KIND - Earnings call transcript Q1 2024

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Operator

Hello, and welcome to the Nextdoor Q1 2024 Earnings Call. My name is Kerry, and I'll be the conference operator for today. [Operator Instructions] I would now hand the call over to John T. Williams Head of Investor Relations, to begin.

John Williams

Thank you, operator. T. John I'm Investor of Williams, Relations. Head Good afternoon, review joining to you first thank quarter for Nextdoor's XXXX us and financial results. With Nirav Tolia, Executive call today and the Anderson, Chief Officer. Matt Officer; us incoming and Financial Executive on Chair Chief are

make call, laws. of our securities business related this are variety are statements and not forward-looking During uncertainties. future statements under subject performance. a are They statements to risks may we federal These that guarantees of to

in any could differ materially reflected from Our statements. actual forward-looking expectations results

For our refer and on in today's could SEC other a website in material important other our well release. risks earnings available of and as discussion of and actual important the as the factors factors that section risks Investor the filings to discussed affect SEC's website please Relations results, our the

XXXX financial can non-GAAP these of GAAP to Additionally, today's on will found to Nirav With discussed turn be A call in letter financial measures conference over directly Tolia. the reconciliation call. QX to that, I'd their shareholder comparable measures released like most today. measures be the

Nirav Tolia

and as T., we this CEO. the good Today, company feelings years have everyone. and an honor It John when to as reconnect I you, Thank same excitement ago. of Nextdoor I is did with possibility you afternoon, XX created

I'd the We details, Nextdoor taking Nextdoor a those productive about since a that before next thinking to then, ahead. get philosophically lot level. times how has we're into are had practically grown our QX. certainly but briefly to I'm best and confident I discuss But like

founders the of set phenomenon their founders held belief Nextdoor. instill is that is the most commonly of their founder's business Bain a companies book in return. attitudes They plan due Chris explored secrets that Valley, behaviors and Partners, by to when one in undervalued this a there's Zook James benefit Silicon we a In same mentality, I This believe the possess of mindset the and is value Allen argue that to of the name. of success. that

is technologists, innovative product that admit that humility and greatest the needs We're incredible, have fix We customers. mentality it the is value the today to And implementation we to our to to are believe where our be. the of delights is that. going do potential and current we Yet that users just comes while not going from to push us so. product founders

means local building unwavering difficult attracts with us for complete This financial results. consumer to this level, and an an a to use engaged Innovation ownership who customers starts focus accountability this audience, community and is and us on which results. an details build of drive robust audience expertise expertise core on for obsession We exceptionally the of enable our problem.

had the easy. potential in the formula our successful. this of continuation will a place. circle full And to I'm Getting but ahead. year right It's unlock building quarters talk definitely We've to to It now, the recent the virtuous enabled But let's not products months on promising won't more and innovative first of excited about the it for Nextdoor momentum. of know happen is creation QX. move and what start in the the overnight, is business. we

driving in sequentially, adjusted efficiencies million, percentage year-over-year of XX strong. improving hit verified Weekly a or commitment up and to Also QX, XX.X grew neighbor WOW remained users margin QX, improvement In to year-over-year again demonstrating engagement saw X% and productivity. we organic growth new high. X% our active EBITDA and points

their schedule. think in now We year our position, full current free our We've we including priced shares, ability EBITDA ahead and from positive guidance adjusted to strength flow repurchase full to at QX, of which our are gained year cash raised track level. generate on a remain cash attractively

is platform good progress. showing advertising Our

As performance of on SMBs Manager and onboard customers door XXX% improved ad ad server. about using half next self-serve our benefiting mid-market and delivery of from to Nextdoor our include the are of end which the and of Ads manage QX, customers, campaigns and

revenue average Among have These by capabilities ads increased self-serve XX%. mid-market first-party grow more customers as and reduced expect in we logos capabilities progress repeat started growth and emerging than to QX, the of mid-market our enterprise our will our deepen later drive this with XX% relationships new migrating new us Real advertising by remaining to increased number continue began year. using spend allowed and we year-over-year agencies. advertisers that delivered managed

clearly advertisers. is approach these resonating Our with

of also be our days businesses used via AI kindness is much in We've ad to added to call our post. far. a it believe before what Nextdoor reminder ads this positive that spoken built we've write We've wouldn't write manager technology so proper we but copy, our artificial potential help than larger these about earnings users help generative to AI mention Now intelligence. we've without some how

has and the a data and Nextdoor as distribution us under ways kitchen kind seek to in we self-sufficient ingredients roof. makes fully of this and test AI all all valuable place in proprietary technology with owned leverage LLM at over time. needed a consumer new scale, This local same the

Board to want news Before closing exciting my Directors. some our remarks, of share I about

leading to CEOs at pleased and product chops experience who announce scale companies. additions, technology operating X in expertise significant founder are have successful all new We proven

Our and Founder, Robert Shah, of of Niraj new of and CEO and directors Wayfair; CEO of Glassdoor. CEO Yahoo!; CEO Founding founder Mayer, are Hohman, Chairman Marissa former Sunshine

local. Internet We them Nextdoor service join definitive for build to are thrilled our to journey into in the consumer

we have about ahead. over Matt With realistic but and road our CFO, to us the our Anderson. about that, a I'll we're of ahead optimistic work it turn I'm lot of challenges,

