AppFolio
The books American property managers must keep on their tenants' money, with a fee taken on every rent payment, tenant check and insurance policy that runs through them.
The scores
Growth3/4 ↓
Growth of 19.3% and organic, but it has decelerated every year since 2023 and narrows to one driver: transaction fees, 78% of revenue.
Business quality3/4 →
A state licence forces the ledger AppFolio sells, and it charges each unit 10.6% more yearly. The toll above it is contested.
Financial position4/4 →
About $305M of cash and investments, no borrowing, an undrawn $150M facility, $242M of operating cash flow, and it funds buybacks from operations.
Execution record3/4 ↑
Raised the 2026 guide twice and beat five of eight prints. But the margin fell in 2025, and management answers no questions in public.
Per share capture4/4 →
Share count down 2.1%, buybacks 3.2 times stock issued, no share-funded deals, no convertible. Revenue for each share grew faster than revenue.
Potential2/4 →
The prize will not compose: published data bounds professionally managed units between 10.9 and 41.6 million. Nothing whatever is contracted.
Risk profile3/4 →
No customer above a rounding error across 22,751 firms, but one industry, one country, and unnamed payment processors some of which have no backup.
Valuation2/4 ↑
At $43 for each dollar of operating profit the price assumes the fee engine compounds and the margin keeps rising.
Evidence quality3/4 →
Central claims are filed, with the base, the market structure and the rival from Census, Justice and Zillow. Management is never questioned.
The Verdict
We rate AppFolio neutral. It keeps the books for American property managers and takes a fee on rent payments, tenant checks and insurance running through them; the ledger is sticky, so the business is solid. Two thirds of its growth now comes from earning more on each home rather than adding homes, and growth has been slowing for years. The price needs that fee on each home to keep rising near a tenth a year, so it is full, not cheap. The view hinges on that fee still outgrowing the number of homes, a figure the company never publishes directly.
The long caseSmall landlords are handing buildings to professional managers who want one system for everything; AppFolio must keep adding homes faster than the rental market grows.
The evidence under this - 8 claims
- 2026-10-22editedQ3 2026 split added: Value Added Services up 20.7%, Subscription Services up 14.5%.
The denominator is period-end units against a full period's revenue, so in a growing base it understates the per-unit figure in both years and overstates the growth in it slightly. Units also include community associations and commercial property, which monetise less than residential - the 10-K says adoption of both service categories is "typically higher for residential properties" - so a mix shift toward residential would raise revenue per unit with no price change at all. And the $117 is annualised from the seasonally strongest quarter. None of these reverses the direction: the full-year version, which has none of these problems, gives 10.8%.
- 2026-10-22editedQ3 2026 split added: revenue $295.7M over 9.8 million units against $249.4M over 9.1 million.
The numerator and the denominator are not the same thing, and the error runs one way. AppFolio's unit count includes community associations and commercial property, neither of which is a renter-occupied housing unit, so the true residential share is lower than 20.5% by an amount the company does not disclose. Pointing the other way, the denominator is renter-occupied units only and excludes vacant rental units, which a manager still administers - the 7.3% vacancy rate would add about 3.7 million units to the addressable base. The two corrections partly offset and neither is quantified, which is why this is an inference and why the open questions carry it.
Three things argue the price is less demanding than 43 times makes it sound. The multiple on earnings is exactly the company's own six-year normal - 51.2 times trailing profit against a prior median of 51.7 - so on that lens nothing has been re-rated at all, and the compression is entirely in the sales multiple, which margin expansion has absorbed. The balance sheet holds about $305M of cash and investments against no drawn debt, so the enterprise value is $182M below the market value. And the trailing operating figure is depressed by a fiscal 2025 in which the non-GAAP operating margin fell; on the guided margin the multiple is a third lower. Against all three: a 35 times forward multiple after stock pay still assumes the fee engine holds, and the guide itself embeds deceleration.
- 2026-10-22editedQ3 2026 growth of 18.6% added; the guide midpoint is 18.3% on the new $1.122B-$1.127B range.
The company
A property manager collects rent for landlords, pays their bills and holds tenants' deposits. In most states the law treats that money as somebody else's: it must sit in a separate trust account, and mixing it up costs the manager a licence.
AppFolio sells the system that keeps that record, in three subscription tiers priced by the home. It then charges for what flows through it: rent collected online, tenant screening, renters insurance. Those fees were 78.4% of revenue in the September quarter.
