Nextdoor Aktie

Good day, and thank you for standing by. Welcome to the Nextdoor Q3 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Colin Bourland, Head of Investor Relations and Corporate Development. Please go ahead.

Good morning, everyone, and welcome to Nextdoor's Q3 2026 Earnings Call. My name is Colin Bourland, Head of Investor Relations and Corporate Development. Joining me today are Nirav Tolia, our Chief Executive Officer and Co-Founder; and Indrajit Ponnambalam, our 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 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 that are most directly comparable GAAP financial measures can be found in the Q3 2026 Nextdoor investor update posted on the Investor Relations section of our website today. And now I'll turn the call over to Nirav.

Thanks, Colin, and good morning, everyone. Q3 was another record quarter for -- Nextdoor, and it's the strongest proof yet that our transformation is well underway. At the start of this year, Platform WOW turned, it has grown every quarter since. And every quarter, we finished above the high end of our guidance on both revenue and adjusted EBITDA, that consistency comes from steady iterative improvements that compound on 1 another, a smarter update, a more relevant feed, and easier way to join a conversation. None of the loan is the story, but taken together, they are. Each improvement makes the next 1 work better, and that's what makes our progress exciting.

The approach shows up clearly in the results. Platform WOW grew to $24.5 million, another all-time high, up 7% sequentially and 14% year-over-year. That's our fastest sequential and year-over-year growth since we began reporting Platform Wow. Revenue grew 14% to $79 million and adjusted EBITDA was $10 million, a 13% margin, both finished above the high end of our guidance. These are our strongest results yet, but what encourages me the most is how we got here. And so before I go further, I want to recognize the real driver behind this progress, our team behind every 1 of these hundreds of improvements is a person who kept working hard quarter after quarter, long before the numbers confirmed it. Today, the numbers do to everyone in Nextdoor. Thank you. You should be proud of what you're building.

Our team has always known what Nextdoor is at its heart, local community neighbors helping neighbors as human connection that grows from it. Last quarter, I described our contribution flywheel. More contributors create more content. More content creates more relevance and more relevance kids neighbors, more reasons to come back. This quarter, that flywheel turned faster here 3 places you can see it.

The first is how neighbors stay connected and what they find when they arrive. We made our update smarter using AI to choose the conversations a neighbor is most likely to join, not just open. We made our feed better at understanding what matters to each neighbor. While it has always favored what's close to you and what you care about, now reads more signals, including how much conversation of post is sparking nearby and in quieter neighborhoods or fewer neighbors are posting, we now fill the gaps with nearby evergreen and event content. So there's always something worth opening. The result is more neighbors visiting and more importantly, taking part. Weekly contributors, the neighbors who post comment or react grew 12% sequentially and 27% year-over-year.

That's faster than our overall platform WOW! growth, and it means that more of our growth is coming from neighbors who read and contribute. The second is ASK, our AI operating system for local answers. Last quarter, I told you how ASK was keeping conversations alive. This quarter, we brought ASKAI into search for every neighbor in the U.S. Search is where neighbors go when they need something specific, a trusted service, a recommendation or an answer about what's happening nearby. Now instead of sorting through post, they get a direct answer drawn from the conversations, recommendations and local businesses their neighbors have already weighed in on.

That matters because more and more people are turning to AI assistance rather than traditional search for answers. It's the same shift we're seeing across the Internet from parsing a page of BlueLinx to getting 1 consolidated intelligent answer. ASK brings that shift to local with answers that come directly from your neighbors. But what makes ASK different isn't the AI, it's what's behind it. 15 years of verified local conversations that no 1 else has growing every day as neighbors contribute. While AI makes that knowledge easier to reach, every new conversation makes the next answer better. And third, phases. Last quarter, I told you we bring back the Faves awards with an all-new in-product voting experience. In September, neighbors cast about 5 million votes for 750,000 local businesses, averaging more than 200,000 Faves a day while voting was open.

Faves matter because they capture something no algorithm can, which local businesses neighbors actually trust. We're now showing fade counts directly on local business ads, so a neighbor deciding who to hire or where to eat can see which businesses their neighbors have recommended. That's a win for the neighbor and for the local business trying to stand out. We'll keep building on this momentum through the rest of the year, making it easier to recommend a business any day, not just during the phase awards.

Now let me tell you how we keep the flywheel turning. Over the coming months, every effort will anchor on the same goals, more neighbors contributing and more reasons for all neighbors to come back. First is our desire to keep turning more users into contributors. This quarter, we made commenting a single tap. Next, we're simplifying posting prompting neighbors to turn a reaction into a comment and piloting new ways for our most active neighbors to take a bigger role in their communities. Then there's Revise, which is where ASK comes in again. We'll take ASK from answers to neighborly Health. When ASK can't answer a question, neighbors will be able to post it to their community in 1 tap. Urgent searches like a lost pet will alert nearby neighbors, and ASK will cover more, including what's for sale or free nearby.

And finally, we want to give neighbors a reason to come back. Our updates have to earn their attention. we've already seen that fewer better notifications get open more. Soon, AI catch-up summaries in the main feed will reach neighbors who visit less often. Badging will get smarter and neighbors will be able to pause notifications when they need a break rather than turning them off for good. Stronger communities create better content, better content drives deeper engagement and deeper engagement builds a stronger business. With that, I'll turn it over to Indrajit to walk through our financial results and outlook in more detail.

Thanks, Nirav. As Nirav described, Q3 was another strong quarter that reinforced the progress we are making across the business. Let's walk through the details. Q3 Platform while was $24.5 million up 14% year-over-year and up sequentially for the third consecutive quarter. We continue to feel confident that our focus on quality over quantity is driving incremental results that set the stage for continued durable platform while growth. Looking at what drove the 7% sequential increase, the growth was organic and product-led with no material paid user acquisition. Growth came from the feed and notification improvements that Nirav covered. .

Now turning to revenue. Q3 revenue was $78.8 million, up 14% year-over-year, finishing above our guidance range of $76 million to $78 million. Our self-serve channel remained strong, growing 35% year-over-year, another quarter of accelerating growth. Self-serve, which includes both national advertisers and SMBs, now comprises approximately 69% of total revenue up from 59% in Q3 last year. Revenue grew without an increase in ad load. Growth came from more neighbors rather than more ads per neighbor. Average revenue per user, or ARPU, increased 1% year-over-year.

Advertisers are getting more from Nextdoor through better ad formats, more supply and the second way for local businesses to pay for demand. Revenue is up for both national advertisers and SMBs and a few drivers stood out. Starting with the U.S. direct sales channel, where advertisers are committing more. Average spend per customer is up double digits year-over-year, and new customers are starting with larger budgets than a year ago. Financial Services was a standout vertical this quarter, along with health care and tech and telco. On the product side, we also made it simpler for businesses to start and buy on Nextdoor with more ways to target.

Q3 upgrades included Quick create improvements, new lead generation capabilities, added targeting built on local signals such as weather and audience extension. Another driver was video, which is moving from a new format to a core buy. Video sold through our field sales team grew 37% year-over-year with vertical video accounting for about 1/4 of that growth and opportunity alerts, our lead gen offering for SMBs is building on its early traction. Customers are up significantly compared to Q2 and we're seeing early signs of improving adoption. It's still small, but we're glad to see this additional monetization opportunity take shape.

Turning now to profitability. Q3 GAAP net loss was $0.7 million or negative 1% margin. This represents 18 points of year-over-year margin expansion. With GAAP results near breakeven and stock-based compensation down to 18% of revenue from 24% a year ago, the quality of our earnings continues to improve. Q3 adjusted EBITDA was $10.3 million or a 13% adjusted EBITDA margin. This compares to the $6.5 million to $8 million range we guided to last quarter. It also represents an approximately $6 million improvement year-over-year.

Our beat versus guidance was driven by revenue outperformance and the timing of certain expenses. We continue to drive productivity improvements across the organization. Annualized revenue per full-time employee increased 23% year-over-year in Q3, another quarter of continued efficiency. Turning to the balance sheet. We ended Q3 with $382 million in cash, cash equivalents and marketable securities, up $4 million sequentially. We also continue to have no debt. Through the first 9 months of 2026, we generated $28 million of cash flow from operations, a $31 million improvement over the same period in 2025.

Our strong cash position and ability to generate cash leave us well positioned to fund future growth, continue investing in the business and return capital through our share repurchase program. In Q3, we repurchased roughly 3 million shares for about $7 million at an average price of $2.38 per share. We had approximately $93 million remaining on our $100 million authorization at the end of the quarter. We plan to keep repurchasing shares on an opportunistic basis. Now let me turn to our financial outlook for the remainder of the year. For Q4 2026, we expect revenue of $78 million to $80 million and adjusted EBITDA of $10 million to $11 million. Our guidance for the fourth quarter implies full year revenue growth of approximately 14%, in line with the low teens range we provided last quarter. It also implies an adjusted EBITDA margin of approximately 10%.

Given typical Q4 seasonality, we expect Platform WOW to be flat sequentially, which would represent over 15% growth year-over-year. It's too early for us to provide an outlook for next year but I want to highlight our monetization priorities for Q4 and into 2027. Our focus is to both grow our advertiser base and to deliver better results for advertisers. This is how we expect ARPU to grow over time without increasing ad load. First, we are working on launching additional ad formats. These include dynamic product ads to help us capture commerce budgets and multi-location adds to enable brands with many locations to run local campaigns at scale. We're also in the early stages of trialing app install ads in Q4.

Second, we're continuing to develop neighborhood intelligence the platform we recently announced at Advertising Week. This market differentiated offering gives advertisers hyper local insights that sharpen targeting and measure results. It offers approximately 12x greater granularity than ZIP Code targeting down to the neighborhood level. And third, we're providing more utility for local businesses. We're making it faster to get started on Nextdoor, adding more lead generation partners and building more products for businesses to grow with over time. These priorities, combined with continued cost discipline give us confidence in our ability to keep driving sustainable, profitable growth. Now let's turn to Q&A, which will structure in a similar manner to the last few quarters. We'll start by taking live questions from our covering analysts. After that, we'll take some questions submitted by our investors. With that, operator, let's open the line for questions.

[Operator Instructions] Our first question comes from the line of Eric Sheridan with Goldman Sachs.

Thanks for all the detail in the release. I wanted to come back to the comments on weekly active users and maybe go a little bit deeper in what you're seeing around the themes of reactivation of prior period users back into the user base, better understand depth of engagement among your weekly active users and sort of paint a broader matrix around what you're seeing where you're investing to stimulate weekly active usage and how we'd be thinking about some of this reacceleration over the last couple of quarters, sustaining deeper into 2027 and beyond?

Yes. I'll take that one, and thank you for the question, Eric. Appreciate it. We are delighted that we have managed to turn around weekly active users, and that's been done without any real top of the funnel growth. And so to answer your question very specifically, the growth is coming from the reactivation of our existing user base, and we think there's a lot of upside there. The growth is particularly coming from neighbors who take part. So we call those contributors. And the weekly contributor number grew 12% and quarter-over-quarter, 27% year-over-year, which is faster than Platform WOW overall. .

I think the most important thing is the growth was organic and product-led. There was no material paid user acquisition, and we're continuing to get better at sending high-signal notifications versus sending more notifications. Our notifications are being opened more versus us just needing to send more e-mails and more noble notifications to activate more users. I think, in general, we believe that there is a ton of upside in improving the product and in a sense, waking up dormant users. And that's the trend that we're seeing, and we'll continue with that into Q4 and into 2027.

Our next question comes from the line of Youssef Squali with Truist Securities.

This is Robert on for Youssef. I also wanted to dial into the WOW acceleration. Curious what markets you guys are seeing, WOWs accelerate the most in? And on ASK, I'm curious like how much of the questions are commercial intent. -- like related to phase and local businesses versus just stale content. And then I think I have 1 follow-up. .

Okay. Thank you, Robert. Let me actually hit both of those. So on the WOW acceleration, I would say that it's broad and encompasses all of the user bases in all of the markets. And so there's nothing we see that would lead us to believe that the WOW acceleration is coming from a particular market. I think we are very optimistic that we can grow the entire platform and the things that we do that are foundational and beneficial to all users will result in all of those markets being lifted over time. So that's the answer to your first question.

