0001433195-23-000021 | 10-K | XBRL Viewer

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Estimated Useful Lives of Property and Equipment

Property and equipment is stated at cost net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of assets as follows:


Asset Type						Depreciation Period
Computer equipment						3 years
Furniture and fixtures						7 years
Office equipment						3 to 5 years
Leasehold improvements						Shorter of remaining life of lease or asset life

Property and equipment, net consists of the following (in thousands):


	December 31,
	2022		2021
Computer equipment	$	5,529	$	4,884
Furniture and fixtures	5,747		5,167
Office equipment	3,800		3,285
Leasehold improvements	23,625		22,679
Construction in process	544		5,227
Gross property and equipment	39,245		41,242
Less: Accumulated depreciation	(13,135)		(10,763)
Total property and equipment, net	$	26,110	$	30,479

Schedule of Weighted Average Number of Shares

The following table presents a reconciliation of the weighted average number of shares of our Class A and Class B common stock used to compute net (loss) income per common share (in thousands):


	Year Ended December 31,
	2022	2021	2020
Weighted average common shares outstanding	35,015	34,583	34,269
Less: Weighted average unvested restricted shares subject to repurchase	5	5	5
Weighted average common shares outstanding; basic	35,010	34,578	34,264

Weighted average common shares outstanding; basic	35,010	34,578	34,264
Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share	—	1,123	1,449
Weighted average common shares outstanding; diluted	35,010	35,701	35,713

Investments Securities and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Available-for-sale Securities

Investment securities classified as available-for-sale consisted of the following at December 31, 2022 and 2021 (in thousands):


	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Corporate bonds	$	17,497	$	2	$	(112)	$	17,387
Agency securities	17,507		—		(484)		17,023

Treasury securities	81,605		—		(1,557)		80,048
Total available-for-sale investment securities	$	116,609	$	2	$	(2,153)	$	114,458


	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Corporate bonds	$	29,080	$	—	$	(11)	$	29,069
Agency securities	19,753		—		(27)		19,726
Treasury securities	77,108		2		(229)		76,881
Total available-for-sale investment securities	$	125,941	$	2	$	(267)	$	125,676

Available-for-sale Investments, by Remaining Contract Maturity

The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands):


	December 31, 2022				December 31, 2021
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	90,822	$	89,297	$	64,627	$	64,600
Due after one year through three years	25,787		25,161		61,314		61,076
Total available-for-sale investment securities	$	116,609	$	114,458	$	125,941	$	125,676

Schedule of Sales and Maturities

During the years ended December 31, 2022 and 2021, we had sales and maturities (which include calls) of investment securities, as follows (in thousands):


	Year Ended December 31, 2022
	Gross Realized Gains		Gross Realized Losses		Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(3)	$	994	$	28,998
Agency securities	—		—		—		2,250

Treasury securities	—		—		—		56,635
	$	—	$	(3)	$	994	$	87,883


	Year Ended December 31, 2021
	Gross Realized Gains		Gross Realized Losses		Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	—	$	—	$	39,075
Agency securities	—		—		—		11,575

Treasury securities	6		—		43,198		56,704

	$	6	$	—	$	43,198	$	107,354

Fair Value, Assets Measured on Recurring Basis

The following tables present our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021 by level within the fair value hierarchy (in thousands):


	December 31, 2022
	Level 1		Level 2		Total Fair Value
Cash equivalents:
Money market funds	$	41,973	$	—	$	41,973
Treasury securities	1,287		—		1,287
Available-for-sale investment securities:
Corporate bonds	—		17,387		17,387
Agency securities	—		17,023		17,023

Treasury securities	80,048		—		80,048
Total	$	123,308	$	34,410	$	157,718


	December 31, 2021
	Level 1		Level 2		Total Fair Value
Cash equivalents:
Money market funds	$	6,105	$	—	$	6,105

Available-for-sale investment securities:
Corporate bonds	—		29,069		29,069
Agency securities	—		19,726		19,726

Treasury securities	76,881		—		76,881
Total	$	82,986	$	48,795	$	131,781

Fair Value, Liabilities Measured on Recurring Basis

The following tables present our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021 by level within the fair value hierarchy (in thousands):


	December 31, 2022
	Level 1		Level 2		Total Fair Value
Cash equivalents:
Money market funds	$	41,973	$	—	$	41,973
Treasury securities	1,287		—		1,287
Available-for-sale investment securities:
Corporate bonds	—		17,387		17,387
Agency securities	—		17,023		17,023

Treasury securities	80,048		—		80,048
Total	$	123,308	$	34,410	$	157,718


	December 31, 2021
	Level 1		Level 2		Total Fair Value
Cash equivalents:
Money market funds	$	6,105	$	—	$	6,105

Available-for-sale investment securities:
Corporate bonds	—		29,069		29,069
Agency securities	—		19,726		19,726

Treasury securities	76,881		—		76,881
Total	$	82,986	$	48,795	$	131,781

Stock-Based Compensation - Stock Option Plans (Details) $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($) plan shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2015 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation, number of stock incentive plans \| plan	2
Options granted (in shares) \| shares	0	0	0
Intrinsic value of options exercised \| $	$ 31.1	$ 39.1	$ 17.9
Intrinsic value of options outstanding \| $	$ 47.7
Class A common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate number of shares reserved for stock incentive plan (in shares) \| shares	4,450,726			2,000,000

Revenue and Other Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Product Information [Line Items]
Revenue	$ 471,883	$ 359,370	$ 310,056
Core solutions
Product Information [Line Items]
Revenue	132,541	105,148	100,938
Value Added Services
Product Information [Line Items]
Revenue	327,636	241,289	195,146
Other
Product Information [Line Items]
Revenue	$ 11,706	$ 12,933	$ 13,972

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
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-Section S99
-Paragraph 1
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-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Investments Securities and Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Investment Securities and Fair Value Measurements

Investment Securities

Investment securities classified as available-for-sale consisted of the following at December 31, 2022 and 2021 (in thousands):


	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Corporate bonds	$	17,497	$	2	$	(112)	$	17,387
Agency securities	17,507		—		(484)		17,023

Treasury securities	81,605		—		(1,557)		80,048
Total available-for-sale investment securities	$	116,609	$	2	$	(2,153)	$	114,458


	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Corporate bonds	$	29,080	$	—	$	(11)	$	29,069
Agency securities	19,753		—		(27)		19,726
Treasury securities	77,108		2		(229)		76,881
Total available-for-sale investment securities	$	125,941	$	2	$	(267)	$	125,676

As of December 31, 2022, the decline in fair value below amortized cost basis was not considered other than temporary as it is more likely than not we will hold the securities until maturity or recovery of the cost basis. No allowance for credit losses for available-for-sale investment securities was recorded as of December 31, 2022 or 2021.

The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands):


	December 31, 2022				December 31, 2021
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	90,822	$	89,297	$	64,627	$	64,600
Due after one year through three years	25,787		25,161		61,314		61,076
Total available-for-sale investment securities	$	116,609	$	114,458	$	125,941	$	125,676

During the years ended December 31, 2022 and 2021, we had sales and maturities (which include calls) of investment securities, as follows (in thousands):


	Year Ended December 31, 2022
	Gross Realized Gains		Gross Realized Losses		Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(3)	$	994	$	28,998
Agency securities	—		—		—		2,250

Treasury securities	—		—		—		56,635
	$	—	$	(3)	$	994	$	87,883


	Year Ended December 31, 2021
	Gross Realized Gains		Gross Realized Losses		Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	—	$	—	$	39,075
Agency securities	—		—		—		11,575

Treasury securities	6		—		43,198		56,704

	$	6	$	—	$	43,198	$	107,354

SecureDocs

In December 2021, we sold all of our interest in SecureDocs. A gain of $12.8 million was recognized within Other income, net in our Consolidated Statements of Operations, a portion of which relates to the recovery of a $2.0 million note receivable which had been previously reserved.

Fair Value Measurements

Recurring Fair Value Measurements

The following tables present our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021 by level within the fair value hierarchy (in thousands):


	December 31, 2022
	Level 1		Level 2		Total Fair Value
Cash equivalents:
Money market funds	$	41,973	$	—	$	41,973
Treasury securities	1,287		—		1,287
Available-for-sale investment securities:
Corporate bonds	—		17,387		17,387
Agency securities	—		17,023		17,023

Treasury securities	80,048		—		80,048
Total	$	123,308	$	34,410	$	157,718


	December 31, 2021
	Level 1		Level 2		Total Fair Value
Cash equivalents:
Money market funds	$	6,105	$	—	$	6,105

Available-for-sale investment securities:
Corporate bonds	—		29,069		29,069
Agency securities	—		19,726		19,726

Treasury securities	76,881		—		76,881
Total	$	82,986	$	48,795	$	131,781

The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value because of the short maturity of these items.

There were no changes to our valuation techniques used to measure asset and liability fair values on a recurring basis during the year ended December 31, 2022. The valuation techniques for the financial assets in the tables above are as follows:

Cash Equivalents

At December 31, 2022 and 2021, cash equivalents include cash invested in money market funds and treasury securities with a maturity of three months or less. Fair value is based on market prices for identical assets.

Available-for-Sale Investment Securities

Fair value for our Level 1 investment securities is based on market prices for identical assets. Our Level 2 securities were priced by a pricing vendor. The pricing vendor utilizes the most recent observable market information in pricing these securities or, if specific prices are not available for these securities, other observable inputs like market transactions involving comparable securities are used.

Stock-Based Compensation - Stock Option Activity (Details) - $ / shares shares in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2022
Number of Shares
Options outstanding, beginning balance (in shares)	846	846
Options exercised (in shares)		(330)
Options outstanding, ending balance (in shares)		516
Options vested of expected to vest (in shares)		516
Options exercisable (in shares)		516
Weighted Average Exercise Price per Share
Options outstanding, beginning balance (in dollars per share)	$ 13.15	$ 13.15
Options exercised (in dollars per share)		13.56
Options outstanding, ending balance (in dollars per share)		12.90
Options vested and expected to vest (in dollars per share)		12.90
Options exercisable (in dollars per share)		$ 12.90
Weighted Average Remaining Contractual Life in Years
Options outstanding (in years)	3 years	2 years 8 months 12 days
Options vested or expected to vest (in years)		2 years 8 months 12 days
Options exercisable (in years)		2 years 8 months 12 days

Intangible Assets, net and Goodwill - Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 22,801	$ 28,021
Accumulated Amortization	(17,968)	(16,310)
Net Carrying Value	$ 4,833	$ 11,711
Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	4 years 8 months 12 days	6 years 3 months 18 days
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 1,670	$ 2,840
Accumulated Amortization	(1,448)	(2,006)
Net Carrying Value	$ 222	$ 834
Customer relationships \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	5 years	5 years
Database
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 4,710	$ 8,330
Accumulated Amortization	(1,884)	(2,620)
Net Carrying Value	$ 2,826	$ 5,710
Database \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	10 years	10 years
Technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 6,539	$ 6,539
Accumulated Amortization	(6,539)	(5,107)
Net Carrying Value	$ 0	$ 1,432
Technology \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	4 years	4 years
Trademarks and trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 1,520	$ 1,890
Accumulated Amortization	(1,211)	(1,128)
Net Carrying Value	$ 309	$ 762
Trademarks and trade names \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	5 years	5 years
Partner relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 680	$ 680
Accumulated Amortization	(680)	(680)
Net Carrying Value	$ 0	$ 0
Partner relationships \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	3 years	3 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 7,340	$ 7,400
Accumulated Amortization	(5,872)	(4,444)
Net Carrying Value	$ 1,468	$ 2,956
Non-compete agreements \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	5 years	5 years
Domain names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 90	$ 90
Accumulated Amortization	(82)	(75)
Net Carrying Value	$ 8	$ 15
Domain names \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	5 years	5 years
Patents
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 252	$ 252
Accumulated Amortization	(252)	(250)
Net Carrying Value	$ 0	$ 2
Patents \| Weighted Average
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful Life in Years	5 years	5 years

Stockholders' Equity - Class A Common Stock and Class B Common Stock, Reverse Stock Split (Details)	12 Months Ended
	Dec. 31, 2022 votePerShare shares
Common Class B To Common Class A
Class of Stock [Line Items]
Number of shares to be issued per share upon conversion (in shares) \| shares	1
Number of shares to be issued per share upon automatic conversion (in shares) \| shares	1
Automatic conversion threshold as a percent of Class B common stock	10.00%
Class A common stock
Class of Stock [Line Items]
Common stock, number of votes \| votePerShare	1
Class B common stock
Class of Stock [Line Items]
Common stock, number of votes \| votePerShare	10

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Reclassification

We reclassified certain amounts in our Consolidated Balance Sheets and Consolidated Statements of Cash Flows within the cash flows from operating activities section in the prior year to conform to the current year's presentation.

