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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 29, 2025
AppFolio, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)
001-3746826-0359894
(Commission File Number)(IRS Employer Identification Number)
70 Castilian Drive
Santa Barbara, CA 93117
(Address of principal executive offices)
Registrant’s telephone number, including area code: (805) 364-6093
N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Common Stock, $0.0001 par valueAPPFNASDAQ Global Market


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02 Results of Operations and Financial Condition.
On January 30, 2025, AppFolio, Inc. (the "Company") issued a press release announcing its financial results for its fourth quarter and fiscal year ended December 31, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Item 2.02, including the press release attached as Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section. Such information shall not be deemed to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as otherwise expressly set forth by specific reference in such a filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(c) On January 29, 2025, the Board of Directors of the Company appointed Tim Eaton as the Company’s interim Principal Accounting Officer. Mr. Eaton, 36, has served as the Company’s interim Chief Financial Officer since October 25, 2024, Chief of Staff to the Chief Executive Officer since 2022, and in various other leadership roles within the Company since 2020. Prior to joining the Company, Mr. Eaton worked in a variety of financial, strategic, and operational positions at Visa, Google, and Goldman Sachs. Mr. Eaton holds an M.B.A. in finance and entrepreneurship from the Wharton School at the University of Pennsylvania and a B.S. in Business Management from Brigham Young University, and is a CFA charterholder.
There are no arrangements or understandings between Mr. Eaton and any other person pursuant to which he was selected to serve as interim Principal Accounting Officer. There are no family relationships between Mr. Eaton and any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer. There are no transactions involving Mr. Eaton that are required to be reported pursuant to Item 404(a) of Regulation S-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Number
Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date:
January 30, 2025AppFolio, Inc.
By: /s/ Tim Eaton
Name: Tim Eaton
Title: Interim Chief Financial Officer










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AppFolio, Inc. Announces Fourth Quarter and Fiscal Year 2024 Financial Results
Fourth quarter caps off year of innovation including new AppFolio Realm-X capabilities
and a transformed resident vision


SANTA BARBARA, Calif., January 30, 2025 -- AppFolio, Inc. (NASDAQ: APPF) ("AppFolio" or the "Company"), a technology leader powering the future of the real estate industry, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2024.

"I am proud of our strong performance in 2024 as we continue to deliver value to our customers through differentiated industry-leading innovation," said Shane Trigg, President and CEO, AppFolio. "Our investments in AI and the resident experience are translating into meaningful outcomes for our customers and fueling our mission to build the platform where the real estate industry comes to do business. We are acquiring, growing, and retaining customers while delivering exceptional service."

Financial Highlights for Fourth Quarter of 2024
•Revenue grew 19% year-over-year to $204 million.
•Total units under management grew 6% year-over-year to 8.7 million.
•GAAP operating income was $23 million, or 11.3% of revenue, compared to operating income of $28 million, or 16.4% of revenue in Q4 2023.
•Non-GAAP operating income was $41 million, or 20.2% of revenue, compared to an operating income of $42 million, or 24.3% of revenue, in Q4 2023.
•Net cash provided by operating activities was $37 million, or 18.0% of revenue, compared to $31 million, or 18.1% of revenue, in Q4 2023.
•Non-GAAP free cash flow was $35 million, or 17.3% of revenue, compared to $34 million, or 19.9% of revenue, in Q4 2023.

Financial Highlights for Fiscal Year 2024
•Revenue grew 28% year-over-year to $794 million.
•GAAP operating income was $136 million, or 17.1% of revenue, compared to operating income of $1 million, or 0.2% of revenue, in fiscal year 2023.
•Non-GAAP operating income was $200 million, or 25.2% of revenue, compared to operating income of $76 million, or 12.2% of revenue, in fiscal year 2023.
•Net cash provided by operating activities was $188 million, or 23.7% of revenue, compared to $60 million, or 9.7% of revenue, in fiscal year 2023.
•Non-GAAP free cash flow was $182 million, or 22.9% of revenue, compared to $74 million, or 11.9% of revenue, in fiscal year 2023.




Financial Outlook
Based on information available as of January 30, 2025, AppFolio's outlook for fiscal year 2025 follows:
•Full year revenue is expected to be in the range of $920 million to $940 million.
•Full year non-GAAP operating margin as a percentage of revenue is expected to be in the range of 24.5% to 26.5%.
•Diluted weighted average shares outstanding are expected to be approximately 37 million for the full year.