As it relates to ASK, I think we see the same kind of trend on ASK that we typically see whenever we are things that are posted to the newsfeed, which is historically, we've seen between 20% and 30% of all what we like to think of as queries as those that have commercial intent. We do think that there is an opportunity with ASK not just to ensure that we are answering queries from neighbors that are general. The ones that have that commercial intent that can be monetized. And so ask is something that we don't see a separate from the normal course of usage that we've seen historically. It's just another way for us to provide those answers as quickly as possible to our users.

Our next question comes from the line of Jamesmichael Sherman-Lewis with Citi. Jamesmichael, your line is now open.

Should I make up a question for Jamesmichael to ask. Maybe we go to the next one, and we'll come back to Jamesmichael.

Yes. Just 1 moment. Our next question comes from the line of Naved Khan with B. Riley Securities.

This is Ryan Powell on for Naved. So we wanted to Ask about ask engagement since much. And as queries shift into AI surfaces on the platform, is there any impact on the quality of the home feed and engagement? And then second, with the rollout of DPAs, multi-location ads and app install initiatives, do you expect any contribution to large advertiser spend? .

Okay. Thank you for the question. I'll take the first one, and then I'll turn it over to Indrajit to answer the question about the additional ad products that you mentioned. And so -- but let me kind of maybe take a step back and say that we all agree with the industry that we're going to see a shift from what we might think of as query-based search into what we might think of as a genetic search. And that's why Ask is such an important product for us. We have not seen any degradation of usage to date.

And so I know that others have reported, and we had a retail investor question that we'll get to a little later where others in the industry have noted that now that Google is starting to answer things agentically with Gemini, there may be less traffic coming to places that were accustomed to Google Search driving traffic into them previously. Because we haven't relied on Google search for traffic, that isn't something that's affected us. What we have seen is that over time, people are using Ask more as they experience it.

Now the important thing to realize about next door is the interface has always been a genetic in some sense. So we've never been a traditional search engine where people go in, ask a question and then get 10 BlueLinx as answers. We've always been conversational which is more like agentic search anyway. And so the shift that we see, I think, is something that is going to be less pronounced on our platform, and we see it really just as upside. We don't have any concern that this is going to degrade either the amount of searches, the amount of activity or the quality results. I'll turn it over to Indrajit to talk about the ad-related question now.

Great. Thanks, Nirav. Ryan, we wanted to plant that seed of information into show. There's a lot of things in our pipeline. Our revenue guidance for Q4 kind of reflects all of that thinking. We think the impact of those specific ad products will be relatively small for Q4 as some of them are just rolling out or honestly just in beta phase. But as we move forward into 2027, we do think those will help us with having more tools for our sales force to sell and more ad products, and that should help us with all advertisers, but notably the medium and larger ones as we go through next year and attract some new advertisers as well by having those capabilities in-house.

Our next question comes from the line of Jason Kreyer with Craig-Hallum. .

Yes. I wanted to unpack the ARPU trends. You're seeing strong self-serve growth, Andrew, you commented on growth in budget from national buyers. But if we look at the numbers, the end result has been an ARPU that's kind of gone from mid-teens to 1% growth over recent quarters. So I just wanted to see what else is driving the current trends in ARPU? .

Yes. There's a few trends there. I think -- we are very proud of the turnaround we've seen in WOW! -- this year. But if you look at those year-over-year trends earlier this year and WOW was down quite a bit. And so revenue held up. So naturally, the math would show ARPU increasing quite a bit. We have now, on the supply side, caught up quite a bit with that strong growth. And so while demand is strong, the natural sort of math suggests the ARPU growth has flattened a little bit. But on the dynamics there, I would say we're pulling in more users, as Nirav have talked about earlier. And initially, some of those users are a little less active. .

And then over time, as they reengage with the platform, we move them to become more active users. And so the blend of that is bringing new users on the platform is obviously a good thing for the near-term and long-term health of the platform, but it takes a little while for monetization to fully catch up as those users become more habituated on the platform. So that's what sort of led to that trend on ARPU in the last few quarters.

So just to clarify, I mean, would you expect a continuation of what we've seen then? Should we expect to be a little bit more flattish as we go into '27? .

I don't want to -- I don't -- we're in the middle of planning for 2027. So I don't want to get too far into metrics for next year. I would say we would expect users to increase. We expect revenue to increase the exact ratio of the 2. We'll have to wait, and we'll provide more guidance on that next quarter.

I just wanted to add that given the trade-off between more users, particularly ones that had been dormant in the past coming back to the platform and learning that Nextdoor is here and it's useful and seeing them use it more over time. We would take the trade-off of WOW increasing and ARPU staying flat or growing the 1% any day of the week. That's a much better long-term trend in our business. .

Yes. That makes sense. .

I wanted to ask about alert advertising. Maybe if you can just talk about the interest in alert ads and how demand has shaped up there? Yes. I'll let Indrajit add to this. I mean, I would say, generally speaking, more and more, we think of the ads opportunity as something that unless it's a different product altogether like opportunity alerts or search advertising. I mean we would think of selling the ads as targeting them regardless of where in the experience they show up. So I don't -- I mean, Indrajit can build on this, but I don't think we think about it specifically as ads related to alerts. Are you talking about opportunity alerts? .

I was talking about opportunity I didn't have the right terminology. .

Okay. Got it. Got it. Okay. Indrajit go ahead. .

Yes, Jason, we're very happy with the product. It's still relatively early stage. We launched it really the back half of last year, and it's very -- it's scaling, but it's still small. We're in the process of optimizing our sort of SMB ad product for the various ways that advertisers can reach our users. And so opportunity alerts is another way for small and medium businesses to reach people in their communities. And so we're still optimizing that. We still think there is considerable room for growth heading into next year. But we think it's a product. And right now, it's particularly strong in sort of certain categories like home services, but we'll be looking to see how we can broaden that over time.

Our next question comes from the line of Jamesmichael Sherman-Lewis with Citi.

Yes. Perfect. Apologies. Underpinning the usage gains you've seen this year. I wonder if you could provide more color on the health of engagement trends is session count expanding, daily time been growing. It's great to hear that posting rates have improved. So I just wanted to dilator Nextdoor is becoming a more everyday utility. .

Okay. So this is probably what we're most excited about as we think about the progress that we've made this year because as everyone knows, I mean, it's very difficult to turn around a consumer asset that has either flattened out or is starting to decline, and we've seen increasing momentum in this area. I would say it's pretty much off the board, and it's driven primarily by I would just call out 2 things.

So the first is the use of ML to ensure that the usage of Nextdoor feels much more personalized and relevant. And that shows up both in the notifications and in the feed experience. And then the second thing I'd point out is more contributors creating more content. And the more content we have, the more that can use the quantity of content to create a more tailored experience. And so when we look at the fact that contributors are growing for the first time in a long time, that's not only a good thing because there's more content. That's a really good thing because the more content compounds in value because the ML gains that we've seen take that additional content and creates an even more personalized experience for users.

And so the good news is these are kind of foundational improvements, and they continue to increase the velocity of the flywheel that I talk about. And so ultimately, we are in an ecosystem business. And if we create a more healthy ecosystem then all of the improvements we make ultimately compound on each other. And that's what we're seeing, and that's what gives us a lot of optimism as we look towards 2027.

Great. A quick follow-up here on the monetization side. With the progress question from Jed formats, the dynamic product ads multi-location. But also U.S. spend improving. Any way you can help us parse out the improvements in the underlying advertising macro environment versus some of the product-based work that you're doing? .

Yes. I would just say we're seeing pretty good advertiser interest demand in Q3. And so we expect having those products actually make us more attractive to certain advertisers as we can meet some of their demands even better. So we're looking forward to serving their needs even better Q4 and into next year.

At this time, I will pass it to Indrajit for a few prepared investor questions.

Okay. Thank you, operator. Like we said, we're going to take a few investor questions that were submitted to us in advance. Actually, the first question Nirav touched on earlier, so I'll -- we might go pretty quick on that one. The first question is others in the industry have noted that AI answers are sending platforms far less traffic? How much does Nextdoor depend on Google Search.

Yes. So we did touch on this. And I will say that I'm sure that this is a big concern for consumer Internet companies that have relied on Google Search historically. -- for distribution. We're very fortunate not to be dependent on Google Search. I mean, we built the company from the very beginning to be reliant when it comes to distribution on our own usage and our own platform. It's actually 1 of our founding principles. And so as we see more and more Google referred traffic decline, we will certainly observe the impact to others, but it's not something that we'll feel ourselves.

Okay. Great. And our second question is with others in the industry launching AI agents that can find a plumber and book a job, won't people ask their assistant and skip Nextdoor.

Yes. This is another 1 of those existential risks that I think everyone in the industry is thinking about. I'm sure that there will be some trial of these AI agents that can find the service provider, book the job, et cetera. We've always believed that neighbors want a real recommendation from neighbors. And people already go to search engines today and other platforms to look for plumbers. But what we've seen is an increasing value in people wanting to find real recommendations that are not created by AI or recommendations from people that they don't know they would much rather put their value and neighbor recommendations from people who live around them. .

So while there may be this industry-wide trend towards people using agents to fulfill some of these tasks, we actually think that we feel a very differentiated -- we still have a very differentiated opportunity, and it's going to be even more important as more of that content on the Internet becomes synthetic and you won't know if it's coming from people or AI agents.

Great. Thank you, Nirav. With that, I think that concludes our investor questions section. And so I'm going to now turn it back over to Nirav for some closing remarks.

Yes, I'll just close by saying I really appreciate everyone joining us today. As you heard, Q3 was another quarter of steady progress. And in May, I told you that the progress was undeniable in August, I said it was starting to compound. This quarter, you can see it in the numbers. We got Platform WOW up 3 quarters in a row, results above the high end of our guidance 3 quarters in a row and more neighbors contributing. The consistency matters because it doesn't come from any single feature or any single moment. It comes from hundreds of improvements that our team has made, and that's what makes it durable. .

We also think it matters for a bigger reason because, obviously, everyone is focused on AI, but most of that attention on AI is on first order effects, the models, the amount of compute needed now agent-assistant. We think there's a second order effect that matters just as much for Nextdoor. And that is as AI makes it effortless to generate content -- more and more of the Internet is written by no 1 in particular and what becomes scarce is what AI can't produce, which is real people verified to a real place sharing what they actually know, and that's our opportunity. That's Nextdoor.

More than 110 million neighbors verified to a real address over -- across 350,000 neighborhoods, and they've got 15 years of local conversations to draw upon. And so while it starts with neighbors helping neighbors, over time, it grows into human connection. And AI can't replace that. It can't replace the neighbor. That's what we're building, and it's actually why we're so confident in the road ahead. So thank you again for joining us, and we'll see you next quarter.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good morning. My name is Leah, and I will be your conference operator today. At this time, I would like to welcome everyone to Nextdoor's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Nirav Tolia, Chief Executive Officer. Nirav, you may now begin.

Good morning, everyone, and welcome to Nextdoor's Q2 2026 Earnings Call. We appreciate everyone joining us today. I'm Nirav Tolia, Co-Founder, Chief Executive Officer, President and Chairperson of the Board. Joining me today is Indrajit Ponnambalam, Chief Financial Officer. I'd also like to take a moment to introduce Colin Bourland, our new Head of Investor Relations and Corporate Development. Colin has a strong background across finance, IR and corporate development, and he'll be leading our investor engagement efforts going forward. We're really excited to have him with us.

Thank you, Nirav. I'm excited to be here, and I appreciate the warm welcome. Hello, everyone. During this call, we may make statements related to our business that are forward-looking statements under federal securities law. 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, 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 2026 Nextdoor investor update posted on the Investor Relations section of our website today. And now I'll turn it back to Nirav.

Thanks, Colin. Q2 was a landmark quarter for Nextdoor with the strongest financial performance in our company's history. Platform WAU reached an all-time high. Revenue exceeded the high end of our guidance, and we delivered record adjusted EBITDA. Platform WAU grew to 22.9 million, increasing both sequentially and year-over-year for the second consecutive quarter. Revenue grew 15% to $75 million, and adjusted EBITDA reached $10 million, a 13% margin and a $12 million improvement over last year.

