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What changed in Nextdoor Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Nextdoor Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+349 added−343 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-27)

Top changes in Nextdoor Holdings, Inc.'s 2024 10-K

349 paragraphs added · 343 removed · 248 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe are therefore subject to U.S. federal, state, local, and foreign laws and regulations regarding data privacy and the collection, storage, sharing, use, processing, disclosure and protection of personal information and other data from users, employees or business partners, including the European Union’s General Data Protection Regulation (“GDPR”), the United Kingdom’s General Data Protection Regulation (“UK GDPR”), Canada’s Personal Information Protection and Electronic Documents Act, Australia’s The Privacy Act 1988 and Australian Privacy Principles, the California Consumer Privacy Act (“CCPA”), along with similar privacy laws enacted in other U.S. states.
Biggest changeThese laws include, but are not limited to, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s General Data Protection Regulation (“UK GDPR”), Canada’s Personal Information Protection and Electronic Documents Act (“PIPEDA”), Australia’s Privacy Act 1988 and the Australian Privacy Principles (“APPs”), and the California Consumer Privacy Act (“CCPA”) along with similar privacy laws enacted in other U.S. states.
Our business may also be affected by the adoption of any new or existing laws or regulations or changes in laws or regulations that adversely affect the growth, popularity or use of the internet, or that significantly restrict or impose conditions on our ability to collect, store, augment, analyze, use and share data or increase consumer notice or consent requirements before a company can utilize cookies or other tracking technologies or that increase the liability of content platforms like us.
Our business may also be affected by the adoption of any new or existing laws or regulations or changes in laws or regulations that would adversely affect the growth, popularity or use of the internet; significantly restrict or impose conditions on our ability to collect, store, augment, analyze, use and share data; augment consumer notice or consent requirements before a company can utilize cookies or other tracking technologies; or increase the liability of content platforms like us.
However, each of these statutes is subject to uncertain or evolving judicial interpretation and regulatory and legislative amendments. For example, in the United States, laws such as the CDA, which have previously been interpreted to provide substantial protection to interactive computer service providers, have seen recent Supreme Court challenges and there have been legislative efforts to curtail the CDA’s protections.
However, each of these statutes is subject to uncertain or evolving judicial interpretation and regulatory and legislative amendments. For example, in the United States, laws such as the CDA, which have previously been interpreted to provide substantial protection to interactive computer service providers, have seen Supreme Court challenges and there have been legislative efforts to curtail the CDA’s protections.
The content of our websites and information that we may post on or provide to online and social media channels and information that can be accessed through our websites or these online and social media channels are not incorporated by reference into this Annual Report or in any other report or document we file with the SEC, and any references to our websites or these online and social media channels are intended to be inactive textual references only. 11 Table of Contents
The content of our websites and information that we may post on or provide to online and social media channels and information that can be accessed through our websites or these online and social media channels are not incorporated by reference into this Annual Report or in any other report or document we file with the SEC, and any references to our websites or these online and social media channels are intended to be inactive textual references only. 10 Table of Contents
Competition presents an ongoing threat to the success of our business .” Government Regulation We are subject to many U.S. federal and state and foreign laws, regulations, and industry standards that involve matters central to our business, including laws and regulations that involve data privacy and data protection, intellectual property (including copyright and patent laws), content regulation, rights of publicity, advertising, marketing, health and safety, competition, protection of minors, consumer protection, taxation, anti-bribery, anti-money laundering and corruption, telecommunications, AI and machine learning, and securities.
Competition presents an ongoing threat to the success of our business .” Government Regulation We are subject to many U.S. federal and state and foreign laws, regulations, and industry standards that involve matters central to our business, including laws and regulations that involve data privacy, security and protection, intellectual property (including copyright and patent laws), content regulation, rights of publicity, advertising, marketing, health and safety, competition, protection of minors, age verification, consumer protection, taxation, anti-bribery, anti-money laundering and corruption, telecommunications, AI and machine learning, and securities.
Further, the impact of these laws and regulations may disproportionately affect our business in comparison to our peers in the technology sector that have greater resources. Any failure on our part to comply with these laws and regulations may subject us to significant liabilities or penalties, or otherwise adversely affect our business, financial condition or operating results.
Further, the impact of these laws and regulations may disproportionately affect our business in comparison to our peers in the technology sector with greater resources. Any failure on our part to comply with these laws and regulations may subject us to significant liabilities or penalties, or otherwise adversely affect our business, financial condition or operating results.
As of December 31, 2023, we had 10 issued patents in the United States. We cannot assure you that any of our patent applications will result in the issuance of a patent or whether the examination process will require us to narrow our claims.
As of December 31, 2024, we had 10 issued patents in the United States. We cannot assure you that any of our patent applications will result in the issuance of a patent or whether the examination process will require us to narrow our claims.
Solely for convenience, our trademarks and tradenames referred to in this Annual Report appear without the ® and ™ symbols, but 10 Table of Contents those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor, to these trademarks and tradenames.
Solely for convenience, our trademarks and tradenames referred to in this Annual Report appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor, to these trademarks and tradenames.
To establish and protect our intellectual property, proprietary rights and brand, we rely on a combination of federal, state, and common-law rights in the United 2 Nextdoor Transparency Report, 2023. 7 Table of Contents States and the rights under the laws of other countries, patents, trademarks, copyrights, domain name, trade secrets, including know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure, and invention assignment agreements, and other contractual rights.
To establish and protect our intellectual property, proprietary rights and brand, we rely on a combination of federal, state, and common-law rights in the United States and the rights under the laws of other countries, patents, trademarks, copyrights, domain name, trade secrets, including know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure, and invention assignment agreements, and other contractual rights.
We compete with these companies to attract, engage, and retain users and to attract and retain advertisers. As we introduce new products, as our platform evolves, or as other companies introduce new products and services, we may become subject to additional competition in other countries.
As we introduce new products, as our platform evolves, or as other companies introduce new products and services, we may become subject to additional competition in other countries. We compete with other companies to attract, engage, and retain users and their time and attention.
For additional information, please see the section entitled “ Risk Factors — Risks Related to Intellectual Property .” Human Capital Our Culture and Core Values Community is at the heart of Nextdoor and our community of employees is our lifeblood.
For additional information, please see the section entitled “ Risk Factors — Risks Related to Intellectual Property .” Talent Management and Development Our Culture and Core Values Community is at the heart of Nextdoor and our community of employees is the heart of the company.
Additional benefits programs (which vary by country and region) include a 401(k) Plan with a company match, healthcare, vision, and dental insurance benefits, health savings and flexible spending accounts, flexible paid time off, parental leave, and other benefits tailored to the specific needs of our employees such as family forming, caregiving and mental health resources.
In addition to base salaries, equity awards, and sales commissions for certain employees, these programs (which vary by country and region) include 8 Table of Contents a 401(k) Plan with a company match, healthcare, vision, and dental insurance benefits, health savings and flexible spending accounts, flexible paid time off, and parental leave, and other benefits tailored to the specific needs of our employees such as family forming, caregiving and mental health resources.
In addition, various countries around the world have adopted legislation, including the Digital Services Act (the “DSA”) in the European Union, the Online Safety Act in Australia, and the Online Safety Bill in the United Kingdom, that may impose additional obligations or liability on us associated with content uploaded by users to our platform.
In addition, various countries around the world have adopted legislation, including the Digital Services Act (the “DSA”) in the European Union, the Online Safety Act 2021 in Australia, and the Online Safety Act in the United Kingdom, that may impose additional obligations or liability on us associated with content uploaded by users to our platform. 9 Table of Contents We collect, store, use, share, and otherwise process data, some of which contains personal information.
This Annual Report contains additional trade names, trademarks, and service marks of other companies that are the property of their respective owners. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
Congress, various state legislatures and foreign governments concerning content regulation and data protection that could affect us, These and other laws and regulations that may be enacted, or new interpretation of existing laws and regulations, may require us to modify our data processing practices and policies and to incur substantial costs in order to comply.
These and other laws and regulations that may be enacted, or new interpretations of existing laws and regulations, may require us to modify our data processing practices and content moderation policies and incur substantial costs in order to comply.
These laws and regulations are constantly evolving and may be interpreted, applied, created, or amended, in a manner that could harm our business. 9 Table of Contents We rely on a variety of statutory and common-law frameworks and defenses relevant to the content available on our service, including the Digital Millennium Copyright Act (the “DMCA”), the Communications Decency Act (“CDA”) and the fair-use doctrine in the United States, and the Electronic Commerce Directive in the European Union.
We rely on a variety of statutory and common-law frameworks and defenses relevant to the content available on the Nextdoor platform, including the Digital Millennium Copyright Act (the “DMCA”), the Communications Decency Act (“CDA”) and the fair-use doctrine in the United States, and the Electronic Commerce Directive in the European Union.
We also support and encourage our employees to give back to our communities by giving each employee “Volunteer Time Off” to dedicate to the causes that matter most to them. Competition We compete in almost every aspect of our business with companies that provide a variety of internet products, services, content, and online advertising.
We also support and encourage our employees to give back to our communities by giving each employee “Volunteer Time Off” to dedicate to the causes that matter most to them. Inclusion and Belonging We strive to create a dynamic, inclusive environment that supports and values employees with a wide range of experiences and perspectives.
Investors should not rely on any such information in deciding whether to purchase our Class A common stock. Nextdoor, the Nextdoor logo, and other registered or common law trade names, trademarks, or service marks of Nextdoor appearing in this Annual Report are the property of Nextdoor.
The information contained on, or that can be accessed through, our website is not incorporated by reference into, and is not a part of, this Annual Report. Investors should not rely on any such information in deciding whether to purchase our Class A common stock.
We live these core values through our approach to our people practices, summarized below. Employees As of December 31, 2023, we had 594 employees in the United States and in our international locations in Canada, the United Kingdom, the Netherlands, Ireland, France and Australia.
By living these principles, we empower our people to thrive and contribute to the success of Nextdoor. As of December 31, 2024, we had 546 employees in the United States and in our international locations in Canada, the United Kingdom, and France.
Our principal executive offices are located at 420 Taylor Street, San Francisco, California 94102 and our telephone number is (415) 344-0333. Our website address is https://www.nextdoor.com. The information contained on, or that can be accessed through, our website is not incorporated by reference into, and is not a part of, this Annual Report.
For additional information, see the section entitled “ Risk Factors — Risks Related to Legal and Regulatory Matters .” Corporate Information Our principal executive offices are located at 420 Taylor Street, San Francisco, California 94102 and our telephone number is (415) 344-0333. Our website address is https://www.nextdoor.com.
Nextdoor is a high-utility platform that connects neighbors with organizations and other local resources. Neighbors can discover and interact with local businesses, leave recommendations, and follow their Faves on the platform. Neighbors can utilize a truly local marketplace, For Sale & Free, to buy, sell, or give away items, and offer services such as dog walking.
Our Search function bridges neighbors with businesses and resources, enabling users to discover local services, leave recommendations, and follow their favorite businesses, which we call Faves. With For Sale & Free neighbors can buy, sell, or donate items or offer services like dog walking.
There are also a number of legislative proposals recently enacted or pending before the U.S.
There are also a number of legislative proposals pending before the U.S. Congress, various state legislatures and foreign governments concerning content regulation and data protection that could affect us.
Volunteer community moderators are active neighbors who have access to specialized tools and resources they can utilize as they help enforce our Community Guidelines. While local community moderators review most types of guideline-violating content, reports of certain types of harmful content (e.g., misinformation, discrimination) are handled by Nextdoor operations staff to ensure our standards and policies are applied consistently.
Equipped with specialized tools, these active neighbors help enforce Community Guidelines in their neighborhoods. Reports of specific types of content, such as misinformation or discriminatory remarks, are handled by Nextdoor’s operations staff to ensure consistent enforcement of our standards and policies.
The programs include performance feedback and promotion cycles and recognition through our “Nextdoor Values Awards”. Our learning and development experiences focus on onboarding new hires as well as offering resources focused on skills development and compliance training. We are committed to making Nextdoor the best place to work by engaging with, and listening to, our community of employees.
We facilitate company-wide performance feedback and promotion cycles, along with employee recognition initiatives like our “Nextdoor Values Awards”. Our learning and development programs are designed to onboard new hires effectively and provide ongoing opportunities for skills development and compliance training.
Our Advertising Solutions Nextdoor offers advertising solutions designed to generate tangible value for businesses seeking to expand their reach and drive sales with unique local context that allows advertisers of all sizes to reach the right neighbor, at the right time, with the right message.
Our Advertising Solutions Nextdoor offers a comprehensive suite of advertising solutions designed to deliver exceptional value for businesses of all sizes. Our Nextdoor Ads Platform empowers businesses to connect with their local communities, build brand awareness, drive customer engagement, and generate measurable results.
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Item 1. Business Overview At Nextdoor, our purpose is to cultivate a kinder world where everyone has a neighborhood they can rely on. Neighbors around the world turn to Nextdoor to receive trusted information, give and get help, get things done, and build real world connections with those nearby — neighbors, businesses, and public services.
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Item 1. Business Overview Nextdoor is the essential neighborhood network. Neighbors, public agencies and businesses use Nextdoor to connect around local information that matters in more than 340,000 neighborhoods globally, across 11 countries. The Nextdoor platform fosters discussion focused on real-world utility and discovery, enables instant distribution of timely local information, and ensures trust and authenticity.
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By fostering these connections, both online and in the real world, Nextdoor builds stronger, more vibrant, and more resilient neighborhoods. As of December 31, 2023, Nextdoor was in more than 325,000 neighborhoods around the world and in 1 in 3 households in the United States.
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This unique combination drives genuine, high-intent engagement, and helps neighborhoods thrive both online and in the real world. Through innovative technology, a focus on relevant content, and a proprietary advertising platform, Nextdoor helps create vibrant communities while empowering businesses of all sizes to reach highly engaged audiences.
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As of the end of the fourth quarter of 2023, Nextdoor had 88 million global Verified Neighbors. 1 Our Platform The Nextdoor platform enables neighbors and organizations to build an engaged community of trusted neighbors, businesses and public services that can be depended on to exchange valuable information, goods, and services.
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As of December 31, 2024, Nextdoor had more than 100 million Verified Neighbors, 1 46 million Weekly Active Users (WAU) and reached 1 in 3 households in the United States. Our Platform and Our Users Nextdoor’s platform is used by neighbors, businesses, and public agencies in 11 different countries to foster stronger, more engaged communities.
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Neighbors use Nextdoor to engage with and stay up to date on the communities that matter to them. They can find posts, photos, and discussions in the Feed, discover nearby neighbors, Groups, businesses, events, and items through a nativized maps surface in the Discover tab, and search for specific content and organizations through our Search feature.
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Neighbors use Nextdoor to stay informed on local news, events, and relevant discussions, discover and support local businesses, and exchange goods and services. Businesses leverage Nextdoor to connect with these engaged communities through Business Pages and targeted advertising, while public agencies rely on the platform to share real-time updates, critical alerts, and pertinent information.
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In addition, Nextdoor is where neighbors can receive critical, real-time information from trusted officials. Public agencies, including government entities and service providers, turn to Nextdoor to directly, quickly, and easily reach neighbors in their community with relevant local information and alerts.
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On Nextdoor, neighbors, business, and public agencies engage through various features designed to strengthen local connections. The Feed delivers a dynamic, personalized stream of local posts, photos, discussions, and community updates tailored to each user.
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Our unique local data set includes event information, safety reports, recommendations, reviews, and discussions, as well as demographic data, interests, and behaviors of local residents. This detailed data contribute to the formation of the unique local knowledge graph that Nextdoor owns.
