Klaviyo made its AI agent free to every customer. Ten days later Goldman pulled its Buy
Goldman Sachs cut Klaviyo to Neutral on October 16 with a $20 target, saying it cannot see when AI agents and the company's other new bets will reach the profit line. Klaviyo had opened its Composer agent, backed by a SQL engine, to every customer free of charge on October 6.
Vincent Jiang · 3 min read
A buy rating that barely outlived the summer
Goldman Sachs−1.27% — Goldman Sachs, down 1.27 percent today pulled its Buy on Klaviyo on Friday, October 16 12, ten days after the company opened its AI agent to every customer for free 7. Analyst Callie Valenti cut the stock to Neutral and lowered her price target to $20 from $27 12, ending a Buy held only since late June, the same month Klaviyo−5.58% — Klaviyo, down 5.58 percent today launched its coordinated AI agents 13.
Klaviyo (KVYO), whose email and text marketing software serves roughly 196,000 merchants, most of them online stores 8, closed at $17.08, down 5.58% on the day and 47.4% since January 4. The same note flipped the pair: rival Zeta Global−6.41% — Zeta Global, down 6.41 percent today, up 65% this year, went to Buy at a $45 target 5.
Goldman cannot see when the new bets get paid
Valenti concedes agent adoption "has been encouraging" and says Goldman stays positive on the long-term opportunity 5. Her industry conversations, though, find small businesses "more likely to experiment with AI or prioritize horizontal tools before adding new application spend," which could lengthen the monetization ramp for agents, its Service product and other newer releases 5. Goldman now models Klaviyo's 2027 revenue and EBIT 1% and 4% below consensus, with Shopify−5.47% — Shopify, down 5.47 percent today merchants still 78% of annual recurring revenue 5.
Klaviyo's answer: hand the agent to everyone for free
Klaviyo's move runs the other way. Composer, its marketing agent, left preview on October 6 and opened to every account, free plan or paid, trade press reported 7. Behind it sits a SQL engine that answers plain-English questions on customer data, and an MCP server, the connector that lets AI tools such as Claude or ChatGPT work inside Klaviyo 7.
The profit bill was booked first: guidance issued on August 5 puts third-quarter revenue at $377 to $381 million, up 21.5 to 22.5%, with non-GAAP operating income, a company-adjusted profit measure, at $40 to $43 million 1. That follows $50.9 million in the second quarter 1. At the midpoints, revenue rises about 2.3% sequentially while profit falls about 18% 1.
The guide has revenue inching up while profit drops about 18%
- Revenue
- Non-GAAP operating income
- Estimate
Data
| Revenue | Non-GAAP operating income | |
|---|---|---|
| Q2 '26 | $370.6M | $50.9M |
| Q3 '26e (estimate) | $379M | $41.5M |
The slowdown the downgrade is made of
The cut lands on a three-year deceleration, from 47.5% growth in late 2023 to 26.4% in the second quarter 9, with the guide pointing lower still. That quarter was not weak: revenue of $370.6 million beat the $362.1 million consensus 4, free cash flow reached $82.9 million 1, and customers spending more than $50,000 a year grew 36% to 4,477 1. Research firm Benchmark had already cut to Hold on August 6, and 23 analysts still carry an average Buy with a $26.24 mean target 4.
Klaviyo's revenue growth has halved in three years, and its own Q3 guide takes it lower still
- Revenue growth, % year over year
- Estimate
Data
| Revenue growth, % year over year | |
|---|---|
| Q3 '23 | 47.5% |
| Q4 '23 | 38.8% |
| Q1 '24 | 34.5% |
| Q2 '24 | 35% |
| Q3 '24 | 33.7% |
| Q4 '24 | 34% |
| Q1 '25 | 33.3% |
| Q2 '25 | 31.9% |
| Q3 '25 | 32.2% |
| Q4 '25 | 29.6% |
| Q1 '26 | 27.9% |
| Q2 '26 | 26.4% |
| Q3 '26e (estimate) | 22% (21.5–22.5%) |
What the November 4 report has to prove
Part of Friday's damage was the tape: the upgraded Zeta fell 5.19% anyway, in a week the Nasdaq dropped 4.5%, its worst since late June 6. And a $20 target on a stock trading at $17.08 still leaves room for the shares to rise, so the call amounts to waiting for results, not exiting 4. Klaviyo reports third-quarter results on November 4 34. Adoption is encouraging, Goldman concedes 5. What Goldman cannot yet see is when any of it shows up as revenue.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
