Nextdoor (KIND) - 2025 Q2 - Quarterly Report

Special Note Regarding Forward-Looking Statements This section outlines the nature of forward-looking statements, emphasizing their basis on current expectations and inherent risks, advising against undue reliance Forward-Looking Statements Overview This section outlines the nature of forward-looking statements contained in the Quarterly Report, emphasizing that they are based on current expectations and projections and are subject to various risks and uncertainties, advising readers not to place undue reliance on these statements, as actual results could differ materially - Forward-looking statements cover anticipated growth, monetization, product development (including the new Nextdoor initiative), economic climate, international expansion, AI investment, profitability, capital access, strategic relationships, NYSE listing, regulatory changes, internal controls, and catastrophic events[8] - These statements are subject to numerous risks, uncertainties, and assumptions detailed in the 'Risk Factors' section, operating in a competitive and rapidly changing environment[10] - The company does not undertake to update such statements after the filing date, except as required by law, and cannot guarantee future results, performance, or achievements[11] Risk Factor Summary This section summarizes key risks, including limited operating history, economic vulnerability, advertising reliance, intense competition, and infrastructure dependence Principal Risks and Uncertainties This summary highlights key risks, including the company's limited operating history and monetization efforts, vulnerability to adverse global economic conditions, heavy reliance on advertising revenue, intense competition, dependence on technical infrastructure and third-party providers, challenges in scaling the business, and a history of net losses, also touching on legal, regulatory, and stock price volatility risks - The company has a limited operating history at its current scale and is still scaling monetization efforts, making future prospects difficult to evaluate[16] - Adverse global economic and financial conditions, including inflation and potential recessions, could harm the business and financial condition[16] - Substantially all revenue is generated from advertising; a reduction in advertiser spending would adversely impact business, operating results, and financial condition[16] - The business is highly competitive, dependent on maintaining and scaling product offerings and technical infrastructure, and relies on third-party software and service providers (e.g., Google Ad Manager, AWS)[16] - Key risks also include failure to scale effectively, build strong brand identity, attract/retain talented employees, security breaches, and a history of net losses with no assurance of future profitability[16][17] Part I - Financial Information This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, deferred revenue, marketable securities, fair value measurements, commitments, equity, net loss per share, income taxes, segment information, and subsequent events Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (vs. Dec 31, 2024) | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------------------- | | Total Assets | $490,355 | $513,953 | -$23,598 | | Total Liabilities | $60,822 | $60,465 | +$357 | | Total Stockholders' Equity | $429,533 | $453,488 | -$23,955 | | Cash and Cash Equivalents | $62,050 | $45,550 | +$16,500 | | Marketable Securities | $351,299 | $381,429 | -$30,130 | | Accounts Receivable, net | $27,050 | $31,173 | -$4,123 | | Total Current Assets | $448,224 | $466,692 | -$18,468 | | Total Current Liabilities | $32,823 | $27,944 | +$4,879 | Condensed Consolidated Statements of Operations This section presents the company's revenues, expenses, and net loss over specific periods, highlighting operational performance | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :------------------------------------------------ | | Revenue | $65,093 | $63,292 | +$1,801 (+3%) | $119,269 | $116,438 | +$2,831 (+2%) | | Total Costs and Expenses | $85,369 | $112,308 | -$26,939 (-24%) | $166,558 | $200,203 | -$33,645 (-17%) | | Loss from Operations | $(20,276) | $(49,016) | +$28,740 (+59%) | $(47,289) | $(83,765) | +$36,476 (+44%) | | Net Loss | $(15,362) | $(42,781) | +$27,419 (+64%) | $(37,314) | $(71,042) | +$33,728 (+47%) | | Net Loss Per Share (basic and diluted) | $(0.04) | $(0.11) | +$0.07 | $(0.10) | $(0.18) | +$0.08 | Condensed Consolidated Statements of Comprehensive Loss This section details the company's net loss and other comprehensive income or loss, providing a complete view of changes in equity from non-owner sources | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :------------------------------------------------ | | Net Loss | $(15,362) | $(42,781) | +$27,419 (+64%) | $(37,314) | $(71,042) | +$33,728 (+47%) | | Total Other Comprehensive Income (Loss) | $105 | $(415) | +$520 | $392 | $(1,199) | +$1,591 | | Comprehensive Loss | $(15,257) | $(43,196) | +$27,939 (+65%) | $(36,922) | $(72,241) | +$35,319 (+49%) | Condensed Consolidated Statements of Stockholders' Equity This section tracks changes in the company's equity accounts, including net loss, stock-based compensation, and share repurchases - Total Stockholders' Equity decreased from $453,488 thousand as of December 31, 2024, to $429,533 thousand as of June 30, 2025[29] - For the six months ended June 30, 2025, key activities included $34,198 thousand in stock-based compensation, $(14,528) thousand in common stock repurchases, and a net loss of $(37,314) thousand[29] Condensed Consolidated Statements of Cash Flows This section reports the cash generated and used by the company's operating, investing, and financing activities over specific periods | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :------------------------------------------------ | | Net Cash Provided by (Used in) Operating Activities | $3,314 | $(18,987) | +$22,301 | | Net Cash Provided by Investing Activities | $31,653 | $61,399 | -$29,746 | | Net Cash Used in Financing Activities | $(21,231) | $(49,743) | +$28,512 | | Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | $13,708 | $(7,273) | +$20,981 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements Note 1. Description of Business This note describes Nextdoor Holdings, Inc. as an essential neighborhood network and details its corporate history - Nextdoor Holdings, Inc. is an essential neighborhood network connecting over 100 million verified neighbors with local news, safety alerts, recommendations, listings, and events[34] - The company completed a Reverse Recapitalization on November 5, 2021, with Khosla Ventures Acquisition Co. II being renamed Nextdoor Holdings, Inc[35] Note 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and policies used in preparing the financial statements, including recent accounting pronouncements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly-owned subsidiaries[36] - There have been no material changes to the Company's significant accounting policies disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[40] - The Company is evaluating ASU 2024-03, 'Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures,' effective for annual periods beginning after December 15, 2026, which will require additional disclosures but is not expected to impact financial statements[42] Note 3. Deferred Revenue This note details the company's deferred revenue balance and the amounts recognized from it over various periods - Deferred revenue was $7.5 million as of June 30, 2025, an increase from $6.8 million as of December 31, 2024[43] | Period | Revenue Recognized from Deferred Revenue (in millions) | | :---------------------- | :--------------------------------------- | | Three Months Ended June 30, 2025 | $2.1 | | Three Months Ended June 30, 2024 | $4.1 | | Six Months Ended June 30, 2025 | $2.8 | | Six Months Ended June 30, 2024 | $4.0 | Note 4. Cash Equivalents and Marketable Securities This note provides a breakdown of cash equivalents and marketable securities, including their fair values and contractual maturities | Metric | As of June 30, 2025 (in thousands) | As of December 31, 2024 (in thousands) | | :-------------------------- | :--------------------------------- | :----------------------------------- | | Total Cash Equivalents | $29,202 | $19,192 | | Total Marketable Securities | $351,299 | $381,429 | | Total | $380,501 | $400,621 | - All marketable securities are designated as available-for-sale[44] | Contractual Maturity | As of June 30, 2025 (Estimated Fair Value in thousands) | As of December 31, 2024 (Estimated Fair Value in thousands) | | :------------------- | :---------------------------------------------------- | :-------------------------------------------------------- | | Due within one year | $131,483 | $172,333 | | Due after one to four years | $219,816 | $209,096 | Note 5. Fair Value Measurements This note explains how financial assets are measured at fair value, categorizing them within the fair value hierarchy - The Company's financial assets measured at fair value are classified within Level 1 (money market funds) or Level 2 (corporate bonds, certificates of deposit, commercial paper, U.S. Treasury securities, asset-backed securities) of the fair value hierarchy[48] - There were no financial assets or liabilities measured using Level 3 inputs as of June 30, 2025, and December 31, 2024[47] - A note receivable from Opportunity Finance Network totaled $15.0 million (carrying amount) with a fair value of $14.128 million as of June 30, 2025[50][52] Note 6. Commitments and Contingencies This note discloses the company's legal proceedings, including class action and shareholder derivative complaints, and its defense strategy - A securities class action complaint was filed in February 2024, alleging violations of the Securities Exchange Act of 1934. A second amended complaint was filed on June 16, 2025, narrowing claims[55] - A shareholder derivative complaint was filed on July 26, 2024, based on similar alleged misstatements, currently stayed[56] - Two class action complaints were filed in October 2024, consolidated in December 2024, alleging breaches of duties related to the November 2021 merger. Discovery has commenced[58][59] - The Company intends to vigorously defend against these claims and is currently unable to estimate the reasonably possible loss or range of loss[57][59] Note 7. Common Stock and Stockholders' Equity This note details changes in common stock and stockholders' equity, including equity incentive plans, ESPP, and share repurchase activities - The 2021 Equity Incentive Plan reserved 46,008,885 shares of Class A common stock, with automatic annual increases[62] - The 2021 Employee Stock Purchase Plan (ESPP) reserved 8,901,159 shares of Class A common stock, with automatic annual increases. 