Let's kick it off. All right. Welcome, everybody. Thank you for joining us. I'm Ron Josey, I lead coverage here of Internet across -- at Citi. And look, we're in for what should be a fun conversation. We have Nextdoor's founder, now CEO, again, Nirav Tolia here with us; and CFO, Matt Anderson.
So -- look, I think most people know what Nextdoor does, and so we'll let Nirav sort of talk about it. But the bottom line is we're in the middle of a turnaround here, new management, new style. There's a lot of news this weekend around the founder mode. So I'm sure they will come up. But Nirav, just tell us a little bit more about your decision to come back. And then ultimately, a decision to come back and then big picture, the broader vision.
Well, thank you, Ron, and it's a pleasure to be here. And I know I speak for Matt, when I say that we're big fans of the work you and your team do. And we're excited about continuing to help people understand that this is really a special time for Nextdoor because we have some scale. We don't have nearly the scale that we think we should have and getting to that scale that we think we should have, we believe, is a matter of execution.
And so to your point, I never really left Nextdoor, I just left in an operating capacity. So founded the company in the summer of 2010, ran it as CEO for 9 years. Ultimately, was lucky enough to find Sarah Friar, who was at the time the CFO of Square, now Block. And thought that she would do an exceptional job taking a company that had been in build mode for the first 9 years and scaling it. And she did exactly that over the last 5 years. She scaled the company, professionalized it, took it public, experienced a lot of success.
And then ultimately, as we know, the entire sector had a pretty dramatic pullback. And as we were looking at that as a Board, it became clear to us that the way Nextdoor was going to respond and come back from that pullback was by dramatically improving the quality of its product. Because while Nextdoor has always had this amazing opportunity to become the definitive consumer Internet service in local. And with 95 million Verified Neighbors, we have certainly experienced some traction, established a good position, we haven't been able to truly realize that potential of being the indispensable site that people turn to every single day for information about their local lives.
How do we get there? We didn't believe the way to get there was scaling what we currently have. We felt like the way to get there was to dramatically improve the quality of the product, transform it. And so I was lucky enough to come back. I consider it a privilege. I mean when you think about coming back to the company that you cofounded that you were able to run with a mission that I believe very deeply in and that is a mission around building community at a local level. It's a real privilege.
Now it's not easy. I was an investor for most of the last 5 years and was in particular looking at AI ideas as many investors have, and that was a fun thing, and I used to joke with my wife that I was "working" compared to being a CEO, which is most of what I've done in my career. But a great privilege to come back because the opportunity for Nextdoor is as ripe and vibrant as it's ever been. And the only thing that really stands between us and that great prize is execution.
And so I'm back to work with the team to execute, and we're trying to simultaneously do two things, which is not easy to do, and those two things are; in the very near term, continue to operate the business in a very rigorous and disciplined way, and achieve performance like we had last quarter. Last quarter, we grew users 8%. We went back to double-digit growth in revenue, 11% growth and we had 20 points of margin improvement. So that's the beginning of real steady progress.
The step function progress, which we're all looking for is the other big challenge and the other big opportunity, and that is to transform the Nextdoor product. And we call that effort NEXT, as you know. NEXT should be in our hands by the end of this year. It should be in everyone's hands by the middle of next year. So we're not talking about a long time frame here. But simultaneously building an execution of culture and showing that in the near term while also tuning our innovation machine, so that NEXT can be something that transforms the user experience, that's the challenge in front of us.
Matt, I don't know if I missed anything or if there's anything salient for you to add.
No, I think, on this one, you captured the real essence.
I found it fascinating that productivity grew 50% -- I think I had this right, grew 50% year-over-year. So talks about the near-term operating the business. You saw improvements across the core metrics of users, engagement, revenue. Nirav, you and I spoke when we were -- when you first joined and then also during the summer and others. And there's been a lot of fun hearing the vision of how you do this. And so you talked about Founder's Mentality and bringing that back and having everyone sort of own it. Would love to understand how you combine, do more with less, for maybe our word and maybe the Founder's Mentality word, right, with execution because it's hard to do both.
