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AppFolio (APPF) Incurs Loss in Q4, Revenues Increase Y/Y

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Zacks Equity Research
·4 min read
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AppFolio, Inc. APPF reported fourth-quarter 2020 loss of 1 cent per share against earnings of 12 cents reported in the year-ago quarter. The Zacks Consensus Estimate was pegged at earnings of 13 cents per share.

Total revenues of $72.4 million increased 7.5% on a year-over-year basis in the fourth quarter. The Zacks Consensus Estimate was pegged at $74 million for the fourth quarter.

Following the announcement of results, shares of the company are down 3.7% in premarket trading on Mar 2. In the past year, AppFolio shares have returned 35% compared with the industry’s rally of 110.6%.

AppFolio, Inc. Price, Consensus and EPS Surprise

AppFolio, Inc. Price, Consensus and EPS Surprise
AppFolio, Inc. Price, Consensus and EPS Surprise

AppFolio, Inc. price-consensus-eps-surprise-chart | AppFolio, Inc. Quote

Segment Revenue Details

Core Solutions’ revenues were $22.9 million, up 18% on a year-over-year basis.

Further, Value+ Services revenues came in at $46 million, up 25% year over year. The segment’s top line was driven by higher uptake of the company’s electronic payment services. Other revenues from continuing operations were $3.5 million in the quarter under review.

In the fourth quarter, number of property manager customers increased 10% year over year to 15,724. The number of property management units increased 5.36 million units from 4.64 million units reported in the year ago quarter.

Amid the ongoing pandemic, the need to maintain social distancing is driving demand for online leasing services and virtual showings. The company is optimistic about its AppFolio Virtual Showings solution which enables clients to conduct live virtual 3D tours of the housing units and revamp leasing processes during COVID-19 crisis.

Management also added new functionalities to its AppFolio Investment Management solution and AppFolio Property Manager PLUS software solution in 2020.

Margins

Total costs and operating expenses of $75.2 million, increased 11.8% year over year, mainly due to higher sales and marketing costs along with increases in general and administrative expenditures.

Meanwhile, the company reported loss from operations of $2.8 million, mainly due to higher costs.

Balance Sheet

As of Dec 31, 2020, AppFolio’s cash and cash equivalents (and investment securities) came in at $175.3 million compared with $181.9 million as of Sep 30, 2020.

In the fourth quarter, cash provided by operating activities stood at $3.1 million compared with $17.8 million generated in the previous quarter.

A Look At 2020 Numbers

AppFolio reported total revenues of $310.1 million in 2020, up 21.1% over 2019 tally.

Excluding the impact of MyCase divestment, revenue from continuing operations for 2020 increased 23% year over year to $284.7 million.

The company concluded the sale of its wholly-owned subsidiary company, MyCase, for $193 million on Sep 30, 2020.

The company reported earnings per share of $4.44 in 2020 against earnings per share of $1.02 reported for 2019.

For 2020, AppFolio’s operating income was $9.8 million compared with operating income of $6.5 million in 2019.

In 2020, AppFolio generated cash flow from operations of $48.3 million compared with $38.9 million in the previous year.

For 2020, the company’s annual dollar-based net expansion for property manager customers came in at 112%.

Guidance

AppFolio refrained from providing any guidance for 2021 due to the coronavirus-triggered uncertainty prevailing in the market.

The Zacks Consensus Estimate for the first quarter and 2021 revenues is currently pegged at $79.68 million and $350.64 million, respectively.

Further, the consensus mark for earnings per share for the first quarter and 2021 are currently pegged at 16 cents and 76 cents, respectively.

Zacks Rank & Stock to Consider

AppFolio currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Shopify SHOP, Skyworks SWKS and MaxLinear MXL. All the stocks sport a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Shopify, Skyworks and MaxLinear is currently pegged at 32.5%, 19%, and 20%, respectively.

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