Q3 2022 Nextdoor Holdings Inc Earnings Call
[music].
Good afternoon. Thank you for attending today's next door Q3, 2022 earnings call. My name is Frances and I'll be your moderator today.
All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.
If you'd like to ask a question. Please press star one on your telephone keypad.
I would now like to pass the conference over to our host Matt Anderson head of Investor Relations with next door.
Thank you Francis and good.
Good afternoon, and thank you for joining us today to review next doors third quarter 'twenty turning to financial results.
With us on the call today are Sarah Friar, Chief Executive Officer, and Mike Doyle, <unk> Chief Financial Officer.
During this call we may make statements related to our business that are forward looking statements under federal Securities laws.
Payments are not guarantees of future performance.
They are subject to a variety of risks and uncertainties.
Actual results could differ materially from expectations reflected in any forward looking statements.
For a discussion of the material risks and other important factors that could affect our actual results. Please refer to our SEC filings available on the SEC's website and in the Investor Relations section of our website as well as the risks and other important factors discussed in today's earnings release.
Additionally, non-GAAP financial measures will be discussed on today's conference call.
A reconciliation of these measures to their most directly comparable GAAP financial measures can be found in the Q3 2022 shareholder letter released today.
With that I'd like to turn the call over to Sarah.
Thank you, Matt and Hello, everyone.
Q3 was another challenging quarter for many neighbors and customers and more verticals and industry participants are beginning to feel the effect of volatile advertising demand.
In this environment, we are focused on the areas, we can control, including product development, providing increasing value to utility and community for nabors and helping advertisers reach their goals.
On the neighbor front our platform remains highly engaged we grew weekly active users wow by 17% year over year and 4% sequentially. This strong growth was driven primarily by U S neighbors with over 1 million net new Wow added quarter over quarter, and 90% of new neighbors to the platform came.
Organically in Q3.
We have successfully held onto and built upon the boost and reach that we generated from the pandemic seeing a 41% growth in overall Wow and a 32% growth in U S. While since Q3 2020, comparing favorably to peers.
We're beginning to see the benefits of this year's investment in machine learning and AI as evidenced by smarter notifications, which are getting more sophisticated in driving greater engagement each quarter.
This focus on ml and AI will continue into 2023 and beyond we are only just getting started on harnessing our neighbor dataset, which when used appropriately has the power to transform the neighbor experience through greater personalization. We expect this investment to also benefit customer performance through improved target.
<unk> of next door's high intent to audience.
Notably we had another strong quarter of sessions growth, which both exceeded sequential wild growth and also accelerated for the third straight quarter.
Strong sessions growth indicates increasingly frequent engagement and ultimately leads to more impression supply.
Our efforts are focused directly on <unk> and revenue growth in the third quarter Nabors neighbor initiatives included building out a native map feature within the discover surface launching faves, which allows neighbors to connect with businesses and introducing the election Civility reminder, to encourage civil political discourse.
During the U S midterms.
Some of our most visible advertiser partnerships in the quarter, including our Halloween treat map with Purina Bergen brand dog treats and the Big neighborhood Meetup sponsored by Verizon contributed to growth in the number of neighbors on our platform as well as revenue.
Revenue grew 2% year over year to $54 million. While this was in line with our guidance from last quarter. It does reflect continued headwinds in advertising spend across a range of customers for.
This is particularly notable in a few key verticals, including financial services and real estate as you recall. This is a continuation of a trend that we first called out earlier in the year.
We did see pockets of strength in the quarter, including from new and existing mid market advertisers shift same day grocery delivery service was one example of a customer who achieve both brand awareness and conversion growth goals on next door.
<unk> realized returns well above their industry engagement benchmarks are result of our ability to connect businesses not just with those who are highest in intense in closest proximity but also with those who hold the purchasing power in fact, 93% of next door neighbors are the primary ore joint decision makers.
On their household purchases.
We also expanded our third party measurement partnerships in the quarter, including with companies such as Oracle advertising lucid and you start to help advertisers understand the efficacy of their spend.
We're continuing to make progress on developing our AD platform, a top priority and important step to deliver even greater value to all advertisers in.
