001-37468 | 26-0359894 | ||||
(Commission File Number) | (IRS Employer Identification Number) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Class A Common Stock, $0.0001 par value | APPF | NASDAQ Global Market |
Exhibit Number |
Description | |||||||
99.1 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Date: January 25, 2024 | AppFolio, Inc. | ||||||||||
By: /s/ Fay Sien Goon | |||||||||||
Name: Fay Sien Goon | |||||||||||
Title: Chief Financial Officer |
December 31, 2023 |
December 31, 2022 |
|||||||||||||
Assets | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | 49,509 | $ | 70,769 | ||||||||||
Investment securities—current | 162,196 | 89,297 | ||||||||||||
Accounts receivable, net | 20,709 | 16,503 | ||||||||||||
Prepaid expenses and other current assets | 39,943 | 24,899 | ||||||||||||
Total current assets | 272,357 | 201,468 | ||||||||||||
Investment securities—noncurrent | — | 25,161 | ||||||||||||
Property and equipment, net | 28,362 | 26,110 | ||||||||||||
Operating lease right-of-use assets | 19,285 | 23,485 | ||||||||||||
Capitalized software development costs, net | 21,562 | 35,315 | ||||||||||||
Goodwill | 56,060 | 56,060 | ||||||||||||
Intangible assets, net | 2,357 | 4,833 | ||||||||||||
Other long-term assets | 8,906 | 8,785 | ||||||||||||
Total assets | $ | 408,889 | $ | 381,217 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable | $ | 1,141 | $ | 2,473 | ||||||||||
Accrued employee expenses | 35,567 | 34,376 | ||||||||||||
Accrued expenses | 21,723 | 15,601 | ||||||||||||
Other current liabilities | 11,335 | 8,893 | ||||||||||||
Total current liabilities | 69,766 | 61,343 | ||||||||||||
Operating lease liabilities | 41,114 | 50,237 | ||||||||||||
Other liabilities | 697 | 4,091 | ||||||||||||
Stockholders’ equity | 297,312 | 265,546 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 408,889 | $ | 381,217 |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenue(1) |
$ | 171,830 | $ | 124,058 | $ | 620,445 | $ | 471,883 | |||||||||||||||
Costs and operating expenses: | |||||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization)(2) |
61,275 | 50,342 | 238,076 | 191,826 | |||||||||||||||||||
Sales and marketing(2) |
21,501 | 29,840 | 107,602 | 107,398 | |||||||||||||||||||
Research and product development(2) |
34,847 | 31,152 | 151,364 | 111,118 | |||||||||||||||||||
General and administrative(2) |
19,035 | 24,534 | 93,452 | 100,792 | |||||||||||||||||||
Depreciation and amortization | 6,933 | 8,142 | 28,988 | 33,119 | |||||||||||||||||||
Total costs and operating expenses | 143,591 | 144,010 | 619,482 | 544,253 | |||||||||||||||||||
Income (loss) from operations | 28,239 | (19,952) | 963 | (72,370) | |||||||||||||||||||
Other income (loss), net | 286 | 213 | 3 | 4,469 | |||||||||||||||||||
Interest income, net | 2,404 | 552 | 7,031 | 1,184 | |||||||||||||||||||
Income (loss) before provision for income taxes | 30,929 | (19,187) | 7,997 | (66,717) | |||||||||||||||||||
Provision for income taxes | 661 | 513 | 5,295 | 1,402 | |||||||||||||||||||
Net income (loss) | $ | 30,268 | $ | (19,700) | $ | 2,702 | $ | (68,119) | |||||||||||||||
Net income (loss) per common share | |||||||||||||||||||||||
Basic | $ | 0.85 | $ | (0.56) | $ | 0.08 | $ | (1.95) | |||||||||||||||
Diluted | $ | 0.83 | $ | (0.56) | $ | 0.07 | $ | (1.95) | |||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||