Conference Call Information
As previously announced, the Company will host a conference call today, January 30, 2025, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the Company’s fourth quarter and fiscal year 2024 financial results. A live webcast of the call will be available at: https://edge.media-server.com/mmc/p/ed7u6ptp/. To access the call by phone, please go to the following link: https://register.vevent.com/register/BIdc9c20754ec649859552be5efc7cfa83, and you will be provided with dial in details. A replay of the webcast will also be available for a limited time on AppFolio’s Investor Relations website at https://ir.appfolioinc.com/news-events/events.

The Company also provides announcements regarding its financial results and other matters, including SEC filings, investor events, and press releases, on its Investor Relations website at https://ir.appfolioinc.com/, as a means of disclosing material nonpublic information and for complying with AppFolio's disclosure obligations under Regulation FD.

About AppFolio
AppFolio is a technology leader powering the future of the real estate industry. Our innovative platform and trusted partnership enable our customers to connect communities, increase operational efficiency, and grow their business. For more information about AppFolio, visit ir.appfolioinc.com.

Investor Relations Contact:
Lori Barker
ir@appfolio.com

Use of Non-GAAP Financial Measures
Reconciliations of current and historical non-GAAP financial measures to AppFolio’s financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables entitled “Statement Regarding the Use of Non-GAAP Financial Measures.”

AppFolio is unable, at this time, to provide GAAP equivalent guidance measures on a forward-looking basis for non-GAAP operating margin because certain items that impact this measure are uncertain, out of our control, or cannot be reasonably predicted, such as charges related to stock-based compensation expense. The effect of these excluded items may be significant.

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,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “future’” “predicts, “projects,” “target,” “seeks,” “contemplates,” “should,” “will,” “would” or similar expressions and the negatives of those expressions. In particular, forward-looking statements contained in this press release relate to future operating results and financial position, including the Company's fiscal year 2025 financial outlook, anticipated future expenses and investments, the Company's business opportunities, the impact of the Company's strategic actions and initiatives, the potential benefits and effect of the Company's AI and resident experience related services and their impact on the Company’s plans, objectives, expectations and capabilities.

Forward-looking statements represent AppFolio's current beliefs and expectations based on information currently available and speak only as of the date the statement is made. Forward-looking statements are subject to 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. The risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to materially differ from those expressed or implied by these forward-looking statements include those risks, uncertainties and other factors described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 1, 2024, and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recently filed Annual Report on Form 10-K or Quarterly Report on Form 10-Q, 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.

The Company undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.




CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
 December 31,
2024		December 31,
2023
Assets
Current assets
Cash and cash equivalents$42,504 $49,509 
Investment securities—current235,745 162,196 
Accounts receivable, net24,346 20,709 
Prepaid expenses and other current assets32,807 39,943 
Total current assets335,402 272,357 
Property and equipment, net24,483 28,362 
Operating lease right-of-use assets17,472 19,285 
Capitalized software development costs, net15,429 21,562 
Goodwill96,410 56,060 
Intangible assets, net49,057 2,357 
Deferred income taxes76,910 — 
Other long-term assets11,515 8,906 
Total assets$626,678 $408,889 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$2,378 $1,141 
Accrued employee expenses30,157 35,567 
Accrued expenses14,658 21,723 
Other current liabilities16,087 11,335 
Total current liabilities63,280 69,766 
Operating lease liabilities37,476 41,114 
Deferred tax liabilities— 697 
Other liabilities6,632 — 
Total liabilities107,388 111,577 
Stockholders’ equity519,290 297,312 
Total liabilities and stockholders’ equity$626,678 $408,889 




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

 Three Months Ended
December 31,		Twelve Months Ended
December 31,
 2024202320242023
Revenue(1)
$203,664 $171,830 $794,202 $620,445 
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)(2)
76,189 61,275 282,067 238,076 
Sales and marketing(2)
33,436 21,501 110,597 107,602 
Research and product development(2)
42,296 34,847 160,375 151,364 
General and administrative(2)
23,449 19,035 85,974 93,452 
Depreciation and amortization5,336 6,933 19,545 28,988 
Total costs and operating expenses180,706 143,591 658,558 619,482 
Income from operations22,958 28,239 135,644 963 
Other income, net697 286 697 3 
Interest income, net3,499 2,404 13,981 7,031 
Income before provision for income taxes27,154 30,929 150,322 7,997 
(Benefit from) provision for income taxes(75,580)661 (53,746)5,295 
Net income$102,734 $30,268 $204,068 $2,702 
Net income per common share:
Basic$2.82 $0.85 $5.63 $0.08 
Diluted$2.79 $0.83 $5.55 $0.07 
Weighted average common shares outstanding
Basic36,374 35,812 36,252 35,629 
Diluted36,783 36,596 36,782 36,417 
(1) The following table presents our revenue categories:
 Three Months Ended
December 31,		Twelve Months Ended
December 31,
 2024202320242023
Core solutions$47,631 $41,252 $180,605 $156,692 
Value Added Services153,334 127,990 605,011 454,098 
Other2,699 2,588 8,586 9,655 
Total revenue$203,664 $171,830 $794,202 $620,445 

