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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 2026 earnings Conference Call. All lines will be muted during the presentation portion of the call with the opportunity for questions and answers at the end. You may now begin your conference.

Thank you, operator. Good afternoon, everyone. Welcome to Nextdoor's 1st 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. 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 break even, 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 five 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 three, and we start, as always, with our unique core asset. Nextdoor is built on a verified address-based neighborhood graph spanning 350,000 neighborhoods and 10 million verified neighbors, roughly one in three 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. 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. 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 4th and 5th drivers, our validated business model and founder's mentality. 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. 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.

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's 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-$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-$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 two 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 equivalents, and marketable securities, 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 four and five of our investment thesis in action. A business model validated through the improved operating leverage in our financial results and a discipline around trade-offs that aligns network health with maximizing long-term shareholder value. 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-$73 million and adjusted EBITDA of $4 million-$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. 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.

Thank you. We will now begin the questions and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. To remove your question, Press Star followed by two. Again, to ask a question, please Press Star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking a question. We will pause here briefly as questions are registered.

Yeah, James, Mike.

Our first question comes from Jason Kreyer with Craig-Hallum.

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

Thank you for that question. 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 two 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 juice short-term engagement, but don't lead to positive NPS over time. 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. I'm delighted to say that we're seeing some results now that tell us that we're headed in the right direction. 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, you know, 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've boiled it down to kinda one very critical user need, and that is when our neighbors come to Nextdoor, they want relevant content. 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 veering off topic, you're not gonna necessarily get relevant content. If you are a neighbor who hasn't visited in a long time and we don't have a very good ML 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. 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. 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. Most of our efforts are around increasing the quality of content on Nextdoor. 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, you know, what transpired over the course of the quarter that improved that performance?

Yeah. 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. That metric is we grew the number of unique contributors over this period of time. 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 gonna be true of Nextdoor.

If we can grow that base, then we start to see lots of really positive effects. 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. One of the things that we've done over the last two 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. Wow 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?

When we see that number growing, we have a lot of conviction that we're headed in the right direction.

That was a great little nugget. Thank you. Appreciate it.

Thank you. Our next question comes from Jamesmichael Sherman-Lewis with Citi. You may now proceed.

Hello, Nirav and Indrajit. Good to see the results. Thank you for taking my questions. First, Nirav, revisiting your closing commentary on AI and Nextdoor's trusted human content, could you talk more broadly about how you see the Nextdoor feed evolving, particularly following the introduction of features like threaded conversations and pinned comments, but also as you onboard more publishers and reduce self-promoted content? What's changing?

Yeah, that's a great question. 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 harnessing 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. 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? 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.

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 surfaces 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. We're very, very early, and that's just exploratory. 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 surfaces, and we're doing the same thing.

We are taking the best of AI technology, which summarizes and makes things more personalized and makes 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. We think that's long-term an 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, you know, a meaningful non-ad revenue opportunity in the future?

Yeah, 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. We do believe that whether it's lead gen or things that we haven't even thought of, there are non-ads, non-feed 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.

It's really good for neighbors, it's really good for the service providers, and it performs. We see that both in the pricing as well as the retention. 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.

Perfect. Thank you very much.

Thank you.

Thank you. Our next question comes from Naved Khan with B. Riley Securities. You may now proceed.

Great. Hi. Thank you for taking our questions. This is Ryan Powell on for Naved Khan. First, we were wondering which of the new features you have launched are resonating most with users and how it's impacting the product pipeline. Second, breaking down advertiser growth between large versus small advertisers on the platform. Thank you.

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. I'm gonna come back to this in a little bit more detail. 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. I'll talk more about that because the question was asked by one of our investors as well.

Give us a little bit of patience on that. You'll hear a much more elaborate answer. 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. 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. 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. It was a very good quarter on revenue growth, as you saw, 14% growth, and it was pretty broad-based across all of our revenue channels, that's very encouraging. I'd say our strongest growth was probably in our direct sales business with our larger advertisers. Home services continues to be a standout category for us, 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 increased advertiser interest in our video products, that's very encouraging year-over-year.

You saw in my comments that self-serve continues to sort of be a larger share of our ad revenue as you know, it's not necessarily managed shrinking, but self-serve is increasing. That's showing sort of advertisers are interested there. SMB also grew. You know, we saw strength across the board there too, so home services being the strongest category. We saw meaningful increases in average spend per advertiser year-over-year, which is also encouraging for us. Finally, search also, we sort of improved our monetization in search. I would say it's a pretty broad-based solid quarter for us.

Great. Thank you, Nirav. Thank you, Indrajit.

Thank you. There currently no questions registered. As a reminder, you may start wanting to ask a question.

Great. Thank you, operator.

Great. Now do you have a question?

Sorry, I'll go ahead and jump in.