Basic | 35,812 | 35,229 | 35,629 | 35,010 | |||||||||||||||||||
Diluted | 36,596 | 35,229 | 36,417 | 35,010 |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Core solutions | $ | 41,252 | $ | 35,378 | $ | 156,692 | $ | 132,541 | |||||||||||||||
Value Added Services | 127,990 | 86,287 | 454,098 | 327,636 | |||||||||||||||||||
Other | 2,588 | 2,393 | 9,655 | 11,706 | |||||||||||||||||||
Total revenue | $ | 171,830 | $ | 124,058 | $ | 620,445 | $ | 471,883 |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Costs and operating expenses: | |||||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization) | $ | 798 | $ | 767 | $ | 3,703 | $ | 2,640 | |||||||||||||||
Sales and marketing | 1,081 | 3,185 | 5,983 | 8,681 | |||||||||||||||||||
Research and product development | 5,123 | 4,870 | 20,974 | 16,030 | |||||||||||||||||||
General and administrative | 5,430 | 3,904 | 21,704 | 13,584 | |||||||||||||||||||
Total stock-based compensation expense | $ | 12,432 | $ | 12,726 | $ | 52,364 | $ | 40,935 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
| |||||||||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Cash from operating activities | |||||||||||||||||||||||
Net income (loss) | $ | 30,268 | $ | (19,700) | $ | 2,702 | $ | (68,119) | |||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||||||||
Depreciation and amortization | 6,385 | 7,525 | 26,500 | 30,820 | |||||||||||||||||||
Amortization of operating lease right-of-use assets | 514 | 689 | 2,132 | 3,187 | |||||||||||||||||||
Gain on lease modification | — | — | (4,281) | — | |||||||||||||||||||
Impairment, net | — | 2,230 | — | 22,022 | |||||||||||||||||||
Stock-based compensation, including as amortized | 12,980 | 13,343 | 54,852 | 43,234 | |||||||||||||||||||
Gain on sale of business | — | — | — | (4,156) | |||||||||||||||||||
Gain on sale of equity-method investment and recovery of note receivable | — | — | — | (40) | |||||||||||||||||||
Other | (2,084) | 620 | (3,598) | (818) | |||||||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||||
Accounts receivable | (349) | (1,619) | (4,206) | (4,198) | |||||||||||||||||||
Prepaid expenses and other assets | (12,781) | (2,493) | (13,493) | (7,281) | |||||||||||||||||||
Accounts payable | (80) | 945 | (1,565) | 1,176 | |||||||||||||||||||
Accrued expenses and other liabilities | (4,246) | 5,317 | 3,744 | 12,062 | |||||||||||||||||||
Operating lease liabilities | 576 | (776) | (2,504) | (2,524) | |||||||||||||||||||
Net cash provided by operating activities | 31,183 | 6,081 | 60,283 | 25,365 | |||||||||||||||||||
Cash from investing activities | |||||||||||||||||||||||
Purchases of available-for-sale investments | (86,821) | (8,845) | (195,740) | (79,279) | |||||||||||||||||||
Proceeds from sales of available-for-sale investments | — | 994 | 1,013 | 994 | |||||||||||||||||||
Proceeds from maturities of available-for-sale investments | 58,130 | 11,285 | 152,382 | 87,883 | |||||||||||||||||||
Purchases of property and equipment | (3,109) | (597) | (9,041) | (6,540) | |||||||||||||||||||
Capitalization of software development costs | (1,431) | (4,220) | (4,825) | (14,688) | |||||||||||||||||||
Proceeds from sale of business, net of cash divested | — | — | — | 5,124 | |||||||||||||||||||
Proceeds from sale of equity-method investment | — | — | 629 | 40 | |||||||||||||||||||
Net cash used in investing activities | (33,231) | (1,383) | (55,582) | (6,466) | |||||||||||||||||||
