AppFolio, Inc. Announces Fourth Quarter and Fiscal Year 2017 Financial Results

SANTA BARBARA, Calif., Feb. 26, 2018 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ:APPF) ("AppFolio" or the "Company"), a leading provider of cloud-based business software solutions, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2017.

AppFolio's operating results for the fourth quarter and fiscal year 2017 are summarized in the tables accompanying this press release. The Company nevertheless urges investors to read its full Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the Securities and Exchange Commission (the "SEC") on February 26, 2018, and is available on AppFolio's website at http://ir.appfolioinc.com. The limited information that follows is not adequate for making an informed investment judgment.

Financial Outlook

Based on information available as of February 26, 2018, the Company's current outlook for fiscal year 2018 follows:

  • Full year revenue is expected to be in the range of $179 million to $182 million.
  • Diluted weighted average shares are expected to be approximately 36 million for the full year.

Conference Call Information

As previously announced, the Company will host a conference call today, February 26, 2018, at 1:30 p.m. Pacific Time, 4:30 p.m. Eastern Time, to discuss its financial results. Investors are invited to submit questions to management via the Investor Q&A form located on the Investor Overview section of AppFolio's website.

A live webcast of the call will be available at http://ir.appfolioinc.com, and it may also be accessed by dialing 866-393-4306 (Domestic), or 734-385-2616 (International). The conference ID is 1675569. A replay of the call will be available at 855-859-2056 (Domestic) and 404-537-3406 (International) until the end of day March 1, 2018, and an archived webcast will be available for twelve months on the Company's website.

Investor Relations Contact: ir@appfolio.com

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements are subject to considerable risks and uncertainties. Forward-looking statements include all statements that are not statements of historical fact contained in this press release, and can be identified by words such as “anticipates,” “believes,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “could,” “will,” “would,” or similar expressions and the negatives of those expressions. In particular, forward-looking statements contained in this press release relate to the Company's future or assumed revenues and weighted-average outstanding shares, as well as its future growth and success.

Forward-looking statements represent AppFolio's current beliefs and assumptions based on information currently available. Forward-looking statements involve numerous known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Some of the risks and uncertainties that may cause the Company's actual results to materially differ from those expressed or implied by these forward-looking statements are described in the section entitled “Risk Factors” in AppFolio's Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the SEC on February 26, 2018, as well as in the Company's other filings with the SEC. You should read this press release with the understanding that the Company's actual future results may be materially different from the results expressed or implied by these forward looking statements.

Except as required by applicable law or the rules of the NASDAQ Global Market, AppFolio assumes no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except par values)
December 31,
2017 2016
Assets
Current assets
Cash and cash equivalents$16,109 $10,699
Investment securities—current29,800 15,473
Accounts receivable, net3,387 2,511
Prepaid expenses and other current assets4,546 3,537
Total current assets53,842 32,220
Investment securities—noncurrent22,401 26,688
Property and equipment, net6,696 7,077
Capitalized software, net17,609 15,539
Goodwill6,737 6,737
Intangible assets, net1,725 3,105
Other assets1,238 1,217
Total assets$110,248 $92,583
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$610 $937
Accrued employee expenses10,710 7,550
Accrued expenses4,289 4,044
Deferred revenue7,080 7,638
Other current liabilities1,223 1,192
Total current liabilities23,912 21,361
Other liabilities1,257 1,540
Total liabilities25,169 22,901
Stockholders’ equity:
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding as of December 31, 2017 and 2016
Class A common stock, $0.0001 par value, 250,000 shares authorized as of December 31, 2017 and 2016; 14,879 and 11,691 shares issued and outstanding as of December 31, 2017 and 2016, respectively1 1
Class B common stock, $0.0001 par value, 50,000 shares authorized as of December 31, 2017 and 2016; 19,102 and 22,028 shares issued and outstanding as of December 31, 2017 and 2016, respectively3 3
Additional paid-in capital152,531 146,692
Accumulated other comprehensive loss(209) (51)
Accumulated deficit(67,247) (76,963)
Total stockholders’ equity85,079 69,682
Total liabilities and stockholders’ equity$110,248 $92,583