In Q3, we further simplified our self serve campaign management tool and added greater automation to facilitate the AD creation process for customers.
We also made progress on our proprietary backend AD platform Q3 was our first full quarter with the selection of customer campaigns running on our own AD server, allowing us to utilize our proprietary datasets and the early outcomes are positive.
In response to early indications of a slowdown in advertising spend we evolved our sales strategy to increase focus on recession resilient verticals and customers such as healthcare and public agencies, one of the global pharmaceutical companies that ran a campaign in the quarter was mature enough.
Throughout their campaign, there was consistent correlation between AD engagement and sentiment lift both across mature and as brand and for vaccines overall, especially in states with higher vaccine hesitancy.
The success of the advertisers we mentioned today illustrates that even in light of headwinds next door continues to perform.
In the quarter. We also enabled government agencies to purchase ads on next door to our self serve campaign management platform.
Government another recession resilient vertical represents a new total addressable market for next door and is a natural fit given already high engagement from agencies.
In closing our purpose has never been more important, especially as the global economic backdrop continues to erode our platform has a unique resource for nabors businesses and public agencies and we are as excited as ever about the product roadmap ahead.
We have a strong team in place and we are well capitalized with over $600 million on the balance sheet to execute against our strategy. There may be volatility ahead, but we are as committed as ever to cultivating a kind of world where everyone has a neighborhood to rely on and we remain confident in our long term growth opportunities I'll now.
Turn it over to Mike for more details on our financials.
Thank you Sarah and good afternoon, everyone.
<unk> noted in Q3, well grew to over $38 million. This growth is a reflection of our strategy to build active valued community across over 300000 neighborhoods around the world and.
In particular, we are proud of the way we delivered on an unparalleled combination of utility and community to both nabors and organizations in the quarter.
From helping Charlotte counting disseminate hurricane Ian updates to neighbors in Florida to helping the California office of the Governor and Advertiser flex alerted to that power outages that would have impacted millions of people during late the late summer heat wave.
Turning to revenue Q3 revenue was $54 million, an increase of 2% year over year in the quarter. We saw softness in advertising spend we also saw areas of resilience from certain verticals, including healthcare government and tech and telco.
Spend from our mid market customers continued to grow and we saw a healthy mix of spend across the top and bottom of the funnel objectives consistent.
Consistent with recent quarters. The majority of Advertiser spend in Q3 was on direct response campaigns.
We also had several strong brand partnerships such as neighborhood favorites sponsored by American Express.
Q3, <unk> declined 12% year over year to $1 41.
A result of stronger well growth and relatively less monetize international markets and lower levels of monetization from SMB customers.
This was partially offset by growth in CPM or delivered revenue per impression.
Adjusted EBITDA for Q3 was a loss of $18 million, representing a negative 34% margin.
The year over year margin change is primarily a reflection of near term deleveraging as revenue growth remains relatively less predictable.
We ended the quarter with $604 million in cash cash equivalents in marketable securities.
<unk> share repurchase program at the end of May and have since repurchased over $77 million of our class a common stock.
We will continue to evaluate our capital allocation opportunities looking forward.
And with our outlook, we are adjusting our Q4 2022 revenue expectation to between 50% and $52 million a year over year growth rate of negative 14% at the midpoint of the range and an adjusted EBIT loss EBITDA loss of between 19 and $17 million.
This implies a full year 2022 revenue outlook of approximately $210 million to $212 million, which is.
The year over year growth rate of 10% at the midpoint of the range we.
We are expecting continued tightening in projects from advertisers, resulting in variability in near term revenue.
We are now forecasting full year 2022, adjusted EBITDA margin to be negative 36%.
The change in margin relative to our prior guidance as a flow through of lower revenue.
This was partially offset by the steps we have taken to streamline operating expenses, mainly by reducing variable cost and keeping that head count growth flat.
Notably, we see leverage from lower marketing cost as organic neighbor acquisition remains strong as.
As a result, we expect Q4 operating expenses to decrease both sequentially and year over year.
We believe our guidance represents a prudent approach in light of current market conditions. Our Q3 results reflect progress on important business results, including neighbor growth and engagement, we remain highly focused on driving healthy long term while in revenue growth.