These are strong results, but what encourages me even more than the numbers is how we achieved them. For the past 2 years, we've talked about rebuilding Nextdoor for long-term sustainable growth. We haven't been looking for shortcuts or one breakthrough feature. Instead, we focused on steadily improving the product quarter after quarter, making it more useful, more relevant and ultimately more valuable for neighbors. This quarter, we're beginning to see those improvements compound.

The long-term success of Nextdoor depends on the health of our community and healthy communities are built by people contributing. Every time a neighbor asks a question, answers one, shares a recommendation, posts an update or help someone nearby, they make Nextdoor more valuable for everyone else. More contributors create more content, more content creates more relevance and more relevance gives neighbors more reasons to come back. When they come back, even more neighbors contribute. That's the flywheel we're building. Our job is to make it stronger every quarter, and that's exactly what we focused on in Q2.

Let me take you through some of the highlights, starting with how we make sure neighbors see content that feels relevant the moment they open Nextdoor. We continued improving our feed ranking systems so neighbors see the most engaging, useful and relevant content. We continued improving video throughout the platform, giving both neighbors and advertisers richer ways to communicate. We rebuilt our events experience, making it easier for neighbors to discover what's happening nearby. And we continue to use AI to improve the quality of our notifications, driving more engagement.

We also launched local journalist accounts, giving trusted local reporters a verified presence on Nextdoor and bringing higher-quality local news directly into neighborhood conversations. Now those may sound like separate product improvements, but they're not. They're all solving the same problem. When neighbors open Nextdoor, we want them to immediately find something that's useful, local and worth engaging with. But showing neighbors better content is only half the equation.

The other half is helping more neighbors create it because the most valuable content on Nextdoor comes from neighbors helping neighbors. So we focused on making it easier, faster and more rewarding to contribute. We added simple prompts that invite active commenters to share their first post, resulting in more neighbors posting for the first time. And we improved post insights, giving neighbors visibility into the real reach and impact of what they share because people contribute more when they can see that it matters.

The result, contributors reached a multiyear high in Q2. Unique posters grew. Post volume increased. Comments were up across the board. That's the flywheel in action. The future of Nextdoor isn't just built by getting more people to consume content. It's built by getting more neighbors to create it, and that's exactly the direction we're heading.

As we look toward the second half, I want to take a moment to explain how our thinking has evolved because I think it's an important story. When I returned as CEO, we began rebuilding Nextdoor around 3 core experiences: news, alerts and recommendations. And that work was essential. News and alerts helped restore utility to the platform. They gave neighbors more reasons to come back and reconnected us with what made Nextdoor valuable in the first place.

But recommendations revealed something even more important. And that is that what makes Nextdoor truly essential isn't the third-party content we surface. It's the content neighbors create for each other. And that is because Nextdoor is valuable because of the people behind it. A neighbor 2 streets away who recommends a plumber or answers a question with nothing to gain but helping someone else to make a better decision. That kind of content cannot be manufactured or aggregated or scraped from somewhere else. It can only be earned. And over the past year, that insight has sharpened our strategy.

The platforms that endure aren't just places where people post things. They're intentionally crafted ecosystems designed to make contribution easy, rewarding and self-reinforcing, where the value compounds as more neighbors participate. As we look ahead, we're laser-focused on building more of these systems. The two I'll call out today that are already delivering results are Faves and Ask. Faves is built around a simple insight. The most trustworthy recommendation isn't the one with the most stars. It's the one from a verified neighbor who lives nearby.

Every day on Nextdoor, neighbors ask who has the best plumber, the best pediatrician, the best pizza or the best landscaper. Faves turns these conversations into a living, trusted local guide, continuously updated by the community for the community. This fall, we'll bring back our annual Faves Award campaign with an all-new in-product experience where neighbors vote for their favorite local businesses across 20 categories, another reason to participate, contribute and strengthen the communities they live in.

The next feature, Ask takes this further. Once you have trusted recommendations, the natural question becomes, how do you help neighbors find them instantly? Ask uses AI to understand what a neighbor needs and surface the most relevant answer, whether that's a conversation, a trusted local business or another neighbor who's been through the same thing. What makes Ask unique isn't that it uses AI, but what's behind it, an archive of nearly 15 years of trusted, verified neighborhood-level conversations that no one else has.

AI simply makes that knowledge dramatically easier to discover and the system compounds. When a question hasn't been answered yet, Ask can surface answers from that same archive, keeping the conversation alive until other neighbors weigh in. That's how we think about AI at Nextdoor, not as a replacement for community, but as a way to make years of community wisdom accessible in real time.

When you take a step back, Faves and Ask are 2 expressions of the same fundamental advantage, a verified community of neighbors who trust each other and help each other. Content no algorithm or AI model can replicate on its own. We've made meaningful progress over the past 2 years, but what's changed most isn't simply the product. It's that we've rediscovered what made Nextdoor special in the first place. And if we keep investing in that, we'll build stronger communities.

Stronger communities create better content. Better content drives deeper engagement. Deeper engagement creates a stronger business and everything else follows from there. With that, I'll turn it over to Indrajit to walk through our financial results and our outlook in more detail.

Thanks, Nirav. As Nirav described, Q2 was another strong quarter that reinforced the progress we are making across the business. Let's walk through the details. Q2 Platform WAU was 22.9 million, up 5% year-over-year and up sequentially for the second quarter in a row, yet another all-time high for Nextdoor. When we reported Q1 results, we had just seen the first sequential inflection in several quarters. With 2 consecutive quarters of sequential growth, I'm now more confident that what we're seeing reflects the durable impact of the product investments we've made, not a onetime effect. As I've noted before, Platform WAU is a lagging indicator, which makes 2 consecutive quarters of improvement particularly encouraging.

Turning now to revenue. Q2 revenue was $75 million, up 15% year-over-year, finishing above our guidance range of $71 million to $73 million. Revenue growth was broad-based. Our self-serve channel remains the primary growth engine, growing 32% year-over-year, an acceleration from the 28% we reported last quarter, and it now comprises roughly 67% of total revenue with continued improvement in advertiser performance and revenue yields. Our growth was achieved without an increase in ad load, reinforcing that our revenue gains are coming from a healthier, more efficient ad product, not from increasing ad density on the platform.

Our U.S. direct sales team had a strong quarter. Growth was driven by deeper investment from existing customers with average revenue per customer up double digits year-over-year. Financial Services, Tech and Telco were standout verticals. And our video ad product continues to gain traction, a signal that advertisers are leaning into richer formats on the platform. On lead generation, one of our newer products, Opportunity Alerts, which helps local service providers connect with neighbors who are expressing real-time needs is showing encouraging traction at the intersection of neighbor intent and local business demand. It's still early, but the trajectory gives us confidence that we are on the right path to closing the gap between the intent that exists on Nextdoor and the monetization that should follow.

Turning now to profitability. Q2 GAAP net loss was $2 million or negative 3% margin, representing 21 points of year-over-year margin improvement. Q2 adjusted EBITDA was $10 million or 13% adjusted EBITDA margin. This compares to the $4 million to $6 million range we guided to last quarter and represents an approximately $12 million improvement year-over-year. Our beat versus guidance is driven primarily by revenue outperformance and continued disciplined cost management. We continue to drive productivity improvements across the organization.

Annualized revenue per employee increased 29% year-over-year in Q2, building on the gains we've driven over the past 2 years. We ended Q2 with $378 million in cash, cash equivalents and marketable securities, and we continue to have no debt on our balance sheet. Through the first 6 months of 2026, we generated $9.6 million of cash flow from operations, a meaningful increase from the $3.3 million we generated during the same time period in 2025.

Now let me turn to our financial outlook for the remainder of the year. For Q3 2026, we expect revenue of $76 million to $78 million and adjusted EBITDA of $6.5 million to $8 million. For full year 2026, we are raising our outlook for both revenue and adjusted EBITDA based on the positive momentum and outperformance we've seen year-to-date. We now expect to achieve low teens revenue growth for the full year and an adjusted EBITDA margin of approximately 10%. Underlying this outlook is our expectation that Platform WAU will continue to increase sequentially during the back half of the year.

Now let's turn to some Q&A, which we will structure in a similar manner as to the last 2 quarters. We'll start by taking live questions from our covering analysts. After that, we'll take some questions submitted by our investors. With that, operator, let's open the line for questions.

[Operator Instructions] Your first question comes from the line of Jason Kreyer with Craig-Hallum.

All right. Great to see the WAU kicking in 2 quarters in a row. It seems like that's coming earlier than expected. Can you just talk about what contributed to that? Is this just organic with just more utilization on the platform? Or do you have some deliberate strategies that you're deploying that's being seen as effective to grow the user base?

All right. Thank you for the question. And yes, we are very encouraged by the fact that now this is the second quarter where we've seen that WAU tick up. The strategy in general is to build a better product and to do so through lots of small improvements versus relying on one big bang that may or may not work out. I talked about in my opening remarks, some of the improvements that we made. And if you take those improvements and you continue to add them together, the compounding effect is the overall platform grows.

I mentioned in particular that we are now investing very deeply in rebuilding the core foundation of our community. And that comes down to user-generated content and how we're fueling contributor growth. And so that's a particular high point for us. But I would describe the progress as across the board, organic and durable. And so we're very encouraged by what we see. And while we can't point to one particular thing, we think that's actually a strength because you want to build a system where all of the improvements come together into something that then looks pretty significant. And that's what we hope we're building towards.

Got it. One follow-up. So you brought a lot of AI functionality into the platform over the last year. Can you just talk about how the benefits accrue to Nextdoor, where you see that in the KPIs, whether that's engagement or monetization or somewhere else in the numbers that we can't see?

Well, look, we continue to believe that AI is the biggest transformation in our industry since we've been not just with Nextdoor, but really since the beginning of the Internet boom. And so it's something that's going to be inescapable for all businesses. We do think that AI, as we've talked about, can assist us both making our company more efficient, but also in making the product experience and the advertiser experience better. And so whether that's on the product side, and I mentioned Ask in my early comments, and how we use AI to summarize and to better present our content or whether that's on the monetization side, where we're using AI and machine learning to create a better opportunity for advertisers to show the best ad at the best time to the best candidate, we will continue to lean into the technology.

And it's rapidly moving from something specific and a kind of vertical initiative, AI, into something that we think about more horizontally that's going to be utilized in all parts of our business and really all parts of our company. And so we do believe that we are well positioned in a world where consumers are starting to turn more towards agentic experiences than general search and things like that. And so we think not only our embrace of AI, but the trend of consumers seeking AI, those are both things that we can take advantage of.

Your next question comes from the line of Eric Sheridan with Goldman Sachs.

This is Alex on for Eric. If you think about some of the growth drivers of core ads monetization going forward, richer formats through video, more down funnel ads, increasing auction density. What are some of the 1 or 2 growth drivers that you see as having the longest runway? And what are some of the investments that you think you guys need to still make going forward to capitalize on that?

I'll start, and then I'll see if Indrajit wants to add something to it. The big thing that I will say is we continue to see more demand for our ad products regardless of the amount of inventory we have. And so as we grow engagement, we think our core display advertising opportunity gets larger and larger. In terms of the specifics, yes, you mentioned video and you mentioned self-service. I mean, Indrajit, you can probably add some color.

But I think the main point that I wanted to make was advertisers want to use Nextdoor because of the intent that our users express every single day. And so as we grow engagement on the platform, that display opportunity, just the basic display opportunity still has a lot of headroom and the ceiling is really, really high.

Yes. I would agree with Nirav. And I would just add, we think we have a lot of room to continue to make optimizations. We've made a bunch of steps over the last year, which you can see with our revenue per user metric improving, but pretty broad-based. We think the more engagement our users have on the platform, the more information we have on them, which is also valuable for our advertisers as well. So there's a compounding benefit of user engagement, which will help us on the monetization side. So I would say across the board, we have plenty of headroom yet to go across a bunch of different ad surfaces and ad formats.

Your next question comes from the line of Ryan Powell with B. Riley Securities.

