10-Q 1 kvsb-20230930.htm 10-Q kvsb-20230930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from   to
Commission file number 001-40246
Nextdoor Holdings, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware86-1776836
(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification Number)
420 Taylor Street
San Francisco, California
(Address of Principal Executive Offices)
94102
(Zip Code)
Registrant’s telephone number, including area code: (415) 344-0333
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.0001 per shareKINDNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ☒   No  ☐ 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes   ☐     No  

As of November 3, 2023, there were 182,078,094 shares of the registrant’s Class A common stock outstanding and 203,049,749 shares of the registrant’s Class B common stock outstanding.

 




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1

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of the federal securities laws. All statements contained in this Quarterly Report, other than statements of historical fact, including statements regarding our or our management team’s expectations, hopes, beliefs, intentions, strategies, future operating results and financial position, potential growth or growth prospects, are forward-looking statements. Words such as “believes,” “may,” “will,” “estimates,” “potential,” “continues,” “anticipates,” “intends,” “expects,” “could,” “would,” “projects,” “plans,” “targets,” and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this Quarterly Report may include, for example, statements about:

our anticipated growth, including our ability to scale new neighbor growth, our ability to grow engagement by our existing neighbor base and our ability to increase monetization of our platform;

our ability to scale our business and monetization efforts;

the political, economic, and macroeconomic climate, whether in the advertising industry in general, or among specific types of advertisers or within particular geographies, including but not limited to the impacts related to recent turmoil in the global banking system, labor shortages, supply chain disruptions, a potential recession, a potential temporary federal government shutdown, inflation, and rising interest rates;

our ability to expand our business operations abroad by opening new and expanding within existing neighborhoods outside of the United States;

our ability to respond to general economic conditions;

our ability to invest in, and the ultimate success of, technologies aimed at enhancing our business solutions and delivering additional value to our platform;

our ability to scale our business effectively;

our ability to achieve and maintain profitability in the future;

our ability to access sources of capital to finance operations and growth;

the success of strategic relationships with third parties;

our ability to maintain the listing of our Class A common stock on the New York Stock Exchange;

changes in applicable laws or regulations, both within and outside of the United States;

the impact of the regulatory environment and complexities with compliance related to such environment;

the inability to develop and maintain effective internal controls;

the impact on our business as a result of interruptions, delays, or failures resulting from earthquakes, fires, floods, adverse weather conditions, other natural disasters, power loss, terrorism, pandemics, geopolitical conflict (including the war in Ukraine and the Israel-Hamas war), other physical security threats, cyber-attacks, or other catastrophic events;

our ability to raise financing in the future;

our success in retaining or recruiting, or changes required in, our officers, key employees, or directors;

our financial performance; and

other factors detailed in Part II, Item 1A, “Risk Factors” in this Quarterly Report.

2

We have based these forward-looking statements largely on our current expectations and projections as of the date of this filing about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A, “Risk Factors” in this Quarterly Report. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report and in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”), that disclose risks and uncertainties that may affect our business. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and circumstances discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. In addition, the forward-looking statements in this Quarterly Report are made as of the date of this filing, and we do not undertake, and expressly disclaim any duty, to update such statements for any reason after the date of this Quarterly Report or to conform statements to actual results or revised expectations, except as required by law.

You should read this Quarterly Report and the documents that we reference herein and have filed with the SEC as exhibits to this Quarterly Report with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect.

As used in this Quarterly Report, the terms “Nextdoor,” “we,” “us,” “Registrant,” and “our” mean Nextdoor Holdings, Inc. and its subsidiaries unless the context indicates otherwise. The term “Business Combination” refers to the transactions contemplated by the that certain Agreement and Plan of Merger, dated as of July 6, 2021, by and among Khosla Ventures Acquisition Co. II, Nextdoor, Inc., and Lorelei Merger Sub Inc., as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of September 30, 2021, including (i) the merger contemplated by the Agreement and Plan of Merger, whereby Lorelei Merger Sub Inc. merged with and into Nextdoor, Inc., with Nextdoor, Inc. surviving the merger as a wholly-owned subsidiary of Khosla Ventures Acquisition Co. II, and (ii) the private placement pursuant to which investors collectively subscribed for 27,000,000 shares of our Class A common stock at $10.00 per share, for an aggregate purchase price of $270,000,000.
3

RISK FACTOR SUMMARY
Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A, “Risk Factors” in this Quarterly Report. You should carefully consider these risks and uncertainties when investing in our Class A common stock. Some of the principal risks and uncertainties include the following:
We have a limited operating history at the current scale of our business and are still scaling up our monetization efforts, which makes it difficult to evaluate our current business and future prospects, and there is no assurance we will be able to scale our business for future growth.

Adverse global economic and financial conditions could harm our business and financial condition.

We currently generate substantially all of our revenue from advertising. If advertisers reduce or eliminate their spending with us, our business, operating results, and financial condition would be adversely impacted.

Our business is highly competitive. Competition presents an ongoing threat to the success of our business.

Our business is dependent on our ability to maintain and scale our product offerings and technical infrastructure, and any significant disruption in the availability of our platform could damage our reputation, result in a potential loss of neighbors and engagement, and adversely affect our business, operating results, and financial condition.

If we fail to scale our business effectively, our business, operating results, and financial condition would be adversely affected.

