[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions that the report contains forward-looking statements subject to risks and uncertainties - This section cautions that the report contains forward-looking statements regarding future events, operating results, and financial performance. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially[8](index=8&type=chunk)[10](index=10&type=chunk) - Key areas covered by forward-looking statements include: anticipated growth in users, engagement, and monetization; development of new products and platform enhancements, including the NEXT initiative; the impact of the macroeconomic and political climate; international expansion efforts; ability to achieve and maintain profitability; and financial performance and ability to raise future financing[8](index=8&type=chunk) [Risk Factor Summary](index=6&type=section&id=Risk%20Factor%20Summary) This section summarizes principal risks including limited operating history, reliance on advertising, and financial volatility - This section provides a high-level summary of the principal risks and uncertainties facing the company, including a limited operating history, substantial reliance on advertising revenue, intense competition, dependence on third-party infrastructure, a history of net losses, and potential volatility in stock price and concentrated voting power[16](index=16&type=chunk)[17](index=17&type=chunk) [Part I - Financial Information](index=9&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements (Unaudited)](index=9&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements, reporting a net loss of **$22.0 million** on **$54.2 million** revenue for Q1 2025 [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets decreased from **$514.0 million** to **$495.0 million**, with stockholders' equity declining to **$436.1 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and cash equivalents | $57,338 | $45,550 | | Marketable securities | $360,547 | $381,429 | | Total current assets | $451,796 | $466,692 | | **Total Assets** | **$494,962** | **$513,953** | | **Total Liabilities** | **$58,893** | **$60,465** | | **Total Stockholders' Equity** | **$436,069** | **$453,488** | [Condensed Consolidated Statements of Operations](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue increased **2%** to **$54.2 million**, with net loss improving to **$22.0 million** due to decreased costs and expenses Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $54,176 | $53,146 | | Total costs and expenses | $81,189 | $87,895 | | Loss from operations | $(27,013) | $(34,749) | | Net loss | $(21,952) | $(28,261) | | Net loss per share, basic and diluted | $(0.06) | $(0.07) | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow turned positive at **$0.4 million**, contributing to a **$9.1 million** increase in cash and equivalents Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $368 | $(13,627) | | Net cash provided by investing activities | $21,551 | $35,890 | | Net cash used in financing activities | $(12,845) | $(12,893) | | **Net increase in cash, cash equivalents, and restricted cash** | **$9,077** | **$9,437** | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, share repurchases, stock-based compensation, legal proceedings, and segment information, with most revenue from the U.S - The company's Share Repurchase Program was increased by **$150.0 million** and its expiration was extended to March 31, 2026, with **4.7 million** shares repurchased for **$9.1 million** in Q1 2025[63](index=63&type=chunk)[65](index=65&type=chunk) - Stock-based compensation expense for Q1 2025 was **$17.1 million**, a decrease from **$19.5 million** in Q1 2024[71](index=71&type=chunk) - The company is involved in several legal proceedings, including a securities class action, a shareholder derivative complaint, and a class action related to its SPAC merger, with the potential loss from these matters currently inestimable[52](index=52&type=chunk)[53](index=53&type=chunk)[55](index=55&type=chunk) Revenue by Geography (in thousands) | Region | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | United States | $51,901 | $49,899 | | International | $2,275 | $3,247 | | **Total** | **$54,176** | **$53,146** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, highlighting a **2%** revenue increase, **6%** WAU growth, and improved Adjusted EBITDA loss [Key Business Metrics](index=26&type=section&id=Key%20Business%20Metrics) Key metrics show **6%** WAU growth to **46.1 million** but a **4%** decline in ARPU, with a future transition to Platform WAU reporting Key Business Metrics Comparison | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Weekly Active Users (WAU) | 46.1 million | 43.4 million | +6% | | Platform WAU | 22.5 million | 21.4 million | +5% | | Average Revenue per WAU (ARPU) | $1.18 | $1.22 | -4% | - Starting with the Q2 2025 report, the company will stop reporting WAU and will instead report Platform WAU, also ceasing to provide a geographic breakout for its key metrics to align with its focus on existing markets, primarily the U.S[82](index=82&type=chunk)[88](index=88&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Revenue grew **2%**, while