Nextdoor Holdings, Inc.

Good afternoon. Thank you for attending today's next door first quarter 2022 financial results. My name is Tania and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Matt Anderson, head of investor relations. Please go ahead.

Thank you, operator. I'm Matt Anderson, Head of Investor Relations. Good afternoon, and thank you for joining us today to review Nextdoor's first quarter 2022 financial results. With us on the call today are Sarah Fryer, Chief Executive Officer, and Mike Doyle, Chief Financial Officer. During this call, we may make statements related to our business that are forward-looking statements under federal securities laws. These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainties. Our actual results could differ materially from expectations reflected in any forward-looking statements. For discussion of material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC's website and in the investor relations section of our website, as well as the risks and other important factors discussed in today's earnings release. Additionally, non-GAAP financial measures will be discussed on today's conference call. A reconciliation of these measures to their most directly comparable gap financial measures can be found in today's earnings release. With that, I'd like to turn the call over to Sarah.

Thank you, Matt. Hello, everyone. We had a strong start to the year, continuing our momentum from Q4 into Q1. Nextdoor is benefiting from the combined tailwind of the rise of local and social commerce. Neighbors remained highly engaged in their communities, resulting in a third consecutive quarter of accelerating year-over-year weekly active user or WOW growth. This contributed to sustained revenue growth of 48% year-over-year, consistent with Q4, and Q1 ARPU growth of 12% year-over-year, driven by continued advertiser demand. We are mindful of the macro backdrop. War in Europe, lockdowns in China, U.S. consumer price index at 8.5%, and consumer sentiment at its lowest level since 2011. But we also know that in times of need, Nextdoor is a platform that neighbors turn to for help, and we are a unique and differentiated platform for advertisers of all sizes. Our purpose is our North Star, cultivating a kinder world where everyone has a neighborhood to rely on. Neighbors come for trusted information, to give and get help, and to create relationships online that can be expanded into the real world. Nextdoor is about place, facilitating online action, that results in real-world outcomes. For example, joining a local running group and meeting in your neighborhood for a run, offering a kid's bike at a discounted price and then selling it to parents on your block, or engaging your community to petition for a new bus route and coming together at City Hall to make the case. And we are about all neighborhood stakeholders, businesses, public agencies, local schools, churches, and nonprofits, to name just a few. The social commerce revolution is happening, and Nextdoor is uniquely positioned to drive and grow with this fast-paced change in consumer behavior. Social commerce is weaving buying and selling into the fabric of everyday life and through a real sense of community and connection. People want to buy products and services based on recommendations and inspiration from people they trust. And we know that neighbors are one of the most highly trusted groups and some of the biggest influencers in our lives. From our latest Insight survey, 71% of neighbors have shared a business recommendation on Nextdoor, 96% of neighbors have seen one, and 72% have been influenced by one. This feeds directly into our product strategy, and improving our Nextdoor ad platform plays a foundational role. What differentiates Nextdoor is our hyper-local, trusted approach to building an active, valued community. As the world experienced significant political and economic disruption in Q1, neighbors turned to the platform to support each other. Neighbors organized food drives and created groups to mitigate the impact of rising inflation. They organized fundraisers, donations, and awareness initiatives to support Ukrainian neighbors locally and globally. And Nextdoor itself partnered with the UN Refugee Agency, a native media ad campaign, where Nextdoor raised donations and delivered higher click-through rates than the UN refugee agency's other digital channels, underscoring the giving power of neighbors. Our community is active and becoming increasingly active. Our product strategy in 2022 is centered on strengthening engagement through building an active, valued community. It's working. In Q1, over 50% of neighbors were weekly active, and over half of weekly active users were active daily, highlighting that as we move neighbors from onboarding to monthly to weekly, they have a high propensity to make next door a daily use case. Everyone is a neighbor. Our continued strength in international growth underscores that this is a global opportunity, solidifying our confidence in the opportunity ahead. In Q1, international wow grew 55% year over year, accelerating quarter over quarter from 47% in Q4, and year-over-year from 39% in Q1 of 2021. In international, engagement metrics surpass even the U.S., with 55% of neighbors active weekly. In 2022, we will remain focused on driving growth and engagement in our existing international markets. One of our key product initiatives in 2022 is connections. Q1 was our first full quarter with connections launched between neighbors, and we're pleased with the early momentum. Connections provides an important signal of who you know, allowing us to better personalize the newsfeed and notifications, and hence drive deeper engagement. It's also a long-term growth driver. Neighbors invite neighbors they know who are not yet benefiting from the utility and community Nextdoor provides. Looking ahead, we plan to expand connections to all neighborhood stakeholders, starting with small and mid-sized businesses, SMBs. Neighbors want to hear from and recommend organizations they know and trust, and they value SMBs as important members of their community. In fact, neighbors have recommended over 5 million businesses and shared over 55 million business recommendations on Nextdoor. This drives business growth. As one customer put it recently, your recommendations are dynamite. Moving to our monetization efforts. In Q1, we reached an important milestone with our proprietary campaign management platform, Nextdoor Ads, making it available to all U.S. SMB customers. Nextdoor Ads is designed to provide advertisers of all sizes, including SMBs, with a simple, hyper-local, self-service advertising experience. U.S. SMBs now have an easy solution they can leverage to meet their business goals, such as increasing traffic to their website or their Nextdoor business page, promoting a sale or a discount, or communicating directly with warm local leads. The enhanced dashboard enables performance tracking, and over time, we plan to offer advice on what's working and not working across business verticals and across communities, all with a differentiated, hyper-local lens. The second pillar of our ad platform investment in 2022 is Nextdoor Ad Manager, which is our proprietary ad-serving platform. It will take the place of our existing third-party solutions and will enable us to better utilize our first-party data. We believe neighbors will benefit from more engaging, useful, and actionable ads, and advertisers will benefit from a higher return on investment from their ad dollars. Since the last time we spoke, we've made significant strides in solidifying the foundation of Nextdoor Ad Manager, which will enable us to scale with demand as we migrate advertisers throughout the year. In addition to strengthening our ad tech stack, we're also improving our measurement and targeting capabilities through our first and third-party tools, delivering ever-increasing value to advertisers. We see this in our revenue outcomes. In Q1, the farmer's dogs, a leading pet food delivery service, nearly doubled their spend quarter over quarter, given strong campaign performance, particularly on their conversion and cost per acquisition goals, and have increased spend further in Q2. We've made significant strides in Q1 that will set us up for continued success in the rest of 2022. Our top priorities for the year remain growing engagement while adding new neighbors to the Nextdoor platform and building products that deliver differentiated results for advertisers of all sizes. And with that, I'll turn it over to Mike for our financial highlights.