If our efforts to build strong brand identity and reputation are not successful, we may not be able to attract or retain neighbors, and our business, operating results, and financial condition will be adversely affected.

We plan to continue expanding our international operations where we have limited operating experience and may be subject to increased business, regulatory, and economic risks that could seriously harm our business, operating results, and financial condition.

If we need additional capital in the future, it may not be available on favorable terms, if at all.

Our business depends largely on our ability to attract and retain talented employees, including senior management. If we lose the services of Sarah Friar, our Chief Executive Officer and President, or other members of our senior management team, we may not be able to execute on our business strategy.

We are dependent on third-party software and service providers, including the Google Ad Manager (“GAM”) platform, for management and delivery of advertisements on the Nextdoor platform. Any failure or interruption experienced by such third-parties could result in the inability of certain businesses to advertise on our platform, and adversely impact our business, operating results, and financial condition.

We rely on third-party software and service providers, including Amazon Web Services (“AWS”), to provide systems, storage and services for our platform. Any failure or interruption experienced by such third parties could result in the inability of neighbors and advertisers to access or utilize our platform, and adversely impact our business, operating results, and financial condition.

Technologies have been developed that can block the display of advertisements on the Nextdoor platform, which could adversely impact our business, operating results, and financial condition.

Security breaches, including improper access to or disclosure of our data or our neighbors’ data, or other hacking and phishing attacks on our or third-party systems, could harm our reputation and adversely affect our business.

Distribution and marketing of, and access to, our platform depends, in significant part, on a variety of third-party publishers and platforms (including mobile app stores, third-party payment providers, computer systems, and other communication systems and service providers). If these third parties limit, prohibit or otherwise interfere with or change the terms of the distribution, use or marketing of our platform in any material way, it could materially adversely affect our business, operating results, and financial condition.

4

Certain of our market opportunities and key metric estimates could prove to be inaccurate, and any real or perceived inaccuracies may harm our reputation and negatively affect our business.

We have a history of net losses and may experience net losses in the future and we cannot assure you that we will achieve or sustain profitability. If we cannot achieve and sustain profitability, our business, financial condition, and operating results will be adversely affected.

We may have greater than anticipated tax liabilities, which could harm our business, revenue and financial results.

We cannot guarantee that our Share Repurchase Program will be fully consummated or that it will enhance long-term stockholder value. Share repurchases could also increase the volatility of the trading price of our stock and diminish our cash reserves.

We may be liable as a result of content or information that is published or made available on our platform.

Our business is subject to complex and evolving U.S. and foreign laws, regulations, and industry standards, many of which are subject to change and uncertain interpretations, which uncertainty could harm our business, operating results, and financial conditions.

We could be involved in legal disputes that are expensive and time consuming, and, if resolved adversely, could harm our business, operating results, and financial condition.

Failure to maintain effective systems of internal controls and disclosure controls could have a material adverse effect on our business, operating results, and financial condition.

If we are unable to protect our intellectual property, the value of our brands and other intangible assets may be diminished, and our business, operating results, and financial condition may be adversely affected.

Third parties may claim that our platform infringes their intellectual property rights and this may create liability for us or otherwise adversely affect our business, operating results, and financial condition.

Our use of “open source” software could subject us to possible litigation or could prevent us from offering products that include open source software or require us to obtain licenses on unfavorable terms.

We license technology from third parties, and our inability to maintain those licenses could harm our business.

The price of our Class A common stock has been and may continue to be volatile.

The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.

The dual class structure of our common stock has the effect of concentrating voting power with our management and other existing stockholders, which will limit your ability to influence the outcome of important transactions, including a change in control.

We do not intend to pay cash dividends for the foreseeable future.
5

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Nextdoor Holdings, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(Unaudited)
As of September 30,As of December 31,
20232022
Assets
Current assets:
Cash and cash equivalents$48,444 $55,236 
Marketable securities491,283 528,067 
Accounts receivable, net of allowance of $441 and $422 as of September 30, 2023 and December 31, 2022, respectively
29,991 29,770 
Prepaid expenses and other current assets11,052 12,185 
Total current assets580,770 625,258 
Restricted cash, non-current11,171  
Property and equipment, net9,050 11,818 
Operating lease right-of-use assets58,123 52,555 
Intangible assets, net1,746 3,067 
Goodwill1,211 1,211 
Other assets8,029 5,653 
Total assets$670,100 $699,562 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$3,307 $4,535 
Operating lease liabilities, current6,021 7,766 
Accrued expenses and other current liabilities25,313 22,362 
Total current liabilities34,641 34,663 
Operating lease liabilities, non-current62,011 53,831 
Other liabilities, non-current267  
Total liabilities96,919 88,494 
Commitments and contingencies (Note 7)
Stockholders’ equity:
Class A common stock, $0.0001 par value; 2,500,000 shares authorized, 180,104 and 153,693 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
18 15 
Class B common stock, $0.0001 par value; 500,000 shares authorized, 203,417 and 218,029 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
20 22 
Additional paid-in capital1,300,845 1,231,482 
Accumulated other comprehensive loss(2,212)(2,196)
Accumulated deficit(725,490)(618,255)
Total stockholders’ equity573,181 611,068 
Total liabilities and stockholders’ equity$670,100 $699,562 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

