Klaviyo, Inc. (KVYO) Earnings Call Transcript & Summary

All right. We're going to go ahead and get started. Good morning. Welcome to Klaviyo's first Investor Day. We're really excited to have you all here. Thanks to everybody who made the trip in to Boston or for those that are local, walked down the street. And for everybody joining us on the live stream, I'm excited to have you all here. We got a really good day ahead of us. Hopefully, a lot of you were able to listen to AB's keynote this morning and listened all the great product innovation we announced today, really exciting stuff going on here at Klaviyo. For those who don't know me, my name is Andrew Zilli, I'm part of the Investor Relations team here, along with Piyushi and Ryan. As always, I'm going to start with the best slide of an Investor Day. Everybody's favorite forward-looking statements. As you know, we may make some forward-looking statements. Those are subject to some risks. Take a look at this. It will be on our website. This entire deck will be posted on our website this afternoon. So you will have access to all of the slides a little bit later today. We have a really exciting day ahead for you. In just a minute, I'll be bringing up Andrew to kind of talk through our overall strategy and vision, talk a little bit about what he announced this morning in the keynote. Then we're going to have our Chief Product Officer Adil come up and talk more about what we're doing on the product side and all the innovation on that front. He's going to introduce Steve Rowland, our President, who's going to talk about our go-to-market motions and the great success we're seeing there. Then we're going to have our Chief Customer Officer, Emily McEvily, come up and host a customer and partner panel discussion. So it gives you a little bit of insight from a few of our customers and one of our partners. Then we'll close the formal presentations with our CFO, Amanda Whalen. And following that, we'll have an executive Q&A session with the presenters. So full day, very exciting. We'll go ahead and get started. So with that, let me invite up, Andrew Bialecki, our CEO.

All right, everybody. Great to see some old faces and great to see some new faces. Hopefully, everybody got a chance to look at what we just shared with our customers and partners an hour ago. I want to spend a few minutes and hit the highlights of where we're taking our product and where we see the opportunity. Let's start with our mission statement. So this has been very durable for Ed and I since we started. We believe in empowering creators to own their destiny. And I want to talk about two of these words. The first is creator and second is ownership. When we think about creators, we're not just talking about content creators, you know, TikTok stars, we mean about creators, builders, doers, the people that are actually putting product services, et cetera, out into the world. And when we talk about ownership, ownership for us means the ability to be successful. And then owning also tracks, right? You can do it independent of the large platforms or with the large platforms. So you can build a durable, scalable business all into yourself. I frankly think the world, especially with AI, I think we're going to find that we're mostly rate limited by the number of people that can create and think and build and Klaviyo is very committed to helping more of those businesses to be successful. Our strategy there revolves around the second line here of being yourself at Internet scale. Ed and I both had the experience of having family members, friends that ran small businesses. We were part of some startups. And one of the things that always struck me was, man, people can build some really compelling products and services, but it's just hard to distribute and deliver amazing customer experiences every single time at scale. It's easy to do if you can show up live with somebody and you know the products and you know your customers well. But it's hard to scale that to hundreds, thousands, millions, tens of millions of consumers. And we wanted to solve that problem. And I'll tell you actually, we'll get to this in a second, like we believed in that in 2012. And I would tell you, as we watch some of the advancements we've seen with language models and their ability to think and reason and replicate some of what we as humans do, we are more bullish than ever that, that set of technology, that software will exist. This ability for anybody, a business to say, this is how we want to interoperate with all of our customers. And "Hey, software, just go take care of that. And by the way, don't just do it, get better as you go." So that is our strategy. Klaviyo right now, we talked about this before, over 176,000 customers around the globe. I think it's over 100 countries. We started out with more with smaller businesses, but we have been moving rapidly upmarket into the mid-market and now into the enterprise. We're doing that by building tremendous products that have great word of mouth that customers take with them to their next job, but also with a great ecosystem of partners and agencies, spending a bunch of time with them on Wednesday night. They are very excited about how to evolve their practices in the age of AI and how Klaviyo is going to -- and how to do that with Klaviyo. And obviously, not just agencies providing services, but also other developers. We built out a really broad developer ecosystem. That's the 350-plus developers, businesses that have integrated into Klaviyo, either push data in so we can deliver a more personalized experience through Klaviyo or are leveraging Klaviyo's database, data platform and our messaging capabilities in their own applications. So we're really excited about where we are. As we built this, I want to touch on a couple of product principles we just have, growth principles. We really believe in building software that is fast, scalable and flexible. So both for our human users and now increasingly for our AI agents or AI users. We believe in building software that meets consumers wherever they are. So while we started with e-mail, we've expanded to text messaging, WhatsApp, mobile, your website, now customer service. We believe in, whatever consumer touch point somebody has with a business, we want to be the ones powering it. We believe that, hey, while we're going to do a lot of that, we should do it through an ecosystem. And then we believe that in order to be smart and be fast, you have to invest in vertical integration. One of the key things we do at Klaviyo is we think about building a database, a brain for a business that stores all of the information you know about your customers, your relationships and puts that data to work. We think when those 2 things get segmented, the latency gets slow, its ability to think and reason gets worse. I think this is only going to be exacerbated in the age of AI. Who are we trying to take this to? When Ed and I started, I remember sitting there and saying like, "Well, we should just do it all, right"? And of course, Ed was the smarter of the 2 of us, and he said, well, "Hang on, we've got to start somewhere." So we decided to pick our first application was marketing automation. And even there, we picked -- we sort of focused a lot of our marketing on one vertical, which is a lot of retail and commerce. But we think the opportunity is obviously much, much, much larger than that. Even before we get to the opportunity that what opens up with AI, Klaviyo really today, the vast majority, almost all of our revenue comes from marketing automation. But as we've expanded this year into the other CRM applications and agents, we think there's a much larger TAM. And then as you think about increasing both international growth, moving into the enterprise, other verticals, other consumer verticals, there's just -- there's a huge opportunity here. And so while we know that we have some real wins in some segments of the market, there's many where we're very -- we're just scratching the surface of what's possible, and that's that less than 1% penetrated. But this AI -- I look at AI for us, I want to touch on this for a second. I think it's going to be an accelerant for all -- for adopting that because there's just this tectonic shift in terms of the way we think about software. If there's one thing you took away for folks that got to see the keynote this morning, it's that I think we are moving towards a world where the software really is autonomous. It will run itself. And what we're finding with our customers is they want this, and they want this badly because they're rate limited amount the time and resources that they have. You heard our friends from away talk about that today, how there's so much to do, but the reality is like their team is constrained. I think in the future, you'll notice some small things. I think software is less about all of these endless like button clicking and drop-downs and all these things that a human needs to configure and instead, the future interfaces are going to look more like what we've got on the right, where you're basically giving the finished product back to the user for them to say, yes, this is right, review, edit, confirm. I actually think we're going to get pretty quickly to a world where people will be auto accepting that. They'll say the work is always good. I don't -- it's not even worth me spending time on. This is how we're going to abstract away and make things like marketing, delivering the customer experience, our customer agent, how we're going to make that more autonomous. I think every business is going to adopt those 2 paradigms in the next couple of years, and our plan is to lead those. Now we already mentioned this, speed and data matter. Obviously, like if you don't have the context, as we now all say, if you don't know who the end consumer is or you don't have all of the business' data, you can't be as productive. This is where the fact that we started out as a database and then added marketing on top with tight vertical integration. It's -- I think AI is just accelerating that advantage. And the speed here, like this really matters for us, both in terms of like how our products work, but also our speed. I mentioned like in the age of AI, speed -- the teams that move the fastest are the ones that are rewarded. So I'm really proud of the way that we -- the culture that we built, Adil will talk a little bit about this on the product engineering side, where, hey, as models advanced, we're not waiting weeks and months to get those integrated. We're doing those in days, which means we're learning faster than everybody else's and also building up the credibility that we're going to have the best products out there. All right. We talked about -- I want to double-click on the data platform that we built. I mentioned like, hey, we have applications on top of that. In the past, we started this, we want people to think about Klaviyo, your mental model is we're going to be the brain for your business. Therefore, we have to know everything we need to know about your customers. And frankly, our software today, you heard this again on stage, our customers love this because they can manipulate the data. They can add some of their own thinking. They can do run their own queries, segmentation, their own analytics. What I'm really excited for here is we've already built some things with our marketing analytics products where more of the thinking is happening autonomously. It's happening due to algorithms. So for example, things like, "Hey, I have a business, I have a SKU catalog of 1,000 products, but I'm trying to figure out what commonly goes together in the same basket or what is the lineage of various consumers." All of that is stuff that we can compute. But it's built on this bedrock of being the data platform and the low latency data platform for both analytics as well as we think of the transactional side, being able to integrate that into the end applications. When we're -- you see some of the customizations, the personalizations that we talked about doing for marketing. If those can't be delivered in a matter of milliseconds, then they sort of don't work. At our scale, if we're sending an e-mail campaign for [ wave ] that's going to millions or tens of millions of consumers, and we need to do that personalization. That kind of inference of merging the profile data together with the actual content, the point of the campaign, if that can't happen with very, very low latency, there's no way we can send it to that whole audience in a reasonable amount of time. Similarly, when you look at things like what we're building with Customer Hub that's actually embedded on people's websites or in their application or in their mobile apps, if the latency there is an instant, folks will tune out. So really excited about what we've done on the data platform side. That obviously underpins the whole thing. We've talked about the B2C CRM for us is all about marketing. I look at that as the proactive side. "Hey, if I'm a business, I need to -- not everybody is coming to my website every day or into my store. I need to remind them about what matters." We think about service as the reactive side. We want brands, as I talked about this morning. We want them to be more than just pitching their products and services. Yes, they should do that, but they should be value-add all the time. I think with what we're building with our customer agent, there's an opportunity where if you need advice that's maybe adjacent to the products and services you offer, we showed the example of the fragrance company. If somebody need some tips or advice on interior design, home decor, there's no reason why our customer agent can't be that really helpful expert that, that company we talked about, Preston Lane is offering. So that their customers keep coming back to them when they have questions. And oh, by the way, yes, here's all the great products that we have. All of this is underpinned by the data platform we have, the integrations, the intelligence layer, and then it's delivered through these applications. Already touched on this, but I'll hit this one more time because I think it's just so important for us. The era of software as tools that you log into and we expect humans to use is over. We've talked a lot about this internally and like how we use AI. And one thing I think is very important is there's a lot of advantages to be in Klaviyo. We have customers that love us. We have a great partner ecosystem. We've got a tremendously talented team. We've got a great business model, great cash flows. But there's some baggage potentially that comes with that. And I think the risk for a lot of SaaS companies is thinking that it's like, yes, the future is really about tools where we kind of sprinkle a little bit of AI on top. I get a little more efficient, but I still sell the seat license. I just want to be very clear for Klaviyo, we believe those days are numbered. Now the reality is not all businesses are ready to adopt this today because the products need to get better, but we are very focused on building for that future. That's why what you saw with our marketing agent, our customer agent, you can then see they're anticipating a future where a lot -- the review still happens through humans. There's still a human in the loop, but a lot more of the work is done by artificial intelligence. I think the companies that think that way, they're thinking about the future of jobs being done, not as like we're offering tools, but really we're doing the work. It's more autonomous, as we say internally. That really matters. And that's the same thing that we're actually embedding inside of Klaviyo's culture, where the way we work, if we're asking our customers to think that way, we need to do the same thing. So this impacts the way that we thought about like building teams, building software, interacting with customers, recruiting the kinds of talent we want. I think SaaS has like -- it's hit its peak. And now really what we should be focused on is products and services that can deliver -- can actually do the things for us. As we move on that, like we're moving towards this autonomous era. You'll see in our products, also the way that we operate with customers, we've kind of moved like if you want kind of a bit of a sliding scale, hey, what are the stepping stones as we get there? What we started out with was actually a bunch of like do some of the machine learning for our customers, so what we call predictive ML and AI. So things like, hey, if I have a bunch of consumers, can you compute so can you enrich basically their profile? Can you tell me what products they're likely to purchase next or what's their propensity to churn or what kinds of content they like. We produced these kind of this metadata that then we were still relying on our customers to leverage, and they love it, right? It's great. But they still have to do all the work of actually configuring it and using it. We then got to more assistive. You saw some of things that we launched around like, hey, image editing, that's getting easier. Hey, we'll show you some optimizations that you should be running. But again, I just want to emphasize that for us, it really is all about this, like how do we build towards a future where I believe any business should be able to plug themselves into Klaviyo. We should be truthful to their business and brands, and they should be able to scale infinitely. They should only be rate limited by the quality of the products and services that they can offer, and we even have some tools to help them there. Awesome. So that's why as we think about AI, the 2 main things we're focused on is our marketing agent we launched today, our service agent, our customer agent that we launched in June that's now available to all of our customers, like we said before, all powered by the Klaviyo data platform, that one brain for business delivers one unified experience to all of the end consumers. This is what we hear all of our customers saying that they want. That's what we're going to deliver. Let's see. Marketing agent, I think we've talked about this a bunch. I mentioned this. The one thing I'll share here that I already shared on stage, I think this is the new user experience. We talked about like for us, it's about this feed. It's an inbox of ideas of things that you need to go -- that you will audit, that you will do, you will review, but the AI is doing the real work. The days of these big editors complex, I do a lot of the tuning myself, right, write the copy, edit the padding, figure out the subject line, all of that, I think, is going away. I actually say this idea of like if you think about a lot of SaaS applications, as they grow and they want to expand some more use cases, a lot of them end up building these like libraries of content, right, templates, they'll say. That to me feels archaic. It feels a little bit like a search engine result where there's 10 links, you have to guess and check which one is probably the one you want, but it's actually a combination of all of them. What we've done with our marketing agents and say like that shouldn't be the case. You shouldn't be guessing from, well, here's 10 examples, pick the one you like the most and customize it for you. Instead, we'll just do that out of the box, all right? On top of that, like I showed the example of like, hey, away travel, hey, they should be doing more than just luggage, but they should also be helping people plan maybe their next trip, be value add. One of the things that's really cool, I don't know if we touched on this on stage. We showed an example of our AI generating content for a traveler about a trip to Portugal. That's great. But obviously, not everybody is going to go to Portugal, right? It's like it's maybe not whereby wants to go. It's obvious that like through our AI, through the content agents we're building, plus mixing that in with the context we have about profiles, about each consumer. When you merge those 2 things together, we can do little things like, hey, timing, channel. But really, what I'm most excited about is this idea that we can personalize the content one-to-one. So way, as an example, in the future, I believe that they'll be able to say, "Yes, yes, we're -- we'll help you plan your next trip," but also it doesn't matter whether it's somewhere in the U.S., it's Europe, it's Asia, we can help everybody regardless of who that traveler is and all of that personalization can be driven by Klaviyo while still consistent with away's brand and the guidelines they have. Our customer agent I just think every business is going to have their own concierge they deliver to their customers. Every business I talk to does not want to be relegated to an answer inside of an LLM. They want to have their own experience, their own style. And that's what we're doing with our customer agent. What's really -- let me go back to this. What's really cool about this is we think it's much broader than customer service. That's why the way that we price this to start actually goes a lot further. It's not just about break/fix kinds of issues. Hey, I have an issue with my order, I need to return something. It's actually asking people, it can help with the marketing and sales process, hey, what should I be thinking about? In the case of a way, it's, hey, I'm going on this trip. I have -- my family is coming, like, tell me, can I fit it all in one large-sized suit case or should I get a couple of carryouts? This is the kind of stuff that our customer agent is able to do today. And then we talked about, hey, broadening out the skill development, that's actually something we're going to be opening up to developers so that they themselves can then like build their own skills. Our developers are very excited, partners are very excited to help us contribute to that. So I believe every business is going to have this multimodal text today. In the future, there will be other modalities, assistant that they offer to their customers. So marketing agent, customer agent, if we can deliver those to every customer, I think we're in great shape. All right. And then with all of that, we talked about like marketing automation to just the CRM stack is great. But as we make this more automated, what we've heard loud and clear from our customers is this drives more results, and they're willing to pay for that. It also saves them a lot of time. It expands what their team can do, but actually at a fraction of the cost. And so that's why we believe that if you look at the B2C CRM TAM, the salmon color in the middle, that's actually understating what the ultimate market will be because we won't be just building tools anymore. Now we're doing things. We're actually executing on that already. I've had customers talk to the last couple of days about our marketing agents like, wow, if you can do this, I don't think about Klaviyo as this tool I buy from my team. I think you as like a part of my team. That's the mentality that we have. All right. Excellent. Now a deep dive on the products, Adil Wali, our Chief Product Officer.

