Klaviyo, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2024, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rule 13a-15(f)) of the Exchange Act) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Management assessed our internal control over financial reporting as of December 31, 2024. Management based its assessment on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2024. The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report included in this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during the three months ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 119 Table of Contents Limitations on Effectiveness of Controls and Procedures Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, the effectiveness of any internal control over financial reporting is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, no matter how well designed and operated, can only provide reasonable, not absolute assurance that its objectives will be met. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting. 120 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Klaviyo, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Klaviyo, Inc. and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 19, 2025, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Boston, Massachusetts February 19, 2025 121 Table of Contents Item 9B. Other Information October 2024 Cybersecurity Incident (a) On October 25, 2024, the Company determined that an unauthorized third-party gained access to the Company’s source code, as well as other system and application credentials. Following detection of this unauthorized activity, the Company initiated its response protocols and took steps to contain, assess and remediate the incident, including launching an investigation with the assistance of counsel and leading external cybersecurity experts. As of the date of this Annual Report on Form 10-K, the Company has concluded its investigation, has found no evidence of continued unauthorized activity on its systems and believes the incident to be contained. The Company’s operations have continued throughout this matter in all material respects. As of the date of this Annual Report on Form 10-K, the Company does not believe that the incident will have a material impact on the Company’s business, financial condition, or results of operations. Securities Trading Plans of Directors or Executive Officers (b) During the three months ended December 31, 2024, two of the Company’s officers (as defined in Rule 16a-1(f) under the Exchange Act) each adopted a written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act for the sale of the Company’s securities as set forth in the table below. Name Position Adoption Date Earliest Trade Date Total Shares Subject to Trading Arrangement Expiration Date Steve Rowland President November 22, 2024 March 7, 2025 183,382 (1) January 31, 2026 Carmel Galvin Chief People Officer November 26, 2024 February 25, 2025 86,392 (1) December 5, 2025 ______________ (1) The actual number of shares of common stock sold pursuant to this plan will be less, after shares are withheld to satisfy tax withholding obligations in connection with the net settlement of equity awards. No other directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408, during the three months ended December 31, 2024. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 122 Table of Contents Part III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item is incorporated by reference herein to our definitive Proxy Statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of our fiscal year. Code of Conduct and Ethics Our board of directors has adopted a code of conduct that applies to all our employees, officers, contractors, and directors, including our Chief Executive Officer, Chief Financial Officer, and other executive and senior financial officers. The full text of our code of conduct is posted on our website at investors.klaviyo.com under “Governance.” We intend to disclose any amendments to our code of conduct, or waivers of its requirements, on our website or in filings under the Exchange Act. Insider Trading Policies and Procedures We have adopted an insider trading policy and related Rule 10b5-1 trading plan policy that are reasonably designed to promote compliance with applicable insider trading laws, rules, regulations, and New York Stock Exchange listing standards. Our insider trading policy prohibits our officers, directors, employees, designated consultants, and their affiliated persons from trading in company securities while in possession of material nonpublic information about the Company. The policy also prohibits tipping (i.e., disclosing material nonpublic information about the Company to others who may trade of the basis of that information). Under