Klaviyo, Inc.KVYO
Klaviyo, Inc. Stock Compensation Disclosure
Stock-Based Compensation
Equity Incentive Plans
On September 1, 2015, the Company’s board of directors (the “Board”) adopted the 2015 Plan. The Board or, at its sole discretion, a committee of the Board, is responsible for the administration of the 2015 Plan. As of December 31, 2025, outstanding awards under the 2015 Plan include stock options and RSUs. Generally, 2015 Plan awards vest or are exercisable into shares of Series B common stock and are immediately reclassified to shares of Series A common stock based upon the employee's conversion election made at the time of the IPO. All equity grants subsequent to the IPO are made pursuant to the 2023 Plan, which was approved by the Board effective as of September 18, 2023. The Board or, at its sole discretion, a committee of the Board, is responsible for the administration of the 2023 Plan. As of December 31, 2025, the Company’s authorized common stock includes 74,700,704 shares of Series A common stock reserved for issuance of equity awards under the 2023 Plan, of which 55,563,432 shares are available for future grants.
The 2015 Plan provides for the grant of various types of stock-based compensation awards including, but not limited to, RSUs, incentive stock options (“ISOs”), non-qualified stock options (“NSOs,” referred to collectively with ISOs as “Options”) and restricted stock awards (“RSAs”) to directors, consultants, employees, and officers of the Company. ISOs may only be granted to employees, and the exercise price thereon cannot be less than the fair value of the Company’s common stock on the date of grant or less than 110% of the fair value in the case of employees holding 10% or more of the voting stock of the Company. The exercise price on NSOs must be at least equal to the fair value of the Company’s common stock on the date of grant. The Company has historically granted RSUs, ISOs, NSOs, and RSAs.
The 2023 Plan provides for the grants of various types of stock-based compensation awards including, but not limited to, RSUs, ISOs, NSOs, and RSAs. During the years ended December 31, 2025, 2024 and 2023, the Company solely granted RSUs as further described below.
Stock Options
Options generally vest over 4 years with the first 25% of the award vesting upon the 12-month anniversary of the vesting commencement date and the remaining 75% vesting monthly over the following 3 years. Grants of Options shall not be exercisable after expiration of 10 years from the date of grant or such shorter period specified in the associated award agreement. Options may not be transferable except by will or by the laws of descent and distribution and domestic relations orders. The 2015 Plan does not allow for the early exercise of Options. The Company did not grant any Options during the years ended December 31, 2025, 2024 and 2023.
Option activity for the year ended December 31, 2025 is as follows (in thousands, except per share data):
| Number of Options | Weighted Average Exercise Price (Per Share) | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at January 1, 2025 | 25,164,415 | $ | 0.29 | 1.21 | $ | 1,030,511 | |||||||||||||||||
| Exercised | (22,938,436) | 0.10 | |||||||||||||||||||||
| Forfeited and expired | — | — | |||||||||||||||||||||
Outstanding at December 31, 2025 | 2,225,979 | $ | 2.27 | 3.25 | $ | 67,215 | |||||||||||||||||
Exercisable at December 31, 2025 | 2,225,979 | $ | 2.27 | 3.39 | $ | 67,215 | |||||||||||||||||
The total intrinsic value of Options exercised during the years ended December 31, 2025, 2024 and 2023 amounted to $797.8 million, $177.7 million and $54.7 million, respectively.
Restricted Stock Units
During the years ended December 31, 2025, 2024 and 2023, the Company granted RSUs to employees under the 2015 Plan and 2023 Plan. In general, RSUs granted under the 2015 Plan vest upon the satisfaction of both a service-based vesting condition and a performance-based vesting condition. Generally, the service-based vesting condition requires the grantee to remain an eligible participant, as that term is defined in the 2015 Plan, for a period of 4 years. Generally, RSUs vest quarterly over the entire 4-year period or vest 25% after 1 year, with the remainder vesting quarterly over the following 3 years. The performance-based vesting condition was satisfied upon the occurrence of the IPO. In general, RSUs granted after the IPO under the 2023 Plan vest upon the satisfaction of service-based vesting conditions only. These service-based vesting conditions are consistent with those under the 2015 Plan detailed above.
Restricted stock unit activity for the year ended December 31, 2025 is as follows:
| Number of Units | Weighted Average Grant Date Fair Value | ||||||||||
Unvested and outstanding at January 1, 2025 | 17,421,450 | $ | 28.33 | ||||||||
| Granted | 8,059,711 | 32.82 | |||||||||
| Vested | (7,162,263) | 28.39 | |||||||||
| Forfeited | (3,768,443) | 29.20 | |||||||||
Unvested and outstanding at December 31, 2025 | 14,550,455 | $ | 30.56 | ||||||||
The fair value of the RSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $252.3 million, $158.1 million and $214.7 million, respectively.
Employee Stock Purchase Plan
On August 24, 2023, the Board adopted the ESPP pursuant to which eligible employees may contribute up to 15% of their base compensation to purchase shares of the Company’s Series A common stock at a price equal to 85% of the lower of (1) the fair market value of a share of the Company’s Series A common stock at the beginning of the offering period and (2) the fair market value of a share of the Company’s Series A common stock on the purchase date. The ESPP provides for 12-month offering periods beginning January 1 and July 1 of each year, or the next trading date thereafter. Each offering period consists of two -month purchase periods. As of December 31, 2025, the Company has 10,670,780 shares of Series A common stock available for issuance pursuant to purchase rights granted to the Company’s eligible employees under the ESPP. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2024, by the least of 6,200,000 shares of the Company’s Series A common stock, 1% of the outstanding number of shares of the Company’s Series A common stock and Series B common stock on the immediately preceding December 31, or such lesser number of shares as determined by the administrator of the ESPP.
