Q2 2023 Nextdoor Holdings Inc Earnings Call

Hello, everyone.

Thank you for attending today's next door second quarter, 20th twenty-three earnings call.

My name is Sierra and I'll be your moderator today.

All lines will be needed during the presentation portion of the call was an opportunity for questions and answers at the end.

If you'd like to ask a question press star one on your telephone keypad.

I don't know like the past the conference over to our House Mad Anderson head of Investor Relations with next door. Please proceed.

Thank you Sir.

Good afternoon, and thank you for joining up today to review next door second quarter of 2023 is the natural result.

With us on the call today or stir Fry, Chief Executive Officer, Mike Doyle, Chief Financial Officer.

During this call we may make statements related to our business forward looking statements under federal Securities laws.

Payments are not guarantee of future performance.

Subject to a variety of risks and uncertainties.

Actual results could differ materially from expectations reflected in any for Davis.

For a discussion of the material risks.

Factors that can affect our actual results. Please.

Please refer to our SEC filings available on his website.

The Investor Relations section of our website.

All of the risks and other important factors discussing today's earnings release.

Additionally.

Financial measures will be discussed on today's conference call.

Conciliation these measures to the most directly comparable GAAP financial measures can be found in the queue to 2023 shareholder letter released today.

With that I'd like to turn the call over to Sir.

Thank you Matt.

With a strong quarter for us that'd be delivered year over year growth across key metrics of weekly active users are wow and revenue as well as adjusted EBITDA margin equipment.

Starting with neighbors.

Wow for 13% year over year to $41.6 million globally, while while declined slightly sequentially. We added 1.6 million well in the first half of the year. We also saw strength and underlining engagement.

Notably fashion that which has increased 24%.

Of 2022.

We are successfully executing on our 2023 product and stuff.

The number of neighbors and organizations on the platform deep engagement driving concentration personalization and enable sustainable advertiser and revenue growth through AD platform development.

We continue to bring new neighbors and organizations to next door through inbox content sharing and brand awareness finished up.

You too we launched our seventh annual neighborhoods face campaign, where neighbors voted for their favorites local business it.

This brand building campaign benefits businesses winters with cheese, almost five times more quick on their next door add six times more recommendations on their business pages.

It also benefits neighbors, 94% of some value recommendations from other neighbors.

During the campaign neighbors photos for almost 2.5 million businesses on the platform, creating a virtuous cycle of support and interaction between neighbors and businesses.

There were 60 million business space and recommendation.

Nearly 4.1 million clams business pages on the platform relative to just over 2 million. When we went public less than two years ago. We clearly strong presents for local businesses and deliver value by providing reached to a high intense audience real people any neighborhoods everywhere.

Last month, we have the opportunity to celebrate the 20th 23 neighborhood faith winters.

Local businesses like Bernie copy.

Brooklyn blooms and fully hardware.

I rang the opening bell at the N Y S. C. We know that one small businesses like these thrive neighborhoods thrive.

And the quarter, we accelerated or a P. I understood to share next door content on and off the popcorn and to make this process more seamless her neighbors, including through partnerships with <unk> and <unk>.

Also in the very early days of partnering with the B B C. Three more local news content to next door.

He finished fifth helped drive engagement and raise awareness of next door at the platform to get things done locally.

Seeing results whichever 90 per cent of global verified neighbors coming to next door organically and a quarter.

We are well positioned to explore the possibilities for AI and generally better AI application because of our unique and highly dynamic local knowledge crap.

<unk> benefits from real time pegging in other words neighbors are already telling us if there is a business recommendation.

Or a for sale items.

We can use this information to train our ammo models and ultimately help neighbors more easily meet their needs on next door, including finding the most up to date local information are exchanging goods and services.

We are excited for AI as potential to drive both Wow and revenue outcomes.

<unk>, especially I'll continue to play a critical role across our product understood to drive engagement in queue too, we implemented AI and the new speed to help content travel based on the number of neighbors in the neighborhood.

As a result neighborhoods with fewer neighbors are seemed more content, which is driven greater session back common hosting and even revenue.

To customize the news feed for neighborhood characteristics like population and engagement level is a precursor personalizing the new speed for neighbor characteristics like and trust.

We continue to roll out the generative AI assistance you started testing late last quarter Ah system's proposed helps neighbors create posts in a way that are kinder and more engaging and we've seen strong adoption.

