Good afternoon, and thank you for attending today's Nextdoor Q1 2023 Earnings Call. My name is Jason, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I'd now like to pass the conference over to our host, Matt Anderson, Head of Investor Relations. Thank you, Jason. Good afternoon, and thank you for joining us today to review Nextdoor's first quarter 2023 financial results. With us on the call today are Sarah Friar, Chief Executive Officer, and Mike Doyle, Chief Financial Officer. During this call, we may make statements related to our business that are forward-looking statements under federal securities laws. 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 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 and in 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. A reconciliation of these measures to their most directly comparable GAAP financial measures can be found in the Q1 2023 shareholder letter released today. I'd like to turn the call over to Sarah. Thank you, Matt. Hello, everyone. We started 2023 with a strong quarter. We're seeing meaningful progress across a range of business outcomes. Starting with neighbors, WAU grew 16% year-over-year and 6% sequentially in Q1, demonstrating healthy and growing engagement. This growth was led by neighbors in the US, where we added over 2 million net WAU quarter-over-quarter. Over 80 million verified neighbors come to Nextdoor with high intent to join, connect, contribute, and transact, thus finding unique value from the utility and the community offered on the platform. In 2023, we've been building product momentum, focusing on growing the base of neighbors and organizations on Nextdoor through work on invites and content sharing. We've been deepening engagement and driving kind conversations through better feed and Discover personalization and new content types such as events. We're making progress on our local ad platform for businesses of all sizes who benefit from Nextdoor's high-intent audience and the ability to target neighborhoods everywhere. Our investments in AI, including ML, have been showing strong returns, particularly in deepening engagement. In Q1, this was the leading driver of WAU growth. We continued to personalize notifications to be relevant and timely to each neighbor. We're making the newsfeed more personal, a focus area in 2023, by enabling content to be more widely accessible based on the use case. For example, a neighbor may want a broader view when looking for a service provider or something to do locally over the weekend, but a much narrower view when searching for a lost pet. This unlocks greater growth on the platform and is important to neighbors who increasingly see Nextdoor as the local network that allows you to connect to the neighborhoods that matter to you. AI is already an integral part of product experiences at Nextdoor, and we've only scratched the surface of its potential use across WAU and revenue outcomes. We are excited to explore the possibilities for generative AI applications on our platform, built on the foundation of our unique local knowledge graph and content that is often already labeled by neighbors. For example, this post is a recommendation. This post is a lost and found item. This is content that potentially needs moderating, and so on. Leveraging the ChatGPT API offered by OpenAI, in April, we launched an assistance feature that helps neighbors write posts that are more engaging, kind, and constructive. This is based on our data of what works well on Nextdoor to achieve the outcomes that neighbors are looking for. For example, making a recommendation about a beloved local business that needs help getting the word out, or finding the best park to delight younger kids, or helping a neighbor entice a group to come together for a local community garden build. We'll continue to share updates here in the coming quarters. In Q1, we also launched several other product features to deepen engagement through driving kind conversations and the volume and diversity of content. For example, we launched the ability for organizations to access all format types, including events, calls, and video. This has increased posting from businesses and agencies, helping connect them with high-intent nearby audiences and creating a better local experience for neighbors. We also launched our ShareKit, which places Nextdoor's logo on partner sites like GoFundMe and Patch, so users of external sites can post directly to Nextdoor. This is another important step in our shift from a private to a local network. These initiatives have driven more posting and posters across more areas of the platform. We've made progress introducing new viral growth loops. Verified neighbors added organically in the U.S. grew at 24% year-over-year in Q1. We bring new neighbors and organizations to Nextdoor through invites and content sharing. Today, features like Contact Sync help neighbors invite each other to our platform. In Q1, we built features for businesses to invite neighbors, and we're seeing positive traction with the number of business inviters growing by 34% since the features were introduced in January of this year. In the coming quarters, we plan to launch new partners with our updated Content API so that content that is flagged as anyone content can be shared to other platforms. This content can then be picked up by SEO, which raises our brand awareness and draws in more neighbors as they discover the specific use cases of our local platform. We also continue to make progress on our ad platform. In Q1, we completed the majority of the work on our unified platform offering for advertisers of all sizes. For SMBs, we will be maintaining the simplicity of the original self-serve experience while also adding advanced tools and reporting capabilities that were not previously available, such as a more flexible location