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AppFolio, Inc. Announces Fourth Quarter and Fiscal Year 2017 Financial Results

February 26, 2018

SANTA BARBARA, Calif., Feb. 26, 2018 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ:APPF) ("AppFolio" or the "Company"), a leading provider of cloud-based business software solutions, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2017.

AppFolio's operating results for the fourth quarter and fiscal year 2017 are summarized in the tables accompanying this press release. The Company nevertheless urges investors to read its full Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the Securities and Exchange Commission (the "SEC") on February 26, 2018, and is available on AppFolio's website at http://ir.appfolioinc.com. The limited information that follows is not adequate for making an informed investment judgment.

Financial Outlook

Based on information available as of February 26, 2018, the Company's current outlook for fiscal year 2018 follows:

  • Full year revenue is expected to be in the range of $179 million to $182 million.
     
  • Diluted weighted average shares are expected to be approximately 36 million for the full year.

Conference Call Information

As previously announced, the Company will host a conference call today, February 26, 2018, 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.

A live webcast of the call will be available at http://ir.appfolioinc.com, and it may also be accessed by dialing 866-393-4306 (Domestic), or 734-385-2616 (International). The conference ID is 1675569. A replay of the call will be available at 855-859-2056 (Domestic) and 404-537-3406 (International) until the end of day March 1, 2018, and an archived webcast will be available for twelve months on the Company's website.

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,” “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, 2017, which was filed with the SEC on February 26, 2018, 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,
  2017   2016
Assets      
Current assets      
Cash and cash equivalents $ 16,109     $ 10,699  
Investment securities—current 29,800     15,473  
Accounts receivable, net 3,387     2,511  
Prepaid expenses and other current assets 4,546     3,537  
Total current assets 53,842     32,220  
Investment securities—noncurrent 22,401     26,688  
Property and equipment, net 6,696     7,077  
Capitalized software, net 17,609     15,539  
Goodwill 6,737     6,737  
Intangible assets, net 1,725     3,105  
Other assets 1,238     1,217  
Total assets $ 110,248     $ 92,583  
Liabilities and Stockholders’ Equity      
Current liabilities      
Accounts payable $ 610     $ 937  
Accrued employee expenses 10,710     7,550  
Accrued expenses 4,289     4,044  
Deferred revenue 7,080     7,638  
Other current liabilities 1,223     1,192  
Total current liabilities 23,912     21,361  
Other liabilities 1,257     1,540  
Total liabilities 25,169     22,901  
Stockholders’ equity:      
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding as of December 31, 2017 and 2016      
Class A common stock, $0.0001 par value, 250,000 shares authorized as of December 31, 2017 and 2016; 14,879 and 11,691 shares issued and outstanding as of December 31, 2017 and 2016, respectively 1     1  
Class B common stock, $0.0001 par value, 50,000 shares authorized as of December 31, 2017 and 2016; 19,102 and 22,028 shares issued and outstanding as of December 31, 2017 and 2016, respectively 3     3  
Additional paid-in capital 152,531     146,692  
Accumulated other comprehensive loss (209 )   (51 )
Accumulated deficit (67,247 )   (76,963 )
Total stockholders’ equity 85,079     69,682  
Total liabilities and stockholders’ equity $ 110,248     $ 92,583  
               


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
 
  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
  2017   2016   2017   2016
Revenue $ 37,897     $ 28,010     $ 143,803     $ 105,586  
Costs and operating expenses:              
Cost of revenue (exclusive of depreciation and amortization) 14,536     11,243     55,283     44,630  
Sales and marketing 7,153     6,730     28,709     28,827  
Research and product development 4,580     3,107     16,578     12,638  
General and administrative 5,889     5,399     21,199     17,979  
Depreciation and amortization 3,352     2,823     12,699     9,935  
Total costs and operating expenses 35,510     29,302     134,468     114,009  
Income (loss) from operations 2,387     (1,292 )   9,335     (8,423 )
Other expense, net (3 )   (3 )   (96 )   (37 )
Interest income, net 158     25     535     246  
Income (loss) before provision for income taxes 2,542     (1,270 )   9,774     (8,214 )
Income tax (benefit) provision (35 )   19     58     67  
Net income (loss) $ 2,577     $ (1,289 )   $ 9,716     $ (8,281 )
Net income (loss) per common share:              
Basic 0.08     (0.04 )   0.29     (0.25 )
Diluted 0.07     (0.04 )   0.28     (0.25 )
Weighted average common shares outstanding:              
Basic 33,944     33,654     33,849     33,561  
Diluted 35,310     33,654     35,151     33,561  
                       

Stock-Based Compensation Expense
(in thousands)

  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
  2017   2016   2017   2016
Costs and operating expenses:              
Cost of revenue (exclusive of depreciation and amortization) $ 198     $ 150     $ 725     $ 471  
Sales and marketing 207     146     723     442  
Research and product development 186     118     657     382  
General and administrative 1,201     1,043     3,991     3,006  
Total stock-based compensation expense $ 1,792     $ 1,457     $ 6,096     $ 4,301  
                               


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 
  Three Months Ended December 31,   Twelve Months Ended December 31,
  2017   2016   2017   2016
Cash from operating activities              
Net income (loss) $ 2,577     $ (1,289 )   $ 9,716     $ (8,281 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:              
Depreciation and amortization 3,352     2,823     12,699     9,935  
Purchased investment premium, net of amortization (17 )   60     (39 )   245  
Amortization of deferred financing costs 15     15     63     63  
Loss on disposal of property, equipment and intangibles 3     8     97     41  
Stock-based compensation 1,792     1,457     6,096     4,301  
Lease abandonment             161  
Changes in operating assets and liabilities:              
Accounts receivable 32     196     (876 )   (463 )
Prepaid expenses and other current assets (153 )   427     (1,009 )   (377 )
Other assets (30 )   60     (84 )   (103 )
Accounts payable (469 )   205     (100 )   (904 )
Accrued employee expenses 2,397     2,367     3,243     2,223  
Accrued expenses (1,442 )   (206 )   271     1,148  
Deferred revenue (428 )   1,011     (558 )   2,685  
Other liabilities 186     (357 )   (148 )   826  
Net cash provided by operating activities 7,815     6,777     29,371     11,500  
Cash from investing activities              
Purchases of property and equipment (533 )   (682 )   (2,213 )   (4,242 )
Additions to capitalized software (2,370 )   (2,612 )   (10,455 )   (11,166 )
Purchases of investment securities (9,051 )   (7,217 )   (26,648 )   (31,551 )
Sales of investment securities     2,543     15     12,559  
Maturities of investment securities 5,500     4,225     16,474     21,337  
Purchases of intangible assets         (1 )   (2 )
Net cash used in investing activities (6,454 )   (3,743 )   (22,828 )   (13,065 )
Cash from financing activities              
Proceeds from stock option exercises 155     92     663     352  
Tax withholding for net share settlement (188 )   (26 )   (1,796 )   (111 )
Principal payments under capital lease obligations     (5 )       (29 )
Proceeds from issuance of debt 30     30     118     117  
Principal payments on debt (30 )   (29 )   (118 )   (128 )
Net cash (used in) provided by financing activities (33 )   62     (1,133 )   201  
Net increase (decrease) in cash and cash equivalents 1,328     3,096     5,410     (1,364 )
Cash and cash equivalents              
Beginning of period 14,781     7,603     10,699     12,063  
End of period $ 16,109     $ 10,699     $ 16,109     $ 10,699  
                               

 

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Source: AppFolio, Inc.

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