SANTA BARBARA, Calif., Oct. 27, 2022 (GLOBE NEWSWIRE) — AppFolio, Inc. (NASDAQ: APPF) (“AppFolio” or the “Company”), a number one supplier of cloud business administration options for the actual property business, at the moment introduced its monetary outcomes for the third quarter ended September 30, 2022.
“AppFolio increased the number of units served year-over-year by more than one million units for the second consecutive quarter – a clear testament that our customers rely on AppFolio products to optimize their operations, maximize their revenue and profits, and solve their staffing challenges,” mentioned Jason Randall, President and CEO, AppFolio. “Our strategy for long-term growth is rooted in keeping existing customers happy, acquiring new customers, expanding adoption and usage, and delivering new capabilities and product value – all on a foundation of operational excellence.”
Financial Highlights
- Revenue: Total income was $125.1 million within the third quarter of 2022, a 31% improve from $95.8 million within the third quarter of 2021.
- Units Served: Total models on the AppFolio Property Manager platform elevated to roughly 7.1 million within the third quarter of 2022 from roughly 6.0 million on the finish of the third quarter of 2021.
- Income (Loss) from Operations: GAAP loss from operations within the third quarter of 2022 was $7.8 million, or 6% of income, in comparison with GAAP break-even in the identical quarter of 2021. Non-GAAP earnings from operations within the third quarter of 2022 was $4.7 million, or 4% of income, in comparison with Non-GAAP earnings from operations of $3.8 million, or 4% of income, within the third quarter of 2021.
- Cash: Cash, money equivalents, and funding securities have been $184.5 million as of September 30, 2022. Non-GAAP free money circulation was $11.9 million, or 10% of income, within the third quarter of 2022, in comparison with $6.8 million, or 7% of income, in the identical quarter of 2021.
Financial Outlook
Based on info obtainable as of October 27, 2022, AppFolio’s outlook for fiscal yr 2022 follows:
- Full yr income is predicted to be within the vary of $462 million to $466 million.
- Full yr non-GAAP working margin as a proportion of income is predicted to be a lack of 1.5-2.5%.
- Weighted common shares excellent are anticipated to be roughly 35 million for the total yr.
Conference Call Information
As beforehand introduced, the Company will host a convention name at the moment, October 27, 2022, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to debate the corporate’s third quarter 2022 monetary outcomes. A stay webcast of the decision will likely be obtainable at: https://edge.media-server.com/mmc/p/b7297keo. To entry the decision by cellphone, please go to the next hyperlink: https://register.vevent.com/register/BIf67920663fb34bef80ab9b99d00c89ec, and you’ll be supplied with dial in particulars. A replay of the webcast can even be obtainable for a restricted time on AppFolio’s Investor Relations web site at https://ir.appfolioinc.com/news-events/events.
The Company additionally offers bulletins concerning its monetary outcomes and different issues, together with SEC filings, investor occasions, and press releases, on its Investor Relations web site at https://ir.appfolioinc.com/, as a method of revealing materials nonpublic info and for complying with AppFolio’s disclosure obligations beneath Regulation FD.
About AppFolio, Inc.
AppFolio is a number one supplier of cloud business administration options for the actual property business. Our options allow our prospects to digitally rework their companies, tackle vital business operations and ship a greater buyer expertise. For extra details about AppFolio, go to www.appfolioinc.com.
Investor Relations Contact:
Lori Barker
[email protected]
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP monetary measures to AppFolio’s monetary outcomes as decided in accordance with GAAP are included on the finish of this press launch following the accompanying monetary information. For an outline of those non-GAAP monetary measures, together with the explanations administration makes use of every measure, please see the part of the tables titled “Statement Regarding the Use of Non-GAAP Financial Measures.” In this earnings launch we’re together with sure non-GAAP monetary measures for prior durations for which such measures weren’t beforehand reported to reinforce comparability between durations.
Forward-Looking Statements
This press launch comprises “forward-looking statements” inside the that means 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 topic to appreciable dangers and uncertainties. Forward-looking statements embrace all statements that aren’t statements of historic truth contained on this press launch, and may be recognized by phrases similar to “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts, “projects,” “seeks,” “should,” “will,” “would” or comparable expressions and the negatives of these expressions. In explicit, forward-looking statements contained on this press launch relate to future working outcomes and monetary place, together with the Company’s fiscal yr 2022 monetary outlook, anticipated future bills and investments, the Company’s business alternatives, and the influence of the Company’s strategic actions and initiatives.
Forward-looking statements signify AppFolio’s present beliefs and assumptions based mostly on info at present obtainable. Forward-looking statements contain quite a few recognized and unknown dangers, uncertainties and different elements which will trigger the Company’s precise outcomes, efficiency or achievements to be materially totally different from any future outcomes, efficiency or achievements expressed or implied by the forward-looking statements. Some of the dangers and uncertainties which will trigger the Company’s precise outcomes to materially differ from these expressed or implied by these forward-looking statements are described within the part entitled “Risk Factors” in AppFolio’s Annual Report on Form 10-Okay for the yr ended December 31, 2021, which was filed with the SEC on February 28, 2022, in addition to within the Company’s different filings with the SEC. You ought to learn this press launch with the understanding that the Company’s precise future outcomes could also be materially totally different from the outcomes expressed or implied by these ahead wanting statements.
