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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 27, 2017

AppFolio, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

001-37468
26-0359894
(Commission File Number)
(IRS Employer Identification Number)

50 Castilian Drive
Santa Barbara, CA 93117
(Address of principal executive offices)

Registrant’s telephone number, including area code: (805) 364-6093

N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02. Results of Operations and Financial Condition.

On February 27, 2017, AppFolio, Inc. (the “Company”) issued a press release announcing its financial results for its fourth fiscal quarter and year ended December 31, 2016. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Item 2.02, including the press release attached as Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section. Such information shall not be deemed to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as otherwise expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

Exhibit
Number
 
Description
99.1
 
Press release issued on February 27, 2017.









SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
AppFolio, Inc.
 
 
 
 
 
 
By: /s/ Ida Kane
 
 
Name: Ida Kane
 
 
Title: Chief Financial Officer
 









EXHIBIT INDEX

Exhibit
Number
 
Description
99.1
 
Press release issued on February 27, 2017.




Exhibit



Exhibit 99.1
https://cdn.kscope.io/16e5d7e22d7436ee5dd868f156811cad-appfolioimagea19.jpg

News Release


AppFolio, Inc. Announces Fourth Quarter and Fiscal Year 2016 Financial Results

SANTA BARBARA, Calif., February 27, 2017 (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, 2016.

AppFolio's operating results for the fourth quarter and fiscal year 2016 are summarized in the accompanying tables in this press release. However, we urge investors to read our Annual Report on Form 10-K which we filed with the Securities and Exchange Commission (the "SEC") on February 27, 2017, and is accessible from our 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 February 27, 2017, we are providing our outlook for fiscal year 2017 as indicated below.
•
Full year revenue is expected to be in the range of $136 million to $138 million.

•
Weighted average common shares outstanding are expected to be approximately 33.8 million for the full year.


Conference Call Information

As previously announced, we will host a conference call today, February 27, 2017, to discuss our fourth quarter and fiscal year 2016 financial results at 2:00 p.m. Pacific Time, 5:00 p.m. Eastern Time. If you have specific questions related to these financial results, we ask that you submit these questions to ir@appfolio.com.

A live webcast of the conference call will be available at http://ir.appfolioinc.com. The conference call can also be accessed by dialing 844-239-5286 (Domestic), or 513-268-0783 (International). The conference ID is 57609689. A replay will be available at 855-859-2056 (Domestic) and 404-537-3406 (International) until the end of day March 3, 2017. An archived webcast of this conference call will be available for 12 months on our website listed above.


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 our future or assumed revenues and weighted-average outstanding shares, as well as our future growth and success.

Forward-looking statements represent our management’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 our 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 our actual results to materially differ from those expressed or implied by these forward-looking statements are described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016, which we filed with the SEC on February 27, 2017, as well as in our other filings with the SEC. You should read this press release with the understanding that our 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 Stock Market, we assume 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,
 
2016
 
2015
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
10,699

 
$
12,063

Investment securities—current
15,473

 
10,235

Accounts receivable, net
2,511

 
2,048

Prepaid expenses and other current assets
3,537

 
3,160

Total current assets
32,220

 
27,506

Investment securities—noncurrent
26,688

 
34,417

Property and equipment, net
7,077

 
6,107

Capitalized software, net
15,539

 
10,022

Goodwill
6,737

 
6,737

Intangible assets, net
3,105

 
4,516

Other assets
1,217

 
1,176

Total assets
$
92,583

 
$
90,481

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities
 
 
 
Accounts payable
$
937

 
$
2,369

Accrued employee expenses
7,550

 
5,159

Accrued expenses
4,044

 
3,340

Deferred revenue
7,638

 
4,953

Other current liabilities
1,192

 
1,084

Total current liabilities
21,361

 
16,905

Other liabilities
1,540

 
879

Total liabilities
22,901

 
17,784

Stockholders’ equity:
 
 
 
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding as of December 31, 2016 and 2015
—

 
—

Class A common stock, $0.0001 par value, 250,000 shares authorized as of December 31, 2016 and 2015; 11,691 and 9,005 shares issued and outstanding as of December 31, 2016 and 2015, respectively
1

 
1

Class B common stock, $0.0001 par value, 50,000 shares authorized as of December 31, 2016 and 2015; 22,028 and 24,541 shares issued and outstanding as of December 31, 2016 and 2015, respectively
3

 
3

Additional paid-in capital
146,692

 
141,528

Accumulated other comprehensive loss
(51
)
 
(153
)
Accumulated deficit
(76,963
)
 
(68,682
)
Total stockholders’ equity
69,682

 
72,697

Total liabilities and stockholders’ equity
$
92,583

 
$
90,481






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


 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
2016
 
2015
 
2016
 
2015
Revenue
$
28,010

 
$
20,399

 
$
105,586

 
$
74,977

Costs and operating expenses:
 
 
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization)
11,243

 
9,465

 
44,630

 
33,903

Sales and marketing
6,730

 
7,100

 
28,827

 
26,076

Research and product development
3,107

 
2,594

 
12,638

 
9,554

General and administrative
5,399

 
3,356

 
17,979

 
14,343

Depreciation and amortization
2,823

 
1,852

 
9,935

 
6,104

Total costs and operating expenses
29,302

 
24,367

 
114,009

 
89,980

Loss from operations
(1,292
)
 
