AppFolio third-quarter revenue rises 19% to $295.7 million and raises full-year revenue outlook

AppFolio, Inc. (APPF) said Thursday in a regulatory filing that revenue for the third quarter ended Sept. 30 rose 19% from a year earlier to $295.7 million.

Net income was $46 million, or $1.29 per diluted share, up from $33.6 million, or 93 cents per diluted share, a year earlier.

Here's how the company did:

• Revenue: $295.7 million vs. $249.4 million a year earlier
• GAAP diluted earnings per share: $1.29 vs. $0.93 a year earlier
• Non-GAAP diluted earnings per share: $1.82 vs. $1.31 a year earlier
• GAAP operating income: $57.4 million vs. $35.0 million a year earlier
• Non-GAAP operating income: $80.7 million vs. $58.6 million a year earlier

Value Added Services revenue was $231.9 million, up from $192.1 million a year earlier.

Subscription Services revenue rose to $61.5 million from $53.8 million. Other revenue fell to $2.2 million from $3.5 million.

Total units under management rose 8% from a year earlier to 9.8 million, the company said in the release.

Chairman and CEO Shane Trigg said, "Q3 reflects the strength and durability of our business, as new and existing customers continue to adopt our performance platform."

Trigg also said, "The promise of Real Estate Performance Management is helping create a future of winning with our customers, turning performance into a competitive advantage that compounds over time."

GAAP operating income rose 64% to $57.4 million, or 19.4% of revenue, from $35.0 million, or 14.1% of revenue, a year earlier.

Non-GAAP operating income rose 38% to $80.7 million, or 27.3% of revenue, from $58.6 million, or 23.5% of revenue. The non-GAAP measure excludes stock-based compensation and amortization of purchased intangibles, which is the expense of spreading the cost of acquired intangible assets over time.

Cost of revenue, excluding depreciation and amortization, was $105.6 million, up from $91.5 million.

Sales and marketing expense rose to $48.6 million from $35.9 million. Research and product development expense fell to $53.1 million from $54.0 million.

General and administrative expense was $26.0 million, down from $27.4 million.

Stock-based compensation expense was $20.6 million, compared with $20.8 million a year earlier. The company also recorded a $1.5 million gain on a lease termination and modification in the quarter.

Net cash provided by operating activities was $96.8 million, up from $86.0 million a year earlier. For the first nine months, it was $218.7 million, compared with $177.1 million.

The company bought $4.2 million of its common stock in the quarter and $129.2 million in the first nine months. Cash and cash equivalents stood at $258.5 million on Sept. 30, up from $107.0 million on Dec. 31, 2025.

For the nine months, revenue was $839.0 million, up from $702.6 million, and net income was $129.9 million, compared with $101.0 million.

For fiscal 2026, the company raised its full-year revenue range to $1.122 billion to $1.127 billion.

The full-year non-GAAP operating margin range is now 26.5% to 27.5% of revenue. The filing does not give the prior range.

The company expects about 36 million diluted weighted average shares outstanding for the full year. It said it cannot provide a GAAP equivalent for the non-GAAP margin outlook because items such as stock-based compensation are uncertain.

The company scheduled a conference call Thursday at 2 p.m. Pacific Time to discuss the third-quarter results.