Oliver: Potentially meaningful opportunities, particularly as you continue to fill out.

Speaker Change: So we think that that is that is going to lay the groundwork for more growth there and I think we'll continue to see that in F&B and I actually think we'll see that even.

Rob Oliver: The product.

Rob Oliver: Portfolio.

Rob Oliver: At the low to mid range and then.

Speaker Change: Sort of picks up faster acceleration into the mid market and maybe if you looked at my colleague is overall growth, where we were same time period.

Rob Oliver: Just a follow up for you.

Rob Oliver: You had mentioned how.

Rob Oliver: You saw better than expected retention.

Speaker Change: In the U S.

Rob Oliver: Price increases the week of the price increases are clearly very encouraging I was wondering if you could just comment relative to kind of why that why you thought that was and what sort of confidence that gives you guys relative to appetite not just traditional price increases down the road, but receptivity of additional products or additional about additional value. Thanks.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Rob Oliver from Baird. Your line is open.

Amanda Whalen: And the consistent retention in Q1 shows the stickiness of the platform and the value that customers get from having all of their data on Klaviyo's vertically integrated platform where they can easily take action and build lasting customer relationships. And in fact, in some cases, we have already seen customers who left Klaviyo earlier in the year because of profile enforcement coming back to us because of the value and the ease of use of our platform. And to your question on new products and how this fits in as we think about pricing going forward, as we mentioned last quarter, these changes that we made in February are very important because they anchor the pricing in the value of the consumer profile and the power of the data that it contains.

Rob Oliver: Great. Thanks, guys I appreciate it I had two for you I was wondering if you could give us or frame for us a little bit about where we are with the matter.

Speaker Change: Yes, okay, great. So on unmet and tick Tock, if you think about <unk> marketing.

Speaker Change: And Tic Toc integrations on the platform they both seem like.

Rob Oliver: Potentially meaningful opportunities, particularly as you continue to fill out.

Obviously, our primary focus has been on the direct channels between our business and its end to end customers consumers. So E mail SMS things, where the business has kind of complete control on a direct connection.

Rob Oliver: The product portfolio.

Rob Oliver: At the low to mid range and then.

Rob Oliver: Amanda.

Rob Oliver: A follow up for you.

Rob Oliver: You had mentioned how you.

Speaker Change: We are putting a lot of product and engineering investment towards continuing to build out other channels. There we've launched.

You saw better than expected retention off of the price increases in the wake of the price increases are clearly very encouraging and I was wondering if you could just comment relative to kind of why that why you thought that was what sort of confidence that gives you guys relative to appetite just traditional price increases down the road, but receptivity of additional products. In addition about additional value.

Speaker Change: Or for mobile applications also owned and operated by our business.

Speaker Change: But now the last 12 months, we've taken a look at what our other places digital places on the Internet that business isn't because there was a meeting and obviously a big part of that is social platform.

Amanda Whalen: There are also, if you recall, were some parts of it that reduce pricing friction for our customers so that Klaviyo can be as easy to buy as we are easy to use. But it's that anchoring on consumer profiles that's really important as we think going forward because consumer profiles are also the driver of pricing for, for instance, our new marketing analytics. So having this change while it provides very little, you know, minimal, as we said, uplift to revenue, it's very important strategically because it provides that foundation for growth in the future. I appreciate all the color.

Rob Oliver: Thanks.

Rob Oliver: Okay, great. So on unmet and tick Tock, if you think about <unk> marketing obviously, our primary focus has been on the direct channels between our business and its and its end customers consumers. So E mail SMS things, where the business has kind of complete control and direct connect.

Speaker Change: Net.

Speaker Change: So a couple of things that we're doing there.

Speaker Change: No.

Speaker Change: What we launched last few months is better tighter integration into the AD networks.

Speaker Change: And some of the shopping capabilities of this platform. So for example, with with meta.

Speaker Change: On Instagram shops, you can now take some of the reviews and the content that you're you're collecting from customers and you can use that not just social crew.

Rob Oliver: <unk> were broadly putting a lot of product and engineering investment toward continuing to build out other channels. There you know we've launched.

Amanda Whalen: Thank you guys.

Rob Oliver: Or for mobile applications also owned and operated by our business.