Principles of Consolidation

The accompanying Consolidated Financial Statements include the operations of AppFolio, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

We accounted for our investment in SecureDocs, Inc. (“SecureDocs”) under the equity method of accounting as we had the ability to exert significant influence, but did not control and were not the primary beneficiary of the entity. Our investment in SecureDocs was not material and any income (loss) activity was not material individually or in the aggregate to our Consolidated Financial Statements for any period presented. In December 2021, we sold our interest in SecureDocs. Refer to Note 4, Investment Securities and Fair Value Measurements for additional information.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue, expenses, other income, and provision for income taxes during the reporting period. Assets and liabilities which are subject to judgment and use of estimates include the fair value of financial instruments, capitalized software development costs, period of benefit associated with deferred costs, incremental borrowing rate used to measure operating lease liabilities, the recoverability of goodwill and long-lived assets, income taxes, useful lives associated with property and equipment and intangible assets, contingencies, assumptions underlying performance-based compensation (whether cash or stock-based), and assumptions underlying stock-based compensation. Actual results could differ from those estimates and any such differences may have a material impact on our Consolidated Financial Statements.

Segment Information

Our chief operating decision maker reviews financial information presented on an aggregated and consolidated basis, together with revenue information for our core solutions, Value Added Services, and other service offerings, principally to make decisions about how to allocate resources and to measure our performance. Accordingly, we have determined that we have one reportable and operating segment.

Concentrations of Credit Risk

Financial instruments that potentially subject us to credit risk consist principally of cash, cash equivalents, restricted cash, accounts receivable, and investment securities. We maintain cash balances at financial institutions in excess of amounts insured by United States government agencies or payable by the United States government directly. We place our cash with high credit, quality financial institutions. We invest in investment securities with a minimum rating of A by Standard & Poor's or A-1 by Moody's and regularly monitor our investment security portfolio for changes in credit ratings.

Concentrations of credit risk with respect to accounts receivable and revenue are limited due to a large, diverse customer base. No individual customer represented 10% or more of accounts receivable at December 31, 2022 and 2021 or revenue for the years ended December 31, 2022, 2021 and 2020.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, in the marketplace.

Level 3 - Unobservable inputs that are supported by little or no market activity.

Cash, Cash Equivalents and Restricted Cash

We consider all highly liquid investments, readily convertible to cash, and which have a remaining maturity date of three months or less at the date of purchase, to be cash equivalents. Cash and cash equivalents are recorded at fair value and consist primarily of bank deposits and money market funds.

Investment Securities

Our investment securities currently consist of corporate bonds, United States government agency securities and treasury securities. We classify investment securities as available-for-sale at the time of purchase and reevaluate such classification at each balance sheet date. All investments are recorded at estimated fair value and investments with original maturities of less than one year at the time of purchase are classified as short-term. Unrealized gains and losses for available-for-sale investment securities are included in accumulated other comprehensive income, a component of stockholders' equity.

For available-for-sale debt securities in an unrealized loss position, we first assess whether we intend to sell, or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria is met, the security’s amortized cost basis is written down to fair value through income. For securities in an unrealized loss position that do not meet these criteria, we evaluate whether the decline in fair value has resulted from credit loss or other factors. If this assessment indicates a credit loss exists, the credit-related portion of the loss is recorded as an allowance for losses on the security. No allowance for credit losses for available-for-sale investment securities was recorded as of December 31, 2022 and 2021.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. The allowance for credit losses is based on historical loss experience, the number of days that receivables are past due, and an evaluation of the potential risk of loss associated with delinquent accounts. Accounts receivable considered uncollectible are charged against the allowance for credit losses when identified. We do not have any off-balance sheet credit exposure related to our customers. At December 31, 2022 and 2021, our allowance for credit losses was not material.

Property and Equipment

Property and equipment is stated at cost net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of assets as follows:


Asset Type						Depreciation Period
Computer equipment						3 years
Furniture and fixtures						7 years
Office equipment						3 to 5 years
Leasehold improvements						Shorter of remaining life of lease or asset life

Leases

We determine if an arrangement is a lease at inception. Operating lease right-of-use ("ROU") assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments, over the lease term at commencement date. As none of our leases provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU assets also include any lease payments made to the lessor before or at the lease commencement date and excludes lease incentives received and initial direct costs incurred. Our lease terms may include options to extend the lease when it is reasonably certain that we will exercise that option.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease arrangements with lease and non-lease components, which are generally accounted for as a single lease component. Leases with an initial term of twelve months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

Capitalized Software Development Costs

Software development costs consist of certain payroll and stock compensation costs incurred to develop functionality of our internal-use software solutions. We capitalize certain software development costs for new offerings as well as significant upgrades and enhancements to our existing software solutions. Capitalized software development costs are amortized using the straight-line method over an estimated useful life of three years. We do not transfer ownership of our software, license, or lease our software to third parties.

Goodwill and Intangible Assets

Goodwill is tested for impairment at least annually at the reporting unit level or at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A qualitative assessment is performed to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount. A quantitative assessment is performed if the qualitative assessment results in a more-likely-than-not determination or if a qualitative assessment is not performed. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent that the reporting unit’s carrying value exceeds its fair value.

We test for goodwill impairment annually during the fourth quarter of the calendar year. Based on the assessment performed at November 1, 2022, we determined it was not more likely than not that our reporting unit fair value was less than its carrying value and no quantitative impairment test assessment was required. No impairment losses were recorded for goodwill during the years ended December 31, 2022, 2021 and 2020.

Intangible assets primarily consist of acquired database and technology, non-compete agreements, customer and partner relationships, trademarks and trade names, domain names and patents, which are recorded at cost, less accumulated amortization. We determine the appropriate useful life of our intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed.

Impairment of Long-Lived Assets

We assess the recoverability of our long-lived assets when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable or that the useful lives of those assets are no longer appropriate. An impairment charge would be recognized when the carrying amount of a long-lived asset or asset group is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. We recorded net lease-related impairment charges of $22.0 million for the year ended December 31, 2022. Refer to Note 9, Leases for additional information. There were no impairment charges related to the identified long-lived assets for the years ended December 31, 2021 and 2020.

Revenue Recognition

We generate revenue from our customers primarily for subscriptions to access our core solutions and Value Added Services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration we expect to receive in exchange for those services. We enter into contracts that can include various combinations of services, which are generally capable of being distinct, distinct within the context of the contract, and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We recognize revenue in proportion to the amount we have the right to invoice for certain core solutions and Value Added Services revenue, as that amount corresponds directly with our performance completed to date. Refer to Note 14, Revenue and Other Information for the disaggregated breakdown of revenue between Core solutions, Value Added Services and Other revenue.

Core Solutions

We charge our customers on a subscription basis for our core solutions. Our customers do not have rights to the underlying software code of our solutions, and, accordingly, we recognize subscription revenue over time on a straight-line basis over the contract term beginning on the date that our service is made available to the customer. The terms of our subscription agreements are monthly, annual, and multiyear and we typically invoice our customers for subscription services in monthly or annual installments, in advance of the subscription period.

Value Added Services

We primarily charge our customers on a usage basis for our Value Added Services. Usage-based fees are charged either as a percentage of the transaction amount (e.g., for certain of our electronic payment services) or on a flat fee per transaction basis with no minimum usage commitments (e.g., for our tenant screening and risk mitigation services). We recognize revenue for usage-based services in the period the service is rendered. Our electronic payments services fees are recorded gross of the interchange and payment processing related fees. We generally invoice our customers for usage-based services on a monthly basis for services rendered in the preceding month. We also have certain Value Added Services which are charged on a subscription basis. We typically invoice our customers for subscription-based services in monthly installments, in advance of the subscription period. We recognize revenue for subscription-based services over time on a straight-line basis over the contract term beginning on the date that our service is made available to the customer. Some subscription or usage-based Value Added Services, such as fees for electronic payment services, are paid by either our customers or clients of our customers at the time the services are rendered.

We work with third-party partners to provide certain of our Value Added Services. For these Value Added Services, we evaluate whether we are the principal, and report revenue on a gross basis, or the agent, and report revenue on a net basis. In this assessment we consider if we obtain control of the specified services before they are transferred to the customer, as well as other indicators such as whether we are the party primarily responsible for fulfillment, and whether we have discretion in establishing price.

Other Revenue

Other revenue include fees from one-time services related to the implementation of our software solutions and other recurring or one-time fees related to our customers who are not otherwise using our core solutions. This includes legacy customers of businesses we have acquired where the customers haven't migrated to our core solutions. The fees for implementation and data migration services are billed upon signing our core subscription contract and are recognized as revenue in the period the service is rendered. Other services are billed when the services rendered are completed and delivered to the customer or billed in advance and deferred over the subscription period.

Deferred Revenue

We record deferred revenue when cash payments are received in advance of our performance. Deferred revenue as of December 31, 2022 and 2021 was $0.9 million and $2.5 million, respectively. During the twelve months ended December 31, 2022 and 2021, we recognized revenue of $2.4 million and $2.2 million, respectively, that were included in the deferred revenue balances at December 31, 2021 and 2020, respectively.

Remaining Performance Obligations

Transaction price allocated to remaining performance obligations (“RPO”) represents contracted revenue that has not been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenue in future periods. RPO does not include revenue related to performance obligations that are part of a contract whose original expected duration is one year or less or related to usage-based Value Added Services that are billed in arrears.

As of December 31, 2022, the total non-cancelable RPO under our contracts with customers was $15 million, and we expect to recognize revenue on approximately 47% of these RPO over the following 12 months, with the balance to be recognized thereafter.

Deferred Costs

Deferred costs, which primarily consist of sales commissions, are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be three years. We typically do not pay commissions for contract renewals. We determined the period of benefit by taking into consideration our customer contract term, the useful life of our internal-use software, average customer life, and other factors. Amortization expense for the deferred costs is included within sales and marketing expense in the accompanying Consolidated Statements of Operations.

Deferred costs were $15.8 million and $12.4 million at December 31, 2022 and 2021, respectively, of which $8.1 million and $6.4 million, respectively, are included in Prepaid expenses and other current assets and $7.7 million and $6.0 million, respectively, are included in Other assets in the accompanying Consolidated Balance Sheets. Amortization expense for deferred costs was $8.1 million, $6.8 million, and $5.8 million for the years ended December 31, 2022, 2021, and 2020, respectively. For the years ended December 31, 2022 and 2021, no impairments were identified in relation to the costs capitalized for the periods presented.

