Financial Performance - Total revenue for the three months ended September 30, 2025, was $249.353 million, a 21.1% increase from $205.733 million in the same period of 2024[14] - Net income for the three months ended September 30, 2025, was $33.646 million, compared to $33.006 million for the same period in 2024, reflecting a slight increase of 1.9%[15] - The company reported a basic net income per common share of $0.94 for the three months ended September 30, 2025, compared to $0.91 for the same period in 2024, an increase of 3.3%[14] - Income from operations for the nine months ended September 30, 2025, was $109.341 million, slightly down from $112.686 million for the same period in 2024, a decrease of 3.1%[14] - Net income for the nine months ended September 30, 2025, was $101,009, compared to $101,334 for the same period in 2024, reflecting a decrease of approximately 0.32%[22] - Basic net income per share for the nine months ended September 30, 2025, was $2.80, unchanged from the same period in 2024[33] Assets and Liabilities - Total current assets decreased to $302.764 million as of September 30, 2025, from $335.402 million as of December 31, 2024, a decline of 9.7%[12] - Total liabilities increased to $141.597 million as of September 30, 2025, from $107.388 million as of December 31, 2024, representing a rise of 31.8%[12] - Total stockholders' equity decreased to $498.868 million as of September 30, 2025, from $519.290 million as of December 31, 2024, a decline of 3.9%[12] - Cash and cash equivalents increased to $76.093 million as of September 30, 2025, from $42.504 million as of December 31, 2024, a significant increase of 79.2%[12] - Total cash, cash equivalents, and restricted cash at the end of the period reached $76,343, compared to $62,667 at the end of September 2024, marking an increase of approximately 21.73%[22] - The balance of accumulated other comprehensive income (loss) was $(172,480) as of September 30, 2025[18] Expenses - Research and product development expenses for the three months ended September 30, 2025, were $54.037 million, up from $40.662 million in the same period of 2024, a growth of 32.7%[14] - The company incurred total stock-based compensation expense of $20.793 million for the three months ended September 30, 2025, compared to $16.035 million for the same period in 2024, an increase of 29.1%[14] - Stock-based compensation expense rose to $55,463 for the nine months ended September 30, 2025, compared to $44,304 in 2024, indicating an increase of about 25.16%[22] Cash Flow - Cash provided by operating activities increased to $177,115 for the nine months ended September 30, 2025, up from $151,593 in 2024, representing a growth of about 16.87%[22] - The company reported a net cash used in financing activities of $176,072 for the nine months ended September 30, 2025, compared to $31,188 in 2024, showing a significant increase in cash outflow[22] - The company reported a net increase in cash, cash equivalents, and restricted cash of $33,589 for the nine months ended September 30, 2025, compared to $12,908 in 2024, indicating a substantial increase[22] Investments - Strategic investments in privately-held companies increased to $77.0 million as of September 30, 2025, compared to $2.0 million as of December 31, 2024, indicating a substantial growth of 3,850%[45] - The company made strategic investments totaling $75,000 during the nine months ended September 30, 2025[22] Stock Repurchase - The company repurchased common stock worth $95,763 during the period ending March 31, 2025[18] - In Q1 2025, the company repurchased 445,311 shares of Class A common stock at an average price of $215.05 per share, totaling $95.8 million[60] - In Q2 2025, the company repurchased 243,987 shares at an average price of $204.77 per share, amounting to $50.0 million[61] - As of September 30, 2025, the remaining amount available for repurchases under the 2025 Stock Repurchase Program was $250.0 million[62] Taxation - The effective tax rate for Q3 2025 was 8.4%, with an income tax expense of $3.1 million[67] Revenue Breakdown - Revenue from Core Solutions in Q3 2025 was $53.8 million, up from $46.0 million in Q3 2024, representing a 16.0% increase[71] - Value Added Services revenue for Q3 2025 was $192.1 million, compared to $157.7 million in Q3 2024, reflecting a 22.0% growth[71] Other Financial Metrics - The company has a $150.0 million senior secured revolving credit facility, which is scheduled to mature on September 30, 2030, with no outstanding borrowings as of September 30, 2025[53][56] - The estimated liability for reported claims and incurred but not reported claims related to landlord insurance policies was $5.7 million as of September 30, 2025, compared to $3.9 million as of December 31, 2024, reflecting an increase of 46.2%[50] - Total prepaid expenses and other current assets increased to $68.3 million as of September 30, 2025, from $32.8 million as of December 31, 2024, marking a growth of 108.5%[46] - The fair value of cash equivalents, including money market funds, was $54.1 million as of September 30, 2025, compared to $25.2 million as of December 31, 2024, indicating a growth of 114.5%[43] - The company has not recorded any allowance for credit losses for available-for-sale investment securities as of September 30, 2025, and December 31, 2024[39] - The company is currently evaluating the impact of ASU 2025-06 on its Consolidated Financial Statements, which will be effective for the 2028 annual period[37]

