AppFolio, Inc. Announces Third Quarter 2024 Financial Results
Q3 revenue grows 24% Company announces acquisition of LiveEasy as part of its expanded resident vision
SANTA BARBARA, Calif., Oct. 24, 2024 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ:APPF) ("AppFolio" or the "Company"), a technology leader powering the future of the real estate industry, today announced its financial results for the third quarter ended September 30, 2024.
"Our results reflect relentless customer focus and strong execution of our strategy," said Shane Trigg, President and CEO, AppFolio. "With our next-generation resident application, FolioSpace™, we are redefining how property managers and residents connect, and demonstrating our commitment to investing in innovation that builds the platform where the real estate industry comes to do business."
Financial Highlights for Third Quarter of 2024
Revenue grew 24% year-over-year to $206 million.
Total units under management grew 9% year-over-year to 8.5 million.
GAAP operating income was $43 million, or 20.7% of revenue, compared to an operating loss of ($0 million), in Q3 2023.
Non-GAAP operating income was $59 million, or 28.7% of revenue, compared to an operating income of $27 million, or 16.1% of revenue, in Q3 2023.
Net cash provided by operating activities was $58 million, or 28.1% of revenue, compared to $37 million, or 22.2% of revenue, in Q3 2023.
Non-GAAP free cash flow was $56 million, or 27.1% of revenue, compared to $34 million, or 20.3% of revenue, in Q3 2023.
Business Highlight
AppFolio acquired LiveEasy, a concierge platform providing moving and home services throughout the resident onboarding process. These services will be integrated into FolioSpace, AppFolio's next-generation resident application.
Executive Management Transition
Fay Sien Goon, the Company's Chief Financial Officer, will depart AppFolio as of October 25, 2024. The Company has commenced a search for a successor to Ms. Goon and will consider internal and external candidates. Pending the appointment of Ms. Goon's successor, AppFolio has appointed Tim Eaton as the Company's interim Chief Financial Officer, effective October 25, 2024. Mr. Eaton has served as the Company's Chief of Staff to the Chief Executive Officer since 2022, and in various other leadership roles within the Company since 2020.
Financial OutlookBased on information available as of October 24, 2024, AppFolio's outlook for fiscal year 2024 follows:
Full year revenue is expected to be in the range of $786 million to $790 million.
Full year non-GAAP operating margin as a percentage of revenue is expected to be in the range of 24.5% to 25.5%.
Full year non-GAAP free cash flow margin as a percentage of revenue is expected to be in the range of 22% to 24%.
Diluted weighted average shares outstanding are expected to be approximately 37 million for the full year.
Conference Call InformationAs previously announced, the Company will host a conference call today, October 24, 2024, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the company's third quarter 2024 financial results. A live webcast of the call will be available at: https://edge.media-server.com/mmc/p/56effhwx. To access the call by phone, please go to the following link: https://register.vevent.com/register/BI0592d6d11ce14a179afe199e2d07039c, and you will be provided with dial in details. A replay of the webcast will also be available for a limited time on AppFolio's Investor Relations website at https://ir.appfolioinc.com/news-events/events.
The Company also provides announcements regarding its financial results and other matters, including SEC filings, investor events, and press releases, on its Investor Relations website at https://ir.appfolioinc.com/, as a means of disclosing material nonpublic information and for complying with AppFolio's disclosure obligations under Regulation FD.
About AppFolioAppFolio is a technology leader powering the future of the real estate industry. Our innovative platform and trusted partnership enable our customers to connect communities, increase operational efficiency, and grow their business. For more information about AppFolio, visit ir.appfolioinc.com.
Investor Relations Contact: Lori
Use of Non-GAAP Financial MeasuresReconciliations of current and historical non-GAAP financial measures to AppFolio's financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables entitled "Statement Regarding the Use of Non-GAAP Financial Measures."
AppFolio is unable, at this time, to provide GAAP equivalent guidance measures on a forward-looking basis for non-GAAP operating margin and non-GAAP free cash flow margin because certain items that impact these measures are uncertain, out of our control, or cannot be reasonably predicted, such as charges related to stock-based compensation expense. The effect of these excluded items may be significant.
Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements are subject to considerable risks and uncertainties. Forward-looking statements include all statements that are not statements of historical fact contained in this press release, and can be identified by words such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "future," "predicts," "projects," "target," "seeks," "contemplates," "should," "will," "would" or similar expressions and the negatives of those expressions. In particular, forward-looking statements contained in this press release relate to future operating results and financial position, including the Company's fiscal year 2024 financial outlook, anticipated future expenses and investments, the Company's business opportunities, the impact of the Company's strategic actions and initiatives, the potential benefits and effect of the FolioSpace resident app and the acquisition of LiveEasy and their impact on the Company's plans, objectives, expectations and capabilities.
