CRM
Salesforce, Inc.
stock NYSE

$10k to invest in SaaS rebound. $NOW or $CRM?

"We help businesses convert 20–40% more leads using AI-powered follow-up, WhatsApp automation, CRM, and appointment booking."

In my opinion, this company has been unfairly bucketed with the rest of SaaS which has created a massive and generational buying opportunity. For Klaviyo, the AI disruption is not only wrong, but it actually is the opposite. This company will and already does benefit massively from AI adoption and advancement. This from both a platform level and pricing level.
Company: Klaviyo
Ticker: KVYO
Market cap: $4 billion USD
Current Stock Price: Roughly $13.25. Was trading between $25-35 most of 2025 before SaaS got hammered. Hit a high of $50 or so
2025 revenue: Roughly $1.2 billion
2026 revenue guidance: Roughly $1.55 billion
Misc: Nearly $1 billion in cash and effectively 0 debt
What is Klaviyo? They are an AI-powered B2C CRM and marketing automation platform. It helps businesses grow by unifying customer data and automating highly personalized messages across email, SMS, WhatsApp, and mobile push notifications. They are the go-to communication platform for any brand that cares about knowing their customers and making money. They have an absolute stranglehold in the Shopify space. 
But wait? A CRM and email/sms platform can just be vibe coded! Well yes, but you can’t just make up the underlying customer data. Also, there is no world where you negotiate better email/sms rates for yourself. Even if somehow you did, your delivery, open rates, conversion, etc would be absolute DOG SHIT and cost you thousands to millions in revenue every year (or month, depending on the brand). 
Now I know you regards like to apply the “data moat” buzzword to every shit SaaS stock you hold and are down 80% on, but with Klaviyo the underlying customer data is what brands NEED to actually see ROI. This is the differentiator.
What Klaviyo is under the surface is a customer database with 8 BILLION customer profiles (collected over their 13 years of existence) and process billions of events every single day. Some examples of the data include:
\- purchase history
\- product interactions
\- website behaviour
\- customer lifetime value data
\- commerce intent data
\- customer profiles
Let those numbers sink in. This data is all 1st party data BTW. 
Access to this data is what allows a brand to know when to send a message, to whom, and with what content. The platform is fundamentally a customer database connected directly to commerce activity. 
This advantage allows Klaviyo to beat any random AI native email platform that has no customer data to work off. A few points below I give a concrete example comparing Klaviyo to some vibe coded garbage.
Oh, and they have always billed on usage, NOT on seats. So ai workflow adoption improve within the platform, the more they can bill.
Now let me break down the key themes as to why klaviyo is undervalued IMO:
1. Current valuation disconnect 
Klaviyo trades at a materially lower revenue multiple than many SaaS peers despite growth being comparable or better. They currently sit at less than a 3x rev multiple 
The attached chart shows KVYO at around 22-23% NTM growth but trading at a lower multiple than many slower-growing names (BTW, their growth rate is likely a lot more than this, I’ll explain the sandbagging later). Oh, they’re also profitable
2. Rule of 40
Revenue growth remains among the strongest in public SaaS, even with the sandbagged guidance
Recently crossed into meaningful profitability and maintain strong margins. Non gaap operating margins at roughly 14-15%, while gross margins are at 75%
3. Management Has a History of Sandbagging
Consistently guided conservatively and then materially beat expectations over the past two years. They have only been public since late 2023
In 2024 they guided around 27% revenue growth but then finished the year at 34% revenue growth, while in 2025 they guided 23% and then finished with 32%. This year they guided 21% initially and already raised to 22%.
Q1 results (28% growth) is additional evidence that current guidance may again prove conservative. Just by the math alone there seems to be almost no way that growth will be under 25% over the year. The business would have to fall flat on its face for that to happen (hint: it wont)
Management explicitly stated that revenue from their new Customer Agent tool contributions were not fully reflected in guidance. They stated that eventually they see this new tool being as big or BIGGER than their current marketing offerings. Customer agent is a chatbot + helpdesk offering that also sits on top of their dense customer data layer. 
My guess is that they will end the year between 25-30% revenue growth