Nextdoor Holdings, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Revenue$56,092 $53,954 $162,752 $159,495 
Costs and expenses:
Cost of revenue10,723 9,882 31,074 29,124 
Research and development39,649 33,398 109,748 95,057 
Sales and marketing30,564 29,000 91,159 92,688 
General and administrative19,532 18,066 55,401 50,499 
Total costs and expenses100,468 90,346 287,382 267,368 
Loss from operations(44,376)(36,392)(124,630)(107,873)
Interest income6,766 2,703 18,635 5,347 
Other income (expense), net(217)(709)(526)(1,602)
Loss before income taxes(37,827)(34,398)(106,521)(104,128)
Provision for income taxes289 319 714 380 
Net loss$(38,116)$(34,717)$(107,235)$(104,508)
Net loss per share attributable to Class A and Class B common stockholders, basic and diluted$(0.10)$(0.09)$(0.28)$(0.27)
Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted381,482 377,756 376,832 381,571 

The accompanying notes are an integral part of these condensed consolidated financial statements.
7

Nextdoor Holdings, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net loss$(38,116)$(34,717)$(107,235)$(104,508)
Other comprehensive income (loss):
Foreign currency translation adjustments29 291 72 783 
Change in unrealized loss on available-for-sale marketable securities21 (709)(88)(4,157)
Total other comprehensive loss$50 $(418)$(16)$(3,374)
Comprehensive loss$(38,066)$(35,135)$(107,251)$(107,882)
The accompanying notes are an integral part of these condensed consolidated financial statements.
8

Nextdoor Holdings, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(Unaudited)
Three Months Ended September 30, 2023
Class A Common StockClass B Common StockAdditional
Paid-in
Capital
Accumulated Other Comprehensive LossAccumulated
Deficit
Total Stockholders’Equity
SharesAmountSharesAmount
Balances as of June 30, 2023168,422 $17 209,194 $21 $1,272,676 $(2,262)$(687,374)$583,078 
Release of restricted stock units3,704 — — — — — — — 
Tax withholdings on release of restricted stock units— — — — (237)— — (237)
Conversion from Class B to Class A common stock7,277 1 (7,277)(1)— — —  
Issuance of common stock upon exercise of stock options229 — 1,500 — 4,113 — — 4,113 
Issuance of common stock under employee stock purchase plan472 — — — 940 — — 940 
Vesting of early exercised stock options— — — — 10 — — 10 
Stock-based compensation— — — — 23,343 — — 23,343 
Other comprehensive income— — — — — 50 — 50 
Net loss— — — — — — (38,116)(38,116)
Balances as of September 30, 2023180,104 $18 203,417 $20 $1,300,845 $(2,212)$(725,490)$573,181 
Three Months Ended September 30, 2022
Class A Common StockClass B Common StockAdditional
Paid-in
Capital
Accumulated Other Comprehensive LossAccumulated
Deficit
Total Stockholders’Equity
SharesAmountSharesAmount
Balances as of June 30, 2022154,979 $16 230,699 $23 $1,255,034 $(3,485)$(550,130)$701,458 
Release of restricted stock units1,555 — — — — — — — 
Repurchase of common stock(20,191)(2)— — (66,737)— — (66,739)
Conversion from Class B to Class A common stock11,343 1 (11,343)(1)— — —  
Issuance of common stock upon exercise of stock options1,587 — — — 3,608 — — 3,608 
Issuance of common stock under employee stock purchase plan552 — — — 1,430 — — 1,430 
Vesting of early exercised stock options— — — — 132 — — 132 
Vesting of restricted stock— — — — 1,430 — — 1,430 
Stock-based compensation— — — — 17,270 — — 17,270 
Other comprehensive loss— — — — — (418)— (418)
Net loss— — — — — — (34,717)(34,717)
Balances as of September 30, 2022149,825 $15 219,356 $22 $1,212,167 $(3,903)$(584,847)$623,454 
9

Nine Months Ended September 30, 2023
Class A Common StockClass B Common StockAdditional
Paid-in
Capital
Accumulated Other Comprehensive LossAccumulated
Deficit
Total Stockholders’ Equity
 SharesAmountSharesAmount
Balances as of December 31, 2022153,693 $15 218,029 $22 $1,231,482 $(2,196)$(618,255)$611,068 
Release of restricted stock units7,757 — — — — — — — 
Tax withholdings on release of restricted stock units— — — — (237)— — (237)
Conversion from Class B to Class A common stock16,112 2 (16,112)(2)— — —  
Issuance of common stock upon exercise of stock options1,510 — 1,500 — 6,676 — — 6,676 
Issuance of common stock under employee stock purchase plan1,032 1 — — 2,015 — — 2,016 
Vesting of early exercised stock options— — — — 174 — — 174 
Stock-based compensation— — — — 60,735 — — 60,735 
Other comprehensive loss— — — — — (16)— (16)
Net loss— — — — — — (107,235)(107,235)
Balances as of September 30, 2023180,104 $18 203,417 $20 $1,300,845 $(2,212)$(725,490)$573,181 
Nine Months Ended September 30, 2022
Class A Common StockClass B Common StockAdditional
Paid-in
Capital
Accumulated Other Comprehensive LossAccumulated
Deficit
Total Stockholders’ Equity
SharesAmountSharesAmount
Balances as of December 31, 202178,954 $8 304,701 $30 $1,225,815 $(529)$(480,339)$744,985 
Release of restricted stock units2,476 — 97 — — — — — 
Tax withholdings on release of restricted stock units— — — — (695)— — (695)
Repurchase of common stock(23,252)(2)— — (77,230)— — (77,232)
Conversion from Class B to Class A common stock88,049 9 (88,049)(9)— — —  
Issuance of common stock upon exercise of stock options3,046 — 2,434 1 11,218 — — 11,219 
Issuance of common stock in connection with acquisition— — 173 — — — — — 
Issuance of common stock under employee stock purchase plan552 — — — 1,430 — — 1,430 
Vesting of early exercised stock options— — — — 383 — — 383 
Vesting of restricted stock— — — — 4,289 — — 4,289 
Stock-based compensation— — — — 46,957 — — 46,957 
Other comprehensive loss— — — — — (3,374)— (3,374)
Net loss— — — — — — (104,508)(104,508)
Balances as of September 30, 2022149,825 $15 219,356 $22 $1,212,167 $(3,903)$(584,847)$623,454 

