Nextdoor Holdings, Inc. Q1 FY2025 earnings call

• Q1 Results: Weekly active users grew 6% YOY to 46.1M, revenue up 2% YOY to $54M, adjusted EBITDA margin improved. - NEXT Initiative: Focus on transitioning to NEXT, with goals to connect neighbors to timely local content, re-center experience around problem-solving content, and improve feed and notifications. The NEXT initiative has 3 pillars:
  • News: Partnered with publishers for local news, aiming to create a proactive local news experience.
  • Alerts: New system with urgency indicators and interactive map for real-time alerts like weather, traffic, etc.
  • Recommendations: Uses AI to enhance neighbor recommendations, with 30% of conversations already around recommendations. - Financials: Q1 revenue $54M (+2% YOY), platform WAU 22.5M (+5% YOY), net loss $22M but adjusted EBITDA loss $9M with 17% margin, positive operating cash flow, balance sheet with $418M cash and 0 debt.

Weekly active users (WAU) grew 6% year-over-year to 46.1 million. Revenue rose 2% year-over-year to $54 million. Adjusted EBITDA margin improved year-over-year. Platform WAU in Q1 was 22.5 million, up 5% year-over-year. Revenue contribution: Weekly active users and revenue growth are key metrics, with platform WAU representing users engaging directly on the app/website.

• Q2 2025 revenue expected ~$60M, adjusted EBITDA loss ~$10M. - NEXT rollout by end of July, with monetization to follow usage and engagement growth. - Programmatic ad buying expected later in the year to support revenue growth.

• Risks related to the transition to NEXT, potential short-term trade-offs, and uncertainties in advertiser spending.

Q: How to think about duration of NEXT impact on user growth, engagement, monetization?

A: Nirav Tolia says usage/engagement growth first, monetization follows. NEXT released by end of July, with more info at next earnings call.

Q: Monetization post-NEXT?

A: Nirav Tolia says more supply, more ad surfaces, and AI closing loop on local needs.

Q: Programmatic ad changes and parallel rollout with NEXT?

A: Matt Anderson says in process of standing up programmatic relationships, can advance in parallel with NEXT rollout.

Q: Alerts strategy and impact on usage?

A: Nirav Tolia says new alert strategy with hyper-local targeting, reinforces crisis value, surface easier to find.

Q: Recommendations and AI integration?

A: Nirav Tolia says AI uses proprietary user-generated content to summarize recommendations, enhancing user experience.

Q: Awareness of NEXT UI and functionality?

A: Nirav Tolia says no large marketing spend, uses notifications and earned media, better content drives awareness.

Q: WAU disclosures and impact on advertisers?

A: Matt Anderson says advertisers want experiences NEXT brings, alignment with consumer expectations and platform value.