408,404 shares were purchased in H1 2025[63][64] - The Share Repurchase Program was increased by $150.0 million and extended to March 31, 2026, with $82.8 million available as of June 30, 2025. The company repurchased 8.4 million shares for $14.5 million in H1 2025[65][67] | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Stock-based compensation | $34,198 | $35,741 | Note 8. Net Loss Per Share Attributable to Common Stockholders This note presents the basic and diluted net loss per share and discusses the treatment of potentially dilutive securities | Period | Net Loss Per Share (Basic and Diluted) | | :-------------------------------- | :------------------------------------- | | Three Months Ended June 30, 2025 | $(0.04) | | Three Months Ended June 30, 2024 | $(0.11) | | Six Months Ended June 30, 2025 | $(0.10) | | Six Months Ended June 30, 2024 | $(0.18) | - Potentially dilutive securities, totaling 76,530 thousand as of June 30, 2025, were excluded from diluted net loss per share computations due to their anti-dilutive impact[76] Note 9. Income Taxes This note outlines the company's income tax expense, primarily related to foreign taxes, for the reported periods - Income tax expense for the three months ended June 30, 2025 and 2024 was $0.3 million each, primarily related to foreign taxes[79] - Income tax expense for the six months ended June 30, 2025, was $0.4 million, a decrease from $0.5 million in 2024, primarily due to a decrease in foreign income tax expenses[79][125] Note 10. Segment and Geographical Information This note provides revenue breakdown by geography and confirms the company operates as a single reportable segment - The Company operates as one reportable and operating segment[80] | Geography | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------- | :---------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | United States | $62,832 | $61,117 | $114,733 | $111,015 | | International | $2,261 | $2,175 | $4,536 | $5,423 | | Total | $65,093 | $63,292 | $119,269 | $116,438 | - Substantially all of the Company's long-lived assets are located in the United States[81] Note 11. Subsequent Events This note discloses significant events occurring after the reporting period, including a cost reduction plan and associated charges - On August 7, 2025, the Company announced a Cost Reduction Plan to align its workforce and expenses with business priorities[82] - The plan is estimated to incur one-time cash charges of approximately $5 million (primarily for severance and benefits) and $1 million in stock-based compensation expense (for accelerated equity vesting)[83] - The majority of these charges are expected in Q3 2025, with the plan substantially complete by the end of Q3 2025[84] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, including an overview of the business, key business metrics, detailed analysis of revenue and expense components, liquidity, cash flows, and a reconciliation of non-GAAP Adjusted EBITDA, highlighting the company's improved financial performance with reduced net losses and operating expenses Overview This section provides a general description of Nextdoor's business as an essential neighborhood network connecting neighbors, businesses, and public agencies - Nextdoor is an essential neighborhood network for over 100 million verified neighbors, offering local news, safety alerts, recommendations, listings, and events[86] - The platform also serves businesses, news publishers, and public agencies for information sharing and community engagement[86] Key Business Metrics This section presents and analyzes key performance indicators such as Platform Weekly Active Users (WAU) and Average Revenue per Platform Weekly Active User (Platform ARPU) - Platform Weekly Active Users (WAU) increased by 1% to 21.8 million for the three months ended June 30, 2025, compared to the same period in 2024[89][90] - Average Revenue per Platform Weekly Active User (Platform ARPU) increased by 2% to $2.99 for the three months ended June 30, 2025, compared to the same period in 2024[89][92] - Revenue for the three months ended June 30, 2025, was $65.1 million (+3% YoY), and for the six months was $119.3 million (+2% YoY)[89] - Net loss for the three months ended June 30, 2025, decreased 64% to $15.4 million, and for the six months decreased 47% to $37.3 million[89] - Platform WAU figures for Q1 2024 through Q1 2025 were revised due to an immaterial overstatement related to iOS push notifications[93] Components of Results of Operations This section details the primary drivers of revenue and the various categories of operating expenses, including cost of revenue, R&D, sales and marketing, and G&A - Revenue is primarily generated from online display advertisements (CPM, CPC, subscription basis), with the majority from the United States[96] - Cost of revenue includes third-party hosting, allocated personnel-related costs for revenue-generating product development, third-party