APPF AppFolio Inc Class A

AppFolio, Inc. Announces Second Quarter 2025 Financial Results

AppFolio, Inc. Announces Second Quarter 2025 Financial Results

Strong revenue growth driven by Realm-X adoption through premium tiers and value added services

SANTA BARBARA, Calif., July 31, 2025 (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 second quarter ended June 30, 2025.

"Our second quarter results reflect that we continue to win in the market,” said Shane Trigg, President and CEO, AppFolio. “Our customers are seeing tangible performance benefits by adopting our central, AI-native platform, with 96% of customers having used one or more of our AI-powered solutions. AppFolio is proving to be a competitive advantage for ambitious property management businesses.”

Financial Highlights for Second Quarter of 2025

  • Revenue grew 19% year-over-year to $236 million.
  • Total units under management grew 6% year-over-year to 8.9 million.
  • GAAP operating income was $41 million, or 17.2% of revenue, compared to operating income of $36 million, or 18.3% of revenue in Q2 2024.
  • Non-GAAP operating income was $62 million, or 26.2% of revenue, compared to non-GAAP operating income of $51 million, or 26.0% of revenue, in Q2 2024.
  • Net cash provided by operating activities was $53 million, or 22.3% of revenue, compared to $51 million, or 25.8% of revenue, in Q2 2024.

Financial Outlook

Based on information available as of July 31, 2025, AppFolio's outlook for fiscal year 2025 follows:

  • Full year revenue is expected to be in the range of $935 million to $945 million.
  • Full year non-GAAP operating margin as a percentage of revenue is expected to be in the range of 24.5% to 26.5%.
  • Diluted weighted average shares outstanding are expected to be approximately 37 million for the full year.

Conference Call Information

As previously announced, the Company will host a conference call today, July 31, 2025, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the Company’s second quarter financial results. A live webcast of the call will be available at: . To access the call by phone, please go to the following link: , 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 .

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 /, as a means of disclosing material nonpublic information and for complying with AppFolio's disclosure obligations under Regulation FD.

About AppFolio

AppFolio 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 Barker

 

Use of Non-GAAP Financial Measures

Reconciliations 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 because certain items that impact this measure 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 2025 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 Company's AI-powered solutions, 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 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, 2024, which was filed with the SEC on February 6, 2025, as such risk factors may be updated from time to time in our subsequent filings with the SEC, 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)
 
  June 30,

2025
 December 31,

2024
Assets    
Current assets    
Cash and cash equivalents $73,478 $42,504
Investment securities—current  54,088  235,745
Accounts receivable, net  32,543  24,346
Prepaid expenses and other current assets  37,026  32,807
Total current assets  197,135  335,402
Property and equipment, net  22,641  24,483
Operating lease right-of-use assets  16,464  17,472
Capitalized software development costs, net  12,414  15,429
Goodwill  96,410  96,410
Intangible assets, net  43,942  49,057
Deferred income taxes  90,095  76,910
Long-term investments  77,033  2,033
Other long-term assets  11,269  9,482
Total assets $567,403 $626,678
Liabilities and Stockholders’ Equity    
Current liabilities    
Accounts payable $3,254 $2,378
Accrued employee expenses  25,784  30,157
Accrued expenses  18,103  14,658
Other current liabilities  20,448  16,087
Total current liabilities  67,589  63,280
Operating lease liabilities  35,180  37,476
Other liabilities  8,988  6,632
Total liabilities  111,757  107,388
Stockholders’ equity  455,646  519,290
Total liabilities and stockholders’ equity $567,403 $626,678
       



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)
 Three Months Ended

June 30,
 Six Months Ended

June 30,
  2025   2024  2025  2024
Revenue(1)$235,575  $197,375 $453,277 $384,805
Costs and operating expenses:       
Cost of revenue (exclusive of depreciation and amortization)(2) 83,827   69,601  163,325  134,247
Sales and marketing(2) 36,776   27,300  67,833  51,755
Research and product development(2) 46,674   39,522  90,432  77,417
General and administrative(2) 21,936   20,254  45,287  41,386
Depreciation and amortization 5,850   4,670  12,105  9,882
Total costs and operating expenses 195,063   161,347  378,982  314,687
Income from operations 40,512   36,028  74,295  70,118
Other (loss)/income, net (11)    45  
Interest income, net 1,466   3,476  4,419  6,468
Income before provision for income taxes 41,967   39,504  78,759  76,586
Provision for income taxes 5,987   9,839  11,396  8,258
Net income$35,980  $29,665 $67,363 $68,328
Net income per common share:       
Basic$1.00  $0.82 $1.87 $1.89
Diluted$0.99  $0.81 $1.85 $1.86
Weighted average common shares outstanding       
Basic 35,922   36,241  36,111  36,164
Diluted 36,204   36,742  36,425  36,720
             

(1) The following table presents our revenue categories:

 Three Months Ended

June 30,
 Six Months Ended

June 30,
  2025  2024  2025  2024
Core solutions$52,473 $44,024 $101,986 $86,944
Value Added Services 180,145  151,620  344,851  293,951
Other 2,957  1,731  6,440  3,910
Total revenue$235,575 $197,375 $453,277 $384,805
            

(2) Includes stock-based compensation expense as follows:

 Three Months Ended

June 30,
 Six Months Ended

June 30,
  2025  2024  2025  2024
Costs and operating expenses:       
Cost of revenue (exclusive of depreciation and amortization)$1,419 $1,175 $2,706 $2,135
Sales and marketing 3,045  1,703  5,893  3,213
Research and product development 8,176  6,472  15,107  12,154
General and administrative 5,659  5,444  10,964  10,766
Total stock-based compensation expense$18,299 $14,794 $34,670 $28,268
            



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)
 
 Three Months Ended

June 30,
 Six Months Ended

June 30,
  2025   2024   2025   2024 
Cash from operating activities       
Net income$35,980  $29,665  $67,363  $68,328 
Adjustments to reconcile net income to net cash provided by operating activities:       
Depreciation and amortization 5,850   4,670   12,105   9,881 
Amortization of operating lease right-of-use assets 507   530   1,008   1,053 
Amortization of costs capitalized to obtain revenue contracts, net 2,699   2,485   5,419   4,985 
Deferred income taxes (7,644)     (13,185)   
Stock-based compensation, including as amortized 18,299   14,795   34,670   28,269 
Other (131)  (2,181)  (1,048)  (4,005)
Changes in operating assets and liabilities:       
Accounts receivable (5,081)  488   (8,197)  (4,982)
Prepaid expenses and other assets (5,966)  (6,177)  (11,426)  172 
Accounts payable (1,694)  (296)  852   437 
Operating lease liabilities (1,051)  (943)  (2,102)  (1,418)
Accrued expenses and other liabilities 10,875   7,833   5,649   (8,897)
Net cash provided by operating activities 52,643   50,869   91,108   93,823 
Cash from investing activities       
Purchases of available-for-sale investments (1,732)  (94,377)  (64,034)  (151,539)
Proceeds from sales of available-for-sale investments 99,944      202,662    
Proceeds from maturities of available-for-sale investments 1,670   57,785   43,820   94,455 
Purchases of property and equipment (275)  (38)  (505)  (1,458)
Capitalization of software development costs (842)  (1,404)  (1,478)  (2,529)
Purchases of long-term investments (75,000)     (75,000)   
Cash paid in business acquisition, net of cash acquired       (906)   
Net cash used in investing activities 23,765   (38,034)  104,559   (61,071)
Cash from financing activities       
Proceeds from stock option exercises 117   24   128   3,898 
Tax withholding for net share settlement (10,020)  (12,434)  (19,098)  (26,520)
Purchase of common stock (49,960)     (145,723)   
Net cash used in financing activities (59,863)  (12,410)  (164,693)  (22,622)
Net decrease in cash, cash equivalents and restricted cash 16,545   425   30,974   10,130 
Cash, cash equivalents and restricted cash       
Beginning of period 57,183   59,464   42,754   49,759 
End of period$73,728  $59,889  $73,728  $59,889 



  RECONCILIATION FROM GAAP TO NON-GAAP RESULTS

(UNAUDITED)

(in thousands, except per share data)
   
   Three Months Ended

June 30,
 Six Months Ended

June 30,
    2025   2024   2025   2024 
Costs and operating expenses:

         
 GAAP cost of revenue (exclusive of depreciation and amortization)$83,827  $69,601  $163,325  $134,247 
  Stock-based compensation expense (1,419)  (1,175)  (2,706)  (2,135)
 Non-GAAP cost of revenue (exclusive of depreciation and amortization)$82,408  $68,426  $160,619  $132,112 
 GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue 36%  35%  36%  35%
 Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue 35%  35%  35%  34%
          
 GAAP sales and marketing$36,776  $27,300  $67,833  $51,755 
  Stock-based compensation expense (3,045)  (1,703)  (5,893)  (3,213)
 Non-GAAP sales and marketing$33,731  $25,597  $61,940  $48,542 
 GAAP sales and marketing as a percentage of revenue 16%  14%  15%  13%
 Non-GAAP sales and marketing as a percentage of revenue 14%  13%  14%  13%
          
 GAAP research and product development$46,674  $39,522  $90,432  $77,417 
  Stock-based compensation expense (8,176)  (6,472)  (15,107)  (12,154)
 Non-GAAP research and product development$38,498  $33,050  $75,325  $65,263 
 GAAP research and product development as a percentage of revenue 20%  20%  20%  20%
 Non-GAAP research and product development as a percentage of revenue 16%  17%  17%  17%
          