So I'm Adil. I'm a Chief Product Officer here at Klaviyo, and I think a lot of you are new faces for me, so I'm excited to get to know this group. And I think AB spent a lot of time talking about the massive opportunity here. And I think it's important maybe just to step back quickly and talk about my story because that's what brought me here, right? So I have this unique opportunity to have been a very early customer of Klaviyo more than 10 years ago, actually. I've been a founder for a lot of my adult life. I started a company called ModCloth, which was an early digitally native retailer. We're one of Klaviyo's first customers. I was a technical youth, sort of like Microsoft certified at 14, wrote a lot of code starting then. And so I have a pretty deep connection to the problem that our customer community, right? The sort of like fragmented data story is very real. The fragmented set of tooling is a very real problem. And so I sort of moved on from ModCloth. I led the fintech organization at Meta, so I ran all of checkouts, payments, commerce, fraud at Meta. And even though that was a big job and a great job, coming to Klaviyo was just a clear and obvious choice for me because of this opportunity, something that I saw very personally and sort of realized, hey, this company is on the cusp of something really, really special. And so what I want to talk about today, AB talked about AI, both in the keynote, which I hope most of you saw. I want to talk about sort of like the underlying pieces of innovation beyond just the headline features, which are meaningful, but there's a lot more we're doing. So we're going to cover 3 things. The first is our high velocity sort of like product innovation engine. The second is thinking about data as our durable advantage. And the third is the sort of autonomous CRM and all of the pieces that sit underneath that. So on high-velocity product innovation, I think this is really important because we -- AB and Jamie talked a lot about AI and how it's sort of manifesting from a headline feature perspective. But I think it's also important to talk about how we're using AI to accelerate internally, which is not a new thing for us at Klaviyo. We've been accelerating over the last couple of years using AI. And I think like the velocity is very real, right? We deploy more than 270 times a day. 18% of our revenue is invested in R&D. I don't think I need to share the comps with this group. You probably all know what everybody else is investing in R&D. And I think we have more than 50 ML models in production today, right? So I think what's interesting about this is not just sort of the speed at which we're moving, but that combined with the scale, right? Because we're doing all of that, not just like -- I mean, these are the sort of metrics of a start-up, right? We're not moving at start-up speed -- at start-up scale. We're actually -- we have more than 8 billion profiles in the system, more than 1.4 billion e-mails sent daily, 3.4 billion events processed, which, by the way, is about 6 million on average in terms of events process per profile per hour for our customers, right? So there's a lot happening in the Klaviyo platform. And I think the reason that we have this combination of scale and speed really comes down to the decisions that AB and Ed made in founding the company as a data company, first and foremost, right? I think when others were sort of like zigging, we were zagging, right? Other companies were focused on e-mail and marketing as the first use case. We were focused on building a data platform, right? And knowing that everything was grounded in the data. And then we thought of retention marketing as like the first thing that sat on top of that data platform. And we thought of e-mail as the first channel within retention marketing. And of course, SMS followed and these other features around what we call the B2C CRM today followed. And I think in 2025, it's really now about sort of accelerating all of that with AI, right? So that innovation velocity played out in the features that AB talked about today in the keynote, but it's also manifesting across the entire stack, right? We're accelerating development. We've shipped more than 200 features in 2025 alone, and these are meaningful in terms of size, right? So I want to show you sort of what that velocity looks like in practice. AB mentioned this earlier, and this is, I think, a great example of this. I think everybody here is probably familiar with Gemini's 2.5 Flash model. This is like the game changer in terms of photo editing. Within 72 hours of this model shipping, we had it live in Klaviyo, right? So this is the speed that we're moving at is ensuring that whatever is happening out in the world, however fast the world is moving, like we need to be moving faster at Klaviyo. And I think it's that foundation of data that makes this all possible, right? So coming back to data first as our durable advantage, I think what's important to talk about here is that most systems kind of force a trade-off between speed and scale, right? So you have some fast system that you're using for your daily transactions and you have some really slow data warehouse system that you're using to actually make your decisions. And what we're doing is we're bringing those things together with a system that actually delivers both. And I think there's 3 key design elements that make that possible. The first is there's no schema for us, right? So we want this to be instantly configurable by any user, like you don't have to be a DBA to use Klaviyo, right? The second piece is that we want to make sure that there are no limits, and that means 2 things, right? It's the ecosystem doesn't have limits because you can connect virtually any data source into Klaviyo. But the other piece is there are not limits or silos across the actual connectivity within our own products, right? So whether you're in service or you're using it for marketing or analytics, it's all that same data source under the hood, and it's all seamlessly connected, right? And -- the final thing on limits, I think, is really important because I think this really does set us apart. We don't put limits on the number of profiles or on the number of events for our customers, which allows them to have a really rich history in our system and to make really powerful decisions based on that data, right? And all of this is made possible because everything flows through KDP, which is why we're able to move faster from a product perspective than our competitors. In terms of the data platform, I think Jamie did a good job today of talking about sort of like, "Hey, here's where we're going. Here's sort of the vision." I think what's important to talk about, I want to step back and just spend a minute on this because I think the state-of-the-art is sort of changing in real time, right? What we have led with in terms of segments, right, and I think this is a area that clearly Klaviyo has led, allowing people to say, "Hey, I have this big audience, let me sort of break it down into these buckets and figure out, okay, how do I deliver different messages to different buckets." If you think about where this is going, and I think we -- this was like the holy grail for us at ModCloth many years ago, was getting to a segment of one, right? How can I deliver literally to the individual something different? And that's something that's actually possible now with AI. It wasn't possible. I mean it wasn't possible like 2 years ago, right? It's possible today, and I think that's really exciting. And that's not just like if you look at the left visual here, okay, that's content, but it's really about the journey, right? It's what content am I getting, where am I getting it, right? In what modality, when am I getting it? All of it coming together in a bespoke journey. And then I think the next piece pretty clearly for us is like, hey, the on-site experience is really part of that journey when you think about it, it's really just another channel. And so for us, we're able to use AI to -- the future for us is very much this personalization at scale across your entire I think, which is really pretty exciting. And again, it's that data foundation that sets us apart and that allows us to build really the autonomous CRM. So talking about sort of how we're getting there. I think it's important just to sort of take a second to think about, okay, what is like a B2C CRM mean? I mean we showed this visual a lot. And I think for me, the thing that's powerful about this visual is that we're showing the Klaviyo data platform as the core foundation. And then we're showing AI sitting directly on top of that, but underneath everything else, right, underneath the core sort of 3 suites of products that we're offering. And I think if there's anything I want this group to take away from today, it's that we're innovating across this entire stack, right? We're moving quickly in all 3 of these areas. And I think that breadth of innovation, I'm going to cover this later in our product keynote later today, but I want to quickly hit on a few of these innovations now. So just talking about marketing, we sort of think about this in 3 core buckets, right? We have our omnichannel orchestration. We have analytics and insights, and then we have autonomous marketing. And if we dig into omnichannel, I think the story here is really important, right, which is like for us at Klaviyo, we need to show up wherever the customer is, right? And so that's a proliferation of channels, which is why, of course, I'm excited to say that today, we're GA-ing for WhatsApp, which is huge for us. We have RCS also live. And the acquisition of Gatsby adding social as a channel, I think, is really exciting, too, right? So all of this for us is ensuring that we're going to be wherever our customers' customers are, right, so that we can deliver the right sort of personalized experience across all the touch points. And I think all of these -- as channels proliferate, this is why our omnichannel builder, which is also GA-ing this week, is super important, right? Because the more channels you have, complexity scales nonlinearly, right? So it's important that we are allowing people to build against all of these on one canvas, right? One unified canvas for an omnichannel campaign irrespective of however many channels you're messaging across, right? So I think that's what powers that sort of best-in-class messaging. And I think as you have more channels, that sort of creates the next important bottleneck, which is, okay, how do you then piece together the data across all those channels, right? And this is why we're innovating on marketing analytics, right? So features like RFM analysis, product and catalog insights, all of this is helping our marketers wherever the data is, right, wherever -- whichever channel they're engaging with their customers. And so we also launched omnichannel attribution. So customers have a full view of their ROI, not just on their owned channels, but also paid in organic channels, right? So I think more channels leads to the need for better insights. And I think all of that insight data then leads to what AB talked about earlier, which is marketing agent. And I want to spend a second to just like make this real because of how important of a step change this is, right? I think this is the step of Klaviyo going from sort of like being software to being a partner that's actually doing the work with you, right? And I think that's really special. And so when you think about the steps, if you decompose, okay, hey, what is marketing agent doing today? I think the first step is building this brief, right? So understanding what your brand does, understanding what your brand voice is, right, and saying, okay, we've looked at your product catalog. We've looked at your brand context. We have a sense of your brand voice, okay, like here's what the marketing brief is, right? And that's one whole process. And then the second is saying, okay, we've got the brief. Now let's actually generate content that you can use. And I think this part is really special. And there's a certain -- we could sort of have the videos on the screen, but there's a certain magic in the experience that you almost have to like use to believe in terms of like, oh, I actually just wrote it all for me, right? And it's like it's good. I can just use it, right? And if I don't like the image, I can remix the image, as AB showed in the keynote, right? So -- and I think the way I think about this is it's also important to have these guardrails, right? I liken this to like the levels of self-driving in a car. Some people are going to want to have their hands more on the wheels. Others are going to want to have more of that autopilot experience. And so it's important for us at Klaviyo to show up across that of do it with me to do it for me, and we're shipping across all of that, right? We're giving the user that capability and control whenever they want to parachute into the experience and sort of make edits or make changes or remix the experience before they put it live, right? So I think the result here is ultimately building campaigns better, lower customer acquisition cost, right, faster iteration and maybe most importantly, allowing the brands to sort of do the things that they love, right, focusing on the strategy and letting sort of Klaviyo actually assist them in delivering the actual work that's driving both their marketing and their service. And so this is sort of the marketing agent. And I think it's important to say that like the customer agent, I think, is like equally interesting. And so if we just talk about service for a second, there's these 3 principles, right? So autonomous conversations, personalized on-site service and then smarter tools for support teams. And so in terms of how all this manifests, right, so on the other side of our AI experience on the customer agent side, the -- so coming back to that sort of example of the user taking control, right, this notion of autopilot, the customer agent is engaging directly with the customer, right? So the idea here is the agent is smart enough to elevate to a human if it doesn't know the answer. But a lot of the times, it actually does know the answer, right? Because it sort of shows up as like a really effective in-store associate, right? Like it has the brand data. It knows about inventory. So it's like the smart associate that's able to interact with you, answer questions. And what's interesting is even in beta, we've found really good results, right? We had 75% success on recommendations in beta. We had 91% on order questions, right? So all of this being solved and deflected by the AI agent and not having to be escalated to a human to answer, right? So I think the win there is twofold, right? I think you have a better experience, right? You're going to have higher conversion on the site, but you're also going to tax your team less, right? So you're going to have lower ticket volume because you're having faster and more accurate service, right? So I think -- and the exciting thing here is like if a human is needed, and this is why, by the way, we actually shipped 3 products in the service suite. We didn't just ship the customer agent. We could have stopped there. But if you need to elevate to a human, it made sense for us to rethink the help desk experience in an AI-native world, right, which is why we added Customer Hub and Help Desk, right? Because Customer Hub is this rethink on like, hey, what does the Help Desk look like in this AI native world, right? And what's powerful about Help Desk for us is we have all the very same context that crosscuts the experience, right? So if you were chatting with customer agent and then you send a message via Help Desk, we know about that. That's surfaced in the experience. If we marketed to you yesterday, that's in the Customer Hub experience, right? We -- all of that is connected across all the touch points. So the agent knows it, the human agent knows it if they're actually going to get a ticket escalated to them to solve, right? So -- and that's why during beta, we saw Hub was deflecting 300,000-plus support interactions, I thought, which is a really exciting statistic with a small number of beta customers, right? So I think the idea here is across all 3 of these products coming together, we're delivering faster, more personal revenue-driving service, which I think is really, really powerful. And what underpins all of this is our data platform, right? So I mentioned earlier sort of like we think of data being founded as a data company, data is at the heart of what we do. And so there's 3 core buckets of investment for us here, right? So there's advanced data management, there's our apps and ecosystem and then there's global scale and readiness. And I think what's important to talk about here is as we look at advanced data management, this is about, hey, extending our built-in CDP capabilities, whether you are a smaller company getting started and you have thousands of profiles or you're one of our larger customers with millions of profiles, the idea here is that we want to make sure your data is connected, it's organized, it's actionable and everything just works, right? Because we want to deliver the right data to the right user. And so having features like advanced identity resolution become really important in that world because you need to know if you have a single source of truth that you can trust it. And I think the other piece here is as we get pulled up into the enterprise, we're seeing a ton of demand there, and we're winning there. Security becomes more important, right? People are asking us for these more advanced features like custom user roles, having the ISO certification for PII. So we're shipping all of these capabilities that larger brands are asking us for. And the other piece here that maybe is just as important is this idea of global reach and internationalization because we're seeing -- again, we're seeing demand here, and we also have our existing customers that are operating across multiple countries, right? So the messaging has to adapt to these different context, whether it's different regulations, different languages. And so today, we're announcing that we have smart translation for SMS, also 2-way SMS in all available markets. And of course, that's going to extend to WhatsApp and MobilePush, which I think is really exciting. And then maybe even more exciting is integration with Shopify Markets for location-aware catalogs, and that's coming in the next quarter. So all of this innovation across the stack, I think, delivers a tremendous amount of value to our customers from the data platform all the way out to internationalization. And so the question, though, is like, okay, yes, as a product person, I'm excited that we're delivering all these capabilities. But the question is why? And I think it's really about this. It's about the impact that we're shipping for our customer community, right? I think what sets us apart is we are building the future of how businesses connect with their customers, and we're actually landing real value here, right? $220 billion in KAV, Klaviyo attributed value since 2021 across the customer base. And there's a meaningful lift here, right? So Fishwife had 67x ROI since adopting Klaviyo. Brodo has seen 293% year-over-year KAV growth and Samsonite has seen 38% quarter-over-quarter KAV growth since adopting Klaviyo. And so for us, this high-velocity innovation powered by the most sophisticated data platform in the space. And now with AI layered on top, I think, creates that autonomous CRM that's letting brands focus on what they do best while we handle the complexity. So with that, I'm going to hand it over to Steve, who's going to talk about how we're taking all this innovation to market.

