Nextdoor Holdings, Inc. (NXDR)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The discussion should be read together with our unaudited condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Special Note Regarding Forward-Looking Statements” and “Risk Factors” or in other parts of this Quarterly Report.

Overview

Nextdoor is the essential neighborhood network connecting over 110 million Verified Neighbors to the people, places, and information that matter most in their local communities. Operating in over 350,000 neighborhoods across 11 countries, Nextdoor fosters trusted, real-world utility through locally relevant content and services, including news, real-time safety alerts, neighbor recommendations, for sale and free listings, and events. This focus on practical local value drives genuine, high-intent local engagement and supports a diverse ecosystem of neighbors and partners seeking to connect with neighbors.

Key business metrics and financial results as of and for the three months ended June 30, 2026 are as follows:

•Platform weekly active users (“Platform WAU”) was 22.9 million, an increase of 5% compared to the three months ended June 30, 2025.

•Average revenue per platform weekly active user (“Platform ARPU”) was $3.26, an increase of 9% compared to the three months ended June 30, 2025.

•Revenue was $74.6 million, an increase of 15% compared to the three months ended June 30, 2025.

•Total costs and expenses were $80.2 million, a decrease of 6% compared to the three months ended June 30, 2025.

•Net loss decreased 86% to $2.1 million, compared to a net loss of $15.4 million for the three months ended June 30, 2025.

•Adjusted EBITDA was $9.5 million, compared to a loss of $2.2 million for the three months ended June 30, 2025.

•Cash, cash equivalents, and marketable securities were $378.0 million as of June 30, 2026.

See “Non-GAAP Financial Measure” below for more information and for a reconciliation of net loss, the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), to Adjusted EBITDA.

Key Business Metrics

In addition to the measures presented in our unaudited condensed consolidated financial statements, we use the following key business metrics to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions:

Platform Weekly Active Users (Platform WAU)

We define a Platform WAU as a Nextdoor user who opens our application or logs on to our website at least once during a defined 7-day period. We calculate average Platform WAU for a particular period by calculating the count of unique users, on a rolling basis for the past seven days, for each day of that period, and dividing that sum by the number of days in that period. We assess the health of our business by measuring Platform WAU because we believe that weekly usage best captures the cadence at which we expect a healthy user base to engage with and derive the most utility from our platform, and by extension their neighborhood.

Our Platform WAU for the three months ended June 30, 2026 and 2025 was 22.9 million and 21.8 million, respectively, which represents a 5% increase period over period.

21

Table of Contents

Quarterly Average Platform WAU

(in millions)

Average Revenue per Platform Weekly Active User (Platform ARPU)

We generate revenue primarily from advertising. We measure monetization of our platform through our Platform ARPU metric. We define Platform ARPU as our total revenue during a period divided by the average of the number of Platform WAU during the same period.

Our Platform ARPU for the three months ended June 30, 2026 and 2025 was $3.26 and $2.99, respectively.

Quarterly Platform ARPU

22

Table of Contents

Components of Results of Operations

Revenue

We generate a majority of our revenue from the delivery of advertising services. We recognize revenue only after transferring control of promised goods or services to the customer. Advertising services are typically sold on a cost per thousand (“CPM”) basis, a cost per click (“CPC”) basis, or on a subscription basis according to the service period. The majority of our revenue is generated in the United States.

Cost of Revenue

Cost of revenue consists primarily of expenses associated with the delivery of our revenue generating activities, including the third-party costs of hosting our platform and allocated personnel-related costs, which include salaries, benefits, and stock-based compensation for employees engaged in development of our revenue generating products. Cost of revenue also includes third-party costs associated with delivering and supporting our advertising services and credit card transaction fees related to processing customer transactions.

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. In addition, allocated overhead costs, such as facilities, information technology, and depreciation are included in research and development expenses.

Sales and Marketing

Sales and marketing expenses consist primarily 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, and allocated overhead costs. 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 consist of digital advertising and, to a lesser extent, direct mail campaigns. Performance marketing costs related to user acquisition largely consist of digital advertising. Fluctuations in our performance marketing expenses are driven by a variety of factors, including but not limited to: our target geographies, whether we are acquiring users or businesses, assessment of return on investment of marketing spend, strategic priorities, and seasonal factors.

General and Administrative

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, restructuring costs, and stock-based compensation, for certain executives, finance, legal, information technology, human resources, and other administrative employees. In addition, general and administrative expenses include fees and costs for professional services, including consulting, third-party legal and accounting services, and allocated overhead costs.

Interest Income

Interest income consists of interest earned on our cash, cash equivalents, and marketable securities.

Other Income (Expense), Net

Other income (expense), net consists primarily of unrealized gains and losses from the re-measurement of monetary assets and liabilities denominated in non-functional currencies, and gains and losses on marketable securities and foreign currency transactions.

Provision for Income Taxes

The provision for income taxes consists primarily of income taxes related to foreign and state jurisdictions in which we conduct business. We maintain a full valuation allowance on our U.S. federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized.

23

Table of Contents

Results of Operations

The results of operations presented below should be reviewed in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report. The following table sets forth our unaudited condensed consolidated results of operations for the periods presented.

__________________

(1)Includes stock-based compensation expense as follows:

The following table sets forth the components of our unaudited condensed consolidated statements of operations as a percentage of revenue for each of the periods presented:

24

Table of Contents

Note: Certain figures may not sum due to rounding.

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Revenue

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The discussion should be read together with our consolidated financial statements and related notes that are included elsewhere in this Annual Report. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Special Note Regarding Forward-Looking Statements” and “Risk Factors” or in other parts of this Annual Report.

