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AppFolio, Inc. Announces Third Quarter 2021 Financial Results

·10 min read

SANTA BARBARA, Calif., Nov. 08, 2021 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ: APPF) ("AppFolio" or the "Company"), a leading provider of cloud-based business software solutions, services, and data analytics to the real estate industry, today announced its financial results for the third quarter ended September 30, 2021.

AppFolio's operating results for the third quarter of 2021 are summarized in the tables accompanying this press release. The Company nevertheless urges investors to read its Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the "SEC") on March 1, 2021, as well as its more detailed third quarter 2021 results that will be included in the Company's Quarterly Report on Form 10-Q, which will be filed with the SEC today. These periodic report filings, together with other documents the Company files with the SEC from time to time, will be accessible 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

Based on information available as of November 8, 2021, AppFolio's outlook for fiscal year 2021 follows:

  • Full year revenue is expected to be in the range of $355 million to $357 million.

  • Diluted weighted average shares 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, November 8, 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 https://www.incommglobalevents.com/registration/q4inc/9012/appfolio-inc-announces-third-quarter-2021-financial-results. 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 866.813.9403 (domestic) or 929.458.6194 (international). The passcode is 367726. To access the webcast during the live call, participants may access https://events.q4inc.com/attendee/783445260 and use passcode 367726. 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 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 future or assumed revenues and weighted-average outstanding shares, as well as its future growth and success.

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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, 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)

September 30,
2021

December 31,
2020

Assets

Current assets

Cash and cash equivalents

$

84,444

$

140,263

Investment securities—current

76,034

28,256

Accounts receivable, net

12,184

10,057

Prepaid expenses and other current assets

24,714

20,777

Total current assets

197,376

199,353

Investment securities—noncurrent

9,287

6,770

Property and equipment, net

28,177

26,439

Operating lease right-of-use assets

42,597

30,561

Capitalized software development costs, net

40,711

35,459

Goodwill

56,147

56,147

Intangible assets, net

12,864

16,357

Deferred income taxes—noncurrent

12,834

12,181

Other long-term assets

7,394

6,213

Total assets

$

407,387

$

389,480

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

$

2,493

$

1,040

Accrued employee expenses—current

25,785

18,888

Accrued expenses

13,090

14,069

Deferred revenue

2,738

2,262

Income tax payable

186

9,095

Other current liabilities

4,910

4,451

Total current liabilities

49,202

49,805

Accrued employee expenses—noncurrent

2,059

Operating lease liabilities

56,559

40,146

Deferred income taxes—noncurrent

7,868

13,609

Total liabilities

115,688

103,560

Stockholders’ equity:

Preferred stock, $0.0001 par value, 25,000 shares authorized and no shares issued and outstanding as of September 30, 2021 and December 31, 2020

Class A common stock, $0.0001 par value, 250,000 shares authorized as of September 30, 2021 and December 31, 2020; 19,610 and 19,148 shares issued as of September 30, 2021 and December 31, 2020, respectively; 19,191 and 18,729 shares outstanding as of September 30, 2020 and December 31, 2020, respectively

2

2

Class B common stock, $0.0001 par value, 50,000 shares authorized as of September 30, 2021 and December 31, 2020; 15,453 and 15,659 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

2

2

Additional paid-in capital

164,740

161,247

Accumulated other comprehensive (loss) income

(17

)

56

Treasury stock, at cost, 419 shares of Class A common stock as of September 30, 2021 and December 31, 2020

(25,756

)

(25,756

)

Retained earnings

152,728

150,369

Total stockholders’ equity

291,699

285,920

Total liabilities and stockholders’ equity

$

407,387

$

389,480



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)
(in thousands, except per share amounts)

Three Months Ended
September 30,

Nine Months Ended
September 30,

Revenue

$

95,809

$

84,086

$

263,770

$

237,624

Costs and operating expenses:

Cost of revenue (exclusive of depreciation and amortization)

