AppFolio (APPF) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $262.2 million, up 20% year-over-year, driven by growth in property management units, value-added services, and AI-powered workflow automation.

• GAAP operating income rose 50% to $51 million (19.4% margin), and non-GAAP operating income grew 36% to $72 million (27.3% margin).

• Net income was $42.4 million, with diluted EPS of $1.18, both up year-over-year.

• Units under management increased 8% to 9.5 million, and customer count grew to 22,500.

• AI adoption surged, with 99% of customers using AI features and Performer adoption up nearly 500% quarter-over-quarter.

Financial highlights

• Subscription services revenue grew 18% to $58.2 million; value-added services revenue rose 22% to $201.4 million.

• Cost of revenue (excluding depreciation/amortization) remained flat at 36% of revenue; sales and marketing held steady at 13%.

• R&D spending declined to 16% of revenue from 17% last year; G&A expense dropped to 7% from 8%.

• Net cash provided by operating activities was $34.3 million, down from $38.5 million in Q1 2025.

• Cash, cash equivalents, and investment securities totaled $151.7 million as of March 31, 2026.

Outlook and guidance

• Full-year 2026 revenue guidance raised to $1.110–$1.125 billion, with midpoint growth of 17.5%.

• Non-GAAP operating margin guidance increased to 26–28%.

• Cost of revenue and operating expenses expected to remain flat or decline modestly as AI drives efficiency.

• Diluted weighted average shares outstanding anticipated at approximately 36 million for the year.