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Klaviyo Announces Third Quarter 2023 Financial Results

Third quarter revenue of $175.8 million, representing 48% year-over-year growth

Expanded platform with launch of Klaviyo CDP

Klaviyo (NYSE: KVYO), the company that powers smarter digital relationships, today announced results for its third quarter ended September 30, 2023.

“Our strong third quarter results validate the strength of our purpose – to help businesses leverage their data to power smarter digital relationships with their customers,” said Andrew Bialecki, co-founder and CEO of Klaviyo. “Today, we are proud to report our inaugural quarterly financial results as a public company with revenue of $175.8 million and 10% non-GAAP operating margin. We are excited that companies and organizations like Stanley 1913, the San Francisco Marathon, Ouai, and others have chosen to switch to or expand with Klaviyo over the past quarter to drive their revenue growth and build better customer relationships.”

Recent Business Highlights:

  • Ended the quarter with over 135,000 customers who are using Klaviyo to drive their own revenue growth, compared to over 109,000 customers in the third quarter of 2022.
  • Increased our penetration up market, ending the quarter with 1,699 customers generating over $50,000 of ARR, compared to 899 in the third quarter of 2022, an increase of 89% year over year.
  • Continued to expand our current customer base, with a dollar-based net revenue retention rate (NRR) of 119% as of September 30, 2023, marking our 10th straight quarter with a NRR of at least 115%.
  • Announced the launch of the Klaviyo CDP, giving businesses a single source of truth for all customer data and advanced analytics to help them understand their audiences and business performance.
  • Hired former Salesforce executive and Chief Marketing Officer of GoTo, Jamie Domenici, as our Chief Marketing Officer to lead all global strategic marketing initiatives.

Third Quarter 2023 Financial Highlights:

  • Revenue: Total revenue of $175.8 million, up from $119.2 million in the third quarter of 2022, representing annual growth of 48%.
  • Gross profit: Gross profit of $117.0 million, representing a gross margin of 67%, compared to gross profit of $86.5 million, representing a gross margin of 73%, in the third quarter of 2022.
  • Non-GAAP gross profit: Non-GAAP gross profit of $140.3 million, representing a gross margin of 80%, compared to non-GAAP gross profit of $86.6 million, representing a gross margin of 73%, in the third quarter of 2022.
  • Operating income (loss): Operating loss of $(302.2) million, representing operating margin of (172)%, compared to an operating loss of $(25.7) million in the third quarter of 2022, representing an operating margin of (22)%.
  • Non-GAAP operating income (loss): Non-GAAP operating income of $17.8 million, representing non-GAAP operating margin of 10%, compared to a non-GAAP operating loss of $(16.3) million in the third quarter of 2022, representing non-GAAP operating margin of (14)%.
  • Balance sheet and cash flow: Cash, cash equivalents, and restricted cash as of the end of the third quarter was $724.4 million. Cash from operating activities was $23.7 million, representing a margin of 13%. Free cash flow for the third quarter was $21.9 million, representing free cash flow margin of 12%.

“In the third quarter our team continued to drive strong growth, at scale, in an efficient manner.” said Amanda Whalen, CFO of Klaviyo. “We delivered $175.8 million in revenue and $17.8 million in non-GAAP operating income. In the fourth quarter we’ll continue to invest in our key growth initiatives, including our penetration in the mid-market and internationally, with a continued focus on areas with strong unit economics.”

Financial Outlook

$ in millions

FY23-Q4 Guidance

 

FY23 Guidance

 

Low

High

 

Low

High

Revenue

$ 195.0

$ 197.0

 

$ 691.5

$ 693.5

Year-over-year Growth Rate

34%

36%

 

46%

47%

 

 

 

 

 

 

Non-GAAP Operating Income

$14.0

$17.0

 

$75.9

$78.9

Non-GAAP Operating Margin

7%

9%

 

11%

11%

Klaviyo has not provided a reconciliation of non-GAAP operating income guidance measures to the most directly comparable GAAP measures because certain items excluded from GAAP cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort. Stock-based compensation-related charges, including employer payroll tax-related items on employee stock transactions, are impacted by the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change.