Elizabeth Porter: Your next question comes from a line of Elizabeth Porter from Morgan Stanley. Your line is open. Great, thank you so much for the question. Is a commentary on existing customers, and Klaviyo being the last thing that they're willing to cut, is really encouraging. And I was hoping you'd just provide additional color on what you're seeing on more of the new customer, top-of-funnel demand side. So could you just talk to what you saw from the gross ads? Is WooCommerce starting to become a bigger contributor to customer acquisition? And just lastly, how top-of-funnel has trended kind of thus far into Q2.

Speaker Change: E Mail in F&I on your website you can actually also use that insight Instagram.

Rob Oliver: But now the last 12 months, we've taken a look at Hey, what are other places you know digital places on the Internet that business isn't consumers are meeting and obviously, a big part of that is social platforms.

Speaker Change: So deepening the.

Speaker Change: The connection between play the only platform.

Speaker Change: And so that's the way you can look at our reviews product functionality.

Speaker Change: Leveraging those assets beyond just E mail SMS mobile and.

Rob Oliver: So a couple of things that we're doing there.

<unk>, that's one where we're saying for every for every social network.

Rob Oliver: But what we what we launched last few months is.

Rob Oliver: Better tighter integration into the AD networks.

Speaker Change: Often have a variety of different ad units.

Speaker Change: And one of the things. We're excited about is a lot of those outside network have a way to not just drive through traffic, but actually collect some information about who that consumer is so for kicked off.

Rob Oliver: And some of the shopping capabilities on those platforms. So for example, with with meta.

Andrew Bialecki: Thank you. Yep.

Rob Oliver: On Instagram shops, you can now take some of the reviews and the content that you're you are collecting from customers and you can use that not just as you know social crew.

Andrew Bialecki: Okay, so I'll talk through the, you know, some of the more on the demand side of the topical side. So as Amanda mentioned, you know, look, the fact that we have such great retention, which I think then translates into word of mouth from customers. I mean, that's a key part of how we thought about driving. So I'll give you a quick rundown as to what we're seeing, a little bit by a different type of customer. You know, we mentioned for our smallest customers, you know, for those just starting out, entrepreneurs we call them, we're actually seeing quite a bit of strength in that cohort.

Speaker Change: <unk> lead AD units will allow somebody rather just acquired clinic, where traffic you can actually also.

Rob Oliver: In email in F&I on your website you can actually also use that insight Instagram.

Speaker Change: Approximately name.

Speaker Change: Phone number email address and honestly that inside of <unk> is very powerful it basically gives them a way to collect more subscribers directly from those other platforms.

Rob Oliver: So deepening the.

Rob Oliver: The connection between clarity on these platform.

Rob Oliver: And so that is a way you can look at our reviews product functionality and leveraging those assets beyond just E mail SMS mobile <unk>.

Speaker Change: We're going to continue to invest in these.

Speaker Change: Social networks.

Speaker Change: <unk>.

Speaker Change: Other major Internet applications, we're doing some work with whatsapp billing a tighter integration there. So I think putting our primary focus is still on these kind of owned and operated channels like E Mail SMS mobile I think we're going to kind of round out our entire marketing portfolio with some of these other channels that we know are important for our brand to consumers.

Rob Oliver: For Tictoc is one where we're fighting for every you know every social network.

Andrew Bialecki: You know, I think we think that's testament to, you know, again, businesses loving Klaviyo. When they spin up a new venture, they're, you know, they're either using Klaviyo because they've used it in a past life or referring it to, you know, to friends. And that's been something we've really been investing in, and we're very excited to see that, you know, kind of that continued growth in that smaller SMB segment. In our core SMB segment, we continue to see that, you know, those customers growing with us. Interestingly there, like I think we're seeing increasing demand, both internationally, we knew about that, also a little bit more outside of pure retail, you know, other use cases, travel, hospitality, restaurants, et cetera.

Rob Oliver: You can have a variety of different ad units.

Rob Oliver: One of the things we're talking about is a lot of those are you know advertising of our callaway to not just drive customer traffic, but actually collect some information about who that consumer is so protect hot.

And to your question on pricing. Thank you. So much we were very pleased by the higher than expected retention rates that we saw following the February pricing changes because it validates the important role that we play as a must have revenue driving platform for brands, who are serious about their growth and serious about their retention and the key difference that we saw.

Rob Oliver: They have lead AD units that allow somebody rather just required cliff for traffic you can actually also.

