AppFolio (NASDAQ: APPF) lifts 2026 outlook after 19% Q2 growth
Rhea-AI Filing Summary
AppFolio reported strong Q2 2026 results, with revenue of $281 million, up 19% year-over-year, and total units under management up 8% to 9.6 million. GAAP operating income was $53 million, an 18.8% margin, while non-GAAP operating income reached $76 million, a 27.1% margin. Net cash provided by operating activities was $88 million, 31.2% of revenue, and management noted trailing-twelve-month revenue has surpassed $1 billion.
Cash and cash equivalents were $217,401 (in thousands) at June 30, 2026. 2026 guidance was raised, with full-year revenue now expected between $1.117 and $1.127 billion and non-GAAP operating margin between 26.5% and 28.0% of revenue, based on approximately 36 million diluted weighted average shares.
Positive
- Q2 2026 revenue grew 19% year-over-year to $281 million, with GAAP and non-GAAP operating margins expanding to 18.8% and 27.1%, respectively.
- Full-year 2026 guidance increased, with revenue now projected between $1.117 and $1.127 billion and non-GAAP operating margin targeted between 26.5% and 28.0% of revenue.
Negative
- None.
Filing Explained
This is a furnished results-and-guidance update, not a disclosed offering or ownership transaction affecting existing common holders.
The Form 8-K is used to report specified material events, and this one furnishes AppFolio’s second-quarter results and 2026 outlook under Item 2.02.
The information is furnished rather than filed for Section 18 purposes and is not incorporated by reference into other filings unless specifically stated. The filing discloses no offering, issuance, or other ownership mechanics for existing common holders; its direct effect is to update reported performance and management’s outlook.
The source’s “expanding profitability” characterization uses both GAAP and non-GAAP operating measures; the non-GAAP figures exclude stock-based compensation, amortization of capitalized stock-based compensation and purchased intangibles, and related tax effects, so they are supplemental rather than GAAP results. The 2026 non-GAAP margin outlook has no GAAP-equivalent guidance because the excluded items are uncertain, outside the company’s control, or not reasonably predictable, and the company says their effect may be significant.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q2 2026 revenue: $281 million
Q2 2026 GAAP operating income: $53 million
Q2 2026 non-GAAP operating income: $76 million
+5 more
8 metrics
Q2 2026 revenue
$281 million
Revenue for the three months ended June 30, 2026; 19% year-over-year growth.
Q2 2026 GAAP operating income
$53 million
GAAP operating income in Q2 2026, representing an 18.8% operating margin.
Q2 2026 non-GAAP operating income
$76 million
Non-GAAP operating income in Q2 2026, representing a 27.1% operating margin.
Q2 2026 net cash from operating activities
$88 million
Net cash provided by operating activities in Q2 2026; 31.2% of revenue.
Units under management
9.6 million
Total units under management in Q2 2026; 8% year-over-year growth.
2026 revenue guidance range
$1.117–$1.127 billion
Updated full-year 2026 revenue outlook issued on July 23, 2026.
2026 non-GAAP operating margin guidance
26.5%–28.0%
Target non-GAAP operating margin range for full-year 2026 as a percentage of revenue.
Cash and cash equivalents
$217,401 (in thousands)
Cash and cash equivalents balance as of June 30, 2026 on the condensed balance sheet.
Key Terms
trailing twelve-month basis, Value Added Services, non-GAAP operating margin, stock-based compensation expense, +1 more
5 terms
trailing twelve-month basis financial
"crossed $1 billion in revenue on a trailing twelve-month basis"
A trailing twelve-month basis measures a company's performance by adding together the actual results from the most recent four quarters to show how it did over the past year. Investors use it like looking at the last 12 months of pay stubs instead of a single month or old annual report, which helps reveal recent trends, smooth out seasonal ups and downs, and make more current comparisons across companies.
Value Added Services financial
"Value Added Services revenue was $219,467 for Q2 2026"
non-GAAP operating margin financial
"Full year non-GAAP operating margin range as a percentage of revenue"
Non-GAAP operating margin is a way companies show how much profit they make from their main business activities, excluding certain expenses or income they consider unusual or non-recurring. It helps investors see how well the company is performing in its normal operations, without the effects of one-time costs or gains that might distort the picture.
stock-based compensation expense financial
"Includes stock-based compensation expense as follows in costs and expenses"
Stock-based compensation expense is the value that a company records when it gives employees or executives shares or options to buy shares as part of their pay. It matters because it shows the true cost of paying employees this way, which can affect the company's profits and how investors see its financial health.
available-for-sale investments financial
"Purchases of available-for-sale investments and proceeds from sales"
Available-for-sale investments are bonds or stocks a company buys to earn income or sell later but not to trade day-to-day or hold until they mature. Price changes in these investments often affect the company’s reported net worth rather than immediate profit or loss, so they can make a firm’s balance sheet look stronger or weaker without changing current earnings — like items stored on a shelf whose sticker price changes but don’t yet show up on this month’s bill.