total costs decreased **8%** due to reduced sales and marketing, leading to a smaller operating loss - Revenue increased by **$1.0 million** (**2%**) primarily due to a **5%** increase in Platform WAUs, which outpaced the increase in advertiser spending[107](index=107&type=chunk) - Sales and marketing expenses decreased by **$7.8 million** (**26%**), mainly from a **$4.2 million** reduction in personnel costs and a **$3.4 million** cut in brand and performance marketing[110](index=110&type=chunk) - Research and development expenses increased by **$2.2 million** (**7%**), primarily due to a **$2.0 million** increase in personnel-related costs from higher headcount[109](index=109&type=chunk) - Interest income decreased by **$1.9 million** (**27%**) due to lower invested balances and lower interest rates[113](index=113&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains **$417.9 million** in liquidity despite an **$886.0 million** accumulated deficit, with **$88.2 million** remaining for share repurchases - The company held **$417.9 million** in cash, cash equivalents, and marketable securities as of March 31, 2025[118](index=118&type=chunk) - The company has a history of losses, with an accumulated deficit of **$886.0 million** as of March 31, 2025, and expects to continue incurring losses for the foreseeable future[117](index=117&type=chunk) - The Board of Directors authorized an additional **$150.0 million** for the Share Repurchase Program and extended its expiration to March 31, 2026, with **$88.2 million** available for future repurchases as of quarter-end[120](index=120&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposures are primarily interest rate and foreign currency fluctuations, deemed immaterial due to short-term investments and USD-denominated revenue - The company is exposed to interest rate risk on its **$417.8 million** portfolio of cash, cash equivalents, and marketable securities, but believes the risk is not material due to the short-term nature of the investments[135](index=135&type=chunk) - Foreign currency risk is currently not significant as the majority of revenue is denominated in U.S. Dollars, though operating expenses in foreign currencies are subject to exchange rate fluctuations[136](index=136&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management concluded that disclosure controls and procedures were effective as of March 31, 2025[137](index=137&type=chunk) - No changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal controls were identified during the quarter[138](index=138&type=chunk) [Part II - Other Information](index=39&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, with detailed discussions referenced in Note 6 of the financial statements - The company is involved in various legal proceedings, and for detailed information, the report refers to Note 6, which describes ongoing securities class action, shareholder derivative, and SPAC-related class action lawsuits[141](index=141&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section outlines numerous risks, including reliance on advertising, intense competition, technology dependence, financial losses, and evolving legal and regulatory environments - **Business & Industry Risks:** The company has a limited operating history at its current scale, generates substantially all revenue from advertising, and faces intense competition from larger companies like Meta and Alphabet[143](index=143&type=chunk)[147](index=147&type=chunk)[159](index=159&type=chunk) - **Security & Technology Risks:** The business depends on third-party providers like AWS and Google Ad Manager, and is vulnerable to security breaches, data loss, and the development of ad-blocking technologies that could harm revenue[197](index=197&type=chunk)[199](index=199&type=chunk)[206](index=206&type=chunk) - **Legal & Regulatory Risks:** The company is subject to complex and evolving laws regarding data privacy (CCPA, GDPR), content liability (CDA, DSA), and artificial intelligence, which could increase costs and legal exposure[243](index=243&type=chunk)[249](index=249&type=chunk)[251](index=251&type=chunk) - **Financial & Ownership Risks:** The company has a history of net losses and may not achieve profitability, while the dual-class stock structure concentrates voting power with management and early stockholders, limiting the influence of Class A shareholders[227](index=227&type=chunk)[293](index=293&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=86&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section reports no unregistered equity sales and details the repurchase of **4.72 million** Class A common shares during Q1 2025 Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2025 | 1,284,360 | $2.38 | | February 2025 | 0 | $— | | March 2025 | 3,436,055 | $1.75 | | **Total** | **4,720,415** | **—** | - The Board of Directors authorized an increase of **$150.0 million** to the Share Repurchase Program and extended its expiration date to March 31, 2026, with **$88.2 million** remaining available for future repurchases[313](index=313&type=chunk) [Defaults Upon Senior Securities](index=88&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports that this item is not applicable - Not applicable[314](index=314&type=chunk) [Mine Safety Disclosures](index=88&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports that this item is not applicable - Not applicable[315](index=315&type=chunk) [Other Information](index=89&type=section&id=Item%205.