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Underpinning the Nextdoor platform is a rich local data set, including event details, recommendations, and insights into the interests and behaviors of neighbors and neighborhoods. This data powers Nextdoor’s unique local knowledge graph, enabling businesses to craft targeted advertising strategies while delivering relevant and engaging content to neighbors.
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Businesses on Nextdoor can use our real-time local data to devise advertising strategies and ensure their messages reach the most relevant and receptive audience in their immediate locality. Other artificial intelligence (“AI”) and machine learning (“ML”) applications allow us to improve notifications, drive positive interactions, optimize ad delivery, drive growth of comments and replies, and analyze data.
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With continually improving artificial intelligence (AI) and machine learning (ML) capabilities, Nextdoor improves the relevance and timeliness of notifications, provides proximate and personalized local content, optimizes ad creation and delivery, and fosters meaningful community engagement. By seamlessly connecting neighbors, businesses, and public agencies, Nextdoor strengthens the social fabric of communities and brings local connections to life.
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Our platform enables advertisers to achieve measurable outcomes that help advertisers build brand awareness, drive consideration and engagement, and generate sales. Ads can be leveraged on multiple surfaces on and off the platform, including Feed, Search, For Sale & Free, Right Hand Rail, and email.
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In 2024, we announced our NEXT initiative, a longer-term effort to transform our product into an essential local application that can enrich the lives of neighbors everywhere. NEXT aims to keep users informed through better local content, safe through timely and relevant alerts, and connected through the sharing of recommendations and collective wisdom.
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We are continually improving and building upon our library of ad formats, including sponsored posts and lead generation, which feature combinations of text (static or dynamic), images (including static and animated), and URL links, and the ways in which advertisers can purchase and deliver ads across our platform.
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To help businesses achieve these goals, we provide a wide range of key features and benefits: • Hyperlocal Targeting : Powered by our first-party data, Nextdoor’s unique neighborhood-level targeting capabilities enable advertisers to reach the right customers at the right time, ensuring their campaigns reach the most relevant audience and drive maximum impact. • Diverse Ad Formats : We offer a variety of engaging ad formats, including sponsored posts, lead generation forms, native display ads, and video ads to cater to different marketing objectives and creative strategies. 1 Verified Neighbors are individuals who have joined Nextdoor and completed the verification process for their account. 6 Table of Contents • Brand Safety and Trust : Nextdoor maintains a safe and trustworthy environment for both users and advertisers.
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Ad Auction Ads on the Nextdoor platform primarily compete via an auction-based system. Our auction system selects the best ad for each available ad impression based on the likelihood of a desired action occurring and how much that action is worth to advertisers.
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We have implemented strict brand safety measures and partner with independent third-party verification providers to ensure brand suitability and protect against fraud. Ad Auction and Delivery Nextdoor’s ad auction system prioritizes ad relevance, quality, and user experience. Our algorithms analyze various factors, including user interests, demographics and historical behavior, to select the most appropriate ads for each individual user.
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The likelihood of the action occurring depends on a variety of factors, such as ad relevance and creative quality. Measurement & Targeting 1 Verified Neighbors are individuals who have joined Nextdoor and completed the verification process for their account. 6 Table of Contents Delivering and demonstrating value for our advertisers is a key focus for Nextdoor.
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This ensures that ads are engaging, informative, and enhance the overall user experience. Measurement and Attribution Our comprehensive measurement and attribution tools give advertisers the insight they need to assess campaign effectiveness. With conversion tracking, advertisers can measure the impact of their ads on key performance indicators, such as website visits, lead generation, and online sales.
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We offer a variety of measurement solutions, including a Conversion API, that are mapped to advertisers’ goals and objectives and validate Nextdoor’s performance. Nextdoor offers both brand safety controls as well as brand safety measurement via independent third-party partners. Utilizing our neighborhood graph, advertisers can effectively target and reach multiple high value audiences, such as homeowners, parents, and recent movers.
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We also offer advanced attribution modeling to help advertisers understand the customer journey and optimize their marketing spend. Go-to-Market Approach Nextdoor offers tailored solutions designed to meet the diverse needs and objectives of advertisers. Our go-to-market approach combines the power of our self-serve ads platform with the expertise of a dedicated global sales team.
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Nextdoor’s neighborhood graph is built off high quality signals shared directly by our neighbors and partners. These signals are integrated using proprietary machine learning models that undergo continuous refinement and optimization to ensure scalability and accuracy. Go-to-Market Approach Nextdoor offers diverse marketing solutions for advertisers depending on size and goals.
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This hybrid approach allows us to cater to businesses of all sizes, from small local advertisers to large global brands. Our self-serve platform empowers advertisers to independently manage campaigns with ease, offering tools for targeting, customization, and performance tracking.
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Our go-to-market approach combines the utilization of our self-service ads platform and support of a dedicated global sales force for managed campaigns. Our sales team is strategically positioned to attract and retain advertisers across all products, and provides support through all stages of the marketing cycle, including campaign planning, optimization, and performance analytics.
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For advertisers with more complex needs, our global sales force delivers personalized support throughout the marketing lifecycle, including campaign planning, optimization, and performance analysis. Strategically positioned across markets, our sales team focuses on attracting and retaining advertisers while driving measurable outcomes across all ad products. A Community First Approach Nextdoor continually innovates to facilitate productive neighborhood conversations.
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A Kind Platform Nextdoor is a leading innovator in creating a welcoming platform that facilitates healthy neighborhood connections and conversations. We set clear Community Guidelines and use a combination of people, including nearly 200,000 2 volunteer community moderators, and technology to encourage kind conversations and promote neighborhood vitality.
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We establish clear Community Guidelines, and use a combination of human moderators and advanced technology to cultivate civility and strengthen neighborhood ties. To ensure authenticity, Nextdoor requires users to sign up using their real names and addresses, creating a network of real people. Businesses undergo a similar verification process to establish trust.
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From day one, we’ve required neighbors to sign up with their real names and addresses to ensure neighborhoods are made up of real people, nearby, and we have improved on similar verification procedures for businesses.
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Upon joining, new users accept our Neighbor Pledge, which introduces Community Guidelines and reinforces personal accountability. As neighbors engage with the platform, a blend of human moderators and AI-driven solutions helps maintain a positive and productive environment. Tools like the Kindness Reminder and Constructive Conversations Reminders encourage respectful dialogue by analyzing tone and suggesting constructive edits.
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We require all new neighbors to accept our Neighbor Pledge upon joining, in order to introduce our Community Guidelines and provide personal accountability for interactions on the platform. Further, neighbors are alerted when a new neighbor joins so they can reach out with a message of connection and belonging and establish rapport.
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Generative AI tools further empower neighbors by helping them draft posts that inspire positive community engagement or revise comments on posts to align with Community Guidelines. Local context is integral to our approach, which is why volunteer community reviewers are a core component of our moderation framework.
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As neighbors interact through the platform, we use a combination of human review and machine learning and predictive technology solutions, like our Kindness Reminder and Constructive Conversations Reminder, launched in 2022, to enforce our Community Guidelines, support civility, and cultivate kindness.
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Technology and Innovation Our continued investments in technology are dedicated to enhancing the products we offer to neighbors, business, and public agencies. At the core of our strategy is the use of AI and machine learning to deliver increasingly valuable experiences to neighbors and improving reach and performance to advertisers.
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In 2023, we gave neighbors the ability to use generative AI to help write posts that are more likely to drive positive community engagement, and integrated AI into the Kindness Remainder to suggest more constructive revisions for comments that may violate the Community Guidelines.
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By leveraging our unique data set, we have developed AI-powered features that personalize content distribution, increasing relevance and making posts more engaging and useful. We are also further investing in our proprietary ad platform to enhance advertising solutions for businesses of all sizes.
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These developments enable us to better analyze tone and context, and help authors rephrase posts and comments to receive a better response from their community. We have always believed it is important to incorporate local context into moderation decisions, which is why we have incorporated volunteer community moderators into our moderation program, alongside Nextdoor operations staff.
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This supports our goals of delivering greater advertiser value, reducing advertiser effort, and empowering businesses to thrive on Nextdoor. By prioritizing usefulness, trust, innovation, and customer value, Nextdoor is transforming the way people and businesses connect with neighborhoods worldwide. 7 Table of Contents Intellectual Property Our intellectual property and core technological innovations are integral components of our business.
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Technology Our investments in technology are consistently focused on creating and improving products for neighbors and organizations in the countries in which we operate around the world. We have built generative AI features that personalize the distribution of content and make posts more engaging and kind through the use of Post Assistant.
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We are committed to attracting and retaining top talent by fostering an environment that promotes career growth and development. Our people practices are anchored in three core values: • Build for community; • Raise the bar; and • Act like an owner. We support these values and our workforce with competitive compensation, comprehensive benefits, and initiatives.
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We continue to use machine-learning and proprietary technology to power our product strategy of building an engaged community. We also continue to invest in our proprietary ad platform to expand and improve our advertising solutions for businesses of all sizes.
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Talent Acquisition, Development and Retention At Nextdoor, we prioritize the acquisition, development, and retention of talent at all levels of the organization. Our hiring managers, in partnership with the Talent Acquisition team, focus on recruiting the best people with a long-term vision for success.
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In support of our objectives of delivering advertiser value, reducing advertising effort, and enabling businesses to thrive on Nextdoor, our development roadmap is focused on unifying our self-service offerings, leveraging machine learning and AI technologies to improve ad targeting, and enhancing measurement solutions to better inform our value proposition.
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Each new hire undergoes a comprehensive, standardized process with a strong emphasis on behavioral-based interviewing, ensuring we select individuals who align with our values and goals. Through our People Business Partner team, we invest in continuous development of our employees, offering resources that support career growth.
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Intellectual Property Our intellectual property and core technological innovations are integral components of our business.
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To foster an environment where employees feel engaged, valued, and heard, we actively seek and respond to their feedback through surveys, one-on-one interactions, and “All Hands” meetings that bring the entire company together.
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Our employees have a wide range of experiences and perspectives, which fuel our purpose to cultivate a kinder world where everyone has a neighborhood they can rely on. Our company core values are: • Earn trust everyday; • Invest in community; • Customer obsessed; • Think big; • Experiment and learn quickly; and • Act like an owner.
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By maintaining open lines of communication, we stay attuned to our employees’ needs, ensuring we continue to evolve as an employer of choice for both current and future team members. Compensation, Benefits and Perks We provide employees with competitive compensation packages designed to meet the diverse needs of our employees.
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Diversity, Equity, Inclusion and Belonging The principles of Diversity, Equity, Inclusion and Belonging (“DEIB ” ) are woven into the very fabric of our organization and guide how we recruit, retain, and develop our talent. Our commitment to DEIB begins at the top and is underscored by the importance of making diverse perspectives a business imperative.
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Our Employee Resource Groups help foster a sense of community, strengthen connections, and contribute to a workplace where every employee feels valued. People Operations Our ongoing investments in technology platforms continue to help automate and customize the employee journey.
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This is reflected in the racially diverse and gendered-balanced leaders that make up our Board of Directors, management team, and employees, and who all share in our passion for contributing to and effecting change in communities globally. We thrive on creating a dynamic, inclusive environment that aims to support and value our employees, and contributes to our award-winning company culture.
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Our People Operations team plays a key role in managing every stage of the employee experience, from onboarding to offboarding, and supporting the hybrid work environment that blends in-person and remote collaboration.
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We have active and engaged Employee Resource Groups (“ERG”) that are aligned around dimensions of diversity, such as gender, ethnicity, religion, sexual orientation and other shared attributes, which we believe help foster a sense of community, and a diverse and inclusive workplace. We have equipped our ERG leaders with tools and training to engage in courageous conversations with their communities.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur operating results in any given quarter can be influenced by numerous factors, many of which are unpredictable or are outside of our control, including, but not limited to: • our ability to generate revenues from our platform; • our ability to acquire, retain, and grow our neighbors and neighbor engagement on our platform; • ability to attract and retain advertisers; • ability to recognize revenue or collect payments from advertisers in a particular period; • fluctuations in spending by our advertisers due to macroeconomic conditions, seasonality, episodic regional or global events, or other factors; • changes in domestic and global business and macroeconomic conditions, including actual or perceived instability in the global banking system, potential recession, uncertainty with respect to the federal budget and debt ceiling and a potential temporary federal government shutdown related thereto, local and national elections, the continued rise of inflation, changing interest rates, and the war in Ukraine and the Israel-Hamas war; • fluctuations in internet usage generally; • the number, prominence, size, format, quality and relevancy of advertisements shown to neighbors; • the success of technologies designed to block the display of advertisements; • changes to third-party policies or applications that limit our ability to deliver, target, or measure the effectiveness of advertising, including changes by mobile operating system and browser providers such as Apple and Google; • the pricing of our advertisements; • the timing, cost of and mix of new and existing sales and marketing and promotional efforts; 26 Table of Contents • the availability of our platform and app on mobile devices and other third-party platforms; • changes to our platform or the development and introduction of new products or services by our competitors; • changes in advertising industry association rules and standards that limit our ability to deliver, target or measure the effectiveness of advertising, such as the Network Advertising Initiative, and Interactive Advertising Bureau; • neighbor behavior or platform changes that may reduce traffic to features of the platform that we monetize; • system failures, disruptions, breaches of security or privacy, whether on our platform or on those of third parties, and the costs associated with any such breaches and remediation; • negative publicity associated with our platform, including as a result of content on our platform, security breaches and neighbor privacy concerns that may result in advertisers reducing or eliminating their spend with us; • health epidemics, such as the COVID-19 pandemic, influenza, and other highly communicable diseases or viruses; • the timing of incurring additional expenses, such as increases in sales and marketing or research and development; • adverse litigation judgments, settlements, or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to privacy and cybersecurity, or actions by governments or regulators, including fines, orders, or consent decrees; and • changes in U.S. generally accepted accounting principles.
Biggest changeOur operating results in any given quarter can be influenced by numerous factors, many of which are unpredictable or are outside of our control, including, but not limited to: • our ability to generate revenues from our platform; • our ability to acquire, retain, and grow our neighbors and neighbor engagement on our platform; • ability to attract and retain advertisers; • ability to recognize revenue or collect payments from advertisers in a particular period; • fluctuations in spending by our advertisers due to macroeconomic conditions, seasonality, episodic regional or global events, or other factors; • changes in domestic and global business and macroeconomic conditions, including the implementation of tariffs by the United States, China, or other governments, actual or perceived instability in the global banking system, potential recession, local and national elections, inflation, changing interest rates, and the wars in Ukraine and the Middle East; • fluctuations in internet usage generally; • the number, prominence, size, format, quality and relevancy of advertisements shown to neighbors; • the success of technologies designed to block the display of advertisements; • changes to third-party policies or applications that limit our ability to deliver, target, or measure the effectiveness of advertising, including changes by mobile operating system and browser providers such as Apple and Google; 25 Table of Contents • the pricing of our advertisements; • the timing, cost of and mix of new and existing sales and marketing and promotional efforts; • the availability of our platform and app on mobile devices and other third-party platforms; • changes to our platform or the development and introduction of new products or services by our competitors; • changes in advertising industry association rules and standards that limit our ability to deliver, target or measure the effectiveness of advertising, such as the Network Advertising Initiative, and Interactive Advertising Bureau; • neighbor behavior or platform changes that may reduce traffic to features of the platform that we monetize; • system failures, disruptions, breaches of security or privacy, whether on our platform or on those of third parties, and the costs associated with any such breaches and remediation; • negative publicity associated with our platform, including as a result of content on our platform, security breaches and neighbor privacy concerns that may result in advertisers reducing or eliminating their spend with us; • health epidemics, such as the COVID-19 pandemic, influenza, and other highly communicable diseases or viruses; • the use of our cash, cash equivalents, and marketable securities, including to repurchase shares of our outstanding Class A common stock or to make acquisitions or investments; • the timing of incurring additional expenses, such as increases in sales and marketing or research and development; • adverse litigation judgments, settlements, or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to privacy and cybersecurity, or actions by governments or regulators, including fines, orders, or consent decrees; and • changes in U.S. generally accepted accounting principles.