targeting. For larger advertisers, Nextdoor Ads Manager will reduce the time it takes to onboard to Nextdoor and to create and launch an ad. Let me give you an example of the success of the platform for an international beauty retailer who ran a campaign to drive neighbors to shop its products in local stores. We leveraged Predictive Intent targeting to reach beauty shoppers when they were most interested and engaged on Nextdoor in order to drive them from the app into the local store. A Foursquare study found the campaign was so successful that it resulted in an approximately 52 times return on ad spend. Another study by Oracle Moat Analytics found that the campaign also far exceeded industry benchmarks in attention-related performance categories like interaction rates and hover rates. The brand has continued to spend on Nextdoor, partnering with us on spring and summer campaigns. In closing, we started 2023 on a strong note, and we are excited to continue executing on our top three priorities: growing our base of neighbors and organizations, deepening engagement, and driving revenue growth by enabling better advertiser outcomes on our proprietary ad platform. We remain confident that our efforts will enable us to return to sustained revenue growth and margin improvements in 2023. I'll turn it over now to Mike for more details on our financials. Thank you, Sarah. Good afternoon, everyone. Q1 revenue of $50 million came in 7% above the midpoint of our guidance range, representing progress in the sequential growth rate. Despite a 2% year-over-year decline, Q1 revenue demonstrated an upward trajectory in the quarter. We expect year-over-year revenue comparisons to ease as we move through 2023. We saw several areas of revenue growth in Q1. Mid-market continued to be an area of strength, with average spend per customer growing as we built relationships with and demonstrated value for customers. We are also seeing success from our strategy of building relationships with advertising agencies, which allow us to increase revenue diversity and retention and to more efficiently activate new logos, a top priority in 2023. Several of our large advertisers from the quarter were brought on board through agency relationships. We've also shifted our sales strategy to focus more on recession-resilient verticals and customers. We are seeing benefits in verticals like healthcare. International was another area of strength, with UK revenue growing year-over-year as we expanded our presence in the market and reached an all-time high of total weekly active users in Q1. We saw a healthy mix of spend across both top and bottom of funnel ad campaign objectives, with a continuing trend towards direct response-focused campaigns, which accounted for more than 60% of managed spend in the quarter. Q1 ARPU of $1.17 declined 16% year-over-year, the result of progress made in growing WAU, which outpaced advertiser demand in the period. Q1 Adjusted EBITDA loss was $22 million, representing a negative 44% margin. The year-over-year decrease in Adjusted EBITDA margin primarily reflects deleveraging from the reduction in revenue, combined with growth in personnel costs and hosting costs as neighbor engagement grows. Our operating cash burn of $14 million was better than Adjusted EBITDA loss as we benefited from positive working capital dynamics and interest income. In Q1, we continued our close focus on operational efficiency, holding total operating expenses largely stable over the past three quarters. We held our year-over-year operating expense growth rate at just 5%, primarily through increased customer acquisition efficiency. We will continue to balance expense management with ensuring that we are resourced to deliver on our long-term product and go-to-market initiatives. We ended Q1 with $575 million in cash equivalents, and marketable securities. We will continue to evaluate our capital allocation opportunities looking forward. I'll close with our outlook. Our Q2 2023 revenue guidance is $53 million-$54 million, a year-over-year growth rate of -2% at the midpoint of the range. While revenue trends are improving, we continue to see some uncertainty with some advertiser budgets in April. Based on progress to date, we expect a return to year-over-year revenue growth in 2023. Turning to Adjusted EBITDA, we expect Q2 Adjusted EBITDA loss to be -$24 million to -$23 million. At the midpoint of the range, this implies an Adjusted EBITDA margin that is approximately flat sequentially. As we look to the second half of 2023, we expect improvements in year-on-year EBITDA margins. We remain highly focused on driving sustained WAU and revenue growth, and we are pleased with our Q1 progress. Thank you for joining our earnings call today. With that, I'll turn it over to the operator for Q&A. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by two. Again, to ask a question, it is star one. Our first question is from Eric Sheridan with Goldman Sachs. Your line is now open. Thanks so much for taking the question. I wanna come back to both your comments with respect to the ad platform and maybe ask a multi-parter. Can you give us an update in terms of the timeline where the ad platform will be fully deployed between either now and the end of the year as we move out of 2023 and into 2024? Based on what you've learned on the rollout of the ad platform, how should we be thinking about that informing mix of advertisers, either by advertiser type and/or promoting further advertiser diversity and driving new verticals as Mike pointed out, like the healthcare vertical in particular, to think about density as a driver of monetization not only in 2023, but over the medium to long term? Thanks so much. Great. Thanks so much, Eric. Appreciate it. Just finally on the ad platform itself, really good momentum in Q1, and that's a reason why you see the revenue