%20Other%20Information) The company discloses that no Section 16 officers adopted or terminated Rule 10b5-1 trading plans during Q1 2025 - During the three months ended March 31, 2025, none of the company's Section 16 officers adopted or terminated any Rule 10b5-1 trading plans[317](index=317&type=chunk) [Exhibits](index=90&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the 10-Q, including SOX certifications and Inline XBRL data files - The exhibits filed with this report include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and interactive data files (Inline XBRL)[319](index=319&type=chunk) [Signatures](index=91&type=section&id=Signatures) The report was signed on May 7, 2025, by the Chief Executive Officer and Chief Financial Officer - The report was signed on May 7, 2025, by Nirav Tolia, Chief Executive Officer and President, and Matt Anderson, Chief Financial Officer and Treasurer[324](index=324&type=chunk)

[Nextdoor First Quarter 2025 Financial Results](index=1&type=section&id=Nextdoor%20First%20Quarter%202025%20Financial%20Results) [Q1 2025 Performance Highlights](index=1&type=section&id=Q1%202025%20Performance%20Highlights) Nextdoor's Q1 2025 saw revenue grow 2% to $54.2 million, Weekly Active Users increase 6% to 46.1 million, and profitability significantly improved with reduced losses - Key achievements in Q1 included user growth, improved margins, and **positive operating cash flow**. The company is executing a transition to a new user experience called "NEXT", expected by **late July 2025**[3](index=3&type=chunk)[4](index=4&type=chunk) Q1 2025 Financial and User Metrics | Metric | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $54.2M | $53.1M | +2% | | Weekly Active Users (WAU) | 46.1M | N/A | +6% | | GAAP Net Loss | ($22.0M) | ($28.3M) | +22% Improvement | | Adjusted EBITDA Loss | ($9.2M) | ($14.0M) | +35% Improvement | | Ending Cash & Marketable Securities | $418M | N/A | N/A | [Reconciliation of GAAP to Non-GAAP Measures](index=1&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Nextdoor reconciles its GAAP Net Loss to Adjusted EBITDA, adjusting a $22.0 million net loss to a $9.2 million Adjusted EBITDA loss for Q1 2025, reflecting a 9-percentage-point margin improvement GAAP to Adjusted EBITDA Reconciliation | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net loss** | **$ (21,952)** | **$ (28,261)** | | Stock-based compensation | 17,091 | 19,506 | | Interest income | (4,982) | (6,846) | | Depreciation and amortization | 544 | 1,387 | | Provision for income taxes | 141 | 199 | | **Adjusted EBITDA** | **$ (9,158)** | **$ (14,015)** | - Profitability margins showed significant year-over-year improvement[7](index=7&type=chunk) - Net loss margin improved to **(41)%** from **(53)%** - Adjusted EBITDA margin improved to **(17)%** from **(26)%** [Non-GAAP Financial Measures Disclosure](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20Disclosure) Nextdoor uses non-GAAP measures like Adjusted EBITDA for internal planning and peer comparison, excluding specific items, while cautioning investors about their inherent limitations - The company uses non-GAAP measures like Adjusted EBITDA for internal planning, measuring core operating results, and comparing performance against peers[10](index=10&type=chunk) - Items excluded from non-GAAP calculations include stock-based compensation, depreciation and amortization, interest income, and provision for income taxes[11](index=11&type=chunk) - The company acknowledges material limitations of non-GAAP measures, noting they do not reflect cash needs for working capital, debt service, taxes, or capital asset replacement[12](index=12&type=chunk) [Company Overview](index=3&type=section&id=About%20Nextdoor) Nextdoor is a local community social network connecting neighbors, public agencies, and businesses across 345,000+ neighborhoods in 11 countries, offering a proprietary advertising platform - Nextdoor operates as the essential neighborhood network in over **345,000 neighborhoods** across **11 countries**[13](index=13&type=chunk) - The company offers a proprietary advertising platform that enables brands and businesses to engage with neighborhoods at scale[13](index=13&type=chunk)

