Summary
AppFolio, Inc. specializes in cloud-based software solutions for the real estate and legal markets, focusing on small and medium-sized businesses. In recent years, the company has expanded its offerings with the introduction of AppFolio Property Manager Plus, an advanced version of their property management software with enhanced capabilities. This product is part of their strategy to increase insights and strategic decision-making for property managers, who account for over 90% of their annual revenue.
The company reported a property manager customer base of 12,641 as of September 30, 2018, with 3.70 million property manager units under management. This marks a year-over-year growth in the customer count and units under management, showcasing AppFolio's ability to expand its core customer base consistently.
On the legal front, their MyCase software supports small law firms by helping them manage calendars, documents, and billing. This segment contributes less than 10% of the company's annual revenue, though it has seen growth with 10,173 legal customers at the end of the quarter, up from 9,349 a year earlier.
Financially, AppFolio continues to invest heavily in growth and expansion. They focus on enhancing their products, exploring new markets, and developing additional Value+ services. This commitment to long-term growth implies that the company is willing to absorb high operational costs upfront with the expectation of future revenue realization. For the nine months ended September 30, 2018, they used $24.8 million in cash from investing activities, a significant increase from the previous year, largely due to investments in software development and the acquisition of WegoWise.
AppFolio's approach includes managing for long-term growth over short-term gains. They acknowledge that this might occasionally require sacrificing short-term financial performance in favor of opportunities believed to benefit shareholders in the long run.
Seasonality affects their revenue, particularly in usage-based services like tenant screening, which typically drops during the fourth quarter. Despite these fluctuations, the company aims to maintain healthy customer renewal rates and increase the adoption of their Value+ services.
Overall, AppFolio's continued investment in expanding their product suite and exploring new verticals reflects their emphasis on evolving with their customers' requirements and market demands. The lack of specific risk disclosures indicates that no new concerns were highlighted this quarter, suggesting a stable operational outlook as they continue their growth trajectory.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2018 | Q2 FY2018 | QoQ | Q3 FY2017 | YoY |
|---|---|---|---|---|---|
| Revenue | $50.1M | $47.2M | +6.1% | $37.9M | +32.2% |
| Gross profit | $30.8M | $29.5M | +4.5% | $23.9M | +29.3% |
| Gross margin | 61.5% | 62.5% | -0.9 pp | 62.9% | -1.4 pp |
| Research & development | $6.4M | $5.8M | +12.0% | $4.4M | +47.5% |
| Sales & marketing | $8.7M | $7.6M | +13.8% | $7.3M | +19.6% |
| General & administrative | $6.5M | $5.2M | +24.6% | $5.4M | +21.0% |
| Total operating expenses | $44.6M | $39.9M | +11.8% | $34.3M | +30.1% |
| Operating income (loss) | $5.5M | $7.3M | -25.1% | $3.6M | +52.8% |
| Operating margin | 10.9% | 15.5% | -4.5 pp | 9.5% | +1.5 pp |
| Net income (loss) | $5.5M | $7.5M | -26.1% | $3.7M | +50.0% |
| Net margin | 11.0% | 15.8% | -4.8 pp | 9.7% | +1.3 pp |
| Diluted EPS | $0.16 | $0.21 | -$0.05 | $0.10 | +$0.06 |
| Customers | 12,300 | 20,000 | -38.5% | — | — |
Summary, forecast, risks and KPIs are extracted from APPFOLIO INC's SEC filings for Q3 FY2018 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Jul 15, 2026.