Earnings Snapshot
Revenue: $281 million · Guidance included
Quarter ended June 30, 2026
Revenue
$281 million
Revenue grew 19% year-over-year in Q2 2026.
GAAP operating income
$53 million
GAAP operating income grew 31% year-over-year, with an 18.8% margin.
Non-GAAP operating income
$76 million
Non-GAAP operating income grew 24% year-over-year, with a 27.1% margin.
Net cash from operations
$88 million
Net cash provided by operating activities increased from $53 million in Q2 2025.
Units under management
9.6 million
Total units under management grew 8% year-over-year.
Guidance
For 2026, AppFolio expects revenue of $1.117–$1.127 billion and a non-GAAP operating margin of 26.5%–28.0% of revenue, based on approximately 36 million diluted weighted average shares.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did AppFolio (APPF) perform financially in Q2 2026?
AppFolio (APPF) delivered solid Q2 2026 performance, reporting revenue of $281 million, up 19% year-over-year. GAAP operating income was $53 million with an 18.8% margin, and non-GAAP operating income reached $76 million with a 27.1% margin.
What 2026 revenue guidance did AppFolio (APPF) provide?
AppFolio raised its 2026 outlook, now expecting full-year revenue between $1.117 and $1.127 billion. Management also guided to a non-GAAP operating margin of 26.5%–28.0% of revenue, based on approximately 36 million diluted weighted average shares.
How strong was AppFolio (APPF) cash flow in Q2 2026?
AppFolio generated $88 million of net cash from operating activities in Q2 2026, equal to 31.2% of revenue. This compares to $53 million, or 22.3% of revenue, in Q2 2025, indicating improved cash conversion alongside revenue growth.
What growth did AppFolio (APPF) see in units under management?
Total units under management on AppFolio’s platform grew 8% year-over-year to 9.6 million in Q2 2026. This expansion in managed units supports transaction volumes and contributes to growth in subscription and Value Added Services revenue categories.
Which non-GAAP metrics does AppFolio (APPF) emphasize?
AppFolio highlights non-GAAP income from operations, operating margin, net income, and net income per share. These exclude stock-based compensation, amortization of purchased intangibles, related tax effects, and certain capitalized software items to help compare operating performance across periods.
What was AppFolio (APPF) liquidity position at June 30, 2026?
As of June 30, 2026, AppFolio held $217,401 (in thousands) in cash and cash equivalents. Total assets were $648,371 (in thousands), with stockholders’ equity of $526,142 (in thousands), providing a solid capital base to support ongoing operations and investment.
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): July 23, 2026
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation)
| (Commission File Number) | (IRS Employer Identification Number) | ||||
(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 class | Trading Symbol | Name of each exchange on which registered | ||||||
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 July 23, 2026 , AppFolio, Inc. (the "Company") issued a press release announcing its financial results for its second quarter ended June 30, 2026. A copy of the press release is attached hereto as Exhibit 99.1.
The information contained in this Item 2.02, including the press release attached hereto as Exhibit 99.1, 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 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Number | Description | |||||||
| 99.1 | Press release issued on July 23, 2026, announcing AppFolio, Inc.'s financial results for its second quarter ended June 30, 2026 | |||||||
| 104 | Cover 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: | July 23, 2026 | AppFolio, Inc. | ||||||||||||
| By: /s/ Tim Eaton | ||||||||||||||
| Name: Tim Eaton | ||||||||||||||
| Title: Chief Financial Officer | ||||||||||||||
AppFolio, Inc. Announces Second Quarter 2026 Financial Results
Strong 2026 Continues with 19% Revenue Growth and Expanding Profitability
SANTA BARBARA, Calif., July 23, 2026 -- 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 second quarter ended June 30, 2026.
