Klaviyo, Inc. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID No 34 ) 87 Consolidated Financial Statements Consolidated Balance Sheets 89 Consolidated Statements of Operations and Comprehensive Loss 90 Consolidated Statements of Changes in Redeemable Common Stock and Stockholders’ Equity (Deficit) 91 Consolidated Statements of Cash Flow 93 86 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Klaviyo, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Klaviyo, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in redeemable common stock and stockholders' equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 10, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue — Refer to Note 2 to the financial statements Critical Audit Matter Description The Company’s revenue is comprised primarily of subscription fees made up of a large volume of low-dollar subscription transactions, sourced from various applications and supporting databases. The processing and recording of revenue is highly automated and is based on the contractual terms with customers. Because of the nature of the Company’s subscription fees, the Company uses automated systems to process and record its revenue transactions. Given the Company’s systems to process and record revenue are highly automated, auditing revenue is complex and challenging due to the extent of audit effort required and involvement of professionals with expertise in information 87 technology ("IT") necessary to identify, test, and evaluate the Company’s systems, software applications, and automated controls. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Company’s systems that process revenue transactions included the following procedures, among others: • With the assistance of our IT specialists, we: ◦ Identified the significant systems used to process revenue transactions and tested the effectiveness of general IT controls over each of these systems, including testing of user access controls, change management controls, and IT operations controls. ◦ Performed testing of system interface controls and automated controls within the relevant revenue streams, as well as the controls designed to ensure the accuracy and completeness of revenue. • We tested internal controls over the Company’s relevant revenue business processes, including those in place to reconcile the various systems to the Company’s general ledger. • We created data visualizations to evaluate recorded revenue and evaluate trends in the transactional revenue data. • For a sample of revenue transactions, we compared the recorded revenue to source documents and tested the accuracy of the recorded revenue. • For the revenue billed through a payment processor, we tested the reconciliation of the recorded revenue to total cash received during the year. /s/ Deloitte & Touche LLP Boston, Massachusetts February 10, 2026 We have served as the Company’s auditor since 2021. 88 Table of Contents Klaviyo, Inc. Consolidated Balance Sheets (In Thousands, Except Share and Per Share Data) As of, December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 1,064,875 $ 881,473 Restricted cash 738 375 Accounts receivable, net of allowance for doubtful accounts 60,714 43,095 Deferred contract acquisition costs, current 29,634 20,544 Prepaid expenses and other current assets 50,115 34,262 Total current assets 1,206,076 979,749 Property and equipment, net 80,341 48,200 Right-of-use assets, net 101,126 42,917 Deferred contract acquisition costs, non-current 47,769 32,527 Restricted cash, non-current — 739 Prepaid marketing expense 132,849 153,346 Other non-current assets 12,443 15,830 Total assets $ 1,580,604 $ 1,273,308 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 29,072 $ 14,579 Accrued expenses 125,159 99,828 Lease liabilities, current 24,757 20,989 Deferred revenue 103,245 64,497 Total current liabilities 282,233 199,893 Lease liabilities, non-current 95,991 32,449 Other non-current liabilities 5,820 6,979 Total liabilities 384,044 239,321 Stockholders’ Equity Preferred stock: $ 0.001 par value; 100,000,000 and 100,000,000 shares authorized; 0 and 0 shares issued; 0 and 0 shares outstanding at December 31, 2025 and 2024, respectively. — — Series A common stock: $ 0.001 par value; 3,000,000,000 and 3,000,000,000 shares authorized; 144,262,443 and 88,956,301 shares issued and outstanding at December 31, 2025 and 2024, respectively. 144 89 Series B common stock: $ 0.001 par value; 350,000,000 and 350,000,000 shares authorized; 159,899,668 and 183,801,332 shares issued and outstanding at December 31, 2025 and 2024, respectively. 160 184 Additional paid-in capital 2,073,209 1,878,899 Accumulated deficit ( 876,953 ) ( 845,185 ) Total stockholders’ equity 1,196,560 1,033,987 Total liabilities and stockholders’ equity $ 1,580,604 $ 1,273,308 The accompanying notes are an integral part of these consolidated financial statements 89 Table of Contents Klaviyo, Inc. Consolidated Statements of Operations and Comprehensive Loss (In Thousands, Except Share and Per Share Data) Year Ended December 31, 2025 2024 2023 Revenue $ 1,234,019 $ 937,464 $ 698,099 Cost of revenue 312,523 221,305 177,888 Gross profit 921,496 716,159 520,211 Operating expenses: Selling and marketing 506,241 404,209 394,369 Research and development 291,209 238,459 262,177 General and administrative 191,804 157,569 194,287 Total operating expenses 989,254 800,237 850,833 Operating loss ( 67,758 ) ( 84,078 ) ( 330,622 ) Other income (expense): Other (expense) income ( 2,162 ) 816 ( 470 ) Interest income 39,402 39,582 24,051 Total other income 37,240 40,398 23,581 Loss before income taxes ( 30,518 ) ( 43,680 ) ( 307,041 ) Provision for income taxes 1,250 2,462 1,192 Net loss ( 31,768 ) ( 46,142 ) ( 308,233 ) Comprehensive loss $ ( 31,768 ) $ ( 46,142 ) $ ( 308,233 ) Net loss per share attributable to Series A and Series B common stockholders, basic and diluted $ ( 0.11 ) $ ( 0.17 ) $ ( 1.27 ) Weighted average common shares outstanding, basic and diluted 290,896,895 266,336,826 242,889,272 The accompanying notes are an integral part of these consolidated financial statements 90 Table of Contents Klaviyo, Inc. Consolidated Statements of Changes in Redeemable Common Stock and Stockholders’ Equity (Deficit) ( In Thousands, Except Share and Per Share Data) Redeemable Common Stock Series A Common Stock Series B Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Equity (Deficit) Number of Shares Amount Number of Shares $ 0.001 Par Value Number of Shares $ 0.001 Par Value Balance as of January 1, 2023 64,046,223 $ 1,531,853 — $ — 170,855,313 $ 171 $ 1,249,065 $ ( 2,285,419 ) $ ( 1,036,183 ) Issuance of common stock upon exercise of common stock options — — — — 2,419,308 3 4,141 — 4,144 Issuance of common stock upon vesting of restricted stock units — — 27,250 — 7,179,136 7 ( 7 ) — — Accretion of redeemable common stock to redemption value — 399,685 — — — — ( 399,685 ) — ( 399,685 ) Issuance of common stock upon exercise of collaboration agreement warrants — — — — 6,051,285 6 56 — 62 Vested warrants related to the collaboration agreement — — — — — — 142,326 — 142,326 Stock-based compensation expense — — — — — — 342,148 — 342,148 Vesting of restricted common stock — — — — 26,795 — 75 — 75 Issuance of Common Stock in Connection with Initial Public Offering Net of Underwriters' Discounts, Commissions and Offering Costs of 25,135 — — 11,507,693 12 — — 320,084 — 320,096 Shares withheld for tax withholding upon vesting of restricted stock units — — ( 11,874 ) ( 1 ) ( 2,735,286 ) ( 2 ) ( 81,508 ) — ( 81,511 ) Reclassification of redeemable common stock to Series B common stock ( 64,046,223 ) ( 1,931,538 ) — — 64,046,223 64 136,865 1,794,609 1,931,538 Conversion of Series B common stock to Series A common stock upon shareholder election and vesting of certain equity awards — — 27,548,447 28 ( 27,548,447 ) ( 28 ) — — — Conversion of Series B common stock to Series A common stock upon exercise of Greenshoe Option — — 1,770,318 2 ( 1,770,318 ) ( 2 ) — — — Net loss — — — — — — — ( 308,233 ) ( 308,233 ) Balance as of December 31, 2023 — $ — 40,841,834 $ 41 218,524,009 $ 219 $ 1,713,560 $ ( 799,043 ) $ 914,777 Issuance of common stock upon exercise of common stock options — — — — 6,567,334 7 9,705 — 9,712 Issuance of common stock upon vesting of restricted stock units — — 1,663,016 2 4,176,480 4 ( 6 ) — — Issuance of common stock upon exercise of collaboration agreement warrants — — — — 1,377,528 1 13 — 14 Issuance of common stock under the employee stock purchase plan — — 387,773 — — — 8,125 — 8,125 Vested warrants related to the collaboration agreement — — — — — — 32,399 — 32,399 Stock-based compensation expense — — — — — — 138,767 — 138,767 Tax withholdings on settlement of stock-based awards — — ( 139,996 ) — ( 640,345 ) ( 1 ) ( 23,664 ) — ( 23,665 ) Conversion of Series B common stock to Series A common stock upon shareholder election and vesting of certain equity awards — — 46,203,674 46 ( 46,203,674 ) ( 46 ) — — — Net loss — — — — — — — ( 46,142 ) ( 46,142 ) Balance as of December 31, 2024 — $ — 88,956,301 $ 89 183,801,332 $ 184 $ 1,878,899 $ ( 845,185 ) $ 1,033,987 91 Table of Contents Klaviyo, Inc. Consolidated Statements of Changes in Redeemable Common Stock and Stockholders’ Equity (Deficit) (cont.) ( In Thousands, Except Share and Per Share Data) Redeemable Common Stock Series A Common Stock Series B Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Equity (Deficit) Number of Shares Amount Number of Shares $ 0.001 Par Value Number of Shares $ 0.001 Par Value Balance as of December 31, 2024 — $ — 88,956,301 $ 89 183,801,332 $ 184 $ 1,878,899 $ ( 845,185 ) $ 1,033,987 Issuance of common stock upon exercise of common stock options — — — — 22,938,436 23 2,180 — 2,203 Issuance of common stock upon vesting of restricted stock units — — 4,535,044 4 2,627,219 3 ( 7 ) — — Issuance of common stock upon exercise of collaboration agreement warrants — — — — 1,377,528 1 14 — 15 Issuance of common stock under the employee stock purchase plan — — 462,681 — — — 11,251 — 11,251 Vested warrants related to the collaboration agreement — — — — — — 32,400 — 32,400 Stock-based compensation expense — — — — — — 166,447 — 166,447 Tax withholdings on settlement of stock-based awards — — ( 291,690 ) — ( 244,740 ) — ( 17,975 ) — ( 17,975 ) Conversion of Series B common stock to Series A common stock upon shareholder election and vesting of certain equity awards — — 50,600,107 51 ( 50,600,107 ) ( 51 ) — — — Net loss — — — — — — — ( 31,768 ) ( 31,768 ) Balance as of December 31, 2025 — $ — 144,262,443 $ 144 159,899,668 $ 160 $ 2,073,209 $ ( 876,953 ) $ 1,196,560 The accompanying notes are an integral part of these consolidated financial statements 92 Table of Contents Klaviyo, Inc. Consolidated Statements of Cash Flow (In Thousands) Year Ended December 31, 2025 2024 2023 Operating activities Net loss $ ( 31,768 ) $ ( 46,142 ) $ ( 308,233 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization expense 18,598 17,717 13,651 Non-cash operating lease costs 24,754 12,682 12,997 Amortization of deferred contract acquisition costs 29,949 19,752 15,764 Amortization of prepaid marketing expense 52,897 52,897 52,897 Gain on derecognition of asset retirement obligation ( 588 ) — — Loss on disposal of property and equipment 776 235 6 Bad debt expense 2,044 741 524 Stock-based compensation expense 162,031 135,212 340,799 Deferred income tax ( 3,062 ) 559 ( 3,229 ) Other — 10 118 Changes in operating assets and liabilities: Accounts receivable ( 19,663 ) ( 20,761 ) ( 12,877 ) Deferred contract acquisition costs ( 54,281 ) ( 34,448 ) ( 26,941 ) Prepaid expenses, prepaid taxes, and other assets ( 6,796 ) ( 17,296 ) ( 2,375 ) Accounts payable 12,034 113 4,505 Accrued expenses 17,534 36,169 26,666 Deferred revenue 38,741 24,397 14,991 Operating lease liabilities ( 23,846 ) ( 16,722 ) ( 15,197 ) Other non-current liabilities ( 1,347 ) 840 5,305 Net cash provided by operating activities 218,007 165,955 119,371 Investing activities Acquisition of property and equipment ( 9,485 ) ( 5,921 ) ( 3,653 ) Capitalization of software development costs ( 18,980 ) ( 11,305 ) ( 5,705 ) Acquisition of business ( 2,031 ) — — Net cash used in investing activities ( 30,496 ) ( 17,226 ) ( 9,358 ) Financing activities Proceeds from exercise of common stock options 2,203 9,741 4,216 Cash paid for finance leases — ( 19 ) ( 21 ) Proceeds from exercise of warrants 15 14 62 Proceeds from issuance of common stock, net of issuance costs — — — Proceeds from issuance of common stock in initial public offering, net of issuance costs — — 320,096 Employee taxes paid related to net share settlement of stock-based awards ( 17,975 ) ( 23,665 ) ( 81,625 ) Proceeds from employee stock purchase plan 11,272 8,130 — Net cash (used in) provided by financing activities ( 4,485 ) ( 5,799 ) 242,728 Net increase in cash, cash equivalents, and restricted cash 183,026 142,930 352,741 Cash, cash equivalents, and restricted cash, beginning of period 882,587 739,657 386,916 Cash, cash equivalents, and restricted cash, end of period $ 1,065,613 $ 882,587 $ 739,657 Supplemental disclosures of cash flow information: Cash paid for income taxes, net of refunds $ 6,536 $ 4,691 $ 283 Non-cash investing and financing activities 93 Table of Contents Klaviyo, Inc. Consolidated Statements of Cash Flow (In Thousands) Recognition of prepaid marketing asset $ 32,400 $ 32,399 $ 142,326 Vesting of restricted common stock $ — $ — $ 75 Accretion of common stock subject to redemption $ — $ — $ ( 399,685 ) Unpaid purchases of property and equipment $ 11,909 $ 2,158 $ 472 Reclassification of redeemable common stock to Series B common stock $ — $ — $ 1,931,538 Non-cash acquisition of property and equipment through tenant incentives $ 8,193 $ — $ — Capitalization of stock-based compensation expense related to internal-use software $ 4,416 $ 3,555 $ 1,349 The accompanying notes are an integral part of these consolidated financial statements 94 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements 1. Organization and Business Description Klaviyo, Inc. (the “Company” or “Klaviyo”) is a technology company that provides a cloud-based, software-as-a-service (“SaaS”) platform that enables consumer-focused businesses to capture, store, analyze, and use their first-party data to create and deliver personalized consumer experiences across digital channels. The Company’s platform combines proprietary data, action, and intelligence layers to unify customer data and support real-time activation across multiple use cases, including marketing, customer service, analytics, and data management. The Company’s offerings include marketing automation capabilities that allow customers to orchestrate campaigns across multiple channels, including email, text messaging, WhatsApp messaging, and mobile push. The Company also offers customer service solutions, including Customer Agent, Customer Hub and Helpdesk, as well as marketing analytics, and data platform functionality. The Company generates revenue through the sale of subscriptions that provide customers access to its platform. Subscription plans are tiered based on the number of consumer profiles stored on the Company’s platform and the number of emails, text messages, and WhatsApp messages sent as well as customer tickets and conversations through Klaviyo Service. The Company is headquartered in Boston, Massachusetts and was incorporated in the state of Delaware on September 14, 2012. The Company has several wholly-owned subsidiaries in the United States and international jurisdictions. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the allowance for doubtful accounts, determination of revenue recognition under ASC 606, Revenue from Contracts with Customers (“ASC 606”), estimated benefit period of deferred contract acquisition costs, estimated life of prepaid marketing expense, and historical valuation of common stock and stock-based compensation, including fair value of the warrants. The Company evaluates estimates based on historical and anticipated results, trends, and various other assumptions. The Company assesses these estimates on a regular basis; however, actual results could differ from these estimates. 95 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Segment Information Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in one operating segment and one reportable segment as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The key measure of segment profit or loss that the CODM uses to make operating decisions, allocate resources and evaluate financial performance is the Company’s consolidated net loss, as reported in the Consolidated Statements of Operations and Comprehensive Loss. Net loss is used to plan and forecast for future periods, design and implement key marketing strategies, expand into new markets, and launch new offerings. Significant expense categories regularly provided to the CODM are those disclosed in the Consolidated Statements of Operations and Comprehensive Loss. There are no other expenses supplemental to those disclosed in these consolidated financial statements that are regularly provided to the CODM. Information related to the geographical distribution of the Company’s revenues and long-lived assets is disclosed in Note 14. Segment Information and Geographic Data . Revenue Recognition The Company derives revenue primarily from subscription fees related to access to its cloud-based SaaS platform. The platform enables customers to store and use first-party consumer data to deliver personalized consumer experiences across multiple digital communication channels and access data-driven marketing, customer service, analytics, and data platform functionality. Contractual subscriptions for customers generally auto-renew on either a monthly, quarterly, or annual basis, and customers may elect not to renew by providing at least five days ’ advance notice for contracts on a monthly billing cycle and thirty days ’ advance notice for contracts with any other billing cycles. Customers do not have the right to take possession of the Company’s software. Subscription pricing is determined based on a customer’s profile count and messaging quantities and is considered fixed based on a tiered pricing structure. Variable consideration in the Company’s contracts is not material but represents the overage charges incurred by customers who exceed their allotments. The Company recognizes revenue under the core principle that depicts the transfer of control to the Company’s customers in an amount reflecting the consideration to which the Company expects to be entitled. In order to achieve that core principle, the Company evaluates its revenue arrangements under the five-step model as follows: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when or as the Company satisfies a performance obligation. Typically, the SaaS subscription contracts consist of a single performance obligation, and revenue is recognized over time as the performance obligation is satisfied. The performance obligation is deemed to be satisfied ratably as the customer simultaneously receives and consumes the services that the Company performs over the contract term. Due to the term of a majority of the Company’s contracts being less than one year, the Company has determined a significant financing component does not exist. The Company accounts for individual performance obligations separately if they have been determined to be distinct (i.e., the services are distinct if identifiable from other items in the arrangement and the customer can benefit from them on their own or with other resources that are readily available). The transaction price is allocated to the distinct performance 96 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements obligations on a relative stand-alone selling price basis. Stand-alone selling prices are determined based on the prices at which the Company separately sells subscriptions. Sales and value-added taxes collected from customers and remitted to government authorities are excluded from revenue. The Company incurs fees based on transaction volume and dollar amounts processed through its credit card processor, which are classified as general and administrative expense. Through the Company’s credit card processor, all receivables related to credit cards are collected within three business days. Cost of Revenue Cost of revenue consists of costs related to supporting and hosting the Company’s software platform and channel offering for paying customers. These costs primarily include cloud-based infrastructure costs, outbound communication sending costs, employee-related costs including payroll, benefits, bonuses, and stock-based compensation expense related to the customer support team, amortization of capitalized internal-use software development costs, and allocated overhead costs, including rent, facilities, depreciation, and costs related to information technology. Deferred Revenue Deferred revenue primarily consists of billings in advance of revenue recognition from subscription services and is recognized as the revenue recognition criteria are met. The Company generally bills its subscription customers in advance of their subscription term. Revenue that is expected to be recognized during future periods is recorded as deferred revenue. Deferred Contract Acquisition Costs Deferred contract acquisition costs are incremental costs incurred in connection with acquiring a customer contract and consist primarily of sales commissions and the associated payroll taxes. The Company expects to benefit from these costs for more than one year as the Company primarily pays sales commissions on the initial contract, and there are no commensurate commissions paid on contract renewals. Deferred contract acquisition costs are amortized on a basis consistent with the transfer of the services to which the asset relates. This results in capitalized costs being recognized on a ratable basis over the estimated period of future benefit ranging from 18 months to 60 months. The Company estimates the future period of benefit considering the size of the customer, the current contract term, the impact of estimated customer renewal terms, and the estimated life of the technology solution underlying the contracts. The Company periodically reviews the carrying amount of capitalized costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. As of December 31, 2025 and 2024, deferred contract acquisition costs expected to be recognized within one year were $ 29.6 million and $ 20.5 million, respectively, and deferred contract acquisition costs expected to be recognized beyond one year were $ 47.8 million and $ 32.5 million, respectively. Shopify Collaboration Agreement On July 28, 2022, the Company entered into a collaboration agreement with Shopify Inc. and certain of its affiliates (collectively, “Shopify”) to form a strategic relationship for the purposes of creating greater interoperability between the Klaviyo and Shopify platforms and forming a strategic product, distribution, and marketing relationship. Shopify became a related party upon execution of this agreement. The collaboration agreement has a term of 7 years and automatically renews for successive one-year periods unless the Company or Shopify provides written notice of non-renewal. In connection with the collaboration agreement, the Company entered into 3 separate agreements including a revenue sharing agreement, common stock warrant agreement, and stock purchase agreement. 