No, it's okay.

Thank you, operator. Thank you. As I mentioned, we are now pleased to answer some questions that investors have submitted to us in the last two weeks. Actually our first two questions come from Eric Jackson, one of our investors. The 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 gonna take that question. I want to start by saying that we think of our opportunity with small and local businesses as a genuine win-win-win. I'll explain what I mean by that. It's a win for local businesses because they've largely lost their traditional advertising channels. There's no more Yellow Pages. The big platforms have largely left them behind. We can fill the gap there for them and give them a cost-effective and highly performant way for them to reach their customers. 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. Because of the way Nextdoor works, neighbors are recommending these businesses. They're vouching for them.

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 advantages 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.

That's 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.

Great. 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. 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 assistant. We actually called it Phase. It was part of the new Nextdoor that we launched. Neighbors could ask questions and get answers generated from 14 years of verified neighbor conversations. It was a local agent. It was real people from real neighborhoods. It wasn't the open internet. 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 engaged with this, it 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, neighbors aren't online at that particular moment to respond. We've begun to embed Ask directly into those gaps. 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. It's neighbors answering neighbors. It's just happening asynchronously, all enabled by AI. The results have been very encouraging. Engagement's up. There are more comments. The quality of the conversation goes up. 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 mention about monetization. I just wanna say that monetization is not a near-term objective for Ask, driving engagement is. 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. We will develop the commercial layer on top of that healthy foundation.

Great. Thanks, Nir. Our third and final question came from a few investors. The question is regarding your path to profitability and free cash flow, is the path primarily revenue-led, or are there structural cost reductions coming? Why don't I take this one as it's a great note to end our Q&A on. First, just as a reminder, we are already operating cash flow and free cash flow positive on a trailing 12-month basis. 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.

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. With that, Nir, I'm gonna turn it over to you for closing remarks.

Okay. Thank you, Inderjit. I wanna 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. Adjusted EBITDA came in near breakeven in what is typically our seasonally softest quarter. Most importantly, as you heard from Inderjit, we're raising our full-year outlook. Those are the numbers, we think they tell a clear story. Now, what gives me the most conviction is not just the 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 that potential, we're gonna remain focused on executing with ambition and discipline. I think you've seen today that the progress is undeniable. 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 line.

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 Holdings, Inc.'s fourth quarter and full year 2025 earnings conference. To prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. You would like to withdraw your question, please press the pound key. Thank you. You may now begin your conference. Thank you, operator.

I am Nirav Tolia, Nextdoor cofounder and CEO, and I would like to welcome everyone to our fourth quarter and full year 2025 earnings conference call and webcast. Joining me today is Indrajit Panambalam, our chief financial officer. I would 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 us 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, 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 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.

Alright. Let us get started.

This quarter, we know we are speaking to a broader audience than usual, including many retail investors joining us for the very first time. I would like to start with absolute clarity about how we think about Nextdoor, how we have approached this turnaround, and why we remain confident in the long-term opportunity in front of us. Let us 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 two 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 founder’s 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 $70,000,000 two 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 WAU 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, continue to invest in our proprietary ad stack, 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 the call over to Indrajit to review the quarter in greater detail and discuss our outlook.

Thanks, Nirav. And hello to everyone joining us today. I am excited to join Nextdoor at such an important time for the company. I have been impressed by the strength of the team, 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 us jump into the results. Q4 platform weekly active users, or WAU, which measures users engaging directly on the Nextdoor app or website, was 21,000,000, 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 us turn to revenue. Q4 revenue was $69,000,000, 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 are 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 us move to profitability. Q4 GAAP net loss was $4,000,000, or negative 6% margin, representing 13 points of year over year improvement. Q4 adjusted EBITDA was $8,000,000, an 11% margin, representing six 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 for the full year 2025, twelve months ahead of schedule, reflecting our continued focus on efficiency and productivity. Revenue per employee increased which is another good proof point 26% year over year in Q4. of our revenue growth and the operating leverage we drove through 2025. At quarter end, we had $405,000,000 in cash, cash equivalents, and marketable securities, and zero debt. In Q4, we repurchased 2,500,000 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 us turn to our financial outlook. We expect Q1 revenue of $57,000,000 to $59,000,000, representing 7% year over year growth at the midpoint of the range, and adjusted EBITDA of negative $6,000,000 to negative $4,000,000, 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, 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 will 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 are bringing are raising the bar across the company, and I am excited about the role you will 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 five 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 105,000,000 verified neighbors, roughly one in three U.S. households. Because identity and location are verified, neighbors come to Nextdoor for you 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. 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. 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 are capturing a differentiated high-intent audience, we have multiple monetization formats, and advertiser retention and ROI are improving. Revenue per employee is expanding, and as Innerge had 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, 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 fifteen 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 hyper-local, real identity graph with AI, 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. 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, happy to take your questions. But before we begin Q&A, let me briefly outline how we will structure it. We will 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 us open the line for questions.

