SANTA BARBARA, Calif., Aug. 07, 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 quarter ended June 30, 2017.

AppFolio's operating results for the second quarter 2017 are summarized in the tables accompanying this press release. The Company urges investors to review its Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the "SEC") on February 27, 2017, as well as its more detailed second quarter 2017 results set forth on Form 10-Q, which was filed with the SEC on August 7, 2017.  Both documents, together with other key SEC filings, are accessible on the Investor Relations page of AppFolio's website, http://ir.appfolioinc.com. The limited information that follows in this press release is not adequate for making an informed investment decision.

Financial Outlook

Based on information available as of August 7, 2017, AppFolio's outlook for fiscal year 2017 follows:
  • Full year revenue is expected to be in the range of $138 million to $139 million.
  • Diluted weighted average shares are expected to be approximately 35 million for the full year.

Executive Leadership Transition

In a separate press release issued today, the Company announced that Jason Randall will succeed Brian Donahoo as President and Chief Executive Officer, and as member of the Board of Directors of AppFolio following Mr. Donahoo's retirement, effective August 8, 2017.

Conference Call Information

As previously announced, the Company will host a conference call today, August 7, 2017 at 1:30 p.m. Pacific Time, 4:30 p.m. Eastern Time, to discuss its financial results. Investors are invited to submit questions to management via the Investor Q&A form located on the Investor Overview section of AppFolio's website. 

A live webcast of the call will be available at http://ir.appfolioinc.com, and it may also be accessed by dialing 844-239-5286 (Domestic), or 513-268-0783 (International). The conference ID is 55482832.  A replay will be available at 855-859-2056 (Domestic) and 404-537-3406 (International) until the end of day August 8, 2017, and an archived webcast will be available for 12 months on the Company's website.

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)
 
  June 30,  2017                   December 31,  2016 
Assets      
Current assets      
Cash and cash equivalents $ 7,389     $ 10,699  
Investment securities—current 24,739     15,473  
Accounts receivable, net 4,231     2,511  
Prepaid expenses and other current assets 3,748     3,537  
Total current assets 40,107     32,220  
Investment securities—noncurrent 25,636     26,688  
Property and equipment, net 6,674     7,077  
Capitalized software, net 16,787     15,539  
Goodwill 6,737     6,737  
Intangible assets, net 2,405     3,105  
Other assets 1,237     1,217  
Total assets $ 99,583     $ 92,583  
Liabilities and Stockholders' Equity      
Current liabilities      
Accounts payable $ 398     $ 937  
Accrued employee expenses 8,053     7,550  
Accrued expenses 5,009     4,044  
Deferred revenue 8,037     7,638  
Other current liabilities 1,547     1,192  
Total current liabilities 23,044     21,361  
Other liabilities 1,374     1,540  
Total liabilities 24,418     22,901  
Stockholders' equity:      
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding as of June 30, 2017 and December 31, 2016      
Class A common stock, $0.0001 par value, 250,000 shares authorized as of June 30, 2017 and December 31, 2016; 13,319 and 11,691 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively; 1     1  
Class B common stock, $0.0001 par value, 50,000 shares authorized as of June 30, 2017 and December 31, 2016; 20,590 and 22,028 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively; 3     3  
Additional paid-in capital 148,716     146,692  
Accumulated other comprehensive loss (49 )   (51 )
Accumulated deficit (73,506 )   (76,963 )
Total stockholders' equity 75,165     69,682  
Total liabilities and stockholders' equity 99,583     $   92,583  

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(in thousands, except per share amounts)
 