doing as well as it did relative to how we guided. On the Nextdoor Ads Manager itself, we continue to iterate on that self-serve, easy-to-use, intuitive platform. In Q1, we unified that so that now every customer of any size is working off of the same platform. By creating one self-serve option, that just simplifies products all around. If you look at what that meant, if you are a small business, it keeps the same self-serve, easy-to-use elements, but it is also adding on new facets like, for example, some of the performance targeting and so on that I talked about in my prepared remarks. If you're a larger enterprise and mid-market all the way up to large, even an ad agency, it now means that there's a place that you can create a self-service ad as well as doing something that's more managed. On the back end, the Nextdoor Ad Server, that's where we're unlocking our ability to better use our first-party data, and that will help advertisers understand their audiences better, optimize ad targeting and delivery, and increase ad relevance. The right ad at the right person at the right time with great content in a high-intent platform like Nextdoor that's very high on utility. It's also great for the advertiser, like search. It's very, very, very efficient. In terms of where we are in Q1, we're continuing to move forward on that. We're pleased with the progress. As we look towards the back half of the year, our goal is to have our SMBs all up and on the platform and then slowly moving towards mid-market, ultimately into the large enterprise. We're gonna do this wisely because we don't want to, in any way, upset our current momentum on the revenue front. We'll do it with a lot of tests and iteration. Of course, it's not just about the ad platform itself. It's also about things like measurement. As an example, we do have first-party measurement with our own pixel, but we also continue to add new third parties into the mix. Folks like Neustar, Oracle Moat, Lucid, Foursquare, Theseus, and so on because the more that we can show advertisers that the performance that Nextdoor can give them, the more likely they are to stick around. That's one of the reasons why our retention rates have been so high across the platform. In terms of the mix of ads of customers by type and by vertical, last year, as we headed into kind of a tougher time in the ad market, we were definitely quite exposed to verticals like financial services, real estate that had done phenomenally well on Nextdoor because they often are targeting in a hyper-local way. Those advertisers will come back when the environment improves. We think there's a lot of pent-up demand in those verticals. That said, we pivoted and went to places where we could see opportunity. For example, more recession-resilient verticals like government and healthcare. We have continued to invest in areas like tech and telco that did really well for us in Q1. We built out our mid-market sales team, so now we're able to go after not just really large advertisers or the smallest SMBs, but more of that kind of torso, the mid-market. They're often not per se national, but they're often multi-state. Finally, in terms of the type of ads being served, Mike talked about the fact that we work across the funnel all the way from brand through consideration into direct response. Clearly, because of the environment, we are tending more towards direct response. I'd expect that balance to come back to be more balanced, frankly, as the ad environment improves. We know there's a lot of debate with CMOs right now about the power of brand marketing. They just want to be able to put numbers behind it. Being able to utilize a digital platform allows you to put a lot of numbers behind what you're doing, why you're doing it, and why it's effective. Anything you wanna add on the density or are we good? Yeah. Maybe just connect the opportunity with the new ad platform with your question specifically about the impact on each of the segments. We do feel like the ad platform has a huge benefit for all of the segments. Given where we are in our penetration of the advertisers in each of the segments, don't expect a large change in composition because there's so much opportunity in each one. Thinking about, from enterprise to mid-market to SMB, the ability to use first-party data to improve targeting, to have self-serve access to campaigns, to be able to experiment and shift budgets between campaign objectives, testing creatives across different target audiences, those are all benefits that will accrue to each segment of the business, and we think will accelerate growth in all three segments. Great. Thank you. Thank you, Eric. Our next question comes from Youssef Squali with Truist. Your line is now open. Hi, this is Robert on for Youssef. Thanks for taking the questions. I just wanted to ask a couple questions in regard to AI. It seems you're investing more heavily now in AI. Is that what explains the step up in R&D versus prior periods, or is it a much larger investment than that? My second question is in relation to increasing the radius of neighborhoods and showing content from nearby neighborhoods. How far did you expand the neighborhood distance for content that you show now? Curious what it was previously and what it is now. Thanks. Okay. Why don't I start, thank you, thank you, Jason. First of all, why don't I start talking about our investment in AI. I'll talk about the radius question, and then I'm gonna flip the R&D cost question back to Mike. From an AI perspective, we definitely wanna make sure you're hearing the message loud and clear that we've been investing here for multiple years, so it's not a new thing for Nextdoor. One of the reasons I came to Nextdoor is because of the data set that we had. Super unique, right? We own the local knowledge graph, and we do see that neighbors are