Nextdoor
is cutting its staff by 25% as the locally focused social network adjusts to a more difficult advertising environment.
The job cuts will affect almost 200 positions across the company, CEO Sarah Friar said in an interview with Barron’s.
Friar said she had hoped for a more sustained recovery in the ad market in the second half of the year, but that the company didn’t see that in the third quarter and isn’t expecting a pickup in the fourth quarter either. Friar said the company is seeing particular weakness in the financial services and home services vertical markets.
“We felt like we had to right-size the business,” Friar said. “It has been a tough day in the office.”
Nextdoor shares (ticker: KIND) in premarket trading Wednesday are 6% lower at $1.71.
Nextdoor expects its restructuring program to reduce expenses by about $60 million a year. Friar said the program should set Nextdoor up to reach cash flow break-even by the end of 2025.
For the third quarter, Nextdoor posted revenue of $56 million, up 4% from a year ago and slightly below Wall Street’s consensus estimate of $56.3 million. Adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, was a loss of $20 million, widening from a loss of $18 million in the year-ago period. Net loss was $38 million, versus $35 million a year ago. Weekly active users in the quarter were 40.4 million, up 6% from a year ago.
For the fourth quarter, the company is projecting revenue of $50 million to $52 million, down 4% from a year ago at the midpoint of the range and below consensus at $61.2 million. The company sees an adjusted Ebitda loss of between $19 million and $21 million for the quarter, not counting the impact of expenses related to the cost-reduction plan.
The company also announced that CFO Mike Doyle will resign effective today. Matt Anderson, the company’s head of finance and strategy, will replace him.
Write to Eric J. Savitz at eric.savitz@barrons.com
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