I believe as a founder of 3 companies and someone who has never been over-resourced that the path to innovation is not made easier with infinite resources. In fact, in many ways, it's made more difficult. I am a big fan of embracing constraints. I'm a big fan of thinking about scarcity more than surplus. And there's a great book in Silicon Valley. I'm sure if one is in founder mode as they're talking about, they are talking about this book. It's called The Mythical Man-Month. And it's about software development. And this idea that if you have a schedule of a piece of software that you're trying to build, you obviously want to either hit that schedule or to pull the schedule back and make it happen as quickly as possible.
But you can't just throw more resources at the problem. Innovation, I don't believe, is gated by resources. You need to have a base level of resources, but we have more than enough resources. Innovation is gated by creativity. It's gated by work ethic. It's gated by caring deeply about what you're doing. And when you talk about the Founder's Mentality, those are the kinds of things that we think about. And when we talk about founder mode, it's a lot more complex than just saying you're going to be a founder when you come back into a public company that needs to deliver results on a quarterly basis.
And I have to give a lot of credit to the former CEO, Sarah and really all the short-term credit for our performance goes to the existing team that I was lucky enough to inherit. They know how to execute. And we've just clarified some things. We've narrowed our focus. We have created a new vision for NEXT.
But that Founder's Mentality is about really believing in the vision, which we do. It's about being obsessed with the front line. And what that means is, the details matter. That's where the magic is. Our users are telling us what they want. We just need to listen. And we need to take immense pride in every single day showing up and having an owner's mindset where every penny matters.
And it's not a question about working late or working on the weekends. This is our company. This is our passion and our purpose. And so going back where the Founder's Mentality is not just relevant when you start a company. It's relevant for any company at any phase in particular, a company that needs to transform itself.
And so that productivity number that you talked about, we're very proud of that internally because what it says is, we can create value through execution. But execution alone is not going to get us where we need to get. We need to also innovate. And so building execution muscle around not just the day-to-day but around innovating that's part of the challenge. And that's what founders have to do when they create companies. They need to simultaneously execute and innovate, that's what we're trying to do.
And if I may add, I just want to pick up one thing on the productivity point too, as well, because as the CFO, it's actually a very deliberate word and there's an equation. It's -- we are a growth business. So we want to make sure people are not just looking at the absolute cost. That's one component of the productivity equation. There's the absolute cost and there's the allocation cost.
So that starts to get into what Nirav was talking about and to give you a few tangible examples. I mean we know over the long, long run, user growth engagement is the ultimate lever in the business. So that guides us. But then we get into things like improving gross margin 2 points year-over-year, what's really happening? We are optimizing the level of [ rigor ] our hosting costs. Will that be recycled back into? Probably more sophisticated models, probably investments in certain areas of the team because we know it cycles back to that top, top product focus.
And then just one other kind of concept as it gets into how we make decisions day-to-day now, which is going from, is it ROI positive to is it the highest ROI? And so when we talk about things like adding millions of organic neighbors each quarter, that's actually very powerful because what it really allows us to do is take our neighbor acquisition spend effectively to 0.
Why is that important? Because that allows us to double down on the better product. When we think about international markets. You see actually more about leverage happening in the U.S. because we are saying, we know, over time, bringing better products, bringing the ad serving and self-serve capabilities to international markets will help us to grow a trajectory very different than if we kind of did incremental neighbor acquisition, incremental ad product availability, so it all comes back to highest ROI, not ROI positive.
And so it's a nuance that doesn't always come through, but that's why productivity was actually a very deliberate word that we use because it's actually more in that equation that means the high interest cost.
That's super helpful and insightful because I think the nuance highest ROI versus is it ROI positive, just changes how you think about things.
