appf-20250630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended June 30, 2025.

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

For the transition period from ________ to ________.

Commission File Number 001-37468

AppFolio, Inc.

(Exact name of registrant as specified in its charter)

Delaware

26-0359894

(State of incorporation or organization)

(I.R.S. Employer Identification No.)

70 Castilian Drive

93117

Santa Barbara,

California

(Address of principal executive offices)

(Zip Code)

(805) 364-6093

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A common stock, $0.0001 par value	APPF	NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 24, 2025, the number of shares of the registrant’s Class A common stock outstanding was 22,871,704 and the number of shares of the registrant’s Class B common stock outstanding was 12,981,324.

TABLE OF CONTENTS


						Page No.
Forward-Looking Statements						1
Part I. Financial Information						2
Item 1. Condensed Consolidated Financial Statements (Unaudited)						2
Condensed Consolidated Balance Sheets as of June 30 , 2025 and December 31, 2024						3
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30 , 2025 and 2024						4
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30 , 2025 and 2024						5
Condensed Consolidated Statements of Stockholders' Equity for the Six Months Ended June 30, 2025 and 2024						6
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024						8
Notes to Condensed Consolidated Unaudited Financial Statements						9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						17
Item 3. Quantitative and Qualitative Disclosures about Market Risk						23
Item 4. Controls and Procedures						23
Part II. Other Information						24
Item 1. Legal Proceedings						24
Item 1A. Risk Factors						24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						25
Item 5. Other Information						25
Item 6. Exhibits						27
Signatures

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2025 (this "Quarterly Report"), contains forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), which statements involve substantial risks and uncertainties. The forward-looking statements made in this Quarterly Report are intended to qualify for the protection of the safe harbor provided by the PSLRA and are based primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, cash flows and/or prospects. Forward-looking statements include all statements that are not statements of historical fact. Forward-looking statements can also be identified by words such as “may,” “will,” “should,” “might,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “future,” or “continue,” or the negative of these words or other similar terms or expressions. Examples of forward-looking statements include, among others, statements regarding changes in the competitive environment, responding to customer needs, research and product development plans, future products and services, growth in the size of our business and number of customers, strategic plans and objectives, the benefits or performance of our strategic investments, business forecasts and plans, our future or assumed financial condition, results of operations and liquidity, trends affecting our business and industry, capital needs and financing plans, capital resource allocation plans, share repurchase plans, and commitments and contingencies, including with respect to the outcome of legal proceedings or regulatory matters. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those risks, uncertainties and other factors described in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in this Quarterly Report and "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (our "Annual Report"), as well as in the other reports we file with the Securities and Exchange Commission (the "SEC"). You should read this Quarterly Report, and the other documents we file with the SEC, with the understanding that our actual future results may be materially different from the results expressed or implied by these forward-looking statements. As such, you should not rely upon forward-looking statements as predictions of future events. Any forward-looking statement made by us in this Quarterly Report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law.

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

APPFOLIO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands)


	June 30, 2025		December 31, 2024
Assets
Current assets
Cash and cash equivalents	$	73,478	$	42,504
Investment securities—current	54,088		235,745
Accounts receivable, net	32,543		24,346
Prepaid expenses and other current assets	37,026		32,807
Total current assets	197,135		335,402
Property and equipment, net	22,641		24,483
Operating lease right-of-use assets	16,464		17,472
Capitalized software development costs, net	12,414		15,429
Goodwill	96,410		96,410
Intangible assets, net	43,942		49,057
Deferred income taxes	90,095		76,910
Long-term investments	77,033		2,033
Other long-term assets	11,269		9,482
Total assets	$	567,403	$	626,678
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	3,254	$	2,378
Accrued employee expenses	25,784		30,157
Accrued expenses	18,103		14,658


Other current liabilities	20,448		16,087

Total current liabilities	67,589		63,280


Operating lease liabilities	35,180		37,476

Other liabilities	8,988		6,632
Total liabilities	111,757		107,388
Commitments and contingencies (Note 6)
Stockholders’ equity:

Class A common stock	2		2
Class B common stock	2		2
Additional paid-in capital	270,782		254,821
Accumulated other comprehensive (loss) Income	(71)		173
Treasury stock	(172,480)		(25,756)
Retained earnings	357,411		290,048
Total stockholders’ equity	455,646		519,290
Total liabilities and stockholders’ equity	$	567,403	$	626,678

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

APPFOLIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenue	$	235,575	$	197,375	$	453,277	$	384,805
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)(1)	83,827		69,601		163,325		134,247
Sales and marketing(1)	36,776		27,300		67,833		51,755
Research and product development(1)	46,674		39,522		90,432		77,417
General and administrative(1)	21,936		20,254		45,287		41,386
Depreciation and amortization	5,850		4,670		12,105		9,882
Total costs and operating expenses	195,063		161,347		378,982		314,687
Income from operations	40,512		36,028		74,295		70,118
Other (loss) income, net	(11)		—		45		—
Interest income, net	1,466		3,476		4,419		6,468
Income before provision for income taxes	41,967		39,504		78,759		76,586
Provision for income taxes	5,987		9,839		11,396		8,258
Net income	$	35,980	$	29,665	$	67,363	$	68,328

