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AppFolio, Inc. Announces Second Quarter 2026 Financial Results
AppFolio, Inc. Announces Second Quarter 2026 Financial
About this update from Appfolio, Inc.
Strong 2026 Continues with 19% Revenue Growth and Expanding Profitability SANTA BARBARA, Calif., July 23, 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 second quarter ended June 30, 2026. "Our Q2 results continue to reflect our momentum with new and existing customers," said Shane Trigg, Chairman and CEO. "For the first time, we've crossed $1 billion in revenue on a trailing twelve-month basis, a milestone we believe reflects the success customers are having by adopting our products and services. The operators on our platform are embracing AI that works because it knows their business and drives real performance outcomes. That is what Real Estate Performance Management delivers." Financial Highlights for Second Quarter of 2026 Revenue grew 19% year-over-year to $281 million. Total units under management grew 8% year-over-year to 9.6 million. GAAP operating income grew 31% to $53 million, or 18.8% of revenue, compared to $41 million, or 17.2% of revenue in Q2 2025. Non-GAAP operating income grew 24% to $76 million, or 27.1% of revenue, compared to $62 million, or 26.2% of revenue in Q2 2025. Net cash provided by operating activities was $88 million, or 31.2% of revenue, compared to $53 million, or 22.3% of revenue in Q2 2025. Financial Outlook Based on information available as of July 23, 2026, AppFolio's outlook for fiscal year 2026 follows: Full year revenue range is increasing to $1.117 - $1.127 billion. Full year non-GAAP operating margin range as a percentage of revenue is increasing to 26.5% - 28.0%. Diluted weighted average shares outstanding are expected to be approximately 36 million for the full year. Conference Call Infor mation As previously announced, the Company will host a conference call today, July 23, 2026, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the Company’s second quarter financial results. A live webcast of the call will be available at: https://edge.media-server.com/mmc/p/iuf6q6wf/ . To access the call by phone, please go to the following link: https://register-conf.media-server.com/register/BIf2eada34bb9140a98f952424c8f0d5f1 , 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 [email protected] 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 AI and its 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, 2025, which was filed with the SEC on February 5, 2026, 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) June 30, 2026 December 31, 2025 Assets Current assets Cash and cash equivalents $ 217,401 $ 106,967 Investment securities—current 4,284 144,256 Accounts receivable, net 50,442 36,873 Prepaid expenses and other current assets 53,058 65,218 Total current assets 325,185 353,314 Property and equipment, net 21,464 23,228 Operating lease right-of-use assets 14,798 15,924 Capitalized software development costs, net 11,444 11,324 Goodwill 96,410 96,410 Intangible assets, net 33,711 38,826 Deferred income taxes 42,819 58,823 Long-term investments 87,668 77,033 Other long-term assets 14,872 14,085 Total assets $ 648,371 $ 688,967 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 4,776 $ 4,123 Accrued employee expenses 30,010 59,774 Accrued expenses 26,990 20,829 Other current liabilities 23,106 22,121 Total current liabilities 84,882 106,847 Operating lease liabilities 30,660 33,287 Other liabilities 6,687 6,254 Total liabilities 122,229 146,388 Stockholders’ equity 526,142 542,579 Total liabilities and stockholders’ equity $ 648,371 $ 688,967 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue (1) $ 281,124 $ 235,575 $ 543,338 $ 453,277 Costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization) (2) 102,595 83,827 197,570 163,325 