effectively labeling that data for us, which makes it really interesting. In 2022, that was a really big year for the build-out of our AI team. It was our fastest-growing team. With that, we have invested in areas like notifications, making the newsfeed more personal. That's why you're seeing that great growth in WAU that we've shown, right. The ninth consecutive quarter of growth, in fact. We're definitely excited to continue to explore more possibilities. For example, how do we use AI to drive more new neighbors coming to the platform. Maybe it's helping with better invitations, neighbor to neighbor, or a new investment for us, which is having businesses invite neighbors to the platform. How do we use data to close that loop. Most recently, we've talked about generative AI. Last Tuesday, we made our announcement about the launch of our assistance feature, and then also the addition of generative AI into some of our vitality areas as well. We are in the business of user-generated content, and so therefore using anything that is generative has a very natural fit here. What gets me super excited about the AI assistant is we're really helping neighbors get done the thing they're coming to the platform to do, but hopefully helping them do it even more effectively. We're training that model from OpenAI on Nextdoor data. It's giving the neighbor a response that is related to our platform on what works on our platform. As they're posting and asking for help, maybe they're giving a recommendation, maybe they're trying to aggregate their neighbors, as I talked about, to build that community garden. We're helping them create a post that is in and of itself much more engaging for the Nextdoor platform. I've really enjoyed myself getting to use it 'cause it's right there, it's easy to see what it's for, but it puts a lot of control into the hands of the user. On the vitality side, this is a place where I feel we have been really leading edge, even relative to other really large platforms in the social media space. We were the first to implement a Kindness Reminder, I think in 2017, that slows people down and reminds them to be more constructive. Up to this point, we've really just given the option to edit their posts. Now we can ask them to edit or we can even offer a suggestion of how to be more constructive. I think that just continues in that same vein of how do we increase the vitality overall of Nextdoor because we know that helps create better neighborhoods, helps customers get things done that they wanna get done. On the radius of neighborhoods, if you recall, I think, back at the end of 2021, we shifted to something called anyone content. This is the first time we allowed neighbors to tag their content and say, "I'm fine with this content going to anyone, depending on how useful it is." Sometimes you wanna make a post that's really better off just in the neighborhood, like you've lost a pet. Sometimes you wanna post about something much bigger, right? On a personal note, living here on the West Coast when fires were happening, I wanted to know what was going on, even if those fires were maybe hundreds of miles away, sometimes 'cause I wanted to be able to help neighbors in need, sometimes 'cause I wanted to know what was going on. That's content that we wanna let move to the extent it's still interesting. This is a place where AI comes to play again because it's not about setting hard and fast rigid boundaries and saying, "This content can only travel this distance." Instead, it's much more about asking the question about, is this content still interesting to this person and making it very personalized. For some people, they may only wanna see things that are literally in their building. For others, they might care about seeing something across a whole county, maybe even across a state line. This is where the data itself starts to become very powerful when we marry it to AI to allow the user to personalize what that feed will look like. Okay, Mike, on the R&D cost. Yes. Robert, I wanted to pick up there on AI and then just operating expense management more generally. Certainly, we are investing deeply in this area of the business, just given the potential for impact, and that is true in R&D generally. We have managed cost very tightly over the last several quarters. We've seen basically flat year sequential OpEx growth over the last three quarters. That's true as well within the R&D line and thinking about headcount. Going forward in the rest of the year, we are selectively adding to our product development team, will include investment in AI capabilities, and you'll see a little bit of that in the quarters to come. We really are leaning in on performance management and really being very targeted in where we add incremental resources. The other area where AI impacts our P&L is worth calling out, is in gross margin. First, I just wanted to call out the fact that we have very high gross margins by industry standards. We finished the quarter at 80% gross margin, this quarter down just a point seasonally. It remains a great tailwind in the business. The most important cost and cost of revenue driving gross margin, is our hosting cost. AI compute costs are included here. We think these are very worthwhile investments to be making, for us to be unlocking additional engagement, and learning more about the impact that AI can have on the business. Okay, great. Thank you very much for the clarity. Thank you. Thanks for the great question. Our next question is from Jocelyn Hung with Evercore. Your line is now open. Hi, this is Jocelyn asking a question for Mark. Maybe first could you give us an update on neighbor and advertiser retention rate? I think probably one year or several quarters ago, there was some disclosure around three months user retention, about 75%, and then six months, 65%. Last earnings call