Core Solutions

Value Added Services

Other

Total Revenue

913c3c7fecba78044d9df19d8e209d641a9492495985d8d8fbe82505ffa16123

The **significant increase** in Investment securities—current in Q3 2024 is primarily attributed to the company's **increased purchases of available-for-sale investment securities** to support its liquidity and capital needs. Additionally, the **fair value** of these securities experienced a **slight increase** due to market conditions, resulting in unrealized gains during the period.  **[0001433195-24-000127_appf-20240930.htm:10]** **[0001433195-24-000127_appf-20240930.htm:3]** **[0001433195-24-000127_appf-20240930.htm:29]** 

Why did Investment securities—current nearly double in Q3 2024?

The significant increase in total assets in Q4 2024 was driven by several factors. The acquisition of Move EZ, Inc. led to substantial increases in **goodwill** (which rose from **$56,060 thousand** to **$96,410 thousand**) and **intangible assets, net** (up from **$2,357 thousand** to **$49,057 thousand**).  **[0001433195-25-000013_appf-20241231.htm:64]** **[0001433195-25-000013_appf-20241231.htm:51]**  Additionally, there was a notable jump in **deferred income taxes** to **$76,910 thousand** due to the release of valuation allowances on previously unrecognized deferred tax assets.  **[0001433195-25-000013_appf-20241231.htm:64]** **[0001433195-25-000013_appf-20241231.htm:53]**  Lastly, an increase in **investment securities (current)**, from **$162,196 thousand** to **$235,745 thousand**, further contributed to the rise in total assets.  **[0001433195-25-000013_appf-20241231.htm:64]** **[0001433195-25-000013_appf-20241231.htm:79]** 

What drove the significant increase in Total assets in Q4 2024?

The surge in **Intangible assets, net** in Q4 2024 was primarily driven by the **acquisition of LiveEasy**. This acquisition resulted in an increase of **goodwill by $40,350,000**, which substantially contributed to the rise in intangible assets from **$2,357,000 in Q4 2023** to **$49,057,000 in Q4 2024**.  **[0001433195-25-000013_appf-20241231.htm:82]** **[0001433195-25-000005_appfq42024exhibit991.htm:3]** 

What explains the sudden surge in Intangible assets, net in Q4 2024?

The **Goodwill** increased significantly in **Q4 2024** because the company acquired **LiveEasy**, which added **$40,350 thousand** to the goodwill balance.  **[0001433195-25-000013_appf-20241231.htm:82]** 

Why did Goodwill jump so high in Q4 2024?

The **massive jump** in **Retained earnings** in Q4 2024 was primarily driven by the company's **net income of $204,068 thousand** during fiscal 2024, which substantially increased the accumulated retained earnings from **$85,980 thousand** at the end of 2023 to **$290,048 thousand** at the end of 2024.  **[0001433195-25-000013_appf-20241231.htm:66]** 

What factors contributed to the massive jump in Retained earnings in Q4 2024?

121042ee53357aebfd5952d92f361eb13cbc16e7d8180839a7c0c3ae5a3b88b1

The **significant increase** in revenue for Q1 2024 was primarily driven by multiple factors. **Value-added services** saw a **47% growth**, largely due to increased customer adoption of services such as online payments and the shift from waiving eCheck fees, which substantially boosted revenue from this segment.  **[0001433195-24-000054_appf-20240331.htm:19]** **[APPF_3380814_0]** **[APPF_3380814_4]**  Additionally, there was an **11% growth** in **units under management**, which led to higher utilization of subscription and usage-based services.  **[0001433195-24-000052_appfq12024exhibit991.htm:0]** **[APPF_3380814_4]**  Other contributing factors included a **6% increase** in the customer base and a rise in **online transactions**, both of which further amplified overall revenue growth.  **[0001433195-24-000054_appf-20240331.htm:19]** **[APPF_3380814_4]** 

Why did revenue increase so significantly in Q1 2024?

The turnaround in operating income in Q1 2024 was driven by **strong revenue growth**, **effective cost management**, and **improved operating efficiency**. Specifically, revenue increased by **38%**, fueled by higher usage of payments, tenant screening, and risk mitigation services along with an **11% growth** in the number of property management units, while operating expenses, including a **17% reduction** in sales and marketing costs due to lower personnel and advertising expenses, helped improve margins and efficiency.  **[0001433195-24-000052_appfq12024exhibit991.htm:0]** **[0001433195-24-000054_appf-20240331.htm:19]** **[0001433195-24-000054_appf-20240331.htm:3]** **[0001433195-24-000054_appf-20240331.htm:19]** 

What drove the turnaround in operating income in Q1 2024?

