APPFOLIO INC (APPF)
SIC breadcrumb: Services > Business Services > SIC 7372 Services-Prepackaged Software
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1433195. Latest filing source: 0001433195-26-000011.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 950,822,000 | USD | 2025 | 2026-02-05 |
| Net income | 140,923,000 | USD | 2025 | 2026-02-05 |
| Assets | 688,967,000 | USD | 2025 | 2026-02-05 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001433195.json. Derived margins are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 105,586,000 | 143,803,000 | 190,071,000 | 256,012,000 | 310,056,000 | 359,370,000 | 471,883,000 | 620,445,000 | 794,202,000 | 950,822,000 |
| Net income | -8,281,000 | 9,716,000 | 19,967,000 | 36,282,000 | 158,403,000 | 1,028,000 | -68,119,000 | 2,702,000 | 204,068,000 | 140,923,000 |
| Operating income | -8,423,000 | 9,335,000 | 19,656,000 | 6,461,000 | 9,783,000 | -11,878,000 | -72,370,000 | 963,000 | 135,644,000 | 152,917,000 |
| Diluted EPS | -0.25 | 0.28 | 0.56 | 1.02 | 4.44 | 0.03 | -1.95 | 0.07 | 5.55 | 3.88 |
| Assets | 92,583,000 | 110,248,000 | 175,741,000 | 260,102,000 | 389,480,000 | 408,017,000 | 381,217,000 | 408,889,000 | 626,678,000 | 688,967,000 |
| Liabilities | 22,901,000 | 25,169,000 | 83,895,000 | 128,152,000 | 103,560,000 | 110,636,000 | 115,671,000 | 111,577,000 | 107,388,000 | 146,388,000 |
| Stockholders' equity | 69,682,000 | 85,079,000 | 91,846,000 | 131,950,000 | 285,920,000 | 297,381,000 | 265,546,000 | 297,312,000 | 519,290,000 | 542,579,000 |
| Cash and cash equivalents | 10,699,000 | 16,109,000 | 74,076,000 | 15,813,000 | 140,263,000 | 57,847,000 | 70,769,000 | 49,509,000 | 42,504,000 | 106,967,000 |
| Net margin | -7.84% | 6.76% | 10.51% | 14.17% | 51.09% | 0.29% | -14.44% | 0.44% | 25.69% | 14.82% |
| Operating margin | -7.98% | 6.49% | 10.34% | 2.52% | 3.16% | -3.31% | -15.34% | 0.16% | 17.08% | 16.08% |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-23. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001433195.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | -0.86 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | -0.12 | reported discrete quarter | ||
| 2023-Q2 | 2023-03-31 | -35,110,000 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | -0.99 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 147,075,000 | -0.53 | reported discrete quarter | |
| 2023-Q3 | 2023-06-30 | -18,901,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 165,440,000 | 0.72 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | 171,830,000 | 30,268,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 187,430,000 | 38,663,000 | 1.05 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 | 38,663,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-06-30 | 29,665,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-30 | 197,375,000 | 0.81 | reported discrete quarter | |
| 2024-Q3 | 2024-09-30 | 205,733,000 | 0.90 | reported discrete quarter | |
| 2024-Q4 | 2024-12-31 | 203,664,000 | 102,734,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 217,702,000 | 31,383,000 | 0.86 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 | 31,383,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-06-30 | 35,980,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 235,575,000 | 0.99 | reported discrete quarter | |
| 2025-Q3 | 2025-09-30 | 249,353,000 | 0.93 | reported discrete quarter | |
| 2025-Q4 | 2025-12-31 | 248,192,000 | 39,914,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 262,214,000 | 42,424,000 | 1.18 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001433195-26-000023.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition, results of operations and liquidity should be read together with our Condensed Consolidated Financial Statements and the related notes included elsewhere in this Quarterly Report and in our Annual Report. Overview We are a technology leader powering the future of the real estate industry. We provide a cloud-based platform on which our customers operate their businesses. We help our customers navigate an increasingly interconnected and growing network of stakeholders in their business ecosystems, including property managers, property investors, potential residents, residents, and vendors. We also provide key functionality related to critical transactions across the real estate lifecycle, including screening potential residents, sending and receiving payments, and providing insurance-related risk mitigation services. Our services enable our customers to connect communities, increase operational efficiency, deliver exceptional customer experiences, and improve financial and operational performance. Financial Highlights for the First Quarter of 2026 •Revenue grew 20% year-over-year to $262.2 million. •Total property management units under management grew 8% year-over-year to 9.5 million. •GAAP operating income was $50.7 million, or 19.4% of revenue, compared to GAAP operating income of $33.8 million, or 15.5% of revenue in Q1 2025. •Non-GAAP operating income was $71.5 million, or 27.3% of revenue, compared to non-GAAP operating income of $53.0 million, or 24.3% of revenue in Q1 2025. •Net cash provided by operating activities was $34.3 million, or 13.1% of revenue, compared to $38.5 million, or 17.7% of revenue in Q1 2025. •Repurchased 703 thousand shares of the Company's Class A common stock for $125 million. Key Business Metric Property management units under management. We believe that our ability to increase our number of property management units under management is an indicator of our market penetration, growth, and potential future business opportunities. We define property