I don't know about you guys, but I'm like so stoked about all this innovation. We've talked a ton about product. And now I want to talk about how are we actually taking it to market. The 3 areas that I want to discuss is, one, how have we built a global diversified business. The second area is what are the growth engines that are going to now continue to help us drive long-term durable growth, really around multiproduct platform, continued international acceleration and then our momentum, continuing our momentum in mid-market and enterprise. And then I'll wrap up with our partner ecosystem because that continues to be an incredible force multiplier for us. So let's talk a bit about the global diversified business that we've built. And I'm going to compare and contrast this since this is our first Investor Day to where we were when we went IPO. And if you recall, we were largely an SMB entrepreneur company, right, selling primarily one product with some ancillary products called SMS and a few other things. And we generally dealt with the Founder, the Marketing Director. Well, now when you fast forward today, we are truly a global business. The entrepreneur and the SMB remain incredibly important to us, and I'll talk about that in a moment. But now we're also serving the mid-market and enterprise, and now we're selling a multiproduct platform called the B2C CRM. And the buyer, the people we're interacting with, yes, still the Founder and the Marketing Director down market, but now we often see upmarket, the CMO, the CTO, the CIO and even occasionally the CEO. So our brand presence and the value that we bring to customers has changed very dramatically in the last 2 years. So when you look at the segments across 176,000 customers, these customer groups, entrepreneur and SMB, still very focused on an efficient product-led, very low-touch motion. And then we have a very significant focus on the sales-led motion upmarket. And just in the last 18 months, we've added brands like Hershey's, Champion, Reebok, P&G. So this diversification across all of these different customer groups gives us the opportunity to build that very diversified business. Now demand sources remain very important to us. Efficiency is key to how we actually go to market. And you'll notice that 50% of our demand still comes through that product-led motion. And 25% is coming through a very focused sales motion, and we still get 25% through partners. So good demand sources, efficient demand sources as well as focused demand sources. So this has led to a very diversified customer mix. If you look on the left-hand side, this is by customer count. So dark purple, lots of entrepreneurs. It makes sense, right, when you have 176,000 customers. But I want to point you to the right, which is the mix by ARR. And you'll notice that mid-market and enterprise now make up a nice portion of our ARR. And that customer group is actually growing faster than our total ARR. So a lot's changed in 2 years. We've built a global business that serves multiple products to multiple customer groups that now gives us the foundation to build upon with 3 major growth engines on top of this foundation. So I want to talk about each one of these. So I'm going to discuss the multiproduct platform, the B2C CRM. How does that actually go to market? How do we capture more opportunities, cross-sell to existing customers. I'll talk about that continued international growth and acceleration, and then I'll wrap with our mid-market and enterprise momentum. So let's look at the multiproduct platform to start with. There are a lot of technology companies. I'm sure you follow a lot of technology companies that build great products, but they don't actually solve a real problem. And so let's start there. This is what our customers deal with before they use Klaviyo. A lot of point products. They're stitching them all together. They're trying to make sense of all the interactions. Then they're trying to take all that information and create these connections with their consumers, and it's really, really hard. And that's what they deal with every single day. And what we do is we simplify all of that. It starts with that data platform. It's the brain that AB talks about. That's our foundation that allows us to capture the entire experience of the customer to then take that insight, activate it, orchestrate it across all digital channels and marketing automation and now into that seamless service experience wrapped around with deep analytics and AI insights. And that takes all that complexity and we solve that. So that's the biggest opportunity we have had in the market in solving those problems and creating value for our customers. And this manifests in really interesting ways. So if you look at all of the customers that are using just e-mail and SMS, when they start using Klaviyo e-mail and Klaviyo SMS, they see a 37% increase in KAV. When they consolidate across more of our technologies, like advanced analytics or advanced KDP, they see returns like Tibi saw, which was 100x return. And new products, this is the best part. When we launched Customer Hub in beta, we drove millions of dollars in incremental KAV for our customers. And the really cool part is that we had -- out of all of those beta customers, we had 30% that activated our customer agent in the product unassisted. So really good insights for what they want to see from us from an AI perspective. So very tangible value across all of our customers when they begin to use more of Klaviyo. I'll give you a specific example of a personal care brand. This customer started 2 years ago with our data platform and e-mail and then the next year, they added SMS and the year after that, they added Advanced KDP. That customer's ARR with us grew 72% over that period of time. So it's good for us. It's this multiproduct solution coming to market. But it was also great for them because they saw over a 60% reduction in campaign setup time. And they saw over a 30% reduction in TCO. So this is very typical where customers start with us, maybe a smaller set of capabilities to get started. As they build out the B2C CRM capabilities, they spend more money with us and they gain more benefit for their businesses. So 2 years ago, we had 4 products. Today, we have 8. This gives us an enormous opportunity to not only cross-sell, but allows us to win more deals because we're more competitive and it allows us to cross-sell. So more deals, bigger deals, cross-sell into the existing installed base. And today, we already have 30% of our mid-market and enterprise customers using more than one product. And 54% of our ARR comes from multiproduct customers. So we've already made a tremendous amount of progress. Now we have more technology products that we launched today. This gives us a long-term opportunity to continue to drive this as one of our growth engines. Okay. So now how do we take this internationally? And we've made a tremendous amount of progress with our international growth. In fact, since going public, we've sustained 40% on average, 40% growth every quarter. I know all of you are excited about that on our calls, asking us how we're going to do more of that? Well, let's talk about that. It starts with the investments we've made today. So when we went public, we offered the product in one language called English. We now offer it in 11 languages. We offered SMS in 5 countries. We now offer it in 22 countries. We operated in 3 physical locations. We now operate in 6. So those investments that we've been making over the last 18 to 24 months now allow us to capture revenue in over 100 countries. And when you look at some of the specific markets like Germany and France, well, we've seen 3x growth in Germany and 2.5x growth in France. So it's already working. We know how to actually go do this effectively, but we're just getting started. And one of the reasons we've been so effective is because we have a framework that allows us to expand internationally in a very cost-effective way in a very thoughtful way. So what do most software companies do when they want to go internationally? They put people in the country. Oh my gosh, we have to hire people in Japan. We have to hire people in Argentina. We play to our strengths, which starts with our product-led motion. So if you look at Phase 1, remember the 1 language to 11 languages, that was all about capturing through product-led growth to allow us to expand globally very quickly, very efficiently through the product. That gives us indicators of what markets are really beginning to pick up. So then we move to Phase 2, and we wrap the ecosystem around that, local knowledge, local language, local expertise to, again, begin to accelerate that growth. Then when we see more indicators, we move to Phase 3, which is our inside sales hub model. So Dublin is a perfect example of this. We opened Dublin in February. And now we cover all of Europe other than the U.K. for SMB out of Dublin. We have local language speakers for Germany. We have local language speakers for Spain and Italy and France and the Benelux in the Netherlands. So this gives us the chance now to get broader coverage but in a centralized location. Then when it comes to beginning to service enterprise customers and mid-market customers in country, those countries that require face-to-face interaction for that business to actually be conducted, well, we moved to Phase 4. So this framework has allowed us to move very quickly in our global and international expansion, but do it in a thoughtful and efficient and an effective way. All right. So let's now talk about the third growth engine, which is mid-market and enterprise. And I have had several of you in the past, and everyone always asks me, why are you running to the enterprise? And I want to be really clear, we are being pulled to the enterprise. So why is that happening? Well, it starts with what's happening in the market. And I love this quote, [ Mike Yield ] is a Senior Managing Director at Accenture, a great partner and friend of mine. And he said, there's 2 things that have really happened. One is businesses are looking for reinvention in the enterprise, and they want to move fast. And they want to have agility, embedded AI, integrated capabilities, and they want outcomes. So why can't enterprises do that today? What's the reason that they're starting to come and talk to Klaviyo over the last 18 months? Well, it starts with the technology that they have. So think about this, Legacy Technologies that were built in 2010, some were acquired and stitched together in 2010 and 2011 and 2012, what was the predominant use case? It was really B2B marketing, right? So this technology was used developers, and it took a long time to implement. And maybe you send a campaign once a month, maybe you send a campaign once a quarter. Well, things have changed. They started to adopt that B2B technology for B2C use cases. But B2C use cases are different. You're not doing a campaign once a month. You could be doing multiple campaigns in a week. You could actually be processing billions of events, not millions of events. You might have tens of millions of profiles, customer profiles, not billions of profiles. So the needs of what are required for B2C use cases is dramatically different than what those B2B legacy technologies were built to do. And I love this quote. I was meeting with a customer in Asia Pac about 6 weeks ago when I was across the world. They're on a legacy contract -- technology contract until 2027, but they purchased Klaviyo. And I said, okay, this doesn't make any sense to me. You have 15 brands. You're running this legacy technology. Why would you spend money on Klaviyo? And she said it best. She said, "Steve, literally, literally, when I have to go run a major campaign, I have to go to my development organization. Sometimes that can take months to do a major campaign. She said, the 3 brands we've already put on Klaviyo, I've taken that power of Klaviyo and I put it in the marketers' hands, and now we can do it in weeks, sometimes hours, sometimes minutes." So they're making the decision to move to Klaviyo before they've moved off their legacy technology because they can't wait. They have to be in market. They have to be in front of those consumers to remain competitive and to drive their revenue. And this captures the essence of why we're winning in the enterprise and mid-market. So these are some new statistics we're going to show you to really make the point. Today, we have over 6,000 mid-market and enterprise customers. And this customer group has a 39% CAGR since going public. And our top 10 customers average over $2 million a year in ARR with us. And our largest customer is paying over $4 million in ARR per year. So we're already winning. We're already making huge success here. But it's early. It's early. This is why this is a big growth engine for us. The enterprises are just now beginning to modernize. So this has a very long tail for us and opportunity and is one of the biggest reasons it's one of our growth engines. So now how do we take this partner ecosystem that remains incredibly important to us and wrap it around not only our international growth and our multiproduct strategy to continue to create that flywheel. So as AB mentioned, we have over 5,000 partners. This is agency partners. This is SIs, and this is GSIs. And there's a big shift that's happened as the market has changed as we've spread our wings across all of those different customer groups as you'll see Accenture up there as well. You'll see Domain. Domain has been buying up capabilities around the world to bring SI capabilities to market. Maze is another one, ehouse. So we still have a tremendous amount of partners and agencies, but the shift in the dynamic of what they look like is changing because they see the changing dynamic as well with the customer base. And then technology partners, AB talked about this is how do we integrate into data. There's also a big shift when it comes to go-to-market that's happening. Customers are realizing and even our technology partners are realizing we do something really well. It's called B2C CRM. They do something really well, which might be commerce. And so our ability to integrate -- tightly integrate with all of these different platforms create unique value together for our customers. And that flywheel has only gotten bigger. So you'll see things like brands like TOAST here. You'll see Mindbody as we begin to get to all these other verticals. So this continues to be a competitive advantage for us with these large integrations, and it also is now becoming a competitive advantage for the technology partners that we integrate because of what we bring to market. So this collaboration is only getting stronger. So when you think about the global diversified business we've built, I think we've made a lot of progress. But as we say, we're 1% done. We have the ability to have a strong foundation now to springboard off of with these 3 growth capture that multiproduct platform through the B2C CRM with more wins, bigger deals and more cross-sell, continuing our momentum with international growth, which is a very thoughtful and efficient approach and strategy and then increasing that momentum on mid-market and enterprise, capturing that early modernization that's starting to happen and making sure that we are the winner in that space, all wrapped around with our ecosystem at the foundation of our autonomous B2C CRM. So I'm very excited about what we've built, and I'm equally as excited about where we're headed and the engines that are going to continue to drive that efficient long-term durable growth. So with that, I'll hand it back over to Andrew Zilli.

Thank you, Steve. One more round of applause for AB, Steve and Adil. Really excited to have them here, get you all some access. We're just going to take a quick minute and get some chairs set up here for our panelists. As I mentioned, we are going to have a customer panel. So give you a chance to hear directly from our customers. We can tell you a lot of things. We're really excited about we're doing, but it's way more impactful for you to hear from them. So our Chief Customer Officer, Emily McEvily, will be up here momentarily. And she's going to have a great panel with customers, a.k.a., Happy Wax and Nestlé Health Science. So we're going to give her a chance to ask some questions, really get you all some direct feedback, what customers are hearing, what they like about us, what they wish we were doing differently, maybe new features, things like that. So with that, I will go ahead and invite Emily up to the stage.

Okay. So I'm privileged to have 3 customers up here with us, and we thought we'd just share some of their experiences that they're having with Klaviyo. So we're going to kick it off and just do -- we're going to do a quick baseline of who you are, where you're working and what your role is. And then if you could also just ground the audience on what products you're using with us.

Yes. Hi, I'm Rachel Fagan. I'm with Happy Wax. I'm the VP of Marketing, and we are pretty much trying to use everything that Klaviyo offers. So e-mail, SMS, Reviews, service, which is Customer Hub and customer agent.

