AppFolio, Inc. reports 337% Net Income growth in 2020 and 21.1% Revenue growth
03/01/2021 • About AppFolio, Inc. (
$APPF) • By InTwits
AppFolio, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- AppFolio, Inc. is a fast growth stock: 2020 revenue growth was 21.1%, 5 year revenue CAGR was 32.8% at 2020 ROIC 4.1%
- EBITDA Margin is quite volatile: 13.5% in 2020, 13.3% in 2019, 18.0% in 2018, 15.3% in 2017, 1.4% in 2016
- AppFolio, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.2%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: $19m in 2020, $8m in 2019, $2m in 2018, $2m in 2017, $4m in 2016
- The company has potentially unprofitable business model: ROIC is 4.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
AppFolio, Inc.'s Revenue jumped on 21.1%. Revenue growth showed slowdown in 20Q4 - it was 7.5% YoY. Revenue decline was accelerating on average at -4.1 pp per annum in 2016-2020. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.9 pp from 12.1% to 5.2% in 2020.
Gross Margin increased slightly on 1.3 pp from 60.3% to 61.6% in 2020. SG&A as a % of Revenue increased slightly on 0.57 pp from 33.6% to 34.2% in 2020. During 2016-2020 SG&A as a % of Revenue bottomed in 2018 at 30.6% and was growing since that time.
Net Income margin jumped on 36.9 pp from 14.2% to 51.1% in 2020. Net Income margin stuck to a growing trend at 12.5 pp per annum in 2016-2020.
Investments (CAPEX, working capital and M&A)
In 2020 AppFolio, Inc. had CAPEX/Revenue of 6.1%. The company's CAPEX/Revenue increased on 4.6 pp from 1.5% in 2017 to 6.1% in 2020. It's average CAPEX/Revenue for the last three years was 3.5%. During the last 5 years CAPEX as a % of Revenue bottomed in 2018 at 1.1% and was growing since that time.
Return on investment
The company operates at good ROE (75.8%) while ROIC is low (4.1%). ROIC showed almost no change in 2020. ROE jumped on 43.4 pp from 32.4% to 75.8% in 2020. During the last 5 years ROIC topped in 2018 at 17.3% and was declining since that time. ROE stuck to a growing trend at 19.5 pp per annum in 2016-2020.
Leverage (Debt)
Debt level is -2.3x Net Debt / EBITDA and 1.0x Debt / EBITDA. Debt dropped on 50.4% while cash surged on 787%.
AppFolio, Inc. has no short term refinancing risk: cash is higher than short term debt (7,602.3%).
Valuation and dividends
The company's trades at EV/EBITDA 57.0x and P/E 15.7x.
Management team
Jason Randall is a AppFolio, Inc.'s CEO. Jason Randall has spent 3 years with the company. The company's CFO is Ida Kane. Ida Kane has 6 years tenure at the company.
Financial and operational results
FY ended 12/31/2020
AppFolio, Inc. ($APPF) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 105.6 | 143.8 | 190.1 | 256.0 | 310.1 | 21.1% |
| Gross Profit | 61.0 | 88.5 | 116.5 | 154.4 | 191.0 | 23.7% |
| SG&A | 46.8 | 49.9 | 58.2 | 86.0 | 105.9 | 23.2% |
| EBITDA | 1.5 | 22.0 | 34.2 | 34.0 | 41.9 | 23.3% |
| EBIT | -8.4 | 9.3 | 19.7 | | | |
| Tax | 0.1 | 0.1 | 0.4 | | | |
| Net Income | -8.3 | 9.7 | 20.0 | 36.3 | 158.4 | 336.6% |
| Stock Based Compensation | 4.3 | 6.1 | 6.3 | | | |