  Three Months Ended June 30,   Six Months Ended June 30,
  2017   2016   2017   2016
Revenue $ 35,877     $ 26,203     $ 68,003     $ 49,414  
Costs and operating expenses:                
Cost of revenue (exclusive of depreciation and amortization)     13,701     11,212     26,694     21,742  
Sales and marketing 7,192     7,567     14,299     15,118  
Research and product development 4,002     3,024     7,631     6,067  
General and administrative 5,101     4,389       9,905     7,938  
Depreciation and amortization 3,114     2,359     6,110     4,476  
Total costs and operating expenses 33,110     28,551     64,639     55,341  
Income (loss) from operations 2,767     (2,348 )   3,364     (5,927 )
Other (expense) income, net (60 )   2     (88 )   (22 )
Interest income, net 120     95     222     119  
Income (loss) before provision for income taxes 2,827     (2,251 )   3,498     (5,830 )
Provision for income taxes 30     13     41     37  
Net income (loss) $ 2,797     $ (2,264 )   $ 3,457     $ (5,867 )
               
Net income (loss) per common share:              
Basic 0.08     (0.07 )   0.10     (0.18 )
Diluted 0.08     (0.07 )   0.10     (0.18 )
Weighted average common shares outstanding:              
Basic 33,838     33,523     33,772     33,493  
Diluted 34,928     33,523     34,879     33,493  

Stock-Based Compensation Expense(in thousands)
 
    Three Months Ended June 30,   Six Months Ended June 30,
    2017   2016   2017   2016
Costs and operating expenses:                  
Cost of revenue (exclusive of depreciation and amortization)         $ 209     $ 138       $ 338     $ 183  
Sales and marketing   $ 210     $ 130     $ 330     $ 172  
Research and product development   $ 182     $ 104     $ 298     $ 155  
General and administrative   $ 1,018     $ 720     $ 1,750     $ 1,045  
Total stock-based compensation expense $ 1,619     $ 1,092     $ 2,716     $ 1,555  

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(in thousands)
               
  Three Months Ended June 30,     Six Months Ended June 30,
  2017   2016   2017   2016
Cash from operating activities              
Net income (loss) $ 2,797     $ (2,264 )   $ 3,457     $ (5,867 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:                  
Depreciation and amortization 3,114     2,359     6,110     4,476  
Purchased investment premium, net of amortization (90 )   (50 )   (104 )   95  
Amortization of deferred financing costs 16     16     32     32  
Loss on disposal of property and equipment 61     3     89     32  
Stock-based compensation 1,619     1,092     2,716     1,555  
Lease abandonment     (31 )       60  
Changes in operating assets and liabilities:              
Accounts receivable (418 )   (402 )   (1,721 )   (996 )
Prepaid expenses and other current assets (614 )   634     (212 )   (647 )
Other assets (56 )   18     (51 )   (92 )
Accounts payable (300 )   82     (319 )   (571 )
Accrued employee expenses 2,238     812     576     906  
Accrued expenses 321     (236 )   794     751  
Deferred revenue (660 )   443     399     1,148  
Other liabilities 31     637     100     1,495  
Net cash provided by operating activities 8,059     3,113     11,866     2,377  
Cash from investing activities              
Purchases of property and equipment (445 )   (1,270 )   (837 )   (3,161 )
Additions to capitalized software (2,280 )   (2,980 )   (5,271 )   (5,159 )
Purchases of investment securities (9,060 )   (7,300 )   (15,597 )   (16,685 )
Sales of investment securities     3,512         10,017  
Maturities of investment securities 3,044     4,557     7,489     11,387  
Purchases of intangible assets (1 )       (1 )    
Net cash used in investing activities (8,742 )   (3,481 )   (14,217 )   (3,601 )
Cash from financing activities              
Proceeds from stock option exercises 241     73     386     153  
Tax withholding for net share settlement (138 )       (1,345 )    
Principal payments under capital lease obligations     (8 )       (15 )
Proceeds from issuance of debt 30     28     59     57  
Principal payments on debt (30 )   (30 )   (59 )   (71 )
Net cash provided by (used in) financing activities 103     63     (959 )   124  
Net decrease in cash and cash equivalents (580 )   (305 )   (3,310 )   (1,100 )
Cash and cash equivalents              
Beginning of period 7,969     11,268     10,699     12,063  
End of period 7,389     10,963     7,389     10,963  

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