Cash from financing activities | |||||||||||||||||||||||
Proceeds from stock option exercises | 410 | 1,895 | 2,595 | 4,474 | |||||||||||||||||||
Tax withholding for net share settlement | (8,790) | (3,056) | (28,556) | (10,637) | |||||||||||||||||||
Net cash used in financing activities | (8,380) | (1,161) | (25,961) | (6,163) | |||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (10,428) | 3,537 | (21,260) | 12,736 | |||||||||||||||||||
Cash, cash equivalents and restricted cash | |||||||||||||||||||||||
Beginning of period | 60,187 | 67,482 | 71,019 | 58,283 | |||||||||||||||||||
End of period | 49,759 | 71,019 | 49,759 | 71,019 |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||
Costs and operating expenses: | |||||||||||||||||||||||||||||
GAAP cost of revenue (exclusive of depreciation and amortization) | $ | 61,275 | $ | 50,342 | $ | 238,076 | $ | 191,826 | |||||||||||||||||||||
Stock-based compensation expense | (798) | (767) | (3,703) | (2,640) | |||||||||||||||||||||||||
Workforce reduction costs | — | — | (2,135) | — | |||||||||||||||||||||||||
Non-GAAP cost of revenue (exclusive of depreciation and amortization) | $ | 60,477 | $ | 49,575 | $ | 232,238 | $ | 189,186 | |||||||||||||||||||||
GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue | 36 | % | 41 | % | 38 | % | 41 | % | |||||||||||||||||||||
Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue | 35 | % | 40 | % | 37 | % | 40 | % | |||||||||||||||||||||
GAAP sales and marketing | $ | 21,501 | $ | 29,840 | $ | 107,602 | $ | 107,398 | |||||||||||||||||||||
Stock-based compensation expense | (1,081) | (3,185) | (5,983) | (8,681) | |||||||||||||||||||||||||
Workforce reduction costs | — | — | (3,401) | — | |||||||||||||||||||||||||
Non-GAAP sales and marketing | $ | 20,420 | $ | 26,655 | $ | 98,218 | $ | 98,717 | |||||||||||||||||||||
GAAP sales and marketing as a percentage of revenue | 13 | % | 24 | % | 17 | % | 23 | % | |||||||||||||||||||||
Non-GAAP sales and marketing as a percentage of revenue | 12 | % | 21 | % | 16 | % | 21 | % | |||||||||||||||||||||
GAAP research and product development | $ | 34,847 | $ | 31,152 | $ | 151,364 | $ | 111,118 | |||||||||||||||||||||
Stock-based compensation expense | (5,123) | (4,870) | (20,974) | (16,030) | |||||||||||||||||||||||||
Workforce reduction costs | — | — | (2,635) | — | |||||||||||||||||||||||||
Non-GAAP research and product development | $ | 29,724 | $ | 26,282 | $ | 127,755 | $ | 95,088 | |||||||||||||||||||||
GAAP research and product development as a percentage of revenue | 20 | % | 25 | % | 24 | % | 24 | % | |||||||||||||||||||||
Non-GAAP research and product development as a percentage of revenue | 17 | % | 21 | % | 21 | % | 20 | % | |||||||||||||||||||||
GAAP general and administrative | $ | 19,035 | $ | 24,534 | $ | 93,452 | $ | 100,792 | |||||||||||||||||||||
Stock-based compensation expense | (5,430) | (3,904) | (21,704) | (13,584) | |||||||||||||||||||||||||
Gain on lease modification | — | — | 4,281 | — | |||||||||||||||||||||||||
CEO separation costs, net | — | — | (11,520) | — | |||||||||||||||||||||||||
Impairment, net | — | (2,230) | — | (22,022) | |||||||||||||||||||||||||
Workforce reduction costs | — | — | (2,106) | — | |||||||||||||||||||||||||
Non-GAAP general and administrative | $ | 13,605 | $ | 18,400 | $ | 62,403 | $ | 65,186 | |||||||||||||||||||||