A majority of neighbors, who see the assistant generate a suggestion are choosing to integrate them leading to more productive and positive posts we've.

It seemed particularly high traction from those creating business posts are recommendation highlighting the strong use case for our two sided network businesses connecting neighbors and vice versa on the platform.

In addition, we have integrated the system with our kindness reminder, to suggest ways to rephrase comments that are potentially Kirk call.

This work accelerates our ongoing efforts to foster neighbourhood bike holidays.

This month, we were honored to participate as the Naacp's National Convention closing plenary keynote with any ACP, President and CEO Derrick Johnson on the theme of thriving together.

Working with trusted advisers and partners such as President Johnson, Dr. Jennifer ever hurt in the Stanford Spark lab, and Julianna <unk> founding scientific Chair and board member for the U S Foundation for social connection and the global initiative and loneliness in connection we're creating a welcoming platform that enables.

All neighbors to thrive while there is more to do features like degenerative AI Assistant Unkindness reminder, are an integral part of our growth and engagement strategy.

Beyond May I, we launched several other product features designed to enhance the next door user experience and drive engagement and ultimately revenue for example, contextually relevant ads on our classified surface for sale and free through our partnership with Microsoft pain now.

Now when neighbours search for an item for example bike they seemed <unk> as well as relevant ads for bikes.

Contextually relevant the ads create a better neighbor experience to provide strong advertising value.

One of the most significant areas of progress in Q2 was on our AD platform over the past several quarters <unk> building. The foundation for our improved self serve add experienced design, who would use advertising effort as well as our proprietary add server designed to improve advertiser outcome.

A soft serve add experience. The next door AD manager is now available to new advertisers have any five.

Additionally, we have started migrating existing advertisers to be increased experience and we're seeing positive results.

Newly migrated solar company in Arizona greatly appreciate our AD creation tool allows them to serve ads to specific zip codes and a uniquely local paper targeted way.

It is a testament to ease and functionality of the next door as manager as well as proximity in place Ah some of our key differentiators.

The next door AD server is now delivering 100 per cent of U F. F M B the man.

Her is already offering a more powerful advertising experience, including after loading times and better distribution of AD impressions.

Overtime. The next door add silver will provide better targeting and optimisation capabilities benefiting customers and neighbors are like.

In closing we are pleased with the progress we've made year to date on many key products initiatives and business metrics.

Excited to continue executing on our top priorities.

Growing our base of neighbors and organizations deepening engagement and driving revenue growth by supporting advertisers through our AD platform.

We return to revenue growth and adjusted EBITDA margin expansion in queue too and we remain confident that we will continue to generate revenue gross margin improvement in 2023 overall and beyond.

I'll turn it over to Mike. Thank.

Thank you, Sir you too revenue at $57 million group, 4% year over year.

<unk> straightened, increasing momentum throughout the quarter.

Several areas of revenue growth and cute too consistent with the past few quarters Midmarket advertisers continues to be an area of strength he added.

17% more mid market logos quarter over quarter.

Small and medium sized businesses or S. M b as returns to revenue growth.

We are continuing to see the benefits of our strategies and keep it in our relationships with advertising agencies, who can help us unlock span for new customers and increase revenue diversity.

Q2, 77% of new Global Enterprise accounts came through agency partnerships.

International revenue grew by 28% year over year, and we added a 79% more new logos internationally. This quarter then issue to 20th 2022.

Growth in the financial services in real estate verticals overall remains muted, but this was upset by strength and other vertical including health care and travel.

And many of our larger advertisers continue to increase spend.

For example, at least homes doubled spanned from Q1 to two two this year as a result of strong performance on the platform.

Two two <unk> of a dollar and 37 cents declined 7% year over year reflect in another quarter of growing a year over year awhile and impressions, both of which outpaced revenue growth in the period.

Due to adjusted EBITDA loss with $19 million, representing a negative 33 per cent margin. This is a four point year over year improvement and an 11 point sequential improvement in margin reflects any combination of revenue growth and expense management. While also ensuring we are a resource to deliver on our longterm growth objectives.

Notably regroup cost of revenue just 2% year over year is platform hosting cost efficiencies drove operating leverage.

R Q2, operating cash burn a $12 million was better than the adjusted EBITDA loss reflect in another quarter of benefit for interest income.

