Nextdoor announced on November 12 that it is launching AI‑driven ad performance optimization and a suite of new video ad formats, a key component of its broader “NEXT” transformation aimed at deepening advertiser value and competing with larger social‑media and local‑search platforms.
The new AI optimization engine automatically adjusts bids and creative placement in real time, building on a pre‑launch testing period that saw an average click‑through‑rate lift of 134% over 11 months. While post‑launch performance data are not yet available, the technology is designed to deliver higher efficiency and cost savings for advertisers by targeting high‑intent neighbors more precisely.
Video capabilities now include native video ads, carousel formats, and pilots for locally personalized messaging that tailors content to individual neighborhoods. These additions expand storytelling options and are expected to increase engagement and conversion rates for local businesses.
Financially, Nextdoor reported record Q3 2025 revenue of $69 million, up 5% year‑over‑year, and a positive Adjusted EBITDA of $4 million—an improvement from a $1 million loss in Q3 2024. The self‑serve channel, which accounts for roughly 60% of revenue, grew 27% YoY to $41 million, driving much of the top‑line momentum. Operating cash flow remained positive and the company’s liquidity position is strong, with no debt on the balance sheet.
CEO Nirav Tolia said the company is “building a new Nextdoor platform that delivers the best user experience while unlocking new monetization opportunities.” Chief Revenue Officer Michael Kiernan added that the AI tools give marketers “precision to turn hyper‑local advertising into tangible business results.” Together, the comments underscore a focus on operational discipline, strategic investment in AI, and a clear path to Adjusted EBITDA breakeven in FY 2026.
Guidance for Q4 2025 projects revenue of $67–$68 million and Adjusted EBITDA of $3.5–$4.5 million, while full‑year 2025 revenue is expected to grow 3–4% to roughly $69–$70 million with an Adjusted EBITDA loss of about $3 million. Investors remain cautious about the company’s GAAP net loss, but the company’s trajectory—strong revenue growth, improving profitability, and AI‑driven product innovation—signals confidence in its long‑term strategy.
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