Our business depends largely on our ability to attract, and retain and assimilate talented employees, including senior management. If we lose the services of or fail to successfully assimilate highly skilled personnel, key employees or members of our senior management team, we may not be able to execute on our business strategy.
Our business depends largely on our ability to attract, retain, and assimilate talented employees, including senior management. If we lose the services of or fail to successfully assimilate highly skilled personnel, key employees or members of our senior management team, we may not be able to execute on our business strategy.
Even though we communicate with lawmakers and regulators in countries and regions in which we conduct business, and despite having a dedicated policy team to monitor legal and regulatory developments, any failure or perceived failure of compliance on our part to comply with the laws and regulations may subject us to significant liabilities or penalties, or otherwise adversely affect our business, financial condition or operating results.
Even though we communicate with lawmakers and regulators in countries and regions in which we conduct business, and despite having a dedicated team to monitor legal and regulatory developments, any failure or perceived failure of compliance on our part to comply with the laws and regulations may subject us to significant liabilities or penalties, or otherwise adversely affect our business, financial condition or operating results.
Though we recently completed a Section 382 study that supports that our use of NOLs will not be subject to limitation, it is possible that the limitation could still apply. We may experience ownership change(s) in the future as a result of subsequent shifts in our stock ownership, some of which may be outside our control.
Though we recently completed a Section 382 study that supports that our use of NOLs will not be subject to limitation, it is possible that the limitation could still apply. In addition, we may experience ownership change(s) in the future as a result of subsequent shifts in our stock ownership, some of which may be outside our control.
We may have greater than anticipated tax liabilities, which could harm our business, revenue and financial results. We operate in a number of tax jurisdictions globally, including in the United States at the federal, state and local levels, and in many foreign countries, and plan to continue to expand the scale of our operations in the future.
We may have greater than anticipated tax liabilities, which could harm our business, revenue and financial results. We operate in a number of tax jurisdictions globally, including in the United States at the federal, state and local levels, and in many foreign countries, and may continue to expand the scale of our operations in the future.
Compliance with these laws and any newly enacted privacy and data security laws or regulations may be challenging and cost- and time-intensive, and may require us to modify our data processing practices and policies and to incur substantial costs and potential liability in an effort to comply with such legislation.
Compliance with these laws and any newly enacted privacy, security, and data protection laws or regulations may be challenging and cost- and time-intensive, and may require us to modify our data processing practices and policies and to incur substantial costs and potential liability in an effort to comply with such legislation.
There are many factors that could negatively impact our ability to grow, retain and engage current and prospective neighbors, including but not limited to: • neighbors increasing their engagement with competitors’ platforms, products or services instead of, or more frequently than, our platform; • changes in the amount of time neighbors spend across all applications and platforms, including our platform; • failing to introduce platform enhancements that neighbors find engaging or if we introduce new features, terms, policies or procedures, or make changes to our platform, that are not favorably received by current or prospective neighbors; • technical or other problems frustrating the neighbor experience, such as problems that prevent us from delivering our service in a fast and reliable manner; • neighbors having difficulty installing, updating or otherwise accessing the Nextdoor platform on mobile devices through the app or web browsers; • neighbor behavior on the Nextdoor platform changing, including a decrease in the quality and frequency of content shares on the platform; • decreases in neighbor or advertiser sentiment due to questions about the quality or usefulness of our platform, concerns about the nature of content made available on the platform, concerns related to privacy, safety, security, well-being or other factors; • changes mandated by legislation, government and regulatory authorities, or litigation that adversely impact our platform or neighbors; • third parties preventing their content from being displayed on the Nextdoor platform; • changes we may make to how we promote different features on our platform; • initiatives designed to attract and retain neighbors and engagement are unsuccessful or discontinued, whether as a result of actions by us, third parties, or otherwise; • we, or other partners and companies in the industry are the subject of adverse media reports or other negative publicity; • we are unable to combat spam, harassment, cyberbullying or other hostile, inappropriate, abusive or offensive content or usage on our platform; or • we cannot preserve and enhance our brand and reputation as a trusted neighborhood networking community.
There are many factors that could negatively impact our ability to grow, retain and engage current and prospective neighbors, including but not limited to: • neighbors increasing their engagement with competitors’ platforms, products or services instead of, or more frequently than, our platform; • changes in the amount of time neighbors spend across all applications and platforms, including our platform; • failing to introduce platform enhancements that neighbors find engaging or if we introduce new features, terms, policies or procedures, or make changes to our platform, including changes we are implementing with our NEXT initiative, that are not favorably received by current or prospective neighbors; • technical or other problems frustrating the neighbor experience, such as problems that prevent us from delivering our service in a fast and reliable manner; • neighbors having difficulty installing, updating or otherwise accessing the Nextdoor platform on mobile devices through the app or web browsers; • neighbor behavior on the Nextdoor platform changing, including a decrease in the quality and frequency of content shares on the platform; • decreases in neighbor or advertiser sentiment due to questions about the quality or usefulness of our platform, concerns about the nature of content made available on the platform, concerns related to privacy, safety, security, well-being or other factors; • changes mandated by legislation, government and regulatory authorities, or litigation that adversely impact our platform or neighbors; • failing to obtain or attract engaging third-party content; • third parties preventing their content from being displayed on the Nextdoor platform; • changes we may make to how we promote different features on our platform; • initiatives designed to attract and retain neighbors and engagement are unsuccessful or discontinued, whether as a result of actions by us, third parties, or otherwise; • we, or other partners and companies in the industry are the subject of adverse media reports or other negative publicity; • we are unable to combat spam, harassment, cyberbullying or other hostile, inappropriate, abusive or offensive content or usage on our platform; or • we cannot preserve and enhance our brand and reputation as a trusted neighborhood networking community.
Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand users.
Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand neighbors.
If our neighbor growth rate slows or reverses, our financial performance will be adversely impacted unless we can increase our engagement with our existing neighbors and our monetization efforts to offset any such reduction or decrease in neighborhood growth rate. 14 Table of Contents If current and potential neighbors do not perceive their experience with the Nextdoor platform to be useful, the content generated on the platform to be valuable or relevant or the social connections with fellow neighbors to be worthwhile, we may not be able to attract new neighbors, retain existing neighbors or maintain or increase the frequency and duration of their engagement on our platform.
If our neighbor growth rate slows or reverses, our financial performance will be adversely impacted unless we can increase our engagement with our existing neighbors and our monetization efforts to offset any such reduction or decrease in neighborhood growth rate. 13 Table of Contents If current and potential neighbors do not perceive their experience with the Nextdoor platform to be useful, the content generated on the platform to be valuable or relevant or the social connections with fellow neighbors to be worthwhile, we may not be able to attract new neighbors, retain existing neighbors or maintain or increase the frequency and duration of their engagement on our platform.
We are currently involved in, and may in the future be involved in, actual and threatened legal proceedings, claims, investigations and government inquiries arising in the ordinary course of our business, including intellectual property, data privacy, cybersecurity, privacy and other torts, illegal or objectionable content, consumer protection, securities, stockholder derivative claims, employment, governance, workplace culture, contractual rights, civil rights infringement, false or misleading advertising, or other legal claims relating to content or information that is provided to us or published or made available on our platform.
We are currently involved in, and may in the future be involved in, actual and threatened legal proceedings, claims, investigations and government inquiries arising in the ordinary course of our business, including intellectual property, data privacy, cybersecurity, our use of AI, privacy and other torts, illegal or objectionable content, consumer protection, securities, stockholder derivative claims, employment, governance, workplace culture, contractual rights, civil rights infringement, false or misleading advertising, or other legal claims relating to content or information that is provided to us or published or made available on our platform.
If these third parties fail to implement adequate data-security practices or fail to comply with their contractual obligations and/or, where applicable, our terms and policies, neighbor data may be improperly accessed, used or disclosed.
If these third parties fail to implement adequate data-security practices or fail to comply with their contractual obligations and/or, where applicable, our applicable terms and policies, our data may be improperly accessed, used or disclosed.
California also recently enacted the Voluntary Carbon Market Disclosures Act, which requires companies that operate within the state to make certain climate-related claims and to provide enhanced disclosures around the achievement of such claims.
California also enacted the Voluntary Carbon Market Disclosures Act, which requires companies that operate within the state to make certain climate-related claims and to provide enhanced disclosures around the achievement of such claims.
We believe that our ability to compete depends upon many factors both within and beyond our control, including: • the popularity, usefulness, ease of use, performance, and reliability of our platform compared to our competitors’ products; • the size and composition of our neighbor base; • the engagement of neighbors with our platform and competing products; • first- and third-party data available to us relative to our competitors; • our ability to attract and retain advertisers who use our free or paid advertisements services; • the timing and market acceptance of developments and enhancements to our platform or our competitors’ products; • our safety and security efforts and our ability to protect neighbor data and to provide neighbors with control over their data; • our ability to distribute our platform to new and existing neighbors; • our ability to effectively monetize our platform; • the successful implementation of platform changes, such as the migration to our proprietary ad server and introduction of AI technologies into our platform; • the frequency, size, format, quality, and relative prominence of the advertisements displayed by us or our competitors; • customer service and support efforts; • marketing and selling efforts, including our ability to measure the effectiveness of our advertisements and to provide advertisers with a compelling return on their investments; • our ability to establish and maintain publisher interest in integrating their content with our platform; 16 Table of Contents • changes mandated by legislation, regulatory authorities, or litigation, some of which may have a disproportionate effect on us; • acquisitions or consolidation within our industry, which may result in more formidable competitors; • our ability to attract, retain, and motivate talented employees, particularly software engineers, designers, and managers; • our ability to cost-effectively manage and grow our operations; and • our reputation and brand strength relative to those of our competitors.
We believe that our ability to compete depends upon many factors both within and beyond our control, including: • the popularity, usefulness, ease of use, performance, and reliability of our platform compared to our competitors’ products; • the size and composition of our neighbor base; • the engagement of neighbors with our platform and competing products; • first- and third-party data available to us relative to our competitors; • our ability to attract and retain advertisers who use our free or paid advertisements services; • the timing and market acceptance of developments and enhancements to our platform or our competitors’ products; • our safety and security efforts and our ability to protect neighbor data and to provide neighbors with control over their data; • our ability to distribute our platform to new and existing neighbors; • our ability to effectively monetize our platform; • the successful implementation of platform changes, such as the migration to our proprietary ad server and introduction of AI technologies into our platform, and our NEXT initiative; • the frequency, size, format, quality, and relative prominence of the advertisements displayed by us or our competitors; 15 Table of Contents • customer service and support efforts; • marketing and selling efforts, including our ability to measure the effectiveness of our advertisements and to provide advertisers with a compelling return on their investments; • our ability to establish and maintain publisher interest in integrating their content with our platform; • changes mandated by legislation, regulatory authorities, or litigation, some of which may have a disproportionate effect on us; • acquisitions or consolidation within our industry, which may result in more formidable competitors; • our ability to attract, retain, and motivate talented employees, particularly software engineers, designers, and product managers; • our ability to cost-effectively manage and grow our operations; and • our reputation and brand strength relative to those of our competitors.
In Australia, we are also subject to, among other laws, Australia’s “Privacy Act 1988” and Australian Privacy Principles (“APPs”), which require us to, among other things: (a) establish a governance framework for managing privacy and data protection; (b) give individuals the option of not identifying themselves or using a pseudonym (unless certain exceptions apply); (c) destroy or de-identify unsolicited personal information that was not obtained for a purpose reasonably necessary or directly related to our business activities; and (d) not transfer or disclose personal information to a party outside of Australia unless consent is obtained, the destination country has substantially similar privacy protections to Australia, or the overseas recipient contractually agrees to comply with the APPs.
In Australia, we are also subject to, among other laws, Australia’s Privacy Act 1988 and the Australian Privacy Principles (“APPs”), which require us to, among other things: (a) establish a governance framework for managing privacy and data protection; (b) give individuals the option of not identifying themselves or using a pseudonym (unless certain exceptions apply); (c) destroy or de-identify unsolicited personal information that was not obtained for a purpose reasonably necessary or directly related to our business activities; and (d) not transfer or disclose personal information to a party outside of Australia unless consent is obtained, the destination country has substantially similar privacy protections to Australia, or the overseas recipient contractually agrees to comply with the APPs.
As a public company, we have and will continue to, among other things: • prepare and distribute periodic public reports and other stockholder communications in compliance with our obligations under the federal securities laws; • create or expand the roles and duties of our Board of Directors and committees of the Board of Directors; • institute more comprehensive financial reporting and disclosure compliance functions; and • establish new and enhance existing internal policies, including those relating to disclosure controls and procedures.
As a public company, we have and will continue to, among other things: • prepare and distribute periodic public reports and other stockholder communications in compliance with our obligations under the federal securities laws; • create or expand the roles and duties of our Board of Directors and committees of the Board of Directors; • institute and maintain comprehensive financial reporting and disclosure compliance functions; and • establish new and enhance existing internal policies, including those relating to disclosure controls and procedures.
The regulatory framework for privacy, information security, data protection and processing worldwide and interpretations of existing laws and regulations is likely to continue to be uncertain and current or future legislation or regulations in the United States and other jurisdictions, or new interpretations of existing laws and regulations, could significantly restrict or impose conditions on our ability to process data and increase notice or consent requirements before we can utilize advertising technologies.
The regulatory framework for data privacy, security, and protection worldwide and interpretations of existing laws and regulations is likely to continue to be uncertain and current or future legislation or regulations in the United States and other jurisdictions, or new interpretations of existing laws and regulations, could significantly restrict or impose conditions on our ability to process data and increase notice or consent requirements before we can utilize advertising technologies.
In the United States, we are subject to numerous federal, state and local data privacy and security laws and regulations governing the processing of information about individuals.
In the United States, we are subject to numerous federal, state and local data privacy, security, and protection laws and regulations governing the processing of information about individuals.
Similar occurrences in the future may impair our ability to maintain or increase the quantity or quality of advertisements shown to neighbors and adversely affect our business, operating results, and financial condition. 13 Table of Contents Our ability to attract and retain advertisers depends on our ability to collect and use data and develop products to enable us to effectively deliver and accurately measure advertisements on the Nextdoor platform.
Similar occurrences in the future may impair our ability to maintain or increase the quantity or quality of advertisements shown to neighbors and adversely affect our business, operating results, and financial condition. 12 Table of Contents Our ability to attract and retain advertisers depends on our ability to collect and use data and develop products to enable us to effectively deliver and accurately measure advertisements on the Nextdoor platform.
We collect, store and otherwise process personal data relating to a number of individuals such as our neighbors, employees and partners, including, but not limited to, neighbor contact details, network details, and location data. The evolution of technology systems introduces unknown and complex security risks that can be unpredictable and difficult to defend against.
We collect, store and otherwise process personal data relating to a significant number of individuals such as our neighbors, employees and partners, including, but not limited to, neighbor contact details, network details, and location data. The evolution of information technology systems introduces unknown and complex security risks that can be unpredictable and difficult to defend against.
On May 31, 2022, our Board of Directors authorized and approved a share repurchase program (the “Share Repurchase Program”) pursuant to which we may repurchase up to $100.0 million in aggregate of shares of our Class A common stock, with the authorization to expire on June 30, 2024, or such shorter period if $100.0 million in aggregate of shares of our Class A common stock have been repurchased.