97 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Under the revenue sharing agreement, the Company will make payments to Shopify in exchange for marketing services received under the collaboration agreement, which are comprised of payments for the Shopify Core Revenue Share and payments for the Shopify Plus Integration Fee. These payments are calculated as follows: • Shopify Core Revenue Share: For all revenue generated through the use of the Company’s email and text messaging and WhatsApp messaging marketing applications by Shopify merchants designated as “Shopify Core Merchants” in respect of leads attributed to Shopify, the Company is obligated to pay Shopify a percentage of such revenues or the amounts owed to Shopify under the terms of Shopify’s standard partnership agreements applicable to all Shopify partners, which is 15 % of any revenues exceeding a $ 1 million threshold. • Shopify Plus Integration Fee : On a monthly basis, the Company is required to pay Shopify a fee (“Shopify Plus Integration Fee” or “Integration Fee”), subject to an annual increase at Shopify’s election (up to a maximum increase of not more than a percentage calculated through a formula provided in the revenue sharing agreement), with respect to each Shopify Plus Merchant where all of the following circumstances apply: (a) the Shopify Plus Merchant was on Shopify’s Plus program at the end of the relevant month; (b) one or more of the Shopify Plus Merchant’s covered stores has the Company’s application installed at both the beginning and at the end of the relevant month; and (c) the Company’s application received a webhook request and/or made any Application Programming Interface calls against one or more of the Shopify Plus Merchant’s covered stores in the relevant month (i.e., the Company’s application is integrated with the Shopify platform and data is flowing between them). The Company determined that Shopify is a vendor and not a customer, as the collaboration agreement is a services contract under which the Company is receiving marketing services from Shopify in exchange for payments under the revenue sharing agreement. The revenue sharing agreement is a mechanism for Shopify to be compensated for the customer acquisition and marketing services Shopify is providing to the Company. Shopify is not a reseller or distributor of the Company’s platform, nor does Shopify provide any services on the Company’s behalf. During the years ended December 31, 2025, 2024, and 2023, the Company incurred $ 33.2 million, $ 27.4 million, and $ 21.9 million, respectively, related to fees paid under the revenue sharing agreement. As of December 31, 2025 and 2024, the Company had $ 3.0 million and $ 2.6 million , respectively, in accrued expenses owed to Shopify for fees payable under the revenue sharing agreement. As of December 31, 2025 and 2024, the Company had $ 3.0 million and $ 2.5 million, respectively, in accounts payable owed to Shopify for fees payable under the revenue sharing agreement. As consideration for the collabor ation agreement, the Company also issued warrants that allow Shopify to purchase up to 15,743,174 shares of common stock at a price of $ 0.01 per share, of whic h 25 % of the warrants vested on the grant date on July 28, 2022, and the remaining 75 % of the warrants vest quarterly over the remaining 5 year period. The aggregate grant date fair value of the warrants was $ 370.3 million and is being capitalized to prepaid marketing expense as the warrants vest. The prepaid marketing ex pense asset is amortized into selling and marketing expense on a straight-line basis over the expected benefit period, which is the 7 year term of the collaboration agreement . Pursuant to the common stock warrant agreement, upon the Company’s initial public offering (“IPO”) in September 2023, an additional 25 % of the total number of warrants were accelerated, and the remaining unvested portion vests quarterly over the remaining term. Specifically, the vesting associated with 3,935,793 of the outstanding warrants was accelerated, resulting in an increase to prepaid marketing expense of $ 92.6 million. During the years ended December 31, 2025 and 2024, the Company capitalized prepaid marketing expense of $ 32.4 million and $ 32.4 million, respectively, related to vested warrants. For the years ended December 31, 2025, 2024 and 2023, the Company recorded marketing expense of $ 52.9 million, $ 52.9 million and $ 52.9 million, respectively, in the Consolidated Statements of Operations and Comprehensive Loss as a component of selling and marketing expense related to the amortization of the prepaid marketing expense. As of December 31, 2025 and 2024, the Company’s prepaid marketing expense was $ 132.8 million and $ 153.3 million , respectively. As of December 31, 2025, there was $ 189.5 million of unrecognized marketing expense 98 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements related to the warrants that will be recognized over 3.6 years. Refer to Note 11. Redeemable Common Stock, Common Stock, and Stockholders’ Equity (Deficit) for further discussion of the warrants. On June 24, 2022, the Company entered into a stock purchase agreement with Shopify. On the closing date of July 28, 2022, Shopify purchased 2,951,846 shares of common stock for $ 33.88 per share. The stock purchase agreement gives Shopify the right to purchase 15,743,174 additional shares of common stock for $ 88.93 per share (the “Investment Option”). The common stock and Investment Option were determined to be freestanding financial instruments purchased at fair value and were accounted for separately from the collaboration agreement, revenue sharing agreement, and common stock warrant agreement. Refer to Note 11. Redeemable Common Stock, Common Stock, and Stockholders’ Equity (Deficit) for further discussion of the common stock purchase and Investment Option. Research and Development Costs Research and development costs are expensed as incurred, unless they qualify as capitalized internal-use software development costs. Research and development costs consist primarily of personnel-related expenses associated with the Company’s research and development staff, including payroll, benefits, bonuses, and stock-based compensation. Advertising Costs Advertising costs are expensed as incurred. During the years ended December 31, 2025, 2024 and 2023, the Company incurred advertising expenses, which are included within selling and marketing expenses in the Consolidated Statements of Operations and Comprehensive Loss, in the amount of $ 51.8 million, $ 45.9 million, and $ 41.6 million, respectively. Stock-Based Compensation The Company recognizes stock-based compensation on awards granted under stock compensation plans, which are described in more detail in Note 12. Stock-Based Compensation . The Company measures stock-based compensation awards, including stock options and restricted stock units (“RSUs”), based on the estimated fair value of the awards on the date of grant. Stock-based compensation expense is recorded for awards issued to employees and non-employees at fair value with a corresponding increase in additional paid-in capital. For awards with service-based vesting conditions only, the Company recognizes compensation expense on a straight-line basis over the requisite service period of the award. Forfeitures are recognized when they occur. RSUs granted under the Company’s 2015 Stock Incentive Plan (the “2015 Plan”) are subject to both service-based and performance-based vesting conditions, whereby the performance condition is satisfied upon occurrence of a liquidity event. Upon the effectiveness of the Company’s registration statement on Form S-1 filed with the SEC in connection with its IPO in September 2023, the performance condition was satisfied and cumulative compensation cost was recognized using the accelerated attribution method. Compensation costs continue to be recognized under this method as the RSUs vest over the remaining service period. Generally, 2015 Plan awards vest or are exercisable into shares of Series B common stock and are immediately reclassified to shares of Series A common stock based upon the employee’s conversion election made at the time of the Company’s IPO. The fair value of each RSU grant is calculated based on the estimated fair value of the Company’s common stock on the date of grant, or, if modified, the date of modification. RSUs granted under the Company’s 2023 Stock Option and Incentive Plan (the “2023 Plan”) are for shares of Series A common stock and are subject to service-based vesting conditions only. Compensation costs related to these awards are recognized using the straight-line method over the service period of the award. The fair value of each RSU grant is calculated based on the fair value of the Company’s Series A common stock on the date of grant, or, if modified, the date of modification. 99 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Rights granted to employees to purchase shares of Series A common stock under the Company’s 2023 Employee Stock Purchase Plan (the “ESPP”) are subject to service-based vesting conditions only. Compensation costs related to the ESPP are recognized using the straight-line method over the service period of the award. The fair value of the estimated shares of Series A common stock to be purchased is computed as the sum of (a) 15 % purchase discount off the grant date quoted trading price of the Company’s Series A common stock and (b) the fair value of the look-back feature of the Company’s Series A common stock on the grant date, which consists of a call option on 85 % of a share of Series A common stock and a put option on 15 % of a share of Series A common stock. Redeemable Common Stock Redeemable common stock represents shares of the Company’s common stock that were redeemable at the option of the investor after a specified date. The initial carrying amount of redeemable common stock is equal to the respective issuance date fair value of the common stock subject to redemption, less issuance costs. The carrying amount was adjusted to equal the redemption value, which was equal to the fair value of a single share of common stock at the end of each reporting period. The carrying amount was subject to a floor equal to the initial carrying amount. The resulting changes in the redemption value were recorded with corresponding adjustments against retained earnings, if available, additional paid-in capital or accumulated deficit. Redeemable common stock was originally classified outside of permanent equity on the Consolidated Balance Sheets as the redemption option was outside of the Company’s control. As the redemption feature applicable to certain shares of the Company’s common stock was terminated upon the Company’s IPO, all shares of the Company’s redeemable common stock converted into 64,046,223 shares of Series B common stock upon the effectiveness of the Company’s registration statement on Form S-1 filed with the SEC on September 19, 2023. Refer to Note 11. Redeemable Common Stock, Common Stock, and Stockholders’ Equity (Deficit) for further discussion. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which utilizes the asset and liability method for the financial accounting and reporting of income taxes. Under this method, deferred income taxes are recognized for the expected future tax consequences of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. The amount of any future tax benefit associated with deferred tax assets is reduced by a valuation allowance when there is uncertainty that those tax benefits will be realized. The Company accounts for uncertain tax positions using a more-likely-than-not recognition threshold in accordance with ASC 740. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity, and changes in facts or circumstances related to a tax position. Interest and penalties related to uncertain tax positions are included as a component of income tax expense. As of December 31, 2025 and 2024, the liability for income taxes associated with uncertain tax positions was $ 1.3 million and $ 1.3 million, respectively. Accounts Receivable Accounts receivable are shown net of an allowance for doubtful accounts of $ 2.3 million and $ 1.0 million as of December 31, 2025 and 2024, respectively. The allowance for doubtful accounts is established to represent the Company’s best estimate of the net realizable value of the outstanding amount of receivables that it will be unable to collect. The development of the Company’s allowance for doubtful accounts is based on a review of factors such as the customer’s payment history, historical loss patterns, the general economic climate, age, and past due status of invoices. If circumstances relating to specific customers change or unanticipated changes occur in the general business environment, the Company’s estimates of the recoverability of receivables could be further adjusted. 