I want to get into NEXT to the platform. Before we get the nitty-gritty of like the quarterlies and everything. But before we do, I found the story really fascinating for you to talk about day 1 or week 1. What did you do? Was it your same office, same HQ. And I know you dug into like the data, and that's what I want to hear, I want the story to be told. But I want to hear day one, you walk in, I'm back.
Well, again, I mean, a real privilege to come back, but also a little bit unique and jarring for me because I've been CEO and founder of 3 companies. But as a founder of those companies, I've been employee 0. And so I have hired every one of those people are at least been CEO when those people were hired. When I left Nextdoor, I think there were about 200 people. And ultimately, we got up to 800 or so. And so there's 600 people hired when I wasn't CEO, when I wasn't in the office, when I wasn't day-to-day, and so when I came back, there were many more people in the company that I didn't know and they didn't know me, and that was a very unique experience that I had never really experienced as a CEO.
And so for me, it was about going back and listening and learning. I wasn't going to go in and have any grand gestures. I mean the truth is if I have some magic solution for the company. I was on the Board and I'm the largest individual shareholder. I would have been pounding the table saying, we need to do this, we need to do this. I have incredible confidence in Sarah and the rest of the management team. And so when I walked in, I wanted to understand given that we have a lot of cash, we have extremely talented people and we have an unbelievable market opportunity, why isn't this clicking the way that we all want it to? And that was really all about listening and learning.
The other thing that's been a real blessing is to come in with fresh eyes because I was away for 5 years as an operator. I was on the board, yes, but being on the board is very different than being in on the day-to-day. And in addition to not being in the day-to-day and as a result, being pretty myopic because when you're an operator, you get leverage from being myopic about the details.
But as an investor, which is what I had been over the last 5 years, you need to be more broad than deep. So you're looking across the industry, that's why I had to learn about AI. That's why I had to think about what are the different ways that CEOs manage companies. I have my way of doing it. But then when I became an investor over the last 5 years and I sat on a dozen Boards, I got to experience different ways of doing it. It really made me think.
So when I came back, I was listening and learning. I was getting to know people, and I was thinking to myself, how can I benefit from fresh eyes? I obviously founded the company and created the product. So it's not as if I don't know where the bodies are buried. I'm very familiar with the concept, what's worked, what hasn't worked, what we've tried, what the basics are of everything we've done. But how can I bring some freshness in? And so I paired those fresh eyes with a lot of investigation around the data. And I tried to marry a fresh perspective from being outside the building, with a very quantitative perspective in looking at the data.
And in particular, I was asking myself questions like, how has the world changed between when we started Nextdoor, and we had some of the foundational principles around the product and where we are today. I ask myself the question, how can I cohort some of these 300,000 neighborhoods that are using Nextdoor to try to understand where Nextdoor is working more effectively than it's not working effectively.
I asked myself the question, what are the things that users are telling us we're not doing that they want us to do. And so synthesizing where the world is, what the data is saying quantitatively and then qualitatively what users are saying, that ultimately culminated in a half dozen pages of single-spaced vision, which we call the NEXT Nextdoor.
Good segue for this -- for the NEXT platform.
And the NEXT Nextdoor was as much about painting a vision of what needed to be new as it was an examination of what we felt was wrong with the current product. And wrong is probably too extreme word, but I'll give you a very specific example because let's get into specifics now.
Nextdoor has performed exceptionally well at a number of use cases that are indispensable to our users in a way that no other Internet entity can provide value, and I'll give you examples. When you lose a pet, Nextdoor is one of the only places you can go and has been successful thousands of times in returning lost pets to pet owners. When your neighborhood is in the middle of any kind of inclement weather, particularly extreme weather like a hurricane or a tornado, you rely on your neighbors and Nextdoor is the way you connect with those neighbors. We've seen that happen over and over again. When you need something related to your home from a service provider standpoint, whether it's a babysitter for your kids or whether it's a painter to paint your fence, there's no one better to ask than your neighbors for recommendation.
