Revenue grows 25%
SANTA BARBARA, Calif., July 27, 2023 (GLOBE NEWSWIRE) -- AppFolio, Inc. ( APPF) ("AppFolio" or the "Company"), a cloud-based technology platform built for the real estate industry, today announced its financial results for the second quarter ended June 30, 2023.
"AppFolio's second quarter results reflect a relentless focus on our customer-centric strategy, and increased operational efficiency," said Shane Trigg, President and CEO, AppFolio. "Aligning the value we provide with the value we receive is what unlocks our industry-leading innovation. From AI-powered solutions including AppFolio Realm to our entry into the affordable housing segment, addition of new AppFolio Stack partners, and expansion of our payments platform, we’re focused on delivering increasingly more value to our customers and their communities."
Financial Highlights
- Revenue: Total revenue was $147.1 million in the second quarter of 2023, a 25% increase from $117.4 million in the second quarter of 2022.
- Units Served: Total units on the AppFolio Property Manager platform increased to approximately 7.7 million in the second quarter of 2023 from approximately 6.8 million at the end of the second quarter of 2022.
- Income (Loss) from Operations: GAAP loss from operations in the second quarter of 2023 was ($0.7 million), or (0.5%) of revenue, compared to ($29.9 million), or (25.5%) of revenue, in the same quarter of 2022. Non-GAAP income from operations in the second quarter of 2023 was $9.4 million, or 6.4% of revenue, compared to Non-GAAP income from operations of $1.2 million, or 1.0% of revenue, in the second quarter of 2022.
- Cash: Cash, cash equivalents, and investment securities were $164.0 million as of June 30, 2023. Non-GAAP free cash flow was $6.2 million, or 4.2% of revenue, in the second quarter of 2023, compared to $(1.5) million, or (1.2)% of revenue, in the same quarter of 2022.
Financial Outlook
Based on information available as of July 27, 2023, AppFolio's outlook for fiscal year 2023 follows:
- Full year revenue is expected to be in the range of $592 million to $598 million.
- Full year non-GAAP operating margin as a percentage of revenue is expected to be in the range of 5.5% to 6.5%.
- Full year non-GAAP free cash flow margin as a percentage of revenue is expected to be in the range of 6% to 7%.
- Weighted average shares outstanding are expected to be approximately 36 million for the full year.
Conference Call Information
As previously announced, the Company will host a conference call today, July 27, 2023, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the company’s second quarter 2023 financial results. A live webcast of the call will be available at: https://edge.media-server.com/mmc/p/dzbq8t9t. To access the call by phone, please go to the following link: https://register.vevent.com/register/BIef5a6ef99e9c484c8473bc05edb298d1, 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 AppFolio, Inc.
AppFolio is a cloud-based technology platform built for the real estate industry. Our solutions enable our customers to digitally transform their businesses, address critical business operations and deliver a better customer experience. For more information about AppFolio, visit appfolioinc.com.
Investor Relations Contact:
Lori Barker
[email protected]
Use of Non-GAAP Financial Measures
Reconciliations of 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 titled “Statement Regarding the Use of Non-GAAP Financial Measures.”
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,” “predicts, “projects,” “seeks,” “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 2023 financial outlook, anticipated future expenses and investments, the Company's business opportunities, and the impact of the Company's strategic actions and initiatives.
Forward-looking statements represent AppFolio's current beliefs and assumptions based on information currently available. Forward-looking statements involve 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. Some of the risks and uncertainties that may cause the Company's actual results to materially differ from those expressed or implied by these forward-looking statements are described in the section entitled “Risk Factors” in AppFolio's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 9, 2023, 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.