100 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements The allowance for doubtful accounts consists of the following activity (in thousands): Year Ended December 31, 2025 2024 2023 Balance at beginning of the period $ 1,030 $ 1,479 $ 2,253 Provisions for uncollectible accounts, net of recoveries 2,578 349 28 Write offs ( 1,352 ) ( 798 ) ( 802 ) Balance at end of the period $ 2,256 $ 1,030 $ 1,479 Accounts receivable is shown inclusive of unbilled accounts receivable of $ 3.3 million and $ 1.7 million as of December 31, 2025 and 2024, respectively. Unbilled accounts receivable is made up entirely of overages incurred by customers who have exceeded their subscription allotments as of the period end but are not yet due for their period end billing. Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments with a remaining maturity of three months or less at the time of purchase to be cash equivalents. As of December 31, 2025 and 2024, the Company had cash equivalents of $ 325.9 million and $ 278.2 million, respectively, in money market funds. As of December 31, 2025 and 2024, the Company had a current restricted cash balance of $ 0.7 million and $ 0.4 million, respectively. As of December 31, 2024, the Company had a non-current restricted cash balance of $ 0.7 million. The Company had no non-current restricted cash as of December 31, 2025. Restricted cash at December 31, 2025 and 2024 related to the Company’s required collateral to fund payroll and credit card obligations in its Australian entity, as well as collateral required to be held as a result of the Company’s office lease in Australia. Restricted cash is included in current assets for obligations that expire within one year and is included in non-current assets for obligations that expire more than one year from the balance sheet date. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the Consolidated Balance Sheets to the total of the amounts reported in the Consolidated Statements of Cash Flow (in thousands): As of, December 31, 2025 December 31, 2024 Cash and cash equivalents $ 1,064,875 $ 881,473 Restricted cash, current 738 375 Restricted cash, non-current — 739 Total cash, cash equivalents, and restricted cash $ 1,065,613 $ 882,587 As of December 31, 2025, $ 150.0 million of the $ 1.1 billion cash and cash equivalents detailed above was held in a high yield notice deposit account requiring 31 days’ notice for withdrawal. Concentrations of Credit Risk, Significant Customers, and Vendors Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash, restricted cash, and accounts receivable. The Company maintains its cash and restricted cash at accredited financial institutions. Bank accounts in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of December 31, 2025 and 101 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements 2024, the Company’s primary operating accounts significantly exceeded federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Credit risk with respect to accounts receivable is dispersed due to the Company’s large number of customers. The Company routinely assesses the creditworthiness of its customers. The Company does not require collateral. The Company maintains an allowance for potentially uncollectible accounts receivable. Accounts receivable is stated at the amount management expects to collect from outstanding balances. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable. Significant concentrations of credit risk exist when a customer represents 10% or more of accounts receivable. As of December 31, 2025 and 2024, no individual customer accounted for 10% or more of accounts receivable. Additionally, there were no customers that represented 10% or more of the Company’s revenue for the years ended December 31, 2025, 2024, and 2023. The Company had certain vendors who individually represented 10% or more of the Company’s total vendor expenditures. For the year ended December 31, 2025, three vendors represented 18 %, 14 %, and 13 % of total vendor expenditures. For the year ended December 31, 2024, three vendors represented 17 %, 16 %, and 12 % of total vendor expenditures. For the year ended December 31, 2023, three vendors represented 19 %, 14 %, and 12 % of total vendor expenditures. Property and Equipment Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets using the straight-line method. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the determination of net income or loss in the period of disposal. Expenditures for maintenance and repairs are charged to expense as incurred, whereas major improvements are capitalized as additions to property and equipment. The estimated useful lives of the Company’s property and equipment are as follows: Office equipment 5 years Computer equipment 3 years Furniture and fixtures 3 - 5 years Leasehold improvements Lesser of lease term or useful life Asset retirement cost Lesser of lease term or 5 years Asset Retirement Obligations (“ARO”) As part of the build out of the Company’s headquarters in Boston, Massachusetts, the Company built an internal staircase connecting multiple floors. This staircase required the removal of ground space to connect the floors. The lease agreement required the Company to incur the costs required to restore the leased space to its original condition. During fiscal year 2020, on the lease commencement date, the Company established an ARO based on the present value of contractually required estimated future costs to retire long-lived assets at the termination or expiration of the lease and to return the space to its original condition. The asset associated with the ARO is amortized over the lease term or 5 years to operating expense, and the ARO is accreted to the end of lease obligation value over the same term. On January 31, 2025, the Company amended the lease agreement for its Boston corporate headquarters and, under the terms of the amendment, the Company was relieved of the obligation to return the space to its original condition. During the year ended December 31, 2025, the Company derecognized the ARO. The ARO activity is described in more detail in Note 5. Property and Equipment, Net. 102 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Capitalized Internal-Use Software The Company capitalizes qualifying costs incurred during the application development stage in connection with the development of internal-use software, which are included on the Consolidated Balance Sheets as a component of property and equipment, net. Costs related to preliminary project activities and post-implementation stages of software development are expensed as incurred. Costs capitalized as internal-use software development costs include eligible salaries, stock-based compensation, and other compensation-related costs of employees incurred in developing new features and enhancements when the costs will result in additional functionality. Capitalized internal-use software development costs are amortized on a straight-line basis over their estimated useful life of 3 years. Computer software development costs that do not qualify for capitalization are expensed as incurred. Capitalization begins when the preliminary project stage is complete, management authorizes and commits to the funding of the software project with appropriate authority, it is probable the project will be completed, the software will be used to perform the functions intended, and certain functional and quality standards have been met. Leases The Company determines whether an arrangement contains a lease at inception. At the commencement date, the Company will perform the classification tests to determine whether its leases are operating or financing and recognize the related lease liability and right-of-use (“ROU”) asset. The Company, as the lessee, recognizes on the Consolidated Balance Sheets a liability to make lease payments and an ROU asset representing the right to use the underlying asset for both finance and operating leases with a lease term longer than twelve months. Lease liabilities and their corresponding ROU assets are recognized based on the present value of unpaid lease payments over the expected lease term. The Company has elected the following practical expedients: (1) not to separate lease and non-lease components for all asset classes and (2) not to recognize leases with a term of 12 months or less at commencement on the Consolidated Balance Sheets for all asset classes. If there is a change in the Company’s assessment of the lease term and, as a result, the remaining lease term extends more than 12 months from the end of the previously determined lease term, the lease no longer meets the definition of a short-term lease and is accounted for as either an operating or finance lease and recognized on the Consolidated Balance Sheets. The Company leases office space and office equipment under non-cancelable operating leases ranging from 1 to 8 years. Certain leases include options to extend the leases for up to 10 years. These options will be included in the lease term when they are reasonably certain to be exercised. The Company’s leases generally do not include options to terminate the leases or to purchase the underlying asset. The Company’s leases are primarily fixed payments. Certain of the Company’s leases include variable lease payments, generally related to the lessor’s operating costs associated with the underlying asset, which are expensed as incurred. The Company’s leases generally do not contain residual value guarantees. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate (“IBR”) to calculate the present value of future minimum lease payments, which is the estimated rate the Company would be required to pay for fully collateralized borrowing over the period similar to lease terms. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. 103 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the U.S. dollar (“USD”). In certain instances, the Company enters into transactions that are denominated in a currency other than the USD. At the date that such transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction is measured and recorded in USD using the exchange rate in effect at that date. At each balance sheet date, recorded monetary balances denominated in a currency other than the USD are adjusted to USD using the exchange rate at the balance sheet date, with gains or losses recognized in other, net in the Consolidated Statements of Operations and Comprehensive Loss. Foreign currency translation gains and losses were immaterial for the periods presented. The Company recognized a $ 1.6 million foreign currency transaction loss and an immaterial foreign currency transaction loss for the years ended December 31, 2025 and 2023, respectively. Foreign currency transaction gains were $ 1.0 million for the year ended December 31, 2024. Fair Value Measurements Certain assets and liabilities are carried at fair value in accordance with ASC 820, Fair Value Measurement (“ASC 820”). Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The guidance establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities • Level 2 – Observable inputs (other than level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Certain non-financial assets, such as intangible assets, right of use assets, and property and equipment, are measured at fair value on a non-recurring basis and are adjusted to fair value only if an impairment charge is recognized. Such fair value measures are considered to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used. The Company has not recorded any impairment charges during any of the periods presented. Loss Per Share In accordance with FASB ASC 260, Earnings Per Share , the basic net loss per share attributable to Series A and Series B common stockholders is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the applicable period. 