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AppFolio, Inc. Announces Fourth Quarter and Fiscal Year 2020 Financial Results

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 December 31, 2020. The Company urges investors to read its Annual Report on Form 10-K for the year ended December 31, 2020, which will also be filed with the Securities and Exchange Commission (the "SEC") today, March 1, 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, March 1, 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 AppFolio’s 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 December 31, 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 31,
2020
  December 31,
2019
Assets        
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 shares authorized and no shares issued and outstanding as of
December 31, 2020 and December 31, 2019
       
Class A common stock, $0.0001 par value, 250,000 shares authorized as of December 31, 2020 and
December 31, 2019; 19,148 and 16,923 shares issued as of December 31, 2020 and December 31, 2019,
respectively; 18,729 and 16,552 shares outstanding as of December 31, 2020 and December 31, 2019,
respectively
  2     2  
Class B common stock, $0.0001 par value, 50,000 shares authorized as of December 31, 2020 and
December 31, 2019; 15,659 and 17,594 shares issued and outstanding as of December 31, 2020 and
December 31, 2019, respectively
  2     2  
Additional paid-in capital   161,247     161,509  
Accumulated other comprehensive income   56     33  
Treasury stock, at cost, 419 and 371 shares of Class A common stock as of December 31, 2020 and
December 31, 2019, respectively
  (25,756 )   (21,562 )
Retained 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
December 31,
  Twelve Months Ended
December 31,
    2020 (1)   2019   2020 (1)   2019
Revenue   $ 72,432     $ 67,362     $ 310,056     $ 256,012  
Costs and operating expenses:                
                         
Cost of revenue (exclusive of depreciation and amortization)   29,905     26,403     119,029     101,642  
Sales and marketing   15,328     14,441     58,445     51,528  
Research and product development   11,735     11,086     48,529     39,508  
General and administrative   11,177     9,117     47,480     34,478  
Depreciation and amortization   7,039     6,226     26,790     22,395  
Total costs and operating expenses   75,184     67,273     300,273     249,551  
(Loss) income from operations   (2,752 )   89     9,783     6,461  
Other income, net   1,138     84     188,897     16  
Interest income (expense), net   60     (330 )   (1,849 )   (1,654 )
(Loss) income before (benefit from) provision for income taxes   (1,554 )   (157 )   196,831     4,823  
(Benefit from) provision for income taxes   (1,041 )   (4,585 )   38,428     (31,459 )
Net (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 average common 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 been included in our results of operations through the date of divestiture.
 


Stock-Based Compensation Expense
 
(in thousands)
         
    Three Months Ended
December 31,
  Twelve Months Ended
December 31,
    2020 (1)   2019   2020 (1)   2019
Costs and operating expenses:                
Cost of revenue (exclusive of depreciation and amortization)   $ 408     $ 393     $ 1,506     $ 1,466  
Sales and marketing   346     367     1,415     1,271  
Research and product development   470     387     1,818     1,411  
General and administrative   993     731     4,286     3,161  
Total stock-based compensation expense   $ 2,217     $ 1,878     $ 9,025     $ 7,309  
                                 
(1) MyCase was divested on September 30, 2020. The results of MyCase have been included in our results of operations through the date of divestiture.
 


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
    Three Months Ended
December 31,
  Twelve Months Ended
December 31,
    2020 (1)   2019   2020 (1)   2019
Cash from operating activities                
Net income   $ (513 )   $ 4,428     $ 158,403     $ 36,282  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation and amortization   7,039     6,226     26,790     22,395  
Amortization of operating lease right-of-use assets   728     1,114     3,701     4,130  
Deferred income taxes   6,124     (4,423 )   29,002     (31,455 )
Stock-based compensation   2,217     1,878     9,025     7,309  
Gain on sale of business   (22 )       (187,658 )    
Other   (45 )   (104 )   125     32  
Changes in operating assets and liabilities:                
Accounts receivable   (553 )   747     (2,782 )   (2,031 )
Prepaid expenses and other current assets   (5,035 )   372     (5,894 )   (4,031 )
Other assets   (199 )   247     (519 )   1,376  
Accounts payable   (1,598 )   241     (903 )   511  
Accrued employee expenses   880     4,056     2,799     4,542  
Accrued expenses   947     69     6,878     55  
Deferred revenue   (285 )   154     530     1,193  
Operating lease liabilities   571     224     (564 )   (2,662 )
Other liabilities   (7,173 )   245     9,366     1,241  
   Net cash provided by operating activities   3,083     15,474     48,299     38,887  
Cash from investing activities                
Purchases of available-for-sale investments   (13,998 )   (14,508 )   (43,877 )   (25,198 )
Proceeds from sales of available-for-sale investments   2,769         16,711     2,750  
Proceeds from maturities of available-for-sale investments   14,030     4,660     27,330     15,660  
Purchases of property, equipment and intangible assets   (2,487 )   (3,999 )   (19,038 )   (8,084 )
Capitalization of software development costs   (6,345 )   (5,329 )   (26,042 )   (20,998 )
Cash paid in business acquisition, net of cash acquired               (54,004 )
Proceeds from sale of business, net of cash divested           191,427      
   Net cash (used in) provided by investing activities   (6,031 )   (19,176 )   146,511     (89,874 )
Cash from financing activities                
Proceeds from stock option exercises   420     294     822     553  
Tax withholding for net share settlement   (1,237 )   (614 )   (12,196 )   (6,155 )
Payment of contingent consideration           (5,977 )    
Proceeds from issuance of debt       472     50,752     2,169  
Principal payments on debt       (785 )   (99,565 )   (3,419 )
Payment of debt issuance costs               (420 )
Purchase of treasury stock           (4,194 )    
   Net cash used in financing activities   (817 )   (633 )   (70,358 )   (7,272 )
   Net (decrease) increase in cash and cash equivalents and restricted cash   (3,765 )   (4,305 )   124,452     (58,259 )
Cash, cash equivalents and restricted cash                
Beginning 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 been included in our results of operations through the date of divestiture.

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Source: AppFolio, Inc.
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