AppFolio, Inc. Q4 FY2025 earnings call

• AI-powered innovation: Fourth quarter caps off a year of AI-driven growth, with 98% of AppFolio's customers using AI capabilities. RealmX performers introduced, with accelerated adoption of agentic AI workflows like Leasing and Maintenance Performers.
• Strategic pillars: Three pillars - 'Differentiate to Win' (leveraging unique value, introducing RealmX performers), 'Deliver Performance Efficiently' (expanding premium tier adoption over 25%, Resident Onboarding Lift with Second Nature), 'Great People and Culture' (acknowledging 20th year, highlighting employee impact).
• Customer success: 96% of new customers switching to AppFolio reported improved overall business performance, 94% reported improved resident satisfaction; named overall leader on G2 Grid.

Fourth quarter revenue reached $248 million, a 22% year-over-year increase. Full year revenue was $951 million, representing 20% year-over-year growth. Core revenue (renamed subscription services revenue) in the fourth quarter was $56 million, a 17% year-over-year increase. Fourth quarter value-added services revenue grew 20% year over year to $185 million. Full year subscription services revenue was $211 million, up 17% YOY, and full year value-added services revenue was $722 million, up 19% YOY. At the end of the fourth quarter, AppFolio managed approximately 9.4 million units from 22,096 customers, an 8% increase in units and 6% increase in customers compared to the prior year.

• 2026 annual revenue guidance: $1.1 to $1.12 billion, midpoint growth rate 17% fueled by premium tier adoption, new business units, and AI/service adoption.
• Non-GAAP operating margin outlook: 25.5% to 27.5% in 2026.
• Cost of revenue: Expected to be relatively flat as a percentage of revenue compared to 2025.
• Diluted weighted average shares outstanding: Anticipated to be between 36 million and 37 million for the full year.

• Rising operating costs and pressure on occupancy rates challenging the bottom line.
• Persistent performance gap in AI adoption: Half of industry AI users can't rely on AI features in core PMS, contrasting with AppFolio's 98% adoption.