Klaviyo Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : <_ALACRA_META_ABSTRACT>Yeah. So last year was your first year in attendance as a public company. And for those that still may be new to the Klaviyo story, I think it'd be great to walk through the founding story, what you set out to do with Klaviyo and how the founding experience helped frame not just the strategic but also the financial principles of the business today.

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : Yeah. And you actually just reported your Q4 results where you were sustaining about 35% revenue growth, which is really rare air today and for a lot of software companies, particularly just given the macro uncertainty that we've seen weigh on other more SMB-exposed vendors. So can you just help us unpack what's driving the stickiness of the platform for customers and the more defensible budget for Klaviyo?

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : Great. Yeah. And so certainly, the KAV metric enables this really hard ROI. I do want to take a step back, though, and just get your view on the current macro. The company has referenced seeing some stabilization in the SMB segment. You've had some consistent demand from the low end and also you're focused more on the high end as well. And I appreciate like we're still early in the year, but are there any sort of changes in behavior that you're seeing thus far into 2025? And what's your broader macro outlook?

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : And then you referenced earlier a key differentiator for Klaviyo being the data-first approach. Can you just unpack the data-first approach and what it enables and how it differentiates Klaviyo from other marketing technology providers?

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : Great. So you've built this data asset. You've beens able to build these smart applications on top of it. You've actually started to push that farther, as you mentioned, not just going out within marketing, but also into customer service, which is a really exciting announcement that you just made recently. So just given your vision of redefining what B2C engagement looks like, how do you see Klaviyo's role evolving from initially being more of this marketing automation to a bigger, more comprehensive CRM solution for B2C businesses?

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : And can you just help us understand, as you've been expanding the portfolio, how does the competitive landscape start to differ as you're eating away more and more of this opportunity?

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : And so we've seen this diversification of different use cases: marketing, service, now analytics. One of the other things that's also been diversifying is your customer base. In the beginning, it was a lot of retail, e-commerce, pulling from that Shopify partnership. You've also made partnerships in Toast or Zenoti or WooCommerce more recently. So how has the mix of the customer base started to shift beyond retail, e-commerce over the last couple of years? And what are some of the other verticals where you clearly are seeing the same data challenge and reflect a large opportunity to penetrate? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 12:50AM, KVYO.N - Klaviyo Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : Yeah. And at the IPO, you guys clearly laid out 4 growth pillars for the business. And one of those was the expansion upmarket. And so I want to better understand how does Klaviyo's value proposition look different to more complex, larger customers relative to the long tail of SMBs that you serve? And what is the most significant competitive advantage you have as you start to move more upmarket?

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : And one of those other drivers is also expanding monetization, and you have been accelerating the pace of additional products, one of the key ones being SMS. And as of last year, about 18% of your customers were taking the SMS product. That's up from 16% in the year-ago period. When we think about kind of where customers are finding the most value with Klaviyo and SMS, where would that be? And then from the spending side, what type of uplift do you see when customsers also are attaching SMS? And where can the mix trend over time?

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : And so one of the things that makes Klaviyo very unique has been your efficiency in the go-to-market process. You've really leaned into an ecosystem-led approach and kind of the most well-known partnership here is certainly Shopify. So I wanted to kind of dig into where you looked at the Shopify relationship as a model for adding additional partnerships. How has the top of funnel evolved as you've been adding on more of these partners?

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : Great. I'm going to ask another question, and then we'll open it up to the audience if there's any questions. But obviously, have to get some generative AI questions in. And so it's really around where does generative AI fit in the product road map. I think you've done a really great job of integrating things like the product recommendations, predicting next-best actions. But what are some of the capabilities with AI that you're really prioritizing into 2025? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 12:50AM, KVYO.N - Klaviyo Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : Awesome. Do we have any questions in the audience? Unidentified Participant Are you the only one that is developing this consumer CRM platform in the way you are with others, with competition?

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : Great. Do we have any more? One more over here. The mic is coming around. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 12:50AM, KVYO.N - Klaviyo Inc at Morgan Stanley Technology, Media & Telecom Conference Unidentified Participant On your example on OpenTable, where OpenTable knows more about the customer, what's an example of what would be different if they know the customer outside of OpenTable versus like I show up, they give me my table, I'm happy, I go away, I review the restaurant?

Question: Elizabeth Porter - Morgan Stanley Co & LLC - Analyst : Awesome. So we are actually up on time. But AB, thank you so much for joining us today, and we're really looking forward to everything in 2025.