ad delivery/support, and credit card transaction fees[97] - Research and development expenses consist mainly of personnel-related costs (salaries, benefits, stock-based compensation), consultants, third-party software, and allocated overhead[98] - Sales and marketing expenses include personnel, commissions, brand and performance marketing for user and local business acquisition, and neighbor services[99] - General and administrative expenses cover personnel for executive, finance, legal, IT, HR, professional services, and allocated overhead[102] Results of Operations This section analyzes the company's financial performance, focusing on changes in revenue, total costs and expenses, loss from operations, and net loss over the reporting periods - Revenue increased by $1.8 million (3%) for Q2 2025 and $2.8 million (2%) for H1 2025, driven by increased advertising spending and a 1% increase in Q2 Platform WAU[109][110] - Total costs and expenses decreased significantly by $26.9 million (24%) for Q2 2025 and $33.6 million (17%) for H1 2025, primarily due to a $23.3 million reduction in restructuring costs from Q2 2024 and decreased sales and marketing expenses[107][117][118] - Loss from operations improved by $28.7 million (59%) for Q2 2025 and $36.5 million (44%) for H1 2025, reflecting the reduction in overall expenses[107] - Interest income decreased by 26% for both Q2 and H1 2025 due to lower invested balances and interest rates[120][121] Liquidity and Capital Resources This section discusses the company's ability to meet its short-term and long-term financial obligations, including cash, cash equivalents, marketable securities, and potential future financing needs - The Company has an accumulated deficit of $901.4 million as of June 30, 2025, and expects continued operating losses and cash outflows[127] - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled $413.3 million, expected to cover short-term cash requirements[129] - The Share Repurchase Program was increased by $150.0 million and extended to March 31, 2026, with $82.8 million available for future repurchases as of June 30, 2025[131] - Long-term cash requirements may necessitate future equity or debt financings, which could lead to dilution or restrictive covenants[129][130] Cash Flows This section analyzes the sources and uses of cash from operating, investing, and financing activities, highlighting significant changes year-over-year - Net cash provided by operating activities was $3.3 million for the six months ended June 30, 2025, a significant improvement from $19.0 million used in the prior year, driven by reduced net loss and favorable changes in operating assets and liabilities[133][134] - Net cash provided by investing activities was $31.7 million for H1 2025, primarily from marketable securities maturities and sales, partially offset by purchases[136] - Net cash used in financing activities was $21.2 million for H1 2025, mainly due to common stock repurchases and tax withholdings on RSUs, partially offset by stock option exercises and ESPP proceeds[138] Non-GAAP Financial Measure This section defines and reconciles Adjusted EBITDA, a non-GAAP measure, to net loss, providing insights into the company's operational performance - Adjusted EBITDA is a non-GAAP measure representing net loss adjusted for depreciation, stock-based compensation, net interest income, income taxes, and restructuring/acquisition costs, used to assess performance and evaluate business strategies[140][141] | Period | Adjusted EBITDA (in thousands) | | :-------------------------- | :----------------------------- | | Three Months Ended June 30, 2025 | $(2,247) | | Three Months Ended June 30, 2024 | $(5,979) | | Six Months Ended June 30, 2025 | $(11,405) | | Six Months Ended June 30, 2024 | $(19,994) | - Adjusted EBITDA loss decreased by 62% for the three months and 43% for the six months ended June 30, 2025, compared to the prior year[142] Critical Accounting Policies and Estimates This section confirms no material changes to the company's critical accounting policies and estimates from the prior annual report - There have been no material changes to the Company's critical accounting policies and estimates as compared to those described in its Annual Report on Form 10-K for the year ended December 31, 2024[144] Recently Issued Accounting Pronouncements This section refers to Note 2 for information on recently issued accounting pronouncements and their potential impact - Refer to Note 2 to the unaudited condensed consolidated financial statements for more information regarding recently issued accounting pronouncements[145] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the company's exposure to market risks, primarily from fluctuations in interest rates and foreign currency exchange rates, and assesses their potential impact on financial condition Interest Rate Risk This section assesses the company's exposure to interest rate fluctuations on its cash, cash equivalents, and marketable securities - As of June 30, 2025, the Company held $62.1 million in cash and cash equivalents and $351.3 million in marketable securities[147] - Due to the short-term nature of its investment portfolio, a hypothetical 100 basis point change in interest rates would not have a material effect on the