management units under management as active or committed units under management at the period end date. We had 9.5 million and 8.8 million property management units under management as of March 31, 2026 and 2025, respectively. Key Components of Results of Operations Revenue Our Subscription Services and certain of our Value Added Services are offered on a subscription basis. The subscription fees for our services vary by property type and are designed to scale with the size of our customers’ businesses. We recognize revenue for subscription-based services on a straight-line basis over the contract term beginning on the date that our service is made available. We generally invoice monthly or, to a lesser extent, annually in advance of a subscription period. We also offer certain Value Added Services, which are not covered by our subscription fees, on a per-use basis. Usage-based fees are charged either as a percentage of the transaction amount (e.g., for certain of our electronic payment services) or on a flat fee per transaction basis generally with no minimum usage commitments (e.g., for our tenant screening and risk mitigation services). We recognize revenue for usage-based services in the period the service is rendered. Our payments services fees are recorded gross of any interchange and payment processing related fees. We generally invoice our usage-based services on a monthly basis or collect the fee at the time of service. A significant majority of our Value Added Services revenue comes from the use of our electronic payment services, tenant screening services, and risk mitigation services. Other revenue includes fees from one-time services related to the implementation of our software solutions and other recurring or one-time fees related to our customers who are not otherwise using our Subscription Services. This includes legacy customers of businesses we have acquired where the customers haven't migrated to our Subscription Services. The fees for implementation and data migration services are billed upon signing our core subscription contract and are recognized as revenue in the period the service is rendered. Other services are billed when the services rendered are completed and delivered to the customer or billed in advance and deferred over the subscription period. As of March 31, 2026 and 2025, we had 22,520 and 21,105 property management customers, respectively. 16 Costs and Operating Expenses Cost of Revenue (Exclusive of Depreciation and Amortization). Many of our Value Added Services are facilitated by third-party service providers. Cost of revenue paid to these third-party service providers includes, without limitation, the cost of electronic interchange and payment processing-related services to support our payments services, the cost of credit reporting services for our tenant screening services, and various costs associated with our risk mitigation service providers. These third-party costs vary both in amount and as a percentage of revenue for each Value Added Service offering. Cost of revenue also includes personnel-related costs for our employees focused on customer service and the support of our operations (including salaries, cash bonuses, benefits, and stock-based compensation), platform infrastructure costs (such as data center operations and hosting-related costs), and allocated shared and other costs. Cost of revenue excludes depreciation of property and equipment, amortization of capitalized software development costs and amortization of intangible assets. Sales and Marketing. Sales and marketing expense consists of personnel-related costs for our employees focused on sales and marketing (including salaries, sales commissions, cash bonuses, benefits, and stock-based compensation), costs associated with sales and marketing activities, and allocated shared and other costs. Marketing activities include advertising, online lead generation, lead nurturing, customer and industry events, and the creation of industry-related content and collateral. We focus our sales and marketing efforts on generating awareness of our software solutions, creating sales leads, establishing and promoting our brands, and cultivating an educated community of successful and vocal customers. Research and Product Development. Research and product development expense consists of personnel-related costs for our employees focused on research and product development (including salaries, cash bonuses, benefits, and stock-based compensation), fees for third-party development resources, and allocated shared and other costs. Our research and product development efforts are focused on expanding functionality and the ease of use of our existing software solutions by adding new core functionality, Value Added Services and other improvements, as well as developing new products and services. We capitalize our software development costs that meet the criteria for capitalization. Amortization of capitalized software development costs is included in depreciation and amortization expense. General and Administrative. General and administrative expense consists of personnel-related costs for employees in our executive, finance, information technology, human resources, legal, compliance, and administrative organizations (including salaries, cash bonuses, benefits, and stock-based compensation). In addition, general and administrative expense includes fees for third-party professional services (including audit, legal, compliance, and tax services), regulatory fees, other corporate expenses, impairment of long-lived assets, gains on lease modifications, and allocated shared and other costs. Depreciation and