KIND - Earnings call transcript Q2 2024

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Operator

Good afternoon. Thank you for attending the Nextdoor Second Quarter 2024 Earnings Call. My name is Cameron, and I'll be your moderator for today. [Operator Instructions]

I would now like to pass the conference over to your host, John T. Relations. Investor of Head Williams,

You may proceed.

John Williams

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

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

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

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

measures of released be conference the will measures today's can XXXX be found on to Additionally, comparable financial directly letter shareholder measures non-GAAP most QX these financial GAAP discussed reconciliation today. in A call. their

that, to turn the call With I'd to Nirav. over like

Nirav Tolia

quarter We you have everyone. Thank be results with to good our progress since today solid financial made in had outlook. second you, to spoke afternoon, I'm and another May. here productive discuss and John and T., happy quarter last we

visible the more our QX outlook core and results, in will our some most clear is product, revitalizing is XXXX. in and for QX our become XXXX. that embedded the it important progress in Some rest of of of work, But

evident committed transforming long on would our are while user like QX in and about the X There we of experience for last highlight. areas is XXXX. adopt focused performance that in to working to Our our team is to particular Mentality Founder's remaining in effort challenge I talked quarter on is results. This taking execution the term and the

QX. an Platform XX% greater better capabilities retention. WAU more Weekly as active Ads driving enabled here reached advertiser The year-over-year role users Revenue are in than and played growth. XX important we adoption, First, performance Nextdoor increased revenue grew new our self-serve it million. or of

resources Second, less. shortly. in adjusted discuss us productivity we raise XX QX, year-over-year in the we reduction allocation giving resulted costs in and year of are Matt more percentage employee a will points better to margins. More improvement, plus guidance. financial greater effective EBITDA with In doing confidence detail our full realized margin this of

require a with would neighborhood step make essential the I we take our experience, Now to which local view, everything user opportunity. complete will business and we the of commitment we do, local, to and is of network and to a Nextdoor This a clear our begins focus like our ambition is a core everyone's and life. believe this the quarter of longer-term unwavering transformation call Building area part back from goal massive represents NEXT. effort an

users By we build with and product that shareholder value significantly advertisers, that in over know combining deep a delight and our profitable we can increase new experience, will improved expertise and a growth drive local time. user

mentioned of I core both everything Founder's the we're challenge is which As at and philosophically approaching a we this above, Mentality, with practically. doing are

Mentality Founder's the reminder, a defining As has X traits.

provides The with us and a and mission first to define that is ambitious clear focus purpose.

the network call that leveraging essential to the stronger, power technology of and home. safer neighborhood For Nextdoor, happier to enables that create places means

advertisers with delights believe magic details they our single obsession The second that product users the every experience. a Nextdoor. is to to create time redoubled the We in have user and with have engage is particularly the our details, that an and around efforts

and action. We cash positive productivity ready adopt and urgency to flow. demonstrated and lean, The more hungry towards less, employee a do to which mindset, to owner's free third is towards an progress with improved and final bias by drives be as trait our want

who people Mentality of Shah, Steele. as for added Niraj few Founder's They mission, Robert and Marissa Hohman a each on Mayer, Directors: are at technology a recently and exemplify our as companies executives the scale. There passion to well Board product who the we experience operating Elisa focus X bring our

are We potential, potential looking achieve to working that significant. with forward to our them and is

engaged list have a are of and first-party a large base, and growing realizing increased advertisers differentiated We who data user ROI.

returned and transformation work platform's product, early our significant and resolve. but process, that CEO the note this I most, of will nor very value by done will And as in full our the I'm mechanism journey. revitalization will most with again linear encouraged be benefit it's generating is as still that our require neither we've for straightforward. core since long-term Unlocking patience

not see such, As to we progress do signs of product-related until expect meaningful mid-XXXX.

other the challenge and humility will blend prize the renewed We The with right of a reinvigorated be side revitalized product, worthwhile: are incredibly growth the is approaching this a on and company. substantial, but trajectory a optimism. effort

that, With turn results. to our discuss to financial over it I'll Matt

Matt Anderson

everyone. significantly all Nirav, via We word of as came year-over-year. year-over-year. and XX grew and new of U.S., the the Verified increase WAU particular users or provided a mouth foundation year-over-year, good These X% afternoon, number XX% acquisition joining in nearly In of Thank new unpaid growth Neighbors million, solid QX, you, reached for saw Nextdoor strength channels. WAU QX where in an increased

users Our relevance enhancing and growth inactive early new and reflected notification quality. engaging and progress

log more users made QX, experience inactive stay. first, likely and in we without in who some Nextdoor on example, easier clicked to made being logged to notifications for in For it which them