Dilutive Securities

Klaviyo has various dilutive securities. The table below details these securities (shares in millions; rounding differences may occur):

 

Price as of

September 30,

2023

 

Weighted

Average

Exercise Price

Shares

Share price

$ 34.50

 

 

 

Common stock outstanding as of 9/30/2023

 

 

 

258.3

Warrants outstanding

 

 

 

5.5

RSUs outstanding

 

 

 

13.4

Options outstanding

 

 

$ 0.54

31.8

Total estimated fully diluted shares

 

 

 

309.0

We have excluded the impact of the Shopify investment option of 15,743,174 shares at $88.93 per share as it was out of the money as of September 30, 2023. The investment option expires on July 28, 2030.

Conference Call Information

In conjunction with this announcement, Klaviyo will host a conference call for investors at 4:30 p.m. ET (1:30 p.m. PT) today to discuss the results for its third quarter ended September 30, 2023 and its outlook for its fourth quarter and fiscal year ending December 31, 2023. The live webcast and a replay of the webcast will be available at the Investor Relations section of Klaviyo’s website: https://investors.klaviyo.com (live and replay).

Select Defined Terms

Customers. We define a customer as a distinct paid subscription to our platform. A single organization could have multiple discrete contracting divisions or subsidiaries or brands each with paid subscriptions to our platform, which would, in general, constitute multiple distinct customers. In some cases at the customer’s request, we allow subscriptions under the same parent organization to be consolidated into a single paid subscription in which case such consolidated paid subscriptions would constitute a single customer. We measure our total number of customers as a point-in-time calculation measured as of the end of a particular period. Customers do not include persons or entities that use our platform on a free trial basis.

Customers Generating Over $50,000 of ARR. We calculate our number of customers generating over $50,000 of ARR as those customers that have an average ARR of greater than $50,000 over the prior twelve months (or the entire duration of the customer’s paying relationship, if it is less than twelve months) as of the date of determination.

Dollar-Based Net Revenue Retention Rate. We calculate our Dollar-Based Net Revenue Retention Rate, or NRR, by first identifying the cohort of customers as of twelve months prior to the date of determination. We then calculate the Annualized Recurring Revenue, or ARR, from this customer cohort as of twelve months prior to the date of determination, or the Prior Period ARR, and the ARR from this customer cohort as of the date of determination, or the Current Period ARR. ARR, for any date of determination, is the annualized value of existing paid subscriptions, which we calculate by taking the amount of revenue that we expect to receive in the next monthly period for our existing paid subscriptions, assuming no changes to such subscriptions in the next month, as of that date of determination, and multiplying that amount by twelve. Current Period ARR includes any expansion, price increases, and customer subscriptions that are deactivated and subsequently reactivated during the applicable twelve-month period and reflects contraction or attrition over the last twelve months from this customer cohort, but excludes any ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time NRR. We then calculate the weighted average point-in-time NRR as of the last day of each month in the current trailing twelve-month period to arrive at the NRR, with the weightings determined by the total ARR at the end of each period.

About Klaviyo

Klaviyo (CLAY-vee-oh) powers smarter digital relationships, making it easy for businesses to capture, store, analyze, and predictively use their own data to drive measurable, high-value outcomes. Klaviyo’s modern and intuitive SaaS platform enables business users of any skill level to harness their first-party data from more than 300 integrations to send the right message at the right time across email, SMS, and push notifications. Innovative businesses like Good American, TaylorMade, Skims, Stanley 1913, and more than 135,000 other paying customers leverage Klaviyo to acquire, engage, and retain customers—and grow on their own terms.