Except as required by relevant legislation or the principles of the NASDAQ Global Market, AppFolio assumes no obligation to replace any forward-looking statements publicly or to replace the explanations precise outcomes may differ materially from these anticipated in these forward-looking statements, even when new info turns into obtainable sooner or later.
| CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in 1000’s) |
||||||||
| September 30, 2022 |
December 31, 2021 |
|||||||
| Assets | ||||||||
| Current belongings | ||||||||
| Cash and money equivalents | $ | 67,232 | $ | 57,847 | ||||
| Investment securities—present | 72,018 | 64,600 | ||||||
| Accounts receivable, internet | 14,884 | 12,595 | ||||||
| Prepaid bills and different present belongings | 22,660 | 23,553 | ||||||
| Total present belongings | 176,794 | 158,595 | ||||||
| Investment securities—noncurrent | 45,200 | 61,076 | ||||||
| Property and tools, internet | 27,633 | 30,479 | ||||||
| Operating lease right-of-use belongings | 28,539 | 41,710 | ||||||
| Capitalized software program improvement prices, internet | 36,002 | 41,212 | ||||||
| Goodwill | 56,060 | 56,147 | ||||||
| Intangible belongings, internet | 5,810 | 11,711 | ||||||
| Other long-term belongings | 8,844 | 7,087 | ||||||
| Total belongings | $ | 384,882 | $ | 408,017 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 1,508 | $ | 1,704 | ||||
| Accrued worker bills—present | 29,496 | 30,065 | ||||||
| Accrued bills | 16,161 | 13,284 | ||||||
| Other present liabilities | 10,600 | 7,589 | ||||||
| Total present liabilities | 57,765 | 52,642 | ||||||
| Operating lease liabilities | 53,256 | 55,733 | ||||||
| Other liabilities | 1,989 | 2,261 | ||||||
| Stockholders’ fairness | 271,872 | 297,381 | ||||||
| Total liabilities and stockholders’ fairness | $ | 384,882 | $ | 408,017 | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in 1000’s, besides per share quantities) |
|||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenue | $ | 125,079 | $ | 95,809 | $ | 347,825 | $ | 263,770 | |||||||
| Costs and working bills: | |||||||||||||||
| Cost of income (unique of depreciation and amortization)(1) | 50,707 | 38,730 | 141,484 | 104,847 | |||||||||||
| Sales and advertising(1) | 25,644 | 19,362 | 77,558 | 53,255 | |||||||||||
| Research and product improvement(1) | 28,959 | 16,500 | 79,966 | 46,389 | |||||||||||
| General and administrative(1) | 19,347 | 13,404 | 76,258 | 40,971 | |||||||||||
| Depreciation and amortization | 8,241 | 7,826 | 24,977 | 22,844 | |||||||||||
| Total prices and working bills | 132,898 | 95,822 | 400,243 | 268,306 | |||||||||||
| Loss from operations | (7,819 | ) | (13 | ) | (52,418 | ) | (4,536 | ) | |||||||
| Other earnings (loss), internet | 4,221 | (353 | ) | 4,256 | 705 | ||||||||||
| Interest earnings | 374 | 65 | 632 | 173 | |||||||||||
| Loss earlier than provision for (profit from) earnings taxes | (3,224 | ) | (301 | ) | (47,530 | ) | (3,658 | ) | |||||||
| Provision for (profit from) earnings taxes | 938 | (160 | ) | 889 | (6,017 | ) | |||||||||
| Net (loss) earnings | $ | (4,162 | ) | $ | (141 | ) | $ | (48,419 | ) | $ | 2,359 | ||||
| Net (loss) earnings per widespread share: | |||||||||||||||
| Basic | $ | (0.12 | ) | $ | — | $ | (1.39 | ) | $ | 0.07 | |||||
| Diluted | $ | (0.12 | ) | $ | — | $ | (1.39 | ) | $ | 0.07 | |||||
| Weighted common widespread shares excellent: | |||||||||||||||
| Basic | 35,043 | 34,614 | 34,936 | 34,525 | |||||||||||
| Diluted | 35,043 | 34,614 | 34,936 | 35,695 | |||||||||||
(1) Includes stock-based compensation expense as follows:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
| 2022 |
2021 |
2022 |
2021 |
||||||||||||
| Costs and working bills: | |||||||||||||||
| Cost of income (unique of depreciation and amortization) | $ | 789 | $ | 575 | $ | 1,873 | $ | 1,509 | |||||||
| Sales and advertising | 2,023 | 738 | 5,496 | 1,587 | |||||||||||
