AppFolio, Inc. Announces Third Quarter 2025 Financial Results

Rhea-AI Summary

AppFolio (NASDAQ: APPF) reported third quarter 2025 results for the period ended September 30, 2025: revenue $249M (+21% YoY), units under management 9.1M (+7% YoY). GAAP operating income was $35M (14.1% of revenue) versus $43M (20.7%) in Q3 2024. Non-GAAP operating income was $59M (23.5% of revenue), unchanged in dollars but lower in margin from 28.7% a year ago. Net cash provided by operating activities was $86M (34.5% of revenue) versus $58M (28.1%) in Q3 2024.

Full‑year 2025 outlook: revenue $945M–$950M, non‑GAAP operating margin 23.5%–24.5%, and diluted weighted average shares ~36M. The company will host a conference call today, October 30, 2025.

Positive

• Revenue +21% YoY to $249M in Q3 2025
• Units under management +7% YoY to 9.1M
• Net cash from operations $86M (34.5% of revenue)

Negative

• GAAP operating income declined to $35M (14.1% of revenue) from $43M (20.7%)
• Non‑GAAP operating margin fell to 23.5% from 28.7% YoY

Insights

Equity Analyst

Revenue and units grew meaningfully, cash generation improved, but GAAP margins contracted and non-GAAP margins are flat year‑over‑year.

AppFolio reported revenue of $249 million, a 21% increase year‑over‑year, and total units under management of 9.1 million, up 7%. These top‑line gains reflect customer acquisition, expansion, and adoption of Realm‑X through premium tiers and services, which drives recurring revenue and scale in the business model.

Profitability shows a mixed picture: GAAP operating income fell to $35 million (GAAP operating margin 14.1%), down from 20.7% in the prior year, while non‑GAAP operating income remained at $59 million but the non‑GAAP margin declined to 23.5% from 28.7%. Net cash from operations rose to $86 million, or 34.5% of revenue, improving cash conversion versus the prior year.

The company reiterated full‑year guidance of $945 million–$950 million revenue and non‑GAAP operating margin of 23.5%–24.5%, implying steady execution but limited margin expansion near term. Key dependencies include sustained customer expansion of Realm‑X, ongoing control of operating costs to restore margin profile, and delivery against the full‑year revenue range during the remainder of fiscal 2025. Watch upcoming quarterly cadence for margin improvement and the conference call today for management commentary on drivers of non‑GAAP adjustments and cash conversion trends.

Strong unit and revenue growth driven by customer acquisition, expansion, and Realm-X adoption through premium tiers and value added services

SANTA BARBARA, Calif., Oct. 30, 2025 (GLOBE NEWSWIRE) -- 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 third quarter ended September 30, 2025.

"I'm pleased with our third quarter results, as we continue to win in the market. We are expanding the value we deliver to our existing customers while effectively capturing new market share," said Shane Trigg, President and CEO. "Our Performance Platform, built on an AI-native architecture, drives real performance outcomes. By embracing our innovations, customers are seeing everyone in their ecosystem thrive. Our success is aligned to our customers' success, and this quarter reflects that our customers are winning."

Financial Highlights for Third Quarter of 2025

• Revenue grew 21% year-over-year to $249 million.
• Total units under management grew 7% year-over-year to 9.1 million.
• GAAP operating income was $35 million, or 14.1% of revenue, compared to operating income of $43 million, or 20.7% of revenue in Q3 2024.
• Non-GAAP operating income was $59 million, or 23.5% of revenue, compared to non-GAAP operating income of $59 million, or 28.7% of revenue, in Q3 2024.
• Net cash provided by operating activities was $86 million, or 34.5% of revenue, compared to $58 million, or 28.1% of revenue, in Q3 2024.