our insider trading policy, insiders may only trade in Company securities during open trading windows at a time when they do not possess material nonpublic information about the Company. We have also designated our executive officers, directors, and certain other designated employees as pre-clearance insiders who must receive approval before trading in our securities. Our insider trading policy also expressly prohibits short sales; purchases or sales of puts, calls, or other derivative securities or hedging transactions; using company securities as collateral in a margin account; or pledging company securities as collateral for a loan. Any waiver of the provisions of our insider trading policy requires approval of our Compliance Officer and all waivers are reported to our Audit Committee. We have adopted an additional policy that governs when our directors, executive officers, and others may adopt written securities trading plans, known as Rule 10b5-1 plans. These plans are intended to take advantage of a safe harbor provided under SEC rules from liability for violating federal antifraud prohibitions that proscribe certain insider trading, including Section 10(b) of the Exchange Act. A qualifying Rule 10b5-1 plan may only be entered into when the individual is not in possession of material nonpublic information about the Company and must authorize a broker other third-party administering the plan to buy or sell our securities on a periodic basis pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. A director or executive officer may amend or terminate a Rule 10b5-1 plan in certain circumstances. Our policy provides that all Rule 10b5-1 plans must comply with SEC rules applicable to the Rule 10b5-1 safe harbor and provides additional requirements and limitations applicable to plans. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information, subject to compliance with the terms of our insider trading policy. 123 Table of Contents A copy of our insider trading policy and related Rule 10b5-1 trading plan policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K. Item 11. Executive Compensation The information required by this Item is incorporated by reference herein to our definitive Proxy Statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated by reference herein to our definitive Proxy Statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item is incorporated by reference herein to our definitive Proxy Statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024. Item 14. Principal Accountant Fees and Services Our independent public accounting firm is Deloitte & Touche LLP, Boston, Massachusetts, PCAOB ID No 34. The information required by this Item is incorporated by reference herein to our definitive Proxy Statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024. 124 Table of Contents Part IV Item 15. Exhibit and Financial Statement Schedules The following documents are filed as part of this Annual Report on Form 10-K: (a) Consolidated Financial Statements Our Consolidated Financial Statements are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8 of this Annual Report on Form 10-K. (b) Financial Statement Schedules All financial statement schedules are omitted because the required information is either not present, not present in material amounts, or is presented within our Consolidated Financial Statements and the related notes thereto included in this Annual Report on Form 10-K. (c) Exhibits The documents listed in the exhibit index of this Annual Report on Form 10-K are incorporated by reference or are filed with this Annual Report on Form 10-K, in each case as indicated herein (numbered in accordance with Item 601 of Regulation S-K). Incorporated by Reference Exhibit Number Description Form File No. Exhibit Number Filing Date Filed Herewith 3.1 Amended and Restated Certificate of Incorporation of Klaviyo, Inc. 10-K 001-41806 3.1 February 29, 2024 3.2 Amended and Restated Bylaws of Klaviyo, Inc. 10-K 001-41806 3.2 February 29, 2024 4.1 Specimen Series A Common Stock Certificate of Klaviyo, Inc. S-1 333-274211 4.1 August 25, 2023 4.2 Description of Securities. 