Cost of Revenue (Exclusive of Depreciation and Amortization)

Many of our Value Added Services are facilitated by third-party service providers. Cost of revenue paid to these third-party service providers includes the cost of electronic interchange and payment processing-related services to support our payments services, the cost of credit reporting services for our tenant screening services, and various costs associated with our risk mitigation service providers. These third-party costs vary both in amount and as a percent of revenue for each Value Added Service offering. Cost of revenue also consists of personnel-related costs for our employees focused on customer service and the support of our operations (including salaries, performance-based compensation, benefits, and stock-based compensation), platform infrastructure costs (such as data center operations and hosting-related costs), and allocated shared and other costs. Cost of revenue excludes depreciation of property and equipment, amortization of capitalized software development costs and amortization of intangible assets.

Sales and Marketing

Sales and marketing expense consists of personnel-related costs for our employees focused on sales and marketing (including salaries, sales commissions, performance-based compensation, benefits, and stock-based compensation), costs associated with sales and marketing activities, and allocated shared and other costs. Marketing activities include advertising, online lead generation, lead nurturing, customer and industry events, and the creation of industry-related content and collateral. We focus our sales and marketing efforts on generating awareness of our software solutions, creating sales leads, establishing and promoting our brands, and cultivating an educated community of successful and vocal customers. Advertising expenses were $9.2 million, $9.4 million and $7.0 million for each of the years ended December 31, 2022, 2021 and 2020, respectively, and are expensed as incurred.

Research and Product Development

Research and product development expense consists of personnel-related costs for our employees focused on research and product development (including salaries, performance-based compensation, benefits, and stock-based compensation), fees for third-party development resources, and allocated shared and other costs. Our research and product development efforts are focused on expanding functionality and the ease of use of our existing software solutions by adding new core functionality, Value Added Services and other improvements, as well as developing new products and services. We capitalize our software development costs which meet the criteria for capitalization. Amortization of capitalized software development costs is included in depreciation and amortization expense.

General and Administrative

General and administrative expense consists of personnel-related costs for employees in our executive, finance, information technology, human resources, legal, compliance, corporate development and administrative organizations (including salaries, performance-based compensation, benefits, and stock-based compensation). In addition, general and administrative expense includes fees for third-party professional services (including audit, legal, compliance, and tax services), transaction costs related to sales of subsidiary businesses, regulatory f, other corporate expenses, impairment of long-lived assets, and allocated shared costs.

Depreciation and Amortization

Depreciation and amortization expense includes depreciation of property and equipment, amortization of capitalized software development costs, and amortization of intangible assets. We depreciate or amortize property and equipment, software development costs, and intangible assets over their expected useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed.

Stock-Based Compensation

We recognize stock-based compensation expense for restricted stock awards ("RSAs") and restricted stock units ("RSUs") with only service conditions on a straight-line basis over the requisite service period. For RSUs with both service and performance conditions (performance share units ("PSUs")), compensation cost is recorded on a graded-vesting method, if it is probable that the performance condition will be achieved. Adjustments to compensation expense are made each period based on changes in our estimate of the number of PSUs that are probable of vesting. PSUs will vest on the vesting date and upon achievement of the relevant performance metric once such calculation is finalized in accordance with our internal policies. We estimate a forfeiture rate to calculate our stock-based compensation expense for our stock-based awards.

Income Taxes

We recognize deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the Consolidated Statements of Operations in the period that includes the enactment date. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In evaluating the need for a valuation allowance, we consider the weighting of all available positive and negative evidence, which includes, among other things, the nature, frequency and severity of current and cumulative taxable income or losses, future projections of profitability, and the duration of statutory carryforward periods.

Net (Loss) Income per Common Share

Basic net (loss) income per share includes no dilution and is computed by dividing net (loss) income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted net income per share by application of the treasury stock method. The calculation of diluted net income per share excludes all anti-dilutive common shares.

Net (loss) income per common share was the same for shares of our Class A and Class B common stock because they are entitled to the same liquidation and dividend rights and are therefore combined in the table below. The following table presents a reconciliation of the weighted average number of shares of our Class A and Class B common stock used to compute net (loss) income per common share (in thousands):


	Year Ended December 31,
	2022	2021	2020
Weighted average common shares outstanding	35,015	34,583	34,269
Less: Weighted average unvested restricted shares subject to repurchase	5	5	5
Weighted average common shares outstanding; basic	35,010	34,578	34,264

Weighted average common shares outstanding; basic	35,010	34,578	34,264
Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share	—	1,123	1,449
Weighted average common shares outstanding; diluted	35,010	35,701	35,713

For the years ended December 31, 2021 and 2020, an aggregate of 181,000 and 79,000 shares, respectively, underlying performance-based restricted stock units ("PSUs") were not included in the computations of diluted and anti-dilutive shares as they are considered contingently issuable upon satisfaction of pre-defined performance measures and their respective performance measures had not been met. Restricted stock units ("RSUs") with an anti-dilutive effect were excluded from the calculation of weighted average number of shares used to compute diluted net income per common share and they were not material for the years ended December 31, 2021 and 2020. Because we reported a net loss for the years ended December 31, 2022, all potentially dilutive common shares are anti-dilutive for these periods and have been excluded from the calculation of net loss per share.

Recent Accounting Pronouncements Not Yet Adopted

In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, "Revenue from Contracts with Customers," as if the acquirer had originated the contracts. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. We expect to adopt ASU 2021-08 on January 1, 2023.

Stockholders' Equity - Amended and Restated Certificate of Incorporation (Details) - $ / shares	Dec. 31, 2022	Dec. 31, 2021	Jun. 25, 2015
Class of Stock [Line Items]
Capital stock, shares authorized (in shares)			325,000,000
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Class A common stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Class B common stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock \| Class A common stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares)			250,000,000
Common stock, par value (in dollars per share)			$ 0.0001
Common Stock \| Class B common stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares)			50,000,000
Common stock, par value (in dollars per share)			$ 0.0001
Preferred stock
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares)			25,000,000

Stockholders' Equity - Preferred Stock (Details) - shares	Dec. 31, 2022	Dec. 31, 2021
Equity [Abstract]
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000

Income Taxes - Narrative (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income tax examination, penalties and interest accrued	$ 0	$ 0
Federal \| Research tax credit carryforward
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Credit carryforwards	8,700,000
State
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net operating loss carryforwards	66,000,000
State \| Research tax credit carryforward
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Credit carryforwards	$ 19,300,000

Property and Equipment, net

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):


	December 31,
	2022		2021
Computer equipment	$	5,529	$	4,884
Furniture and fixtures	5,747		5,167
Office equipment	3,800		3,285
Leasehold improvements	23,625		22,679
Construction in process	544		5,227
Gross property and equipment	39,245		41,242
Less: Accumulated depreciation	(13,135)		(10,763)
Total property and equipment, net	$	26,110	$	30,479

Depreciation expense for property and equipment totaled $5.1 million, $4.7 million, and $4.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the year ended December 31, 2022, we recorded an impairment of $4.4 million related to property and equipment associated with our leased office spaces. For additional information, see Note 9, Leases.

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 70,769	$ 57,847
Investment securities—current	89,297	64,600
Accounts receivable, net	16,503	12,595
Prepaid expenses and other current assets	24,899	23,553
Total current assets	201,468	158,595
Investment securities—noncurrent	25,161	61,076
Property and equipment, net	26,110	30,479
Operating lease right-of-use assets	23,485	41,710
Capitalized software development costs, net	35,315	41,212
Goodwill	56,060	56,147
Intangible assets, net	4,833	11,711
Other long-term assets	8,785	7,087
Total assets	381,217	408,017
Current liabilities
Accounts payable	2,473	1,704
Accrued employee expenses	34,376	30,065
Accrued expenses	15,601	13,284
Other current liabilities	8,893	7,589
Total current liabilities	61,343	52,642
Operating lease liabilities	50,237	55,733
Other liabilities	4,091	2,261
Total liabilities	115,671	110,636
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 25,000 shares authorized and no shares issued and outstanding as of December 31, 2022 and December 31, 2021	0	0
Additional paid-in capital	209,704	171,930
Accumulated other comprehensive loss	(1,684)	(194)
Treasury stock, at cost, 419 shares of Class A common stock as of December 31, 2022 and December 31, 2021	(25,756)	(25,756)
Retained earnings	83,278	151,397
Total stockholders’ equity	265,546	297,381
Total liabilities and stockholders’ equity	381,217	408,017
Class A common stock
Stockholders’ equity:
Common stock	2	2
Class B common stock
Stockholders’ equity:
Common stock	$ 2	$ 2

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash from operating activities
Net (loss) income	$ (68,119)	$ 1,028	$ 158,403
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	30,820	29,032	25,507
Amortization of operating lease right-of-use assets	3,187	3,199	3,701
Impairment, net	22,022	0	0
Deferred income taxes	(993)	250	29,002
Stock-based compensation, including as amortized	43,234	17,154	10,308
Gain on sale of business	(4,156)	(380)	(187,658)
Gain on sale of equity-method investment and recovery of note receivable	(40)	(12,767)	0
Other	175	249	125
Changes in operating assets and liabilities:
Accounts receivable	(4,198)	(2,103)	(2,782)
Prepaid expenses and other current assets	(5,398)	(2,168)	(5,894)
Other assets	(1,883)	(1,259)	(519)
Accounts payable	1,176	497	(903)
Accrued employee expenses	4,281	11,264	2,799
Accrued expenses	3,452	(1,773)	6,878
Operating lease liabilities	(2,524)	1,268	(564)
Other liabilities	4,329	(8,100)	9,896
Net cash provided by operating activities	25,365	35,391	48,299
Cash from investing activities
Purchases of available-for-sale investments	(79,279)	(241,215)	(43,877)
Proceeds from sales of available-for-sale investments	994	43,198	16,711
Proceeds from maturities of available-for-sale investments	87,883	107,354	27,330
Purchases of property and equipment	(6,540)	(8,103)	(19,038)
Capitalization of software development costs	(14,688)	(24,615)	(26,042)
Proceeds from sale of business, net of cash divested	5,124	402	191,427
Proceeds from sale of equity-method investment	40	12,520	0
Net cash (used in) provided by investing activities	(6,466)	(110,459)	146,511
Cash from financing activities
Proceeds from stock option exercises	4,474	2,614	822
Tax withholding for net share settlement	(10,637)	(9,962)	(12,196)
Payment of contingent consideration	0	0	(5,977)
Proceeds from issuance of debt	0	0	50,752
Principal payments on debt	0	0	(99,565)
Purchase of treasury stock	0	0	(4,194)
Net cash used in financing activities	(6,163)	(7,348)	(70,358)
Net increase (decrease) in cash and cash equivalents	12,736	(82,416)	124,452
Cash, cash equivalents and restricted cash
Beginning of period	58,283	140,699	16,247
End of period	71,019	58,283	140,699
Supplemental disclosure of cash flow information
Cash paid for interest	0	0	1,815
Cash paid for income taxes	3,338	9,324	85
Cash paid for amounts included in the measurement of lease liabilities included in operating cash flows	3,933	1,618	2,198
Right-of-use assets obtained in exchange for operating lease liabilities	$ 0	$ 11,945	$ 6,644

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Liability to Landlord Insurance We have a wholly owned subsidiary, Terra Mar Insurance Company, Inc., which was established in connection with reinsuring liability to landlord insurance policies offered to our customers by our third-party service provider. We assume a 100% quota share of the liability to landlord insurance policies placed with our customers by our third-party service provider. We accrue for reported claims, and include an estimate of losses incurred but not reported by our property manager customers, in cost of revenue because we bear the risk related to all such claims. Our estimated liability for reported claims and incurred but not reported claims as of December 31, 2022 and 2021 was $2.7 million and $1.7 million, respectively, and is included in Other current liabilities on our Consolidated Balance Sheets. Included in Prepaid expenses and other current assets as of December 31, 2022 and 2021 are $4.5 million and $3.0 million, respectively, of deposits held with a third party related to requirements to maintain collateral for this risk mitigation service. Legal Proceedings From time to time we may become involved in various legal proceedings, investigative inquiries, and other disputes arising from or related to matters incident to the ordinary course of our business activities. We are not currently a party to any legal proceedings, nor are we aware of any pending or threatened legal proceedings, that we believe would have a material adverse effect on our business, operating results, cash flows or financial condition should such proceedings be resolved unfavorably. Indemnification In the ordinary course of business, we may provide indemnification of varying scope and terms to customers, business partners, investors, directors, officers, and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of any applicable agreements, intellectual property infringement claims made by third parties, and other liabilities relating to or arising from our services or our acts or omissions. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments we could be required to make under these indemnification provisions may not be subject to maximum loss clauses and is indeterminable. We have not incurred any costs as a result of such indemnification obligations and have not recorded any liabilities related to such obligations in the Consolidated Financial Statements.