We ended Q2 with $552 million in cash cash equivalents of marketable securities. We will continue to evaluate our capital allocation opportunities looking forward.

A close with our outlook, we expect to Q3 of 2023 revenue growth to be in line with our future growth rate at approximately 4% growth.

Based on progress today, we expect it to you for a year over year revenue growth to accelerate complain made a single digit year over year growth for the full year of 2023.

Turning to adjusted EBITDA, we expect to three adjusted EBITDA loss to be minus 21 to minus $20 million to continue to expect to return to adjusted EBITDA margin improvement for the full year of 2023.

We will hold sequential operating expense growth to low single digits in the second half of this year.

We've made substantial progress across key business metrics year to date remains focused on growing well in revenue through our 2000 twenty-three product priorities.

Thank you for joining areas call today with that I'll turn it over to the operator for to you and I.

Thank you.

If you like to ask a question. Please press star followed by one on your telephone keypad.

Move your question Press Star followed by two.

And if you're using a speaker phone please pick up your handset before asking your question.

Our first question today comes from Youssef Squali lift Truist. Please proceed.

Hi, This is Robert around for you, Sir Thanks for taking our questions.

Increasing the content from nearby neighborhoods seems like a really good idea because the more relevant content or user will see the more time. He will send me out but I'm curious how old are you strikes a balance between expanding to more content from nearby neighborhoods, while also maintaining.

Proposition of that close proximity and localization I'm just curious like how much more room is there to expand this without losing their stores.

Proposition and then.

And then I'll have one follow up thanks.

Great. Thank you Robert that's a great question something about we discuss a lot in sunlight I think the punch my answer is personal vacation, but let me.

<unk> at all next door honest shifts of going from private to local we used to be the private social network for your neighborhood and we really broke out a part over the last couple of years. It really is a move to become much higher utilities for neighbors and much hiring sense of community Uhm. So there's a balance here.

The one of the first one.

It was to be able to have anyone contacts so that allows us to have constant travel depending on how you spell. It out for example, something about lost keys from Iran, Iran, or a lost pet probably should stay hyper local Amanda not gonna go that far, but if you think about something like an emergency situation right with.

I'll make a living under sadly tornado warning him in high heat exposure those could be examples where you actually want to contact you travel to be able to have a cough multiple neighborhood. So that was a big push on anyone content of course that also gives us a lot of leverage in areas like S. C O as well, but I'm gonna come back to personalization because this is a place.

Four we've been doing a lot of deepened back months on a I M L perspective.

Join next door because of the unique data back like we are the local knowledge graph highly dynamic very unique content on top of that you'll hear other companies talk about having to get their their data climbed are labeled uhm next door is really interesting and that our data effectively gets labolt in real time.

By our neighbors, so the ability for them to say Hey, This is a post about a recommendation because something I'm flagging for moderation. This is something I'm selling or something I'm offering for free.

That's a really interesting base to them to be able to apply models on top of him so being able to train those models means but we have a lot of possibility to do better personalization I put some people local is literally they're building or the street and for others local might be the whole county there.

Even for an individual.

They are looking for their lost keys from Iran. Local is a very small radio, but if they're looking for an emergency plumber, they're probably willing to have a close to travel further to get utility. So even for individuals the concept of local can change depending on the use case in on the contacts. So that's the balance for US. That's why we have done this kind of longterm.

Most of your efforts and there's some private to local.

Gives us the ability to move content.

Just on personalization, but then to where you started with your appointment. It also now allows us to really ask the amount of liquidity in neighborhoods that are perhaps the younger where we don't have as many neighbors at the moment not creating as much content. When we can do that we're already seeing the opposite of that which is higher engagement mmm Britney for verified neighbors to the platform.

And it allows for deeper scrawl scrawling. The app itself. So that's why you saw wildly with 13% year over year flashing back grew faster and in fact, he told you that the percentage overall obsession that was up about 24 per cent just since the end of last year. So I. Appreciate the question I'm happy to take the follow up.

Okay, great. Thank you and yes. The <unk> is just clarification, so I understand.

System features seems pretty straightforward for helping us improve posts I'm curious how it exactly works for the business related purposes. It seems like a very interesting new.

<unk> produces in future for business purposes, So how exactly does that work.