Financial Outlook
Based on information available as of October 30, 2025, AppFolio's outlook for fiscal year 2025 follows:

• Full year revenue is expected to be in the range of $945 million to $950 million.
• Full year non-GAAP operating margin as a percentage of revenue is expected to be in the range of 23.5% to 24.5%.
• Diluted weighted average shares outstanding 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, October 30, 2025, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the Company’s third quarter financial results. A live webcast of the call will be available at: https://edge.media-server.com/mmc/p/Ksw66h7s/. To access the call by phone, please go to the following link: https://register-conf.media-server.com/register/BIea6cb65f31dc40be9de34783fcefbaf4, 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-powered solutions, 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, 2024, which was filed with the SEC on February 6, 2025, as such risk factors may be updated from time to time in our subsequent filings with the SEC, 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)
		September 30, 2025			December 31, 2024
Assets
Current assets
Cash and cash equivalents		$	76,093		$	42,504
Investment securities—current			124,056			235,745
Accounts receivable, net			34,346			24,346
Prepaid expenses and other current assets			68,269			32,807
Total current assets			302,764			335,402
Property and equipment, net			22,901			24,483
Operating lease right-of-use assets			16,620			17,472
Capitalized software development costs, net			11,679			15,429
Goodwill			96,410			96,410
Intangible assets, net			41,384			49,057
Deferred income taxes			59,792			76,910
Long-term investments			77,033			2,033
Other long-term assets			11,882			9,482
Total assets		$	640,465		$	626,678
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		$	4,112		$	2,378
Accrued employee expenses			52,321			30,157
Accrued expenses			19,224			14,658
Other current liabilities			24,775			16,087
Total current liabilities			100,432			63,280
Operating lease liabilities			34,533			37,476
Other liabilities			6,632			6,632
Total liabilities			141,597			107,388
Stockholders’ equity			498,868			519,290
Total liabilities and stockholders’ equity		$	640,465		$	626,678

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

	Three Months Ended September 30,							Nine Months Ended September 30,
		2025				2024			2025			2024
Revenue(1)	$	249,353			$	205,733		$	702,630		$	590,538
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)(2)		91,476				71,631			254,801			205,878
Sales and marketing(2)		35,912				25,406			103,745			77,161
Research and product development(2)		54,037				40,662			144,469			118,079
General and administrative(2)		27,446				21,139			72,733			62,525
Depreciation and amortization		5,436				4,327			17,541			14,209
Total costs and operating expenses		214,307				163,165			593,289			477,852
Income from operations		35,046				42,568			109,341			112,686
Other (loss)/income, net		(4	)			—			41			—
Interest income, net		1,690				4,014			6,109			10,482
Income before provision for income taxes		36,732				46,582			115,491			123,168
Provision for income taxes		3,086				13,576			14,482			21,834
Net income	$	33,646			$	33,006		$	101,009		$	101,334
Net income per common share:
Basic	$	0.94			$	0.91		$	2.80		$	2.80
Diluted	$	0.93			$	0.90		$	2.78		$	2.76
Weighted average common shares outstanding
Basic		35,889				36,306			36,036			36,211
Diluted		36,259				36,756			36,371			36,752

⁽¹⁾ The following table presents our revenue categories:

	Three Months Ended September 30,						Nine Months Ended September 30,
		2025			2024			2025			2024
Core solutions	$	53,752		$	46,030		$	155,738		$	132,974
Value Added Services		192,092			157,726			536,943			451,677
Other		3,509			1,977			9,949			5,887
Total revenue	$	249,353		$	205,733		$	702,630		$	590,538

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

	Three Months Ended September 30,						Nine Months Ended September 30,
		2025			2024			2025			2024
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)	$	1,241		$	1,126		$	3,947		$	3,261
Sales and marketing		3,443			2,071			9,336			5,284
Research and product development		9,076			7,471			24,182			19,625
General and administrative		7,033			5,367			17,998			16,133
Total stock-based compensation expense	$	20,793		$	16,035		$	55,463		$	44,303