Financial Performance - Revenue grew 21% year-over-year to $249 million[5] - Net income for Q3 2025 was $33,646, compared to $33,006 in Q3 2024, reflecting a year-over-year increase of 1.9%[17] - Non-GAAP net income for the nine months ended September 30, 2025, was $141,686, up from $126,922 in 2024, reflecting an increase of 11.6%[20] - Basic net income per common share was $0.94, compared to $0.91 in Q3 2024[15] - Non-GAAP net income per share, basic, for Q3 2025 was $1.33, compared to $1.30 in Q3 2024, showing a slight increase of 2.3%[20] Operating Income and Margins - GAAP operating income was $35 million, or 14.1% of revenue, compared to $43 million, or 20.7% of revenue in Q3 2024[5] - Non-GAAP operating income remained at $59 million, but as a percentage of revenue, it decreased to 23.5% from 28.7% in Q3 2024[5] - The company reported a GAAP operating margin of 14.1% for Q3 2025, down from 20.7% in Q3 2024[20] - Full year non-GAAP operating margin is expected to be between 23.5% and 24.5%[5] Cash Flow and Assets - Net cash provided by operating activities was $86 million, or 34.5% of revenue, compared to $58 million, or 28.1% of revenue in Q3 2024[5] - Cash provided by operating activities for the nine months ended September 30, 2025, was $177,115, compared to $151,593 for the same period in 2024, representing a 16.8% increase[17] - The company’s cash, cash equivalents, and restricted cash at the end of Q3 2025 stood at $76,343, compared to $62,667 at the end of Q3 2024[17] - Total assets increased to $640.5 million from $626.7 million as of December 31, 2024[13] Expenses - Stock-based compensation expense for the quarter was $20.8 million, up from $16.0 million in Q3 2024[15] - Stock-based compensation expense for Q3 2025 was $20,793, compared to $16,035 in Q3 2024, marking an increase of 29.1%[20] - The company’s total operating expenses for Q3 2025 were $91,476, which is a 27.7% increase from $71,631 in Q3 2024[19] - GAAP cost of revenue for Q3 2025 was $91,476, up 27.7% from $71,631 in Q3 2024, with a GAAP cost of revenue as a percentage of revenue increasing from 35% to 37%[19] Non-GAAP Financial Measures - The company utilizes non-GAAP financial measures to assess and compare operating results across reporting periods, which include income from operations, operating margin, and net income per share[22] - Non-GAAP operating margin is calculated as non-GAAP operating income from operations as a percentage of revenue, providing useful supplemental information to investors[22] - Non-GAAP financial measures may not be directly comparable to those of other companies in the industry due to different calculation methods[23] - The company encourages investors to review reconciliations of historical non-GAAP financial measures to their most directly comparable GAAP measures[23] - Limitations exist in using non-GAAP financial measures as they can exclude expenses that may materially impact reported financial results[23] - Non-GAAP financial measures should not be considered in isolation from GAAP financial information[23] Tax Rate Projections - The company projects a long-term non-GAAP tax rate of 21% for 2025 and 25% for 2024, considering factors such as operating structure and existing tax positions[24] - The company periodically re-evaluates its projected tax rate based on significant events and relevant tax law changes[24] - Amortization of purchased intangible assets is viewed as arising from pre-acquisition activities and is not typically affected by operations during any particular period[24] - Stock-based compensation expenses are aimed at aligning employee interests with stockholders and vary for reasons generally unrelated to operational performance[24]