The accompanying notes are an integral part of these condensed consolidated financial statements.
10

Nextdoor Holdings, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine Months Ended September 30,
20232022
Cash flows from operating activities
Net loss$(107,235)$(104,508)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization4,356 4,169 
Stock-based compensation60,735 46,957 
Bad debt expense75 (40)
Accretion of investments(6,505)954 
Other245 (1,631)
Changes in operating assets and liabilities:
Accounts receivable, net(296)2,750 
Prepaid expenses and other assets2,815 5,806 
Operating lease right-of-use assets3,539 5,120 
Accounts payable(1,228)(445)
Operating lease liabilities(4,230)(5,280)
Accrued expenses and other liabilities3,393 5,351 
Net cash used in operating activities(44,336)(40,797)
Cash flows from investing activities
Purchases of property and equipment(268)(2,182)
Purchases of marketable securities(454,897)(555,052)
Sales of marketable securities81,266 7,822 
Maturities of marketable securities416,587 224,005 
Loan to Opportunity Finance Network(2,500) 
Net cash provided by (used in) investing activities40,188 (325,407)
Cash flows from financing activities
Proceeds from exercise of stock options6,676 11,219 
Proceeds from issuance of common stock under employee stock purchase plan2,016 1,430 
Payment of transaction costs related to the Reverse Recapitalization (314)
Tax withholdings on release of restricted stock units(237)(695)
Repurchase of common stock (77,232)
Prepayment under share repurchase program (68)
Net cash provided by (used in) financing activities8,455 (65,660)
Effect of exchange rate changes on cash and cash equivalents72 783 
Net increase (decrease) in cash and cash equivalents4,379 (431,081)
Cash, cash equivalents, and restricted cash at beginning of period55,236 521,812 
Cash, cash equivalents, and restricted cash at end of period$59,615 $90,731 
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents$48,444 $90,731 
Restricted cash, non-current11,171  
Total cash, cash equivalents, and restricted cash$59,615 $90,731 
Supplemental cash flow disclosures
Non-cash investing and financing activities:
Vesting of restricted stock and early exercised stock options$174 $4,672 
Lease liabilities arising from obtaining right-of-use assets$10,665 $ 
Purchases of property and equipment not yet settled$ $734 
The accompanying notes are an integral part of these condensed consolidated financial statements.

11

Notes to Condensed Consolidated Financial Statements
Note 1. Description of Business
Nextdoor Holdings, Inc. (“Nextdoor” or the “Company”) is headquartered in San Francisco, California. Nextdoor’s purpose is to cultivate a kinder world where everyone has a neighborhood they can rely on. That purpose enables the Company’s mission to be the neighborhood hub for trusted connections and the exchange of helpful information, goods, and services.
On November 5, 2021 (the “Closing”), the Company consummated the transactions contemplated by the Agreement and Plan of Merger, dated July 6, 2021, as amended on September 30, 2021, by and among Khosla Ventures Acquisition Co. II (“KVSB”), a special purpose acquisition company, Lorelei Merger Sub Inc., and Nextdoor, Inc. (“Legacy Nextdoor”), with Legacy Nextdoor surviving as a wholly owned subsidiary of KVSB (the “Merger” and, collectively with the other transactions that occurred in connection with the Merger, the “Reverse Recapitalization”). In connection with the Closing, KVSB was renamed to Nextdoor Holdings, Inc.

Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year ends on December 31.
The condensed consolidated balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. The Company has condensed or omitted certain information and note disclosures normally included in financial statements prepared in accordance with GAAP pursuant to the applicable required disclosures and regulations of the U.S. Securities and Exchange Commission (“SEC”). As such, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position, results of operations, and cash flows. The results for the interim periods presented are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 or any other future interim or annual period.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Estimates include, but are not limited to, valuation of financial instruments, valuation of common stock through the date of the Reverse Recapitalization, valuation of stock-based awards, revenue recognition, collectability of accounts receivable, valuation of acquired intangible assets and goodwill, useful lives of intangible assets, useful lives of property and equipment, the incremental borrowing rate applied in lease accounting, income taxes and deferred income tax assets and associated valuation allowances. The Company bases these estimates and assumptions on historical experience and various other assumptions that it considers reasonable. The actual results could differ materially from these estimates.
Significant Accounting Policies
There have been no changes to the Company’s significant accounting policies disclosed in Note 2 to the consolidated financial statements described in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2022 that have had a material impact on the Company’s condensed consolidated financial statements and related notes, except as noted below.
Restricted Cash
The Company’s restricted cash balance is primarily invested in a savings account and pledged as collateral for standby letters of credit as security deposits for the Company’s office leases.
Recently Adopted Accounting Pronouncements
12