| Research and product improvement | 4,330 | 1,451 | 11,160 | 3,522 | |||||||||||
| General and administrative | 3,688 | 1,299 | 9,680 | 3,435 | |||||||||||
| Total stock-based compensation expense | $ | 10,830 | $ | 4,063 | $ | 28,209 | $ | 10,053 | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in 1000’s) |
|||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Cash from working actions | |||||||||||||||
| Net (loss) earnings | $ | (4,162 | ) | $ | (141 | ) | $ | (48,419 | ) | $ | 2,359 | ||||
| Adjustments to reconcile internet (loss) earnings to internet money utilized in working actions: | |||||||||||||||
| Depreciation and amortization | 7,658 | 7,355 | 23,295 | 21,545 | |||||||||||
| Amortization of working lease right-of-use belongings | 689 | 913 | 2,498 | 2,312 | |||||||||||
| Impairment | — | — | 19,792 | — | |||||||||||
| Deferred earnings taxes | 158 | (308 | ) | (1,392 | ) | (6,394 | ) | ||||||||
| Stock-based compensation, together with as amortized | 11,413 | 4,534 | 29,891 | 11,352 | |||||||||||
| Gain on sale of business | (4,156 | ) | (21 | ) | (4,156 | ) | (380 | ) | |||||||
| Other | (92 | ) | 309 | (86 | ) | 89 | |||||||||
| Changes in working belongings and liabilities: | |||||||||||||||
| Accounts receivable | 345 | 2,657 | (2,579 | ) | (1,350 | ) | |||||||||
| Prepaid bills and different present belongings | (507 | ) | (1,387 | ) | (3,159 | ) | (3,558 | ) | |||||||
| Other belongings | (321 | ) | (199 | ) | (1,629 | ) | (1,181 | ) | |||||||
| Accounts payable | 214 | 83 | 231 | 1,384 | |||||||||||
| Accrued worker bills—present | 2,395 | (1,303 | ) | (822 | ) | 6,335 | |||||||||
| Accrued bills | 809 | 1,621 | 3,991 | (1,426 | ) | ||||||||||
| Operating lease liabilities | (437 | ) | 310 | (1,748 | ) | 1,995 | |||||||||
| Other liabilities | 1,997 | 1,375 | 3,576 | (6,623 | ) | ||||||||||
| Net money offered by working actions | 16,003 | 15,798 | 19,284 | 26,459 | |||||||||||
| Cash from investing actions | |||||||||||||||
| Purchases of available-for-sale investments | (25,494 | ) | (18,748 | ) | (70,394 | ) | (167,041 | ) | |||||||
| Proceeds from gross sales of available-for-sale investments | — | 1,000 | — | 43,198 | |||||||||||
| Proceeds from maturities of available-for-sale investments | 33,100 | 47,004 | 76,598 | 73,754 | |||||||||||
| Purchases of property and tools | (844 | ) | (2,362 | ) | (5,943 | ) | (5,166 | ) | |||||||
| Capitalization of software program improvement prices | (3,275 | ) | (6,600 | ) | (10,468 | ) | (18,511 | ) | |||||||
| Proceeds from sale of business, internet of money divested | 5,124 | — | 5,124 | — | |||||||||||
| Net money offered by (utilized in) investing actions | 8,611 | 20,294 | (5,083 | ) | (73,766 | ) | |||||||||
| Cash from financing actions | |||||||||||||||
| Proceeds from inventory choice workouts | 1,976 | 145 | 2,579 | 791 | |||||||||||
| Tax withholding for internet share settlement | (1,984 | ) | (403 | ) | (7,581 | ) | (9,303 | ) | |||||||
| Net money utilized in financing actions | (8 | ) | (258 | ) | (5,002 | ) | (8,512 | ) | |||||||
| Net improve lower) in money and money equivalents and restricted money | 24,606 | 35,834 | 9,199 | (55,819 | ) | ||||||||||
| Cash, money equivalents and restricted money | |||||||||||||||
| Beginning of interval | 42,876 | 49,046 | 58,283 | 140,699 | |||||||||||
| End of interval | $ | 67,482 | $ | 84,880 | $ | 67,482 | $ | 84,880 | |||||||
| RECONCILIATION FROM GAAP TO NON-GAAP RESULTS (UNAUDITED) (in 1000’s, besides per share information) |
|||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Costs and working bills: |
|||||||||||||||||
| GAAP value of income (unique of depreciation and amortization) | $ | 50,707 | $ | 38,730 | $ | 141,484 | $ | 104,847 | |||||||||
| Less: Stock-based compensation expense | 789 | 575 | 1,873 | 1,509 | |||||||||||||
| Non-GAAP value of income (unique of depreciation and amortization) | $ | 49,918 | $ | 38,155 | $ | 139,611 | $ | 103,338 | |||||||||
