10-Q · April 23, 2026
AppFolio reported Q1 2026 revenue of $262,214,000, up 20% year‑over‑year, driven by Value Added Services and an 8% increase in units under management to 9.5 million. GAAP operating income expanded to $50,748,000 (19.4%…
Earnings analysis · 10-Q
APPF earnings analysis
Filed October 22, 2026 · Our reading of the company's report
The latest report
AppFolio delivered strong Q3 results, with revenue of $295.691 million up 19% year over year, GAAP operating margin expanding to 19.4% from 14.1%, and GAAP diluted EPS of $1.29. Value Added Services and an 8% increase…
Read full summary
AppFolio delivered strong Q3 results, with revenue of $295.691 million up 19% year over year, GAAP operating margin expanding to 19.4% from 14.1%, and GAAP diluted EPS of $1.29. Value Added Services and an 8% increase in units under management drove growth, while nine-month operating cash flow improved to $218.668 million and liquidity remained strong at $307.3 million. Higher tax expense, third-party service costs, and substantial stock-based compensation remain the primary offsets, but the overall operating trend is positive.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.29
What stood out
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Revenue growth and modest beat
Revenue was $295.691 million, up 19% year over year and approximately 5.2% sequentially from $281 million in Q2 2026. Revenue modestly exceeded the $294.338 million consensus estimate.
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GAAP profitability improved
GAAP diluted EPS was $1.29 versus $1.17 in Q2 2026 and $0.93 in Q3 2025. GAAP operating margin expanded to 19.4% from 18.8% sequentially and 14.1% year over year.
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Gross margin expanded
Gross margin was approximately 64.3%, calculated from $295.691 million of revenue and $105.580 million of cost of revenue, versus 63.5% in Q2 2026 and 63.3% in Q3 2025.
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Value Added Services led growth
Value Added Services grew 21% to $231.948 million and drove most of the revenue increase, supported by higher usage of payments, tenant screening, risk mitigation, and resident services.
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Customer and unit expansion
Property management units under management increased 8% year over year to 9.8 million, while property management customers rose to 23,121 from 21,759 year over year.
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Strong liquidity and cash generation
Nine-month operating cash flow increased to $218.668 million from $177.115 million. The company held $307.3 million of cash, cash equivalents, and investment securities and had no borrowings under its $150.0 million revolving credit facility.
What to watch
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High stock-based compensation
Stock-based compensation expense was $20.600 million in Q3, equal to 7.0% of revenue, and was excluded from non-GAAP operating income. This creates a material gap between GAAP operating margin of 19.4% and non-GAAP operating margin of 27.3%.
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Higher effective tax rate
The effective tax rate increased to 22.9% from 8.4% year over year, while tax expense rose to $13.636 million from $3.086 million. Management attributed the increase primarily to higher non-deductible officers' compensation and lower excess tax benefits.
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Third-party service cost pressure
Cost of revenue increased 15% year over year to $105.580 million, primarily due to $13.4 million of higher third-party service-provider costs tied to increased Value Added Services usage. Greater transaction usage could pressure margins if these costs grow faster than revenue.
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Elevated go-to-market spending
Sales and marketing expense rose 35% year over year to $48.623 million, including a $7.6 million increase in events, advertising, and promotion expense. Execution risk remains as the company makes targeted go-to-market investments.
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No material risk-factor changes
The filing states that there were no material changes to the risk factors disclosed in the February 5, 2026 Annual Report. However, the company had $120.8 million remaining under its repurchase authorization after $125.0 million of first-quarter repurchases and $4.2 million in third-quarter repurchases.
Management's outlook
The 10-Q provides no explicit numerical EPS or revenue guidance range. Management expects full-year 2026 revenue to increase versus 2025, with cost of revenue, sales and marketing, and general and administrative expense each expected to remain relatively flat as a percentage of revenue.
Earlier filings 4
10-Q · October 30, 2025
AppFolio reported Q3 (ended September 30, 2025) revenue of $249,353,000, up $43,620,000 (+21.2%) versus Q3 2024 and up $13,353,000 (+5.7%) versus the prior quarter. Operating margin compressed to 14.1% (income from…
10-Q · April 24, 2025
AppFolio reported Q1 revenue of $217,702,000 (up $30,272,000 vs. Q1 2024) with operating income of $33,783,000 and diluted EPS of $0.86. Gross margin compressed to 63.5% and operating margin to 15.5% versus the…
10-Q · October 25, 2024
AppFolio reported strong Q3 results with revenue of $205,733,000 (up $40,293,000 YoY from $165,440,000) and operating income of $42,568,000 (vs an operating loss of $67,000 a year ago). Diluted EPS was $0.90 for the…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.