This is Ryan on for Naved. So first question is with Platform WAU up 5% year-over-year despite the 9% pullback in brand and performance marketing in the second quarter. Could you talk about your updated timing for retargeting lapsed Platform WAU? And then if guidance for sequential WAU growth in second half assumes any step-up in brand and performance marketing spend? And then I have a follow-up.

Go ahead, Indrajit, you can start.

I think you probably have heard my tone change a little bit on Platform WAU, where the last couple of quarters, we said we expected it to grow over time, but there might be some short-term fluctuations. And so now we're feeling a little bit more confident based on our results year-to-date. And so we're sort of giving some forward-looking guidance on the fact that we continue -- that we expect that growth to continue the back half of the year. So that's sort of an important shift I wanted to note.

We're not quite ready to quantify exactly how much that increase will be because we're still working hard to do a whole bunch of things to the product to make that a durable long-term growth, but we do think it's going to grow. It is not related to any specific or significant marketing investments. So that will take more time.

I think as we continue to see retention of our users improve on the platform, as we see improving NPS on the platform, I think those will be key indicators for us on when we might step more on the marketing investment front, but we don't see that as a significant driver of growth for the rest of this year at least.

Understood. And then on ARPU growth, could you discuss the contribution from pricing versus impressions?

For Q2, I would say it was primarily pricing.

There are no further questions at this time. I will now turn the call back to Indrajit Ponnambalam.

Thank you, operator. As I mentioned earlier, we're now pleased to answer some questions that investors have submitted to us in advance. So I'll pose a question and then either Nirav or I will answer.

So first question is, I keep reading about how AI search summaries are cutting into traffic for sites that benefit from search optimization. Does Nextdoor depend much on search traffic to bring in new users? Or does growth come from somewhere else?

All right. I'll take this one, Indrajit. It's a great question. And the short answer is we've never depended on search traffic, and that's by design. Unlike most platforms, Nextdoor was never built for the open web. Our content is only accessible to verified neighbors within our private network. So Google can't index it, and that means that SEO has never been a part of how we grow. Instead, what we've built is a self-fueled distribution engine, direct traffic from neighbors who find Nextdoor useful, notifications that surface relevant local content directly and virality through neighbor invitations and word of mouth.

And so this is an organic growth mechanic that's not reliant on any outside traffic source. And that's the part that I find genuinely exciting. We're not just insulated from this AI search disruption. We may be a big beneficiary because we believe people will continue to migrate away from general search and towards direct trusted agentic destinations. And that's what Nextdoor is, and we think we're very well positioned for that world.

Great. Second question, as a shareholder, when do you think Nextdoor could be profitable on a straightforward GAAP basis, not just adjusted EBITDA?

So why don't I take this one? GAAP net income profitability is a priority for us. It's not just an eventual outcome. Just to level set, we've already delivered positive adjusted EBITDA and positive cash flow from operations for full year 2025. And we guided today to approximately 10% adjusted EBITDA margin in 2026. And you just heard me point out that our Q2 results reflected 16 points of year-over-year improvement in adjusted EBITDA margin. So we are making real progress on the profitability front.

Our team looks at net income profitability closely every quarter. For us, the gap between adjusted EBITDA and net income is primarily related to stock-based compensation. So as you guys can see in our financial results, SBC as a percent of revenue has been shrinking consistently over the last few years as we scale revenue and gain operating leverage, which is bringing us closer and closer to positive net income.

So we're not going to commit to a specific time period today, but GAAP net income profitability is definitely where we're driving the business, and we're closing that distance each quarter.

All right. Third and final question. Beyond core display advertising, what do you see as the next major monetization lever? And how large could it become?

I'll take this one, Indrajit, and this will build a little bit on the question that Alex from Goldman Sachs asked earlier. So first, let me just reiterate, we think there's real runway within advertising itself. Display is obviously one format, but we're still early on video. We're still scaling self-service. And there are ad products and formats that we haven't fully built yet. Remember that the self-serve channel alone grew 28% year-over-year in Q1. So even within advertising, we're not anywhere near a ceiling.

We do see an additional large opportunity, and that is local lead generation. Recall that from the very beginning of Nextdoor, one of our prime use cases has been when a neighbor asks who has the best plumber or recommends a landscaper or searches for a local business, all of that conversation around service providers. And that's verified trust-based intent from someone whose identity and address we know embedded in a community that already has a relationship with that business. We are increasingly monetizing this intent in products like search, opportunity alerts and even in Faves. And while we're not ready to size it today, we do see a very large opportunity ahead, and that excites us.

All right. Thank you, Nirav. With that, I'm going to turn it over to Nirav for some closing remarks.

Thank you, Indrajit, and thank you all for joining us today. Before we wrap up, I just want to leave you with one thought. Over the past 2 years, we've talked a lot about rebuilding Nextdoor. And this quarter, I think we saw the results of that work. Platform WAU reached another all-time high. Revenue grew 15%. Adjusted EBITDA improved by $12 million over last year. Those numbers do matter. But what gives me the most confidence isn't any single metric. It's that they're all moving together.

We're finally seeing the cumulative benefit of hundreds of product improvements working together. We're seeing healthier communities creating better content. We're seeing better content driving deeper engagement, and that deeper engagement is creating a stronger business. That was always the strategy. And over the past 2 years, we've rediscovered it for Nextdoor. As AI changes how people find information, we believe that what becomes increasingly valuable isn't just information, it's trusted information created by real people, real people that are helping one another solve real problems, and that's what we've been building for nearly 15 years. And I still think that we're just getting started.

So thank you for joining us today, and we look forward to updating you in the months and quarters ahead.

This concludes today's call. Thank you for attending. You may now disconnect.

Good afternoon. My name is Jasmine, and I will be your conference operator today. At this time, I would like to welcome everyone to Nextdoor's First Quarter 2026Earnings Conference Call. [Operator Instructions] You may now begin your conference.

Thank you, operator. Good afternoon, everyone, and welcome to Nextdoor's First Quarter 2026 Earnings Conference Call and Webcast. I'm Indrajit Ponnambalam, Nextdoor's Chief Financial Officer. With me today is Nirav Tolia, our Co-Founder, Chief Executive Officer, President and Chairperson of the Board.

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 2026 Nextdoor investor update released today.

And now I'll turn it over to Nirav.

Thank you, Indrajit, and good afternoon, everyone. I'm pleased to report that Q1 was a standout quarter for Nextdoor. Platform weekly active users reached an all-time high, revenue grew 14% year-over-year, and we delivered meaningful improvements in profitability.

Here are the highlights. Platform WAU reached 22.3 million, marking our first positive inflection point in several quarters. Revenue was $62 million, up 14% year-over-year. And adjusted EBITDA was nearly breakeven, a $9 million improvement year-over-year. These results represent a real step change in the business. And what's especially encouraging is the momentum we built as the quarter progressed.

In our last earnings call, we laid out the 5 key drivers of our investment thesis. In Q1, we delivered material progress across each of them. Let me walk through that progress focusing on the first 3, and we start, as always, with our unique core asset.

Nextdoor is built on a verified address-based neighborhood graph spanning 350,000 neighborhoods, [indiscernible] 110 million verified neighbors, roughly 1 in 3 U.S. households. This quarter, we continued to strengthen the integrity of that graph by expanding verification for both neighbors and local businesses. That's what keeps Nextdoor real and what makes every recommendation alert and conversation on the platform meaningful.

Next is high intent engagement, where we are revitalizing the core community experience. We introduced threaded conversations, pinned comments and smarter linking. We added richer media in the feed and improved performance through latency and infrastructure work. And for the first time, we began down ranking self-promotional content.

At the same time, Nextdoor continues to show up when it matters most. As we saw again this quarter, engagement increases during severe weather events and moments of local need. During the winter storms, neighbors turned to our platform for real-time updates on road closures, power outages and which local businesses were still open. This was yet another example of how our product can serve as an essential lifeline for communities.

Our third driver is monetization pathways, and Q1 was an important proof point. We entered the year with a clear thesis. Closing the monetization gap does not require a step change in user growth. It requires better matching of intent to outcomes. And in Q1, we saw that working across multiple surfaces. For example, local service providers reaching neighbors at the moment they're actively asking for recommendations and seeing strong engagement and conversion as a result.

I will leave it to Indrajit to cover the fourth and fifth drivers, our validated business model and founder's mentality. But as we look towards Q2, we will stay focused on continuing the momentum. Our priorities include improving content relevance, deepening engagement, expanding recommendations, strengthening distribution and advancing our AI and machine learning capabilities.

Speaking of AI, I would like to close with why I'm more confident than ever in Nextdoor's position in an AI-driven world. As machine-generated content increases, truly verified human content becomes more scarce and more valuable. We've spent 15 years building a network of over 110 million verified neighbors across 350,000 neighborhoods. That network generates first-party content that is continuously refreshed, rooted in real identity and grounded in local context. That foundation puts us in a uniquely strong position. AI allows us to unlock significantly more value from that network by making it easier to find relevant information, summarize conversations and connect neighbors to the people and insights that matter most in their local community.

But what truly differentiates Nextdoor is the connection to the people behind that information. The neighbor who knows the best contractor, the parent a year ahead of you making the same school decision, the local business that others genuinely trust. That's also what powers our recommendations experience. When a neighbor asks for a plumber or a babysitter, they're not just getting a list, they're getting trusted input from people nearby who've actually made that choice.

AI can make these connections faster, more relevant and more accessible, but it cannot replace the trust and context that comes from real neighbors. And that combination, AI-powered discovery built on a foundation of verified local identity is what gives us confidence in Nextdoor's position in the years ahead.

With that, I'll hand it over to Indrajit to walk through the quarter in more detail and discuss our outlook.

Thanks, Nirav. As Nirav described, Q1 was a strong quarter that reinforced the progress we are making across the business. Let me walk you through the details.

Q1 Platform weekly active users, or WAU, which measures users who engage directly on the Nextdoor app or website was 22.3 million. This represents a meaningful sequential increase from 21 million in Q4, reversing the prior sequential trend and hitting an all-time high for Nextdoor. Year-over-year Platform WAU was up slightly from Q1 2025 to 22 million.

This sequential improvement reflects the compounding impact of the product investments we've made over the past several quarters, more relevant content, smarter notifications and an overall better user experience. As I've said before, Platform WAU is a lagging indicator of the product investments we're making. We are encouraged by the sequential improvement, although we continue to expect short-term fluctuations in WAU in the coming quarters.

Turning now to revenue. Q1 revenue was $62 million, up 14% year-over-year. This represents a significant acceleration from Q4's 7% year-over-year growth and finished well ahead of our guidance range of $57 million to $59 million. Q1 is historically our softest quarter for advertising demand, which makes this performance especially encouraging.

Revenue growth was broad-based. Our self-serve channel continues to be a growth engine, growing 28% year-on-year and now comprising roughly 68% of total revenue, with continued improvement in advertiser performance, revenue yields and retention. Every major monetization channel contributed to growth this quarter from small local advertisers to large national brands.

Our ad stack improvements, including AI-assisted targeting and optimization and new ad formats are delivering measurable results for advertisers of all sizes, increasing eCPMs while reducing lower quality backfill.

Outside the U.S., we also expanded self-serve into Canada and brought click optimization to the U.K., our first ML-powered performance product in that market, delivering meaningful CPC reductions in our beta period.

Q1 GAAP net loss was $11 million or a negative 19% margin, representing 22 points of year-over-year margin improvement. Q1 adjusted EBITDA was near breakeven at negative $200,000. This compares to the negative $4 million to $6 million we guided to last quarter and represents an approximately $9 million improvement year-over-year. Even in our seasonally softest quarter, we achieved near breakeven adjusted EBITDA, a meaningful milestone that underscores the operating leverage in our model.

We continue to drive productivity improvements across the organization. Revenue per employee increased 31% year-over-year in Q1, building on the gains we've driven over the past 2 years.

Turning to capital allocation. During Q1, we repurchased 17 million shares for $29 million at an average price of $1.69 per share. We ended Q1 with $373 million in cash, cash equivalents and marketable securities, and we continue to have no debt on our balance sheet.

