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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

AppFolio, Inc. Announces Fourth Quarter and Fiscal Year 2019 Financial Results

March 2, 2020 GMT

SANTA BARBARA, Calif., March 02, 2020 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ: APPF) (“AppFolio” or the “Company”), a leading provider of cloud-based business software solutions, services, and data analytics to the real estate and legal markets, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2019.

AppFolio’s operating results for the fourth quarter and fiscal year 2019 are summarized in the tables accompanying this press release. The Company nevertheless urges investors to read its Annual Report on Form 10-K for the year ended December 31, 2019, which will be filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2020, and will be available on AppFolio’s website at http://ir.appfolioinc.com. The limited information that follows in this press release is not adequate for making an informed investment judgment.

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Financial Outlook

Based on information available as of March 2, 2020, AppFolio’s outlook for fiscal year 2020 follows:

-- Full year revenue is expected to be in the range of $312.0 million to $320.0 million. -- Diluted weighted average shares are expected to be approximately 36 million for the full year.

Executive Leadership Transition

Today the Company also announced that Klaus Schauser will retire from his position as Chief Strategist, effective as of May 1, 2020. Mr. Schauser will remain a Class II Director on the Company’s Board of Directors. As an active member of AppFolio’s Board, Mr. Schauser will continue to contribute to the Company’s vision and strategy.

Conference Call Information

As previously announced, the Company will host a conference call today, March 2, 2020, 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.

The conference call can be accessed by dialing 844.624.1561 and entering ID #5869959. International callers may dial 647.253.8652. A replay of the conference call will be available at 800.585.8367, and at 416.621.4642 for international callers. A live and recorded webcast of the conference call will be available at http://ir.appfolioinc.com.

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About AppFolio, Inc.AppFolio offers industry-specific, cloud-based business software solutions, services, and data analytics to the real estate and legal markets. Today our products include real estate software (AppFolio Property Manager, AppFolio Property Manager PLUS and AppFolio Investment Management) 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,” “

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, 2019, which will be filed with the SEC on March 2, 2020, 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 December 31, 31, 2019 2018 ----------- ----------- Assets Current assets Cash and cash equivalents $ 15,813 $ 74,076 Investment securities—current 22,876 16,631 Accounts receivable, net 7,562 5,516 Prepaid expenses and other current assets 15,540 11,775 --------- - --------- - Total current assets 61,791 107,998 Investment securities—noncurrent 12,089 11,256 Property and equipment, net 14,744 6,871 Operating lease right-of-use assets 27,803 — Capitalized software, net 30,023 20,485 Goodwill 58,425 15,548 Intangible assets, net 21,377 5,895 Deferred taxes 27,574 — Other long-term assets 6,276 7,688 --------- - --------- - Total assets $ 260,102 $ 175,741 - ------- - - ------- - Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 1,927 $ 1,481 Accrued employee expenses 17,758 12,377 Accrued expenses 10,833 8,281 Deferred revenue 4,586 3,414 Other current liabilities 11,139 1,447 Long-term debt, net—current portion 1,208 1,213 --------- - --------- - Total current liabilities 47,451 28,213 Operating lease liabilities 33,312 — Long-term debt, net 47,375 48,602 Other long-term liabilities 14 7,080 --------- - --------- - Total liabilities 128,152 83,895 --------- - --------- - Stockholders’ equity: Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and — — outstanding at December 31, 2019 and December 31, 2018 Class A common stock, $0.0001 par value, 250,000 shares authorized at December 31, 2019 and December 31, 2018; issued - 16,923 and 16,160, shares at December 31, 2019 2 2 and December 31, 2018, respectively; outstanding - 16,552 and 15,789 shares at December 31, 2019 and December 31, 2018, respectively; Class B common stock, $0.0001 par value, 50,000 shares authorized at December 31, 2019 and December 31, 2018; 17,594 and 18,109 shares issued and outstanding at 2 2 December 31, 2019 and December 31, 2018, respectively; Additional paid-in capital 161,509 157,898 Accumulated other comprehensive income (loss) 33 (178 ) Treasury stock, at cost, 371 Class A shares at December 31, 2019 and December 31, (21,562 ) (21,562 ) 2018 Accumulated deficit (8,034 ) (44,316 ) --------- - --------- - Total stockholders’ equity 131,950 91,846 --------- - --------- - Total liabilities and stockholders’ equity $ 260,102 $ 175,741 - ------- - - ------- -