Tag: IR

Forward Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Other than statements of historical facts, all statements contained in this press release, including, but not limited to, statements about Klaviyo’s outlook for the fourth quarter of fiscal year 2023 ending December 31, 2023 and the full fiscal year ending December 31, 2023, and Klaviyo’s expectations regarding possible or assumed business strategies, potential growth and innovation opportunities, new products, potential market opportunities, and other similar matters, are forward-looking statements. Words such as “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “going to,” “guidance,” “intend,” “keep,” “may,” “opportunity,” “outlook,” “plan,” “potential,” “predict,” “project,” “shall,” “should,” “strategy,” “target,” “will,” “would,” or words of similar meaning or similar references to future periods may identify these forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements reflect management’s beliefs, expectations and assumptions about future events as of the date hereof, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. These risks include, among others, the following: our ability to achieve future growth and sustain our growth rate; our ability to successfully execute our business and growth strategy, such as the success of our investment in our key growth initiatives and our ability to recognize effective areas for growth; our ability to successfully integrate with third-party platforms; our relationships with third parties, such as our marketing agency and technology partners; unfavorable conditions in our industry; our ability to attract new customers, including mid-market and enterprise customers, retain revenue from existing customers and increase sales from both new and existing customers; success of our marketing and sales strategies; costs and expenses associated with being a public company; as well as other risks and uncertainties set forth under the caption “Risk Factors” and elsewhere in our Quarterly Report on Form 10-Q for the third quarter ended September 30, 2023 to be filed with the Securities and Exchange Commission (the “SEC”) and other filings and reports we make with the SEC from time to time, which may be obtained on our Investor Relations website at https://investors.klaviyo.com and on the SEC website at www.sec.gov. Moreover, we operate in a very competitive and rapidly changing environment, and new risks may emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor(s) may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. In light of the risks, uncertainties, assumptions, and other factors, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Therefore, you should not rely on any of the forward-looking statements. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. Other than as required by law, we assume no obligation to update any forward-looking statements contained in this press release in the event of new information, future developments or otherwise.

Statement Regarding Use of Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles in the United States (GAAP), this press release and the accompanying tables contain non-GAAP financial measures, including non-GAAP gross profit, non-GAAP operating income (loss), non-GAAP operating margin, free cash flow, and free cash flow margin. The non-GAAP financial information is presented for supplemental informational purposes only and is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please see the accompanying tables for reconciliations of these non-GAAP financial measures to their nearest GAAP equivalents.

Our non-GAAP gross profit and non-GAAP operating income (loss) exclude significant expenses and income that are required by GAAP to be recorded in our consolidated financial statements, including, but not limited to, (i) amortization of prepaid marketing expenses, (ii) stock-based compensation and related employer payroll taxes, and (iii) restructuring expenses. Our non-GAAP operating margin is calculated as non-GAAP operating income (loss) divided by total revenue. Free cash flow is defined as cash and cash equivalents provided by or used in operating activities less purchases of property and equipment and capitalization of software development costs. Free cash flow margin is a non-GAAP financial measure that is calculated as free cash flow divided by total revenue.

We believe that all these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to decision making by our management, who use these measures as important tools for financial and operational decision-making and for evaluating Klaviyo’s own operating results over different periods of time.

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures versus their nearest GAAP equivalents. Other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Further, stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in Klaviyo’s business and an important part of the compensation provided to attract and retain its employees to create long-term incentive alignment with stockholders.

Klaviyo, Inc.

Consolidated Balance Sheet (Unaudited)

(In Thousands)

 

As of

 

September 30,

2023

December 31,

2022

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$

723,415

 

$

385,820

 

Restricted cash

 

386

 

 

409

 

Accounts receivable, net of allowance for doubtful accounts

 

17,380

 

 

10,723

 

Deferred contract acquisition costs, current

 

14,161

 

 

11,215

 

Prepaid expenses and other current assets

 

26,010

 

 

19,336

 

Total current assets

 

781,352

 

 

427,503

 

Property and equipment, net

 

42,730

 

 

45,837

 

Right-of-use assets, net

 

39,506

 

 

45,695

 

Deferred contract acquisition costs, non-current

 

20,687

 

 

15,983

 

Restricted cash, non-current

 

648

 

 

687

 

Prepaid marketing expense

 