Sales and marketing (2) 43,944 36,776 81,445 67,833 Research and product development (2) 50,997 46,674 100,626 90,432 General and administrative (2) 25,626 21,936 49,967 45,287 Depreciation and amortization 4,985 5,850 10,005 12,105 Total costs and operating expenses 228,147 195,063 439,613 378,982 Income from operations 52,977 40,512 103,725 74,295 Other (loss) income, net (1 ) (11 ) 568 45 Interest income, net 1,435 1,466 3,219 4,419 Income before provision for income taxes 54,411 41,967 107,512 78,759 Provision for income taxes 12,867 5,987 23,544 11,396 Net income $ 41,544 $ 35,980 $ 83,968 $ 67,363 Net income per common share: Basic $ 1.17 $ 1.00 $ 2.36 $ 1.87 Diluted $ 1.17 $ 0.99 $ 2.36 $ 1.85 Weighted average common shares outstanding Basic 35,391 35,922 35,544 36,111 Diluted 35,461 36,204 35,635 36,425 (1) The following table presents our revenue categories: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Subscription Services $ 59,800 $ 52,473 $ 118,022 $ 101,986 Value Added Services 219,467 180,145 420,830 344,851 Other 1,857 2,957 4,486 6,440 Total revenue $ 281,124 $ 235,575 $ 543,338 $ 453,277 (2) Includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization) $ 1,246 $ 1,419 $ 2,334 $ 2,706 Sales and marketing 3,633 3,045 6,973 5,893 Research and product development 8,918 8,176 16,800 15,107 General and administrative 6,674 5,659 12,353 10,964 Total stock-based compensation expense $ 20,471 $ 18,299 $ 38,460 $ 34,670 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cash from operating activities Net income $ 41,544 $ 35,980 $ 83,968 $ 67,363 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,985 5,850 10,005 12,105 Amortization of operating lease right-of-use assets 566 507 1,126 1,008 Amortization of costs capitalized to obtain revenue contracts, net 3,300 2,699 6,468 5,419 Deferred income taxes 7,976 (7,644 ) 16,004 (13,185 ) Stock-based compensation, including as amortized 20,471 18,299 38,460 34,670 Other — (131 ) (523 ) (1,048 ) Changes in operating assets and liabilities: Accounts receivable (6,475 ) (5,081 ) (13,918 ) (8,197 ) Prepaid expenses and other assets (1,887 ) (5,966 ) (10,093 ) (11,426 ) Accounts payable 1,035 (1,694 ) 653 852 Operating lease liabilities (1,204 ) (1,051 ) (2,384 ) (2,102 ) Accrued expenses and other liabilities 17,293 10,875 (7,864 ) 5,649 Net cash provided by operating activities 87,604 52,643 121,902 91,108 Cash from investing activities Purchases of available-for-sale investments (3,277 ) (1,732 ) (45,940 ) (64,034 ) Proceeds from sales of available-for-sale investments — 99,944 140,154 202,662 Proceeds from maturities of available-for-sale investments 3,230 1,670 45,590 43,820 Purchases of property and equipment 3 (275 ) (228 ) (505 ) Capitalization of software development costs (1,250 ) (842 ) (2,554 ) (1,478 ) Purchases of long-term investments (10,000 ) (75,000 ) (10,000 ) (75,000 ) Cash paid in business acquisition, net of cash acquired — — — (906 ) Net cash (used in) provided by investing activities (11,294 ) 23,765 127,022 104,559 Cash from financing activities Proceeds from stock option exercises and the issuance of common stock under the Employee Stock Purchase Plan — 117 998 128 Tax withholding for net share settlement (6,321 ) (10,020 ) (14,478 ) (19,098 ) Purchase of common stock — (49,960 ) (125,010 ) (145,723 ) Net cash used in financing activities (6,321 ) (59,863 ) (138,490 ) (164,693 ) Net increase in cash, cash equivalents and restricted cash 69,989 16,545 110,434 30,974 Cash, cash equivalents and restricted cash Beginning of period 147,662 57,183 107,217 42,754 End of period $ 217,651 $ 73,728 $ 217,651 $ 73,728 RECONCILIATION FROM GAAP TO NON-GAAP RESULTS (UNAUDITED) (in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Costs and operating expenses: GAAP cost of revenue (exclusive of depreciation and amortization) $ 