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AppFolio, Inc. Announces Third Quarter 2025 Financial Results

Strong unit and revenue growth driven by customer acquisition, expansion, and Realm-X adoption through premium tiers and value added services

SANTA BARBARA, Calif., October 30, 2025 -- 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 third quarter ended September 30, 2025.

"I'm pleased with our third quarter results, as we continue to win in the market. We are expanding the value we deliver to our existing customers while effectively capturing new market share," said Shane Trigg, President and CEO. "Our Performance Platform, built on an AI-native architecture, drives real performance outcomes. By embracing our innovations, customers are seeing everyone in their ecosystem thrive. Our success is aligned to our customers' success, and this quarter reflects that our customers are winning."

Financial Highlights for Third Quarter of 2025
•Revenue grew 21% year-over-year to $249 million.
•Total units under management grew 7% year-over-year to 9.1 million.
•GAAP operating income was $35 million, or 14.1% of revenue, compared to operating income of $43 million, or 20.7% of revenue in Q3 2024.
•Non-GAAP operating income was $59 million, or 23.5% of revenue, compared to non-GAAP operating income of $59 million, or 28.7% of revenue, in Q3 2024.
•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.

Financial Outlook
Based on information available as of October 30, 2025, AppFolio's outlook for fiscal year 2025 follows:
•Full year revenue is expected to be in the range of $945 million to $950 million.
•Full year non-GAAP operating margin as a percentage of revenue is expected to be in the range of 23.5% to 24.5%.
•Diluted weighted average shares outstanding are expected to be approximately 36 million for the full year.

Conference Call Information
As previously announced, the Company will host a conference call today, October 30, 2025, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the Company’s third quarter financial results. A live webcast of the call will be available at: https://edge.media-server.com/mmc/p/Ksw66h7s/. To access the call by phone, please go to the following link: https://register-conf.media-server.com/register/BIea6cb65f31dc40be9de34783fcefbaf4, 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 2025 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)
 September 30,
2025		December 31,
2024
Assets
Current assets
Cash and cash equivalents$76,093 $42,504 
Investment securities—current124,056 235,745 
Accounts receivable, net34,346 24,346 
Prepaid expenses and other current assets68,269 32,807 
Total current assets302,764 335,402 
Property and equipment, net22,901 24,483 
Operating lease right-of-use assets16,620 17,472 
Capitalized software development costs, net11,679 15,429 
Goodwill96,410 96,410 
Intangible assets, net41,384 49,057 
Deferred income taxes59,792 76,910 
Long-term investments77,033 2,033 
Other long-term assets11,882 9,482 
Total assets$640,465 $626,678 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$4,112 $2,378 
Accrued employee expenses52,321 30,157 
Accrued expenses19,224 14,658 
Other current liabilities24,775 16,087 
Total current liabilities100,432 63,280 
Operating lease liabilities34,533 37,476 
Other liabilities6,632 6,632 
Total liabilities141,597 107,388 
Stockholders’ equity498,868 519,290 
Total liabilities and stockholders’ equity$640,465 $626,678 




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

 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2025202420252024
Revenue(1)
$249,353 $205,733 $702,630 $590,538 
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)(2)
91,476 71,631 254,801 205,878 
Sales and marketing(2)
35,912 25,406 103,745 77,161 
Research and product development(2)
54,037 40,662 144,469 118,079 
General and administrative(2)
27,446 21,139 72,733 62,525 
Depreciation and amortization5,436 4,327 17,541 14,209 
Total costs and operating expenses214,307 163,165 593,289 477,852 
Income from operations35,046 42,568 109,341 112,686 
Other (loss)/income, net(4)— 41 — 
Interest income, net1,690 4,014 6,109 10,482 
Income before provision for income taxes36,732 46,582 115,491 123,168 
Provision for income taxes3,086 13,576 14,482 21,834 
Net income$33,646 $33,006 $101,009 $101,334 
Net income per common share:
Basic$0.94 $0.91 $2.80 $2.80 
Diluted$0.93 $0.90 $2.78 $2.76 
Weighted average common shares outstanding
Basic35,889 36,306 36,036 36,211 
Diluted36,259 36,756 36,368 36,752 
(1) The following table presents our revenue categories:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2025202420252024
Core solutions$53,752 $46,030 $155,738 $132,974 
Value Added Services192,092 157,726 536,943 451,677 
Other3,509 1,977 9,949 5,887 
Total revenue$249,353 $205,733 $702,630 $590,538 

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

Three Months Ended
September 30,		Nine Months Ended
September 30,
2025202420252024
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)$1,241 $1,126 $3,947 $3,261 
Sales and marketing3,443 2,071 9,336 5,284 
Research and product development9,076 7,471 24,182 19,625 
General and administrative7,033 5,367 17,998 16,133 
Total stock-based compensation expense$20,793 $16,035 $55,463 $44,303 




