AppFolio, Inc. Announces Second Quarter 2018 Financial Results


SANTA BARBARA, Calif., July 30, 2018 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ:APPF) ("AppFolio" or the "Company"), a leading provider of cloud-based business software solutions, today announced its financial results for the quarter ended June 30, 2018 and has updated its financial guidance for fiscal year 2018.

AppFolio's operating results for the second quarter 2018 are summarized in the tables accompanying this press release. The Company nevertheless urges investors to review its Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the "SEC") on February 26, 2018, as well as its more detailed second quarter 2018 results that will be included in the Company's Quarterly Report on Form 10-Q, which will be filed with the SEC on July 30, 2018.  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 July 30, 2018, AppFolio has updated its financial guidance for fiscal year 2018 as follows:

  • Full year revenue is expected to be in the range of $183 million to $185 million.
  • Diluted weighted average shares outstanding 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, July 30, 2018 at 1:30 p.m. Pacific Time, 4:30 p.m. Eastern Time, to discuss its financial results. Investors are invited to submit questions to management via the Investor Q&A form located on the Investor Overview section of AppFolio's website.

A live webcast of the call will be available at http://ir.appfolioinc.com, and it may also be accessed by dialing 866-393-4306 (Domestic), or 734-385-2616 (International). The conference ID is 1199261.  A replay will be available at 855-859-2056 (Domestic) and 404-537-3406 (International) until the end of day August 2, 2018, and an archived webcast will be available for 12 months on the Company's website.

About AppFolio, Inc.

AppFolio's mission is to revolutionize vertical industry businesses by providing great software and service. Our cloud-based solutions serve over 20,000 customers in the real estate and legal markets. Today our products include property management software (AppFolio Property Manager) and legal practice management software (MyCase). 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,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “could,” “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.

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, 2017, which was filed with the SEC on February 26, 2018, 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)
 
 June 30,
 2018
 December 31,
 2017
Assets   
Current assets   
Cash and cash equivalents$18,010  $16,109 
Investment securities—current34,710  29,800 
Accounts receivable, net5,554  3,387 
Prepaid expenses and other current assets6,253  4,546 
Total current assets64,527  53,842 
Investment securities—noncurrent22,550  22,401 
Property and equipment, net6,528  6,696 
Capitalized software, net18,392  17,609 
Goodwill6,737  6,737 
Intangible assets, net1,140  1,725 
Other assets4,084  1,238 
Total assets$123,958  $110,248 
Liabilities and Stockholders’ Equity   
Current liabilities   
Accounts payable$1,840  $610 
Accrued employee expenses8,772  10,710 
Accrued expenses5,759  4,289 
Deferred revenue3,791  7,080 
Other current liabilities1,751  1,223 
Total current liabilities21,913  23,912 
Other liabilities1,067  1,257 
Total liabilities22,980  25,169 
Stockholders’ equity:   
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding as of June 30, 2018 and December 31, 2017   
Class A common stock, $0.0001 par value, 250,000 shares authorized as of June 30, 2018 and December 31, 2017; 15,638 and 14,879 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively;2  1 
Class B common stock, $0.0001 par value, 50,000 shares authorized as of June 30, 2018 and December 31, 2017; 18,577 and 19,102 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively;2  3 
Additional paid-in capital153,752  152,531 
Accumulated other comprehensive loss(289) (209)
Accumulated deficit(52,489) (67,247)
Total stockholders’ equity100,978  85,079 
Total liabilities and stockholders’ equity$123,958  $110,248 


 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
 
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2018 2017 2018 2017
Revenue$47,240  $35,877  $89,580  $68,003 
Costs and operating expenses:       
Cost of revenue (exclusive of depreciation and amortization)17,729  13,701  34,342  26,694 
Sales and marketing7,625  7,192  15,030  14,299 
Research and product development5,750  4,002  11,083  7,631 
General and administrative5,248  5,101  10,564  9,905 
Depreciation and amortization3,579  3,114  7,079  6,110 
Total costs and operating expenses39,931  33,110  78,098  64,639 
Income from operations7,309  2,767  11,482  3,364 
Other expense, net(18) (60) (21) (88)
Interest income, net226  120  402  222 
Income before provision for income taxes7,517  2,827  11,863  3,498 
Provision for income taxes43  30  69  41 
Net income$7,474  $2,797  $11,794  $3,457 
        
Net income per common share:       
Basic0.22  0.08  0.35  0.10 
Diluted0.21  0.08  0.33  0.10 
Weighted average common shares outstanding:       
Basic34,173  33,838  34,122  33,772 
Diluted35,408  34,928  35,361  34,879 


     
Stock-Based Compensation Expense
(in thousands)
    
  Three Months Ended
June 30,
 Six Months Ended
June 30,
  2018 2017 2018 2017
Costs and operating expenses:        
Cost of revenue (exclusive of depreciation and amortization) $250  $209  $470  $338 
Sales and marketing 228  210  438  330 
Research and product development 287  182  512  298 
General and administrative 572  1,018  1,235  1,750 
Total stock-based compensation expense$1,337  $1,619  $2,655  $2,716 


 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
        
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2018 2017 2018 2017
Cash from operating activities       
Net income$7,474  $2,797  $11,794  $3,457 
Adjustments to reconcile net income to net cash provided by operating activities:       
Depreciation and amortization3,579  3,114  7,079  6,110 
Purchased investment premium, net of amortization32  (90) 94  (104)
Amortization of deferred financing costs16  16  32  32 
Loss on disposal of property and equipment19  61  20  89 
Stock-based compensation1,337  1,619  2,655  2,716 
Changes in operating assets and liabilities:       
Accounts receivable(1,020) (418) (2,168) (1,721)
Prepaid expenses and other current assets(1,000) (614) (559) (212)
Other assets(296) (56) (1,062) (51)
Accounts payable424  (300) 839  (319)
Accrued employee expenses1,802  2,238  (2,040) 576 
Accrued expenses822  321  1,433  794 
Deferred revenue(1,955) (660) (3,289) 399 
Other liabilities478  31  226  100 
Net cash provided by operating activities11,712  8,059  15,054  11,866 
Cash from investing activities       
Purchases of property and equipment(317) (445) (580) (837)
Additions to capitalized software(2,569) (2,280) (5,505) (5,271)
Purchases of investment securities(5,259) (9,060) (20,832) (15,597)
Sales of investment securities    5   
Maturities of investment securities7,299  3,044  15,595  7,489 
Purchases of intangible assets  (1)   (1)
Net cash used in investing activities(846) (8,742) (11,317) (14,217)
Cash from financing activities       
Proceeds from stock option exercises188  241  658  386 
Tax withholding for net share settlement(1,593) (138) (2,494) (1,345)
Proceeds from issuance of debt31  30  63  59 
Principal payments on debt(31) (30) (63) (59)
Net cash (used in) provided by financing activities(1,405) 103  (1,836) (959)
Net increase (decrease) in cash, cash equivalents and restricted cash9,461  (580) 1,901  (3,310)
Cash, cash equivalents and restricted cash       
Beginning of period8,977  8,396  16,537  11,126 
End of period$18,438  $7,816  $18,438  $7,816 
                

                The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the total of the same such amounts shown above (in thousands):

    
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2018 2017 2018 2017
Cash and cash equivalents$18,010  $7,389  $18,010  $7,389 
Restricted cash included in other assets428  427  428  427 
Total cash, cash equivalents and restricted cash$18,438  $7,816  $18,438  $7,816