Document

"We are proud of our start to 2026 - our strategy is translating into strong financial outcomes and our momentum continues," said Shane Trigg, President and CEO. "We are putting AI to work across every dimension of our business, accelerating performance for our customers while driving greater efficiency across our own operations. Our ability to expand both customer value and financial performance continues to grow."

As previously announced, the Company will host a conference call today, April 23, 2026, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the Company’s first quarter financial results. A live webcast of the call will be available at: https://edge.media-server.com/mmc/p/hja3su4g. To access the call by phone, please go to the following link: https://register-conf.media-server.com/register/BI3901a9bd63cb48c1a2cf4d7d4e1b8821, 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.

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.

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 2026 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 AI and its 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, 2025, which was filed with the SEC on February 5, 2026, 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.


	March 31, 2026		December 31, 2025
Assets
Current assets
Cash and cash equivalents	$	147,412	$	106,967
Investment securities—current	4,241		144,256
Accounts receivable, net	43,966		36,873
Prepaid expenses and other current assets	59,323		65,218
Total current assets	254,942		353,314
Property and equipment, net	22,449		23,228
Operating lease right-of-use assets	15,364		15,924
Capitalized software development costs, net	11,416		11,324
Goodwill	96,410		96,410
Intangible assets, net	36,269		38,826
Deferred income taxes	50,795		58,823
Long-term investments	77,668		77,033
Other long-term assets	15,247		14,085
Total assets	$	580,560	$	688,967
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	3,740	$	4,123
Accrued employee expenses	25,163		59,774
Accrued expenses	21,436		20,829
Other current liabilities	22,018		22,121
Total current liabilities	72,357		106,847
Operating lease liabilities	31,981		33,287
Other liabilities	5,994		6,254
Total liabilities	110,332		146,388
Stockholders’ equity	470,228		542,579
Total liabilities and stockholders’ equity	$	580,560	$	688,967


	Three Months Ended March 31,
	2026		2025
Revenue(1)	$	262,214	$	217,702
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)(2)	94,975		79,498
Sales and marketing(2)	37,501		31,057
Research and product development(2)	49,629		43,758
General and administrative(2)	24,341		23,351
Depreciation and amortization	5,020		6,255
Total costs and operating expenses	211,466		183,919
Income from operations	50,748		33,783
Other income, net	569		56
Interest income, net	1,784		2,953
Income before provision for income taxes	53,101		36,792
Provision for income taxes	10,677		5,409
Net income	$	42,424	$	31,383
Net income per common share:
Basic	$	1.19	$	0.86
Diluted	$	1.18	$	0.86
Weighted average common shares outstanding
Basic	35,699		36,302
Diluted	35,812		36,648


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
	Three Months Ended March 31,
	2026		2025
Cash from operating activities
Net income	$	42,424	$	31,383
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,020		6,255
Amortization of operating lease right-of-use assets	560		501

Amortization of costs capitalized to obtain revenue contracts, net	3,168		2,720
Deferred income taxes	8,028		(5,541)
Stock-based compensation, including as amortized	17,989		16,371
Other	(523)		(917)
Changes in operating assets and liabilities:
Accounts receivable	(7,443)		(3,116)
Prepaid expenses and other assets	(8,206)		(5,460)
Accounts payable	(382)		2,546
Operating lease liabilities	(1,180)		(1,051)
Accrued expenses and other liabilities	(25,157)		(5,226)
Net cash provided by operating activities	34,298		38,465
Cash from investing activities
Purchases of available-for-sale investments	(42,663)		(62,302)
Proceeds from sales of available-for-sale investments	140,154		102,718
Proceeds from maturities of available-for-sale investments	42,360		42,150
Purchases of property and equipment	(231)		(230)
Capitalization of software development costs	(1,304)		(636)


Cash paid in business acquisition, net of cash acquired	—		(906)

