Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2026 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”).
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| Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the allowance for doubtful accounts, determination of revenue recognition under ASC 606, Revenue from Contracts with Customers (“ASC 606”), estimated benefit period of deferred contract acquisition costs, estimated life of prepaid marketing expense, and historical valuation of common stock and stock-based compensation. The Company evaluates estimates based on historical and anticipated results, trends, and various other assumptions. The Company assesses these estimates on a regular basis; however, actual results could differ from these estimates.
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| Shopify Collaboration Agreement | Shopify Collaboration Agreement On July 28, 2022, the Company entered into a collaboration agreement with Shopify Inc. and certain of its affiliates (collectively, “Shopify”) to form a strategic relationship for the purposes of creating greater interoperability between the Klaviyo and Shopify platforms and forming a strategic product, distribution, and marketing relationship. Shopify became a related party upon execution of this agreement. The Company determined that Shopify is a vendor and not a customer, as the collaboration agreement is a services contract under which the Company is receiving marketing services from Shopify in exchange for payments under the revenue sharing agreement. The revenue sharing agreement is a mechanism for Shopify to be compensated for the customer acquisition and marketing services Shopify is providing to the Company. Shopify is not a reseller or distributor of our platform, nor does Shopify provide any services on the Company’s behalf. Fees paid under the revenue share agreement are recognized as a component of selling and marketing expense in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During the three months ended March 31, 2026, the Company incurred $8.9 million related to fees paid under the revenue sharing agreement. During the three months ended March 31, 2025, the Company incurred $7.9 million related to fees paid under the revenue sharing agreement. As of March 31, 2026 and December 31, 2025, the Company had $2.9 million and $3.0 million in accrued expenses owed to Shopify for fees payable under the revenue sharing agreement, respectively. As of March 31, 2026 and December 31, 2025, the Company had $3.0 million and $3.0 million, respectively, in accounts payable owed to Shopify for fees payable under the revenue sharing agreement. During the three months ended March 31, 2026 and March 31, 2025, the Company capitalized prepaid marketing expense of $8.1 million and $8.1 million related to the vested warrants issued as consideration for the collaboration agreement, respectively. For the three months ended March 31, 2026 and 2025, the Company recorded marketing expense of $13.2 million and $13.2 million in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) as a component of selling and marketing expense related to the amortization of the prepaid marketing expense. As of March 31, 2026 and December 31, 2025, the Company’s prepaid marketing expense was $127.7 million and $132.8 million, respectively. As of March 31, 2026, there was $176.3 million of unrecognized marketing expense related to the warrants that will be recognized over 3.3 years. See Note 10. Common Stock and Stockholders’ Equity for further discussion of the warrants.
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| Stock-Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation on awards granted under stock compensation plans, which are described in more detail in Note 12. Stock-Based Compensation. The Company measures stock-based compensation awards, including stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”), based on the estimated fair value of the awards on the date of grant. Stock-based compensation expense is recorded for awards issued to employees and non-employees at fair value with a corresponding increase in additional paid-in capital. Forfeitures for all types of awards are recognized when they occur. RSUs granted under the Company’s 2015 Stock Incentive Plan (the “2015 Plan”) are subject to both service-based and performance-based vesting conditions, whereby the performance condition is satisfied upon occurrence of a liquidity event. Upon the effectiveness of the Company’s registration statement on Form S-1 filed with the SEC in connection with its IPO in September 2023, the performance condition was satisfied and cumulative compensation cost was recognized using the accelerated attribution method. Compensation costs continue to be recognized under this method as the RSUs vest over the remaining service period. Generally, 2015 Plan awards vest or are exercisable into shares of Series B common stock and are immediately reclassified to shares of Series A common stock based upon the employee’s conversion election made at the time of the Company’s IPO. The fair value of each RSU grant is calculated based on the estimated fair value of the Company’s common stock on the date of grant, or, if modified, the date of modification. RSUs granted under the Company’s 2023 Stock Option and Incentive Plan (the “2023 Plan”) are for shares of Series A common stock and are subject to service-based vesting conditions only. Compensation costs related to these awards are recognized using the straight-line method over the service period of the award. The fair value of each RSU grant is based on the fair value of the Company’s Series A common stock on the date of grant, or, if modified, the date of modification. The Company has granted PSUs under the 2023 Plan that are for shares of Series A common stock and are subject to service-based and performance-based vesting conditions. Compensation costs related to these awards are recognized using the graded vesting attribution method over the requisite service period when it becomes probable that the performance target will be achieved. The fair value of each PSU grant subject to service-based and performance-based vesting conditions is based on the fair value of the Company’s Series A common stock on the date of grant, or, if modified, the date of modification. The Company has additionally granted PSUs under the 2023 Plan that are for shares of Series A common stock and are subject to service-based and market-based vesting conditions. Compensation costs related to these awards are recognized using the graded vesting attribution method over the requisite service period. The fair value of each PSU grant subject to service-based and market-based vesting conditions is estimated using a Monte Carlo simulation. Rights granted to employees to purchase shares of Series A common stock under the Company’s 2023 Employee Stock Purchase Plan (the “ESPP”) are subject to service-based vesting conditions only. Compensation costs related to the ESPP are recognized using the straight-line method over the service period of the award. The fair value of the estimated shares of Series A common stock to be purchased is computed as the sum of (a) 15% purchase discount off the grant date quoted trading price of the Company’s Series A common stock and (b) the fair value of the look-back feature of the Company’s Series A common stock on the grant date, which consists of a call option on 85% of a share of Series A common stock and a put option on 15% of a share of Series A common stock.
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| Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments with a remaining maturity of three months or less when purchased to be cash equivalents. As of March 31, 2026 and December 31, 2025, the Company had cash equivalents of $376.1 million and $325.9 million, respectively, in money market funds. As of March 31, 2026 and December 31, 2025, the Company had a current restricted cash balance of $0.7 million and $0.7 million, respectively. Restricted cash as of March 31, 2026 and December 31, 2025 related to the Company’s required collateral to fund payroll and credit card obligations in its Australian entity as well as collateral required to be held as a result of the Company’s office lease in Australia. Restricted cash is included in current assets for obligations that expire within one year and is included in non-current assets for assets that expire more than one year from the balance sheet date.
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| Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. The new guidance requires additional disclosure related to the disaggregation of income statement expense categories. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements. In September 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software. The new guidance amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. ASU 2025-06 is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-06 on its consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The new guidance is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. ASU 2025-11 is effective for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11 on its interim condensed consolidated financial statements and related disclosures. There are no other new accounting pronouncements that have been issued that could have a material impact on the Company’s financial position or results of operations.
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