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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 -- 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: https://edge.media-server.com/mmc/p/ijgr58yt. To access the call by phone, please go to the following link: https://register-conf.media-server.com/register/BIdccd543a8ef7485c8f06cd2837c68ea9, 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
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
ir@appfolio.com

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—current54,088 235,745 
Accounts receivable, net32,543 24,346 
Prepaid expenses and other current assets37,026 32,807 
Total current assets197,135 335,402 
Property and equipment, net22,641 24,483 
Operating lease right-of-use assets16,464 17,472 
Capitalized software development costs, net12,414 15,429 
Goodwill96,410 96,410 
Intangible assets, net43,942 49,057 
Deferred income taxes90,095 76,910 
Long-term investments77,033 2,033 
Other long-term assets11,269 9,482 
Total assets$567,403 $626,678 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$3,254 $2,378 
Accrued employee expenses25,784 30,157 
Accrued expenses18,103 14,658 
Other current liabilities20,448 16,087 
Total current liabilities67,589 63,280 
Operating lease liabilities35,180 37,476 
Other liabilities8,988 6,632 
Total liabilities111,757 107,388 
Stockholders’ equity455,646 519,290 
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,
 2025202420252024
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 amortization5,850 4,670 12,105 9,882 
Total costs and operating expenses195,063 161,347 378,982 314,687 
Income from operations40,512 36,028 74,295 70,118 
Other (loss)/income, net(11)— 45 — 
Interest income, net1,466 3,476 4,419 6,468 
Income before provision for income taxes41,967 39,504 78,759 76,586 
Provision for income taxes5,987 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
Basic35,922 36,241 36,111 36,164 
Diluted36,204 36,742 36,425 36,720 
(1) The following table presents our revenue categories:
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2025202420252024
Core solutions$52,473 $44,024 $101,986 $86,944 
Value Added Services180,145 151,620 344,851 293,951 
Other2,957 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,
2025202420252024
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)$1,419 $1,175 $2,706 $2,135 
Sales and marketing3,045 1,703 5,893 3,213 
Research and product development8,176 6,472 15,107 12,154 
General and administrative5,659 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,
 2025202420252024
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 amortization5,850 4,670 12,105 9,881 
Amortization of operating lease right-of-use assets507 530 1,008 1,053 
Amortization of costs capitalized to obtain revenue contracts, net2,699 2,485 5,419 4,985 
Deferred income taxes(7,644)— (13,185)— 
Stock-based compensation, including as amortized18,299 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 liabilities10,875 7,833 5,649 (8,897)
Net cash provided by operating activities52,643 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 investments99,944 — 202,662 — 
Proceeds from maturities of available-for-sale investments1,670 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 activities23,765 (38,034)104,559 (61,071)
Cash from financing activities
Proceeds from stock option exercises117 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 cash16,545 425 30,974 10,130 
Cash, cash equivalents and restricted cash
Beginning of period57,183 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,
2025202420252024
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 revenue36 %35 %36 %35 %
Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue35 %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 revenue16 %14 %15 %13 %
Non-GAAP sales and marketing as a percentage of revenue14 %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 revenue20 %20 %20 %20 %
Non-GAAP research and product development as a percentage of revenue16 %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 revenue9 %10 %10 %11 %
Non-GAAP general and administrative as a percentage of revenue7 %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 revenue2 %2 %3 %3 %
Non-GAAP depreciation and amortization as a percentage of revenue1 %2 %1 %2 %



Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Income from operations:
GAAP income from operations$40,512 $36,028 $74,295 $70,118 
Stock-based compensation expense18,299 14,794 34,670 28,268 
Amortization of stock-based compensation capitalized in software development costs241 471 482 989 
Amortization of purchased intangibles2,558 118 5,115 237 
Non-GAAP income from operations$61,610 $51,411 $114,562 $99,612 
Operating margin:
GAAP operating margin17.2 %18.3 %16.4 %18.2 %
Stock-based compensation expense as a percentage of revenue7.8 7.4 7.7 7.3 
Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue0.1 0.2 0.1 0.3 
Amortization of purchased intangibles as a percentage of revenue1.1 0.1 1.1 0.1 
Non-GAAP operating margin26.2 %26.0 %25.3 %25.9 %
Net income (loss):
GAAP net income $35,980 $29,665 $67,363 $68,328 
Stock-based compensation expense18,299 14,794 34,670 28,268 
Amortization of stock-based compensation capitalized in software development costs241 471 482 989 
Amortization of purchased intangibles2,558 118 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 income0.39 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 income0.39 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
Basic35,922 36,241 36,111 36,164 
Diluted36,204 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.




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