Klaviyo, Inc.

All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the conference over to Andrew Zilli, Vice President of Investor Relations. You may begin.

Thanks. Good afternoon, and thanks for joining Klaviyo's third quarter 2024 earnings call. Our earnings press release, investor presentation, SEC filings, and a replay of today's call can be found on our IR website at investors.klaviyo.com. With me on the call today are Andrew Bilecki, co-founder and CEO, and Amanda Whalen, CFO. As a reminder, our commentary today will include non-GAAP measures. Reconciliation to the most directly comparable gap measures can be found in today's earnings press release or earnings release supplemental materials, which can be found on our investor relations website. Additionally, some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions, which could change. Should any of these risks materialize, or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risks, uncertainties, and assumptions, and other factors that could affect our financial results are included in our SEC filings, including our most recent report on Form 10-K and subsequent reports on Form 10-Q. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. With that, I'll now turn it over to Andrew.

Thanks, Billy, and thanks, everyone, for joining us today. Cleggio drove another strong quarter of results in Q3. delivering revenue of $235 million, growing 34% year over year. More than 157,000 customers around the world continue to rely on Klaviyo's data and marketing platform to grow revenue by leveraging first-party consumer data to create highly personalized AI-powered communications over email, SMS, and push notifications. Klaviyo powers smarter digital relationships. Using real-time, first-party data, our vertically integrated platform enables our customers to quickly and intuitively customize segments, orchestrate omnichannel campaigns, and measure every interaction. Instead of requiring developer support, marketers can leverage Klaviyo AI to get work done faster, optimize campaign testing, and generate creative strategies. Klaviyo makes complex tasks simple and scalable, making marketers much more efficient. Enabling customers to centralize their consumer data on Klaviyo allows them to build more personalized engagement, which ultimately drives more revenue. This is a key differentiator for Klaviyo, as many companies are dealing with a fragmented experience, trying to manage consumer experiences across multiple marketing solutions. Companies choose Klaviyo to modernize and consolidate their tech stack because our platform is easy to use, flexible, and capable of handling even the most difficult use cases. This is particularly true at the high end of the market, where our platform and our best-in-class integrations drive value and create efficiencies. In the third quarter, we announced our partnership with Authentic Brands Group, an IP company that owns more than 50 large, well-known brands, including Vince Camuto, Billabong, BC Shoes, and Juicy Couture. Authentic came to Klaviyo to modernize their tech stack across select brands within their portfolio. We're excited to build our partnership with authentic brands and help them deepen their relationships with their consumers across many of their brands. Every business wants to know their consumer and deliver an experience that beats the competition so consumers keep coming back. Marketers are leveraging multiple channels with increasing complexity to reach this goal. But trying to combine data across multiple systems is more difficult as the business scales. With multiple channels, CDP, and reviews natively built on one unified platform, Klaviyo makes marketers more efficient. Rag & Bone, an iconic fashion brand, joined Klaviyo this quarter to consolidate on our vertically integrated platform. And this is another example of an upmarket business turning to Klaviyo for a unified view of the consumer. They were using a legacy marketing vendor with several other point solutions. And due to this fragmented stack, they were having a difficult time getting an aggregated view of their consumer's lifestyle. Centralizing their consumer data with Klaviyo helped them unlock increased customer lifetime value across online and in-store purchases. In the highly competitive fashion industry that relies on brand loyalty, we believe this will be a game changer. We had a similar win with Prest, the leader in the cold press juice and champion of functional wellness. They were using multiple point solutions and were struggling with reporting, basic personalization, and poor segmentation. They consolidated onto Klaviyo, leveraging email, SMS, and CDP to drive more personalized communications with their consumers. Beyond our new customer winds-up market, we continue to drive cross-sell growth, particularly with SMS, as customers see the value in leveraging multiple channels on one platform. We recently expanded our relationship with Spot and Tango, a fresh dog food delivery service, and a Klaviyo email customer for the past five years. They were looking to drive an omnichannel strategy to create highly segmented, unified consumer outreach, and so added SMS to drive further conversion. Moving next to international, we are continuing our investments across go-to-market and project engineering to address this large growth opportunity. We started a new relationship with The Body Shop, a UK-based global beauty brand with more than 30 million global consumers. They were one of the largest customers on a legacy vendor solution, but were unable to deliver personalized communications due to the complexity of the system. Working with the new Klaviyo partner, Absolute Labs, they did a full strategy review and chose Klaviyo to consolidate from nine different tools to one. enabling greater personalization and streamlining their marketing tech stack. On the product side, we now support SMS in 18 countries, recently added coverage in Norway, Denmark, Sweden, Finland, Italy, and Portugal. Additionally, following the successful launch of our French language products in Q2, we made Flows AI and Segments AI available in French, further expanding our features and functionality for those customers. And just a few weeks ago, we announced our product is available in five new languages, German, Portuguese, Korean, Spanish, and Italian. Klaviyo is now available in seven languages, including our customer help center, where we offer an immense amount of resources for all of our customers. In addition to making our product available in more languages, we're constantly working to make our platform smarter and more automated for our customers with Klaviyo AI. Our AI-driven content creation tools