Discussions regarding our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 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 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, 2024, filed with the SEC on February 27, 2025.

Overview

Nextdoor is the essential neighborhood network connecting over 105 million Verified Neighbors to the people, places, and information that matter most in their local communities. Operating in over 350,000 neighborhoods across 11 countries, Nextdoor fosters trusted, real-world utility through locally relevant content and services, including news, real-time safety alerts, neighbor recommendations, for sale and free listings, and events. This focus on practical local value drives genuine, high-intent local engagement and supports a diverse ecosystem of neighbors and partners seeking to connect with neighbors.

Key business metrics for the three months ended December 31, 2025 are as follows:

•Platform weekly active users (“Platform WAU”) was 21.0 million, a decrease of 5% compared to the three months ended December 31, 2024.

•Average revenue per platform weekly active user (“Platform ARPU”) was $3.31, an increase of 13% compared to the three months ended December 31, 2024.

Financial Results as of and for the year ended December 31, 2025 are as follows:

•Revenue was $257.6 million, an increase of 4% compared to 2024.

•Total costs and expenses were $329.6 million, a decrease of 11% compared to 2024.

•Net loss decreased 45% to $54.2 million in 2025, compared to $98.1 million in 2024.

•Adjusted EBITDA was positive $0.6 million in 2025, compared to a loss of $18.2 million in 2024.

•Cash, cash equivalents, and marketable securities were $404.8 million.

See “Non-GAAP Financial Measure” below for more information and for a reconciliation of net loss, the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), to Adjusted EBITDA.

47

Table of Contents

Restructuring

In August 2025, we announced a cost reduction plan intended to right size the business and align the workforce and other expenses with our business priorities. The execution of the cost reduction plan was substantially complete by the end of the third quarter of 2025.

The following table summarizes the restructuring charges in the consolidated statements of operations for the year ended December 31, 2025 (in thousands):

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 $2.8 million in connection with the plan, consisting primarily of cash expenditures for severance payments, employee benefits and related costs. 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. As a result, 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).

(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.

In the fourth quarter of 2023, we announced a 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%. The execution of the cost reduction plan was substantially complete by the end of the fourth quarter of 2023.

The following table summarizes the restructuring charges in the consolidated statements of operations for the year ended December 31, 2023 (in thousands):

Refer to Note 13 to our consolidated financial statements for further information on our restructuring charges.

Key Business Metrics

In addition to the measures presented in our consolidated financial statements, we use the following key business metrics to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions:

48

Table of Contents

Platform Weekly Active Users (Platform WAU)

We define a Platform WAU as a Nextdoor user who opens our application or logs on to our website at least once during a defined 7-day period. We calculate average Platform WAU for a particular period by calculating the count of unique users, on a rolling basis for the past seven days, for each day of that period, and dividing that sum by the number of days in that period. We assess the health of our business by measuring Platform WAU because we believe that weekly usage best captures the cadence at which we expect a healthy user base to engage with and derive the most utility from our platform, and by extension their neighborhood.

Our Platform WAU for the three months ended December 31, 2025 and 2024 was 21.0 million and 22.2 million, respectively, which represents a 5% decrease period over period.

Quarterly Average Platform Weekly Active Users

(in millions)

Average Revenue per Platform Weekly Active User (Platform ARPU)

We generate revenue primarily from advertising. We measure monetization of our platform through our Platform ARPU metric. We define Platform ARPU as our total revenue during a period divided by the average of the number of Platform WAU during the same period.

Our Platform ARPU for the years ended December 31, 2025 and 2024 was $11.94 and $11.36, respectively.

49

Table of Contents

Quarterly Platform ARPU

Factors Affecting Our Performance

Macroeconomic Conditions. Macroeconomic conditions, whether in the advertising industry in general, among specific types of advertisers or within particular geographies, including but not limited to health epidemics or pandemics, actual or perceived instability in the global banking system, labor shortages, supply chain disruptions, the implementation of tariffs by the United States, China, or other governments, a potential recession, inflation, changing interest rates and 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. 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 Platform WAU. As the size and engagement of our user base grows, we believe the potential to increase our revenue grows.

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 Platform ARPU, are a key factor that affects our revenue and financial results. To increase monetization, we are focused on catering to businesses of all sizes, from small local businesses to large global brands across both self-serve and managed campaigns through our go-to-market approach. This approach combines the scale and efficiency of our proprietary ad stack with the expertise of a dedicated global sales team. 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.

There are many variables that impact Platform ARPU, including the number of ad impressions shown on our platform and the price per ad, which depends on a number of factors including the engagement of our user base, the number and diversity of our customers, seasonality of advertising spend, our customers’ advertising objectives, advertising performance, the effectiveness of our advertising services, our ability to measure that effectiveness for our customer, and the effect of geographic differences on each of these factors.

While we continue to view international monetization as a long-term growth opportunity, our focus is on improving our product experience and aligning our operations to best serve users and advertisers in existing markets, primarily in the United States. Due to our decision to focus our earliest monetization efforts in the United States, we have less experience monetizing international markets and therefore may experience challenges scaling and monetizing these markets. The international advertising market is also less mature than the U.S. digital advertising market.

50

Table of Contents

Investment for Growth. We continually invest in technology to enhance our offerings for neighbors, businesses, and public agencies. At the core of our strategy is the use of AI and ML, which powers personalized content distribution and optimizes ad reach and performance. By leveraging our unique data set, we have developed AI-powered features to increase relevance, engagement, and utility for neighbors. We continue investing in our proprietary ad platform to deliver greater advertiser value, reduce ad

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]