Nextdoor Holdings, Inc. (NYSE:KIND) Q3 2023 Earnings Call Transcript

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In an ideal world, they show up, we’ve already created it for them based on either what we know about their business already or what we see happening with other local businesses in their community. And we can create the perfect campaign to get what they want, which is more customers, more revenue, but we can do it in a way that feels seamless and literally at real-time for them. So that’s a place that we are investing in. And I also did mention that we saw almost 300,000 pages created using Gen AI to put out there from an SEO perspective. That’s a really good way to drive people back to Nextdoor to make sure we keep showing up as being highly relevant. It’s also important because it’s a way to not show all of our data externally rather to effectively give a really performance summary, but to ensure that our proprietary data stays proprietary within the Nextdoor’s vault.

Operator: Thank you. We have no further questions in the line-up. So I’d like to turn the call back to Sarah Friar for any closing thoughts.

Sarah Friar: Great. Thank you so much, operator. Thank you all for dialing in today. We always appreciate your support and your interest in Nextdoor. When I look at what the quarter brought positively, we felt good seeing year-over-year growth across our key metrics. WAU up 6%, revenue up 4% and, in a tough environment, seeing a record number of new verified neighbors come to Nextdoor. We do feel like we have a lot of levers at all stages of our user funnel to keep driving growth. So, whether it’s top of funnel, where as I said, we added our highest number ever of organic users to the platform, if it is mid-funnel where we continue to see folks engage, VN to WAU ratios remain in the 50% range, or if it’s bottom of funnel, so session-depth as Matt talked about, up 30% year-over-year.

We did see strength in areas such as international ad agency partnerships and with the push from Neighborhood Faves, we now have $4.3 million claimed business pages, a really fertile ground for upselling advertising. We do expect verticals like finserv, real estate, home services to approve overtime; we know we performed really well for them. So we view that as an area of pent-up demand, but unfortunately are just not seeing it at the moment. AI is really important for Nextdoor. We own the local knowledge graph with label data with a really high-intent audience of real people and neighborhoods everywhere. It’s a very unique asset for us. As we look forward, we are laser-focused on growing WAU and revenue. So that means we have to continue delivering value for neighbors and organizations, really highlighting the importance of local.

Second, we need to keep investing in our platform initiatives to keep growing that engagement, and that’s where AI comes to play too. And then finally, we need to keep iterating on our monetization capabilities for advertisers of all sizes. So, building out the Nextdoor Ads platform to make sure that those advertisers get better outcomes, but that we also reduce advertiser efforts to be on Nextdoor. Right now, we’re very focused on near-term performance. But we don’t want to be shy to continue to invest in long-term opportunities of this very unique global hyper-local neighborhood network. What are we going to do in order to drive that in 2024? We’re going to make sure that we add more verified neighbors in 2024 than we did in 2023 and with our expense reduction plan accelerate our past margin improvement and cash flow generation.

So with that, thank you so much. I will also be on the follow-up Analyst Call to go a little deeper, and appreciate your time this afternoon.

Operator: This concludes today’s call. Thank you for joining. You may now disconnect your lines.

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