Thank you. We will now begin the question and answer session.

If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason at all you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. The first question comes from Jamesmichael Sherman-Lewis with Citi. You may proceed.

Hey. Good afternoon, Nirav and Indrajit. Thank you for taking my questions. It is two here, if I may. First, encouraging to hear frequency and engagement quality are improvement improving. Can you add more color on the specific product changes that are resonating most of users? As we look at the new UI, recommendations and notification changes, etcetera? 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 is good to hear from you. And I will just give you the color on what we are seeing that working. I would 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 are 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 is a series of different things that we need to do because the end of the day, the product experience is not just one feature. It is 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. I think we are starting to see the very beginnings of that and we are excited about it. Were gonna ask me to follow-up question.

Yeah.

Follow-up here. As we think about the advertiser base and self serve segment, could you revisit, you know, any budget trends by vertical or advertiser size? And and specifically, any update on spending patterns from larger advertisers? Thank you very much. Okay. Thanks for the question. You know, 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 will 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, Nir. Yeah. I would echo what you said. It was pretty broad based to what we saw in Q4, which is obviously 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 ad advertisers, net new ad revenue. So we feel like those are headed in the right direction. Excellent. Thank you, Moe.

Thank you.

As a quick reminder, if you would like to ask a question, please press 1 on your telephone keypad. Next comes from Jason Michael Kreyer with Craig-Hallum. You may proceed.

Thank you, guys. Appreciate it.

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

Sure. So

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

And, Neera, if I could just add, I think what we have seen over the last

twelve months since we first introduced programmatic is really strong in improving performance on our on our direct sales ourselves. We are seeing strong demand from advertisers there, which we are able to monetize quite well. So I think program programmatic has been a great supplement to that. But we are also encouraged by our own our own performance too.

Great update. Thank you. And then just maybe another one in terms of the evolution of recommendations. I know that you have kinda tweaked that kinda go to market or the rollout of of recommendations over the last couple of quarters. What what is in store for 2026? How broad is that rollout now, and how much does that change in the next few months? It is 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 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 is a closed loop kind of experience, those are all things that we are 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 is not bots that are creating the recommendations. It is not star ratings. It is 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 is nothing like it across the web. Wonderful. Cannot wait to see it. Thanks, guys.

Thank you. The next question comes from Ryan James Powell with B. Riley Securities. You may proceed.

Great. Hi. Thank you for taking our question. This is Ryan Powell on for Naveen. So first,

we appreciate the color in the prepared remarks, but we are wondering a little more on much more work needs to be done on moderating the notifications and emails. 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 have taken a very, very conservative view as it relates to notifications. We have made the difficult decision to focus on the long term, and as a result, we pulled back quite a bit, and, frankly, we will continue to do that if it is the right thing for neighbors. So as we build more relevant notifications, we can be more aggressive with them. And we will. I would say today, we still have a lot of work to do. And we are gonna be much more long-term minded versus feel like we need to pump out as many emails and mobile notifications as possible. Just so we can pump up the metrics. What is really important to us is ensuring that when someone receives a notification, they feel like it is relevant to them. And until we can do that with real regularity, we will continue to be conservative in how many we send out.

Great. That makes sense. Thank you.

And then second on the phase launch, where are you currently in rollout? And how has it impacted the quality of content in neighborhoods that it is live.

Okay. It is 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 do not think that this year, we will think about this as some large rollout. We are gonna think about it as a series of improvements that are ongoing and iterative. And so at any moment, you may think that it is 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 have got a big release next quarter and then another release the quarter after that. We are 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 the product is getting gradually better and better and better and better.

Awesome. Thank you.

Thank you.

There are currently no other questions queued. So this is your final reminder that if you would like to ask a question, please press 1. With that being said, I will pass it back over to the team for a 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 is happened in our lifetimes in the technology industry. So we are 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 three 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 have done things in all three 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 is natural 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 do not see AI as some vertical thing that we focus on that is outside of the main set of things that we are doing. We see AI as a powerful technology that needs to be the foundation of everything that we are doing. And so the real opportunity for us is to take our incredible community system, which is uniquely human, and it is 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 is 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 or home services apps on the Internet?

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

Great.

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 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 sub-verticals as well. So this is a big challenge for us. It is 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, 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, Nir. Alright. Now on to our last question, which is related to cash management. Couple folks several folks asked, what is your philosophy on the use of your cash? So why do not I take this one? First, as a reminder, we ended 2025 with slightly over $400,000,000 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 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 cap 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 of invest return on investment thresholds. So, really, if we look at it, you know, 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 are gonna 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 line.