AppFolio (APPF) Reports Q4 Earnings, Revenues Beat Estimates

AppFolio, Inc. (NASDAQ:APPF) reported fourth-quarter 2017 adjusted earnings of 12 cents per share as compared with in-line earnings reported in the year-ago quarter. On a GAAP basis, the company reported earnings of 7 cents per share. The Zacks Consensus Estimate is pegged at 9 cents per share.

Notably, Appfolio shares have gained 81.7% year over year, substantially outperforming the 31.6% rally of the industry it belongs to.

Quarter Details

Revenues surged 35% year over year to $37.9 million and also beat the Zacks Consensus estimate of $35 million. Core solution revenue came in at $15.5 million during the quarter, up 27% year over year. The increase was primarily driven by increase in the number of property manager customers (up 17%) and 21% higher property manager units under management.

The company ended the quarter with roughly 11,700 property managers, up from approximately 10,000 customers in the year-ago period. Legal customers count grew 15% year over year and came in at 9,350.

Notably, the company upgraded product suite during the fourth quarter with enhancements including the likes of AppFolio Renters Insurance, a new Value+ Service, and same day ACH, an addition to the existing Electronic Payments Value+ Platform. During the quarter, Value + services revenue was $20.8 million, up 42% year over year.

Total cost and operating expenses for the quarter increased 21% year over year and came in at $35.5 million. The increase can primarily be attributed to higher revenues and increase in headcount.

Operating income during the quarter came in at $2.4 million against an operating loss of $1.3 million reported in the year-ago quarter.

The company ended the quarter with cash and short-term investments of $45.9 million. Operating cash flow was $7.8 million during the quarter.

2017 at a Glance

GAAP net income was 28 cents per share, compared with a loss of 25 cents per share delivered in 2016. Revenues increased 36% to $143.8 million for full year 2017.

Guidance

For 2018, the company forecasts revenues between $179 million and $182 million, representing year-over-year growth of 26% at the mid-point of the range. The Zacks Consensus Estimate is pegged at $180.9 million.

Zacks Rank and Stocks to Consider

AppFolio has a Zacks Rank #4 (Sell).

Paycom Software (NYSE:PAYC) , Facebook (NASDAQ:FB) and The Trade Desk (NASDAQ:TTD) are some better-ranked stocks worth considering in the broader technology sector. While Paycom sports a Zacks Rank #1 (Strong Buy), Facebook and The Trade Desk, both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Paycom, Facebook and The Trade Desk are currently pegged at 25.75%, 26.51% and 25%, respectively.

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