| GAAP value of income (unique of depreciation and amortization) as a proportion of income | 41 | % | 40 | % | 41 | % | 40 | % | |||||||||
| Non-GAAP value of income (unique of depreciation and amortization) as a proportion of income | 40 | % | 40 | % | 40 | % | 39 | % | |||||||||
| GAAP gross sales and advertising | $ | 25,644 | $ | 19,362 | $ | 77,558 | $ | 53,255 | |||||||||
| Less: Stock-based compensation expense | 2,023 | 738 | 5,496 | 1,587 | |||||||||||||
| Non-GAAP gross sales and advertising | $ | 23,621 | $ | 18,624 | $ | 72,062 | $ | 51,668 | |||||||||
| GAAP gross sales and advertising as a proportion of income | 21 | % | 20 | % | 22 | % | 20 | % | |||||||||
| Non-GAAP gross sales and advertising as a proportion of income | 19 | % | 19 | % | 21 | % | 20 | % | |||||||||
| GAAP analysis and product improvement | $ | 28,959 | $ | 16,500 | $ | 79,966 | $ | 46,389 | |||||||||
| Less: Stock-based compensation expense | 4,330 | 1,451 | 11,160 | 3,522 | |||||||||||||
| Non-GAAP analysis and product improvement | $ | 24,629 | $ | 15,049 | $ | 68,806 | $ | 42,867 | |||||||||
| GAAP analysis and product improvement as a proportion of income | 23 | % | 17 | % | 23 | % | 18 | % | |||||||||
| Non-GAAP analysis and product improvement as a proportion of income | 20 | % | 16 | % | 20 | % | 16 | % | |||||||||
| GAAP basic and administrative | $ | 19,347 | $ | 13,404 | $ | 76,258 | $ | 40,971 | |||||||||
| Less: Stock-based compensation expense | 3,688 | 1,299 | 9,680 | 3,435 | |||||||||||||
| Less: Impairment | — | — | 19,792 | — | |||||||||||||
| Less: Legal prices and insurance recoveries | — | (1,900 | ) | — | (1,900 | ) | |||||||||||
| Non-GAAP basic and administrative | $ | 15,659 | $ | 14,005 | $ | 46,786 | $ | 39,436 | |||||||||
| GAAP basic and administrative as a proportion of income | 15 | % | 14 | % | 22 | % | 16 | % | |||||||||
| Non-GAAP basic and administrative as a proportion of income | 13 | % | 15 | % | 13 | % | 15 | % | |||||||||
| GAAP depreciation and amortization | $ | 8,241 | $ | 7,826 | $ | 24,977 | $ | 22,844 | |||||||||
| Less: Amortization of stock-based compensation capitalized in software program improvement prices | 584 | 471 | 1,682 | 1,299 | |||||||||||||
| Less: Amortization of bought intangibles | 1,093 | 1,153 | 3,396 | 3,494 | |||||||||||||
| Non-GAAP depreciation and amortization | $ | 6,564 | $ | 6,202 | $ | 19,899 | $ | 18,051 | |||||||||
| GAAP depreciation and amortization as a proportion of income | 7 | % | 8 | % | 7 | % | 9 | % | |||||||||
| Non-GAAP depreciation and amortization as a proportion of income | 5 | % | 6 | % | 6 | % | 7 | % | |||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Loss from operations: | |||||||||||||||||
| GAAP loss from operations | $ | (7,819 | ) | $ | (13 | ) | $ | (52,418 | ) | $ | (4,536 | ) | |||||
| Less: Stock-based compensation expense | 10,830 | 4,063 | 28,209 | 10,053 | |||||||||||||
| Less: Amortization of stock-based compensation capitalized in software program improvement prices | 584 | 471 | 1,682 | 1,299 | |||||||||||||
| Less: Amortization of bought intangibles | 1,093 | 1,153 | 3,396 | 3,494 | |||||||||||||
| Less: Impairment | — | — | 19,792 | — | |||||||||||||
| Less: Legal prices and insurance recoveries | — | (1,900 | ) | — | (1,900 | ) | |||||||||||
| Non-GAAP earnings from operations | $ | 4,688 | $ | 3,774 | $ | 661 | $ | 8,410 | |||||||||
| Operating margin: | |||||||||||||||||
| GAAP working margin | (6.3 | )% | — | % | (15.1 | )% | (1.7 | )% | |||||||||
| Stock-based compensation expense as a proportion of income | 8.7 | 4.2 | 8.1 | 3.8 | |||||||||||||
| Amortization of stock-based compensation capitalized in software program improvement prices as a proportion of income | 0.5 | 0.5 | 0.5 | 0.5 | |||||||||||||
| Amortization of bought intangibles as a proportion of income | 0.9 | 1.2 | 1.0 | 1.3 | |||||||||||||
| Impairment as a proportion of income | — | — | 5.7 | — | |||||||||||||