The evidence under this - 4 claims
- 2026-10-22editedQ3 2026 split added: Value Added Services up 20.7%, Subscription Services up 14.5%.
AppFolio itself says the cost is surmountable, and spends money surmounting it: the 10-K's growth strategy describes "continued innovation in onboarding tools, processes, and workflows" designed "to remove barriers for customers to switch to AppFolio". A barrier the company can lower for inbound customers is one a competitor can lower for outbound ones. The 10-K also says the market "has relatively low barriers to entry", and the DOJ's account of the neighbouring market records a landlord moving between systems of record without describing the move as prohibitive. The mechanism is real; that it is insurmountable is not established, and no retention or churn figure is published to settle it.
How it makes money
Two ways. A subscription for the software, which grew 14.5% in the September quarter, and a fee on every transaction, which grew 20.7%. The fees come with no minimum: nobody has promised to pay a single rent through AppFolio next quarter. They keep coming because the transactions run on a ledger the manager would find hard to leave.
The evidence under this - 3 claims
- 2026-10-22editedQ3 2026 split added: Value Added Services up 20.7%, Subscription Services up 14.5%.
AppFolio itself says the cost is surmountable, and spends money surmounting it: the 10-K's growth strategy describes "continued innovation in onboarding tools, processes, and workflows" designed "to remove barriers for customers to switch to AppFolio". A barrier the company can lower for inbound customers is one a competitor can lower for outbound ones. The 10-K also says the market "has relatively low barriers to entry", and the DOJ's account of the neighbouring market records a landlord moving between systems of record without describing the move as prohibitive. The mechanism is real; that it is insurmountable is not established, and no retention or churn figure is published to settle it.
Where the money comes from, stream by stream
| Stream | Share of sales (Q2 2026) | How it earns it |
|---|---|---|
| Value Added Services | 78.1% | Per-transaction fees on online rent payments, tenant screening and renters insurance, with no minimum usage commitment. |
| Subscription Services | 21.3% | The Core, Plus and Max tiers of the property accounting system, billed by subscription and recognised over the contract term. |
| Other | 0.7% | Onboarding help, other one-off services and legacy customers of acquired businesses. |
Who runs it
Shane Trigg has run AppFolio since March 2023, after three years running its property business; Tim Eaton became finance chief in July 2025. Under Trigg it went from breaking even to a solid profit, though growth slowed each year. The board and managers own little; two founders outside the board hold most of the votes. The bonus and most share awards pay on new homes signed, sales and margin over one year, nothing on the fee per home or the share price.
The evidence under this - 4 claims
Units are the weaker half of the growth arithmetic (C05): revenue per unit drives about two thirds of revenue growth, yet the heaviest-weighted and most generously capped goal is units signed. The pay-versus-performance table shows share return only as a required disclosure, not a goal. Say-on-pay passed with 99.6% in 2025.
Why it wins, and who could beat it
Why customers come back
Leaving means moving a live trust ledger, deposits owed to named tenants and money owed to named owners, while rent keeps arriving. The cost is not the software; it is the risk of the books being wrong on a day a regulator asks.
It shows up as customers going deeper rather than leaving. In the year to September, revenue for each home rose 10.1% while the number of homes rose 7.7%.
The evidence under this - 4 claims
AppFolio itself says the cost is surmountable, and spends money surmounting it: the 10-K's growth strategy describes "continued innovation in onboarding tools, processes, and workflows" designed "to remove barriers for customers to switch to AppFolio". A barrier the company can lower for inbound customers is one a competitor can lower for outbound ones. The 10-K also says the market "has relatively low barriers to entry", and the DOJ's account of the neighbouring market records a landlord moving between systems of record without describing the move as prohibitive. The mechanism is real; that it is insurmountable is not established, and no retention or churn figure is published to settle it.
The denominator is period-end units against a full period's revenue, so in a growing base it understates the per-unit figure in both years and overstates the growth in it slightly. Units also include community associations and commercial property, which monetise less than residential - the 10-K says adoption of both service categories is "typically higher for residential properties" - so a mix shift toward residential would raise revenue per unit with no price change at all. And the $117 is annualised from the seasonally strongest quarter. None of these reverses the direction: the full-year version, which has none of these problems, gives 10.8%.