John Gonneville, Vice President of Strategy and M&A at a.k.a. Brands. We've got 4 e-commerce first brands, now omnichannel brands in our portfolio, Princess Polly, Petal and Pup, Culture Kings and mnml. All brands have now, as of last quarter, onboarded fully for SMS, e-mail and then the full data and analytics stack, Customer Hub and those sort of things as well.

Hi, everyone. Arben Azizi, I am with Nestlé Health Science. I am the IT application owner for Klaviyo for here in U.S. for the Nestlé Health Science. So my responsibilities include security compliance. So those are very big with us at Nestlé and then the others are data integrations, user management, road mapping contracts and then usage projections. I work with the marketing team very closely on that. And we have 25-plus brands that I basically manage. Nestlé Health Science, we develop nutritional products for consumers and patients as well. So far, we've been using e-mail and SMS.

Sorry, I'm doing a little adjustment here. It's not uncomfortable at all. So -- and Arben, just to clarify, you guys have brands both in the U.S. and EMEA, correct?

We do, yes. So we have 25-plus brands in U.S. and then about 25 or 6 in Europe as well. And I think we have another one in Japan or so.

Yes. Okay. Amazing. I really don't know which think I'm using so I'll try both. Okay. What I'd like to do is kind of start at the beginning of the journey that you have with Klaviyo. And I know you guys all kind of have really interesting entry points that you maybe inherited our stack or you may have made the decision to move on or to move on to us. So Rachel, maybe we'll start with you just about how you were introduced to Klaviyo or how you brought Klaviyo into your organization and possibly like what other products you were using at the time?

Yes, for sure. So when I came on to Happy Wax, we were using it for e-mail only. I very quickly -- we were using postscript at the time for SMS. I very quickly moved from postscript to Klaviyo, really, we wanted to bring everything in-house, but we are in one place. But we were also having issues with attribution, customer service issues with postscript. So I always had really great experiences with Klaviyo customer support. So we really wanted to get all of that under one roof. We were also using stamped for Reviews and again, onboarded as quickly as possible to Klaviyo Reviews.

Awesome. And I think, Arben, you had a different experience, right? You inherited us as the solution, but then you also had a decision point later to bring other brands on.

Yes. So when I -- yes, so my team was using Klaviyo for a long time. So once I joined the team, so we just recently, actually, we decided to move 4 brands from another marketing automation platform to Klaviyo. And we are actually in the process of doing that right now. So -- and the main reason for that was the capabilities, basically. The other marker automation platform was easy to use as well, but not as capable as Klaviyo. We were missing data integrations that was big there. So with Klaviyo, we're able to have data integrations seamlessly with our e-commerce platform. So where we can get a ton of transactional data, we're able to do way more there. And then also the integration of social media, which we were not -- we could not get before. Integration with direct mail was another miss we didn't have before. So yes, the data integration was the big.

Integrations are key. Yes. And then, John, I think I want to talk about your story a little bit differently in that a.k.a Brands have had Klaviyo for long time. I want to kind of fast forward to last April, you and I met in San Francisco. And April was a really weird time for retailers, right? They had -- we had just announced or the administration just announced like all the tax changes, right? So there was so much stress in these brands about what am I going to do? Am I going to change distribution channels? And so we talked a lot about that at lunch. And in the meantime, we were trying to convince John to add another brand over into the Klaviyo family from a.k.a. And so it was a really stressful time. And so I'd like to kind of just talk a little bit about how you made that choice amidst like all of the economic uncertainty to kind of continue to standardize on Klaviyo.

Yes. I think we brought 2 of the brands on from -- we've had e-mail forever, but we brought 2 of the brands on for SMS. And that was a really different discussion when we did that at the beginning of 2024, because it was really focused on just price, like how cheap can I send an SMS, can we get there? We know it's better to be integrated. We know it's better for our customers. Klaviyo more reliable. Can we make it work? And this was a totally different discussion. We ran a super robust RFP process, as you know. The key core question of that is we gave you a list of 25 partners and like how many of these do you integrate with? And there was only 2 folks in that RFP process that got over 20. Klaviyo was one of them. They had 22 out of 25. The other 3 were in the works. And then there was another partner and then it kind of came down to another group we were assessing. And then it came down to the question of like what's it actually look like to run this thing? We were going to have to bring on like twice as many people, maybe potentially it's going to be a huge drain to bring ourselves on. Klaviyo, we're actually going to be able to keep our headcount the same, maybe reduce it. And that was really huge for us in that moment in time because we needed to be able to hold our OpEx steady. We didn't -- we're dealing with a bunch of headaches in our gross margin line and our supply chain. So it was really right place, right time for us to bring on a totally scalable solution.

Yes, that's amazing. I think that's a good jumping off point into like the next stage is after you make the choice like implementing our solutions. I remember, John, that we told you we're like we can get you live in 30 days.

Yes, I didn't believe you at all. Yes, I thought that was just the sales team bs-ing us, and it was going to be a huge headache. And the greatest thing about it is that I do the contract, you do not do the marketing. I do not use the tool. The amazing thing is I negotiated a contract, I signed it, and I never heard anything again. And when the team starts talking about SLAs and headaches and what's in this for legal and how do we hold our partners accountable, like that's a big headache and it reflects poorly an organization. The fact that I haven't heard anything on the integration and that we were live when I checked in with our VP of Marketing, and it was all set and it was ahead of schedule, like amazing. And I actually think that you were quicker this time around sort of 15 months later, launching more products than when we did the move from e-mail and SMS with our 2 smaller men's brands. So it just kind of speaks to what you've done.

Yes. Yes, attribute to the product. And Rachel, you're like our tester of all new products, right? You're the innovator, and you've had experiences like similarly with Customer Hub and Customer Agent, right? Like can you talk about how you enable those and...

It was -- I mean, literally a button. It was a click. It took us minutes, and it saved customer -- our customer service team so much time. They were thinking it was going to be this big undertaking and same with our marketing department, and it was so fast, so easy, super impressive, and we've had nothing but really great experiences. Same with even SMS, it took us days.

Amazing. Arben, I think also you have a very complex environment, 28 brands that you're managing on Klaviyo.

Yes, 25-plus brands. But when you look at all the accounts, there's -- we have so many. Now we're bringing 4 over. So we're going to -- yes, we're just growing.

Yes. Can you talk a little bit to about like how you manage that within the system and because you are kind of the enabler of all these different lines of business, right?

Yes. So I work very closely with the marketing team. So I'm able to help them out with building brand-new solutions because we have some brands that are way ahead of the others. So sometimes we get some by from the marketing teams that have -- are doing something for the first time. So in many cases, we can go back to those bigger brands and clone the solution and just bring them over via the portfolio thing that Klaviyo has. It makes it very easy. It makes it super easy for even the marketing teams to handle such things. But the other things are, of course, because there's -- the integrations are easy to set up. We can get up to speed with other things as well. So we're able to do those as well.

Yes, that's great. One of my very favorite things about Klaviyo besides the fact that we can get customers live so easy. And I will tell you a personal story. I didn't -- I joined Klaviyo in my first 6 months, I didn't have a single escalation on an implementation. It was like I felt like maybe like my e-mail wasn't hooked up or my LinkedIn profile was enabled because I had nothing because the ease of getting live on our solutions is so vastly different than like typical legacy software solutions. But my other favorite thing about Klaviyo is that the power that it puts in the hands of the marketer, right, to be more agile as opposed to having to call IT to enable things or to connect things. And so I wonder if you guys could talk a little bit about that, about the freedom it gives you to be agile and...

100% Yes. So we're a very small team, small but mighty, I like to say. And so what's been great with Klaviyo is that we can move fast. And we feel like we're a bigger team because it's so quick, and we don't have to have a developer to help us with Customer Hub, for example. It looks like our website, it looks like our brand, and we didn't have to do that. I mean it was so easy to do. And really, it's made us feel more powerful because we can move so quick.

That's amazing.

We don't want to be in the business of hiring engineers. We [ make ] close. Engineers are really expensive and the best ones, the guys coming out of MAT, they don't want to work for clothing company. So I'm really happy we've got great data analytics folks and folks like that. But the fact that we still don't have outside of our data team, a single engineer is unbelievable. And it's because of Klaviyo that you can -- it would have been impossible to think that a brand could be $600 million, $700 million of revenue without that, like probably definitely 10 years ago, 5 years ago, it's all part of that. And I think the other piece that's been really amazing for me is the adoption of the data analytics platform. We do have a robust internal platform ourselves that we use. Our team, by and large, uses the Klaviyo native metrics because it gives them exactly what they need and use it in real time. The adoption of that has been great. And it's something that, frankly, going in the negotiation, we didn't even really think we needed and didn't need to pay for, but it's been -- that's been kind of like the surprise winner [indiscernible] and team.

Look at the business and be able to kind of quickly adjust. That's great.

For us as well, the marketer, they have a lot of power. They can do a lot of things on their own, but they don't need a lot of support from us [ tech ]. But even when they need support to make some sort of an integration like a few months ago, I helped them out doing data integration with our direct mail platform, which is popular that we use. So I was able to do that myself, train the marketing person who was not very technical. They were able to basically get up to speed really fast and then leverage that solution for the remainder of the brands, for the rest of the brands basically. So a little bit of training or no training, they're able to do a lot on their own.

Great. So you just mentioned like your direct mail. It kind of makes me think of like we talked about this morning in the keynote about the -- what we call the omni of curse, but basically omnichannel. And I think you all have kind of really interesting use cases about like a little bit of twist on how you use omnichannel. I think, John, starting with you, just Princess Polly stores are like a new kind of flagship for you, right, to drive your consumers there. Can you talk a little bit how you integrate that with like in an omnichannel way?

Yes. We're still early days. So we've started rolling out really last year, opened up 7 stores. We'll have 14 open here by the end of the year, going into 2 geographies. And we -- it's a two-pronged approach. It's grabbing girls who do not like to shop online, like to go touch and feel the product. But it's also -- shopping is an activity for Princess Poly Girl. So if you like -- she is going to the mall, she's not buying 100% of her clothes online, no matter what, and we need that to grow our wallet and market share. We really want to see how we can create an effective customer journey that's seamless across those 2 platforms. And that was a really big part of bringing Klaviyo on as being able to see in one area, all the interactions that we have with our customer. If she comes in store, if she makes a return in store, if she makes a return online, if she reaches out to customer service, we can see that all together in the first -- for the first time, it's been really helpful to have it in one platform.

Yes. So the stores are viral. I've waited in line in New York for a long time with my girls to get in the store.

We're putting more dressing rooms in then.

And so Arben, talk a little bit more about how you're using it with the direct mail. I think you have like a pecking order of how you're...

Yes. So flows within Klaviyo are very powerful. So of course, we default -- we start with e-mail. So and then those that don't engage with e-mail, we go to SMS. And then after that, we have direct mail because of that easy integration. So -- and then with the direct mail, I was told that we get about 19% or so conversion rates, which otherwise we would have never gotten that if we didn't have that integration. And then also, we -- of course, we use social media as well. So sometimes we use that sort of at the end there as well or we're trying to find the right spot within the flow for the social media. But that's also another thing. But direct mail has been a huge success for us so far.

That's awesome. And I know, Rachel, you guys are really included in on social media, too, and you even used Gatsby, which we talked about a little bit this morning. Can you talk a little bit about that?

Yes. So we've used Gatsby for 2 years. I was so excited whenever I found out it was coming under Klaviyo, like game-changing for us. It grew our e-mail list so quickly, but also got us amazing ambassadors that we would not have had otherwise. So it sort of made us go viral in a way, which was amazing. So yes, I'm very excited to see it under the Klaviyo umbrella.

Awesome. And then, John, I know you guys are also really heavy on social as well, right, with Meta and Instagram.

We were an existing Gatspy customer. So that was really great. But I think the largest thing for us is we were -- when I was a private equity investor, we were investing in brands in like the Wild West in 2016, 2018, and those were like dream times to be advertising on Meta and in those platforms. And the rent charged on those eyeballs has steadily gone up and up and up and up. And so if we can take those folks that we bring in through those channels and turn them into folks that we can market with in our highest performing channel, which is SMS and e-mail, that is a massive win for us. The other piece of this is having the data platform across all of our customers and being able to actually export that out to Meta and TikTok and things like that with more data points helps bring our CACs and CPMs down in those platforms. And that's been tremendous because like I said, rent on those eyeballs is only going up, and it's becoming much more difficult with the data privacy restrictions, iOS changes to get an accurate picture within those platforms. The fact that we can get our data in there in a right -- and I guess the other thing that I would add to that is we have total trust in the compliance organization at Klaviyo in order to do that because we've been pitched a bunch of these kind of similar solutions already, frankly, that are like 5 guys in a WeWork. And it sounds awesome until you start to ask ARCON, our data security driver about what's going on. And they're like, well, guys, please don't do that. It's the first time that we really feel confident and safe going into an experimenting with one of those things, and we're seeing the results already.

Yes, right. The regulation, the landscape is getting more and more complex, right? And so you need to trust in your vendor to do that work for you, right, to be compliant. Okay. How about the -- what are you most proud of? So you guys have been -- your teams have been using Klaviyo. Like what is something that you're like most proud of in terms of what you've been able to deliver to the business? And Arben, I'll start with you kind of.

For me, I guess it's being able to -- it's 2 things, being able to leverage existing solutions from the bigger brands and then just carrying them over to the smaller brands with ease super fast. But then also anything with any integration, like [ popular ], for example, we did that super fast. And then I was so happy to see that the marketing team was able to take that and run with it. So that was the most recent one, but there's -- a lot of it has to do with data integration. So I can go into more examples. I can stay here all day and talk about them, but we don't have too much time.

No. That's great. So unlocking the business. Okay, John, how about you?

Yes. Turning our business into a true omnichannel business has been awesome. We talked about the store openings, and that's been great. We've also done a great wholesale rollout. Nordstrom has picked up our 2 women's brands in all of their locations. And our Petal & Pup brand has been a top 2 brand for the entire year, which has been awesome. What I'm excited about is seeing what innovations, I mean, that come to Klaviyo. Is there things -- like right now, we have to train our sales associates to get the e-mail and actually put it in. I am stoked for the day that we don't have to do that because it's going to be a tremendous advantage for us, and I'm kind of speaking that into existence, although the Chief Product Officer is not in the front seat anymore.

Andrew is there.

But it's -- it's those sort of things like -- and I know they're coming, just the speed that Klaviyo is working. So I'm pumped to see how they're going to be able to support our omnichannel organization.

Amazing. Rachel?

Yes. So we actually had a really traumatic event. We had a fire in our warehouse last year. We were not sure if we were going to come back from that. But we bounced back, and I'm really proud of how our team bounced back from that. But really, Klaviyo powered that. We rethought how we connect with our customers and Klaviyo has helped us do that with Customer Hub, with Customers Agent. And really, it's built our community and strengthen trust with our customers. So I'm really excited to see how that continues with all of these new launches and announcements.

