Nextdoor's Q3 2025 Earnings Call: Contradictions Emerge on User Engagement, Ad Load, Monetization, and Programmatic Strategy

Business Commentary:

* Revenue and Ad Performance: - Nextdoor Holdings reported revenue of $69 million in Q3, up 5% year-over-year. - Growth was driven by strong demand from self-serve advertisers on the Nextdoor Ads platform, which saw self-serve revenue grow by 33% year-over-year and account for roughly 60% of total revenue.

• Platform Engagement and User Base:
• Q3 Platform WAU, representing users who engage directly on the Nextdoor app or website, was $21.6 million, a sequential decline.

• The decline was intentional, driven by a reduction in notification and email volumes to focus on engagement quality over quantity.

• Product and Content Strategy:

• Nextdoor expanded its content offerings, with local news now accounting for approximately 7% of total feed content, benefiting from 4,000 live local publishers.

• The strategy focuses on increasing high-quality content and distributing it effectively to enhance user engagement and monetization.

• Financing and Leadership:

• The company reported $403 million in cash, cash equivalents, and marketable securities, with no debt at the end of Q3.
• Nextdoor announced the hiring of Indrajit Ponnambalam as the new CFO, effective December 1, 2025, to further support its growth and operational excellence.

Contradiction Point 1

User Engagement and Alert Strategy

It involves the company's approach to user engagement and alerts, which are critical for driving platform usage and user retention.

Did reducing alerts improve engagement with surfaced alerts? - Ryan James Powell (B. Riley Securities, Inc., Research Division)

2025Q3: Reducing notifications while maintaining revenue growth shows that the alerts sent are more effective. - Nirav Tolia(CEO)

How do alerts impact your strategy with the focus on platform WAUs? - Jason Kreyer (Craig-Hallum Capital Group LLC, Research Division)

2025Q1: Notifications target specific regions rather than neighborhoods, ensuring users get relevant information. - Nirav Tolia(CEO)

Contradiction Point 2

Ad Load and Supply Growth

It involves the company's approach to ad load and supply growth, which are critical for understanding revenue generation and market positioning.

What is the depth of customer engagement 4 months after the new Nextdoor launch? What are your 2026 user acquisition strategy plans? - Jamesmichael Sherman-Lewis(Citigroup Inc., Research Division)

2025Q3: We want to learn and optimize to better serve our users before increasing ad load. - Nirav Tolia(CEO)

Can you explain the shift from broader user growth to deeper engagement and its 12-18 month impact? Also, is the ad impression headwind ongoing or limited to Q1? - Eric Sheridan(Goldman Sachs)

2024Q4: Our focus in the first half is on testing and learning, which may constrain supply growth. The headwind affects Q1, but it's tied to long-term growth strategy. - Matt Anderson(CFO)

Contradiction Point 3

Monetization Strategy Post-NEXT

It involves the company's approach to monetization post-NEXT launch, which is crucial for revenue growth and investor expectations.

Can you share insights on customer engagement depth four months post-launch of the new Nextdoor? - Jamesmichael Sherman-Lewis(Citigroup Inc., Research Division)

2025Q3: We're excited about the progress since the new Nextdoor launch. - Nirav Tolia(CEO)

How is monetization different in a post-NEXT world compared to traditional ad impressions on the platform? - Jason Kreyer (Craig-Hallum Capital Group LLC, Research Division)

2025Q1: The monetization needs to follow any growth in usage and engagement. - Nirav Tolia(CEO)

Contradiction Point 4

Advertising Strategy and Programmatic Expansion

It highlights a contradiction in the company's strategy regarding advertising formats and the expansion of programmatic capabilities, which are crucial for revenue growth.

Can you provide an update on the progress and plans for programmatic capabilities on and off-platform? - Jason Kreyer (Craig-Hallum Capital Group LLC, Research Division)

2025Q3: We've done a deal with Yahoo where advertisers can target Nextdoor audiences directly from Yahoo's DSP. Programmatic complements direct sold inventory and is additive. - Nirav Tolia(CEO)

What are the key use cases driving growth for Nextdoor, and which features are users engaging with most? How are budget discussions with major advertisers progressing, and how can new supply-side integrations boost revenue? - Jamesmichael Charles Sherman-Lewis (Citigroup Inc.)

2025Q2: We are completing the integration of our supply side platform or SSP. And that will allow us to access the demand side platform or DSP inventory bought from DSPs in the market. - Matt Anderson(CFO)