Nextdoor Holdings, Inc.

Thank you for attending today's next door fourth quarter and full year 2022 earnings conference call. My name is Jason and I'll be the 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'd like to ask a question, please press star one on your cell phone keypad. I would now like to pass the conference over to our host, Matt Anderson, head of investor relations.

Thank you, Jason. Good afternoon, and thank you for joining us today to review Nextdoor's fourth quarter and full year 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 Q4 2022 shareholder letter released today. With that, I'd like to turn the call over to Sarah.

Thank you, Matt, and hello, everyone. Q4 marked the end of a challenging year for many neighbors and customers. Against this backdrop, we remain focused on providing value to neighbors and organizations and driving results in the areas we can more directly control. On the neighbor front, platform engagement is high, with weekly active users, WOW, growing 11% year over year and 4% sequentially in Q4. This growth was led by the U.S., where we added over 1 million net WOW quarter over quarter. Q4 WOW grew sequentially for the eighth quarter in a row, and over the past two years, WOW has grown by 42%, demonstrating the community, utility, and durable value Nextdoor offers. In conjunction with WOW growth, we are also growing at the top of the funnel, indicating a clear opportunity for sustained growth. Today, we have almost 80 million verified neighbors on Nextdoor. 2022 was a year of product innovation and execution. We made substantial progress on deploying machine learning to enhance the neighbor experience, drive engagement, and platform growth. In Q4, we advanced our email and push notifications by optimizing not just for sessions, but for sessions from neighbors who are most likely to become long-term users based on their activity. Moreover, in the quarter, we laid the groundwork for a more personalized and more engaging next newsfeed by incorporating data points from neighbor interactions on the platform to capture interest and preferences. This latter workstream is still at an early stage. but we expect that it will become a prominent driver of neighbor growth and engagement in 2023 and beyond, as our models become more powerful and work at greater scale and velocity. In the year, we also significantly updated our app, optimizing our user interface for the way we believe neighbors will derive the most value in the long term. We placed the posting function front and center and simplified the navigation bar to highlight the highest engagement surfaces, We also launched the Discover Surface to help neighbors find groups, other neighbors, and businesses nearby. In Q4, we ended the year on a high note with the launch of the new and improved events function and the events map within the location-forward Discover Surface, further leaning into our value proposition of local at scale. With these launches, we are deepening engagement by creating more ways for neighbors and organizations to interact engage and share useful content. In addition, we continue to innovate in neighborhood vitality. Our recently launched transparency report highlighted a 35% reduction year over year in harmful content to just 0.2% of total user generated content. Our community is active. Over 210,000 volunteer community moderators in neighborhoods around the world reviewed 92% of all reported content and reported content was removed at industry setting speeds with a median time of 5.1 hours from time of report to removal. And this is an area where we've used ML and AI to launch new features such as constructive conversations and appeals and improve features such as our kindness reminder. We also continued to make progress on our multi-year ad platform build. Our top priorities are to create a unified self-serve option for customers of all sizes, but particularly for SMBs and to prepare our proprietary backend ad server to host large scale customer demand. On the revenue front, 2022 growth of 11% year over year was certainly a tale of two halves. While we started off the year on a strong note with 32% year over year growth in the first half, We saw advertisers start to spend with increased caution in the second half of the year as macroeconomic conditions became more uncertain. Q4 revenue declined 10% year-over-year to $53 million, driven by reduced advertising spend from the financial services, home services, and real estate verticals, and an overall reduction in spend per customer. Importantly, however, in 2022, we retained 90% of our top 50 customers, reflecting the sustained results advertisers are seeing on Nextdoor. In Q4, we were focused on operational efficiency, holding operating expenses constant year over year. We've held headcount approximately flat over the past three quarters, actively managing performance and selectively hiring in only the most critical areas, product, engineering, ML and AI, design, and sales. Going into 2023, we remain focused on growing well in revenue with an emphasis on increasing productivity. We will continue to balance expense management while ensuring that we are resourced to deliver on our long-term product and go-to-market initiatives. In closing, with community and utility at the forefront, our platform is a unique resource for neighbors and businesses of all sizes. We are as excited as ever about the product roadmap we have in place to execute on our top three priorities, growing our base of neighbors and organizations, deepening engagement, and driving long-term revenue growth above 2022 levels. While there may be continued uncertainty ahead, we have a strong team in place and are well capitalized to execute against our strategy. We are committed to our purpose to cultivate a kinder world where everyone has a neighborhood to rely on. and remain confident that our efforts will enable us to return to sustained revenue growth and margin improvement in 2023. With that, let me turn it over to Mike for more details on our financials.