And I think it really helps you bounce back from a revenue perspective too and I think you guys were concerned about how...

Of course, I mean, we were -- operations was like nonexistent. It didn't happen. We couldn't produce. So we were able to segment and really target the products that we did have on hand and use segmentation for that and then later came Customer Hub and favorites even like customer being able to add favorites. So it was truly, Klaviyo was our partner through that, and it was incredible.

Yes. Again, something we're super proud of is how we're really enabling that growth of your businesses, all 3 of you, that's really great. Okay. So Zilli told me that one of the favorite questions would be like what -- if you had a wish for something for Klaviyo to do better and the Genie is in the front row. So like if you're -- if he's here to grant wishes, what would your wish be that we could do differently, better? You want to start, yes.

I'll start. Okay. For me, because security is very serious. We take that very seriously at Nestlé Health Science, and we're an enterprise client, of course. We have -- I manage so many brands. I would wish for something that -- for an easier way to manage data integrations into maybe at the like portfolio level or something, user management as well. We are required to review these things every few months or so or redo them and so on. So it's a little bit tedious for me to -- I have to go into every single account to do that. But yes, anything at the dashboard level to manage these accounts would be super helpful for me right now, of course. Well, I'm sure you guys will get to it really. You get things done really fast. But yes, that's the one thing, I guess, one example for the moment.

I snuck mine in earlier because I want to make sure I got it in. But look, I...

You also want Reviews, right? Don't you want to...

So we have to move in -- the Reviews product is going, and I want loyalty, but I think it's all going to be one. Like in my vision of your product, AB, it's all one. So I want to know like when the customer comes in, if -- I don't want to have to have our sales associates type their e-mails in because that also implies that they have to make a checkout for us to know that they were in our store to begin with. And we have like an endless list. We have a really long list of product online. We can only fit so much in the store. We want to know if the customer is coming in. And if they left without converting and they went and online, like those sort of things are really, really important. But -- I mean, I also have to plug just in terms of like the innovations that you're doing just the reliability of this platform, which nobody has talked about, so I'm going to talk about it, is like has been table stakes because we were -- we've been burned by doing with old partners sending out an SMS for a 12-hour flash sale and having it arrive at hour 11. That does not happen with Klaviyo. So like the amazing thing about this is like it sets a level of trust within our organization for us to be able to test and innovate. And then I run our FP&A org as well. It's part of the strategy. And one of the really nice things now is that I get to delete all the headcount asks that are coming to my inbox this year for marketing for the next year because it looks like we don't need any more people. So that's awesome.

Yes. So really, anything that I've asked for from Klaviyo, I've gotten. So there's probably nothing I think that's missing. And...

Ask for a car.

I want a car. And I mean, and if it hasn't come yet, I know they're working on it. And I just -- I feel like I matter and that Happy Wax matters. And so I think that's all we can ask for.

Amazing. Thank you.

I'm guessing I'll get my thing soon then. Tomorrow.

Okay. Please give a huge round of applause for our panel. Okay. To close us out before the next session, I don't know, Zilli, do they have a break after us or no? No break. No break. No break. I'd like to welcome up Ami Palan. She is the CEO of Americas for Accenture Song. So we're going to talk a little bit. We're going to bring it up a few levels and talk about some trends that Accenture is seeing in the market. Ami, welcome.

Thank you.

So I thought what we'd do is just start out by letting people know like what Accenture Song is. And so let's start there.

Yes. Can you guys hear me? I think it's on. Yes. All right. So very happy to be here. Thanks, everyone. Accenture Song. So we -- Accenture launched the brand Song probably about 4 years ago now. And what it is, is essentially our customer business. So all things, marketing, sales, service, commerce as well as all of our digital and creative, so all the agencies that we've acquired over the years. And the intent was to really put all of these capabilities under one organization so that we can really help our customers who are going through any sort of front office transformation. So we've got consulting, strategy, technology and, of course, all the creative work sitting in that team.

Okay. Great. Okay. So I want to kind of take a theme that came out of the panel about agility, speed to market. And also in Steve's presentation, you guys saw the quote from [ Mike Yield ], your coworker that said, clients want us to move fast. They want agility, AI and integrated capabilities. So can you go a little bit deeper on that and talk about how you're seeing customer expectations evolve right now?

Yes. I mean I think the one thing I'll say, and I think we're all experiencing this is there is a lot of fatigue in the market right now. A lot of customers are going through a lot of change. They're making a lot of investments into these large transformation programs. And they're at a point where they want to see more results. They want to move faster and they want to see results much more quickly as well. And so for us, as a services provider for Klaviyo as a vendor, it's our responsibility to really help these customers sort of move across that spectrum and see some of that return, especially in this time of changing technology at the pace at which it is and AI playing such a significant role. And so what we're seeing emerge are a couple of different scenarios. One is sort of this idea of a traditional scenario where clients and companies are experimenting with AI, and they're sort of testing and piloting, sort of seeing incremental outcome. Another scenario is the evolution scenario where you have AI and labor arbitrage coming together in a hybrid model. And so you're starting to see more efficiency and delivery and scale as a result of that. And the third is this reinvention scenario. And this is really where Accenture is focused. This is where we're really pushing the boundaries with our clients as well. And this is where AI is at the core to really fully redesign the operations, the operating model, the decision-making, the governance where AI is leading the way and everybody is sort of moving with that. And so you're moving at a much quicker pace. And so this concept of reinvention is certainly something that we're striving for internally and helping our clients to do as well.

The shifting of customer expectations, like you said, is shifting the way that we have to work, right, as vendors and partners. I think of my own personal experience from a legacy vendor perspective, a lot of my time was spent on, okay, how can we make these implementations of our software less than 12 months, less than 9 months that was always trying to like squeeze it down. And then I shift to my Klaviyo life, and we're getting customers live in 30 days. Our largest customer is live in 30 days or my relationship with product has significantly changed. In the past, I was always pushing on product, can you please develop these features for customers, right? And it's taking forever to develop them. With Klaviyo, we develop things so quickly, it really shifts. So our work needs to become more partners to our customers really to help them drive revenue, right, drive revenue in efficient and durable ways. And so I'm curious like how you're thinking about that, about the way that your organization is going to be shifting how you engage.

Yes. I mean it's also how we're shifting the way that we speak to our clients. And I think what you're describing is a very classic Ferrari example, right? We see a lot of clients spending a lot of money into technology and the new tools and putting a lot of investment into that and sort of building the Ferrari, if you will, right? And what's happening is their teams, the people aren't necessarily digitally fluent in that technology for the Ferrari to move at speed. And so there's other obstacles around organizational change around that, too, that are sort of preventing from the organization from moving at the pace at which it can, right? So the point is technology alone is not enough. We have to think about how do we support our clients in thinking through the organizational impact of what technology can do and making sure that the people are digitally fluent in that organization to really embrace and unleash the power of, in this case, the platform.

Yes. Great opportunity, right? And I know you feel very fortunate for Accenture, because you're leading this, you're leading these transformations. I feel really fortunate to be at Klaviyo because we're on the edge, the front end of it leading customers.

Well, it was incredible to hear from your customers and hear the pace at which some of this is moving. And so it's sort of like you're taking those obstacles out of the way and you're actually driving the outcomes much more quickly.

Yes. So yes, so let's talk about that. Like the most important thing, so you're kind of describing this dissonance between where customers want to go and where the market is kind of pulling them and their ability to really get there, right? So can we talk about just like key things that you think we need to consider as we're leading customers into the future?

Yes. I think a couple of takeaways or points I would summarize. The first is this idea of leading with outcomes rather than experiments. I think for the last couple of years, we've seen a lot of experimentation and people sort of dipping their toe into, "Oh, what can this technology do? What can AI do?" And so we want to make sure every investment is tied to revenue or customer experience and really move from idea to scale impact as quickly as possible. The second thing I would say, and I touched on this, is empowering your employees at pace, making sure they are digitally fluent and savvy and understanding what the technology can actually do in order to move at a pace that allows them to uncover and seize those outcomes in a much more rapid fashion. And the last thing I would say is build agility into the core. Cloud native composable, resilient technology is what is going to allow any organization to pivot as any disruption comes along. In this case, the AI evolution that we're all facing.

All right. Thanks, Ami. Thanks, for closing this out on the customer and partner session, and I will hand it back to Zilli.

All right. Thank you, Emily, and to our customers and to Ami for joining us. Hopefully, that was helpful. We're going to just get a quick change over to get these chairs off the stage. And just in a second, we will invite Amanda up to give our financial presentation. So with that, welcome, Amanda Whalen, our CFO.