 GAAP general and administrative$21,936  $20,254  $45,287  $41,386 
  Stock-based compensation expense (5,659)  (5,444)  (10,964)  (10,766)
 Non-GAAP general and administrative$16,277  $14,810  $34,323  $30,620 
 GAAP general and administrative as a percentage of revenue 9%  10%  10%  11%
 Non-GAAP general and administrative as a percentage of revenue 7%  8%  8%  8%
          
 GAAP depreciation and amortization$5,850  $4,670  $12,105  $9,882 
  Amortization of stock-based compensation capitalized in software development costs (241)  (471)  (482)  (989)
  Amortization of purchased intangibles (2,558)  (118)  (5,115)  (237)
 Non-GAAP depreciation and amortization$3,051  $4,081  $6,508  $8,656 
 GAAP depreciation and amortization as a percentage of revenue 2%  2%  3%  3%
 Non-GAAP depreciation and amortization as a percentage of revenue 1%  2%  1%  2%



   Three Months Ended

June 30,
 Six Months Ended

June 30,
    2025   2024   2025   2024 
Income from operations:       
 GAAP income from operations$40,512  $36,028  $74,295  $70,118 
  Stock-based compensation expense 18,299   14,794   34,670   28,268 
  Amortization of stock-based compensation capitalized in software development costs 241   471   482   989 
  Amortization of purchased intangibles 2,558   118   5,115   237 
 Non-GAAP income from operations$61,610  $51,411  $114,562  $99,612 
          
Operating margin:       
 GAAP operating margin 17.2%  18.3%  16.4%  18.2%
  Stock-based compensation expense as a percentage of revenue 7.8   7.4   7.7   7.3 
  Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue 0.1   0.2   0.1   0.3 
  Amortization of purchased intangibles as a percentage of revenue 1.1   0.1   1.1   0.1 
 Non-GAAP operating margin 26.2%  26.0%  25.3%  25.9%
          
Net income (loss):       
 GAAP net income$35,980  $29,665  $67,363  $68,328 
  Stock-based compensation expense 18,299   14,794   34,670   28,268 
  Amortization of stock-based compensation capitalized in software development costs 241   471   482   989 
  Amortization of purchased intangibles 2,558   118   5,115   237 
  Income tax effect of adjustments (7,257)  (3,883)  (13,599)  (18,262)
 Non-GAAP net income$49,821  $41,165  $94,031  $79,560 
          
Net income per share, basic:       
 GAAP net income per share, basic$1.00  $0.82  $1.87  $1.89 
  Non-GAAP adjustments to net income 0.39   0.32   0.73   0.31 
 Non-GAAP net income per share, basic$1.39  $1.14  $2.60  $2.20 
          
Net income per share, diluted:       
 GAAP net income per share, diluted$0.99  $0.81  $1.85  $1.86 
  Non-GAAP adjustments to net income 0.39   0.31   0.73   0.31 
 Non-GAAP net income per share, diluted$1.38  $1.12  $2.58  $2.17 
          
 Weighted-average shares used in GAAP and non-GAAP per share calculation       
  Basic 35,922   36,241   36,111   36,164 
  Diluted 36,204   36,742   36,425   36,720 

Statement Regarding the Use of Non-GAAP Financial Measures

We use the following non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

  • Non-GAAP presentation of income from operations, costs and operating expenses, operating margin, net income, and net income per share. These measures exclude certain non-cash or non-recurring items, including stock-based compensation expense, amortization of stock-based compensation capitalized in software development costs, amortization of purchased intangibles, and the related income tax effect of these adjustments, as applicable and described below. Non-GAAP operating margin is calculated as non-GAAP operating income from operations as a percentage of revenue.

We use each of these non-GAAP financial measures internally to assess and compare operating results across reporting periods, for internal budgeting and forecasting purposes, and to evaluate our financial performance. We believe these non-GAAP financial measures also provide useful supplemental information to investors and facilitate the analysis of our operating results and comparison of operating results across reporting periods.

In particular, we believe these non-GAAP financial measures are useful to investors and others in assessing our operating performance due to the following factors:

  • Stock-based compensation expense and amortization of stock-based compensation capitalized in software development costs. We utilize stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of our stockholders while ensuring long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.



  • Amortization of purchased intangibles. We view amortization of purchased intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.



  • Income tax effects of adjustments. We utilize a fixed long-term projected tax rate in our computation of non-GAAP income tax effects to provide better consistency across interim reporting periods. In projecting this long-term non-GAAP tax rate, we utilize a financial projection that excludes the direct impact of other non-GAAP adjustments. The projected rate, which we have determined to be 21% and 25% for 2025 and 2024, respectively, considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. We periodically re-evaluate this tax rate, as necessary, for significant events, based on relevant tax law changes, and material changes in the forecasted geographic earnings mix.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and can exclude expenses that may have a material impact on our reported financial results. As such, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the tables above. We encourage investors to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.



EN
31/07/2025

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