Klaviyo, Inc. Series A · NYSE:KVYO
Klaviyo, Inc. Series A — Klaviyo — Q3 2023 Earnings Presentation
34 slides from Klaviyo, Inc. Series A's earnings presentation, Nov 7, 2023
Slide 1: Financial Results Q3 Fiscal 2023
FINANCIAL RESULTS Q3 FISCAL 2023 November 7, 2023 2023 © Klaviyo 1
Slide 2: Forward-Looking Statements and Disclaimer
Forward-Looking Statements and Disclaimer This presentation 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
Slide 3: Statement Regarding Use of Non-GAAP Financial Measures
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 presentation and accompanying oral commentary contain non-GAAP financial measures, including non-GAAP gross pr
Slide 4: Klaviyo powers smarter digital relationships
Klaviyo powers smarter digital relationships Activate Connect Guide Grow data in real-time to with customers marketing with audience, better target, through a built-in AI, customer lifetime personalize, and seamless email, automations, value, and total measure all SMS, mobile push, predictive revenu
Slide 5: Klaviyo at a glance
Klaviyo at a glance1 $642M Revenue 119% Dollar-Based Net Revenue 31% EMEA and APAC 15% Free Cash Flow Margin3 Retention Rate2,4 Revenue 54% 135,000+ 1,699 2,4 11% Revenue Growth Total Customers Customers Generating Over Non-GAAP $50K ARR2,4 Operating Margin 89% YoY Growth 1 All metrics for trailing
Slide 6: Businesses need to deliver highly personalized experiences to drive revenue growth
Businesses need to deliver highly personalized experiences to drive revenue growth 01 Initial connection 02 Revenue-driving engagement 03 Real-time engagement 04 Ongoing engagement Collect first-party data to Connect with consumers—not Predictive analytics advise Predictive analytics create connect w
Slide 7: Delivering impactful consumer experiences is challenging
Delivering impactful consumer experiences is challenging X Wrong product X Lack of context X Fractured experience X Counterproductive Messages are impersonal and Without real-time event data, Disjointed consumer experience Lack of context results in disconnected from consumer inappropriate messages
Slide 8: Other solutions do not have the full stack to unlock all the capabilities
Other solutions do not have the full stack to unlock all the capabilities required by creators Cloud data warehouses and Single channel solutions Marketing solution providers operational databases 2023 © Klaviyo 8
Slide 9: Our vertically-integrated platform unifies data and application layers
Our vertically-integrated platform unifies data and application layers 1 As of September 30, 2023 2023 © Klaviyo 9
Slide 10: Key benefits of our vertically-integrated platform
Key benefits of our vertically-integrated platform Ease of use + Advanced capabilities Rapid Easy-to-use Coordinated Real-time Extremely AI / ML-enabled implementation regardless of engagement action to reach granular predictive with clear technical skill across consumers segmentation insights drive
Slide 11: Ease of use allows businesses to put all their data to work
Ease of use allows businesses to put all their data to work Rapid implementation with Easy-to-use regardless Coordinated engagement clear attributable value to of technical skill level across channels drive high ROI Email SMS Push KAV = revenue generated for our customers One-click customizable temp
Slide 12: Advanced capabilities deliver highly personalized experiences
Advanced capabilities deliver highly personalized experiences Real-time action to reach Extremely granular AI / ML-enabled predictive consumers data segmentation insights drive revenue growth Behavior forecasting Benchmarking A/B testing Generative content Sub-second-level accessibility to query dat
Slide 13: AI is central to our roadmap and we have a significant advantage
AI is central to our roadmap and we have a significant advantage AI strategy is built on foundational values of data privacy and trust ▪ AI is a meaningful component of our platform today and we will continue to drive innovation Generative and predictive AI ▪ We have a differentiated advantage Idea ge
Slide 14: Product-led growth drives highly efficient go-to-market engine
Product-led growth drives highly efficient go-to-market engine Efficient inbound motion Organic, Inbound Targeted Word of mouth Agency Partners Self-serve, outbound motion Platform Partners low-touch sales Focused on larger customers 135,000+ Total Customers1 Deliver actionable Frictionless Land with in
Slide 15: Our partner ecosystem enriches customer offerings and expands reach
