EX-99.1 2 appfq42018exhibit991.htm EXHIBIT 99.1 Exhibit



Exhibit 99.1
image2.jpg

News Release


AppFolio, Inc. Announces Fourth Quarter and
Fiscal Year 2018 Financial Results

SANTA BARBARA, Calif., February 28, 2019 (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, 2018.

AppFolio's operating results for the fourth quarter and fiscal year 2018 are summarized in the tables accompanying this press release. The Company nevertheless urges investors to read its full Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the Securities and Exchange Commission (the "SEC") on February 28, 2019, and is available on AppFolio's website at http://ir.appfolioinc.com. The limited information that follows is not adequate for making an informed investment judgment.

Financial Outlook

Based on information available as of February 28, 2019, the Company's current outlook for fiscal year 2019 follows:
•
Full year revenue is expected to be in the range of $250 million to $255 million.

•
Diluted weighted average shares are expected to be approximately 36 million for the full year.

Conference Call Information

As previously announced, the Company will host a conference call today, February 28, 2019, 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 866-393-4306 (Domestic), or 734-385-2616 (International). The conference ID is 5763969. A replay of the call will be available at 855-859-2056 (Domestic) and 404-537-3406 (International) until the end of day March 4, 2019, and an archived webcast will be available for twelve months on the Company's website.

About AppFolio, Inc.

AppFolio's mission is to revolutionize vertical industry businesses by providing great software and service. Our cloud-based solutions serve customers in the real estate and legal markets. Today our products include property management software (AppFolio Property Manager, including the new AppFolio Property Manager Plus) and legal practice management software (MyCase). AppFolio was founded in 2006 and is headquartered in Santa Barbara, CA. Learn more at www.appfolioinc.com.

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 the Company's future or assumed revenues and weighted-average outstanding shares, as well as its future growth and success.

Forward-looking statements represent AppFolio'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 the Company's 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 the Company's actual results to materially differ from those expressed or implied by these forward-looking statements are described in the section entitled “Risk Factors” in AppFolio's Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 28, 2019, as well as in the Company's other filings with the SEC. You should read this press release with the understanding that the Company's 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 Global Market, AppFolio assumes 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,
 
 
2018
 
2017
Assets
 
 
 
 
Current assets
 
 
 
 
Cash and cash equivalents
 
$
74,076

 
$
16,109

Investment securities—current
 
16,631

 
29,800

Accounts receivable, net
 
5,516

 
3,387

Prepaid expenses and other current assets
 
11,775

 
4,546

Total current assets
 
107,998

 
53,842

Investment securities—noncurrent
 
11,256

 
22,401

Property and equipment, net
 
6,871

 
6,696

Capitalized software, net
 
20,485

 
17,609

Goodwill
 
15,548

 
6,737

Intangible assets, net
 
5,895

 
1,725

Other assets
 
7,688

 
1,238

Total assets
 
$
175,741

 
$
110,248

Liabilities and Stockholders’ Equity
 
 
 
 
Current liabilities
 
 
 
 
Accounts payable
 
$
1,481

 
$
610

Accrued employee expenses
 
12,377

 
10,710

Accrued expenses
 
8,281

 
4,289

Deferred revenue
 
3,414

 
7,080

Other current liabilities
 
1,447

 
1,223

Long-term debt, net—current portion
 
1,213

 
—

Total current liabilities
 
28,213

 
23,912

Long-term debt, net
 
48,602

 
—

Long-term deferred rent and other liabilities
 
7,080

 
1,257

Total liabilities
 
83,895

 
25,169

Commitments and contingencies
 
 
 
 
Stockholders’ equity:
 
 
 
 
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding at December 31, 2018 and December 31, 2017
 
—

 
—

Class A common stock, $0.0001 par value, 250,000 shares authorized at December 31, 2018 and December 31, 2017; issued - 16,159 and 14,879, shares at December 31, 2018 and December 31, 2017; outstanding - 15,789 and 14,879 shares at December 31, 2018 and December 31, 2017, respectively;
 
2

 
1

Class B common stock, $0.0001 par value, 50,000 shares authorized at December 31, 2018 and December 31, 2017; 18,109 and 19,102 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively;
 
2

 
3

Additional paid-in capital
 
157,898

 
152,531

Accumulated other comprehensive loss
 
(178
)
 
(209
)
Treasury stock, at cost, 370,751 Class A shares
 
(21,562
)
 
—

Accumulated deficit
 
(44,316
)
 
(67,247
)
Total stockholders’ equity
 
91,846

 
85,079

Total liabilities and stockholders’ equity
 
$
175,741

 
$
110,248






CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)


 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
2018
 
2017
 
2018
 
2017
Revenue
$
50,365

 
$
37,897

 
$
190,071

 
$
143,803

Costs and operating expenses:
 
