AppFolio, Inc. Announces Third Quarter 2026 Financial Results
APPFOLIO INC (APPF) filed an SEC Form 8-K — Results of Operations and Financial Condition. AppFolio, Inc. Announces Third Quarter 2026 Financial Results Consistency Continues with 19% Revenue Growth and Expanding Profitability SANTA BARBARA, Calif., October 22, 2026 -- AppFolio, Inc. (NASDAQ: APPF) ("AppFolio" or the "Company"), a technology leader powering the future
How this was made
The 30-second read
Why it matters
The company demonstrated robust revenue growth and improved operating margins, prompting an upward revision of its full‑year revenue guidance.
Market read
The earnings beat and issued guidance are likely to drive short‑term buying interest in APPF.
What to watch
Potential headwinds from rising interest rates could affect property‑management demand.
Consistency Continues with 19% Revenue Growth and Expanding Profitability
Revenue grew 19% year-over-year to $296 million, GAAP operating income grew 64% to $57 million, and non-GAAP operating margin expanded to 27.3% from 23.5%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30GAAP | $295.7M | – | 19% |
| Revenue, nine months ended September 30GAAP | $839.0M | – | – |
| Total units under managementother | 9.8M | – | 8% |
| Cost of revenue (exclusive of depreciation and amortization), three months ended September 30GAAP | $105.6M | – | – |
| Cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue, three months ended September 30GAAP | 36 % | – | – |
| Cost of revenue (exclusive of depreciation and amortization), three months ended September 30non-GAAP | $104.3M | – | – |
| Cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue, three months ended September 30non-GAAP | 35 % | – | – |
| Sales and marketing, three months ended September 30GAAP | $48.62M | – | – |
| Sales and marketing, three months ended September 30non-GAAP | $45.04M | – | – |
| Research and product development, three months ended September 30GAAP | $53.13M | – | – |
| Research and product development, three months ended September 30non-GAAP | $44.29M | – | – |
| General and administrative, three months ended September 30GAAP | $25.95M | – | – |
| General and administrative, three months ended September 30non-GAAP | $19.09M | – | – |
| Depreciation and amortization, three months ended September 30GAAP | $5.00M | – | – |
| Depreciation and amortization, three months ended September 30non-GAAP | $2.29M | – | – |
| Total costs and operating expenses, three months ended September 30GAAP | $238.3M | – | – |
| Income from operations, three months ended September 30GAAP | $57.41M | – | 64% |
| Operating margin, three months ended September 30GAAP | 19.4 % | – | – |
| Income from operations, three months ended September 30non-GAAP | $80.72M | – | 38% |
| Operating margin, three months ended September 30non-GAAP | 27.3 % | – | – |
| Income before provision for income taxes, three months ended September 30GAAP | $59.61M | – | – |
| Provision for income taxes, three months ended September 30GAAP | $13.64M | – | – |
| Net income, three months ended September 30GAAP | $45.98M | – | – |
| Net income, three months ended September 30non-GAAP | $64.68M | – | – |
| Net income per common share, basic, three months ended September 30GAAP | $1.30 | – | – |
| Net income per share, basic, three months ended September 30non-GAAP | $1.83 | – | – |
| Net income per common share, diluted, three months ended September 30GAAP | $1.29 | – | – |
| Net income per share, diluted, three months ended September 30non-GAAP | $1.82 | – | – |
| Weighted average common shares outstanding, diluted, three months ended September 30GAAP | 35.58M | – | – |
| Net cash provided by operating activities, three months ended September 30GAAP | $96.77M | – | – |
| Net cash provided by operating activities as a percentage of revenue, three months ended September 30GAAP | 32.7% | – | – |
| Net cash provided by operating activities, nine months ended September 30GAAP | $218.7M | – | – |
| Net cash (used in) provided by investing activities, three months ended September 30GAAP | −$45.31M | – | – |
| Net cash used in financing activities, three months ended September 30GAAP | −$10.32M | – | – |
| Cash and cash equivalents, September 30, 2026GAAP | $258.5M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Subscription Services, three months ended September 30Not stated | $61.52M | – | – |
| Value Added Services, three months ended September 30Not stated | $231.9M | – | – |
| Other, three months ended September 30Not stated | $2.22M | – | – |
| Subscription Services, nine months ended September 30Not stated | $179.5M | – | – |
| Value Added Services, nine months ended September 30Not stated | $652.8M | – | – |
| Other, nine months ended September 30Not stated | $6.70M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fiscal year 2026 outlook
- Revenue$1.122 - $1.127 billion
- NoteFull year non-GAAP operating margin range as a percentage of revenue: 26.5% - 27.5%.
- NoteDiluted weighted average shares outstanding are expected to be approximately 36 million for the full year.
Capital returns
- Purchase of common stock: $(4,180) (in thousands) for the three months ended September 30, 2026, compared to $— for the three months ended September 30, 2025.
- Purchase of common stock: $(129,190) (in thousands) for the nine months ended September 30, 2026, compared to $(145,723) (in thousands) for the nine months ended September 30, 2025.
What drove it
- Revenue grew 19% year-over-year to $296 million.
- Total units under management grew 8% year-over-year to 9.8 million.
- The Company said new and existing customers continue to adopt its performance platform.
- Value Added Services generated $231,948 (in thousands) of third-quarter revenue.
