SANTA BARBARA, Calif., Feb. 27, 2017 (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, 2016.

AppFolio's operating results for the fourth quarter and fiscal year 2016 are summarized in the accompanying tables in this press release. However, we urge investors to read our Annual Report on Form 10-K which we filed with the Securities and Exchange Commission (the "SEC") on February 27, 2017, and is accessible from our website at http://ir.appfolioinc.com. The limited information that follows in this press release is not adequate for making an informed investment judgment.

Financial Outlook

Based on information available as of February 27, 2017, we are providing our outlook for fiscal year 2017 as indicated below.
  • Full year revenue is expected to be in the range of $136 million to $138 million. 
  • Weighted average common shares outstanding are expected to be approximately 33.8 million for the full year.

Conference Call Information

As previously announced, we will host a conference call today, February 27, 2017, to discuss our fourth quarter and fiscal year 2016 financial results at 2:00 p.m. Pacific Time, 5:00 p.m. Eastern Time. If you have specific questions related to these financial results, we ask that you submit these questions to ir@appfolio.com.

A live webcast of the conference call will be available at http://ir.appfolioinc.com. The conference call can also be accessed by dialing 844-239-5286 (Domestic), or 513-268-0783 (International). The conference ID is 57609689.  A replay will be available at 855-859-2056 (Domestic) and 404-537-3406 (International) until the end of day March 3, 2017. An archived webcast of this conference call will be available for 12 months on our website listed above.

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 our future or assumed revenues and weighted-average outstanding shares, as well as our future growth and success.

Forward-looking statements represent our management'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 our 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 our actual results to materially differ from those expressed or implied by these forward-looking statements are described in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2016, which we filed with the SEC on February 27, 2017, as well as in our other filings with the SEC. You should read this press release with the understanding that our 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 Stock Market, we assume 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,
  2016   2015
Assets      
Current assets      
Cash and cash equivalents $ 10,699     $ 12,063  
Investment securities—current 15,473     10,235  
Accounts receivable, net 2,511     2,048  
Prepaid expenses and other current assets 3,537     3,160  
  Total current assets 32,220     27,506  
Investment securities—noncurrent 26,688     34,417  
Property and equipment, net 7,077     6,107  
Capitalized software, net 15,539     10,022  
Goodwill 6,737     6,737  
Intangible assets, net 3,105     4,516  
Other assets 1,217     1,176  
  Total assets $ 92,583     $ 90,481  
Liabilities and Stockholders' Equity      
Current liabilities      
Accounts payable $ 937     $ 2,369  
Accrued employee expenses 7,550     5,159  
Accrued expenses 4,044     3,340  
Deferred revenue 7,638     4,953  
Other current liabilities 1,192     1,084  
  Total current liabilities 21,361     16,905  
Other liabilities 1,540     879  
  Total liabilities 22,901     17,784  
Stockholders' equity:      
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding as of December 31, 2016 and 2015      
Class A common stock, $0.0001 par value, 250,000 shares authorized as of December 31, 2016 and 2015; 11,691 and 9,005 shares issued and outstanding as of December 31, 2016 and 2015, respectively 1     1  
Class B common stock, $0.0001 par value, 50,000 shares authorized as of December 31, 2016 and 2015; 22,028 and 24,541 shares issued and outstanding as of December 31, 2016 and 2015, respectively 3     3  
Additional paid-in capital 146,692     141,528  
Accumulated other comprehensive loss (51 )   (153 )
Accumulated deficit (76,963 )   (68,682 )
  Total stockholders' equity 69,682     72,697  
  Total liabilities and stockholders' equity $ 92,583     $ 90,481  

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(in thousands, except per share amounts)
       
