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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): May 5, 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 May 5, 2017, AppFolio, Inc. (the “Company”) issued a press release announcing its financial results for its first fiscal quarter ended March 31, 2017. 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 May 5, 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 May 5, 2017.




Exhibit



Exhibit 99.1
https://cdn.kscope.io/c55638c89d0c013d7210f5a4e1e0e47f-appfolioimagea25.jpg

News Release


AppFolio, Inc. Announces First Quarter 2017 Financial Results

SANTA BARBARA, Calif., May 5, 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 quarter ended March 31, 2017.

AppFolio's operating results for the first quarter 2017 are summarized in the tables accompanying this press release. However, the Company urges investors to review its Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the "SEC") on February 27, 2017, as well as its more detailed first quarter 2017 results set forth on Form 10-Q, which was filed with the SEC on May 5, 2017. Both documents, as well as other key SEC filings, are accessible on the Investor Relations page of AppFolio's website, http://ir.appfolioinc.com. The limited information that follows in this press release is not adequate for making an informed investment decision.

Financial Outlook

Based on information available as of May 5, 2017, AppFolio's outlook for fiscal year 2017 follows:

•
Full year revenue is expected to be in the range of $136 million to $138 million.

•
Diluted weighted average shares are expected to be approximately 35 million for the full year.

Conference Call Information

As previously announced, the Company will host a conference call before the open of the U.S. financial markets on Monday, May 8, 2017, at 6:00 a.m. (pacific), 9:00 a.m. (eastern), 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 844-239-5286 (Domestic), or 513-268-0783 (International). The conference ID is 14582305. A replay of the call will be available at 855-859-2056 (Domestic) and 404-537-3406 (International) until May 12, 2017, 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 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)

 
March 31,
2017
 
December 31,
2016
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
7,969

 
$
10,699

Investment securities—current
19,355

 
15,473

Accounts receivable, net
3,815

 
2,511

Prepaid expenses and other current assets
3,135

 
3,537

Total current assets
34,274

 
32,220

Investment securities—noncurrent
24,933

 
26,688

Property and equipment, net
6,635

 
7,077

Capitalized software, net
16,363

 
15,539

Goodwill
6,737

 
6,737

Intangible assets, net
2,756

 
3,105

Other assets
1,196

 
1,217

Total assets
$
92,894

 
$
92,583

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities
 
 
 
Accounts payable
$
700

 
$
937

Accrued employee expenses
5,626

 
7,550

Accrued expenses
4,520

 
4,044

Deferred revenue
8,697

 
7,638

Other current liabilities
1,402

 
1,192

Total current liabilities
20,945

 
21,361

Other liabilities
1,456

 
1,540

Total liabilities
22,401

 
22,901

 
 
 
 
Stockholders’ equity:
 
 
 
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding as of March 31, 2017 and December 31, 2016
—

 
—

Class A common stock, $0.0001 par value, 250,000 shares authorized as of March 31, 2017 and December 31, 2016; 12,249 and 11,691 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively;
1

 
1

Class B common stock, $0.0001 par value, 50,000 shares authorized as of March 31, 2017 and December 31, 2016; 21,576 and 22,028 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively;
3

 
3

Additional paid-in capital
146,821

 
146,692

Accumulated other comprehensive loss
(29
)
 
(51
)
Accumulated deficit
(76,303
)
 
(76,963
)
Total stockholders’ equity
70,493

 
69,682

Total liabilities and stockholders’ equity
$
92,894

 
$
92,583






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


 
Three Months Ended
March 31,
 
2017
 
2016
Revenue
$
32,126

 
$
23,211

Costs and operating expenses:
 
 
 
Cost of revenue (exclusive of depreciation and amortization)
12,993

 
10,530

Sales and marketing
7,107

 
7,551

Research and product development
3,629

 
3,043

General and administrative
4,804

 
3,549

Depreciation and amortization
2,996

 
2,117

Total costs and operating expenses
31,529

 
26,790

Income (loss) from operations
597

 
(3,579
)
Other expense, net
(28
)
 
(24
)
Interest income, net
102

 
24

Income (loss) before provision for income taxes
671

 
(3,579
)
Provision for income taxes
11

 
24

Net income (loss)
$
660

 
$
(3,603
)
 
 
 
 
Net income (loss) per common share:
 
 
 
Basic
$
0.02

 
$
(0.11
)
Diluted
$
0.02

 
$
(0.11
)
Weighted average common shares outstanding:
 
 
 
Basic
33,706

 
33,463

Diluted
34,765

 
33,463


Stock-Based Compensation Expense
(in thousands)
 
Three Months Ended
March 31,
 
2017
 
2016
Costs and operating expenses:
 
 
 
Cost of revenue (exclusive of depreciation and amortization)
$
129

 
$
45

Sales and marketing
120

 
42

Research and product development
116

 
51

General and administrative
732

 
325

Total stock-based compensation expense
$
1,097

 
$
463








CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 
Three Months Ended
March 31,
 
2017
 
2016
Cash from operating activities
 
 
 
Net income (loss)
$
660

 
$
(3,603
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
2,996

 
2,117

Purchased investment premium, net of amortization
(14
)
 
145

Amortization of deferred financing costs
16

 
16

Loss on disposal of property and equipment
28

 
29

Stock-based compensation
1,097

 
463

Lease abandonment
—

 
91

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(1,303
)
 
(594
)
Prepaid expenses and other current assets
402

 
(1,281
)
Other assets
5

 
(110
)
Accounts payable
(19
)
 
(653
)
Accrued employee expenses
(1,662
)
 
94

Accrued expenses
473

 
987

Deferred revenue
1,059

 
705

Other liabilities
69

 
858

Net cash provided by (used in) operating activities
3,807

 
(736
)
Cash from investing activities
 
 
 
Purchases of property and equipment
(392
)
 
(1,891
)
Additions to capitalized software
(2,991
)
 
(2,179
)
Purchases of investment securities
(6,537
)
 
(9,385
)
Sales of investment securities
—

 
6,505

Maturities of investment securities
4,445

 
6,830

Net cash used in investing activities
(5,475
)
 
(120
)
Cash from financing activities
 
 
 
Proceeds from stock option exercises
145

 
80

Tax withholding for net share settlement
(1,207
)
 
—

Principal payments under capital lease obligations
—

 
(7
)
Proceeds from issuance of debt
29

 
29

Principal payments on debt
(29
)
 
(41
)
            Net cash (used in) provided by financing activities
(1,062
)
 
61

Net decrease in cash and cash equivalents
(2,730
)
 
(795
)
Cash and cash equivalents
 
 
 
Beginning of period
10,699

 
12,063

End of period
$
7,969

 
$
11,268