SANTA BARBARA, Calif., Jan. 29, 2026 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ:APPF) ("AppFolio" or the "Company"), a technology leader powering the future of the real estate industry, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2025.

"I am proud of our strong unit acquisition and financial performance in 2025, which validates our strategy and the momentum we have as a business," said Shane Trigg, President and CEO. "Our AI-native Performance Platform, with continued investments in agentic AI and the resident experience, is powering the future of real estate. As we enter 2026, we are driving real, measurable performance outcomes for our customers."

Financial Highlights for Fourth Quarter of 2025

Revenue grew 22% year-over-year to $248 million.
Total units under management grew 8% year-over-year to 9.4 million.
GAAP operating income was $44 million, or 17.6% of revenue, compared to GAAP operating income of $23 million, or 11.3% of revenue in Q4 2024.
Non-GAAP operating income was $62 million, or 24.9% of revenue, compared to non-GAAP operating income of $41 million, or 20.2% of revenue in Q4 2024.
Net cash provided by operating activities was $65 million, or 26.2% of revenue, compared to $37 million, or 18.0% of revenue in Q4 2024.

Financial Highlights for Fiscal Year 2025

Revenue grew 20% year-over-year to $951 million.
GAAP operating income was $153 million, or 16.1% of revenue, compared to GAAP operating income of $136 million, or 17.1% of revenue in 2024.
Non-GAAP operating income was $235 million, or 24.7% of revenue, compared to non-GAAP operating income of $200 million, or 25.2% of revenue in 2024.
Net cash provided by operating activities was $242 million, or 25.5% of revenue, compared to $188 million, or 23.7% of revenue in 2024.

Financial Outlook

Based on information available as of January 29, 2026, AppFolio's outlook for fiscal year 2026 follows:

Full year revenue is expected to be in the range of $1,100 million to $1,120 million.
Full year non-GAAP operating margin as a percentage of revenue is expected to be in the range of 25.5% to 27.5%.
Diluted weighted average shares outstanding are expected to be approximately 36 million to 37 million for the full year.

Conference Call Information

As previously announced, the Company will host a conference call today, January 29, 2026, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the Company's fourth quarter financial results. A live webcast of the call will be available at: https://edge.media-server.com/mmc/p/tm2qcytz/. To access the call by phone, please go to the following link: https://register-conf.media-server.com/register/BI13feb1c461a145ec8f63254057c3bcf6, and you will be provided with dial-in details. A replay of the webcast will also be available for a limited time on AppFolio's Investor Relations website at https://ir.appfolioinc.com/news-events/events.

The Company also provides announcements regarding its financial results and other matters, including SEC filings, investor events, and press releases, on its Investor Relations website at https://ir.appfolioinc.com/, as a means of disclosing material nonpublic information and for complying with AppFolio's disclosure obligations under Regulation FD.

About AppFolio

AppFolio is a technology leader powering the future of the real estate industry. Our innovative platform and trusted partnership enable our customers to connect communities, increase operational efficiency, and grow their business. For more information about AppFolio, visit ir.appfolioinc.com.

Investor Relations Contact:

Lori Barker

ir@appfolio.com

Use of Non-GAAP Financial Measures

Reconciliations of current and historical non-GAAP financial measures to AppFolio's financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables entitled "Statement Regarding the Use of Non-GAAP Financial Measures."

AppFolio is unable, at this time, to provide GAAP equivalent guidance measures on a forward-looking basis for non-GAAP operating margin because certain items that impact this measure are uncertain, out of our control, or cannot be reasonably predicted, such as charges related to stock-based compensation expense. The effect of these excluded items may be significant.

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," "could," "estimates," "expects," "intends," "may," "plans," "potential," "future'" "predicts, "projects," "target," "seeks," "contemplates," "should," "will," "would" or similar expressions and the negatives of those expressions. In particular, forward-looking statements contained in this press release relate to future operating results and financial position, including the Company's fiscal year 2026 financial outlook, anticipated future expenses and investments, the Company's business opportunities, the impact of the Company's strategic actions and initiatives, the potential benefits and effect of the Company's AI-powered solutions, and their impact on the Company's plans, objectives, expectations and capabilities.

