Q2 2026 Nextdoor Holdings Inc Earnings Call

August 5, 2026

Speaker #1: Good morning. My name is Leah, and I will be your conference operator today. At this time, I would like to welcome everyone to Nextdoor's second quarter 2026 earnings conference call.

Operator: Good morning. My name is Leah, and I will be your conference operator today. At this time, I would like to welcome everyone to Nextdoor's Q2 2026 Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Nirav Tolia, Chief Executive Officer. Nirav, you may now begin.

Speaker #1: After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star 1 to raise your hand.

Speaker #1: To withdraw your question, press star 1 again. I will now hand the conference over to Nirav Tolia, Chief Executive Officer. Nirav, you may now begin.

Speaker #2: Good morning, everyone, and welcome to Nextdoor's Q2 2026 earnings call. We appreciate everyone joining us today. I'm Nirav Tolia, co-founder, Chief Executive Officer, President, and Chairperson of the Board.

Nirav Tolia: Good morning, everyone, and welcome to Nextdoor's Q2 2026 earnings call. We appreciate everyone joining us today. I'm Nirav Tolia, Co-founder, Chief Executive Officer, President, and Chairperson of the Board. Joining me today is Indrajit Ponnambalam, Chief Financial Officer. I'd also like to take a moment to introduce Colin Borland, our new Head of Investor Relations and Corporate Development. Colin has a strong background across finance, IR, and corporate development, and he'll be leading our investor engagement efforts going forward. We're really excited to have him with us.

Speaker #2: Joining me today is Indrajit Panambulam, Chief Financial Officer. I'd also like to take a moment to introduce Colin Borland, our new Head of Investor Relations and Corporate Development.

Speaker #2: Colin has a strong background across finance, IR, and corporate development, and he'll be leading our investor engagement efforts going forward. We're really excited to have him with us.

Speaker #3: Thank you, Nirav. I'm excited to be here, and I appreciate the warm welcome. Hello everyone. During this call, we may make statements related to our business that are forward-looking statements under federal securities law.

Colin Borland: Thank you, Nirav. I'm excited to be here, and I appreciate the warm welcome. Hello, everyone. During this call, we may make statements related to our business that are forward-looking statements under federal securities law. These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainties. Our 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, 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.

Colin Bourland: Thank you, Nirav. I'm excited to be here, and I appreciate the warm welcome. Hello, everyone. During this call, we may make statements related to our business that are forward-looking statements under federal securities law. These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainties. Our 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, 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.

Speaker #3: These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainties. Our actual results could differ materially from expectations reflected in any forward-looking statements.

Speaker #3: 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, the Investor Relations section of our website, as well as the Risks and Other Important Factors discussed in today's earnings release.

Speaker #3: 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 Q2 2026 Nextdoor Investor Update posted on the Investor Relations section of our website today.

Colin Borland: A reconciliation of these measures to their most directly comparable GAAP financial measures can be found in the Q2 2026 Nextdoor Investor Update posted on the investor relations section of our website today. Now I'll turn it back to Nirav.

Colin Bourland: A reconciliation of these measures to their most directly comparable GAAP financial measures can be found in the Q2 2026 Nextdoor Investor Update posted on the investor relations section of our website today. Now I'll turn it back to Nirav.

Speaker #3: And now, I'll turn it back to Nirav.

Speaker #2: Thanks, Colin. Q2 was a landmark quarter for Nextdoor, with the strongest financial performance in our company's history. Platform Wow reached an all-time high, revenue exceeded the high end of our guidance, and we delivered record-adjusted EBITDA.

Nirav Tolia: Thanks, Colin. Q2 was a landmark quarter for Nextdoor, with the strongest financial performance in our company's history. Platform WOW reached an all-time high. Revenue exceeded the high end of our guidance, and we delivered record adjusted EBITDA. Platform WOW grew to 22.9 million, increasing both sequentially and year over year for the second consecutive quarter. Revenue grew 15% to $75 million, and adjusted EBITDA reached $10 million, a 13% margin and a $12 million improvement over last year. These are strong results. What encourages me even more than the numbers is how we achieved them. For the past two years, we've talked about rebuilding Nextdoor for long-term sustainable growth. We haven't been looking for shortcuts or one breakthrough feature. Instead, we focused on steadily improving the product quarter after quarter, making it more useful, more relevant, and ultimately more valuable for neighbors.

Speaker #2: Platform Wow grew to 22.9 million, increasing both sequentially and year-over-year for the second consecutive quarter. Revenue grew 15% to $75 million, and adjusted EBITDA reached $10 million, a 13% margin and a $12 million improvement over last year.

Speaker #2: These are strong results, but what encourages me even more than the numbers is how we achieved them. For the past 2 years, we've talked about rebuilding Nextdoor for long-term, sustainable growth.

Speaker #2: We haven't been looking for shortcuts or one breakthrough feature. Instead, we focused on steadily improving the product, quarter after quarter, making it more useful, more relevant, and ultimately more valuable for neighbors.

Speaker #2: This quarter, we're beginning to see those improvements compound. The long-term success of Nextdoor depends on the health of our community, and healthy communities are built by people contributing.

Nirav Tolia: This quarter, we're beginning to see those improvements compound. The long-term success of Nextdoor depends on the health of our community. Healthy communities are built by people contributing. Every time a neighbor asks a question, answers one, shares a recommendation, posts an update, or helps someone nearby, they make Nextdoor more valuable for everyone else. More contributors create more content. More content creates more relevance. More relevance gives neighbors more reasons to come back. When they come back, even more neighbors contribute. That's the flywheel we're building. Our job is to make it stronger every quarter. That's exactly what we focused on in Q2. Let me take you through some of the highlights, starting with how we make sure neighbors see content that feels relevant the moment they open Nextdoor. We continued improving our feed ranking systems so neighbors see the most engaging, useful, and relevant content.

