What happened
Shares of real estate management software company AppFolio(NASDAQ: APPF) popped on Friday following the release of financial results for the third quarter of 2022. As of 11:15 a.m. ET, AppFolio stock was up almost 13%.
So what
In Q3, AppFolio generated revenue of $125 million, up 31% year over year and slightly ahead of analysts' expectations. The company's software is used by landlords to manage their real estate portfolios. Therefore, it's important to note that AppFolio ended Q3 with 7.1 million units being managed on its platform, up sharply from the 6.8 million units on the platform at the end of the second quarter.
AppFolio's profitability is a mixed bag. On the one hand, the company was free cash flow (FCF) positive in Q3 with a 10% FCF margin compared to a 7% FCF margin in the same quarter last year. On the other hand, AppFolio has a $52.4 million loss from operations so far in 2022, with non-cash expenses like stock-based compensation and impairment charges eating into operating profits. That said, the company's bottom line is better than Wall Street expected, which contributed to the stock's gains today.
Now what
There's a final cherry-on-top for AppFolio today. The company previously guided for full-year 2022 revenue of $455 million to $461 million. With its Q3 report, management increased this guidance range to $462 million to $466 million. At the midpoint of guidance, that represents 29% year-over-year growth, which is a healthy outlook considering the present headwinds in the real estate industry.
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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AppFolio. The Motley Fool has a disclosure policy.