So that local word of mouth is proxied on Nextdoor in a way that you can't get through Google Search. You can't get through one of your friends on Facebook. So there are a number of use cases where Nextdoor is not just working, it's indispensable. However, the challenge of those use cases is, they don't happen every day. So as we think about building a resource that people rely on every single day to make their local lives better. Hopefully, they're not losing their pets every day. Hopefully, there isn't inclement weather every single day in the neighborhood, right? And once you find the person who's great at power washing your deck, hopefully, you don't need to ask for another person.
So that led us to ask the question, okay, what do people need on a daily basis? And why aren't we delivering? And to give you one specific example, people are looking, particularly with the erosion of local newspapers and we no longer watch the 5:00 p.m. news. So where are we getting local information? How do we know what's going on this weekend where we live? How do we know what local issues need to be discussed and need to be debated? How do we know there's a new restaurant in the area? How do we know that an existing restaurant is closing down, right? That information is in a vacuum right now that's not really accessible. It's not accessible through AI tools either, right?
But our users are telling us they want to rely on Nextdoor to be informed every single day on what's happening in their neighborhood. And that, as we start to get a little bit more fine grained and subtle about how we build a product around it, those set of use cases, what's going on in my neighborhood, broadly speaking, those set of use cases are much more discovery-centric than they are intent-centric. Intent is why we use Google. I'm searching for something specific. Intent is when you lose your pet, or when you need a plumber, or when you need to know what you should do because there's going to be a tornado that's sweeping through, right? Those are intent-centric use cases.
Discovery is why, you wake up in the morning and go to Instagram, or you go to Twitter, or you go to the New York Times. It's because you don't really know what's going on in the world, but you want to know and you rely on some of those sources to find out.
And so as we start to think about NEXT, we're not getting rid of all of the intent-centric use cases. Those are really valuable. We're just going to build around them a set of discovery-centric use cases that we know are really valuable because our users are asking for those things, there's a new house for sale in the neighborhood. What's it worth? What's it going to sell for. This weekend, there is a concert that maybe you didn't hear about, right? Your kids go to a high school. What happened in the football game on Friday night for that high school?
These are all things that typically we find out about either through local media or through conversations with our neighbors. And we know that the world has moved into a place where we no longer rely on local media, and we don't talk to our neighbors as much. And so it's a great opportunity for Nextdoor.
That's a great way to pick -- to paint how we can think about NEXT. That's the platform mid-2025. And I guess we'll be hearing about this discovery of use cases from here to there. But internally, you said by 4Q, you might be seeing something and testing it out.
We're already testing internally ourselves. And I think it is the first chapter of NEXT. And so let me be clear that we think that there are more opportunities around monetization, for example, than what we have seen today, which is we've done really well with ads in the newsfeed, but what is most people's most important financial asset? It's their home. So what can Nextdoor do to help you ensure that, that asset is well cared for, is maintained, is maximized in value, that should be a chapter of NEXT. It's just not going to be the first chapter.
So the first chapter is about those discovery-centric use cases because back to Matt's point about engagement being one of the very first things that you look for from a successful social network, engagement is where we can start. And if that engagement starts to really become more vibrant, that creates a fertile ground to start to push on things like monetization.
And so I think NEXT is not just something that in the middle of 2025, you're going to have something, and that's it, right? It's like all other pieces of innovation. It's a series of breakthroughs that you try to string together in a coherent way. And the first set of those breakthroughs for us are around local information. And making Nextdoor a place that when you wake up in the morning, it's one of that very small set of tools that you feel like you have to check the same way that you would go outside and on your front doorstep was the local newspaper, but that doesn't exist anymore. So where are you going to get the information. It's hard to get it on Twitter. You can't get it on TikTok or Instagram, right? Nextdoor is a very natural place for that to exist, but that's only the first chapter.