Rob Oliver: Parts of the name.

Rob Oliver: Number email address and obviously that inside radio is very powerful it basically gives them a way to collect more subscribers directly from those other platforms. So we're going to continue to invest in these.

Speaker Change: From pilot into GAA was in our team took and applied the learnings from the pilot to get out ahead of and mitigate the churn risks as we moved into <unk>, we went out and very proactively communicated with customers about the tools and the resources that we put in place to help them clean up their active profiles, which allows.

Rob Oliver: Social networks.

Andrew Bialecki: So that's in that core kind of SMB segment, still seeing very good growth there. And then we mentioned, you know, in the mid-market and enterprise, you know, Matt already talked about, you know, measuring yield cycles, we're not seeing any real lengthening there. We're very excited about some of the milestones we've hit, you know, having over 1,000 customers now at 100K in ARR. We think there's a lot of opportunity there. And I mentioned how, you know, sharing our product vision of this B2C CRM and building it all, you know, AI first from the ground up, attached to our Clego data platform, so all of these applications work together.

Rob Oliver: <unk>.

Rob Oliver: Other major Internet applications, we're doing some work with whatsapp billing a tighter integration there. So I think our primary focus is still on these kind of owned and operated channels like E Mail SMS mobile I think we're going to try to round out our entire marketing portfolio with some of these other channels that we know are important for our brand to consumers.

Speaker Change: Them to more effectively target the right customers and drive high Rois from those highly engaged profiles who remain.

Rob Oliver: And to your question on pricing. Thank you. So much we were very pleased by the higher than expected retention rates that we saw following the February pricing changes because it validates the important role that we play as a must have revenue driving platform for brands, who are serious about their growth and serious about their retention and the key difference that we saw.

Speaker Change: And the consistent retention in Q1 shows the stickiness of the platform and the value that customers get from having all of their data enclave, yes vertically integrated platform, where they can easily take action and builds lasting customer relationships and in fact in some cases, we have already seen customers last claim you earlier on.

Andrew Bialecki: That is really – that has gotten a lot of folks' attention in that mid-market enterprise segment. And so I think a lot of folks are excited for us to deliver on that, and we do see, you know, some good leading indicators in terms of pipeline growth and then obviously And, you know, we're clearly early in Q2. So we're not going to specifically disclose metrics related to April. But I will say that we look at all of our key operational metrics and indicators on a daily basis. And through the end of April, those remained consistent. And we took those trends that we're seeing in the business into account when we were building our outlook.

Rob Oliver: From pilot into GAA was in our team took and applied the learnings from the pilot to get out ahead of and mitigate the churn risks as we moved into <unk>, we went out and very proactively communicated with customers about the tools and the resources that we had put in place to help them clean up their active profiles, which allows them.

Speaker Change: The year because of profile enforcement coming back to us because of the value and the ease of use of our platform.

And to your question on new products and how this fits in as we think about pricing going forward as we mentioned last quarter. These changes that we made in February are very important because the anchor of the pricing in the value of the consumer profile and the power of the data that it contains there also if you recall, where some parts of it that reduce.

Rob Oliver: Them to more effectively target the right customers and drive high ROI from those highly engaged profiles who remain.

Amanda Whalen: And we have really strong confidence in the Q2 guide. Great, thank you very much.

Rob Oliver: And the consistent retention in Q1 shows the stickiness of the platform and the value that customers get from having all of their data enclave years vertically integrated platform, where they can easily take action and builds lasting customer relationships and in fact in some cases, we have already seen customers lapsed clave you earlier in the.

Speaker Change: Pricing friction for our customers so that <unk> can be as easy to buy as we are easy to use but is that anchoring on consumer profiles. That's really important as we think going forward because consumer profiles are also the driver of pricing for for instance, our new marketing analytics, so having this change while it.

D.J. Hynes: Your next question comes from a line of D.J. Hynes from Canaccord. Your line is open. Hey, thank you guys. And congrats on the next quarter.

Andrew Bialecki: AJ, I was hoping you could talk a little bit about How you're thinking about sequencing or prioritizing investment dollars these days. I feel like, you know, from the time of the IPO, you've been very explicit. It's kind of new customer acquisition, our new logo ads first, you know, then upmarket, then international. Now the surface area is greatly expanded with all the new product introductions. Just talk about kind of prioritization of investments these days and where you're focused. Sure. Well, in general, you know, we're going to be a very, you know, ambitious company. And for us, that means aiming at the biggest opportunities, where's the where's the place we can drive the most value for customers, and not, you know, not not restrict ourselves to just the, you know, the markets or the price gap.