| Legal prices and insurance recoveries as a proportion of income | — | (2.0 | ) | — | (0.7 | ) | |||||||||||
| Non-GAAP working margin | 3.7 | % | 3.9 | % | 0.2 | % | 3.2 | % | |||||||||
| Net (loss) earnings: | |||||||||||||||||
| GAAP internet (loss) earnings | $ | (4,162 | ) | $ | (141 | ) | $ | (48,419 | ) | $ | 2,359 | ||||||
| Less: Stock-based compensation expense | 10,830 | 4,063 | 28,209 | 10,053 | |||||||||||||
| Less: Amortization of stock-based compensation capitalized in software program improvement prices | 584 | 471 | 1,682 | 1,299 | |||||||||||||
| Less: Amortization of bought intangibles | 1,093 | 1,153 | 3,396 | 3,494 | |||||||||||||
| Less: Impairment | — | — | 19,792 | — | |||||||||||||
| Less: Legal prices and insurance recoveries | — | (1,900 | ) | — | (1,900 | ) | |||||||||||
| Less: Gain on sale of business | (4,156 | ) | — | (4,156 | ) | — | |||||||||||
| Less: Income tax impact of changes | 234 | 1,104 | (724 | ) | 8,120 | ||||||||||||
| Non-GAAP internet earnings | $ | 3,955 | $ | 2,542 | $ | 1,228 | $ | 7,185 | |||||||||
| Net (loss) earnings per share, fundamental: | |||||||||||||||||
| GAAP internet (loss) earnings per share, fundamental | $ | (0.12 | ) | $ | — | $ | (1.39 | ) | $ | 0.07 | |||||||
| Non-GAAP changes to internet earnings | 0.23 | 0.08 | 1.42 | 0.14 | |||||||||||||
| Non-GAAP internet earnings per share, fundamental | $ | 0.11 | $ | 0.08 | $ | 0.03 | $ | 0.21 | |||||||||
| Net (loss) earnings per share, diluted: | |||||||||||||||||
| GAAP internet (loss) earnings per share, diluted | $ | (0.12 | ) | $ | — | $ | (1.39 | ) | $ | 0.07 | |||||||
| Non-GAAP changes to internet earnings | 0.23 | 0.08 | 1.39 | 0.14 | |||||||||||||
| Non-GAAP internet earnings per share, diluted | $ | 0.11 | $ | 0.08 | $ | — | $ | 0.21 | |||||||||
| Weighted-average shares utilized in GAAP per share calculation | |||||||||||||||||
| Basic | 35,043 | 34,614 | 34,936 | 34,525 | |||||||||||||
| Diluted | 35,043 | 34,614 | 34,936 | 35,695 | |||||||||||||
| Weighted-average shares utilized in non-GAAP per share calculation | |||||||||||||||||
| Basic | 35,043 | 34,614 | 34,936 | 34,525 | |||||||||||||
| Diluted | 35,710 | 35,653 | 35,695 | 35,695 | |||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||
| 2022 | 2021(1) | 2022 | 2021 | ||||||||||||||
| Free money circulation: |
|||||||||||||||||
| GAAP internet money offered by working actions | $ | 16,003 | $ | 15,798 | $ | 19,284 | $ | 26,459 | |||||||||
| Purchases of property and tools | (844 | ) | (2,362 | ) | (5,943 | ) | (5,166 | ) | |||||||||
| Capitalized software program improvement prices | (3,275 | ) | (6,600 | ) | (10,468 | ) | (18,511 | ) | |||||||||
| Non-recurring bills paid associated to the sale of MyCase | — | — | — | 7,759 | |||||||||||||
| Legal prices and insurance recoveries | — | — | — | 4,250 | |||||||||||||
| Non-GAAP free money circulation | $ | 11,884 | $ | 6,836 | $ | 2,873 | $ | 14,791 | |||||||||
| Free money circulation margin: | |||||||||||||||||
| GAAP internet money offered by working actions as a proportion of income | 12.8 | % | 16.5 | % | 5.5 | % | 10.0 | % | |||||||||
| Purchases of property and tools as a proportion of income | (0.7 | ) | (2.5 | ) | (1.7 | ) | (2.0 | ) | |||||||||
| Capitalized software program improvement prices as a proportion of income | (2.6 | ) | (6.9 | ) | (3.0 | ) | (7.0 | ) | |||||||||
| Non-recurring bills paid associated to the sale of MyCase as a proportion of income | — | — | — | 2.9 | |||||||||||||
| Legal prices and insurance recoveries as a proportion of income | — | % | — | % | — | % | 1.6 | % | |||||||||
| Non-GAAP free money circulation margin | 9.5 | % | 7.1 | % | 0.8 | % | 5.6 | % | |||||||||
(1) Amounts have been revised from these beforehand reported to mirror sure insurance recoveries acquired within the fourth quarter of fiscal yr 2021 that had beforehand been reported within the third quarter of fiscal yr 2021.