Got it. Super helpful. Let's switch gears a little bit and talk about the here and now. This was a good quarter in that we saw accelerating growth. Matt, I wanted to ask you about WAU specifically. I think growth accelerated to 8% in the quarter, 12% in the U.S. I'd love to hear about the drivers because I think we can better see the vision of discoverability, can better see the vision of monetization and how a home and different things you can anchor to, 2Q was good. And so what was it that drove that WAU growth, that greater engagement, anything we can point to?
Yes. I'd break it down into three things, and these are probably good guides at least as you think about the next couple of quarters as well. The first is something referenced right from earlier, which is we are adding millions of new Verified Neighbors each quarter and they're coming organically. And so that is a very powerful input into that WAU equation. So occasionally, that gets lost in the mix of this, but it's a really important starting point.
The next is, what are the things we can do today to remove friction. And we looked at, okay, as Nirav mentioned, looking at the details, looking through the flows, looking to the experiences. One of the things we uncovered is that there were plenty of people that wanted to go consume Nextdoor content who might have just been logged out. And before, they will have hit a WAU and the natural human behavior is to abandon. But how can we get people a log out experience when they click on a link or when they're working on to come back platform. And we can -- by doing that, we get them access to the content. We can actually then prompt them to log back in. And it sounds very -- again, I mean, obvious thing to say, but it's really important because we removed friction that really changes how our existing base of 95 million Verified Neighbors actually comes to us. So that was -- I'd say that was probably the most new engagement dynamic in the quarter.
And then there's the third, which is, in many ways, a perpetual one, which is how do we continue to drive towards a more personalized experience with better content relevance? And the step function there is NEXT. But we can look at things and say, you know what, what content do you see in your feed? What's the distance of that content? And we can actually get much smarter about tailoring and optimizing just the content, how it's ranked, how it's presented based on things as simple as how far away it is from you. And so those things, when taken together, and still driving meaningful improvement from our base today. So I think those are the three, I think about now and then really around how those really start to get amplified as the type of content Nirav have talked about starts to come to before.
Super helpful, especially that removing friction, that logged out experience. You don't hear too much about that. So that's really helpful. Bigger picture, U.S., international? International, we're focusing more in the U.S. now? How do we think about those two?
Yes. I think this is probably the best real-time case study of that focus that we're talking about. Because it really is -- and you can see that -- and I think one of the things that's important to us, and you can see that in the metrics today. Every one of those headline metrics you mentioned is even stronger than the U.S. And that's because we can see some of the -- whether it's a user growth and engagement dynamics playing out. It's really, really important. And going back to my comment earlier, we know that by accelerating our efforts towards improving the product, that's how we are going to unlock international markets. Now we are prioritizing a select set of those markets, particularly the U.K. and Canada. And so we are seeing steady growth there, but we are making very deliberate trade-offs around how we think about near-term neighbor acquisition in those markets. So that we can keep pushing back and do a better product experience...
Said a different way, we cannot do everything all at the same time, right? So much of the way that we think about strategy is through a sequential kind of build. And so it's important for us to get all of the pieces on the table. They are all opportunities. International is a huge opportunity for Nextdoor. We're one of the few local companies, by the way, that has that opportunity, but we have launched in 11 countries, and we know that it will work globally.
But when we put everything on the table, we said, okay, now as we arrange the strategic road map, how many things can we do at the beginning. And we wanted to pick as few as possible because we want to pick the most important ones and really drive a truck through those.
And so to just reiterate what Matt said, we felt the best avenue to drive growth internationally was to develop a better product. And that is a product that -- because some of those international markets would be considered subscale relative to the U.S., the U.K. and Canada, we'll hold off on in the very near term, while we're using the U.S., the U.K. and Canada as our test markets for NEXT. And then as we get NEXT off the ground and we see it working, we'll bring those to the international markets. There's no reason for us to invest behind the existing product in those international markets. Today, when we know that isn't the product that they're going to get long term.