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and has since issued various amendments including ASU 2018-19, ASU 2019-04, and ASU 2019-05. The guidance and related amendments modify the accounting for credit losses for most financial assets and require the use of an expected loss model, replacing the currently used incurred loss method. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. The Company adopted this standard as of January 1, 2023, and the adoption did not have an impact on the Company’s unaudited condensed consolidated financial statements.
Note 3. Deferred Revenue
In certain advertising arrangements the Company requires payment upfront from its customers. The Company records deferred revenue when it collects cash from customers in advance of revenue recognition. As of September 30, 2023 and December 31, 2022, deferred revenue was $8.3 million and $6.0 million, respectively, and included within accrued expenses and other current liabilities on the condensed consolidated balance sheets. For the three months ended September 30, 2023 and 2022, revenue recognized from deferred revenue at the beginning of each period was $2.8 million and $2.6 million, respectively. For the nine months ended September 30, 2023 and 2022, revenue recognized from deferred revenue at the beginning of each period was $2.9 million and $2.9 million, respectively.
Note 4. Cash Equivalents and Marketable Securities
The amortized costs, unrealized gains and losses, and estimated fair values of the Company’s cash equivalents and marketable securities were as follows (in thousands):
 As of September 30, 2023
 Amortized
Cost
Unrealized
Gain
Unrealized
Loss
Estimated
Fair Value
Cash equivalents:    
Money market funds$28,609 $ $ $28,609 
Corporate bonds478   478 
Total cash equivalents$29,087 $ $ $29,087 
Marketable securities:
Certificates of deposit50,460 14 (8)50,466 
Commercial paper101,600 1 (213)101,388 
Corporate bonds159,929 38 (746)159,221 
U.S. Treasury securities70,921  (1,260)69,661 
U.S. Agency bonds76,343  (268)76,075 
Asset-backed securities34,525 7 (60)34,472 
Total marketable securities493,778 60 (2,555)491,283 
Total$522,865 $60 $(2,555)$520,370 
13

 As of December 31, 2022
 Amortized
Cost
Unrealized
Gain
Unrealized
Loss
Estimated
Fair Value
Cash equivalents:    
Money market funds$20,381 $ $ $20,381 
Corporate bonds6,021 3  6,024 
Commercial paper9,394  (3)9,391 
Total cash equivalents$35,796 $3 $(3)$35,796 
Marketable securities:
Certificates of deposit44,732 9 (191)44,550 
Commercial paper100,909 27 (92)100,844 
Corporate bonds280,023 11 (1,980)278,054 
U.S. Treasury securities41,646 3 (123)41,526 
U.S. Agency bonds46,366 66 (22)46,410 
Asset-backed securities16,798  (115)16,683 
Total marketable securities530,474 116 (2,523)528,067 
Total$566,270 $119 $(2,526)$563,863 
All marketable securities are designated as available-for-sale securities as of September 30, 2023 and December 31, 2022.

The following table summarizes the fair value and gross unrealized losses aggregated by category and the length of time that individual securities have been in a continuous unrealized loss position. No investments had been in a continuous unrealized loss position for greater than 12 months as of December 31, 2022.
As of September 30, 2023
Less than 12 Months
12 Months or Greater
Total
Fair ValueGross Unrealized LossFair ValueGross Unrealized LossFair ValueGross Unrealized Loss
Certificates of deposit$19,670 $(8)$ $ $19,670 $(8)
Commercial paper96,403 (213)  96,403 (213)
Corporate bonds85,540 (523)26,626 (223)112,166 (746)
U.S. Treasury securities69,335 (1,260)  69,335 (1,260)
U.S. Agency bonds75,520 (268)  75,520 (268)
Asset-backed securities22,610 (38)2,453 (22)25,063 (60)
Total
$369,078 $(2,310)$29,079 $(245)$398,157 $(2,555)

The following tables present the contractual maturities of the Company’s marketable securities (in thousands):
 As of September 30, 2023
 
Amortized Cost
Estimated Fair Value
Due within one year$301,523 $300,785 
Due after one to three years192,255 190,498 
Total$493,778 $491,283 
 As of December 31, 2022
 