Income Taxes - Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Deferred income tax assets:
Net operating loss carryforwards	$ 5,802	$ 10,849
Research and development tax credits	18,558	15,966
Capitalized research and software costs	14,706	0
Stock-based compensation	5,105	3,965
Lease liability	14,260	13,983
Other	3,614	2,853
Total deferred tax assets	62,045	47,616
Valuation allowance	(43,776)	(17,217)	$ 0	$ 0
Deferred tax assets, net of valuation allowance	18,269	30,399
Deferred tax liabilities:
Capitalized research and software costs	0	(9,972)
Property and equipment	(4,914)	(5,024)
Intangible assets	(940)	(1,558)
Capitalized commissions	(4,217)	(3,296)
Lease asset	(6,249)	(11,056)
Other	(2,634)	(1,171)
Total deferred tax liabilities	(18,954)	(32,077)
Total net deferred tax liabilities	$ (685)	$ (1,678)

Property and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and equipment is stated at cost net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of assets as follows:


Asset Type						Depreciation Period
Computer equipment						3 years
Furniture and fixtures						7 years
Office equipment						3 to 5 years
Leasehold improvements						Shorter of remaining life of lease or asset life

Property and equipment, net consists of the following (in thousands):


	December 31,
	2022		2021
Computer equipment	$	5,529	$	4,884
Furniture and fixtures	5,747		5,167
Office equipment	3,800		3,285
Leasehold improvements	23,625		22,679
Construction in process	544		5,227
Gross property and equipment	39,245		41,242
Less: Accumulated depreciation	(13,135)		(10,763)
Total property and equipment, net	$	26,110	$	30,479

Nature of Business	12 Months Ended
Nature of Business	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business	Nature of BusinessAppFolio, Inc. ("we," "us" or "our") is a leading provider of cloud business management solutions for the real estate industry. Our solutions are designed to enable our property manager customers to digitally transform their businesses, address critical business operations and deliver a better customer experience. Digital transformation is effectively a requirement for business success in the modern world, and the way we work and live requires powerful software solutions.During the year ended December 31, 2020, we also provided cloud-based solutions and services to the legal industry via MyCase, a solution primarily designed for small and mid-sized law firms. As previously disclosed, we completed the sale of MyCase, Inc. on September 30, 2020. For additional details, see Note 3, Sales of Subsidiary Businesses.

Accrued Employee Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Compensation Related Costs [Abstract]
Accrued vacation	$ 12,067	$ 10,675
Accrued bonuses	13,806	13,101
Accrued payroll and other	8,503	6,289
Accrued employee expenses	$ 34,376	$ 30,065

Revenue and Other Information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Revenue and Other Information

The following table presents our revenue categories (in thousands):


	Year Ended December 31,
	2022		2021		2020
Core solutions	$	132,541	$	105,148	$	100,938
Value Added Services	327,636		241,289		195,146
Other	11,706		12,933		13,972
Total revenue	$	471,883	$	359,370	$	310,056

Our revenue is generated primarily from United States customers. All of our property and equipment is located in the United States.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Stockholders' Equity	12 Months Ended
Stockholders' Equity	Dec. 31, 2022
Equity [Abstract]
Stockholders' Equity	Stockholders' Equity Amended and Restated Certificate of Incorporation Upon the effectiveness of our Amended and Restated Certificate of Incorporation on June 25, 2015, the number of shares of capital stock that is authorized to be issued was increased to 325,000,000 shares, of which 250,000,000 shares are Class A common stock, 50,000,000 shares are Class B common stock and 25,000,000 are undesignated preferred stock. The Class A common stock, Class B common stock and preferred stock have a par value of $0.0001 per share. Class A Common Stock and Class B Common Stock Except for voting rights, or as otherwise required by applicable law, the shares of our Class A common stock and Class B common stock have the same powers, preferences and rights and rank equally, share ratably and are identical in all respects as to all matters. The rights and preferences are as follows: Dividend Rights. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of outstanding shares of our Class A common stock and Class B common stock are entitled to receive dividends out of funds legally available at the times and in the amounts that our Board of Directors may determine. Voting Rights. The holders of our Class A common stock are entitled to one vote per share, and holders of our Class B common stock are entitled to 10 votes per share. The holders of our Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders, unless otherwise required by Delaware law or our amended and restated certificate of incorporation. Delaware law could require either holders of our Class A common stock or holders of our Class B common stock to vote separately. In addition, our amended and restated certificate of incorporation requires the approval of the holders of at least a majority of the outstanding shares of our Class B common stock, voting as a separate class to approve a change-in-control transaction. Conversion. Each share of our Class B common stock is convertible at any time at the option of the holder into one share of our Class A common stock. In addition, each share of our Class B common stock will convert into one share of our Class A common stock upon any transfer, whether or not for value, except for certain transfers described in our amended and restated certificate of incorporation, including, without limitation, (i) a transfer by a partnership or limited liability company that was a registered holder of our Class B common stock at the “effective time,” as defined in our amended and restated certificate of incorporation, to a partner or member thereof at the effective time or (ii) a transfer to a “qualified recipient,” as defined in our amended and restated certificate of incorporation. All the outstanding shares of our Class B common stock will convert automatically into shares of our Class A common stock upon the date when the number of outstanding shares of our Class B common stock represents less than 10% of all outstanding shares of our Class A common stock and Class B common stock. Once converted into our Class A common stock, our Class B common stock may not be reissued. Right to Receive Liquidation Distributions. Upon our dissolution, liquidation or winding-up, the assets legally available for distribution to our stockholders are distributable ratably among the holders of our Class A common stock and Class B common stock, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock. Preferred Stock Our Board of Directors is authorized, subject to limitations prescribed by Delaware law, to issue up to 25,000,000 shares of our preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further action by our stockholders. The number of authorized shares of any series of preferred stock may be increased or decreased, but not below the number of shares of that series then outstanding, by the affirmative vote of the holders of a majority of the voting power of our outstanding capital stock entitled to vote thereon, or such other vote as may be required by the certificate of designation establishing the series. Share Repurchase Program On February 20, 2019, our Board of Directors authorized a $100.0 million share repurchase program (the "Share Repurchase Program") relating to our outstanding shares of Class A common stock. Under the Share Repurchase Program, share repurchases may be made from time to time, as directed by a committee consisting of three directors, in open market purchases or in privately negotiated transactions at a repurchase price that the members of the committee unanimously believe is below intrinsic value conservatively determined. The Share Repurchase Program does not obligate us to repurchase any specific dollar amount or number of shares, there is no expiration date for the Share Repurchase Program, which may be modified, suspended or terminated at any time and for any reason. During the year ended December 31, 2020, we repurchased a total of 48,002 shares of our Class A common stock through open market repurchases, and recorded a $4.2 million reduction to stockholders' equity, which includes broker commissions. We have not made any other repurchases under the Share Repurchase Program.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

Leases - Narrative (Details) - USD ($)	12 Months Ended
Leases - Narrative (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Lessee, Lease, Description [Line Items]
Lease renewal term	10 years
Impairment, long-lived asset, held-for-use	$ 22,000,000	$ 0	$ 0
Impairment related to ROU assets	17,600,000
Impairment of leased office property and equipment	$ 4,400,000
Minimum
Lessee, Lease, Description [Line Items]
Lease term	5 months
Maximum
Lessee, Lease, Description [Line Items]
Lease term	10 years

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Summary of Stock Option Activity

A summary of activity in connection with our stock options for the year ended December 31, 2022 is as follows (number of shares in thousands):


	Number of Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life in Years
Options outstanding as of December 31, 2021	846	$	13.15	3.0

Options exercised	(330)	13.56

Options outstanding as of December 31, 2022	516	$	12.90	2.7

At December 31, 2022:
Options vested and expected to vest	516	$	12.90	2.7
Options exercisable	516	$	12.90	2.7

Schedule of Restricted Stock Units Activity

A summary of activity in connection with our RSUs for the year ended December 31, 2022 is as follows (number of shares in thousands):


	Number of Shares	Weighted Average Grant Date Fair Value per Share
Unvested as of December 31, 2021	837	$	118.27
Granted	726	110.61
Vested	(252)	111.03
Forfeited	(149)	104.09
Unvested as of December 31, 2022	1,162	$	116.88

Schedule of Restricted Stock Activity

A summary of activity in connection with our RSAs for the year ended December 31, 2022 is as follows (number of shares in thousands):


	Number of Shares	Weighted- Average Grant Date Fair Value per Share
Unvested as of December 31, 2021	4	$	144.33
Granted	6	96.33
Vested	(4)	144.33

Unvested as of December 31, 2022	6	$	96.33

Sales of Subsidiary Businesses	12 Months Ended
Sales of Subsidiary Businesses	Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract]
Sales of Subsidiary Businesses	Sales of Subsidiary Businesses Sale of WegoWise In August 2022, we completed the sale of AppFolio Utility Management, Inc., dba WegoWise ("WegoWise"), a former wholly owned subsidiary of the Company that provided cloud-based utility analytics reporting software solutions to our customers. We sold WegoWise for $5.2 million (the “WegoWise Transaction”) and recognized a pre-tax gain on the sale of $4.2 million. Net assets divested are primarily comprised of intangible assets of $2.5 million and deferred revenue of $1.7 million. The gain on the sale is included within Other income, net in our Consolidated Statements of Operations. Sale of MyCase On September 30, 2020, we completed the sale of MyCase, Inc. ("MyCase"), a former wholly owned subsidiary that provided legal practice and case management software solutions to our legal customers, for $193.0 million, consisting of $192.2 million of cash proceeds, plus a $2.2 million employee retention bonus pool funded by us, less cash divested of $0.8 million and a preliminary working capital adjustment of $0.6 million (the "MyCase Transaction"). The retention bonus pool was refundable to the Company to the extent that MyCase employees were terminated prior to the retention period, which was one year from the closing date of the MyCase Transaction. We recognized a pre-tax gain on the sale of $188.0 million on the MyCase Transaction, consisting of cash proceeds of $192.2 million, less net assets divested of $4.6 million, plus an adjustment in the employee retention bonus pool of $0.4 million. Net assets divested is primarily comprised of capitalized software of $3.9 million, deferred revenue of $2.8 million and goodwill allocated to MyCase of $2.3 million. The gain on the sale was recorded within Other income, net. Income received during the twelve months ended December 31, 2021 and 2020 in relation to the transition services provided by us to MyCase was $2.4 million, and $1.1 million respectively, and is included within Other income, net in our Consolidated Statements of Operations.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of Presentation

The accompanying Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Reclassification

Principles of Consolidation

Use of Estimates

Segment Information

Segment Information Our chief operating decision maker reviews financial information presented on an aggregated and consolidated basis, together with revenue information for our core solutions, Value Added Services, and other service offerings, principally to make decisions about how to allocate resources and to measure our performance. Accordingly, we have determined that we have one reportable and operating segment.