Forward-looking statements represent AppFolio's current beliefs and expectations based on information currently available and speak only as of the date the statement is made. Forward-looking statements are subject to 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. The risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to materially differ from those expressed or implied by these forward-looking statements include those risks, uncertainties and other factors described in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 6, 2025, as such risk factors may be updated from time to time in our subsequent filings with the SEC, and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's most recently filed Annual Report on Form 10-K or Quarterly Report on Form 10-Q, 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.

The Company undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands)

	December 31, 2025		December 31, 2024
Assets
Current assets
Cash and cash equivalents	$	106,967	$	42,504
Investment securities—current		144,256		235,745
Accounts receivable, net		36,873		24,346
Prepaid expenses and other current assets		65,218		32,807
Total current assets		353,314		335,402
Property and equipment, net		23,228		24,483
Operating lease right-of-use assets		15,924		17,472
Capitalized software development costs, net		11,324		15,429
Goodwill		96,410		96,410
Intangible assets, net		38,826		49,057
Deferred income taxes		58,823		76,910
Long-term investments		77,033		2,033
Other long-term assets		14,085		9,482
Total assets	$	688,967	$	626,678
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	4,123	$	2,378
Accrued employee expenses		59,774		30,157
Accrued expenses		20,829		14,658
Other current liabilities		22,121		16,087
Total current liabilities		106,847		63,280
Operating lease liabilities		33,287		37,476
Other liabilities		6,254		6,632
Total liabilities		146,388		107,388
Stockholders' equity		542,579		519,290
Total liabilities and stockholders' equity	$	688,967	$	626,678

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts)

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2025			2024		2025			2024
Revenue⁽¹⁾	$	248,192		$	203,664		$	950,822	$	794,202
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)⁽²⁾		90,540			76,189			345,341		282,067
Sales and marketing⁽²⁾		40,159			33,436			143,904		110,597
Research and product development⁽²⁾		45,950			42,296			190,419		160,375
General and administrative⁽²⁾		22,857			23,449			95,590		85,974
Depreciation and amortization		5,110			5,336			22,651		19,545
Total costs and operating expenses		204,616			180,706			797,905		658,558
Income from operations		43,576			22,958			152,917		135,644
Other (loss)/income, net		(3	)		697			38		697
Interest income, net		2,048			3,499			8,157		13,981
Income before provision for income taxes		45,621			27,154			161,112		150,322
Provision for (benefit from) income taxes		5,707			(75,580	)		20,189		(53,746	)
Net income	$	39,914		$	102,734		$	140,923	$	204,068
Net income per common share:
Basic	$	1.11		$	2.82		$	3.91	$	5.63
Diluted	$	1.10		$	2.79		$	3.88	$	5.55
Weighted average common shares outstanding
Basic		35,946			36,374			36,013		36,252
Diluted		36,202			36,783			36,327		36,782

⁽¹⁾ The following table presents our revenue categories:

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2025		2024		2025		2024
Core solutions	$	55,719	$	47,631	$	211,457	$	180,605
Value Added Services		184,606		153,334		721,549		605,011
Other		7,867		2,699		17,816		8,586
Total revenue	$	248,192	$	203,664	$	950,822	$	794,202

⁽²⁾ Includes stock-based compensation expense as follows:

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2025		2024		2025		2024
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)	$	1,191	$	1,261	$	5,138	$	4,522
Sales and marketing		2,996		2,746		12,332		8,030
Research and product development		6,504		5,789		30,687		25,414
General and administrative		4,636		6,228		22,633		22,361
Total stock-based compensation expense	$	15,327	$	16,024	$	70,790	$	60,327