On May 31, 2022, our Board of Directors authorized and approved the Share Repurchase Program pursuant to which we may repurchase up to $100.0 million in aggregate of shares of our Class A common stock, with the authorization to expire on June 30, 2024, or such shorter period if $100.0 million in aggregate of shares of our Class A common stock have been repurchased.
In addition, any errors, bugs, vulnerabilities, or defects in our systems or the software and hardware on which we rely, failures to properly address or mitigate the technical limitations in our systems, or associated degradations or interruptions of service or failures to fulfill our commitments to our neighbors, have in the past led to, and may in the future lead to, outcomes including damage to our reputation, loss of neighbors, loss of advertisers, loss of revenue, regulatory inquiries, litigation, or liability for fines, damages, or other remedies, any of which could adversely affect our business, operating results, and financial condition.
In addition, any errors, bugs, vulnerabilities, or defects in our systems or the software and hardware on which we rely, failures to properly address or mitigate the technical limitations in our systems, or associated degradations or interruptions of service or failures to fulfill our commitments to our neighbors, have in the past led to, and may in the future lead to, outcomes including damage to our reputation, loss of neighbors, loss of advertisers, loss of revenue, regulatory 24 Table of Contents inquiries, litigation, or liability for fines, damages, or other remedies, any of which could adversely affect our business, operating results, and financial condition.
Litigation could be costly for us to defend, have a material adverse effect on our business, results of operations and financial condition, or require us to devote additional development resources to change our platform. We license technology from third parties, and our inability to maintain those licenses could harm our business.
Litigation could be costly for us to defend, have a material adverse effect on our business, results of operations and financial condition, or require us to devote additional development resources to change our platform. We license technology from third parties for the development of our products, and our inability to maintain those licenses could harm our business.
We plan to continue expanding our international operations where we have limited operating experience and may be subject to increased business, regulatory, and economic risks that could seriously harm our business, operating results, and financial condition. We plan to continue expanding our business operations abroad by opening new and expanding within existing neighborhoods outside of the United States.
We may expand our international operations where we have limited operating experience and may be subject to increased business, regulatory, and economic risks that could seriously harm our business, operating results, and financial condition. We may continue expanding our business operations abroad by opening new and expanding within existing neighborhoods outside of the United States.
Such changes may lead to uncertainties or increased costs and risks surrounding the prosecution, validity, ownership, enforcement, and defense of our issued patents and patent applications and other intellectual property, the outcome of third-party claims of infringement, misappropriation, or other violation of intellectual property brought against us and the actual or enhanced damages (including treble damages) that may be awarded in connection with any such current or future claims, and could have a material adverse effect on our business.
Such changes may lead to uncertainties or increased costs and risks surrounding the prosecution, validity, ownership, enforcement, and 34 Table of Contents defense of our issued patents and patent applications and other intellectual property, the outcome of third-party claims of infringement, misappropriation, or other violation of intellectual property brought against us and the actual or enhanced damages (including treble damages) that may be awarded in connection with any such current or future claims, and could have a material adverse effect on our business.
As we continue to expand our international operations, we will become more exposed to the effects of fluctuations in currency exchange rates. A substantial majority of our revenues to date have been denominated in U.S. dollars and, therefore, we have not historically been subject to foreign currency risk.
If we continue to expand our international operations, we will become more exposed to the effects of fluctuations in currency exchange rates. A substantial majority of our revenues to date have been denominated in U.S. dollars and, therefore, we have not historically been subject to foreign currency risk.
Of these companies, we most directly compete with social media companies that offer local products to advertisers and users, including large companies such as Meta (including through Facebook and Instagram) and Alphabet (including through Google), and other companies that provide home services, classifieds, real estate, recommendations, and search engines.
Of these companies, we most directly compete with social media companies that offer local products to advertisers and users, including large companies such as Meta (including through Facebook and Instagram) and Alphabet (including through Google), and other companies that provide home services, classifieds, recommendations, and search engines.
Unfavorable publicity regarding us, for example regarding our privacy or cybersecurity practices, terms of service, advertising policies, platform changes, platform quality, litigation or regulatory activity, the actions of our advertisers, the use of our platform for illicit or objectionable ends, the substance or enforcement of our community standards, the actions of our neighbors, the quality and integrity of content shared on our platform, or the actions of other companies that provide similar services to us, has in the past, and 19 Table of Contents could in the future, adversely affect our reputation.
Unfavorable publicity regarding us, for example regarding our privacy or cybersecurity practices, terms of service, advertising policies, platform changes, platform quality, litigation or regulatory activity, the actions of our advertisers, the use of our platform for illicit or objectionable ends, the substance or enforcement of our community standards, the actions of our neighbors, the quality and integrity of content shared on our platform, or the actions of other companies that provide similar services to us, has in the past, and could in the future, adversely affect our reputation.
On October 26, 2023, similarly, the United Kingdom’s Online Safety Act became law. The Act creates requirements around monitoring and handling harmful content and will require us to expend resources to try to comply with the new regulations or incur liability.
On October 26, 2023, similarly, the United Kingdom’s Online Safety Act became law. The Act creates requirements around content moderation and handling harmful content and will require us to expend resources to try to comply with the new regulations or incur liability.
Our agreements with third parties, including without limitation significant agreements with payment processors, credit card and debit card issuers and bank partners, contain contractual commitments we are required to adhere to related to information security and data privacy compliance.
In addition, our agreements with third parties, including without limitation significant agreements with payment processors, credit card and debit card issuers and bank partners, contain contractual commitments we are required to adhere to related to information security and data privacy compliance.
In addition, our effective tax rate may change from year to year based on changes in the mix of activities and income allocated or earned among various jurisdictions, tax laws and the applicable tax rates in these jurisdictions (including future tax laws that may become material), tax treaties between countries, our eligibility for benefits under those tax treaties and the valuation of deferred tax assets and liabilities.
In addition, our effective tax rate may change from year to year based on changes in the mix of activities and income allocated or earned among various jurisdictions, tax laws and the applicable tax rates in these jurisdictions 28 Table of Contents (including future tax laws that may become material), tax treaties between countries, our eligibility for benefits under those tax treaties and the valuation of deferred tax assets and liabilities.
Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that are filed with the SEC.
Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management 33 Table of Contents evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that are filed with the SEC.
If we were to change our verification methods, that may adversely impact our ability to add new neighbors or retain existing neighbors. Our business is highly competitive. Competition presents an ongoing threat to the success of our business. We compete with companies that provide a variety of internet products, services, content, and online advertising.
If we were to change our verification methods, that may adversely impact our ability to add new neighbors or retain existing neighbors. 14 Table of Contents Our business is highly competitive. Competition presents an ongoing threat to the success of our business. We compete with companies that provide a variety of internet products, services, content, and online advertising.
Our reliance on third parties makes us vulnerable to any service interruptions, whether as a result of a cyber-attack, security breach, weather or other events, or delays in their operations. Additionally, alternative email providers, mobile data networks, geolocation providers or postal providers may be more costly to use than our current providers.
Our reliance on third parties makes us vulnerable to any service interruptions, whether as a result of a cyber-attack, security breach, weather or other events, or delays in their operations. Additionally, alternative email providers, mobile data networks, identity verification service providers or postal providers may be more costly to use than our current providers.
We have recorded a full valuation allowance related to our U.S. federal and state NOL carryforwards and other net deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets. Our NOL carryforwards may expire 28 Table of Contents unutilized or underutilized, which could prevent us from offsetting future taxable income.
We have recorded a full valuation allowance related to our U.S. federal and state NOL carryforwards and other net deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets. Our NOL carryforwards may expire unutilized or underutilized, which could prevent us from offsetting future taxable income.
Our brand and reputation may also be negatively affected by the content or actions of neighbors that are deemed to be hostile or inappropriate to other neighbors, by the actions of neighbors acting under false or inauthentic identities, by the use of our platform to disseminate misleading or false information, the use of our platform for fraudulent schemes and scams, or by the use of our service for illicit, illegal or objectionable ends.
Our brand and reputation may also be negatively affected by the content or actions of neighbors that are deemed to be hostile or inappropriate to other neighbors, by the actions of neighbors acting under false or inauthentic identities, by the use of our platform to 18 Table of Contents disseminate misleading or false information, the use of our platform for fraudulent schemes and scams, or by the use of our service for illicit, illegal or objectionable ends.
Further, as we have grown, our business has become increasingly complex and requires more resources. To manage any future growth effectively, we must continue to improve and expand our information technology and financial infrastructure, our operating and administrative systems and controls, and our ability to manage headcount, capital, and processes in an efficient and appropriate manner.
Further, as we have grown, our business has become increasingly complex and may require more resources. To manage any future growth effectively, we must continue to improve and expand our information technology and financial infrastructure, our operating and administrative systems and controls, and our ability to manage headcount, capital, and processes in an efficient and appropriate manner.
Compliance with these rules and regulations has increased, and will continue to increase, our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources.
Compliance with these rules and regulations will continue to increase, our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources.
Our employees may be more likely to leave if the shares they own or the shares underlying their vested options have significantly appreciated in value relative to the original purchase price of the shares or the exercise price of the options, or conversely, if the exercise price of the options that they hold are significantly above the market price of our Class A common stock.
Our employees may be more likely to leave if the shares they own or the shares underlying their vested options have significantly appreciated in value relative to the original purchase price of the shares or the exercise price of the options, or conversely, if the exercise price of the 21 Table of Contents options that they hold are significantly above the market price of our Class A common stock.
Security breaches may cause interruptions to our platform, degrade the neighbor experience, cause neighbors or advertisers to lose confidence and trust in our platform, impair our internal systems, or result in financial harm to our company.
Security incidents may cause interruptions to our platform, degrade the neighbor experience, cause neighbors or advertisers to lose confidence and trust in our platform, impair our internal systems, or result in financial harm to our company.
While we maintain insurance policies, our coverage may be insufficient to compensate us for all losses caused by security breaches, and any such security breaches may result in increased costs for such insurance.
While we maintain insurance policies, our coverage may be insufficient to compensate us for all losses caused by security incidents, and any such security incidents may result in increased costs for such insurance.
If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and seriously harm our business. 38 Table of Contents The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.
If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and seriously harm our business. The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.
Any new products or services or platform enhancements that we introduce, including by way of acquisitions, may not achieve any significant degree of market acceptance from current or potential neighbors, which would 18 Table of Contents adversely affect our business, operating results, and financial condition.
Any new products or services or platform enhancements that we introduce, including by way of acquisitions, may not achieve any significant degree of market acceptance from current or potential neighbors, which would adversely affect our business, operating results, and financial condition.
If the protection of our 35 Table of Contents proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of our brands and other intangible assets may be diminished and competitors may be able to more effectively mimic the Nextdoor platform and methods of operations.
If the protection of our proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of our brands and other intangible assets may be diminished and competitors may be able to more effectively mimic the Nextdoor platform and methods of operations.
In addition, any breach, or reported breach, of our systems, our information security policies, or legal requirements that results in a compromise of customer data or causes customers to believe their data has been compromised could have a significant negative effect on our business.
In addition, any breach, or reported breach, of our systems, our information security policies, or legal requirements that results in a compromise of customer data or causes customers to believe their data has been compromised 17 Table of Contents could have a significant negative effect on our business.
In addition, because our Board of Directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors.
In addition, because our Board of Directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts 39 Table of Contents by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors.
Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, including the ability to pay dividends. This may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, including the ability to pay dividends. This may make it more difficult for us to obtain additional capital and to pursue business opportunities, 20 Table of Contents including potential acquisitions.
These new and proposed laws, together with any changes to the existing laws and regulations within the jurisdictions in which we operate could require us to expend additional resources to maintain compliance with any new or evolving regulations. As a result, we may incur additional liability, and our business, operating results, and financial condition could be harmed.
These new and proposed laws, together with any changes to the existing laws and regulations within the jurisdictions in which we operate, could require us to expend additional resources to maintain 30 Table of Contents compliance with new or evolving regulations. As a result, we may incur additional liability, and our business, operating results, and financial condition could be harmed.
For example, Apple launched its Intelligent Tracking Prevention (“ITP”) feature in its Safari browser. ITP blocks some or all third-party cookies by default on mobile and desktop and ITP has become increasingly restrictive over time.
For example, Apple has its Intelligent Tracking Prevention (“ITP”) feature in its Safari browser, which blocks some or all third-party cookies by default on mobile and desktop and has become increasingly restrictive over time.
For example, computer malware, viruses, social engineering (predominantly spear phishing attacks), ransomware, and general hacking have become more prevalent in the industry, have occurred on our systems in the past, and are likely to occur on our systems in the future.
For example, computer malware, viruses, social engineering (such as spear phishing attacks), ransomware, and general hacking have become more prevalent in the industry, have occurred on our systems in the past, and are likely to occur on our systems in the future.
The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our 33 Table of Contents business and operating results with the SEC. We are also required to ensure that we have the ability to prepare financial statements that are fully compliant with all SEC reporting requirements on a timely basis.
The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results with the SEC. We are also required to ensure that we have the ability to prepare financial statements that are fully compliant with all SEC reporting requirements on a timely basis.
If we introduce or acquire new products and services or evolve our platform in a way that subjects us to additional competition or as existing competitors introduce new products 15 Table of Contents and services or evolve their platforms, we may fail to engage or retain neighbors or attract new neighbors, which could harm our business, operating results, and financial condition.
If we introduce or acquire new products and services or evolve our platform in a way that subjects us to additional competition or as existing competitors introduce new products and services or evolve their platforms, we may fail to engage or retain neighbors or attract new neighbors, which could harm our business, operating results, and financial condition.
Technologies have been developed that can block the display of advertisements on the Nextdoor platform, which could adversely impact our business, operating results, and financial condition. Technologies have been developed, and will likely continue to be developed, that can block the display of advertisements on the Nextdoor platform.
Technologies have been developed that can block the display of advertisements on the Nextdoor platform, which could adversely impact our business, operating results, and financial condition. 22 Table of Contents Technologies have been developed, and will likely continue to be developed, that can block the display of advertisements on the Nextdoor platform.
While we consistently evaluate opportunities to reduce our operating costs and optimize efficiencies, including, for example, through our workforce reduction in November 2023, we cannot guarantee that these efforts will be successful or that we will not re-accelerate operating expenditures in the future in order to capitalize on growth opportunities.
While we consistently evaluate opportunities to reduce our operating costs and optimize efficiencies, including, for example, through our workforce reductions in 2023 and 2024, we cannot guarantee that these efforts will be successful or that we will not re-accelerate operating expenditures in the future in order to capitalize on growth opportunities.
Moreover, California recently adopted two new climate-related bills, which require companies doing business in California that meet certain revenue thresholds to publicly disclose certain greenhouse gas emissions data and climate-related financial risk reports.
Moreover, California has adopted two climate-related bills, which require companies doing business in California that meet certain revenue thresholds to publicly disclose certain greenhouse gas emissions data and climate-related financial risk reports.
Although we have implemented systems and processes that are designed to protect our data and our neighbors’ data, prevent data loss, disable 23 Table of Contents undesirable accounts and activities on our platform and prevent or detect security breaches, and maintain an information security policy, such measures cannot provide absolute security, and despite measures that we have or will in the future put in place, we may be unable to anticipate or prevent unauthorized access to such data.
Although we have implemented systems and processes that are designed to protect our data, prevent data loss, disable undesirable accounts and activities on our platform and prevent or detect security breaches, and maintain an information security policy, such measures cannot provide absolute security, and despite measures that we have or will in the future put in place, we may be unable to anticipate or prevent unauthorized access to such data.