and streamlined automation setup allow customers to move faster and more efficiently. We're designing these features to boost productivity, deepen customer engagement, and drive revenue growth. As part of our quarterly feature release last week, we announced Enhanced Email AI, which takes an existing template and creates multiple new versions based on a text prompt. The prompt can call for copy changes or new sections being added, and the new email will match branding and voice, removing the need for manual editing. For our enterprise and international customers, we released Portfolio earlier this year. And now with Portfolio-level metric mapping, customers can set up custom metrics that span multiple brand accounts within a holding company. For instance, if one brand within the Portfolio uses Shopify and another uses BigCommerce, rather than managing separate revenue reports, Plagio allows our users to create a unified revenue metric. For complex businesses, we give the flexibility for brands to create these types of metrics and easily analyze performance across all brands and integrations, providing consistent reporting at the portfolio level. We've also been expanding our product offerings over the last 18 months beyond email and SMS with reviews and CDP. Our reviews product continues to make progress, empowering brands to understand their customers, and we're seeing customers who want to consolidate their applications and related spend with Klaviyo. Happy Wax, a Klaviyo customer for several years using both email and SMS, added reviews earlier this year, resulting in a 27% increase in the number of reviews they collected over their first 100 days using the product. As we expand our product capabilities, Beyond messaging and marketing, providing a powerful data and analytics platform enables marketers to uncover important insights and take action. We're really excited about our progress in CDP, and compared to other CDPs in market, our differentiation lies in its vertical integration, making it fast to implement, see value, and scale. We recently launched a new action center within our RFM analysis report, containing pre-built starting points for customers to enable key use cases, like triggering automation based on key inflection points found in RFMs. Ultimately, this allows brands to shorten the time from insight to action. We also launched a new product analysis feature, which provides customers easy access to insights about their product catalog and purchase behavior. Using this flexible dashboard, brands can find insights on every product, including their repeat purchase timing and what products consumers tend to buy together or in succession. This new feature makes it simpler than ever to build a strong merchandising strategy, giving brands insights on how to promote the right product at the right time to drive repeat purchases and ultimately grow customer lifetime value. This quarter, Harney & Sons, a company known for their high-quality teas, added CDP for product and RFM analysis. By leveraging the advanced analytics capabilities on our platform, they created a consumer segment of possible churn risks and sent a one-time win-back campaign. This targeted approach ultimately led to an average order value that was 29% higher than their year-to-date average order value. In fact, their CEO said this was the one campaign that paid for the first three months of the CDP products. While we continue to make great progress on our product and growth initiatives, we know that we can't do this alone. Our ecosystem of third-party partners, including marketing agencies, system integrators, and developers, are key to our success and create important network effects for Klaviyo. We continue to see new partners proactively reach out to join our partner ecosystem, further expanding our reach. Partners are also continuing to build on Klaviyo, adding 20 new applications to our integration directory in the last three months, as well as contributing more than 40 new flow templates that customers can implement quickly and easily. Our third-party platform integrations continue to be a strong differentiator for Klaviyo, allowing customers to connect nearly 400 technologies, giving them more choice and enabling them to combine first-party data on our platform. Our team is constantly working to build new connections with other companies. And in Q3, we launched our integration with Canva, which has achieved the fastest adoption growth of any integration in our history. Design and content creation is one of the key roles of marketing, particularly for smaller businesses and has a large impact on performance. With this integration, customers can now bring images from Klaviyo into Canva and designs from Canva into Klaviyo for use across our platform. These integrations are driving customers to Klaviyo, as we saw in Q3, with True Food Kitchen, a healthy restaurant chain with over 45 locations across the U.S. They moved from a traditional marketing platform to Klaviyo because of how well we integrated with their tech stack, particularly with Olo and OpenTable, as well as several other softwares they use. They are extremely excited about the power of the Klaviyo platform and our ability to help them execute on differentiated strategies going forward. I'd like to end by thanking all Klaviyos for their hard work in supporting our customers and continuing to make Klaviyo a leading data and marketing platform. As our customers gear up for Black Friday, Cyber Monday, and the holiday season, our teams are ensuring they have the support they need. Last BSTM, Klaviyo Health brands generate almost $60 million of Klaviyo Attributed Value, or KAV, per hour at peak times. This year, we're excited to help our customers hit their biggest holiday goals yet and are making it easier for them with the Black Friday Cyber Monday Hub, a dedicated space in-app where users can plan, strategize, and prepare for their upcoming holiday season. Before I hand it over to Amanda, I wanted to highlight two recent leadership hires. Sarah B. Gupta joined as our Chief Technology Officer in September. And earlier today, we announced that Adil Wali will be joining as our new Chief Product Officer later this month. Both leaders bring deep experience in scaling world-class businesses and will help us continue to grow and deliver exceptional value to our customers. Ed, my co-founder, who has been serving as our Chief Product Officer, will transition to become our Chief Strategy Officer. Ed has obviously played a tremendous role in growing Klaviyo. And I'm excited for him to take a more holistic strategic role to help drive Klaviyo forward over the next several years. And with that, I'll turn it over to Amanda.