(2) Includes stock-based compensation expense as follows:

Three Months Ended
December 31,		Twelve Months Ended
December 31,
2024202320242023
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)$1,261 $798 $4,522 $3,703 
Sales and marketing2,746 1,081 8,030 5,983 
Research and product development5,789 5,123 25,414 20,974 
General and administrative6,228 5,430 22,361 21,704 
Total stock-based compensation expense$16,024 $12,432 $60,327 $52,364 




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 Three Months Ended
December 31,		Twelve Months Ended
December 31,
 2024202320242023
Cash from operating activities
Net income (loss)$102,734 $30,268 $204,068 $2,702 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization4,986 6,385 17,790 26,500 
Amortization of operating lease right-of-use assets489 514 2,030 2,132 
Gain on lease modification— — — (4,281)
Deferred income taxes(76,937)(494)(76,937)(490)
Stock-based compensation, including as amortized16,374 12,980 62,081 54,852 
Other(2,074)(1,590)(8,220)(3,108)
Changes in operating assets and liabilities:
Accounts receivable1,489 (349)(3,383)(4,206)
Prepaid expenses and other assets3,015 (12,781)4,126 (13,493)
Accounts payable1,850 (80)1,559 (1,565)
Operating lease liabilities53 576 (3,143)(2,504)
Accrued expenses and other liabilities(15,413)(4,246)(11,812)3,744 
Net cash provided by operating activities36,566 31,183 188,159 60,283 
Cash from investing activities
Purchases of available-for-sale investments(51,854)(86,821)(317,173)(195,740)
Proceeds from sales of available-for-sale investments9,984 — 9,984 1,013 
Proceeds from maturities of available-for-sale investments76,280 58,130 240,035 152,382 
Purchases of property and equipment(195)(3,109)(2,016)(9,041)
Capitalization of software development costs(1,058)(1,431)(5,170)(4,825)
Proceeds from equity-method investment— — — 629 
Cash paid in business acquisition, net of cash acquired(77,421)— (77,421)— 
Net cash used in investing activities(44,264)(33,231)(151,761)(55,582)
Cash from financing activities
Proceeds from stock option exercises11 410 3,924 2,595 
Tax withholding for net share settlement(12,226)(8,790)(47,327)(28,556)
Net cash used in financing activities(12,215)(8,380)(43,403)(25,961)
Net decrease in cash, cash equivalents and restricted cash(19,913)(10,428)(7,005)(21,260)
Cash, cash equivalents and restricted cash
Beginning of period62,667 60,187 49,759 71,019 
End of period$42,754 $49,759 $42,754 $49,759 




RECONCILIATION FROM GAAP TO NON-GAAP RESULTS
(UNAUDITED)
(in thousands, except per share data)