10-K 001-41806 4.2 February 29, 2024 4.3 Amended and Restated Investors’ Rights Agreement by and among Klaviyo, Inc. and certain of its stockholders, dated May 10, 2021. S-1 333-274211 4.2 August 25, 2023 4.4 Warrant Agreement by and between Klaviyo, Inc. and Shopify Inc., dated July 28, 2022. S-1 333-274211 4.3 August 25, 2023 4.5 Warrant Agreement by and between Klaviyo, Inc. and Shopify International Limited, dated July 28, 2022. S-1 333-274211 4.4 August 25, 2023 4.6 Warrant Agreement by and between Klaviyo, Inc, and Shopify Commerce Singapore PTE. LTD., dated July 28, 2022. S-1 333-274211 4.5 August 25, 2023 4.7 Stock Purchase Agreement by and between Klaviyo, Inc. and Shopify Strategic Holdings 3 LLC, dated June 24, 2022. S-1 333-274211 4.6 August 25, 2023 10.1 Forms of Indemnification Agreement between Klaviyo, Inc. and each of its directors and executive officers. S-1 333-274211 10.1 August 25, 2023 10.2* 2015 Stock Incentive Plan, as amended, and forms of award agreements thereunder. S-1 333-274211 10.2 August 25, 2023 10.3* 2023 Stock Option and Incentive Plan, and forms of award agreements thereunder. S-1/A 333-274211 10.3 September 11, 2023 10.4* Senior Executive Cash Incentive Bonus Plan. S-1 333-274211 10.4 August 25, 2023 10.5* Employment Agreement by and between Klaviyo, Inc. and Landon Edmond, effective August 27, 2023. S-1 333-274211 10.6 August 25, 2023 10.6* Employment Agreement by and between Klaviyo, Inc. and Amanda Whalen, effective August 27, 2023. S-1 333-274211 10.8 August 25, 2023 10.7* Employment Agreement by and between Klaviyo, Inc. and Steve Rowland , effective August 27, 2023. 10-Q 001-41806 10.1 May 8, 2024 10.8* Form of Director Offer Letter. S-1 333-274211 10.10 August 25, 2023 125 Table of Contents 10.9 Lease Agreement by and between Klaviyo, Inc. and OPG 125 Summer Owner (DE) LLC, dated August 9, 2012, as amended on August 7, 2020 . S-1 333-274211 10.11 August 25, 2023 10.10# Collaboration Agreement by and among Klaviyo, Inc., Shopify Inc., Shopify International Limited, Shopify Commerce Singapore PTE. LTD., and Shopify Strategic Holdings 3 LLC, dated July 28, 2022. S-1 333-274211 10.12 August 25, 2023 10.11# Revenue Sharing Agreement by and between Klaviyo, Inc. and Shopify Inc., dated July 28, 2022. S-1 333-274211 10.13 August 25, 2023 10.12* 2023 Employee Stock Purchase Plan. S-1/A 333-274211 10.14 September 11, 2023 10.13* Non-Employee Director Compensation Policy. S-1 333-274211 10.15 August 25, 2023 10.14 Second Amendment dated June 30, 2022 to Lease Agreement by and between Klaviyo, Inc. and OPG 125 Summer Owner (DE) LLC, dated August 9, 2012 . X 10.15# Third Amendment dated January 31, 2025 to Lease Agreement by and between Klaviyo, Inc. and OPG 125 Summer Owner (DE) LLC, dated August 9, 2012 . X 19.1 I n sider Trading Policy and related Rule 10b5-1 Trading Plan Policy X 21.1 Subsidiaries of Klaviyo, Inc. X 23.1 Consent of Deloitte & Touche LLP, independent registered public accounting firm. X 24.1 Power of Attorney (included on signature page) . X 31.1 Certification of Principal Executive Officer pursuant to SEC Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 31.2 Certification of Principal Financial Officer pursuant to SEC Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 32.1† Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X 32.2† Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X 97.1* Compensation Recovery Policy . 10-K 001-41806 97.1 February 29, 2024 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). X 101.SCH Inline XBRL Taxonomy Extension Schema Document. X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). X * Indicates a management contract or any compensatory plan, contract or arrangement. † This certification will not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by reference into such filing. # Certain confidential information contains in this exhibit has been omitted because it is both (i) not material and (ii) the type that Klaviyo, Inc. treats as private or confidential. Item 16. Form 10-K Summary Not applicable. 126 Table of Contents Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. KLAVIYO, INC. Dated: February 19, 2025 By: /s/ Andrew Bialecki Name: Andrew Bialecki Title: Chief Executive Officer (Principal Executive Officer) Dated: February 19, 2025 By: /s/ Amanda Whalen Name: Amanda Whalen Title: Chief Financial Officer (Principal Financial and Accounting Officer) 127 Table of Contents Power of Attorney KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Andrew Bialecki, Amanda Whalen, and Landon Edmond, and each one of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in their name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Andrew Bialecki Chief Executive Officer and Director (Principal Executive Officer) February 19, 2025 Andrew Bialecki /s/ Amanda Whalen Chief Financial Officer ( Principal Financial and Accounting Officer ) February 19, 2025 Amanda Whalen /s/ Jennifer Ceran Director February 19, 2025 Jennifer Ceran /s/ Luciano Fernandez Gomez Director February 19, 2025 Luciano Fernandez Gomez /s/ Edward Hallen Chief Strategy Officer and Director February 19, 2025 Edward Hallen /s/ Ping Li Director February 19, 2025 Ping Li /s/ Michael Medici Director February 19, 2025 Michael Medici /s/ Roxanne Oulman Director February 19, 2025 Roxanne Oulman /s/ Susan St. Ledger Director February 19, 2025 Susan St. Ledger /s/ Tony Weisman Director February 19, 2025 Tony Weisman 128