All right. Thanks, everyone, and welcome to our very first Investor Day as a public company. I hope you had a chance to be out there and have the chance this afternoon to spend some time at K:Boston with our customers. The energy is just incredible. It's so awesome to see all the new launches that we had today. You heard this morning about the innovation that we're driving in product and how our go-to-market engine is firing on all cylinders. And then importantly, you heard from our customers about how Klaviyo is helping them grow their businesses. Now I'll bring it all together this afternoon with -- as you might expect, what does that mean for our numbers and the returns that we generate for you, our shareholders. But I'd like to start a little bit first with my journey and what brought me to Klaviyo. I joined Klaviyo from Walmart, where I was most recently the CFO of Walmart International, where we oversaw finance for 8 markets and over $90 billion in revenue around the world. Before that, I was in finance and strategy roles across multiple industries, and I started my career with a decade in strategy consulting at Bain & Company. But what brought me to Klaviyo was actually personal. So during COVID, my family and I, as many families were, we're very into cooking. And we were trying to perfect this tie dish called Pad See Ew that requires a really specific type of wide flat noodle that at the time was not widely available in stores. And our favorite noodle company kept sending me these e-mails. They weren't just about sales or back in stocks. They were recipe suggestions for other ways that I might want to use wide flat noodles. And they were cooking tips for how do I get that perfect walk chart. They were the types of e-mails that I was really excited to get, and I realized that they were all powered by Klaviyo. That's when I recognize that this is a company who is doing something fundamentally different in the way that it helps businesses engage with their consumers. I met Andrew. He is, as you heard today, incredibly compelling in his vision for the future, and I knew that I wanted to be a part of this story. And that was over 3 years ago, and it has exceeded every expectation since. Now 2 years ago, we reached a major milestone as a company when we went public and had our IPO. And in the time since then, we have shown remarkable progress. We've grown the top and the bottom line. Our revenue trailing 12 months today is over $1 billion. That's up 68% from the quarter when we went public. And our free cash flow is over $155 million. That's up 65%, but importantly, we've also done it by delivering on the growth levers that we told you that you should expect from Klaviyo. When we went public, we said there were going to be 4 things that would drive our growth in the near term, expanding our number of customers, expanding with those customers, growing in the mid-market and growing internationally. And that's exactly what we've done. On our customer count, we now have over 176,000 customers, up 30%. Our average revenue per customer today is $6,700. That's up 29% and on our core growth areas in mid-market and international, we have nearly doubled in mid-market, the number of customers who are generating over $50,000 in ARR with us. And in international, in EMEA, where we've launched the bulk of our new languages and our new SMS markets, we have also nearly doubled our EMEA revenue. So in a short period of time, it's tremendous progress. We've shown that we can combine fast growth with smart growth while investing to drive growth in the future. And that momentum sets the stage for how we frame our financial journey and the growth engines that we have ahead. So I'd like to cover 4 things with us today. First is the massive market opportunity that we're going after. Second, the track record that we have of execution and our ability to deliver durable, efficient growth. Third, the growth engines that are going to help us sustain that growth well into the future. And then finally, we'll bring it all together in terms of our financial framework and how we'll maintain that financial discipline that's been so core to Klaviyo's success. So let's start with the size of the market that we're going after. Andrew covered this a little bit earlier, but when we began in marketing automation, we were going after a large opportunity. Since then, as the B2C CRM, we have not only expanded into new geographies and new customer types as we've been pulled up into the enterprise, but most importantly, we've expanded into entirely new product categories with service and analytics, and that's grown our TAM to $160 billion. The next horizon for us will be autonomous CRM, and that's going to open up even more market. So the key takeaway is the market we're pursuing is massive, and we are uniquely positioned to capture it. And we've proven that we can deliver on capturing that market while driving efficient growth. Let's start with revenue. Since we went public, our revenue has grown at a cumulative annual growth rate of 34%. The growth has been strong. It's been consistent, and it demonstrates the value that we create for our customers. And we've also delivered that strong top line growth while delivering a strong bottom line as well. I'll start with gross profits. Our gross profit dollars have grown strong and consistently since we went public. Our gross margins, as we expected, have come down a few percentage points, and that's due to the success that we've had in building our SMS business since we -- SMS comes with structurally lower gross margins. We've also made investments in our infrastructure, and those infrastructure investments are beginning to pay off in leverage and scale, which you can see in the stability in our gross margins over the last couple of quarters. So overall, healthy gross margins, some pressure from our SMS success, but we do have levers where we're able to somewhat moderate that pressure and continue to deliver strong margins overall. Beyond gross profit, we've also driven leverage in our operating expenses. Our operating expenses since the time we went public are down 3 percentage points as a percentage of revenue. Let me walk through a little bit about how we get there. On G&A, we've made investments to help this company be able to operate with the future scale that we need. And as we've grown, we've been very disciplined about how we leverage and scale those. One important thing to note in G&A, just for those of you who are building models, is that there is a little bit of floor on how much leverage we can drive there just because our Stripe expenses, which are about 3% of our revenue, do sit in G&A. But again, tremendous progress and leverage there. In R&D, we've made investments in our technology foundations, and we're scaling and getting leverage on those investments as we grow. But importantly, we're doing it while investing in the innovation that delivers the kind of excitement that you're seeing today, both in terms of new products and new features that we're launching, and we're committed to continuing to drive that innovation at an accelerating pace into the future. And then finally, in sales and marketing, we're investing to go after that massive market opportunity that we just talked about, but we're doing so behind strong unit economics. It's one of the fun things about coming into the business as a CFO. Andrew and I, I think at one point, spent a 2-hour car ride talking through each of the details of how we think about unit economics. Landon was with us. He can attest to that. It's something that's really important to us at Klaviyo and make sure that as we're making these investments, we're doing so with strong returns. Key takeaway here is that we've scaled the business efficiently. We've driven leverage on operating expenses while making the investments that are going to continue to drive growth in the future. And that discipline shows up in the form of improved profitability and cash flow. So since we went public, our operating margins have improved by 1 percentage point, and our free cash flow continues to grow. So we have a track record of not only disciplined execution, but consistent top line growth while expanding our margins, which proves that this is a business model that can deliver efficient growth at scale. Compared to our peers, this puts us in the top tier of software companies who are out there. If you take all the public software companies who are out there today and you narrow it down to the ones who are over $1 billion in trailing 12 months revenue run rate, and then you narrow it down further to those who are operating at the Rule of 40 and those who are doing it by driving really rapid growth, north of 30%. There's only 8 companies who fit that bill. Klaviyo is among them. That puts us in the top 7% of financial performance among software companies today, and we are incredibly proud of those results. That performance also gives us confidence in the levers and the growth engines that we have to continue to drive growth ahead of us. Now you heard about these from Steve a bit, but our model has 3 durable growth levers: multiproduct adoption, international expansion and mid-market and enterprise momentum. And I'll walk through each of these in turn with a focus on how it shows up in our financials. Let's start with multiproduct platform. So for multiproduct platform, an important part of driving growth is going to be driving an increase in the number of customers we serve and our average revenue per customer with them. And as you can see, since we went public, we've increased our customer count by 30%, and we've increased our average revenue per customer by 29%. We're driving a balanced growth algorithm with contribution coming from both customer additions and expansion. And an important part of that expansion is the health of our customer cohorts. Our customer cohorts continue to grow with us over time. Customers stick with us and they expand their business with us because we deliver tangible value. You just heard about it from our customers today. Because we help them grow their business, they expand their business with us over time. And that expansion shows up in the form of our NRR. Our NRR has been steady and consistent at 108% for the last few quarters. And if you break down the components of it, GRR remains steady and strong. Expansion of existing products, which is labeled on here as expansion, has historically been the largest driver of expansion for us. And we're really pleased with the trends that we've been seeing there, particularly in our e-mail product. And then finally, cross-sell. Historically, it's been a smaller driver of expansion for us, but it's one where we see huge upside opportunity ahead. So the product is sticky. Customers stay with us and expand, and we have even more NRR upside ahead as we expand the multiproduct platform. So let me dive into each of those. Our GRR has been steady since the IPO at 88%. And I think there's a couple of important things to note here. First thing to note is that based on what we see and hear from our peers and see out there in the marketplace, we believe that 88% is among the very best-in-class for businesses who have a similar customer profile as we do, those who are primarily serving entrepreneurs and SMBs. Now there's certainly opportunity for that to increase over time because our mid-market customers, as you might imagine, have an even stronger gross retention. And as they grow as a portion of our customers, there's the opportunity for it to grow. But also, as you saw in Steve's presentation, they remain a relatively smaller portion of the business today. So there's more upside ahead. Second thing to note on here is that is a very straight line. The world has been quite dynamic over the last couple of years. There's been a lot going on in the external environment and yet customers stay consistently with Klaviyo. The reason they stay consistently with us is what you just heard from them today. We make their lives easier, and we help their businesses grow. In an LTV to CAC equation where the CAC is going up, think of us as the driver of LTV. And the fact that we help them build stronger relationships with their loyal customers makes the product incredibly sticky. The other benefit from a business standpoint is that strong retention gives us the opportunity to expand with those customers over time in the form of cross-sell. Now over the last few years since we launched SMS, we have built our ability to cross-sell. We launched SMS recently or a couple of years ago. Today, it is over $180 million in trailing 12 months revenue. And 27% of our SMB and mid-market and other customers today have SMS with us. That is terrific progress, and it shows that we have the capability to sell new products into our customer base. At the same time, it's 27%, and there's a lot more upside ahead. So we've shown the progress, and we've also shown that we have great room to grow. And an important part of driving that room to grow is going to be the uplift that comes from multiple products. With the B2C CRM, the cross-sell opportunity that we have is huge. Now there's a lot on this page, so let me just orient you to what we're looking at. This slide shows the typical uplift for our customers when they add multiple products across the B2C CRM compared to their initial e-mail subscription. It represents roughly the middle 50% of customers from the 25th to 75th percentile. So if I take mobile as an example, which would include SMS and WhatsApp, if a customer starts with e-mail and adds mobile, that can drive anywhere from 10% to 50% uplift compared to their original e-mail subscription. There's a variety of ranges on there. And the reason there are ranges is because, one, it depends on which specific elements within each product category that they're adopting. And then two, it also depends on how they're using that particular product and how core it is to their strategy. Some customers lean heavier into mobile, some into e-mail, you name it. But what you can see across the entire chart is just how big that opportunity is. When a customer starts with e-mail and adds the full suite of B2C CRM, including all of marketing automation and service and analytics, it can result in a total customer profile and revenue with us that's anywhere from 1.8 up to 3.3x the size of their e-mail subscription. That's huge. Second thing that's really important to note on this chart is on the right, we have the pricing axis and the way that these products are priced. We do not price based on seats. We price based on the value that we provide for our customers. For e-mail and analytics, that's in the form of profiles and the number of consumers who they're engaging with in the business. For service and for mobile as well, that's priced based on usage, whether in the form of conversations and tickets or sends. But again, the consistent theme is we price based on the value that we provide and our incentives are aligned to our customers. So this opportunity for growth across the multiproduct platform is massive, and it's one of our core growth engines going forward. Alongside product expansion, international growth is also going to continue to be an important driver for us. Steve spoke about the new languages that we've added, the new SMS markets that we've entered. That has driven some significant revenue growth, 43% per year internationally since we went public. And that's driven an increase because it's faster than the rate the overall business is growing, it's driven an increase in international as a percentage of our revenue, which is now 35% today. And importantly, we've laid the foundation for how we're going to continue to drive that international growth going forward. The #1 driver of it is going to be continuing to bring markets through the different phases that Steve spoke about, starting with local language, expanding into partners, inside sales and then finally, in select markets, boots on ground. But that's not all. We know how important data residency is for our international customers, and so we will be looking to expand our data footprint. And we also have seen with languages, the power of opening up the platform and making it easier to buy locally. So in the future, we'll add not only new languages, but new currencies as well. So in international, we've demonstrated the strong growth, and we have a path for durable growth ahead. So now let's touch on mid-market and enterprise. In mid-market and enterprise, our 50,000 ARR and up customers have grown at a rate of 40% per year since we went public. But importantly, we have particular traction amongst our largest customers. So our number of customers who are generating over $100,000 in ARR with us is now over 1,000. And our number of customers who are generating over $500,000 with us is now over 600. That's quadruple. I'll repeat that, quadruple the number that we had when we went public. We've been focused on growing this base of large customers, and it is working. And it's also showing up in our financial profile. Today, 36% of our ARR comes from customers who are generating $50,000 or more with us. That's up from 27% at the time of our IPO. And importantly, much of that growth, as you can see on the chart, is coming from the larger customers, those who are generating over $100,000 in ARR. So the key takeaway in mid-market and enterprise is we've got momentum with those larger customers. It's showing up in our numbers. And with more and more customers looking to replace their legacy tech stack and modernize the way that they engage with their consumers, the opportunity ahead of us here is vast. And of course, underpinning all of this is the success that we have in AI and data. So as you heard about earlier this morning, I just love that sparkle there. As you heard about earlier this morning, when you combine our Klaviyo data platform or the brain behind the business with the exciting products that we launched this morning in AI, it gives us a unique opportunity to build the first and the best CRM for B2C businesses. That's an autonomous CRM for those B2C businesses. That autonomous CRM is going to underpin all of our success, and it's going to help us drive our durable growth into the future. So on these levers for sustained growth, messages I would like to leave you with are, we're clear on what the growth engines are. We've demonstrated our ability to drive success in them. And together, they're going to help us drive durable growth in the future. So now with that context, let me turn to the moment we have all been waiting for. Let's talk about the multiple growth engines and how they'll translate into the financial model going forward. I'm going to start with our 3-year outlook. In the next 3 years, we're going to expand our operating margins from 12%, which is where they are today at the midpoint of our guidance for fiscal '25 to 15% to 17% by fiscal '28. Let's talk through a little bit about how we're going to get there. Starting with gross margins. In gross margins, we do expect that we'll continue to see some pressure from the success that we're seeing in our mobile products in the future, not only SMS, but also WhatsApp. But we will be able to moderate that impact somewhat by continuing to get leverage from the infrastructure investments that we've made and then also importantly, from the new products that we've launched earlier this year and today, all of which come with margins that are higher than those SMS products. And then overall, we'll be able to more than offset that pressure on gross margins with leverage in operating expenses. In sales and marketing, we'll continue to invest behind strong unit economics while driving efficiencies across each of the unique go-to-market motions that are important to our different customer groups that we serve. In R&D, we'll get leverage on those foundational technology investments while continuing to invest behind the innovation that helps drive our success and growth with customers. And in G&A, we'll continue to be disciplined in how we scale. And then importantly, underpinning all of this is AI, which is transforming the way we work. Every team across Klaviyo today is using AI to fundamentally rethink the way that we do our business, whether it's product teams who are using coding tools to build their initial mockups or our HR team who is using AI to transform the way that we recruit and hire. As we look forward into the future, we're no longer going to need to add headcount at the same pace that we have in the past in order to drive that growth into the future. And then beyond P&L, we're going to continue to focus on being good stewards of capital for you, our shareholders. We're very mindful of stock-based compensation. And last year, as many of you know, we put in place a cash bonus program to start to shift that mix of compensation between cash and equity. And our target in the next 3 years is to have our dilution be less than 2.5%. And then we're on track as well based on all of this towards our longer-term target that we've spoken about in the past. Over the next few years, beyond fiscal '28, we'll continue to drive structural improvements driven by AI, efficiency in our go-to-market motions, leverage on our platform and R&D, all of which position us to achieve that longer-term margin target of 20%. So the bottom line is that over the last few years, we've demonstrated the ability to drive rapid growth in the business while expanding our margins, and that is what we will continue to do in the future. This is a financially disciplined business that can generate high levels of profit and cash flow as it grows. And then as we generate that cash, we're going to be equally as disciplined in the way that we allocate our capital. Here's how we think about capital allocation. There we go. First, we're a growth company. So the primary place we think about putting our capital to use is driving growth in the business. And then more specifically than being just a growth company, we're also a product-led and engineering-led growth company who are big believers in the power of having products that work really, really well together because they create a great experience for our customers. So we tend to be builders more than buyers, and that will be our first place that we're putting capital to use is driving organic growth in the business. That being said, we'll consider opportunities for inorganic growth through M&A as well. You should think of it as typically small teams with outstanding talent who've got great technology and a great product that helps us accelerate our product road map faster than what we could achieve on our own. And Gatsby, our recent acquisition, is a great example of that. Strong, small team, fantastic product. Our customers love it, and it accelerated our entry into social. Now over the longer term, we'll think about returning cash to shareholders. But again, given where we are in our growth trajectory as a company, I would think of that more as a longer-term consideration versus one that we will focus on in the near term for now. So we've covered a lot of ground. Here are the key things that I want to leave you with today. One, we've got a massive growth opportunity ahead. With the B2C CRM, we've expanded into entirely new product categories, and we're creating the future with the AI-driven autonomous CRM. So we are defining this market. Two, our track record speaks for itself. Since we went public, our revenue run rate has grown 68%, and we've delivered that while expanding our operating margins. We've proven -- and importantly, I almost forgot, we've done it not only while delivering strong top and bottom line, but by demonstrating strong success in our core growth areas. We have nearly doubled our number of 50,000 customers and our revenue in EMEA, driving our growth in the mid-market and internationally. And we've proven that with discipline and some creativity, growth and profitability absolutely can go hand in hand. And then three, we've got multiple engines for continuing that growth durably into the future. We're going to continue to grow internationally. We're going to continue to grow in the mid-market. We have a massive opportunity ahead of us in our multiproduct platform and underpinning it all is going to be K:AI and the autonomous CRM. So when I look at everything that Klaviyo has put into place, here's what I see. I see that every metric, every investment, every strategic decision that we make is built to compound on one another. We're building a business that gets stronger over time, where each success ladders upon the next and sets the ground for the future. As we like to say in Klaviyo, and it's actually one of our core values, we really are only 1% done. And that is why I am so excited about the journey that we have ahead of us. So with that, I'll turn it back to Zilli, and we'll go into Q&A.

All right. Thank you, Amanda. Again, give us just 1 minute, and we're going to go ahead and get some chairs set up up here for our executives to come up. Ryan on the IR team and I will both be running mics in the audience. So if you have a question, please raise your hand. We will try to get to as many as possible. We do have a bit of a hard stop because this afternoon is our product keynote and encourage all of you to go attend that. It's going to be back in the main hall, starting around 1:15. We would also encourage as you're here throughout the day, you have free access to K:Boston. So walk around, talk to customers, talk to partners, Go check out the expo hall, really get hands on with the product, so you can see the stuff in action. It's very, very exciting. So I encourage you to walk around and talk to as many folks as you can. So with that, we'll go ahead and invite Andrew, Adil, Steve and Amanda back up on to stage, and we will start to come to the audience for Q&A.

Adil, what time do you have to be on stage?

I think 1:15.

1:15, alright.

Will be hard to start without me.

I know, yes, we gonna make sure you get there at time.

I might have to dip out early.

It's kind of a road map session.

Okay. This is Jackson Ader at KeyBanc Capital Markets. No time for a joke. I had one, but that's all right. Amanda, what revenue growth is assumed in that 15% to 17% operating margin target by the time you get out to 2028?

Yes. Great question, Jackson, and we appreciate that you guys are very focused on our longer-term revenue growth because as you can see, we are very focused on our longer-term revenue growth. And the way that we think about measuring success there and what we would encourage you guys to look at is the success that we're driving in each of those growth engines that we talked about and the progress that we're making in each one. So if you take our different metrics, starting with multiproduct platform, we've launched some amazing new products today. We're really excited about them. And we'll be looking at what is the adoption that those generate over time. The response in the beta has been fantastic. Customers are super interested in it. And what you saw in that expansion chart is that it can drive really significant uplift. So as we go through it, we'll be talking about what is the progress that we're making there on multiproduct. On international, we're very excited about the progress that we have there. We're pleased with the revenue growth that we've seen, and we'll continue talking to you about the progress that we're making as we draw more countries through those phases and see it show up in our revenue and our international results. And then in mid-market, it's that $50,000 and up customer cohort. It's grown at 40% per year. And importantly, as we reach major milestones with other customer cohorts as well, we'll share those as well. So we're really excited about the revenue potential that we have ahead of us. We've got a strong track record of delivering, and we've got a clear path ahead.

Siti Panigrahi from Mizuho. Thanks for hosting us. It's great presentation. Great to see some of the product portfolio expansion. I want to go back, try another way to ask the revenue growth part. You talked about some of the product expansion. It's definitely above our expectation, what we saw during IPO time. You talked about mid-market is another growth driver in international. How do you rank order the growth opportunity in each of the area? And looking at your operating margin expansion, how do you see your mid-market enterprise as one of your growth drivers?