Amortized Cost
Estimated Fair Value
Due within one year$473,133 $471,378 
Due after one to four years57,341 56,689 
Total$530,474 $528,067 
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Note 5. Fair Value Measurements
The Company’s financial assets and liabilities measured at fair value on a recurring basis are classified by level within the fair value hierarchy. There were no financial assets or liabilities measured using Level 3 inputs as of September 30, 2023 and December 31, 2022. The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis (in thousands):
As of September 30, 2023
 Level 1Level 2Total
Cash equivalents:   
Money market funds$28,609 $ $28,609 
Corporate bonds 478 478 
Total cash equivalents$28,609 $478 $29,087 
Marketable securities:
Certificates of deposit 50,466 50,466 
Commercial paper 101,388 101,388 
Corporate bonds 159,221 159,221 
U.S. Treasury securities 69,661 69,661 
U.S. Agency bonds 76,075 76,075 
Asset-backed securities 34,472 34,472 
Total marketable securities 491,283 491,283 
Total cash equivalents and marketable securities$28,609 $491,761 $520,370 
As of December 31, 2022
Level 1Level 2Total
Cash equivalents:   
Money market funds$20,381 $ $20,381 
Corporate bonds 6,024 6,024 
Commercial paper 9,391 9,391 
Total cash equivalents$20,381 $15,415 $35,796 
Marketable securities:
Certificates of deposit 44,550 44,550 
Commercial paper 100,844 100,844 
Corporate bonds 278,054 278,054 
U.S. Treasury securities 41,526 41,526 
U.S. Agency bonds 46,410 46,410 
Asset-backed securities 16,683 16,683 
Total marketable securities 528,067 528,067 
Total cash equivalents and marketable securities$20,381 $543,482 $563,863 
The Company classifies its cash equivalents and marketable securities within Level 1 or Level 2 because it determines their fair values using quoted market prices or alternative pricing sources and models utilizing market observable inputs. There were no transfers between levels of the fair value hierarchy during the periods presented.

Assets and Liabilities Measured at Fair Value on a Recurring Basis
The carrying amounts of certain financial instruments, including cash held in banks, accounts receivable, and accounts payable approximate fair value due to their short-term maturities and are excluded from the fair value table above.
Financial Instruments, Assets, and Liabilities Not Recorded at Fair Value
The following table presents the fair value of assets not recorded at fair value (in thousands):
15

As of September 30, 2023
Carrying AmountLevel 1Level 2 Level 3Fair Value
Assets
Note receivable$7,500 $ $ $6,998 $6,998 
As of December 31, 2022
Carrying AmountLevel 1Level 2 Level 3Fair Value
Assets
Note receivable$5,000 $ $ $4,646 $4,646 
As of September 30, 2023 and December 31, 2022, there were no financial instruments or liabilities that were not recorded at fair value.

Note 6. Leases
The Company has entered into various non-cancellable office facility leases in various locations with original lease periods expiring between 2020 and 2029, with its primary office location in San Francisco, California. The Company entered into a lease consisting of multiple floors for its San Francisco headquarters in 2019, with a lease term through 2029. On January 30, 2023, the Company entered into a lease amendment for its headquarters lease. The lease amendment extended the lease term through April 30, 2032, and resulted in an increase to right-of-use assets and operating lease liabilities. The Company's lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.
The components of lease costs were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Operating lease cost
$2,333 $2,445 $7,037 $7,336 
Short-term lease cost
545 620 1,358 1,190 
Variable lease cost
645 221 1,959 635 
Total
$3,523 $3,286 $10,354 $9,161 
Other information related to the Company’s operating leases was as follows (in thousands):
Nine Months Ended September 30,
20232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$7,722 $7,497 
ROU assets obtained in exchange for new operating lease liabilities
$9,107 $ 
Lease terms and discount rates for operating leases were as follows:
As of September 30,
20232022
Weighted average remaining lease term (in years)8.66.6
Weighted average discount rate
7.1 %4.5 %
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As of September 30, 2023, future minimum lease payments under operating leases were as follows (in thousands):
Remainder of 2023$2,625 
202410,657 
202510,977 
202610,777 
202710,586 
Thereafter44,391 
Total lease payments90,013 
Less: imputed interest(21,981)
Present value of lease liabilities68,032 
Less: current operating lease liabilities
(6,021)
Long-term operating lease liabilities
$62,011 
The table above does not include lease payments that were not fixed at commencement or lease modification.
Note 7. Commitments and Contingencies
Legal matters
From time to time, the Company is a party to a variety of claims, lawsuits, and proceedings which arise in the ordinary course of business, including claims of alleged infringement of intellectual property rights. The Company records a liability when it believes that it is probable that a loss will be incurred and the amount of loss or range of loss can be reasonably estimated. The Company discloses potential losses when they are reasonably possible. In the Company’s opinion, resolution of pending matters is not likely to have a material adverse impact on its consolidated results of operations, cash flows, or its financial position. Given the unpredictable nature of legal proceedings, the Company bases its estimate on the information available at the time of the assessment. As additional information becomes available, the Company reassesses the potential liability and may revise the estimate. There were no such material matters as of September 30, 2023 and December 31, 2022.
Indemnification
In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with its customers, partners, suppliers, and vendors. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with its service, breach of representations or covenants, intellectual property infringement, or other claims made against such parties. These provisions may limit the time within which an indemnification claim can be made. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. For the three and nine months ended September 30, 2023 and 2022, the Company did not incur material costs to defend lawsuits or settle claims related to these indemnifications. The Company believes the fair value of these liabilities is not material and accordingly has no liabilities recorded for these agreements as of September 30, 2023 and December 31, 2022.
Opportunity Finance Network Loan Agreement
On June 29, 2022, the Company entered into a credit agreement with Opportunity Finance Network (“OFN”) to lend up to an aggregate of $15.0 million, unsecured, over the course of 24 months. OFN is a national network of community development financial institutions (“CDFIs”). OFN will use the loan proceeds to make low-cost, fixed-rate loans to OFN-member CDFIs that on-lend those loan proceeds to fund affordable housing, community facilities, small businesses, nonprofit organizations, consumer finance, and other eligible financing extended by such CDFIs. OFN may borrow in increments of $2.0 million or more and may not borrow more than $7.5 million within the first 12 months immediately following the closing date of June 29, 2022. Each disbursement made by the Company will bear interest at a rate of 0.75% per annum and will be due quarterly from OFN. The outstanding principal, plus any accrued and unpaid interest, for each disbursement becomes due and payable 10 years following the disbursement date. During the three months ended September 30, 2023, no disbursements were made related to this loan. During the nine months ended September 30, 2023, the Company made one loan disbursement of $2.5 million. During the year ended December 31, 2022, the Company made one loan disbursement of $5.0 million.
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Note 8. Common Stock and Stockholders’ Equity
Common Stock Subject to Repurchase
Certain stock option grant agreements permit exercise prior to vesting. Upon termination of service of an employee, the Company has the right to repurchase any unvested, but issued, common stock at the original purchase price. The consideration received for an exercise of an option is accounted for as a deposit of the exercise price and is recorded as a liability. Upon vesting of the shares pursuant to the grant agreements, the shares and related liability are reclassified into stockholders’ equity. As of September 30, 2023, all shares of common stock subject to repurchase were fully vested with no balance remaining. As of December 31, 2022, the Company had $0.2 million recorded in accrued expenses and other current liabilities related to 101,593 unvested shares of common stock subject to repurchase.
Equity Incentive Plans
2021 Equity Incentive Plan
In November 2021, the Company’s Board of Directors and stockholders approved the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) as a successor to the 2018 Equity Incentive Plan (the “2018 Plan”), with the purpose of granting stock-based awards to employees, directors, officers, and consultants, including stock options, restricted stock awards, and restricted stock units (“RSUs”).