Today, we are also announcing that we have authorized a new $100 million share repurchase program effective through June 2028. This gives us the flexibility to act opportunistically while preserving our ability to invest in growth and pursue strategic opportunities.

As Nirav outlined, these financial results reflect drivers 4 and 5 of our investment thesis in action. A business model validated through the improved operating leverage in our financial results and the discipline around trade-offs that aligns network health with maximizing long-term shareholder value.

Now let me turn to our financial outlook. Given the momentum we are seeing, we are providing guidance for both Q2 and updating our full year 2026 outlook. For Q2 2026, we expect revenue of $71 million to $73 million and adjusted EBITDA of $4 million to $6 million. Based on our strong start to the year, we are raising our full year expectations. We now expect to achieve approximately 10% revenue growth for the full year and an adjusted EBITDA margin in the high-single-digit range, up from the mid-single-digit margin guidance I provided in our last earnings call. This reflects our expected revenue trajectory, continued operating discipline and expanding leverage we are seeing across the business.

Now let's turn to some Q&A, which we will structure in a similar manner to last quarter. We'll start by taking live questions from our covering analysts. After that, we will take some questions submitted by our investors.

With that, operator, let's open the line for questions.

[Operator Instructions] Our first question comes from Jason Kreyer with Craig-Hallum.

Great. Nice work. Wanted to start on the Platform WAU and maybe if you can just unpack the turnaround there. I'm curious the strategy, how the strategy evolves to take 100 million users that are on the platform and get more of those into that 20 million WAU and grow the more engaged audience over time?

Okay. Thank you for that question. And this is really kind of our primary objective at Nextdoor, which is making the most of not just our total registered audience of now over 110 million verified users but also attracting new users.

Now what I'll say is much of the work that we've done over the last 2 years, has been on, I'd say, repairing the foundation and putting ourselves in a position where we can reduce the things that we know may use short-term engagement but don't lead to positive NPS over time. And so you may have seen some things that made WAU go down. You may still see some things that make WAU go down. Over time, though, we're pretty confident that we're building a better foundation, not just for our existing users but to then enable us to resuscitate the lapsed users because there's a pretty big gap between 22 million and 110 million registered and then ultimately to attract new users to the platform as well.

I will mention that we have not been aggressive about trying to remarket to the lapsed users because we don't believe that the product is in a position yet where we're playing from a position of strength. But I'm delighted to say that we're seeing some results now that tell us that we're headed in the right direction. And that's why WAU trended up, and we feel really good about that.

Can you perhaps just double-click on kind of the platform and what's not where you want it, but what it takes to get where you want it, so you're more aggressive on that WAU growth?

Sure. It's actually pretty simple. We boiled it down to kind of one very critical user need. And that is when our neighbors come to Nextdoor, they want relevant content. And so if you're in a neighborhood that's not very active, it's hard for us to show you relevant content. If you're in a neighborhood where the discussion is varying off topic, you're not going to necessarily get relevant content. If you're in a neighborhood who hasn't visited in a long time and we don't have very good no model for you, we can't show you relevant content because we don't know exactly what you're looking for. Those are all things that we're addressing.

We're up-leveling the quality of content overall so that everyone has an opportunity to see more relevant content. We're focusing on neighborhoods that have less liquidity so that when those neighbors visit the platform, they find great content. And we're investing a ton in machine learning and profiling our neighbors in a way that we can personalize the experience and find the content that they're looking for.

But it really all comes back to one very simple thing, which is the more content we have, the better we can be at targeting that content and making it relevant to our users. And so most of our efforts are around increasing the quality of content on Nextdoor. And we need to increase quantity as well, but we're taking a quality-first view there.

That was great. Nirav, one follow-up maybe. Just you'd mentioned that momentum had built as the quarter progressed. Can you just elaborate on what transpired over the course of the quarter that improved that performance?

Yes. I'll give you something that we didn't talk about in the results that I think is a leading indicator that makes us very optimistic that we're headed in the right direction. And it's something that we wouldn't typically report because it's an early thing that then leads to lots of chain reactions on the platform. But that metric is we grew the number of unique contributors over this period of time. And what that means is we grew the number of people who are adding content to the system on Nextdoor.

We have a base of really great high-frequency users who create a lot of the content. In fact, if you look at most of these user-generated content platforms, 1% of the users create 99% of the content. The same is going to be true of Nextdoor. But if we can grow that base, then we start to see lots of really positive effects.

And in this period, we were able to grow that contributor base that resulted in more content, which resulted in more reasons for people to visit Nextdoor, more relevant content when they visit Nextdoor and all good things start to happen on the platform. And so one of the things that we've done over the last 2 years is we've gone pretty deep to understand the core aspects of the foundation of the system, so we can go and fix root causes versus just deal with a superficial layer on top.

WAU in and of itself, it's actually an output metric. It's not an input metric. An input metric is how many unique contributors do you have. And when we see that number growing, we have a lot of conviction that we're headed in the right direction.

Our next question comes from Jamesmichael Sherman-Lewis with Citi.

Great to see the result. First, Nirav, revisiting your closing commentary on AI and Nextdoor trusted human content, could you talk more broadly about how you see the Nextdoor evolving, particularly following the introduction of features like threaded conversation and pinned comments but also as you onboard more publishers and reduce self-promoted content? What's changing?

Yes, that's a great question. And I'll just elaborate a little bit on the closing about AI because I've never actually been more bullish on the AI future for our industry and I've also never been more bullish on our opportunity to be a big part of that. Because I truly believe we're one of the few companies that can use the power of AI, which is furnishing machines and technology, but combine it with verified human content, data and profiles to really create kind of the best of both to take the best of technology and the best of humanism and provide the best solution for users as a result.

The feed itself will continue to be more personalized. So how do you use AI and really machine learning in a feed? You don't want the same experience for every user on Nextdoor. The users who really want news, they should see a lot of news. The users who actually want a lot of neighborhood conversation, they should see a lot of neighborhood conversation.

The history of Nextdoor has been that everyone in the neighborhood saw exactly the same feed. Well, that is no longer the case, and we see much better outcomes using AI to personalize the feeds. That's number one.

Number two, we will increasingly be experimenting with summarizing the feed by using AI so that you can get the value of reading lots of threads in a smaller little concise nugget. Now you see this all over the web, right? And so we should be doing this on Nextdoor as well. We need to make sure that we do it in the right way so that contributions and the ability to reply to these threads continues to happen. But we're seeing, I think, some encouraging different results and experiments that we're doing that give us the conviction that we can use AI in one of the most powerful ways that you can use it, which is to summarize and make more useful existing user-generated content.

The final thing I'll say is we're starting to think a little bit more deeply about are there services other than the feed that can be really valuable on Nextdoor, whether that's your messaging inbox or whether that's another surface altogether such as groups or for sale and free. And we're very, very early, and that's just exploratory. But what we're realizing is we have more than the feed as a resource on Nextdoor.

We have multiple surfaces and we can use AI across all of those services, and we're doing the same thing. We are taking the best of AI technology, which summarizes and make things more personalized and make things more relevant, and we're combining that technology with verified human content that's proprietary that we generate from people that we know well. And we think that's long term and unbeatable combination.

That's very helpful. I appreciate the color. Second question here. On your pillar for multiple monetization pathways, I realize we're very early days here, but things like opportunity alerts or maybe even a subscription offering could be interesting. Is there ultimately a meaningful non-ad revenue opportunity in the future?

Yes. I'm glad you asked that question because opportunity alerts has definitely been a big bright spot for us. And we are increasingly thinking about not just investing in the feed advertising revenue stream because that's growing. As you see, it's very vibrant, and we're performing for our advertisers. But we do believe that whether it's lead gen or things that we haven't even thought of, there are non-ads, nonfeed revenue opportunities inside Nextdoor.

Opportunity Alerts is one of the first, and it's something that is very powerful because it has strong product market fit. Opportunity Alerts works because neighbors come to Nextdoor looking for service providers, and we can go proactively to service providers and tell them that we will connect them or match-make them between the neighbors and the service providers that want to serve those neighbors based on expressed intent.

And so it's really good for neighbors. It's really good for the service providers, and it performs. And we see that both in the pricing as well as the retention. And so it's still early for Opportunity Alerts, but it is certainly one of the more exciting monetization vehicles that we've seen over the last couple of months.

Our next question comes from Naved Khan with B. Riley Securities.

This is Ryan Powell on for Naved. So first, we are wondering which of the new features you have launched or resonating most with users and how it's impacting the product pipeline? And then second, breaking down advertiser growth between large versus small advertisers on the platform?

Okay. Thank you for the question. I'll take the first and then Indrajit will take the second. We have a number of questions that were submitted by our investors. And so I'm going to come back to this in a little bit more detail, but I'll just start by saying that one of the features that our users are really excited about and I'm most excited about is a feature called Ask, which utilizes AI to take existing content from the 14 or 15 years of conversations that we have between neighbors, between verified human neighbors on our platform and uses that information to proactively answer questions either on demand in an agentic way or when neighbors come to Nextdoor and just post in the feed.

And so I'll talk more about that because the question was asked by one of our investors as well. And so give us a little bit of patience on that, they are much a much more elaborate answer, but that is a feature called Ask. And I'll just say that the really exciting thing about the feature is that it has given us many new ideas on how to deploy AI into the consumer experience.

And so while you hear a lot about AI transforming companies operationally, making them more efficient, making them more effective in the way that they do their workflows, we're doing that at Nextdoor, but we're also using AI inside the product itself. And that's what's really exciting about Ask because it's one of the first features we've seen where we can combine the power of AI with the user-generated content that has been our bread and butter for the last 15 years and create a better experience for users.

I'll let Indrajit talk about the composition of advertisers.

Yes. So it was a very good quarter on revenue growth, as you saw a 14% growth, and it was pretty broad-based across all of our revenue channels. So that's very encouraging. I'd say our strongest growth is probably in our direct sales business with our larger advertisers. Home services continues to be a standout category for us, but we saw quite a bit of growth in other categories such as telco and tech, healthcare, financial services, all performed well, sort of broad-based portfolio strength.

We saw a big uptake in advertiser interest in our video products. So that's very encouraging year-over-year. And you saw in my comments that self-serve continues to sort of be a larger share of our ad revenue as it's not necessarily managed to shrinking, but self-serve is increasing that's showing sort of advertisers are interested there.

SMB also grew and we saw strength across the board there, too. So home service being the strongest category. We saw meaningful increases in average spend per advertiser year-over-year, which is also encouraging for us. And then finally, search also, we sort of improved our monetization in search. So I would say it's a pretty broad-based solid quarter for us.

There are no questions registered. [Operator Instructions].

Great. Thank you, operator -- all right, I'll jump in. Thank you, operator. As I mentioned, we are now pleased to answer some questions that investors have submitted to us in the last couple of weeks. So actually our first two questions come from Eric Jackson, one of our investors. So first question, can you share more about the traction you are seeing on local business inventory, including onboarding pace and retention and marginal contribution economics?

Okay. I'm going to take that question. And I want to start by saying that we think of our opportunity with small and local businesses as a genuine win-win-win. And I'll explain what I mean by that. It's a win for local businesses because they largely lost their traditional advertising channels. There's no more Yellow Pages. The big platforms have largely left them behind. And so we can fill the gap there for them and give them a cost-effective and highly performant way for them to reach their customers.

And this is a win for neighbors because neighbors genuinely want to find and support businesses that they can trust that are in their local area. And because of the way Nextdoor works, neighbors are recommending these businesses. They're vouching for them. And so it's a great match between well-performing businesses and neighbors who are looking to spend money where they live.

Finally, it's a win for Nextdoor because this market reinforces our core mission of strengthening local communities, not to mention that it's structurally efficient to operate because it tends to be in the self-service category.

On the specifics, I'll say that spend per advertiser is growing, which is a really positive signal. Churn is roughly in line with what you'd expect in this part of the market, but it's still higher than we'd like. And that's an area of continued focus.

Now speaking of these structural events that I talked about, serving local businesses is a very efficient model for us. There's less overhead, better unit economics as we scale, and it's a key driver of the self-service growth that you've been seeing in our business. This really happened for a number of quarters now. We're still early, but the signal is positive, and this is an area that we're definitely leaning into.