- 2026-10-22editedQ3 2026 split added: revenue $295.7M over 9.8 million units against $249.4M over 9.1 million.
- 2026-10-22editedQ3 2026 release and call: units 9.8 million against 9.1 million, customers 23.1 thousand against 21.8 thousand.
The threat
The attack is on the fees, not the ledger. Zillow offers small landlords applications, rent payment and renters insurance, four of the five things AppFolio charges for, and its rentals business grew 39% in 2025 against AppFolio's 19.7%. AppFolio's own annual report concedes its market has relatively low barriers to entry, and warns that AI agents could cut demand for its customers.
The evidence under this - 3 claims
The same filing names AppFolio as a partner rather than a rival - "strategic partnerships with AppFolio and Esusu extend our reach" - and Zillow's competition section is written about residential brokerage, not about property management software. Zillow monetises the marketplace and sells no accounting system of record, so it does not replace what a manager of 5,000 units runs the business on. The overlap is at the sub-25-unit end and at the resident transaction, not at the ledger.
The rivals: Z, and 3 more that are private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | How far along | Priced against it |
|---|---|---|---|
| Z | Zillow Rental Manager (Zillow Group)Priced against it: One segment only | On sale | One segment only |
| Private | EliseAIPriced against it: Private | On sale | Private |
| Private | RealPage (Thoma Bravo), through BuildiumPriced against it: Private | On sale | Private |
| Private | General-purpose agent providers reaching the ledger through the interface (Anthropic's Claude, and equivalents)Priced against it: Private | On sale | Private |
How big it could get
How big this could get
There are 46.8 million rented homes in America, and AppFolio already runs 20.5% of them. Its room to grow is the homes nobody manages professionally: only 22% of small rental properties have a manager. That figure is counted by building, not by home, so nobody can say how many homes are left to win.
The evidence under this - 4 claims
The numerator and the denominator are not the same thing, and the error runs one way. AppFolio's unit count includes community associations and commercial property, neither of which is a renter-occupied housing unit, so the true residential share is lower than 20.5% by an amount the company does not disclose. Pointing the other way, the denominator is renter-occupied units only and excludes vacant rental units, which a manager still administers - the 7.3% vacancy rate would add about 3.7 million units to the addressable base. The two corrections partly offset and neither is quantified, which is why this is an inference and why the open questions carry it.
- 2026-10-22editedQ3 2026 release and call: units 9.8 million against 9.1 million, customers 23.1 thousand against 21.8 thousand.
The results
The numbers
Sales grew 20% over the twelve months to Sep 2026, about the same pace as the 20% in the year to Dec 2025.
Operating margin is 19%, up from 0.2% in the year to Dec 2023.
Yearly sales growth has ranged from +16% to +31% over the last 5 years.
Each dollar put into the business earns 30% a year after tax, up from −2.4% in the year to Dec 2021.
It turned 26% of sales into free cash, $282M over the last twelve months.
Free cash flow was 1.7 times net income.
The share count barely moved in 4.8 years, and pay in shares costs 6.8% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-22. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Sep 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $359M | $472M | $620M | $794M | $951M | $1.09B |
| Sales growth | +16% | +31% | +31% | +28% | +20% | +20% |
| Profit | ||||||
| Gross margin | 60% | - | - | - | - | - |
| Operating margin | −3.3% | −15% | 0.2% | 17% | 16% | 19% |
| Net margin | 0.3% | −14% | 0.4% | 26% | 15% | 16% |
| What growth costs, per sales dollar | ||||||
| Research and development | 18% | 24% | 24% | 20% | 20% | 18% |
| Sales and marketing | 20% | 23% | 17% | 14% | 15% | 16% |
| General and admin | 16% | 21% | 15% | 11% | 10% | 9.1% |
| Pay in shares | 4.8% | 9.2% | 8.4% | 7.6% | 7.4% | 6.8% |
| Capital spending | 2.3% | 1.4% | 1.5% | 0.3% | 0.3% | 0.1% |
| Cash | ||||||
| Cash from operations | $35.4M | $25.4M | $60.3M | $188M | $242M | $284M |
| Free cash flow | $27.3M | $18.8M | $51.2M | $186M | $239M | $282M |
| Balance sheet | ||||||
| Cash and short-term investments | $122M | $70.8M | $49.5M | $42.5M | $107M | $259M |
| Returns and shares | ||||||
| Return on capital | −2.4% | - | - | 33% | 25% | 30% |
| Shares (diluted) | 35.7M | 35.0M | 36.4M | 36.8M | 36.3M | 35.6M |
What growth costs
Growth has made AppFolio more profitable: research and office costs rise more slowly than sales, so each new dollar of sales costs less to win. Two costs keep pace with sales, processing the payments it collects and selling, and in 2025 they rose fast enough to dent the margin for a year.