So again, it sounds very elementary and almost pedantic. But when you reach a certain scale as a company, you do need to have a little bit of that Founder's Mentality. You got to go to founder mode and say, we can't do everything at the same time. And that's okay. There's tremendous strength and focus. And so we're going to embrace that focus.
That's great. So we've gotten through, I don't know, 2/3, 3/4 of the talk today. We haven't spoken about monetization yet. So let's sort of transition to monetization of the user base that's growing. And obviously, we have the longer-term vision. But let's kick it off with just from a macro perspective, what are you all seeing from a macro advertiser, local but also national, which is a big part of your...
Yes. So I'll make a kind of a global comment, which is that we look at all kinds of matters. We look at vertical trends, we look at campaign objectives, we look at the macro down that you all can see. We take it seriously, we build strategies around it. But we know today that our story is as much around how effectively we deliver value to advertisers regardless of vertical, and we'll get to those in a minute. And so that's really, I think, important going back to how we work and think about the opportunity today.
And I also think that's present in our results in the quarter. And sometimes they aren't fine. We talked about things like home services, which is our most important vertical today, growing very nicely. Now if we try and get external data points, there are probably some things to suggest that there were some areas of strength there, but that vertical was also the vertical where a significant share of our mid-market demand was coming through. These are the folks coming in through self-serve for the first time. By definition, if they're coming through the self-serve platform, what we call Nextdoor Ad Manger, then they are necessarily -- their demand is being served on our ad sever. That's where the value offers or the data comes to before.
Then you layer on the fact that home services vertical is very endemic. And so that's why I think you'll continue to hear us talk about there's macro. But at our stage of our journey, it's going to be deeply intertwined with the value to advertisers.
Now going to other verticals, really, the way we think about it is things that are close to the home or proximity or for traffic matter. So retail and QSR is actually really it's a meaningful vertical for us, and we've seen continued progress. This is where our progress on performance objectives becomes increasingly important. So it kind of reinforces our priority in terms of the ad stack. You have things like tech and telecom. Again, think about the home as the center of your life. That's a big part of it.
And then there's also areas like financial services, which we've discussed at the points in time in the past, which used to be a much bigger share in absolute and relative terms of our business. Some modest signs of rebound and potentially some on the horizon if rate sensitive dynamics change. But at the end of the day, it all ties into what we believe very strongly, which is diversification. We have a portfolio of emerging verticals. I'm not going to list them all here. Collectively, they're meaningful. We think they all represent opportunities. But it's just [ more of ] form of diversity. We think about the advertiser size and objective, we think about verticals. So we'll continue to push and growing those. But I'd say, overall, certainly relative to this time a year ago, better trends, big picture, but really those 4 core verticals I talked about are the ones that are most relevant if you're thinking about us in the macro context.
And when you think about those 4 core verticals, and I think the comment was 50% self-serve accounted for 50% of revenue growing 40%. Do I have that right?
That's right.
So self-serve function is growing significantly faster than the overall company. It's accounting for a bigger part of revenue. But this was sort of -- for us, I think first time we're hearing these numbers, it's sort of an unlock. Talk to us what was that unlock? Was it home services, financial services, these verticals got stronger in the quarter or execution improved, which is a productivity we still have a conversation with. Does that make sense?
In many ways, they're probably are self-reinforcing. I think the first thing I'd point you to is when you come to the self-serve, we talk about things like introducing video formats or lead gen formats, what just an important side of the format itself, which is important, but also available on other platforms, it's that it is also available self-serve. That's the key distinction. And so that starts to unlock all kinds of different -- that allows us to more effectively go to agencies whether it's an enterprise, but there's plenty of in-market agencies who now can go to their clients and say, this platform looks endemic. They've got these capabilities, your kind of key threshold requirements are starting to be met.