Core Insights - The first quarter of 2025 has seen significant volatility in stock performance, with some stocks gaining up to 40% while others have declined nearly 30% [1][2] Teva Pharmaceutical - Teva Pharmaceutical is the worst-performing stock in the portfolio, down 27% in less than three months, primarily due to disappointing guidance in its fourth quarter earnings report [3][4] - Despite slightly beating revenue and earnings expectations, the company's guidance for 2025 earnings of $2.65 per share was significantly lower than anticipated, leading to a sharp decline in stock price [4] - Teva aims for "accelerated growth" from 2025 to 2027 by focusing on generics, expanding margins, and innovative launches, with a current valuation of 6.3 times forward earnings estimates indicating potential upside if management meets its goals [5] Block - Block is the second worst-performing stock, down 26% this year, largely due to its earnings report which missed expectations on both revenue and earnings, with year-over-year revenue growth of less than 5% [6][7] - Increased competition from other payment processors, particularly those with specialized capabilities, has raised concerns among investors [7] - Block is focusing on enhancing its lending capabilities, having acquired Afterpay and recently launching Cash App Borrow, along with developing an open bitcoin mining system called Proto [8] Nextdoor - Nextdoor has also seen a 26% decline in stock price, despite a 17% year-over-year revenue growth and positive adjusted EBITDA for the first time as a public company [10] - The company has a strong cash position of $427 million with no debt, yet its average revenue per U.S. daily active user is significantly lower than competitors like Pinterest [9][10] - Investors are skeptical about the company's vision to reinvent the platform as NEXT, which includes local-focused content and AI-powered recommendations, especially given the forecast for flat revenue and a significant adjusted EBITDA loss in the first quarter [11][12] Investment Opportunities - All three stocks—Teva, Block, and Nextdoor—are considered solid investment opportunities despite their current performance issues [13] - Teva is viewed as having long-term potential with a cheap valuation, while Nextdoor could be a significant growth opportunity if its leadership executes effectively [14] - Block has been identified as a stock where additional shares have been purchased in 2025, indicating confidence in its growth potential [14]

Financial Data and Key Metrics Changes - Weekly active users (WAU) increased by 10% year-over-year, reaching 45.9 million [10] - Revenue grew by 17% year-over-year to $65 million [10] - Achieved positive adjusted EBITDA and operating cash flow for the first time [10][33] - Adjusted EBITDA for Q4 was $3 million, representing a 5% margin, with a 30 percentage point year-over-year improvement [34] - Operating cash flow was $11 million, reflecting strong cash flow conversion [34] - Ended the year with $427 million in cash and equivalents, with zero debt [35] Business Line Data and Key Metrics Changes - Revenue growth was driven by self-serve advertisers and improved revenue retention [31] - Average revenue per weekly active user (ARPU) grew by 7% year-over-year to $1.42 [31] - Self-serve advertisers experienced a 47% lower cost per click compared to non-optimized campaigns [32] Market Data and Key Metrics Changes - New user acquisition remained strong, particularly in the U.S. [28] - Fastest growth in new users was observed among those aged 18 to 34 [28] Company Strategy and Development Direction - The company is focused on transforming the user experience through a new initiative called NEXT, which aims to improve local content, alerts, and recommendations [15][25] - The strategy includes moving away from incremental optimizations to fully committing to the NEXT initiative [13] - The company is intentionally making short-term trade-offs to prioritize long-term value, which may impact near-term metrics [24][100] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for deeper engagement with existing users and the opportunity to reconnect with inactive users through the NEXT initiative [30][50] - The company anticipates some short-term impacts on user engagement and ad impressions due to the transition to NEXT [24][39] - Management is confident that the decisions made will drive durable growth for the long term [41][98] Other Important Information - The company repurchased 31 million shares, reducing the fully diluted share count by 5% year-over-year [35] - The company is on track to launch NEXT by mid-2025 [25][39] Q&A Session Summary Question: User engagement focus versus broader user growth - Management emphasized the importance of deepening engagement with the existing user base rather than solely focusing on new user acquisition, aiming for more frequent and deeper interactions [44][50] Question: Ad impression headwinds - Management indicated that the reduction in ad impressions is expected to be a headwind in Q1 but will be absorbed as the year progresses [45][51] Question: Local community content integration - Management confirmed that they are actively securing partnerships with local news publishers to enhance content offerings, with thousands already established [58][60] Question: Large advertisers' spending shifts - Management acknowledged the shift towards programmatic ad buying among large advertisers and is focused on improving ease of use and performance for these advertisers [64][66] Question: User growth and engagement strategies - Management highlighted the growth from younger demographics and the importance of optimizing engagement strategies to drive user growth [70][72] Question: Operating leverage and marketing strategy - Management discussed the strategic shift towards organic growth and the reduction in sales and marketing expenses, focusing on improving product offerings [76][82] Question: Confidence in long-term growth despite short-term trade-offs - Management provided insights into qualitative and quantitative feedback from users, indicating early positive signals from the new content strategy [85][89] Question: First half 2025 revenue guidance - Management explained that the revenue guidance reflects intentional decisions around ad supply and user engagement strategies, with expectations for growth in the second half of the year [92][96]