Amortization. Depreciation and amortization expense includes depreciation of property and equipment, amortization of capitalized software development costs, and amortization of intangible assets. We depreciate or amortize property and equipment, software development costs, and intangible assets over their expected useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed. Interest Income, Net. Interest income, net includes interest earned on investment securities, amortization and accretion of the premium and discounts paid from the purchase of investment securities, and interest earned on cash deposited in our bank accounts. Provision for income taxes. Provision for income taxes consists of federal and state income taxes in the United States. Results of Operations Revenue Three Months Ended March 31, Change 2026 2025 Amount % (dollars in thousands) Subscription Services $ 58,222 $ 49,513 $ 8,709 18 % Value Added Services 201,363 164,706 36,657 22 % Other 2,629 3,483 (854) (25) % Total revenue $ 262,214 $ 217,702 $ 44,512 20 % The increase in revenue for the three months ended March 31, 2026, compared to the same period in the prior year, was primarily attributable to an increase in the usage of our payments, tenant screening, and risk mitigation services. During the three months ended March 31, 2026, we also experienced growth of 8% in the number of property management units under management compared to the same period in the prior year, which drove growth in users of our Subscription Services and Value Added Services. 17 Our payment services experienced increased usage during the comparative periods as residents and property managers transacted more business online. We expect total revenue for the year ending December 31, 2026 to increase compared to the year ended December 31, 2025 as we continue to add new customers and property management units under management, along with increased adoption and usage of our Value Added Services. Cost of Revenue (Exclusive of Depreciation and Amortization) Three Months Ended March 31, Change 2026 2025 Amount % (dollars in thousands) Cost of revenue (exclusive of depreciation and amortization) $ 94,975 $ 79,498 $ 15,477 19 % Percentage of revenue 36.2 % 36.5 % Stock-based compensation, included above $ 1,088 $ 1,287 $ (199) (15) % Percentage of revenue 0.4 % 0.6 % Cost of revenue (exclusive of depreciation and amortization) increased for the three months ended March 31, 2026, compared to the same period in the prior year. The increase was primarily driven by higher third-party service provider costs of $14.6 million due to increased adoption and usage of our Value Added Services for the respective three-month periods. We expect cost of revenue (exclusive of depreciation and amortization) for the year ending December 31, 2026, to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025. Sales and Marketing Three Months Ended March 31, Change 2026 2025 Amount % (dollars in thousands) Sales and marketing $ 37,501 $ 31,057 $ 6,444 21 % Percentage of revenue 14.3 % 14.3 % Stock-based compensation, included above $ 3,340 $ 2,848 $ 492 17 % Percentage of revenue 1.3 % 1.3 % Sales and marketing expense increased for the three months ended March 31, 2026, compared to the same period in the prior year. The increase was primarily due to a $4.5 million increase in personnel-related costs, including stock-based and performance-based compensation, to support growth in the business, combined with a $1.1 million increase in advertising and promotion expense due to increased targeted go-to-market investment, for the respective three-month periods. We expect sales and marketing expense for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025. Research and Product Development T [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition, results of operations and liquidity should be read together with our Consolidated Financial Statements and the related notes included elsewhere in this Annual Report.
The following discussion and analysis of our financial condition and results of operations includes 2025 and 2024 items and year-over-year comparisons between 2025 and 2024. For discussion of 2023 items and year-over-year comparisons between 2024 and 2023, refer to Part II. Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024. Our Consolidated Financial Statements are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"). This Annual Report also contains information regarding our non-GAAP income from operations ("Non-GAAP operating income") and non-GAAP operating margin ("Non-GAAP Operating Margin"), each of which constitutes a non-GAAP financial measure. We use these non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. For more information regarding these non-GAAP financial measures, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" below.
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Overview
We are a technology leader powering the future of real estate. We provide a cloud-based platform on which our customers operate their businesses. We help our customers navigate an increasingly interconnected and growing network of stakeholders in their business ecosystems, including property managers, property investors, potential residents, residents, and vendors. We also provide key functionality related to critical transactions across the real estate lifecycle, including screening potential residents, sending and receiving payments, and providing insurance-related risk mitigation services. Our services enable our customers to connect communities, increase operational efficiency, deliver exceptional customer experiences, and improve financial and operational performance.