fair value of the portfolio[147] Foreign Currency Risk This section evaluates the company's exposure to foreign currency exchange rate fluctuations, particularly for international operating expenses - The majority of the Company's revenue is denominated in U.S. Dollars, limiting foreign currency risk on revenue[148] - Operating expenses in international subsidiaries are denominated in local currencies (e.g., British Pound, Euro, Canadian Dollar, Australian Dollar), exposing the company to fluctuations in foreign currency exchange rates[148] - A 10% change in the relative value of the U.S. Dollar would not have materially affected the unaudited condensed consolidated financial statements for the periods presented, and there is no formal hedging program[148] Item 4. Controls and Procedures This section details the evaluation of the company's disclosure controls and procedures, confirms no material changes in internal control over financial reporting, and acknowledges the inherent limitations of control systems Evaluation of Disclosure Controls and Procedures This section confirms management's conclusion on the effectiveness of the company's disclosure controls and procedures - Management concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[149] Changes in Internal Control over Financial Reporting This section reports that no material changes in internal control over financial reporting occurred during the period - No changes in internal control over financial reporting were identified during the period that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[151] Limitations on the Effectiveness of Disclosure Controls and Procedures This section acknowledges the inherent limitations of control systems, emphasizing that they provide reasonable, not absolute, assurance - Management acknowledges that control systems provide only reasonable, not absolute, assurance and may not prevent all errors or fraud due to inherent limitations[152] - Inherent limitations include faulty judgments, simple errors, circumvention by individuals or collusion, and management override[152] Part II - Other Information This part includes information on legal proceedings, risk factors, equity security sales, and other disclosures not covered in the financial statements Item 1. Legal Proceedings This section refers to Note 6, Commitments and Contingencies, in Part I, Item 1 of this Quarterly Report for detailed information regarding the company's involvement in various legal proceedings and claims - For information regarding legal proceedings and other claims, refer to Note 6, Commitments and Contingencies, in Part I, Item 1 of this Quarterly Report[155] Item 1A. Risk Factors This comprehensive section details various risks that could materially and adversely affect the company's business, operating results, financial condition, and prospects, covering risks related to business and industry, security and technology, financial and accounting matters, legal and regulatory compliance, intellectual property, and ownership of Class A common stock Risks Related to Our Business and Industry This section outlines risks associated with the company's operating history, economic conditions, advertising reliance, competition, and international expansion - The company's limited operating history and early monetization efforts make it difficult to evaluate current business and future prospects, with no assurance of sustained growth[157][158] - Adverse global economic and financial conditions, including inflation, recessions, and trade policies, could lead to decreased advertiser spending and harm the business[159][160] - Substantial reliance on advertising revenue means reductions in advertiser spending due to factors like decreased engagement, competition, platform changes, or privacy regulations would negatively impact results[161][162] - Failure to attract or retain neighbors, or decreased engagement, would adversely impact the business and may necessitate higher marketing expenses[169][172] - The business operates in a highly competitive market, facing large social media and tech companies, which poses an ongoing threat to success[173][174] - Product and investment decisions, including the 'new Nextdoor' initiative and AI investments, may conflict with short-term financial results and may not yield expected long-term benefits[192][199] - Expanding international operations introduces increased business, regulatory, and economic risks due to limited experience, local laws, and currency fluctuations[200][201] - Future success depends on attracting, retaining, and assimilating talented employees, including senior management; loss of key personnel could hinder strategy execution[204][207] Risks Related to Security and Technology This section addresses risks concerning technical infrastructure, third-party providers, ad-blocking, security breaches, and reliance on mobile app platforms - The business is dependent on maintaining and scaling its product offerings and technical infrastructure; any significant disruption could damage reputation and lead to loss of neighbors and engagement[179] - Reliance on third-party software and service providers, including Google Ad Manager for ad delivery and AWS for infrastructure, means failures or interruptions could prevent