The dramatic surge in full-year **net income** in FY 2024 was driven by several key factors. **Revenue growth** increased by **28%**, reaching **$794,202 thousand** compared to **$620,445 thousand** in FY 2023, propelled by higher usage of electronic payment, tenant screening, risk mitigation services, and a **6% increase** in property management units.  **[0001433195-25-000013_appf-20241231.htm:65]** **[0001433195-25-000013_appf-20241231.htm:50]**  Additionally, **operating income** improved dramatically—from only **$963 thousand** in FY 2023 to **$135,644 thousand** in FY 2024, thanks to costs that lagged behind revenue increases and enhanced cost management.  **[0001433195-25-000013_appf-20241231.htm:65]** **[0001433195-25-000005_appfq42024exhibit991.htm:0]**  The impact of an **income tax benefit**, which reversed a previous tax provision from **$5,295 thousand** to a benefit of **$53,746 thousand**, also played a major role.  **[0001433195-25-000013_appf-20241231.htm:53]**  Further contributing were the nearly **doubled interest income**—increasing by **99%** to **$13,981 thousand**—and strategic **cost management measures**, including an **8% decrease** in general and administrative expenses and a **33% reduction** in depreciation and amortization expenses.  **[0001433195-25-000013_appf-20241231.htm:53]** **[0001433195-25-000013_appf-20241231.htm:52]** 

What factors contributed to the dramatic surge in full-year net income in FY 2024?

EPS in Q4 2024 was significantly higher because AppFolio experienced a dramatic improvement in its net income, which was driven by several key factors. The company reported a **net income of $204.1 million** in FY2024 compared to much lower figures in prior periods, boosting earnings per share. This improvement was supported by strong revenue growth with a **28% increase year-over-year** to **$794.2 million** and enhanced operating efficiencies, as evidenced by improved GAAP and non-GAAP operating margins. Additionally, a **$53.7 million income tax benefit** from the release of a deferred tax asset valuation allowance further amplified net income, while a relatively stable share count ensured that the higher net income translated effectively into a higher EPS.  **[0001433195-25-000013_appf-20241231.htm:76]** **[0001433195-25-000013_appf-20241231.htm:65]** **[0001433195-25-000005_appfq42024exhibit991.htm:0]** **[APPF_3413787_3]** **[0001433195-25-000013_appf-20241231.htm:53]** 

Why was EPS significantly higher in Q4 2024?

3377164d28f0c656385f2f04e139f5d2fc3a5308b2e26410229cf8b60bbd41a4

Operating cash flow in Q1 2024 increased significantly over Q1 2023 primarily because the company turned a substantial net income improvement—from a loss of **$(35,110) thousand** in Q1 2023 to a profit of **$38,663 thousand** in Q1 2024—which drove enhanced cash inflows.  **[0001433195-24-000054_appf-20240331.htm:6]** **[0001433195-24-000052_appfq12024exhibit991.htm:4]**  Additionally, favorable changes in operating assets and liabilities, such as a **decrease in accrued expenses and other liabilities** (contributing a reversal from an increase of **$22,923 thousand** in Q1 2023 to a decrease of **$(16,730) thousand** in Q1 2024) and a positive impact from prepaid expenses and other current assets (improving by **$8,849 thousand**), further contributed to this improvement.  **[0001433195-24-000054_appf-20240331.htm:6]** **[0001433195-24-000052_appfq12024exhibit991.htm:4]**  Improved operational efficiency, including better cash collections from customers due to higher adoption of value-added services, also supported the higher operating cash flow in Q1 2024.  **[0001433195-24-000054_appf-20240331.htm:22]** 

Why is operating cash flow in Q1 2024 so much higher than in Q1 2023?

The significant increase in Q3 2024 operating cash flow was primarily driven by **improved cash collections from customers**, fueled by **growth in revenue**. This revenue boost was largely attributed to the increased usage of AppFolio's **core solutions** and **value-added services** such as **payments**, **tenant screening**, and **risk mitigation services**.  **[0001433195-24-000125_appfq32024exhibit991.htm:0]** **[0001433195-24-000125_appfq32024exhibit991.htm:5]** **[0001433195-24-000127_appf-20240930.htm:27]** 

What contributed to the significant increase in Q3 2024 operating cash flow?

