Key Highlights

  • Third-quarter 2026 Revenue was $295.7 million, up 19 per cent from $249.4 million a year earlier.
  • Full-year revenue guidance was raised to between $1.122 billion and $1.127 billion.
  • Units under management reached 9.8 million, up 8 per cent year on year.

The latest development

AppFolio (NASDAQ:APPF), the provider of cloud software for the property management industry, reported third-quarter 2026 results on 22 October 2026. Revenue for the quarter ended 30 September 2026 was $295.7 million, up 19 per cent from $249.4 million a year earlier.

The company also raised its full-year revenue guidance to between $1.122 billion and $1.127 billion. Guidance is management's expectation rather than a reported outcome, and it remains subject to execution and market conditions.

Profitability and cash generation

Net income rose to $46.0 million from $33.6 million, while Diluted Earnings per Share on a GAAP basis were $1.29 against $0.93 in the prior-year quarter. On a non-GAAP basis, diluted earnings per share were $1.82 compared with $1.31.

GAAP Operating Income reached $57.4 million, equal to 19.4 per cent of revenue, compared with $35.0 million, or 14.1 per cent, a year before. Non-GAAP operating income was $80.7 million, or 27.3 per cent of revenue, up from 23.5 per cent.

Operating cash flow was $96.8 million, or 32.7 per cent of revenue, compared with $86.0 million, or 34.5 per cent, in the same quarter of 2025. Cash generation therefore grew in absolute terms even though the Margin on that measure slipped slightly.

Operating scale and balance sheet

Units under management, a key Volume measure for the business, reached 9.8 million, an increase of 8 per cent year on year. Revenue growth of 19 per cent against unit growth of 8 per cent indicates that revenue per unit is rising, which the company's product and services mix would be expected to influence.

At 30 September 2026, cash and cash equivalents stood at $258.5 million, compared with $107.0 million at the end of 2025. The company also held $48.7 million of current and $87.7 million of long-term Investment securities.

AppFolio repurchased $4.2 million of shares during the third quarter and $129.2 million in the first nine months of 2026. Buybacks of that scale can influence per-share figures, and guidance assumes roughly 36 million diluted weighted average shares.

What to watch

The first item is the full-year outlook. Management now expects a non-GAAP Operating Margin of 26.5 per cent to 27.5 per cent of revenue, so fourth-quarter delivery against that range will show how much of the third-quarter margin of 27.3 per cent is sustained.

The second is unit growth. If units under management continue to expand at a high single-digit rate while revenue grows faster, the pricing and product-mix story remains intact; a narrowing gap would Warrant closer attention.

The third is Capital allocation. Third-quarter repurchases were far smaller than the year-to-date total, so the pace of future buybacks relative to the cash balance will be worth monitoring in the next quarterly filing.