Concentrations of Credit Risk

Concentrations of credit risk with respect to accounts receivable and revenue are limited due to a large, diverse customer base.

Fair Value Measurements

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, in the marketplace.

Level 3 - Unobservable inputs that are supported by little or no market activity.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash We consider all highly liquid investments, readily convertible to cash, and which have a remaining maturity date of three months or less at the date of purchase, to be cash equivalents. Cash and cash equivalents are recorded at fair value and consist primarily of bank deposits and money market funds.

Investment Securities

Accounts Receivable

Accounts Receivable Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. The allowance for credit losses is based on historical loss experience, the number of days that receivables are past due, and an evaluation of the potential risk of loss associated with delinquent accounts. Accounts receivable considered uncollectible are charged against the allowance for credit losses when identified. We do not have any off-balance sheet credit exposure related to our customers.

Property and Equipment

Property and equipment is stated at cost net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of assets as follows:


Asset Type						Depreciation Period
Computer equipment						3 years
Furniture and fixtures						7 years
Office equipment						3 to 5 years
Leasehold improvements						Shorter of remaining life of lease or asset life

Leases

Capitalized Software Development Costs

Goodwill and Intangible Assets

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets We assess the recoverability of our long-lived assets when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable or that the useful lives of those assets are no longer appropriate. An impairment charge would be recognized when the carrying amount of a long-lived asset or asset group is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group.

Revenue Recognition and Deferred Costs

Revenue Recognition

Core Solutions

Value Added Services

Other Revenue

Deferred Revenue

We record deferred revenue when cash payments are received in advance of our performance.Deferred Costs Deferred costs, which primarily consist of sales commissions, are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be three years. We typically do not pay commissions for contract renewals. We determined the period of benefit by taking into consideration our customer contract term, the useful life of our internal-use software, average customer life, and other factors. Amortization expense for the deferred costs is included within sales and marketing expense in the accompanying Consolidated Statements of Operations.

Cost of Revenue (Exclusive of Depreciation and Amortization)

Sales and Marketing, General and Administrative

Sales and Marketing Sales and marketing expense consists of personnel-related costs for our employees focused on sales and marketing (including salaries, sales commissions, performance-based compensation, benefits, and stock-based compensation), costs associated with sales and marketing activities, and allocated shared and other costs. Marketing activities include advertising, online lead generation, lead nurturing, customer and industry events, and the creation of industry-related content and collateral. We focus our sales and marketing efforts on generating awareness of our software solutions, creating sales leads, establishing and promoting our brands, and cultivating an educated community of successful and vocal customers.

General and Administrative

Research and Product Development

Depreciation and Amortization

Depreciation and Amortization Depreciation and amortization expense includes depreciation of property and equipment, amortization of capitalized software development costs, and amortization of intangible assets. We depreciate or amortize property and equipment, software development costs, and intangible assets over their expected useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed.

Stock-Based Compensation

Income Taxes

Net (Loss) Income per Common Share

Recent Accounting Pronouncements Not Yet Adopted

Property and Equipment, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 39,245	$ 41,242
Less: Accumulated depreciation	(13,135)	(10,763)
Total property and equipment, net	26,110	30,479
Depreciation expense on property and equipment	5,100	4,700	$ 4,000
Impairment of leased office property and equipment	4,400
Computer equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	5,529	4,884
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Gross property and equipment	5,747	5,167
Office equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	3,800	3,285
Leasehold improvements
Property, Plant and Equipment [Line Items]
Gross property and equipment	23,625	22,679
Construction in process
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 544	$ 5,227

Capitalized Software Development Costs, net - Software Development Costs (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Research and Development [Abstract]
Capitalized software development costs, gross	$ 129,749	$ 115,377
Less: Accumulated amortization	(94,434)	(74,165)
Capitalized software development costs, net	$ 35,315	$ 41,212

Intangible Assets, net and Goodwill (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets, net consisted of the following (in thousands, except years):


	December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted Average Useful Life in Years
Customer relationships	$	1,670	$	(1,448)	$	222	5.0
Database	4,710		(1,884)		2,826		10.0
Technology	6,539		(6,539)		—		4.0
Trademarks and trade names	1,520		(1,211)		309		5.0
Partner relationships	680		(680)		—		3.0
Non-compete agreements	7,340		(5,872)		1,468		5.0
Domain names	90		(82)		8		5.0
Patents	252		(252)		—		5.0

Total intangible assets, net	$	22,801	$	(17,968)	$	4,833	4.7


	December 31, 2021
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted Average Useful Life in Years
Customer relationships	$	2,840	$	(2,006)	$	834	5.0
Database	8,330		(2,620)		5,710		10.0
Technology	6,539		(5,107)		1,432		4.0
Trademarks and trade names	1,890		(1,128)		762		5.0
Partner relationships	680		(680)		—		3.0
Non-compete agreements	7,400		(4,444)		2,956		5.0
Domain names	90		(75)		15		5.0
Patents	252		(250)		2		5.0

Total intangible assets, net	$	28,021	$	(16,310)	$	11,711	6.3

Scheduled of Future Amortization Expense

Future amortization expense with respect to intangible assets is estimated as follows (in thousands):


Years Ending December 31,
2023	$	2,476
2024	473
2025	471
2026	471
2027	471
Thereafter	471
Total	$	4,833

Schedule of Goodwill

The change in the carrying amount of goodwill during the year ended December 31, 2022 is as follows (in thousands):


Goodwill at December 31, 2021	$	56,147
Goodwill attributed to WegoWise Transaction	(87)
Goodwill at December 31, 2022	$	56,060

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
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-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
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-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
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Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1
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Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
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-Paragraph 1A
-URI https://asc.fasb.org/extlink&oid=121556970&loc=SL108378252-109267

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
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-Paragraph 1
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Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
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-Paragraph 2
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Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 55
-Paragraph 24
-URI https://asc.fasb.org/extlink&oid=122137925&loc=d3e14258-109268

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

+ Details

Leases - Schedule of Components of Lease expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Operating lease cost	$ 5,403	$ 5,203	$ 5,272
Variable lease cost	1,058	1,463	1,443
Total lease cost	$ 6,461	$ 6,666	$ 6,715

Retirement Plans (Details) - USD ($) $ in Millions	12 Months Ended
Retirement Plans (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Retirement Benefits [Abstract]
401k cash contributions	$ 5.9	$ 4.0	$ 3.2

Sales of Subsidiary Businesses - Narrative (Details) - USD ($) $ in Thousands			12 Months Ended
	Aug. 31, 2022	Sep. 30, 2020	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on sale of business			$ 4,156	$ 380	$ 187,658
WegoWise \| Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration for disposal of subsidiary	$ 5,200
Gain on sale of business	4,200
Disposal group, intangible assets	2,500
Deferred revenue	$ 1,700
MyCase \| Discontinued operations, disposed of by sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration for disposal of subsidiary		$ 193,000
Deferred revenue		2,800
Proceeds from divestiture of subsidiary		192,200
Employee retention bonus pool		2,200
Cash divested		800
Working capital adjustment		$ 600
Retention period		1 year
Gain on sale of subsidiary		$ 188,000
Assets divested		4,600
Adjustment in employee retention bonus pool		400
Capitalized software		3,900
Goodwill		$ 2,300
Income received				$ 2,400	$ 1,100

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

The effective tax rate as compared to the U.S. federal statutory rate of 21% differs primarily due to change in valuation allowance against deferred taxes and non-deductible expenses, partially offset by state income taxes and tax benefits associated with stock-based compensation expense and research and development tax credits.

Set forth below is a reconciliation of the components that caused our provision for income taxes to differ from amounts computed by applying the United States federal statutory rate:


	Year Ended December 31,
	2022		2021		2020
U.S. federal statutory income tax rate	21	%	21	%	21	%
State and local income taxes, net of federal benefit	9		(214)		3
Stock-based compensation expense	7		(426)		(3)
Non-deductible officers' compensation	(6)		47		—
Meals and entertainment	—		3		—

Change in valuation allowance	(37)		795		—

Other permanent differences	(1)		20		1
Research and development tax credits	5		(205)		(2)
Provision for income taxes	(2)	%	41	%	20	%

The provision for income tax consists of the following (in thousands):


	Year Ended December 31,
	2022		2021		2020
Current
Federal	$	1,313	$	20	$	3,982
State and local	686		346		5,444
Total current	1,999		366		9,426
Deferred
Federal	(854)		(10,966)		27,982
State and local	257		11,306		1,020
Total deferred	(597)		340		29,002
Total income tax provision	$	1,402	$	706	$	38,428

The components of deferred tax assets (liabilities) were as follows (in thousands):


	December 31,
	2022		2021
Deferred income tax assets:
Net operating loss carryforwards	$	5,802	$	10,849
Research and development tax credits	18,558		15,966
Capitalized research and software costs	14,706		—

Stock-based compensation	5,105		3,965
Lease liability	14,260		13,983
Other	3,614		2,853
Total deferred tax assets	62,045		47,616
Valuation allowance	(43,776)		(17,217)
Deferred tax assets, net of valuation allowance	18,269		30,399
Deferred tax liabilities:
Capitalized research and software costs	—		(9,972)
Property and equipment	(4,914)		(5,024)
Intangible assets	(940)		(1,558)
Capitalized commissions	(4,217)		(3,296)

Lease asset	(6,249)		(11,056)
Other	(2,634)		(1,171)
Total deferred tax liabilities	(18,954)		(32,077)
Total net deferred tax liabilities	$	(685)	$	(1,678)

At December 31, 2022, we had state net operating loss carryforwards $66.0 million. The state net operating losses will begin to expire in 2028. At December 31, 2022, we also had federal and state research and development credit carryforwards of $8.7 million and $19.3 million, respectively. The federal credit carryforwards will begin to expire in 2040, while the state credit carryforwards apply indefinitely. Utilization of our net operating loss and credit carryforwards may be subject to annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. We have undertaken an analysis and have determined that there are no limitations on the tax attributes at December 31, 2022.

The change in the valuation allowance are as follows (in thousands):


	Year Ended December 31,
	2022		2021		2020
Valuation allowance, at beginning of year	$	17,217	$	—	$	—
Increase in valuation allowance	26,559		17,217		—
Valuation allowance, at end of year	$	43,776	$	17,217	$	—

The following is a reconciliation of the total amounts of reserves for unrecognized tax benefits from uncertain tax positions (in thousands):


	Year Ended December 31,
	2022		2021		2020
Unrecognized tax benefit beginning of year	$	7,816	$	6,141	$	4,421

Increases-tax positions in current year	1,639		1,675		1,720
Unrecognized tax benefit end of year	$	9,455	$	7,816	$	6,141

The unrecognized tax benefits are recorded as a reduction to the deferred tax assets and liabilities.

