SANTA BARBARA, Calif., April 10, 2025 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ: APPF) today announced that it will report its first quarter 2025 financial results after the close of the U.S. financial markets on Thursday, April 24, 2025. About AppFolio In conjunction with this announcement, AppFolio will host a conference call on Thursday, April 24, 2025, at 5:00 p.m. (Eastern Time), to discuss the company's financial results and business outlook. A live webcast of the call will be available at https://ed ...

Company Overview - AppFolio (APPF) shares increased by 4.4% to close at $230.33, with notable trading volume compared to typical sessions, and a 2.6% gain over the past four weeks [1] - The company is experiencing strong customer growth, driven by AI innovations like Realm-X and strategic acquisitions such as LiveEasy, enhancing its value proposition in property management [1] Earnings Expectations - AppFolio is expected to report quarterly earnings of $1.23 per share, reflecting a year-over-year increase of 17.1%, with revenues projected at $221.56 million, up 18.2% from the previous year [2] - The consensus EPS estimate for AppFolio has remained unchanged over the last 30 days, indicating that stock price movements may not continue without trends in earnings estimate revisions [3] Industry Context - AppFolio is part of the Zacks Internet - Software industry, where Atlassian (TEAM) also operates, closing the last trading session at $236.22 with a -17.4% return over the past month [3] - Atlassian's consensus EPS estimate for its upcoming report is $0.90, showing a 1.1% increase from the previous year, and it also holds a Zacks Rank of 3 (Hold) [4]

Core Viewpoint - The average brokerage recommendation (ABR) for AppFolio (APPF) is 2.00, indicating a "Buy" rating based on recommendations from seven brokerage firms [2]. Group 1: Brokerage Recommendations - The ABR of 2.00 is derived from seven recommendations, with four classified as "Strong Buy," accounting for 57.1% of the total recommendations [2]. - Despite the positive ABR, relying solely on brokerage recommendations may not be advisable, as studies suggest they have limited success in guiding investors toward stocks with significant price appreciation potential [4][9]. - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, issuing five "Strong Buy" recommendations for every "Strong Sell" [5]. Group 2: Zacks Rank vs. ABR - The Zacks Rank, which classifies stocks from 1 (Strong Buy) to 5 (Strong Sell), is a more reliable indicator of a stock's near-term price performance, driven by earnings estimate revisions [7][10]. - The Zacks Rank is updated more frequently than the ABR, reflecting timely changes in earnings estimates, while the ABR may not always be current [11]. - For AppFolio, the Zacks Consensus Estimate for the current year remains unchanged at $5.37, indicating steady analyst views on the company's earnings prospects [12]. Group 3: Investment Outlook for AppFolio - The recent consensus estimate changes and other related factors have resulted in a Zacks Rank of 3 (Hold) for AppFolio, suggesting caution despite the Buy-equivalent ABR [13].

Company Performance - AppFolio (APPF) stock closed at $216.99, reflecting a +1.96% increase compared to the previous day, outperforming the S&P 500's daily gain of 1.08% [1] - Over the past month, AppFolio's stock has increased by 0.1%, contrasting with the Computer and Technology sector's decline of 13.17% and the S&P 500's decline of 8.26% [1] Upcoming Financial Results - AppFolio is expected to report an EPS of $1.23, which represents a 17.14% increase from the prior-year quarter [2] - The consensus estimate for revenue is $221.56 million, indicating an 18.21% increase from the prior-year quarter [2] Full-Year Estimates - The full-year Zacks Consensus Estimates project earnings of $5.37 per share and revenue of $940.44 million, reflecting year-over-year changes of +22.88% and +18.41%, respectively [3] Analyst Estimates and Market Sentiment - Recent modifications to analyst estimates for AppFolio indicate positive sentiment regarding the company's business operations and profit generation capabilities [4] - Changes in estimates are correlated with near-term stock prices, suggesting that upward revisions may lead to stock price increases [5] Zacks Rank and Valuation - AppFolio currently holds a Zacks Rank of 3 (Hold), with a Forward P/E ratio of 39.62, which is a premium compared to the industry's average Forward P/E of 27.36 [6] - The Internet - Software industry, which includes AppFolio, has a Zacks Industry Rank of 82, placing it in the top 33% of over 250 industries [7]

Group 1 - AppFolio has lower gross margins compared to top software companies but has reduced R&D and S&M needs, resulting in a high FCF/EC quality metric [1] - The company's core solutions are particularly beneficial for multi real estate management [1]