Three Months Ended
December 31,		Twelve Months Ended
December 31,
2024202320242023
Costs and operating expenses:
GAAP cost of revenue (exclusive of depreciation and amortization)$76,189 $61,275 $282,067 $238,076 
Stock-based compensation expense(1,261)(798)(4,522)(3,703)
Workforce reduction costs— — — (2,135)
Non-GAAP cost of revenue (exclusive of depreciation and amortization)$74,928 $60,477 $277,545 $232,238 
GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue37 %36 %36 %38 %
Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue37 %35 %35 %37 %
GAAP sales and marketing$33,436 $21,501 $110,597 $107,602 
Stock-based compensation expense(2,746)(1,081)(8,030)(5,983)
Workforce reduction costs— — — (3,401)
Non-GAAP sales and marketing$30,690 $20,420 $102,567 $98,218 
GAAP sales and marketing as a percentage of revenue16 %13 %14 %17 %
Non-GAAP sales and marketing as a percentage of revenue15 %12 %13 %16 %
GAAP research and product development$42,296 $34,847 $160,375 $151,364 
Stock-based compensation expense(5,789)(5,123)(25,414)(20,974)
Workforce reduction costs— — — (2,635)
Non-GAAP research and product development$36,507 $29,724 $134,961 $127,755 
GAAP research and product development as a percentage of revenue21 %20 %20 %24 %
Non-GAAP research and product development as a percentage of revenue18 %17 %17 %21 %
GAAP general and administrative$23,449 $19,035 $85,974 $93,452 
Stock-based compensation expense(6,228)(5,430)(22,361)(21,704)
Gain on lease modification— — — 4,281 
CEO separation costs, net— — — (11,520)
Workforce reduction costs— — — (2,106)
Non-GAAP general and administrative$17,221 $13,605 $63,613 $62,403 
GAAP general and administrative as a percentage of revenue12 %11 %11 %15 %
Non-GAAP general and administrative as a percentage of revenue8 %8 %8 %10 %
GAAP depreciation and amortization$5,336 $6,933 $19,545 $28,988 
Amortization of stock-based compensation capitalized in software development costs(350)(548)(1,754)(2,489)
Amortization of purchased intangibles(1,744)(619)(2,100)(2,476)
Non-GAAP depreciation and amortization$3,242 $5,766 $15,691 $24,023 
GAAP depreciation and amortization as a percentage of revenue3 %4 %2 %5 %
Non-GAAP depreciation and amortization as a percentage of revenue2 %3 %2 %4 %



Three Months Ended
December 31,		Twelve Months Ended
December 31,
2024202320242023
Income from operations:
GAAP income from operations$22,958 $28,239 $135,644 $963 
Stock-based compensation expense16,024 12,432 60,327 52,364 
Amortization of stock-based compensation capitalized in software development costs350 548 1,754 2,489 
Amortization of purchased intangibles1,744 619 2,100 2,476 
Gain on lease modification— — — (4,281)
CEO separation costs, net— — — 11,520 
Workforce reduction costs— — — 10,278 
Non-GAAP income from operations$41,076 $41,838 $199,825 $75,809 
Operating margin:
GAAP operating margin11.3 %16.4 %17.1 %0.2 %
Stock-based compensation expense as a percentage of revenue7.8 7.2 7.6 8.4 
Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue0.2 0.3 0.2 0.4 
Amortization of purchased intangibles as a percentage of revenue0.9 0.4 0.3 0.4 
Gain on lease modification as a percentage of revenue— — — (0.7)
CEO separation costs, net as a percentage of revenue— — — 1.9 
Workforce reduction costs as a percentage of revenue— — — 1.8 
Non-GAAP operating margin20.2 %24.3 %25.2 %12.2 %
Net income (loss):
GAAP net income $102,734 $30,268 $204,068 $2,702 
Stock-based compensation expense16,024 12,432 60,327 52,364 
Amortization of stock-based compensation capitalized in software development costs350 548 1,754 2,489 
Amortization of purchased intangibles1,744 619 2,100 2,476 
Gain on lease modification— — — (4,281)
CEO separation costs, net— — — 11,520 
Workforce reduction costs— — — 10,278 
Income tax effect of adjustments(86,898)(11,556)(107,372)(15,415)
Non-GAAP net income$33,954 $32,311 $160,877 $62,133 
Net income per share, basic:
GAAP net income per share, basic $2.82 $0.85 $5.63 $0.08 
Non-GAAP adjustments to net income(1.89)0.05 (1.19)1.66 
Non-GAAP net income per share, basic $0.93 $0.90 $4.44 $1.74 
Net income per share, diluted:
GAAP net income per share, diluted$2.79 $0.83 $5.55 $0.07 
Non-GAAP adjustments to net income(1.87)0.05 (1.18)1.64 
Non-GAAP net income per share, diluted$0.92 $0.88 $4.37 $1.71 
Weighted-average shares used in GAAP per share calculation
Basic36,374 35,812 36,252 35,629 
Diluted36,783 36,596 36,782 36,417 
Weighted-average shares used in non-GAAP per share calculation
Basic36,374 35,812 36,252 35,629 
Diluted36,783 36,596 36,782 36,417 