Financial Highlights for the Fiscal Year 2025
•Total property management units under management grew 8% year-over-year to 9.4 million.
•Revenue grew 20% year-over-year to $950.8 million.
•GAAP operating income was $152.9 million, or 16.1% of revenue, compared to GAAP operating income of $135.6 million, or 17.1% of revenue in 2024.
•Non-GAAP operating income was $234.9 million, or 24.7% of revenue, compared to non-GAAP operating income of $199.8 million, or 25.2% of revenue, in 2024.
•Net cash provided by operating activities was $242.1 million, or 25.5% of revenue, compared to $188.2 million, or 23.7% of revenue, in 2024.
Key Business Metric
We monitor the key business metric set forth below to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.
Property management units under management. We believe that our ability to increase the number of property management units under management is an indicator of our market penetration, growth, and potential future business opportunities. We define property management units under management as active or committed units under management at the period end date. We had 9.4 million and 8.7 million property management units under management, as of December 31, 2025 and 2024, respectively.
Seasonality
We have historically experienced seasonality in our Value Added Services revenue due to seasonally higher leasing activities in the second quarter. Specifically, higher tenant applications in the second quarter typically result in increased use by our property management customers of our tenant screening services and, in the third quarter once resident move-ins have occurred, higher demand for our risk mitigation services. Because of the seasonality in our Value Added Services, we typically experience a sequential increase in revenue in the first, second, and third quarters and a sequential decline in revenue in the fourth quarter. Moreover, if macroeconomic factors in a given fiscal year impact tenant behavior, our product portfolio mix, or the adoption rate of our other less seasonally impacted Value Added Services, the effect that seasonal factors have on our revenue may be exacerbated. Although these seasonal factors are common in the real estate industry, historical patterns should not be considered a reliable indicator of our future sales activity or performance.
Key Components of Results of Operations
Revenue
Our Subscription Services and certain of our Value Added Services are offered on a subscription basis. The subscription fees for our Subscription Services vary by property type and are designed to scale with the size of our customers’ businesses. We recognize revenue for subscription-based services on a straight-line basis over the contract term beginning on the date that our service is made available. We generally invoice monthly or, to a lesser extent, annually in advance of a subscription period.
We also offer certain Value Added Services, which are not covered by our subscription fees, on a per-use basis. Usage-based fees are charged either as a percentage of the transaction amount (e.g., for certain of our electronic payment services) or on a flat fee per transaction basis, generally with no minimum usage commitments (e.g., for our tenant screening and risk mitigation services). We recognize revenue for usage-based services in the period the service is rendered. Our payments services fees are recorded gross of any interchange and payment processing related fees. We generally invoice our usage-based services on a monthly basis or collect the fee at the time of service. A significant majority of our Value Added Services revenue comes from the use of our electronic payment services, tenant screening services, and risk mitigation services.
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In addition, we charge our customers for assistance onboarding onto our Subscription Services and for certain other non-recurring services. We generally invoice for these other services in advance of the services being completed and recognize revenue in the period the service is rendered. We also generate revenue from the legacy customers of businesses we acquire that provide standalone services outside of our platform. Revenue derived from these services is recorded in Other revenue. As of December 31, 2025 and 2024, we had 22,096 and 20,784 property management customers, respectively.
Costs and Operating Expenses
Cost of Revenue (Exclusive of Depreciation and Amortization). Many of our Value Added Services are facilitated by third-party service providers. Cost of revenue paid to these third-party service providers includes, without limitation, the cost of electronic interchange and payment processing-related services to support our payments services, the cost of credit reporting services for our tenant screening services, and various costs associated with our risk mitigation service providers. These third-party costs vary both in amount and as a percentage of revenue for each Value Added Service offering. Cost of revenue also includes personnel-related costs for our employees focused on customer service and the support of our operations (including salaries, cash bonuses, benefits, and stock-based compensation), platform infrastructure costs (such as data center operations and hosting-related costs), and allocated shared and other costs. Cost of revenue excludes depreciation of property and equipment, amortization of capitalized software development costs and amortization of intangible assets.
Sales and Marketing. Sales and marketing expense consists of personnel-related costs for our employees focused on sales and marketing (including salaries, sales commissions, cash bonuses, benefits, and stock-based compensation), costs associated with sales and marketing activities, and allocated shared and other costs. Marketing activities include advertising, online lead generation, lead nurturing, customer and industry events, and the creation of industry-related content and collateral. We focus our sales and marketing efforts on generating awareness of our products and services, creating sales leads, establishing and promoting our brands, and cultivating an educated community of successful and vocal customers.
