• Revenue: $63 million, an 11% year-over-year increase.
• Weekly Active Users (WAU): 45 million, an 8% year-over-year increase.
• Adjusted EBITDA Margin Improvement: 23 percentage points year-over-year.
• Adjusted EBITDA Loss: $6 million in Q2.
• Cash, Cash Equivalents, and Marketable Securities: $457 million with zero debt.
• Stock-Based Compensation Expense Reduction: 25% in Q2.
• Share Repurchase: 18 million shares repurchased for $44 million.
• Restructuring Charge: $26 million one-time charge in Q2.
• Q3 Revenue Guidance: Approximately $62 million.
• Q3 Adjusted EBITDA Loss Guidance: Approximately $8 million.
• Full-Year 2024 Revenue Growth Expectation: Approximately 10% year-over-year.
• Full-Year 2024 Adjusted EBITDA Margin Improvement Expectation: Approaching 20 percentage points year-over-year.

• Warning! GuruFocus has detected 6 Warning Signs with NZSE:VHP.

Release Date: August 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Revenue grew 11% year over year in Q2, driven by the Nextdoor Ads platform's enhanced capabilities.
• Weekly active users (WAU) increased to over 45 million, reflecting an 8% year-over-year growth.
• Improved employee productivity and margins, with a 23 percentage point year-over-year improvement in adjusted EBITDA margin.
• Significant increase in new users joining through word of mouth or unpaid acquisition channels.
• Strong advertiser retention, with top 50 advertiser retention improving to 96% in Q2.

Negative Points

• The transformation of the user experience is expected to take time, with meaningful progress not anticipated until mid-2025.
• Q2 adjusted EBITDA loss was $6 million, indicating ongoing financial challenges.
• A one-time restructuring charge of $26 million was recognized in Q2, impacting financial results.
• Q3 revenue is expected to be approximately $62 million, with an anticipated adjusted EBITDA loss of $8 million.
• The company is still in the early stages of revitalizing its core product, which is crucial for long-term growth.

Q & A Highlights

Q: Can you discuss the macroeconomic factors in Europe and how they impact your performance? Also, with expectations of positive adjusted EBITDA in Q4, is this sustainable for 2025? A: Nirav Tolia, CEO: We focus on what we can control, not the macro environment. Our improvements are driven by internal execution. Regarding cost efficiency, we aim to manage our business frugally, but our main focus is on growth and revitalizing our product. Matt Anderson, CFO: We see positive momentum in key verticals like home services. For Q4, we expect cash flow breakeven, supported by interest income. We're positioning for growth and product changes, but not commenting on 2025 specifics yet.

Q: How do you view the landscape of local versus national advertising, and how does user growth from word of mouth impact marketing investments? A: Nirav Tolia, CEO: Nextdoor offers a local experience at a national scale, serving both local and national advertisers. Matt Anderson, CFO: Advertisers seek reach and return on ad spend. We're seeing strong user growth through word of mouth, with nearly zero spend on user acquisition, indicating significant marketing leverage.

Q: What are the key drivers for your growth in new users and how do you plan to maintain this momentum? A: Matt Anderson, CFO: We've seen significant growth in new verified neighbors, driven by word of mouth and unpaid channels. This reflects our scale and product improvements. We aim to maintain this momentum as part of our strategy, which is built into our guidance.

Q: Can you elaborate on the improvements in advertiser retention and revenue growth? A: Matt Anderson, CFO: We've improved mid-market revenue retention and increased average spend from new advertisers. Nearly 50% of revenue comes from self-serve advertisers. We're focused on delivering more value to advertisers and improving top 50 advertiser retention, which rose to 96% in Q2.

Q: What are the long-term goals for Nextdoor's product transformation and growth strategy? A: Nirav Tolia, CEO: Our long-term goal is to revitalize our core product through the NEXT initiative, combining local expertise with an improved user experience. This transformation aims to delight users and advertisers, driving growth and shareholder value. It's a challenging journey, but the potential payoff is significant.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.