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 28, 2022
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation)
| (Commission File Number) | (IRS Employer Identification Number) | ||||
(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)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On February 28, 2022, AppFolio, Inc. (the “Company”) issued a press release announcing its financial results for its fourth quarter and fiscal year ended December 31, 2021. 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 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
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.
| Date: February 28, 2022 | AppFolio, Inc. | ||||||||||
| By: /s/ Fay Sien Goon | |||||||||||
| Name: Fay Sien Goon | |||||||||||
| Title: Chief Financial Officer | |||||||||||
Exhibit 99.1
News Release
AppFolio, Inc. Announces Fourth Quarter and Fiscal Year 2021 Financial Results
Revenue grows 32 percent year-over-year in the fourth quarter
SANTA BARBARA, Calif., February 28, 2022 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ: APPF) ("AppFolio" or the "Company"), a leading provider of cloud business management solutions for the real estate industry, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2021.
“I’m pleased to announce that in the fourth quarter we expanded our number of units served to 6.35 million and revenue from continuing operations grew 32%, capping off a year of 26% growth. This is evidence that we are driving success with our ongoing multi-year investments,” said Jason Randall, President and CEO, AppFolio. “In 2022 our talented team continues to focus on igniting revenue growth by continuing to make it increasingly easy for our customers to manage their communities in our ever-changing world.”
The Company urges investors to read its Annual Report on Form 10-K for the year ended December 31, 2021, which will also be filed with the Securities and Exchange Commission (the "SEC") today, February 28, 2022, and will be available on AppFolio's website, http://ir.appfolioinc.com.
Financial Outlook
Based on information available as of February 28, 2022, AppFolio's outlook for fiscal year 2022 follows:
•Full year revenue is expected to be in the range of $447 million to $457 million.
•Diluted weighted average shares are expected to be approximately 36.5 million for the full year.
Conference Call Information
As previously announced, the Company will host a conference call today, February 28, 2022, at 1:30 p.m. Pacific Time (PT), 4:30 p.m. Eastern Time (ET), to discuss the company’s fourth quarter and year ended 2021 financial results. Participants who wish to dial into the conference call, please dial +1 844-200-6205 (in the U.S.) or +1 929-526-1599 (international) and use passcode 419445.
Following the conference call, a replay of the call will be available until Thursday, March 3, 2022 by dialing +1 866-813-9403 (in the U.S.) or +1 929-458-6194 (international) and using passcode 090322.
To access the webcast during the live call, participants may access https://events.q4inc.com/attendee/414042236. 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, Inc. (NASDAQ: APPF) is a leading provider of cloud business management solutions for the real estate industry. Our solutions enable our customers to digitally transform their businesses, address critical business operations and deliver a better customer experience. Today, our solutions are AppFolio Property Manager and AppFolio Investment Management, which are supplemented with Value Added Services that enhance, automate and streamline business-critical processes and workflows. For more information about AppFolio, visit www.appfolioinc.com.