4a. AI Is an accelerator not a disrupter 
Klaviyo owns one of the largest collections of first-party commerce data in the industry 
An AI-generated marketing campaign is only as good as the customer data feeding it.
AI can generate emails. AI cannot magically recreate years of purchase history, browsing behavior, customer profiles, and attribution data. AI would still need to answer to questions like:
\- which customer should receive this message?
\- which customer is likely to churn?
\- which customer will buy again?
\- which customer is high ltv?
But Klaviyo CAN answer those. So the better AI gets, the more valuable the underlying data becomes
I want to explain the stark difference comparing Klaviyo to some vibe coded BS in a real life example. The idea here is  predicting who will buy
Let’s say a merchant has 500k customers and wants to know: Who is most likely to purchase in the next 30 days?
The vibe coded klaviyo knows:
\- Last site visit
\- Last purchase
\- Email opens
= can make a decent prediction.
Klaviyo instead learned from:
\- Millions of similar stores
\- Billions of purchase events
\- Historical customer journeys
Klaviyo knows that:
\- Customers who buy Product A and revisit within 7 days convert 3.4x more often
\- Customers who stop opening emails after 45 days have an 80% higher churn risk
\- Customers exhibiting Pattern X respond better to SMS than email
These improvements in prediction accuracy create enormous ROI.
Now lets look at a revenue example for a brand that generates:
\- $10 million annual revenue.
\- current email marketing revenue at $3 million.
..If better targeting increases conversion rates by only 10%:
$3M × 10% = $300,000 additional revenue.
If Klaviyo charges $30,000-$50,000 annually, the ROI is obvious.
4b. They have AI products in the pipeline:
1) Product 1 (already available to customers): AI Customer Service Agent - this is a helpdesk + chatbot, or in other terms the AI representative of your brand. You can imagine how important underlying data here becomes vs some random AI startup with no data to work with
2) Product 2: Composer. This is the agent within Klaviyo where you can easily prompt campaigns to be made, instead of manually building them out. 
5. Enterprise Expansion Is crushing
Historically viewed as SMB and midmarket-focused, but enterprise adoption continues accelerating.
In q1 they reported 38%YoY growth in their enterprise segment
They hired former Workday CEO to co-CEO with the current CEO/founder to help accelerate this further. The recent CRO hire also comes from Workday. If you are not regarded and know anything about Workday, they are enterprise focused completely
They are also expanding aggressively and successfully in Europe
6. NRR is crushing
Existing customers continue adding products and increasing platform spend. They don't leave.
NRR at 110%
7. Shopify Relationship
Deep integration with Shopify ecosystem.
Klaviyo brings Shopify business as well
Shopify has a 5% stake in Klaviyo
Many dingbats use Shopify as a bear case and that Klaviyo is too deeply reliant… if you know anything about this space, you know that Shopify absolutely benefits from a growing and successful Klaviyo. There is no world where they can make their own version of Klaviyo and have it be anywhere near as good. Also, why nuke your own investment? It is more likely that Shopify outright buys Klaviyo one day IMO
8. Founder-Led Company
Founders are still heavily involved with significant ownership. Andrew Bialecki is the co-founder and now holds a co-CEO title along with the new ex Workday CEO, Chano. Andrew is focusing on the AI side while Chano focused on enterprise penetration (like your wife's boyfriend) 
9. Klaviyo recently authorized a $500 million share repurchase program, including an immediate $100 million accelerated share repurchase.  
At announcement, the authorization represented roughly 9-10% of market capitalization 
TLDR:
The market is valuing Klaviyo like a generic SaaS company that AI will commoditize, while the reality is that it is becoming a profitable, enterprise-focused, first-party commerce data platform whose moat actually strengthen as AI takes over.
The fun part: I hold roughly 16,200 shares at a $15 average. I am adding on any dips and my target is first $30-35, and then $50+
Bear case:
1. Some argue they are too dependent on Shopify, and if Shopify decided to build out a legit competitor, it would put pressure on Klaviyo.
\\>See above why i dont believe in this bear case
2. Klaviyo cant successfuly and meaningfully break into enterprise and remain smb and midmarket focused.
\\>Again above you can see why i dont think this is an issue
In conclusion…. This is NOT financial advice and like all of you, i am regarded. Do your own research and buy at your own risk.