178,968

 

 

84,415

 

Other non-current assets

 

7,533

 

 

8,959

 

Total assets

$

1,071,424

 

$

629,079

 

Liabilities, redeemable common stock, and stockholders' equity (deficit)

 

 

Current liabilities:

 

 

Accounts payable

$

9,738

 

$

8,890

 

Accrued expenses

 

62,602

 

 

36,126

 

Lease liabilities, current

 

14,449

 

 

14,864

 

Deferred revenue

 

32,866

 

 

25,109

 

Total current liabilities

 

119,655

 

 

84,989

 

Lease liabilities, non-current

 

40,016

 

 

47,544

 

Other non-current liabilities

 

6,409

 

 

876

 

Total liabilities

 

166,080

 

 

133,409

 

Redeemable Common Stock

 

 

Redeemable common stock

 

 

 

1,531,853

 

Stockholders' equity (deficit)

 

 

Preferred stock

 

 

 

 

Common stock - Series A

 

33

 

 

 

Common stock - Series B

 

226

 

 

171

 

Additional paid-in capital

 

1,677,833

 

 

1,249,065

 

Accumulated deficit

 

(772,748

)

 

(2,285,419

)

Total stockholders' equity (deficit)

 

905,344

 

 

(1,036,183

)

Total liabilities, redeemable common stock, and stockholders' equity (deficit)

$

1,071,424

 

$

629,079

 

 

 

 

Klaviyo, Inc.

 

Consolidated GAAP Statement of Operations (Unaudited)

 

(In Thousands, Except Share and Per Share Data)

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

Revenue

$

175,807

 

$

119,168

 

 

Cost of revenue

 

58,825

 

 

32,619

 

 

Gross profit

 

116,982

 

 

86,549

 

 

Operating expenses:

 

 

 

Selling and marketing

 

167,877

 

 

61,482

 

 

Research and development

 

141,455

 

 

30,090

 

 

General and administrative

 

109,853

 

 

20,640

 

 

Total operating expenses

 

419,185

 

 

112,212

 

 

Operating loss

 

(302,203

)

 

(25,663

)

 

Other (expense) income

 

(265

)

 

529

 

 

Interest income

 

6,183

 

 

1,537

 

 

Total other income expense

 

5,918

 

 

2,066

 

 

Loss before income taxes

 

(296,285

)

 

(23,597

)

 

Provision for income taxes

 

819

 

 

276

 

 

Net loss

$

(297,104

)

$

(23,873

)

 

Net loss per share

 

 

 

Basic and Diluted

$

(1.24

)

$

(0.10

)

 

Weighted average shares outstanding

 

 

 

Basic and Diluted

 

240,125,168

 

 

231,973,229

 

 

 

 

 

 

 

 

 

 

Klaviyo, Inc.

Consolidated GAAP Statement of Operations (Unaudited)

(In Thousands, Except Share and Per Share Data)

 

 

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

Revenue

$

496,481

 

$

327,513

 

Cost of revenue

 

132,875

 

 

90,694

 

Gross profit

 

363,606

 

 

236,819

 

Operating expenses:

 

 

Selling and marketing

 

291,845

 

 

153,401

 

Research and development

 

209,542

 

 

75,365

 

General and administrative

 

156,511

 

 

59,012

 

Total operating expenses

 

657,898

 

 

287,778

 

Operating loss

 

(294,292

)

 

(50,959

)

Other (expense) income

 

(344

)

 

703

 

Interest income

 

14,484

 

 

1,963

 

Total other income

 

14,140

 

 

2,666

 

Loss before income taxes

 

(280,152

)

 

(48,293

)

Provision for income taxes

 

1,786

 

 

145

 

Net loss

$

(281,938

)

$

(48,438

)

Net loss per share

 

 

Basic and Diluted

$

(1.19

)

$

(0.21

)

Weighted average shares outstanding

 

 

Basic and Diluted

 

237,411,574

 

 

228,271,900

 

 

 

 

 

 

 

 

 

 

Klaviyo, Inc.