The operating cash flow nearly tripled in FY 2024 because the company saw **substantial growth in net income**—increasing from **$2,702 thousand** in FY 2023 to **$204,068 thousand** in FY 2024—combined with **improved cash collections** and **reduced operating expenses** (notably, lower one-time costs such as CEO separation and severance payments). Additionally, a rise in **stock-based compensation** contributed to favorable non-cash adjustments, culminating in a significant boost in operating cash flow.  **[0001433195-25-000013_appf-20241231.htm:54]** **[0001433195-25-000013_appf-20241231.htm:67]** **[0001433195-25-000013_appf-20241231.htm:65]** **[0001433195-25-000013_appf-20241231.htm:52]** 

How did FY 2024 operating cash flow nearly triple compared to FY 2023?

3823b1b56b13baf464f1d732c19b6c3f27391d6539b7cbe4a1cd8055d7928fe6

Net income (loss) [USD, thousands]

Depreciation and amortization [USD, thousands]

Amortization of operating lease right-of-use assets [USD, thousands]

Stock-based compensation, including as amortized [USD, thousands]

Other [USD, thousands]

Net cash provided by operating activities [USD, thousands]

Purchases of available-for-sale investments [USD, thousands]

Proceeds from sales of available-for-sale investments [USD, thousands]

Proceeds from maturities of available-for-sale investments [USD, thousands]

Purchases of property and equipment [USD, thousands]

Capitalization of software development costs [USD, thousands]

Cash paid in business acquisition, net of cash acquired [USD, thousands]

Net cash used in investing activities [USD, thousands]

Proceeds from stock option exercises [USD, thousands]

Tax withholding for net share settlement [USD, thousands]

Net cash used in financing activities [USD, thousands]

Net (decrease) increase in cash, cash equivalents and restricted cash [USD, thousands]

Deferred income taxes [USD, thousands]

Accounts receivable [USD, thousands]

Prepaid expenses and other assets [USD, thousands]

Accounts payable [USD, thousands]

Operating lease liabilities [USD, thousands]

Accrued expenses and other liabilities [USD, thousands]

Beginning of period [USD, thousands]

End of period [USD, thousands]

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Cash and cash equivalents (USD, thousands)

Investment securities—current (USD, thousands)

Accounts receivable, net (USD, thousands)

Prepaid expenses and other current assets (USD, thousands)

Total current assets (USD, thousands)

Property and equipment, net (USD, thousands)

Operating lease right-of-use assets (USD, thousands)

Capitalized software development costs, net (USD, thousands)

Goodwill (USD, thousands)

Intangible assets, net (USD, thousands)

Deferred income taxes (USD, thousands)

Other long-term assets (USD, thousands)

Total assets (USD, thousands)

Accounts payable (USD, thousands)

Accrued employee expenses (USD, thousands)

Accrued expenses (USD, thousands)

Other current liabilities (USD, thousands)

Total current liabilities (USD, thousands)

Operating lease liabilities (USD, thousands)

Other liabilities (USD, thousands)

Total liabilities (USD, thousands)

Total stockholders’ equity (USD, thousands)

Total liabilities and stockholders’ equity (USD, thousands)

9bed3a9e7cac6d0d12a4844bc9ba3a2df37d8d89207c13bcbc9bffdd558eb8ff

Revenue (USD, thousands)

Cost of Revenue (USD, thousands)

Sales and Marketing Expenses (USD, thousands)

Research and Product Development Expenses (USD, thousands)

General and Administrative Expenses (USD, thousands)

Depreciation and Amortization (USD, thousands)

Total Costs and Operating Expenses (USD, thousands)

Income (Loss) from Operations (USD, thousands)

Other Income (Loss), Net (USD, thousands)

Interest Income, Net (USD, thousands)

Income (Loss) Before Provision for Income Taxes (USD, thousands)

(Benefit from) Provision for Income Taxes (USD, thousands)

Net Income (Loss) (USD, thousands)

Basic Net Income (Loss) per Common Share (USD)

Diluted Net Income (Loss) per Common Share (USD)

Weighted Average Common Shares Outstanding, Basic (Thousands)

Weighted Average Common Shares Outstanding, Diluted (Thousands)

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Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

a521f16100d1c6c5d0e47c9dee46b0dd7c62c764d8266117fbcdc18909abf6f8

3c4fb9139f7e708f407452060a60803685f4d1d37b43caaa0b3a007da62b2a20

Property management units under management (millions of units)

Number of property management customers (count)

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ab20c07dbf1f64ed664e841892ac1f0826b637fc453637fd2af1c0af82c7ca7b

APPFOLIO (APPF)

Financials