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

Three Months Ended Twelve Months Ended December 31, December 31, 2019 2018 2019 2018 ---------- ----------- ----------- Revenue $ 67,362 $ 50,365 $ 256,012 $ 190,071 Costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization) 26,403 19,925 101,642 73,549 Sales and marketing 14,441 9,577 51,528 33,288 Research and product development 11,086 6,588 39,508 24,111 General and administrative 9,117 7,786 34,478 24,891 Depreciation and amortization 6,226 3,792 22,395 14,576 -------- - -------- - --------- - --------- - Total costs and operating expenses 67,273 47,668 249,551 170,415 -------- - -------- - --------- - --------- - Income from operations 89 2,697 6,461 19,656 Other income (expense), net 84 (36 ) 16 (56 ) Interest income (expense), net (330 ) 156 (1,654 ) 787 -------- - -------- - --------- - --------- - Income (loss) before provision for (benefit from) income (157 ) 2,817 4,823 20,387 taxes Provision for (benefit from) income taxes (4,585 ) 168 (31,459 ) 420 Net income $ 4,428 $ 2,649 $ 36,282 $ 19,967 - ------ - - ------ - - ------- - - ------- - Net income per common share: Basic $ 0.13 $ 0.08 $ 1.07 $ 0.59 Diluted $ 0.12 $ 0.07 $ 1.02 $ 0.56 Weighted average common shares outstanding: Basic 34,091 34,050 34,016 34,128 Diluted 35,597 35,425 35,567 35,562

Stock-Based Compensation Expense(in thousands)

Three Months Ended Twelve Months Ended December 31, December 31, 2019 2018 2019 2018 -------- -------- -------- --------- Costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization) $ 393 $ 351 $ 1,466 $ 1,103 Sales and marketing 367 326 1,271 1,034 Research and product development 387 349 1,411 1,079 General and administrative 731 892 3,161 3,121 Total stock-based compensation expense $ 1,878 $ 1,918 $ 7,309 $ 6,337 - ----- - ----- - ----- - ----- -

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Three Months Ended Twelve Months Ended December 31, December 31, 2019 2018 2019 2018 ---------- ---------- ---------- ---------- Cash from operating activities Net income $ 4,428 $ 2,649 $ 36,282 $ 19,967 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,226 3,792 22,395 14,576 Amortization of operating lease right-of-use assets 1,114 — 4,130 — Stock-based compensation 1,878 1,918 7,309 6,337 Deferred income taxes (4,423 ) (31,455 ) — Other (104 ) 59 32 224 Changes in operating assets and liabilities: Accounts receivable 747 557 (2,031 ) (908 ) Prepaid expenses and other current assets 372 (859 ) (4,031 ) (6,073 ) Other assets 247 (756 ) 1,376 (4,447 ) Accounts payable 241 137 511 614 Accrued employee expenses 4,056 4,443 4,542 1,219 Accrued expenses 69 (116 ) 55 3,281 Deferred revenue 154 (342 ) 1,193 (4,589 ) Operating lease liabilities 224 — (2,662 ) — Other liabilities 245 184 1,241 6,067 Net cash provided by operating activities 15,474 11,666 38,887 36,268 -------- - -------- - -------- - -------- - Cash from investing activities Purchases of property, equipment and intangible assets (3,999 ) (362 ) (8,084 ) (2,102 ) Additions to capitalized software (5,329 ) (3,307 ) (20,998 ) (12,304 ) Purchases of investment securities (14,508 ) (732 ) (25,198 ) (29,516 ) Sales of investment securities — 20,199 2,750 20,900 Maturities of investment securities 4,660 4,342 15,660 32,819 Acquisition, net of cash acquired — — (54,004 ) (14,441 ) Net cash (used in) provided by investing activities (19,146 ) 20,140 (89,874 ) (4,644 ) -------- - -------- - -------- - -------- - Cash from financing activities Proceeds from stock option exercises 294 322 553 1,035 Tax withholding for net share settlement (614 ) (233 ) (6,155 ) (3,127 ) Purchase of treasury stock — (21,562 ) — (21,562 ) Proceeds from issuance of debt 472 50,045 2,169 50,138 Principal payments on debt (785 ) (45 ) (3,419 ) (138 ) Payment of debt issuance costs — — (420 ) — Net cash (used in) provided by financing activities (633 ) 28,527 (7,272 ) 26,346 -------- - -------- - -------- - -------- - Net (decrease) increase in cash and cash equivalents and (4,305 ) 60,333 (58,259 ) 57,970 restricted cash Cash, cash equivalents and restricted cash Beginning of period 20,552 14,173 74,506 16,536 -------- - -------- - -------- - -------- - End of period $ 16,247 $ 74,506 $ 16,247 $ 74,506 - ------ - - ------ - - ------ - - ------ -