Yes. Let me start with that, Amanda. And obviously, feel free to -- on things I missed or want to add on. So yes, I think there's some sort of baseline growth that we're going to have from just the -- we think about the CRM and the applications where we still -- look, we have a lot of customers today that are -- they're logging in, they're using our products, right, across marketing, across service, et cetera. I think there's a baseline growth rate there. I really like the picture Amanda drew of NRR. We've not historically been a company that's had many products where that's been a big tailwind. But I think as Amanda said set up exactly right, like I think that's going to be a big tailwind for us going forward. So I put that up there. I also think the growth upmarket and internationally, those are both things where we know the market is there. And actually, my point was with AI, I think a lot of people are going to be kind of reevaluating their technology choices faster than they would have otherwise, right? It's less of a game of, well, do I move to something that's maybe a little bit better, but there's now an even more compelling reason to buy. And then just on the revenue growth in general, I think there's -- any time you get these big technology shifts, there's real uncertainty into like how fast those take hold. I think it's obvious to all of us that, look, the future of the way customer experiences get delivered is going to happen autonomously. So we think of traditionally CRM as a stack. It's like, yes, it's the thing you give to your team and then they go deliver the customer experience, and that's how you do it, right? It's obviously going to move to AI. I think everybody is just the question is how fast. Now I think based on the conversations that we've had with customers, we think that will be sooner than a lot of past technology shifts. And the one that we most index off of is maybe the shift from, say, like on-prem to cloud or Internet. I think it will happen faster than that. But it's hard to put hard boundaries on that, which is part of the reason why when we think about revenue growth, I think there's this baseline. There's really this -- I think this up-leveling that's going to happen as our agents take hold. The only question to us is how fast. And obviously, we're very committed to helping people adopt that sooner rather than later. I think it will happen quickly.

Yes. And to the second part of your question on mid-market and enterprise and the economics as we continue to move upmarket, it's built into the model that we shared with you. So we know that those markets come with different unit economics. Historically, we have a bias towards CAC payback because of our history as a bootstrapped company. In mid-market and enterprise, it's a little bit longer of a CAC payback, but still has a really nice healthy LTV to CAC. And we've been able to make the progress that we've made in mid-market and enterprise over the last couple of years while expanding our operating margins because we're really thoughtful about how do we continually increase the efficiency of each of our different customer groups and how we go to market for those specific groups.

DJ Hynes from Canaccord over here. Clearly, with the product expansion today, one of my takeaways was cross-sell is a tremendous opportunity. So Steve, for you and maybe Adil, it bleeds into product as well. As you think about that opportunity in the installed base, how much of that cross-sell motion can be product-led or driven by in-product messaging versus how much of that is kind of a direct sales effort and that bleeds into kind of efficiency in the model going forward?

Yes, I think, I'll start with the go-to-market motion because if you go back to the customer groups that I talked about of really having that diversity across entrepreneur SMB mid-market and enterprise. You'll remember in the slide, it was really about optimizing that product-led experience and entrepreneur. But that also transcends even into the mid-market and enterprise. If you look at our Customer Hub beta, I mentioned that we had 30% of those beta customers, they adopted the customer AI agent in product. So the product-led thread goes all the way across all segments, but we optimize very heavily for that digital experience in the entrepreneur and a big portion of our SMB. When it comes to the sales-led motion, it's very focused in how do you attach products at point of sale and cross-sell into the installed base, really centered around how do you bring marketing automation to life, how do you bring service to life. So it's less about calling a customer and saying, "Hey, do you want our service product?" It's much more how do we expand the maturity and capabilities you need as a customer to achieve the B2C CRM capabilities. And our partners are doing the same thing now as well, positioning the broader set of capabilities. So there's been some shift in the market and how people think about point products, and they're really starting to take hold of, oh, this marketing automation and service and analytics under the foundation of the data platform is a B2C CRM, that makes a lot of sense to me. So it increases our ability to really cross-sell products and attach.

Yes. I think the thing I would add -- I think Steve covered it well, but maybe the thing I would add is it's a pretty big area of investment for us from a product perspective to drive that cross-sell and attach. And I think there's ripe fruit there to pick, right? So first, on the talent side, we recently brought in Chris Miller, who is the VP of Growth and AI from HubSpot, who's, I think, one of the top PLG leaders in Boston. He is excellent. He's here at the conference. And we're -- I think not just from a talent perspective, but we're also making investments in the product, which is how do we make it easier for people to get. As Steve was saying, without having to pick up the phone call somebody, how can you quickly sort of add a new product to the portfolio or at least try it? And then how do you move quickly from that sort of like free to paid if you're doing a trial, how do we do that? And I think one thing that ties this back to the AI investment is if you are sort of like free to paid on a new product, having the scaffolding that we're driving with the AI agents and some of our sort of essential flows, essential campaigns, these kinds of capabilities sort of like gets you value right away so that you might not need to be convinced, right, to just sort of like drive the paid upgrade. So we're sort of investing on it across multiple fronts on the product side, and I think there's a lot here in terms of value for us in the months to come.

It's Mark Zgutowicz with The Benchmark Company. I just wanted to maybe zero in on enterprise and specifically where your sales capacity is there today relative to where you want it to be over the next few years. And Aman, as you look at your OpEx targets, sort of thinking about S&M leverage there, how much of enterprise is maybe heavy on that line item specifically for the foreseeable future?

Sure. Yes. We're continuing -- I'll go back to the efficient growth that we've continued to drive. And I think a lot of times when companies try to push into the enterprise as opposed to being pulled in the enterprise. They just hire a bunch of salespeople. And we've shown an ability to demonstrate really thoughtful expansion as that market continues to mature. And as I said in my presentation, the enterprise is -- we're early innings of the modernization that's happening. So we'll add capacity, but we'll also add product capabilities within product to make sure that we're keeping pace of the market. And we won't get out ahead of it is really how we think about it, keeping those unit economics in check along the way.

Yes. And in terms of how it builds into the model, it's built into our operating margin expectations that we just went through today. We've assumed that we're going to continue to drive significant growth there in the enterprise. And the way that we can make it work within the overall model is we have multiple customer cohorts who we serve. There's not only enterprise, but also entrepreneurs and SMBs, and we're continually partnering with Steve and team to think about for each motion, how do we make that as efficient as it can be, which lets us invest behind growing in these new areas while continuing to drive strong returns.

Yes. I'll make one last comment. That leverage, and this is something that Steve and Adil and Surabhi, our CTO, have been working on. There's leverage kind of across the board. I think when you apply AI internally, we talked a little bit about at the top, like there's actually a lot there. If you think about our customer base, we have 175,000, 176,000 customers. They all -- I mean we want to deliver a customer agent to them. So we're obviously using our own tech, right, to deliver a great experience to them. And what you find out pretty quickly is across those folks, if you can answer their questions well or give them advice proactively, this is even outside of our product. All of a sudden, you start to say we find our sales team, our customer team say, well, geez, if that works, like can I leverage that with larger and larger customers. So it both gives us leverage on the SMB part of our business, where all of a sudden folks, wow, I get a better experience because there's always on agent. That's obviously we're building our own, using our own there. And then enterprise go say, well, that's great. I actually don't have -- my questions aren't all that different. In some cases, they're a little more complex. So there's a little more we need to train the agent on. But we very much believe that's how this will work. So I think if you look at the unit economics when it comes to acquisition and cost to serve, et cetera, in enterprise, from the, let's say, the SaaS over the last 15 years, I think they're going to look different in the future because a lot more of that -- the experience is literally going to get better. I think the cost to serve or cost to acquire is literally going to change, right, reduce because of what we can do with AI. And that's something we're working very, very hard on internally. Obviously, it's something our customers want, but we need to be a customer of our own stuff.

Matt VanVliet from Cantor. I guess on that last element, it seems like you guys are taking a different approach to AI monetization rather than sort of nickel and diming your customers because you have to justify the amount of seats they're paying you yesterday to what they're going to pay tomorrow. So I guess as you think about that, how much can you leverage that getting into and replacing the legacy marketing stack by saying, we'll give all of it to you for just the cost of operating the value we give you. How much does that drive product development? How much does that drive go-to-market? Just love to hear kind of the bigger picture thought on monetizing what you've already built and is available today.

Yes, sure. So maybe I'll take the marketing agent and obviously, Adil, Steve, feel free to chime in on the customer side. So the marketing agent is really interesting. I think people tend to look at marketing as we can kind of overlay on a system, but you actually just want our marketing platform plus our AI on top. And the big thing that I'll double down on from earlier today is that I think there's a mistake a lot of companies are making where they're saying, like, look, I still -- I think we've had the right pricing model from the start, which is like index to the size of the business, not the number of people using the software, right? So you heard from our customers, a lot of very small but mighty teams are able to do a lot with millions or tens of millions of customers. They don't need a lot of seats. But they may have a lot of profiles, right? So we index off that. I think with AI, what we're going to find there is as we can show -- as we don't just add more to the users, the real rate limit there is the team's time and size. As we can do more of the work, drafting creative, showing them that, finding optimizations, running experiments for them that generate incrementality, people are willing to spend more. So a model, we're obviously working this with our customers now. But as an example, I think folks will say, "Hey, if today, you charge me a certain rate per profile because that's the value of that relationship. If you can grow the value of that relationship through the channels and the experiences that Klaviyo offers, I'll pay you a different rate for that." And that may be even differential based on the value of that customer. So while some of what we baked in today, we're making available to all of our customers. We already are anticipating something you can imagine a little bit like what Google and OpenAI are doing where it's like, yes, there's multiple tiers based on the types of the compute, right, and actually really the value that we're driving on top of that. And I think that's very natural to customers because they understand it's like, yes, yes, you're helping me with every one of these relationships. And as you make them more valuable, that's more valuable to me. I also like, hey, Klaviyo, you can share in that. Customer Agent, I think, is actually -- is interesting because there, it's a little less of like everybody -- I think with us, this is going to be a reason to replace your marketing stack with us. Customer and I actually think there's an opportunity there. We're actually not trying to swap out folks call centers. I don't know, Adil, if you want to speak. But like, hey, there actually, I think we can overlay quite well, and that's a really interesting model for how they serve customers and the number of experience or conversations they can deliver.

Yes. I mean I can just quickly start there and see if you want to add. I mean I think I would say that, yes, on Customer Agent, we can really index to the solutions, right? Like so how many problems did we solve? How many -- so it doesn't -- there's lots of ways to sort of think through the metering there and directly tie that back to value. So I think in the end, both are ultimately accretive to our customer. And then I think as AB said, we think about it being accretive to the business, and so we have sort of an incrementality framework internally and think about all the vectors of value to us. I don't think it has to be a direct monetization, right? I think it can be depending on a customer agent, it makes sense for us to do that. But in other cases, if it's making our customers more successful, we know that, that's going to accrue back to us, I think is the headline.

Yes. I would just add 45 seconds addition to this because don't lose sight of why customers -- enterprise customers are replacing their legacy stack. I was meeting with this customer, very large retailer, and I was meeting with the Head of Salesforce Development, he asked for a meeting with me and the Head of Product. And we're going through this. He's grilling me. Can you do these use cases? Can you do these use cases? And finally, I said, listen, I apologize like you asked for this meeting, but why are you even talking to me? And he said, because 80% of what my marketing team wants to do, it takes too long in my legacy tech. And I said, "Okay, you're just trying to control your own destiny. And he said, "Yes, I've got to find a solution to figure out how I satisfy the business because they're starting to look at Klaviyo." I said, great, we can help you with that. And by the way, all those developers, you can deploy those on higher-value things. So everything that AB and Adil said, 100% right. In the near term, there's still this opportunity to monetize these customers we haven't had a chance to monetize yet because they just can't move fast enough for sure.

Elizabeth Porter from Morgan Stanley. Thanks so much for today. We've seen a lot of really interesting technology. And I'd love to just better understand the opportunity as it relates to Agentic commerce. So AB, I'd love to get your view on if agents could start to replace some of the customer-facing funnel, what opportunity does Klaviyo have to serve as that engagement layer between agents and merchants? And what are some of the unique assets you have between the first-party data and the integrations to really capitalize on the opportunity?

Yes. So we spent a lot of time today talking about the releases we have that we're launching this quarter. That is all about doing -- making the active marketing more automated. But really interesting is how do we literally make a better buying experience. So it can be 2 things that we're already starting to play with. The first is on the customer agent side. I think it's very likely going to happen. We're starting with obviously text and chats. I think we'll get into audio. I think in the future, there's a reason why it could be video as well. Like all these things are now becoming possible. And there's a real question here. We talked about skills and developing those for the agent, like what are they allowed to do? What can they do? I think in the very near future, you're going to see from our customer agents say, hey, I need some product recommendations. Can you help me find the thing to buy? Okay, great. Can you just form that cart for me and allow me to check out? And there, whether it's integrating with our partners like Shopify and others or for folks that have more custom-built back ends, that's something we should be able to -- that's something we should be able to -- we're going to facilitate. And that's really interesting because I think the website just as an experience is about to go -- undergo a big overhaul. And one of the things we're considering is like, hey, how much is the website browsing experience. You heard from one of our customers, Princess Polly, like some people want browse around and that's a thing. So we'll facilitate. I'll talk about in a second, right? It's agenda conference. But some people, "Hey, I know what I'm looking for. Just help me direct me there, don't force me to click through a bunch of pages to find the product I want." And we think our customer agent should be able to do that, and it should be directly integrated into that experience, right? So it's going to happen on the customer agent side. We're already thinking about what that would look like on the e-mail, the text messaging, the mobile side. I think you're going to find that messaging and commerce just we close the loop. So instead of it being message, website, buy, it could just be message buy. And that shorting of the cycle, I think, is going to increase conversion rates. The business we talk to brands, they're like, yes, yes, we very much want that. So that's one. The other thing is when you think about the experience of, say, shopping or browsing, like what is the website, what's the future of the mobile app to look like? What's even the future of the in-store experience. We're already playing with some things of, hey, well, what does it look like if in your customer hub profile, we know a bit about you. I'll give you an example from my personal life. I do a lot of running and you go out and you buy running shorts and they all come in different lengths, right? And it's like it's not very helpful because 5, 7 -- I don't know how long my leg is, right? We're now building stuff in a Customer Hub where we know like things about you, like, say, your heights, and we can actually take that information and rewrite the web page so that we can show you or somebody like you as the model versus whatever the stock thing is for that apparel site. I think that's really, really interesting. In the in-store experience, as we start to experiment more with audio, I think the future of walking into a store rather than having to wait for somebody, a store associate to get some help, why can't you just take the expertise of that business and put it in a headphone? I think that's going to happen in short order. So when you walk into a store and say, hey, I'm trying to actually figure out I'm going on a trip, I need to figure what to buy. Maybe you want that to be a more personal conversation or you just don't want to wait in line. That's the kind of thing you can just do, and it might even be multimodal. It might be a bit of audio. It could also at the same time on your phone, show you the products and where to find them in the store. So these are all things that we're anticipating. And what's cool is like as we've talked about, it's very much the merging of we see the marketing side with kind of this customer agent more conversational side. So more to come on that. We've got some things cooking, but to be talked about in the future.