Speaker #2: Every time a neighbor asks a question, answers one, shares a recommendation, posts an update, or helps someone nearby, they make Nextdoor more valuable for everyone else.

Speaker #2: More contributors create more content. More content creates more relevance. And more relevance gives neighbors more reasons to come back. When they come back, even more neighbors contribute.

Speaker #2: That's the flywheel we're building. Our job is to make it stronger every quarter, and that's exactly what we focused on in Q2. Let me take you through some of the highlights, starting with how we make sure neighbors see content that feels relevant the moment they open Nextdoor.

Speaker #2: We continue to improve our feed ranking systems so neighbors see the most engaging, useful, and relevant content. We also continue to improve video throughout the platform, giving both neighbors and advertisers richer ways to communicate.

Nirav Tolia: We continued improving video throughout the platform, giving both neighbors and advertisers richer ways to communicate. We rebuilt our events experience, making it easier for neighbors to discover what's happening nearby. We continue to use AI to improve the quality of our notifications, driving more engagement. We also launched local journalist accounts, giving trusted local reporters a verified presence on Nextdoor and bringing higher-quality local news directly into neighborhood conversations. Those may sound like separate product improvements. They're not. They're all solving the same problem. When neighbors open Nextdoor, we want them to immediately find something that's useful, local, and worth engaging with. Showing neighbors better content is only half the equation. The other half is helping more neighbors create it, because the most valuable content on Nextdoor comes from neighbors helping neighbors. We focused on making it easier, faster, and more rewarding to contribute.

Speaker #2: We rebuilt our events experience, making it easier for neighbors to discover what's happening nearby. And we continue to use AI to improve the quality of our notifications, driving more engagement.

Speaker #2: We also launched local journalist accounts, giving trusted local reporters a verified presence on Nextdoor and bringing higher-quality local news directly into neighborhood conversations. Now, those may sound like separate product improvements, but they're not.

Speaker #2: They're all solving the same problem: when neighbors open Nextdoor, we want them to immediately find something that's useful, local, and worth engaging with. But showing neighbors better content is only half the equation.

Speaker #2: The other half is helping more neighbors create it. Because the most valuable content on Nextdoor comes from neighbors helping neighbors. So we focused on making it easier, faster, and more rewarding to contribute.

Speaker #2: We added simple prompts that invite active commenters to share their first post, resulting in more neighbors posting for the first time. And we improved post insights, giving neighbors visibility into the real reach and impact of what they share.

Nirav Tolia: We added simple prompts that invite active commenters to share their first post, resulting in more neighbors posting for the first time. We improved post insights, giving neighbors visibility into the real reach and impact of what they share, because people contribute more when they can see that it matters. The result, contributors reached a multi-year high in Q2. Unique posters grew. Post volume increased. Comments were up across the board. That's the flywheel in action. The future of Nextdoor isn't just built by getting more people to consume content. It's built by getting more neighbors to create it. That's exactly the direction we're heading. As we look toward H2, I want to take a moment to explain how our thinking has evolved, because I think it's an important story.

Speaker #2: Because it matters. The result? Contributors reached a multi-year high in Q2, unique posters grew, post volume increased, comments were up across the board. That's the flywheel in action.

Speaker #2: The future of Nextdoor isn't just built by getting more people to consume content; it's built by getting more neighbors to create it. And that's exactly the direction we're heading.

Speaker #2: As we look toward the second half, I want to take a moment to explain how our thinking has evolved. Because I think it's an important story.

Speaker #2: When I returned to CEO, we began rebuilding Nextdoor around three core experiences: news, alerts, and recommendations. And that work was essential. News and alerts helped restore utility to the platform.

Nirav Tolia: When I returned as CEO, we began rebuilding Nextdoor around three core experiences, news, alerts, and recommendations. That work was essential. News and alerts helped restore utility to the platform. They gave neighbors more reasons to come back and reconnected us with what made Nextdoor valuable in the first place. Recommendations revealed something even more important, and that is that what makes Nextdoor truly essential isn't the third-party content we surface. It's the content neighbors create for each other. Nextdoor is valuable because of the people behind it. A neighbor two streets away who recommends a plumber or answers a question with nothing to gain but helping someone else to make a better decision. That kind of content cannot be manufactured or aggregated or scraped from somewhere else. It can only be earned. Over the past year, that insight has sharpened our strategy.

Speaker #2: They gave neighbors more reasons to come back and reconnected us with what made Nextdoor valuable in the first place. But recommendations revealed something even more important: and that is that what makes Nextdoor truly surface.

Speaker #2: It's the content neighbors create for each other. And that is because Nextdoor is valuable because of the people behind it. A neighbor two streets away who recommends a plumber, or answers a question with nothing to gain but helping someone else to make a better decision.

Speaker #2: That kind of content cannot be manufactured or aggregated or scraped from somewhere else. It can only be earned. And over the past year, that insight has sharpened our strategy.

Speaker #2: The platforms that endure aren't just places where people post things. They're intentionally crafted ecosystems, designed to make contribution easy, rewarding, and self-reinforcing, where the value compounds as more neighbors participate.

