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Nextdoor Holdings, Inc. (NXDR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered highest-ever revenue at $69.0M (+5% YoY) and a positive adjusted EBITDA of $4.4M (6% margin), while GAAP net loss improved to $12.9M; Platform WAU declined 3% YoY to 21.6M as management intentionally reduced notifications to prioritize engagement quality .
  • Results beat Wall Street consensus: revenue beat by ~$2.4M and EPS beat by $0.02; Q4 revenue guidance set at $67–$68M (+3–4% YoY) and adjusted EBITDA of $3.5–$4.5M (5–7% margin), reiterating path to FY26 full-year adjusted EBITDA breakeven . Values marked with * retrieved from S&P Global Market Intelligence.
  • Self-serve ad channel remains the growth engine: +33% YoY in Q3 and ~60% of revenue; company also completed programmatic supply integrations, enabling DSP buying to complement direct sales and unlock future budgets .
  • Leadership update: Nextdoor appointed Indrajit Ponnambalam as CFO effective Dec 1, 2025, adding scaled consumer tech finance experience; stock reaction catalyst likely tied to beats, positive adjusted EBITDA, stronger Q4 profitability targets, and CFO appointment .

What Went Well and What Went Wrong

What Went Well

  • Highest-ever quarterly revenue and positive adjusted EBITDA: “We delivered our highest quarterly revenue ever” and achieved adjusted EBITDA of $4.4M (6% margin), +8 ppt YoY .
  • Self-serve momentum and mix: Self-serve revenue grew 33% YoY and represented nearly 60% of Q3 revenue, driven by performance improvements and automation in the Nextdoor Ads Platform .
  • Programmatic integration completed: Management highlighted completion of programmatic supply integrations and availability via Yahoo DSP to complement direct-sold inventory and broaden demand .

What Went Wrong

  • User metric headwind: Platform WAU fell 3% YoY to 21.6M and saw a modest 1% sequential decline due to deliberate reduction in notifications and emails to emphasize engagement quality over quantity .
  • Large advertiser pressure continued: Q2 update flagged large advertiser spending down YoY offset by other channels; Q3 continued with intentional platform changes limiting impression growth, weighing near-term ad supply .
  • Ongoing GAAP losses: Net loss improved but remained sizable at $12.9M (−19% margin), reflecting continued investment and transition costs notwithstanding improved operating leverage .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$54.2 $65.1 $68.9
Net Loss ($USD Millions)$(22.0) $(15.4) $(12.9)
Net Loss Margin (%)(41%) (24%) (19%)
Adjusted EBITDA ($USD Millions)$(9.2) $(2.2) $4.4
Adjusted EBITDA Margin (%)(17%) (3%) 6%
Q3 vs EstimatesEstimateActual
Revenue ($USD)$66.50M*$68.90M
EPS ($USD)−0.05*−0.03*

Values marked with * retrieved from S&P Global Market Intelligence.

Segment/Mix

Segment/Mix KPIQ1 2025Q2 2025Q3 2025
Self-Serve % of Revenuen/a~58% ~60%
Self-Serve Revenue YoY Growthn/a+27% +33%

KPIs

KPIQ1 2025Q2 2025Q3 2025
Platform WAU (Millions)22.5 (+5% YoY) 21.8 (+1% YoY) 21.6 (−3% YoY)
Ending Cash & Marketable Securities ($USD Millions)$418 $413 $403

Estimate Beat/Miss Assessment

  • Revenue: beat by ~$2.4M; EPS: beat by $0.02. Values retrieved from S&P Global Market Intelligence. Actuals per press release .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)Q4 2025n/a$67M–$68M (3–4% YoY) New (explicit range)
Adjusted EBITDA ($USD)Q4 2025“Breakeven” expected in Q4 2025 $3.5M–$4.5M (margin 5–7%) Raised (from breakeven to positive)
Adjusted EBITDA Breakeven (Full-year)FY 2026Breakeven expected Reiterated Maintained
Ad Load PolicyQ4 2025/FY 2026n/aNo increase in ad load; prioritize UX Clarified policy
User AcquisitionQ4 2025n/aIntentional reduction of new user acquisition in Q4 Strategic shift

