Nextdoor Holdings, Inc. · NYSE:NXDR
Nextdoor — Q2 2022 Earnings Presentation
35 slides from Nextdoor's earnings presentation, September 2022
Slide 1: September 2022
September 2022
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,”
Slide 3: Nextdoor is the neighborhood network
3 Nextdoor is the neighborhood network Network effects with online & offline connection is unique ~1 in 3 Each social link is highly valuable because most commerce is local U.S. Households Secular shift towards digital advertising, future new revenue models 11 Many vectors for sustained revenue growt
Slide 4: Q2'22 highlights
4 Q2’22 highlights >50% of WAU return daily >75M Continued strength internationally, with WAU growing >50% YoY Verified Neighbors Global sessions growth accelerated 10 points QoQ1 Launched the new navigation bar and Discover surface 26% Advertising revenue growth throughout the funnel, with >60% of Y
Slide 5: Our purpose: a kinder world with neighborhoods to rely on
OUR PURPOSE To cultivate a kinder world where everyone has a neighborhood they can rely on 5 5
Slide 6: Slide 6
Slide 7: Building Active Valued Communities
Building Active Valued Communities 73% say neighbors are the most important community in their lives(1) Knowing at least 6 neighbors (2) can reduce loneliness 75% plan to shop more (3) locally (1) Nextdoor Insights Series; (2) Nextdoor Global Loneliness Study (3) Brightpearl, 2021
Slide 8: People interact with and rely on their neighborhoods every day
8 People interact with and rely on their neighborhoods every day... Feed Discover Connections For Sale & Free Notifications
Slide 9: Strong competitive moat with viral growth loops built in
9 Strong competitive moat with viral growth loops built in Real people Local Businesses Hyperlocal proximity Analytics Trusted information Civic Engagement Local perspective Public Instant distribution Neighbors Agencies Publishing Local Recommendations Help me plug in Verified people Tools & info Lo
Slide 10: Enduring retention combined with strong network effects
10 Enduring retention combined with strong network effects... Our path to engagement growth is proven: After two years >50% of our audience remains engaged Nearly 3x increase in weekly engagement as more neighbors join Engagement defined as % of U.S. Verified Neighbors Active Weekly on platform. Data
Slide 11: With an audience that finds distinct value on Nextdoor
11 ...With an audience that finds distinct value on Nextdoor % of people who visit Nextdoor at least once per month but do not visit this social media platform at least once per month Source: GWI data as of Q2 2022.
Slide 12: Nextdoor is one of the most frequently used consumer products
12 Nextdoor is one of the most frequently used consumer products Source: Sensor Tower from 6/2/2021 - 6/1/2022. DAU/WAU ratio based on DAU and WAU averages over the 12-month time period. Nextdoor DAU/WAU based on internal data from Q1’21 - Q1’22. DAU defined as a Nextdoor user who starts a session or
Slide 13: We can ~4x our reach with global penetration
13 We can ~4x our reach just by reaching global penetration in-line with our more mature U.S. neighborhoods >300M Households +100M Households Future opportunities in 11 existing markets >200M (U.S. / International) Households +152M Households Next opportunity for additional households at 65% penetra
Slide 14: A verified daily audience with significant monetization potential
14 A verified daily audience with significant monetization potential U.S. DAU and ARPU1 95M U.S. DAU 38M 32M (est.) 13M $14 $30 $63 (est.) $76 U.S. Average Revenue per User (ARPU) Annual Revenue per DAU Source: Nextdoor data is based on 2021. Total WAU in FY21 was ~31M. Average US % of total WAU was ~
Slide 15: Digital advertising TAM represents $800B+ opportunity
15 Digital advertising TAM represents $800B+ opportunity Large Adjacent $824B Markets 45% Global Growth Classifieds $566B Global Home services Local commerce $341B Local events $234B U.S. U.S. Real estate 2022 TAM 2026 TAM Source: Global and US digital ad markets, eMarketer March 2022. Note: Digital
Slide 16: Social commerce is a huge opportunity
16 Social commerce is a The influencer in your huge opportunity neighborhood is right next door! 72% of neighbors have been influenced 71% of neighbors have shared by a neighbor recommendation(1) a recommendation (1) 84% of neighbors travel 10 miles or less >55M business recommendations on for their e
Slide 17: Full funnel approach helping neighbors from awareness to action
17 Full funnel approach helping neighbors from awareness to action Awareness Sponsored Maps & Discovery Posts Local context means Nextdoor content is relevant Intent & Nextdoor Nextdoor Influence Ads Ads Get more messages Increase website visits First-party data creates efficient targeting Action Next
Slide 18: Connecting neighbors and organizations with highly relevant information
18 Connecting neighbors and organizations with highly relevant information Global / national brands SMBs / neighbors for hire Public agencies / utilities Hyperlocal targeting & creative Discovery by relevant Verified distribution with at scale audiences flexible targeting >1,000 enterprise & mid-marke