Three Months Ended
December 31,		Twelve Months Ended
December 31,
2024202320242023
Free cash flow:
GAAP net cash provided by operating activities$36,566 $31,183 $188,159 $60,283 
Purchases of property and equipment(195)(3,109)(2,016)(9,041)
Capitalized software development costs(1,058)(1,431)(5,170)(4,825)
CEO separation costs payment— — — 14,926 
Partial lease termination payment— — — 2,851 
Severance payments for workforce reduction— 7,624 566 9,425 
Non-GAAP free cash flow$35,313 $34,267 $181,539 $73,619 
Free cash flow margin:
GAAP net cash provided by operating activities as a percentage of revenue18.0 %18.1 %23.7 %9.7 %
Purchases of property and equipment as a percentage of revenue(0.1)(1.8)(0.3)(1.4)
Capitalized software development costs as a percentage of revenue(0.6)(0.8)(0.6)(0.8)
CEO separation costs payment as a percentage of revenue— — — 2.4 
Partial lease termination payment as a percentage of revenue— — — 0.5 
Severance payments for workforce reduction as a percentage of revenue— 4.4 0.1 1.5 
Non-GAAP free cash flow margin17.3 %19.9 %22.9 %11.9 %





























Statement Regarding the Use of Non-GAAP Financial Measures

We use the following non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

•Non-GAAP presentation of income (loss) from operations, costs and operating expenses, operating margin, net income (loss), and net income (loss) per share. These measures exclude certain non-cash or non-recurring items, including stock-based compensation expense, amortization of stock-based compensation capitalized in software development costs, amortization of purchased intangibles, CEO separation costs, net, gain on lease modification, workforce reduction costs, and the related income tax effect of these adjustments, as applicable and described below. Non-GAAP operating margin is calculated as non-GAAP operating income (loss) from operations as a percentage of revenue.

•Non-GAAP free cash flow. Non-GAAP free cash flow is defined as net cash from operating activities, less purchases of property and equipment, capitalization of software development costs, payments for separation costs and lease termination payments and severance payments for workforce reduction. We use free cash flow to evaluate our generation of cash from operations that is available for purposes other than capital expenditures and capitalized software development costs. Additionally, we believe that information regarding free cash flow provides investors with a perspective on the cash available to fund ongoing operations. We review cash flows generated from operations after taking into consideration capital expenditures and the capitalization of software development costs due to the fact that these expenditures are considered to be a necessary component of ongoing operations. Free cash flow margin is calculated as free cash flow as a percentage of revenue.

We use each of these non-GAAP financial measures internally to assess and compare operating results across reporting periods, for internal budgeting and forecasting purposes, and to evaluate our financial performance. We believe these adjustments also provide useful supplemental information to investors and facilitate the analysis of our operating results and comparison of operating results across reporting periods.

In particular, we believe these non-GAAP financial measures are useful to investors and others in assessing our operating performance due to the following factors:

•Stock-based compensation expense and amortization of stock-based compensation capitalized in software development costs. We utilize stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of our stockholders while ensuring long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses, which include costs related to our workforce reduction, vary for reasons that are generally unrelated to financial and operational performance in any particular period.

•Amortization of purchased intangibles. We view amortization of purchased intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.

•CEO separation costs, net. We incurred one-time separation costs associated with our former Chief Executive Officer's Transition and Separation Agreement, dated March 1, 2023. We have excluded these costs, as we do not consider such amounts to be part of the ongoing operation of our business.

•Gain on lease modification. In January 2023 and June 2023, we amended our San Diego lease. We have excluded any gain related to the remeasurement of the lease liability, as we do not consider such amounts to be part of the ongoing operation of our business.




•Workforce reduction costs. We incurred one-time severance and related personnel costs associated with our workforce reduction in the third quarter of 2023. We have excluded these costs, along with the subsequent cash payments, as we do not consider such amounts to be part of the ongoing operation of our business.

•Income tax effects of adjustments. We utilize a fixed long-term projected tax rate in our computation of non-GAAP income tax effects to provide better consistency across interim reporting periods. In projecting this long-term non-GAAP tax rate, we utilize a financial projection that excludes the direct impact of other non-GAAP adjustments. The projected rate, which we have determined to be 25%, considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. We periodically re-evaluate this tax rate, as necessary, for significant events, based on relevant tax law changes, and material changes in the forecasted geographic earnings mix.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and can exclude expenses that may have a material impact on our reported financial results. As such, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the tables above. We encourage investors to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.











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v3.24.4
Cover
Jan. 29, 2025
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 29, 2025
Entity Registrant Name AppFolio, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-37468
Entity Tax Identification Number 26-0359894
Entity Address, Address Line One 70 Castilian Drive
Entity Address, City or Town Santa Barbara
Entity Address, State or Province CA
Entity Address, Postal Zip Code 93117
City Area Code 805
Local Phone Number 364-6093
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of each class Class A Common Stock, $0.0001 par value
Trading Symbol APPF
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001433195
Amendment Flag false
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