Derrick Wood at TD Cowen. You guys have this advantage of having a clean slate when it comes to building this new service product with AI first principles I'd just be curious, what are the kind of key differentiating factors when you look at kind of legacy systems out there today like a Zendesk? And as you look at the opportunity, do you see more of a greenfield opportunity down market, more of a replacement opportunity in the mid-market? What's going to be the focus as you go to market with service.

Maybe I can start if I can. Yes, I would say that there's a couple of key pieces, right, in terms of the principles that I think are fundamentally differentiating. I think the first is actually the connectedness of the systems, right? Because when you think about service, I think the big trend that's happening in the industry is the lines between sort of like service and sales are blurring, right? I think it used to be like service is only a thing you engaged in when a customer had a problem, right? Like something was wrong, and so now I'm reaching out to service. And I think you're seeing a lot more of the, hey, can you help me figure out what to buy right? Help me figure out this is my sort of lifestyle or these are the things about me, and I want some sort of guidance in the shopping experience, right? And I think that gets even further pushed by the question we heard earlier around AI and that sort of like if we're getting trained on this Agentic like, hey, I think I can actually talk to an agent to help me through the experience. And so I think as that point of contact comes earlier in the experience and not after a problem, then having that data in the profile across all of your marketing activity, all of the user's browsing and engagement activity becomes critically important. So I think that's principle number one. And then I think principle #2 is really just being AI first, right? So ensuring that you're leading with the AI, and it's not sort of this afterthought, right? So like the default mechanism as you send an e-mail to support at. And then like if you like try hard to find the AI, right? In our case, right, we're actually working on the beta of like the e-mail can be replied to by an AI, right? So all these things sort of being baked in, in the first-class way from an AI perspective, I think, is the next major piece there. I think I would start there, and then feel free if you want to add to that, but I think that's the headline for us, I think, is those 2 key pieces.

I think the one thing I would add from a go-to-market perspective is it also allows us to enter a customer in a different vector now. So not replacing a help desk, every customer, particularly enterprise customers are talking about agents. And we believe we have one of the best, if not the best, customer agent. So instead of starting with marketing automation solely, we have another entry point into a customer not to talk about replacing their help desk because they're more interested in how do I do a case deflection? How do I have customer conversations? And we have an exceptionally good solution there that allows us now to have conversations with customers, maybe we wouldn't have had in the past.

One quick thing to add about, I think is important is also the trend towards self-service. I mean, I know speaking for myself, I don't want to like, call, wait on hold or sort of engage with -- if I can solve the thing myself, I think that's important, and that's what Customer Hub comes in. And so the thing to stress about Customer Hub, I think is really special getting to the second part of your question is that it's like -- it's a no-code solution. I mean, you can flip a toggle button on in Shopify and that customer -- that whole hub, that whole slide out panel is essentially enabled instantly, right? And so that we have found even in beta to be incredibly powerful. We talked about this in a product keynote a little bit later. So, Grant, who leads our service product area, he's going to talk about Customer Hub in addition to the other two core service products. But I think what's really powerful about that is you can turn on Customer Hub and still have a third-party service tool. So for us, that's a pretty great sort of land-and-expand type motion of like, hey, you don't need to change anything. Like if you're on Zendesk or whatever else, that's fine, you can turn on Hub today. And you see the value of what Klaviyo is bringing you. And then you start to see the natural extension of like, okay, hey, maybe I should maybe try out Klaviyo help desk or Klaviyo agent.

Well, one color I'll make a little bit of historical context is we've thought for years about this customer service use case. And we're always -- I really want to build it because I was like me, like the hard part there is you have hundreds or thousands of people that are used to be workflow. And you could build something, you can obviously build something better. I mean there's always a level up. But everybody has to or wanting to adopt that new thing and you have to rebuild all of that functionality to point on the kind of the white space, the huge advantage we have there is, well, we don't have to solve for teams of hundreds of thousands. As far as we're concerned, there's just the Agentic layer. And that's incredibly powerful. One of the things that Adil and I and the team are working on, we actually thought about not even building a help desk products. Like what's a point? Like this is -- it's obviously not the future, right? But Adil and the product like it convinced me that no, no, we should do this. But literally as like a lever to help people adopt the customer agents. So we think it was like, oh, okay, I need to help Jasmine run my call center with a side of Agentic. So like, no, no, we thought it would be entirely a different way, right? Look, we know at the end of the day, all of your volume, most of your volume, the vast majority of it is going to run through agents. What we found was customers like, hey, that don't make sense. But yes, okay, I can put on top of what I have, but guys, can I just run your whole stack. So we say, okay, fine, we're going to build some of that. But we're going to be very cautious because most of our investment is actually going towards this agent layer because that's ultimately where it's ended up.

Scott Berg with Needham here. And kind of a follow-up to the service question that you had there. And your Nestle customer kind of spurred this earlier because I think this is my fourth Sales and Marketing Service event in 3 weeks I attend to. Is there's a lot of talk up market about how some different vendors are starting to think about and use things like agent functionality to support the broader service environment. But, when you think of the service functionality that you've released today, what are you seeing in your beta customers that suggest that the product market fit upmarket is a really good fit today versus maybe some of your smaller to midsized customers? Would love to understand kind of how that fits today. And if it's like the Nestle customer, are there still gaps or feature functionality that you think you have to build in to meet that larger customer?

Yes, sure. Do you want to take that one?

Yes, I'm going to start. And I think we can layer on if you want. I think there's a couple of key things. So in terms of PMF, we're seeing a bunch of key sort of data points that are validating. The first is just the incremental lift that people are seeing with customer hub activation. So for example, you have the slide out panel I mentioned where you sort of -- you can go in very quickly, get what you need in terms of resolution if you're a customer, right? So that's, hey, I want to see where my product is, I want help. I shifted to the wrong address, whatever you need to do, there's a lot of things that we can sort of deflect there. The value that we're seeing as we look at upmarket to the bigger brands is, hey, the fact that this on right away. I don't need to go talk to my IT team. I don't need to wait in backlog for them to get to this 6 months from now. I can move just turn it on and consider it myself in a no-code way seeing that really resonate. I think the second piece -- so that's sort of like time to value and just like getting it going. And what's exciting there is they -- like I said, they can -- even if they had a different -- hub is net new, right? So even if they have a third-party solution for service, they can turn on hub and see value right away. The other piece we're finding is incrementality just in their business because we have a recommended product block in Customer Hub that's personalized. So the nice thing about that is as soon as they turn that on, they're actually seeing lift, right? So they're seeing, hey, I'm actually -- I think Amazon is best in class at this, right, but they'll sell you products like in a return flow, right? Like you go through the thing is like, hey, you want to buy this other thing, right, which ends up being really valuable. And that's a thing -- that's a pretty complex piece of functionality to build if you're a retailer trying to build it for yourself. We sort of turn it on for everybody, right? With customer hubs. So we're seeing that land, I think, really, really well. And then I think on the AI side, with agent, what we're seeing people lean in on is how quickly they can sort of get it going with the trading sort of already on all their customer data, right, on the profile data as well as the product catalog and the sort of FAQ and other health content. So they're sort of able to get value right away. I think those are we're really seeing that are pretty positive.

Arjun Bhatia with William Blair. I have two questions. Maybe if you kind of just zoom out and think about the business and what it might look like in 3 to 5 years, how does the customer profile change from what you have today? Like we're talking about mid-market cross-sell, service. I think a lot of these things can be more upmarket oriented, but do you think the shift is going to move meaningfully higher. And then for Amanda, what do you -- what might that mean for gross retention? Is there a potential for that to increase as more cross-sell and mid-market, upmarket traction starts to layer in?

Yes. So let's say let's divide the world into enterprise and entrepreneurs and SMBs. In enterprise, here's a state of play. We have a handful of the Fortune 500, the Global 2000, that have engaged with Klaviyo in some way at this point. I know for certainty every single one of them is going to move towards an autonomous CRM like stack in the next 2 to 3 years. When that contract is up for renewal, they're going to say like, what is the future. It's moving that fast. And the value it's driving, right, both in terms of consumer engagement, and therefore, revenue performance as well as the cost savings. It's just so massive. They're going to replatform or they're going to double down on whatever is the best products. We believe all 4 of us, that is our opportunity. It's our opportunity to lose, right? We are the leaders there. We should go win all of those accounts. And I think you've heard it from all of our customers, they desperately want to unify the experience, one brain, I want marketing, all of those experiences, I want the customer side, service and all these is, as Bill said, the advice side, hey, tell me what's next. They want all of that integrated together. That's the future state. The only question to us is how fast can we get to that. And I think AI has accelerated that massively. I know you can ask us, but I also say on the -- and we're going to obviously do that globally, we should get for all segments. That's why you've such this like we're going to go quite quickly on this. We also want to be the place that every business starts. I think the -- there are a lot of businesses that will be the future Fortune 500s, Global 2000, out there. And when they start, we want to be that CRM stack they start with, and I think there's a huge opportunity for us to do that for any consumer business, and we're also focused on that as well.

And in terms of where it shows up in our numbers, yes, you're exactly right. As we grow in the mid-market and enterprise and as we expand and sell more products across our customers, that has the opportunity to increase our GRR. GRR as you saw, is already very strong for the mix that we have, but the retention among those mid-market customers is even higher. They take these decisions very seriously. And then once they've made them, they are very sticky. And then what we see in our data today is that multiproduct customers have even stronger retention than single product customers. So you grow more in the mid-market and you expand the number of multiproduct customers, and that creates great opportunity ahead.

Terry Tillman, Truist Securities. The $180 million of SMS. That was a nice juicy data point. to me, there was a lot earlier about SMS in the sessions or in the keynote, a lot of innovation. In the past, I think AB, I asked, why don't I just get aggressive and just go after all of your mid-market and enterprise customers, they should be using that channel right away. It feels like maybe there's more unlocked now because of things like RCS, 2-way, Geo-fencing. Do you think there's an opportunity here to even accelerate the attach rate now of the SMS and the mobile products with just some of the new things you're all doubting.

Yes. To answer your question, you're not wearing any of swag today. But yes, we'll take the question. You want to answer that?

I think there's two things happening. One is remember the slide I showed with all of the point products and people trying to stitch it together. I think we were playing in that kind of environment a couple of years ago where we were trying to have those great point products and helping them stitch together. We're still building great channels. But the big shift that's happened is customers want to know how do I make -- how do I really orchestrate across every one of those channels. And WhatsApp in international markets is becoming a -- it's obviously a big thing. Mobile is a big thing. And so what you saw was people had e-mail and they're like, oh, I think I'll try SMS we've got a little more sophisticated than that. And now they're looking at other channels. Now they're asking us, how do you orchestrate that better so that I know which channel, so channel preference, channel affinity for the profile instead of like stitching it together, how do I orchestrate it together. So that opens up all sorts of possibilities for us to sell all channels in the marketing automation suite because of the shift you're seeing in the market.

Yes. I think in customer conversations, just to reiterate quickly, like the thing that struck me is that the job to be done is very much retention marketing. People are not thinking about such specific channel anymore. They want to think about all of the channel at once because that's where the value is. So I think it's important to note that like -- I think that like the days of the point solutions are largely over.

That's why they're so excited about the omnichannel campaign builder because you can actually build a multi-week even a multi-month campaign, and we will orchestrate which channels at what point in time and show you how they're performing. So that you can make adjustments to that campaign along the way. They're not thinking any more e-mail SMS or thinking about what's the right campaign and the right channels to actually reach my consumers and you a unique and differentiated ways.

All right. Now our final question here.

Rob Oliver from Baird. Thanks for all the info today. Great stuff. My question is around Steve, I think you called out Accenture I think, on the slide, in particular, and there were a bunch of new enterprise logos up there, which is pretty impressive, and it was great to hear from Nestle 25 brands. So these are pretty impressive examples. But help us understand how ready from a partner perspective you guys are to really grow that number from the 600 competitive displacements with some of the SaaS legacy vendors that we know are vulnerable to a much higher number over the next few years. That's going to take security as Nestle called out, but it's also going to take a lot of real partner engagement. So where are we in that partner development, the ecosystems, the training that the practices. Help us understand that.

Yes, it's a great question. I think, first and foremost, remember what I said, we're in early innings on this modernization. My background is enterprise. I was at Okta as its Splunk. And when I got here, there was a big -- there's a lot of energy. Let's go to the enterprise, actually slowed us down because they said, look, we've got to build the portfolio out. Let's really nail our core market. And besides, the enterprise was not modernizing yet. So I think we've timed it really well in that we're getting pulled to the enterprise. We've got a really strong strategy now. So you're starting to see not just the Accentures of the world because GSIs take time. I've built Accenture relationships for many companies. But there's that middle tier 2, what I would just call regional SIs that I also showed. So you have these partnerships that are expanding their capabilities to SI-like capabilities I mentioned domain and eHouse that are also being pulled into the enterprise, where maybe a big GSI exists because they're looking for innovation from that partner. So it's not about just the GSIs, it's also about building the mid-tier. And so we have a really strong strategy and activation on how do we ramp up those capabilities to address this modernization that's really starting to get underway.

Actually, one thing the same way we're talking about customers are reevaluating their technology choices. Something that Steve and our partner team's really done a great job. Every single one of the rethinking what their portfolio of services looks like. And so there's a massive moment here, and we've had these conversations with the Accenture. I've also had this with the 5,000-plus agencies. What I was maybe initially a little worried about was how much they were going to kind of stick to what they know. What's been fascinating is really in the last 12, 18 months is all correct, they said, hey, help us rethink our entire business in the services we should be offering and Steve's team has done a wonderful job of, great, let's write you the new playbook of what that should look like and how that interacts with Klaviyo. So there's a real moment here. I think Steve rightfully say that we can step into, to go build some of those ratios and actually help work with them to co-develop maybe what some of their future practices should look like.

All right. Thank you all so much for the time. Thanks to everybody for joining us today. Just for those in the room, there are lunches outside that you can grab the keynote with Adil starts in about 15 minutes in the main keynote room. It also be streamed over here where several of you were watching earlier. We will be around for the rest of the conference. But again, go enjoy yourself, check out the expo, talk to customers, talk to partners. And thanks, everybody, for joining.