Nextdoor Holdings, Inc.

Good afternoon. My name is Joel, and I will be your conference operator today. At this time, I would like to welcome everyone to Nextdoor's first quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star two. Thank you. You may now begin your conference.

Thank you, operator. I'm John T. Williams, Nextdoor's head of investor relations. Good afternoon and thank you for joining us to review Nextdoor's first quarter 2025 financial results. With us on the call today are Nirav Tolia, chief executive officer, and Matt Anderson, 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 a 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 Q1 2025 Nextdoor Investor Update released today. With that, I'd like to turn the call over to Nirav.

Thank you, John T. Good afternoon, everyone. I'm happy to be with you today to discuss our first quarter 2025 financial results and provide a preview of NEXT, our initiative to transform the Nextdoor product. Before diving into that preview, Here are some brief comments on our Q1 results. Weekly active users grew 6% year-over-year to $46.1 million. Revenue rose 2% year-over-year to $54 million. We maintain expense discipline, achieving continued year-over-year adjusted EBITDA margin improvement. That said, our most significant progress in Q1 was product-related, as we furthered the transition to next and continued to make its upcoming launch our top priority. This means that any short-term trade-offs we have made and continue to make are intentional and aligned with our plan to maximize long-term value. Okay, so let's get to that top priority, the next next door. For just about a year now, you've heard me talk about how we need a better product to unlock our full potential as a company. And since I returned to CEO, that has been our primary focus, to build a substantially enhanced offering, one that delivers greater value to our neighbors, advertisers, and ultimately our shareholders. Next is more than a redesign. It's a re-founding of our vision, an opportunity to take the core elements that once defined our success and bring them to life in a more powerful and future-ready way. I'm excited to show our vision to you today. But first, let me outline three clear goals, each building on the last for this first version of the Next Next Door. It starts with connecting neighbors to the most timely and relevant local content. That's what brings people back more often, leading to deeper and more frequent usage. As engagement grows, it opens the door to more supply as well as new ways to monetize. But because everything starts with delivering high value content, let me explain why we're confident this is exactly what our users want. It's not just our hypothesis, it's what our users consistently and explicitly tell us they value the most. They want timely updates, local insights, and real neighborhood news, things they can't currently find on the open web or in other apps. It's neighborhood word of mouth, and from day one, that's what Nextdoor was purpose-built to digitize. We do know that the current product, however, isn't fully delivering on that promise. There are several reasons why content on our current platform falls short, but we've identified three areas where we know we can and will do better. First, users do want hyperlocal updates, but what's hyperlocal depends on the topic. A lost pet matters within a few blocks, while a local election affects the entire city. With smarter machine learning and geospatial targeting, we can match content to users based on relevance as well as distance. Second, Nextdoor was built as a utility, not a place for self-expression like other social platforms. But over time, conversations drifted. With Next, we're re-centering the experience all around content that helps neighbors solve real-world problems, the kind of high-value information that people really need. Third, the old user interface, and in particular the feed, sometimes buried important updates. Even when we sent notifications, they weren't always timely. With a more structured feed and fewer more relevant notifications, we'll make it easier for users to get what they need when they need it. The bottom line is we listen deeply to our users. And we put their feedback into action to build a product that we believe can become indispensable. So let me show you some of the biggest shifts between the next door of today and the next next door. We are shifting from reactive to proactive. No more wondering, is the power out? Next surfaces critical information in real time and gives it the user interface prominence it deserves. While neighbor-created content will always be at the heart of our platform, Next will layer in high-quality information from more sources, like local news and official alerts, giving users a richer, more complete view of what's happening around them. The feed remains, but it will be supported by smarter search and a powerful new AI-driven agent that brings neighborhood favorites right to users' fingertips. All of this comes to life through three core pillars of version 1.0 of Next, news, alerts, and recommendations. They aren't just product features. They meet real, everyday needs. People may not wake up looking for local news, but they absolutely want to know what's happening around them. People certainly don't seek out alerts, but they absolutely want peace of mind when something important is happening nearby. And while you may not crave recommendations, all of us want to make smart decisions around our homes and our families. So now let's take a closer look at how each of these pillars come to life in the next Nextdoor. Local news matters to our users, so we are building a new foundation for local content. We've already partnered with thousands of publishers to embed high-quality local news directly in the feed. This enables users to discover what is happening around them, read perspectives from verified neighbors, and join real-time