104 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Diluted net loss per share attributable to Series A and Series B common stockholders is computed in the same manner as basic net loss per share, as the inclusion of all potentially dilutive securities outstanding would be antidilutive. See Note 13. Loss Per Share for further information. Impairment of Long-Lived Assets The Company periodically evaluates all long-lived assets or asset groups for impairment. Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset or asset group to the estimated undiscounted future net cash flows expected to be generated by the asset or the asset group. If the carrying amount of an asset or asset group exceeds its estimated undiscounted future net cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset. There was no impairment recorded during the years ended December 31, 2025, 2024, and 2023. Recent Accounting Pronouncements The Company has implemented all applicable accounting pronouncements that are in effect. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 on its consolidated financial statements in the current period on a prospective basis. See Note 9. Income Taxes for the related disclosures. In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses . The new guidance requires additional disclosure related to the disaggregation of income statement expense categories. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements. In September 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software . The new guidance amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. ASU 2025-06 is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-06 on its consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements . The new guidance is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. ASU 2025-11 is effective for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11 on its interim condensed consolidated financial statements and related disclosures. There are no other new accounting pronouncements that have been issued that would have a material impact on the Company's financial position or results of operations. 105 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements 3. Revenue Recognition Disaggregation of Revenue The Company provides disaggregation of revenue based on geographic region in Note 14. Segment Information and Geographic Data. Deferred Revenue The change in deferred revenue reflects billings during the period for which the performance obligation was not satisfied prior to the end of the period, partially offset by revenues recognized during the period. The following table summarizes the changes in the balance of deferred revenue during the periods presented (in thousands): Year Ended December 31, 2025 2024 Balance at beginning of the period $ 64,497 $ 40,100 Plus: Billings during the period 1,272,767 961,861 Less: Revenue recognized during the period ( 1,234,019 ) ( 937,464 ) Balance at end of the period $ 103,245 $ 64,497 For the years ended December 31, 2025 and 2024, revenue recognized from amounts included in deferred revenue at the beginning of the period was $ 64.5 million and $ 40.1 million, respectively. Remaining Performance Obligations Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, including deferred revenue. As of December 31, 2025, the Company’s remaining performance obligations were $ 253.7 million, of which $ 235.9 million is expected to be recognized within the next twelve months and $ 17.8 million is expected to be recognized during a period greater than twelve months. 4. Fair Value Measurements The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis at the periods indicated below, by level within the fair value hierarchy (in thousands): As of December 31, 2025 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 325,904 $ — $ — $ 325,904 Total $ 325,904 $ — $ — $ 325,904 As of December 31, 2024 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 278,235 $ — $ — $ 278,235 Total $ 278,235 $ — $ — $ 278,235 106 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements As of December 31, 2025 and 2024, certain of the Company’s cash equivalents were held in money market funds. The Company’s investments in money market funds are classified within Level 1 of the fair value hierarchy as they are valued using quoted market prices in active markets. As of December 31, 2025 and 2024, the Company’s carrying amounts of financial instruments, including cash, restricted cash, accounts receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term maturities. 107 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements 5. Property and Equipment, Net Property and equipment consist of the following (in thousands): As of, December 31, 2025 December 31, 2024 Capitalized internal-use software $ 49,430 $ 26,698 Office equipment 7,630 4,841 Computer equipment 11,385 7,027 Furniture and fixtures 14,144 8,052 Leasehold improvements 50,488 46,062 Construction-in-progress 9,109 124 Asset retirement cost — 643 Total property and equipment 142,186 93,447 Less accumulated depreciation and amortization ( 61,845 ) ( 45,247 ) Total property and equipment, net $ 80,341 $ 48,200 In the years ended December 31, 2025, 2024 , and 2023 , depreciation and amortization expense related to property and equipment was approximately $ 18.6 million, $ 17.7 million, and $ 13.7 million, respectively. On January 31, 2025, the Company amended the lease agreement for its corporate headquarters located in Boston, Massachusetts which, among other things, extended the term of the lease to March 2033. Under the Company’s accounting policy, the useful life of leasehold improvements is the lesser of the lease term and the useful life of the asset. As such, the extension of the lease represents a change in estimate of the useful life of the leasehold improvements within the corporate headquarters. The Company accounted for this change in the useful lives as a change in accounting estimate under ASC 250 Accounting Changes and Error Corrections , which were recorded prospectively upon execution of the lease amendment. This change in estimate resulted in a reduction of $ 5.7 million in depreciation and amortization expense for the year ended December 31, 2025, respectively, and an immaterial impact on basic and diluted net loss per share attributable to Series A and Series B common stockholders. During the years ended December 31, 2025, 2024 and 2023, the Company capitalized $ 23.2 million, $ 14.9 million, and $ 7.0 million of internal-use software development costs, respectively. Of the $ 23.2 million internal-use software development costs that were capitalized during the year ended December 31, 2025, $ 5.2 million relates to software that is not yet in service. The Company recorded amortization expense associated with its capitalized internal-use software development costs of $ 9.5 million , $ 4.6 million, and $ 1.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. Amortization expense is included in cost of revenue in the Consolidated Statements of Operations and Comprehensive Loss. 108 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements During fiscal year 2020, on the commencement date of the lease for the Company’s Boston corporate headquarters, the Company established an ARO based on the present value of contractually required estimated future costs to remove long-lived assets at the termination or expiration of the lease and to return the space to its original condition. As of December 31, 2024, the ARO was included in other non-current liabilities on the Consolidated Balance Sheets. On January 31, 2025, the Company amended the lease agreement for its Boston corporate headquarters and, under the terms of the amendment, the Company was relieved of the obligation to return the space to its original condition. During the year ended December 31, 2025, the Company derecognized the ARO and recorded an immaterial gain for the difference between the Company’s estimate of the ARO and the carrying value of the asset retirement cost, which is included in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. ARO activity is as follows (in thousands): Year Ended December 31, 2025 2024 Beginning balance $ 802 $ 761 Additions — — Accretion — 41 Derecognition ( 802 ) — Ending balance $ — $ 802 6. Accrued Expenses The following table presents components of accrued expenses (in thousands): As of, December 31, 2025 December 31, 2024 Accrued compensation and employee related costs $ 65,230 $ 53,652 Accrued sabbatical 4,458 3,233 Accrued value added tax 948 1,000 Other accrued taxes 8,691 7,055 Accrued cost of revenue 22,609 18,216 Accrued professional services 3,742 3,475 Accrued marketing 4,597 8,739 Accrued occupancy costs 9,262 1,415 Other accrued expenses 5,622 3,043 Total accrued expenses $ 125,159 $ 99,828 109 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements 7. Commitments and Contingencies Contractual Obligations and Commitments The Company has material long-term non-cancellable contractual obligations outstanding with marketing vendors and service providers. Future minimum payments under the Company’s non-cancellable purchase commitments as of December 31, 2025 are presented in the table below (in thousands): Year Ending December 31, Contractual Commitments 2026 $ 214,952 2027 231,136 2028 146,496 2029 132,789 2030 203,865 Total Contractual Commitments: $ 929,238 Legal Matters From time to time, the Company may become involved in legal proceedings or be subject to claims arising in the course of its business, including but not limited to claims brought by its customers in connection with commercial disputes and litigation arising from employee and ex-employee related matters. The Company is not presently subject to any pending or threatened litigation, individually or taken together, for which it is reasonably possible to have a material effect on its consolidated financial position or results of operations. Guarantees and Indemnification Obligations In the ordinary course of business, the Company enters into agreements with its customers that include commercial provisions with respect to licensing, infringement, indemnification, and other common provisions. In the ordinary course of business, the Company does not agree to indemnification obligations under its customer contracts, except for intellectual property infringement claims related to the Company’s services. Based on historical experience and information known as of December 31, 2025 and 2024, the Company had not incurred any costs for guarantees or indemnities. 8. Leases The components of lease expense are as follows (in thousands): Year Ended December 31, 2025 2024 2023 Operating lease cost $ 24,754 $ 12,682 $ 12,618 Short-term lease cost 1,650 178 630 Financing lease cost — 19 21 Total lease cost $ 26,404 $ 12,879 $ 13,269 Supplemental balance sheet information related to the Company’s operating leases is as follows (in thousands): 110 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements As of, December 31, 2025 December 31, 2024 Operating lease ROU assets $ 101,126 $ 42,917 Operating lease liabilities, current 24,757 20,989 Operating lease liabilities, non-current 95,991 32,449 Total lease liabilities $ 120,748 $ 53,438 Supplemental cash flow information and non-cash activity related to the Company’s leases are as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cash paid for operating lease liabilities, net of tenant incentives received $ 15,653 $ 16,722 $ 15,197 ROU assets recognized for new leases and amendments (non-cash) $ 74,936 $ 17,039 $ 1,299 Other information related to leases is as follows: As of, December 31, 2025 December 31, 2024 Weighted average remaining lease term 6.6 years 2.8 years Weighted average discount rate 6.71 % 5.13 % Future undiscounted annual cash flows for the Company’s operating leases as of December 31, 2025 are as follows (in thousands): Year Ending December 31, Operating Leases 2026 $ 25,508 2027 19,860 2028 20,863 2029 20,769 2030 21,054 Thereafter 42,720 Total future undiscounted lease payments 150,774 Less imputed interest ( 30,026 ) Total lease liabilities $ 120,748 The table above does not include options to extend lease terms that are not reasonably certain of being exercised or leases signed but not yet commenced as of December 31, 2025. On January 31, 2025, the Company amended the lease agreement for its Boston corporate headquarters. The amendment (i) modified the lease term and payment terms for the existing leased premises and (ii) expanded the leased premises under the lease. The newly leased premises had phased lease commencement dates ranging from February 2025 to December 2025. The lease term for the existing and newly leased premises ends in March 2033. 