MSFT, NOW, CSU. I like CSU the most. The large ERPs like CRM and SAP probably will too. INTU and ADBE, while cheap on financial metrics, I think will slowly bounce back.

CRM is so cheap

I agree on the ERP side, but there are plenty of SaaS companies that are not ERP. Think of something like jira.
Jira is simple out of the box but hard to customize team to team. If you want the basic functionality, AI can build that in an hour. If you need something complicated, Jira customization is difficult enough that it may be worth just building your own with AI. Then you get it exactly how you wan.
Major caveat is AI needs gets good enough to outperform SMEs using SaaS vs SMEs creating their own product.
But the SAPs, Dynamics, CRM. Those are here to stay imo.

I see CRM has 15 billion fcf, why did they use a loan instead of fcf to buy back their shares

One counter argument I could speak to in the realm of ERP systems (maybe CRM idk) is that it's nice when you can hire people with knowledge of a big system. Like with home brewed software at a large company you have to teach people how to use it and continuous improvement efforts can be more difficult because the capabilities aren't sitting there dormant, they just don't exist.
I'm not disagreeing with you. Just adding to the conversation with some counter thoughts. You brought up some good points in later comments.

I opened a position in CRM this week. It checks all the boxes from a fundamentals and MoS perspective for me. I strongly believe AI is going to be a significant catalyst for CRM in the long run.

Being a SaaS entrepreneur/investor who has had private excite, I think about this al lot.
To me the issues come down to margins and monopolies.
Margins: So I personally can vibecode an app in a week-month that competes with most software that an enterprise uses. A company could have one employee with software background managing a tool. This impacts margins for Service Now, CRM, etc. because the company can say for $500K per year we have a decent replica. The CRM contract may be $2M per year and they have to cut it by 75%. As AI improves, the margins will be impacted more and more.
Monopoly: Now home grown software is reducing margins, but what about for smaller companies that can’t pay $500K per year? To actually go to market with software for these smaller companies will still require hundreds of millions in advertising. This is where your large SP500 type companies come in. Even companies that are non-SaaS companies will create software in valuable markets because it only takes a small team to do so and the moat is simply the advertising capital.
Advertising — will get more valuable as it’ll be a strong SaaS moat
Software developers — probably lower paid but still
abundantly used for next 10-20 years.
Licensing - Companies like Spotify and Netflix will be the most valuable SaaS type offers, where software is just the presentation of very complex license agreements.
Genuine content is king as long as copyright holds up. Advertising will be the largest industry in the world.

I also have VEEV on my watchlist 😄. The only thing that gives me pause is their relationship with CRM. Seems that I need to have conviction in both (which you have). Is REL = RELX? I also had it on my watchlist, but not a priority, as relatively close to Wolters Kluwer in its business model.

The only thing that bothers me about global diversification is having a bunch of different currencies, but that's not really a big deal.
Something to be aware of is that not every country operates on the same rules. I found this out holding Mercedes stock. My dividend got taxed, like it doesn't here in the UK. I still did well on the shares, though.
Good investments are good investments. Shares, property, land. Burry shorting housing bonds. Use your knowledge and insights. Things you understand that the analyst with a Bloomberg screen doesn't. Because these guys aren't reading really detailed stuff about the Middle East. They don't understand what AI does. Mostly they just follow the herd and say something vaguely plausible. Look at the absurd target prices for Tesla and SpaceX, all based on Elon's Medicine Shows that everyone who has a reasonable grasp of the technical details know are exaggerated.
I own companies in the USA, UK (and of those, some really aren't UK businesses but just trade on the exchange like Energean), Hong Kong. I have owned various European businesses in the past, and got close to buying Argentinian banks (missed an opportunity there). They're all about where the narrative is wrong and I can apply some insight. I've done the details. I can see massive sell-offs where people's risk assessment is very poor. If you know about SAP, get some (I've considered it myself but went with NOW, CRM, VEEV and REL).