"Our Q2 results continue to reflect our momentum with new and existing customers," said Shane Trigg, Chairman and CEO. "For the first time, we've crossed $1 billion in revenue on a trailing twelve-month basis, a milestone we believe reflects the success customers are having by adopting our products and services. The operators on our platform are embracing AI that works because it knows their business and drives real performance outcomes. That is what Real Estate Performance Management delivers."
Financial Highlights for Second Quarter of 2026
•Revenue grew 19% year-over-year to $281 million.
•Total units under management grew 8% year-over-year to 9.6 million.
•GAAP operating income grew 31% to $53 million, or 18.8% of revenue, compared to $41 million, or 17.2% of revenue in Q2 2025.
•Non-GAAP operating income grew 24% to $76 million, or 27.1% of revenue, compared to $62 million, or 26.2% of revenue in Q2 2025.
•Net cash provided by operating activities was $88 million, or 31.2% of revenue, compared to $53 million, or 22.3% of revenue in Q2 2025.
Financial Outlook
Based on information available as of July 23, 2026, AppFolio's outlook for fiscal year 2026 follows:
•Full year revenue range is increasing to $1.117 - $1.127 billion.
•Full year non-GAAP operating margin range as a percentage of revenue is increasing to 26.5% - 28.0%.
•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, July 23, 2026, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the Company’s second quarter financial results. A live webcast of the call will be available at: https://edge.media-server.com/mmc/p/iuf6q6wf/. To access the call by phone, please go to the following link: https://register-conf.media-server.com/register/BIf2eada34bb9140a98f952424c8f0d5f1, 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 2026 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 AI and its 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, 2025, which was filed with the SEC on February 5, 2026, 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)
| June 30, 2026 | December 31, 2025 | |||||||||||||
| Assets | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 217,401 | $ | 106,967 | ||||||||||
| Investment securities—current | 4,284 | 144,256 | ||||||||||||
| Accounts receivable, net | 50,442 | 36,873 | ||||||||||||
| Prepaid expenses and other current assets | 53,058 | 65,218 | ||||||||||||
| Total current assets | 325,185 | 353,314 | ||||||||||||
| Property and equipment, net | 21,464 | 23,228 | ||||||||||||
| Operating lease right-of-use assets | 14,798 | 15,924 | ||||||||||||
| Capitalized software development costs, net | 11,444 | 11,324 | ||||||||||||
| Goodwill | 96,410 | 96,410 | ||||||||||||
| Intangible assets, net | 33,711 | 38,826 | ||||||||||||
| Deferred income taxes | 42,819 | 58,823 | ||||||||||||
| Long-term investments | 87,668 | 77,033 | ||||||||||||
| Other long-term assets | 14,872 | 14,085 | ||||||||||||
| Total assets | $ | 648,371 | $ | 688,967 | ||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | $ | 4,776 | $ | 4,123 | ||||||||||
| Accrued employee expenses | 30,010 | 59,774 | ||||||||||||
| Accrued expenses | 26,990 | 20,829 | ||||||||||||
| Other current liabilities | 23,106 | 22,121 | ||||||||||||
| Total current liabilities | 84,882 | 106,847 | ||||||||||||
| Operating lease liabilities | 30,660 | 33,287 | ||||||||||||
| Other liabilities | 6,687 | 6,254 | ||||||||||||
| Total liabilities | 122,229 | 146,388 | ||||||||||||
| Stockholders’ equity | 526,142 | 542,579 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 648,371 | $ | 688,967 | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Revenue(1) | $ | 281,124 | $ | 235,575 | $ | 543,338 | $ | 453,277 | |||||||||||||||
| Costs and operating expenses: | |||||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization)(2) | 102,595 | 83,827 | 197,570 | 163,325 | |||||||||||||||||||
Sales and marketing(2) | 43,944 | 36,776 | 81,445 | 67,833 | |||||||||||||||||||