Market opportunity estimates, whether obtained from third-party sources or developed internally, are subject to significant uncertainty and are based on assumptions that may not prove to be accurate. In particular, our estimates regarding our market penetration in new and existing markets are difficult to predict.
Market opportunity estimates, whether obtained from third-party sources or developed internally, are subject to 26 Table of Contents significant uncertainty and are based on assumptions that may not prove to be accurate. In particular, our estimates regarding our market penetration in new and existing markets are difficult to predict.
In 12 Table of Contents addition, advertisers may view some of the features on our platform as experimental and unproven.
In 11 Table of Contents addition, advertisers may view some of the features on our platform as experimental and unproven.
In addition, aspects of our platform compete with other products and services, including home services, classifieds, real estate, recommendations, and search engines.
In addition, aspects of our platform compete with other products and services, including home services, classifieds, recommendations, and search engines.
Any failure or interruption experienced by such third-parties could result in the inability of certain businesses to advertise on our platform, and adversely impact our business, operating results, and financial condition. Currently, we are dependent on third-party software and service providers, including the GAM platform, for management and delivery of advertisements on the Nextdoor platform.
Risks Related to Security and Technology We are dependent on third-party software and service providers, including the GAM platform, for management and delivery of advertisements on the Nextdoor platform. Any failure or interruption experienced by such third-parties could result in the inability of certain businesses to advertise on our platform, and adversely impact our business, operating results, and financial condition.
Therefore, it is possible that such an ownership change could limit the amount of NOLs we can use to offset future taxable income. Our current NOL carryforwards, and any NOL carryforwards of companies we have acquired, may be subject to limitations, thereby increasing our overall tax liability. Our NOL carryforwards may also be impaired under similar provisions of state law.
Therefore, it is possible that an ownership change could limit the amount of NOLs we can use to offset future taxable income. Any NOL carryforwards of companies we have acquired, may be subject to limitations, thereby increasing our overall tax liability. Our NOL carryforwards may also be limited under similar provisions of state law.
It is possible that government authorities could take action that impairs our ability to sell advertising, collect, process, use, store, disclose or transfer data including in countries 30 Table of Contents where access to our consumer-facing platform may be blocked or restricted.
It is possible that government authorities could take action that impairs our ability to sell advertising, collect, process, use, store, disclose or transfer data including in countries where access to our consumer-facing platform may be blocked or restricted.
Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.
Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court. 40 Table of Contents Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.
For example, as we expand our product offerings, including video, we may not be able to do so cost-effectively.
For example, as we expand our product offerings, we may not be able to do so cost-effectively.
We might be required to seek a license for the intellectual property, which may not be available on reasonable terms or at all. Even if a license were available, we could be required to pay significant royalties, 36 Table of Contents which would increase our operating expenses.
We might be required to seek a license for the intellectual property, which may not be available on reasonable terms or at all. Even if a license were available, we could be required to pay significant royalties, which would increase our operating expenses.
In addition, as our international operations and sales to advertisers continue to grow, we will be subject to a variety of risks inherent in doing business internationally, including: • political, social and economic instability, including as a result of acts of war or terrorism, including the war in Ukraine and the Israel-Hamas war; • risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy and data protection, and unexpected changes in laws, regulatory requirements, and enforcement; • potential damage to our brand and reputation due to compliance with local laws, including potential censorship and requirements to provide neighbor information to local authorities; • enhanced difficulty in reviewing content on the Nextdoor platform and enforcing community standards across different languages and countries; • fluctuations in currency exchange rates; • foreign exchange controls and tax and other regulations and orders that might prevent us from repatriating cash earned in countries outside the United States or otherwise limit our ability to move cash freely, and impede our ability to invest such cash efficiently; • compliance with multiple U.S. and international tax jurisdictions and management of tax impact of global operations; • potentially higher levels of credit risk and payment fraud; • difficulties integrating any foreign acquisitions; • burdens of complying with a variety of foreign laws, including laws related to taxation, content removal, data localization, data transfer, consents, payments, and regulatory oversight; • reduced protection for intellectual property rights in some countries; • different regulations and practices with respect to employee/employer relationships, existence of workers’ councils and labor unions, increase in labor costs due to high wage inflation in certain international jurisdictions, and other challenges caused by distance, language and cultural differences, making it harder to do business in certain international jurisdictions; and • difficulties in staffing and managing global operations and the increased travel, infrastructure, and legal compliance costs associated with multiple international locations. 20 Table of Contents In addition, we must manage the potential conflicts between locally accepted business practices in any given jurisdiction and our obligations to comply with laws and regulations, including anti-money laundering laws, anti-corruption laws or regulations applicable to us, such as the U.S.
In addition, as 19 Table of Contents our international operations and sales to advertisers continue to grow, we will be subject to a variety of risks inherent in doing business internationally, including: • political, social and economic instability, including as a result of acts of war or terrorism, including the wars in Ukraine and the Middle East; • risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy and data protection, and unexpected changes in laws, regulatory requirements, and enforcement; • potential damage to our brand and reputation due to compliance with local laws, including potential censorship and requirements to provide neighbor information to local authorities; • enhanced difficulty in reviewing content on the Nextdoor platform and enforcing community standards across different languages and countries; • fluctuations in currency exchange rates; • foreign exchange controls and tax and other regulations and orders that might prevent us from repatriating cash earned in countries outside the United States or otherwise limit our ability to move cash freely, and impede our ability to invest such cash efficiently; • compliance with multiple U.S. and international tax jurisdictions and management of tax impact of global operations; • potentially higher levels of credit risk and payment fraud; • difficulties integrating any foreign acquisitions; • burdens of complying with a variety of foreign laws, including laws related to taxation, content removal, data localization, data transfer, consents, payments, and regulatory oversight; • reduced protection for intellectual property rights in some countries; • different regulations and practices with respect to employee/employer relationships, existence of workers’ councils and labor unions, increase in labor costs due to high wage inflation in certain international jurisdictions, and other challenges caused by distance, language and cultural differences, making it harder to do business in certain international jurisdictions; and • difficulties in staffing and managing global operations and the increased travel, infrastructure, and legal compliance costs associated with multiple international locations.
We may not be successful in our AI initiatives, which could adversely affect our business, reputation, or financial results. We are continuing to make investments in AI initiatives, including to recommend relevant content across our products, enhance our advertising tools, and develop new product features using generative AI. Our AI initiatives may require increased investment in infrastructure and headcount.
We may not be successful in our AI initiatives, which could adversely affect our business, reputation, or financial results. We are continuing to make investments in AI initiatives, including to recommend relevant content across our products, enhance our advertising tools, and develop new product features using generative AI.
These changes, and the additional involvement of accountants and legal advisors, will require a significant commitment of additional resources. We might not be successful in complying with these obligations and the significant commitment of resources required for complying with them could have a material adverse effect on our business, financial condition, results of operations and cash flows.
These actions and the additional involvement of accountants and legal advisors, requires a significant commitment of our resources. We might not be successful in complying with these obligations and the significant commitment of resources required for complying with them could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If we experience an incident that triggers a breach of such contractual commitments, we could be exposed to significant liability or cancellation of service under these agreements. The damages payable to the counterparty as well as the impact to our service could be substantial and create substantial costs and loss of business.
If we experience a data protection violation or security incident that triggers a breach of such contractual commitments, we could be exposed to significant liability or cancellation of service under these agreements. The damages payable to the counterparty as well as the impact to our service could be substantial and create substantial costs and loss of business.
Outside the United States, we are subject to an increasing number of laws, regulations and industry standards that apply to data privacy and security. In Canada, we are subject to the Personal Information Protection and Electronic Documents Act, which governs the collection, use and disclosure of Canadian residents’ personal information in the course of commercial activities.
Outside the United States, we are subject to an increasing number of laws, regulations and industry standards that apply to data privacy and security. In Canada, we are subject to PIPEDA, which governs the collection, use and disclosure of Canadian residents’ personal information in the course of commercial activities.
We rely on third parties, including email providers, mobile data networks, and geolocation providers to complete the verification process for our neighbors’ accounts.
We rely on third parties, including email providers, mobile data networks, and identity verification service providers to complete the verification process for our neighbors’ accounts.
In addition, our business may be subject to interruptions, delays, or failures resulting from earthquakes, fires, floods, adverse weather conditions, other natural disasters, power loss, terrorism, pandemics, geopolitical conflict (including the current war in Ukraine and the Israel-Hamas war), other physical security threats, cyber-attacks, or other catastrophic events.
In addition, our business may be subject to interruptions, delays, or failures resulting from earthquakes, fires, floods, adverse weather conditions, other natural disasters, power loss, terrorism, pandemics, geopolitical conflict (including the current wars in Ukraine and the Middle East), other physical security threats, cyber-attacks, or other catastrophic events.
The effective scaling of our business will require us to invest financial and operational resources and the continuous dedication of our management team. 17 Table of Contents We plan to continue to expand our international operations into more countries in the future, which will place additional demands on our resources and operations.
The effective scaling of our business will require us to invest financial and operational resources and the continuous dedication of our management team. We may continue to expand our international operations into more countries in the future, which will place additional demands on our resources and operations.
The impact of these laws and regulations may disproportionately affect our business in comparison to our peers in the technology sector that have greater resources.
The impact of these laws and regulations may disproportionately affect our business in comparison to our peers in the technology sector with greater resources.
Factors that could cause fluctuations in the trading price of our Class A common stock include the following: • actual or anticipated fluctuations in our user growth, retention, engagement, revenue, or other operating results; • developments involving our competitors; • variations between our actual operating results and the expectations of securities analysts, investors, and the financial community; • actual or anticipated fluctuations in our quarterly or annual operating results; • any forward-looking financial or operating information we may provide to the public or securities analysts, any changes in this information, or our failure to meet expectations based on this information; • publication of research reports by securities analysts about us, our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • additional shares of our Class A common stock being sold into the market by us or our existing stockholders, or the anticipation of such sales, or if existing stockholders subject to a lock-up sell shares into the market when applicable “lock-up” periods end; • additions and departures of key personnel; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our Class A common stock available for public sale; • announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • announcements by us or estimates by third parties of actual or anticipated changes in the size of our user base or the level of user engagement; • changes in operating performance and stock market valuations of technology companies in our industry, including our partners and competitors; • the impact of interest rate increases on the overall stock market and the market for technology company stocks; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies; and • other events or factors, including those resulting from recessions, rising inflation, changing interest rates, local and national elections, actual or perceived instability in the global banking system, international currency fluctuations, corruption, political instability and acts of war or terrorism, such as the war in Ukraine and the Israel-Hamas war.
Factors that could cause fluctuations in the trading price of our Class A common stock include the following: • actual or anticipated fluctuations in our user growth, retention, engagement, revenue, or other operating results; • developments involving our competitors; • variations between our actual operating results and the expectations of securities analysts, investors, and the financial community; • actual or anticipated fluctuations in our quarterly or annual operating results; 37 Table of Contents • any forward-looking financial or operating information we may provide to the public or securities analysts, any changes in this information, or our failure to meet expectations based on this information; • publication of research reports by securities analysts about us, our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • additional shares of our Class A common stock being sold into the market by us or our existing stockholders, or the anticipation of such sales; • additions and departures of key personnel; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our Class A common stock available for public sale; • announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • announcements by us or estimates by third parties of actual or anticipated changes in the size of our user base or the level of user engagement; • changes in operating performance and stock market valuations of technology companies in our industry, including our partners and competitors; • the impact of interest rate increases on the overall stock market and the market for technology company stocks; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies; and • other events or factors, including those resulting from recessions, the implementation of tariffs by the United States, China, or other governments, inflation, changing interest rates, local and national elections, actual or perceived instability in the global banking system, international currency fluctuations, corruption, political instability and acts of war or terrorism, such as the wars in Ukraine and the Middle East.
We rely on third parties to verify our neighbors’ accounts through several methods, including but not limited to email, SMS text message, phone calls, geolocation and mailed invitations. For example, we utilize email providers, mobile data networks, and geolocation providers to verify neighbors’ accounts.
We rely on third parties to verify our neighbors’ accounts through several methods, including but not limited to email, SMS text message, geolocation and mailed invitations. For example, we utilize email providers, mobile data networks, and identity verification service providers to verify neighbors’ accounts.
Stockholders who hold shares of our Class B common stock, including certain of our executive officers, employees, and directors and their affiliates, together hold a substantial majority of the voting power of our outstanding capital stock as of December 31, 2023.
Stockholders who hold shares of our Class B common stock, including certain of our executive officers, employees, and directors and their affiliates, together 38 Table of Contents hold a substantial majority of the voting power of our outstanding capital stock as of December 31, 2024.
The publication of our privacy policies and other documentation that provide commitments about data privacy 31 Table of Contents and security can subject us to potential actions if they are found to be deceptive, unfair, or otherwise misrepresent our actual practices, which could materially and adversely affect our business, operating results, and financial condition.
The publication of our privacy policies and notices that provide commitments about data privacy, security, and protection can subject us to potential actions if they are found to be deceptive, unfair, or otherwise misrepresent our actual practices, which could materially and adversely affect our business, operating results, and financial condition.
As of December 31, 2023, the Nextdoor platform was accessible in 11 countries (including the United States) and had over 325,000 neighborhoods. We plan to enter new international markets and expand in existing markets where we have limited or no experience in marketing, selling, advertising and deploying our platform or selling advertising.
As of December 31, 2024, the Nextdoor platform was accessible in 11 countries (including the United States) and had over 340,000 neighborhoods. We may enter new international markets and expand in existing markets where we have limited or no experience in marketing, selling, advertising and deploying our platform or selling advertising.
Further, Apple introduced an App Tracking Transparency framework that limits the ability of mobile applications to request an iOS device’s advertising identifier and may also affect our ability to track neighbors’ actions off our platform and connect their interactions with on-platform advertising.
Further, Apple uses an App Tracking Transparency framework that limits the ability of mobile applications to request an iOS device’s advertising identifier and affects our ability to track neighbors’ actions off our platform and connect their interactions with on-platform advertising.
For example, in November 2023, in response to changing economic conditions and in an effort to support our growth, scale and profitability objectives, reduce our operational costs and improve our organizational efficiency, we executed a restructuring plan, which included a restructuring and reduction of the current workforce by approximately 25%.
For example, in 2023 and 2024, in response to changing economic conditions and in an effort to support our growth, scale and profitability objectives, reduce our operational costs and improve our organizational efficiency, we executed restructuring plans, which included a restructuring and reduction of the current workforce.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Audit & Risk Committee is responsible for ensuring that management has processes in place designed to identify and evaluate 41 Table of Contents cybersecurity risks to which the company is exposed and to implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents.
Biggest changeComprising solely independent directors, our Audit & Risk Committee receives regular updates from our Chief Information Security Officer (“CISO”) and is responsible for ensuring that management has processes in place to identify, assess, and mitigate cybersecurity risks. The Audit & Risk Committee collaborates with management to oversee the implementation of security measures, incident response plans, and ongoing risk management strategies.
Our cyber risk management includes: (1) enterprise risk management to identify top cybersecurity risks; (2) vulnerability management to identify software vulnerabilities and risks related to compute infrastructure; (3) vendor risk management to identify risks related to third parties and business partners, which includes pre-engagement review, use of contractual security provisions, and continued monitoring, as applicable; (4) privacy risk management to identify privacy risks in our product and platforms and ensure regulatory compliance; (5) security monitoring to analyze and assess threat activity in real time; and (6) security incident response to investigate, respond to, and mitigate cyber threats.