Yeah. So right now one of the big use cases on next door is giving and getting recommendation.

And this is a place where we're seeing in particular they the AI.

<unk> do very well for Ya. So if I'm looking for a recommendation for a hair salon or I Wanna give a recommendation for the amazing.

Still enough that I had this morning at the local coffee shop.

This is where we see the a I have the ability to rewrite the posted a much more engaging way already taken off and we're seeing the majority of neighbors, except the the prompt and say yeah I would rather posted this way what we're learning as as we get into the long tail Uhm, where maybe there's less aggregation like lots of similarities with the post.

Neighbors are still better at being engaged and so this is where now the iteration of AI began where there will be places, where we have a lot of data and that allows us to give really good kind of offers of different ways to write a post and in other places where there's just a lot of pale and the ability to sound really authentic local really mad.

<unk> and again, it just keeps coming back to work so unique and differentiated by next door, which is the fact that we have this local very highly demand highly dynamic local knowledge grass I think we're we're going I don't think.

Going with trying to rid of AI thinking about our AD platform. Because we have this insight now that says M. A I can actually be very effective and writing a recommendation, which was really just a step away from writing.

The benefits of building our own next generation AD platform, which were through the build on is that we cannot take advantage of next generation technology leapfrog and in fact, so we think that there's very first call ground to start creating an AD using generative <unk>, which is pulling from what the neighbors.

Already written about a business, maybe pictures that ready posted up out of business. So that when you as the as the business and you might even be a big that's not that's not just a small business and small business plan, you're everything you're creating a product here the service provider. Your the CFO , usually the person doing all the legal stuff, you're making sure. The server showed up and they were all.

<unk> and if we can make your life easier and have that kind of wild moment, where it's like Wow next door really understands me. We think that is phenomenal way to get a great out for local business. So they get more revenue and also have a great outcome for a neighbor, where they feel like it's great content.

Why I quoted the 4.1 million claimed pages, because that's kind of the immediate close to go right. Those are businesses that have taken a first step with next door <unk>.

Claim their business page almost double since we went public and now we know we can go back and sell them on that upsell moment from job postings about turning it into an app hopefully what's that may I help them.

Okay, great. Thank you very much.

I appreciate the question.

Our next question comes from Eric Sheridan with Goldman Sachs. Please proceed.

Thanks, so much for taking my questions, maybe too if I could one.

Drawn to the comment you made about agency relationships and the nature of that being a driver of the advertiser momentum and the quarter can you talk a little bit about some of the investment you've made to date and how you're thinking about the execution piece in terms of building [laughter] agency relationships through this year and more importantly, as a backdrop for budget decisions.

Two next year that could possibly step up either advertise your account or your advertising revenue base going into 2024th thanks, So much sir.

Eric just a nightclub particular question so much like we have built out our approach and.

And industry verticals, we've made significant investments in rebuilding it seemed to deepen our relationships with advertising agencies first and foremost it's to help to build awareness of the next door platform.

And then to leverage the agency relationships with their client base to help them to to learn how to best take advantage of them.

Last four of them, we have a variety of ways. We we do this including some advanced relationships, where we have preferential treatment.

Treatment of a client base within agencies here, just allowing us to get more energy introductions through the the average appetizer.

Client base.

This has helped us really to make that.

The first thing to introduction to get the that the trial budgets related deep in to spend on the on the platform. You mentioned the 77 per cent of our our new enterprise accounts issue to how to an agency partnership Ah components, and we will work together with the agencies to make sure that we're delivering the <unk>.

Farmers and meeting the expectations of their of their client base. So this is an area that will continue to any through investing and and it works alongside with our our direct relationships with the with the advertisers.

Great. Thanks for the call to make.

Thanks, Eric our next.

Our next question comes from Ron Jesse with City. Please proceed great great. Thanks for taking the question I've got two Sir I wanted <unk> to dig it a little bit more about adding and improving contextually relevant ads for for for sale and free on next door to talk to us a little bit more about if you could the size of the classifieds business in terms of traffic recession.

And then specifically how big monetization might improve the user experience and how it's integrated that's the first question. The second question is just on on Wild I think that declines sequentially any additional insights here it'd be helpful. Thank you.

Samsung, but first of all Unfulfilling free I think it started to fight breaking ma'am. If you look at why people come to the next door number one is given get recommendations I just talked about but the second reason is.