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesQ1 previewed “NEXT” with Local News, Alerts, AI Recommendations; launched AI tools in Ads Manager Focus on increasing high-quality content and reinventing recommendations; “turn authentic word-of-mouth into actionable insights” Improving execution; scaling content and recommendations
Programmatic supply integrationQ2: made significant progress toward unlocking programmatic budgets later this year Completed programmatic integrations; available via Yahoo DSP; complementary to direct Achieved milestone; expected to unlock incremental demand
User engagement/content volumeQ1/Q2: NEW UX prioritizes retention; impression supply limited near-term Intentional reduction in notifications; need “dramatically increasing the amount of content”; Platform WAU −3% YoY Mixed: quality focus near-term headwind; long-term engagement thesis intact
Advertising mix (self-serve vs large advertisers)Q2: self-serve +27% YoY, 58% mix; large advertisers down YoY Self-serve +33% YoY, ~60% mix; advertisers benefit from performance optimizations Self-serve strengthening; large advertiser spend recovering gradually
New user experience (“cold start”)Q2: transitioning to new Nextdoor experience Specialized experiences planned for new users; not aggressive in acquisition until UX optimized Strategic staging; tempered near-term growth for long-term value
Leadership/CFOQ2: CFO transition announced; search initiated CFO appointed: Indrajit Ponnambalam effective Dec 1, 2025 Strengthened finance leadership

Management Commentary

  • “We saw steady execution and progress in Q3, delivering our highest-ever quarterly revenue… Self-serve remains our growth engine… With the new Nextdoor live in market, we continue to test and optimize for stronger engagement, improved monetization, and a reenergized user base over the long-term.” — CEO Nirav Tolia .
  • “We will avoid chasing short-term metrics in favor of investing in durable, compounding growth initiatives… Transformation… is neither predictable nor immediate, but it represents the best path for us to unlock the next phase of growth.” — Prepared remarks .
  • On programmatic: “Programmatic generally complements direct-sold inventory and is additive… We expect that to pay dividends in the months and quarters to come.” — Q&A .

Q&A Highlights

  • Content strategy: Management emphasized need to “dramatically increase the amount of content” to deepen engagement; early signals show more high-quality content drives deeper usage .
  • New user (“cold start”) experience: Team plans specialized onboarding; not aggressive in acquisition until optimized, favoring long-term value creation over short-term metrics .
  • Programmatic integration: Yahoo DSP availability now complements direct; expected to unlock incremental advertiser budgets and complement mix .
  • Profitability trajectory: Reinforced path to Q4 positive adjusted EBITDA and FY26 full-year breakeven; revenue per employee up 21% YTD, $403M cash and no debt supports execution .

Estimates Context

  • Q3 beat vs consensus: Revenue $68.9M vs $66.5M estimate; EPS −$0.03 vs −$0.05 estimate. Q4 consensus sits at revenue ~$67.7M and EPS −$0.025; company guided above breakeven to adjusted EBITDA $3.5–$4.5M, implying upward pressure on profitability expectations . Values retrieved from S&P Global Market Intelligence.
  • Implications: Street models likely raise near-term profitability assumptions (Q4 adjusted EBITDA positive vs prior “breakeven”) and acknowledge sustained self-serve growth and programmatic tailwinds; however, user metric softness may temper top-of-funnel growth expectations in the near term .

Key Takeaways for Investors

  • Beat-and-raise quarter: Revenue and EPS beat; adjusted EBITDA turned positive with guidance for Q4 profitability — an inflection toward sustained non-GAAP profitability . Values retrieved from S&P Global Market Intelligence.
  • Self-serve strength: Mix ~60% and +33% YoY growth underpin operating leverage and margin improvement; a durable driver as performance optimizations scale .
  • Programmatic unlock: Completed integrations (e.g., Yahoo DSP) broaden demand access and should complement direct sales, aiding budget diversification and fill .
  • Engagement-quality over quantity: Intentional reduction in notifications and measured acquisition may limit near-term WAU but aims to deepen engagement and monetization over time — watch for content volume and recommendation ecosystem updates .
  • Liquidity and operating discipline: $403M cash, no debt, and rising revenue per employee provide flexibility to invest while advancing profitability targets .
  • Leadership adds credibility: New CFO appointment (Dec 1) brings scaled consumer tech finance experience; expect refined capital allocation and investor communication .
  • Trading setup: Near-term catalysts include programmatic ramp and Q4 positive adjusted EBITDA delivery; watch WAU trajectory and large advertiser spending recovery for top-line velocity .
Note: Values marked with * are retrieved from S&P Global Market Intelligence.