The evidence under this - 2 claims
The widening stalled in 2025: operating margin fell to 16.1% from 17.1% as sales and marketing rose faster than revenue, and cost of revenue, the line that grows with payments volume, rose as a share of sales in 2025 and again in 2026 (C10). The numbers card's R&D is the ResearchAndDevelopmentExpense tag, which equals the income statement's 'Research and product development' line ($190.419M in 2025), so the two definitions agree.
- 2026-10-22editedQ3 2026 release: cost of revenue 35.7% of revenue, down from 36.7%; the CFO guides the full year flat on 2025.
The last report (23 Jul)
Quarter ended June 2026, filed figures.
The September 2026 quarter was a good one. Sales grew 18.6% to $295.7M, homes on the platform reached 9.8 million, and the operating margin rose to 19.4% from 14.1%, helped by a year-ago bonus charge that did not repeat.
The slope is the same. The company raised the bottom of its sales outlook but lowered the top of its profit-margin outlook, and what is left implies about 15% sales growth next quarter. Management again took no analyst questions.
What it did to the thesisIt supported the case that the fee on each home keeps rising: revenue for each home grew faster than the number of homes, and payments and insurance grew faster than software. It did not change the slowdown the price already reflects. A good business at a full price, so Neutral.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $1.71 against $1.69 expected; $1.17 as filed, the gap being what the company adds back.
The evidence under this - 5 claims
- 2026-10-22editedQ3 2026 split added: Value Added Services up 20.7%, Subscription Services up 14.5%.
- 2026-10-22editedQ3 2026 margins added, with the two comparisons management flagged.
- 2026-10-22editedOctober outlook: revenue low end raised to $1,122M, margin range top lowered to 27.5%.
- 2026-10-22editedQ3 2026 growth of 18.6% added; the guide midpoint is 18.3% on the new $1.122B-$1.127B range.
The midpoint is not a forecast, it is the centre of a range management has already raised once and has beaten in each of the last three prints - Q2 2026 revenue came in 1.4% above the vendor consensus, Q1 2026 1.6% above and Q4 2025 0.7% above. At the top of the range the second half grows 18.3% rather than 16.3%, which is barely a deceleration at all. The 2025 fourth quarter also carried one-time Stack partnership revenue, which raises the base the second half is measured against. The direction is right and the magnitude is soft. Q3 2026 revenue of $295.7M was 18.6% above a year earlier against a first-half 19.9%, so the deceleration the guide shows has begun.
- 2026-10-22editedOctober outlook: fourth-quarter growth implied at about 15.0%, replacing the 16.3% second-half rate from July.
What management did with the money
It bought back $125.0M of stock in the first half of 2026, 3.2 times what it paid staff in shares, so the share count fell 2.1% in a year. There is no debt. Holders of the listed shares have 17% of the votes; a second class of stock carries the other 83%.
Insiders in 2026Q2: 11 purchases and 44 sales, from their Form 4 filings.
The evidence under this - 3 claims
- 2026-10-04editedsaid the only deal was Move EZ for $0.9M of cash; the FY2025 10-K (Note 7, Note 4) gives $78.5M total consideration, $0.9M being the 2025 instalment, and a $75.0M Second Nature stake (S1)
The price, and where we disagree
In short. Full. A good business at a full price. It is cheaper against sales than it used to be, but not against profit, so the fall in the price has only caught up with the slowdown.
The shares fell 18.2% in the year to 15 September while sales for each share rose 22.6%; they have since recovered part of it. Buyers are paying a third less for each dollar of sales, on a worry that AI will wear the business down.
The December-quarter results, due about February, will show whether the fee on each home is still outgrowing the number of homes, the one ratio the case rests on.