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2025			2024			2025			2024
Cash from operating activities
Net income	$	39,914		$	102,734		$	140,923		$	204,068
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,110			5,336			22,651			19,543
Amortization of operating lease right-of-use assets		696			489			2,221			2,030
Amortization of costs capitalized to obtain revenue contracts, net		2,928			2,514			11,115			9,985
Deferred income taxes		1,021			(76,937	)		18,139			(76,937	)
Stock-based compensation, including as amortized		15,327			16,024			70,790			60,328
Other		(838	)		(2,074	)		(2,119	)		(8,220	)
Changes in operating assets and liabilities:
Accounts receivable		(2,527	)		1,489			(12,527	)		(3,383	)
Prepaid expenses and other assets		(5,769	)		501			(21,446	)		(5,859	)
Accounts payable		21			1,850			1,767			1,559
Operating lease liabilities		(1,086	)		53			(4,263	)		(3,143	)
Accrued expenses and other liabilities		10,193			(15,413	)		14,854			(11,812	)
Net cash provided by operating activities		64,990			36,566			242,105			188,159
Cash from investing activities
Purchases of available-for-sale investments		(62,312	)		(51,854	)		(228,887	)		(317,173	)
Proceeds from sales of available-for-sale investments		—			9,984			202,662			9,984
Proceeds from maturities of available-for-sale investments		42,350			76,280			118,970			240,035
Purchases of property and equipment		(1,314	)		(195	)		(3,155	)		(2,016	)
Capitalization of software development costs		(1,026	)		(1,058	)		(3,440	)		(5,170	)
Purchases of long-term investments		—			—			(75,000	)		—
Cash paid in business acquisition, net of cash acquired		—			(77,421	)		(906	)		(77,421	)
Net cash (used in) provided by investing activities		(22,302	)		(44,264	)		10,244			(151,761	)
Cash from financing activities
Proceeds from stock option exercises		4			11			134			3,924
Tax withholding for net share settlement		(11,818	)		(12,226	)		(43,248	)		(47,327	)
Proceeds from the issuance of common stock under the employee stock purchase plan		—			—			951			—
Purchase of common stock		—			—			(145,723	)		—
Net cash used in financing activities		(11,814	)		(12,215	)		(187,886	)		(43,403	)
Net increase in cash, cash equivalents and restricted cash		30,874			(19,913	)		64,463			(7,005	)
Cash, cash equivalents and restricted cash
Beginning of period		76,343			62,667			42,754			49,759
End of period	$	107,217		$	42,754		$	107,217		$	42,754

RECONCILIATION FROM GAAP TO NON-GAAP RESULTS (UNAUDITED) (in thousands, except per share data)

			Three Months Ended December 31,						Twelve Months Ended December 31,
				2025			2024			2025			2024
Costs and operating expenses:
	GAAP cost of revenue (exclusive of depreciation and amortization)		$	90,540		$	76,189		$	345,341		$	282,067
		Stock-based compensation expense		(1,191	)		(1,261	)		(5,138	)		(4,522	)
	Non-GAAP cost of revenue (exclusive of depreciation and amortization)		$	89,349		$	74,928		$	340,203		$	277,545
	GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue			36	%		37	%		36	%		36	%
	Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue			36	%		37	%		36	%		35	%

	GAAP sales and marketing		$	40,159		$	33,436		$	143,904		$	110,597
		Stock-based compensation expense		(2,996	)		(2,746	)		(12,332	)		(8,030	)
	Non-GAAP sales and marketing		$	37,163		$	30,690		$	131,572		$	102,567
	GAAP sales and marketing as a percentage of revenue			16	%		16	%		15	%		14	%
	Non-GAAP sales and marketing as a percentage of revenue			15	%		15	%		14	%		13	%

	GAAP research and product development		$	45,950		$	42,296		$	190,419		$	160,375
		Stock-based compensation expense		(6,504	)		(5,789	)		(30,687	)		(25,414	)
	Non-GAAP research and product development		$	39,446		$	36,507		$	159,732		$	134,961
	GAAP research and product development as a percentage of revenue			19	%		21	%		20	%		20	%
	Non-GAAP research and product development as a percentage of revenue			16	%		18	%		17	%		17	%

	GAAP general and administrative		$	22,857		$	23,449		$	95,590		$	85,974
		Stock-based compensation expense		(4,636	)		(6,228	)		(22,633	)		(22,361	)
	Non-GAAP general and administrative		$	18,221		$	17,221		$	72,957		$	63,613
	GAAP general and administrative as a percentage of revenue			9	%		12	%		10	%		11	%
	Non-GAAP general and administrative as a percentage of revenue			7	%		8	%		8	%		8	%

	GAAP depreciation and amortization		$	5,110		$	5,336		$	22,651		$	19,545
		Amortization of stock-based compensation capitalized in software development costs		(241	)		(350	)		(963	)		(1,754	)
		Amortization of purchased intangibles		(2,558	)		(1,744	)		(10,231	)		(2,100	)
	Non-GAAP depreciation and amortization		$	2,311		$	3,242		$	11,457		$	15,691
	GAAP depreciation and amortization as a percentage of revenue			2	%		3	%		2	%		2	%
	Non-GAAP depreciation and amortization as a percentage of revenue			1	%		2	%		1	%		2	%