38,730

32,752

104,847

89,124

Sales and marketing

19,362

14,894

53,255

43,117

Research and product development

16,500

13,454

46,389

36,794

General and administrative

13,404

12,946

40,971

36,303

Depreciation and amortization

7,826

6,680

22,844

19,751

Total costs and operating expenses

95,822

80,726

268,306

225,089

(Loss) income from operations

(13

)

3,360

(4,536

)

12,535

Other (loss) income, net

(353

)

187,747

705

187,759

Interest income (expense), net

65

(853

)

173

(1,909

)

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

(301

)

190,254

(3,658

)

198,385

(Benefit from) provision for income taxes

(160

)

52,578

(6,017

)

39,469

Net (loss) income

$

(141

)

$

137,676

$

2,359

$

158,916

Net (loss) income per common share:

Basic

$

$

4.01

$

0.07

$

4.64

Diluted

$

$

3.86

$

0.07

$

4.46

Weighted average common shares outstanding:

Basic

34,614

34,296

34,525

34,241

Diluted

34,614

35,665

35,695

35,662



Stock-Based Compensation Expense

(in thousands)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Costs and operating expenses:

Cost of revenue (exclusive of depreciation and amortization)

$

575

$

452

$

1,509

$

1,098

Sales and marketing

738

367

1,587

1,069

Research and product development

1,451

474

3,522

1,348

General and administrative

1,299

1,803

3,435

3,293

Total stock-based compensation expense

$

4,063

$

3,096

$

10,053

$

6,808



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Cash from operating activities

Net income

$

(141

)

$

137,676

$

2,359

$

158,916

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

Depreciation and amortization

7,826

6,680

22,844

19,751

Amortization of operating lease right-of-use assets

913

902

2,312

2,973

Deferred income taxes

(308

)

36,015

(6,394

)

22,878

Stock-based compensation

4,063

3,096

10,053

6,808

Gain on sale of business

(21

)

(187,636

)

(380

)

(187,636

)

Other

309

200

89

170

Changes in operating assets and liabilities:

Accounts receivable

2,657

2,907

(1,350

)

(2,229

)

Prepaid expenses and other current assets

(1,387

)

(567

)

(3,558

)

(859

)

Other assets

(199

)

(213

)

(1,181

)

(320

)

Accounts payable

83

502

1,384

695

Accrued employee expenses—current

(1,303

)

1,202

6,335

1,919

Accrued expenses

1,621

1,397

(1,426

)

5,931

Deferred revenue

(335

)

283

(302

)

815

Income tax payable

120

(8,909

)

Accrued employee expenses—noncurrent

1,091

2,059

Operating lease liabilities

310

(1,043

)

1,995

(1,135

)

Other liabilities

499

16,439

529

16,539

Net cash provided by operating activities

15,798

17,840

26,459

45,216

Cash from investing activities

Purchases of available-for-sale investments

(18,748

)

(16,490

)

(167,041

)

(29,879

)

Proceeds from sales of available-for-sale investments

1,000

43,198

13,942

Proceeds from maturities of available-for-sale investments

47,004

5,550

73,754

13,300

Purchases of property, equipment and intangible assets

(2,362

)

(2,245

)

(5,166

)

(16,551

)

Capitalization of software development costs

(6,600

)

(6,988

)

(18,511

)

(19,697

)

Proceeds from sale of business, net of cash divested

191,427

191,427

Net cash provided by (used in) investing activities

20,294

171,254

(73,766

)

152,542

Cash from financing activities

Proceeds from stock option exercises

145

73

791

402

Tax withholding for net share settlement

(403

)

(1,269

)

(9,303

)

(10,959

)

Payment of contingent consideration

(5,977

)

Proceeds from issuance of debt

562

50,752

Principal payments on debt

(97,747

)

(99,565

)

Purchase of treasury stock

(4,194

)

Net cash used in financing activities

(258

)

(98,381

)

(8,512

)

(69,541

)

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

35,834

90,713

(55,819

)

128,217

Cash, cash equivalents and restricted cash

Beginning of period

49,046

53,751

140,699

16,247

End of period

$

84,880

$

144,464

$

84,880

$

144,464