Slide 19: Expanding the suite of tools: Nextdoor Ads
19 Expanding the suite of tools for businesses to create campaigns on Nextdoor: Nextdoor Ads New Ads Creation Interface New Advertiser Experience New Ads Dashboard Create ad in 5 easy steps Simplified UI Enhanced performance tracking Expanded reach (30 miles) New ad formats for on-the-go businesses
Slide 20: Why Nextdoor wins
20 Why Nextdoor wins: We are the neighborhood network, strong network effects, and clear monetization upside Nextdoor = Nextdoor is where you plug into the neighborhoods that matter to you. Neighborhoods Purpose-driven brand Purpose-driven brand — promotes growth, differentiates the business, and al
Slide 21: Experienced leadership team
21 Experienced leadership team Heidi Andersen Mike Doyle Sarah Friar Prakash Janakiraman Head of Revenue Chief Financial Officer Chief Executive Officer Co-Founder, Chief Architect Craig Lisowski John Orta Bryan Power Kiran Prasad Antonio Silveira Head of Data, Information, Chief Legal Officer & Head o
Slide 22: Seasoned Board of Directors
22 Seasoned Board of Directors John Hope Bryant Sarah Friar Bill Gurley Leslie Kilgore Mary Meeker Entrepreneur, founder, chairman, Chief Executive Officer Benchmark Former Netflix CMO Bond CEO, author, activist Jason Pressman David Sze Nirav Tolia Chris Varelas Andrea Wishom Shasta Ventures Greylock
Slide 23: Monetization and Outlook
Monetization and Outlook
Slide 24: Financial highlights
24 Financial highlights Differentiated products with contextual relevance enable sustainable growth High levels of neighbor retention enable consistent growth and ROI on acquisition spend Network effects increase WAU engagement as penetration increases Multiple levers for ARPU growth provide continu
Slide 25: Growing base of engaged users
Growing base of engaged users... Annual Quarterly Avg. Weekly Active Users (WAU) 27% 25% 36.9M 2019–2021 CAGR Q2 2019–Q2 2022 CAGR 7.7M 31.3M 29.2M 26.7M 27.8M 5.5M 5.1M 29.2M 3.9M 3.9M 25.9M 19.5M 19.2M 23.9M 24.1M 22.8M 2.3M 2.1M 17.3M 17.1M +59% +12% +33% +45% +5% +26% 2019 2020 2021 Q2 2019 Q2 2
Slide 26: Leading to revenue growth
...Leading to revenue growth... Annual Quarterly 52% 39% 2019–2021 CAGR Q2 2019–Q2 2022 CAGR $192M $55M $46M $123M $28M $83M $20M +36% +66% +19% 2019 2020 2021 Q2 2019 Q2 2020 Q2 2021 Q2 2022 Some figures may not tie due to rounding.
Slide 27: And increasing levels of monetization
...And increasing levels of monetization Annual Quarterly Avg. Revenue Per Weekly Active User (ARPU) 20% 12% 2019–2021 CAGR Q2 2019–Q2 2022 CAGR $6.13 $1.57 $1.48 $4.62 $4.23 $1.06 $0.99 –6% 59% –6% 2019 2020 2021 Q2 2019 Q2 2020 Q2 2021 Q2 2022 ARPU shown above is calculated as total global revenue
Slide 28: Viral growth loops reinforce the strength of our model
28 Viral growth loops reinforce the strength of our model Increased Scale Improved unit economics, Increased reach reinvestment for growth & & engagement product expansion Neighbors Public Agencies Businesses Improved advertiser Enhanced advertiser retention & platform performance & additional activ
Slide 29: Appendix
X = e Appendix
Slide 30: Adjusted EBITDA reconciliation
30 Adjusted EBITDA reconciliation 2020A 2021A Net Loss $(75.2M) $(95.3M) Depreciation and amortization $3.1M $4.2M Stock-based compensation 22.6M 47.5M Interest (0.7M) (0.2M) Provision for income taxes 0.1M 0.2M Acquisition-related costs – – Adjusted EBITDA $(50.2M) $(43.7M) Some figures may not tie
Slide 31: Non-GAAP operating expenses reconciliation
31 Non-GAAP operating expenses reconciliation 2020A 2021A Operating Expenses Cost of revenue $21.6M $28.8M Sales and marketing 80.3M 106.4M Research and development 69.2M 97.1M General and administrative 28.8M 54.7M Total GAAP Operating Expenses $199.9M $287.0M (-) Depreciation and amortization ($3.
Slide 32: Definitions
Definitions 32 Metrics Definition U.S. Household A single (U.S.) residence containing at least one Current Verified Neighbor The number of active Launched (10+ member) neighborhoods. A “neighborhood” is a specific geographic area with a defined Neighborhoods boundary. Neighborhoods do not overlap. The nu
Slide 33: A day in the life of a parent: meet Abraham
33 A day in the life of a parent: meet Abraham Kingstowne Thompson Center, VA Reaches out to neighbors for a pasta machine, to make his Hosts 30 coffees in favorite chef’s 24-layer lasagna 30 days to meet 7AM people nearby Borrows neighbor’s 12PM 6PM Meets neighbors pasta machine Searches for for co
Slide 34: A week in the life of a small business owner: meet Bill
34 A week in the life of a small business owner: meet Bill Clayton, North Carolina Responds to a question about certifications from his local Checks his ads dashboard to small business owner group see how its performing and MON re-ups for another month Checks in with his THU SAT Checks his business g
Slide 35: A week in the life of fire info manager: meet Cecile
35 A week in the life of fire info manager: meet Cecile San Mateo-Santa Cruz, CA Posts real time update on evacuation procedures for Checks the post metrics to MON the immediate area make sure messages are WED getting through FRI Updates Evacuation Order Monitors metrics Sets up wildfire Alerts neighb