access to the platform and adversely impact business[209][210][212] - Ad-blocking technologies could prevent the display of advertisements, adversely impacting revenue, as the company generates substantially all revenue from advertising[215] - Security breaches, including improper access to or disclosure of data, or hacking/phishing attacks, could harm reputation, adversely affect business, and result in legal liability[216][217][221] - Distribution and marketing of the platform depend significantly on third-party publishers and platforms (e.g., mobile app stores); changes in their terms or policies could materially adversely affect the business[225][226] - Errors, bugs, or vulnerabilities in the highly technical software and hardware, or failures to address technical limitations, could negatively impact user experience, product introductions, data protection, and lead to reputational harm or litigation[228] Risks Related to Financial and Accounting Matters This section covers risks related to fluctuating operating results, inaccurate metric estimates, net losses, NOL limitations, accounting changes, and currency fluctuations - Operating results may fluctuate significantly due to numerous unpredictable factors, making future results difficult to forecast and potentially causing stock price volatility[232][233] - Market opportunity and key metric estimates (e.g., Platform WAU, ARPU) could prove inaccurate, harming reputation and negatively affecting the business, as evidenced by past revisions[235][236][237] - The company has a history of net losses, with an accumulated deficit of $901.4 million as of June 30, 2025, and cannot assure future profitability[241] - The ability to use U.S. federal and state net operating losses (NOLs) to offset future taxable income may be limited by ownership changes (Section 382) or future tax law changes, potentially increasing tax liability[242][244] - Changes in accounting principles generally accepted in the United States (GAAP) or their interpretations could adversely affect revenue and financial results[245] - Fluctuations in currency exchange rates, particularly with increased international operations, could adversely affect operating results reported in U.S. dollars[246] - The company may face greater than anticipated tax liabilities due to operations in multiple global jurisdictions, complex transfer pricing regulations, and indirect tax audits[247][248] - The Share Repurchase Program may not be fully consummated or enhance long-term stockholder value, and could increase stock price volatility or diminish cash reserves[250][251] Risks Related to Legal and Regulatory Matters This section details risks from content liability, government restrictions, evolving laws (data privacy, online safety, AI), and public company compliance obligations - The company may be liable for content or information published on its platform, including claims of defamation, IP infringement, or privacy breaches, especially with new regulatory regimes and AI-generated content[252][253] - Governments may restrict access to the Nextdoor platform or impair the ability to sell advertising in their countries, substantially harming the business[255][256] - The business is subject to complex and evolving U.S. and foreign laws, regulations, and industry standards (e.g., data privacy, online safety, AI), with uncertain interpretations that could lead to burdensome compliance or liability[257] - Changes to liability protections for online platforms (e.g., CDA Section 230, EU DSA, UK OSA, Australia's Online Safety Act) could increase operational costs, litigation exposure, and regulatory sanctions[258][259] - Increasing regulatory attention to AI systems (e.g., Colorado AI Act, Texas Responsible AI Governance Act, EU AI Act) could require modifications to AI use, incur substantial costs, and impact access to AI technologies[264][268] - The obligations of operating as a public company (SEC reporting, Sarbanes-Oxley Act compliance) require significant resources and management attention, increasing expenses and potentially diverting focus from core business concerns[277][279] - Failure to maintain effective internal controls and disclosure controls could harm business, lead to restatements of financial statements, and adversely affect investor confidence in the company[281][282] Risks Related to Intellectual Property This section discusses risks concerning the protection and enforcement of intellectual property, potential infringement claims, and the use of open-source software - Failure to obtain, maintain, protect, or enforce intellectual property and proprietary rights (trademarks, copyrights, patents, trade secrets) could enable others to copy aspects of the platform without compensation, harming the brand and business[288][291] - Third parties may claim that the platform infringes their intellectual property rights, potentially leading to costly litigation, damage to brand and reputation, and significant liability[294][296] - The use of 'open source' software could subject the company to litigation, require public disclosure of proprietary source code, or necessitate obtaining licenses on unfavorable terms[297][298][300][301] - Inability to maintain licenses for technology from third parties, or issues with such licensed