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

Goleta, California, UNITED STATES


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.