SANTA BARBARA, Calif., Feb. 18, 2026 (GLOBE NEWSWIRE) -- AppFolio (NASDAQ:APPF), the technology leader powering the future of the real estate industry, today released its 2026 Property Management Benchmark Report. The findings indicate that the property management industry is at a pivotal moment. Firms integrating AI into their core workflows report stronger growth expectations, both in portfolio expansion and team investment, than the broader market. The survey shows that property management professionals ...

Customer Base and Services - As of December 31, 2025, AppFolio had 22,096 property management customers[31]. - The AppFolio Platform offers three Subscription Plans: Core, Plus, and Max, catering to different sizes and complexities of property management businesses[20]. - AppFolio's Value Added Services include electronic payment services, tenant screening, and risk mitigation, enhancing operational efficiency for property managers[22]. - Subscription Services revenue increased by 17% to $211.5 million, while Value Added Services revenue rose by 19% to $721.5 million[180]. - Total property management units under management increased by 8% year-over-year to 9.4 million as of December 31, 2025[168]. Technology and Innovation - The platform integrates AI capabilities, such as Smart Budgeting and Realm Leasing Performer, to automate workflows and improve decision-making[23]. - AppFolio's competitive positioning is strengthened by its innovative platform and the ability to integrate third-party solutions through the AppFolio Stack[43]. - The integration of AI technologies into the company's offerings is ongoing, but there is no assurance that these innovations will be successful or adopted by customers[99]. - The development and incorporation of AI technologies carry risks of reputational harm and increased regulatory oversight, which could adversely affect business operations[78]. Growth Strategy and Market Position - AppFolio's growth strategy focuses on delivering value to all stakeholders in the property management ecosystem, aiming to improve customer retention and attract new clients[26]. - The company aims to expand sales to new markets within the real estate space, but this strategy involves risks such as new regulatory regimes and increased competition[103]. - Existing customers' renewal of subscriptions and expansion of Value Added Services is critical for revenue growth, and any decline could adversely affect financial results[104]. - Revenue growth is expected to decline over the long term due to increasing competition and market maturation, despite prior significant growth[119]. Employee Engagement and Culture - As of December 31, 2025, the company had 1,702 employees, indicating a focus on human capital management and employee engagement[50]. - The company emphasizes an inclusive workplace culture, which is essential for driving innovation and long-term success[50]. - Significant resources are invested in employee development, including in-person training and on-demand programming tailored for individual growth[51]. - The company offers competitive compensation packages, including base salary, commission, performance-based bonuses, and stock-based compensation[54]. Regulatory and Compliance Risks - The company is subject to various federal, state, and local laws and regulations, which may introduce new compliance requirements and risks[59]. - The company has faced regulatory scrutiny regarding its tenant screening services, including a settlement with the FTC in January 2021[69]. - The company faces increased regulatory scrutiny and legal requirements related to resident-focused offerings, which could lead to litigation or governmental investigations if transparency is deemed inadequate[71]. - Regulatory requirements vary across markets, and unfavorable interpretations of landlord-tenant laws could adversely impact the company's operating results[72]. Financial Performance - Revenue grew by 20% year-over-year to $950.8 million for the fiscal year 2025[172]. - GAAP operating income was $152.9 million, representing 16.1% of revenue, compared to 17.1% in 2024[172]. - Non-GAAP operating income was $234.9 million, or 24.7% of revenue, down from 25.2% in 2024[172]. - Net cash provided by operating activities was $242.1 million, or 25.5% of revenue, compared to 23.7% in 2024[172]. Financial Risks and Liabilities - The company entered a $150 million senior secured revolving credit facility on September 30, 2025, which includes covenants that may limit operational flexibility[123]. - The dual-class structure of the company's common stock concentrates voting control, with Class B stockholders holding approximately 83% of the voting power, potentially limiting influence of Class A stockholders[131]. - The company does not expect to pay any cash dividends to holders of its Class A common stock in the foreseeable future[135]. - The company is subject to adverse global and regional economic conditions that could negatively impact demand for its products and services[138]. Cybersecurity and Data Privacy - The company maintains comprehensive cybersecurity measures, including encryption and 24/7 security monitoring, to protect sensitive information[144]. - The company has experienced cybersecurity threats in the past but believes they have not materially affected its operations or financial condition[150]. - The company is subject to comprehensive privacy laws across multiple states, with new laws in Indiana, Kentucky, and Rhode Island expected in 2026, which may increase compliance costs[89]. - The California Consumer Privacy Act (CCPA) imposes significant operational requirements and potential civil penalties for violations, increasing the risk of data breach litigation[88].