Our cyber risk management framework includes: (1) enterprise risk management to identify top cybersecurity risks; (2) vulnerability management to identify software vulnerabilities and infrastructure risks; (3) vendor risk management to identify risks related to third parties and business partners, which includes pre-engagement due diligence, use of contractual security provisions, and continued monitoring through risk-based periodic audits, as applicable; (4) privacy risk management to ensure regulatory compliance and proactively manage privacy risks across our products and platforms; (5) security monitoring to analyze and assess threat activity in real time; and (6) security incident response protocols to investigate, contain, and mitigate cybersecurity threats.
For more information regarding cybersecurity risks that we face and potential impacts on our business related thereto, see the section entitled “Risk Factors — Security breaches, including improper access to or disclosure of our data or our neighbors’ data, or other hacking and phishing attacks on our or third-party systems, could harm our reputation and adversely affect our business.” Governance Our Board of Directors maintains oversight of risks from cybersecurity threats by meeting with and receiving periodic updates from our Chief Information Security Officer (“CISO”), via our Audit & Risk Committee, which is assigned oversight of cybersecurity risks.
For more information regarding cybersecurity risks that we face and potential impacts on our business related thereto, see the section entitled “Risk Factors — Security breaches, including improper access to or disclosure of our data or our neighbors’ data, or other hacking and phishing attacks on our or third-party systems, could harm our reputation and adversely affect our business.” Governance Our Board of Directors, as a whole and at a committee level, maintains oversight of cybersecurity risk management, with primary responsibility assigned to our Audit & Risk Committee.
However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents.
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents.
Our strategy to assess, identify, and manage material cybersecurity risks is through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security, and availability of our information systems and data. We implement security measures and processes to identify, prevent, and mitigate cybersecurity threats and to effectively respond to cybersecurity incidents when they occur.
Item 1C. Cybersecurity Risk Management and Strategy We employ a comprehensive, cross-functional approach to assess, identify, and manage material cybersecurity risks, ensuring the confidentiality, security, and availability of our information systems and data. Our cybersecurity strategy is guided by applicable laws and regulations, industry standards, and best practices.
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Item 1C. Cybersecurity Risk Management and Strategy Our cybersecurity policies, standards, processes and practices are based on applicable laws and regulations and informed by industry standards and industry-recognized practices.
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We have established robust policies, standards, and processes to proactively safeguard our digital assets, mitigate risks, and respond effectively to cybersecurity incidents.
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We regularly engage third parties to identify risks in our underlying software and infrastructure, to provide threat intelligence, and to assist in triaging, identifying, and responding to cyber threats. In 2023, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
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To strengthen our defenses, we regularly engage third party experts to assess vulnerabilities, provide threat intelligence, and assist in triaging and responding to cyber incidents. We also conduct employee training on cybersecurity awareness, data protection, and threat response to reinforce our security culture.
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Our CISO, has over 20 years of experience in the technology and cybersecurity, including senior leadership roles in software security, penetration testing, and incident response. Our CISO attained and maintains multiple security certifications including CISSP (Certified Information Security Professional). Prior to Nextdoor, our CISO led Software Security at the Federal Reserve’s National Incident Response Team.
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Our CISO, who reports directly to the Chief Technology Officer, has over 15 years of experience in technology and cybersecurity matters, with expertise spanning IT leadership, incident response, enterprise security, and business technology. Our CISO holds multiple cloud and IT certifications and is an active thought leader in the cybersecurity space.
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Prior to joining Nextdoor, our CISO led Business Technology, IT and Cybersecurity at Workato, Inc. and held key roles at Peloton Interactive, Inc. and KPMG LLP, where they built and implemented business continuity and cyber resilience programs.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our current facilities are adequate to meet our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Biggest changeAll of our facilities are leased. 41 Table of Contents We believe that our current facilities are adequate to meet our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Item 2. Properties We are headquartered in San Francisco, California. As of December 31, 2023, we maintained offices in various locations in the United States and internationally, including approximately 115,770 square feet for our corporate headquarters. All of our facilities are leased.
Item 2. Properties We are headquartered in San Francisco, California. As of December 31, 2024, we maintained offices in various locations in the United States and internationally, including approximately 115,770 square feet for our corporate headquarters.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business or financial results. Item 4.
Biggest changeItem 3. Legal Proceedings We are currently a party to, and may from time to time in the future, be involved in, various litigation matters and subject to claims that arise in the ordinary course of business, including claims asserted by third parties in the form of letters and other communications.
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Mine Safety Disclosures Not applicable. 42 Table of Contents PART II
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For more information regarding legal proceedings and other claims in which we are involved, see Note 7 - Commitments and Contingencies, to our unaudited condensed consolidated financial statements, included in Part II, Item 8 of this Annual Report on Form 10-K, and is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 42 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAfter deducting payments to existing KVSB shareholders of $12.2 million in connection with their exercise of redemption rights, the payment of the $14.6 million of deferred underwriting fees, and $28.9 million of expenses in connection with the Business Combination paid from the trust account, the remainder of the trust account is now held on our balance sheet to fund our operations and continued growth. 43 Table of Contents Issuer Purchases of Equity Securities Share Repurchases On May 31, 2022, our Board of Directors authorized and approved the Share Repurchase Program to repurchase up to $100.0 million in aggregate of our Class A common stock, with the authorization to expire on June 30, 2024.
Biggest changeUse of Proceeds None. Issuer Purchases of Equity Securities Share Repurchases On May 31, 2022, our Board of Directors authorized and approved the Share Repurchase Program to repurchase up to $100.0 million in aggregate of our Class A common stock, with the authorization to expire on June 30, 2024.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our Proxy Statement (the “Proxy Statement”) for the 2024 Annual Meeting of Stockholders, to be filed with the SEC within 120 days of the year ended December 31, 2023, and is incorporated herein by reference. Sales of Unregistered Securities None.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our Proxy Statement (the “Proxy Statement”) for the 2025 Annual Meeting of Stockholders, to be filed with the SEC within 120 days of the year ended December 31, 2024, and is incorporated herein by reference. Sales of Unregistered Securities None.
An investment of $100 and reinvestment of all dividends is assumed to have been made in our Class A common stock and in each index on November 8, 2021, the date our Class A common stock began trading on the New York Stock Exchange, and its relative performance is tracked through December 31, 2023.
An investment of $100 and reinvestment of all dividends is assumed to have been made in our Class A common stock and in each index on November 8, 2021, the date our Class A common stock began trading on the New York Stock Exchange, and its relative performance is tracked through December 31, 2024.
Our Class B common stock is not listed or traded on any stock exchange. Holders of Record As of February 23, 2024, there were 72 stockholders of record of our Class A common stock and 318 stockholders of record of our Class B common stock.
Our Class B common stock is not listed or traded on any stock exchange. Holders of Record As of February 24, 2025, there were 66 stockholders of record of our Class A common stock and 273 stockholders of record of our Class B common stock.
The stock price performance of the following graph is not necessarily indicative of future stock price performance.
The stock price performance of the following graph is not necessarily indicative of future stock price performance. Item 6. [Reserved] 44 Table of Contents
We did not repurchase or retire any shares of Class A common stock during the year ended December 31, 2023. As of December 31, 2023, we had $22.8 million available for future share repurchases under the Share Repurchase Program.
During the year ended December 31, 2024, the Company repurchased and retired 31.0 million shares of Class A common stock at an average purchase price of $2.44 per share for an aggregate repurchase price of $75.5 million. As of December 31, 2024, we had $97.2 million available for future share repurchases under the Share Repurchase Program.
Removed
Use of Proceeds On March 26, 2021, KVSB consummated its initial public offering of 40,000,000 public shares. On March 30, 2021 in connection with the underwriters’ election to partially exercise their over-allotment option, KVSB sold an additional 1,634,412 public shares to cover over-allotments.
Added
The following table summarizes share repurchase activity for the three months ended December 31, 2024: 43 Table of Contents Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of the Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2024 to October 31, 2024 — $ — — $ 99,468 November 1, 2024 to November 30, 2024 — $ — — $ 99,468 December 1, 2024 to December 31, 2024 932,214 $ 2.39 932,214 $ 97,238 Total 932,214 932,214 (1) Average price paid per share includes costs associated with the repurchases.
Removed
The public shares were sold at a price of $10.00 per share, generating total gross proceeds of $416.3 million from the initial public offering and partial exercise of the underwriters’ over-allotment option. The securities sold in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-253098).
Removed
The registration statement became effective on March 23, 2021. Simultaneously with the consummation of the initial public offering, KVSB consummated a private placement of 1,100,000 private placement shares, at a price of $10.00 per share, to Khosla Ventures SPAC Sponsor II LLC (the “Sponsor”) , generating gross proceeds to KVSB of $11.0 million.
Removed
In connection with the underwriters’ partial exercise of their over-allotment option that closed on March 30, 2021, KVSB also consummated the sale of an additional 32,688 private placement shares to the Sponsor, generating gross proceeds of $0.3 million. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Removed
KVSB incurred $23.6 million in offering costs for its initial public offering including $14.6 million of deferred underwriting fees, $8.3 million of underwriting discounts and commissions, and $0.7 million of other costs.
Removed
Following the initial public offering, the partial exercise of the over-allotment option, and the sale of the private placement shares, a total of $416.3 million was deposited into the trust account for the purpose of effecting an initial business combination.
Removed
As of November 5, 2021, the record date of the Business Combination, there was $416.4 million held in the trust account.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

55 edited+14 added−16 removed49 unchanged
Biggest changeYear Ended December 31, (in thousands) 2023 2022 2021 Revenue $ 218,309 $ 212,765 $ 192,197 Costs and expenses (1) : Cost of revenue 41,613 38,981 28,813 Research and development 149,998 127,073 97,096 Sales and marketing 122,925 123,182 106,430 General and administrative 76,057 67,733 54,664 Total costs and expenses 390,593 356,969 287,003 Loss from operations (172,284) (144,204) (94,806) Interest income 25,780 9,304 177 Other income (expense), net (505) (1,343) (539) Loss before income taxes (147,009) (136,243) (95,168) Provision for income taxes 756 1,673 157 Net loss $ (147,765) $ (137,916) $ (95,325) __________________ (1) Includes stock-based compensation expense as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Cost of revenue $ 3,201 $ 2,627 $ 1,466 Research and development 43,619 35,567 20,690 Sales and marketing 12,548 10,160 6,388 General and administrative 23,657 16,066 18,970 Total $ 83,025 $ 64,420 $ 47,514 51 Table of Contents The following table sets forth the components of our consolidated statements of operations as a percentage of revenue for each of the periods presented: Year Ended December 31, (as a percentage of total revenue) 2023 2022 2021 Revenue 100 % 100 % 100 % Costs and expenses: Cost of revenue 19 18 15 Research and development 69 60 51 Sales and marketing 56 58 55 General and administrative 35 32 28 Total costs and expenses 179 168 149 Loss from operations (79) (68) (49) Interest income 12 4 — Other income (expense), net — (1) — Loss before income taxes (67) (64) (50) Provision for income taxes — 1 — Net loss (68) % (65) % (50) % Note: Certain figures may not sum due to rounding.
Biggest changeYear Ended December 31, (in thousands) 2024 2023 2022 Revenue $ 247,276 $ 218,309 $ 212,765 Costs and expenses (1) : Cost of revenue 41,850 41,613 38,981 Research and development 127,939 149,998 127,073 Sales and marketing 106,977 122,925 123,182 General and administrative 92,149 76,057 67,733 Total costs and expenses 368,915 390,593 356,969 Loss from operations (121,639) (172,284) (144,204) Interest income 24,381 25,780 9,304 Other income (expense), net (99) (505) (1,343) Loss before income taxes (97,357) (147,009) (136,243) Provision for income taxes 706 756 1,673 Net loss $ (98,063) $ (147,765) $ (137,916) __________________ (1) Includes stock-based compensation expense as follows: Year Ended December 31, (in thousands) 2024 2023 2022 Cost of revenue $ 2,736 $ 3,201 $ 2,627 Research and development 39,037 43,619 35,567 Sales and marketing 9,671 12,548 10,160 General and administrative 22,611 23,657 16,066 Total $ 74,055 $ 83,025 $ 64,420 51 Table of Contents The following table sets forth the components of our consolidated statements of operations as a percentage of revenue for each of the periods presented: Year Ended December 31, (as a percentage of total revenue) 2024 2023 2022 Revenue 100 % 100 % 100 % Costs and expenses: Cost of revenue 17 19 18 Research and development 52 69 60 Sales and marketing 43 56 58 General and administrative 37 35 32 Total costs and expenses 149 179 168 Loss from operations (49) (79) (68) Interest income 10 12 4 Other income (expense), net — — (1) Loss before income taxes (39) (67) (64) Provision for income taxes — — 1 Net loss (40) % (68) % (65) % Note: Certain figures may not sum due to rounding.
Financing activities Cash provided by financing activities for the year ended December 31, 2023 was $8.9 million, which consisted of $7.2 million of proceeds from the exercise of stock options and $2.0 million of proceeds from the issuance of common stock under the employee stock purchase plan.
Cash provided by financing activities for the year ended December 31, 2023 was $8.9 million, which consisted of $7.2 million of proceeds from the exercise of stock options and $2.0 million of proceeds from the issuance of common stock under the employee stock purchase plan.
The following table summarizes the restructuring charges in the consolidated statements of operations for the year ended December 31, 2023 (in thousands): Severance and Related Charges Stock-Based Compensation Expense Total Research and development $ 5,141 $ 903 $ 6,044 Sales and marketing 2,984 228 3,212 General and administrative 1,763 80 1,843 Total $ 9,888 $ 1,211 $ 11,099 Refer to Note 14 to our consolidated financial statements for further information on our restructuring charges.
The following table summarizes the restructuring charges in the consolidated statements of operations for the year ended December 31, 2023 (in thousands): Severance and Related Charges Stock-Based Compensation Expense Total Research and development $ 5,141 $ 903 $ 6,044 Sales and marketing 2,984 228 3,212 General and administrative 1,763 80 1,843 Total $ 9,888 $ 1,211 $ 11,099 Refer to Note 13 to our consolidated financial statements for further information on our restructuring charges.
Periods of significant growth and changes in the macroeconomic environment have partially masked these trends in historical periods.
Periods of significant growth and changes in the macroeconomic environment have partially masked these trends in some historical periods.
A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Recently Issued Accounting Pronouncements Refer to Note 2 to our consolidated financial statements included elsewhere in this Annual Report for more information regarding recently issued accounting pronouncements.
A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. 56 Table of Contents Recently Issued Accounting Pronouncements Refer to Note 2 to our consolidated financial statements included elsewhere in this Annual Report for more information regarding recently issued accounting pronouncements.
The net cash inflows from changes in operating assets and liabilities were primarily due to a $5.3 million increase in accrued expenses and other liabilities, a $4.7 million 54 Table of Contents decrease in operating lease right-of-use assets due to normal amortization, a $3.5 million decrease in accounts receivable, and a $3.4 million decrease in prepaid expenses and other assets.
The net cash inflows from changes in operating assets and liabilities were primarily due to a $5.3 million increase in accrued expenses and other liabilities, a $4.7 million decrease in operating lease right-of-use assets due to normal amortization, a $3.5 million decrease in accounts receivable, and a $3.4 million decrease in prepaid expenses and other assets.
Macroeconomic conditions, such as inflation, supply chain issues, fluctuations in foreign currency exchange rates, competition from other platforms and other risks and uncertainties have impacted, and all or some of these factors may continue to impact, advertiser demand, user growth, user engagement, and our business, operations and financial results.
Quarterly ARPU Factors Affecting Our Performance Macroeconomic Conditions. Macroeconomic conditions, such as inflation, supply chain issues, fluctuations in foreign currency exchange rates, competition from other platforms and other risks and uncertainties have impacted, and all or some of these factors may continue to impact, advertiser demand, user growth, user engagement, and our business, operations and financial results.