Consistent to making continued which QX. during impression each during we depth, still Nirav but number experience. product much the visit improve opportunities noted, the with reflects with more to work each user to content do content of have to as Session engaged platform. year-over-year significantly our better core session, ad progress more in recent delivering users, Nextdoor grow to quarters, users We're

improved of from expect better improved performance on year-over-year, grew making momentum delivery performance channel, an increasing and and and XX% million $XX of Enhanced advertisers advertisers of increasing outcomes efficient self-serve we for for both. benefiting driving reflecting reporting audiences, more our delivering the and Advertisers Nextdoor already ad in ease revenue are revenue and continued functionality use, Ad Platform. are QX are mix where Nextdoor. progress

mid-market revenue year-over-year. retention levels new In Average came spend nearly QX, improved and self-serve revenue increased from of XX% advertisers. year-over-year, advertisers from

more far user enterprise our done. advertisers As experience, core with and to on from managed our mid-market capabilities to advertisers. work more remain value deliver our to We bringing focused is

are improved from up As we we which encouraged continue by XX% that XX% in top to QX, QX. advertiser retention, work, XX our in

less are leverage. are generating more with and we As Nirav highlighted, operating doing more

EBITDA as than employee, by adjusted XX% Productivity, million. was QX revenue loss $X Our per year-over-year. measured improved more

operate by leverage We marketing Alongside these improvements, QX. expense we with of leaner will compensation focused the team, year increased as a the remainder expect and stock-based this we and rent discipline reduced the benefit XX% more persist of expense. through reduced in

ended diluted with cash, repurchased for debt. count million We X cash share reduced by $XX In securities we in X%. quarter $XXX the We marketable fully million QX, equivalents and and XX million. shares

remained allocation our and in of with shares the actions XX% repurchase with remaining, reduction Both Additionally, authorization in of share current conjunction our number and we end dilutive of buyers long-term securities quarter-to-date. QX, equity align strategy. million employee grants. our had capital compensation our potentially stock-based we by the have $XXX At reduced

note. One final

reductions. our onetime on million charge million this recognized mentioned reductions briefly we in QX. $XX of in restructuring space expense in earnings million of QX call, to The connection office a our team related $XX we was size. $X with As remaining

further total and charges, onetime expect time. any declined these Excluding We cost year-over-year. in this expenses by charges related XX% at do not QX

guidance. on our Now outlook to and financial

For year the XX% we full of revenue year-over-year. expect XXXX, approximately growth

expectation to a year-over-year XX We percentage percentage point expect prior adjusted improvement XX of our EBITDA margin approaching points compared improvement.

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

QX to We cash positive continue expect in to this of free generate year. flow

continually long-term We growth and committed clarifying also margin our trajectory. to remain

Our focus aspires value allocating in and NEXT product, NEXT our over experience is through delivering turn, value a toward time. significantly resources create our advertisers initiative. create and product to shareholder growth, substantial transforming for more consistently on better

We begin on Thanks call keeping joining earnings now over turn you for it our updated Q&A. look today. I'll to to operator forward to progress. our the

Operator

first line The the is Instructions] from with [Operator Truist. Squali of Youssef question

Youssef Squali

should believe of takes actually at and what is Can you in the the talk increase maybe realized you're sustainable about level with XXXX? guiding seeing not product-led questions to in the around we look macro that look that for I Europe. positive in XXXX. showing of much as a you expectations that efficiency? you're showing little couple do full a bit improvement? puts marketing know macro guys kind a material cost -- kind of you as to a adjusted EBITDA maybe QX, efficiencies time expect are in terms versus second, that you But you Just And How quite you've be at you're of at of of just year when pretty

Nirav Tolia

you couple Thank And let that me those just question, a the of hit Youssef. for you mentioned. things

times of can the focus things of the And mentioned Mentality. things you of control. the a We've on the founder as couple do this idea on First, you you macro. one Founder's that a is

That's actually For what internally. the that's macro. we not us, do

is is on going execute so on to And a that that's we by the do see macro. job on, anything stuff primarily of you things a us driven There good control. from that ability the and our lot can

us lift bit. little a can Sometimes it

Sometimes that and a to provide can little do we're But I'm a what focus path trying on we perspective. we're serve can on our it better advertisers. from And against. current is of that encouraged bit good what pretty to users

talk cost XXXX, little now me a mentioned and year rest the and bit you Let the about into efficiency. of

Founder's more Mentality is doing less. So again, with about the

frugal going we business thing just everything in kind just will It's or we something be XXXX. just disciplined do. do that this in to year into managing way. that a -- we or make not and So We'll of a wrap our onetime

to real have growth. is our focus said, on That I say,

product. Our real our revitalizing focus is on

is focus today real we but that on capture by we to product. is Our believe have the existing our captured trying not potential

the way and we've tried is that our being the value real a to effectively can And into our we focus real can only growth do we is better do while tighten more turning so unlocking can that run boats value on we with and product. that, business. and business And a

focus And so our where primary that is is.