Group 1 - AppFolio (APPF) has an average brokerage recommendation (ABR) of 2.00, indicating a Buy based on recommendations from seven brokerage firms, with 57.1% of these being Strong Buy [2][4] - The ABR is calculated solely from brokerage recommendations, which may not always align with retail investors' interests, leading to potential biases in stock ratings [5][6][9] - The Zacks Rank, a different rating system, categorizes stocks based on earnings estimate revisions and is considered a more reliable indicator of near-term stock performance [7][10] Group 2 - The Zacks Consensus Estimate for AppFolio's earnings for the current year remains unchanged at $5.37, suggesting stable analyst views on the company's earnings prospects [12] - Due to the unchanged consensus estimate and other factors, AppFolio holds a Zacks Rank 3 (Hold), indicating caution despite the Buy-equivalent ABR [13]

Core Viewpoint - AppFolio's stock performance has lagged behind major indices, with a recent close of $214.50, reflecting a +1.35% change, compared to the S&P 500's gain of 1.59% [1] Group 1: Stock Performance - Over the past month, AppFolio's shares have decreased by 16.54%, underperforming the Computer and Technology sector's loss of 3.43% and the S&P 500's loss of 2.42% [2] - The stock is currently trading at a Forward P/E ratio of 39.41, which is higher than the industry average of 27.99 [8] Group 2: Earnings Expectations - Analysts expect AppFolio to report earnings of $1.23 per share in the upcoming earnings disclosure, indicating a year-over-year growth of 17.14% [3] - The consensus estimate for quarterly revenue is $221.56 million, representing an 18.21% increase from the previous year [3] - Full-year estimates project earnings of $5.37 per share and revenue of $940.44 million, reflecting year-over-year changes of +22.88% and +18.41%, respectively [4] Group 3: Analyst Sentiment - Recent changes to analyst estimates for AppFolio suggest a positive outlook on the company's business operations and profit generation capabilities [5] - The Zacks Rank system, which evaluates estimate changes, currently ranks AppFolio at 3 (Hold), with a recent 5.83% decline in the Zacks Consensus EPS estimate [7] Group 4: Industry Context - The Internet - Software industry, to which AppFolio belongs, holds a Zacks Industry Rank of 82, placing it in the top 33% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [9]

Group 1 - The Federal Reserve's interest rate cuts have led to unexpectedly high longer-term yields and mortgage rates, indicating market expectations of future rate increases to combat inflation [1] - Gary Alexander has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, and has been a contributor to Seeking Alpha since 2017 [1] Group 2 - The article does not provide any specific company or industry-related content beyond the general observations regarding interest rates and market expectations [2][3]