And so it really is around making that available, making the capabilities, the measurement, the targeting. One of the elements we talked about at our last earnings was a 26% improvement in cost per click. And the reason that's really important is because at its core, what that is doing, it's always in that first part of data, that I talked about before and bringing higher propensity audiences to those advertisers. Before for us, as we were working through GAM, which was our -- we worked with -- until we have started building our ad stack, an impression was an impression. We were not optimizing our inventory. We were not bringing higher propensity audiences to those advertisers. And so that's really the key is those capabilities.
Now we like to believe that, that starts to reinforce drive brand awareness to have better attention, but I think that's really at the core. And the reason I think home services [indiscernible], it is so endemic that that's kind of the first leg of awareness because they are naturally thinking about us. But as we start showing that performance across more and more verticals, then we see no reason it can't be problem for every vertical.
The macro is not something that we're immune to, but we focus on what we can control for. And so to the execution point, what can we control? Well, I think, generally speaking, advertisers online are increasingly looking for three things. They want scale of audience because they don't want to have to advertise in 100 different places. They, of course, want performance. And the third thing is they want ease of use. And so what does that translate to for us. We need to grow our user base and our usage. You've heard us talk about that, right? We need to ensure that we're using all technologies, whether they're targeting technologies or ML technologies to ensure that ROI is as good as the other platforms.
And then the third thing is, and this is self-serve, we need to reduce friction as much as possible so that people can do as much as possible with as little effort as possible. All three of those things are about execution. And so we can sit here and say, the macro is uncertain, and this is happening and that's happening. And it may even be true. But there's plenty that we can do to control our own destiny, and that is culturally the way that we want to think about it.
And so to speak, when you get the question all the time on ad loads and impression growth. Where do you think we are on the ad load world? Super early days, newer inventory could open up as we go after NEXT and newer platforms, but how do you think about ad loads?
We will always try to grow the number of impressions, and we will always ask ourselves the question, what's the efficient frontier of showing more ads and the better the ads are, the more you can show and how is that balance relative to the user experience. Now one of the trends that I think is actually quite interesting and I'll use one of the big juggernauts to illustrate this. Instagram increasingly feels like the ads are better content than the content on being served by the graph I've build. And that's really kind of remarkable. It's like turning on the TV to watch the ads versus the programming, right? So I think that tells us that when you get really good when you have the scale of advertisers, when you have incredible technologies to understand what your users are looking for.
And when you can start to use ML and AI, personalize everyone's feed, words like ad load, they start to fade away because the ads become the content. Now that's the Holy Grail. That's really kind of where everyone wants to go. For us, at this point, because Nextdoor is a utility-centric platform, in many cases, the ads we serve up, they are valuable pieces of content for our users. So we just need to get better and better at starting to blend the line between that's content that I care about, and that's an ad that I have to scroll past to get to the content.
And so I think it's a little bit, in my opinion of the rearview mirror to think about things like ad load. I think the way we want to position it much more is, how do we get the quality of advertisers, the quality of targeting and the quality of personalization to a point where the ads are adding value to the experience. And then users don't think about things like ad load, right? They just keeps growing because they see valuable content.
Yes. I'll just add two things I really want to reinforce there. One, the ad inventory growth to date has been 100% increase in the content base. We have not changed our ad load. When we talk about things like steady WAU growth and [ meet ] more than steady [ such a depth ], 20%, 30%, we actually kind of just add those two -- multiply those two together, that gives you a sense for the impression growth and what's being driven by. Now -- and we take very serious the idea of ad load. But I think that's really important, like ad load is not a part of our impression growth story today and has not been over the last several years.
And then the other thing, I'll just flip back to the comment I made earlier, when we talk about things like ads being great content. That's in many ways, the flip side of the improved cost per click that I mentioned earlier, which is that ad was more relevant for that user. Now it's obviously delivering better performance for advertisers as well. And so that's really a key piece. And there's even more fundamental things like as we move through our ad server, and we have better density because we have more mid-market customers, there's a lot less repeat ads. That's something that is kind of mission to eliminate the idea of that even being possible. And so I think there are other things even just today where we're making progress on that get us closer to that idea of great ads being great content.