Research and Product Development. Research and product development expense consists of personnel-related costs for our employees focused on research and product development (including salaries, cash bonuses, benefits, and stock-based compensation), fees for third-party development resources, and allocated shared and other costs. Our research and product development efforts are focused on expanding functionality and the ease of use of our existing software products and services by adding new core functionality, Value Added Services and other improvements, as well as developing new products and services. We capitalize our software development costs that meet the criteria for capitalization. Amortization of capitalized software development costs is included in depreciation and amortization expense.
General and Administrative. General and administrative expense consists of personnel-related costs for employees in our executive, finance, information technology, human resources, legal, compliance, and administrative organizations (including salaries, cash bonuses, benefits, and stock-based compensation). In addition, general and administrative expense includes fees for third-party professional services (including audit, legal, compliance, and tax services), regulatory fees, other corporate expenses, impairment of long-lived assets, gains on lease modifications, and allocated shared and other costs.
Depreciation and Amortization. Depreciation and amortization expense includes depreciation of property and equipment, amortization of capitalized software development costs, and amortization of intangible assets. We depreciate or amortize property and equipment, software development costs, and intangible assets over their expected useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed.
Interest Income, Net. Interest income, net includes interest earned on investment securities, amortization and accretion of the premium and discounts paid from the purchase of investment securities, and interest earned on cash deposited in our bank accounts.
Provision for (benefit from) income taxes. Provision for (benefit from) income taxes consists of federal and state income taxes in the United States.
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Results of Operations
Revenue
Year Ended December 31,
Change
2025
2024
Amount
%
(dollars in thousands)
Subscription Services
$
211,457
$
180,605
$
30,852
17
%
Value Added Services
721,549
605,011
116,538
19
Other
17,816
8,586
9,230
108
Total revenue
$
950,822
$
794,202
$
156,620
20
%
The increase in revenue for the year ended December 31, 2025, compared to the prior year, was primarily attributable to an increase in the usage of our electronic payment, tenant screening, and risk mitigation services by property managers and residents. During the year ended December 31, 2025, we experienced growth of 8% in the number of property management units under management compared to the prior year, which drove growth in users of our Subscription Services and Value Added Services.
We expect total revenue for the year ending December 31, 2026 to increase compared to the year ended December 31, 2025 as we continue to add new customers and property management units under management, along with increased adoption and usage of our Value Added Services.
Cost of Revenue (Exclusive of Depreciation and Amortization)
Year Ended December 31,
Change
2025
2024
Amount
%
(dollars in thousands)
Cost of revenue (exclusive of depreciation and amortization)
$
345,341
$
282,067
$
63,274
22
%
Percentage of revenue
36.3
%
35.5
%
Stock-based compensation, included above
$
5,138
$
4,522
$
616
14
%
Percentage of revenue
0.5
%
0.6
%
Cost of revenue (exclusive of depreciation and amortization) increased for the year ended December 31, 2025, compared to the prior year primarily driven by higher third-party service provider costs of $54.7 million, due to increased adoption and usage of our Value Added Services, combined with a $4.9 million increase in personnel-related costs, including stock-based and performance-based compensation, to support growth in the business, for the year ended December 31, 2025.
We expect cost of revenue (exclusive of depreciation and amortization) for the year ending December 31, 2026, to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.
Sales and Marketing
Year Ended December 31,
Change
2025
2024
Amount
%
(dollars in thousands)
Sales and marketing
$
143,904
$
110,597
$
33,307
30
%
Percentage of revenue
15.1
%
13.9
%
Stock-based compensation, included above
$
12,332
$
8,030
$
4,302
54
%
Percentage of revenue
1.3
%
1.0
%
Sales and marketing expense for the year ended December 31, 2025 increased compared to the prior year primarily due to a $20.0 million increase in personnel-related costs, including stock-based and performance-based compensation, to support growth in the business, combined with a $6.8 million increase in advertising and promotion expense due to increased targeted go-to-market investment, for the year ended December 31, 2025.
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We expect sales and marketing expense for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.