Rob Oliver: A year because of the profile of enforcement coming back to us because of the value and the ease of use of our platform.

Speaker Change: Very little.

Speaker Change: Minimal as we said uplift to revenue it is very important strategically because it provides that foundation for growth in the future.

Rob Oliver: And to your question on new products and how this fits in as we think about pricing going forward as we mentioned last quarter. These changes that we made in February are very important because they anchor the pricing in the value of the consumer profile and the power of the data that it contains there also if you recall, where some parts of it that reduced.

Speaker Change: I appreciate all the color. Thank you guys.

Elizabeth Park: Your next question comes from the line of Elizabeth Park from Morgan Stanley. Your line is open.

Great. Thank you so much for the question, it's a commentary on existing customers and <unk> being the last thing that they are willing to cut is really encouraging and I was hoping you could provide additional color on what youre seeing on more of the new customer top of funnel demand side. So could you just talk to what you saw from the gross adds is blue commerce starting in <unk>.

Rob Oliver: Pricing friction for our customers.

Rob Oliver: So that <unk> can be as easy to buy as we are easy to use but is that anchoring on consumer profiles. That's really important as we think going forward because consumer profiles are also the driver of pricing for for instance, our new marketing analytics. So having this change while it provides very little <unk>.

Andrew Bialecki: So let me touch on a couple things here that I think we're very excited about. The first is what we're doing around machine learning and artificial intelligence. I've talked in the past about, like, you know, the fact that we can help businesses use their data to do better personalization and do that automatically. We actually, increasingly over the last few months, think that opportunity is even larger than we, you know, previously thought. I think there's the opportunity to use some of the technology that's come out, improvements in some of the large language models, to actually help businesses automate more of the content creation, you know, even without personalization and the amount of leveling up that that does.

Elizabeth Park: A bigger contributor to customer acquisition and just lastly, how top of funnel has trended thus far into Q2.

Rob Oliver: Minimal as we said uplift to revenue it is very important strategically because it provides that foundation for growth in the future.

Elizabeth Park: Yep Okay.

Some of the we're seeing on the demand side on the top of qualified so as I mentioned.

Rob Oliver: Yeah.

Speaker Change: I appreciate all the color. Thank you guys.

Elizabeth Park: Look the fact that we have such great.

Speaker Change: Your next question comes from the line of Elizabeth Park from Morgan Stanley. Your line is open.

Elizabeth Park: Retention, which I think then translates into work now from customers I mean, that's a key part of how we thought about driving demand.

Speaker Change: Great. Thank you so much for the question in the commentary on existing customers and <unk> being the last thing that they're willing to cut is really encouraging and I was hoping you just could provide additional color on what youre seeing on more than new customer our top of funnel demand side. So could you just talk to what you saw from the gross adds is blue commerce starting to <unk>.

Elizabeth Park: So I'll give you a quick rundown is what we are seeing a little bit by a different type of customer.

You mentioned for our smallest customers.

Elizabeth Park: For those just starting out entrepreneurs, we call them, we're actually seeing quite a bit of strength in that cohort.

Andrew Bialecki: We think that, you know, a lot of the businesses that work with Klaviyo, we give them very powerful tools, but they're actually rate limited by how fast they can dream up and create content. A lot of those, you know, barriers are going away. So, that's technologically, plus the fact that we have all of this data to provide as context into that content creation process and that we can measure the results and iterate and help businesses improve, we think there's a massive opportunity there. We think that's both an opportunity, you know, to, you know, strengthen our, you know, product market fit with existing customers, but we also think there's, you know, large, you know, monetization opportunity because there's incremental value we can provide to businesses.

Elizabeth Park: We think Thats Testament to again business is loving <unk> when they spin up a new venture there or they are either using <unk>, because they're using a past life of referring it to friends.

Speaker Change: Come a bigger contributor to customer acquisition and just lastly, how top of funnel has trended thus far into Q2. Thank you.

Elizabeth Park: And that's been that's been something we've really been investing in and we're very excited to see that kind of that continued growth in that smaller SMB segment.