Except as required by applicable law or the rules of the NASDAQ Global Market, AppFolio assumes no obligation to update any forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
| CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands) | |||||||
| June 30, 2023 | December 31, 2022 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 24,698 | $ | 70,769 | |||
| Investment securities—current | 139,273 | 89,297 | |||||
| Accounts receivable, net | 20,033 | 16,503 | |||||
| Prepaid expenses and other current assets | 25,478 | 24,899 | |||||
| Total current assets | 209,482 | 201,468 | |||||
| Investment securities—noncurrent | — | 25,161 | |||||
| Property and equipment, net | 26,635 | 26,110 | |||||
| Operating lease right-of-use assets | 20,308 | 23,485 | |||||
| Capitalized software development costs, net | 26,857 | 35,315 | |||||
| Goodwill | 56,060 | 56,060 | |||||
| Intangible assets, net | 3,593 | 4,833 | |||||
| Other long-term assets | 8,424 | 8,785 | |||||
| Total assets | $ | 351,359 | $ | 381,217 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 1,532 | $ | 2,473 | |||
| Accrued employee expenses | 31,447 | 34,376 | |||||
| Accrued expenses | 18,560 | 15,601 | |||||
| Income tax payable | 13,485 | — | |||||
| Other current liabilities | 9,687 | 8,893 | |||||
| Total current liabilities | 74,711 | 61,343 | |||||
| Operating lease liabilities | 39,554 | 50,237 | |||||
| Other liabilities | 11,141 | 4,091 | |||||
| Stockholders’ equity | 225,953 | 265,546 | |||||
| Total liabilities and stockholders’ equity | $ | 351,359 | $ | 381,217 | |||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenue(1) | $ | 147,075 | $ | 117,450 | $ | 283,175 | $ | 222,746 | |||||||
| Costs and operating expenses: | |||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization)(2) | 57,854 | 47,430 | 114,062 | 90,777 | |||||||||||
| Sales and marketing(2) | 27,002 | 26,995 | 56,400 | 51,914 | |||||||||||
| Research and product development(2) | 37,263 | 26,687 | 74,925 | 51,007 | |||||||||||
| General and administrative(2) | 18,819 | 37,947 | 50,510 | 56,911 | |||||||||||
| Depreciation and amortization | 6,816 | 8,321 | 14,487 | 16,736 | |||||||||||
| Total costs and operating expenses | 147,754 | 147,380 | 310,384 | 267,345 | |||||||||||
| Loss from operations | (679 | ) | (29,930 | ) | (27,209 | ) | (44,599 | ) | |||||||
| Other (loss) income, net | (54 | ) | 45 | (34 | ) | 35 | |||||||||
| Interest income, net | 1,478 | 151 | 2,839 | 258 | |||||||||||
| Income (loss) before provision for income taxes | 745 | (29,734 | ) | (24,404 | ) | (44,306 | ) | ||||||||
| Provision for (benefit from) income taxes | 19,646 | 236 | 29,607 | (49 | ) | ||||||||||
| Net loss | $ | (18,901 | ) | $ | (29,970 | ) | $ | (54,011 | ) | $ | (44,257 | ) | |||
| Net loss per common share, basic and diluted | $ | (0.53 | ) | $ | (0.86 | ) | $ | (1.52 | ) | $ | (1.27 | ) | |||
| Weighted average common shares outstanding, basic and diluted | 35,565 | 34,927 | 35,505 | 34,881 | |||||||||||
(1) The following table presents our revenue categories:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Core solutions | $ | 38,515 | $ | 32,414 | $ | 75,684 | $ | 63,223 | |||||||
| Value Added Services | 106,085 | 81,450 | 202,920 | 152,950 | |||||||||||
| Other | 2,475 | 3,586 | 4,571 | 6,573 | |||||||||||
| Total revenue | $ | 147,075 | $ | 117,450 | $ | 283,175 | $ | 222,746 | |||||||
(2) Includes stock-based compensation expense as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Costs and operating expenses: | |||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization) | $ | 988 | $ | 726 | $ | 1,756 | $ | 1,084 | |||||||
| Sales and marketing | 444 | 2,013 | 2,861 | ||||||||||||