Research and product development(2) | 50,997 | 46,674 | 100,626 | 90,432 | |||||||||||||||||||
General and administrative(2) | 25,626 | 21,936 | 49,967 | 45,287 | |||||||||||||||||||
| Depreciation and amortization | 4,985 | 5,850 | 10,005 | 12,105 | |||||||||||||||||||
| Total costs and operating expenses | 228,147 | 195,063 | 439,613 | 378,982 | |||||||||||||||||||
| Income from operations | 52,977 | 40,512 | 103,725 | 74,295 | |||||||||||||||||||
| Other (loss) income, net | (1) | (11) | 568 | 45 | |||||||||||||||||||
| Interest income, net | 1,435 | 1,466 | 3,219 | 4,419 | |||||||||||||||||||
| Income before provision for income taxes | 54,411 | 41,967 | 107,512 | 78,759 | |||||||||||||||||||
| Provision for income taxes | 12,867 | 5,987 | 23,544 | 11,396 | |||||||||||||||||||
| Net income | $ | 41,544 | $ | 35,980 | $ | 83,968 | $ | 67,363 | |||||||||||||||
| Net income per common share: | |||||||||||||||||||||||
| Basic | $ | 1.17 | $ | 1.00 | $ | 2.36 | $ | 1.87 | |||||||||||||||
| Diluted | $ | 1.17 | $ | 0.99 | $ | 2.36 | $ | 1.85 | |||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||
| Basic | 35,391 | 35,922 | 35,544 | 36,111 | |||||||||||||||||||
| Diluted | 35,461 | 36,204 | 35,635 | 36,425 | |||||||||||||||||||
(1) The following table presents our revenue categories:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Subscription Services | $ | 59,800 | $ | 52,473 | $ | 118,022 | $ | 101,986 | |||||||||||||||
| Value Added Services | 219,467 | 180,145 | 420,830 | 344,851 | |||||||||||||||||||
| Other | 1,857 | 2,957 | 4,486 | 6,440 | |||||||||||||||||||
| Total revenue | $ | 281,124 | $ | 235,575 | $ | 543,338 | $ | 453,277 | |||||||||||||||
(2) Includes stock-based compensation expense as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Costs and operating expenses: | |||||||||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization) | $ | 1,246 | $ | 1,419 | $ | 2,334 | $ | 2,706 | |||||||||||||||
| Sales and marketing | 3,633 | 3,045 | 6,973 | 5,893 | |||||||||||||||||||
| Research and product development | 8,918 | 8,176 | 16,800 | 15,107 | |||||||||||||||||||
| General and administrative | 6,674 | 5,659 | 12,353 | 10,964 | |||||||||||||||||||
| Total stock-based compensation expense | $ | 20,471 | $ | 18,299 | $ | 38,460 | $ | 34,670 | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) | |||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Cash from operating activities | |||||||||||||||||||||||
| Net income | $ | 41,544 | $ | 35,980 | $ | 83,968 | $ | 67,363 | |||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||
| Depreciation and amortization | 4,985 | 5,850 | 10,005 | 12,105 | |||||||||||||||||||
| Amortization of operating lease right-of-use assets | 566 | 507 | 1,126 | 1,008 | |||||||||||||||||||
| Amortization of costs capitalized to obtain revenue contracts, net | 3,300 | 2,699 | 6,468 | 5,419 | |||||||||||||||||||
| Deferred income taxes | 7,976 | (7,644) | 16,004 | (13,185) | |||||||||||||||||||
| Stock-based compensation, including as amortized | 20,471 | 18,299 | 38,460 | 34,670 | |||||||||||||||||||
| Other | — | (131) | (523) | (1,048) | |||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||
| Accounts receivable | (6,475) | (5,081) | (13,918) | (8,197) | |||||||||||||||||||
| Prepaid expenses and other assets | (1,887) | (5,966) | (10,093) | (11,426) | |||||||||||||||||||
| Accounts payable | 1,035 | (1,694) | 653 | 852 | |||||||||||||||||||
| Operating lease liabilities | (1,204) | (1,051) | (2,384) | (2,102) | |||||||||||||||||||
| Accrued expenses and other liabilities | 17,293 | 10,875 | (7,864) | 5,649 | |||||||||||||||||||
| Net cash provided by operating activities | 87,604 | 52,643 | 121,902 | 91,108 | |||||||||||||||||||
| Cash from investing activities | |||||||||||||||||||||||
| Purchases of available-for-sale investments | (3,277) | (1,732) | (45,940) | (64,034) | |||||||||||||||||||
