AppFolio Stock

AppFolio, Inc. (AppFolio) is a leading provider of cloud business management solutions for the real estate industry. The company’s solutions are designed to enable its property manager customers to digitally transform their businesses, address critical operations, and deliver a better customer experience.

AppFolio solutions are designed to meet that need in the real estate industry. The company helps its customers navigate an increasingly interconnected and growing network of stakeholders in their business ecosystems, including property owners, real estate investment managers, rental prospects, residents, and vendors, and provide key functionality related to critical transactions across the real estate lifecycle, including screening potential tenants, sending and receiving payments and providing insurance-related risk mitigation services. AppFolio’s intuitive interface, streamlined workflows, and artificial intelligence (AI) powered automation services make it easier for its customers to eliminate redundant and manual processes so they can deliver a great experience for their network of stakeholders while improving financial and operational performance.

The company’s platform, which is designed for use across multiple devices and operating systems, is a system of record to centralize and automate essential business processes, a system of engagement to enhance business interactions between its customers and their network of stakeholders, and a system of intelligence to leverage data to predict and optimize business workflows in order to enable exceptional customer experiences and increase efficiency across its customers' businesses. The company’s solutions are offered as a service, and are hosted using a public cloud service provider.

The company relies on strategic partners and third-party service providers to deliver certain aspects of its solutions, and strives to provide a seamlessly integrated experience for its customers and their stakeholders.

Core Solutions

Platform

AppFolio provides a cloud-based platform on which the company’s customers operate their businesses, leveraging process automation and optimized workflows. The platform is enhanced with AppFolio Realm, a suite of AI-powered tools that assist with Leasing, Maintenance and Accounting and that includes generative AI to answer questions, perform tasks and automate common workflows. The platform also includes AppFolio Stack, the company’s partner ecosystem that allows customers to connect its platform with specialized technology and services offered by third parties. The platform is frequently updated to provide new innovations and respond to market trends and customer needs.

AppFolio Property Manager Core

AppFolio Property Manager Core provides the basic functionality required to operate a property management business. Centered on accounting, AppFolio Property Manager Core serves as the company’s customers’ system of record. All critical transactions are completed and recorded in the system, giving its customers access to the data they need. It also serves as their system of engagement as they interact with key stakeholders in their business ecosystem, including residents living at their properties, owners and investors owning those properties, and vendors providing products and services to the properties. Both aspects of the system are inherently interconnected so that day-to-day interactions, such as residents paying rent through the AppFolio Property Manager mobile app, are instantly reflected in the system of record. AppFolio Property Manager Core is best suited for small property management companies that need a system that is comprehensive yet easy to use.

AppFolio Property Manager Plus

AppFolio Property Manager Plus includes the functionality of AppFolio Property Manager Core and adds an expanded set of functionalities designed to meet the needs of more complex, growing property management businesses. This includes support for affordable housing management, student housing management, more complex accounting needs, deeper leasing insights, bulk actions to support larger scale operations, role-based permissions to allow managing a larger team, Stack integrations to extend the company’s platform's functionality, and enhanced customer support.

AppFolio Property Manager Max

AppFolio Property Manager Max includes the functionality of AppFolio Property Manager Plus and adds functionality designed to meet the needs of even larger property management businesses. This includes an end-to-end leasing funnel with built-in Customer Relationship Management (CRM) functionality, increased customization with user-defined fields, full access to the customer database through an application programming interface, and dedicated customer success management.

Value Added Services

AppFolio Property Manager offers Value Added Services that supplement the company’s core services and are often mission-critical for enhancing, automating and streamlining business-critical processes and workflows. These services build on functionality and workflows in the company’s core solutions and generally fall into the categories of marketing and leasing, electronic payment services, business optimization, and risk mitigation. The company strives for a seamless experience for its customers that increases their efficiency while not sacrificing ease of use, whether services are offered by AppFolio or by a third-party partner. Utilization and adoption of the company’s Value Added Services is typically higher for residential properties than community association or commercial properties because of the unique and complex needs of the residential rental lifecycle.

