Nextdoor (US:KIND)2023-03-01 02:19Financial Data and Key Metrics Changes - In 2022, the company achieved revenue growth of 11% year-over-year, totaling $213 million, but Q4 revenue declined by 10% year-over-year to $53 million due to reduced advertising spend from key verticals [7][29][25] - Q4 adjusted EBITDA loss was $17 million, representing a negative 32% margin, primarily due to revenue decline and increased personnel and hosting costs [12][41] - Q4 ARPU declined 19% year-over-year to $1.33, reflecting a growth in sessions and supply that outpaced advertiser demand [12][29] Business Line Data and Key Metrics Changes - The company reported a 42% year-over-year growth in weekly active users (WAU) internationally, with a total of 40 million WAU, indicating strong engagement [15][21][112] - The For Sale & Free platform is a significant driver of engagement, bringing new users to the platform and contributing to overall monetization [72][98] - The company retained 90% of its top 50 customers in 2022, demonstrating the sustained value proposition to advertisers despite macroeconomic challenges [11][25] Market Data and Key Metrics Changes - The company noted a shift in advertising spend towards recession-resilient verticals, particularly in healthcare and government, which showed year-over-year growth [59][40] - U.S. CPMs remained stable year-over-year, indicating the value delivered to advertisers [12] - The company reported that 21% of its WAU is international, but only 5% of its revenue comes from international markets, highlighting significant growth potential [67][89] Company Strategy and Development Direction - The company is focused on enhancing product offerings through machine learning and AI to improve user engagement and advertising effectiveness [4][24] - There is a commitment to growing WAU and revenue while balancing expense management and investing in long-term product initiatives [26][9] - The company aims to deepen engagement through new features like the Events Map and improved ad formats, emphasizing local community interactions [107][70] Management's Comments on Operating Environment and Future Outlook - Management acknowledged continued uncertainty in the advertising environment but expressed confidence in the company's ability to return to revenue growth and margin improvement in 2023 [9][81] - The focus remains on cultivating a safer neighborhood environment to enhance user engagement and advertiser spending [82][81] - Management highlighted the importance of local engagement and brand awareness as key drivers for future growth [82][63] Other Important Information - The company ended Q4 with $583 million in cash and equivalents, after repurchasing $77 million of its Class A common stock in 2022 [114] - The company is investing in its proprietary ad platform to leverage first-party data for better advertiser performance [47][60] Q&A Session Questions and Answers Question: What does engagement look like today with the recent launch? - Engagement has seen a 42% year-over-year growth in WAU internationally, with users returning on average about four times a week [15][21] Question: What are the use cases for consistently engaged neighbors? - The top use cases include recommendations, trusted information sharing, and social commerce through the For Sale & Free platform [45][72] Question: What advertising verticals are focused on for growth in 2023? - Key verticals include tech, telco, healthcare, and government, with a focus on building brand awareness in these areas [59][40] Question: How is the company addressing the advertising environment volatility? - The company is focused on retaining existing advertisers while bringing new customers on board, with a strong emphasis on mid-market accounts [40][55] Question: What differentiates Nextdoor in the advertising market? - Nextdoor's unique local focus and high trust among users provide a competitive advantage, allowing for targeted advertising to specific community segments [60][63]