SAN DIEGO (TheStreet) -- A recurrent theme of Reality Check is keeping an eye on seemingly high-growth acquisitive companies whose growth, in reality, appears to be slowing.
Which is why, when apartment-management software company RealPage (RP) reports fourth-quarter financial results, perhaps as soon as Thursday, the quality of the numbers will be front and center.
For good reason: Quality, or lack thereof, appears to be getting messy.
To understand why, you first need to understand what RealPage does. Its cloud software helps rental housing managers, mostly multi-family, determine pricing so they can maximize revenue -- not much different than the airlines price seats. Or as the company says in its 10-K:
Our solutions enable property owners and managers to increase revenues and reduce operating costs through higher occupancy, improved pricing methodologies, new sources of revenue from ancillary services, improved collections and more integrated and centralized processes.
More Than 2 Dozen Deals
Much of its growth has been through acquisitions, with 26 deals since 2002.
Even with all of those deals, however, overall revenue growth has been slowing. In the third quarter it rose 17.8%, down from 23% a year earlier and 40.9% two years ago -- a near peak, of sorts, since the company's 2010 IPO.
As with all acquisitive companies, however, the metric is organic revenue growth -- that is, the growth of the business without acquisitions. At RealPage, organic unit growth is equally important, because the company charges based on the number of units its customers manage.