Shares of Nextdoor Holdings experienced a significant boost on Friday following the news that co-founder Nirav Tolia is assuming the role of CEO, as well as the company’s expansion of its stock buyback program, along with stronger than anticipated financial results.
New Leadership and Strategic Moves
Nirav Tolia is making a comeback to Nextdoor as the CEO, president, and chairperson, taking over from Sarah Friar, who will be stepping down in the second quarter. This move comes in tandem with a $150 million increase to the existing share buyback program, bringing the total to $250 million. So far, $77 million has already been utilized, leaving $173 million for future repurchases, equivalent to about 22% of the company’s market capitalization of roughly $800 million. As of December, Nextdoor closed with $531 million in cash and marketable securities.
Strong Financial Performance
Along with this strategic shift in leadership, Nextdoor also revealed better-than-expected fourth-quarter financial results. The company anticipates reporting revenue of $56 million – surpassing the previously forecasted range of $50 million to $52 million. Additionally, weekly average users have reached 41.8 million, marking a 5% increase from the previous year and a 3% sequential growth.
In a statement, Friar expressed confidence in the company’s trajectory, stating that “Our Q4 results demonstrate renewed strength across all our key metrics.” She further emphasized the significant growth Nextdoor has seen since her arrival in 2018, with the number of Verified Neighbors nearly tripling to over 88 million, spanning across 330,000 neighborhoods worldwide.
Transition and Reshaping
Notably, in response to a challenging advertising market, Nextdoor had previously announced a 25% reduction in staff back in November. Friar highlighted the necessity of aligning the business accordingly during that period.
Prior to her role at Nextdoor, Friar had an extensive background as the CFO at Square (now Block) for six years and spent 11 years as a software analyst at Goldman Sachs earlier in her career.
Market Response and Future Outlook
Market response to these developments was positive, with Nextdoor shares rising by 21% to $2.08 in mid-morning trading.