Thank you for joining our earnings call today with that I'll turn it over to the operator for Q&A.
Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad.
If you'd like to remove that question you May press star followed by two.
Again to ask a question that shar.
<unk> one as.
As a reminder, if youre using a speakerphone. Please remember to pick up your handset before asking your question we.
We will pause briefly ask questions are registered.
Our first question comes from the line of Mark Mahaney with Evercore. Please go ahead Marc.
Thanks, I guess two questions. Please one on.
The wild growth and maybe just in the U S 10 million ads this quarter could you peel that back a little bit any any.
That's after the last two quarters, and which whilst in the U S.
Modestly declined sequentially. So anything particular do you think drove the kind of the change in the direction of while ads is something that you've done.
Just talk to that a little bit and then the 90% that come through organic channels.
Like when you talk about our game channels what are those channels.
What's most effective for you is it largely word of mouth, it's still driving.
While growth thank you very much.
Great. Thank you Mark.
So first on <unk>, yes, we are definitely very happy to see that 17% year over year total wild growth and then to your point the sequential growth rate that incremental 1 million added what's driving it is a couple of things number one definitely being the investment that we've made really starting deeply this year alone.
Multiple years, now and then around machine learning and AI.
What that's doing is allowing us to go deep within our datasets and be able to begin with notifications and personalized content on delivery, we know that when we get the right notification in front of the right neighbor at the right time and inherently draws them back to the platform and helps them get engaged.
And that we also did quite a lot in terms of other elements of the platform that were worked on through the quarter mile relaunch thing.
First and foremost a much more native map experience. So if you think about our Halloween map to.
You don't just pin yourself on that map about Penn becomes a post once we create a pulse.
Thats off the whole engine of next door, because now you have something thats available to be reactive to to be commented on to send out a notification to bring more neighbors back to the platform and so it creates that beautiful flywheel.
Second thing that we launched it saves were just getting going here as you know when people come to next door, a very natural step is for them to either recommend the business.
Ask for a recommendation for our business and I think we've seen something like over $55 million recommendations on the platform to date.
We're very deliberately owning this word phase because that action tends to be inherently very very positive and we know that businesses, who have a much more well online page who have more faith, absolutely see more engagement from neighbors ultimately, resulting in more customers for them in the neighborhood.
Finally, we have a much more simplified feet right. We took the big step earlier this year, a little terrifying for a consumer platform to decide the completely reskinned itself, but now I'm much more simple way to see how to engage how to be an active valued member of your communities through postbank, but also to get you to that discover surface to get you to first of all on <unk>.
Three are to get you to your notifications, so a very big shift on that.
On your second question, which was with regard to our overall organic yes, 90% today of new neighbors came organically, what's driving that is really I would say three things first of all it is organic word of mouth, we have.
Work to do to keep upping, our brand awareness, but we do see particularly outside the U S where we've done big campaigns are being involved in big Activations, we've seen a very nice step up in overall brand awareness in countries like Canada, Australia and somewhat in the U K, although we're already quite penetrated there where in one in four households, one and three.
In London.
Second thing that we've done is a big investment in connection so connections as our way of giving you a chance to signal who you know on next year already or who you want to hear from.
Connections gives us an opportunity to personalize your feed but also now the have you invite guests you may now so people in your address book that are not on next door, but that warm introduction holds on to next door and hopefully we convert them to become a neighbor on the platform and then finally partnerships. We have started to invest more in partnerships when we were.
Doing that is through our content API that allows us to put content out onto other people cite a good example is a lot of the Microsoft local sites.
That gives the trumped up engagement for people, who are already our next door neighbors, but it's definitely allows for people to get a taste of what next year is all about and then again come to the platform to engage with our new neighbor. So those are the three big areas of investment for us.
And yes, we were very happy to see about 90% organic number because it really puts us in charge of our own destiny.
Okay. Thank you Sir.
Thank you Mike.
Thank you for your question.
Our next question comes from Ron Josey with Citi. Please go ahead.
Great. Thanks for taking the questions I wanted to ask maybe a quick follow up to Mark Sara.