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Cash from operating activities
Net income	$	33,646			$	33,006			$	101,009			$	101,334
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,436				4,326				17,541				14,207
Amortization of operating lease right-of-use assets		517				488				1,525				1,541
Amortization of costs capitalized to obtain revenue contracts, net		2,768				2,486				8,187				7,471
Deferred income taxes		30,303				—				17,118				—
Stock-based compensation, including as amortized		20,793				16,035				55,463				44,304
Other		(233	)			(2,141	)			(1,281	)			(6,146	)
Changes in operating assets and liabilities:
Accounts receivable		(1,803	)			110				(10,000	)			(4,872	)
Prepaid expenses and other assets		(4,251	)			(6,532	)			(15,677	)			(6,360	)
Accounts payable		894				(728	)			1,746				(291	)
Operating lease liabilities		(1,075	)			(1,778	)			(3,177	)			(3,196	)
Accrued expenses and other liabilities		(988	)			12,498				4,661				3,601
Net cash provided by operating activities		86,007				57,770				177,115				151,593
Cash from investing activities
Purchases of available-for-sale investments		(102,541	)			(113,780	)			(166,575	)			(265,319	)
Proceeds from sales of available-for-sale investments		—				—				202,662				—
Proceeds from maturities of available-for-sale investments		32,800				69,300				76,620				163,755
Purchases of property and equipment		(1,336	)			(363	)			(1,841	)			(1,821	)
Capitalization of software development costs		(936	)			(1,583	)			(2,414	)			(4,112	)
Purchases of long-term investments		—				—				(75,000	)			—
Cash paid in business acquisition, net of cash acquired		—				—				(906	)			—
Net cash (used in) provided by investing activities		(72,013	)			(46,426	)			32,546				(107,497	)
Cash from financing activities
Proceeds from stock option exercises		2				15				130				3,913
Tax withholding for net share settlement		(12,332	)			(8,581	)			(31,430	)			(35,101	)
Proceeds from the issuance of common stock under the employee stock purchase plan		951				—				951				—
Purchase of common stock		—				—				(145,723	)			—
Net cash used in financing activities		(11,379	)			(8,566	)			(176,072	)			(31,188	)
Net increase in cash, cash equivalents and restricted cash		2,615				2,778				33,589				12,908
Cash, cash equivalents and restricted cash
Beginning of period		73,728				59,889				42,754				49,759
End of period	$	76,343			$	62,667			$	76,343			$	62,667

		RECONCILIATION FROM GAAP TO NON-GAAP RESULTS (UNAUDITED) (in thousands, except per share data)
			Three Months Ended September 30,								Nine Months Ended September 30,
				2025				2024				2025				2024
Costs and operating expenses:
	GAAP cost of revenue (exclusive of depreciation and amortization)		$	91,476			$	71,631			$	254,801			$	205,878
		Stock-based compensation expense		(1,241	)			(1,126	)			(3,947	)			(3,261	)
	Non-GAAP cost of revenue (exclusive of depreciation and amortization)		$	90,235			$	70,505			$	250,854			$	202,617
	GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue			37	%			35	%			36	%			35	%
	Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue			36	%			34	%			36	%			34	%
	GAAP sales and marketing		$	35,912			$	25,406			$	103,745			$	77,161
		Stock-based compensation expense		(3,443	)			(2,071	)			(9,336	)			(5,284	)
	Non-GAAP sales and marketing		$	32,469			$	23,335			$	94,409			$	71,877
	GAAP sales and marketing as a percentage of revenue			14	%			12	%			15	%			13	%
	Non-GAAP sales and marketing as a percentage of revenue			13	%			11	%			13	%			12	%
	GAAP research and product development		$	54,037			$	40,662			$	144,469			$	118,079
		Stock-based compensation expense		(9,076	)			(7,471	)			(24,182	)			(19,625	)
	Non-GAAP research and product development		$	44,961			$	33,191			$	120,287			$	98,454
	GAAP research and product development as a percentage of revenue			22	%			20	%			21	%			20	%
	Non-GAAP research and product development as a percentage of revenue			18	%			16	%			17	%			17	%
	GAAP general and administrative		$	27,446			$	21,139			$	72,733			$	62,525
		Stock-based compensation expense		(7,033	)			(5,367	)			(17,998	)			(16,133	)
	Non-GAAP general and administrative		$	20,413			$	15,772			$	54,735			$	46,392
	GAAP general and administrative as a percentage of revenue			11	%			10	%			10	%			11	%
	Non-GAAP general and administrative as a percentage of revenue			8	%			8	%			8	%			8	%
	GAAP depreciation and amortization		$	5,436			$	4,327			$	17,541			$	14,209
		Amortization of stock-based compensation capitalized in software development costs		(241	)			(414	)			(723	)			(1,404	)
		Amortization of purchased intangibles		(2,558	)			(118	)			(7,673	)			(355	)
	Non-GAAP depreciation and amortization		$	2,637			$	3,795			$	9,145			$	12,450
	GAAP depreciation and amortization as a percentage of revenue			2	%			2	%			2	%			2	%
	Non-GAAP depreciation and amortization as a percentage of revenue			1	%			2	%			1	%			2	%