| Proceeds from sales of available-for-sale investments | — | 99,944 | 140,154 | 202,662 | |||||||||||||||||||
| Proceeds from maturities of available-for-sale investments | 3,230 | 1,670 | 45,590 | 43,820 | |||||||||||||||||||
| Purchases of property and equipment | 3 | (275) | (228) | (505) | |||||||||||||||||||
| Capitalization of software development costs | (1,250) | (842) | (2,554) | (1,478) | |||||||||||||||||||
| Purchases of long-term investments | (10,000) | (75,000) | (10,000) | (75,000) | |||||||||||||||||||
| Cash paid in business acquisition, net of cash acquired | — | — | — | (906) | |||||||||||||||||||
| Net cash (used in) provided by investing activities | (11,294) | 23,765 | 127,022 | 104,559 | |||||||||||||||||||
| Cash from financing activities | |||||||||||||||||||||||
| Proceeds from stock option exercises and the issuance of common stock under the Employee Stock Purchase Plan | — | 117 | 998 | 128 | |||||||||||||||||||
| Tax withholding for net share settlement | (6,321) | (10,020) | (14,478) | (19,098) | |||||||||||||||||||
| Purchase of common stock | — | (49,960) | (125,010) | (145,723) | |||||||||||||||||||
| Net cash used in financing activities | (6,321) | (59,863) | (138,490) | (164,693) | |||||||||||||||||||
| Net increase in cash, cash equivalents and restricted cash | 69,989 | 16,545 | 110,434 | 30,974 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash | |||||||||||||||||||||||
| Beginning of period | 147,662 | 57,183 | 107,217 | 42,754 | |||||||||||||||||||
| End of period | $ | 217,651 | $ | 73,728 | $ | 217,651 | $ | 73,728 | |||||||||||||||
RECONCILIATION FROM GAAP TO NON-GAAP RESULTS
(UNAUDITED)
(in thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Costs and operating expenses: | |||||||||||||||||||||||||||||
| GAAP cost of revenue (exclusive of depreciation and amortization) | $ | 102,595 | $ | 83,827 | $ | 197,570 | $ | 163,325 | |||||||||||||||||||||
| Stock-based compensation expense | (1,246) | (1,419) | (2,334) | (2,706) | |||||||||||||||||||||||||
| Non-GAAP cost of revenue (exclusive of depreciation and amortization) | $ | 101,349 | $ | 82,408 | $ | 195,236 | $ | 160,619 | |||||||||||||||||||||
| GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue | 36 | % | 36 | % | 36 | % | 36 | % | |||||||||||||||||||||
| Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue | 36 | % | 35 | % | 36 | % | 35 | % | |||||||||||||||||||||
| GAAP sales and marketing | $ | 43,944 | $ | 36,776 | $ | 81,445 | $ | 67,833 | |||||||||||||||||||||
| Stock-based compensation expense | (3,633) | (3,045) | (6,973) | (5,893) | |||||||||||||||||||||||||
| Non-GAAP sales and marketing | $ | 40,311 | $ | 33,731 | $ | 74,472 | $ | 61,940 | |||||||||||||||||||||
| GAAP sales and marketing as a percentage of revenue | 16 | % | 16 | % | 15 | % | 15 | % | |||||||||||||||||||||
| Non-GAAP sales and marketing as a percentage of revenue | 14 | % | 14 | % | 14 | % | 14 | % | |||||||||||||||||||||
| GAAP research and product development | $ | 50,997 | $ | 46,674 | $ | 100,626 | $ | 90,432 | |||||||||||||||||||||
| Stock-based compensation expense | (8,918) | (8,176) | (16,800) | (15,107) | |||||||||||||||||||||||||
| Non-GAAP research and product development | $ | 42,079 | $ | 38,498 | $ | 83,826 | $ | 75,325 | |||||||||||||||||||||
| GAAP research and product development as a percentage of revenue | 18 | % | 20 | % | 19 | % | 20 | % | |||||||||||||||||||||
| Non-GAAP research and product development as a percentage of revenue | 15 | % | 16 | % | 15 | % | 17 | % | |||||||||||||||||||||
| GAAP general and administrative | $ | 25,626 | $ | 21,936 | $ | 49,967 | $ | 45,287 | |||||||||||||||||||||
| Stock-based compensation expense | (6,674) | (5,659) | (12,353) | (10,964) | |||||||||||||||||||||||||
| Non-GAAP general and administrative | $ | 18,952 | $ | 16,277 | $ | 37,614 | $ | 34,323 | |||||||||||||||||||||
| GAAP general and administrative as a percentage of revenue | 9 | % | 9 | % | 9 | % | 10 | % | |||||||||||||||||||||