Speaker Change: Yeah, Okay. So I'll talk through the some of the more thing on the demand side of the topic apologize so as I mentioned.

Elizabeth Park: Our core SMB segment, we continue to see that.

Speaker Change: The fact that we have such great rich.

Speaker Change: Retention, which I think then translates into word of mouth from customers I mean, that's a key part of how we thought about driving demand.

Elizabeth Park: Those customers growing with us.

Elizabeth Park: Interestingly there like I think we're seeing increasing demand.

Elizabeth Park: Both internationally, we knew about that also a little bit more outside of pure retail.

Speaker Change: So I'll give you a quick rundown as what we are seeing a little bit by a different type of customer.

Speaker Change: The mission for our smallest customers are you know.

Elizabeth Park: Other use cases travel hospitality restaurants et cetera.

Speaker Change: For those just starting out entrepreneurs become rockies being quite a bit of strength in that cohort.

Andrew Bialecki: So, we're putting a lot of focus on that. You know, we already talked about, you know, the mid-market and now moving into the enterprise. You know, we think that that's just there's a lot of businesses there, you know, some of which still haven't, you know, aren't aware of Klaviyo, that when they find out, you know, that Klaviyo exists and that we've built, you know, sort of marketing and now other applications with this data first, AI first point of view, you know, they're even going to level up. You know, the technology, the marketing technology, you know, from 10 years, 15 years ago, it's not state of the art anymore.

Elizabeth Park: So that's in that core SMB segment still seeing very good growth. There and then we mentioned in the mid market and enterprise <unk> already talked about Youll cycles, we're not seeing any real lengthening there. We're very excited about some of the milestones we've hit.

Speaker Change: I think we think that's a testament to again businesses loving Clady Oh, when they spin up a new venture here or.

Speaker Change: They're either using <unk> because of use in a past life of referring it to friends.

Speaker Change: And that's been that's been something we've really been investing in and we're very excited to see that kind of that continued growth in that smaller SMB segment.

Elizabeth Park: Having over 1000 customers now at 100 K in IRR.

Elizabeth Park: There's a lot of opportunity there and I mentioned, how sharing our product vision of this BDC CRM.

Speaker Change: <unk> segment, we continue to see that.

Speaker Change: Those customers growing with us.

Elizabeth Park: In building at all AI first from the ground up attached to <unk> data platform. So all of these applications work together.

Speaker Change: Interestingly there like I think we're seeing increasing demand.

Andrew Bialecki: They're looking for best in breed and we think that we can fill that and do a great job there. So, that's, you know, we're putting a lot of effort there.

Speaker Change: Both internationally, we knew about that also a little bit more outside of pure retail.

Elizabeth Park: That has really done a lot of folks' attention in that mid market enterprise segment.

Speaker Change: Your other use cases travel hospitality restaurants et cetera.

Andrew Bialecki: And then finally, you know, obviously the B2C CRM, this expansion of, you know, new marketing channels as well as these other applications of service and analytics. You know, I think service is a very interesting use case. You know, we think about marketing as kind of the, you know, how do you help customers and consumers, you know, remind them what's top of mind in a very personal way. We think the other side of that is like when people need help, how are we doing that in a way that, you know, answers their question more quickly. We think that's a huge market and very important.

And so I think a lot of folks are excited for us to deliver on that and we do see.

Speaker Change: So that in that core kind of SMB segment.

Elizabeth Park: Some good leading indicators in terms of pipeline growth and obviously customer nature.

Speaker Change: Seeing very good growth there and then we mentioned in our Midmarket and enterprise Humana already talked about your metric youll cycles, we're not seeing a real lengthening there. We're very excited about some of the milestones we've hit our having over 1000 customers now at a 100 K in a or are we.

Elizabeth Park: And we're clearly early in Q2, so we're not going to specifically disclose metrics related to April, but I will say that we look at all of our key operational metrics indicators on a daily basis and through the end of April those remained consistent and we took those trends that we're seeing in the business into account when we were building our outlook and we.

Speaker Change: We think theres a lot of opportunity there and I mentioned, how sharing our product vision of this BDC CRM and.

Elizabeth Park: Have really strong confidence in the case you got.

Speaker Change: In building at all AI first from the ground up attached Arcadia data platform. So all of these applications work together.

Speaker Change: Great. Thank you very much.

