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    APPF
    Earnings call· Mar 2026(Q1 FY26)

    APPFOLIO Q1 FY26 earnings call APPF

    Apr 23, 2026 Source

    Executive summary

    AppFolio Q1 FY26 — Strong Revenue Growth and AI Adoption

    AppFolio delivered a strong first quarter, driven by robust revenue growth and significant adoption of its AI-powered platform. The company's focus on Real Estate Performance Management (RPM) and AI-native architecture is enhancing customer value and operational efficiency. Management raised its full-year revenue and non-GAAP operating margin guidance, reflecting confidence in continued momentum and disciplined capital allocation.

    Highlights

    5

    • Revenue grew 20% year-over-year to $262 million, exceeding Q1 2025's 16% growth.

    • Non-GAAP operating income grew 35% to $72 million, expanding margin to 27.3% of revenue.

    • Units on platform increased 8% year-over-year to 9.5 million, with customer growth of 7% to 22,520.

    • AI actions are up 7x year-over-year, and performer adoption grew almost 500% quarter-over-quarter.

    • Full-year 2026 revenue guidance raised to $1.110 billion to $1.125 billion (17.5% midpoint growth).

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $1.110 billion to $1.125 billion
    high materiality
    High
    Full-year 2026 Revenue Growth Rate (midpoint)
    17.5%
    high materiality
    High
    Full-year 2026 Non-GAAP Operating Margin
    26% to 28%
    high materiality
    High
    Full-year 2026 Diluted Weighted Average Shares Outstanding
    approximately $36 million
    medium materiality
    High
    Full-year 2026 Cost of Revenue (exclusive of depreciation and amortization) as % of revenue
    relatively flat
    medium materiality
    Medium
    Full-year 2026 Operating Expenses as % of revenue
    decline modestly
    medium materiality
    Medium

    Operational metrics

    22
    Revenue
    $262 million20% year-over-year increase
    Q1 FY26

    Compared to $218 million in Q1 2025.

    Subscription services revenue
    $58 million18% year-over-year
    Q1 FY26

    Previously called core revenue. Driven by new customers, units under management growth, and premium tier upgrades.

    Value-added services revenue
    $201 million22% year-over-year
    Q1 FY26

    Driven by increased adoption of Folio Guard, Folio screen, online payments, and growth in units under management. Also increasing contribution from Resident onboarding lift and Realm-X performers.

    GAAP operating income
    $51 million50% year-over-year
    Q1 FY26

    Includes stock-based compensation expense.

    Non-GAAP operating income
    $72 million35% year-over-year
    Q1 FY26
    Cost of revenue (exclusive of depreciation and amortization) as % of revenue
    36%flat year-over-year
    Q1 FY26

    Efficiencies offset by payments product mix and additional data center spend for AI product capabilities.

    Sales and marketing as % of revenue
    13%consistent with Q1 2025
    Q1 FY26

    Continued investment in sales capacity and go-to-market initiatives.

    R&D spending as % of revenue
    16%declined from 17% in prior year
    Q1 FY26

    Due to use of AI tools and systems increasing innovation velocity and engineering team productivity.

    G&A expense as % of revenue
    7%declined from 8%
    Q1 FY26

    Reflects benefits of scale and continued operational efficiencies.

    AI actions
    7xyear-over-year
    Q1 FY26
    Performer adoption
    500%quarter-over-quarter
    Q1 FY26
    Units connected on stack
    5 millionsurpassed
    Q1 FY26
    Resident renewal likelihood (satisfied residents)
    72%more likely
    Q1 FY26

    Satisfied residents are more likely to renew.

    Resident move likelihood (satisfied residents)
    34%less likely
    Q1 FY26

    Satisfied residents are less likely to plan a move.

    Resident onboarding lift attach rate
    95%compared to 64% without it
    Q1 FY26

    At move-in.

    Group rate Internet user savings
    97%
    Q1 FY26

    Of group rate Internet users say it saved them money and improved financial well-being.

    Inquiry to completed showing conversion rate increase
    20%increased
    Q1 FY26

    For Newberry Living after deploying Leasing Performer.

    Completed showings driven by Leasing Performer
    57%
    Q1 FY26

    For Newberry Living.

    Shares repurchased
    702,500
    Q1 FY26

    Part of opportunistic share repurchase strategy.

    Total shares repurchased
    1.4 million
    2025-Q1 FY26

    Repurchased since 2025.

    Remaining share repurchase authorization
    $125 million
    Q1 FY26

    Remaining under existing share repurchase program.

