AppFolio (APPF) 27 Apr 232023 Q1 Earnings call transcript

Good afternoon. Thank you for standing by, and welcome to AppFolio, Inc.'s conference call. Please be advised that today's conference is being recorded, and a replay will be available on AppFolio's Investor Relations website. I would now like to hand the conference over to Lori Barker, Investor Relations.

Thank you. everyone. afternoon, Good Investor Barker, AppFolio. I'm Relations Lori for AppFolio's I'd as we to me AppFolio's the Shane Chief you Sien and XXXX thank today us on Trigg, are today joining Financial for call and report Goon, Results. With CEO; Fay And Financial like President AppFolio's Officer. Quarter First webcast the Relations is of section call This on our being simultaneously Investor website www.appfolioinc.com. at

forward-looking or policy. the materially call statements started, development remind filings. AppFolio of future product Securities everyone such as risks future safe required obligation listed are including such by expressed refers contain characterizations including harbor projections events, that to and meaning enhancements statements, I those conference to of to subject forward-looking except statement this update like could Comments or our within other would get differ during AppFolio's in conditions the is we Litigation actual from results of those any Before of made reason, law. the forward-looking in Reform to SEC financial statements projections, for webcast XXXX market forward-looking no statement. or expectations, uncertainties. Any AppFolio's Private assumes any future and Act and

please see XXXX. Form For greater about ended SEC February X, SEC which the on risks and for was filings, including XXXX, detail our the XX, our uncertainties, XX-K December year fiscal filed with

Trigg. I with go the quarter comparable will that, on over includes call ahead. first this section Investor posted of directly non-GAAP financial financial please measures. Shane most call addition, the the our measures these measures In in release to of are Reconciliations GAAP turn Shane, earnings our included website. With Relations non-GAAP

as of first welcome, my everyone, earnings and to AppFolio. CEO Thanks, President XXXX and quarter Lori, and our call first

grew the bright present our helped who I'd grow take like to and organization of Before AppFolio we to that with from and demonstrate real quarter management have Today, AppFolio. Results employees a the for customers future AppFolio mission and past make million. right what him and product nearly I'm honored opportunity first gratitude to the platform. differentiated we're making platform revenue in We to grow years X that is strategy, and leading wish shareholders. I to moment on year-over-year our this customers vision acknowledge Jason I'm of say than million to X.X XX,XXX. that quarter guide we're and track. strategy progress to XXXX through total have company, property go-to-market AppFolians rapid this a now move $XXX on quarter a customers, the have and Randall's and I'm best. I goal business expanded first towards for XX% choose estate to more has inspires on with Jason very have all lead a pleased ago to our discussion into the to our confident the immense number accomplishments our units through joined

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their thrive. and with it are in deliver our Not and ways faster and like customer doesn't as bog team winning, increasing AppFolio's down enabling this including, our meet where much for They customers to platform. It's get support its and new customers' building AppFolian services to QX, more take time the reduced the our data on to onboarding dynamic a committed people. onboarding to on completed demonstrated manual We time company time aligning customers the focus customers productivity time from value time their to happen across our the our takes capture self-service process migration all value-added property we segments. Meeting innovation also customers unique AppFolio's integrating value we as that our customers adoption diverse of industry, opportunity team their days for of well. products pace an less on customers. By satisfaction. data and make higher the each running. or has easier. spends improved to In steps, We'll XX% the submissions AppFolio's exceeding the We've our managers remain is needs in and services ways which of now in time-intensive rapid of all Across win customers their drives doing we of One basic expand of helping on improvements continue can only due continue to invest value our a into we're sizes. that result tenant significantly and example inclusive lives up example, we customers' of automating SMB without platform needs to team of in that customers great data when our the owner, We'll important XX we less. value scale information. deliver is new by and that property bank, own, that import often and

an instrumental be announce on I'm Officer. Barat I'm pillars, to focusing has end, and our People the I'll customer to fueled AppFolio's in on promoted by that Rooted drive her new have growth. first Sien phase. our value I'm X-plus AppFolio, new customers our To financial inspired at close, people call in Elizabeth efficient values, and been opportunity turn lead by her during continue we our happy been Fay X incredible to next Chief excited now quarter strategic our deliver to see grow our detail role. To and for years more our that to has culture and this to building extraordinary in innovation. Elizabeth world-class results. over by to AppFolio into honored