Let me go to our second question on AI features, what are the early engagement metrics? And how is that translating to monetization, if at all yet?

Okay. I'm excited to talk about one of the features that I mentioned already Ask because I do believe that it opens up lots of different opportunities for us. So Ask is this exciting feature. And what's exciting about it, as I said, is the way that it's evolved because it says a lot about where we're headed. We launched it as an AI assisted. We actually called it phase. It was part of the new Nextdoor that we launched. Neighbors can ask questions and get answers generated from 14 years of verified neighbor conversations. It was a local agent. But it was real people from real neighborhood. It wasn't the open Internet. And so that local authenticity is something that we felt then and we understand today is absolutely true is something that just can't be replicated.

As we watched how users engage with this gave us a new idea. Why wait for people to find the feature, which was outside of the feed and then ask a question? It turns out there are conversations happening in the feed every single day. Members aren't online at that particular moment to respond. So we've begun to embed Ask directly into those gaps. And here's the important part. We use the power of AI to summarize and surface real answers and they are real answers from that 14-year corpus. So it's neighbors answering neighbors. It's just happening asynchronously, all enabled by AI.

The results have been very encouraged. Engagement's up, there are more comments, the quality of the conversation goes up, and there are more organic mentions of businesses. This has really given us a playbook for how we keep deploying AI across the product in ways that feel very native and differentiated to who we are.

There was that mentioned about monetization. I just want to say monetization is not a near-term objective for Ask, driving engagement is. Because ultimately, when neighbors are actively asking for recommendations and getting real answers from their neighbors, that is exactly the high intent environment our advertisers value. And we will develop the commercial layer on top of that healthy foundation.

Our third and final question came from a few investors. And the question is regarding your path to profitability and free cash flow is the past primarily revenue-led? Or are there structural cost reductions coming? So why don't I take this one as it's a great note to end our Q&A on.

So first, just as a reminder, we are already operating cash flow and free cash flow positive on a trailing 12-month basis. So the path to growing free cash flow is really about compounding what's already a good start.

Second, to address the question directly, we expect revenue to be the primary driver. Our business is beginning to demonstrate meaningful operating leverage, which means incremental revenue growth flows through to the bottom line at quite an attractive rate, which is encouraging. But that being said, we're not standing still either on the cost side. We will continue to leverage AI and many other technology advances to optimize how we operate, and we expect that discipline to be a consistent feature with how we run the business going forward.

So with that, Nirav, I'm going to turn it over to you for closing remarks.

Okay. Thank you, Indrajit. And I want to thank all of you for joining us today. This was a fun one because Q1 was the strongest first quarter in our company's history. Platform WAU inflected positively, reaching 22.3 million. Revenue grew 14% year-over-year, and adjusted EBITDA came in near breakeven in what is typically our seasonally softest quarter. Most importantly, as you heard from Indrajit, we're raising our full year outlook. And those are the numbers we think they tell a clear story.

Now what gives me the most conviction is not just a quarter. It's the moment we're in. As AI makes the digital world more synthetic, the network that is real, local and human becomes more valuable. And that is Nextdoor. That is what we're here to build. We know there's still significant work ahead to fully realize our potential, and we're going to remain focused on executing with ambition and discipline. But I think you've seen today that the progress is undeniable.

So we thank you for listening and for your support. We look forward to continuing to share the progress.

This concludes today's conference call. Thank you for your participation. You may now disconnect your lines.

Good afternoon. My name is Tamia, and I will be your conference operator today. At this time, I would like to welcome everyone to Nextdoor's Fourth Quarter and Full Year 2025 Earnings Conference. [Operator Instructions] Thank you. You may now begin your conference.

Thank you, operator. I'm Nirav Tolia, Nextdoor Co-Founder and CEO, and I'd like to welcome everyone to our fourth quarter and full year 2025 earnings conference call and webcast. Joining me today is Indrajit Ponnambalam, our Chief Financial Officer. I'd like to extend a big welcome to Indrajit, who joined us in December. We are thrilled to have him as part of the Nextdoor executive team.

Now let's start today's call with our standard disclaimers. 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 Q4 2025 Nextdoor investor update released today.

All right. Let's get started. This quarter, we know we're speaking to a broader audience than usual, including many retail investors joining us for the very first time. So I would like to start with absolute clarity about how we think about Nextdoor, how we've approached this turnaround and why we remain confident in the long-term opportunity in front of us.

Let's begin with our foundation. Nextdoor is not a traditional social app. It is a trust-based local network built on a verified address-based neighborhood graph that connects real people to real places. That graph grounded in identity and location is our core asset. It is what differentiates Nextdoor, and it becomes more valuable in a world where digital experiences are increasingly shaped by AI. The asset has always been unique. What has changed is how we are unlocking its value.

Over the past 2 years, we have reworked the product experience to elevate the most relevant decision-oriented content, the recommendations, services, alerts, local news and information that people rely on when something in their real world requires action. Unlike many social platforms, our value is not measured by passive scrolling. It shows up when intent is high and decisions are being made. Our strategy is to combine the strength of our trusted community with AI to surface the right local information at the right moment, increasing utility for neighbors and economic value for both local businesses and Nextdoor.

We have paired this strategy with disciplined execution and a clear founders' mentality, one that prioritizes long-term network health over short-term optics, capital efficiency over growth at any cost and durable unit economics over temporary wins. With that context, Q4 was an important quarter. It reflected progress not only in our product and operating performance, but in demonstrating that this strategy is gaining traction.

Turning to performance. While we still have significant work ahead, Q4 was our strongest quarter ever in terms of financial metrics. Revenue grew 7% year-over-year, and we delivered positive adjusted EBITDA with continued margin expansion. That progress reflects improved execution, disciplined cost management and strengthening performance across our monetization platform. Comparing full year results, we have repositioned the company from an adjusted EBITDA loss of over $70 million 2 years ago to positive adjusted EBITDA in 2025. We expect 2026 will build on this momentum, and this is a result of structural changes in how we operate, not short-term optimization.

On the user side, we continue to be focused on leading indicators. Platform WOW will not inflect overnight, nor does it need to for this model to improve. What matters most at this stage is engagement quality and intent. Our Net Promoter Score improved steadily throughout 2025, and we are seeing encouraging increases in engagement frequency. Neighbors are returning more often for high-value use cases, which reinforces the durability of the network.

And on the advertiser side, we continue to invest in our proprietary ad stack and are seeing measurable gains, particularly in self-serve. Our AI-driven tools have reduced friction in campaign creation, improved reporting transparency and strengthened optimization performance. Advertiser retention remains solid, outcomes are improving, and these gains are being driven by better ad performance, not by increasing ad load.

Overall, I will reiterate that Q4 reinforced that the strategy outlined earlier is translating into real material progress. I will now turn it over to Indrajit to review the quarter in greater detail and discuss our outlook.

Thanks, Nirav, and hello to everyone joining us today. I'm excited to join Nextdoor at such an important time for the company. I've been impressed by the strength of the team and the opportunity ahead of us, and I look forward to partnering with my colleagues to drive sustainable growth and long-term shareholder value.

Now let's jump into the results. Q4 platform weekly active users, or WOW, which measures users engaging directly on the Nextdoor app or website, was 21 million, a 3% sequential decline, roughly in line with our expectations. This reflects our ongoing effort to prioritize engagement quality over volume. Specifically, our users have told us to get smarter on notifications. So we are working on those improvements with the goal of maximizing long-term user value as notifications improve. As a result, we expect Platform WAU will continue to fluctuate in the near term, which is an intentional trade-off as we focus on relevance, retention and overall improved user experience.

Now let's turn to revenue. Q4 revenue was $69 million, up 7% year-over-year. This was our highest ever quarterly revenue, reflecting continued strong self-serve advertiser demand, improved sales productivity and better yields driven by product improvements. We saw year-over-year growth in both customer count and average customer spend, while ARPU increased 13% year-over-year, all without an increase in ad load. Advertisers benefited from higher click-through rates, while we grew our active customer base and associated net new advertiser spend. In short, our ad stack investments are delivering measurable improvements.

We're seeing positive effects in our self-serve platform, including incremental advertiser spend, improving advertiser mix and retention and better operating efficiency from a more streamlined sales model. As we continue to roll out new ad formats and apply AI to optimization and creative workflows, our focus remains on steadily improving monetization and advertiser outcomes over time. Our self-serve platform lets businesses of any size quickly create and run their own ads on Nextdoor. By removing friction for advertisers, we have created an efficient path for businesses to leverage our neighborhood data and AI to reach verified household decision-makers and measure results clearly. Our self-serve channel was again a core growth driver and remains a key component of our monetization strategy. Q4 self-serve revenue grew 32% year-over-year and comprised roughly 60% of total revenue.

Now let's move to profitability. Q4 GAAP net loss was $4 million or negative 6% margin, representing 13 points of year-over-year improvement. Q4 adjusted EBITDA was $8 million, an 11% margin, representing 6 points of year-over-year improvement, driven by revenue scale and continued broad-based operating expense leverage. Like revenue, Q4 was the strongest adjusted EBITDA quarter in our history. Our strong Q4 results allowed us to achieve positive adjusted EBITDA for the full year 2025, 12 months ahead of schedule, reflecting our continued focus on efficiency and productivity. Revenue per employee increased 26% year-over-year in Q4, which is another good proof point of our revenue growth and the operating leverage we drove through 2025. At quarter end, we had $405 million in cash, cash equivalents and marketable securities and 0 debt. In Q4, we repurchased 2.5 million shares at an average price of $1.77. Looking ahead, we continue to prioritize operational investments that we feel will drive long-term value for the platform.

Now let's turn to our financial outlook. We expect Q1 revenue of $57 million to $59 million, representing 7% year-over-year growth at the midpoint of the range and adjusted EBITDA of negative $6 million to negative $4 million, representing negative 9% adjusted EBITDA margin at the midpoint. Here are some factors to consider related to our Q1 outlook. First, our Q1 guidance reflects normal revenue seasonality, where Q1 is typically our softest quarter of the year. Second, we remain focused on optimizing the core user experience and driving quality engagement. So we are intentionally limiting our new user acquisition efforts and do not plan to increase ad load in Q1 2026. Given the multi-quarter nature of our product initiatives and their impact on usage patterns, we believe quarterly guidance is the most appropriate way to communicate our near-term outlook. That said, we are encouraged by our operating progress in 2025. For full year 2026, we expect to see continued revenue growth. We also expect to see adjusted EBITDA margins in the mid-single-digit range. With that, I'll turn it back over to Nirav.

Thank you, Indrajit. You made a strong impact in a short period of time. The discipline, perspective and cross-functional leadership you're bringing are raising the bar across the company, and I'm excited about the role you'll play in our next chapter. We are fortunate to have you on the team.

Before we move to Q&A, I would like to wrap up our prepared remarks by specifically articulating our investment thesis, which rests on 5 pillars. First, our core asset, the neighborhood graph. Nextdoor is built on a verified address-based neighborhood graph covering 350,000 neighborhoods and more than 105 million verified neighbors, roughly 1 in 3 U.S. households. Because identity and location are verified, neighbors come to Nextdoor for utility, not passive scrolling. We have built a trust-based graph that is differentiated and difficult to replicate.

Second, intent-driven engagement. Our platform centers on real-world decisions, finding a service, responding to an alert, getting a recommendation. The value of the network appears when intent is high. We are not optimizing for entertainment and scrolling. We are optimizing for relevance and action.

Third, multiple monetization pathways. High intent creates commercial opportunity. We see substantial room to close the gap between user intent and monetization through contextual native advertising and lead generation, all that connects local demand with local supply. This is particularly compelling with small- and medium-sized businesses, a fragmented market with lower digital penetration and clear ROI expectations. Importantly, improving monetization does not require a step change in user growth. It simply requires better matching of intent and outcomes.

Fourth, a validated business model. We are demonstrating that this model works. We're capturing a differentiated high-intent audience. We have multiple monetization formats, advertiser retention and ROI are improving, revenue per employee is expanding. And as Indrajit outlined, operating leverage is emerging in our financial results. These are early but concrete signs of validation.