Consolidated Statement of Cash Flows (Unaudited)

(In Thousands)

 

Three Months Ended September 30,

 

 

2023

 

 

2022

 

Operating activities

 

 

Net loss

$

(297,104

)

$

(23,873

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

Depreciation and amortization expense

 

3,357

 

 

2,104

 

Non-cash operating lease costs

 

3,088

 

 

2,629

 

Amortization of deferred contract acquisition costs

 

4,117

 

 

2,769

 

Amortization of prepaid marketing expense

 

13,224

 

 

8,816

 

Bad debt expense

 

415

 

 

275

 

Stock-based compensation expense

 

299,975

 

 

522

 

Other

 

89

 

 

9

 

Changes in operating assets and liabilities:

 

 

Accounts receivable

 

(4,629

)

 

(1,310

)

Deferred contract acquisition costs

 

(6,992

)

 

(4,913

)

Prepaid expenses, prepaid taxes, and other assets

 

(1,557

)

 

(1,378

)

Accounts payable

 

1,297

 

 

(3,239

)

Accrued expenses

 

3,079

 

 

(1,537

)

Deferred revenue

 

3,706

 

 

3,144

 

Operating lease liabilities

 

(3,846

)

 

(1,352

)

Other non-current liabilities

 

5,481

 

 

10

 

Net cash provided by (used in) operating activities

 

23,700

 

 

(17,324

)

Investing activities

 

 

Acquisition of property and equipment

 

(54

)

 

(4,427

)

Capitalization of software development costs

 

(1,776

)

 

(585

)

Net cash used in investing activities

 

(1,830

)

 

(5,012

)

Financing activities

 

 

Proceeds from exercise of common stock awards

 

1,616

 

 

95

 

Cash paid for finance leases

 

(5

)

 

(6

)

Proceeds from exercise of warrants

 

45

 

 

40

 

Proceeds from issuance of common stock, net of issuance costs

 

 

 

99,558

 

Recognition of deferred offering costs

 

2,954

 

 

 

Proceeds from issuance of common stock in initial public offering, net of issuance costs

 

321,029

 

 

 

Employee taxes paid related to net share settlement of stock-based awards

 

(62,863

)

 

 

Net cash provided by financing activities

 

262,776

 

 

99,687

 

Net increase in cash, cash equivalents, and restricted cash

 

284,646

 

 

77,351

 

Cash, cash equivalents, and restricted cash, beginning of period

 

439,803

 

 

291,123

 

Cash, cash equivalents, and restricted cash, end of period

$

724,449

 

$

368,474

 

Klaviyo, Inc.

Consolidated Statement of Cash Flows (Unaudited)

(In Thousands)

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

Operating activities

 

 

Net loss

$

(281,938

)

$

(48,438

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

Depreciation and amortization expense

 

9,823

 

 

6,216

 

Non-cash operating lease costs

 

9,649

 

 

8,218

 

Amortization of deferred contract acquisition costs

 

11,380

 

 

7,473

 

Amortization of prepaid marketing expense

 

39,672

 

 

8,816

 

Bad debt expense

 

368

 

 

533

 

Stock-based compensation expense

 

302,317

 

 

6,245

 

Other

 

108

 

 

28

 

Changes in operating assets and liabilities:

 

 

Accounts receivable

 

(7,025

)

 

(4,912

)

Deferred contract acquisition costs

 

(19,030

)

 

(14,244

)

Prepaid expenses, prepaid taxes, and other assets

 

(5,479

)

 

(6,452

)

Accounts payable

 

389

 

 

(18,693

)

Accrued expenses

 

18,668

 

 

10,158

 

Deferred revenue

 

7,757

 

 

6,325

 

Operating lease liabilities

 

(11,482

)

 

(5,769

)

Other non-current liabilities

 

5,550

 

 

30

 

Net cash provided by (used in) operating activities

 

80,727

 

 

(44,466

)

Investing activities

 

 

Acquisition of property and equipment

 

(823

)

 

