AppFolio, Inc.
Q2 2020 Earnings Call Transcript

Published: 3 Aug 2020

[Operator:]

Good afternoon, ladies and gentlemen, and welcome to the AppFolio Inc. Announces Second Quarter 2020 Financial Results Conference Call. As a remainder, this call is being recorded. I would now like to turn the call over to your host, Ms. Erica Abrams. You may begin.

[Erica Abrams:]

Thank you. Good afternoon, ladies and gentlemen, and thank you for joining us today as we report AppFolio's second quarter 2020 financial results. With me on the call today are Jason Randall, AppFolio's President and CEO; and Ida Kane, AppFolio's Chief Financial Officer. This call is simultaneously being webcast on the Investor Relations section of our website at www.appfolioinc.com. Before we get started, I would like to call everyone's attention to our Safe Harbor policy. Please note that certain statements made on this - within the meaning of the federal securities laws that are subject to considerable risks and uncertainties. Actual results or performance may be materially different from any results, performance expressed or implied by the forward-looking statements. Forward-looking statements including any such statements referring to the potential effects or impacts of the COVID-19 pandemic on AppFolio's business may relate to future plans and financial conditions, results of operations, business forecasts and plans, strategic plans and objectives, product development plans, trends affecting our business and industry and the economy as a whole, capital needs and financing plans and various commitments and contingencies, including with respect to the outcome of legal proceedings or regulatory matters. Please see our filings with the SEC, including our Form 10-Q which was filed earlier today for greater detail about risks and uncertainty.

[Ida Kane:]

Thank you, Erica, and welcome to everyone joining us on the call today for AppFolio's second quarter of fiscal year 2020 financial results. Before I get started on the financial highlights for the quarter, I wanted to take a moment to thank our over 1,300 employees and their families for their professionalism and dedication during these difficult times. Our AppFolians have remained focused on developing innovative products and providing excellent services and support to our customers, and we are proud of their commitment to our business. We believe our people and culture are the heart of our success and the current environment has only amplified that belief. Turning to the numbers, we reported total revenue of $81 million during the second quarter, a 27% increase year-over-year. GAAP net income was $19.3 million or $0.54 per diluted share for the quarter, including an income tax benefit of $13.5 million, which is attributable to tax benefit associated with stock-based compensation expense and research and development tax credits that follow our forecasted pre-tax results for the year. Also included in our second quarter results are $2.8 million in non-cash charges related to stock-based compensation. For those of you, who track non-GAAP results, our Form 10-Q was filed today and includes more details that you may find helpful in calculating non-GAAP results on your own. Second quarter revenue from core solutions grew 21% to $26.1 million primarily driven by a 17% growth in the average number of property management units under management, resulting from a growth in the average number of property management customers. Second quarter Value Plus services was $51.6 million, a 32% increase year-over-year, also driven primarily by the increase in property manager customers and majority of our Value Plus services revenue comes directly and indirectly from our customers use of our electronic payment services, tenant screening services and insurance services and screening services experienced increased demand during the most recent quarter as residents, property managers, owners and customers transacted more business online. We ended the second quarter with 15,011 real estate property manager customers, managing an aggregate of 4.9 million units in our portfolios compared to 13,737 customers and 4.23 million units under management reported one-year ago.

[Jason Randall:]

Thank you, Ida, and thanks to everyone for joining us today. In the second quarter of 2020, we continued on our mission to revolutionize vertical industry businesses by providing great software and service to our expanding customer base. I want to echo Ida's remarks regarding our employees professionalism and commitment. The COVID-19 pandemic and remote work environment have unquestionably added personal and professional challenges for many of us but our team has continued to lean in despite those challenges and we all appreciate their continued effort in that regard. With that said, we continue our focus on delivering long-term value via transformational technology and remain committed to our strategy of delivering rapid and consistent innovation and exceptional customer experiences while maintaining our strong team, our culture and trusted partner relationships. In our real estate vertical in the second quarter, we partnered with customers to provide education and peer networking opportunities, shifting our focus to hosting a variety of events and customer networking exchanges virtually rather than in person. Our commitment to innovation, we're helping our customers maintain an advantage in the areas of remote work capabilities and communication, and for our property manager customers, we are bringing key workflows such as leasing online.

[Operator:]

This concludes today's conference call. If you would like to hear replay of the call, please dial 1800-585-8367 or 404-537-3406. Again the replay number is 1800-585-8367 or 404-537-3406. You may now disconnect.

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