The evidence under this - 3 claims
The denominator is period-end units against a full period's revenue, so in a growing base it understates the per-unit figure in both years and overstates the growth in it slightly. Units also include community associations and commercial property, which monetise less than residential - the 10-K says adoption of both service categories is "typically higher for residential properties" - so a mix shift toward residential would raise revenue per unit with no price change at all. And the $117 is annualised from the seasonally strongest quarter. None of these reverses the direction: the full-year version, which has none of these problems, gives 10.8%.
- 2026-10-22editedQ3 2026 split added: revenue $295.7M over 9.8 million units against $249.4M over 9.1 million.
How we read the multiple
Buyers pay about 51 times last year's profit, the same as usual over six years. Rising profit margins, the profit on each dollar of sales, absorbed the whole fall in the price.
Counting staff share pay as a cost, the whole company costs about 43 times last year's operating profit and about 35 times this year's expected.
That works only if the fee on each home keeps growing near 10% a year while margins rise. Yet sales growth has slowed every year since 2023.
Against its own history. Cheaper than its own normal on sales, not on earnings: rising margins absorbed the whole fall, so this is not a bargain against its own past.
The evidence under this - 3 claims
Three things argue the price is less demanding than 43 times makes it sound. The multiple on earnings is exactly the company's own six-year normal - 51.2 times trailing profit against a prior median of 51.7 - so on that lens nothing has been re-rated at all, and the compression is entirely in the sales multiple, which margin expansion has absorbed. The balance sheet holds about $305M of cash and investments against no drawn debt, so the enterprise value is $182M below the market value. And the trailing operating figure is depressed by a fiscal 2025 in which the non-GAAP operating margin fell; on the guided margin the multiple is a third lower. Against all three: a 35 times forward multiple after stock pay still assumes the fee engine holds, and the guide itself embeds deceleration.
- 2026-10-22editedQ3 2026 growth of 18.6% added; the guide midpoint is 18.3% on the new $1.122B-$1.127B range.
The six-year median spans a period that includes fiscal 2022, when AppFolio ran a NEGATIVE 15.3% operating margin, and fiscal 2023 at 0.2%. A price-to-earnings median struck across years with almost no earnings in the denominator is close to meaningless, so 'at its own median' is a weaker statement than it sounds. The sales and cash-profit comparisons do not have that defect, which is why the argument leans on those. The free cash flow yield is also flattered: trailing free cash flow of $270M adds back roughly $78M a year of stock pay, and at 2.4% after it the yield is less than four times its own median rather than five.
Priced against its rivals
None of the listed rivals above sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Where we disagree with the market
A software company whose growth is fading and whose moat AI agents will wear away.
AI is the wrong question. The real one is whether the fee on each home keeps rising, and so far it does.
The company publishes homes and it publishes revenue, but never divides one by the other, so the fact that two thirds of growth is price appears nowhere in its reports.
The evidence for the market is real: analysts' positive share slipped from 100% to 88.9%, and 6.9% of the tradable shares are sold short, a lot for a profitable company with no debt.
What analysts say, and the evidence
The evidence under this - 4 claims
The denominator is period-end units against a full period's revenue, so in a growing base it understates the per-unit figure in both years and overstates the growth in it slightly. Units also include community associations and commercial property, which monetise less than residential - the 10-K says adoption of both service categories is "typically higher for residential properties" - so a mix shift toward residential would raise revenue per unit with no price change at all. And the $117 is annualised from the seasonally strongest quarter. None of these reverses the direction: the full-year version, which has none of these problems, gives 10.8%.
- 2026-10-22editedQ3 2026 split added: revenue $295.7M over 9.8 million units against $249.4M over 9.1 million.
What could go wrong, and how we would know
The risks
- Growth keeps slowing. Four years of slower growth, and the company's own outlook implies about 15% for the December quarter.
- A free rival for fees. Zillow offers small landlords payments, screening and insurance, and has no need to charge for them.
- Payments eat the margin. The cost of delivering the service reached 36.5% of sales in June as payments grew. It fell to 35.7% in September, but the year is guided flat.
- Nobody is cross-examined. Management has not taken an analyst question on an earnings call in two years, and did not on 22 October.
- A few payment processors. The payments run through a small number of outside providers, some with no backup.
The evidence under this - 7 claims
- 2026-10-22editedQ3 2026 growth of 18.6% added; the guide midpoint is 18.3% on the new $1.122B-$1.127B range.