At December 31, 2022 and 2021, we had no accrued interest and penalties related to uncertain income tax positions. We do not anticipate that the amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

We are subject to taxation in the United States and various states. Due to the net operating loss carryforwards, our federal and state returns are open to examination by the Internal Revenue Service and state jurisdictions for all years since inception.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Intangible Assets, net and Goodwill - Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
2023	$ 2,476
2024	473
2025	471
2026	471
2027	471
Thereafter	471
Net Carrying Value	$ 4,833	$ 11,711

Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands

12 Months Ended

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

Income Statement [Abstract]

Revenue

$ 471,883

$ 359,370

$ 310,056

Costs and operating expenses:

Cost of revenue (exclusive of depreciation and amortization)

^[1]

191,826

143,944

119,029

Sales and marketing

^[1]

107,398

73,200

58,445

Research and product development

^[1]

111,118

65,980

48,529

General and administrative

^[1]

100,792

57,279

47,480

Depreciation and amortization

33,119

30,845

26,790

Total costs and operating expenses

544,253

371,248

300,273

(Loss) income from operations

(72,370)

(11,878)

9,783

Other income, net

4,469

13,111

188,897

Interest income (expense), net

1,184

501

(1,849)

(Loss) income before provision for income taxes

(66,717)

1,734

196,831

Provision for income taxes

1,402

706

38,428

Net (loss) income

$ (68,119)

$ 1,028

$ 158,403

Net (loss) income per common share:

Basic (in dollars per share)

$ (1.95)

$ 0.03

$ 4.62

Diluted (in dollars per share)

$ (1.95)

$ 0.03

$ 4.44

Weighted average common shares outstanding:

Basic (in shares)

35,010

34,578

34,264

Diluted (in shares)

35,010

35,701

35,713

[1]

(1) Includes stock-based compensation expense as follows:


	Year Ended December 31,
	2022		2021		2020
Stock-based compensation expense included in costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)	$	2,640	$	2,024	$	1,506
Sales and marketing	8,681		2,329		1,415
Research and product development	16,030		5,457		1,818
General and administrative	13,584		5,531		4,286
Total stock-based compensation expense	$	40,935	$	15,341	$	9,025

Stock-Based Compensation - Restricted Stock Units (Details) - RSUs shares in Thousands	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Number of Shares
Unvested, beginning balance (in shares) \| shares	837
Granted (in shares) \| shares	726
Vested (in shares) \| shares	(252)
Forfeited (in shares) \| shares	(149)
Unvested, ending balance (in shares) \| shares	1,162
Weighted Average Grant Date Fair Value per Share
Unvested, beginning balance (in dollars per share) \| $ / shares	$ 118.27
Granted (in dollars per share) \| $ / shares	110.61
Vested (in dollars per share) \| $ / shares	111.03
Forfeited (in dollars per share) \| $ / shares	104.09
Unvested, ending balance (in dollars per share) \| $ / shares	$ 116.88

Income Taxes - Effective Income Tax Reconciliation (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
U.S. federal statutory income tax rate	21.00%	21.00%	21.00%
State and local income taxes, net of federal benefit	9.00%	(214.00%)	3.00%
Stock-based compensation expense	7.00%	(426.00%)	(3.00%)
Non-deductible officers' compensation	(6.00%)	47.00%	0.00%
Meals and entertainment	0.00%	3.00%	0.00%
Change in valuation allowance	(37.00%)	795.00%	0.00%
Other permanent differences	(1.00%)	20.00%	1.00%
Research and development tax credits	5.00%	(205.00%)	(2.00%)
Provision for income taxes	(2.00%)	41.00%	20.00%

Stockholders' Equity - Share Repurchase Program (Details)	12 Months Ended
	Dec. 31, 2020 USD ($) shares	Feb. 20, 2019 USD ($) director
Equity [Abstract]
Authorized amount under share repurchase program		$ 100,000,000
Number of directors to authorized repurchases \| director		3
Repurchased shares (in shares) \| shares	48,002
Reduction in stockholders' equity	$ 4,200,000

Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2022
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	3 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	7 years
Office equipment \| Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	3 years
Office equipment \| Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years

Summary of Significant Accounting Policies - Additional Information (Details) shares in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) segment	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) shares
Finite-Lived Intangible Assets [Line Items]
Number of operating segments \| segment	1
Number of reportable segments \| segment	1
Allowance for credit losses, available-for sale investments	$ 0	$ 0
Impairment losses for goodwill	0	0	$ 0
Impairment, long-lived asset, held-for-use	22,000,000	0	0
Deferred revenue	900,000	2,500,000
Deferred revenue recognized during the period	2,400,000	2,200,000
Revenue, remaining performance obligation, amount	$ 15,000,000
Amortization period of deferred cost	3 years
Deferred costs	$ 15,800,000	12,400,000
Deferred costs, current	8,100,000	6,400,000
Deferred costs, noncurrent	7,700,000	6,000,000
Amortization expense	8,100,000	6,800,000	5,800,000
Capitalized contract cost, impairment loss	0	0
Advertising expense	$ 9,200,000	$ 9,400,000	$ 7,000,000
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration]	Impairment, net
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Finite-Lived Intangible Assets [Line Items]
Revenue, remaining performance obligation, percentage	47.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	12 months
Performance shares
Finite-Lived Intangible Assets [Line Items]
Shares excluded from net loss per share attributable to common stockholders (in shares) \| shares		181	79
Capitalized software development costs
Finite-Lived Intangible Assets [Line Items]
Estimated useful lives (in years)	3 years

Accrued Employee Expenses

12 Months Ended

Dec. 31, 2022

Accrued Employee Expenses

Accrued employee expenses consisted of the following (in thousands):


	December 31,
	2022		2021
Accrued vacation	$	12,067	$	10,675
Accrued bonuses	13,806		13,101
Accrued payroll and other	8,503		6,289



Total accrued employee expenses	$	34,376	$	30,065

Capitalized Software Development Costs, net - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Capitalized software development costs during the period	$ 17.7	$ 27.2	$ 27.3
Amortization expense with respect to software development costs during the period	23.6	21.5	$ 17.9
Fully amortized capitalized software development costs disposed of	$ 3.3	$ 8.8

Stock-Based Compensation - Restricted Stock Units Narrative (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 40,935	$ 15,341	$ 9,025
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	0.00%
RSUs and PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 43,300	17,300	10,400
Stock-based compensation capitalized for software development	3,000	2,700	2,100
Remaining stock-based compensation expense for unvested shares, not yet recognized	$ 100,100
Stock-based compensation expense, weighted average recognition period (in years)	2 years 7 months 6 days
Fair value of shares vested	$ 27,500	$ 26,600	$ 32,000
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	726
Vesting period	4 years
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Percent of award target performance metric	100.00%
PSUs \| Tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	100
PSUs \| Tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	100
PSUs \| Minimum \| Tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	0.00%
PSUs \| Minimum \| Tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	100.00%
PSUs \| Minimum \| Tranche three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of cash bonus payment on initial targets	0.00%
PSUs \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	100.00%
PSUs \| Maximum \| Tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	150.00%
PSUs \| Maximum \| Tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of award target performance metric	150.00%
PSUs \| Maximum \| Tranche three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of cash bonus payment on initial targets	65.00%
Unvested RSAs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	6
Vesting period	1 year
Remaining stock-based compensation expense for unvested shares, not yet recognized	$ 300
Stock-based compensation expense, weighted average recognition period (in years)	6 months
Restricted Stock Units With Service Conditions
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	1,000
Restricted Stock Units with Service and Performance Conditions
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	200

Capitalized Software Development Costs, net - Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Research and Development [Abstract]
2023	$ 19,237
2024	11,407
2025	4,377
2026	294
Capitalized software development costs, net	$ 35,315	$ 41,212

Intangible Assets, net and Goodwill - Schedule of Goodwill (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Goodwill [Roll Forward]
Goodwill at December 31, 2021	$ 56,147
Goodwill attributed to WegoWise Transaction	(87)
Goodwill at December 31, 2022	$ 56,060

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Schedule of Components of Lease Expense

The components of lease expense recognized in the Consolidated Statements of Operations were as follows (in thousands):


	Year Ended December 31,
	2022		2021		2020
Operating lease cost	$	5,403	$	5,203	$	5,272
Variable lease cost	1,058		1,463		1,443
Total lease cost	$	6,461	$	6,666	$	6,715

Lease Assets and Liabilities

Lease-related assets and liabilities were as follows (in thousands, except years and %):


	December 31,
	2022			2021
Assets
Prepaid expenses and other current assets	$	—		$	4,854
Operating lease right-of-use assets	23,485			41,710

Liabilities
Other current liabilities	$	3,357		$	1,874
Operating lease liabilities	50,237			55,733
Total lease liabilities	$	53,594		$	57,607

Weighted-average remaining lease term (years)	9.4			10.3
Weighted-average discount rate	3.9		%	4.0		%

Schedule of Minimum Lease Payments Under Leases

Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows (in thousands):


Years ending December 31,
2023(1)	$	2,615
2024	6,351
2025	6,837
2026	7,035
2027	7,239
Thereafter	35,042
Total future minimum lease payments	65,119
Less: imputed interest	(11,525)
Total	$	53,594

(1) Future minimum lease payments for the year ending December 31, 2023 are presented net of tenant improvement allowances of $3.5 million.

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2022
Auditor Information [Abstract]
Auditor Firm ID	238
Auditor Name	PricewaterhouseCoopers LLP
Auditor Location	Los Angeles, California

Investments Securities and Fair Value Measurements - Investment Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 116,609	$ 125,941
Gross Unrealized Gains	2	2
Gross Unrealized Losses	(2,153)	(267)
Estimated Fair Value	114,458	125,676
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	17,497	29,080
Gross Unrealized Gains	2	0
Gross Unrealized Losses	(112)	(11)
Estimated Fair Value	17,387	29,069
Agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	17,507	19,753
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(484)	(27)
Estimated Fair Value	17,023	19,726
Treasury securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	81,605	77,108
Gross Unrealized Gains	0	2
Gross Unrealized Losses	(1,557)	(229)
Estimated Fair Value	$ 80,048	$ 76,881

Summary of Significant Accounting Policies - Net Income per Share Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Weighted average common shares outstanding (in shares)	35,015	34,583	34,269
Less: weighted average unvested restricted shares subject to repurchase (in shares)	5	5	5
Weighted average common shares outstanding; basic (in shares)	35,010	34,578	34,264
Plus: weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share (in shares)	0	1,123	1,449
Weighted average common shares outstanding; diluted (in shares)	35,010	35,701	35,713

Income Taxes - Changes in Valuation Allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Changes In Valuation Allowance [Roll Forward]
Valuation allowance, at beginning of year	$ 17,217	$ 0	$ 0
Increase in valuation allowance	26,559	17,217	0
Valuation allowance, at end of year	$ 43,776	$ 17,217	$ 0

Revenue and Other Information (Tables)

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Schedule of Product Information by Revenue Categories

The following table presents our revenue categories (in thousands):


	Year Ended December 31,
	2022		2021		2020
Core solutions	$	132,541	$	105,148	$	100,938
Value Added Services	327,636		241,289		195,146
Other	11,706		12,933		13,972
Total revenue	$	471,883	$	359,370	$	310,056

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

Set forth below is a reconciliation of the components that caused our provision for income taxes to differ from amounts computed by applying the United States federal statutory rate:


	Year Ended December 31,
	2022		2021		2020
U.S. federal statutory income tax rate	21	%	21	%	21	%
State and local income taxes, net of federal benefit	9		(214)		3
Stock-based compensation expense	7		(426)		(3)
Non-deductible officers' compensation	(6)		47		—
Meals and entertainment	—		3		—

Change in valuation allowance	(37)		795		—

Other permanent differences	(1)		20		1
Research and development tax credits	5		(205)		(2)
Provision for income taxes	(2)	%	41	%	20	%

Schedule of Components of Income Tax Expense (Benefit)

The provision for income tax consists of the following (in thousands):


	Year Ended December 31,
	2022		2021		2020
Current
Federal	$	1,313	$	20	$	3,982
State and local	686		346		5,444
Total current	1,999		366		9,426
Deferred
Federal	(854)		(10,966)		27,982
State and local	257		11,306		1,020
Total deferred	(597)		340		29,002
Total income tax provision	$	1,402	$	706	$	38,428