Nirav Tolia: The platforms that endure aren't just places where people post things. They're intentionally crafted ecosystems designed to make contribution easy, rewarding, and self-reinforcing, where the value compounds as more neighbors participate. As we look ahead, we're laser-focused on building more of these systems. The two I'll call out today that are already delivering results are Faves and Ask. Faves is built around a simple insight. The most trustworthy recommendation isn't the one with the most stars. It's the one from a verified neighbor who lives nearby. Every day on Nextdoor, neighbors ask who has the best plumber, the best pediatrician, the best pizza, or the best landscaper. Faves turns these conversations into a living, trusted, local guide, continuously updated by the community for the community.

Speaker #2: As we look ahead, we're laser-focused on building more of these systems. The two I'll call out today that are already delivering results are FAVES and ASK.

Speaker #2: FAVES is built around a simple insight: the most trustworthy recommendation isn't the one with the most stars. It's the one from a verified neighbor who lives nearby.

Speaker #2: Every day on Nextdoor, neighbors ask, "Who has the best plumber? The best pediatrician? The best pizza? Or the best landscaper?" FAVES turns these conversations into a living, trusted local guide, continuously updated by the community, for the community.

Speaker #2: This fall, we'll bring back our annual FAVES Award campaign with an all-new, in-product experience, where neighbors vote for their favorite local businesses across 20 categories—another reason to participate, contribute, and strengthen the communities they live in.

Nirav Tolia: This fall, we'll bring back our annual Neighborhood Faves campaign with an all-new in-product experience where neighbors vote for their favorite local businesses across 20 categories. Another reason to participate, contribute, and strengthen the communities they live in. The next feature, Ask, takes this further. Once you have trusted recommendations, the natural question becomes, how do you help neighbors find them instantly? Ask uses AI to understand what a neighbor needs and surface the most relevant answer, whether that's a conversation, a trusted local business, or another neighbor who's been through the same thing. What makes Ask unique isn't that it uses AI, but what's behind it, an archive of nearly 15 years of trusted, verified, neighborhood-level conversations that no one else has. AI simply makes that knowledge dramatically easier to discover. The system compounds.

Speaker #2: The next feature, ASK, takes this further. Once you have trusted recommendations that natural question becomes, "How do you help neighbors find them instantly?" ASK uses AI to understand what a neighbor needs and surface the most relevant answer, whether that's a conversation, a trusted local business, or another neighbor who's been through the same thing.

Speaker #2: What makes ASK unique isn't that it uses AI, but what's behind it. And archive of nearly 15 years of trusted, verified neighborhood-level conversations that no one else has.

Speaker #2: AI simply makes that knowledge dramatically easier to discover. And the system compounds. When a question hasn't been answered yet, ASK can surface answers from that same archive, keeping the conversation alive until other neighbors weigh in.

Nirav Tolia: When a question hasn't been answered yet, Ask can surface answers from that same archive, keeping the conversation alive until other neighbors weigh in. That's how we think about AI at Nextdoor, not as a replacement for community, but as a way to make years of community wisdom accessible in real time. When you take a step back, Faves and Ask are two expressions of the same fundamental advantage, a verified community of neighbors who trust each other and help each other. Content no algorithm or AI model can replicate on its own. We've made meaningful progress over the past two years. What's changed most isn't simply the product, it's that we've rediscovered what made Nextdoor special in the first place. If we keep investing in that, we'll build stronger communities. Stronger communities create better content. Better content drives deeper engagement.

Speaker #2: That's how we think about AI at Nextdoor: not as a replacement for community, but as a way to make years of community wisdom accessible in real time.

Speaker #2: When you take a step back, FAVES and ASK are two expressions of the same fundamental advantage: a verified community of neighbors who trust each other and help each other.

Speaker #2: Content no algorithm or AI model can replicate on its own. We've made meaningful progress over the past 2 years. But what's changed most isn't simply the product.

Speaker #2: It's that we've rediscovered what made Nextdoor special in the first place. And if we keep investing in that, we'll build stronger communities. Stronger communities create better content.

Speaker #2: Better content drives deeper engagement. Deeper engagement creates a stronger business. And everything else follows from there. With that, I'll turn it over to Indrajit to walk through our financial results and our outlook in more detail.

Nirav Tolia: Deeper engagement creates a stronger business, everything else follows from there. With that, I'll turn it over to Indrajit to walk through our financial results and our outlook in more detail.

Speaker #1: Thanks, Nirav. As Nirav described, Q2 was another strong quarter that reinforced the progress we are making across the business. Let's walk through the details.

Indrajit Ponnambalam: Thanks, Nirav. As Nirav described, Q2 was another strong quarter that reinforced the progress we are making across the business. Let's walk through the details. Q2 platform WOW was 22.9 million, up 5% year over year and up sequentially for the second quarter in a row. Yet another all-time high for Nextdoor. When we reported Q1 results, we had just seen the first sequential inflection in several quarters. With two consecutive quarters of sequential growth, I'm now more confident that what we're seeing reflects the durable impact of the product investments we've made, not a one-time effect. As I've noted before, platform WOW is a lagging indicator, which makes two consecutive quarters of improvement particularly encouraging. Turning now to revenue. Q2 revenue was $75 million, up 15% year over year, finishing above our guidance range of $71 to $73 million. Revenue growth was broad-based.

Speaker #1: Q2 platform wow was 22.9 million. A 5% year-over-year and up sequentially for the second quarter in a row. Yet another all-time high for Nextdoor.

Speaker #1: When we reported Q1 results, we had just seen the first sequential inflection in several quarters. With two consecutive quarters of sequential growth, I'm now more confident that what we're seeing reflects the durable impact of the product investments we've made, not a one-time effect.

