Nextdoor Holdings 2025 Q1 Earnings Slight Revenue Growth, Losses Narrow

Nextdoor Holdings (KIND) reported its fiscal 2025 Q1 earnings on May 07th, 2025. The company posted a slight revenue increase and managed to narrow losses compared to the previous year. Although the revenue of $54.18 million surpassed the Zacks Consensus Estimate by 1.30%, the earnings per share (EPS) of a $0.06 loss was better than the expected $0.07 loss, marking a 14.29% earnings surprise. Guidance for Q2 2025 anticipates revenue of approximately $60 million, with an adjusted EBITDA loss around $10 million.

Revenue

The total revenue of Nextdoor Holdings increased by 1.9% to $54.18 million in 2025 Q1, up from $53.15 million in 2024 Q1.

Earnings/Net Income

Nextdoor Holdings narrowed losses to $0.06 per share in 2025 Q1 from a loss of $0.07 per share in 2024 Q1 (14.3% improvement). Meanwhile, the company successfully narrowed its net loss to $-21.95 million in 2025 Q1, reducing losses by 22.3% compared to the $-28.26 million net loss reported in 2024 Q1. The sustained EPS losses indicate ongoing financial hurdles.

Post-Earnings Price Action Review

The strategy of purchasing Nextdoor Holdings (KIND) shares following a quarter-over-quarter revenue decline and holding them for 30 days has historically resulted in notable losses. Over the past five years, this approach yielded a return of -41.41%, significantly underperforming a benchmark return of 16.16%, which translates to an excess return of -57.57%. The compound annual growth rate (CAGR) during this period was -14.26%, with a maximum drawdown of -43.88%. The strategy's Sharpe ratio stood at -0.98, indicating high risk relative to the return, and it exhibited a volatility of 14.60%. These metrics highlight that this investment strategy not only underperformed the market but also carried substantial risk, rendering it an impractical approach for investors.

CEO Commentary

Nirav Tolia, Chief Executive Officer, remarked on Nextdoor's Q1 performance, highlighting a 6% year-over-year growth in weekly active users to 46.1 million and a 2% increase in revenue to $54 million. He emphasized the company's intentional product-focused strategy, stating, "we furthered the transition to NEXT," aimed at delivering better local content that users demand. Tolia expressed confidence in transforming the Nextdoor experience, noting, "NEXT is more than a redesign... it's a re-founding of our vision." He maintained an optimistic outlook, stating that while short-term trade-offs are necessary, they align with the plan to maximize long-term value for shareholders.

Guidance

Nextdoor anticipates Q2 2025 revenue of approximately $60 million and an adjusted EBITDA loss of around $10 million. Tolia noted that the introduction of NEXT, including updated user experience and local news, prioritizes long-term retention over immediate session depth, affecting total impression opportunities in Q2. The company also expects large advertiser spending to continue to decline year-over-year, although growth in other channels is anticipated to offset this trend.

Additional News

In recent weeks, there has been notable activity surrounding Nextdoor Holdings. Manatuck Hill Partners LLC announced a new stake in Nextdoor Holdings on May 5, 2025, indicating increased interest from institutional investors. Additionally, Nextdoor Holdings has been focusing on enhancing its technological infrastructure to support its NEXT initiative, aiming for a complete overhaul of the user experience by late July 2025. Lastly, there have been no significant changes in the company's C-level management, maintaining stability in leadership as the company progresses with its strategic objectives.