you mentioned you retained 90% of your top 50 advertisers. Just wondering, is there anything you can share on that front? Yeah. Thank you, Jocelyn. Appreciate the question. I think the TLDR I'd wanna give you is that we continue to see really strong durability in the business, and there's been no meaningful change to our retention rates from a neighbor perspective. They're still incredibly high, I would say best in class in the industry. A fast way that I think about it's 50-50-50. Of our verified neighbors, 50% return on a weekly basis. In internationally, that's actually more than 50%. Of the folks who come back weekly, they come back on average about 4 times a week. That's actually a little bit over 50% from our WAUs to our DAUs. The third stat is the one that we gave you way back at our investment Investor Day in 2021, where we continue to see over 50% of neighbors engaged after two years. That indicates the enduring retention that we see on Nextdoor because of what we're bringing to neighbors, great utility in the neighborhood and a great way to build community. On the advertiser side, last quarter, we told you that 90% of our top 50 advertisers in 2022 had been retained. Again, speaking to the fact that advertisers are coming to the platform, finding value and staying with us, and there has been no change in the LTM of that trend. It's remained in and around about 90%. Again, it's something we're very proud of because we think that builds a great base for revenue growth. Because if we can keep the advertisers we have, we're continuing to build out how we're going to market. I talked about pivoting towards recession resilience verticals, pivoting towards the mid-market, building deeper relationships with ad agencies. All of that should then be additive on top of the advertisers we already have, the net new logos that are coming, of course, we'll continue to go deeper within each of those customers, right? We typically find once we get a foothold, our ability to grow revenue in the hundreds of percent is quite high. Great example is a tech and telco provider that we look to here in Q1 of 2023. Their spend has grown 300% since Q1 of 2022 as an example. We feel very good about retention rates on both sides of our marketplace. Thank you. Just one quick follow-up on the session rate, the session growth rate. Is there anything you can provide, especially comparing versus WAU growth? The session growth rate continues to grow faster than the WAU growth. If you were kind of asking why is that happening? We're bringing people back to the platform, but then we're giving them reasons to go deeper. Why are they going deeper? Number one is because we're personalizing the feeds. The more you're using your newsfeed, the more you're seeing content that is really relevant to you. You're finding if you're someone who loves a local business, you're probably seeing more recommendations of local businesses. If you're a new mover, you're maybe seeing some examples of places, things to do in your neighborhood that you might not yet know about. If you're a millennial parent, a key demographic for Nextdoor, you might be seeing more things to do with kids. Particularly now as we head into the summer, I'm seeing a lot of stuff in my feed around things like local summer camps as an example. Why that's important is if we bring those neighbors back, and I talked about the 50-50-50 durability, we help them to go deeper in the newsfeed and in other surfaces like Discover. That is just creating more impressions that we can ultimately sell to advertisers, which increases our revenue. It should all be done in a loop where it feels really high value to that high intent audience that's coming to Nextdoor to get things done. Thank you. Thank you. Once again, if you would like to ask a question, it is star one on your telephone keypad. There are no questions. I'll pass the call back over to Sarah Friar with closing remarks. Great. Thank you so much. As ever, we appreciate your time and support of everyone dialing in for this call, the analysts for asking great questions, but we also know we have a lot of investors and other stakeholders on the line. As you can tell from our quarter, we're really pleased with how we've entered 2023. We continue to control what we can control. First and foremost, we are driving more neighbors to the platform, WAU growth up 16% year-over-year, and continuing to see progress on both revenue and margin improvement. Sessions growth, as I just talked about to Jocelyn, again continues to show that users are finding real value on Nextdoor. Because of that, they're also joining more organically. Over 70% of our US verified neighbors came organically to the platform in Q1. We're continuing to see strength in revenue, areas like the mid-market, tech and telco, and our ad agency partnerships. We're optimistic that when verticals like financial services and real estate, return to spending, they will perform well again for us. We're investing in AI. This is a place where Nextdoor should absolutely thrive because of our local knowledge graph, because of that label data, and because we're creating products that are actually helping neighbors get done what they need to get done on Nextdoor. We're laser focused on growing wow and revenue, and you'll continue to hear us talk about that, whether it's driving invitations, top of funnel growth, whether it's driving new content types or better Discover and feed relevance, and then of course, continuing to build out our proprietary ad tech stack. Finally, we're on track to return to revenue growth and margin improvement in 2023, while also investing in the long-term opportunity that we have. Everyone's a neighbor, and we're really excited to bring Nextdoor to them. With that, thank you so much for your time today, and we look forward to talking to you through the quarter.