Klaviyo Q2FY26 Results: Revenue up 26% YoY to $370.6 million
- Revenue grew 26% YoY to $370.6 million in Q2 2026
- Full-year 2026 revenue guidance raised to $1.526-$1.534 billion
- Enterprise customers ($50k+ ARR) now represent 40% of total ARR
- Non-GAAP operating income reached $50.9 million with a 13.7% margin
- Company acquired Agency team to enhance AI capabilities
*this image is generated using AI for illustrative purposes only.
Klaviyo (NYSE: KVYO) reported second-quarter 2026 revenue of $370.6 million, representing a 26% year-over-year increase. The company raised its full-year 2026 revenue guidance to between $1.526 billion and $1.534 billion.
Financial Performance
Klaviyo achieved an annualized revenue run rate of nearly $1.5 billion. Non-GAAP gross margin was 73.4%, down three points year-over-year due to strong growth in text messaging and higher carrier fees absorbed in prior quarters. Non-GAAP operating expenses were approximately 60% of revenue, down roughly three points year-over-year. Non-GAAP operating income stood at $50.9 million, or a 13.7% margin.
| Metric | Q2 2026 | Change |
|---|---|---|
| Revenue | $370.6 million | +26% YoY |
| Non-GAAP Gross Margin | 73.4% | -3 pts YoY |
| Non-GAAP Operating Income | $50.9 million | +13.7% margin |
The company generated $83 million in cash during the quarter, ending with a total cash balance of $833 million. Klaviyo used approximately $240 million to repurchase shares, leaving $160 million in capacity under its $500 million buyback authorization.
What the Numbers Show
Enterprise customers are driving significant revenue concentration. Customers with $50,000-plus annual recurring revenue (ARR) grew 36% year-over-year to 4,477 accounts, now representing 40% of total ARR. This shift toward larger contracts coincides with the company signing its largest-ever eight-figure multi-product deal with a top e-commerce brand.
Product and Growth Drivers
International revenue outside the Americas increased by 35% year-over-year, with EMEA revenue outside the UK up 41%. Net revenue retention was 109% in Q2, reflecting strengthening gross retention and cross-sell momentum, though offset by the lapping of last year's profile enforcement.
Klaviyo’s AI-driven marketing tool, Composer, saw rapid adoption with over 95,000 users in its first month. Nearly a quarter of these users became regular weekly users. The company also reported that human and AI multi-channel campaigns increased nearly 50% quarter-over-quarter.
Outlook and Strategic Moves
Management raised full-year 2026 non-GAAP operating income guidance to a range of $212 million to $218 million, implying a margin of approximately 14%. This revision includes $10 million to $12 million in costs associated with the acquisition of Agency, whose founder Elias Torres will join as Chief Product Officer.
For Q3 2026, Klaviyo expects revenue between $377 million and $381 million, representing growth of approximately 21.5% to 22.5%. Non-GAAP operating income is expected to be $40 million to $43 million. Erica Smith will assume the role of CFO on September 1, succeeding Amanda Whalen.
How will the integration of Agency and the appointment of Elias Torres as CPO accelerate Klaviyo's AI product roadmap beyond the initial adoption of Composer?
What specific strategies is Klaviyo employing to mitigate the margin pressure from rising text messaging carrier fees while maintaining its 26% revenue growth trajectory?
With enterprise customers now comprising 40% of ARR, how might this increased concentration impact customer churn rates and negotiation leverage in future quarters?
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