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2025202420252024
Cash from operating activities
Net income$33,646 $33,006 $101,009 $101,334 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization5,436 4,326 17,541 14,207 
Amortization of operating lease right-of-use assets517 488 1,525 1,541 
Amortization of costs capitalized to obtain revenue contracts, net2,768 2,486 8,187 7,471 
Deferred income taxes30,303 — 17,118 — 
Stock-based compensation, including as amortized20,793 16,035 55,463 44,304 
Other(233)(2,141)(1,281)(6,146)
Changes in operating assets and liabilities:
Accounts receivable(1,803)110 (10,000)(4,872)
Prepaid expenses and other assets(4,251)(6,532)(15,677)(6,360)
Accounts payable894 (728)1,746 (291)
Operating lease liabilities(1,075)(1,778)(3,177)(3,196)
Accrued expenses and other liabilities(988)12,498 4,661 3,601 
Net cash provided by operating activities86,007 57,770 177,115 151,593 
Cash from investing activities
Purchases of available-for-sale investments(102,541)(113,780)(166,575)(265,319)
Proceeds from sales of available-for-sale investments— — 202,662 — 
Proceeds from maturities of available-for-sale investments32,800 69,300 76,620 163,755 
Purchases of property and equipment(1,336)(363)(1,841)(1,821)
Capitalization of software development costs(936)(1,583)(2,414)(4,112)
Purchases of long-term investments— — (75,000)— 
Cash paid in business acquisition, net of cash acquired— — (906)— 
Net cash (used in) provided by investing activities(72,013)(46,426)32,546 (107,497)
Cash from financing activities
Proceeds from stock option exercises2 15 130 3,913 
Tax withholding for net share settlement(12,332)(8,581)(31,430)(35,101)
Proceeds from the issuance of common stock under the employee stock purchase plan951 — 951 — 
Purchase of common stock— — (145,723)— 
Net cash used in financing activities(11,379)(8,566)(176,072)(31,188)
Net increase in cash, cash equivalents and restricted cash2,615 2,778 33,589 12,908 
Cash, cash equivalents and restricted cash
Beginning of period73,728 59,889 42,754 49,759 
End of period$76,343 $62,667 $76,343 $62,667 




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

Three Months Ended
September 30,		Nine Months Ended
September 30,
2025202420252024
Costs and operating expenses:
GAAP cost of revenue (exclusive of depreciation and amortization)$91,476 $71,631 $254,801 $205,878 
Stock-based compensation expense(1,241)(1,126)(3,947)(3,261)
Non-GAAP cost of revenue (exclusive of depreciation and amortization)$90,235 $70,505 $250,854 $202,617 
GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue37 %35 %36 %35 %
Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue36 %34 %36 %34 %
GAAP sales and marketing$35,912 $25,406 $103,745 $77,161 
Stock-based compensation expense(3,443)(2,071)(9,336)(5,284)
Non-GAAP sales and marketing$32,469 $23,335 $94,409 $71,877 
GAAP sales and marketing as a percentage of revenue14 %12 %15 %13 %
Non-GAAP sales and marketing as a percentage of revenue13 %11 %13 %12 %
GAAP research and product development$54,037 $40,662 $144,469 $118,079 
Stock-based compensation expense(9,076)(7,471)(24,182)(19,625)
Non-GAAP research and product development$44,961 $33,191 $120,287 $98,454 
GAAP research and product development as a percentage of revenue22 %20 %21 %20 %
Non-GAAP research and product development as a percentage of revenue18 %16 %17 %17 %
GAAP general and administrative$27,446 $21,139 $72,733 $62,525 
Stock-based compensation expense(7,033)(5,367)(17,998)(16,133)
Non-GAAP general and administrative$20,413 $15,772 $54,735 $46,392 
GAAP general and administrative as a percentage of revenue11 %10 %10 %11 %
Non-GAAP general and administrative as a percentage of revenue8 %8 %8 %8 %
GAAP depreciation and amortization$5,436 $4,327 $17,541 $14,209 
Amortization of stock-based compensation capitalized in software development costs(241)(414)(723)(1,404)
Amortization of purchased intangibles(2,558)(118)(7,673)(355)
Non-GAAP depreciation and amortization$2,637 $3,795 $9,145 $12,450 
GAAP depreciation and amortization as a percentage of revenue2 %2 %2 %2 %
Non-GAAP depreciation and amortization as a percentage of revenue1 %2 %1 %2 %



Three Months Ended
September 30,		Nine Months Ended
September 30,
2025202420252024
Income from operations:
GAAP income from operations$35,046 $42,568 $109,341 $112,686 
Stock-based compensation expense20,793 16,035 55,463 44,303 
Amortization of stock-based compensation capitalized in software development costs241 414 723 1,404 
Amortization of purchased intangibles2,558 118 7,673 355 
Non-GAAP income from operations$58,638 $59,135 $173,200 $158,748 
Operating margin:
GAAP operating margin14.1 %20.7 %15.6 %19.1 %
Stock-based compensation expense as a percentage of revenue8.3 7.7 7.9 7.5 
Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue0.1 0.2 0.1 0.2 
Amortization of purchased intangibles as a percentage of revenue1.0 0.1 1.1 0.1 
Non-GAAP operating margin23.5 %28.7 %24.7 %26.9 %
Net income (loss):
GAAP net income $33,646 $33,006 $101,009 $101,334 
Stock-based compensation expense20,793 16,035 55,463 44,303 
Amortization of stock-based compensation capitalized in software development costs241 414 723 1,404 
Amortization of purchased intangibles2,558 118 7,673 355 
Income tax effect of adjustments(9,582)(2,211)(23,182)(20,474)
Non-GAAP net income$47,656 $47,362 $141,686 $126,922 
Net income per share, basic:
GAAP net income per share, basic $0.94 $0.91 $2.80 $2.80 
Non-GAAP adjustments to net income0.39 0.39 1.13 0.71 
Non-GAAP net income per share, basic $1.33 $1.30 $3.93 $3.51 
Net income per share, diluted:
GAAP net income per share, diluted$0.93 $0.90 $2.78 $2.76 
Non-GAAP adjustments to net income0.38 0.39 1.12 0.69 
Non-GAAP net income per share, diluted$1.31 $1.29 $3.90 $3.45 
Weighted-average shares used in GAAP and non-GAAP per share calculation
Basic35,889 36,306 36,036 36,211 
Diluted36,259 36,756 36,368 36,752 














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.




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