The company empowers its customers and their network of stakeholders with a wide variety of Value Added Services, primarily:

Payments: The company’s electronic payment services allow property managers to streamline their receivables and payables through a variety of online payment options. Property managers can collect funds through the company’s secure online portal, its mobile application and/or via electronic cash payments from various stakeholders, including applicants, residents, vendors, and property owners. Types of funds that may be collected include rental application fees, security deposits, rent payments, and other tenant charges; contributions from property owners; and periodic dues from those living in community associations. Property managers can also electronically send funds to various stakeholders, including property owners, vendors, and even to their own management company.

Screening: The company’s tenant screening services include background screening, credit checks, income verification, and a streamlined rental history verification process for use in connection with the rental application process.

Risk Mitigation: Through its FolioGuard brand, the company offers risk mitigation products for residents and property managers. FolioGuard Smart Ensure is a software tool that allows property management customers to enforce insurance coverage requirements within their leases by tracking coverage of their units and adding uncovered units to a qualifying liability to landlord insurance policy via a licensed insurance broker. FolioGuard Renters Insurance provided by AppFolio Insurance Services, Inc., a wholly-owned subsidiary of AppFolio, protects the personal belongings of renters, as well as the property itself, from certain unexpected damages.

The company experiences some seasonality in its Value Added Services revenue.

Growth Strategy

The company’s growth strategy involves providing valuable business management solutions to new and existing customers in the real estate industry. The company will strive to continue to create a differentiated product experience that solves customer needs and creates new revenue streams for AppFolio. The company will continue to focus on attracting larger operators with complex and diversified property portfolios, who derive value from managing their entire portfolio on a single platform. The company will focus the efforts of its customer-facing teams on driving use and adoption of its products and services, helping customers to achieve success on its platform. The company will continue its efforts to efficiently and effectively scale its capabilities, processes, and systems to adapt and grow with its business, and continually align the value of its offerings to the size, scale, and complexity of its customers, while upholding a rigorous standard of privacy, protection, compliance, and ethics.

Customers

The company defines customers as those paying for a subscription to its core solutions. As of December 31, 2023, the company had 19,737 property management customers.

Customer Service

The company regularly measures its Net Promoter Score and solicit customer feedback in a variety of ways in an effort to continue to better serve its customers. The company utilizes a tiered engagement model to align the value it delivers with the value it captures from its customers, including add-on offerings, such as tailored training and certification programs.

Onboarding consists of a dedicated team that works to ensure that customers are prepared to run their businesses on the company’s platform. As a result of its assistance with data migration matters, the company is able to provide valuable insights into data integrity and work with its customers to help resolve any issues in their underlying business processes. The company also assists its customers with the configuration of its products for particular property types, as appropriate. The company shares insights on best practices for the markets it serves and dedicate resources to guide its customers through the adoption and utilization of its Value Added Services.

Sales and Marketing

The company leverages a modern and scalable marketing approach along with marketing automation technology to attract and engage prospects and build brand recognition as an industry leader. The company participates in industry thought leadership and education, and it uses a variety of inbound and outbound marketing techniques to promote AppFolio solutions.

The company’s business development team acts in partnership with its marketing and sales teams to reach potential customers, generate sales opportunities, and accelerate the time from evaluation to close. The company’s sales representatives assist prospective customers as they evaluate its products. The company’s interactive sales methodology allows its sales team to quickly build relationships, assess its customers’ business challenges, and demonstrate the benefits of its core functionality and, where applicable, Value Added Services.

Technology and Operations

The company’s products are powered by a highly scalable computing platform and are designed with a strong focus on data security and availability. The company’s computing platform and cloud infrastructure are primarily powered by Amazon Web Services platform.

All sensitive data in the company’s systems, including passwords, Social Security numbers, and tax identification numbers, is encrypted during transmission, and before being written to disk. The company regularly evaluates its product and infrastructure security, including through third-party penetration testing. In addition, the company’s products allow its customers to define roles that provide different levels of access to users, allowing them to view and modify specific items depending on their role.

History

AppFolio, Inc. was founded in 2006 as a Delaware limited liability company and converted to a Delaware corporation in 2007. The company was incorporated in 2006.