Customer Base and Market Penetration - As of December 31, 2024, AppFolio had 20,784 property management customers[28]. - As of December 31, 2024, the company managed 8.7 million property management units, an increase from 8.2 million units in 2023, indicating growth in market penetration[152]. - The company had 20,784 property management customers as of December 31, 2024, up from 19,737 in 2023, reflecting an increase in customer base[156]. Product and Service Offerings - AppFolio's platform includes AI-powered tools through AppFolio Realm, enhancing leasing, maintenance, and accounting tasks[16]. - The company offers three subscription plans: Core, Plus, and Max, catering to different sizes of property management businesses[17][19]. - AppFolio's Value Added Services include electronic payment services, tenant screening, and risk mitigation, aimed at increasing efficiency for residential properties[20][21]. - The company’s revenue model includes subscription fees for core solutions and usage-based fees for Value Added Services, with a significant majority of revenue coming from electronic payment services, tenant screening, and risk mitigation services[155]. Financial Performance - Total revenue for the year ended December 31, 2024, was $794,202, representing a 28% increase from $620,445 in 2023[163]. - Core solutions revenue increased by 15% to $180,605, while Value Added Services revenue grew by 33% to $605,011[163]. - Cost of revenue (exclusive of depreciation and amortization) increased by 18% to $282,067, representing 35.5% of total revenue[166]. - Sales and marketing expenses rose by 3% to $110,597, accounting for 13.9% of total revenue[168]. - Research and product development expenses increased by 6% to $160,375, representing 20.2% of total revenue[170]. - General and administrative expenses decreased by 8% to $85,974, accounting for 10.8% of total revenue[172]. - Interest income increased by 99% to $13,981, primarily due to higher interest rates[177]. - The company recorded an income tax benefit of $53.7 million due to the release of a valuation allowance against deferred tax assets[179]. - As of December 31, 2024, cash and cash equivalents totaled $278.2 million, sufficient to meet working capital needs for at least the next twelve months[180]. Employee Relations and Development - As of December 31, 2024, the company had 1,634 employees, emphasizing strong relationships with both employees and consultants[43]. - The company invests significant resources in employee development, offering tailored learning and development programs aligned with business needs[44]. - The company provides eight hours of paid volunteer time off annually to encourage employee volunteerism through its "Give Back Committee"[45]. - The compensation packages include base salary, commission, annual performance-based bonuses, and stock-based compensation, aimed at retaining and motivating employees[49]. - The company maintains a commitment to health, safety, and wellness, regularly soliciting feedback to assess employee well-being[50]. Regulatory and Compliance Risks - The company’s business operations are subject to various federal, state, and local regulations, particularly concerning tenant screening and risk mitigation services[41]. - The tenant screening services business is subject to complex laws, including the Fair Credit Reporting Act, which may lead to regulatory inquiries and enforcement actions[65]. - In January 2021, the company entered into a settlement agreement with the FTC, paying a fine and agreeing to ongoing compliance obligations[66]. - The company faces potential liability from enforcement actions or lawsuits, which could materially impact its business and reputation[67]. - Compliance with evolving privacy laws may increase operational costs and complexity, potentially leading to legal claims and regulatory actions[82][84]. - The company faces significant risks from government regulations and privacy concerns, which may increase costs and impede growth plans[85]. Technology and Innovation - AppFolio emphasizes continuous innovation and frequent platform updates to meet market trends and customer needs[36]. - Rapid technological developments and changing customer needs require the company to innovate continuously; failure to do so may harm demand for its products[95]. - The incorporation of AI technologies carries risks of reputational harm, increased regulatory oversight, and potential legal liabilities, which could adversely affect business operations[73]. - The inability to keep pace with technological advancements may render solutions less competitive, adversely affecting operating results[74]. Market and Competitive Landscape - The growth strategy focuses on delivering value to all segments in the property management ecosystem, enhancing customer retention and attracting new clients[22]. - The company aims to attract larger property management customers with complex portfolios, providing a single platform for management[23]. - Effective brand management is essential for attracting new customers, and failure to enhance brand recognition could lead to competitive disadvantages[93]. - The company expects long-term revenue growth rate to decline due to increasing competition and market saturation[106]. - Market opportunity estimates are subject to significant uncertainty, which could affect investment decisions and long-term growth prospects[91]. Risks and Challenges - Errors, defects, or disruptions in products could lead to significant expenditures and reputational harm, potentially resulting in substantial costs for correction[68]. - The inability to deliver effective customer service may adversely affect customer relationships and operating results, with increased demand potentially raising costs without corresponding revenue[69]. - A decline in demand for insurance-related risk mitigation products could adversely affect revenues if property management customers stop requiring renters to purchase rental insurance policies[70]. - Failure to maintain relationships with third-party service providers could impair the ability to compete and grow customer base and revenue, negatively impacting operating results[71][72]. - Disruptions in third-party services that host the platform could negatively impact operations and business performance[76]. - Cybersecurity vulnerabilities could lead to unauthorized access to sensitive data, harming customer relationships and exposing the company to litigation and penalties[77][78]. - The company may face significant expenses and damages from third-party claims of intellectual property infringement[104]. - Risks associated with open source and third-party software could introduce security vulnerabilities and adversely impact business operations[105]. Corporate Governance - The dual class structure of common stock concentrates voting control, limiting influence of Class A shareholders on corporate matters[114]. - The Risk and Compliance Oversight Committee of the Board of Directors oversees the company’s cybersecurity program and risk exposure, ensuring regular updates to the full Board[129]. - The company maintained effective internal control over financial reporting as of December 31, 2024[211]. Investment and Capital Management - The company has authorized a share repurchase program of up to $100 million, with $4.2 million repurchased to date[184]. - Cash used in investing activities increased due to higher purchases of available-for-sale investment securities and cash paid in business acquisitions, net of cash acquired[189]. - Cash used in financing activities increased primarily due to an increase in net share settlements for employee tax withholdings associated with the vesting of equity awards[190]. - The company recognized deferred tax assets and released its valuation allowance at December 31, 2024, indicating it is more likely than not that the deferred tax assets will be realized[196]. - The allocation of purchase price in business combinations requires significant estimates in determining the fair value of acquired assets and assumed liabilities[201].

Core Viewpoint - AppFolio's stock declined approximately 8% following the release of its Q4 2024 financial results, despite reporting a year-over-year revenue increase of 19% [1][2]. Financial Performance - Q4 revenue reached $204 million, exceeding management's expectations of $195 million to $199 million, driven by a 6% increase in managed rental units [2]. - Operating income fell from $28 million in the prior year to $23 million in Q4 2024 due to elevated operating expenses, which negatively impacted the company's profitability [3]. Long-term Perspective - Despite the Q4 profit decline, AppFolio's overall performance for 2024 showed significant improvement, with adjusted income from operations rising from $76 million in 2023 to $200 million in 2024, nearly tripling [5]. - The company is optimistic about potential improvements in operating margins for 2025, suggesting that the Q4 results may be a temporary setback [6].