Schedule of Deferred Tax Assets and Liabilities

The components of deferred tax assets (liabilities) were as follows (in thousands):


	December 31,
	2022		2021
Deferred income tax assets:
Net operating loss carryforwards	$	5,802	$	10,849
Research and development tax credits	18,558		15,966
Capitalized research and software costs	14,706		—

Stock-based compensation	5,105		3,965
Lease liability	14,260		13,983
Other	3,614		2,853
Total deferred tax assets	62,045		47,616
Valuation allowance	(43,776)		(17,217)
Deferred tax assets, net of valuation allowance	18,269		30,399
Deferred tax liabilities:
Capitalized research and software costs	—		(9,972)
Property and equipment	(4,914)		(5,024)
Intangible assets	(940)		(1,558)
Capitalized commissions	(4,217)		(3,296)

Lease asset	(6,249)		(11,056)
Other	(2,634)		(1,171)
Total deferred tax liabilities	(18,954)		(32,077)
Total net deferred tax liabilities	$	(685)	$	(1,678)

Summary of Valuation Allowance

The change in the valuation allowance are as follows (in thousands):


	Year Ended December 31,
	2022		2021		2020
Valuation allowance, at beginning of year	$	17,217	$	—	$	—
Increase in valuation allowance	26,559		17,217		—
Valuation allowance, at end of year	$	43,776	$	17,217	$	—

Schedule of Unrecognized Tax Benefits Roll Forward

The following is a reconciliation of the total amounts of reserves for unrecognized tax benefits from uncertain tax positions (in thousands):


	Year Ended December 31,
	2022		2021		2020
Unrecognized tax benefit beginning of year	$	7,816	$	6,141	$	4,421

Increases-tax positions in current year	1,639		1,675		1,720
Unrecognized tax benefit end of year	$	9,455	$	7,816	$	6,141

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Class A common stock	Class B common stock	Common Stock Class A common stock	Common Stock Class B common stock	Additional paid-in capital	Accumulated other comprehensive (loss) income	Treasury Stock	Retained Earnings/Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2019				16,552,000	17,594,000
Beginning balance at Dec. 31, 2019	$ 131,950			$ 2	$ 2	$ 161,509	$ 33	$ (21,562)	$ (8,034)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)				106,000	13,000
Exercise of stock options	822					822
Stock-based compensation	11,112					11,112
Vesting of restricted stock units, net of shares withheld for taxes (in shares)				166,000
Vesting of restricted stock units, net of shares withheld for taxes	(12,196)					(12,196)
Conversion of Class B stock to Class A stock (in shares)				1,948,000	(1,948,000)
Issuance of restricted stock awards (in shares)				5,000
Other comprehensive income (loss)	23						23
Repurchase of common stock (in shares)				(48,000)
Repurchase of common stock	(4,194)							(4,194)
Net (loss) income	158,403								158,403
Ending balance (in shares) at Dec. 31, 2020				18,729,000	15,659,000
Ending balance at Dec. 31, 2020	285,920			$ 2	$ 2	161,247	56	(25,756)	150,369
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)				238,000	84,000
Exercise of stock options	2,614					2,614
Stock-based compensation	18,031					18,031
Vesting of restricted stock units, net of shares withheld for taxes (in shares)				111,000
Vesting of restricted stock units, net of shares withheld for taxes	(9,962)					(9,962)
Conversion of Class B stock to Class A stock (in shares)				335,000	(335,000)
Issuance of restricted stock awards (in shares)				4,000
Other comprehensive income (loss)	(250)						(250)
Net (loss) income	1,028								1,028
Ending balance (in shares) at Dec. 31, 2021		19,417,000	15,408,000	19,417,000	15,408,000
Ending balance at Dec. 31, 2021	$ 297,381			$ 2	$ 2	171,930	(194)	(25,756)	151,397
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)	330,000			303,000	27,000
Exercise of stock options	$ 4,474					4,474
Stock-based compensation	43,937					43,937
Vesting of restricted stock units, net of shares withheld for taxes (in shares)				154,000
Vesting of restricted stock units, net of shares withheld for taxes	(10,637)					(10,637)
Conversion of Class B stock to Class A stock (in shares)				689,000	(689,000)
Issuance of restricted stock awards (in shares)				6,000
Other comprehensive income (loss)	(1,490)						(1,490)
Net (loss) income	(68,119)								(68,119)
Ending balance (in shares) at Dec. 31, 2022		20,569,000	14,746,000	20,569,000	14,746,000
Ending balance at Dec. 31, 2022	$ 265,546			$ 2	$ 2	$ 209,704	$ (1,684)	$ (25,756)	$ 83,278

Income Taxes - Components of Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Current
Federal	$ 1,313	$ 20	$ 3,982
State and local	686	346	5,444
Total current	1,999	366	9,426
Deferred
Federal	(854)	(10,966)	27,982
State and local	257	11,306	1,020
Total deferred	(597)	340	29,002
Total income tax provision	$ 1,402	$ 706	$ 38,428

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Leases - Schedule of Minimum Lease payments Under Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Leases [Abstract]
2023	$ 2,615
2024	6,351
2025	6,837
2026	7,035
2027	7,239
Thereafter	35,042
Total future minimum lease payments	65,119
Less: imputed interest	(11,525)
Total	53,594	$ 57,607
Tenant improvement allowances, net	$ 3,500

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Class A common stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	20,988,000	19,836,000
Common shares outstanding (in shares)	20,569,000	19,417,000
Treasury stock (in shares)	419,000
Class B common stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	14,746,000	15,408,000
Common shares outstanding (in shares)	14,746,000	15,408,000

Consolidated Statements of Cash Flows - Reconciliation - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Cash Flows [Abstract]
Cash and cash equivalents	$ 70,769	$ 57,847	$ 140,263
Restricted cash included in other assets	250	436	436
Total cash, cash equivalents and restricted cash	$ 71,019	$ 58,283	$ 140,699

Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

We currently have two stock incentive plans, our 2007 Stock Incentive Plan (the "2007 Plan") and the 2015 Stock Incentive Plan (the "2015 Plan"). The 2007 Plan expired on February 14, 2017, however it will continue to govern outstanding awards granted under the 2007 Plan.

Under the 2015 Plan, 2,000,000 shares of our Class A common stock were reserved and available for grant and issuance. On January 1 of each subsequent calendar year, the number of shares available for grant and issuance under the 2015 Plan increase by the lesser of (i) the number of shares of our Class A common stock subject to awards granted under the 2015 Plan during the preceding calendar year and (ii) such lesser number of shares of our Class A common stock determined by our Board of Directors. At December 31, 2022, we have reserved an aggregate of 4,450,726 shares of our Class A common stock for grant and issuance under the 2015 Plan. The number of shares of our Class A common stock is also subject to adjustment in the event of a recapitalization, stock split, reclassification, stock dividend or other change in our capitalization. The 2015 Plan authorizes the award of stock options, stock appreciation rights, RSAs, RSUs, performance awards and stock bonuses. The 2015 Plan provides for the grant of awards to our employees, directors, consultants and independent contractors, subject to certain exceptions. RSUs, PSUs, and RSAs have been issued during 2022 pursuant to the 2015 Plan.

RSUs and PSUs represent the right on the part of the holder to receive shares of our Class A common stock at a specified date in the future or the achievement of performance conditions at the discretion of our compensation committee, subject to forfeiture of that right due to termination of employment. If an RSU or PSU has not been forfeited, then, on the specified date, we will deliver to the holder of the RSU or PSU shares of our Class A common stock.

Stock Options

A summary of activity in connection with our stock options for the year ended December 31, 2022 is as follows (number of shares in thousands):


	Number of Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life in Years
Options outstanding as of December 31, 2021	846	$	13.15	3.0

Options exercised	(330)	13.56

Options outstanding as of December 31, 2022	516	$	12.90	2.7

At December 31, 2022:
Options vested and expected to vest	516	$	12.90	2.7
Options exercisable	516	$	12.90	2.7

Our stock-based compensation expense for stock options were not material for the periods presented.

No stock options were granted during the years ended December 31, 2022, 2021 or 2020.

The total intrinsic value of options exercised in 2022, 2021 and 2020 was $31.1 million, $39.1 million, and $17.9 million, respectively. This intrinsic value represents the difference between the fair value of our common stock on the date of exercise and the exercise price of each option. Based on the fair value of our common stock at December 31, 2022, the total intrinsic value of all outstanding options, exercisable options, and options vested and expected to vest was $47.7 million.

Restricted Stock Units

A summary of activity in connection with our RSUs for the year ended December 31, 2022 is as follows (number of shares in thousands):


	Number of Shares	Weighted Average Grant Date Fair Value per Share
Unvested as of December 31, 2021	837	$	118.27
Granted	726	110.61
Vested	(252)	111.03
Forfeited	(149)	104.09
Unvested as of December 31, 2022	1,162	$	116.88

Unvested RSUs as of December 31, 2022 were composed of 1.0 million RSUs with only service conditions and 0.2 million PSUs with both service conditions and performance conditions. RSUs granted with only service conditions generally vest over a four-year period. The number of PSUs granted, as included in the above table, assumes achievement of the performance metric at 100% of the performance target. Of the unvested PSUs as of December 31, 2022, 0.1 million are subject to vesting based on the achievement of pre-established performance metrics for the year ending December 31, 2022 and will vest over a three year period, assuming continued employment throughout the performance period. The actual number of shares to be issued at the end of the performance period will range from 0% to 150% of the target number of shares depending on achievement relative to the performance metric over the applicable period. The remaining 0.1 million PSUs unvested as of December 31, 2022 are subject to vesting based on the achievement of pre-established performance metrics for the years ending December 31, 2022 and 2023, assuming continued employment throughout the performance period. The actual number of shares to be issued at the end of the performance period will range from 0% to 100% of the initial target awards. Achievement of the performance metric between 100% and 150% of the performance target will result in a performance-based cash bonus payment between 0% and 65% of the initial target awards.

We recognized stock-based compensation expense for the RSUs and PSUs of $43.3 million, $17.3 million and $10.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. Excluded from stock-based compensation expense is capitalized software development costs of $3.0 million, $2.7 million, and $2.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, the total estimated remaining stock-based compensation expense for the aforementioned RSUs and PSUs was $100.1 million, which is expected to be recognized over a weighted average period of 2.6 years. The total fair value of RSUs and PSUs vested during the years ended December 31, 2022, 2021 and 2020 was approximately $27.5 million, $26.6 million and $32.0 million, respectively.

Restricted Stock Awards

A summary of activity in connection with our RSAs for the year ended December 31, 2022 is as follows (number of shares in thousands):


	Number of Shares	Weighted- Average Grant Date Fair Value per Share
Unvested as of December 31, 2021	4	$	144.33
Granted	6	96.33
Vested	(4)	144.33

Unvested as of December 31, 2022	6	$	96.33

We have the right to repurchase any unvested RSAs subject to certain conditions. Restricted stock awards vest over a one-year period. Our stock-based compensation expense for RSAs was not material for the periods presented.

As of December 31, 2022, the total estimated remaining stock-based compensation expense for unvested restricted stock awards with a repurchase right was $0.3 million, which is expected to be recognized over a weighted average period of 0.5 years.

