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Cloud Stocks: AppFolio Improves Offerings for Current Conditions

Posted on Wednesday, Jul 1st 2020

According to a report published by Technavio earlier this year, the real estate software market is estimated to grow 8% in 2020. The recent global economic crisis would have altered this forecast. AppFolio (NASDAQ: APPF), a SaaS player in the real estate industry, recently announced its quarterly results that failed to impress the analysts.

AppFolio’s Financials

AppFolio’s Q1 revenues grew 27% over the year to $72.5 million, ahead of the market’s estimates of $66.7 million. Net income fell 85% to $2 million. On an adjusted basis, net income was $0.06 per share, falling short of the market’s forecast of $0.08 per share.

Revenue from core solutions in the quarter grew 20% to $24.9 million. The quarter’s Value Plus services revenue grew 31% to $44.1 million driven by 18% increase in property manager units under management and 10% increase in the number of property manager customers it serves.

AppFolio has been impacted by the Covid-19 crisis. During the first quarter that ended in March this year, it experienced variability, both positive and negative demand for certain Value Plus services as government restrictions were enforced in the US. It expects demand variability for its products and services to continue with the crisis and is not entirely sure if those impacts will be overall positive or negative. As a result, the company withdrew its earlier provided outlook for the year.

Analysts expect AppFolio to end the second quarter with $80.02 million in revenues with an EPS of $0.13 and to end the year with $319.78 million in revenues with an EPS of $0.47.

AppFolio’s Product Growth

AppFolio is leveraging AI and remote management services to ensure it stays the service of choice for its customers. It recently expanded the functionality of AppFolio AI Leasing Assistant Lisa so that it now allows virtual showings and provides end-to-end AI powered virtual leasing experience. With global lockdown conditions in place and people concerned about visiting new places, Lisa allows customers to maintain their leasing operations by hosting live video walkthroughs with prospective residents. Real-estate owners can show available units and sign new leases without any in-person contact. Lessors can also leverage the benefit of AppFolio Property Manager PLUS that allows residents to make payments and submit work orders online while communicating remotely.

It also released enhanced communication tools that allow property owners to post custom announcements across AppFolio resident, homeowner, and owner portals. It also added functionality to the maintenance workflow so that property managers can post important safety policies. With regards to the payment services, AppFolio improved the flexibility of its online payment capabilities by adding abilities to waive late fees and provide and track payment plans for renters.

For customers who manage community association portfolios, its solution allows association manager and homeowners with access to in-app messaging so that they can stay connected throughout a project on a single platform. This streamlines communication over a single portal.

Communication tools have also been improved within the Investment Management offering. Customers now have the ability to deliver portfolio visibility for their investors. During the quarter, it released improvements to its online fund raising flow, which now shows a deal page that can be shared via the AppFolio Investor portal. It improved its electronic document signing capabilities and simplified the Investor Portal activation and login flow to allow for easier document uploads and reporting capabilities.

Its stock is currently trading at $157.84 with a market cap of $5.5 billion. It had touched a 52-week high of $180.56 last month. The stock has recovered from the 52-week low of $81.01 that it had fallen to in March this year due to the market turbulence.

This segment is a part in the series : Cloud Stocks


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