Speaker #1: As I've noted before, platform wow is a lagging indicator, which makes two consecutive quarters of improvement particularly encouraging. Turning now to revenue. Q2 revenue was 75 million dollars, up 15% year-over-year.

Speaker #1: Finishing above our guidance range of $71 to $73 million. Revenue growth was broad-based. Our self-serve channel remains the primary growth engine, growing 32% year-over-year—an acceleration from the 28% we reported last quarter.

Indrajit Ponnambalam: Our self-serve channel remains the primary growth engine, growing 32% year over year, an acceleration from the 28% we reported last quarter. It now comprises roughly 67% of total revenue, with continued improvement in advertiser performance and revenue yields. Our growth was achieved without an increase in ad load, reinforcing that our revenue gains are coming from a healthier, more efficient ad product, not from increasing ad density on the platform. Our US direct sales team had a strong quarter. Growth was driven by deeper investment from existing customers, with average revenue per customer up double digits year over year. Financial services, tech, and telco were standout verticals. Our video ad product continues to gain traction, a signal that advertisers are leaning into richer formats on the platform.

Speaker #1: And it now comprises roughly 67% of total revenue, with continued improvement in advertiser performance and revenue yields. Our growth was achieved without an increase in ad load, reinforcing that our revenue gains are coming from a healthier, more efficient ad product, not from increasing ad density on the platform.

Speaker #1: Our US direct sales team had a strong quarter. Growth was driven by deeper investment from existing customers, with average revenue per customer up double digits year-over-year.

Speaker #1: Financial services, tech, and telco were standout verticals. And our video ad product continues to gain traction, a signal that advertisers are leaning into richer formats on the platform.

Speaker #1: On lead generation, one of our newer products, Opportunity Alerts, which helps local service providers connect with neighbors who are expressing real-time needs, is showing encouraging traction at the intersection of neighbor intent and local business demand.

Indrajit Ponnambalam: On lead generation, one of our newer products, Opportunity Alerts, which helps local service providers connect with neighbors who are expressing real-time needs, is showing encouraging traction at the intersection of neighbor intent and local business demand. It's still early, but the trajectory gives us confidence that we are on the right path to closing the gap between the intent that exists on Nextdoor and the monetization that should follow. Turning now to profitability. Q2 GAAP net loss was $2 million, or -3% margin, representing 21 points of year-over-year margin improvement. Q2 adjusted EBITDA was $10 million or 13% adjusted EBITDA margin. This compares to the $4 to $6 million range we guided to last quarter and represents an approximately $12 million improvement year over year. Our beat versus guidance is driven primarily by revenue outperformance and continued disciplined cost management. We continue to drive productivity improvements across the organization.

Speaker #1: It's still early, but the trajectory gives us confidence that we are on the right path to closing the gap between the intent that exists on Nextdoor and the monetization that should follow.

Speaker #1: Turning now to profitability. Q2 gap net loss was 2 million dollars, or negative 3% margin. Representing 21 points of year-over-year margin improvement. Q2 adjusted EBITDA was 10 million dollars, or 13% adjusted EBITDA margin.

Speaker #1: This compares to the 4 to 6 million dollar range we guided to last quarter, and represents an approximately 12 million dollar improvement year-over-year. Our beat-versus-guidance is driven primarily by revenue outperformance and continued disciplined cost management.

Speaker #1: We continue to drive productivity improvements across the organization. Annualized revenue per employee increased 29% year-over-year in Q2, building on the gains we've driven over the past 2 years.

Indrajit Ponnambalam: Annualized revenue per employee increased 29% year over year in Q2, building on the gains we've driven over the past two years. We ended Q2 with $378 million in cash equivalents, and marketable securities, and we continue to have no debt on our balance sheet. Through H1 2026, we generated $9.6 million of cash flow from operations, a meaningful increase from the $3.3 million we generated during the same time period in 2025. Now, let me turn to our financial outlook for the remainder of the year. For Q3 2026, we expect revenue of $76 to $78 million and adjusted EBITDA of $6.5 to $8 million. For full year 2026, we are raising our outlook for both revenue and adjusted EBITDA based on the positive momentum and outperformance we've seen year to date.

Speaker #1: We ended Q2 with $378 million in cash, cash equivalents, and marketable securities, and we continue to have no debt on our balance sheet.

Speaker #1: Through the first six months of 2026, we generated $9.6 million of cash flow from operations, a meaningful increase from the $3.3 million we generated during the same time period in 2025.

Speaker #1: Now let me turn to our financial outlook for the remainder of the year. For Q3 2026, we expect revenue of $76 to $78 million, and adjusted EBITDA of $6.5 to $8 million.

Speaker #1: For full year 2026, we are raising our outlook for both revenue and adjusted EBITDA based on the positive momentum and outperformance we've seen year to date.

Speaker #1: We now expect to achieve low teens revenue growth for the full year, and an adjusted EBITDA margin of approximately 10%. Underlying this outlook is our expectation that platform wow will continue to increase sequentially during the back half of the year.

Indrajit Ponnambalam: We now expect to achieve low teens revenue growth for the full year and an adjusted EBITDA margin of approximately 10%. Underlying this outlook is our expectation that platform WOW will continue to increase sequentially during H2 of the year. Now, let's turn to some Q&A, which we'll structure in a similar manner as to the last two quarters. We'll start by taking live questions from our covering analysts. After that, we'll take some questions submitted by our investors. With that, operator, let's open the line for questions.

Speaker #1: Now let's turn to some Q&A, which we will structure in a similar manner as the last two quarters. We'll start by taking live questions from our covering analysts. After that, we'll take some questions submitted by our investors.

Speaker #1: With that, operator, let's open the line for questions.