Fifth and finally, a founder's mentality. Turnarounds require a precise understanding of the core asset and disciplined execution around it. A founder's mentality brings both. This translates into an approach that prioritizes long-term thinking, disciplined capital allocation and an uncompromising focus on network health. It means resisting short-term monetization tactics that erode trust. It means making decisions that strengthen the platform over years, not quarters. That founder's mentality underpins how we are executing this turnaround and how we are investing for durable growth. It also shapes how we approach AI, which we strongly believe will drive a material transformation, not just for our company, but for our entire industry. We are not pursuing AI as a feature cycle. We are applying it to a proprietary asset built over more than 15 years, a verified address-based neighborhood graph that generates content and context that does not exist anywhere else. The value of AI here is not a generic capability. It is based on the uniqueness of our data and the community engine that produces it. By combining our hyperlocal real identity graph with AI, we can enhance relevance, improve advertiser performance, increase efficiency and most importantly, deepen our competitive moat. As such, AI does not compromise our thesis. It strengthens all parts of it.

The opportunity in front of Nextdoor has not changed. What has changed is the rigor and discipline with which we are executing. When viewed through the right lens, one centered on trust, intent and durable economics, Nextdoor represents a differentiated platform with a path to sustainable long-term growth that we believe remains underappreciated. And with that, we're happy to take your questions. But before we begin Q&A, let me briefly outline how we'll structure it. We'll start with questions from our covering analysts. After that, Indrajit will share some of the most common questions we received from individual investors over the past few weeks. We appreciate the engagement and look forward to the discussion. With that, operator, let's open the line for questions.

[Operator Instructions] The first question comes from Jamesmichael Sherman-Lewis with Citi.

Two here, if I may. First, encouraging to hear frequency and engagement quality improving. Can you add more color on the specific product changes that are resonating most with users as we look at the new UI, recommendations and notification changes, et cetera? And are you seeing any delta in usage trends from existing versus newer user cohorts? And then I have a follow-up.

Great. Well, James, Michael, it's good to hear from you. And I'll just give you the color on what we're seeing that's working. I'd say, in general, we are slowly but surely converting our product to something that feels much more utility-centric and is driven by intent. And so the things that are driving deeper engagement are whether they're big things like a greater focus on recommendations and local news and other things that give you the information you need to make decisions or whether they are smaller things that are at the ecosystem level, like more relevant notifications, using AI to better personalize the feed. It's a series of different things that we need to do because at the end of the day, the product experience is not just one feature. It's a set of lots of different features, and we have to make all of them better. And if we do, we start to see compounding. And I think we're starting to see the very beginnings of that, and we're excited about it.

You were going to ask a question Yes, a follow-up here. As we think about the advertiser base and specifically the momentum in the self-serve segment, -- can you revisit any budget trends by vertical or advertiser size? And specifically, any update on spending patterns from larger advertisers?

Okay. Thanks for the question. We did have the strongest revenue quarter in our history. And so I would say across the board, we saw strength from advertiser demand. And we continue to use AI to generate better outcomes for those advertisers. I'll let Indrajit chime in a little bit on a few of the specifics, but I think it was really better demand and better performance across the board.

Thanks, Nirav. Yes, I would echo what you said. It was pretty broad-based what we saw in Q4, which was obviously a very strong quarter for us. There were no particular verticals that stood out as significantly sort of outperforming the others. And as I mentioned in my remarks, we are seeing good trends on number of advertisers, net new ad revenue. So we feel like those are headed in the right direction.

[Operator Instructions] The next comes from Jason Kreyer with Craig-Hallum.

Just want to build on the last question. Any updates on building out a programmatic ad stack for the large advertisers? It's been kind of a year since we've talked about more volatility in that category. I think last quarter, you kind of said you were stabilizing things with SSPs and DSPs. So curious where that's at and if you think that can drive more growth throughout 2026 just as you get that stack fully implemented.

Sure. So we need to continue investing in programmatic formats and the programmatic ad stack in general because that's what large advertisers are seeking. What you heard a year ago is that there were large advertisers who said that they wouldn't consider us until we started to roll out those improvements to the platform, and we've done that. And so as we have done that, we've seen greater demand. As we continue to invest in that, we should see greater demand as well. But it's a part of the whole. I wouldn't call it out as a particular focus of ours. It's something that we need to do to be competitive, and so we will continue to do it. And we do expect demand to go up as a result. But it's not something that I would point to as some specific opportunity that we think is outsized that we're going after aggressively.

And Nirav, if I could just add, I think what we've seen over the last 12 months since we first introduced programmatic is really strong and improving performance on our direct sales ourselves. We're seeing strong demand from advertisers there, which we're able to monetize quite well. So I think programmatic has been a great supplement to that, but we're also encouraged by our own performance, too.

Great update. And then just maybe another one in terms of the evolution of recommendations. I know that you've kind of tweaked that kind of go-to-market or the rollout of recommendations over the last couple of quarters. What's in store for 2026? How broad is that rollout now? And how much does that change in the next few months?

It's a great question. And I would say that in 2026, recommendations and in general, making it possible to easily find the absolute best small businesses in your neighborhood is a major priority for us. And so whether that means ensuring that when neighbors ask questions, they are answered more quickly, whether that means using the power of AI to summarize old conversations or new conversations so that you can get multiple recommendations in one fell swoop or if it means bringing those great SMBs on the platform so they can respond directly to neighbors so that it's a closed-loop kind of experience, those are all things that we're focused on in 2026. We think this is one of the really unique advantages that Nextdoor has. We are a place where you come to get real recommendations from your neighbors. It's not bots that are creating the recommendations. It's not star ratings. It's neighbors that are willing to vouch for the small businesses that they believe in. And this is a value proposition that we need to get much better and much more forward in front of our consumers because there's nothing like it across the web.

The next question comes from Naved Khan with B. Riley Securities.

This is Ryan Powell on for Naved. So first, we appreciate the color in the prepared remarks, but we're wondering a little more on how much more work needs to be done on moderating the notifications and e-mails and whether the current frequency is about what you expect long term? And then I have a follow-up.

Okay. Thank you for the question. I think that we will never stop working to make the notifications more relevant. The way that it goes with notifications is that the more relevant they are, the more you can send. The problem with sending irrelevant notifications is it may not show up in the near term, but in the long term, it does, either through a lower NPS score or even worse when people unsubscribe. And so we've taken a very, very conservative view as it relates to notifications. We've made the difficult decision to focus on the long term. And as a result, we've pulled back quite a bit. And frankly, we'll continue to do that if it's the right thing for neighbors. So as we build more relevant notifications, we can be more aggressive with them, and we will. I'd say today, we still have a lot of work to do. And we're going to be much more long-term minded versus feel like we need to pump out as many e-mails and mobile notifications as possible just so we can pump up the metrics. What's really important to us is ensuring that when someone receives a notification, they feel like it's relevant to them. And until we can do that with real regularity, we'll continue to be conservative in how many we send out.

Great. That makes sense. And then second, on the Faves launch. Where are you currently in rollout? And how has it impacted the quality of content in neighborhoods that it is live?

Okay. It's a very good question. And Faves is part of that overall ecosystem of recommendations and small businesses. And in general, one of the things that we feel that Nextdoor should be truly great at, which is helping you find the best service providers, the best businesses, the best places to spend your money in your neighborhood. I don't think that this year, we will think about this as some large rollout. We're going to think about it as a series of improvements that are ongoing and iterative. And so at any moment, you may think that it's mildly improved. But if you look back at this over a year, I think you will see some major progress. So versus thinking about this as there was a launch and then we've got a big release next quarter and then another release the quarter after that, we're thinking about this much more like traditional web development, where we should have deadlines and milestones and releases every few weeks. And you should feel like the product is getting gradually better and better and better and better.

There are currently no other questions in queue. [Operator Instructions] With that being said, I'll pass it back over to the team for Q&A with the analysts.

Great. Thank you, operator. As Nirav mentioned, we are pleased to now answer some of the most popular questions that investors have submitted to us in the last few weeks. So let me start with our first question, which is on AI. What has been the progress of implementing AI features into the app? What are the main bottlenecks to implementing more AI features?

Okay. So let me start by saying that we are of the mind that AI is as transformative as anything that's happened in our lifetimes in the technology industry. So we're true believers when it comes to the power and potential of AI. We think that it should ultimately shape us and has shaped us already in 3 different ways. It should make the company more efficient. It should make the consumer product better and it should increase advertiser optimization and performance. We've done things in all 3 of those areas. And much like I described our Faves rollout as not one big bang, but rolling thunder that is increasingly just something that's natural and something that we look to as part of our normal cadence over time, that is the way that we will continue to implement AI solutions. We don't see AI as some vertical thing that we focus on that's outside of the main set of things that we're doing. We see AI as a powerful technology that needs to be the foundation of everything that we're doing. And so the real opportunity for us is to take our incredible community system, which is uniquely human and it's verified and you have actual neighbors that are creating content and combine that with AI to create content that ends up being higher quality, more relevant, but still uniquely human. And that's a very unique opportunity that we think exists for Nextdoor.

Great. Second question is on platform differentiation. How is Nextdoor truly different from other social media or home services apps on the Internet?

So I would go back to what I articulated with our investment thesis, and that's point number one. The core asset of Nextdoor is a neighborhood graph. It's a graph of people that have verified identity and real location. That then enables a trust-based network that's very different than the other social networks. That's difference number one. Difference number two is many of the social platforms today engage in what I would describe as one-to-many communication. There's content on the social network, and then there are consumers of that content. Followers is typically what you call those consumers. And you have one content creator that's communicating with lots of different followers. On Nextdoor, it's not one-to-many communication. It's many-to-many communication. It's more about community. You post on Nextdoor. And then what's really interesting is the responses that come to your post. And those responses are not just from one person. They're from a number of different people, and they're all your neighbors. And so it creates a completely different dynamic because it's not about the one big content creator and then you are responding to that content creator, but you're not talking to all the other people that are responding to the content creator. Nextdoor is a community-centric social network. And increasingly, that's different than the other things that we see across the web.

Okay. Third question is on vertical-specific monetization. Question was, would you consider leaning more heavily into vertical-specific use cases like home services and pet services?

So Nextdoor has, from the very beginning, been a very broad local social network, which means there are a variety of different use cases that may span from simply getting to know your neighbors to understanding what to do this weekend in your neighborhood to asking for help to find a lost pet to coming together in times of crisis to, of course, finding recommendations for the best businesses in your neighborhood. Those are a series of very different things. And even within those verticals like finding the best business in your neighborhood, there are lots of subverticals as well. So this is a big challenge for us. It's also an incredible opportunity. In the highest value verticals and service providers is one of them, we should actually build more vertically specific features and functionality. Whether that ultimately looks in the app like a series of channels or whether there continues to be a single monotonic news feed that then actually branches out when you need it to, -- those are the things that we will experiment with. But ultimately, we know that particularly for the highest intent and the best monetization use cases, we do need to push deeper and build more vertically specific solutions.

Okay. Thanks, Nirav. All right. Now on to our last question, which is related to cash management. A couple of folks -- several folks asked, what is your philosophy on the use of your cash? So why don't I take this one? First, as a reminder, we ended 2025 with slightly over $400 million of cash and marketable securities and no debt, which we view as a major strategic asset of ours. Also, as you saw in our results, we reported positive adjusted EBITDA and positive cash flow from operating activities for full year 2025, which we find very encouraging. And look, we do not assume that access to capital markets will always be readily available for companies of our size. So preserving liquidity gives us important operating and strategic flexibility. And for us, really any use of cash, whether for organic investments, external opportunities or capital return, it must all exceed our return on investment thresholds. So really, as we look at it, we continue to regularly evaluate all options for our cash, and we use those objectives as we evaluate the opportunities before us.

Okay. With that, we're going to wrap up this call. We really appreciate your interest in Nextdoor, and we look forward to continuing to communicate our progress on this turnaround. We are very optimistic about our future, but we know that there is a lot of hard work ahead. Stay tuned.

Thank you, operator.

This concludes today's conference call. Thank you for your participation. You may now disconnect your lines.

Good afternoon. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Nextdoor's Third Quarter 2025 Earnings Conference Call. [Operator Instructions]. Thank you. You may begin the conference.