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2017 2016 2017 2016
Revenue$37,897 $28,010 $143,803 $105,586
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)14,536 11,243 55,283 44,630
Sales and marketing7,153 6,730 28,709 28,827
Research and product development4,580 3,107 16,578 12,638
General and administrative5,889 5,399 21,199 17,979
Depreciation and amortization3,352 2,823 12,699 9,935
Total costs and operating expenses35,510 29,302 134,468 114,009
Income (loss) from operations2,387 (1,292) 9,335 (8,423)
Other expense, net(3) (3) (96) (37)
Interest income, net158 25 535 246
Income (loss) before provision for income taxes2,542 (1,270) 9,774 (8,214)
Income tax (benefit) provision(35) 19 58 67
Net income (loss)$2,577 $(1,289) $9,716 $(8,281)
Net income (loss) per common share:
Basic0.08 (0.04) 0.29 (0.25)
Diluted0.07 (0.04) 0.28 (0.25)
Weighted average common shares outstanding:
Basic33,944 33,654 33,849 33,561
Diluted35,310 33,654 35,151 33,561

Stock-Based Compensation Expense
(in thousands)

Three Months Ended
December 31,
Twelve Months Ended
December 31,
2017 2016 2017 2016
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)$198 $150 $725 $471
Sales and marketing207 146 723 442
Research and product development186 118 657 382
General and administrative1,201 1,043 3,991 3,006
Total stock-based compensation expense$1,792 $1,457 $6,096 $4,301


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Three Months Ended December 31, Twelve Months Ended December 31,
2017 2016 2017 2016
Cash from operating activities
Net income (loss)$2,577 $(1,289) $9,716 $(8,281)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization3,352 2,823 12,699 9,935
Purchased investment premium, net of amortization(17) 60 (39) 245
Amortization of deferred financing costs15 15 63 63
Loss on disposal of property, equipment and intangibles3 8 97 41
Stock-based compensation1,792 1,457 6,096 4,301
Lease abandonment 161
Changes in operating assets and liabilities:
Accounts receivable32 196 (876) (463)
Prepaid expenses and other current assets(153) 427 (1,009) (377)
Other assets(30) 60 (84) (103)
Accounts payable(469) 205 (100) (904)
Accrued employee expenses2,397 2,367 3,243 2,223
Accrued expenses(1,442) (206) 271 1,148
Deferred revenue(428) 1,011 (558) 2,685
Other liabilities186 (357) (148) 826
Net cash provided by operating activities7,815 6,777 29,371 11,500
Cash from investing activities
Purchases of property and equipment(533) (682) (2,213) (4,242)
Additions to capitalized software(2,370) (2,612) (10,455) (11,166)
Purchases of investment securities(9,051) (7,217) (26,648) (31,551)
Sales of investment securities 2,543 15 12,559
Maturities of investment securities5,500 4,225 16,474 21,337
Purchases of intangible assets (1) (2)
Net cash used in investing activities(6,454) (3,743) (22,828) (13,065)
Cash from financing activities
Proceeds from stock option exercises155 92 663 352
Tax withholding for net share settlement(188) (26) (1,796) (111)
Principal payments under capital lease obligations (5) (29)
Proceeds from issuance of debt30 30 118 117
Principal payments on debt(30) (29) (118) (128)
Net cash (used in) provided by financing activities(33) 62 (1,133) 201
Net increase (decrease) in cash and cash equivalents1,328 3,096 5,410 (1,364)
Cash and cash equivalents
Beginning of period14,781 7,603 10,699 12,063
End of period$16,109 $10,699 $16,109 $10,699


Source:AppFolio, Inc.