AppFolio, Inc. Class A 2026 Q3 Earnings Call

Thank you. Good afternoon, everyone. I'm Lori Barker, investor relations for AppFolio, and we thank you for joining us today as we report AppFolio's third quarter 2026 financial results. With me on the call today are Shane Trigg, AppFolio's Chairman and CEO, and Tim Eaton, AppFolio's CFO. This call is being simultaneously webcast on the investor relations section of our website at appfolioinc.com. Additionally, an audio replay of the call and a transcript of the prepared comments will be posted to the website. Before we get started, I would like to remind everyone of AppFolio's safe harbor policy. Comments made during this conference call and webcast contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties.

Any statement that refers to expectations, projections, or other characterizations of future events, including financial projections, future market conditions, business performance, or future product enhancements or development, is a forward-looking statement. AppFolio's actual future results could differ materially from those expressed in such forward-looking statements for any reason, including those issued in our SEC filings. AppFolio assumes no obligation to update any such forward-looking statements except as required by law. For greater detail about risks and uncertainties, please see our SEC filings, including our Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on February 5, 2026. In addition, this call includes non-GAAP financial measures. Reconciliation of these non-GAAP financial measures with the most directly comparable GAAP measures are included in our third quarter earnings release posted on the investor relations section of our website.

With that, I turn the call over to Shane Trigg.

Shane, please go ahead. Thanks, Lori, and welcome to everyone joining us today.

Q3 was another quarter of strong, consistent performance for AppFolio. Revenue reached $296 million, a 19% year-over-year increase. non-GAAP operating income was 27.3% of revenue, and GAAP operating income was 19.4% of revenue. Units on platform grew to 9.8 million. Along with our strong, consistent financial results, one of the biggest highlights this quarter was FUTURE, our annual industry event, where we hosted 2,500 real estate operators and innovators united by our shared ambition to build a future of winning. Across four days, 130 sessions, 19 expert-led performance labs, and our biggest ever Explore Floor, our marketplace spanning the AppFolio performance platform and the partners across our AppFolio Stack ecosystem, attendees left with tangible ways to deliver performance for their residents, investors, teams, and communities.

I felt tremendous pride and gratitude watching 60-plus of our customers taking the stage as FUTURE speakers, educating their peers on the ways they've achieved meaningful performance in their own businesses. It was truly a privilege to share our vision with the industry and to watch our customers shape it alongside us. The key theme at FUTURE this year was that the future won't be won by organizations that simply keep up. It will be won by organizations that continuously level up. As one attendee told us, quote, "We're never done striving to get better, because the moment we think we're the best is the moment we get left behind." End quote. Achieving a sustained competitive advantage requires two things. First, interconnected systems built with performance in mind. A system of record that securely stores data while reflecting the operator's business.

A system of action where AI does the work with and for them, and a system of growth that turns exceptional experiences for their residents and owners into growth for their business. Second is behaviors. What a team does with the capacity the systems create. Applying judgment, building relationships, and anticipating rather than reacting. Meeting a resident's need before they ask and bringing an owner a plan, not a problem. Combine systems built for performance with these behaviors, and customers achieve real performance. That is real estate performance management or what we call RPM. Eucalyptus Real Estate shows how rapid transformation is possible when an operator picks a platform that has the right systems built in and makes the right behaviors easy to adopt. This family-owned operator manages nearly 14,000 units and 106 separate tax entities across Oklahoma City, Wichita, and Topeka.

Before switching to AppFolio in 2025, they ran their three cities independently on paper checks, paper work orders, scanned applications, and fax machines. Less than a year later, 85% of receivables are paid online. Leasing runs digitally from application to signature. A single automated flow delivers move-in disclosures consistently across every property, and 53% of maintenance requests now resolve without a work order ever being created.

As Megan McGinnis, President of Eucalyptus, put it, "We didn't move to AppFolio just to change tools. We moved to change how we run this business. Three cities now work the same way on the same platform with one source of truth." Customers like Eucalyptus show how real estate performance management works in practice, combining systems and behaviors to realize performance. Our goal is to enable this type of transformation for any operator in our industry, because when customers reach new levels of performance, they start asking, "What can we do now that we couldn't do before?" They get better experiences for residents and owners, more value for their business, and new versions of what their business can become. Empowering our customers to find those answers is why we differentiate to win, the first of our three strategic pillars.

Our performance platform is purpose-built for real estate performance management because customers operate on a single system of record that understands the rules of real estate, their business, and permissions. Every workflow, insight, and action compounds on the same data rather than fragmenting across disconnected point solutions. While operators outside our platform can buy isolated AI features, a point solution cannot provide the connected foundation, governance, and economic alignment that allows performance to compound month after month, creating an engine for competitive advantage. Within our system of record, expanded entity accounting capabilities are designed to serve multi-entity operators, bringing corporate, portfolio, and credit card accounting into the same data model for a more unified accounting experience.

At the same time, we're bringing more of our customers' financial data, balances, statements, transfers, and controls directly into AppFolio through Stack Banking partnerships with Enterprise Bank & Trust and our featured banking partner, Column. Through our Column partnership, bank data flows straight into AppFolio. Transactions are matched automatically as they come in, not just at month-end, so teams only touch the exceptions. That's what makes a truly automated close possible. Max Property Management, an AppFolio customer managing 3,500 units across Utah, Idaho, and Arizona, is seeing the benefit. As Corey Bohner, Principal Broker and Owner, put it, "This integration with Column brings our banking and property operations into a more connected process. It gives our accounting team cleaner information and greater confidence in the numbers so we can scale while keeping operations smooth for our team.

In the system of action, which includes our AI suite of Realm-X, Performers, Flows, and the connector for Claude, the new Realm-X remembers context across conversations, draws on a knowledge base where customers store their own documents and policies, and builds custom workflows and dashboards directly from a prompt. With AI-native capabilities available across every plan, every customer can move beyond task efficiency to real performance. Realm-X runs alongside a growing suite of Performers, agents that each work from the same platform, data, and governance. Maintenance Performer responds to resident requests in seconds, including after hours. Beta customers reported that Resident Messenger Performer resolved over 30% of conversations without escalation, and Accounting Performer saved an average of 17 hours per month, and Leasing Performer boosts showings up to 35%. A customer transforming their leasing operations through the Leasing Performer is Merge Urban Development, a 750-unit portfolio in Cedar Falls, Iowa.

Since moving off the standalone tool and onto Leasing Performer, Merge has converted automated prospect engagement into move-ins, averaging nearly 45 leases a month with a pipeline that is the largest it has ever been. As Joy Brenner, co-founder and operations partner, put it, quote, "AppFolio has moved us from reactive to proactive." End quote. We are extending the Performer suite with Receptionist Performer unveiled at FUTURE, which will answer incoming calls, handle simple questions on the spot, and route everything else to the right Performer or person at any hour. Our connector for Claude is now available to every customer, making sure that every agent action, whether it runs through a Performer or a third-party model like Claude, operates within the permissions and guardrails defined within AppFolio. With full visibility into their business and key workflows completed on their behalf, operators can turn capacity into opportunity.