Thank you, operator. Good afternoon, everyone, and welcome to Nextdoor's Third Quarter 2025 Earnings Conference Call and Webcast. I'm John T. Williams, Nextdoor's Head of Investor Relations. With me today is Nirav Tolia, our Chief Executive Officer.

As a reminder, 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. Reconciliation of these measures to their most directly comparable GAAP financial measures can be found in the Q3 2025 Nextdoor investor update released today.

And now I'll turn it over to Nirav.

Thank you, John, and good afternoon, everyone. I'm Nirav Tolia, Co-Founder and CEO of Nextdoor. Q3 was a quarter of steady execution and our results are consistent with the plan we've communicated. We delivered our highest quarterly revenue ever and generated positive Q3 adjusted EBITDA. In addition, we are on track for positive adjusted EBITDA in Q4 and are reaffirming our expectation for full year 2026 breakeven.

Let's talk more about Q3. Revenue grew to $69 million, up 5% year-over-year and reflecting strong demand from self-serve advertisers who continue to be drawn to our Nextdoor ads platform. ARPU improved 8% year-over-year even amidst reduced ad load. On the large customer front, we delivered on our commitment to complete our programmatic supply integrations, enabling deeper collaboration with scaled parties who are looking to reach audiences on next door more efficiently.

Our self-serve channel continues to be a growth engine. Q3 self-serve revenue grew 33% year-over-year and made up roughly 60% of total revenue. Advertisers saw meaningful gains, including higher click-through rates and lower cost per click. We also grew our active customer base and associated net new advertiser spend.

In short, our ad tech investments are delivering results and we expect the introduction of new ad formats and deeper AI integration over the coming months may further improve monetization. Q3 platform WOU, defined as users who engage directly on the Nextdoor APRA website was $21.6 million, a modest sequential decline. This was driven by an intentional decision to reduce notification and e-mail volumes, reflecting our focus on engagement, quality over quantity.

In the short term, platform while may continue to fluctuate due to seasonality and our continued commitment to delivering the best user experience. As I've said many times before, we will deliberately make trade-offs even if they are difficult, all in the interest of driving long-term and sustainable growth.

Continuing Q3 GAAP net loss was $13 million. Q3 adjusted EBITDA was $4 million, a positive 6% margin, representing 8 points of year-over-year improvement. This reflects our strong revenue performance and continued focus on operating the company as efficiently as possible.

Further, revenue per day has now increased 21% year-to-date. And at quarter end, we had $403 million in cash, cash equivalents and marketable securities, along with 0 debt.

Now let's move on to our financial outlook. We expect Q4 revenue between $67 million and $68 million and adjusted EBITDA in a range between $3.5 million and $4.5 million. This implies full year 2025 revenue growth of 3% to 4% and an approximately $3 million adjusted EBITDA loss. We do continue to expect full year adjusted EBITDA breakeven in 2026.

Here are some key factors to consider related to our Q4 outlook. Our Q4 guidance reflects normal seasonality and a full quarter of savings from our recent workforce reduction, partially offset by incremental platform investments. We do not plan to increase ad load in Q4 or into 2026 as we continue to prioritize the best user experience. Consistent with this approach, we also expect to intentionally reduce new user acquisition efforts during Q4. Those are the numbers, and now I'm excited to go into more detail about our product, the true driver of long-term value.

The first phase of our transformation marked by the launch of the new Nextdoor, rebuilt our foundation. We reset our expense base, strengthened our team and instilled greater operating discipline. At the same time, we enriched the platform by pairing user-generated content with trusted third-party local information that drives meaningful conversations and real-world utility.

At quarter end, more than 4,000 local publishers are live on Nextdoor, and local news now accounts for approximately 7% of total feed content. We also created a real-time local alert system to help stay informed and safe during high-impact local events such as fires, inclement weather and utility outages. New integrations include WASS real-time traffic and road updates and instant earthquake alerts from the U.S. geological survey.

Looking ahead, we will continue leveraging third-party content to reinforce Nextdoor as the neighborhood of go-to source for what's happening nearby. This foundational work has helped clarify what users truly value and has given us a stronger and more sustainable baseline for growth. That said, the takeaway is clear. We must continue to dramatically increase high-quality content and distribute it more effectively to the right users at the right times.

So now we're entering the next phase. We're moving beyond the content feed to build a stronger neighborhood ecosystem, grounded in a vibrant, useful and trusted local community. Community driven content has always been part of our DNA. Our opportunity now is to modernize how we surface and connect it, focusing on the interactions that drive real-world outcomes, providing utility for neighbors and visibility for local businesses.

Authenticity is what matters, and we have a material opportunity to invest further in Neighbor recommendations. Neighbors want to know why a business is trusted. Real recommendations for VERIFI neighbors build that trust and we know that's what sets Nextdoor apart.

With this in mind, we plan to reinvent our recommendations ecosystem to turn authentic word-of-mouth into actionable insights that help Neighbors make smart decisions and help local businesses thrive. We believe these efforts can meaningfully improve engagement and monetization all across our platform.

Ultimately, our goal is to create more relevant and trusted connections that reflect how neighbors engage in the real world with each other and with local businesses. The first phase gave us stability and insight. The current phase is where we take bold swings and begin to see the results.

As we move forward, we'll focus on a few key indicators: quality and quantity of content, depth of engagement and the value we create for advertisers. We will avoid chasing short-term metrics in favor of investing in durable compounding growth initiatives. Transformation takes focus. It takes courage and it takes time. It is not a straight line and it's neither predictable nor immediate but it represents the best path for us to unlock the next phase of growth for Nextdoor and create lasting value for our users, advertisers and shareholders.

Before wrapping up, I'd like to share an important leadership update. I'm pleased to announce that we've hired our next Chief Financial Officer, Indrajit Ponnambalam will be joining Nextdoor as CFO effective December 1, 2025. Indrajit brings more than 2 decades of experience leading high-performing finance and operations teams most recently as CFO at Premion, an industry-leading connected TV advertising platform and prior to that, at Match Group, Time Warner Cable and AOL. He has a proven track record of driving growth of achieving operational excellence and financial rigor at scale, and we are thrilled to have him on board.

In closing, we remain laser-focused on building a platform that makes neighborhoods more vibrant, more connected and more useful. At our core, Nextdoor is about real local connections that create value every day. That vision will continue to guide us in everything we do. Thanks for joining our earnings call today. I'll now turn it over to the operator to begin Q&A.

[Operator Instructions]

Our first question comes from the line of James Sherman Lewis from Citigroup.

First for me here, and by the way, we're only about 4 months out from the launch of the new next door and understood the commentary around it being a nonlinear transformation. But we'd love any insight you have into the underlying customer engagement, specifically that depth of engagement metrics that you mentioned. And then I have a follow-up.

Great. Thank you for the question. And yes, we're 4 months out and we are excited about the progress. You may remember that initially, we talked about the new Nextdoor as being focused on news, alerts and recommendations. We now have news as approaching 10% of news feed content. We know that alerts are essential to our users, and we've seen that in the metrics.

And then finally, I talked about in the comments that recommendations is the big swing that we plan to take next because we think it has the most potential of anything that we've worked on. What we're seeing with our user base gives us a lot of optimism. We know that we've made the content more relevant even amidst reducing notifications and keeping ad load exactly where it is.

What we also know is that 7% of new content, which is what the news represents is not enough. The way next door works best is when there is so much content that's showing up in your neighborhood that we can use AI and ML to show you the most relevant things for you, whether that's from a proximity standpoint or from your affinity standpoint.

And so the real focus for us is on dramatically increasing the amount of content. What we've learned from the new next door is when we add more high-quality content, we see deeper engagement. And so we now have the signal that we need to really bear down and do our best.

That's helpful. Second here and potentially a little bit more tactical. -- the notification changes in 3Q and the planned pullback in new user acquisition for 4Q. Can you update us on how you see your user acquisition strategies evolving into 2.

Yes, it's a great question. So the reason that we mentioned that is because as we continue to focus on the best user experience, -- the thing that we need to do is to ensure that the first time a user comes to Nextdoor, they have the best possible experience. We have a number of things that we plan to release over the next couple of months that we believe will create a better cold-start experience, and we use cold start to represent the first time that you come in to next door.

Today, when you come into Nextdoor, you see the same thing that someone who's been an ex door member for 10 years may see. And we know that it should be a different experience. And so as we work towards a specialized experience that will be fully suited for the new user to Nextdoor, it makes sense for us not to be aggressive and use your acquisition. We just wanted to make that statement. As an example of how we are looking at long-term value creation versus trying to make all the metrics go up in the short term.

Your next question comes from the line of Jason Kreyer from Craig-Hallum.

Nirav, so when you talk about adding more content, can you just give us a sense of where that comes from? Like are you talking about inspiring more user-generated content? Or is this an expansion of some of the third-party publisher partners that you've already started to ingest on the platform?

Jason, thank you for the question. And you kind of answered it, but I'll give you more specifics. So we've now got at quarter and 4,000 publishers that are pumping news content into Nextdoor. We think there's more upside there. And we certainly think that there's more upside in integrating more third-party alerts -- but as you indicated, we believe the greatest opportunity is where Nextdoor's DNA is, and that's user-generated content.

And so the next phase for us is to think less about integrating external content and to think more about ramping up our internal user-generated content engine on Nextdoor, which has really been, again, at the DNA of how we were created. We think that a natural place for that to start and potentially the most impactful is in Neighbor recommendations. And so you should expect to hear a lot more about that in the months to come.

That's great. Also, I just wanted to see if you could give an update on the build-out of your programmatic capabilities. curious on kind of what you're doing on platform. And then off platform, I know you recently did a deal with Yahoo!. So maybe a little perspective on both would be great.

Yes. That's a great question as well because we have spoken about this throughout the year. So the first thing to say very specifically is that we've completed the supply side platform integration earlier this year, and we are currently testing with DSPs. We have announced that off-platform deal with Yahoo!. So now an advertiser can go into Yahoo DSP, find next door audiences target against and then campaign directly from Yahoo.

The way we see this is a programmatic generally complements direct sold inventory and is additive. It was a capability that we were asked to add to what we were doing at next door, and we always knew that we would. We announced it back, I think, in the Q4 earnings call almost 6 or 7 months ago, and I'm delighted to say that we've actually lived up to what we said. And so we expect that to pay dividends again in the months and quarters to come.

Your final question comes from the line of Naved Khan from B. Riley Securities.

This is Ryan Polo on for Naved. So I wanted to ask another question on the alerts and notifications. So obviously, you mentioned that you had reduced the alerts -- was there an improvement in engagement for the alerts that you were surfacing? And then also, were there any differences in trends for users coming from alerts versus entering the app organically?

That's a great question. So obviously, if we are materially decreasing the number of notifications but yet experiencing a growth in revenue, you can see that the alerts and notification that we are sending are more effective. And so that's obviously playing out in the numbers, and we expect that to continue to play out. In terms of what we are seeing specifically in user behavior, the third-party alerts in particular around implement weather around now traffic with Wave and earthquake alerts from the USGS, those are particularly effective at resurrecting users who may not have been to next door in some time.

And so if we're very honest with ourselves over the past few years, we lost our way a little bit. And the content not as relevant as it should have been. -- alerts on the other hand, particularly the way we built the new alerts platform, which targets a particular area that is very specifically being affected by the alert those perform quite well.

And we think that they are a way to get lapsed users back onto the platform. And when they come back on the platform, because of the other improvements that we've made, they should come back more frequently.

Okay. I think that was our final question. And so I'd just like to make a few closing remarks. We are very excited about this next phase of our transformation. We know that our foundation is strong. We've stabilized the business, driven material gains in productivity and our products and operational changes are starting to bear fruit. But it's very, very important for us to say that we're fully committed to building the best product. There are no store cuts here, and we will make the necessary trade-offs to unlock long-term and sustainable growth.

And that's all because our conviction in Nextdoor's potential has never been higher. We have a clarified strategy, the team is super focused and now it's all about having the courage to do what it takes to win. So with that, thank you for joining the call and for your interest in Nextdoor.

And that concludes the meeting. You may disconnect.