technology, could harm the business by limiting platform development or forcing the use of alternative, potentially inferior, technology[302][303] Risks Related to Ownership of Our Class A Common Stock This section addresses risks associated with stock price volatility, the dual-class structure, dividend policy, and anti-takeover provisions - The trading price of Class A common stock has been and may continue to be volatile due to various factors, including operating results, competitor developments, macroeconomic conditions, and market sentiment[304][305] - The dual-class common stock structure, with Class B shares having 10 votes per share, concentrates voting power with management and existing stockholders, limiting the ability of Class A holders to influence important transactions[308] - The company does not intend to pay cash dividends for the foreseeable future, focusing on business development, expansion, and the Share Repurchase Program[310] - Provisions in the company's charter documents and Delaware law, including anti-takeover provisions, could make an acquisition more difficult and limit attempts by stockholders to replace or remove current management[314][315] - Exclusive forum provisions in the Certificate of Incorporation may limit stockholders' ability to choose a judicial forum for disputes with the company or its directors, officers, or employees[316][317] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities This section reports on the absence of unregistered sales of equity securities, details the use of proceeds from the initial public offering and private placement, and summarizes the company's share repurchase activities for the quarter Sales of Unregistered Securities This section confirms that no unregistered sales of equity securities occurred during the reporting period - There were no unregistered sales of equity securities during the period[321] Use of Proceeds This section details the gross proceeds from the initial public offering and private placement, and their allocation - KVSB's initial public offering in March 2021 generated $416.3 million in gross proceeds, and a private placement generated $11.3 million[322][323] - A total of $416.3 million was deposited into the trust account for the business combination. After deducting $12.2 million for redemptions and $43.5 million for business combination expenses, the remainder is held on the balance sheet[324] Issuer Purchases of Equity Securities This section summarizes the company's share repurchase activities, including the number of shares bought back and the remaining authorization | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :------------------------ | :----------------------------- | :--------------------------- | | April 1, 2025 to April 30, 2025 | 3,688,863 | $1.46 | | May 1, 2025 to May 31, 2025 | — | — | | June 1, 2025 to June 30, 2025 | — | — | - As of June 30, 2025, $82.8 million remained available for future share repurchases under the Share Repurchase Program, which was extended to March 31, 2026[325] Item 3. Defaults Upon Senior Securities This item is not applicable to the company for the reporting period - This item is not applicable[326] Item 4. Mine Safety Disclosures This item is not applicable to the company for the reporting period - This item is not applicable[327] Item 5. Other Information This section provides information on Rule 10b5-1 trading plans adopted or modified by Section 16 officers during the quarter Rule 10b5-1 Trading Plans This section details the Rule 10b5-1 trading plans adopted or modified by Section 16 officers for potential sales of Class A common shares - Section 16 officers are permitted to trade in company securities only pursuant to Rule 10b5-1 Plans[328] - Sophia Schwartz (General Counsel) modified her Rule 10b5-1 Plan on May 20, 2025, for the potential sale of up to 200,000 Class A common shares between August 19, 2025, and December 31, 2025[329][330] - Matt Anderson (Chief Financial Officer) entered into a new Rule 10b5-1 Plan on June 6, 2025, for the potential sale of up to 762,342 Class A common shares between September 5, 2025, and September 30, 2026[331] Item 6. Exhibits This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications from executive officers and various Inline XBRL documents - The report includes certifications of the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[334] - Various Inline XBRL (eXtensible Business Reporting Language) documents are filed, including the Instance Document and Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents (Exhibits 101.INS to 101.PRE)[334] - A Cover Page Interactive Data File, formatted in iXBRL, is also included as Exhibit 104[334] Signatures This section contains the official signatures for the Quarterly Report on Form 10-Q, confirming its submission by authorized officers of Nextdoor Holdings, Inc Report Signatures This section contains the official signatures for the Quarterly Report on Form 10-Q, confirming its submission by authorized officers of Nextdoor Holdings, Inc - The Quarterly Report on Form 10-Q was signed on August 7, 2025[339] - Signed by Nirav Tolia, Chief Executive Officer and President (Principal Executive Officer), and Matt Anderson, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)[339]