conversations from city council debates to restaurant openings to local sports. A redesigned feed will make all of this easier to discover and build daily habits around its usage. The goal is to create a proactive, reliable experience where neighbors know that they can come every day to find the local news that truly matters to them. In our test version, three content categories consistently drive the most engagement. Local politics, safety, and lifestyle. That's no surprise. These were once some of the cornerstones of the local newspaper. With next we aim to become a modern version of that trusted resource delivering the same essential information, but in a faster more relevant more personalized way. In moments of need wildfires severe weather power outages. Next door has always become a trusted lifeline. We've seen this throughout our history and saw it again during the recent LA wildfires when usage surged as neighbors looked for real-time updates on evacuations and service disruptions. But in the past, those alerts sometimes arrived too late or got lost in the noise. With NEXT, we are building an alert system from the ground up with a clear visual design, urgency indicators, and an interactive map that enables neighbors to track events as they unfold. This is one of the most meaningful upgrades we've made because when it really counts, people need to trust that Nextdoor will keep them informed and safe. Alerts don't have to be severe to be useful. With three levels of urgency, green, yellow, and red, we are aiming to be able to notify users in one place about everything from weather and traffic to utility outages, construction, public transit delays, trash pickup, school events, and even open houses. It's a broad range of topics, but all with one goal, keeping neighbors safe and providing the peace of mind they need in their daily lives. And because alerts is built on our proprietary geospatial platform, we can deliver them with precision, targeting the right people in the right place at the right time. And it doesn't stop there. With Next, users can track alerts across their broader community, whether it's checking wildfire conditions nearby where family members may live or staying informed about traffic disruptions along their full commute. What sets Nextdoor apart, however, is the layer of real-time conversation with verified neighbors, adding the context, insight, and local relevance that turns these alerts into action. Our final pillar is recommendations. which already make up around 30% of the conversations on Nextdoor. It's a vital way that neighbors share trusted advice to make smarter purchasing decisions for their homes and families. It's one of our most frequent and highest potential use cases. You've heard me talk about the potential for AI on our platform. This is where much of our investment in this critical new technology comes to life. I'm excited to introduce the new Faves section of Nextdoor, where AI and recommendations come together to simulate one of the most valuable local experiences, asking a trusted neighbor for advice. Powered by our proprietary data, technical expertise, and insights from over 100 million verified neighbors, we are building a truly innovative way to scale local word of mouth and make it smarter, faster, and more useful than ever before all with the power of AI. Drawing on 14 years of unique community data from verified neighbors, we aim to deliver fast, trusted answers that move users from discovery to action, reaching a high intent audience that's often ready to make purchasing decisions. And like many of the agentic AI experiences that are now becoming mainstream, we believe this will be, quite simply, a better user experience. not to mention a powerful new surface for local commerce. By connecting intent with discovery in a seamless way, we can help neighbors make smarter decisions and in the process unlock meaningful monetization opportunities. The possibilities here are endless and uniquely Nextdoor. We've always been a platform where neighbors ask free form questions, not just type queries into a search bar. With this upgraded surface, we aim to respond faster and more powerfully, using AI to surface and summarize years of verified neighbor insights in a way that only we can. It's the next evolution of local knowledge, and it's made possible by truly effective AI. The user feedback on this vision has been overwhelmingly positive, and we plan to make the feature available in five DMAs at launch and are very eager to expand it more broadly later this year. So hopefully you can see now why we are so optimistic about Next, not just for its potential to deliver better local information, but to deepen engagement and drive increased monetization. That focus on monetization will ramp up in the second half of the year, as we expect to roll out new ad formats and services, but that's all after the launch of Next. It's still too early to go into detail, but initial interest from advertisers has been encouraging. reinforcing our belief that Next will deliver marketers with a more engaged and valuable audience across the board. Okay, we've talked about what, now let's focus on when. We're already making solid progress with news and alerts being tested so we can continue to improve them as we prepare for a full Next launch by the end of July. A transformation of this scale naturally comes with some variability. While we believe financial impact We'll follow product milestones. We're confident that the foundation we're laying will position us for long-term success. We believe Nextdoor has the potential to become a daily habit, a deeply engaging product with strong monetization potential. And Next is what we believe will make this possible. It's more than just a product update. It has sparked a company-wide shift in how we build, think, and operate. And we're just getting started. With that, I'll hand it over to Matt to walk through our financial results.