Speaker #2: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand.

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jason Kramer with Craig-Hallum. Your line is open. Please go ahead.

Speaker #2: To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #2: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jason Krayer with Craig Hallam.

Speaker #2: Your line is open. Please go ahead.

Speaker #3: All right. Thank you, guys. Great to see the wow kicking in, you know, 2 quarters in a row. It seems like that's coming earlier than expected.

Jason Kramer: All right. Thank you, guys. Great to see the WOW kicking in two quarters in a row. It seems like that's coming earlier than expected. Can you just talk about what contributed to that? Is this just organic with just more utilization on the platform, or do you have some deliberate strategies that you're deploying that's being seen as effective to grow the user base?

Jason Kreyer: All right. Thank you, guys. Great to see the WOW kicking in two quarters in a row. It seems like that's coming earlier than expected. Can you just talk about what contributed to that? Is this just organic with just more utilization on the platform, or do you have some deliberate strategies that you're deploying that's being seen as effective to grow the user base?

Speaker #3: Can you just talk about what contributed to that? Is this just organic with just more utilization on the platform, or do you have some deliberate strategies that you're deploying that's being seen as effective to grow the user base?

Speaker #4: All right. Thank you for the question. And yes, we are very encouraged by the fact that now this is the second quarter where we've seen that WOW tick up.

Nirav Tolia: All right. Thank you for the question. Yes, we are very encouraged by the fact that now this is the Q2 where we've seen that WOW tick up. The strategy in general is to build a better product and to do so through lots of small improvements versus relying on one big bang that may or may not work out. I talked about in my opening remarks some of the improvements that we made. If you take those improvements and you continue to add them together, the compounding effect is the overall platform grows. I mentioned in particular that we are now investing very deeply in rebuilding the core foundation of our community, and that comes down to user-generated content and how we're fueling contributor growth. That's a particular high point for us.

Speaker #4: The strategy in general is to build a better product and to do so through lots of small improvements versus relying on one big bang.

Speaker #4: That may or may not work out. I talked about in my opening remarks some of the improvements that we made, and if you take those improvements and you continue to add them together, the compounding effect is the overall platform grows.

Speaker #4: I mentioned in particular that we are now investing very deeply in rebuilding the core foundation of our community. And that comes down to user-generated content and how we're fueling contributor growth.

Speaker #4: And so that's a particular high point for us. But I would describe the progress as, across the board, organic and durable. And so we're very encouraged by what we see, and while we can't point to one particular thing, we think that's actually a strength.

Nirav Tolia: I would describe the progress as across the board, organic, and durable. We're very encouraged by what we see. While we can't point to one particular thing, we think that's actually a strength. Because you want to build a system where all of the improvements come together into something that then looks pretty significant. That's what we hope we're building towards.

Speaker #4: Because you want to build a system where all of the improvements come together into something that then looks pretty significant. And that's what we hope we're building towards.

Speaker #3: Got it. Thank you, Nirav. One follow-up. So, you've brought a lot of AI functionality into the platform over the last year. Please talk about how the benefits accrue to Nextdoor.

Jason Kramer: Got it. Thank you, Nirav. One follow-up. You've brought a lot of AI functionality into the platform over the last year. Can you just talk about how the benefits accrue to Nextdoor, where you see that in the KPIs, whether that's engagement or monetization or somewhere else in the numbers that we can't see?

Jason Kreyer: Got it. Thank you, Nirav. One follow-up. You've brought a lot of AI functionality into the platform over the last year. Can you just talk about how the benefits accrue to Nextdoor, where you see that in the KPIs, whether that's engagement or monetization or somewhere else in the numbers that we can't see?

Speaker #3: Where you see that in the KPIs, whether that's engagement or monetization or somewhere else in the numbers that we can't see.

Speaker #4: Well, look, we continue to believe that AI is the biggest transformation in our industry. Since we've been not just with Nextdoor, but really since the beginning of the internet boom.

Nirav Tolia: Well, look, we continue to believe that AI is the biggest transformation in our industry since we've been, not just with Nextdoor, but really since the beginning of the internet boom. It's something that's going to be inescapable for all businesses. We do think that AI, as we've talked about, can assist us both making our company more efficient, but also in making the product experience and the advertiser experience better. Whether that's on the product side, and I mentioned Ask in my early comments and how we use AI to summarize and to better present our content, or whether that's on the monetization side, where we're using AI and machine learning to create a better opportunity for advertisers to show the best ad at the best time to the best candidate.

Speaker #4: And so it's something that's going to be inescapable for all businesses. We do think that AI, as we've talked about, can assist us both making our company more efficient, but also in making the product experience and the advertiser experience better.

Speaker #4: And so, whether that's on the product side—and I mentioned ASK in my early comments, and how we use AI to summarize and to better present our content—or whether that's on the monetization side, where we're using AI and machine learning to create a better opportunity for advertisers to show the best ad at the best time to the best candidate, we will continue to lean into the technology.

Nirav Tolia: We will continue to lean into the technology, it's rapidly moving from something specific and a kind of vertical initiative AI into something that we think about more horizontally that's going to be utilized in all parts of our business and really all parts of our company. We do believe that we are well-positioned in a world where consumers are starting to turn more towards agentic experiences than general search and things like that. We think not only our embrace of AI, but the trend of consumers seeking AI, those are both things that we can take advantage of.

Speaker #4: And it's rapidly moving from something specific and a kind of vertical initiative, AI, into something that we think about more horizontally that's going to be utilized in all parts of our business.

Speaker #4: And really, all parts of our company. And so, we do believe that we are well positioned in a world where consumers are starting to turn more towards agentic experiences than general search and things like that.