Investor Relations Contact:
Lori Barker
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, 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, 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)
| December 31, 2021 | December 31, 2020 | |||||||||||||
| Assets | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 57,847 | $ | 140,263 | ||||||||||
| Investment securities—current | 64,600 | 28,256 | ||||||||||||
| Accounts receivable, net | 12,595 | 10,057 | ||||||||||||
| Prepaid expenses and other current assets | 23,553 | 20,777 | ||||||||||||
| Total current assets | 158,595 | 199,353 | ||||||||||||
| Investment securities—noncurrent | 61,076 | 6,770 | ||||||||||||
| Property and equipment, net | 30,479 | 26,439 | ||||||||||||
| Operating lease right-of-use assets | 41,710 | 30,561 | ||||||||||||
| Capitalized software development costs, net | 41,212 | 35,459 | ||||||||||||
| Goodwill | 56,147 | 56,147 | ||||||||||||
| Intangible assets, net | 11,711 | 16,357 | ||||||||||||
| Deferred income taxes—noncurrent | — | 12,181 | ||||||||||||
| Other long-term assets | 7,087 | 6,213 | ||||||||||||
| Total assets | $ | 408,017 | $ | 389,480 | ||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | $ | 1,704 | $ | 1,040 | ||||||||||
| Accrued employee expenses—current | 30,065 | 18,888 | ||||||||||||
| Accrued expenses | 13,284 | 14,069 | ||||||||||||
| Deferred revenue | 2,512 | 2,262 | ||||||||||||
| Income tax payable | 136 | 9,095 | ||||||||||||
| Other current liabilities | 4,941 | 4,451 | ||||||||||||
| Total current liabilities | 52,642 | 49,805 | ||||||||||||
| Accrued employee expenses—noncurrent | 583 | — | ||||||||||||
| Operating lease liabilities | 55,733 | 40,146 | ||||||||||||
| Deferred income taxes—noncurrent | 1,678 | 13,609 | ||||||||||||
| Stockholders’ equity | 297,381 | 285,920 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 408,017 | $ | 389,480 | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 (1) | ||||||||||||||||||||
| Revenue | $ | 95,600 | $ | 72,432 | $ | 359,370 | $ | 310,056 | |||||||||||||||
| Costs and operating expenses: | |||||||||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization) | 39,097 | 29,905 | 143,944 | 119,029 | |||||||||||||||||||
| Sales and marketing | 19,945 | 15,328 | 73,200 | 58,445 | |||||||||||||||||||
| Research and product development | 19,591 | 11,735 | 65,980 | 48,529 | |||||||||||||||||||
| General and administrative | 16,308 | 11,177 | 57,279 | 47,480 | |||||||||||||||||||
| Depreciation and amortization | 8,001 | 7,039 | 30,845 | 26,790 | |||||||||||||||||||
| Total costs and operating expenses | 102,942 | 75,184 | 371,248 | 300,273 | |||||||||||||||||||
| (Loss) income from operations | (7,342) | (2,752) | (11,878) | 9,783 | |||||||||||||||||||
| Other income, net | 12,406 | 1,138 | 13,111 | 188,897 | |||||||||||||||||||
| Interest income (expense), net | 328 | 60 | 501 | (1,849) | |||||||||||||||||||
| Income (loss) before provision for (benefit from) income taxes | 5,392 | (1,554) | 1,734 | 196,831 | |||||||||||||||||||
| Provision for (benefit from) income taxes | 6,723 | (1,041) | 706 | 38,428 | |||||||||||||||||||
| Net (loss) income | $ | (1,331) | $ | (513) | $ | 1,028 | $ | 158,403 | |||||||||||||||
| Net (loss) income per common share: | |||||||||||||||||||||||
| Basic | $ | (0.04) | $ | (0.01) | $ | 0.03 | $ | 4.62 | |||||||||||||||
| Diluted | $ | (0.04) | $ | (0.01) | $ | 0.03 | $ | 4.44 | |||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | 34,738 | 34,332 | 34,578 | 34,264 | |||||||||||||||||||
| Diluted | 34,738 | 34,332 | 35,701 | 35,713 | |||||||||||||||||||
(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, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 (1) | ||||||||||||||||||||
| Costs and operating expenses: | |||||||||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization) | $ | 515 | $ | 408 | $ | 2,024 | $ | 1,506 | |||||||||||||||
| Sales and marketing | 742 | 346 | 2,329 | 1,415 | |||||||||||||||||||
| Research and product development | 1,935 | 470 | 5,457 | 1,818 | |||||||||||||||||||
| General and administrative | 2,096 | 993 | 5,531 | 4,286 | |||||||||||||||||||