Discussions regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 are presented below.
Discussions regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 are presented below.
Discussions regarding our financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 are located in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023.
Discussions regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 are located in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 27, 2024.
Restructuring In the fourth quarter of 2023, we announced a cost reduction plan (the “Cost Reduction Plan”) intended to right size the business and align the workforce and other expenses with our near term revenue expectations and long term business priorities. The Cost Reduction 45 Table of Contents Plan included a reduction of full-time employee headcount by approximately 25%.
In the fourth quarter of 2023, we announced a cost reduction plan (the “Cost Reduction Plan”) intended to right size the business and align the workforce and other expenses with our near term revenue expectations and long term business priorities. The Cost Reduction Plan included a reduction of full-time employee headcount by approximately 25%.
We currently have no debt outstanding. We have generated losses from our operations, as reflected in our accumulated deficit of $766.0 million as of December 31, 2023. We incurred operating losses and cash outflows from operations by supporting the growth of our business. We expect these losses and operating cash outflows to continue for the foreseeable future.
We currently have no debt outstanding. We have generated losses from our operations, as reflected in our accumulated deficit of $864.1 million as of December 31, 2024. We incurred operating losses and cash outflows from operations by supporting the growth of our business. We expect these losses and operating cash outflows to continue for the foreseeable future.
We also expect to incur significant research and development, sales and marketing, and general and administrative expenses over the next several years in connection with the continued development and strategic expansion of our business. As of December 31, 2023, we had $531.1 million in cash, cash equivalents, and marketable securities.
We also expect to incur significant research and development, sales and marketing, and general and administrative expenses over the next several years in connection with the continued development and strategic expansion of our business. As of December 31, 2024, we had $427.0 million in cash, cash equivalents, and marketable securities.
The introduction of these changes impacts our ability to accurately calculate a portion of WAUs for periods following the adoption of the updated operating systems. Following this introduction, we use estimates for these user engagement numbers based on historical data sets, as well as data from users who engage with Nextdoor’s monetizable content on email clients other than Apple email.
This impacts our ability to accurately calculate a portion of WAUs for periods following the adoption of the updated operating systems. To address this, we use estimates for these user engagement numbers based on historical data sets, as well as data from users who engage with Nextdoor’s monetizable email content.
Sales and marketing expenses also include brand and performance marketing for both user and local business acquisition, and neighbor services, which includes personnel-related costs for our neighbor support team, our outsourced neighbor support function, and verification costs. Performance marketing costs related to user acquisition largely consist of the distribution of mailed invitations and, to a lesser extent, digital advertising.
Sales and marketing expenses also include brand and performance marketing for both user and local business acquisition, and neighbor services, which includes personnel-related costs for our neighbor support team, our outsourced neighbor support function, and verification costs. Performance marketing costs related to local business acquisition largely consists of digital advertising and, to a lesser extent, direct mail campaigns.
Adjusted EBITDA is not presented in accordance with GAAP and the use of this term varies from others in our industry. 55 Table of Contents The following is a reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA: Year Ended December 31, (in thousands) 2023 2022 2021 Net loss $ (147,765) $ (137,916) $ (95,325) Depreciation and amortization 5,769 5,656 4,172 Stock-based compensation 83,025 64,420 47,514 Interest income (25,780) (9,304) (177) Provision for income taxes 756 1,673 157 Restructuring charges 9,888 — — Adjusted EBITDA $ (74,107) $ (75,471) $ (43,659) Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with GAAP.
Adjusted EBITDA is not presented in accordance with GAAP and the use of this term varies from others in our industry. 55 Table of Contents The following is a reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA: Year Ended December 31, (in thousands) 2024 2023 2022 Net loss $ (98,063) $ (147,765) $ (137,916) Depreciation and amortization 3,898 5,769 5,656 Stock-based compensation 74,055 83,025 64,420 Interest income (24,381) (25,780) (9,304) Provision for income taxes 706 756 1,673 Restructuring charges 25,578 9,888 — Adjusted EBITDA $ (18,207) $ (74,107) $ (75,471) Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with GAAP.
The increase was primarily due to a $1.3 million increase in third-party hosting costs due to rising user growth and engagement, a $0.9 million increase in allocated personnel-related costs, and a $0.4 million increase in third-party costs associated with delivering and supporting our advertising products.
The increase was primarily due to a $0.6 million increase in third-party hosting costs due to rising user growth and engagement, a $0.4 million increase in advertising platform costs, and a $0.2 million increase in third-party costs associated with delivering and supporting our advertising products, partially offset by a $1.0 million decrease in allocated personnel-related costs.
The incremental borrowing rate is a hypothetical rate based on the rate of interest we would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment.
The incremental borrowing rate is a hypothetical rate based on the rate of interest we would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. Income Taxes We are subject to income taxes in the United States and numerous foreign jurisdictions.
The decrease was primarily due to a $14.7 million decrease in performance marketing costs for user acquisition as focus shifted to organic user acquisition channels and a $0.9 million decrease in performance marketing costs to attract local businesses, offset by a $15.3 million increase in personnel-related and other costs, inclusive of restructuring costs, which was driven by an increase in average headcount.
The decrease was primarily due to a $15.7 million decrease in personnel-related and other costs, inclusive of restructuring costs, which was driven by a decrease in average headcount, a $1.1 million decrease in neighbor services, and a $0.3 million decrease in performance marketing costs to attract local businesses, partially offset by a $1.1 million increase in performance marketing costs for user acquisition.
In addition, allocated overhead costs, such as facilities, information technology, and depreciation are included in research and development expenses. 49 Table of Contents Sales and Marketing Sales and marketing expenses consist of personnel-related and other costs which include salaries, commissions, benefits, restructuring costs, and stock-based compensation for employees engaged in sales and marketing activities as well as other costs including third-party consulting, public relations, allocated overhead costs, and amortization of acquired intangible assets.
Sales and Marketing Sales and marketing expenses consist of personnel-related and other costs which include salaries, commissions, benefits, restructuring costs, and stock-based compensation for employees engaged in sales and marketing activities as well as other costs including third-party consulting, public relations, allocated overhead costs, and amortization of acquired intangible assets.
Investing activities Cash provided by investing activities for the year ended December 31, 2023 was $66.5 million, which consisted of proceeds from maturities of marketable securities of $504.4 million and proceeds from sales of marketable securities of $155.4 million.
Investing activities Cash provided by investing activities for the year ended December 31, 2024 was $86.4 million, which consisted of proceeds from maturities of marketable securities of $198.5 million and proceeds from sales of marketable securities of $185.6 million.
Provision for income taxes Year Ended December 31, Change (in thousands) 2023 2022 $ % Provision for income taxes $ 756 $ 1,673 $ (917) (55) % Provision for income taxes decreased by $0.9 million, or 55%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Provision for income taxes Year Ended December 31, Change (in thousands) 2024 2023 $ % Provision for income taxes $ 706 $ 756 $ (50) (7) % Provision for income taxes decreased by $0.1 million, or 7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The decrease was primarily due to the periodic re-measurement of monetary assets and liabilities denominated in non-functional currencies.
The decrease was primarily due to the periodic re-measurement of monetary assets and liabilities denominated in non-functional currencies and gains and losses on marketable securities and foreign currency transactions.
Key business metrics for the three months ended December 31, 2023 are as follows: • Weekly active users (“WAUs”) were 41.8 million, an increase of 5% compared to the three months ended December 31, 2022. • Average revenue per weekly active user (“ARPU”) was $1.33 and remained flat compared to the three months ended December 31, 2022.
Key business metrics for the three months ended December 31, 2024 are as follows: • Weekly active users (“WAUs”) were 45.9 million, an increase of 10% compared to the three months ended December 31, 2023. • Average revenue per weekly active user (“ARPU”) was $1.42, an increase of 7% compared to the three months ended December 31, 2023.
Financial Results as of and for the year ended December 31, 2023 are as follows: • Revenue was $218.3 million, an increase of 3% compared to 2022. • Total costs and expenses were $390.6 million, an increase of 9% compared to 2022, including $11.1 million of restructuring charges. • Net loss increased 7% to $147.8 million in 2023, compared to $137.9 million in 2022. • Adjusted EBITDA loss decreased 2% to $74.1 million in 2023, compared to $75.5 million in 2022. • Cash, cash equivalents, and marketable securities were $531.1 million.
Financial Results as of and for the year ended December 31, 2024 are as follows: • Revenue was $247.3 million, an increase of 13% compared to 2023. • Total costs and expenses were $368.9 million, a decrease of 6% compared to 2023, including $25.6 million of restructuring charges. • Net loss decreased 34% to $98.1 million in 2024, compared to $147.8 million in 2023. • Adjusted EBITDA loss decreased 75% to $18.2 million in 2024, compared to $74.1 million in 2023. • Cash, cash equivalents, and marketable securities were $427.0 million.
Cost of revenue Year Ended December 31, Change (in thousands, except percentages) 2023 2022 $ % Cost of revenue $ 41,613 $ 38,981 $ 2,632 7 % Cost of revenue increased by $2.6 million, or 7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Cost of revenue Year Ended December 31, Change (in thousands, except percentages) 2024 2023 $ % Cost of revenue $ 41,850 $ 41,613 $ 237 1 % Cost of revenue increased by $0.2 million, or 1%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Other income (expense), net Year Ended December 31, Change (in thousands, except percentages) 2023 2022 $ % Other income (expense), net $ (505) $ (1,343) $ 838 (62) % Other expense, net decreased by $0.8 million, or 62%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Other income (expense), net Year Ended December 31, Change (in thousands, except percentages) 2024 2023 $ % Other income (expense), net $ (99) $ (505) $ 406 (80) % Other expense, net decreased by $0.4 million, or 80%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Cash used in operating activities during the year ended December 31, 2022 was $60.5 million which resulted from a net loss of $137.9 million, adjusted for non-cash charges of $68.0 million and net cash inflows of $9.4 million from changes in operating assets and liabilities.
Cash used in operating activities during the year ended December 31, 2023 was $59.3 million which resulted from a net loss of $147.8 million, adjusted for non-cash charges of $79.9 million and net cash inflows of $8.6 million from changes in operating assets and liabilities.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (in thousands) 2023 2022 2021 Net cash used in operating activities $ (59,273) $ (60,503) $ (51,268) Net cash provided by (used in) investing activities $ 66,490 $ (342,448) $ (149,522) Net cash provided by (used in) financing activities $ 8,916 $ (64,348) $ 637,576 Operating activities Cash used in operating activities during the year ended December 31, 2023 was $59.3 million which resulted from a net loss of $147.8 million, adjusted for non-cash charges of $79.9 million and net cash inflows of $8.6 million from changes in operating assets and liabilities.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (in thousands) 2024 2023 2022 Net cash used in operating activities $ (20,202) $ (59,273) $ (60,503) Net cash provided by (used in) investing activities $ 86,426 $ 66,490 $ (342,448) Net cash provided by (used in) financing activities $ (81,035) $ 8,916 $ (64,348) Operating activities Cash used in operating activities during the year ended December 31, 2024 was $20.2 million which resulted from a net loss of $98.1 million, adjusted for non-cash charges of $95.9 million and net cash outflows of $18.0 million from changes in operating assets and liabilities.
Research and development Year Ended December 31, Change (in thousands, except percentages) 2023 2022 $ % Research and development $ 149,998 $ 127,073 $ 22,925 18 % Research and development expenses increased by $22.9 million, or 18%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Research and development Year Ended December 31, Change (in thousands, except percentages) 2024 2023 $ % Research and development $ 127,939 $ 149,998 $ (22,059) (15) % Research and development expenses decreased by $22.1 million, or 15%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The increase was primarily due to a $20.2 million increase in personnel-related costs, inclusive of restructuring costs, primarily driven by an increase in average headcount, a $2.4 million increase in third-party software costs, and a $0.5 million increase in allocated overhead costs reflecting an increase in average headcount. 52 Table of Contents Sales and marketing Year Ended December 31, Change (in thousands, except percentages) 2023 2022 $ % Personnel-related and other $ 93,056 $ 77,718 $ 15,338 20 % Brand and performance marketing 18,054 33,628 (15,574) (46) % Neighbor services 11,815 11,836 (21) — % Total sales and marketing $ 122,925 $ 123,182 $ (257) — % Sales and marketing expenses decreased by $0.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The decrease was primarily due to a $21.3 million decrease in personnel-related costs, inclusive of restructuring costs, primarily driven by a decrease in average headcount, and a $0.4 million decrease in allocated overhead costs reflecting a decrease in average headcount, partially offset by a $0.6 million increase in third-party software costs. 52 Table of Contents Sales and marketing Year Ended December 31, Change (in thousands, except percentages) 2024 2023 $ % Personnel-related and other $ 77,350 $ 93,056 $ (15,706) (17) % Brand and performance marketing 18,876 18,054 822 5 % Neighbor services 10,751 11,815 (1,064) (9) % Total sales and marketing $ 106,977 $ 122,925 $ (15,948) (13) % Sales and marketing expenses decreased by $15.9 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Comparison of the Years Ended December 31, 2023 and 2022 Revenue Year Ended December 31, Change (in thousands, except percentages) 2023 2022 $ % Revenue $ 218,309 $ 212,765 $ 5,544 3 % Revenue increased by $5.5 million, or 3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, Change (in thousands, except percentages) 2024 2023 $ % Revenue $ 247,276 $ 218,309 $ 28,967 13 % Revenue increased by $29.0 million, or 13%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
General and administrative Year Ended December 31, Change (in thousands, except percentages) 2023 2022 $ % General and administrative $ 76,057 $ 67,733 $ 8,324 12 % General and administrative expenses increased by $8.3 million, or 12%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
General and administrative Year Ended December 31, Change (in thousands, except percentages) 2024 2023 $ % General and administrative $ 92,149 $ 76,057 $ 16,092 21 % General and administrative expenses increased by $16.1 million, or 21%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
As the size and engagement of our user base grows, we believe the potential to increase our revenue grows. 48 Table of Contents We may face challenges increasing the size and engagement of our user base due to a number of factors including competition, challenges in acquiring and engaging users, or changes in regulations. Growth in Monetization .
We may face challenges increasing the size and engagement of our user base due to a number of factors including competition, challenges in acquiring and engaging users, or changes in regulations. Growth in Monetization . Monetization trends, which are reflected in our ARPU, are a key factor that affects our revenue and financial results.
The net cash inflows from changes in operating assets and liabilities were primarily due to a $7.7 million increase in accrued expenses and other liabilities, a $6.9 million decrease in operating lease right-of-use assets due to normal amortization, and a $3.8 million decrease in prepaid expenses and other assets.
The net cash outflows from changes in operating assets and liabilities were primarily due to a $8.1 million decrease in accrued expenses and other liabilities, a $6.9 million decrease in operating lease liabilities due to lease payments, a $5.1 million increase in accounts receivable, and a $1.6 million decrease in accounts payable.
See "Risk Factors" and "Special Note Regarding Forward-Looking Statements” for additional details. Growth in and Engagement of Users. We measure growth in, and engagement of, users by tracking WAUs.
See "Risk Factors" and "Special Note Regarding Forward-Looking Statements” for additional details. 48 Table of Contents Growth in and Engagement of Users. We measure growth in, and engagement of, users by tracking WAUs. As the size and engagement of our user base grows, we believe the potential to increase our revenue grows.
We also present WAUs by geography because we are more advanced in engagement and monetization in the United States than internationally. Beginning in September 2021, Apple introduced changes to the Apple email client available on its operating systems, which limit our ability to measure user engagement with emails containing monetizable content for users that use the Apple email client.