Speaker #4: So we think not only our embrace of AI, but the trend of consumers seeking AI, those are both things that we can take advantage of.

Speaker #3: Perfect. Thank you.

Jason Kramer: Perfect. Thank you.

Jason Kreyer: Perfect. Thank you.

Speaker #2: Your next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is open. Please go ahead.

Speaker #5: Hey, guys. This is Alex on for Eric. Thanks for taking the question. If you think about some of the growth drivers of core ads monetization going forward, you know, richer formats through video, more down funnel ads, you know, increasing option density, what are some of the one or two growth drivers that you see as having the longest runway?

[Analyst] (Goldman Sachs): Hey, guys. This is Alex on for Eric. Thanks for taking the question. If you think about some of the growth drivers of core ads monetization going forward, richer formats through video, more down-funnel ads, increasing auction density, what are some of the one or two growth drivers that you see as having the longest runway, what are some of the investments that you think you guys need to still make going forward to capitalize on that? Thanks.

Alex Vegliante: Hey, guys. This is Alex on for Eric. Thanks for taking the question. If you think about some of the growth drivers of core ads monetization going forward, richer formats through video, more down-funnel ads, increasing auction density, what are some of the one or two growth drivers that you see as having the longest runway, what are some of the investments that you think you guys need to still make going forward to capitalize on that? Thanks.

Speaker #5: And what are some of the investments that you think you guys need to still make going forward to capitalize on that? Thanks.

Speaker #4: I'll start, and then I'll see if Andrew wants to add something to it. You know, the big thing that I will say is we continue to see more demand for ad products regardless of the amount of inventory we have.

Nirav Tolia: I'll start, then I'll see if Indrajit wants to add something to it. The big thing that I will say is we continue to see more demand for our ad products regardless of the amount of inventory we have. As we grow engagement, we think our core display advertising opportunity gets larger and larger. In terms of the specifics, yeah, you mentioned video and you mentioned self-service. Indrajit, you can probably add some color. I think the main point that I wanted to make was advertisers want to use Nextdoor because of the intent that our users express every single day. As we grow engagement on the platform, that display opportunity, just the basic display opportunity still has a lot of headroom, and the ceiling is really, really high.

Speaker #4: And so as we grow engagement, we think our core display advertising opportunity gets larger and larger. In terms of the specifics, yeah, you mentioned video, and you know, you mentioned self-service.

Speaker #4: I mean, Andrew, did you can probably add some color? But I think the main point that I wanted to make was advertisers want to use Nextdoor because of the intent that our users express every single day.

Speaker #4: And so as we grow engagement on the platform, that display opportunity just the basic display opportunity still has a lot of headroom. And the ceiling is really, really high.

Speaker #5: Yeah, I would agree with Nirav. And I would just add, we think we have a lot of room to continue to make optimizations. We've made a bunch of steps over the last year, which you can see with our revenue per user metric improving.

Indrajit Ponnambalam: Yeah. I would agree with Nirav. I would just add, we think we have a lot of room to continue to make optimizations. We've made a bunch of steps over the last year, which you can see with our revenue per user metric improving. Pretty broad-based. We think the more engagement our users have on the platform, the more information we have on them, which is also valuable for our advertisers as well. There's a compounding benefit of user engagement, which will help us on the monetization side. I would say across the board, we have plenty of headroom yet to go across a bunch of different ad surfaces and ad formats.

Speaker #5: But pretty broad-based, we think the more engagement our users have on the platform, the more information we have on them, which is also valuable for our advertisers as well.

Speaker #5: So there's a compounding benefit of user engagement, which will help us on the monetization side. So I would say across the board, we have plenty of headroom yet to go across a bunch of different ad surfaces and ad formats.

Speaker #5: Great. Thanks, guys.

[Analyst] (Goldman Sachs): Great. Thanks, guys.

Alex Vegliante: Great. Thanks, guys.

Speaker #2: Your next question comes from the line of Ryan Powell with B. Reilly Securities. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Ryan Powell with B. Riley Securities. Your line is open. Please go ahead.

Speaker #3: Great. Hi. Thank you for taking our questions. This is Ryan on for Nived. So first question is with platform while up 5%. You're here despite the 9% pullback and branded performance marking in second quarter.

Ryan Powell: Great. Hi. Thank you for taking our questions. This is Ryan on for Nived. First question is, with platform WOW up 5% year-over-year despite the 9% pullback in branded performance marketing in Q2, could you talk about your updated timing for retargeting lapsed platform WOW? If guidance for sequential WOW growth in H2 assumes any step-up in brand and performance marketing spend? I have a follow-up. Thanks.

Speaker #3: Could you talk about your updated timing for retargeting lapsed platform while? And then if guidance for sequential while growth in second half assumes any step-up in branded performance marking spend, you know, I have a follow-up.

Speaker #3: Thanks.

Speaker #4: Go ahead, Andrew. You can start.

Nirav Tolia: Go ahead, Indrajit. You can start.

Indrajit Ponnambalam: Yeah. I think you probably have heard my tone change a little bit on platform WOW, where the last couple of quarters we said we expected it to grow over time, but there might be some short-term fluctuations. Now we're feeling a little bit more confident based on our results year to date. We're sort of giving some forward-looking guidance on the fact that we expect that growth to continue the H2. That's sort of an important shift I wanted to note. We're not quite ready to quantify exactly how much that increase will be, because we're still working hard to do a whole bunch of things to the product to make that a durable long-term growth. We do think it's going to grow. It is not related to any specific or significant marketing investments.