Balance Sheet
|
|---|
| Cash | 10.7 | 16.1 | 74.1 | 15.8 | 140.3 | 787.0% |
| Accounts Receivable | 2.5 | 3.4 | 5.5 | | | |
| Accounts Payable | 0.9 | 0.6 | 1.5 | | | |
| Short Term Debt | 0.0 | 0.0 | 1.2 | 4.0 | 1.8 | -54.3% |
| Long Term Debt | 0.0 | 0.0 | 48.6 | 80.7 | 40.1 | -50.2% |
Cash flow
|
|---|
| Capex | 4.2 | 2.2 | 2.1 | 8.1 | 19.0 | 135.5% |
| Acquisitions | | | 14.4 | | | |
Ratios
|
|---|
| Revenue growth | 40.8% | 36.2% | 32.2% | 34.7% | 21.1% | |
| EBITDA growth | -117.0% | 1,357.3% | 55.4% | -0.8% | 23.3% | |
|
|---|
| Gross Margin | 57.7% | 61.6% | 61.3% | 60.3% | 61.6% | 1.3% |
| EBITDA Margin | 1.4% | 15.3% | 18.0% | 13.3% | 13.5% | 0.2% |
| EBIT Margin | -8.0% | 6.5% | 10.3% | | |
| SG&A, % of revenue | 44.3% | 34.7% | 30.6% | 33.6% | 34.2% | 0.6% |
| SBC, % of revenue | 4.1% | 4.2% | 3.3% | | |
| Net Income Margin | -7.8% | 6.8% | 10.5% | 14.2% | 51.1% | 36.9% |
| CAPEX, % of revenue | 4.0% | 1.5% | 1.1% | 3.2% | 6.1% | 3.0% |
|
|---|
| ROIC | -11.8% | 12.1% | 17.3% | 4.5% | 4.1% | -0.3% |
| ROE | -11.6% | 12.6% | 22.6% | 32.4% | 75.8% | 43.4% |
| Net Debt/EBITDA | -7.1x | -0.7x | -0.7x | 2.0x | -2.3x | -4.4x |
People
|
|---|
| Insider ownership | 0.5% | 0.5% | 0.5% | | | |
| Employees | 626 | 672 | 916 | | | |
| Revenue/Employee, th. $ | 169 | 214 | 208 | | | |
AppFolio, Inc. ($APPF) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 72 | 81 | 84 | 72 | | 27.0% | 27.4% | 23.8% | 7.5% |
| EBITDA | 11 | 14 | 11 | 6 | | 71.2% | 61.6% | 2.1% | -23.7% |
| Net Income | 2 | 19 | 138 | -1 | | -46.8% | -16.8% | 2,665.7% | -111.6% |
Balance Sheet
|
|---|
| Cash | 57 | 53 | 144 | 140 | | 238.3% | 173.2% | 615.8% | 787.0% |
| Short Term Debt | 4 | 4 | 2 | 2 | | -17.7% | -20.1% | -67.4% | -54.3% |
| Long Term Debt | 81 | 80 | 33 | 40 | | 20.1% | 20.4% | -50.5% | -50.2% |
Ratios
|
|---|
| Gross Margin | 60.1% | 66.2% | 61.0% | 58.7% | | 2.4% | 5.7% | -0.8% | -2.1% |
| EBITDA Margin | 14.7% | 17.8% | 13.5% | 8.1% | | 3.8% | 3.8% | -2.9% | -3.3% |
| Net Income Margin | 2.7% | 23.8% | 163.7% | -0.7% | | -3.8% | -12.6% | 156.4% | -7.3% |
Peers in Application Software
Below we provide AppFolio, Inc. benchmarking against other companies in Application Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 14.8% | 15.1% | 19.4% | 14.5% |
|---|
| AppFolio, Inc. ($APPF) | - | 36.2% | 32.2% | 34.7% | 21.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 66.0% | 68.4% | 70.6% |
|---|
| AppFolio, Inc. ($APPF) | 57.7% | 61.6% | 61.3% | 60.3% | 61.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| AppFolio, Inc. ($APPF) | 1.4% | 15.3% | 18.0% | 13.3% | 13.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 2.9% | 2.3% | 2.4% | 2.9% | 2.5% |
|---|
| AppFolio, Inc. ($APPF) | 4.0% | 1.5% | 1.1% | 3.2% | 6.1% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.2% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| AppFolio, Inc. ($APPF) | -11.8% | 12.1% | 17.3% | 4.5% | 4.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.9x | -0.6x | 0.4x | 0.3x |
|---|
| AppFolio, Inc. ($APPF) | -7.1x | -0.7x | -0.7x | 2.0x | -2.3x |