The market place that we have the we call for sale and free it's it's actually quite bars and see over a billion dollars per month, but <unk> and one other thing you wanted me when they're white people come to the next door number one is a hyper local so if you're trying to get rid of I.

I don't know something in your garage or a table not gonna fat access you need someone that can probably show up at your house.

<unk>, it's <unk> cause I'm I'm, probably going to show up at your account and then the third reason investment in community that we see through that platform or Austin someone like say.

Mom might give away.

He'd have grown out of partially because she or maybe a bad he wants to give back to the community as well.

Something like about 20% of all the items in the catalogue or actually offers for free so it's incredible value proposition call local community.

I Love that you picked up on the piece, where we honestly put add ons about perfect.

Historically.

Just put our add that we're getting broadly speaking from from any clients that satisfying as on the platform. What we did in queue to be integrated and with Microsoft things AD platform, where now we can do that much more contextual AD. So when someone purchased for advice for example.

Yeah, I hope, we can show them the bikes that are available from the community or we can also showed him a contextual ad.

A couple of things we're doing here a number one just wants the neighbor experience to be awesome, you're trying to get a job done I need to get a bike for my Kid. We want you to be able to do that whether you buy at through an actual third party vendor or whether you get it from your community, but it's also my <unk> belief, we have that we have so.

Much information in such a high end attempt audience that if we can keep offering an AD that has high contextual relevance in the amount of money you can prove that from an advertiser perspective, they're going to have the best possible outcome.

What <unk>, what we're doing is be answered, yes, yes, yes, yes, yes.

Credibly per four nine.

So it's given up a lot of confidence that has been moved to our new at the accident are able to actually take advantage of our proprietary data, we're going to be able to add more and more of the capsule relevant sometimes research, but also just generally speaking uhm, because we know something about you as an individual or we know something about your.

Community.

And then Ron I can't remember for that too.

Okay great.

Is it.

I don't know if you can you still hear me.

Yeah, we can hear Ya yeah, Okay, Oh, Hey, no Sir that was super helpful. On the classifieds and an exciting I was just wondering on the on the Wow that looks like a decline sequentially anything to call out there specifically.

No I would say overall like we looked at it and it comes out the first half and fault. Yeah. We we've had a lot of outperformance in Q1, I'd, probably just settle down a little and to to let me go back to the year over year growth of 13% year over year, just under $42 million total Wow I think a couple of things I'd really want a call out for you.

Number one.

Wild growth is coming from Papa funneled verified neighbor growth, what we're proud of and a quarter as we have cut our own cost to make sure. We're staying mindful of Martin progression is that over 90% of all verified neighbors came from a classical Montana.

Great signal that on next door, we have strong product markets pet. The second thing is as people comes verified neighborhood, if they're engaged in.

Best in class, so verified neighbor to while Rachel stayed up just a little over 50 per cent, but also while to downright trills have also stated over 50 per cent. So.

Strong strong signal from what that means for overall growth somebody out about $2 million in your verified neighbors a quarter right now and that's with no halo effect or many pig marketing et cetera.

I'm going down with <unk>.

Why that's important is because of course, they're gonna get you some questions and impressions are what's gonna get you the revenue fashion grocers actually faster the marlboros and that was also being treated for the last couple of quarters and that's because we're driving people come to the platform. We're driving them to go deeper on the platform and that's cause we're putting more content on from the time that is valuable.

And that's in output on all of them basketball, we've done from an AI M. L pushed back up so we talked about construction continues to outpace <unk>.

And then finally in terms of retention, we continue to see ongoing from her attention standpoint.

All the same the course of sticking around as we have seen in the past couple of years. There's no changes there. So yeah really strong signaled once we get you you stick around and you find that value on next door as we look forward into two three in the back part of the year our expectation for two three Wow is probably gonna be about similar to Q.

Two we don't want to get ahead of ourselves, but we are putting a lot of focus on driving that Apple's final broke right now and continuing to drive <unk>. So that's giving us the confidence that we can continue to drive revenue growth.

We'll see that accelerate and this is the back half of the year.

Two three we gave you the guidance for it but if you're kind of doing the math forget to overall revenue growth for the full year for the company you would know that that starts to get you into mid seems even hiking type growth rate by the time, we <unk>.