Andrew Bialecki: So, all three of those, we think, you know, match our criteria of, hey, the market is very large. When we talk to customers, there's a lot of willingness to try. They want to level up what they're doing. They know AI, you know, it's new age. And I think we have teams that are very committed, you know, working really hard to build great products and great experiences for all those upcoming. Yeah, very helpful. Thank you. And we have time for one more question.

Elizabeth Park: Yes.

Speaker Change: Your next question comes from the line of DJ Hynes from Canaccord. Your line is open.

Speaker Change: That is really that it has gotten a lot of folks' attention in that mid market enterprise segment.

DJ Hynes: Hey, Thank you guys and congrats on a nice quarter.

Speaker Change: And so I think a lot of folks are excited for us to deliver on that and we do see.

Speaker Change: I was hoping you could talk a little bit about.

Speaker Change: How youre thinking about sequencing are prioritizing investment dollars. These days I feel like from the.

Speaker Change: Some good leading indicators in terms of pipeline growth and obviously customer addition.

Speaker Change: And we're clearly early in Q2, so we're not going to specifically disclose metrics related to April, but I will say that we look at all of our key operational metrics and indicators on a daily basis and through the end of April those remained consistent and we took those trends that we're seeing in the business into account when we were building our outlook and we.

Speaker Change: The time of the IPO, you've been very explicit.

Speaker Change: New customer acquisition, our new logo adds first then upmarket than international now the surface areas greatly expanded with all the new product introductions, just talk about kind of prioritization of investments these days and where you're focused.

Brett Hough: Your final question comes from the line of Brett Hough from Stevens. Your line is open. Thanks so much for sitting me in. Appreciate it. Congrats on a nice quarter. Digging in a little bit on international, which we've been excited about. How did international perform relative to your expectations vis-a-vis what's built into guidance? And the thrust of the question is trying to understand, as we look at the raised guidance, which is great, you know, how much of that is being buoyed by international? Because it seems like it's a net new market you all are going after, right?

Speaker Change: Sure.

Speaker Change: Well in general.

Speaker Change: Have really strong confidence in the Q2 guide.

Speaker Change: We're going to be a very.

Speaker Change: Great. Thank you very much.

Speaker Change: In addition, <unk>.

Speaker Change: Company and for us that means aiming at the biggest opportunities, whereas the worst place you can drive the most value for customers and not.

Speaker Change: Yeah.

Speaker Change: Your next question comes from the line of DJ Hynes from Canaccord. Your line is open.

DJ Hynes: Hey, Thank you guys and congrats on a nice quarter Avi I was hoping you could talk a little bit about.

Speaker Change: Restrict ourselves to just the market price yesterday.

Speaker Change: So let me touch on a couple of things there that I think we're very excited about.

DJ Hynes: How youre thinking about sequencing are prioritizing investment dollars. These days I feel like from the time of the IPO you've been very explicit it's kind of new customer acquisition New logo adds first then upmarket than international now the surface areas greatly expanded with all the new product introductions.

Amanda Whalen: It's new stuff that maybe has less to do with macro. Thanks for the time.

Speaker Change: The first is what we're doing around machine learning and.

Amanda Whalen: Yeah, great question. Thanks so much, Brett. So the international trends that we're seeing are, as you said, incredibly strong. We made investments last year in launching new languages and expanding SMS to multiple markets, and we're seeing those paid off this year. The fact that I think we're particularly proud of is France, Germany, and Spain each growing their new business in the quarter over 100% year over year, which was 4 to 10 times faster than those markets were growing last year. So it certainly is an important accelerator, and it's an accelerator that we continue to invest behind, making investments like Aby spoke about earlier.

Speaker Change: Artificial intelligence <unk> talked in the past about like the fact that we can help businesses use their data to.

Speaker Change: Do better personalization and do that automatically.

DJ Hynes: Just talk about kind of prioritization of investments these days and where you're focused.

Speaker Change: We actually increasingly over the last few months I think that opportunity is even larger.

Speaker Change: Previously thought.

DJ Hynes: Sure.

Speaker Change: I think theres the opportunity to use some of the technology that's come out improvements in some of the larger language model to <unk>.

DJ Hynes: Well in general we're going to be a very you know.

DJ Hynes: And bishops are cut.

DJ Hynes: Okay.