We also present WAUs by geography because we are more advanced in engagement and monetization in the United States than internationally. In recent years, changes made to third party email operating systems have limited our ability to measure user engagement with emails containing monetizable content.
If our near-term investments do not lead to increased international WAUs and ARPU and expected revenue growth over time, we may not achieve or, if achieved, maintain profitability and our growth rates may slow or decline. Seasonality. Industry advertising spend tends to be strongest in the fourth quarter, and we typically observe a similar pattern in our historical revenue.
If these efforts do not lead to increased international WAUs and ARPU and expected revenue growth over time, we may not achieve or, if achieved, maintain profitability and our growth rates may slow or decline. Seasonality. We typically observe seasonal improvements in advertising spend beginning in the second quarter, with those demand trends remaining stable through the fourth quarter.
Research and Development Research and development expenses consist primarily of personnel-related costs, including salaries, benefits, restructuring costs, and stock-based compensation for our employees engaged in research and development, as well as costs for consultants, contractors and third-party software.
Cost of revenue also includes third-party costs associated with delivering and supporting our advertising products and credit card transaction fees related to processing customer transactions. 49 Table of Contents Research and Development Research and development expenses consist primarily of personnel-related costs, including salaries, benefits, restructuring costs, and stock-based compensation for our employees engaged in research and development, as well as costs for consultants, contractors and third-party software.
We define ARPU as our total revenue in that geography during a period divided by the average of the number of WAUs in that geography during the same period. We present ARPU on a U.S. and international basis because we are more advanced in our monetization in the United States than internationally. U.S.
We present ARPU on a U.S. and international basis because we are more advanced in our monetization in the United States than internationally. 47 Table of Contents U.S.
We are also focused on increasing our user base and engagement in the United States and internationally, which will increase the opportunities for businesses to advertise on Nextdoor.
To increase monetization, we are focused on serving more national brands by efficiently scaling our sales force, increasing ad agency relationships, and enhancing our self-serve tools for customers of all sizes. We are also focused on increasing our user base and engagement in the United States and internationally, which will increase the opportunities for businesses to advertise on Nextdoor.
Performance marketing costs related to local business acquisition largely consists of digital advertising and, to a lesser extent, direct mail campaigns.
Performance marketing costs related to user acquisition largely consist of digital advertising and, to a lesser extent, the distribution of mailed invitations.
Cash used in financing activities for the year ended December 31, 2022 was $64.3 million, which consisted of repurchases of common stock of $77.2 million. This was partially offset by $12.5 million of proceeds from the exercise of stock options.
Financing activities Cash used in financing activities for the year ended December 31, 2024 was $81.0 million, which consisted of repurchases of common stock of $75.5 million and $19.9 million of tax withholdings from stock-based awards, partially offset by $13.3 million of proceeds from the exercise of stock options and $1.1 million of proceeds from the issuance of common stock under the employee stock purchase plan.
The increase was primarily due to a $10.5 million increase in personnel-related costs, inclusive of restructuring costs, which was driven by an increase in average headcount, partially offset by a $2.7 million decrease in insurance expenses.
The increase was primarily due to $22.8 million of impairment costs related to office space reductions, partially offset by a $4.0 million decrease in personnel-related costs, inclusive of restructuring costs, which was driven by a decrease in average headcount, and a $1.9 million decrease in professional fees.
Interest income Year Ended December 31, Change (in thousands, except percentages) 2023 2022 $ % Interest income $ 25,780 $ 9,304 $ 16,476 177 % Interest income increased by $16.5 million, or 177%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was driven by higher interest rates.
Interest income Year Ended December 31, Change (in thousands, except percentages) 2024 2023 $ % Interest income $ 24,381 $ 25,780 $ (1,399) (5) % Interest income decreased by $1.4 million, or 5%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily driven by lower invested balances.
For purposes of calculating ARPU, revenue by user geography is apportioned to each region based on a determination of the location of the account where the revenue-generating 47 Table of Contents activities occur.
For purposes of calculating ARPU, revenue by user geography is apportioned to each region based on a determination of the location of the account where the revenue-generating activities occur. Our ARPU for the years ended December 31, 2024 and 2023 was $5.48 and $5.25, respectively, with the increase due to stronger revenue growth relative to WAU growth.
The increase was primarily due to an increase in advertiser demand for our product offerings, which we believe was driven by increased marketer spending as well as increased user engagement as measured by a 9% increase in 2023 WAUs. Full year ARPU decreased 6% reflecting stronger year-over-year WAU growth relative to revenue growth.
The increase was primarily due to increased advertiser spending as well as increased user engagement as measured by an 8% increase in 2024 WAUs. Full year ARPU increased 4% reflecting year-over-year growth in both revenue and WAUs.
These amounts were partially offset by a $7.1 million decrease in operating lease liabilities due to lease payments, and a $1.6 million decrease in accounts payable.
These amounts were partially offset by a $3.7 million decrease in operating lease right-of-use assets due to normal amortization.
We believe that increased international monetization presents an important opportunity for long-term growth, and we are working on localizing our product and expanding our operations to better serve our international user and customer base.
While we believe that increased international monetization presents an important opportunity for long-term growth, our primary focus remains on improving our product experience and aligning our operations to best serve users and advertisers in our existing markets.
Cash used in investing activities for the year ended December 31, 2022 was $342.4 million, which consisted of purchases of marketable securities of $711.9 million, a loan to Opportunity Finance Network of $5.0 million, and purchases of property and equipment of $3.2 million.
This was partially offset by purchases of marketable securities of $289.8 million and a loan to Opportunity Finance Network of $7.5 million. Cash provided by investing activities for the year ended December 31, 2023 was $66.5 million, which consisted of proceeds from maturities of marketable securities of $504.4 million and proceeds from sales of marketable securities of $155.4 million.
The Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares, and the program may be extended, modified, suspended, or discontinued at any time. During the year ended December 31, 2023, we did not repurchase or retire any shares of Class A common stock.
The Share Repurchase Program does not obligate us to repurchase any dollar amount or number of shares, and the program may be extended, modified, suspended, or discontinued at any time. On February 21, 2024, our Board of Directors authorized and approved an increase of $150.0 million to the Share Repurchase Program and extended the expiration date to March 31, 2026.
While we have the ability to serve ads in all emails with monetizable content, we currently only do so on a portion of the total. 46 Table of Contents Quarterly Average Weekly Active Users (in millions) Average Revenue per Weekly Active User (ARPU) We generate revenue primarily from advertising. We measure monetization of our platform through our ARPU metric.
Quarterly Average Weekly Active Users (in millions) Average Revenue per Weekly Active User (ARPU) We generate revenue primarily from advertising. We measure monetization of our platform through our ARPU metric. We define ARPU as our total revenue in that geography during a period divided by the average of the number of WAUs in that geography during the same period.
Our ability to grow our user base, attract new advertisers, increase our revenue, and expand our total addressable market will depend, in part, on our ability to continue innovating. International Expansion. Our early proof points from launches in certain countries outside of the United States show user engagement across international markets on par with the U.S. market.
Our ability to grow our user base, attract new advertisers, increase our revenue, and expand our total addressable market will depend, in part, on our ability to continue innovating. Investments in Platform . In 2024, we announced the launch of our NEXT initiative, a planned transformation of our platform.
Our WAU for the three months ended December 31, 2023 and 2022 was 41.8 million and 40.0 million, respectively, which represents 5% growth period over period. 1 Emails with monetizable content are emails with a primary purpose to regularly inform users about topics that are relevant to them, and are therefore appropriate for delivering ads to users.
While we have the ability to serve ads in all emails with monetizable content, we currently only do so on a portion of the total. 46 Table of Contents Our WAU for the three months ended December 31, 2024 and 2023 was 45.9 million and 41.8 million, respectively, which represents 10% growth period over period.
Non-cash charges primarily consisted of $64.4 million of stock-based compensation expense and $5.7 million of depreciation and amortization expense.
Non-cash charges primarily consisted of $74.1 million of stock-based compensation expense, $22.8 million of non-cash impairment charges related to lease abandonment, and $3.9 million of depreciation and amortization expense, partially offset by $5.5 54 Table of Contents million of accretion on investments.
We also believe that we can increase the monetization of users in international markets and that we can increase long-term ARPU for international WAUs from current levels. While we expect to grow ARPU for international WAUs, we still expect this to be lower than ARPU for U.S. WAUs. We expect that our international expansion will require significant investment.
We are taking a strategic and measured approach to international expansion, prioritizing investments in markets where we see the strongest potential for sustainable growth. Over time, we believe that international WAUs can expand meaningfully, and we see opportunities to increase monetization and ARPU in these markets. However, we expect ARPU for international WAUs to be lower than ARPU for U.S.
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Overview At Nextdoor, our purpose is to cultivate a kinder world where everyone has a neighborhood they can rely on. Neighbors around the world turn to Nextdoor to receive trusted information, give and get help, get things done, and build real world connections with those nearby — neighbors, businesses, and public services.
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Overview Nextdoor is the essential neighborhood network. Neighbors, public agencies and businesses use Nextdoor to connect around local information that matters in more than 340,000 neighborhoods globally, across 11 countries. The Nextdoor platform fosters discussion focused on real-world utility and discovery, enables instant distribution of timely local information, and ensures trust and authenticity.
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By fostering these connections, both online and in the real world, Nextdoor builds stronger, more vibrant, and more resilient neighborhoods. As of December 31, 2023, Nextdoor was in more than 325,000 neighborhoods around the world and in 1 in 3 households in the United States.
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This unique combination drives genuine, high-intent engagement, and helps neighborhoods thrive both online and in the real world. Through innovative technology, a focus on relevant content, and a proprietary advertising platform, Nextdoor helps create vibrant communities while empowering businesses of all sizes to reach highly engaged audiences.
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As of the end of the fourth quarter of 2023, Nextdoor had 88 million global Verified Neighbors.
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As of December 31, 2024, Nextdoor had more than 100 million Verified Neighbors, 46 million Weekly Active Users (WAU) and reached 1 in 3 households in the United States.
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Our ARPU for the years ended December 31, 2023 and 2022 was $5.25 and $5.60, respectively, with the decrease due to stronger WAU growth relative to revenue growth. Quarterly ARPU Factors Affecting Our Performance Macroeconomic Conditions.
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Restructuring In April 2024, we performed a restructuring intended to refocus the Company for future growth. The plan impacted 38 of our full-time employees. We incurred one-time charges of approximately $2.8 million in connection with the plan, consisting primarily of cash expenditures for severance payments, employee benefits, and related costs.
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Monetization trends, which are reflected in our ARPU, are a key factor that affects our revenue and financial results. To increase monetization, we are focused on serving more national brands by efficiently scaling our salesforce, increasing ad agency relationships, and enhancing our self-serve tools for customers of all sizes.
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The execution of the plan was substantially complete by the end of the second quarter of 2024. In addition, in June 2024 we ceased occupying and abandoned certain floors of our leased headquarters in San Francisco in order to adjust our office space footprint to better align with the needs of our work model.
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We are still in the early stages of global expansion and will continue to evaluate expansion opportunities in our current international markets, and also in additional geographies. Over time, we believe that international WAUs can grow rapidly.
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As a result, 45 Table of Contents we recorded impairment charges of $22.8 million for the related operating lease right-of-use assets, leasehold improvements and furniture and fixtures. The following table summarizes the restructuring charges in the consolidated statements of operations for the year ended December 31, 2024 (in thousands).
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Although our investments in international expansion may adversely affect our operating results in the near term, we believe that they will contribute to our long-term growth.
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Office Space Reductions (1) Severance and Related Charges Total Research and development $ — $ 250 $ 250 Sales and marketing — 1,956 1,956 General and administrative 22,760 612 23,372 Total $ 22,760 $ 2,818 $ 25,578 (1) Office space reductions are primarily non-cash and include impairment charges related to operating lease right-of-use assets, leasehold improvements and furniture and fixtures.
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Cost of revenue also includes third-party costs associated with delivering and supporting our advertising products and credit card transaction fees related to processing customer transactions.
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For additional information, please see the section entitled “Risk Factors – Certain of our market opportunities and key metric estimates could prove to be inaccurate, and any real or perceived inaccuracies may harm our reputation and negatively affect our business .” 1 Emails with monetizable content are emails with a primary purpose to regularly inform users about topics that are relevant to them, and are therefore appropriate for delivering ads to users, as well as emails that deliver sponsored ads.
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As of December 31, 2023, we had $22.8 million available for future share repurchases under the Share Repurchase Program. On February 21, 2024, the Company’s Board of Directors authorized and approved an increase of $150.0 million to the Share Repurchase Program and extended the expiration date to March 31, 2026.
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We have made and expect to continue to make investments in our platform, including our efforts to transform our product with the NEXT initiative.
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This was partially offset by proceeds from maturities of marketable securities of $366.8 million and proceeds from sales of marketable securities of $10.8 million.
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The success of NEXT, and the return on our investments associated with NEXT, will depend on the ability of these platform changes to drive additional users and user engagement on our platform and to provide value to advertisers. International Expansion. We continue to assess opportunities to grow our international user base and expand monetization outside of the United States.
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Stock-based compensation Stock-based compensation expense for stock-based awards is measured based on the grant date fair value of the awards and recognized in the consolidated statements of operations on a straight-line basis over the requisite service period of the awards. The grant date fair value of stock options granted is estimated using the Black-Scholes option pricing model.
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WAUs. Our investments in international expansion are targeted and align with our broader strategic priorities. The success of these initiatives will depend on our ability to drive engagement and monetization in international markets.
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Forfeitures are accounted for as they occur. Historically, our stock option awards and restricted stock permitted early exercise. The unvested portion of shares exercised is recorded as a liability on our consolidated balance sheets and reclassified into stockholders’ equity (deficit) as vesting occurs. 56 Table of Contents The Black-Scholes option-pricing model requires the use of highly subjective assumptions.
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In addition, allocated overhead costs, such as facilities, information technology, and depreciation are included in research and development expenses.
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These assumptions are estimated as follows: • Fair Value of the Underlying Common Stock—Prior to the Business Combination, the Board of Directors considered numerous objective and subjective factors to determine the fair value of our common stock.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates. Interest Rate Risk As of December 31, 2023, we had cash and cash equivalents of $60.2 million and marketable securities of $470.9 million.
Biggest changeOur market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates. Interest Rate Risk As of December 31, 2024, we had cash and cash equivalents of $45.6 million and marketable securities of $381.4 million. Our cash and cash equivalents consist of cash in bank accounts, demand deposits, money market funds, and corporate bonds.
Dollar would have materially affected our consolidated financial statements for the periods presented. To date, we have not had a formal hedging program with respect to foreign currency, but we may do so in the future if our exposure to foreign currency should become more significant. 58 Table of Contents
Dollar would have materially affected our consolidated financial statements for the periods presented. To date, we have not had a formal hedging program with respect to foreign currency, but we may do so in the future if our exposure to foreign currency should become more significant. 57 Table of Contents
Our sales are typically denominated in the local currency of the country in which the sale was made. The majority of our revenue is denominated in U.S. Dollars. As such, our 57 Table of Contents revenue is not currently exposed to significant foreign currency risk.
Our sales are typically denominated in the local currency of the country in which the sale was made. The majority of our revenue is denominated in U.S. Dollars. As such, our revenue is not currently exposed to significant foreign currency risk.
Our cash and cash equivalents consist of cash in bank accounts, demand deposits, money market funds, corporate bonds, and commercial paper. The primary objectives of our investment activities are to preserve principal and provide liquidity without significantly increasing risk. We do not enter into investments for trading or speculative purposes.
The primary objectives of our investment activities are to preserve principal and provide liquidity without significantly increasing risk. We do not enter into investments for trading or speculative purposes.

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