<unk> before.

Thank you very much appreciate it.

You're welcome thank you.

Our next question comes from Brian Fitzgerald with Wells Fargo. Please proceed.

Thanks for a couple of them advertising shot a quick ones can you remind us what did you expect a timeline for the full migration of existing advertisers to the to the edge manager where do you stand today in terms of that and then are you seeing any dynamics of accelerating transition is.

You kind of get more and more depth of doing that advertisers are getting more and more depth with using tools.

They don't they don't have to follow up.

Sure Great. So you have to first of all I'll I'll put some extra adds managers to remember that's the actual interface that you know had standalone app and it's all about reducing advertise our efforts. So how do we make it super easy if it comes next door create an AD and get it out to learn what it needs to do for you growing your business. The good news is in the quarter were not a point, where we businesses have.

Including AD agencies can now surf on the platform that was our big goal to get to that point, where everyone could self sir.

And now over the next couple of quarters. It started migrating our existing customer base. So net new customers can offer to their heart's content.

<unk> <unk> <unk> <unk> <unk> <unk>, sorry migrating are currently just Wanna make sure I get that straight so that should be done over the next couple of quarters.

<unk> is it the more powerful tool, we're able to give them better performance metrics better reporting.

They like the simplification my prepared remarks that talks about the the solar company out of Arizona. Good example of a bad market clients. They like it because they can just need very precise targeting.

<unk>, which neighborhood currently a lotta penetration and frankly, where they needed to go south mm mm. They really do that as differentiated I'm next door. They can't do that as well on other platforms. So that's next door as manager the other piece, which is the back end next door AD server, that's our backend piece, which is about advertisement.

So how do we make sure the outperformed better there in terms of progress in queue too we've not deliver 100 per cent of the U S. S. M. B demands on it and we look forward into Q3 and Q4, it's about how do we bring all of the Midmarket over and then 2024 will be bringing finally, the large enterprises.

Why we're doing it in that order is really about just managing risk I think what we're seeing right now with with math is actually a lot of stuff that makes us quite excited cause I mentioned on on the prior question Presupposes latency has gone down so not having to do a call out to someone else's AD server or add platform.

That you know, it's just growing through the fees, we don't Miss an opportunity to put that right add in front of you. So that's good from a revenue standpoint second with me can be a much better job of optimizing AD targeting an AD delivery, so again, making sure that the right out of going on at the right time like when do you want to see the advert from the local bakery for what they've got going in there.

Nine versus when do you need an AD from the local plumber or the local flooring experts and then finally add relevance you know again from a neighbor of perspective, what what does the neighbor C. N Y. So we're really happy to finally be making me cause he was a really big quarter for us the momentum on the <unk>.

<unk> was really phenomenal I'm super grateful to the team and I feel like it's starting to show up in a result, the fact that we're about to go over your growth I'm looking at acceleration, that's we get into the back part of the year, it's pretty exciting.

Got it and.

Just prior calls.

Oh, you sure their attention levels for your top 50 advertisers any update on that the latest advertiser numbers or revenue touch branch.

Just give me an overall if you look at two two in terms of retention trends, we saw stable <unk> advertiser retention plans for the.

Quarter in particular, what we would call kind of mannose advertisers folks that's our salesmen with touching directly yourself, Sir what's more stable I would say retention amongst the largest advertisers. So really high you know not not as having changed from the numbers that we've given you before so that is good.

And the final thing I would say in terms of you know what makes us a little bit more upbeat there are vertical like financial services home services, but I think there's still under a lot of strain, they're not really spending, but we know that we really perform for them. So the fact that we can get back to grow up with a lot of your vertical, but we weren't really servicing a year ago looks like health care.

Government and so on.

Mixed be excited for the latent capacity and that is hopefully there at least.

Other vertical begin to see some you know returned to normal overall, yeah, feeling good oncoming advertiser retention standpoint as well.

Awesome. Thank you Sir I really appreciate it.

Thank you.

Our next question comes from Mark Mahaney with Evercore. Please proceed.

Thanks, I just have two quick questions did you did you already comment on just the overall advertising environment. How you would describe it since the beginning of the year stable soft starting to recover or anything like that and then could you also secondly, just call US particular verticals is there any change in kind of a vertical strengths and weakness.

That you've seen over the last year or two thank you.