Financial Data and Key Metrics Changes - In Q4 2024, weekly active users (WAU) increased by 10% year-over-year, reaching 45.9 million [10] - Revenue grew by 17% year-over-year to $65 million [10] - For the first time, the company achieved positive adjusted EBITDA of $3 million, representing a 5% margin, and operating cash flow of $11 million [33] - The company ended the year with $427 million in cash and equivalents, with no debt [35] Business Line Data and Key Metrics Changes - The growth in WAU was driven by strong new user acquisition, particularly among users aged 18 to 34 [28] - Average revenue per weekly active user (ARPU) grew by 7% year-over-year to $1.42, reflecting improved ad relevance [31] - Self-serve advertisers showed strong revenue growth, with a 47% lower cost per click compared to non-optimized campaigns [32] Market Data and Key Metrics Changes - The company observed a shift in spending among large advertisers towards programmatic ad buying, impacting revenue expectations [37] - The self-serve advertising channel continued to perform well, with 100% of U.S. self-serve revenue delivered via the new ad server [33] Company Strategy and Development Direction - The company is focused on launching a transformed user experience called NEXT, which aims to enhance local content, timely alerts, and community recommendations [15][25] - The strategy includes moving away from incremental product optimizations to a complete overhaul, which may impact short-term results but is seen as essential for long-term success [13][24] - The company is prioritizing existing user engagement over new user acquisition in the short term to deepen user interaction [24][74] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for deeper engagement with the existing user base, particularly with the younger demographic [71] - The company anticipates that the transition to NEXT will lead to short-term trade-offs but is confident in the long-term benefits [100] - The outlook for Q1 2025 includes expected revenue of approximately $53 million and an adjusted EBITDA loss of about $13 million due to the transition [39] Other Important Information - The company repurchased 31 million shares in 2024, reducing the fully diluted share count by 5% year-over-year [35] - The management emphasized the importance of balancing strategic investments with cost controls to drive productivity gains [11] Q&A Session Summary Question: Discussion on user engagement focus versus broader user growth - Management highlighted the importance of deepening engagement with the existing user base, aiming for more frequent and deeper interactions [50] Question: Clarification on ad impression headwinds - Management indicated that the ad impression headwinds are expected to be absorbed by the end of Q1, with a focus on long-term growth strategies [54] Question: Status of integrating local community content - Management confirmed that they are actively securing partnerships with local news publishers and integrating third-party content to enhance user experience [60] Question: Feedback from large advertisers shifting to programmatic - Management acknowledged the need to improve ease of use for large advertisers and is focused on delivering performance to retain their business [66] Question: Impact of younger users on engagement and growth - Management noted that the growth from younger users is encouraging and that the NEXT initiative aims to broaden the value proposition for this demographic [71] Question: Strategic shift in customer acquisition strategies - Management explained that the focus is shifting towards organic growth and improving product offerings to enhance customer acquisition [82]

Company Performance - Nextdoor Holdings, Inc. reported a quarterly loss of $0.03 per share, better than the Zacks Consensus Estimate of a loss of $0.04, and an improvement from a loss of $0.08 per share a year ago, representing an earnings surprise of 25% [1] - The company posted revenues of $65.23 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.17% and showing an increase from year-ago revenues of $55.56 million [2] - Over the last four quarters, Nextdoor has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Outlook - Nextdoor shares have increased approximately 7.6% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at -$0.05 for the coming quarter and -$0.16 for the current fiscal year [4][7] - The current estimate revisions trend for Nextdoor is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Nextdoor belongs, is currently ranked in the top 33% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Nextdoor's stock performance [5]