This struck to me it stuck out to me was sessions up 15% sequentially. If people are using the platform more and more notifications or better maps saves et cetera. Can you just talk about other drivers that have led to that 15% up on sessions, because I think we heard.
That drives more impressions et cetera, and then Mike on the AD verticals, we talked about health care government Tech telco some of the more resilient ones.
Are we on the penetration of those verticals is that a newer sort of focus area for the company and so we're just getting started or have the has the team been focus on these vehicles for some time, which which would help sort of stabilized revenue going forward. Thank you.
Great. Okay, I'll start off with some questions. So yes.
And a way for us to show you what that funnel looks like when you go from and you've verified named our top of funnel for someone who comes from monthly to weekly daily, but then sessions with just how frequently people are coming back on one of the things. We have seen is that our most engaged segments are coming back we're seeing that engage segments are grow almost.
50% year over year. So again this comes back to where you have strong product market fit or you're not building more utility more avenues for community that are bringing those people back more frequently and I think as you know we have a pretty high ratio of wild to dow's, it's over 50% and so on average our weekly active come back about four times.
Per week and of those people coming back they're not coming back maybe multiple times in a day, which is why that notification platform is so important you.
You did call out the right staff, which is we've now seen sessions growth accelerate for the third straight quarter, which is another data point about frequency people coming back more that both impressions and then ultimately we need to go sell those impressions in order to drive our revenue growth, it's a little harder given the macro backdrop, but thats why the former is the <unk>.
Most important thing that we can do because that's an indication of the future potential for next door from a revenue standpoint.
But I will take the second question Ron This is Mike.
On verticals amongst advertiser demand. So the three that we called out this quarter healthcare government and tech and telco as areas of resilience.
Or a little bit different position on the platform. So first tech and telco is one of <unk>.
Larger verticals that we had called out with.
With an early and demonstrate on the platform and just as a reminder, things like home security home services.
Retail financial services Tech and telco have been amongst our top five verticals for for quite some time.
Karen and governments are new pushes for us health care.
We had some great adoption during the pandemic initially behind our help map and then those advertisers have been retained we're complete with the corporate work performance and continue to be spenders.
But both areas are new earning pushes for our sales organization. So I'll just add too with the with the expansion of our mid market.
Our products through the self serve advertising platform. It also helps us to increase advertiser diversity, just like expansion into new verticals.
Great. Thank you Mike Thank you Sir.
Thank you.
Thank you for your question.
Our next question comes from the line of Eric Sheridan with Goldman Sachs. Please go ahead with your question.
Thank you so much for taking the questions I hope all is well with the team up maybe just first following up on Ron's question and coming at it from a little bit of a different angle. When you think about the AD environment, you're going to be facing in 2023, how do you think about elements of your existing advertiser base and how their own advertising might change cyclical.
Versus non cyclical and what might be an environment that there's headwinds versus just repositioning the company against.
For lack of a better term sort of inorganic growth I mean, you've seen still well we're early enough in the monetization part of the platform fees that then maybe you could be a little bit more immune to some of the cyclical nature of an advertising recession, given there probably is a fair bit of vertical an advertiser and geographic expansion to mine.
To possibly mute some of the effects of that so want to understand a little bit better what the engagements like with advertisers and how you're aligning investments up against that looking out to next year and then maybe.
One quick follow up.
The message was clear all this year that you were staying in the investment mode irrespective of what happened on sort of the revenue environment, how should we be thinking about lap.
Lapping the investments that we're seeing this year and elements of yield or output on those investments, especially around bottom of the funnel advertising and platform growth.
Could cause leverage in the operating model in 'twenty three thanks, so much.
Hi, Eric This is Mike let me take the first question and what gives us optimism about our ability to attract and retain new advertisers.
First and foremost as we've called out in prior calls.
We're able to perform across the marketing funnel and in difficult climate like we're currently in and we've been able to help our advertisers to pivot or modify their campaigns.
To be able to continue to spend and attract the demand that thereafter shifting from things like brand campaign to brand awareness to direct response and Thats something that we continue to do and is also a benefit of our managed advertiser models that we have those direct relationships and conversations with our large enterprise customers and we continue.
To continue to lean in there.
