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AppFolio, Inc. Announces Fourth Quarter and Fiscal Year 2020 Financial Results

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SANTA BARBARA, Calif., March 01, 2021 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ: APPF) ("AppFolio" or the "Company"), today announced its financial results for the fourth quarter and fiscal year ended December 31, 2020. The Company urges investors to read its Annual Report on Form 10-K for the year ended December 31, 2020, which will also be filed with the Securities and Exchange Commission (the "SEC") today, March 1, 2021, and will be available on AppFolio's website, http://ir.appfolioinc.com. The limited information that follows in this press release is not adequate for making an informed investment judgment.

Financial Outlook

The Company is not providing revenue guidance for fiscal year 2021 due to limited visibility into future business trends and financial performance in the current operating environment. Diluted weighted average shares are expected to be approximately 36 million for fiscal year 2021.

Conference Call Information

As previously announced, the Company will host a conference call today, March 1, 2021, at 1:30 p.m. Pacific Time, 4:30 p.m. Eastern Time, to discuss its financial results. Participants who wish to dial into the conference call please register in advance at http://www.directeventreg.com/registration/event/8438087. After registering, a confirmation email will be sent, including dial-in details and a unique code for entry. Registration will be open through the start of the live call.

Following the conference call, a replay will be available at (800) 585-8367 (domestic) or (416) 621-4642 (international). The replay passcode is 8438087. An archived webcast of this conference call will also be available on AppFolio’s Investor Relations website at http://ir.appfolioinc.com.

About AppFolio, Inc.

AppFolio provides innovative software, services and data analytics to the real estate industry. Our industry-specific, cloud-based business management solutions are designed to enable our customers to digitally transform their businesses, address critical business operations and enable exceptional customer service. Today our core solutions include AppFolio Property Manager, AppFolio Property Manager PLUS, and AppFolio Investment Management. In addition, the Company offers a variety of Value+ services that are designed to enhance, automate and streamline essential processes and workflows for our customers. AppFolio was founded in 2006 and is headquartered in Santa Barbara, CA. Learn more at www.appfolioinc.com.

Investor Relations Contact: ir@appfolio.com

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 the Company's business opportunities, the impact of the Company's strategic actions and initiatives, the impact of the COVID-19 pandemic on the Company's business, and the timing of providing updated financial guidance.

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 year ended December 31, 2020, which will be filed with the SEC today, 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, except par values)

December 31,
2020

December 31,
2019

Assets

Current assets

Cash and cash equivalents

$

140,263

$

15,813

Investment securities—current

28,256

22,876

Accounts receivable, net

10,057

7,562

Prepaid expenses and other current assets

20,777

15,540

Total current assets

199,353

61,791

Investment securities—noncurrent

6,770

12,089

Property and equipment, net

26,439

14,744

Operating lease right-of-use assets

30,561

27,803

Capitalized software development costs, net

35,459

30,023

Goodwill

56,147

58,425

Intangible assets, net

16,357

21,377

Deferred taxes

12,181

27,574

Other long-term assets

6,213

6,276

Total assets

$

389,480

$

260,102

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

$

1,040

$

1,927

Accrued employee expenses

18,888

17,758

Accrued expenses

14,069

10,833

Deferred revenue

2,262

4,600

Income tax payable

9,095

Other current liabilities

4,451

11,139

Term loan, net—current portion

1,208

Total current liabilities

49,805

47,465

Operating lease liabilities

40,146

33,312

Term loan, net

47,375

Deferred taxes

13,609

Total liabilities

103,560

128,152

Stockholders’ equity:

Preferred stock, $0.0001 par value, 25,000 shares authorized and no shares issued and outstanding as of
December 31, 2020 and December 31, 2019

Class A common stock, $0.0001 par value, 250,000 shares authorized as of December 31, 2020 and
December 31, 2019; 19,148 and 16,923 shares issued as of December 31, 2020 and December 31, 2019,
respectively; 18,729 and 16,552 shares outstanding as of December 31, 2020 and December 31, 2019,
respectively

2

2

Class B common stock, $0.0001 par value, 50,000 shares authorized as of December 31, 2020 and
December 31, 2019; 15,659 and 17,594 shares issued and outstanding as of December 31, 2020 and
December 31, 2019, respectively

2

2

Additional paid-in capital

161,247

161,509

Accumulated other comprehensive income

56

33

Treasury stock, at cost, 419 and 371 shares of Class A common stock as of December 31, 2020 and
December 31, 2019, respectively

(25,756

)

(21,562

)

Retained earnings (accumulated deficit)

150,369

(8,034

)

Total stockholders’ equity

285,920

131,950

Total liabilities and stockholders’ equity

$

389,480

$

260,102


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2020(1)

2019

2020(1)