111 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements 9. Income Taxes The domestic and foreign components of loss before income taxes are as follows (in thousands): Year Ended December 31, 2025 2024 2023 United States $ ( 42,129 ) $ ( 54,059 ) $ ( 312,759 ) Foreign 11,611 10,379 5,718 Loss before income taxes $ ( 30,518 ) $ ( 43,680 ) $ ( 307,041 ) The provision for income taxes contained the following components (in thousands): Year Ended December 31, 2025 2024 2023 Current: Federal $ ( 277 ) $ 750 $ — State 237 211 ( 26 ) Foreign 4,352 942 4,652 4,312 1,903 4,626 Deferred: Federal ( 141 ) — — State ( 47 ) — — Foreign ( 2,874 ) 559 ( 3,434 ) ( 3,062 ) 559 ( 3,434 ) Provision for income taxes $ 1,250 $ 2,462 $ 1,192 The Company’s effective tax rates for the years ended December 31, 2025, 2024, and 2023 were less than the U.S. federal statutory income tax rate of 21.0%, primarily due to valuation allowance on the U.S. federal and state deferred tax assets. Effective January 1, 2025, the Company adopted ASU 2023-09, Improvements to Income Tax Disclosures , on a prospective basis. As a result of this adoption, the Company is providing the expanded quantitative rate reconciliation disclosures required by ASU 2023-09 for the year ended December 31, 2025 on a prospective basis. Below is a tabular reconciliation pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 (in thousands, except percentages): 112 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Year Ended December 31, 2025 Amount ($) Percent U.S. federal taxes at statutory rate $ ( 6,412 ) 21.0 % State and local income tax, net of federal (national) income tax effect (1) 190 ( 0.6 ) Foreign tax effects United Kingdom Stock Based Compensation ( 701 ) 2.3 Other 128 ( 0.4 ) Australia Stock Based Compensation ( 312 ) 1.0 Other 60 ( 0.2 ) Other foreign jurisdictions ( 3 ) — Total ( 828 ) 2.7 Effect of changes in tax laws or rates enacted in the current period Effect of cross-border tax laws Tax credits Federal R&D Credit ( 15,562 ) 51.0 Total ( 15,562 ) 51.0 Changes in valuation allowances 195,140 ( 639.1 ) Nontaxable or nondeductible items Meals and Entertainment 1,993 ( 6.5 ) Stock Based Compensation ( 170,121 ) 557.2 Prepaid marketing expense ( 2,935 ) 9.6 Other ( 215 ) 0.7 Total ( 171,278 ) 561.0 Changes in unrecognized tax benefits. Total $ 1,250 ( 4.1 ) % (1) State taxes in Texas and Ohio make up the majority of tax effect in this category. Below is a reconciliation of the statutory federal income tax expense and the Company's total income tax expense for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 U.S. federal taxes at statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 7.6 4.3 Federal research and development credits 48.3 3.8 State research and development credits 20.2 0.9 Permanent items ( 2.4 ) ( 0.4 ) Stock-based compensation 57.3 1.6 Foreign rate differential 0.1 — Non-deductible officers compensation ( 32.2 ) ( 2.3 ) Prepaid marketing expense 3.2 3.6 Other ( 2.7 ) — Change in valuation allowance 126.0 ( 32.9 ) Total ( 5.6 ) % ( 0.4 ) % 113 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Income taxes paid for the year ended December 31, 2024 were $ 4.7 million. As required by ASU 2023-09, the table below presents the amount of income taxes paid (in thousands, net of refunds received) for the year ended December 31, 2025, disaggregated by federal, state, and foreign jurisdictions. Year Ended December 31, 2025 Federal $ 939 State 578 Foreign UK 1,819 AUS 3,160 Other 40 Total $ 6,536 Deferred income taxes reflect the impact of carryforwards and temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. The carryforwards and temporary differences that give rise to a significant portion of the Company’s deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows (in thousands): Year Ended December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 245,586 $ 76,714 Research and development credits 87,255 63,894 Stock-based compensation 17,060 25,544 Lease liability 29,558 13,146 Capitalized research and development 154,483 105,266 Other 10,622 7,582 Total deferred tax assets 544,564 292,146 Deferred tax liabilities: Depreciation ( 2,365 ) ( 2,362 ) Deferred commissions ( 13,659 ) ( 9,818 ) Amortization ( 8,163 ) ( 4,579 ) ROU asset ( 24,763 ) ( 10,604 ) Prepaid marketing expense ( 32,417 ) ( 37,112 ) Total deferred tax liabilities ( 81,367 ) ( 64,475 ) Valuation allowance ( 457,787 ) ( 225,135 ) Net deferred tax assets $ 5,410 $ 2,536 As of December 31, 2025 and 2024, the Company has federal net operating loss (“NOL”) carryforwards of $ 1.0 billion and $ 304.1 million, respectively, which can be carried forward indefinitely, and state net operating loss carryforwards of $ 618.5 million and $ 232.6 million, respectively, which expire at various dates beginning in 2027. As of December 31, 2025 and 2024, the Company has federal credit carryforwards of $ 59.5 million and $ 44.0 million, respectively, and state credit carryforwards of $ 35.1 million and $ 25.2 million, respectively, which are available to reduce future tax liabilities. If not utilized, the federal research and development credit will begin to expire in 2039 and the state research and development credit will begin to expire in 2026. 114 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements The Company may not be subject to an annual limitation on its NOL and research and development credit attributes as of December 31, 2025, but subsequent ownership changes may affect the limitation in future years. The net change in the total valuation allowance for the year ended December 31, 2025 was an increase of $ 232.7 million, primarily as a result of the increase in research and development capitalization, federal research and development credits, and the generation of net operating losses. The net changes in the total valuation allowance for the year ended December 31, 2024 was an increase of $ 55.1 million, primarily as a result of the increase in research and development capitalization and federal research and development credits offset by the utilization of net operating losses. Uncertain Tax Positions A reconciliation of the gross unrecognized tax benefits consists of the following (in thousands): Year Ended December 31, 2025 2024 2023 Unrecognized tax benefits, beginning balance $ 1,334 $ — $ — Gross increases for tax positions taken in prior years 11 1,334 — Unrecognized tax benefits, ending balance $ 1,345 $ 1,334 $ — The unrecognized tax benefits as of December 31, 2025, if recognized, would not affect the effective income tax rate due to the valuation allowance that currently offsets the deferred tax assets. The Company had no interest and penalties accrued related to uncertain tax positions as of December 31, 2025, 2024, and 2023. The Company files income tax returns in the United States and in foreign jurisdictions. All periods since inception are subject to examination in most jurisdictions. On July 4, 2025, tax reform legislation included in the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States. The OBBBA includes significant tax reforms, including the reinstatement of immediate expensing for domestic research and development expenditures, the option to claim 100% accelerated depreciation deductions on qualified property, and modifications in international tax provisions. The change to U.S. tax law enacted by the OBBBA resulted in an immaterial effect on the income tax provision due to the Company’s valuation allowance and has been accounted for in the current period. 10. Employee Benefit Plans The Company maintains a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. The plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pretax basis, subject to legal limitations. Employees can designate the investment of their 401(k) accounts into several mutual funds. The Company does not allow investment in its common stock through the 401(k) plan. During the years ended December 31, 2025, 2024, and 2023 , the Company made contributions to the plan of $ 11.3 million, $ 11.2 million, and $ 7.4 million, respectively. The Company contributes to defined contribution savings plans for its employees in the United Kingdom and Australia who satisfy certain eligibility requirements. The plans allow each participant from the United Kingdom and Australia to defer a percentage of their compensation, and the Company contributes an additional 5 % and 12 % of wages for employees 115 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements in the United Kingdom and Australia, respectively, on a monthly basis. The Company made contributions to the plans of $ 4.3 million, $ 2.9 million, and $ 1.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. 11. Redeemable Common Stock, Common Stock, and Stockholders’ Equity (Deficit) Initial Public Offering On September 22, 2023, the Company completed its IPO of 19,200,000 shares of its Series A common stock at a price to the public of $ 30.00 per share. The Company sold 11,507,693 of such shares and certain existing stockholders sold an aggregate of 7,692,307 of such shares. The Company received net proceeds from the IPO of approximately $ 320.1 million, after deducting approximately $ 17.7 million in underwriting discounts and commissions, and $ 7.4 million in offering-related expenses. In connection with the IPO, all shares of the Company’s redeemable common stock automatically converted into 64,046,223 shares of Series B common stock. In connection with and immediately subsequent to the IPO, 21,233,074 shares of Series B common stock were converted to shares of Series A common stock. On October 19, 2023, the underwriters for the IPO exercised their option to purchase additional shares granted in connection with the IPO, with respect to 2,764,066 shares of Series A common stock of a possible 2,880,000 shares. The Company received no proceeds from this transaction, as the option was an option to purchase additional shares of Series A common stock from certain existing stockholders. All RSUs granted to employees prior to the IPO vested upon the satisfaction of both a service condition and a liquidity event condition. These RSUs with both a service condition and liquidity event condition are collectively referred to as “Double-Trigger Awards” and are described in more detail within Note 12. Stock-Based Compensation. Redeemable Common Stock The Company issued 64,046,223 shares of common stock at various dates in 2019, 2020, and 2021 to select investors that were subject to redemption at fair value of common stock at the investor’s option after November 6, 2029. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within control of the Company require classification of the associated instrument outside of permanent equity. During the year ended December 31, 2021, the Company entered into the 2021 Stock Purchase agreement. The Company issued and sold 10,365,017 shares of common stock to investors at a price of $ 33.38 per share, for an aggregate purchase price and gross proceeds of $ 346.0 million. At the time of the sale, 3,025,625 of the total shares issued allowed investors to acquire additional substantive rights including financial information rights, restrictive covenants, secondary refusal rights, right of co-sale, and right of redemption after November 6, 2029, at fair value. These shares were classified outside of permanent equity. The remaining 7,339,392 shares were classified in permanent equity as they did not contain the right of redemption after November 6, 2029. Prior to the IPO, the Company determined that the redeemable shares were probable of becoming redeemable. In accordance with ASC 480-10-S99, the Company elected to recognize changes in redemption value immediately as they occur. The per-share redemption value is equal to the fair market value of a single share of the Company’s common stock subject to a floor of the initial carrying value. Immediately prior to the Company’s IPO in September 2023, the redeemable common stock was accreted to the IPO issuance price of $ 30.00 per share. Upon the IPO, the redemption right of these shares was terminated and all shares of the Company’s redeemable common stock automatically converted into 64,046,223 shares of Series B common stock. This transaction resulted in a reclassification of $ 1.9 billion in redeemable common stock to stockholder’s equity including an increase to additional paid-in capital of $ 136.9 million and Accumulated Deficit of $ 1.8 billion to reverse accretion recorded to these accounts. 