AppFolio, Inc. (APPF) on Q1 2021 Results - Earnings Call Transcript
Operator: Good day and thank you for standing by. Welcome to the AppFolio, Inc. First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today’s conference is being recorded. I will now hand it over to the presenter, Ms. Erica Abrams. You may begin your conference. Erica Abrams: Thank you, Maria. Good afternoon, ladies and gentlemen, and thank you for joining us today as we report AppFolio's first quarter of 2021 financial results. With me on the call today are Jason Randall, AppFolio's President and CEO; and Ida Kane, AppFolio's Chief Financial Officer. This call is simultaneously being webcast on the Investor Relations section of our Web site at www.appfolioinc.com. Before we get started, I would like to remind everyone that AppFolio's Safe Harbor Policy. Comments made during this conference call and webcast contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subjects to risks and uncertainties. Any statement that refers to expectations, projections, or other characterizations of future events, including financial projections or future market conditions is a forward-looking statement. Ida Kane: Thank you, Erica, and welcome to everyone joining us for AppFolio’s first quarter of fiscal year 2021 financial results. For the quarter, we recorded total revenue of $78.9 million, GAAP net income was $479,000 or $0.01 per diluted share. This includes an income tax benefit of $5.5 million. Also included in GAAP net income is $2.8 million in non-cash charges related to stock-based compensation. As Erica mentioned, our Form 10-Q was filed today and includes more details on our results. On the call today, to enhance clarity and comparability, I’ll discuss the results of our continuing real estate business, excluding the impact of the MyCase operations for comparable periods historically. To that end, revenue from our continuing business for the first quarter of 2021 was $78.9 million, which represents an increase of 22% over revenue of $64.9 million over the same period in the prior-year. As you know, we provide innovative software services and data analytics to customers in the real estate industry. Our solutions are used by property managers whom we refer to as "Customers" in our public filing, and also by numerous other constituencies in the property management business ecosystem. These other constituencies include property owners, rental prospects, tenants, and service providers, whom we collectively refer to as "Users" in our public filings. We generate revenue from our customers and from these users, as our software and services aim to serve the full business ecosystem. Core solutions revenue derived from subscriptions to our customers in our continuing business in the first quarter of fiscal 2021 was $24.2 million, an increase of 18% over $20.5 million for the year-ago period. Value+ services revenue from our continuing business was $51.5 million in the first quarter of 2021, an increase of 26% over $40.9 million for the same year-ago period. The increase in revenue year-over-year was primarily attributed to a 10% growth in the average number of property manager customers using our software, and a 16% growth in the average number of units under management. Jason Randall: Thank you, Ida, and thanks to everyone for joining us today. I know the Board and everyone at AppFolio thanks Ida for her contributions to our company over the past six plus years. Through her leadership, we have built a strong finance and corporate development team that will continue its financial discipline and growth mindset together with a new CFO. We have initiated a search for her successor, and Ida and I will work together on a smooth transition. Ida, I will miss working with you, and wish you the best. I know you'll be cheering for AppFolio from the sidelines moving forward. Our first quarter results reflect our continued focus on providing great software and service to a growing customer base. It is our goal to deliver transformational technology and exceptional customer experiences, while nurturing a strong team culture. And we believe these are key pillars on our path to achieve long-term sustainable growth. Our customers continue to rely on our cloud-based software to power their businesses, especially if they adapt to the evolving needs and expectations of their own customers in business ecosystems. AppFolio Software and Solutions are designed to serve as our customers systems of record, system of engagement, and system of intelligence, helping them unlock more value in their business and keep up with the pace of digital transformation across the real estate industry. Operator: And this concludes today's conference call. If you would like to hear the replay of the call, you may do so by dialing 800-585-8367 or 416621464. And the international number is 416-621-4642. You may type in the conference ID 6585354. Again, if you'd like to hear the replay of the call, you may do so by dialing 800-585-8367 or 416621464 and the international number is 416-621-4642. You may type in the conference ID 6585354. Thank you for participating. You may now disconnect your lines. Have a great day. End of Q&A:
AppFolio upgraded to Overweight, Shares Jump 11%
Analysts at Stephens upgraded AppFolio (NASDAQ:APPF) from Equal Weight to Overweight and increased the price target from $184.00 to $212.00. As a result, shares surged more than 11% intra-day today.
The upgrade is based on the company's recent leadership changes and strategic moves aimed at improving profit margins. The analysts noted that the focus on profitability has been a missing piece in the AppFolio story, and they expect these changes to lead to a shift toward profitable growth.
The analysts predict that AppFolio has the potential to exceed expectations and raise the outlook for 2023, which could result in higher consensus estimates for this year and the next. Looking further ahead, the analysts see a positive trajectory for the company with above-average revenue growth compared to peers and a substantial expansion in profit margins, potentially reaching +680 basis points in 2024.
AppFolio Started With Overweight Rating at JPMorgan
JPMorgan initiated coverage on AppFolio (NASDAQ:APPF) with an Overweight rating and a $200 per share price target. The firm suggests that the stock offers an attractive opportunity in the US residential real estate sector.
The company operates solely in the US and serves over 19,000 customers managing more than 7.7 million units on its platform. With a profitable track record, AppFolio's past three-year revenue growth has been driven by an increase in platform units and an expansion of Average Revenue Per User (ARPU).
AppFolio Started With Overweight Rating at JPMorgan
JPMorgan initiated coverage on AppFolio (NASDAQ:APPF) with an Overweight rating and a $200 per share price target. The firm suggests that the stock offers an attractive opportunity in the US residential real estate sector.
The company operates solely in the US and serves over 19,000 customers managing more than 7.7 million units on its platform. With a profitable track record, AppFolio's past three-year revenue growth has been driven by an increase in platform units and an expansion of Average Revenue Per User (ARPU).