Matt Anderson

in is well. as Matt. there jump I'll This

macro, and mean key the to regards With to too. which we what I points, value of to here advertisers. couple on draw, point, delivering just is is can a focusing So neighbors

that Now like when look we bit do we've which can we verticals us, areas further, for highlighted. matter a services, at double-click home

We momentum seeing positive there. really are

in rebound services. financial small Some

really, our advertiser it's those, from our around base. Beyond perspective, diversifying

to endemic smaller in the role the play bigger we that think seeing future. it can in. the ultimately, contributing value. emerging at verticals comes that a day, So way are end But back -- today. it We a we advertising But to us, have of verticals in are the are momentum positive be delivering

just that to regard do efficiencies I QX. on to to looking QX is XXXX, with it cash cost one, flow a and Now breakeven. want comment reiterate forward

we generate So addition significant in income do adjusted interest EBITDA. to

So wanted that's I there. to something clarify

as positioning of is the on we're ourselves focused things for one Additionally, mentioned. really growth, Eric

And so less. we more with do can we believe

resources. are our We allocating

We not ultimately, positioned. of are noted. quarter that the commenting about. better we the But marketing, feel that changes position XXXX puts think some that each has But Nirav with from pursue we to goes specifically. day, And you at leverage of we're talked getting end more a efficient as by, the product on in ambitiously us

Operator

Goldman with question line Sheridan next Eric from The Sachs. is the of

Eric Sheridan

Two questions, can. if I

growth And of for interesting, might scope be marketing state about the potential for word that into national levels and to terms it your term? marketing term, the Is you that today local the from compared of to acquisition unpaid the long thinking user not of think you or grow long into channels. platform the comment thought might made that years local over something of in a and In only of ahead? landscape investments irrespective of are do mouth about terms in look over and leverage how you local the how I predominantly about evolve the should of budgets was higher these current we different ability way how as coming broad-based but coming in

Nirav Tolia

Thank you for the question.

intrinsically of idea that me one this that platform are the with of an is Nextdoor local unique we versus really things scale. national Let actually but saying national, start by that makes local

that's users a and that can the to advertising. having regardless nationally very bring neighborhoods across been local, We where typically to States advertise, of to we've where people at XX% And being to that which they is great or want and that scale. advertisers able fact adoption something United they're it's go one scale, difficult so to experience place do to for the means of got whether regardless whether it's living,

experience how as framed the national an mouth, of way And it a you we so an growth the or. Matt. and. deliver originally, that of pass scale. can don't internally it that that. we we it actually the as going think cetera, you We on question little think local to of can at et more either a think In detail think more I'm give about and growth, regards word to he organic And to a We

Matt Anderson

Yes, that's the that point They're large advertiser do ad easily. local on the I'll the looking enterprise, they're or well. for to more -- looking return looking it's they're and flexibly And for spend. right. just on more business Whether as reach. And

And so true. that's

some that advertisers or already today, smaller our partners starting see of self-serve. to or SMB Now some mid-market, it be of

to the but enterprise more side, needs lot are on same. We a have the those do of

to commented growth, user this is last we've the of on something quarters. your going point in couple actually around Now

So top-of-funnel as refer sometimes what we growth. to

are these million platform. neighbors requiring significantly So XX Verified there. absolute approaching we total look prior of the nice verifying Neighbors. new We're seeing versus terms, coming growth this years, and at If really more, on

continue see there. progress to So

As are scale; of noted, in as that's I and unpaid of my significant something one, our comments, a opportunity show the two, product; improvements organic, to them in reflects reflects mentioned through And nearly all leverage. represents channels. coming three, that, mouth, you word

taken user nearly So as acquisition, it to X. actually spend to we've relates that

absolute that driving and we're we're neighbor limited spend. neighbor hitting levels acquisition high acquisition that with of so relatively And

and seen our you So that's half into something in It's of in QX, of will part have a key built second more more little bit you'll see we really we see in of well, -- piece. but guidance. of to our a and be QX, as QX, expect a that's you

a good to our progress continuing of it's on. So leverage, today. day that's we're We core something operating it and make a really that of is feel about source part

Operator

There would the additional over conference Instructions] any remarks. pass this I management no are the [Operator waiting questions time. at to like team for closing to

Nirav Tolia

we looking just you And are the you. then where everyone ahead. third, today thank and around. Thank and quarter X joined Appreciate or do call. this the to then will we just a closing I'd remarks, what the is who add few to it, about importantly, most really current we end points: give I'll you and like about time X that reported

with the current report that were we we heartened the On well quarter reported, very, doing as growth very by could more fact that as less. we

You heard growing XX growing EBITDA adjusted year-over-year, margin and WAU, of more revenue, then improvement. on the better the points less, statistics, with

be our deep able is to potential this completely delight the an future, better linear. our idea is to user to and us truly and users and with find we growth for advertisers, experience going path. NEXT, extremely, payoff start story But of advertisers attractive. to revitalized combine look be product as as a to NEXT our the our It's for not story that to achieve straightforward. not real and extremely focus towards new be easy the going Nextdoor. Being for and we potential. real But local users experience the going a platform a a all. A It's expertise internally something company It's not innovative and

for and you to call. joining. you, until the joining keep you So for appreciate Thank of everyone, the abreast journey we We'll time. continue next

Operator

Quarter you That the your for concludes Earnings Call. Second Nextdoor XXXX participation. Thank

may line. now You your disconnect

Nextdoor (KIND) 7 Aug 242024 Q2 Earnings call transcript