Net cash (used in) provided by investing activities	138,316		80,794
Cash from financing activities
Proceeds from stock option exercises and the issuance of common stock under the Employee Stock Purchase Plan	998		11
Tax withholding for net share settlement	(8,157)		(9,078)
Purchase of common stock	(125,010)		(95,763)
Net cash used in financing activities	(132,169)		(104,830)
Net increase in cash, cash equivalents and restricted cash	40,445		14,429
Cash, cash equivalents and restricted cash
Beginning of period	107,217		42,754
End of period	$	147,662	$	57,183


			Three Months Ended March 31,
			2026			2025
Costs and operating expenses:
	GAAP cost of revenue (exclusive of depreciation and amortization)		$	94,975		$	79,498
		Stock-based compensation expense	(1,088)			(1,287)

	Non-GAAP cost of revenue (exclusive of depreciation and amortization)		$	93,887		$	78,211
	GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue		36		%	37		%
	Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue		36		%	36		%

	GAAP sales and marketing		$	37,501		$	31,057
		Stock-based compensation expense	(3,340)			(2,848)

	Non-GAAP sales and marketing		$	34,161		$	28,209
	GAAP sales and marketing as a percentage of revenue		14		%	14		%
	Non-GAAP sales and marketing as a percentage of revenue		13		%	13		%

	GAAP research and product development		$	49,629		$	43,758
		Stock-based compensation expense	(7,882)			(6,931)

	Non-GAAP research and product development		$	41,747		$	36,827
	GAAP research and product development as a percentage of revenue		19		%	20		%
	Non-GAAP research and product development as a percentage of revenue		16		%	17		%

	GAAP general and administrative		$	24,341		$	23,351
		Stock-based compensation expense	(5,679)			(5,305)





	Non-GAAP general and administrative		$	18,662		$	18,046
	GAAP general and administrative as a percentage of revenue		9		%	11		%
	Non-GAAP general and administrative as a percentage of revenue		7		%	8		%

	GAAP depreciation and amortization		$	5,020		$	6,255
		Amortization of stock-based compensation capitalized in software development costs	(241)			(241)
		Amortization of purchased intangibles	(2,558)			(2,558)
	Non-GAAP depreciation and amortization		$	2,221		$	3,456
	GAAP depreciation and amortization as a percentage of revenue		2		%	3		%
	Non-GAAP depreciation and amortization as a percentage of revenue		1		%	2		%


			Three Months Ended March 31,
			2026			2025
Income from operations:
	GAAP income from operations		$	50,748		$	33,783
		Stock-based compensation expense	17,989			16,371
		Amortization of stock-based compensation capitalized in software development costs	241			241
		Amortization of purchased intangibles	2,558			2,558
	Non-GAAP income from operations		$	71,536		$	52,953

Operating margin:
	GAAP operating margin		19.4		%	15.5		%
		Stock-based compensation expense as a percentage of revenue	6.8			7.5
		Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue	0.1			0.1
		Amortization of purchased intangibles as a percentage of revenue	1.0			1.2
	Non-GAAP operating margin		27.3		%	24.3		%

Net income (loss):
	GAAP net income		$	42,424		$	31,383
		Stock-based compensation expense	17,989			16,371
		Amortization of stock-based compensation capitalized in software development costs	241			241
		Amortization of purchased intangibles	2,558			2,558
		Income tax effect of adjustments	(5,579)			(6,343)
	Non-GAAP net income		$	57,633		$	44,210

Net income per share, basic:
	GAAP net income per share, basic		$	1.19		$	0.86
		Non-GAAP adjustments to net income	0.42			0.36
	Non-GAAP net income per share, basic		$	1.61		$	1.22

Net income per share, diluted:
	GAAP net income per share, diluted		$	1.18		$	0.86
		Non-GAAP adjustments to net income	0.43			0.35
	Non-GAAP net income per share, diluted		$	1.61		$	1.21

	Weighted-average shares used in GAAP and non-GAAP per share calculation
		Basic	35,699			36,302
		Diluted	35,812			36,648

•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.

•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 22% and 21% for 2026 and 2025, 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.


	Three Months Ended March 31,
	2026		2025
Subscription Services	$	58,222	$	49,513
Value Added Services	201,363		164,706
Other	2,629		3,483
Total revenue	$	262,214	$	217,702