| Total stock-based compensation expense | $ | 5,288 | $ | 2,217 | $ | 15,341 | $ | 9,025 | |||||||||||||||
(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, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 (1) | ||||||||||||||||||||
| Cash from operating activities | |||||||||||||||||||||||
| Net (loss) income | $ | (1,331) | $ | (513) | $ | 1,028 | $ | 158,403 | |||||||||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||||||||||
| Depreciation and amortization | 7,488 | 6,670 | 29,032 | 25,507 | |||||||||||||||||||
| Amortization of operating lease right-of-use assets | 887 | 728 | 3,199 | 3,701 | |||||||||||||||||||
| Deferred income taxes | 6,644 | 6,124 | 250 | 29,002 | |||||||||||||||||||
| Stock-based compensation, including as amortized | 5,801 | 2,586 | 17,154 | 10,308 | |||||||||||||||||||
| Gain on sale of business | — | (22) | (380) | (187,658) | |||||||||||||||||||
| Gain on sale of equity-method investment and recovery of note receivable | (12,767) | — | (12,767) | — | |||||||||||||||||||
| Other | 160 | (45) | 249 | 125 | |||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||
| Accounts receivable | (753) | (553) | (2,103) | (2,782) | |||||||||||||||||||
| Prepaid expenses and other current assets | 1,390 | (5,035) | (2,168) | (5,894) | |||||||||||||||||||
| Other assets | (78) | (199) | (1,259) | (519) | |||||||||||||||||||
| Accounts payable | (887) | (1,598) | 497 | (903) | |||||||||||||||||||
| Accrued employee expenses—current | 4,929 | 880 | 11,264 | 2,799 | |||||||||||||||||||
| Accrued expenses | (347) | 947 | (1,773) | 6,878 | |||||||||||||||||||
| Deferred revenue | 116 | (285) | (186) | 530 | |||||||||||||||||||
| Income tax payable | (50) | (4,475) | (8,959) | 9,095 | |||||||||||||||||||
| Accrued employee expenses—noncurrent | (1,476) | — | 583 | — | |||||||||||||||||||
| Operating lease liabilities | (727) | 571 | 1,268 | (564) | |||||||||||||||||||
| Other liabilities | (67) | (2,698) | 462 | 271 | |||||||||||||||||||
| Net cash provided by operating activities | 8,932 | 3,083 | 35,391 | 48,299 | |||||||||||||||||||
| Cash from investing activities | |||||||||||||||||||||||
| Purchases of available-for-sale investments | (74,174) | (13,998) | (241,215) | (43,877) | |||||||||||||||||||
| Proceeds from sales of available-for-sale investments | — | 2,769 | 43,198 | 16,711 | |||||||||||||||||||
| Proceeds from maturities of available-for-sale investments | 33,600 | 14,030 | 107,354 | 27,330 | |||||||||||||||||||
| Purchases of property, equipment and intangible assets | (2,937) | (2,487) | (8,103) | (19,038) | |||||||||||||||||||
| Capitalization of software development costs | (6,104) | (6,345) | (24,615) | (26,042) | |||||||||||||||||||
| Proceeds from sale of business, net of cash divested | 402 | — | 402 | 191,427 | |||||||||||||||||||
| Proceeds from sale of equity-method investment and recovery of note receivable | 12,520 | — | 12,520 | — | |||||||||||||||||||
| Net cash (used in) provided by investing activities | (36,693) | (6,031) | (110,459) | 146,511 | |||||||||||||||||||
| Cash from financing activities | |||||||||||||||||||||||
| Proceeds from stock option exercises | 1,823 | 420 | 2,614 | 822 | |||||||||||||||||||
| Tax withholding for net share settlement | (659) | (1,237) | (9,962) | (12,196) | |||||||||||||||||||
| Payment of contingent consideration | — | — | — | (5,977) | |||||||||||||||||||
| Proceeds from issuance of debt | — | — | — | 50,752 | |||||||||||||||||||
| Principal payments on debt | — | — | — | (99,565) | |||||||||||||||||||
| Purchase of treasury stock | — | — | — | (4,194) | |||||||||||||||||||
| Net cash provided by (used in) financing activities | 1,164 | (817) | (7,348) | (70,358) | |||||||||||||||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | (26,597) | (3,765) | (82,416) | 124,452 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash | |||||||||||||||||||||||
| Beginning of period | 84,880 | 144,464 | 140,699 | 16,247 | |||||||||||||||||||
| End of period | $ | 58,283 | $ | 140,699 | $ | 58,283 | $ | 140,699 | |||||||||||||||
(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.