Additionally, as with the with the expansion of our mid market product.
Being able to attract advertisers of a different scale.
And different scale economically and so whether they are large enterprises with a high touch model in kind of our managed business or smaller spending in the mid market that helps us.
Two to attract and retain demand.
Then thirdly I'll call out is what we have seen is great progress in retention of advertisers and so while we've had revenue headwinds have largely come from advertisers reducing spend our campaign size.
In reaction to challenges in their own business, but we're I think what gives us a.
Longer term as our ability to to retain those advertisers and having delivered for them the performance thereafter.
On the platform.
And then in terms of the second question and I'll, let Mike dive into specifics, but just broad based how do we think about it we know we're building a very unique platform with Nexstar right. We are the only neighborhood platform. The only one doing local at scale on top of that we have real neighbors that we'll address.
We have the power of proximity and we have this great kind of community also high intent audience feel so for advertisers.
A very potent combination done well as we think about what that means for investment next year, we do absolutely want to keep investing on both sides of our network to grow neighbors to the platform and keep engaging them and then also to keep building out our AD Tech stack on the former we are at an all time high in terms of organic neighbors.
Coming to the platform, 90% as I said earlier, that's giving US a lot of leverage on marketing and then from an AD Tech stack, we're slowly moving turn up flow like off quite quickly through the bell tower on proprietary platform and we're seeing the benefit when we do that the fact that mid market was a real highlight for us as a bill that we have done through.
2022, the fact that we are starting to see more self serve ability should be a big unlock in 2023 and of course that incremental revenue when we drive it should drive a lot of leverage through the model at the same time, we have $600 million plus of cash sitting on the balance sheet. So we want to make sure we are investing appropriately.
Lately against that big opportunity.
Definitely a balance for us as we think about how we go into 2023, and how we balance the upside potential on revenue.
The macro environment begins to settle down and how we keep investing against our opportunity while being mindful of the pretty tough economic conditions, but I think everyone is waiting for at the moment, yes, and I'll just add I think the investment we've made over the last 12 months has really resulted in us driving driving while and driving it.
Engagement and so thinking about where that can how that provides leverage to the model is giving us a larger unique audience for our advertisers and more supply.
Thereafter, and that's ultimately where leverage will come is in is in topline growth in our model.
And.
And we've also had a very tight focus on controlling our costs, which will also help us leverage into 2023, we've had.
Flat head count growth in Q3, and I expect the same in Q4.
And so again.
Continuing to.
<unk>.
Experienced leverage from the growth in audience and engagement.
With the control on the cost side of the P&L, because where we should see leverage in 'twenty three.
Great. Thank you.
Okay.
Thank you for your question.
Our next question comes from Brian Nowak with Morgan Stanley . Please proceed.
Great. Thanks for taking my questions I have two first one.
Give us an update on the overall <unk>.
Advertiser growth in <unk>.
Sort of the progress you've made in bringing new advertisers onboard as opposed to increasing spend per advertiser and just how you think about 2023, increasing the advertiser base and what could potentially be a more challenging macro backdrop and the second one to kind of go back to the point on investment sort of cash balance if we look at the Q.
Quite a bit of unrecognized stock comp to come through in the next two and a half years of $174 million higher than we have how are you thinking about sort of managing through the stock based comp dilution that could flow through for the queue. Thanks.
Okay.
Okay.
Yes, So let me take the first question on number of advertisers and so as you think about the three segments of which were.
<unk> advertisers with enterprise and mid market and Smbs.
The biggest part of revenue the majority of revenue comes from enterprise and mid market and there we have.
Between the global 1000 advertisers active on the platform.
It's a real it's a big push to bring on new logos onto the platform and this helps to drive demand, where we're seeing some headwind and spend per advertiser, which I think was the second part of that first question is.
And where we see great great resulted in retention of advertisers and that gives us the opportunity to increase spending in the future when when their businesses and their marketing budgets allow.
But we but there is some headwind and spend per advertiser and then on the F&B side, we have around 35000 to 40000 active F&B is at any one time with our paid advertising products.
And we're excited about it.
The potential there is to drive penetration more deeply given we have more than $3 5 million businesses that have claimed their profile page.