GAAP general and administrative as a percentage of revenue | 11 | % | 20 | % | 15 | % | 21 | % | |||||||||||||||||||||
Non-GAAP general and administrative as a percentage of revenue | 8 | % | 15 | % | 10 | % | 14 | % | |||||||||||||||||||||
GAAP depreciation and amortization | $ | 6,933 | $ | 8,142 | $ | 28,988 | $ | 33,119 | |||||||||||||||||||||
Amortization of stock-based compensation capitalized in software development costs | (548) | (618) | (2,489) | (2,299) | |||||||||||||||||||||||||
Amortization of purchased intangibles | (619) | (977) | (2,476) | (4,373) | |||||||||||||||||||||||||
Non-GAAP depreciation and amortization | $ | 5,766 | $ | 6,547 | $ | 24,023 | $ | 26,447 | |||||||||||||||||||||
GAAP depreciation and amortization as a percentage of revenue | 4 | % | 7 | % | 5 | % | 7 | % | |||||||||||||||||||||
Non-GAAP depreciation and amortization as a percentage of revenue | 3 | % | 5 | % | 4 | % | 6 | % |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||
Income (loss) from operations: | |||||||||||||||||||||||||||||
GAAP income (loss) from operations | $ | 28,239 | $ | (19,952) | $ | 963 | $ | (72,370) | |||||||||||||||||||||
Stock-based compensation expense | 12,432 | 12,726 | 52,364 | 40,935 | |||||||||||||||||||||||||
Amortization of stock-based compensation capitalized in software development costs | 548 | 618 | 2,489 | 2,299 | |||||||||||||||||||||||||
Amortization of purchased intangibles | 619 | 977 | 2,476 | 4,373 | |||||||||||||||||||||||||
Impairment, net | — | 2,230 | — | 22,022 | |||||||||||||||||||||||||
Gain on lease modification | — | — | (4,281) | — | |||||||||||||||||||||||||
CEO separation costs, net | — | — | 11,520 | — | |||||||||||||||||||||||||
Workforce reduction costs | — | — | 10,278 | — | |||||||||||||||||||||||||
Non-GAAP income (loss) from operations | $ | 41,838 | $ | (3,401) | $ | 75,809 | $ | (2,741) | |||||||||||||||||||||
Operating margin: | |||||||||||||||||||||||||||||
GAAP operating margin | 16.4 | % | (16.1) | % | 0.2 | % | (15.3) | % | |||||||||||||||||||||
Stock-based compensation expense as a percentage of revenue | 7.2 | 10.3 | 8.4 | 8.7 | |||||||||||||||||||||||||
Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue | 0.3 | 0.5 | 0.4 | 0.5 | |||||||||||||||||||||||||
Amortization of purchased intangibles as a percentage of revenue | 0.4 | 0.8 | 0.4 | 0.9 | |||||||||||||||||||||||||
Impairment, net as a percentage of revenue | — | 1.8 | — | 4.7 | |||||||||||||||||||||||||
Gain on lease modification as a percentage of revenue | — | — | (0.7) | — | |||||||||||||||||||||||||
CEO separation costs, net as a percentage of revenue | — | — | 1.9 | — | |||||||||||||||||||||||||
Workforce reduction costs | — | — | 1.8 | — | |||||||||||||||||||||||||
Non-GAAP operating margin | 24.3 | % | (2.7) | % | 12.2 | % | (0.6) | % | |||||||||||||||||||||
Net income (loss): | |||||||||||||||||||||||||||||
GAAP net income (loss) | $ | 30,268 | $ | (19,700) | $ | 2,702 | $ | (68,119) | |||||||||||||||||||||
Stock-based compensation expense | 12,432 | 12,726 | 52,364 | 40,935 | |||||||||||||||||||||||||
Amortization of stock-based compensation capitalized in software development costs | 548 | 618 | 2,489 | 2,299 | |||||||||||||||||||||||||
Amortization of purchased intangibles | 619 | 977 | 2,476 | 4,373 | |||||||||||||||||||||||||
Impairment, net | — | 2,230 | — | 22,022 | |||||||||||||||||||||||||
