GlobeNewswire Inc | Mar 1, 2021 04:10PM EST

March 01, 2021

SANTA BARBARA, Calif., March 01, 2021 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ: APPF) ("AppFolio" or the "Company"), today announced its financial results for the fourth quarter and fiscal year ended December31, 2020. The Company urges investors to read its Annual Report on Form 10-K for the year ended December31, 2020, which will also be filed with the Securities and Exchange Commission (the "SEC") today, March1, 2021, and will be available on AppFolio's website, http://ir.appfolioinc.com.The limited information that follows in this press release is not adequate for making an informed investment judgment.

Financial Outlook

The Company is not providing revenue guidance for fiscal year 2021 due to limited visibility into future business trends and financial performance in the current operating environment. Diluted weighted average shares are expected to be approximately 36 million for fiscal year 2021.

Conference Call Information

As previously announced, the Company will host a conference call today, March1, 2021, at 1:30 p.m. Pacific Time, 4:30 p.m. Eastern Time, to discuss its financial results. Participants who wish to dial into the conference call please register in advance at http://www.directeventreg.com/registration/event/8438087. After registering, a confirmation email will be sent, including dial-in details and a unique code for entry. Registration will be open through the start of the live call.

Following the conference call, a replay will be available at (800) 585-8367 (domestic) or (416) 621-4642 (international). The replay passcode is 8438087. An archived webcast of this conference call will also be available on AppFolios Investor Relations website at http://ir.appfolioinc.com.

About AppFolio, Inc.

AppFolio provides innovative software, services and data analytics to the real estate industry. Our industry-specific, cloud-based business management solutions are designed to enable our customers to digitally transform their businesses, address critical business operations and enable exceptional customer service. Today our core solutions include AppFolio Property Manager, AppFolio Property Manager PLUS, and AppFolio Investment Management. In addition, the Company offers a variety of Value+ services that are designed to enhance, automate and streamline essential processes and workflows for our customers. AppFolio was founded in 2006 and is headquartered in Santa Barbara, CA. Learn more at www.appfolioinc.com.

Investor Relations Contact ir@appfolio.com

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, predicts, projects, seeks, should, 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 business opportunities, the impact of the Company's strategic actions and initiatives, the impact of the COVID-19 pandemic on the Company's business, and the timing of providing updated financial guidance.

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 December31, 2020, which will be filed with the SEC today, 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 December 31, 31, 2020 2019Assets Current assets Cash and cash equivalents $ 140,263 $ 15,813 Investment securities?current 28,256 22,876 Accounts receivable, net 10,057 7,562 Prepaid expenses and other current assets 20,777 15,540 Total current assets 199,353 61,791 Investment securities?noncurrent 6,770 12,089 Property and equipment, net 26,439 14,744 Operating lease right-of-use assets 30,561 27,803 Capitalized software development costs, net 35,459 30,023 Goodwill 56,147 58,425 Intangible assets, net 16,357 21,377 Deferred taxes 12,181 27,574 Other long-term assets 6,213 6,276 Total assets $ 389,480 $ 260,102 Liabilities and Stockholders? Equity Current liabilities Accounts payable $ 1,040 $ 1,927 Accrued employee expenses 18,888 17,758 Accrued expenses 14,069 10,833 Deferred revenue 2,262 4,600 Income tax payable 9,095 ? Other current liabilities 4,451 11,139 Term loan, net?current portion ? 1,208 Total current liabilities 49,805 47,465 Operating lease liabilities 40,146 33,312 Term loan, net ? 47,375 Deferred taxes 13,609 ? Total liabilities 103,560 128,152 Stockholders? equity: Preferred stock, $0.0001 par value, 25,000 sharesauthorized and no shares issued and outstanding as ? ? ofDecember 31, 2020 and December 31, 2019Class A common stock, $0.0001 par value, 250,000shares authorized as of December 31, 2020 andDecember 31, 2019; 19,148 and 16,923 shares issuedas of December 31, 2020 and December 31, 2019, 2 2 respectively; 18,729 and 16,552 shares outstandingas of December 31, 2020 and December 31, 2019,respectivelyClass B common stock, $0.0001 par value, 50,000shares authorized as of December 31, 2020 andDecember 31, 2019; 15,659 and 17,594 shares issued 2 2 and outstanding as of December 31, 2020 andDecember 31, 2019, respectivelyAdditional paid-in capital 161,247 161,509 Accumulated other comprehensive income 56 33 Treasury stock, at cost, 419 and 371 shares ofClass A common stock as of December 31, 2020 and (25,756 ) (21,562 )December 31, 2019, respectivelyRetained earnings (accumulated deficit) 150,369 (8,034 )Total stockholders? equity 285,920 131,950 Total liabilities and stockholders? equity $ 389,480 $ 260,102

