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SANTA BARBARA, Calif., March 02, 2020 (GLOBE NEWSWIRE) — AppFolio, Inc. (NASDAQ: APPF) (“AppFolio” or the “Company”), a leading provider of cloud-based business software solutions, services, and data analytics to the real estate and legal markets, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2019.

AppFolio’s operating results for the fourth quarter and fiscal year 2019 are summarized in the tables accompanying this press release. The Company nevertheless urges investors to read its Annual Report on Form 10-K for the year ended December 31, 2019, which will be filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2020, and will be available on AppFolio’s website at http://ir.appfolioinc.com. The limited information that follows in this press release is not adequate for making an informed investment judgment.

Financial Outlook

Based on information available as of March 2, 2020, AppFolio’s outlook for fiscal year 2020 follows:

  • Full year revenue is expected to be in the range of $312.0 million to $320.0 million.
     
  • Diluted weighted average shares are expected to be approximately 36 million for the full year.

Executive Leadership Transition

Today the Company also announced that Klaus Schauser will retire from his position as Chief Strategist, effective as of May 1, 2020. Mr. Schauser will remain a Class II Director on the Company’s Board of Directors. As an active member of AppFolio’s Board, Mr. Schauser will continue to contribute to the Company’s vision and strategy.

Conference Call Information

As previously announced, the Company will host a conference call today, March 2, 2020, at 1:30 p.m. Pacific Time, 4:30 p.m. Eastern Time, to discuss its financial results. Investors are invited to submit questions to management via the Investor Q&A form located on the Investor Overview section of AppFolio’s website.

The conference call can be accessed by dialing 844.624.1561 and entering ID #5869959. International callers may dial 647.253.8652. A replay of the conference call will be available at 800.585.8367, and at 416.621.4642 for international callers. A live and recorded webcast of the conference call will be available at http://ir.appfolioinc.com

About AppFolio, Inc.
AppFolio offers industry-specific, cloud-based business software solutions, services, and data analytics to the real estate and legal markets. Today our products include real estate software (AppFolio Property Manager, AppFolio Property Manager PLUS and AppFolio Investment Management) and legal practice management software (MyCase). AppFolio was founded in 2006 and is headquartered in Santa Barbara, CA. Learn more at www.appfolioinc.com

Investor Relations Contact: [email protected] 

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,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “could,” “will,” “would,” or similar expressions and the negatives of those expressions. In particular, forward-looking statements contained in this press release relate to the Company’s future or assumed revenues and weighted-average outstanding shares, as well as its future growth and success.

Forward-looking statements represent AppFolio’s current beliefs and assumptions based on information currently available. Forward-looking statements involve 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. Some of the risks and uncertainties that may cause the Company’s actual results to materially differ from those expressed or implied by these forward-looking statements are described in the section entitled “Risk Factors” in AppFolio’s Annual Report on Form 10-K for the year ended December 31, 2019, which will be filed with the SEC on March 2, 2020, 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.

Except as required by applicable law or the rules of the NASDAQ Global Market, AppFolio assumes no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except par values)

    December 31,
2019
  December 31,
2018
Assets        
Current assets        
Cash and cash equivalents   $ 15,813     $ 74,076  
Investment securities—current   22,876     16,631  
Accounts receivable, net   7,562     5,516  
Prepaid expenses and other current assets   15,540     11,775  
Total current assets   61,791     107,998  
Investment securities—noncurrent   12,089     11,256  
Property and equipment, net   14,744     6,871  
Operating lease right-of-use assets   27,803      
Capitalized software, net   30,023     20,485  
Goodwill   58,425     15,548  
Intangible assets, net   21,377     5,895  
Deferred taxes   27,574      
Other long-term assets   6,276     7,688  
Total assets   $ 260,102     $ 175,741  
Liabilities and Stockholders’ Equity        
Current liabilities        
Accounts payable   $ 1,927     $ 1,481  
Accrued employee expenses   17,758     12,377  
Accrued expenses   10,833     8,281  
Deferred revenue   4,586     3,414  
Other current liabilities   11,139     1,447  
Long-term debt, net—current portion   1,208     1,213  
Total current liabilities   47,451     28,213  
Operating lease liabilities   33,312      
Long-term debt, net   47,375     48,602  
Other long-term liabilities   14     7,080  
Total liabilities   128,152     83,895  
Stockholders’ equity:        
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding at December 31, 2019 and December 31, 2018        
Class A common stock, $0.0001 par value, 250,000 shares authorized at December 31, 2019 and December 31, 2018; issued – 16,923 and 16,160, shares at December 31, 2019 and December 31, 2018, respectively; outstanding – 16,552 and 15,789 shares at December 31, 2019 and December 31, 2018, respectively;   2     2  
Class B common stock, $0.0001 par value, 50,000 shares authorized at December 31, 2019 and December 31, 2018; 17,594 and 18,109 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively;   2     2  
Additional paid-in capital   161,509     157,898  
Accumulated other comprehensive income (loss)   33     (178 )
Treasury stock, at cost, 371 Class A shares at December 31, 2019 and December 31, 2018   (21,562 )   (21,562 )
Accumulated deficit   (8,034 )   (44,316 )
Total stockholders’ equity   131,950     91,846  
Total liabilities and stockholders’ equity   $ 260,102     $ 175,741  


