SANTA BARBARA, Calif., Oct. 28, 2019 (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 September 30, 2019.

AppFolio's operating results for the third quarter of 2019 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 February 28, 2019, as well as its more detailed third quarter 2019 results that will be included in the Company's Quarterly Report on Form 10-Q, which will be filed with the SEC on October 28, 2019.  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 October 28, 2019, AppFolio's outlook for fiscal year 2019 follows:

  • Full year revenue is expected to be in the range of $254.5 million to $255.5 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, October 28, 2019, 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.

The conference call can be accessed by dialing 844.624.1561 and entering ID # 8056038. International callers may dial 647.253.8652. A replay of the conference call will be available at 800.585.8367 and 416.621.4642 for international callers. A live and recorded webcast of the conference call will be available at http://ir.appfolioinc.com.

About AppFolio, Inc.
AppFolio offers industry-specific, cloud-based business software solutions, services, and data analytics to the real estate and legal markets. Today our products include real estate software (AppFolio Property Manager, AppFolio Property Manager PLUS and AppFolio Investment Management) 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, 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, 2019, which will be filed with the SEC on October 28, 2019, 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,
2019
 December 31,
2018
Assets    
Current assets    
Cash and cash equivalents $20,121  $74,076 
Investment securities—current 20,355  16,631 
Accounts receivable, net 8,039  5,516 
Prepaid expenses and other current assets 16,150  11,775 
Total current assets 64,665  107,998 
Investment securities—noncurrent 4,698  11,256 
Property and equipment, net 9,842  6,871 
Operating lease right-of-use assets 16,433   
Capitalized software, net 27,621  20,485 
Goodwill 58,392  15,548 
Intangible assets, net 22,678  5,895 
Deferred taxes 23,196   
Other long-term assets 6,303  7,688 
Total assets $233,828  $175,741 
Liabilities and Stockholders’ Equity    
Current liabilities    
Accounts payable $1,539  $1,481 
Accrued employee expenses 13,101  12,377 
Accrued expenses 9,166  8,281 
Deferred revenue 4,163  3,414 
Other current liabilities 13,093  1,447 
Long-term debt, net—current portion 1,208  1,213 
Total current liabilities 42,270  28,213 
Operating lease liabilities 18,448   
Long-term debt, net 47,677  48,602 
Other long-term liabilities 16  7,080 
Total liabilities 108,411  83,895 
Stockholders’ equity:    
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding at September 30, 2019 and December 31, 2018    
Class A common stock, $0.0001 par value, 250,000 shares authorized at September 30, 2019 and December 31, 2018; issued - 16,743 and 16,159, shares at September 30, 2019 and December 31, 2018; outstanding - 16,373 and 15,789 shares at September 30, 2019 and December 31, 2018, respectively; 2  2 
Class B common stock, $0.0001 par value, 50,000 shares authorized at September 30, 2019 and December 31, 2018; 17,685 and 18,109 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively; 2  2 
Additional paid-in capital 159,399  157,898 
Accumulated other comprehensive income (loss) 38  (178)
Treasury stock, at cost, 370 Class A shares at September 30, 2019 and December 31, 2018 (21,562) (21,562)
Accumulated deficit (12,462) (44,316)
Total stockholders’ equity 125,417  91,846 
Total liabilities and stockholders’ equity $233,828  $175,741 
         

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

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2019 2018 2019 2018
Revenue$67,935  $50,126  $188,650  $139,706 
Costs and operating expenses:       
Cost of revenue (exclusive of depreciation and amortization)25,930  19,282  75,239  53,624 
Sales and marketing12,636  8,681  37,087  23,711 
Research and product development10,602  6,440  28,422  17,523 
General and administrative8,955  6,541  25,361  17,105 
Depreciation and amortization5,678  3,705  16,169  10,784 
Total costs and operating expenses63,801  44,649  182,278  122,747 
Income from operations4,134  5,477  6,372  16,959 
Other income (expense), net(11) 1  (68) (20)
Interest income (expense), net(400) 229  (1,324) 631 
Income before provision for (benefit from) income taxes3,723  5,707  4,980  17,570 
Provision for (benefit from) income taxes(1,255) 183  (26,874) 252 
Net income$4,978  $5,524  $31,854  $17,318 
        
Net income per common share:       
Basic$0.15  $0.16  0.94  0.51 
Diluted$0.14  $0.16  0.90  0.49 
Weighted average common shares outstanding:       
Basic34,047  34,219  33,991  34,154 
Diluted35,421  35,610  35,406  35,524 

Stock-Based Compensation Expense
(in thousands)

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2019 2018 2019 2018
Costs and operating expenses:       
Cost of revenue (exclusive of depreciation and amortization)$334  $282  $1,073  $752 
Sales and marketing354  270  904  708 
Research and product development353  218  1,024  730 
General and administrative1,151  994  2,430  2,229 
Total stock-based compensation expense$2,192  $1,764  $5,431  $4,419 
                


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2019 2018 2019 2018
Cash from operating activities       
Net income$4,978  $5,524  $31,854  $17,318 
Adjustments to reconcile net income to net cash provided by operating activities:       
Depreciation and amortization5,678  3,705  16,169  10,784 
Amortization of operating lease right-of-use assets1,088  547  3,016   
Stock-based compensation2,192  1,764  5,431  4,419 
Deferred income taxes(1,389)   (27,032)  
Other28  19  136  165 
Changes in operating assets and liabilities:       
Accounts receivable(83) 703  (2,778) (1,465)
Prepaid expenses and other current assets796  (4,655) (4,403) (3,902)
Other assets(125) (3,176) 1,129  (5,003)
Accounts payable82  (362) 270  477 
Accrued employee expenses(194) (1,185) 486  (3,225)
Accrued expenses(1,398) 1,964  (14) 3,397 
Deferred revenue458  (958) 1,039  (4,247)
Operating lease liabilities(1,127)   (2,886)  
Other liabilities616  5,657  996  5,883 
Net cash provided by operating activities11,600  9,547  23,413  24,601 
Cash from investing activities       
Purchases of property and equipment(1,690) (1,160) (4,085) (1,740)
Additions to capitalized software(6,249) (3,492) (15,669) (8,997)
Purchases of investment securities(10,012) (7,952) (10,690) (28,784)
Sales of investment securities1,000  696  2,750  701 
Maturities of investment securities7,000  12,882  11,000  28,477 
Acquisition, net of cash acquired  (14,441) (54,004) (14,441)
Purchases of intangible assets   (30)  
Net cash used in investing activities(9,951) (13,467) (70,728) (24,784)
Cash from financing activities       
Proceeds from stock option exercises60  55  259  713 
Tax withholding for net share settlement(790) (400) (5,541) (2,894)
Proceeds from issuance of debt528  30  1,697  93 
Principal payments on debt(840) (30) (2,634) (93)
Payment of debt issuance costs   (420)  
Net cash used in financing activities(1,042) (345) (6,639) (2,181)
Net increase (decrease) in cash and cash equivalents and restricted cash607  (4,265) (53,954) (2,364)
Cash, cash equivalents and restricted cash       
Beginning of period19,945  18,438  74,506  16,537 
End of period$20,552  $14,173  $20,552  $14,173