Gain on lease modification | — | — | (4,281) | — | |||||||||||||||||||||||||
CEO separation costs, net | — | — | 11,520 | — | |||||||||||||||||||||||||
Workforce reduction costs | — | — | 10,278 | — | |||||||||||||||||||||||||
Gain on sale of business | — | — | — | (4,156) | |||||||||||||||||||||||||
Gain on sale of equity-method investment | — | — | — | (40) | |||||||||||||||||||||||||
Income tax effect of adjustments | (11,556) | 1,363 | (15,415) | 2,087 | |||||||||||||||||||||||||
Non-GAAP net income (loss) | $ | 32,311 | $ | (1,786) | $ | 62,133 | $ | (599) | |||||||||||||||||||||
Net income (loss) per share, basic: | |||||||||||||||||||||||||||||
GAAP net income (loss) per share, basic | $ | 0.85 | $ | (0.56) | $ | 0.08 | $ | (1.95) | |||||||||||||||||||||
Non-GAAP adjustments to net income (loss) | 0.05 | 0.51 | 1.66 | 1.93 | |||||||||||||||||||||||||
Non-GAAP net income (loss) per share, basic | $ | 0.90 | $ | (0.05) | $ | 1.74 | $ | (0.02) | |||||||||||||||||||||
Net income (loss) income per share, diluted: | |||||||||||||||||||||||||||||
GAAP net income (loss) per share, diluted | $ | 0.83 | $ | (0.56) | $ | 0.07 | $ | (1.95) | |||||||||||||||||||||
Non-GAAP adjustments to net income (loss) | 0.05 | 0.51 | 1.64 | 1.93 | |||||||||||||||||||||||||
Non-GAAP net income (loss) per share, diluted | $ | 0.88 | $ | (0.05) | $ | 1.71 | $ | (0.02) | |||||||||||||||||||||
Weighted-average shares used in GAAP per share calculation | |||||||||||||||||||||||||||||
Basic | 35,812 | 35,229 | 35,629 | 35,010 | |||||||||||||||||||||||||
Diluted | 36,596 | 35,229 | 36,417 | 35,010 | |||||||||||||||||||||||||
Weighted-average shares used in non-GAAP per share calculation | |||||||||||||||||||||||||||||
Basic | 35,812 | 35,229 | 35,629 | 35,010 | |||||||||||||||||||||||||
Diluted | 36,596 | 35,229 | 36,417 | 35,010 |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||
Free cash flow: | |||||||||||||||||||||||||||||
GAAP net cash provided by operating activities | $ | 31,183 | $ | 6,081 | $ | 60,283 | $ | 25,365 | |||||||||||||||||||||
Purchases of property and equipment | (3,109) | (597) | (9,041) | (6,540) | |||||||||||||||||||||||||
Capitalized software development costs | (1,431) | (4,220) | (4,825) | (14,688) | |||||||||||||||||||||||||
CEO separation costs payment | — | — | 14,926 | — | |||||||||||||||||||||||||
Partial lease termination payment | — | — | 2,851 | — | |||||||||||||||||||||||||
Severance payments for workforce reduction | 7,624 | — | 9,425 | — | |||||||||||||||||||||||||
Non-GAAP free cash flow | $ | 34,267 | $ | 1,264 | $ | 73,619 | $ | 4,137 | |||||||||||||||||||||
Free cash flow margin: | |||||||||||||||||||||||||||||
GAAP net cash provided by operating activities as a percentage of revenue | 18.1 | % | 4.9 | % | 9.7 | % | 5.4 | % | |||||||||||||||||||||
Purchases of property and equipment as a percentage of revenue | (1.8) | (0.5) | (1.4) | (1.4) | |||||||||||||||||||||||||
Capitalized software development costs as a percentage of revenue | (0.8) | (3.4) | (0.8) | (3.1) | |||||||||||||||||||||||||
CEO separation costs payment | — | — | 2.4 | — | |||||||||||||||||||||||||
Partial lease termination payment | — | — | 0.5 | — | |||||||||||||||||||||||||
Severance payments for workforce reduction | 4.4 | — | 1.5 | — | |||||||||||||||||||||||||
Non-GAAP free cash flow margin | 19.9 | % | 1.0 | % | 11.9 | % | 0.9 | % |