The fair value of employee options granted under the ESPP is based on a 15% purchase discount off the grant date quoted trading price of the Company’s Series A common stock and is estimated using the Black-Scholes option-pricing model with the following assumptions:
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
Risk-free rate | 3.96% 5.33% | 4.79% - 5.33% | ||||||
| Expected term | 0.5 - 1.0 years | 0.5 - 1.0 years | ||||||
| Volatility | 45.90% - 60.32% | 45.90% - 64.12% | ||||||
| Expected dividends | — | — | ||||||
The interest rate is based on the U.S. Treasury bond rate at the date of grant with a maturity approximately equal to the expected term. The expected term is based on the term of the offering period. The expected volatility for the common stock is based on the average of the Company’s historical volatility over the expected term of the award. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The fair value of the common stock is the closing price of the stock on the date the offering period starts.
The Company recognized stock-based compensation expense related to the ESPP of $5.8 million and $4.3 million during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, $2.6 million of unrecognized stock-based compensation expense related to the ESPP is expected to be recognized on a straight-line basis over the subsequent 6 months. The weighted average grant date fair value of ESPP awards granted during the years ended December 31, 2025 and 2024 was $10.63 and $9.28 per share, respectively.
During the year ended December 31, 2025, the Company issued 462,681 shares of Series A common stock under the ESPP.
Modifications
During the year ended December 31, 2025, the Company modified one employee’s stock-based awards to accommodate their employment transition by changing the timing of the service-based vesting condition of 121,969 RSUs. This resulted in incremental stock-based compensation expense of $1.4 million during the year ended December 31, 2025.
During the year ended December 31, 2025, the Company provided nineteen terminated employees with accelerated vesting on the service-based vesting conditions of 42,781 RSUs. These modifications resulted in incremental stock-based compensation of $1.1 million during the year ended December 31, 2025.
During the year ended December 31, 2023, the Company extended the expiration dates of four employees’ Options. The extension of the expiration date impacted 1,004,667 granted Options, resulting in incremental stock-based compensation expense of $0.8 million during the year ended December 31, 2023.
During the year ended December 31, 2023, the Company accelerated the vesting start dates of two employees’ RSUs. The modification impacted 167,500 previously granted RSUs that were Double-Trigger awards in which the liquidity-based vesting condition was not considered probable at the date of modification. As the liquidity-based vesting condition was met upon the IPO, the impact of the modified RSUs is included in the total stock-based compensation recognized during the year ended December 31, 2023.
On April 10, 2023, the Company approved an amendment to the vesting schedule of 4,250,947 RSUs governed by the 2015 Plan. Specifically, the vesting schedule of these RSUs was amended to align with the Company’s standard four quarterly vesting dates that were established on a prospective basis in June 2022. This modification impacted 657 grantees, and all RSUs that were modified were Double-Trigger awards in which the liquidity-based vesting condition was not considered probable at the date of modification. As the liquidity-based vesting condition was met upon the IPO, the impact of this modification is included in the total stock-based compensation recognized during the year ended December 31, 2023 and is based on the fair value of the award on the date of modification.
On March 15, 2023, the Company announced a reduction in workforce that resulted in the termination of approximately 8% of the Company’s full-time workforce (130 employees). As part of the reduction in workforce, the Company modified 608,698 previously granted Options and 64,301 previously granted RSUs. During the year ended December 31, 2023, the Company incurred an incremental stock-based compensation expense of $0.6 million related to the modification of Options. All RSUs that were modified were Double-Trigger awards in which the liquidity-based vesting condition was not considered probable at the date of modification. As the liquidity-based vesting condition was met upon the IPO, the impact of the modified RSUs is included in the total stock-based compensation recognized during the year ended December 31, 2023 and is based on the fair value of the award on the date of modification.
Stock-Based Compensation Expense
During the years ended December 31, 2025, 2024, and 2023, the Company capitalized $4.4 million, $3.6 million, and $1.3 million of stock-based compensation expense related to services performed on capitalized internal-use software, respectively.
Stock-based compensation included in the Consolidated Statements of Operations and Comprehensive Loss is as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of revenue | $ | 7,891 | $ | 8,917 | $ | 24,973 | |||||||||||
| Selling and marketing | 49,725 | 40,907 | 107,954 | ||||||||||||||
| Research and development | 68,178 | 50,693 | 120,184 | ||||||||||||||
| General and administrative | 36,237 | 34,695 | 87,688 | ||||||||||||||
| Stock-based compensation, net of amounts capitalized | 162,031 | 135,212 | 340,799 | ||||||||||||||
| Capitalized stock-based compensation expense | 4,416 | 3,555 | 1,349 | ||||||||||||||
| Total stock-based compensation expense | $ | 166,447 | $ | 138,767 | $ | 342,148 | |||||||||||
As of December 31, 2025, total unrecognized compensation cost related to unvested RSUs was $366.5 million, which will be recognized over a weighted-average remaining period of 2.6 years.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.