Nextdoor (US:KIND)2023-08-09 01:45Financial Data and Key Metrics Changes - Q2 revenue was $57 million, representing a 4% year-over-year growth, with increasing momentum throughout the quarter [86] - Q2 ARPU was $1.37, declining 7% year-over-year, reflecting a growing WAU and impressions that outpaced revenue growth [3] - Adjusted EBITDA loss for Q2 was $19 million, with a negative margin of 33%, showing a four-point year-over-year improvement [3][58] Business Line Data and Key Metrics Changes - Mid-market advertisers showed strength with a 17% increase in new logos quarter-over-quarter [86] - The SMB business returned to revenue growth, contributing positively to overall performance [86] - International revenue grew by 28% year-over-year, with a 79% increase in new logos internationally compared to Q2 2022 [59] Market Data and Key Metrics Changes - WAU grew 13% year-over-year to 41.6 million globally, although it declined slightly sequentially [138] - Session growth increased by 24% since the end of 2022, indicating strong underlying engagement trends [138] - Over 90% of global verified neighbors came to the platform organically in Q2, signaling strong product-market fit [54][19] Company Strategy and Development Direction - The company is focused on growing WAU and revenue while investing in long-term opportunities [31] - There is a significant emphasis on AI and machine learning to enhance user engagement and content personalization [39][55] - The strategy includes deepening relationships with advertising agencies to unlock new customer spending and diversify revenue [59][70] Management's Comments on Operating Environment and Future Outlook - Management noted a recovery in the ad market, with sequential improvements in mid-market businesses and SMB growth [23][127] - The company expects Q3 adjusted EBITDA loss to be between $20 million and $21 million, with a focus on margin improvement for the full year [60] - There is optimism regarding the potential for AI to drive both WAU and revenue outcomes, leveraging the unique local knowledge graph [135][119] Other Important Information - The Nextdoor Ads Manager is now available for new advertisers, with existing advertisers being migrated to the improved experience [139] - The company has seen a strong performance in verticals such as healthcare and travel, while financial services and real estate remain muted [136] - The classified business sees over $1 billion per month in pre-sale and free items, indicating a robust marketplace [99] Q&A Session Summary Question: Insights on WAU decline - Management indicated that WAU growth is primarily driven by top-of-funnel verified neighbor growth, with a focus on driving session depth [19][76] Question: Advertising environment and vertical performance - Management described the advertising environment as stabilizing, with a noted recovery in Q2, and highlighted strength in new verticals like healthcare and travel [127][136] Question: Timeline for advertiser migration to ads manager - The company is currently migrating existing advertisers to the new ads manager, with positive feedback on the improved experience [139][122] Question: Contextually relevant ads and user experience - Management emphasized the importance of contextual relevance in ads, which enhances user experience and advertiser outcomes [100][57]