Companies aren't going to replace these systems right away. It will happen incrementally and over time. One scenario that I can imagine is a large company creating their own product, but deploying it initially to non-critical teams.
And for small and midsize companies, products like Salesforce may be overkill anyway. I worked at a company in the 2000's and we used a homegrown CRM in our call center. It was shitty, but it got the job done. The company was all about keeping expenses low and so that's what we did.
I worked for another company, a large one, that created their own internal version of Zoom and it worked great. Something like that would no doubt be even easier today with the new development tools that are available.
I think a lot of companies will be interested in building their own tools, but will struggle with it and probably fail at first. The issue won't be the actual coding part, but all of the other aspects of software development, i.e. defining features, supportability, change management, communications, etc. All of that stuff is still necessary. So it will take time for organizations to really develop those internal product development muscles. But it will happen.

Like which billion dollar companies? And wouldnt microsoft be able to create that more efficient CRM with ai too? Couldnt microsoft with so much money be able to create more of those agents?

I know of examples of billion dollar companies using agents to create a more efficient CRM than the current Microsoft product. When their license ends they will be using agents that sit on top of their data warehouse.

Oh yes, Claude, if you don't mind. I have fourteen million customers using 739 legacy billing packages on my Comverse platform I need to migrate to Amdocs. So please replicate those, migrate the data, ensure all the hundreds of eligibility rules are incorporated for new customers EXACTLY so we don't get sued to smithereens. We'll need functioning connectors into CRM, web self care, reporting, revenue assurance, the rating & charging engine, mediation, provisioning and orchestration and about 80 other systems. Propose me a smoke test, system test, integration test, UAT and performance assessment regime that will guarantee this all works. Tell me how to incorporate this into my annual release calendar so I don't break the whole IT stack. Now give me a cutover schedule how we're gonna migrate all these customers in tranches with minimal disruption so we don't all get fired...I could go on
Mebbe I'm just a crotchety GenX relic but this idea baffles me. ChatGPT makes math mistakes a ten year old wouldn't. I mean it's super useful but you can't rely on it.

CRM already took out a loan to buy back their shares, what else does the market want?

Wasn’t CRM buyback like 10% of shares outstanding? From 930M to 830M roughly.

When SaaS stocks act like mature companies in other sectors and get serious with buybacks. Think your stock is a bargain? Prove it by directing FCF to buybacks.
At the moment, among the large caps only CRM, ADBE and INTU come close to attractive FCF yields, and all could up their buybacks.
FCF buyback
yield yield / dilution
MSFT 2.59% 0.13%
ORCL -4.47% -1.68%
PLTR 0.87% -3.24%
PANW 1.62% -4.01%
SAP 5.12% 0.83%
CRWD 0.86% -2.29%
UBER 6.72% 2.51%
SHOP 1.50% -0.26%
CRM 11.79% 4.02%
CDNS 1.34% 0.19%
FTNT 2.30% 2.25%
NOW 4.73% -0.07%
ADP 6.06% 0.87%
SNPS 3.02% -17.34%
SNOW 1.45% 2.47%
DDOG 1.34% 0.96%
NET 0.39% -2.03%
ADBE 13.25% 5.84%
INTU 10.62% 1.15%

Can’t be since he’s the greatest stock trader of all time with the billions he made. It’s like he has insider knowledge. Meanwhile, Blurry bets against him with his NVDA permabear positions and with BABA and CRM longs. Losing money faster than most people on this sub.