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Klaviyo’s revenue rose 32% YoY to $311M, with NRR at 109%, non-GAAP margin 14.5%, and Rule of 40 at 47%. This puts it among fewer than ten public software companies with a $1B run rate and also growing over 30%.
The same company that once built email tools for Shopify merchants is now redefining how businesses and consumers interact through AI. Moreover, as it works through SMB softness, it’s moving decisively upmarket and fast becoming an enterprise powerhouse.
Not everything was up and to the right. The company projected a 10% drop in 2026 revenue growth rate.
The Good: Cross-Selling, Broad Revenue Growth
Cross-selling is working. Over 50% of ARR now comes from multi-product customers, and the new K:Service suite—Customer Hub, Customer Agent, and Helpdesk—is already outpacing SMS adoption at a similar stage. Enterprise momentum is building, with 272 net adds in the $50K+ ARR cohort (+36% YoY), including brands like Bissell, Rhone, and Proper Hotels.
Revenue outside the Americas grew 43% YoY, EMEA up 48%, marking six straight quarters of acceleration.
New languages, WhatsApp integration, and regional data centers are expanding reach. CEO Andrew Bialecki described the opportunity as “nowhere near saturated.”
The Interesting: CRM as the Platform, AI as the OS, Enterprise as the Base
Andrew described the company’s architecture as three layers: data, applications, and intelligence, with AI as the connective tissue. Instead of AI assisting marketers, it does the work: creating campaigns, analyzing performance, and optimizing results. “CRM for consumers,” Andrew said, “will be agentic at its core.”
That philosophy now extends to commerce. Klaviyo plans to embed conversational buying directly into Customer Agent, allowing consumers to chat with a brand’s AI, get recommendations, and complete transactions without ever visiting a site. The company is positioning itself at the intersection of messaging, data, and conversion.
From the Q&A, two other threads stood out:
- Product and Pricing Momentum: Marketing Agent pilots start in Q4, and K:Service is scaling faster than SMS, creating a second ARR engine that could rival Marketing.
- Enterprise and Ecosystem Expansion: Enterprise perception is shifting, and the new Model Context Protocol (MCP) lets partners build workflows in ChatGPT and Claude directly on Klaviyo data.
The Unknown: 2026 Guidance, RCS Silence
Revenue is expected to grow a solid 21–22% next year, down from this year’s 30%. AI is central to the story but not yet to the financials. 2026 guidance assumes “limited near-term revenue” from AI products despite strong adoption, implying a lag between usage and monetization.
Some of the revenue drop can be attributed to simple maturation, it’s harder to keep higher growth rates when you cross certain revenue thresholds. But 10% drop is a lot. Rule of 40 would mean that you need to increase your opex from 14% to 19%. This is tough to accomplish for a high-growth company that’s investing heavily in R&D.
So, if margin expansion is insufficient, the other option is to do a Snowflake-like re-acceleration. While SMB/email/SMS slows, the new engine—Enterprise/AI/Service—takes off. The latter is not happening fast enough, which means the SMB weakness is more severe than the Enterprise/AI strength can overcome.
Andrew acknowledged that smaller businesses are feeling SEO fatigue and tightening marketing budgets. Many are focusing on retention rather than acquisition, relying on Klaviyo to “nurture existing relationships harder” and extract more value from loyal customers. Demand isn’t collapsing, but it’s not expanding either. SMBs are having a harder time navigating the collapse of SEO, the rise of GPT commerce, and macroeconomic turbulence.
RCS, notably, didn’t come up at all. Klaviyo’s messaging road map focused on WhatsApp and owned channels. This could very well be because RCS still isn’t ready for self-serve onboarding or scalable CRM integration. For now, messaging innovation remains confined to channels that don’t require carrier intermediation or approval cycles.
Finally
Klaviyo has reduced its reliance on the SMB and built strong pipelines in the mid-market and enterprise, and now it earns more revenue internationally than in the Americas.
That’s a record-breaking summer by any measure. The next test comes in two weeks: BFCM. However, the question remains, if the growth rate leader struggles to sustain growth in 2026, what does it signal to the rest of the industry?