Forward-looking statements represent AppFolio's current beliefs and expectations based on information currently available and speak only as of the date the statement is made. Forward-looking statements are subject to numerous known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to materially differ from those expressed or implied by these forward-looking statements include the Company's ability to successfully launch the FolioSpace resident app and integrate the LiveEasy business, the Company's ability to implement its plans, objectives and expectations with respect to the FolioSpace resident app and the LiveEasy business, negative effects of the announcement of the FolioSpace resident app and/or the Live Easy acquisition on the Company's business operations, operating results or share price, and unknown liabilities associated with the acquisition as well as those risks, uncertainties and other factors described in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 1, 2024, and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's most recently filed Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as well as in the Company's other filings with the SEC. You should read this press release with the understanding that the Company's actual future results may be materially different from the results expressed or implied by these forward-looking statements.
The Company undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
September 30,2024
December 31,2023
Assets
Current assets
Cash and cash equivalents
$
62,417
$
49,509
Investment securities—current
268,951
162,196
Accounts receivable, net
25,581
20,709
Prepaid expenses and other current assets
38,194
39,943
Total current assets
395,143
272,357
Property and equipment, net
25,478
28,362
Operating lease right-of-use assets
17,744
19,285
Capitalized software development costs, net
16,330
21,562
Goodwill
56,060
56,060
Other long-term assets
12,542
11,263
Total assets
$
523,297
$
408,889
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable
$
509
$
1,141
Accrued employee expenses
33,625
35,567
Accrued expenses
14,899
21,723
Other current liabilities
14,664
11,335
Total current liabilities
63,697
69,766
Operating lease liabilities
38,402
41,114
Other liabilities
8,371
697
Total liabilities
110,470
111,577
Stockholders' equity
412,827
297,312
Total liabilities and stockholders' equity
$
523,297
$
408,889
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2024
2023
2024
2023
Revenue(1)
$
205,733
$
165,440
$
590,538
$
448,615
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)(2)
71,631
62,739
205,878
176,801
Sales and marketing(2)
25,406
29,701
77,161
86,101
Research and product development(2)
40,662
41,592
118,079
116,517
General and administrative(2)
21,139
23,907
62,525
74,417
Depreciation and amortization
4,327
7,568
14,209
22,055
Total costs and operating expenses
163,165
165,507
477,852
475,891
Income (loss) from operations
42,568
(67
)
112,686
(27,276
)
Other income (loss), net
—
(249
)
—
(283
)
Interest income, net
4,014
1,788
10,482
4,627
Income (loss) before provision for income taxes
46,582
1,472
123,168
(22,932
)
Provision for (benefit from) income taxes
13,576
(24,973
)
21,834
4,634
Net income (loss)
$
33,006
$
26,445
$
101,334
$
(27,566
)
Net income (loss) per common share:
Basic
$
0.91
$
0.74
$
2.80
$
(0.78
)
Diluted
$
0.90
$
0.72
$
2.76
$
(0.78
)
Weighted average common shares outstanding
Basic
36,306
35,691
36,211
35,567
Diluted
36,756
36,482
36,752
35,567
(1) The following table presents our revenue categories:
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2024
2023
2024
2023
Core solutions
$
46,030
$
39,756
$
132,974
$
115,440
Value Added Services
157,726
123,188
451,677
326,108
Other
1,977
2,496
5,887
7,067
Total revenue
$
205,733
$
165,440
$
590,538
$
448,615
(2) Includes stock-based compensation expense as follows:
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2024
2023
2024
2023
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)
$
1,126
$
1,149
$
3,261
$
2,905
Sales and marketing
2,071
2,041
5,284
4,902
Research and product development
7,471
6,064
19,625
15,851
General and administrative
5,367
6,003
16,133
16,274
Total stock-based compensation expense
$
16,035
$
15,257
$
44,303
$
39,932
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2024
2023
2024
2023
Cash from operating activities
Net income (loss)
$
33,006
$
26,445
$
101,334
$
(27,566
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
3,912
6,980
12,804
20,115
Amortization of operating lease right-of-use assets
488
509
1,541
1,618
Gain on lease modification
—
—
—
(4,281
)
Stock-based compensation, including as amortized
16,449
15,845
45,707
41,872