| Non-GAAP general and administrative as a percentage of revenue | 7 | % | 7 | % | 7 | % | 8 | % | |||||||||||||||||||||
| GAAP depreciation and amortization | $ | 4,985 | $ | 5,850 | $ | 10,005 | $ | 12,105 | |||||||||||||||||||||
| Amortization of stock-based compensation capitalized in software development costs | (241) | (241) | (482) | (482) | |||||||||||||||||||||||||
| Amortization of purchased intangibles | (2,558) | (2,558) | (5,115) | (5,115) | |||||||||||||||||||||||||
| Non-GAAP depreciation and amortization | $ | 2,186 | $ | 3,051 | $ | 4,408 | $ | 6,508 | |||||||||||||||||||||
| GAAP depreciation and amortization as a percentage of revenue | 2 | % | 2 | % | 2 | % | 3 | % | |||||||||||||||||||||
| Non-GAAP depreciation and amortization as a percentage of revenue | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Income from operations: | |||||||||||||||||||||||||||||
| GAAP income from operations | $ | 52,977 | $ | 40,512 | $ | 103,725 | $ | 74,295 | |||||||||||||||||||||
| Stock-based compensation expense | 20,471 | 18,299 | 38,460 | 34,670 | |||||||||||||||||||||||||
| Amortization of stock-based compensation capitalized in software development costs | 241 | 241 | 482 | 482 | |||||||||||||||||||||||||
| Amortization of purchased intangibles | 2,558 | 2,558 | 5,115 | 5,115 | |||||||||||||||||||||||||
| Non-GAAP income from operations | $ | 76,247 | $ | 61,610 | $ | 147,782 | $ | 114,562 | |||||||||||||||||||||
| Operating margin: | |||||||||||||||||||||||||||||
| GAAP operating margin | 18.8 | % | 17.2 | % | 19.1 | % | 16.4 | % | |||||||||||||||||||||
| Stock-based compensation expense as a percentage of revenue | 7.3 | 7.8 | 7.1 | 7.7 | |||||||||||||||||||||||||
| Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue | 0.1 | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||||||
| Amortization of purchased intangibles as a percentage of revenue | 0.9 | 1.1 | 0.9 | 1.1 | |||||||||||||||||||||||||
| Non-GAAP operating margin | 27.1 | % | 26.2 | % | 27.2 | % | 25.3 | % | |||||||||||||||||||||
| Net income (loss): | |||||||||||||||||||||||||||||
| GAAP net income | $ | 41,544 | $ | 35,980 | $ | 83,968 | $ | 67,363 | |||||||||||||||||||||
| Stock-based compensation expense | 20,471 | 18,299 | 38,460 | 34,670 | |||||||||||||||||||||||||
| Amortization of stock-based compensation capitalized in software development costs | 241 | 241 | 482 | 482 | |||||||||||||||||||||||||
| Amortization of purchased intangibles | 2,558 | 2,558 | 5,115 | 5,115 | |||||||||||||||||||||||||
| Income tax effect of adjustments | (4,223) | (7,257) | (9,801) | (13,599) | |||||||||||||||||||||||||
| Non-GAAP net income | $ | 60,591 | $ | 49,821 | $ | 118,224 | $ | 94,031 | |||||||||||||||||||||
| Net income per share, basic: | |||||||||||||||||||||||||||||
| GAAP net income per share, basic | $ | 1.17 | $ | 1.00 | $ | 2.36 | $ | 1.87 | |||||||||||||||||||||
| Non-GAAP adjustments to net income | 0.54 | 0.39 | 0.97 | 0.73 | |||||||||||||||||||||||||
| Non-GAAP net income per share, basic | $ | 1.71 | $ | 1.39 | $ | 3.33 | $ | 2.60 | |||||||||||||||||||||
| Net income per share, diluted: | |||||||||||||||||||||||||||||
| GAAP net income per share, diluted | $ | 1.17 | $ | 0.99 | $ | 2.36 | $ | 1.85 | |||||||||||||||||||||
| Non-GAAP adjustments to net income | 0.54 | 0.39 | 0.96 | 0.73 | |||||||||||||||||||||||||
| Non-GAAP net income per share, diluted | $ | 1.71 | $ | 1.38 | $ | 3.32 | $ | 2.58 | |||||||||||||||||||||
Weighted-average shares used in GAAP and non-GAAP per share calculation | |||||||||||||||||||||||||||||
| Basic | 35,391 | 35,922 | 35,544 | 36,111 | |||||||||||||||||||||||||
| Diluted | 35,461 | 36,204 | 35,635 | 36,425 | |||||||||||||||||||||||||
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 22% and 21% for 2026 and 2025, 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.
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