Research and Product Development
Year Ended December 31,
Change
2025
2024
Amount
%
(dollars in thousands)
Research and product development
$
190,419
$
160,375
$
30,044
19
%
Percentage of revenue
20.0
%
20.2
%
Stock-based compensation, included above
$
30,687
$
25,414
$
5,273
21
%
Percentage of revenue
3.2
%
3.2
%
Research and product development expense for the year ended December 31, 2025 increased compared to the prior year primarily due to a $22.8 million increase in personnel-related costs, including stock-based and performance-based compensation, net of capitalized software development costs driven by headcount growth, combined with a $2.3 million increase in software spending to support our research and development activities, for the year ended December 31, 2025.
We expect research and product development expenses for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.
General and Administrative
Year Ended December 31,
Change
2025
2024
Amount
%
(dollars in thousands)
General and administrative
$
95,590
$
85,974
$
9,616
11
%
Percentage of revenue
10.1
%
10.8
%
Stock-based compensation, included above
$
22,633
$
22,361
$
272
1
%
Percentage of revenue
2.4
%
2.8
%
General and administrative expense for the year ended December 31, 2025 increased compared to the prior year primarily due to a $12.3 million increase in personnel-related costs, including stock-based and performance-based compensation, driven by headcount growth, for the year ended December 31, 2025.
We expect general and administrative expenses for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.
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Depreciation and Amortization
Year Ended December 31,
Change
2025
2024
Amount
%
(dollars in thousands)
Depreciation and amortization
$
22,651
$
19,545
$
3,106
16%
Percentage of revenue
2.4
%
2.5
%
Depreciation and amortization expense for the year ended December 31, 2025 increased, compared to the prior year, primarily due to amortization of the intangible assets recognized from the acquisition of Move EZ, Inc. in the fourth quarter of 2024.
We expect depreciation and amortization expenses for the year ending December 31, 2026 to stay flat as a percentage of revenue compared to the year ended December 31, 2025.
Interest Income, Net
Year Ended December 31,
Change
2025
2024
Amount
%
Interest income, net
$
8,157
$
13,981
$
(5,824)
(42)
%
Percentage of revenue
0.9
%
1.8
%
Interest income for the year ended December 31, 2025 decreased, compared to the prior year, primarily due to the sale of available-for-sale investment securities and lower interest rates.
Provision for (benefit from) income taxes
Year Ended December 31,
Change
2025
2024
Amount
%
(dollars in thousands)
Income before provision for income taxes
$
161,112
$
150,322
$
10,790
7
%
Provision for (benefit from) income taxes
$
20,189
$
(53,746)
$
73,935
(138)
%
Effective tax rate
12.5
%
(35.8)
%
The increase in our effective tax rate for the year ended December 31, 2025, as compared to the prior year, is primarily due to the tax benefits recognized in the prior year related to the valuation allowance release against our federal and state deferred tax assets, as well as lower excess tax benefits from stock-based compensation and research and development tax credits.
As of December 31, 2024, we recorded an income tax benefit of $53.7 million, primarily due to the release of our valuation allowance of certain U.S. federal and state deferred tax assets. In evaluating the need for a valuation allowance at each reporting period, we consider the weighting of all available positive and negative evidence, which includes, among other things, the nature, frequency and severity of current and cumulative taxable income or losses, future projections of profitability, timing of the future reversal of existing temporary differences, and the duration of statutory carryforward periods. In assessing all available evidence, we determined that there was sufficient positive evidence to overcome the negative evidence, including our past and current financial results, growth demonstrated in our top-line performance, as well as projected profitability. Accordingly, we determined it is more likely than not that the deferred tax assets will be realized and we released our valuation allowance at December 31, 2024.
Liquidity and Capital Resources
Our principal sources of liquidity continue to be cash, cash equivalents, and investment securities, as well as cash flows generated from our operations. As of December 31, 2025, we had $251.2 million in cash, cash equivalents, and investment securities. We have financed our operations primarily through cash generated from operations.
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In addition, to optimize our capital structure, on September 30, 2025, we entered into the Credit Facility, which provides for a $150.0 million senior secured revolving credit facility, including sublimits of $25.0 million for letters of credit and $25.0 million for swingline loans, and is scheduled to mature on September 30, 2030. We did not draw on the Credit Facility in the fourth quarter of 2025, and as of December 31, 2025, we had no outstanding borrowings under the Credit Facility, and were in compliance with the covenants under the Credit Facility. For more information regarding the Credit Facility, refer to "Credit Facility" in Note 11, Commitments and Contingencies, of our Consolidated Financial Statements of this Annual Report.
