GlobeNewswire Inc | Nov 8, 2021 04:10PM EST

November 08, 2021

SANTA BARBARA, Calif., Nov. 08, 2021 (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 industry, today announced its financial results for the third quarter ended September30, 2021.

AppFolio's operating results for the third quarter of 2021 are summarized in the tables accompanying this press release. The Company nevertheless urges investors to read its Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the "SEC") on March 1, 2021, as well as its more detailed third quarter 2021 results that will be included in the Company's Quarterly Report on Form 10-Q, which will be filed with the SEC today. These periodic report filings, together with other documents the Company files with the SEC from time to time, will be accessible 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

Based on information available as of November8, 2021, AppFolio's outlook for fiscal year 2021 follows:

-- Full year revenue is expected to be in the range of $355 million to $357 million. -- Diluted weighted average shares are expected to be approximately 36 million for the full year.

Conference Call InformationAs previously announced, the Company will host a conference call today, November8, 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 https://www.incommglobalevents.com/registration/q4inc/9012/appfolio-inc-announces-third-quarter-2021-financial-results. 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 866.813.9403 (domestic) or 929.458.6194 (international). The passcode is 367726. To access the webcast during the live call, participants may access https://events.q4inc.com/attendee/783445260 and use passcode 367726. 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 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 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 Quarterly Report on Form 10-Q for the quarter ended September30, 2021, 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)

September December 30, 31, 2021 2020Assets Current assets Cash and cash equivalents $ 84,444 $ 140,263 Investment securities?current 76,034 28,256 Accounts receivable, net 12,184 10,057 Prepaid expenses and other current assets 24,714 20,777 Total current assets 197,376 199,353 Investment securities?noncurrent 9,287 6,770 Property and equipment, net 28,177 26,439 Operating lease right-of-use assets 42,597 30,561 Capitalized software development costs, net 40,711 35,459 Goodwill 56,147 56,147 Intangible assets, net 12,864 16,357 Deferred income taxes?noncurrent 12,834 12,181 Other long-term assets 7,394 6,213 Total assets $ 407,387 $ 389,480 Liabilities and Stockholders? Equity Current liabilities Accounts payable $ 2,493 $ 1,040 Accrued employee expenses?current 25,785 18,888 Accrued expenses 13,090 14,069 Deferred revenue 2,738 2,262 Income tax payable 186 9,095 Other current liabilities 4,910 4,451 Total current liabilities 49,202 49,805 Accrued employee expenses?noncurrent 2,059 ? Operating lease liabilities 56,559 40,146 Deferred income taxes?noncurrent 7,868 13,609 Total liabilities 115,688 103,560 Stockholders? equity: Preferred stock, $0.0001 par value, 25,000 sharesauthorized and no shares issued and outstanding as of ? ? September 30, 2021 and December 31, 2020Class A common stock, $0.0001 par value, 250,000shares authorized as of September 30, 2021 andDecember 31, 2020; 19,610 and 19,148 shares issued asof September 30, 2021 and December 31, 2020, 2 2 respectively; 19,191 and 18,729 shares outstanding asof September 30, 2020 and December 31, 2020,respectivelyClass B common stock, $0.0001 par value, 50,000shares authorized as of September 30, 2021 andDecember 31, 2020; 15,453 and 15,659 shares issued 2 2 and outstanding as of September 30, 2021 and December31, 2020, respectivelyAdditional paid-in capital 164,740 161,247 Accumulated other comprehensive (loss) income (17 ) 56 Treasury stock, at cost, 419 shares of Class A common (25,756 ) (25,756 )stock as of September 30, 2021 and December 31, 2020Retained earnings 152,728 150,369 Total stockholders? equity 291,699 285,920 Total liabilities and stockholders? equity $ 407,387 $ 389,480

