Nextdoor Holdings, Inc.

Good afternoon, and thank you for attending today's Nextdoor Q1 2023 earnings 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 telephone keypad. I'd 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 first quarter 2023 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're 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. The reconciliation of these measures to their most directly comparable GAAP financial measures can be found in the Q1 2023 shareholder letter released today. With that, I'd like to turn the call over to Sarah.

Thank you, Matt, and hello, everyone. We started 2023 with a strong quarter, and we're seeing meaningful progress across a range of business outcomes. Starting with neighbors, WOW grew 16% year-over-year and 6% sequentially in Q1, demonstrating healthy and growing engagement. This growth was led by neighbors in the U.S., where we added over 2 million NetWow quarter-over-quarter. Over 80 million verified neighbors come to Nextdoor with high intent to join, connect, contribute, and tune back, thus finding unique value from the utility and the community offered on the platform. In 2023, we've been building product momentum, focusing on growing the base of neighbors and organizations on Nextdoor through work on invites and content sharing. We've been deepening engagement and driving kind conversations through better feed and discover personalization and new content types, such as events. Finally, we're making progress on our local ad platform for businesses of all sizes who benefit from Nextdoor's high intent audience and the ability to target neighborhoods everywhere. Our investments in AI, including ML, have been showing strong returns, particularly in deepening engagement. In Q1, this was the leading driver of WOW Growth. We continued to personalize notifications to be relevant and timely to each neighbor. We're making the newsfeed more personal, a focus area in 2023, by enabling content to be more widely accessible based on the use case. For example, a neighbor may want a broader view when looking for a service provider or something to do locally over the weekend, but a much narrower view when searching for a lost pet. This unlocks greater growth on the platform and is important to neighbors who increasingly see Nextdoor as the local network that allows you to connect to the neighborhoods that matter to you. AI is already an integral part of product experiences at Nextdoor, and we've only scratched the surface of its potential use across WOW and revenue outcomes. We are excited to explore the possibilities for generative AI applications on our platform. built on the foundation of our unique local knowledge graph and content that is often already labeled by neighbors. For example, this post is a recommendation, this post is a lost and found item, this is content that potentially needs moderating, and so on. Leveraging the chat GPT API offered by OpenAI, in April we launched an assistant feature that helps neighbors write posts that are more engaging, kind, and constructive. This is based on our data of what works well on Nextdoor to achieve the outcomes that neighbors are looking for. For example, making a recommendation about a beloved local business that needs help getting the word out, or finding the best park to delight younger kids, or helping a neighbor entice a group to come together for a local community garden build. We'll continue to share updates here in the coming quarters. In Q1, we also launched several other product features to deepen engagement through driving kind conversations and the volume and diversity of content. For example, we launched the ability for organizations to access all format types, including events, polls, and video. This has increased posting from businesses and agencies, helping connect them with high intent nearby audiences, and creating a better local experience for neighbors. We also launched our share kit, which places Nextdoor's logo on partner sites like GoFundMe and Patch, so users of external sites can post directly to Nextdoor. This is another important step in our shift from a private to a local network. These initiatives have driven more posting and posters across more areas of the platform. We've made progress introducing new viral growth loops. Verified neighbors added organically in the U.S. grew at 24% year-over-year in Q1. We bring new neighbors and organizations to Nextdoor through invites and content sharing. Today, features like ContentSync help neighbors invite each other to our platform. In Q1, we built features for businesses to invite neighbors, and we're seeing positive traction with the number of business inviters growing by 34% since the features were introduced in January of this year. In the coming quarters, we plan to launch new partners with our updated content API so that content that is flagged as anyone content can be shared to other platforms. This content can then be picked up by SEO, which raises our brand awareness and draws in more neighbors as they discover the specific use cases of our local platform. We also continue to make progress on our ad platform. In Q1, we completed the majority of the work on our unified platform, offering for advertisers of all sizes. For SMBs, we will be maintaining the simplicity of the original self-serve experience, while also adding advanced tools and reporting capabilities that were not previously available, such as a more flexible location targeting. For larger advertisers, Nextdoor Ads Manager will reduce the time it takes to onboard Nextdoor and to create and launch an ad. Let me give you an example of the success of the platform for an international beauty retailer who ran a campaign to drive neighbors to shop its products in local stores. We leveraged predictive intent targeting to reach beauty shoppers when they were most interested and engaged on Nextdoor in order to drive them from the app into the local store. A four-square study found the campaign was so successful that it resulted in an approximately 52 times return on ad spend. Another study by Oracle Mode Analytics found that the campaign also far exceeded industry benchmarks in attention-related performance categories, like interaction rate and hopper rate. The brand has continued to spend on Nextdoor, partnering with us on spring and summer campaigns. In closing, we started 2023 on a strong note, and we are excited to continue executing on our top three priorities, growing our base of neighbors and organizations, deepening engagement, and driving revenue growth by enabling better advertiser outcomes on our proprietary ad platform. We remain confident that our efforts will enable us to return to sustained revenue growth and margin improvement in 2023. I'll turn it over now to Mike for more details on our financials.