Core Viewpoint - AppFolio (APPF) is experiencing significant selling pressure, with a 17.6% decline over the past four weeks, but is now positioned for a potential trend reversal as it enters oversold territory, supported by analyst expectations of better earnings than previously predicted [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold conditions, with readings below 30 indicating a stock may be oversold [2]. - AppFolio's current RSI reading is 24.6, suggesting that the heavy selling pressure is exhausting, and a trend reversal may be imminent [5]. Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts that earnings estimates for AppFolio will increase, with a 0.8% rise in the consensus EPS estimate over the last 30 days, indicating potential price appreciation [7]. - AppFolio holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the stock's potential for a turnaround [8].

Market Sentiment - The prevailing mood in the markets during Q4 earnings season is one of caution, with investors wary of escalating macroeconomic and trade tensions [1] Industry Insights - Gary Alexander has extensive experience covering technology companies on Wall Street and working in Silicon Valley, providing insights into themes shaping the industry [2]

Core Viewpoint - AppFolio Inc reported its Fourth Quarter and Full Year 2025 financial results during a conference call, highlighting key financial metrics and future expectations [1][2]. Financial Results - The conference call was led by AppFolio's President and CEO Shane Trigg and CFO Tim Eaton, indicating a structured approach to presenting financial outcomes [3]. - The company emphasized the importance of its safe harbor policy, which outlines that forward-looking statements made during the call are subject to risks and uncertainties [3][4]. Future Outlook - AppFolio's management discussed expectations and projections regarding future market conditions and business performance, indicating a focus on growth and product development [4].

Core Insights - AppFolio reported revenue of $248.19 million for the quarter ended December 2025, marking a year-over-year increase of 21.9% and exceeding the Zacks Consensus Estimate of $246.09 million by 0.86% [1] - The company's EPS for the same period was $1.39, compared to $0.92 a year ago, resulting in an EPS surprise of 13.93% against the consensus estimate of $1.22 [1] Revenue Breakdown - Revenue from Other services was $7.87 million, significantly higher than the average estimate of $2.9 million, reflecting a year-over-year change of 191.5% [4] - Revenue from Value Added Services was $184.61 million, slightly below the average estimate of $186.84 million, with a year-over-year increase of 20.4% [4] - Revenue from Core Solutions was $55.72 million, compared to the average estimate of $56.01 million, showing a year-over-year growth of 17% [4] Stock Performance - Over the past month, AppFolio's shares have returned -6.3%, while the Zacks S&P 500 composite has increased by 0.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Fourth quarter revenue reached $248 million, a 22% year-over-year increase, while full-year revenue was $951 million, representing 20% year-over-year growth [4][15] - Non-GAAP operating margin for the fourth quarter was 24.9%, compared to 20.2% last year, and for the full year, it was 24.7%, down from 25.2% last year [17] - Core revenue, now referred to as subscription services revenue, was $56 million in the fourth quarter, a 17% year-over-year increase [15][16] Business Line Data and Key Metrics Changes - Subscription services revenue for the full year was $211 million, representing 17% growth year-over-year [16] - Fourth quarter revenue from value-added services grew 20% year-over-year to $185 million, driven by increased adoption of various services [16] - Full year value-added services revenue was $722 million, representing 19% growth year-over-year [17] Market Data and Key Metrics Changes - The company managed approximately 9.4 million units from 22,096 customers, compared to 8.7 million units from 20,784 customers a year ago, reflecting an 8% increase in units and a 6% increase in customers [16] - Adoption of premium tiers, Plus and Max, exceeded 25%, indicating success in capturing both SMB and upmarket customers [10] Company Strategy and Development Direction - The company focuses on three strategic pillars: Differentiate to Win, Deliver Performance Efficiently, and Great People and Culture [7][11][12] - The introduction of agentic AI capabilities aims to transform property management into performance management, enhancing customer workflows and operational efficiency [7][10] - The company is positioned to lead the transition towards a unified platform that reduces software fragmentation and enhances customer experience [6] Management's Comments on Operating Environment and Future Outlook - Management noted that while 81% of managers feel positive about the market, rising operating costs and pressure on occupancy rates remain challenges [5] - The 2026 financial outlook anticipates annual revenue between $1.1 billion and $1.12 billion, with a midpoint growth rate of 17% [19] - Management emphasized the importance of innovation and execution in achieving customer performance and maintaining a competitive edge [20] Other Important Information - The company ended 2025 with 1,702 employees, a 4% increase from the previous year, reflecting growth in various functional areas [18] - The company has been recognized on Forbes' America's Most Successful Mid-Cap Companies and Time Magazine's America's Growth Leaders, validating its strategic momentum [4] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.