102,595 $ 83,827 $ 197,570 $ 163,325 Stock-based compensation expense (1,246 ) (1,419 ) (2,334 ) (2,706 ) Non-GAAP cost of revenue (exclusive of depreciation and amortization) $ 101,349 $ 82,408 $ 195,236 $ 160,619 GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue 36 % 36 % 36 % 36 % Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue 36 % 35 % 36 % 35 % GAAP sales and marketing $ 43,944 $ 36,776 $ 81,445 $ 67,833 Stock-based compensation expense (3,633 ) (3,045 ) (6,973 ) (5,893 ) Non-GAAP sales and marketing $ 40,311 $ 33,731 $ 74,472 $ 61,940 GAAP sales and marketing as a percentage of revenue 16 % 16 % 15 % 15 % Non-GAAP sales and marketing as a percentage of revenue 14 % 14 % 14 % 14 % GAAP research and product development $ 50,997 $ 46,674 $ 100,626 $ 90,432 Stock-based compensation expense (8,918 ) (8,176 ) (16,800 ) (15,107 ) Non-GAAP research and product development $ 42,079 $ 38,498 $ 83,826 $ 75,325 GAAP research and product development as a percentage of revenue 18 % 20 % 19 % 20 % Non-GAAP research and product development as a percentage of revenue 15 % 16 % 15 % 17 % GAAP general and administrative $ 25,626 $ 21,936 $ 49,967 $ 45,287 Stock-based compensation expense (6,674 ) (5,659 ) (12,353 ) (10,964 ) Non-GAAP general and administrative $ 18,952 $ 16,277 $ 37,614 $ 34,323 GAAP general and administrative as a percentage of revenue 9 % 9 % 9 % 10 % Non-GAAP general and administrative as a percentage of revenue 7 % 7 % 7 % 8 % GAAP depreciation and amortization $ 4,985 $ 5,850 $ 10,005 $ 12,105 Amortization of stock-based compensation capitalized in software development costs (241 ) (241 ) (482 ) (482 ) Amortization of purchased intangibles (2,558 ) (2,558 ) (5,115 ) (5,115 ) Non-GAAP depreciation and amortization $ 2,186 $ 3,051 $ 4,408 $ 6,508 GAAP depreciation and amortization as a percentage of revenue 2 % 2 % 2 % 3 % Non-GAAP depreciation and amortization as a percentage of revenue 1 % 1 % 1 % 1 % Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Income from operations: GAAP income from operations $ 52,977 $ 40,512 $ 103,725 $ 74,295 Stock-based compensation expense 20,471 18,299 38,460 34,670 Amortization of stock-based compensation capitalized in software development costs 241 241 482 482 Amortization of purchased intangibles 2,558 2,558 5,115 5,115 Non-GAAP income from operations $ 76,247 $ 61,610 $ 147,782 $ 114,562 Operating margin: GAAP operating margin 18.8 % 17.2 % 19.1 % 16.4 % Stock-based compensation expense as a percentage of revenue 7.3 7.8 7.1 7.7 Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue 0.1 0.1 0.1 0.1 Amortization of purchased intangibles as a percentage of revenue 0.9 1.1 0.9 1.1 Non-GAAP operating margin 27.1 % 26.2 % 27.2 % 25.3 % Net income (loss): GAAP net income $ 41,544 $ 35,980 $ 83,968 $ 67,363 Stock-based compensation expense 20,471 18,299 38,460 34,670 Amortization of stock-based compensation capitalized in software development costs 241 241 482 482 Amortization of purchased intangibles 2,558 2,558 5,115 5,115 Income tax effect of adjustments (4,223 ) (7,257 ) (9,801 ) (13,599 ) Non-GAAP net income $ 60,591 $ 49,821 $ 118,224 $ 94,031 Net income per share, basic: GAAP net income per share, basic $ 1.17 $ 1.00 $ 2.36 $ 1.87 Non-GAAP adjustments to net income 0.54 0.39 0.97 0.73 Non-GAAP net income per share, basic $ 1.71 $ 1.39 $ 3.33 $ 2.60 Net income per share, diluted: GAAP net income per share, diluted $ 1.17 $ 0.99 $ 2.36 $ 1.85 Non-GAAP adjustments to net income 0.54 0.39 0.96 0.73 Non-GAAP net income per share, diluted $ 1.71 $ 1.38 $ 3.32 $ 2.58 Weighted-average shares used in GAAP and non-GAAP per share calculation Basic 35,391 35,922 35,544 36,111 Diluted 35,461 36,204 35,635 36,425 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 22% and 21% for 2026 and 2025, 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.