We believe that our existing cash and cash equivalents, investment securities, and cash generated from operating activities will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months. The available borrowing capacity under the Credit Facility provides us additional liquidity and financial flexibility.
Capital Requirements
Our future capital requirements depend on many factors, including continued market acceptance of our software products and services; changes in the number of our customers; adoption and utilization of our Value Added Services by new and existing customers; the timing and extent of the introduction of new core functionality, products and Value Added Services; and the timing and extent of our investments across our organization, including acquisitions of businesses and technologies.
As of December 31, 2025, our non-cancelable purchase commitments for business operations totaled $31.3 million, which are due primarily over the next three years. Operating lease obligations associated with leased facilities totaled $38.2 million as of December 31, 2025 and have varying maturities with $44.8 million due over the next five years.
We have in the past entered into, and may in the future enter into, arrangements to acquire or invest in new technologies or markets. We may, as a result of those arrangements or the general expansion of our business, be required to seek additional equity or debt financing, which may not be available on terms favorable to us or at all, impacting our ability to compete successfully, which would harm our business, results of operations, and financial condition.
During the first quarter of 2025, we substantially exhausted the shares of Class A common stock remaining available for purchase under the $100 million share repurchase program authorized by our Board of Directors in 2019 (the "2019 Stock Repurchase Program"). On April 23, 2025, our Board authorized the repurchase of up to $300.0 million of shares of our Class A common stock from time to time pursuant to the 2025 Stock Repurchase Program. For more information regarding our repurchases under the 2019 Stock Repurchase Program and the 2025 Stock Repurchase Program, refer to Note 12, Stockholders' Equity, of our Consolidated Financial Statements of this Annual Report.
Cash Flows
The following table presents our cash flows for the periods indicated (in thousands):
Year Ended December 31,
2025
2024
Net cash provided by operating activities
$
242,105
$
188,159
Net cash provided by (used in) investing activities
10,244
(151,761)
Net cash used in financing activities
(187,886)
(43,403)
Net increase (decrease) in cash and cash equivalents
$
64,463
$
(7,005)
Operating Activities
Our primary source of operating cash inflows is cash collected from our customers in connection with their use of our Subscription Services and Value Added Services. Our primary uses of cash from operating activities are for personnel-related expenditures and third-party costs incurred to support the delivery of our software products and services.
The net increase in cash provided by operating activities for the year ended December 31, 2025, compared to the prior year, was primarily due to a higher increase in cash collections from customers relative to the increase in operating expenditures.
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Investing Activities
Cash provided by (used in) investing activities is generally composed of cash paid in purchases of investment securities, maturities and sales of investment securities, purchases of property and equipment, business acquisition, net of cash acquired, and additions to capitalized software development.
The net increase in cash provided by investing activities for the year ended December 31, 2025, compared to the prior year, was primarily due to higher sales and maturities of available-for-sale investment securities and lower purchases of available-for-sale investment securities. We used $77.4 million of cash paid for a business acquisition in 2024 and $75.0 million of cash for a long-term investment in 2025. For additional information regarding the business acquisition and long-term investment, see Note 4, Investment Securities and Fair Value Measurements, and Note 7, Business Combination, of our Consolidated Financial Statements of this Annual Report.
Financing Activities
Cash used in financing activities is generally composed of net share settlements for employee tax withholdings associated with the vesting of equity awards and repurchases of our Class A common stock offset by proceeds from the exercise of stock options and issuance of common stock under our employee stock purchase plan.
The net increase in cash used in financing activities for the year ended December 31, 2025, compared to the prior year, was primarily due to repurchases of our Class A common stock.
Off-Balance Sheet Arrangements
As of December 31, 2025, we did not have any off-balance sheet arrangements.
Non-GAAP Financial Measures
To supplement our Consolidated Financial Statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), this Annual Report contains information regarding our non-GAAP income from operations ("Non-GAAP Operating Income") and non-GAAP operating margin ("Non-GAAP Operating Margin"), each of which constitutes a non-GAAP financial measure. We use these 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 Operating Income excludes certain non-cash or non-recurring items, including stock-based compensation expense, amortization of stock-based compensation capitalized in software development costs, and amortization of purchased intangibles, as described below. Non-GAAP Operating Margin is calculated as Non-GAAP Operating Income 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.
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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 income from operations, the most comparable GAAP measure, to Non-GAAP Operating Income, and operating margin, the most comparable GAAP measure, to Non-GAAP Operating Margin is provided in the table below. We encourage investors to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.