So we have about 2 minutes left. It gives us time for some Q&A, if there's a Q in the audience.
So I have a question, one of as a user, but also tying into some of what we're saying, where I am in Texas, like everyone is on Nextdoor, for everything that you said, like it's amazing and heartwarming to see 5 different groups like track a cat who's gone 8 miles, fighting to coyotes and then you find them and reunite them. But one of the other things is because so like in Texas, where you have these communities and they're -- I don't want to say they're isolated, but everything is so spread out. So people maybe don't want to hear all the posts from this other community that an algorithm thinks as close, but people on the ground don't want to see it.
So what the perspective is trying to get the ads to as many eyeballs as you can, but certain people back to the user experience, don't want to -- they might want to have more isolated experiences. And then I see people saying, how do I change my settings and then it goes to an easy user interface so people can figure that out because a lot of your users aren't very tech savvy and everything and sort of need handholding. So I guess, I'm just wondering how do you sort of triangulate those things like trying to appease some users that want limited, say, geographical death, which is to the detriment of your advertisers as well as just making, I guess, the simplest, easiest user interface as possible. That's just something I see. And I'm just curious...
Are you in Dallas, by the way, where are you?
In Houston.
Okay, Houston. I'm in Dallas. So good to meet a fellow Texan and I grew up in Odessa. So I didn't just move to Texas like many people have. I went back home. So two things. One is, in regards to the user interface, and being a change settings and having users that maybe aren't as sophisticated, whatever the case is, right? The best products in the world are intuitive. So whether we have the most sophisticated audience or the least sophisticated audience, we need to drive really hard to create the most intuitive user experience that we possibly can have. And that's something that you're going to see with NEXT. So that part is kind of, I think, table stakes of building a great consumer product.
The second thing you said is actually a little bit more complex because way back when I started talking about coming back to the company, one of the things that we invented as a pioneering feature of Nextdoor was the thing called nearby neighborhoods. So in the early days of Nextdoor, it was only for your neighborhood, which, on average, was about 300 households, and that's all the content you saw, just 300 households around you, which was a little difficult because if you're in Manhattan, 300 household could be in the building you're in whereas if you're in West Texas, that could be 100 square miles, right? So this is a complex problem. Like getting local right is not trivial and it's something we thought about very deeply for 14 years.
So then we created this concept called nearby neighborhoods where we said, you know what, if you live on edge of neighborhood boundary that we've created, you kind of want to hear from your neighborhood that you associate yourself with but also the adjacent neighborhood. And so we created that technology. I think we've probably taken that too far because when we went from nearby neighborhoods, which is kind of neighborhood squared to something we call neighborhood cubed and we extended the radius even more. And so we have heard the feedback that you mentioned. It's not feedback that we hear everywhere, so we have to tune it the right way.
And the way to ultimately solve it is when we start company, personalization and AI and ML were not nearly as sophisticated as they are today. So we had to create some global settings that would apply to all the experiences that people would see. This notion of every single feed being personalized, that was not something that was realistic 14 years ago. Today, it's completely realistic. So as we think about certain users, there are users who say, I just want to hear mostly from people whose houses I see every day, when I'm driving through the neighborhood and when I'm walking around. Others say, I'm commuting to work between here and wherever I'm working, I want all the information in that area.
And so I think in addition to thinking about the system controls and thinking about how we can create intimacy at scale, this is not driven by trying to get advertisers more eyeballs. It's not driven by that at all. It's driven by creating the best experience for our users, and we just have to continue to fine-tune it. And we need to think about it in a more evolved way than the way we did initially, and that's one of those things that we're piling in the NEXT.
So with that, we are over time. So thank you, Nirav. Thank you, Matt. Thanks for joining us today. Thanks for all the discussion, I very much appreciate it.
Thank you all for joining. Thank you.
Thanks Ron.
