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., Oct. 30, 2025 (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 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—current		124,056		235,745
Accounts receivable, net		34,346		24,346
Prepaid expenses and other current assets		68,269		32,807
Total current assets		302,764		335,402
Property and equipment, net		22,901		24,483
Operating lease right-of-use assets		16,620		17,472
Capitalized software development costs, net		11,679		15,429
Goodwill		96,410		96,410
Intangible assets, net		41,384		49,057
Deferred income taxes		59,792		76,910
Long-term investments		77,033		2,033
Other long-term assets		11,882		9,482
Total assets	$	640,465	$	626,678
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	4,112	$	2,378
Accrued employee expenses		52,321		30,157
Accrued expenses		19,224		14,658
Other current liabilities		24,775		16,087
Total current liabilities		100,432		63,280
Operating lease liabilities		34,533		37,476
Other liabilities		6,632		6,632
Total liabilities		141,597		107,388
Stockholders’ equity		498,868		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,
		2025			2024		2025		2024
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 amortization		5,436			4,327		17,541		14,209
Total costs and operating expenses		214,307			163,165		593,289		477,852
Income from operations		35,046			42,568		109,341		112,686
Other (loss)/income, net		(4	)		—		41		—
Interest income, net		1,690			4,014		6,109		10,482
Income before provision for income taxes		36,732			46,582		115,491		123,168
Provision for income taxes		3,086			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
Basic		35,889			36,306		36,036		36,211
Diluted		36,259			36,756		36,371		36,752

⁽¹⁾ The following table presents our revenue categories:

	Three Months Ended September 30,				Nine Months Ended September 30,
		2025		2024		2025		2024
Core solutions	$	53,752	$	46,030	$	155,738	$	132,974
Value Added Services		192,092		157,726		536,943		451,677
Other		3,509		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,
		2025		2024		2025		2024
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)	$	1,241	$	1,126	$	3,947	$	3,261
Sales and marketing		3,443		2,071		9,336		5,284
Research and product development		9,076		7,471		24,182		19,625
General and administrative		7,033		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,
		2025			2024			2025			2024
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 amortization		5,436			4,326			17,541			14,207
Amortization of operating lease right-of-use assets		517			488			1,525			1,541
Amortization of costs capitalized to obtain revenue contracts, net		2,768			2,486			8,187			7,471
Deferred income taxes		30,303			—			17,118			—
Stock-based compensation, including as amortized		20,793			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 payable		894			(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 activities		86,007			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 investments		32,800			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 exercises		2			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 plan		951			—			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 cash		2,615			2,778			33,589			12,908
Cash, cash equivalents and restricted cash
Beginning of period		73,728			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,
				2025			2024			2025			2024
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 revenue			37	%		35	%		36	%		35	%
	Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue			36	%		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 revenue			14	%		12	%		15	%		13	%
	Non-GAAP sales and marketing as a percentage of revenue			13	%		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 revenue			22	%		20	%		21	%		20	%
	Non-GAAP research and product development as a percentage of revenue			18	%		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 revenue			11	%		10	%		10	%		11	%
	Non-GAAP general and administrative as a percentage of revenue			8	%		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 revenue			2	%		2	%		2	%		2	%
	Non-GAAP depreciation and amortization as a percentage of revenue			1	%		2	%		1	%		2	%

			Three Months Ended September 30,						Nine Months Ended September 30,
				2025			2024			2025			2024
Income from operations:
	GAAP income from operations		$	35,046		$	42,568		$	109,341		$	112,686
		Stock-based compensation expense		20,793			16,035			55,463			44,303
		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 income from operations		$	58,638		$	59,135		$	173,200		$	158,748

Operating margin:
	GAAP operating margin			14.1	%		20.7	%		15.6	%		19.1	%
		Stock-based compensation expense as a percentage of revenue		8.3			7.7			7.9			7.5
		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			0.1			1.1			0.1
	Non-GAAP operating margin			23.5	%		28.7	%		24.7	%		26.9	%

Net income (loss):
	GAAP net income		$	33,646		$	33,006		$	101,009		$	101,334
		Stock-based compensation expense		20,793			16,035			55,463			44,303
		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
		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 income		0.39			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 income		0.38			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
		Basic		35,889			36,306			36,036			36,211
		Diluted		36,259			36,756			36,371			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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