| Three Months Ended | |||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | ||||||||||||||
| 2021 | 2021 | 2021 | 2021 | ||||||||||||||
| Costs and working bills: |
|||||||||||||||||
| GAAP value of income (unique of depreciation and amortization) | $ | 33,298 | $ | 32,819 | $ | 38,730 | $ | 39,097 | |||||||||
| Less: Stock-based compensation expense | 471 | 463 | 575 | 515 | |||||||||||||
| Non-GAAP value of income (unique of depreciation and amortization) | $ | 32,827 | $ | 32,356 | $ | 38,155 | $ | 38,582 | |||||||||
| GAAP value of income (unique of depreciation and amortization) as a proportion of income | 42 | % | 37 | % | 40 | % | 41 | % | |||||||||
| Non-GAAP value of income (unique of depreciation and amortization) as a proportion of income | 42 | % | 36 | % | 40 | % | 40 | % | |||||||||
| GAAP gross sales and advertising | $ | 16,179 | $ | 17,714 | $ | 19,362 | $ | 19,945 | |||||||||
| Less: Stock-based compensation expense | 402 | 447 | 738 | 742 | |||||||||||||
| Non-GAAP gross sales and advertising | $ | 15,777 | $ | 17,267 | $ | 18,624 | $ | 19,203 | |||||||||
| GAAP gross sales and advertising as a proportion of income | 21 | % | 20 | % | 20 | % | 21 | % | |||||||||
| Non-GAAP gross sales and advertising as a proportion of income | 20 | % | 19 | % | 19 | % | 20 | % | |||||||||
| GAAP analysis and product improvement | $ | 14,383 | $ | 15,506 | $ | 16,500 | $ | 19,591 | |||||||||
| Less: Stock-based compensation expense | 857 | 1,214 | 1,451 | 1,935 | |||||||||||||
| Non-GAAP analysis and product improvement | $ | 13,526 | $ | 14,292 | $ | 15,049 | $ | 17,656 | |||||||||
| GAAP analysis and product improvement as a proportion of income | 18 | % | 17 | % | 17 | % | 20 | % | |||||||||
| Non-GAAP analysis and product improvement as a proportion of income | 17 | % | 16 | % | 16 | % | 18 | % | |||||||||
| GAAP basic and administrative | $ | 13,361 | $ | 14,206 | $ | 13,404 | $ | 16,308 | |||||||||
| Less: Stock-based compensation expense | 1,046 | 1,090 | 1,299 | 2,096 | |||||||||||||
| Less: Legal prices and insurance recoveries | — | — | (1,900 | ) | — | ||||||||||||
| Non-GAAP basic and administrative | $ | 12,315 | $ | 13,116 | $ | 14,005 | $ | 14,212 | |||||||||
| GAAP basic and administrative as a proportion of income | 17 | % | 16 | % | 14 | % | 17 | % | |||||||||
| Non-GAAP basic and administrative as a proportion of income | 16 | % | 15 | % | 15 | % | 15 | % | |||||||||
| GAAP depreciation and amortization | $ | 7,369 | $ | 7,649 | $ | 7,826 | $ | 8,001 | |||||||||
| Less: Amortization of stock-based compensation capitalized in software program improvement prices | 398 | 430 | 471 | 513 | |||||||||||||
| Less: Amortization of bought intangibles | 1,187 | 1,153 | 1,153 | 1,153 | |||||||||||||
| Non-GAAP depreciation and amortization | $ | 5,784 | $ | 6,066 | $ | 6,202 | $ | 6,335 | |||||||||
| GAAP depreciation and amortization as a proportion of income | 9 | % | 9 | % | 8 | % | 8 | % | |||||||||
| Non-GAAP depreciation and amortization as a proportion of income | 7 | % | 7 | % | 6 | % | 7 | % | |||||||||
| Three Months Ended | |||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | ||||||||||||||
| 2021 | 2021 | 2021 | 2021 | ||||||||||||||
| Loss from operations: | |||||||||||||||||
| GAAP (loss) earnings from operations | $ | (5,669 | ) | $ | 1,146 | $ | (13 | ) | $ | (7,342 | ) | ||||||
| Less: Stock-based compensation expense | 2,776 | 3,214 | 4,063 | 5,288 | |||||||||||||
| Less: Amortization of stock-based compensation capitalized in software program improvement prices | 398 | 430 | 471 | 513 | |||||||||||||
| Less: Amortization of bought intangibles | 1,187 | 1,153 | 1,153 | 1,153 | |||||||||||||
| Less: Legal prices and insurance recoveries | — | — | (1,900 | ) | — | ||||||||||||
| Non-GAAP (loss) earnings from operations | $ | (1,308 | ) | $ | 5,943 | $ | 3,774 | $ | (388 | ) | |||||||
| Operating margin: | |||||||||||||||||
| GAAP working margin | (7.2 | )% | 1.3 | % | — | % | (7.7 | )% | |||||||||
| Stock-based compensation expense as a proportion of income | 3.5 | 3.6 | 4.2 | 5.5 | |||||||||||||
| Amortization of stock-based compensation capitalized in software program improvement prices as a proportion of income | 0.5 | 0.5 | 0.5 | 0.5 | |||||||||||||
