iMGP Small Company Fund’s Views on AppFolio (APPF)

Fund Performance - iMGP Small Company Fund returned 1.33% in Q4 2025, underperforming the Russell 2000 Index which returned 2.19% [1] - The Fund's overall return for 2025 was flat at 0.01%, compared to a 12.81% return for the Index [1] - The Fund's poor performance in Q4 was attributed to the strong performance of biotech stocks, which increased by over 25%, a sector the Fund generally avoids due to its binary nature [1] Investment Strategy - The Fund aims to refine its investment process and improve performance by focusing on high-quality, growing firms moving into 2026 [1] Company Highlight: AppFolio, Inc. - AppFolio, Inc. is a cloud-based technology provider for the real estate industry, focusing on small to medium-sized property managers [2][3] - As of March 6, 2026, AppFolio's stock closed at $191.17, with a one-month return of 4.02% and a 52-week loss of 11.34% [2] - AppFolio has a market capitalization of $6.88 billion [2] Financial Insights on AppFolio, Inc. - AppFolio's Q4 results were negatively impacted by a bonus accrual that caused margin contraction, attributed to new units added [3] - The management views the addition of new customers as a positive long-term indicator due to their high lifetime value [3] - Concerns around AI competition, particularly from EliseAI, have negatively impacted AppFolio's stock, although the company plans to introduce comparable AI solutions in 2026 [3] - The management is seen as disciplined operators, emphasizing the importance of appropriately compensating employees for new business [3]