Speaker #5: Yeah. You know, I think you probably have heard my tone change a little bit on platform while, where the last couple of quarters we said, you know, we expected it to grow over time, but there might be some short-term fluctuations.

Speaker #5: And so now we're feeling a little bit more confident based on our results year to date. And so we're sort of giving some forward-looking guidance on the fact that we continue that we expect that growth to continue, the back half of the year.

Speaker #5: So that's sort of an important shift I wanted to note. We're not quite ready to quantify exactly how much that increase will be, because we're still, you know, working hard to do a whole bunch of things for the product to make that a durable, long-term growth.

Speaker #5: But we do think it's going to grow. It is not related to any specific or significant marketing investments. So that will take more time.

Indrajit Ponnambalam: That will take more time. I think as we continue to see retention of our users improve on the platform, as we see improving NPS on the platform, I think those will be key indicators for us on when we might step more on the marketing investment front. We don't see that as a significant driver of growth for the rest of this year, at least.

Speaker #5: I think as we continue to see retention of our users improve on the platform, as we see improving NPS on the platform, I think those will be key indicators for us on when we might step more on the marketing investment front.

Speaker #5: But we don't see that as a significant driver of growth for the rest of this year, at least.

Speaker #3: Understood. Thank you, Andrew. And then on our two growth, could you discuss the contribution from pricing versus impressions?

Ryan Powell: Understood. Thank you, Inderjit. Then on ARPU growth, could you discuss the contribution from pricing versus impressions?

Speaker #5: For Q2, I would say it was primarily pricing.

Indrajit Ponnambalam: For Q2, I would say it was primarily pricing.

Speaker #3: Understood. Thank you.

Ryan Powell: Understood. Thank you.

Speaker #2: There are no further questions at this time. I will now turn the call back to Andrew Phenomenon.

Operator: There are no further questions at this time. I will now turn the call back to Inderjit Phanamom.

Speaker #5: Thank you, operator. As I mentioned earlier, we're now pleased to answer some questions that investors have submitted to us in advance. So I'll pose a question, and then either Nirav or I will answer.

Indrajit Ponnambalam: Thank you, operator. As I mentioned earlier, we are now pleased to answer some questions that investors have submitted to us in advance. I will pose a question, and then either Nirav or I will answer. First question is, I keep reading about how AI search summaries are cutting into traffic for sites that benefit from search optimization. Does Nextdoor depend much on search traffic to bring in new users, or does growth come from somewhere else?

Speaker #5: So first question is, I keep reading about how AI search summaries are cutting into traffic for sites that benefit from search optimization. Does Nextdoor depend much on search traffic to bring in new users, or does growth come from somewhere else?

Speaker #4: All right. I'll take this one, Andrew did. It's a great question. And the short answer is, we've never depended on search traffic, and that's by design.

Nirav Tolia: All right. I will take this one, Indrajit. It is a great question, and the short answer is we have never depended on search traffic, and that is by design. Unlike most platforms, Nextdoor was never built for the open web. Our content is only accessible to verified neighbors within our private network. Google cannot index it, and that means that SEO has never been a part of how we grow. Instead, what we have built is a self-fueled distribution engine, direct traffic from neighbors who find Nextdoor useful, notifications that surface relevant local content directly, and virality through neighbor invitations and word of mouth. This is an organic growth mechanic that is not reliant on any outside traffic source. That is the part that I find genuinely exciting. We are not just insulated from this AI search disruption.

Speaker #4: Unlike most platforms, Nextdoor was never built for the open web. Our content is only accessible to verified neighbors within our private network. So Google can't index it, and that means SEO has never been a part of how we grow.

Speaker #4: Instead, what we've built is a self-fueled distribution engine, direct traffic from neighbors who find Nextdoor useful, notifications that surface relevant local content directly, and virality through neighbor invitations and word of mouth.

Speaker #4: And so this is an organic growth mechanic that's not reliant on any outside traffic source. And that's the part that I find genuinely exciting.

Speaker #4: We're not just insulated from this AI search disruption; we may be a big beneficiary, because we believe people will continue to migrate away from general search and towards direct, trusted, agentic destinations.

Nirav Tolia: We may be a big beneficiary because we believe people will continue to migrate away from general search and towards direct, trusted agentic destinations. That is what Nextdoor is, and we think we are very well positioned for that world.

Speaker #4: And that's what Nextdoor is. And we think we're very well positioned for that world.

Speaker #5: Great. Second question. As a shareholder, when do you think Nextdoor could be profitable on a straightforward gap basis? Not just adjusted EBITDA. So why don't I take this one?

Indrajit Ponnambalam: Great. Second question, as a shareholder, when do you think Nextdoor could be profitable on a straightforward GAAP basis, not just adjusted EBITDA? Why do not I take this one? GAAP net income profitability is a priority for us. It is not just an eventual outcome. Just to level set, we have already delivered positive adjusted EBITDA and positive cash flow from operations for full year 2025. We guided today to approximately 10% adjusted EBITDA margin in 2026. You just heard me point out that our Q2 results reflected a 16 points of year-over-year improvement in adjusted EBITDA margin. We are making real progress on the profitability front. Our team looks at net income profitability closely every quarter. For us, the gap between adjusted EBITDA and net income is primarily related to stock-based compensation.

Speaker #5: GAAP net income profitability is a priority for us—it's not just an eventual outcome. Just to level set, we've already delivered positive adjusted EBITDA and positive cash flow from operations for the full year 2020 to 2025.

Speaker #5: And we guided today to approximately a 10% adjusted EBITDA margin in 2026. And you just heard me point out that our Q2 results reflected a 16-point year-over-year improvement in adjusted EBITDA margin.