I look forward welcome, next with Thank during to partnering and you, AppFolio's phase. Shane. you

million upmarket. At earlier. increase to as X% year-over-year first customers the represents in Core another the management million. Manager solutions APM year-over-year managed $XXX.X a PLUS, X.X by XX,XXX continued delivered our PLUS customers revenue customers revenue growth XX% particularly units quarter platforms, ending increase revenue property Property million with $XX.X and year we with a or management to from strong quarter, We in approximately first customers XX% management in on continued management XX% units quarter. move increase in property along units from We rate of are AppFolio was adoption compared driven and XX,XXX pleased property we QX, our growth strong property units. property million new end additional a and X.X This a management of of

to services, continued to value-added revenue $XX.X XX% grow For year-over-year in million. QX

the the previous growth quarters. rate was more moderate than While in payments few very business attractive,

of that in assumes rate indicated will call, guidance we XXXX last As the high for normalize adoption in quarter's XXXX. cards our payments

risk increased product rise well Also, under and property the saw as services continued called [indiscernible] management our and as utilization in units screening from mitigation effort management. of we adoption a

the X.X% rate. quarter over the at attrition and X,XXX XXXX to Headcount Turning to X% from slower quarter fourth due spending. first the to hiring first of a dipped grew quarter of XXXX. end Headcount normal of

non-GAAP In of cost of amortization the revenue. exclusive QX of depreciation and of XXXX was revenue and XX% XXXX,

of Our product increasing mix services to value-added due has shift revenue. to an continued mix

additional offset However, the efficiencies. related increase by providers largely was third-party headcount in service expenses for

non-GAAP expenses. operating to now other Turning

G&A, retaining with Our revenue to in XX% primarily QX a prior a expenses percentage quarter XX% revenue of year. areas to fell due On from operating from year. year the expenses percentage to basis, specialized R&D employee and XX% and percent increased XXXX. Sales as also increase in XXXX headcount particularly and costs due such in in to year-over-year as current and marketing, R&D first quarter first the talent, of of in a combined associated dollar in XX% from as sales QX from marketing growth. is R&D in to of the revenue decreased last XX% year the XX% this of expenses

we continue quarter, as to easier other some make move invest upmarket AI offering, and the and affordable that Stack, use. capabilities in also continued that to product us innovation During housing such in capabilities products expanding help to our our

a revenue quarter prior percentage first of to compared the of last year G&A as the the this first from decreased XXXX. improved Our in of first quarter non-GAAP XX% to to our compared expenses Overall, Free this of in the breakeven XX% a in cash in operating year to of a year quarter last X.X% flow approximately same year. quarter was X.X% X.X%. negative quarter margin

Turning sheet. cash with quarter equivalents securities. to first investment million We cash, the balance ended the and in $XXX

The full increasing XXXX revenue our $XXX year projected are We range rate $XXX XX%. to of guidance year to growth of million million. a full represents range midpoint this

in strategy. conviction our last we As strong have indicated growth year, we

for moderate outlook. are prudent XXXX. of that in Our guidance economic use in cards And the environment, this will payments we in our high assumes gradually growth being

the seasonality the slower. services with in screening a managers fourth an business seasonally higher our typical value-added property resulted the services, quarter. risk This of for Then demand in the mitigation quarter. quarter consistent and third our expansion quarter, experienced tenants increased, in in in in third years, our applications the tenant prior Regarding and second new is

We to expect XXXX. such seasonality to continue

We depreciation to a slightly percentage decrease revenue normalized of at value-added cost a rate. and growing a will XXXX revenue now more amortization as of exclusive due changing with revenue mix product services expected of

operating modest, the on increase of percent is projected Our reduce to basis. revenue and be efficiency and XXXX increase working expenses in are we headcount to

X% flow We increasing revenue. free our margin X% cash year of grow to revenue, full to non-GAAP to are to X.X% expectations projected and X.X% operating is of to

outstanding XX expected approximately shares average the are be year. for weighted million to full Basic

The cash in and customers, as to kickoff growth units first our for quarter expanded our free efficiencies new drive we residential all was added while looking a XXXX to flow. increase good

continued long-term position as this success. Operator, all and innovation well joining Our track real estate you today. strategy for call us. the record of for delivering Thank concludes

for the conclude Thank great conference. Everyone, you a program, you have This does participating and in now disconnect. today's day. may