(14,392

)

Capitalization of software development costs

 

(4,612

)

 

(1,526

)

Net cash used in investing activities

 

(5,435

)

 

(15,918

)

Financing activities

 

 

Proceeds from exercise of common stock options

 

4,034

 

 

1,363

 

Cash paid for finance leases

 

(16

)

 

(16

)

Proceeds from exercise of warrants

 

57

 

 

40

 

Proceeds from issuance of common stock, net of issuance costs

 

 

 

99,558

 

Proceeds from issuance of common stock in initial public offering, net of issuance costs

 

321,029

 

 

 

Employee taxes paid related to net share settlement of stock-based awards

 

(62,863

)

 

 

Net cash provided by financing activities

 

262,241

 

 

100,945

 

Net increase in cash, cash equivalents, and restricted cash

 

337,533

 

 

40,561

 

Cash, cash equivalents, and restricted cash, beginning of period

 

386,916

 

 

327,913

 

Cash, cash equivalents, and restricted cash, end of period

$

724,449

 

$

368,474

 

Klaviyo, Inc.

Reconciliation of Operating Income to Non-GAAP Operating Income (Unaudited)

(In Thousands)

 

 

 

 

Three Months Ended September 30,

 

 

2023

 

 

2022

 

Operating loss

$

(302,203

)

$

(25,663

)

Stock-based compensation

 

299,975

 

 

522

 

Employer payroll tax on employee stock transactions

 

6,838

 

 

 

Amortization of prepaid marketing

 

13,224

 

 

8,816

 

Non-GAAP operating income (loss)

$

17,834

 

$

(16,325

)

Operating margin

 

(171.9

)%

 

(21.5

)%

Non-GAAP operating margin

 

10.1

%

 

(13.7

)%

Klaviyo, Inc.

Reconciliation of Gross Profit to Non-GAAP Gross Profit (Unaudited)

(In Thousands)

 

 

 

 

Three Months Ended September 30,

 

 

2023

 

 

2022

 

Gross profit

$

116,982

 

$

86,549

 

Stock-based compensation

 

21,902

 

 

25

 

Employer payroll tax on employee stock transactions

 

1,451

 

 

 

Non-GAAP gross profit

$

140,335

 

$

86,574

 

Gross margin

 

66.5

%

 

72.6

%

Non-GAAP gross margin

 

79.8

%

 

72.6

%

 

Klaviyo, Inc.

Reconciliation of Expenses to Non-GAAP Expenses (Unaudited)

(In Thousands)

 

 

Three Months Ended September 30,

 

 

2023

 

 

2022

 

Selling and marketing

$

167,877

 

$

61,482

 

Stock-based compensation

 

(95,962

)

 

(96

)

Employer payroll tax on employee stock transactions

 

(2,515

)

 

 

Amortization of prepaid marketing

 

(13,224

)

 

(8,816

)

Non-GAAP Selling and marketing

$

56,176

 

$

52,570

 

 

 

 

Research and development

$

141,455

 

$

30,090

 

Stock-based compensation

 

(104,829

)

 

(298

)

Employer payroll tax on employee stock transactions

 

(1,675

)

 

 

Non-GAAP Research and development

$

34,951

 

$

29,792

 

 

 

 

General and administrative

$

109,853

 

$

20,640

 

Stock-based compensation

 

(77,282

)

 

(103

)

Employer payroll tax on employee stock transactions

 

(1,197

)

 

 

Non-GAAP General and administrative

$

31,374

 

$

20,537

 

 

 

 

Total operating expenses

$

419,185

 

$

112,212

 

Stock-based compensation

 

(278,073

)

 

(497

)

Employer payroll tax on employee stock transactions

 

(5,387

)

 

 

Amortization of prepaid marketing

 

(13,224

)

 

(8,816

)

Non-GAAP Total operating expenses

$

122,501

 

$

102,899

 

Klaviyo, Inc.