Our partner ecosystem enriches customer offerings and expands reach Commerce • Drive revenue for Klaviyo and GMV • Building applications that extend for commerce platforms platforms functionality for Klaviyo Developers • Partner on product and GTM • Inside customers or third party developers Other te
Slide 16: Whitespace for durable growth with sustained execution
Whitespace for durable growth with sustained execution ● $642M in TTM Revenue1 Global TAM $68B ● $16B market in retail and eCommerce (~4% penetrated) ● $34B market across verticals in the U.S. (~2% penetrated) U.S. TAM $34B ● $68B market globally (<1% penetrated) SAM $16B $642M in TTM Revenue1 1 For
Slide 17: Our growth drivers
Our growth drivers Developer-led apps New use cases Expand into new verticals Further invest Broad platform Grow our in our platform applicability Customer service mid-market and enterprise Expand Integrations with Open architecture presence In-product or app Internationally Reviews Olo, and data-fir
Slide 18: Financials
Financials
Slide 19: Financial highlights from FY23 Q3
Financial highlights from FY23 Q31 Operating at Scale $176M Quarterly revenue Rapid Revenue Growth 48% Year-over-year growth rate Strong Expansion With Our Customers 119% Dollar-Based Net Revenue Retention Rate Momentum in the Mid Market 89% Year-over-year growth in Customers > $50K ARR2 Generating
Slide 20: Revenue growth at scale
Revenue growth at scale YoY Growth 54% 57% 62% 57% 51% 48% 2023 © Klaviyo 20
Slide 21: Strong customer growth
Strong customer growth 20%+ 89% 2023 © Klaviyo 21
Slide 22: Continuing to diversify internationally
Continuing to diversify internationally Percentages rounded for presentation purposes. 2023 © Klaviyo 22
Slide 23: Gaining leverage in operating expenses while investing for growth
Gaining leverage in operating expenses while investing for growth Leverage drivers ▪ Revenue growth ▪ G&A absorbing one-time IPO and public company readiness initiatives ▪ R&D headcount investment at scale ▪ Investing behind strong unit economics to drive growth See Appendix for Non-GAAP reconciliat
Slide 24: Maintaining discipline on the bottom line
Maintaining discipline on the bottom line Non-GAAP (14%) 10% Operating Margin See Appendix for Non-GAAP reconciliation. 2023 © Klaviyo 24
Slide 25: Increasing free cash flow generation
Increasing free cash flow generation TTM Free Cash (18%) (9%) (1%) 8% 15% Flow Margin See Appendix for Non-GAAP reconciliation. 2023 © Klaviyo 25
Slide 26: Guidance
Guidance ($ in millions) FY23 Q4 FY23 Revenue $195.0 - $197.0 $691.5 - $693.5 YoY Growth 34% - 36% 46% - 47% Non-GAAP Operating Income $14.0 - $17.0 $75.9 - $78.9 Non-GAAP Operating Margin 7% - 9% 11% - 11% 2023 © Klaviyo 26
Slide 27: Appendix
Appendix
Slide 28: Summary Non-GAAP P&L
Summary Non-GAAP P&L (USD $ In Millions) FY22 Q3 FY22 Q4 FY23 Q1 FY23 Q2 FY23 Q3 Revenue $119.2 $145.2 $156.1 $164.6 $175.8 Cost of Revenue $32.6 $37.3 $35.4 $37.5 $35.5 Gross Profit $86.6 $107.9 $120.7 $127.1 $140.3 Gross margin % 73% 74% 77% 77% 80% Selling and marketing $52.6 $47.1 $45.5 $50.1 $56
Slide 29: GAAP to Non-GAAP reconciliation of Operating Income
GAAP to Non-GAAP reconciliation of Operating Income (USD $ In Thousands) FY22 Q3 FY22 Q4 FY23 Q1 FY23 Q2 FY23 Q3 Operating Income (Loss) ($25,663) ($4,077) $878 $7,032 ($302,203) Stock-based compensation $522 $557 $1,823 $519 $299,975 Employer payroll tax on employee stock transactions - - - - $6,83
Slide 30: GAAP to Non-GAAP reconciliation of Gross Profit
GAAP to Non-GAAP reconciliation of Gross Profit (USD $ In Thousands) FY22 Q3 FY22 Q4 FY23 Q1 FY23 Q2 FY23 Q3 Gross profit $86,549 $107,904 $119,514 $127,110 $116,982 Stock-based Compensation $25 $24 $26 $17 $21,902 Employer payroll tax on employee stock transactions - - - - $1,451 Restructuring - - $1
Slide 31: GAAP to Non-GAAP reconciliation of Operating Expenses
GAAP to Non-GAAP reconciliation of Operating Expenses (USD $ In Thousands) FY22 Q3 FY22 Q4 FY23 Q1 FY23 Q2 FY23 Q3 Selling and marketing $61,482 $60,447 $60,613 $63,357 $167,877 Stock-based Compensation ($96) ($76) ($127) ($52) ($95,962) Employer payroll tax on employee stock transactions - - - - ($
Slide 32: Free Cash Flow
Free Cash Flow (USD $ In Thousands) FY22 Q3 FY22 Q4 FY23 Q1 FY23 Q2 FY23 Q3 Cash Provided by (used in) operating activities ($17,324) $20,914 $15,552 $41,474 $23,700 Acquisition of property and equipment ($4,427) ($1,429) ($325) ($444) ($54) Capitalization of software development costs ($585) ($898)
Slide 33: Select defined terms
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 c
Slide 34: klaviyo
klaviyo™