Net income per common share:
Basic	$	1.00	$	0.82	$	1.87	$	1.89
Diluted	$	0.99	$	0.81	$	1.85	$	1.86
Weighted average common shares outstanding:
Basic	35,922		36,241		36,111		36,164
Diluted	36,204		36,742		36,425		36,720

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Stock-based compensation expense included in costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)	$	1,419	$	1,175	$	2,706	$	2,135
Sales and marketing	3,045		1,703		5,893		3,213
Research and product development	8,176		6,472		15,107		12,154
General and administrative	5,659		5,444		10,964		10,766
Total stock-based compensation expense	$	18,299	$	14,794	$	34,670	$	28,268

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

APPFOLIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net income	$	35,980	$	29,665	$	67,363	$	68,328
Other comprehensive loss:
Changes in unrealized losses on investment securities, net of tax	(37)		(69)		(244)		(283)
Comprehensive income	$	35,943	$	29,596	$	67,119	$	68,045

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

APPFOLIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

(in thousands)


									Accumulated
							Additional		Other
	Common Stock			Common Stock			Paid-in		Comprehensive		Treasury		Retained
	Class A			Class B			Capital		Income (Loss)		Stock		Earnings		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2024	23,241	$	2	13,163	$	2	$	254,821	$	173	$	(25,756)	$	290,048	$	519,290
Exercise of stock options	1	—		—	—		11		—		—		—		11
Stock-based compensation	—	—		—	—		16,483		—		—		—		16,483
Vesting of restricted stock units, net of shares withheld for taxes	60	—		—	—		(9,078)		—		—		—		(9,078)
Conversion of Class B common stock to Class A common stock	182	—		(182)	—		—		—		—		—		—
Repurchase on common stock	(445)	—		—	—		—		—		(95,763)		—		(95,763)
Other comprehensive loss	—	—		—	—		—		(207)		—		—		(207)
Net Income	—	—		—	—		—		—		—		31,383		31,383
Balance at March 31, 2025	23,039	$	2	12,981	$	2	$	262,237	$	(34)	$	(121,519)	$	321,431	$	462,119
Exercise of stock options	8	—		—	—		117		—		—		—		117
Stock based compensation	—	—		—	—		18,448		—		—		—		18,448
Vesting of restricted stock units, net of shares withheld for taxes	68	—		—	—		(10,020)		—		—		—		(10,020)
Conversion of Class B common stock to Class A common stock	—	—		—	—		—		—		—		—		—
Repurchase of common stock	(244)	—		—	—		—		—		(50,961)		—		(50,961)
Other comprehensive loss	—	—		—	—		—		(37)		—		—		(37)
Net Income	—	—		—	—		—		—		—		35,980		35,980
Balance at June 30, 2025	22,871	$	2	12,981	$	2	$	270,782	$	(71)	$	(172,480)	$	357,411	$	455,646

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.


									Accumulated
							Additional		Other
	Common Stock			Common Stock			Paid-in		Comprehensive		Treasury		Retained
	Class A			Class B			Capital		Income (Loss)		Stock		Earnings		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2023	21,749	$	2	14,116	$	2	$	236,985	$	99	$	(25,756)	$	85,980	$	297,312
Exercise of stock options	244	—		—	—		3,874		—		—		—		3,874
Stock-based compensation	—	—		—	—		13,646		—		—		—		13,646
Vesting of restricted stock units, net of shares withheld for taxes	89	—		—	—		(14,086)		—		—		—		(14,086)
Conversion of Class B common stock to Class A common stock	199	—		(199)	—		—		—		—		—		—
Other comprehensive loss	—	—		—	—		—		(214)		—		—		(214)
Net Income	—	—		—	—		—		—		—		38,663		38,663
Balance at March 31, 2024	22,281	$	2	13,917	$	2	$	240,419	$	(115)	$	(25,756)	$	124,643	$	339,195
Exercise of stock options	3	—		—	—		25		—		—		—		25
Stock based compensation	—	—		—	—		15,032		—		—		—		15,032
Vesting of restricted stock units, net of shares withheld for taxes	71	—		—	—		(12,436)		—		—		—		(12,436)
Conversion of Class B common stock to Class A common stock	644	—		(644)	—		—		—		—		—		—
Other comprehensive loss	—	—		—	—		—		(69)		—		—		(69)
Net Income	—	—		—	—		—		—		—		29,665		29,665
Balance at June 30, 2024	22,999	$	2	13,273	$	2	$	243,040	$	(184)	$	(25,756)	$	154,308	$	371,412

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.


APPFOLIO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

	Six Months Ended June 30,
	2025		2024
Cash from operating activities
Net income	$	67,363	$	68,328
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12,105		9,881
Amortization of operating lease right-of-use assets	1,008		1,053
Amortization of costs capitalized to obtain revenue contracts	5,419		4,985

Deferred income taxes	(13,185)		—
Stock-based compensation, including as amortized	34,670		28,269


Other	(1,048)		(4,005)
Changes in operating assets and liabilities:
Accounts receivable	(8,197)

SEC Form 10-Q filed by AppFolio Inc.