Reconciliation of Operating Income to Non-GAAP Operating Income (Unaudited)

(In Thousands)

 

 

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

Operating loss

$

(294,292

)

$

(50,959

)

Stock-based compensation

 

302,317

 

 

6,245

 

Employer payroll tax on employee stock transactions

 

6,838

 

 

 

Amortization of prepaid marketing

 

39,672

 

 

8,816

 

Restructuring expense

 

7,366

 

 

 

Non-GAAP operating income (loss)

$

61,901

 

$

(35,898

)

Operating margin

 

(59.3

)%

 

(15.6

)%

Non-GAAP operating margin

 

12.5

%

 

(11.0

)%

Klaviyo, Inc.

Reconciliation of Gross profit to Non-GAAP gross profit (Unaudited)

(In Thousands)

 

 

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

Gross profit

$

363,606

 

$

236,819

 

Stock-based compensation

 

21,945

 

 

105

 

Employer payroll tax on employee stock transactions

 

1,451

 

 

 

Restructuring expense

 

1,156

 

 

 

Non-GAAP gross profit

$

388,158

 

$

236,924

 

Gross margin

 

73.2

%

 

72.3

%

Non-GAAP gross margin

 

78.2

%

 

72.3

%

Klaviyo, Inc.

Reconciliation of Expenses to Non-GAAP Expenses (Unaudited)

(In Thousands)

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

Selling and marketing

$

291,845

 

$

153,401

 

Stock-based compensation

 

(96,141

)

 

(909

)

Employer payroll tax on employee stock transactions

 

(2,515

)

 

 

Restructuring expense

 

(1,802

)

 

 

Amortization of prepaid marketing

 

(39,672

)

 

(8,816

)

Non-GAAP Selling and marketing

$

151,715

 

$

143,676

 

 

 

 

Research and development

$

209,542

 

$

75,365

 

Stock-based compensation

 

(105,642

)

 

(932

)

Employer payroll tax on employee stock transactions

 

(1,675

)

 

 

Restructuring expense

 

(3,300

)

 

 

Non-GAAP Research and development

$

98,925

 

$

74,433

 

 

 

 

General and administrative

$

156,511

 

$

59,012

 

Stock-based compensation

 

(78,589

)

 

(4,299

)

Employer payroll tax on employee stock transactions

 

(1,197

)

 

 

Restructuring expense

 

(1,108

)

 

 

Non-GAAP General and administrative

$

75,617

 

$

54,713

 

 

 

 

Total operating expenses

$

657,898

 

$

287,778

 

Stock-based compensation

 

(280,372

)

 

(6,140

)

Employer payroll tax on employee stock transactions

 

(5,387

)

 

 

Restructuring expense

 

(6,210

)

 

 

Amortization of prepaid marketing

 

(39,672

)

 

(8,816

)

Non-GAAP Total operating expenses

$

326,257

 

$

272,822

 

Klaviyo, Inc.

Reconciliation of Operating Cash Flow to Free Cash Flow (Unaudited)

(In Thousands)

 

 

 

 

Three Months Ended September 30,

 

 

2023

 

 

2022

 

Cash Provided by (used in) operating activities

$

23,700

 

$

(17,324

)

Acquisition of property and equipment

 

(54

)

 

(4,427

)

Capitalization of software development costs

 

(1,776

)

 

(585

)

Free cash flow

$

21,870

 

$

(22,336

)

Operating cash flow margin

 

13.5

%

 

(14.5

)%

Free cash flow margin

 

12.4

%

 

(18.7

)%

Klaviyo, Inc.

Reconciliation of Operating Cash Flow to Free Cash Flow (Unaudited)

(In Thousands)

 

 

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

Cash Provided by (used in) operating activities

$

80,727

 

$

(44,466

)

Acquisition of property and equipment

 

(823

)

 

(14,392

)

Capitalization of software development costs

 

(4,612

)

 

(1,526

)

Free cash flow

$

75,292

 

$

(60,384

)

Operating cash flow margin

 

16.3

%

 

(13.6

)%

Free cash flow margin

 

15.2

%

 

(18.4

)%

 

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