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

Three Months Ended Nine Months Ended September 30, September 30, Revenue $ 95,809 $ 84,086 $ 263,770 $ 237,624 Costs and operating expenses:Cost of revenue (exclusiveof depreciation and 38,730 32,752 104,847 89,124 amortization)Sales and marketing 19,362 14,894 53,255 43,117 Research and product 16,500 13,454 46,389 36,794 developmentGeneral and administrative 13,404 12,946 40,971 36,303 Depreciation and 7,826 6,680 22,844 19,751 amortization Total costs and 95,822 80,726 268,306 225,089 operating expenses(Loss) income from (13 ) 3,360 (4,536 ) 12,535 operationsOther (loss) income, net (353 ) 187,747 705 187,759 Interest income (expense), 65 (853 ) 173 (1,909 )net(Loss) income before(benefit from) provision (301 ) 190,254 (3,658 ) 198,385 for income taxes(Benefit from) provision (160 ) 52,578 (6,017 ) 39,469 for income taxesNet (loss) income $ (141 ) $ 137,676 $ 2,359 $ 158,916 Net (loss) income per common share:Basic $ ? $ 4.01 $ 0.07 $ 4.64 Diluted $ ? $ 3.86 $ 0.07 $ 4.46 Weighted average common shares outstanding:Basic 34,614 34,296 34,525 34,241 Diluted 34,614 35,665 35,695 35,662

Stock-Based Compensation Expense(in thousands)

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Costs and operating expenses:Cost of revenue(exclusive of $ 575 $ 452 $ 1,509 $ 1,098 depreciation andamortization)Sales and marketing 738 367 1,587 1,069 Research and product 1,451 474 3,522 1,348 developmentGeneral and 1,299 1,803 3,435 3,293 administrativeTotal stock-based $ 4,063 $ 3,096 $ 10,053 $ 6,808 compensation expense

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Cash from operating activitiesNet income $ (141 ) $ 137,676 $ 2,359 $ 158,916 Adjustments to reconcilenet income to net cash provided by operatingactivities:Depreciation and 7,826 6,680 22,844 19,751 amortizationAmortization of operating 913 902 2,312 2,973 lease right-of-use assetsDeferred income taxes (308 ) 36,015 (6,394 ) 22,878 Stock-based compensation 4,063 3,096 10,053 6,808 Gain on sale of business (21 ) (187,636 ) (380 ) (187,636 )Other 309 200 89 170 Changes in operating assets and liabilities:Accounts receivable 2,657 2,907 (1,350 ) (2,229 )Prepaid expenses and other (1,387 ) (567 ) (3,558 ) (859 )current assetsOther assets (199 ) (213 ) (1,181 ) (320 )Accounts payable 83 502 1,384 695 Accrued employee (1,303 ) 1,202 6,335 1,919 expenses?currentAccrued expenses 1,621 1,397 (1,426 ) 5,931 Deferred revenue (335 ) 283 (302 ) 815 Income tax payable 120 ? (8,909 ) ? Accrued employee 1,091 ? 2,059 ? expenses?noncurrentOperating lease liabilities 310 (1,043 ) 1,995 (1,135 )Other liabilities 499 16,439 529 16,539 Net cash provided by 15,798 17,840 26,459 45,216 operating activitiesCash from investing activitiesPurchases ofavailable-for-sale (18,748 ) (16,490 ) (167,041 ) (29,879 )investmentsProceeds from sales ofavailable-for-sale 1,000 ? 43,198 13,942 investmentsProceeds from maturities ofavailable-for-sale 47,004 5,550 73,754 13,300 investmentsPurchases of property,equipment and intangible (2,362 ) (2,245 ) (5,166 ) (16,551 )assetsCapitalization of software (6,600 ) (6,988 ) (18,511 ) (19,697 )development costsProceeds from sale ofbusiness, net of cash ? 191,427 ? 191,427 divested Net cash provided by(used in) investing 20,294 171,254 (73,766 ) 152,542 activitiesCash from financing activitiesProceeds from stock option 145 73 791 402 exercisesTax withholding for net (403 ) (1,269 ) (9,303 ) (10,959 )share settlementPayment of contingent ? ? ? (5,977 )considerationProceeds from issuance of ? 562 ? 50,752 debtPrincipal payments on debt ? (97,747 ) ? (99,565 )Purchase of treasury stock ? ? ? (4,194 ) Net cash used in (258 ) (98,381 ) (8,512 ) (69,541 )financing activities Net increase(decrease) in cash and cash 35,834 90,713 (55,819 ) 128,217 equivalents and restrictedcashCash, cash equivalents and restricted cashBeginning of period 49,046 53,751 140,699 16,247 End of period $ 84,880 $ 144,464 $ 84,880 $ 144,464