Speaker Change: Actually help businesses automate more of the content creation.

DJ Hynes: And for us that means aiming at the biggest opportunities, whereas the worst place you can drive the most value for customers and not not not restrict ourselves to just the markets or the price of yesterday.

Speaker Change: Even without preservation in the amount of leveling off at that Doug.

Speaker Change: We think that a lot of the businesses that work with <unk>, we give them very powerful tools, but they're actually rate limited by how fast they can dream up and create content.

DJ Hynes: So let me touch on a couple of things there that I think we're very excited about.

Amanda Whalen: Last year, we launched the product in new languages. This year, we're launching an important part of the customer journey by making local websites in German, Spanish, and Italian. So built into the guidance is an assumption that we're going to continue to see results from those strong investments that we've made, and then also that we will start to see some benefit that comes through later in the year from some of the investments that we're making now in go-to-market and localization of that customer journey that really helps to build upon the investments that we started last year.

DJ Hynes: The first is what we're doing around machine learning and artificial intelligence.

Speaker Change: A lot of those barriers are going away. So that's <unk>.

Speaker Change: Technological leap plus the fact that we have all of this data to provide a context into that content creation process and then we can measure the results and iterate and help businesses improve we think there's a massive opportunity there.

DJ Hynes: In the past about like you know the fact that we can help businesses use their data.

DJ Hynes: To do better personalization and do that automatically.

DJ Hynes: We actually increasingly over the last few months I think that opportunity is even larger than we previously thought.

Speaker Change: We think that's both an opportunity.

DJ Hynes: I think theres the opportunity to use some of the technology that's come out improvements in some of the larger language model.

Speaker Change: Strengthen our product market fit with existing customers, but we also think theres.

DJ Hynes: Actually help businesses automate more of the content creation.

Speaker Change: <unk>, new monetization opportunity because there is incremental value. We can provide businesses. So we're putting a lot of focus on that.

Amanda Whalen: Great, thanks so much. And this concludes today's conference call. Thank you for your participation. You may now disconnect.

DJ Hynes: Even without preservation in the amount of leveling up the data.

Speaker Change: We already talked it out.

DJ Hynes: We think that a lot of the businesses that work with Libya, we give them very powerful tools that are actually rate limited by how fast they can dream up and create content.

Speaker Change: The mid market and now moving into the enterprise.

Speaker Change: We think that that's just theres a lot of businesses there.

Some of which still haven't aren't aware of <unk> that when they find out that clearly exists.

DJ Hynes: A lot of those barriers are going away so that technology technologically plus the fact that we have all of this data to provide as context into that content creation process and then we can measure the results and iterate and help businesses improve we think there's a massive opportunity there.

Speaker Change: And that we built sort of marketing and how other applications with this data first AI first point of view there are you going to level up.

Speaker Change: The technologies and marketing technology from 10 years 15 years ago, It's not state of the art anymore Theyre looking for best in breed.

DJ Hynes: That's both an opportunity to.

DJ Hynes: Strengthen our prime market that with existing customers, but we also think there is.

Speaker Change: And we think that we can fill that and do a great job. There. So we're putting a lot of effort there and then finally obviously.

DJ Hynes: Large monetization opportunity because there is incremental value we can provide them.

Speaker Change: The BDC CRM this expansion of new marketing channels as.

DJ Hynes: We're putting a lot of focus on that.

DJ Hynes: We already talked about.

As well as these other applications or services and analytics.

DJ Hynes: The mid market and now moving into the enterprise.

Speaker Change: I think service is a very interesting use case.

DJ Hynes: We think that that's just theres a lot of businesses there.

DJ Hynes: Some of which don't haven't aren't aware of <unk> that when they find out that <unk> exist.

Speaker Change: We think about marketing is kind of.

Speaker Change: How do you help customers and consumers remind them what's top of mind in a very personal way, we think the other side of that like when people need help.

DJ Hynes: We've built sort of marketing in our other applications with this data first AI first point of view there are you going to level out.

Speaker Change: Are we how are we doing that in a way that.

DJ Hynes: The technology is the marketing technology from 10 years 15 years ago, It's not state of the art anymore Theyre looking for best in breed.

Speaker Change: To answer your question more quickly.

Speaker Change: We think that's a huge market.