(3,968
)
 
(8,423
)
 
(15,003
)
Other income (expense), net
(3
)
 
13

 
(37
)
 
5

Interest income (expense), net
25

 
106

 
246

 
(595
)
Loss before provision for income taxes
(1,270
)
 
(3,849
)
 
(8,214
)
 
(15,593
)
Provision for income taxes
19

 
41

 
67

 
75

Net loss
$
(1,289
)
 
$
(3,890
)
 
$
(8,281
)
 
$
(15,668
)
Net loss per share, basic and diluted
(0.04
)
 
(0.12
)
 
(0.25
)
 
(0.73
)
Weighted average common shares outstanding, basic and diluted
33,654

 
33,407

 
33,561

 
21,336




Stock-Based Compensation Expense
(in thousands)
 
Three Months Ended
December 31,
 
Twelve Months Ended December 31,
 
2016
 
2015
 
2016
 
2015
Costs and operating expenses:
 
 
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization)
$
150

 
$
38

 
$
471

 
$
124

Sales and marketing
146

 
31

 
442

 
115

Research and product development
118

 
19

 
382

 
41

General and administrative
1,043

 
296

 
3,006

 
727

Total stock-based compensation expense
$
1,457

 
$
384

 
$
4,301

 
$
1,007








CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2016
 
2015
 
2016
 
2015
Cash from operating activities
 
 
 
 
 
 
 
Net loss
$
(1,289
)
 
$
(3,890
)
 
$
(8,281
)
 
$
(15,668
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
2,823

 
1,852

 
9,935

 
6,104

Purchased investment premium, net of amortization
60

 
(485
)
 
245

 
(865
)
Amortization of deferred financing costs
15

 
15

 
63

 
456

Loss on disposal of property, equipment and intangibles
8

 
60

 
41

 
67

Stock-based compensation
1,457

 
384

 
4,301

 
1,007

Lease abandonment
—

 
—

 
161

 
—

Changes in operating assets and liabilities:
—

 
 
 
 
 
 
Accounts receivable
196

 
190

 
(463
)
 
(746
)
Prepaid expenses and other current assets
427

 
(548
)
 
(377
)
 
(1,893
)
Other assets
60

 
64

 
(103
)
 
(56
)
Accounts payable
205

 
(606
)
 
(904
)
 
(439
)
Accrued employee expenses
2,367

 
(1,223
)
 
2,223

 
1,887

Accrued expenses
(206
)
 
(99
)
 
1,148

 
1,135

Deferred revenue
1,011

 
511

 
2,685

 
1,173

Other liabilities
(357
)
 
705

 
826

 
994

Net cash provided by (used in) operating activities
6,777

 
(3,070
)
 
11,500

 
(6,844
)
Cash from investing activities
 
 
 
 
 
 
 
Purchases of property and equipment
(682
)
 
(1,460
)
 
(4,242
)
 
(3,694
)
Additions to capitalized software
(2,612
)
 
(2,304
)
 
(11,166
)
 
(7,677
)
Purchases of investment securities
(7,217
)
 
(13,750
)
 
(31,551
)
 
(74,176
)
Sales of investment securities
2,543

 
4,100

 
12,559

 
4,100

Maturities of investment securities
4,225

 
17,186

 
21,337

 
26,136

Cash paid in business acquisition, net of cash acquired
—

 
—

 
—

 
(4,039
)
Purchases of intangible assets
—

 
(1
)
 
(2
)
 
(17
)
Net cash (used in) provided by investing activities
(3,743
)
 
3,771

 
(13,065
)
 
(59,367
)
Cash from financing activities
 
 
 
 
 
 
 
Proceeds from stock option exercises
92

 
29

 
352

 
357

Proceeds from issuance of restricted stock
—

 
—

 
—

 
141

Proceeds from issuance of options
—

 
—

 
—

 
208

Tax withholding for net share settlement
(26
)
 
—

 
(111
)
 
—

Principal payments under capital lease obligations
(5
)
 
(5
)
 
(29
)
 
(27
)
Proceeds from initial public offering, net of underwriting discounts and commissions
—

 
—

 
—

 
79,570

Payments of initial public offering costs
—

 
(214
)
 
—

 
(4,213
)




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2016
 
2015
 
2016
 
2015
Payment of contingent consideration
—

 
—

 
—

 
(2,429
)
Proceeds from issuance of debt
30

 
253

 
117

 
10,253

Principal payments on debt
(29
)
 
(241
)
 
(128
)
 
(10,241
)
Payment of debt issuance costs
—

 
(218
)
 
—

 
(757
)
             Net cash provided by (used in) financing activities
62

 
(396
)
 
201

 
72,862

Net increase (decrease) in cash and cash equivalents
3,096

 
305

 
(1,364
)
 
6,651

Cash and cash equivalents
 
 
 
 
 
 
 
Beginning of period
7,603

 
11,758

 
12,063

 
5,412

End of period
$
10,699

 
$
12,063

 
$
10,699

 
$
12,063