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Cloud Stocks: AppFolio Leverages AI for Product Enhancement

Posted on Thursday, Apr 2nd 2020

AppFolio (NASDAQ: APPF), a SaaS player operating in the real estate and legal industries, recently announced its fourth quarter results that surpassed market expectations. Like other stocks, AppFolio’s stock also fell to a 52-week low last month. But during the past couple weeks, the stock has been registering significant growth.

AppFolio’s Financials

For the fourth quarter, AppFolio’s revenues grew 33% to $67.4 million, ahead of the market’s estimates of $66.7 million. Net income grew from $2.65 million last year to $4.43 million. On an adjusted basis, net income was $0.12 per share, significantly ahead of the market’s forecast of $0.03 per share.

By segment, Core solutions revenue grew 22% over the year to $23.6 million driven by a 19% increase in property manager units under management and a 10% increase in the number of property manager customers. Value+ services revenue grew 37% to $39.6 million due to the increased usage of its electronic payments, screening, and insurance services. Other revenues came in at $4.1 million primarily through revenue generated from customer subscriptions for its stand-alone services.

Among key metrics, it ended the year with 14,385 real estate property manager customers, managing 4.64 million units in their portfolios, compared to 13,046 customers and 3.9 million units reported a year ago. Within the legal vertical, it closed the year with 10,971 customers, up from 10,279 a year ago. Its annual dollar-based net expansion was 118% for the property manager customers and 121% for law firm customers compared with 116% and 113%, respectively a year ago.

AppFolio ended the year with revenues of $256 million compared with $190 million a year ago. Net income grew from $20 million last year to $36.3 million.

It expects to end the current year with revenues of $312-$320 million compared with the market’s expectations of $323.79 million.

AppFolio’s Product Growth

AppFolio continued to expand its market reach through significant product enhancements. Within the real estate vertical, it improved the AppFolio Property Manager PLUS (APM PLUS) by adding capabilities to help drive business efficiency, mitigate risk, and provide business insights. The product now offers configurable workflows so that customers can gain more flexibility. For larger customers, the product offers automation to allow them to manage large dispersed teams with more complex property portfolios. It continues to add AI capabilities to its products. Recently, it released Smart Bill Entry, which leverages AI capabilities to free up invoice entry.

Within other product areas, it launched AppFolio Investment Management, a product that has been designed for real estate investment managers. Investment Management allows real estate investment managers to be able to streamline fundraising, reporting, and communication. It delivers enhanced transparency and personalized self-service experience. Recently, it has also improved reporting capabilities for its products by automatically calculating key performance metrics so that they can visualize the performance of their investments.

Its stock is currently trading at $107.60 with a market cap of $3.8 billion. It had touched a 52-week high of $118 in February this year. The stock market turbulence resulted in the stock falling to a 52-week low of $78.30 last month.

This segment is a part in the series : Cloud Stocks


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