116 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Common Stock Immediately following the effectiveness of the registration statement relating to the Company’s IPO in September 2023, the Company filed its Amended and Restated Certificate of Incorporation, which authorized a total of 3,000,000,000 shares of Series A common stock, 350,000,000 shares of Series B common stock, and 100,000,000 shares of undesignated preferred stock. All shares of common stock then outstanding were reclassified as Series B common stock. The rights of the holders of Series A common stock and Series B common stock are identical, except with respect to voting and conversion. Each share of Series A common stock is entitled to one vote per share and is not convertible into any other shares of the Company’s capital stock. Each share of Series B common stock is entitled to ten votes per share and is convertible into one share of Series A common stock at any time. Shares of the Company’s Series B common stock will also automatically convert into shares of Series A common stock upon certain transfers and other events. Upon the seventh anniversary of the Company’s IPO, all outstanding shares of Series B common stock will automatically convert into shares of Series A common stock. Preferred Stock The Company has authorized 100,000,000 shares of preferred stock with a par value of $ 0.001 per share. As of December 31, 2025, there were no shares of preferred stock issued or outstanding. Common Stock Warrants On July 28, 2022, the Company granted warrants to purchase up to 15,743,174 shares of Series B common stock in connection with the collaboration agreement and strategic partnership with Shopify as compensation for marketing services. 25 % of the shares subject to the warrants vested on the grant date, and the remaining 75 % of the shares subject to the warrants vest quarterly in equal amounts until July 28, 2027. On September 22, 2023, upon the Company’s IPO, the vesting of an additional 25 % of the total number of warrants was accelerated, and the remaining unvested portion vests quarterly over the remaining vesting term. Vesting will cease, and any unvested portion of the warrants will be cancelled, in the event of a material breach or early termination of the collaboration agreement by Shopify. The exercise price is $ 0.01 per share, and the term of the warrants is 10 years. These common stock warrants are included as a component of additional paid-in capital within the Consolidated Balance Sheets upon vesting. The Company valued the warrants at the grant date using the Black-Scholes option pricing model with the following assumptions: fair value of common stock, a dividend yield of zero , contractual terms of 10 years, volatility of 55.00 %, and a risk-free rate of 2.85 %. The following table summarizes the warrants activity during the year ended December 31, 2025: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life (years) Warrants outstanding at December 31, 2024 3,788,204 $ 0.01 7.58 Granted — — — Exercised ( 1,377,528 ) 0.01 7.10 Cancelled — — — Warrants outstanding at December 31, 2025 2,410,676 $ 0.01 6.58 During the years ended December 31, 2025, 2024, and 2023 , 1,377,528 , 1,377,528 , and 6,051,285 warrants vested, respectively. The Company has no vested but not exercised warrants outstanding as of December 31, 2025. 117 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Restricted Stock In 2019, the Company permitted the purchase of 142,908 shares of restricted stock prior to vesting by an employee of the Company. These shares are restricted and subject to repurchase by the Company until the conditions for vesting are met. Upon termination of employment of the restricted stockholder, the Company has the right to repurchase, at the original purchase price, any unvested restricted shares. Accordingly, the Company recorded the proceeds from the issuance of restricted stock as a liability given the implicit repurchase feature. The Company reclassified an immaterial amount of restricted stock liability to stockholders’ deficit upon vesting of restricted shares during the year ended December 31, 2023. During the year ended December 31, 2023 , t he aggregate fair value of restricted stock that vested was $ 0.7 million. All restricted stock became fully vested during the year ended December 31, 2023. Stock Purchase and Investment Option On July 28, 2022, the Company entered into a stock purchase agreement in connection with the collaboration agreement and strategic partnership with Shopify. Under the stock purchase agreement, the Company issued and sold 2,951,846 shares of common stock to Shopify at a price of $ 33.88 per share. The stock purchase agreement also granted Shopify an Investment Option, which allows Shopify to purchase an additional 15,743,174 shares of common stock at a purchase price of $ 88.93 per share. The Company allocated the common stock and Investment Option based on the relative fair value of each instrument. The Investment Option is exercisable at any time at Shopify’s option until July 28, 2030. As of December 31, 2025, the Investment Option has not been exercised. 12. Stock-Based Compensation Equity Incentive Plans On September 1, 2015, the Company’s board of directors (the “Board”) adopted the 2015 Plan. The Board or, at its sole discretion, a committee of the Board, is responsible for the administration of the 2015 Plan. As of December 31, 2025, outstanding awards under the 2015 Plan include stock options and RSUs. Generally, 2015 Plan awards vest or are exercisable into shares of Series B common stock and are immediately reclassified to shares of Series A common stock based upon the employee's conversion election made at the time of the IPO. All equity grants subsequent to the IPO are made pursuant to the 2023 Plan, which was approved by the Board effective as of September 18, 2023. The Board or, at its sole discretion, a committee of the Board, is responsible for the administration of the 2023 Plan. As of December 31, 2025, the Company’s authorized common stock includes 74,700,704 shares of Series A common stock reserved for issuance of equity awards under the 2023 Plan, of which 55,563,432 shares are available for future grants. The 2015 Plan provides for the grant of various types of stock-based compensation awards including, but not limited to, RSUs, incentive stock options (“ISOs”), non-qualified stock options (“NSOs,” referred to collectively with ISOs as “Options”) and restricted stock awards (“RSAs”) to directors, consultants, employees, and officers of the Company. ISOs may only be granted to employees, and the exercise price thereon cannot be less than the fair value of the Company’s common stock on the date of grant or less than 110 % of the fair value in the case of employees holding 10% or more of the voting stock of the Company. The exercise price on NSOs must be at least equal to the fair value of the Company’s common stock on the date of grant. The Company has historically granted RSUs, ISOs, NSOs, and RSAs. The 2023 Plan provides for the grants of various types of stock-based compensation awards including, but not limited to, RSUs, ISOs, NSOs, and RSAs. During the years ended December 31, 2025, 2024 and 2023, the Company solely granted RSUs as further described below. Stock Options 118 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements Options generally vest over 4 years with the first 25 % of the award vesting upon the 12-month anniversary of the vesting commencement date and the remaining 75 % vesting monthly over the following 3 years. Grants of Options shall not be exercisable after expiration of 10 years from the date of grant or such shorter period specified in the associated award agreement. Options may not be transferable except by will or by the laws of descent and distribution and domestic relations orders. The 2015 Plan does not allow for the early exercise of Options. The Company did not grant any Options during the years ended December 31, 2025, 2024 and 2023. Option activity for the year ended December 31, 2025 is as follows (in thousands, except per share data): Number of Options Weighted Average Exercise Price (Per Share) Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at January 1, 2025 25,164,415 $ 0.29 1.21 $ 1,030,511 Exercised ( 22,938,436 ) 0.10 Forfeited and expired — — Outstanding at December 31, 2025 2,225,979 $ 2.27 3.25 $ 67,215 Exercisable at December 31, 2025 2,225,979 $ 2.27 3.39 $ 67,215 The total intrinsic value of Options exercised during the years ended December 31, 2025, 2024 and 2023 amounted to $ 797.8 million, $ 177.7 million and $ 54.7 million, respectively. Restricted Stock Units During the years ended December 31, 2025, 2024 and 2023, the Company granted RSUs to employees under the 2015 Plan and 2023 Plan. In general, RSUs granted under the 2015 Plan vest upon the satisfaction of both a service-based vesting condition and a performance-based vesting condition. Generally, the service-based vesting condition requires the grantee to remain an eligible participant, as that term is defined in the 2015 Plan, for a period of 4 years. Generally, RSUs vest quarterly over the entire 4-year period or vest 25 % after 1 year, with the remainder vesting quarterly over the following 3 years. The performance-based vesting condition was satisfied upon the occurrence of the IPO. In general, RSUs granted after the IPO under the 2023 Plan vest upon the satisfaction of service-based vesting conditions only. These service-based vesting conditions are consistent with those under the 2015 Plan detailed above. Restricted stock unit activity for the year ended December 31, 2025 is as follows: Number of Units Weighted Average Grant Date Fair Value Unvested and outstanding at January 1, 2025 17,421,450 $ 28.33 Granted 8,059,711 32.82 Vested ( 7,162,263 ) 28.39 Forfeited ( 3,768,443 ) 29.20 Unvested and outstanding at December 31, 2025 14,550,455 $ 30.56 The fair value of the RSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $ 252.3 million, $ 158.1 million and $ 214.7 million, respectively. Employee Stock Purchase Plan 119 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements On August 24, 2023, the Board adopted the ESPP pursuant to which eligible employees may contribute up to 15 % of their base compensation to purchase shares of the Company’s Series A common stock at a price equal to 85 % of the lower of (1) the fair market value of a share of the Company’s Series A common stock at the beginning of the offering period and (2) the fair market value of a share of the Company’s Series A common stock on the purchase date. The ESPP provides for 12 -month offering periods beginning January 1 and July 1 of each year, or the next trading date thereafter. Each offering period consists of two six -month purchase periods. As of December 31, 2025, the Company has 10,670,780 shares of Series A common stock available for issuance pursuant to purchase rights granted to the Company’s eligible employees under the ESPP. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2024, by the least of 6,200,000 shares of the Company’s Series A common stock, 1 % of the outstanding number of shares of the Company’s Series A common stock and Series B common stock on the immediately preceding December 31, or such lesser number of shares as determined by the administrator of the ESPP. The fair value of employee options granted under the ESPP is based on a 15 % purchase discount off the grant date quoted trading price of the Company’s Series A common stock and is estimated using the Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2025 2024 Risk-free rate 3.96 % 5.33 % 4.79 % - 5.33 % Expected term 0.5 - 1.0 years 0.5 - 1.0 years Volatility 45.90 % - 60.32 % 45.90 % - 64.12 % Expected dividends — — The interest rate is based on the U.S. Treasury bond rate at the date of grant with a maturity approximately equal to the expected term. The expected term is based on the term of the offering period. The expected volatility for the common stock is based on the average of the Company’s historical volatility over the expected term of the award. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The fair value of the common stock is the closing price of the stock on the date the offering period starts. The Company recognized stock-based compensation expense related to the ESPP of $ 5.8 million and $ 4.3 million during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, $ 2.6 million of unrecognized stock-based compensation expense related to the ESPP is expected to be recognized on a straight-line basis over the subsequent 6 months. The weighted average grant date fair value of ESPP awards granted during the years ended December 31, 2025 and 2024 was $ 10.63 and $ 9.28 per share, respectively. During the year ended December 31, 2025, the Company issued 462,681 shares of Series A common stock under the ESPP. Modifications During the year ended December 31, 2025, the Company modified one employee’s stock-based awards to accommodate their employment transition by changing the timing of the service-based vesting condition of 121,969 RSUs. This resulted in incremental stock-based compensation expense of $ 1.4 million during the year ended December 31, 2025. During the year ended December 31, 2025, the Company provided nineteen terminated employees with accelerated vesting on the service-based vesting conditions of 42,781 RSUs. These modifications resulted in incremental stock-based compensation of $ 1.1 million during the year ended December 31, 2025. 120 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements During the year ended December 31, 2023, the Company extended the expiration dates of four employees’ Options. The extension of the expiration date impacted 1,004,667 granted Options, resulting in incremental stock-based compensation expense of $ 0.8 million during the year ended December 31, 2023. During the year ended December 31, 2023, the Company accelerated the vesting start dates of two employees’ RSUs. The modification impacted 167,500 previously granted RSUs that were Double-Trigger awards in which the liquidity-based vesting condition was not considered probable at the date of modification. As the liquidity-based vesting condition was met upon the IPO, the impact of the modified RSUs is included in the total stock-based compensation recognized during the year ended December 31, 2023. On April 10, 2023, the Company approved an amendment to the vesting schedule of 4,250,947 RSUs governed by the 2015 Plan. Specifically, the vesting schedule of these RSUs was amended to align with the Company’s standard four quarterly vesting dates that were established on a prospective basis in June 2022. This modification impacted 657 grantees, and all RSUs that were modified were Double-Trigger awards in which the liquidity-based vesting condition was not considered probable at the date of modification. As the liquidity-based vesting condition was met upon the IPO, the impact of this modification is included in the total stock-based compensation recognized during the year ended December 31, 2023 and is based on the fair value of the award on the date of modification. On March 15, 2023, the Company announced a reduction in workforce that resulted in the termination of approximately 8 % of the Company’s full-time workforce ( 130 employees). As part of the reduction in workforce, the Company modified 608,698 previously granted Options and 64,301 previously granted RSUs. During the year ended December 31, 2023, the Company incurred an incremental stock-based compensation expense of $ 0.6 million related to the modification of Options. All RSUs that were modified were Double-Trigger awards in which the liquidity-based vesting condition was not considered probable at the date of modification. As the liquidity-based vesting condition was met upon the IPO, the impact of the modified RSUs is included in the total stock-based compensation recognized during the year ended December 31, 2023 and is based on the fair value of the award on the date of modification. Stock-Based Compensation Expense During the years ended December 31, 2025, 2024 , and 2023, the Company capitaliz ed $ 4.4 million, $ 3.6 million, and $ 1.3 million of stock-based compensation expense related to services performed on capitalized internal-use software, respectively. Stock-based compensation included in the Consolidated Statements of Operations and Comprehensive Loss is as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cost of revenue $ 7,891 $ 8,917 $ 24,973 Selling and marketing 49,725 40,907 107,954 Research and development 68,178 50,693 120,184 General and administrative 36,237 34,695 87,688 Stock-based compensation, net of amounts capitalized 162,031 135,212 340,799 Capitalized stock-based compensation expense 4,416 3,555 1,349 Total stock-based compensation expense $ 166,447 $ 138,767 $ 342,148 As of December 31, 2025, total unrecognized compensation cost related to unvested RSUs was $ 366.5 million, which will be recognized over a weighted-average remaining period of 2.6 years. Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements 13. Loss Per Share Basic net loss per share attributable to Series A and Series B common stockholders is computed by dividing the net loss by the number of weighted-average outstanding common shares. Diluted net loss per share attributable to Series A and Series B common stockholders is determined by giving effect to all potential common equivalents during the reporting period, unless including them yields an antidilutive result, and is calculated using the treasury stock method. The Company considers its warrants, Investment Option, RSUs, Options, and shares to be issued under the ESPP as potential common equivalents, but excluded them from the computation of diluted earnings per share attributable to common stockholders in the periods presented, as their effect was antidilutive during the years ended December 31, 2025, 2024 and 2023. The rights, including the liquidation and dividend rights, of the holders of Series A and Series B common stock are identical, except with respect to voting and conversion. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis to each series of common stock and the resulting basic and diluted net loss per share attributable to common stockholders are, therefore, the same for both Series A and Series B common stock on both individual and combined basis. The following table presents the calculation of basic and diluted net loss per share attributable to Series A and Series B common stockholders for the periods presented (in thousands, except share and per share data): Year Ended December 31, 2025 2024 2023 Net loss per share attributable to Series A and Series B common stockholders, basic and diluted: Numerator: Net loss $ ( 31,768 ) $ ( 46,142 ) $ ( 308,233 ) Denominator: Weighted-average shares - basic and diluted 290,896,895 266,336,826 242,889,272 Net loss per share attributable to Series A and Series B common stockholders, basic and diluted $ ( 0.11 ) $ ( 0.17 ) $ ( 1.27 ) The following table summarizes the potential common shares excluded from the computation of diluted net income (loss) per share: Year Ended December 31, 2025 2024 2023 Warrants outstanding 2,410,676 3,788,204 5,165,732 Investment Option 15,743,174 15,743,174 15,743,174 RSUs outstanding 14,550,455 17,421,450 14,690,417 Options outstanding 2,225,979 25,164,415 31,734,725 ESPP 245,840 258,033 — Total 35,176,124 62,375,276 67,334,048 14. Related Party Transactions In December 2025, the Company entered into a contract with Wyze Labs, Inc., who is a related party to a member of our Board of Directors. During the year ended December 31, 2025, we have recognized an immaterial amount of revenue within the Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2025, there is an 122 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements outstanding accounts receivable balance of $ 220.4 thousand and deferred revenue balance of $ 202.2 thousand within the Consolidated Balance Sheets and total remaining performance obligation under the contract of $ 392.6 thousand. In May 2025, the Company purchased services from Jellyfish, who is a related party to a member of our Board of Directors. As of December 31, 2025, we purchased services in the aggregate of approximately $ 212.5 thousand, of which $ 148.0 thousand was included within prepaid expenses on the Consolidated Balance Sheets and an immaterial amount was included within operating expenses on the Consolidated Statements of Operations and Comprehensive Loss. 15. Segment Information and Geographic Data As described in the Company’s Summary of Significant Accounting Policies, the Company operates as one operating segment. Revenue and long-lived assets by geographic region are as follows: Disaggregation of Revenue Revenue by geographic area, based on the location of the Company’s customers, is as follows (in thousands): Year Ended December 31, 2025 2024 2023 Americas: United States $ 741,101 $ 584,844 $ 443,471 Other Americas (1) 59,636 47,461 38,180 APAC (1)(2) 127,179 95,920 72,797 EMEA (1)(3) United Kingdom 123,609 90,593 63,424 Other EMEA (4) 182,494 118,646 80,227 Total Revenue $ 1,234,019 $ 937,464 $ 698,099 (1) Other than the United States, no other individual country accounted for 10% or more of total revenue for any of the periods presented. (2) Asia-Pacific (3) Europe, the Middle East and Africa (4) Other than the United Kingdom, no other individual country accounted for 10% or more of total revenue for any of the periods presented. Disaggregation of Long-lived Assets Long-lived assets consist of property and equipment and ROU assets. Long-lived assets by geographical region are as follows: Year Ended December 31, 2025 2024 Americas United States $ 171,140 $ 71,894 APAC (1) 1,402 2,207 EMEA (2) United Kingdom 8,615 17,016 Other (3) 310 — Total Long-lived Assets $ 181,467 $ 91,117 (1) Asia-Pacific (2) Europe, the Middle East and Africa 123 Table of Contents Klaviyo, Inc. Notes to the Consolidated Financial Statements (3) No other country in this geographic region represented more than 10% of the Company’s long-lived assets for the periods presented 16. Restructuring Costs During the years ended December 31, 2025 and 2023, the Company recorded $ 4.2 million and $ 7.9 million, respectively, of restructuring costs . The restructuring plans in 2025 and 2023 resulted in a reduction of approximately 3 % and 8 %, respectively, of Company’s full time workforce. The Company’s restructuring actions were intended to improve operational efficiencies. Restructuring costs consist primarily of employee severance and related benefits as well as stock-based compensation from the modification of terminated employee stock options. There were no restructuring costs incurred during the year ended December 31, 2024. See Note 12. Stock-Based Compensation for further detail on award modifications due to the 2023 restructuring. Restructuring costs included in the Consolidated Statements of Operations and Comprehensive Loss is as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cost of revenue $ — $ — $ 1,138 Selling and marketing — — 1,832 Research and development 4,224 — 3,375 General and administrative — — 1,532 Total $ 4,224 $ — $ 7,877 There were no unpaid restructuring costs as of December 31, 2025 and 2023. 124 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.