Intangible Assets, net and Goodwill - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Aug. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 4.4	$ 4.6	$ 4.9
Disposal Group, Disposed of by Sale, Not Discontinued Operations \| WegoWise
Finite-Lived Intangible Assets [Line Items]
Disposal group, intangible assets				$ 2.5

Stock-Based Compensation - Restricted Stock Award Narrative (Details) - Unvested RSAs $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Remaining stock-based compensation expense for unvested shares, not yet recognized	$ 0.3
Stock-based compensation expense, weighted average recognition period (in years)	6 months

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefit beginning of year	$ 7,816	$ 6,141	$ 4,421
Increases-tax positions in current year	1,639	1,675	1,720
Unrecognized tax benefit end of year	$ 9,455	$ 7,816	$ 6,141

Cover - USD ($) $ in Millions	12 Months Ended
Cover - USD ($) $ in Millions	Dec. 31, 2022	Feb. 02, 2023	Jun. 30, 2022
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-37468
Entity Registrant Name	AppFolio, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-0359894
Entity Address, Address Line One	70 Castilian Drive
Entity Address, City or Town	Santa Barbara,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	93117
City Area Code	805
Local Phone Number	364-6093
Title of each class	Class A common stock, par value $0.0001 per share
Trading Symbol	APPF
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 2,136
Documents Incorporated by Reference	Portions of the registrant’s definitive Proxy Statement for the 2023 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed with the Securities and Exchange Commission (the “SEC”) pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K (this “Annual Report”), are incorporated by reference in Part III, Items 10-14 of this Annual Report. Except for the portions of the Proxy Statement specifically incorporated by reference in this Annual Report, the Proxy Statement shall not be deemed to be filed as part hereof.
Entity Central Index Key	0001433195
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		20,649,685
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		14,746,432

Capitalized Software Development Costs, net

12 Months Ended

Dec. 31, 2022

Research and Development [Abstract]

Capitalized Software Development Costs, net

Capitalized software development costs, net were as follows (in thousands):


	December 31,
	2022		2021
Capitalized software development costs, gross	$	129,749	$	115,377
Less: Accumulated amortization	(94,434)		(74,165)
Capitalized software development costs, net	$	35,315	$	41,212

Capitalized software development costs were $17.7 million, $27.2 million and $27.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization expense with respect to software development costs totaled $23.6 million, $21.5 million and $17.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the years ended December 31, 2022 and 2021, we disposed of $3.3 million and $8.8 million, respectively, of fully amortized capitalized software development costs.

Future amortization expense with respect to capitalized software development costs is estimated as follows (in thousands):


Years Ending December 31,
2023	$	19,237
2024	11,407
2025	4,377
2026	294
Total amortization expense	$	35,315

Retirement Plans	12 Months Ended
Retirement Plans	Dec. 31, 2022
Retirement Benefits [Abstract]
Retirement Plans	Retirement PlansWe have a 401(k) retirement and savings plan made available to all employees. We may, at our discretion, make matching contributions to the 401(k) plan. Cash contributions to the plan were $5.9 million, $4.0 million, and $3.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Leases - Lease Related Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Assets
Prepaid expenses and other current assets	$ 0	$ 4,854
Operating lease right-of-use assets	23,485	41,710
Liabilities [Abstract]
Other current liabilities	3,357	1,874
Operating lease liabilities	50,237	55,733
Total lease liabilities	$ 53,594	$ 57,607
Weighted-average remaining lease term (years)	9 years 4 months 24 days	10 years 3 months 18 days
Weighted-average discount rate	3.90%	4.00%
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other current liabilities	Other current liabilities

Accrued Employee Expenses (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Accrued Employee Expenses

Accrued employee expenses consisted of the following (in thousands):


	December 31,
	2022		2021
Accrued vacation	$	12,067	$	10,675
Accrued bonuses	13,806		13,101
Accrued payroll and other	8,503		6,289



Total accrued employee expenses	$	34,376	$	30,065

Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (68,119)	$ 1,028	$ 158,403
Other comprehensive (loss) income:
Changes in unrealized (losses) gains on investment securities	(1,490)	(250)	23
Comprehensive (loss) income	$ (69,609)	$ 778	$ 158,426

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Operating leases for our corporate offices have remaining lease terms ranging from five months to ten years, some of which include options to extend the leases for up to ten years. These options to extend have not been recognized as part of our operating lease right-of-use assets and lease liabilities as it is not reasonably certain that we will exercise these options. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. Certain leases contain provisions for property-related costs that are variable in nature for which we are responsible, including common area maintenance, which are expensed as incurred.

The components of lease expense recognized in the Consolidated Statements of Operations were as follows (in thousands):


	Year Ended December 31,
	2022		2021		2020
Operating lease cost	$	5,403	$	5,203	$	5,272
Variable lease cost	1,058		1,463		1,443
Total lease cost	$	6,461	$	6,666	$	6,715

Lease-related assets and liabilities were as follows (in thousands, except years and %):


	December 31,
	2022			2021
Assets
Prepaid expenses and other current assets	$	—		$	4,854
Operating lease right-of-use assets	23,485			41,710

Liabilities
Other current liabilities	$	3,357		$	1,874
Operating lease liabilities	50,237			55,733
Total lease liabilities	$	53,594		$	57,607

Weighted-average remaining lease term (years)	9.4			10.3
Weighted-average discount rate	3.9		%	4.0		%

Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows (in thousands):


Years ending December 31,
2023(1)	$	2,615
2024	6,351
2025	6,837
2026	7,035
2027	7,239
Thereafter	35,042
Total future minimum lease payments	65,119
Less: imputed interest	(11,525)
Total	$	53,594

(1) Future minimum lease payments for the year ending December 31, 2023 are presented net of tenant improvement allowances of $3.5 million.

During the current year, we decided to exit and make available for sublease certain leased office spaces. As a result, we reassessed our asset groupings and evaluated the recoverability of our right-of-use and other lease related assets, and determined that the carrying value of the respective asset groups was not fully recoverable. We utilized discounted cash flow models to estimate the fair value of the asset groups taking into consideration the time period it will take to obtain a sublessee, the applicable discount rates and the anticipated sublease income and calculated the corresponding impairment loss. We used prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in real estate transactions. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. We recorded a net impairment of $22.0 million consisting of $17.6 million related to ROU assets and $4.4 million related to property and equipment associated with our leased office spaces. These amounts were recorded within General and administrative in our Consolidated Statements of Operations.

Investments Securities and Fair Value Measurements - Sales and Maturities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains	$ 0	$ 6
Gross Realized Losses	(3)	0
Gross Proceeds from Sales	994	43,198	$ 16,711
Gross Proceeds from Maturities	87,883	107,354	$ 27,330
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains	0	0
Gross Realized Losses	(3)	0
Gross Proceeds from Sales	994	0
Gross Proceeds from Maturities	28,998	39,075
Agency securities
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains	0	0
Gross Realized Losses	0	0
Gross Proceeds from Sales	0	0
Gross Proceeds from Maturities	2,250	11,575
Treasury securities
Debt Securities, Available-for-sale [Line Items]
Gross Realized Gains	0	6
Gross Realized Losses	0	0
Gross Proceeds from Sales	0	43,198
Gross Proceeds from Maturities	$ 56,635	$ 56,704

Intangible Assets, net and Goodwill

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, net and Goodwill

Intangible assets, net consisted of the following (in thousands, except years):


	December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted Average Useful Life in Years
Customer relationships	$	1,670	$	(1,448)	$	222	5.0
Database	4,710		(1,884)		2,826		10.0
Technology	6,539		(6,539)		—		4.0
Trademarks and trade names	1,520		(1,211)		309		5.0
Partner relationships	680		(680)		—		3.0
Non-compete agreements	7,340		(5,872)		1,468		5.0
Domain names	90		(82)		8		5.0
Patents	252		(252)		—		5.0

Total intangible assets, net	$	22,801	$	(17,968)	$	4,833	4.7


	December 31, 2021
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted Average Useful Life in Years
Customer relationships	$	2,840	$	(2,006)	$	834	5.0
Database	8,330		(2,620)		5,710		10.0
Technology	6,539		(5,107)		1,432		4.0
Trademarks and trade names	1,890		(1,128)		762		5.0
Partner relationships	680		(680)		—		3.0
Non-compete agreements	7,400		(4,444)		2,956		5.0
Domain names	90		(75)		15		5.0
Patents	252		(250)		2		5.0

Total intangible assets, net	$	28,021	$	(16,310)	$	11,711	6.3

During the year ended December 31, 2022, we divested intangible assets of $2.5 million as part of the WegoWise Transaction. For additional information see Note 3, Sales of Subsidiary Businesses. Amortization expense with respect to intangible assets totaled $4.4 million, $4.6 million and $4.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. Future amortization expense with respect to intangible assets is estimated as follows (in thousands):


Years Ending December 31,
2023	$	2,476
2024	473
2025	471
2026	471
2027	471
Thereafter	471
Total	$	4,833

Our goodwill balance is solely attributed to acquisitions. The change in the carrying amount of goodwill during the year ended December 31, 2022 is as follows (in thousands):


Goodwill at December 31, 2021	$	56,147
Goodwill attributed to WegoWise Transaction	(87)
Goodwill at December 31, 2022	$	56,060

Investments Securities and Fair Value Measurements - Available-for-sale Investments, by Remaining Contract Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Amortized Cost
Due in one year or less	$ 90,822	$ 64,627
Due after one year through three years	25,787	61,314
Amortized Cost	116,609	125,941
Estimated Fair Value
Due in one year or less	89,297	64,600
Due after one year through three years	25,161	61,076
Available-for-sale investment securities:	$ 114,458	$ 125,676

Capitalized Software Development Costs, net (Tables)

12 Months Ended

Dec. 31, 2022

Research and Development [Abstract]

Schedule of Capitalized Computer Software

Capitalized software development costs, net were as follows (in thousands):


	December 31,
	2022		2021
Capitalized software development costs, gross	$	129,749	$	115,377
Less: Accumulated amortization	(94,434)		(74,165)
Capitalized software development costs, net	$	35,315	$	41,212

Schedule of Capitalized Computer Software, Future Amortization Expense

Future amortization expense with respect to capitalized software development costs is estimated as follows (in thousands):


Years Ending December 31,
2023	$	19,237
2024	11,407
2025	4,377
2026	294
Total amortization expense	$	35,315

Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Total stock-based compensation expense	$ 40,935	$ 15,341	$ 9,025
Cost of revenue (exclusive of depreciation and amortization)
Total stock-based compensation expense	2,640	2,024	1,506
Sales and marketing
Total stock-based compensation expense	8,681	2,329	1,415
Research and product development
Total stock-based compensation expense	16,030	5,457	1,818
General and administrative
Total stock-based compensation expense	$ 13,584	$ 5,531	$ 4,286

Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Loss Contingencies [Line Items]
Quota share of tenant liability insurance provided, percent	100.00%
Other current liabilities
Loss Contingencies [Line Items]
Liability for reported claims and claims incurred but not reported	$ 2.7	$ 1.7
Other current assets
Loss Contingencies [Line Items]
Deposits held with a third party related to insurance services collateral	$ 4.5	$ 3.0

Investments Securities and Fair Value Measurements - Narrative (Details) - USD ($)	Dec. 20, 2021	Dec. 31, 2022	Dec. 31, 2021
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Allowance for credit losses, available-for sale investments		$ 0	$ 0
SecureDocs
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Realized gain from recovery of note receivable	$ 2,000,000
SecureDocs \| Other income, net
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain recognized on sale of interest	$ 12,800,000

Stock-Based Compensation - Restricted Stock Awards (Details) - RSAs shares in Thousands	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Number of Shares
Unvested, beginning balance (in shares) \| shares	4
Granted (in shares) \| shares	6
Vested (in shares) \| shares	(4)
Unvested, ending balance (in shares) \| shares	6
Weighted Average Grant Date Fair Value per Share
Unvested, beginning balance (in dollars per share) \| $ / shares	$ 144.33
Granted (in dollars per share) \| $ / shares	96.33
Vested (in dollars per share) \| $ / shares	144.33
Unvested, ending balance (in dollars per share) \| $ / shares	$ 96.33