2019

Revenue

$

72,432

$

67,362

$

310,056

$

256,012

Costs and operating expenses:

Cost of revenue (exclusive of depreciation and amortization)

29,905

26,403

119,029

101,642

Sales and marketing

15,328

14,441

58,445

51,528

Research and product development

11,735

11,086

48,529

39,508

General and administrative

11,177

9,117

47,480

34,478

Depreciation and amortization

7,039

6,226

26,790

22,395

Total costs and operating expenses

75,184

67,273

300,273

249,551

(Loss) income from operations

(2,752

)

89

9,783

6,461

Other income, net

1,138

84

188,897

16

Interest income (expense), net

60

(330

)

(1,849

)

(1,654

)

(Loss) income before (benefit from) provision for income taxes

(1,554

)

(157

)

196,831

4,823

(Benefit from) provision for income taxes

(1,041

)

(4,585

)

38,428

(31,459

)

Net (loss) income

$

(513

)

$

4,428

$

158,403

$

36,282

Net (loss) income per common share:

Basic

$

(0.01

)

$

0.13

$

4.62

$

1.07

Diluted

$

(0.01

)

$

0.12

$

4.44

$

1.02

Weighted average common shares outstanding:

Basic

34,332

34,091

34,264

34,016

Diluted

34,332

35,597

35,713

35,567

(1) MyCase was divested on September 30, 2020. The results of MyCase have been included in our results of operations through the date of divestiture.


Stock-Based Compensation Expense

(in thousands)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2020(1)

2019

2020(1)

2019

Costs and operating expenses:

Cost of revenue (exclusive of depreciation and amortization)

$

408

$

393

$

1,506

$

1,466

Sales and marketing

346

367

1,415

1,271

Research and product development

470

387

1,818

1,411

General and administrative

993

731

4,286

3,161

Total stock-based compensation expense

$

2,217

$

1,878

$

9,025

$

7,309

(1) MyCase was divested on September 30, 2020. The results of MyCase have been included in our results of operations through the date of divestiture.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2020(1)

2019

2020(1)

2019

Cash from operating activities

Net income

$

(513

)

$

4,428

$

158,403

$

36,282

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

7,039

6,226

26,790

22,395

Amortization of operating lease right-of-use assets

728

1,114

3,701

4,130

Deferred income taxes

6,124

(4,423

)

29,002

(31,455

)

Stock-based compensation

2,217

1,878

9,025

7,309

Gain on sale of business

(22

)

(187,658

)

Other

(45

)

(104

)

125

32

Changes in operating assets and liabilities:

Accounts receivable

(553

)

747

(2,782

)

(2,031

)

Prepaid expenses and other current assets

(5,035

)

372

(5,894

)

(4,031

)

Other assets

(199

)

247

(519

)

1,376

Accounts payable

(1,598

)

241

(903

)

511

Accrued employee expenses

880

4,056

2,799

4,542

Accrued expenses

947

69

6,878

55

Deferred revenue

(285

)

154

530

1,193

Operating lease liabilities

571

224

(564

)

(2,662

)

Other liabilities

(7,173

)

245

9,366

1,241

Net cash provided by operating activities

3,083

15,474

48,299

38,887

Cash from investing activities

Purchases of available-for-sale investments

(13,998

)

(14,508

)

(43,877

)

(25,198

)

Proceeds from sales of available-for-sale investments

2,769

16,711

2,750

Proceeds from maturities of available-for-sale investments

14,030

4,660

27,330

15,660

Purchases of property, equipment and intangible assets

(2,487

)

(3,999

)

(19,038

)

(8,084

)

Capitalization of software development costs

(6,345

)

(5,329

)

(26,042

)

(20,998

)

Cash paid in business acquisition, net of cash acquired

(54,004

)

Proceeds from sale of business, net of cash divested

191,427

Net cash (used in) provided by investing activities

(6,031

)

(19,176

)

146,511

(89,874

)

Cash from financing activities

Proceeds from stock option exercises

420

294

822

553

Tax withholding for net share settlement

(1,237

)

(614

)

(12,196

)

(6,155

)

Payment of contingent consideration

(5,977

)

Proceeds from issuance of debt

472

50,752

2,169

Principal payments on debt

(785

)

(99,565

)

(3,419

)

Payment of debt issuance costs

(420

)

Purchase of treasury stock

(4,194

)

Net cash used in financing activities

(817

)

(633

)

(70,358

)

(7,272

)

Net (decrease) increase in cash and cash equivalents and restricted cash

(3,765

)

(4,305

)

124,452

(58,259

)

Cash, cash equivalents and restricted cash

Beginning of period

144,464

20,552

16,247

74,506

End of period

$

140,699

$

16,247

$

140,699

$

16,247

(1) MyCase was divested on September 30, 2020. The results of MyCase have been included in our results of operations through the date of divestiture.