On the platform and that is an active and engaged base to which took to market our SMB products.
Your second question was on.
Stock based compensation and and leverage.
There so.
Really our stock based compensation is driven by a couple of things one is in and growth of the team.
And we did expand our team size in the first half of the year, but as I just mentioned withheld head count flat in Q3 and anticipate doing the same in Q4. The second part is also.
About.
The composition of that growth and came in the first half.
Relative seniority of.
Yes.
Those new additions and so we were adding some new critical in senior roles to the team that had.
That impact there.
And then the third piece is just as a public company and so our stock rewards, particularly.
Initially out of the gates as a as a public company.
Our higher cost in nature versus the ones that we had as a private company.
And then finally.
I'll just add that our.
Our buyback and so we have put to work $77 million up.
Of our cash and acquiring shares in the market under.
Our share repurchase program.
Which helps too.
On dilution taking shares out of the market.
Great. Thanks.
Thank you Brian Our next question comes from Youssef Squali with true Securities. Please go ahead.
Great. Thank you very much.
Let me try a couple one and I apologize if I. If this was answered just trying but can you. Maybe this is maybe for Mike can you maybe just.
Give us the growth by different.
Segments, SMB mid market and enterprise during the quarter relative to maybe the prior quarter.
Self serve versus not and just maybe to Eric's question about 2020 through I know youre not guiding to 2022, yet, but what what base case scenario are you baking into your plans for next year as you kind of you know.
Kind of your budget your cost.
Cost side of the business et cetera, really just trying to get a sense of as we think through your path to breakeven.
Ultimately profitability et cetera.
Do you.
Is that path been extended since say 12 months ago has shortened I know there are a lot of moving parts and there is uncertainty, but as you plan for next year. How are you thinking about it. Thank you.
So this is Mike let me take those one at a time. So I think furniture first question was on the segment growth.
We haven't provided that level of detail, but what I, what we're pleased with is.
As the rapid growth, we're seeing in the mid market group of advertisers, where we have the ability to improve diversity of advertisers sandwich subsidiary revenue and also improves AD performance and we're continuing to see that in the current quarter and I think theres a huge amount of runway in front of us.
So we'll comment on that in future periods, but.
But all three of our enterprise.
Market and SMB.
Customer segments have huge potential in front of us.
And we have a lot of penetration to drive.
With or without.
With our go to market.
So that's that's one so I think the second one was.
Sure.
<unk>.
Got it.
Our path to breakeven.
And.
So we're not providing guidance yet.
'twenty three and beyond but I think what we have commented on and feel strongly about is the leverage in our business really comes from scale of revenue.
And so and the climate that we're that we're currently in where we're focused is on things that we can control, which is on a neighbor growth the acquisition of new active engaged businesses on the platform.
Overall engagement and so with that larger unique audience with that increase in supply we feel feel great about our ability to deliver value to advertisers with a well tested.
Model.
And one that has attractive long term margins.
That said we also.
A thousand feel strongly about the need to show financial discipline and demonstrate leverage in the model. That's something we have been able to do for the last several years and.
In the current climate is not going to happen in 2022, but it's something that we plan to continue to demonstrate is putting that.
Certainly knight gradual leverage on our path to breakeven and eventually.
Profitability in the long term margins, we see from our peers.
Okay. That's helpful color. Thank you.
Thank you Sir.
Thank you for your question.
Our next question comes from Brian Fitzgerald with Wells Fargo. Please go ahead Brian .
Thank you.
And you can speak a bit to the Oracle partnership and some of the others on the attribution measurement side first at a high level and then maybe more specifically should those appeal predominantly to smbs in the self service space or more to the Midmarket and enterprise or maybe some smbs are.
As well suited to leverage the caliber of the insights those relationships. Thanks.
Yeah.
Great Thanks, Brian for that.
First of all from an alcohol from perspective like is it going to take your question to just remind everyone kind of I think it was front end, which is the campaign management piece.
Heavily focused right now on self serve and then ultimately AD formats and so on.
The backend, which is our AD manager, where we are now moving more of our AD campaigns over our advertisers over that way, we can take full advantage of our proprietary datasets.