			Three Months Ended September 30,								Nine Months Ended September 30,
				2025				2024				2025				2024
Income from operations:
	GAAP income from operations		$	35,046			$	42,568			$	109,341			$	112,686
		Stock-based compensation expense		20,793				16,035				55,463				44,303
		Amortization of stock-based compensation capitalized in software development costs		241				414				723				1,404
		Amortization of purchased intangibles		2,558				118				7,673				355
	Non-GAAP income from operations		$	58,638			$	59,135			$	173,200			$	158,748
Operating margin:
	GAAP operating margin			14.1	%			20.7	%			15.6	%			19.1	%
		Stock-based compensation expense as a percentage of revenue		8.3				7.7				7.9				7.5
		Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue		0.1				0.2				0.1				0.2
		Amortization of purchased intangibles as a percentage of revenue		1.0				0.1				1.1				0.1
	Non-GAAP operating margin			23.5	%			28.7	%			24.7	%			26.9	%
Net income (loss):
	GAAP net income		$	33,646			$	33,006			$	101,009			$	101,334
		Stock-based compensation expense		20,793				16,035				55,463				44,303
		Amortization of stock-based compensation capitalized in software development costs		241				414				723				1,404
		Amortization of purchased intangibles		2,558				118				7,673				355
		Income tax effect of adjustments		(9,582	)			(2,211	)			(23,182	)			(20,474	)
	Non-GAAP net income		$	47,656			$	47,362			$	141,686			$	126,922
Net income per share, basic:
	GAAP net income per share, basic		$	0.94			$	0.91			$	2.80			$	2.80
		Non-GAAP adjustments to net income		0.39				0.39				1.13				0.71
	Non-GAAP net income per share, basic		$	1.33			$	1.30			$	3.93			$	3.51
Net income per share, diluted:
	GAAP net income per share, diluted		$	0.93			$	0.90			$	2.78			$	2.76
		Non-GAAP adjustments to net income		0.38				0.39				1.12				0.69
	Non-GAAP net income per share, diluted		$	1.31			$	1.29			$	3.90			$	3.45
	Weighted-average shares used in GAAP and non-GAAP per share calculation
		Basic		35,889				36,306				36,036				36,211
		Diluted		36,259				36,756				36,371				36,752

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 from operations, costs and operating expenses, operating margin, net income, and net income 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, 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 from operations 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 non-GAAP financial measures 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 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.

• 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 21% and 25% for 2025 and 2024, respectively, 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.

FAQ

What were AppFolio's reported Q3 2025 revenue and growth (APPF)?

AppFolio reported Q3 2025 revenue of $249 million, a 21% year‑over‑year increase.

How many units under management did APPF report for Q3 2025?

AppFolio reported 9.1 million units under management, up 7% year‑over‑year.

What guidance did AppFolio give for full‑year 2025 revenue and margin (APPF)?

Full‑year 2025 revenue is guided to $945M–$950M with non‑GAAP operating margin of 23.5%–24.5%.

How did AppFolio's GAAP and non‑GAAP operating incomes compare in Q3 2025 (APPF)?

GAAP operating income was $35M (14.1% of revenue); non‑GAAP operating income was $59M (23.5% of revenue).

What was AppFolio's operating cash flow in Q3 2025 and how did it compare to last year (APPF)?

Net cash provided by operating activities was $86M or 34.5% of revenue, versus $58M (28.1% of revenue) in Q3 2024.

When is AppFolio's Q3 2025 earnings call and where can investors listen (APPF)?

The earnings call is on October 30, 2025; a live webcast is available via the company's investor relations site and the provided webcast link.