Nextdoor (US:KIND)2024-02-28 02:31Financial Data and Key Metrics Changes - Q4 revenue reached $56 million, growing 4% year-over-year, with expectations for continued trends into Q1 [9][39] - Q4 ARPU was stable at $1.33 year-over-year, with mid-market advertisers increasing their average spend by over 125% year-over-year [36][39] - Q4 adjusted EBITDA was a loss of $14 million, representing a negative 25% margin, but showed a 7% point improvement year-over-year [37][39] Business Line Data and Key Metrics Changes - Revenue from home services vertical grew 16% year-over-year in Q4, recovering from a decline in Q3 [11][51] - Self-serve customers now contribute over 40% of total revenue, indicating strong growth in this segment [10][11] - The transition to the Nextdoor Ads Server is complete for 100% of Nextdoor Ads Manager impression demand, marking a key milestone [12][84] Market Data and Key Metrics Changes - The company ended the quarter with $531 million in cash and cash equivalents, with zero debt [58] - Verified Neighbors grew to over 88 million, a 13% year-over-year increase, with weekly active users (WAU) growing to 41.8 million, up 5% year-over-year [18][39] - Session depth increased by 36% year-over-year, reflecting more ad impression opportunities during user sessions [19][57] Company Strategy and Development Direction - The company is focused on increasing user engagement, advertiser growth, and retention while reducing costs to enable growth and positive free cash flow [20][41] - A $150 million increase in the share repurchase program demonstrates confidence in the business and opportunity [4][58] - The strategy includes leveraging AI and machine learning to enhance user experience and ad delivery [21][63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued user and engagement growth, with expectations for revenue growth in 2024 to exceed that of 2023 [28][59] - The company is seeing a diversification in advertising verticals, with emerging sectors like healthcare and government gaining traction [24][74] - Management acknowledged challenges in certain verticals like financial services and travel but remains focused on recovery as the macro environment improves [80][73] Other Important Information - The CEO announced plans to step down, with Nirav Tolia designated as the incoming CEO, ensuring a smooth transition [5][6] - The company is investing in real-time messaging and community engagement to enhance user experience [48][67] Q&A Session Summary Question: User engagement and conversion trends - Management noted sustained organic growth in Verified Neighbors and emphasized the importance of providing value to users to maintain engagement [66][68] Question: Seasonality in user metrics - Management clarified that while there are seasonal trends, the sustained growth in new neighbor acquisition helps neutralize these effects [76][89] Question: Ad server benefits and vertical performance - The transition to the ad server has driven growth in self-serve ads, with notable performance in home services and retail sectors [84][85]