Matt Anderson

grew largely good by quarter-over-quarter platform Nirav, time. and the QX revenue you, coming Thank to driven increased while in Nextdoor afternoon, for strong of the $XX million everyone. and continued year-over-year, growth X% users first year-over-year

the then QX, our year in ago U.S., have organically period. focused. as context, efforts heavily twice evident been many most where especially in was joined For This Verified more progress in the than Neighbors

signs already the impression reflecting our Session the reflects user acceleration number and engagement for to growing by year-over-year spending and the increased of increase in better both XX% users during levels. by see ad enhanced those each ad advertiser with in of self-serve We continuing which view encouraged we platform, saw we've $X.XX in sustaining each amount QX more ARPU advertisers. from session delivery increased year-over-year demand using QX. seen X% We're QX, improved outcomes the audiences, customers depth particularly of they now the engagement to by content increased efficient are driving reporting, session. opportunities advertising

SMB continue to average be to and nearly spending mid-market key growth and revenue As Self-serve customers QX. levels increase contributed a quarter-over-quarter. of both in advertisers a total result, of continued driver XX%

revenue share coming manager continues to mature. continue from self-serve as our expect rise our time, to particularly will over the functionality We of ads door next of

mix an soft serve revenue our be margins. in increase also to We our operating expect will accretive

While progress, the we we managed capabilities bring full to enterprise urgency of our have made platform and recent advertising our with mid-market set are of moving to customers.

growth showing posting verticals, in saw growth years. During services time the also key quarter, financial again, in in with strong year-over-year X the first for Home Services, we positive improvement several

streamlined market XXXX. drive We're layers operating percentage opportunities remainder resources management points our be driver, QX further personnel improved year-over-year, And through overhead, of meaningfully lower costs, we and see what and most driven leverage the in spending to enduring product. by reducing margin XX costs. adjusted go-to by must eliminating platform directing efficiencies EBITDA additional growth to our

an $XXX We remainder repurchased securities employee our repurchase year-over-year with Nirav million of is debt. in nearly and less. a are QX, early we cash, signal put, with focused Simply the more X.X and shares. progress. ended XX% in on program million noted, the revenue increase equivalents we're As and we per early share cash in productivity of quarter our through and March marketable We X commenced doing

to had $XXX of end, active remaining, buyers At million be continue quarter authorization our and shares. our we current

on Now and our financial to guidance. outlook

to For expectation year margin million we percentage expect prior improve $XXX the in we XX a points expect year-over-year compared million. and XX And our revenue adjusted full approximately our between of range by EBITDA percentage will XXXX, points. $XXX

this end XXXX. expectation Nirav is our margin and mentioned cash to now a flow earlier, in focus free QX milestone. generate to is than we Clarifying XX the generation growth path the one sooner prior improvement cash for us quarterly QX year, flow crucial long-term As free for of expect important positive months and

For QX, of of expect loss adjusted approximately revenue we $XX and EBITDA million approximately million. an $XX

smaller of QX. these Our expected and rent reduced reductions both for charges effect reflects and more year restructuring onetime quarter a and will of workforce, focused marketing largely result reduced Certain improvement in in expense. margin spend the the the

advertiser new means reduced This look ahead, growth, our persistent and our user retention engagement is of advertiser algorithm. we more power cost demonstrating growth consistent As the showing increasingly durable base. a focus growth

core earnings call and to users, over of our delivering is Q&A. value today. now begin turn to shareholders. each in it the Progress operator I'll for more these joining Thanks to areas for advertisers

Operator

question [Operator Instructions] Wells The from Fitzgerald Brian comes line the Fargo. on of first

Stanislav Velikov

can, Stan the It performance possible to I you I guess you momentum that don't U.S.? you So so what international. This color the Brian. seems if U.S. in relative if business more it's is the is on for provide Velikov of the a have guess, domestically the seeing the see abroad contributed strong were in the factors major and what that year stronger we showing much broad? to versus

Matt Anderson

This is Matt to happy one. Stan, I'm take speaking. this

highlight, which was I the you off, first So U.S. the to the strong referenced in really growth thing think very

So approaching the throughout million in $X quarter-over-quarter. and terms That today. that's our WOW the platform reflected really commentary of coming total Verified to focus Neighbors reflects

drive growth. focused really can So markets we think are greatest where we the we on the

we're engagement. of also where growth, content also seeing of funnel in terms and but increasing It's flywheel falls type

So on our U.S. the focus be increasingly will

efforts in some to well. back We been engagement effect does have quarters on period-to-period gradually our scaling as internationally, We've neighbors have overall pay commented past acquire growth. where that go-to-market

and highly But That's clear growth see overall of our efforts focused growth are the one in expect U.S. we encouraged the funnel is we we continuing. thing by to that's that's where where are very type us

Operator

hand Therefore, We further for back currently remarks. will Nirav CEO, questions. closing to Tolia, have no I

Nirav Tolia

we of ending just We EBITDA free our grew line revenue. I to our improvement. and We in strong a we and to we where QX accelerated cash everyone, full a we for us company began, focus year start Thank time solid you full to you, a know, raised joining for by which this and adjusted flow comments, had guidance, to then had where I margin want by as on close growth. year today. well is product want with QX breakeven XXXX. And is couple

quarters us focus on to position on product firm tomorrow. size this our is We today for while footing And and that it, updated months in you opportunity earnings joining is today, We where a believe a we're this of ahead our of puts on appreciate massive. keeping headed. you all and the for the not deep today. to capture call but That is is in progress us forward look the

Operator

today's you concludes all This Thank call. joining. for conference

your disconnect now lines. may You

Nextdoor (KIND) 7 May 242024 Q1 Earnings call transcript