| Amortization of bought intangibles as a proportion of income | 1.5 | 1.3 | 1.2 | 1.2 | |||||||||||||
| Legal prices and insurance recoveries as a proportion of income | — | — | (2.0 | ) | — | ||||||||||||
| Non-GAAP working margin | (1.7 | )% | 6.7 | % | 3.9 | % | (0.4 | )% | |||||||||
| Net earnings (loss): | |||||||||||||||||
| GAAP internet earnings (loss) | $ | 479 | $ | 2,021 | $ | (141 | ) | $ | (1,331 | ) | |||||||
| Less: Stock-based compensation expense | 2,776 | 3,214 | 4,063 | 5,288 | |||||||||||||
| Less: Amortization of stock-based compensation capitalized in software program improvement prices | 398 | 430 | 471 | 513 | |||||||||||||
| Less: Amortization of bought intangibles | 1,187 | 1,153 | 1,153 | 1,153 | |||||||||||||
| Less: Legal prices and insurance recoveries | — | — | (1,900 | ) | — | ||||||||||||
| Less: Income tax impact of changes | 5,206 | 1,810 | 1,104 | (6,820 | ) | ||||||||||||
| Non-GAAP internet (loss) earnings | $ | (366 | ) | $ | 5,008 | $ | 2,542 | $ | 12,443 | ||||||||
| Net earnings (loss) per share, fundamental: | |||||||||||||||||
| GAAP internet earnings (loss) per share, fundamental | $ | 0.01 | $ | 0.06 | $ | — | $ | (0.04 | ) | ||||||||
| Non-GAAP changes to internet earnings (loss) | (0.02 | ) | 0.09 | 0.08 | 0.40 | ||||||||||||
| Non-GAAP internet (loss) earnings per share, fundamental | $ | (0.01 | ) | $ | 0.15 | $ | 0.08 | $ | 0.36 | ||||||||
| Net earnings (loss) per share, diluted: | |||||||||||||||||
| GAAP internet earnings (loss) per share, diluted | $ | 0.01 | $ | 0.06 | $ | — | $ | (0.04 | ) | ||||||||
| Non-GAAP changes to internet earnings (loss) | (0.02 | ) | 0.08 | 0.08 | 0.39 | ||||||||||||
| Non-GAAP internet (loss) earnings per share, diluted | $ | (0.01 | ) | $ | 0.14 | $ | 0.08 | $ | 0.35 | ||||||||
| Weighted-average shares utilized in GAAP per share calculation | |||||||||||||||||
| Basic | 34,409 | 34,548 | 34,614 | 34,738 | |||||||||||||
| Diluted | 35,712 | 35,674 | 34,614 | 34,738 | |||||||||||||
| Weighted-average shares utilized in non-GAAP per share calculation | |||||||||||||||||
| Basic | 34,409 | 34,548 | 34,614 | 34,738 | |||||||||||||
| Diluted | 34,409 | 35,674 | 35,653 | 35,675 | |||||||||||||
| Three Months Ended | |||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | ||||||||||||||
| 2021(1) | 2021 | 2021(1) | 2021(1) | ||||||||||||||
| Free money circulation: |
|||||||||||||||||
| GAAP internet money (utilized in) offered by working actions | $ | (4,437 | ) | $ | 15,098 | $ | 15,798 | $ | 8,932 | ||||||||
| Purchases of property and tools | (938 | ) | (1,866 | ) | (2,362 | ) | (2,937 | ) | |||||||||
| Capitalized software program improvement prices | (6,140 | ) | (5,771 | ) | (6,600 | ) | (6,104 | ) | |||||||||
| Non-recurring bills paid associated to the sale of MyCase | 5,185 | 2,574 | — | — | |||||||||||||
| Legal prices and insurance recoveries | 4,250 | — | — | (1,900 | ) | ||||||||||||
| Non-GAAP free money circulation | $ | (2,080 | ) | $ | 10,035 | $ | 6,836 | $ | (2,009 | ) | |||||||
| Free money circulation margin: | |||||||||||||||||
| GAAP internet money (utilized in) offered by working actions as a proportion of income | (5.6 | )% | 17.0 | % | 16.5 | % | 9.3 | % | |||||||||
| Purchases of property and tools as a proportion of income | (1.2 | ) | (2.1 | ) | (2.5 | ) | (3.1 | ) | |||||||||
| Capitalized software program improvement prices as a proportion of income | (7.8 | ) | (6.5 | ) | (6.9 | ) | (6.4 | ) | |||||||||
| Non-recurring bills paid associated to the sale of MyCase as a proportion of income | 6.6 | 2.9 | — | — | |||||||||||||
| Legal prices and insurance recoveries as a proportion of income | 5.4 | — | — | (2.0 | ) | ||||||||||||
| Non-GAAP free money circulation margin | (2.6 | )% | 11.3 | % | 7.1 | % | (2.1 | )% | |||||||||
(1) Amounts have been revised from these beforehand reported to mirror (i) sure insurance recoveries acquired within the fourth quarter of fiscal yr 2021 that had beforehand been reported within the third quarter of fiscal yr 2021, (ii) receipt of proceeds from sure post-closing transition companies offered by the Company to MyCase within the first quarter of fiscal yr 2021, and (iii) fee of sure authorized prices within the first quarter of fiscal yr 2021.