Core Insights - AppFolio reported strong unit and revenue growth driven by customer acquisition, expansion, and adoption of its Realm-X platform through premium tiers and value-added services [1][2] - The company emphasizes its AI-native architecture, which enhances performance outcomes for customers, aligning its success with that of its clients [2] Financial Highlights - Revenue increased by 21% year-over-year to $249 million [7] - Total units under management rose by 7% year-over-year to 9.1 million [7] - GAAP operating income was $35 million, representing 14.1% of revenue, down from $43 million or 20.7% of revenue in Q3 2024 [7] - Non-GAAP operating income remained stable at $59 million, accounting for 23.5% of revenue, compared to 28.7% in Q3 2024 [7] - Net cash provided by operating activities was $86 million, or 34.5% of revenue, compared to $58 million or 28.1% in Q3 2024 [7] Financial Outlook - Full-year revenue is projected to be between $945 million and $950 million [7] - The expected full-year non-GAAP operating margin is anticipated to be in the range of 23.5% to 24.5% [7] - Diluted weighted average shares outstanding are expected to be approximately 36 million for the full year [7] Cash Flow and Balance Sheet - Cash and cash equivalents as of September 30, 2025, were $76.1 million, up from $42.5 million at the end of 2024 [13] - Total assets increased to $640.5 million from $626.7 million at the end of 2024 [14] - Total liabilities rose to $141.6 million from $107.4 million at the end of 2024 [14] Revenue Breakdown - Core solutions revenue was $53.8 million, up from $46.0 million [17] - Value-added services revenue increased to $192.1 million from $157.7 million [17] - Other revenue sources contributed $3.5 million, compared to $2.0 million in the previous year [17]

Core Insights - AppFolio announced the winners of the 2025 FUTUREist Awards, recognizing customers who are making significant contributions to their communities through leadership and commitment to equitable housing [1][2] - The awards program reflects AppFolio's belief that successful businesses contribute to thriving communities, with a total donation of $75,000 to the charities chosen by the award recipients [2][3] Community FUTUREist - Fairlawn is recognized for its investment in creativity and public art, enhancing community life through diverse murals and cultural partnerships, particularly in Champaign-Urbana [5] - Runners-up in this category include RentRight and DLP Capital [5] Housing FUTUREist - Atlas Real Estate has dedicated over 1,500 volunteer hours in 2025 and expanded its Atlas Uplift Program, assisting over 200 residents towards homeownership through coaching and financial support [5] - The company also engaged in sustainability initiatives, educational workshops, youth mentorships, and donation drives to empower communities [5] - Runners-up are GSF Properties and The Stonekey Group [5] Leadership FUTUREist - Enclave Companies focuses on developing future leaders through initiatives like the Ignite Leadership Development Program and Elevate Annual Summit, fostering leadership at all organizational levels [5] - Runners-up in this category include Evernest and Prosper Communities [5]

Core Viewpoint - AppFolio Inc. shares experienced a rise of over 5% following an upgrade from KeyBanc Capital Markets, which moved the stock rating from Sector Weight to Overweight with a price target set at $285 [1] Group 1: Growth Potential - KeyBanc analysts expressed renewed confidence in AppFolio's growth trajectory after attending the annual FUTURE user conference, highlighting accelerating momentum in new customer acquisitions and expansions within its Plus and Max offerings [1] - The firm identified attractive and expansive opportunities in monetizing resident experience tools, which could significantly enhance AppFolio's average revenue per user (ARPU) [2] - KeyBanc raised its growth estimates for 2026, indicating a positive outlook for the company's future performance [2] Group 2: Valuation and Market Position - Analysts characterized the recent share pullback as a "buying opportunity," noting that the stock's valuation at 7.2 times the 2026 enterprise value-to-sales is appealing compared to peers [2] - KeyBanc anticipates that AppFolio's ARPU growth and product innovation will drive meaningful top-line expansion over the next several years [3]

Core Insights - Top Wall Street analysts have revised their outlook on several key stocks, indicating a shift in market sentiment and potential investment opportunities [1] Company Ratings - The consensus rating for APPF stock is "Overweight," suggesting a positive outlook from analysts [1] - The highest price target for APPF stock is set at $375.00, while the lowest price target is $275.00, indicating a range of expectations among analysts [1] - The consensus price target for APPF stock is $317.00, reflecting an average expectation of future performance [1]

