Nextdoor Holdings, Inc.

Good afternoon. Thank you for attending today's Nextdoor Q2 2022 earnings call. My name is Hannah, 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 1 on your telephone keypad. I would now like to pass the conference over to our host, Matt Anderson with Nextdoor. Please go ahead.

Thank you, Hannah. I'm Matt Anderson, Head of Investor Relations. Good afternoon, and thank you for joining us today to review Nextdoor's second 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 the 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 GAAP financial measures can be found in the Q2 2022 shareholder letter released today. With that, I'd like to turn the call over to Sarah.

Thank you, Matt, and hello, everyone. A lot has changed in the world since our last earnings report. Macroeconomic conditions have become more uncertain, the risk of a recession has increased, and neighbors and businesses are facing continued pressures from factors such as inflation and rising interest rates. We know that when times get tough, Nextdoor shows up for neighbors, businesses, and public agencies globally. In times of need, neighbors increasingly rely on Nextdoor for trusted information, to connect with neighbors both online and in real life, and to give and get help within their communities. We saw this throughout the pandemic and we're seeing it again now. Whether it's to find that side hustle to pay for accelerating rental costs, to use our classified section to grab those free baby clothes, to help food raise for neighbors in need of an extra bag of groceries, or to aggregate community members in support of a local cause. This reinforces our belief in Nextdoor's purpose to cultivate a kinder world where everyone has a neighborhood to rely on. Q2 revenue growth of 19% year over year benefited from continued advertiser demand in areas such as home services, despite some macroeconomic-driven reductions in customer budgets. Advertisers of all sizes are realizing results from the Nextdoor platform. From my own recent conversations with CMOs, I know there is a significant and enduring demand for the kind of engaged audiences and unique hyper-local targeting that Nextdoor provides. Marketers also value the utility aspect of Nextdoor because it drives intent. as our neighbors have that buyer mindset and are typically the household decision maker. Weekly active users are wowed through 26% year over year to approximately 37 million. We're seeing durable engagement trends amongst our most active users. In Q2, over 50% of weekly active users were active daily. Across all regions, growth in total sessions accelerated 10 points quarter over quarter. These trends show that our focus on engagement through the introduction of new machine learning models for increased personalization, more engaging notifications, a simplified user experience, and welcoming platform initiatives is working. With the progress we've made on engagement, we are now shifting more of our product focus to new neighbor growth. Today, we have over 75 million verified neighbors on the platform, and we're just scratching the surface of our global total addressable market. In Q2, we made significant progress across our international markets. And in the UK, for example, we're now in one in four households, increasing to nearly one in three in London. While neighbors turned to Nextdoor in times of need, Nextdoor also remains highly relevant in major societal moments. In the quarter, we helped bring together more than 15 million UK neighbors in real life through the Big Lunch campaign to celebrate Queen Elizabeth's Platinum Jubilee. On the advertiser front, Nextdoor helps brands reach real neighbors based on their interests and location, engage neighbors in a high utility, high contextual setting, and convert neighbors into customers. Our value proposition for advertisers grows as we improve our measurements and targeting capabilities, supported by our first party proprietary data. Maid renovation is a great example of a customer who used Nextdoor to exceed their cost per lead goal and also, importantly, achieved 10% below their cost per lead on other paid channels. More broadly, leading advertising measurement companies, Foursquare and Oracle Moat, recently shared that Nextdoor outperforms their industry benchmarks across a variety of metrics, including cost per visit and viewability. And this is true across verticals. We're continuing to develop our ad platform to deliver increasing value to advertisers of all sizes. In Q2, we expanded next-door ads to all US small and mid-sized customers, giving them broader access to ad formats and inventory, more compelling visual options and calls to action, and a comprehensive dashboard so they can track metrics and performance of their ad campaigns. We also continue to develop our proprietary ad server to improve ad relevance and performance for advertisers and the ad experience for neighbors. The right ad served at the right time to the right neighbor is highly useful content. We recognize the need to adapt and adjust with changing market conditions. Thus, while our long-term strategy and priorities remain the same, to grow our base of neighbors and organizations, increase engagement, and drive sustained revenue growth, As we enter the second half of 2022, we're sharpening our focus to our highest impact products and go-to-market initiatives that we believe will contribute most meaningfully to WOW and revenue growth. One of these high impact initiatives is Connections. In Q1, we fully launched Connections and in less than six months, 20% of daily active users now have at least one Connection. We're also starting to see that connections have a meaningful impact on contributions on Nextdoor. More contributions lead to a more vibrant ecosystem. We're now working to enhance the value of connections by nudging neighbors to send contacts at the right moment, such as a new neighbor onboarding or after making a connection. This enables neighbors to connect with more of the people they want to hear from, and it also enables us to provide more relevant suggestions for neighbors you may know or get to invite. We increased daily contact sinks by 90% this quarter. This will support further new neighbor growth in the second half of the year. Our purpose has never been more important. Our platform is a unique resource for neighbors and businesses. We are as excited as ever about the product roadmap ahead. We have a strong team in place and we are well capitalized with $660 million on the balance sheet to execute against our strategy. There may be volatility ahead, but we are as committed as ever to the work we do at Nextdoor, and we remain confident in our long-term growth opportunities. With that, I'll turn it over to Mike for our financial highlights.