  Three Months Ended December 31,   Twelve Months Ended December 31,
  2016   2015   2016   2015
Revenue $ 28,010     $ 20,399     $ 105,586     $ 74,977  
Costs and operating expenses:              
Cost of revenue (exclusive of depreciation and amortization) 11,243     9,465     44,630     33,903  
Sales and marketing 6,730     7,100     28,827     26,076  
Research and product development 3,107     2,594     12,638     9,554  
General and administrative 5,399     3,356     17,979     14,343  
Depreciation and amortization 2,823     1,852     9,935     6,104  
  Total costs and operating expenses 29,302     24,367     114,009     89,980  
Loss from operations (1,292 )   (3,968 )   (8,423 )   (15,003 )
Other income (expense), net (3 )   13     (37 )   5  
Interest income (expense), net 25     106     246     (595 )
Loss before provision for income taxes (1,270 )   (3,849 )   (8,214 )   (15,593 )
Provision for income taxes 19     41     67     75  
Net loss $ (1,289 )   $ (3,890 )   $ (8,281 )   $ (15,668 )
Net loss per share, basic and diluted (0.04 )   (0.12 )   (0.25 )   (0.73 )
Weighted average common shares outstanding, basic and diluted 33,654     33,407     33,561     21,336  

Stock-Based Compensation Expense(in thousands)
       
  Three Months Ended December 31,   Twelve Months Ended December 31,
  2016   2015   2016   2015
Costs and operating expenses:              
Cost of revenue (exclusive of depreciation and amortization) $ 150     $ 38     $ 471     $ 124  
Sales and marketing 146     31     442     115  
Research and product development 118     19     382     41  
General and administrative 1,043     296     3,006     727  
Total stock-based compensation expense $ 1,457     $ 384     $ 4,301     $ 1,007  

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED) (in thousands)
  Three Months Ended December 31,   Twelve Months Ended December 31,
  2016   2015   2016   2015
Cash from operating activities              
Net loss $ (1,289 )   $ (3,890 )   $ (8,281 )   $ (15,668 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:              
Depreciation and amortization 2,823     1,852     9,935     6,104  
Purchased investment premium, net of amortization 60     (485 )   245     (865 )
Amortization of deferred financing costs 15     15     63     456  
Loss on disposal of property, equipment and intangibles 8     60     41     67  
Stock-based compensation 1,457     384     4,301     1,007  
Lease abandonment         161      
Changes in operating assets and liabilities:              
Accounts receivable 196     190     (463 )   (746 )
Prepaid expenses and other current assets 427     (548 )   (377 )   (1,893 )
Other assets 60     64     (103 )   (56 )
Accounts payable 205     (606 )   (904 )   (439 )
Accrued employee expenses 2,367     (1,223 )   2,223     1,887  
Accrued expenses (206 )   (99 )   1,148     1,135  
Deferred revenue 1,011     511     2,685     1,173  
Other liabilities (357 )   705     826     994  
  Net cash provided by (used in) operating activities 6,777     (3,070 )   11,500     (6,844 )
Cash from investing activities              
Purchases of property and equipment (682 )   (1,460 )   (4,242 )   (3,694 )
Additions to capitalized software (2,612 )   (2,304 )   (11,166 )   (7,677 )
Purchases of investment securities (7,217 )   (13,750 )   (31,551 )   (74,176 )
Sales of investment securities 2,543     4,100     12,559     4,100  
Maturities of investment securities 4,225     17,186     21,337     26,136  
Cash paid in business acquisition, net of cash acquired             (4,039 )
Purchases of intangible assets     (1 )   (2 )   (17 )
  Net cash (used in) provided by investing activities (3,743 )   3,771     (13,065 )   (59,367 )
Cash from financing activities              
Proceeds from stock option exercises 92     29     352     357  
Proceeds from issuance of restricted stock             141  
Proceeds from issuance of options             208  
Tax withholding for net share settlement (26 )       (111 )    
Principal payments under capital lease obligations (5 )   (5 )   (29 )   (27 )
Proceeds from initial public offering, net of underwriting discounts and commissions             79,570  
Payments of initial public offering costs     (214 )       (4,213 )
Payment of contingent consideration             (2,429 )
Proceeds from issuance of debt 30     253     117     10,253  
Principal payments on debt (29 )   (241 )   (128 )   (10,241 )
Payment of debt issuance costs     (218 )       (757 )
             Net cash provided by (used in) financing activities 62     (396 )   201     72,862  
  Net increase (decrease) in cash and cash equivalents 3,096     305     (1,364 )   6,651  
Cash and cash equivalents              
Beginning of period 7,603     11,758     12,063     5,412  
End of period $ 10,699     $ 12,063     $ 10,699     $ 12,063  

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