Financial Data and Key Metrics Changes - Fourth quarter revenue reached $248 million, a 22% year-over-year increase, while full-year revenue was $951 million, representing 20% year-over-year growth [4][15] - Non-GAAP operating margin for the fourth quarter was 24.9%, compared to 20.2% last year, and for the full year, it was 24.7%, down from 25.2% last year [17] - Core revenue, now referred to as subscription services revenue, was $56 million in the fourth quarter, a 17% year-over-year increase [15][16] Business Line Data and Key Metrics Changes - Subscription services revenue for the full year was $211 million, representing 17% growth year-over-year [16] - Fourth quarter revenue from value-added services grew 20% year-over-year to $185 million, driven by increased adoption of FolioGuard, FolioScreen, and online payments [16] - Full year value-added services revenue was $722 million, representing 19% growth year-over-year [17] Market Data and Key Metrics Changes - The company managed approximately 9.4 million units from 22,096 customers, compared to 8.7 million units from 20,784 customers a year ago, reflecting an 8% increase in units and a 6% increase in customers [16] - In the second half of 2025, over 500,000 units were added to the platform, with adoption of premium tiers exceeding 25% [10] Company Strategy and Development Direction - The company focuses on three strategic pillars: Differentiate to Win, Deliver Performance Efficiently, and Great People and Culture [7][11][12] - The introduction of agentic AI capabilities aims to transform property managers into performance managers, enhancing operational efficiency and customer experience [7][10] - The company is positioned to lead the transition towards a unified platform that reduces software fragmentation and enhances user experience [6] Management's Comments on Operating Environment and Future Outlook - Management noted that while 81% of managers feel positive about the market, rising operating costs and occupancy rate pressures remain challenges [5] - The 2026 guidance for annual revenue is projected to be between $1.1 billion and $1.12 billion, with a midpoint growth rate of 17% [19] - Management emphasized the importance of innovation and execution in achieving customer performance and maintaining a competitive edge [20] Other Important Information - The company has been recognized on Forbes' America's Most Successful Midcap Companies and Time Magazine's America's Growth Leaders, validating its strategy and momentum [4] - The company ended 2025 with 1,702 employees, reflecting a 4% increase from the previous year, indicating ongoing investment in innovation and sales capacity [18] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.

Financial Data and Key Metrics Changes - Fourth quarter revenue reached $248 million, a 22% year-over-year increase, while full-year revenue was $951 million, representing 20% year-over-year growth [4][15] - Non-GAAP operating margin for the fourth quarter was 24.9%, compared to 20.2% last year, and for the full year, it was 24.7%, down from 25.2% last year [17] - Core revenue, now referred to as subscription services revenue, was $56 million in the fourth quarter, a 17% year-over-year increase [15][16] Business Line Data and Key Metrics Changes - Subscription services revenue for the full year was $211 million, representing 17% growth year-over-year [16] - Fourth quarter revenue from value-added services grew 20% year-over-year to $185 million, reflecting greater adoption of various services [16][17] - Full-year value-added services revenue was $722 million, representing 19% growth year-over-year [17] Market Data and Key Metrics Changes - The company managed approximately 9.4 million units from 22,096 customers, compared to 8.7 million units from 20,784 customers a year ago, representing an 8% increase in units and a 6% increase in customers [16] - Adoption of premium tiers, Plus and Max, exceeded 25%, indicating success with both SMB and upmarket customers [10] Company Strategy and Development Direction - The company focuses on three strategic pillars: Differentiate to Win, Deliver Performance Efficiently, and Great People and Culture [6][11] - The introduction of AI-native features aims to transform property management into performance management, enhancing customer operations [6][9] - The company is positioned to lead the transition towards a unified platform that reduces fragmentation and enhances customer experience [5][10] Management's Comments on Operating Environment and Future Outlook - Management noted that while 81% of managers feel positive about the market, rising operating costs and pressure on occupancy rates remain challenges [5] - The 2026 guidance for annual revenue is projected to be between $1.1 billion and $1.12 billion, with a midpoint growth rate of 17% [19] - Management emphasized the importance of innovation and execution in achieving customer performance and business growth [20] Other Important Information - The company has been recognized on Forbes' America's Most Successful Midcap Companies and Time Magazine's America's Growth Leaders, validating its strategy and momentum [4] - The company ended 2025 with 1,702 employees, reflecting a 4% increase from the previous year, indicating growth in various functional areas [18] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.