Speaker #5: So, we are making real progress on the profitability front. Our team looks at net income profitability closely every quarter. For us, the gap between adjusted EBITDA and net income is primarily related to stock-based compensation.

Speaker #5: So as you guys can see in our financial results, SBC has a percent of revenue has been shrinking consistently over the last few years.

Indrajit Ponnambalam: As you guys can see in our financial results, SBC as a percent of revenue has been shrinking consistently over the last few years as we scale revenue and gain operating leverage, which is bringing us closer and closer to + net income. We're not going to commit to a specific time period today, but GAAP net income profitability is definitely where we're driving the business, and we're closing that distance each quarter. All right, third and final question. Beyond core display advertising, what do you see as the next major monetization lever, and how large could it become?

Speaker #5: As we scale revenue and gain operating leverage, which is bringing us closer and closer to positive net income. So we're not going to commit to a specific time period today, but gap net income profitability is definitely where we're driving the business, and we're closing that distance each quarter.

Speaker #5: All right. Third and final question. Beyond core display advertising, what do you see as the next major monetization lever and how large could it become?

Speaker #4: I'll take this one, Andrew. And this will build a little bit on the question that Alex from Goldman Sachs asked earlier. So, first, let me just reiterate, we think there's real runway within advertising itself.

Nirav Tolia: I'll take this one, Indrajit. This will build a little bit on the question that Alex from Goldman Sachs asked earlier. First, let me just reiterate, we think there's real runway within advertising itself. Display is obviously one format, but we're still early on video. We're still scaling self-service, and there are ad products and formats that we haven't fully built yet. Remember that the self-serve channel alone grew 28% year-over-year in Q1. Even within advertising, we're not anywhere near a ceiling. We do see an additional large opportunity, and that is local lead generation. Recall that from the very beginning of Nextdoor, one of our prime use cases has been when a neighbor asks who has the best plumber or recommends a landscaper, searches for a local business, all of that conversation around service providers.

Speaker #4: Display is obviously one format, but we're still early on video. We're still scaling self-service, and there are ad products and formats that we haven't fully built yet.

Speaker #4: Remember that the self-serve channel alone grew 28% year-over-year in Q1. So, even within advertising, we're not anywhere near a ceiling. We do see an additional large opportunity.

Speaker #4: And that is local lead generation. Recall that from the very beginning of Nextdoor, one of our prime use cases has been when a neighbor asks who has the best plumber or recommends a landscaper or searches for a local business.

Speaker #4: All of that conversation around service providers—and that's verified, trust-based intent from someone whose identity and address we know—embedded in a community that already has a relationship with that business.

Nirav Tolia: That's verified trust-based intent from someone whose identity and address we know embedded in a community that already has a relationship with that business. We are increasingly monetizing this intent in products like search, Opportunity Alerts, and even in Faves. While we're not ready to size it today, we do see a very large opportunity ahead, and that excites us.

Speaker #4: We are increasingly monetizing this intent in products like search opportunity alerts and even in faves. And while we're not ready to size it today, we do see a very large opportunity ahead, and that excites us.

Speaker #5: All right. Thank you, Nirav. With that, I'm going to turn it over to Nirav for some closing remarks.

Indrajit Ponnambalam: All right. Thank you, Nirav. With that, I'm going to turn it over to Nirav for some closing remarks.

Speaker #4: Thank you, Andrew, and thank you all for joining us today. Before we wrap up, I just want to leave you with one thought. Over the past two years, we've talked a lot about rebuilding Nextdoor, and this quarter, I think we saw the results of that work.

Nirav Tolia: Thank you, Indrajit. Thank you all for joining us today. Before we wrap up, I just want to leave you with one thought. Over the past 2 years, we've talked a lot about rebuilding Nextdoor. This quarter, I think we saw the results of that work. Platform WOW reached another all-time high. Revenue grew 15%. Adjusted EBITDA improved by $12 million over last year. Those numbers do matter. What gives me the most confidence isn't any single metric. It's that they're all moving together. We're finally seeing the cumulative benefit of hundreds of product improvements working together. We're seeing healthier communities creating better content. We're seeing better content driving deeper engagement. That deeper engagement is creating a stronger business. That was always the strategy. Over the past 2 years, we've rediscovered it for Nextdoor.

Speaker #4: Platform Wow reached another all-time high. Revenue grew 15%. Adjusted EBITDA improved by $12 million over last year. Those numbers do matter. But what gives me the most confidence isn't any single metric.

Speaker #4: It's that they're all moving together. We're finally seeing the cumulative benefit of hundreds of product improvements working together. We're seeing healthier communities creating better content.

Speaker #4: We're seeing better content driving deeper engagement. And that deeper engagement is creating a stronger business. That was always the strategy. And over the past two years, we've rediscovered it for Nextdoor.

Speaker #4: As AI changes how people find information, we believe that what becomes increasingly valuable isn't just information, it's trusted information created by real people. Real people that are helping one another solve real problems.

Nirav Tolia: As AI changes how people find information, we believe that what becomes increasingly valuable isn't just information, it's trusted information created by real people. Real people that are helping one another solve real problems. That's what we've been building for nearly 15 years. I still think that we're just getting started. Thank you for joining us today. We look forward to updating you in the months and quarters ahead.

Speaker #4: And that's what we've been building for nearly 15 years. And I still think that we're just getting started. So thank you for joining us today.

Speaker #4: We look forward to updating you in the months and quarters ahead.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

Q2 2026 Nextdoor Holdings Inc Earnings Call

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