In the middle.
That's quite the way to visualize that is how do we API out of our AD platform to work with third parties and one group of third parties is clearly on the measurement side. So that's where we do work with Oracle looser Foursquare and so on on where we've been able to show some really good outcomes from advertisers.
Generally speaking in terms of selling that nextera kind of outperformed benchmarks. So some of the examples that we gave in the quarter. We talked about shipped for example, adult local closer.
So definitely seeing better performance in terms of lead generation and ultimately conversion on their website.
We have also seen.
In prior quarters, we've talked about folks like Albertsons and so on where we can show our ability to drive online to offline purchasing behavior well ahead of other benchmarks since again, how do we lean into the elements of next door that make it truly unique I'll give you one other example.
Which is working what Lou said, we were able to show the effectiveness of our solutions to an insurance company that ran on National brand awareness campaign to help them understand through our brand lift study that we were able to less overall brand recognition that they were seeing.
We're doing that to almost a 90% confidence level. So these are ways, where we shift away from quote unquote grading around hallmark just showing that next door is a very pro forma platform in a very unique platform utilizing that third party measurement. The other places where we will use API is going forward might be for very differentiated AD formats, maybe we.
Don't build them ourselves, but we want to have them available on our platform and you could also imagine us working with other forms of supply may be more programmatic over time as well. So that is a core part of the development of the add back and I'm glad that you asked the question on measurement, because often people don't get into that.
Okay.
Thank you Sir I appreciate it.
Yes, and actually sorry, there was the second part of your question was by channel and who will make month benefit of that I mean, it's definitely terms today to be a more sophisticated scale of advertisers. So larger enterprise, there's definitely agent agencies and then to some degree mid market that's.
Smbs want to know that there is performance there for them until they inherently can see nexstar working quite right. When I go talk to F&B I, just had a back and forth with one yesterday and she was talking about the fact that my post had driven.
Number of people to give her a call to place orders just in the last week. So there's this kind of inherent.
Performance, but small small businesses see on next door. The question is how do we take that and now help them understand it in a more sophisticated way, but also in a kind of an easy to understand and package way and so if you recall I think last quarter, we talked about the shift we've done with our next door at.
Offering to give F&B not just easier AD formats, not just faster click to be on the platform, but also the finally start giving them. Some of these insights that frankly other quite sophisticated platforms. They don't give them a lot of insight so but the key for them is always believes can we prove that we're giving them. The neighbors that are going to come into their store buys.
From that.
By their services or whatever that is the key and so the more we can connect that thought I think the more and more next door is going to be seen at the platform you have to be on a local basis.
Thank you.
Thank you.
There are currently no questions registered so as a reminder.
Is star one if you'd like to ask a question.
There are no questions waiting at this time, so I'll pass the conference back over to Sarah Friar Next-door CEO .
Great. Thank you Francesca and thank you everyone, who joined the call. We really appreciate your question, while we delivered on our Q3 revenue and beat on EBITDA expectations and definitely built momentum in areas such as the mid market. We now we've worked today are to continue to grow next door through a global macro environment that continues to be very challenging next door is a unique platform.
As I've said over and over and Paul we are local we have organic driven growth and engagement we're not.
To others to drive that we have real neighbors at real addresses and we really have an incredibly high intent audience. So with that we're laser focused on what we can control first we need to beat the drum on the importance of local for nabors businesses and agencies to make sure that everyone recognizes that next door equals neighborhood and then building that.
Brand awareness really provide the utility and community that our customers demand second we want to continue to invest in our platform development initiatives things like map things like our ml AI platform things like phase in connections and of course vitality, a place where I think nextera is leading edge and then third and finally, we want to continue to iterate on monetizing.
<unk> capabilities that three tiers of the App platform that I was just describing to you.
And while we're seeing near term revenue and EBITDA variability, we are focused on getting back to higher growth and margin improvement. While also investing in the long term opportunity that's afforded to us by the strength of our balance sheet. So with that thanks, so much for tuning in today and we look forward to talking to you in about three months take care now bye bye.
That can everyone else unless it around so it looks like no one else is going to join her in Hong Kong.
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