AppFolio (APPF) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 34% year-over-year to $197.4 million, driven by strong adoption of AI-driven and value-added services, payment, tenant screening, and risk mitigation offerings.

• Net income for Q2 2024 was $29.7 million, or $0.81 per diluted share, reversing a net loss of $18.9 million in Q2 2023.

• Units under management increased 9% year-over-year to 8.4 million from 20,167 customers.

• Operational efficiency improved through innovation, headcount management, and expanded partner integrations.

• The company is scaling its platform for both large and small property management customers, focusing on upmarket growth and product differentiation.

Financial highlights

• Q2 2024 revenue was $197.4 million, up from $147.1 million in Q2 2023; six-month revenue reached $384.8 million.

• Non-GAAP operating margin expanded to 26% from 6.4% last year; GAAP operating income was $36.0 million (18.3% margin).

• Non-GAAP free cash flow margin rose to 25% from 4.2%; non-GAAP net income was $41.2 million, or $1.12 per diluted share.

• Core solutions revenue was $44 million, up 14% year-over-year; Value Added Services revenue grew 43% to $152 million.

• Cash, cash equivalents, and investment securities totaled $281.3 million as of June 30, 2024.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $772 million–$778 million, implying 25% annual growth at the midpoint.

• Full-year non-GAAP operating margin guidance increased to 23.5%–24.5%; free cash flow margin guidance raised to 22%–24%.

• Guidance reflects continued customer upgrades, increased adoption of value-added services, and a modest increase in card usage.

• Diluted weighted average shares outstanding for the year expected to be approximately 37 million.

• Second half of 2024 expected to be slightly higher than the first half, with some margin impact from reduced card-based transaction fees.