Reconciliation from GAAP to Non-GAAP Results
(in thousands except percentages)
Year Ended December 31,
2025
2024
Income from operations:
GAAP income from operations
$
152,917
$
135,644
Stock-based compensation expense
70,790
60,327
Amortization of stock-based compensation capitalized in software development costs
963
1,754
Amortization of purchased intangibles
10,231
2,100
Non-GAAP income from operations
$
234,901
$
199,825
Operating margin:
GAAP operating margin
16.1
%
17.1
%
Stock-based compensation expense as a percentage of revenue
7.4
7.6
Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue
0.1
0.2
Amortization of purchased intangibles as a percentage of revenue
1.1
0.3
Non-GAAP operating margin
24.7
%
25.2
%
Critical Accounting Policies and Estimates
Our Consolidated Financial Statements and the related notes included elsewhere in this Annual Report are prepared in accordance with GAAP. The preparation of our Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
We believe that the following critical accounting policies involve a greater degree of judgment or complexity than our other accounting policies. Accordingly, these are the policies we believe are the most critical to a full understanding and evaluation of our Consolidated Financial Statements. For additional information, refer to Note 2, Summary of Significant Accounting Policies, of our Consolidated Financial Statements of this Annual Report.
Revenue Recognition
Many of our contracts with customers contain multiple performance obligations. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require judgment. We account for individual performance obligations separately if they are distinct. The performance obligations for these contracts include access and use of our Subscription Services, implementation services, and customer support. Access and use of our Subscription Services and implementation services are considered distinct.
The transaction price is allocated to each performance obligation on a relative standalone selling price basis. Judgment is required to determine the standalone selling price for each distinct performance obligation. We typically have more than one standalone selling price for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we determine the standalone selling price based on our overall pricing objectives, taking into consideration customer demographics and other factors. Fees are fixed based on rates specified in the subscription agreements, which do not provide for any refunds or adjustments.
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Income Taxes
We recognize deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in our Consolidated Statements of Operations in the period that includes the enactment date. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In evaluating the need for a valuation allowance at each reporting period, we consider the weighting of all available positive and negative evidence, which includes, among other things, the nature, frequency and severity of current and cumulative taxable income or losses, future projections of profitability, timing of the future reversal of existing temporary differences, and the duration of statutory carryforward periods. In assessing all available evidence, we determined that there was sufficient positive evidence to overcome the negative evidence, including our past and current financial results, growth demonstrated in our top-line performance, as well as projected profitability. Accordingly, we determined it is more likely than not that the deferred tax assets will be realized and we released our valuation allowance at December 31, 2024.
Judgment is required to measure the amount of tax benefits that can be recognized in connection with uncertain tax positions. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We recognize interest and penalties accrued with respect to uncertain tax positions, if any, in our provision for income taxes in our Consolidated Statements of Operations.
Business Combinations
The results of a business acquired in a business combination are included in our Consolidated Financial Statements from the date of acquisition. We allocate the purchase price, including the fair value of contingent consideration, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill.
Determining the fair value of assets acquired and liabilities assumed requires management to make significant judgments and estimates, including the selection of valuation methodologies and assumptions. Critical estimates used in valuing certain intangible assets include, but are not limited to, development costs, the time required to recreate the assets and profit margin a market participant would receive, and rate of return. These estimates are based on information obtained from the management of the acquired companies, our assessment of the information, and historical experience. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period of up to one year from the acquisition date, we may record adjustments to the preliminary fair value of the assets acquired and liabilities assumed with a corresponding offset to goodwill for these business combinations.
Acquisition-related transaction costs are not included as a component of consideration transferred, but are accounted for as an operating expense in the period in which the costs are incurred.
The allocation of the purchase price in a business combination requires management to make significant estimates in determining the fair value of acquired assets and assumed liabilities, especially with respect to intangible assets. The excess of the purchase price in a business combination over the fair value of these tangible and intangible assets acquired and liabilities assumed is recorded as goodwill. Critical estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows, discount rates, revenue growth rates, the time and expense to recreate the assets and profit margin a market participant would receive. These estimates are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. We evaluate these estimates and assumptions as new information is obtained and may record adjustments to the fair value of the tangible and intangible assets acquired and liabilities assumed but not later than one year from the acquisition date.
Recent Accounting Pronouncements
For information regarding recent accounting pronouncements, refer to Note 2, Summary of Significant Accounting Policies of our Consolidated Financial Statements of this Annual Report.
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