    Employees
    1,7214% increase from Q1 2025
    Q1 FY26

    Primarily reflecting growth in sales capacity.

    Industry KPIs

    4
    MetricValueDetails
    Revenue growth$262 millionUSD
    Customer account count22,520customers
    Operating FCF margin rule of 4027.3%%
    Ai product adoption monetization7xmultiple

    Orderbook & backlog

    2
    Units on platform9.5 millionQ1 FY26

    8% increase year-over-year

    Compared to 8.8 million units a year ago.

    Customers22,520Q1 FY26

    7% growth

    Compared to 21,105 customers a year ago.

    Product announcements

    3
    ProductTypeDetails
    Realm-X Maintenance Performerupdate
    Simple VoIPexpansion
    Group Rate Internetexpansion

    Deals & partnerships

    4
    Hampton Management Associates3-year renewal on MAX plan3 years

    A 3,000-unit Bay Area property management company signed a 3-year renewal on their MAX plan.

    Avid ExchangeIntegration for accounts payable lifecycle management

    Partnership allows Plus and Max customers to manage their entire accounts payable life cycle directly within AppFolio.

    Mandy ManagementNew customer acquisition, consolidating disparate systems onto AppFolio platform

    A New Haven, Connecticut-based operator managing more than 3,000 units chose AppFolio to consolidate their disparate systems into one unified platform.

    Newberry LivingContinued consolidation of new acquisitions under AppFolio platform, driven by AI tools.

    West Des Moines, Iowa-based company grew its portfolio to 2,300 units on AppFolio since 2017 and continues to consolidate new acquisitions.

    What to watch in Q2 FY26

    5

    Revenue Growth Rate

    Next quarter (Q2 FY26) and full year FY26
    Current20% YoY (Q1 FY26)
    TargetContinued strong growth towards 17.5% FY26 midpoint

    Why it matters

    Revenue growth is a primary driver of the investment thesis for software companies.

    In the first quarter, we delivered revenue of $262 million, growing 20% year-over-year compared to $218 million in Q1 2025. We are raising our guidance for annual revenue to a range of $1.110 billion to $1.125 billion, for a full year midpoint growth rate of 17.5%...

    2 min read6 chapters

    Detailed Narrative

    01

    Real Estate Performance Management (RPM) and AI Strategy

    AppFolio is driving a fundamental shift in real estate management through its RPM framework, moving from reactive tasks to holistic value creation. The company's AI-native architecture, comprising a system of record, action, and growth, is central to this strategy. Over 99% of customers use some form of the AI-powered Realm suite, with AI actions up 7x year-over-year and performer adoption growing nearly 500% quarter-over-quarter.

    02

    Realm-X Performers and Workflow Automation

    Realm-X performers, such as the Maintenance Performer, are AI agents built directly into the platform to automate workflows. The Maintenance Performer now includes vendor follow-up capabilities, proactively contacting vendors, monitoring work orders, and confirming completions. This automation frees up customer teams for high-value resident engagement, as exemplified by Hampton Management Associates.

    03

    AppFolio Stack and Partner Ecosystem

    The AppFolio stack is deepening customer capabilities within the platform and expanding coverage, including cloud communications via Simple VoIP. Over 5 million units are connected on the stack. Integrations with partners like Avid Exchange allow customers to manage entire accounts payable lifecycles directly within AppFolio, providing full workflow integration rather than just data handoffs.

    04

    Resident Experience and Onboarding Lift

    AppFolio emphasizes the resident experience as a key driver of business performance, with satisfied residents 72% more likely to renew. Resident On-boarding Lift transforms the move-in process into a streamlined digital experience, covering renters insurance, utility setup, and essential services. This results in a 95% attach rate at move-in and improved resident satisfaction, with group rate Internet further enhancing financial well-being.

    05

    Operational Efficiency and AI-Native Engineering

    AppFolio applies the same performance discipline internally, leveraging AI-native engineering to accelerate product development. This approach compresses time from concept to deployment, increasing the velocity of innovation and productivity of engineering teams. This efficiency is reflected in R&D spending declining as a percentage of revenue year-over-year.

    06

    Customer Acquisition and Retention

    The company continues to demonstrate strong customer acquisition and retention. Mandy Management, a 3,000-unit operator, chose AppFolio to consolidate systems, while Newberry Living, with 2,300 units, continues to expand its use of the platform, driven by high-performance AI tools like Leasing Performer, which increased inquiry-to-showing conversion by 20%.

    AI-generated summary of the company’s earnings call. Not investment advice.