 
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization)
19,925

 
14,536

 
73,549

 
55,283

Sales and marketing
9,577

 
7,153

 
33,288

 
28,709

Research and product development
6,588

 
4,580

 
24,111

 
16,578

General and administrative
7,786

 
5,889

 
24,891

 
21,199

Depreciation and amortization
3,792

 
3,352

 
14,576

 
12,699

Total costs and operating expenses
47,668

 
35,510

 
170,415

 
134,468

Income from operations
2,697

 
2,387

 
19,656

 
9,335

Other (expense), net
(36
)
 
(3
)
 
(56
)
 
(96
)
Interest income, net
156

 
158

 
787

 
535

Income before provision for income taxes
2,817

 
2,542

 
20,387

 
9,774

Provision for income taxes
168

 
(35
)
 
420

 
58

Net income
$
2,649

 
$
2,577

 
$
19,967

 
$
9,716

Net income per common share:
 
 
 
 
 
 
 
Basic
0.08

 
0.08

 
0.59

 
0.29

Diluted
0.07

 
0.07

 
0.56

 
0.28

Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
34,050

 
33,944

 
34,128

 
33,849

Diluted
35,425

 
35,310

 
35,562

 
35,151


Stock-Based Compensation Expense
(in thousands)
 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
2018
 
2017
 
2018
 
2017
Costs and operating expenses:
 
 
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization)
$
351

 
$
198

 
$
1,103

 
$
725

Sales and marketing
326

 
207

 
1,034

 
723

Research and product development
349

 
186

 
1,079

 
657

General and administrative
892

 
1,201

 
3,121

 
3,991

Total stock-based compensation expense
$
1,918

 
$
1,792

 
$
6,337

 
$
6,096








CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2018
 
2017
 
2018
 
2017
Cash from operating activities
 
 
 
 
 
 
 
Net income
$
2,649

 
$
2,577

 
$
19,967

 
$
9,716

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
3,792

 
3,352

 
14,576

 
12,699

Purchased investment premium, net of amortization
43

 
(17
)
 
142

 
(39
)
Amortization of deferred financing costs
12

 
15

 
60

 
63

Loss on disposal of property, equipment, and intangibles
4

 
3

 
22

 
97

Stock-based compensation
1,918

 
1,792

 
6,337

 
6,096

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
557

 
32

 
(908
)
 
(876
)
Prepaid expenses and other current assets
(859
)
 
(153
)
 
(6,073
)
 
(1,009
)
Other assets
(756
)
 
(30
)
 
(4,447
)
 
(84
)
Accounts payable
137

 
(469
)
 
614

 
(100
)
Accrued employee expenses
4,443

 
2,397

 
1,219

 
3,243

Accrued expenses
(116
)
 
(1,442
)
 
3,281

 
271

Deferred revenue
(342
)
 
(428
)
 
(4,589
)
 
(558
)
Other liabilities
184

 
186

 
6,067

 
(148
)
Net cash provided by operating activities
11,666

 
7,815

 
36,268

 
29,371

Cash from investing activities
 
 
 
 
 
 
 
Purchases of property and equipment
(362
)
 
(533
)
 
(2,102
)
 
(2,213
)
Additions to capitalized software
(3,307
)
 
(2,370
)
 
(12,304
)
 
(10,455
)
Purchases of investment securities
(732
)
 
(9,051
)
 
(29,516
)
 
(26,648
)
Sales of investment securities
20,199

 
—

 
20,900

 
15

Maturities of investment securities
4,342

 
5,500

 
32,819

 
16,474

Cash paid in business acquisition
—

 
—

 
(14,441
)
 
—

Purchases of intangible assets
—

 
—

 
—

 
(1
)
Net cash used in investing activities
20,140

 
(6,454
)
 
(4,644
)
 
(22,828
)
Cash from financing activities
 
 
 
 
 
 
 
Proceeds from stock option exercises
322

 
155

 
1,035

 
663

Tax withholding for net share settlement
(233
)
 
(188
)
 
(3,127
)
 
(1,796
)
Purchase of treasury stock
(21,562
)
 
—

 
(21,562
)
 
—

Proceeds from issuance of debt
50,045

 
30

 
50,138

 
118

Principal payments on debt
(45
)
 
(30
)
 
(138
)
 
(118
)
Net cash provided by (used in) financing activities
28,527

 
(33
)
 
26,346

 
(1,133
)
Net increase (decrease) in cash and cash equivalents
60,333

 
1,328

 
57,970

 
5,410

Cash, cash equivalents and restricted cash
 
 
 
 
 
 
 
Beginning of period
14,173

 
15,208

 
16,536

 
11,126

End of period
$
74,506

 
$
16,536

 
$
74,506

 
$
16,536