Company Overview - The company has a limited operating history at its current scale, making it difficult to evaluate its business and future prospects [63]. - The company operates in over 340,000 neighborhoods globally, providing a platform for local connections [353]. - The company’s financial results are reported based on a single reportable segment, aligning with the CEO's review for operational decisions [353]. Revenue Generation - The company generates substantially all of its revenue from advertising, which is currently derived from online display advertisements, including sponsored posts and local deals [66]. - Economic conditions in the United States significantly impact the company's performance, as the majority of its revenue comes from U.S. advertisers [65]. - The company is still in the early stages of monetizing its platform and faces challenges in increasing neighbor engagement and attracting advertisers [64]. - If the company fails to add new neighbors or retain current ones, its financial performance will be adversely impacted [74]. - The company must continue to develop and improve its products for advertisers to maintain revenue growth and attract new advertisers [70]. Competition and Market Challenges - The company faces significant competition from major players like Meta and Alphabet, which could impact user engagement and advertiser retention [77]. - Competitors leverage broader product offerings and economies of scale, potentially making their advertising products more attractive [78]. - The company faces risks from macroeconomic conditions, including inflation and potential recessions, which could lead to decreased advertiser spending [65]. - The company faces risks from ad-blocking technologies that could prevent the display of advertisements, which are a primary revenue source [119]. Regulatory and Compliance Issues - Changes in privacy regulations and platform policies, such as Apple's iOS updates, may hinder the company's ability to track users and measure ad effectiveness [79]. - The company is subject to various U.S. and foreign laws regarding data privacy, which may increase operational costs and liability risks [164]. - Over a third of U.S. states have enacted privacy laws similar to the CCPA, increasing compliance challenges and potential liabilities [166]. - The Digital Services Act (DSA) in the EU, effective February 2024, may limit targeted advertising and impose compliance costs, impacting financial results [162]. - The company may incur substantial costs in defending against claims related to user-generated content, which could harm financial condition [157]. Financial Performance - The company reported net losses of $98.1 million, $147.8 million, and $137.9 million for the years ended December 31, 2024, 2023, and 2022, respectively, with an accumulated deficit of $864.1 million as of December 31, 2024 [145]. - Revenue for the year ended December 31, 2024, was $247,276,000, representing a 13.3% increase from $218,309,000 in 2023 [342]. - Net loss for 2024 was $98,063,000, a decrease from a net loss of $147,765,000 in 2023, indicating an improvement in financial performance [343]. - The company anticipates an increase in operating expenses and capital expenditures as it continues to invest in acquiring additional users, increasing engagement, and expanding operations internationally [145]. Operational Challenges - The company must effectively scale its technical infrastructure to accommodate growing demands, or risk losing user engagement and revenue growth [83]. - A substantial portion of the company's network infrastructure relies on third-party providers, increasing vulnerability to service disruptions [84]. - The company has implemented restructuring plans in 2024 to reduce operational costs and improve efficiency, including workforce reductions [90]. - The company faces intense competition for skilled personnel, particularly in the San Francisco Bay Area, which may impact its ability to execute business strategy [107]. Intellectual Property and Legal Risks - The company relies on a combination of legal protections for its intellectual property, but challenges to these rights could harm its competitive position [188]. - The company may face legal claims regarding the infringement of third-party intellectual property rights, which could damage its brand and result in liability [195]. - The company is involved in ongoing legal disputes related to intellectual property, which could result in costly litigation and impact its business operations [173]. Future Outlook and Strategic Initiatives - The company has introduced the NEXT initiative aimed at transforming its platform to enhance user engagement and attract advertisers [75]. - The company is investing in AI initiatives to enhance product features and advertising tools, facing significant competition and regulatory scrutiny [94]. - Future international expansion will place additional demands on resources and operations, requiring improved IT and financial infrastructure [87]. - The company may require additional capital in the future, which may not be available on favorable terms, potentially impacting growth and operational capabilities [104].