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

Three Months Ended Twelve Months Ended December 31, December 31, 2020^(1) 2019 2020^(1) 2019Revenue $ 72,432 $ 67,362 $ 310,056 $ 256,012 Costs andoperating expenses: Cost of revenue(exclusive of 29,905 26,403 119,029 101,642 depreciation andamortization)Sales and 15,328 14,441 58,445 51,528 marketingResearch andproduct 11,735 11,086 48,529 39,508 developmentGeneral and 11,177 9,117 47,480 34,478 administrativeDepreciation and 7,039 6,226 26,790 22,395 amortizationTotal costs andoperating 75,184 67,273 300,273 249,551 expenses(Loss) income (2,752 ) 89 9,783 6,461 from operationsOther income, net 1,138 84 188,897 16 Interest income 60 (330 ) (1,849 ) (1,654 )(expense), net(Loss) incomebefore (benefit (1,554 ) (157 ) 196,831 4,823 from) provisionfor income taxes(Benefit from)provision for (1,041 ) (4,585 ) 38,428 (31,459 )income taxesNet (loss) income $ (513 ) $ 4,428 $ 158,403 $ 36,282 Net (loss) income per common share:Basic $ (0.01 ) $ 0.13 $ 4.62 $ 1.07 Diluted $ (0.01 ) $ 0.12 $ 4.44 $ 1.02 Weighted averagecommon shares outstanding:Basic 34,332 34,091 34,264 34,016 Diluted 34,332 35,597 35,713 35,567 ^(1) MyCase was divested on September 30, 2020. The results of MyCase have beenincluded in our results of operations through the date of divestiture.

Stock-Based Compensation Expense

(in thousands) Three Months Ended Twelve Months Ended December 31, December 31, 2020^(1) 2019 2020^(1) 2019Costs and operating expenses:Cost of revenue(exclusive of $ 408 $ 393 $ 1,506 $ 1,466 depreciation andamortization)Sales and marketing 346 367 1,415 1,271 Research and 470 387 1,818 1,411 product developmentGeneral and 993 731 4,286 3,161 administrativeTotal stock-basedcompensation $ 2,217 $ 1,878 $ 9,025 $ 7,309 expense ^(1) MyCase was divested on September 30, 2020. The results of MyCase have beenincluded in our results of operations through the date of divestiture.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)(in thousands) Three Months Ended Twelve Months Ended December 31, December 31, 2020^(1) 2019 2020^(1) 2019Cash from operating activitiesNet income $ (513 ) $ 4,428 $ 158,403 $ 36,282 Adjustments toreconcile net incometo net cash provided by operatingactivities:Depreciation and 7,039 6,226 26,790 22,395 amortizationAmortization ofoperating lease 728 1,114 3,701 4,130 right-of-use assetsDeferred income taxes 6,124 (4,423 ) 29,002 (31,455 )Stock-based 2,217 1,878 9,025 7,309 compensationGain on sale of (22 ) ? (187,658 ) ? businessOther (45 ) (104 ) 125 32 Changes in operatingassets and liabilities:Accounts receivable (553 ) 747 (2,782 ) (2,031 )Prepaid expenses and (5,035 ) 372 (5,894 ) (4,031 )other current assetsOther assets (199 ) 247 (519 ) 1,376 Accounts payable (1,598 ) 241 (903 ) 511 Accrued employee 880 4,056 2,799 4,542 expensesAccrued expenses 947 69 6,878 55 Deferred revenue (285 ) 154 530 1,193 Operating lease 571 224 (564 ) (2,662 )liabilitiesOther liabilities (7,173 ) 245 9,366 1,241 Net cash providedby operating 3,083 15,474 48,299 38,887 activitiesCash from investing activitiesPurchases ofavailable-for-sale (13,998 ) (14,508 ) (43,877 ) (25,198 )investmentsProceeds from salesof available-for-sale 2,769 ? 16,711 2,750 investmentsProceeds frommaturities of 14,030 4,660 27,330 15,660 available-for-saleinvestmentsPurchases ofproperty, equipment (2,487 ) (3,999 ) (19,038 ) (8,084 )and intangible assetsCapitalization ofsoftware development (6,345 ) (5,329 ) (26,042 ) (20,998 )costsCash paid in businessacquisition, net of ? ? ? (54,004 )cash acquiredProceeds from sale ofbusiness, net of cash ? ? 191,427 ? divested Net cash (used in)provided by investing (6,031 ) (19,176 ) 146,511 (89,874 )activitiesCash from financing activitiesProceeds from stock 420 294 822 553 option exercisesTax withholding for (1,237 ) (614 ) (12,196 ) (6,155 )net share settlementPayment of contingent ? ? (5,977 ) ? considerationProceeds from ? 472 50,752 2,169 issuance of debtPrincipal payments on ? (785 ) (99,565 ) (3,419 )debtPayment of debt ? ? ? (420 )issuance costsPurchase of treasury ? ? (4,194 ) ? stock Net cash used in (817 ) (633 ) (70,358 ) (7,272 )financing activities Net (decrease)increase in cash and (3,765 ) (4,305 ) 124,452 (58,259 )cash equivalents andrestricted cashCash, cashequivalents and restricted cashBeginning of period 144,464 20,552 16,247 74,506 End of period $ 140,699 $ 16,247 $ 140,699 $ 16,247 ^(1) MyCase was divested on September 30, 2020. The results of MyCase have beenincluded in our results of operations through the date of divestiture.