AppFolio Raises 2026 Revenue Floor After Third Quarter

The Tip Desk · October 24, 2026 · 2 min read

The company lifted its full-year revenue range to $1.122 billion to $1.127 billion after third-quarter sales of $296 million.

AppFolio, Inc. (APPF), a technology company that sells software to the real estate industry, raised the floor of its fiscal 2026 revenue outlook to $1.122 billion from $1.117 billion after third-quarter sales of $296 million, a 19% increase from a year earlier.

The year-over-year growth rate matched the 19% pace reported in the second quarter, when revenue was $281 million. Total units under management rose 8% to 9.8 million, the same unit-growth rate as the prior quarter. Chairman and CEO Shane Trigg said the quarter reflected the strength and durability of the business as new and existing customers adopted the company’s performance platform.

Profitability widened on a GAAP basis. Operating income grew 64% to $57 million, or 19.4% of revenue, from $35 million, or 14.1% of revenue, in the third quarter of 2025. Non-GAAP operating income was $81 million, or 27.3% of revenue, compared with $59 million, or 23.5% of revenue, a year earlier. GAAP net income was $46.0 million, or $1.29 a share, versus $33.6 million, or $0.93 a share. Non-GAAP net income was $64.7 million, or $1.82 a share.

The GAAP margin expansion of 530 basis points was larger than the 160 basis-point GAAP expansion in the second quarter, when operating income rose 31% to $53 million, or 18.8% of revenue. Non-GAAP operating margin in the third quarter was 27.3% of revenue.

Value Added Services generated $231.9 million in the three months ended September 30, 2026, versus $192.1 million a year earlier. Subscription Services were $61.5 million, compared with $53.8 million. Other revenue was $2.2 million.

GAAP cost of revenue, exclusive of depreciation and amortization, was 36% of revenue, versus 37% a year earlier. Sales and marketing rose to 16% of revenue from 14%. Research and product development fell to 18% from 22%. General and administrative expenses were 9% of revenue, versus 11%.

Net cash provided by operating activities was $97 million, or 32.7% of revenue, compared with $86 million, or 34.5% of revenue, a year earlier. Cash and cash equivalents were $258.5 million at September 30, 2026, versus $107.0 million at December 31, 2025.

The company now expects full-year 2026 non-GAAP operating margin of 26.5% to 27.5% of revenue, a narrower band than the 26.5% to 28.0% range it gave in July. Diluted weighted average shares outstanding are expected to be approximately 36 million for the full year.