Klaviyo Reports Strong Revenue Growth in Latest Quarter
Segments of revenue
Klaviyo reported revenue of $175.8 million for the third quarter of 2023, representing a significant increase from $119.2 million in the same quarter last year. The company's revenue for the nine months ended September 30, 2023, reached $496.5 million, a substantial growth of 51.6% compared to $327.5 million in the same period in 2022.
The increase in revenue can be attributed to several factors. Approximately 51% of the revenue growth in the third quarter of 2023 was driven by new customers, particularly in the mid-market and outside of the Americas. Klaviyo's expansion with existing customers, driven by increased usage of their platform and SMS channel, also contributed to the revenue growth. Sales to existing customers accounted for around 65% of the revenue for the nine months ended September 30, 2023.
Klaviyo faced significant operating expenses, with total operating expenses amounting to $419.2 million for the quarter. This resulted in an operating loss of $302.2 million. The company's selling and marketing expenses were particularly high at $167.9 million, reflecting the investments made to acquire new customers and expand their market presence.
Klaviyo highlighted the seasonality of their business, with stronger revenue growth historically observed in the fourth quarter of each year compared to other quarters. The company's SMS offering experiences increased usage during the holiday season, which further contributes to their revenue growth. Klaviyo expects seasonality to continue impacting their quarterly results in the future.
Klaviyo delivered a strong performance in the latest quarter, with a significant increase in revenue driven by both new and existing customers. The company's expansion efforts, particularly in the mid-market and international markets, have paid off. However, Klaviyo continues to face challenges in managing their operating expenses, particularly in selling and marketing. The seasonality of their business, with stronger revenue growth in the fourth quarter, is a noteworthy factor to consider. Overall, Klaviyo's revenue growth demonstrates the effectiveness of their platform in driving personalized consumer experiences and revenue growth for businesses.