Three important so all three of those we think match our criteria of Hey, the market is very large when we talk to customers. There's a lot of willingness to try they want to level up what they're doing they know AI is new age and I think we have the teams that are very committed working really hard to.

DJ Hynes: We think that we can fill that and do a great job. There. So we're putting a lot of effort on there and then finally you know obviously the BTC CRM this expansion of new marketing channels as.

DJ Hynes: As well as these other applications of services and analytics.

DJ Hynes: I think service is a very interesting use case.

Speaker Change: Build great products and great experiences for all of those opportunities.

DJ Hynes: We think about marketing is kind of the heart.

Speaker Change: Very helpful. Thank you.

DJ Hynes: How do you help customers and consumers remind them what's top of mind in a very personal way, we think the other side of that like when people need help how are we how are we doing that in a way that in fact.

Speaker Change: And we have time for one more question. Your final question comes from the line of Brett Huff from Stephens. Your line is open.

Thanks, So much for fitting me in I appreciate it congrats on a nice quarter digging in a little bit on international which we've been excited about.

Speaker Change: To answer your question more quickly.

Brett Huff: How did international perform relative to your expectations vis vis what's built into guidance and the rest of the question I was trying to understand as we look at the raised guidance, which is great.

Speaker Change: We think that's a huge market and very very important so all three of those we think match our criteria of a the market is very large when we talk to customers. There's a lot of our willingness to try the one level up what they're doing they know AI.

Brett Huff: How much of that is being buoyed by international because it seems like it's a net new market you all are going after it.

Speaker Change: New age and I think we have teams that are very committed working really hard to build great products and great experiences for all of those opportunities.

Brett Huff: With new stuff that maybe has less to do with macro thanks for the time.

Brett Huff: Yeah, Great question. Thanks, so much Brad.

Brett Huff: So the international trends that we're seeing are as you said incredibly strong.

Speaker Change: Very helpful. Thank you.

Speaker Change: And we have time for one more question. Your final question comes from the line of Brett Huff from Stephens. Your line is open.

We made investments last year in launching new languages, and expanding SMS multiple markets and we're seeing those paid off this year.

Speaker Change: Thanks, So much for fitting me in appreciate it congrats on a nice quarter digging in a little bit on international which we've been excited about.

Brett Huff: The fact that I think we're particularly proud of it.

Speaker Change: France, Germany, and Spain, each growing their new business in the quarter over 100% year over year, which was four to 10 times faster than those markets were growing last year. So it certainly is an important accelerator and its an accelerator that we continue to invest behind making investments I gave you spoke about earlier.

Brett Huff: How did international performed relative to your expectations vis vis what's built into guidance.

Brett Huff: The rest of the question is trying to understand as we look at the raised guidance, which is great.

Brett Huff: How much of that is being buoyed by international because it seems like it's a net new market you all are going after it.

Brett Huff: It's new stuff that maybe has less to do with macro thanks for the time.

Speaker Change: Last year, we launched the product in new languages. This year, we're launching.

Speaker Change: Yeah, Great question. Thanks, so much Brad.

Speaker Change: And part of the customer journey by making local websites in German Spanish and Italian so built into the guidance is an assumption that we're going to continue to see results from those strong investments that we've made and then also that we will start to see some benefit that comes through later in the year from some of the investments that we're making.

Speaker Change: So at the international trends that we're seeing are as you said incredibly strong.

Speaker Change: We made investments last year in launching new languages, and expanding SMS multiple markets and we're seeing those paid off this year and.

Speaker Change: Fact that I think we're particularly proud of is France.

Speaker Change: France, Germany, and Spain, each growing their new business in the quarter over 100% year over year, which was four to 10 times faster than those markets were growing last year. So it certainly is an important accelerator and its an accelerator that we continue to invest behind making investments I gave you spoke about earlier.

Speaker Change: Now and go to market and localization of that customer journey that really helps to build upon the investments that we started last year.

Speaker Change: Great. Thanks, so much.

Speaker Change: Okay.

Speaker Change: And this concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: Last year relaunched the product in new languages. This year, we're launching.

Speaker Change: Part of the customer journey by making local websites in German Spanish and Italian so built into the guidance is an assumption that we're going to continue to see results from those strong investments that we've made and then also you know that we will start to see some benefit that comes through later in the year from some of the investments that we're making.

Speaker Change: Now in go to market and localization of that customer journey that really helps to build upon.