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

  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
  2019   2018   2019   2018
Revenue $ 67,362     $ 50,365     $ 256,012     $ 190,071  
Costs and operating expenses:              
Cost of revenue (exclusive of depreciation and amortization) 26,403     19,925     101,642     73,549  
Sales and marketing 14,441     9,577     51,528     33,288  
Research and product development 11,086     6,588     39,508     24,111  
General and administrative 9,117     7,786     34,478     24,891  
Depreciation and amortization 6,226     3,792     22,395     14,576  
Total costs and operating expenses 67,273     47,668     249,551     170,415  
Income from operations 89     2,697     6,461     19,656  
Other income (expense), net 84     (36 )   16     (56 )
Interest income (expense), net (330 )   156     (1,654 )   787  
Income (loss) before provision for (benefit from) income taxes (157 )   2,817     4,823     20,387  
Provision for (benefit from) income taxes (4,585 )   168     (31,459 )   420  
Net income $ 4,428     $ 2,649     $ 36,282     $ 19,967  
               
Net income per common share:              
Basic $ 0.13     $ 0.08     $ 1.07     $ 0.59  
Diluted $ 0.12     $ 0.07     $ 1.02     $ 0.56  
Weighted average common shares outstanding:              
Basic 34,091     34,050     34,016     34,128  
Diluted 35,597     35,425     35,567     35,562  


Stock-Based Compensation Expense
(in thousands)

  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
  2019   2018   2019   2018
Costs and operating expenses:              
Cost of revenue (exclusive of depreciation and amortization) $ 393     $ 351     $ 1,466     $ 1,103  
Sales and marketing 367     326     1,271     1,034  
Research and product development 387     349     1,411     1,079  
General and administrative 731     892     3,161     3,121  
Total stock-based compensation expense $ 1,878     $ 1,918     $ 7,309     $ 6,337  

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
  2019   2018   2019   2018
Cash from operating activities              
Net income $ 4,428     $ 2,649     $ 36,282     $ 19,967  
Adjustments to reconcile net income to net cash provided by operating activities:              
Depreciation and amortization 6,226     3,792     22,395     14,576  
Amortization of operating lease right-of-use assets 1,114         4,130      
Stock-based compensation 1,878     1,918     7,309     6,337  
Deferred income taxes (4,423 )       (31,455 )    
Other (104 )   59     32     224  
Changes in operating assets and liabilities:              
Accounts receivable 747     557     (2,031 )   (908 )
Prepaid expenses and other current assets 372     (859 )   (4,031 )   (6,073 )
Other assets 247     (756 )   1,376     (4,447 )
Accounts payable 241     137     511     614  
Accrued employee expenses 4,056     4,443     4,542     1,219  
Accrued expenses 69     (116 )   55     3,281  
Deferred revenue 154     (342 )   1,193     (4,589 )
Operating lease liabilities 224         (2,662 )    
Other liabilities 245     184     1,241     6,067  
Net cash provided by operating activities 15,474     11,666     38,887     36,268  
Cash from investing activities              
Purchases of property, equipment and intangible assets (3,999 )   (362 )   (8,084 )   (2,102 )
Additions to capitalized software (5,329 )   (3,307 )   (20,998 )   (12,304 )
Purchases of investment securities (14,508 )   (732 )   (25,198 )   (29,516 )
Sales of investment securities     20,199     2,750     20,900  
Maturities of investment securities 4,660     4,342     15,660     32,819  
Acquisition, net of cash acquired         (54,004 )   (14,441 )
Net cash (used in) provided by investing activities (19,146 )   20,140     (89,874 )   (4,644 )
Cash from financing activities              
Proceeds from stock option exercises 294     322     553     1,035  
Tax withholding for net share settlement (614 )   (233 )   (6,155 )   (3,127 )
Purchase of treasury stock     (21,562 )       (21,562 )
Proceeds from issuance of debt 472     50,045     2,169     50,138  
Principal payments on debt (785 )   (45 )   (3,419 )   (138 )
Payment of debt issuance costs         (420 )    
Net cash (used in) provided by financing activities (633 )   28,527     (7,272 )   26,346  
Net (decrease) increase  in cash and cash equivalents and restricted cash (4,305 )   60,333     (58,259 )   57,970  
Cash, cash equivalents and restricted cash              
Beginning of period 20,552     14,173     74,506     16,536  
End of period $ 16,247     $ 74,506     $ 16,247     $ 74,506