The Company initially reserved for issuance under the 2021 Plan (a) 46,008,885 shares of Class A common stock, plus (b) shares that are subject to issuance upon exercise of options granted under the 2018 Plan prior to the Closing but which, after the Closing, cease to be subject to the option for any reason other than exercise of the option, (c) shares that are subject to awards granted under the 2018 Plan prior to the Closing that, after the Closing, are forfeited or are repurchased by the Company at the original issue price, (d) shares that are subject to awards granted under the 2018 Plan prior to the Closing that, after the Closing, otherwise terminate without such shares being issued, and (e) shares that, after the Closing, are used to pay the exercise price of a stock option issued under the 2018 Plan prior to the Closing or are withheld to satisfy the tax withholding obligations related to any award issued under the 2018 Plan prior to the Closing. The number of shares available for grant and issuance under the 2021 Plan will increase automatically on January 1 of each of 2022 through 2031 by the number of shares equal to the lesser of (i) five percent (5%) of the number of shares (rounded down to the nearest whole share) of Class A common stock and Class B common stock issued and outstanding on each December 31 immediately prior to the date of increase, or (ii) such number of shares determined by the Company’s Board of Directors.
2021 Employee Stock Purchase Plan
In November 2021, the Company’s Board of Directors and stockholders approved the Company’s 2021 Employee Stock Purchase Plan (the “2021 ESPP”). Over a series of offering periods, each of which may consist of one or more purchase periods, eligible employees will be offered the option to purchase shares of Class A common stock at 85% of the lesser of the fair market value of Class A common stock on (i) the first business day of the applicable offering period and (ii) the date of purchase. Under the 2021 ESPP, the Company initially reserved 8,901,159 shares of Class A common stock for issuance, and the aggregate number of shares reserved will increase automatically on January 1 of each of 2022 through 2031 by the number of shares equal to the lesser of (i) one percent (1%) of the total number of outstanding shares of Class A common stock and Class B common stock as of the immediately preceding December 31, or (ii) a number of shares as may be determined by the Company’s Board of Directors. The aggregate number of shares issued over the term of the 2021 ESPP, subject to adjustments for stock-splits, recapitalizations, or similar events, may not exceed 89,011,590 shares. In February 2022, the Company commenced its first offering period under the 2021 ESPP. During the three and nine months ended September 30, 2023, 472,606 and 1,032,313 shares of Class A common stock were purchased under the 2021 ESPP, respectively.
Share Repurchase Program
On May 31, 2022, the Company’s Board of Directors authorized and approved a share repurchase program (the “Share Repurchase Program”) to repurchase up to $100.0 million in aggregate of the Company’s Class A common stock, with the authorization to expire on June 30, 2024. Repurchases of Class A common stock under the Share Repurchase Program may be made from time to time, on the open market, in privately negotiated transactions or by other methods, and in accordance with the limitations set forth in Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, and other applicable legal requirements. The timing of any repurchases will depend on market conditions and other investment opportunities, and will be made at the Company’s discretion. The Company currently anticipates that the Share Repurchase Program will extend through June 30, 2024, or such shorter period if $100.0 million in aggregate of shares of the Company’s Class A common stock have been repurchased. The Share Repurchase Program does
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not obligate the Company to repurchase any dollar amount or number of shares, and the program may be extended, modified, suspended, or discontinued at any time.
When the Company repurchases shares under the Share Repurchase Program, it reduces the common stock component of stockholders’ equity by the par value of the repurchased shares. The excess of the repurchase price over par value is recorded to additional paid-in capital. All repurchased shares are retired and become authorized and unissued shares.
During the three and nine months ended September 30, 2023, the Company did not repurchase or retire any shares of its Class A common stock. During the three and nine months ended September 30, 2022, the Company repurchased and retired 20,190,611 and 23,251,703 shares of Class A common stock at an average purchase price of $3.31 and $3.32 per share for an aggregate repurchase price of $66.7 million and $77.2 million, respectively. As of September 30, 2023, the Company had $22.8 million available for future share repurchases under the Share Repurchase Program.
Stock Options and RSUs
The Company may grant options to acquire shares of Class A common stock to employees, directors, officers, and consultants at a price not less than the fair market value of the shares at the date of grant. Options granted to a person who, at the time of the grant, owns more than 10% of the voting power of all classes of stock shall be at no less than 110% of the fair market value and expire five years from the date of grant. All other options generally have a contractual term of ten years. Options granted generally vest on a monthly basis over two to four years. RSUs granted for Class A common stock generally vest on a quarterly basis over two to four years.
A summary of the Company’s stock option activity for the nine months ended September 30, 2023 and related information is as follows (in thousands, except per share data):
Number of OptionsWeighted Average Exercise PriceWeighted Average Remaining Contractual Term (years)Aggregate Intrinsic Value
Outstanding at December 31, 2022
55,388 $2.67 7.5$10,552 
Options granted2,936 $2.30 
Options exercised(3,010)$2.22 
Options forfeited or expired(3,604)$2.73 
Outstanding at September 30, 2023
51,710 $2.68 6.5$7,187 
Exercisable at September 30, 2023
33,236 $2.16 5.5$7,187 
Vested or expected to vest at September 30, 2023
51,710 $2.68 6.5$7,187 
The intrinsic value is calculated as the difference between the exercise price of the underlying common stock option award and the fair value of the Company’s common stock as of the respective balance sheet date. The weighted average grant date fair value of options granted was $1.45 per share and $3.13 per share during the nine months ended September 30, 2023 and 2022, respectively.
The intrinsic value of the options exercised was $1.8 million and $13.4 million for the nine months ended September 30, 2023 and 2022, respectively.