			Three Months Ended December 31,						Twelve Months Ended December 31,
				2025			2024			2025			2024
Income from operations:
	GAAP income from operations		$	43,576		$	22,958		$	152,917		$	135,644
		Stock-based compensation expense		15,327			16,024			70,790			60,327
		Amortization of stock-based compensation capitalized in software development costs		241			350			963			1,754
		Amortization of purchased intangibles		2,558			1,744			10,231			2,100
	Non-GAAP income from operations		$	61,702		$	41,076		$	234,901		$	199,825

Operating margin:
	GAAP operating margin			17.6	%		11.3	%		16.1	%		17.1	%
		Stock-based compensation expense as a percentage of revenue		6.2			7.8			7.4			7.6
		Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue		0.1			0.2			0.1			0.2
		Amortization of purchased intangibles as a percentage of revenue		1.0			0.9			1.1			0.3
	Non-GAAP operating margin			24.9	%		20.2	%		24.7	%		25.2	%

Net income (loss):
	GAAP net income		$	39,914		$	102,734		$	140,923		$	204,068
		Stock-based compensation expense		15,327			16,024			70,790			60,327
		Amortization of stock-based compensation capitalized in software development costs		241			350			963			1,754
		Amortization of purchased intangibles		2,558			1,744			10,231			2,100
		Income tax effect of adjustments		(7,680	)		(86,898	)		(30,861	)		(107,372	)
	Non-GAAP net income		$	50,360		$	33,954		$	192,046		$	160,877

Net income per share, basic:
	GAAP net income per share, basic		$	1.11		$	2.82		$	3.91		$	5.63
		Non-GAAP adjustments to net income		0.29			(1.89	)		1.42			(1.19	)
	Non-GAAP net income per share, basic		$	1.40		$	0.93		$	5.33		$	4.44

Net income per share, diluted:
	GAAP net income per share, diluted		$	1.10		$	2.79		$	3.88		$	5.55
		Non-GAAP adjustments to net income		0.29			(1.87	)		1.41			(1.18	)
	Non-GAAP net income per share, diluted		$	1.39		$	0.92		$	5.29		$	4.37

	Weighted-average shares used in GAAP and non-GAAP per share calculation
		Basic		35,946			36,374			36,013			36,252
		Diluted		36,202			36,783			36,327			36,782

Statement Regarding the Use of Non-GAAP Financial Measures

We use the following non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

Non-GAAP presentation of income from operations, costs and operating expenses, operating margin, net income, and net income per share. These measures exclude certain non-cash or non-recurring items, including stock-based compensation expense, amortization of stock-based compensation capitalized in software development costs, amortization of purchased intangibles, and the related income tax effect of these adjustments, as applicable and described below. Non-GAAP operating margin is calculated as non-GAAP operating income from operations as a percentage of revenue.

We use each of these non-GAAP financial measures internally to assess and compare operating results across reporting periods, for internal budgeting and forecasting purposes, and to evaluate our financial performance. We believe these non-GAAP financial measures also provide useful supplemental information to investors and facilitate the analysis of our operating results and comparison of operating results across reporting periods.

In particular, we believe these non-GAAP financial measures are useful to investors and others in assessing our operating performance due to the following factors:

Stock-based compensation expense and amortization of stock-based compensation capitalized in software development costs. We utilize stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of our stockholders while ensuring long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Amortization of purchased intangibles. We view amortization of purchased intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.

Income tax effects of adjustments. We utilize a fixed long-term projected tax rate in our computation of non-GAAP income tax effects to provide better consistency across interim reporting periods. In projecting this long-term non-GAAP tax rate, we utilize a financial projection that excludes the direct impact of other non-GAAP adjustments. The projected rate, which we have determined to be 21% and 25% for 2025 and 2024, respectively, considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. We periodically re-evaluate this tax rate, as necessary, for significant events, based on relevant tax law changes, and material changes in the forecasted geographic earnings mix.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and can exclude expenses that may have a material impact on our reported financial results. As such, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the tables above. We encourage investors to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.