Okay, why don't I take the first and then I'll definitely should jumping on the second so overall mark.

<unk>, a thorn [laughter] marquez only get too carried away, but it definitely keeps you felt like a better quarter for each month actually got better from a year over year growth perspective, I'm not continue within the first month of the of the new quarter.

Gentlemen.

I'd say.

Probably advertisers just a little bit more optimistic I don't think the recession has manifested to the same degree that people may have here I think secondly, when I've talked to marketers.

They're ready to do more full frontal advertising again, <unk> clearly needs to get the dollars to do that but they want to be able to feel better Max of brand all the way down to performance Marchbank 15 in this kind of trap of performance marketing only if they're spending at all they're kind of recognize you know <unk> they need them to come back to that.

If they're going to be able to create the the sort of brand recognition. The the feel of the emotional call that a consumer field brand and then if they think about we were in Congress here <unk> com really kind of resonate for next door a lot of conversation about showing up authentically showing up around community around local really.

Kind of struck a cord and I think next door is the ability to show up and say, we're about real people you know and we know a lot about where you live so targeting a pie or about a heightened sense of audience. That's in a mode of spending like they're looking for a plumber or they're looking for a dog groomer and then finally, the fact that we can do that.

Customize local at scale messaging is also very unique and interesting and so the incrementality is quite high relative to other platforms.

The only reason why agencies are starting to get a lot more work with us as my talk about earlier, Michael let you take the the vertical on the scale of business conversation, Yeah, if I could just add I mean.

[noise] mentioned some recovery in the AD market, there is essentials choppiness as well, but we've seen contingency strengthen our market business as we've added a record number of new logos.

We also saw they got some of the business return to growth and we're continuing to see momentum there, which is something new to add to the discussion. This this quarter.

And there's still some pressure on an average Spanish per advertiser, but really are pleased with our ability to retain and acquire advertisers I think that speaks to oh cause was being willing to be out there in 80 spending to drive to manage their own business businesses, we manage our.

Or a group of advertisers as a portfolio and part of our investments in the advertising agency channel has been really to improve diversification there and it is it is yielding results. So so we just talked about.

The vehicles that are performing in a very strong way for us.

<unk> health care checking telco travel pets has been really area of fast growth for us as well and it allows us to work with advertisers to help them in their pass back to spending in areas like essential services any kind of real estate Uhm and then I think the other aspect of that is just.

Have you noticed that a block from their capabilities in multiple areas things like Ah brand awareness versus performance advertising in working with our advertisers partners change to drive <unk> and in ways that they need to based on their performance and their own underlying businesses.

Okay. Thank you Mike Thank you Sir.

Thanks Mark.

Thank you all for your questions.

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There are no more questions waiting at this time, so I'll pass a conference back over to Sarah Friar C E O for any closing remarks.

Alright. Thank you so much thanks, everyone for joining as I said at the top of the call. We're really pleased with our return to cross on your your year over year growth across all of our key metrics, while going 13 per cent revenue going 4% and seeing EBITDA margin improvement of four points. If I look at what are the levers for future growth. The fact that.

90 per cent of abusers joined us organically and Q2 really good indication that there's real value on next door and that's all without any halo effect of paid marketing. The fact obsession growth continues to show strength to stop pacing wild growth. That's a direct link back to revenue and the fact that fucking depth is up as well as Mike mentioned.

<unk> strengths and areas like mid market sales international and of course, our AD agency partnerships and the.

Big push from neighborhood faith, a really important one the fact, we now have 4.1 million claimed pages, that's fertile ground for Upselling I talked a little bit about the vertical like censor of real estate that we think will improve over time, we performed really well for them. So there's been latent capacity there and then of course, our opportunity on a I <unk>.

<unk> is the local knowledge crap with labor data, hi, intent audience real people and neighborhoods everywhere. So we are laser focused on growing while in revenue and I Wanna say keeps thank you to the team because this was a great quarter for momentum in terms of the product belt. We're on track towards the revenue growth in March and improvement for the <unk>.

Full year, while also investing in the longterm opportunity for the business. So thanks for your time, we look forward to any follow up questions and we'll talk to you all a 90 day. Thanks a lot.

That will conclude today's conference call. Thank.

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A few all a 90 day thanks a lot.

That will conclude today's conference call.

Thank you all for Ya.