A summary of the Company’s RSU activity for the nine months ended September 30, 2023 and related information is as follows (in thousands, except per share data):
Number of SharesWeighted Average Grant Date Fair Value
Unvested at December 31, 2022
21,986 $4.25 
RSUs granted21,204 $2.37 
RSUs vested(7,863)$3.55 
RSUs forfeited(3,787)$4.11 
Unvested at September 30, 2023
31,540 $3.18 

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Valuation Assumptions
The following assumptions were used to calculate the fair value of employee and non-employee stock option grants made during the following periods:
Nine Months Ended September 30,
20232022
Expected volatility
64.9% - 72.7%
53.9% -73.9%
Expected term (in years)
5.0 - 6.2
6.0
Risk-free interest rate
3.4% - 4.3%
2.6%
Expected dividend yield
Fair value of common stock per share
$1.91 - $3.31
$3.34 - $6.06
Stock-Based Compensation
The Company recorded stock-based compensation expense in the condensed consolidated statements of operations as follows (in thousands):
 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Cost of revenue$835 $732 $2,311 $1,906 
Research and development12,107 9,630 31,804 25,914 
Sales and marketing3,582 2,621 9,140 7,617 
General and administrative6,819 4,287 17,480 11,520 
Total$23,343 $17,270 $60,735 $46,957 
As of September 30, 2023, there was $137.9 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted average period of 1.8 years.
Note 9. Net Loss Per Share Attributable to Common Stockholders
The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except per share data):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Class AClass BClass AClass BClass AClass BClass AClass B
Net loss attributable to common stockholders$(17,663)$(20,453)$(14,142)$(20,575)$(46,819)$(60,416)$(32,588)$(71,920)
Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted176,780204,702153,877223,879164,527212,305118,984 262,587 
Net loss per share attributable to Class A and Class B common stockholders, basic and diluted$(0.10)$(0.10)$(0.09)$(0.09)$(0.28)$(0.28)$(0.27)$(0.27)
20

The following potentially dilutive securities outstanding have been excluded from the computations of diluted net loss per share because such securities have an anti-dilutive impact due to losses reported (in thousands):
As of September 30,
20232022
Outstanding stock options51,71052,426
Unvested RSUs31,54020,921
Unvested early exercised stock options subject to repurchase 184
Unvested restricted stock 321
Shares issuable pursuant to the ESPP2,4812,539
Contingently issuable shares77
Total85,738 76,398 
Note 10. Income Taxes
The Company’s provision for income taxes for interim periods was determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arose during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period.
The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in pretax income or loss, the mix of jurisdictions to which such income or loss relates, tax law developments and changes in how the Company does business, such as acquisitions, intercompany transactions, or the Company’s corporate structure.
The Company recorded an income tax expense for the three months ended September 30, 2023 and 2022 of $0.3 million and $0.3 million, respectively, both of which were primarily related to foreign taxes. The Company recorded an income tax expense for the nine months ended September 30, 2023 and 2022 of $0.7 million and $0.4 million, respectively, both of which were primarily related to foreign taxes.
Note 11. Geographical Information
Revenue disaggregated by geography based on the customers’ location was as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
United States$52,964 $52,205 $154,239 $153,715 
International3,128 1,749 8,513 5,780 
Total$56,092