Concerns
- Net cash provided by operating activities as a percentage of revenue was 32.7%, compared to 34.5% in Q3 2025.
- Sales and marketing was $48,623 (in thousands), compared to $35,912 (in thousands) in Q3 2025.
- The Company cannot provide GAAP equivalent guidance for non-GAAP operating margin because certain items, including stock-based compensation expense, are uncertain, out of its control, or cannot be reasonably predicted.
What to watch
- Execution against fiscal year 2026 revenue guidance of $1.122 - $1.127 billion.
- Delivery against the fiscal year 2026 non-GAAP operating margin range of 26.5% - 27.5%.
- The pace of total units under management growth following 8% year-over-year growth to 9.8 million.
- Operating cash flow conversion following 32.7% of revenue in Q3 2026.
Balance sheet and cash flow
- Cash and cash equivalents: $258,536 (in thousands) at September 30, 2026, compared to $106,967 (in thousands) at December 31, 2025.
- Investment securities—current: $48,740 (in thousands) at September 30, 2026, compared to $144,256 (in thousands) at December 31, 2025.
- Long-term investments: $87,668 (in thousands) at September 30, 2026, compared to $77,033 (in thousands) at December 31, 2025.
- Total assets: $715,671 (in thousands) at September 30, 2026, compared to $688,967 (in thousands) at December 31, 2025.
- Total liabilities: $133,157 (in thousands) at September 30, 2026, compared to $146,388 (in thousands) at December 31, 2025.
- Net increase in cash, cash equivalents and restricted cash: $41,135 (in thousands) for the three months ended September 30, 2026, compared to $2,615 (in thousands) for the three months ended September 30, 2025.
- Purchases of available-for-sale investments: $(46,195) (in thousands) for the three months ended September 30, 2026, compared to $(102,541) (in thousands) for the three months ended September 30, 2025.
Analysis
AppFolio reported third-quarter revenue of $295,691 (in thousands), compared with $249,353 (in thousands) in the prior-year quarter. The release described this as 19% year-over-year growth, while total units under management grew 8% year-over-year to 9.8 million. Value Added Services was the largest reported revenue category at $231,948 (in thousands), followed by Subscription Services at $61,525 (in thousands).
Profitability expanded materially. GAAP income from operations was $57,411 (in thousands), or 19.4% operating margin, compared with $35,046 (in thousands), or 14.1%. Non-GAAP income from operations was $80,722 (in thousands), or 27.3% operating margin, compared with $58,638 (in thousands), or 23.5%. GAAP net income was $45,978 (in thousands), and diluted GAAP net income per share was $1.29. Non-GAAP diluted net income per share was $1.82.
The expense profile shows research and product development of $53,128 (in thousands), compared with $54,037 (in thousands), and general and administrative expense of $25,953 (in thousands), compared with $27,446 (in thousands). Sales and marketing was $48,623 (in thousands), compared with $35,912 (in thousands). Total stock-based compensation expense was $20,600 (in thousands), compared with $20,793 (in thousands).
Cash generation remained substantial, with net cash provided by operating activities of $96,766 (in thousands), compared with $86,007 (in thousands), although operating cash flow as a percentage of revenue was 32.7%, compared with 34.5%. Cash and cash equivalents were $258,536 (in thousands) at September 30, 2026. The Company purchased $4,180 (in thousands) of common stock during the quarter and $129,190 (in thousands) during the first nine months of 2026.
For fiscal year 2026, AppFolio increased its revenue range to $1.122 - $1.127 billion and set a non-GAAP operating margin range of 26.5% - 27.5%. The guide calls for approximately 36 million diluted weighted average shares outstanding for the full year. The primary reported markers are continued platform adoption, units-under-management growth, the durability of Value Added Services revenue, and the ability to sustain the expanded operating-margin profile while cash flow as a percentage of revenue remains below the prior-year quarter.
Management, verbatim
Q3 reflects the strength and durability of our business, as new and existing customers continue to adopt our performance platform.
Shane Trigg, Chairman and CEO
The promise of Real Estate Performance Management is helping create a future of winning with our customers, turning performance into a competitive advantage that compounds over time.
Shane Trigg, Chairman and CEO
Not in the filing
stated, not guessed- Gross margin was not reported.
- Free cash flow was not reported.
- Debt was not reported.
- Dividends were not reported.
- Prior-quarter comparisons were not reported for the presented operating metrics.
- Prior fiscal year guidance was not provided, so no comparison of actual results with prior guidance is available.
- GAAP equivalent guidance for non-GAAP operating margin was not provided.
- Effective GAAP tax rate was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
AppFolio, a cloud‑based real‑estate software provider, released its Q3 2026 results via an SEC Form 8‑K.
Ticker impact
issued guidance showing revenue grew 19% YoY to $296M and issued full-year revenue outlook to $1.122‑$1.127B
likely upward pressure as investors price in higher growth and issued outlook
The earnings beat and issued guidance signal improved profitability, which typically supports a price rally in the near term.
Market effects
Strong performance may boost sentiment in the real‑estate software sector.
Positive for U.S. tech earnings landscape.
Limited to investors tracking SaaS and property‑tech stocks.
Counterpoint
If the raised outlook is already priced in, the stock could face a short‑term pullback.
Key entities
- ExecutiveShane Trigg
Chairman and CEO of AppFolio who commented on the results.