Financial Performance - Q4 2024 revenue reached $65 million, a 17% year-over-year increase, driven by performance-optimized campaigns for self-serve advertisers [16] - Full-year 2024 revenue grew 13%, with WAU increasing by 8% year-over-year, reflecting improvements in content relevance and advertising platform investments [25] - Revenue for Q4 2024 was $65,228,000, an increase of 17.5% compared to $55,557,000 in Q4 2023 [51] - Total revenue for the year ended December 31, 2024, was $247,276,000, up 13.3% from $218,309,000 in 2023 [51] - The company expects Q1 2025 revenue of approximately $53 million, with year-over-year revenue growth in the first half of 2025 expected to be flat [40] User Engagement - Weekly Active Users (WAU) grew 10% year-over-year to 45.9 million, supported by steady organic U.S. user acquisition and improved notification delivery [17] - The company is focusing on attracting younger audiences, particularly those aged 18-34, whose usage habits align with the evolving platform [20] - The company expects to implement its NEXT initiative, which aims to enhance user engagement and growth [45] - The company anticipates growth in its Verified Neighbor program, contributing to future performance [45] Profitability and Expenses - Adjusted EBITDA for Q4 was $3 million, representing a 5% margin and a 30 percentage point year-over-year improvement [17] - The company reduced GAAP and non-GAAP operating expenses by 6% and 9% respectively in 2024, while increasing adjusted EBITDA margin by 27 percentage points year-over-year [26] - The net loss for Q4 2024 was $12,123 thousand, a significant improvement from a net loss of $40,530 thousand in Q4 2023, resulting in a margin of -19% compared to -73% [56] - Adjusted EBITDA for the year ended December 31, 2024, was -$18,207 thousand, an improvement from -$74,107 thousand in 2023, reflecting a margin of -7% versus -34% [56] - Total operating expenses for Q4 2024 were $82,325 thousand, down from $103,211 thousand in Q4 2023, with non-GAAP operating expenses at $61,860 thousand compared to $69,620 thousand [56] Cash and Assets - The cash balance at year-end was $427 million, with zero debt, and the company repurchased 31 million shares at an average price of $2.44 [27] - Cash and cash equivalents decreased to $45,550,000 as of December 31, 2024, from $60,233,000 in 2023 [50] - Total assets decreased to $513,953,000 as of December 31, 2024, down from $654,564,000 in 2023 [50] - Total liabilities decreased to $60,465,000 as of December 31, 2024, compared to $96,007,000 in 2023 [50] Strategic Initiatives - The launch of NEXT is on track for mid-2025, which is anticipated to redefine the user experience and impact short-term business results [12] - The company is focusing on expanding its operations into new markets as part of its strategic objectives [45] - The Nextdoor Ads Platform drove significant performance improvements, with a 47% lower cost per click (CPC) compared to non-optimized campaigns [22] Restructuring and Compensation - The company reported restructuring charges of $25,578 thousand for the year ended December 31, 2024, compared to $9,888 thousand in 2023, indicating increased restructuring efforts [56] - Stock-based compensation for the year ended December 31, 2024, was $74,055 thousand, down from $83,025 thousand in 2023, indicating a focus on managing compensation expenses [56] - The company aims to improve its financial metrics by focusing on reducing operating expenses and managing stock-based compensation in the upcoming quarters [56]

Core Insights - Celebrity Cruises is innovating the cruise experience by involving guests, referred to as "Dream Makers," in the design and offerings of the new ship, Celebrity Xcel [1][2] - Celebrity Xcel is set to launch with a focus on sustainability, featuring the first tri-fuel capable engine, aligning with Royal Caribbean Group's goal of achieving net-zero emissions by 2050 [2] - The ship will offer diverse itineraries, including seven-night journeys in the Caribbean and a European season starting in Summer 2026 [3] Group 1: Guest Involvement and Experience - The "Dream Makers" initiative allows guests to influence key aspects of the ship's design, culinary offerings, and entertainment [1][2] - Celebrity Xcel will feature seven new experiences that have yet to be revealed, showcasing the brand's commitment to pushing the boundaries of leisure travel [2][6] Group 2: Sustainability and Innovation - Celebrity Xcel has reached a significant milestone by floating out of dry dock, marking the completion of its exterior [2] - The ship's tri-fuel capable engine represents a major step in Royal Caribbean Group's sustainability efforts [2] Group 3: Itineraries and Future Plans - Celebrity Xcel will operate from Fort Lauderdale, offering itineraries that include the Bahamas, Mexico, and other Caribbean destinations [3] - In Summer 2026, the ship will transition to European itineraries, providing unique experiences in the Mediterranean [3]

Group 1 - Nextdoor Holdings (NYSE: KIND) is well-positioned to benefit from the growth of the digital advertising industry, particularly as advertisers focus on platforms that provide hyper-local engagement [1] - The company is expected to capitalize on secular tailwinds in the digital advertising space, indicating a favorable market environment for its services [1] Group 2 - The investment approach emphasizes identifying undervalued companies with long-term growth potential, focusing on quality companies available at a discount to their intrinsic value [2] - The strategy involves holding these companies for an extended period to allow for compounding of earnings and shareholder returns [2]