AppFolio, Inc. Q3 FY2025 earnings call

• In the third quarter, revenue was $249 million, growing 21% year-over-year and non-GAAP operating margin was 23.5%. Unit count reached 9.1 million. • Property management faces challenges like external market pressures, surge of new AI tools, and disjointed task-based operations. New research shows property management businesses spend much time on routine and reactive work. • AppFolio introduced its vision for real estate performance management with a product strategy including 3 interconnected systems: system of record, system of action, and system of growth. • Differentiating to win through system of action (e.g., Realm-X Performers like Leasing Performer, Maintenance Performer, Resident Messenger Performer) and system of record (expanding configuration options, enabling complex portfolio management). • System of growth (e.g., FolioSpace, Resident Onboarding Lift) creating value for the ecosystem. • Team recognized on Fortune lists and voted Vendor of the Year by Real Property Management franchisees.

In the third quarter, revenue was $249 million, growing 21% year-over-year. Core solutions revenue was $54 million in the third quarter, a 17% year-over-year increase, driven by winning new customers, growth in total units under management and more customers choosing Plus and Max premium tiers. Revenue from value-added services grew 22% year-over-year to $192 million. At the end of the quarter, AppFolio managed approximately 9.1 million units from 21,759 customers compared to 8.5 million units from 20,403 customers a year ago, representing a 7% increase in ending units and a 7% increase in customers.

• 2025 annual revenue guidance increased to $945 million to $950 million, with a midpoint growth rate of 19% fueled by Plus and Max tier adoption, customer growth, and product/service adoption. • Non-GAAP operating margin expected between 23.5% and 24.5%. • Diluted weighted average shares outstanding anticipated to be approximately $36 million for the full year, down from $37 million in 2024. • Cost of revenue exclusive of depreciation and amortization expected to be higher as a percentage of revenue due to various factors like product mix, bonus plan overattainment, and data center spend. • Too early to provide guidance for 2026, but focus on delivering efficiencies as scaling occurs.

• Comments during the call contain forward-looking statements subject to risks and uncertainties. Actual future results could differ materially from forward-looking statements. Risks and uncertainties detailed in AppFolio's SEC filings, including Form 10-K for the fiscal year ended December 31, 2024.