Statement Regarding the Use of Non-GAAP Financial Measures
We disclose the next non-GAAP monetary measures on this press launch: non-GAAP earnings (loss) from operations, non-GAAP working bills (value of income (unique of depreciation and amortization), gross sales and advertising, analysis and product improvement, basic and administrative, and depreciation and amortization), non-GAAP internet earnings (loss), non-GAAP internet earnings (loss) per share, and free money circulation.
- Non-GAAP presentation of earnings (loss) from operations, working bills, internet earnings (loss), and internet earnings (loss) per share. These measures exclude sure non-cash or non-recurring objects, together with stock-based compensation expense, amortization of stock-based compensation capitalized in software program improvement prices, amortization of bought intangibles, impairment, authorized prices and insurance recoveries, achieve on sale of business, and the associated earnings tax impact of those changes, as relevant and described beneath.
- Free money circulation. Free money circulation is outlined as internet money from working actions, much less purchases of property and tools, capitalization of software program improvement prices, and insurance recoveries, plus authorized prices and non-recurring bills paid associated to the sale of MyCase. We use free money circulation to guage our era of money from operations that’s obtainable for functions aside from capital expenditures and capitalized software program improvement prices. Additionally, we imagine that info concerning free money circulation offers traders with a perspective on the money obtainable to fund ongoing operations, as a result of we evaluate money flows generated from operations after making an allowance for capital expenditures and the capitalization of software program improvement prices on account of the truth that these expenditures are thought of to be a essential element of ongoing operations.
We use every of those non-GAAP monetary measures internally to evaluate and examine working outcomes throughout reporting durations, for inside budgeting and forecasting functions, and to guage our monetary efficiency. We imagine these changes additionally present helpful supplemental info to traders and facilitate the evaluation of our working outcomes and comparability of working outcomes throughout reporting durations.
In explicit, we imagine these non-GAAP monetary measures are helpful to traders and others in assessing our working efficiency as a result of following elements:
- Stock-based compensation expense and amortization of stock-based compensation capitalized in software program improvement prices. We make the most of stock-based compensation to draw and retain workers. It is principally geared toward aligning their pursuits with these of our stockholders whereas making certain long-term retention, somewhat than to deal with operational efficiency for any explicit interval. As a consequence, stock-based compensation bills differ for causes which can be usually unrelated to monetary and operational efficiency in any explicit interval.
- Amortization of bought intangibles. We view amortization of bought intangible belongings as objects arising from pre-acquisition actions decided on the time of an acquisition. While these intangible belongings are evaluated for impairment commonly, amortization of the price of bought intangibles is an expense that isn’t sometimes affected by operations throughout any explicit interval.
- Impairment. We imagine that impairment expenses don’t mirror future working bills, and are usually unrelated to monetary and operational efficiency in any explicit interval.
- Significant authorized prices and insurance recoveries. Significant authorized litigation prices, settlement bills or proceeds, different related bills, and insurance recoveries of such prices don’t relate to the continuing operation of the business and have a tendency to differ considerably based mostly on the circumstances of every transaction. This is just not indicative of our core working efficiency and is probably not significant compared to our previous working efficiency.
- Gains and non-recurring prices associated to the sale of companies. In August 2022 we accomplished the sale of AppFolio Utility Management, Inc. and in September 2020 we accomplished the sale of MyCase, Inc., every a former wholly owned subsidiary. We have excluded any positive factors and expenses associated to those gross sales, as we don’t contemplate such quantities to be a part of the continuing operation of our business.
- Income tax results of changes. We make the most of a set long-term projected tax price in our computation of non-GAAP earnings tax results to offer higher consistency throughout interim reporting durations. In projecting this long-term non-GAAP tax price, we make the most of a monetary projection that excludes the direct influence of different non-GAAP changes. The projected price considers different elements similar to our present working construction, current tax positions in numerous jurisdictions, and key laws in main jurisdictions the place we function. For the quarter ended September 30, 2022, we now have decided the projected non-GAAP tax price to be 25%. We periodically re-evaluate this tax price, as essential, for vital occasions, based mostly on related tax legislation adjustments, and materials adjustments within the forecasted geographic earnings combine.
Our non-GAAP monetary measures might not present info that’s instantly similar to that offered by different corporations in our business, as different corporations might calculate non-GAAP monetary outcomes in another way. In addition, there are limitations in utilizing non-GAAP monetary measures as a result of non-GAAP monetary measures will not be ready in accordance with GAAP and might exclude bills which will have a cloth influence on our reported monetary outcomes. As such, non-GAAP monetary measures shouldn’t be thought of in isolation from, or as an alternative choice to, monetary info ready in accordance with GAAP. A reconciliation of the historic non-GAAP monetary measures to their most instantly comparable GAAP measures has been offered within the tables above. We encourage traders to evaluate the reconciliation of those historic non-GAAP monetary measures to their most instantly comparable GAAP monetary measures.