Financial Performance - Revenue for Q4 2025 was $248.2 million, a 22% increase year-over-year from $203.7 million in Q4 2024[15] - Full year revenue for 2025 reached $951 million, a 20% increase from $794 million in 2024[4] - Net income for Q4 2025 was $39,914 thousand, a decrease of 61% compared to $102,734 thousand in Q4 2024[17] - Non-GAAP net income for the twelve months ended December 31, 2025, was $192,046 thousand, up from $160,877 thousand in 2024, reflecting a growth of 19%[20] Operating Income and Margins - GAAP operating income for Q4 2025 was $44 million, representing 17.6% of revenue, compared to $23 million or 11.3% of revenue in Q4 2024[4] - Non-GAAP operating income for Q4 2025 was $62 million, or 24.9% of revenue, up from $41 million or 20.2% in Q4 2024[4] - Full year non-GAAP operating margin is expected to be in the range of 25.5% to 27.5% for fiscal year 2026[4] - Non-GAAP operating margin improved to 24.9% in Q4 2025 from 20.2% in Q4 2024[20] Cash Flow and Assets - Net cash provided by operating activities for Q4 2025 was $65 million, or 26.2% of revenue, compared to $37 million or 18.0% in Q4 2024[4] - Cash provided by operating activities for Q4 2025 was $64,990 thousand, compared to $36,566 thousand in Q4 2024, marking an increase of 78%[17] - Cash and cash equivalents increased to $107 million in 2025 from $42.5 million in 2024[13] - Total assets grew to $689 million in 2025, up from $627 million in 2024[13] Expenses - GAAP cost of revenue for Q4 2025 was $90,540 thousand, up from $76,189 thousand in Q4 2024, indicating a rise of 19%[19] - GAAP sales and marketing expenses for Q4 2025 were $40,159 thousand, up from $33,436 thousand in Q4 2024, reflecting a growth of 20%[19] - Stock-based compensation expense for the twelve months ended December 31, 2025, was $70,790 thousand, compared to $60,328 thousand in 2024, an increase of 17%[20] Future Projections - The company anticipates full year revenue for 2026 to be in the range of $1,100 million to $1,120 million[4] Non-GAAP Financial Measures - The company utilizes non-GAAP financial measures to assess operating performance, 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 insights into financial performance[22] - The company emphasizes the importance of reconciling non-GAAP financial measures to GAAP measures for a comprehensive understanding of financial results[23] - Investors are encouraged to review reconciliations of historical non-GAAP measures to their GAAP counterparts for better clarity[23] - Non-GAAP financial measures may not be directly comparable to those of other companies in the industry due to different calculation methods[23] - Non-GAAP measures are used for internal budgeting and forecasting, aiding in the evaluation of financial performance across reporting periods[22] Tax Rates and Compliance - The projected long-term non-GAAP tax rates are set at 21% for 2025 and 25% for 2024, based on the company's operating structure and tax positions[24] - The company periodically re-evaluates its projected tax rate based on significant events and changes in tax law[24] - Amortization of purchased intangibles is considered a pre-acquisition expense and does not typically reflect operational performance during specific periods[24] - Stock-based compensation expenses are used to attract and retain employees, aligning their interests with stockholders, but vary independently of operational performance[24]