Company Performance - AppFolio (APPF) closed at $223.31, down 2.29% from the previous trading session, underperforming the S&P 500's loss of 0.63% [1] - Over the past month, AppFolio shares have decreased by 17.42%, contrasting with the Computer and Technology sector's gain of 1.9% and the S&P 500's gain of 0.92% [1] Upcoming Financial Results - AppFolio is expected to report EPS of $1.45, reflecting an 11.54% increase from the prior-year quarter [2] - Revenue is anticipated to be $246.08 million, indicating a 19.61% increase from the same quarter last year [2] Fiscal Year Projections - For the entire fiscal year, earnings are projected at $5.36 per share, representing a 22.65% increase from the prior year [3] - Revenue for the fiscal year is estimated at $943.55 million, showing an 18.8% increase from the previous year [3] Analyst Estimates and Stock Performance - Recent changes to analyst estimates for AppFolio are crucial for investors, as positive revisions indicate optimism regarding business and profitability [3][4] - The Zacks Rank system, which assesses estimated changes, currently ranks AppFolio at 3 (Hold) [5] Valuation Metrics - AppFolio is trading at a Forward P/E ratio of 42.64, which is a premium compared to its industry's Forward P/E of 29.25 [5] Industry Context - The Internet - Software industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 62, placing it in the top 26% of over 250 industries [6] - The top 50% rated industries outperform the bottom half by a factor of 2 to 1 [6]

Core Viewpoint - AppFolio, Inc. is set to report its third quarter 2025 financial results on October 30, 2025, after the U.S. financial markets close [1] Group 1: Financial Results Announcement - The financial results will be disclosed after the market closes on October 30, 2025 [1] - A conference call will be held on the same day at 5:00 p.m. Eastern Time to discuss the results and business outlook [2] - A live webcast of the conference call will be available, and a replay will be accessible for a limited time on the Investor Relations website [2] Group 2: Disclosure Practices - AppFolio utilizes its Investor Relations website to disclose material nonpublic information and comply with Regulation FD [3] - Investors are encouraged to monitor the Investor Relations website along with SEC filings and public communications for updates [3] Group 3: Company Overview - AppFolio is recognized as a technology leader in the real estate industry, providing innovative solutions to enhance operational efficiency and business growth [4] - The company focuses on connecting communities through its performance platform [4]

Core Insights - AppFolio (APPF) shares have declined by 20.2% in less than a month, dropping from $285.18 on September 22, 2025, to a current price of $227.50, with potential for further decline due to its Very High valuation [2] - Historically, APPF stock has delivered a median return of 53% over one year, with a peak return of 97% following sharp dips greater than 30% within 30 days [3][6] - The stock has experienced two occasions since January 1, 2010, where the dip threshold of -30% within 30 days was triggered, with a median time to peak return of 268 days following a dip event [6] Financial Performance - AppFolio meets basic financial quality criteria, including revenue growth, profitability, cash flow, and balance sheet strength, which are essential for assessing the risk of a dip indicating declining business performance [7] - The Trefis High Quality Portfolio, which integrates strategies from Empirical Asset Management, has achieved positive returns during market downturns, outperforming the S&P index [5][7] Investment Strategy - While dip buying can be appealing, a thorough assessment from multiple perspectives is crucial for making informed investment decisions [7] - A diversified investment approach is recommended over relying on a single stock, as it can provide substantial benefits and a more stable investment experience [5]

Core Insights - AppFolio has launched the AppFolio Performance Platform, which utilizes artificial intelligence-native architecture to enhance property management capabilities [1][2] - The platform aims to address the evolving needs of property operators by automating repetitive tasks and optimizing workflows [3] Platform Features - The AppFolio Performance Platform securely stores property, resident, and vendor data while automating tasks with agentic tools [2] - It includes Realm-X Performers, which are AI capabilities designed to automate workflows such as leasing, maintenance, and resident communication [3][4] - Specific functionalities include engaging prospects, managing maintenance requests, and handling communications regarding renewals and payments [4] User Experience - The platform offers innovations in Resident Onboarding, providing a guided move-in experience and integrating technology from Second Nature to enhance services for residents [5] - An early user, Advanced Management Company, reported that the platform replaced nine separate systems, allowing teams to focus on building connections with residents [5][6] Industry Trends - A significant portion of renters (over 50%) prefer online rent payment methods, with 77% citing ease and speed as key advantages over traditional methods [7] - Satisfaction rates for online payment users stand at 77%, compared to only 35% for traditional payment methods, indicating a strong preference for technology in the rental space [7]