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AppFolio, Inc. Announces Second Quarter 2018 Financial Results

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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—current 34,710     29,800  
Accounts receivable, net 5,554     3,387  
Prepaid expenses and other current assets 6,253     4,546  
Total current assets 64,527     53,842  
Investment securities—noncurrent 22,550     22,401  
Property and equipment, net 6,528     6,696  
Capitalized software, net 18,392     17,609  
Goodwill 6,737     6,737  
Intangible assets, net 1,140     1,725  
Other assets 4,084     1,238  
Total assets $ 123,958     $ 110,248  
Liabilities and Stockholders' Equity      
Current liabilities      
Accounts payable $ 1,840     $ 610  
Accrued employee expenses 8,772     10,710  
Accrued expenses 5,759     4,289  
Deferred revenue 3,791     7,080  
Other current liabilities 1,751     1,223  
Total current liabilities 21,913     23,912  
Other liabilities 1,067     1,257  
Total liabilities 22,980     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 capital 153,752     152,531  
Accumulated other comprehensive loss (289 )   (209 )
Accumulated deficit (52,489 )   (67,247 )
Total stockholders' equity 100,978     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 marketing 7,625     7,192     15,030     14,299  
Research and product development 5,750     4,002     11,083     7,631  
General and administrative 5,248     5,101     10,564     9,905  
Depreciation and amortization 3,579     3,114     7,079     6,110  
Total costs and operating expenses 39,931     33,110     78,098     64,639  
Income from operations 7,309     2,767     11,482     3,364  
Other expense, net (18 )   (60 )   (21 )   (88 )
Interest income, net 226     120     402     222  
Income before provision for income taxes 7,517     2,827     11,863     3,498  
Provision for income taxes 43     30     69     41  
Net income $ 7,474     $ 2,797     $ 11,794     $ 3,457  
               
Net income per common share:              
Basic 0.22     0.08     0.35     0.10  
Diluted 0.21     0.08     0.33     0.10  
Weighted average common shares outstanding:              
Basic 34,173     33,838     34,122     33,772  
Diluted 35,408     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 amortization 3,579     3,114     7,079     6,110  
Purchased investment premium, net of amortization 32     (90 )   94     (104 )
Amortization of deferred financing costs 16     16     32     32  
Loss on disposal of property and equipment 19     61     20     89  
Stock-based compensation 1,337     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 payable 424     (300 )   839     (319 )
Accrued employee expenses 1,802     2,238     (2,040 )   576  
Accrued expenses 822     321     1,433     794  
Deferred revenue (1,955 )   (660 )   (3,289 )   399  
Other liabilities 478     31     226     100  
Net cash provided by operating activities 11,712     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 securities 7,299     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 exercises 188     241     658     386  
Tax withholding for net share settlement (1,593 )   (138 )   (2,494 )   (1,345 )
Proceeds from issuance of debt 31     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 cash 9,461     (580 )   1,901     (3,310 )
Cash, cash equivalents and restricted cash              
Beginning of period 8,977     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 assets 428     427     428     427  
Total cash, cash equivalents and restricted cash $ 18,438     $ 7,816     $ 18,438     $ 7,816  

 

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