The midpoint is not a forecast, it is the centre of a range management has already raised once and has beaten in each of the last three prints - Q2 2026 revenue came in 1.4% above the vendor consensus, Q1 2026 1.6% above and Q4 2025 0.7% above. At the top of the range the second half grows 18.3% rather than 16.3%, which is barely a deceleration at all. The 2025 fourth quarter also carried one-time Stack partnership revenue, which raises the base the second half is measured against. The direction is right and the magnitude is soft. Q3 2026 revenue of $295.7M was 18.6% above a year earlier against a first-half 19.9%, so the deceleration the guide shows has begun.
- 2026-10-22editedOctober outlook: fourth-quarter growth implied at about 15.0%, replacing the 16.3% second-half rate from July.
The same filing names AppFolio as a partner rather than a rival - "strategic partnerships with AppFolio and Esusu extend our reach" - and Zillow's competition section is written about residential brokerage, not about property management software. Zillow monetises the marketplace and sells no accounting system of record, so it does not replace what a manager of 5,000 units runs the business on. The overlap is at the sub-25-unit end and at the resident transaction, not at the ledger.
- 2026-10-22editedQ3 2026 release: cost of revenue 35.7% of revenue, down from 36.7%; the CFO guides the full year flat on 2025.
- 2026-10-22editedQ3 2026 call read: it ended after the chief financial officer's prepared remarks with no analyst question.
- 2026-10-22editedOctober outlook: revenue low end raised to $1,122M, margin range top lowered to 27.5%.
What we still do not know
- What AppFolio charges. No tier price, no cut of a rent payment and no screening fee is published.
- How many customers stay each year. The company discloses no retention rate.
- How many rented homes, rather than buildings, have a professional manager, which is the true size of the market left.
The evidence under this - 2 claims
What would change our view
- Neutral→AttractiveRevenue per unit keeps compounding, at a lower multiple
It needs all of:
- ○Revenue for each home keeps growing faster than homes, with the transaction fees growing faster than the subscription.checked at the next results, due in Feb 2027
- ○The company's value falls to about 25 times this year's expected operating profit, from roughly 35.about ≈$164.55 today, 27% below the last close
- Neutral→UnattractiveThe mix outruns the price, or a portfolio is lost
It needs any of:
- ○The cost of delivering the service passes 38% of sales, meaning payments are outgrowing the fee taken on them.checked at the next results, due in Feb 2027
- ○A named rival wins a disclosed portfolio of over 100,000 homes, or home growth falls below 6% with nothing to explain it.watched as it happens
We would also be wrong if
- Revenue for each home grows more slowly than the number of homes for three quarters running.
What is coming
- 29 October 2026 Q3 2026 results: Whether revenue per unit keeps compounding faster than units and Value Added Services growth holds above 20%, and whether the guide is raised a third time.
Every dated event ahead
- 29 October 2026 Q3 2026 results: Whether revenue per unit keeps compounding faster than units and Value Added Services growth holds above 20%, and whether the guide is raised a third time.
- February 2027 Q4 and full-year 2026 results, the 2027 guide and the FY2026 10-K: Whether growth settles near the guide's implied mid-teens second half, whether the 2026 margin gain holds, and how much of the buyback authorisation was used.
- April 2027 2027 proxy statement: Whether pay still rewards units signed over revenue per unit, what 2026 paid out, and what the founders and insiders now hold.
Since we wrote this
- 22 OctEarningsSales up 19%, units 9.8 million, outlook moved only a littleRevenue per unit still outgrew units. The outlook implies about 15% growth next quarter, which the price already counts. Neutral holds.
- 5 OctThesis reviewThe long case now sits under the verdictAfter the five-name pilot, the owner asked for the long case on every thesis.
- 4 OctThesis reviewOwner's checklist: revenue streams, cost of growth, management, catalystsThe owner's checklist found the method silent on who runs the company, what growth costs, where the money comes from and what is dated ahead; this pass fills those four blocks from the proxy and filings.
- 16 SepThesis writtenNeutral, medium convictionA fifth of America's rented homes run on its ledger, but the price already assumes the fee on each home keeps compounding.
Also checked 3 times with nothing new to act on.
Sources 19
Sources - 19
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S1primarycompany filing2026-02-05Item 1: the two revenue categories and what sits in each, the three subscription plans, the Value Added Services list, the Competition section (two classes, no company named), the government-regulation list, 22,096 property management customers and 1,702 employees at 31 December 2025. Item 1A: the generative and agentic AI risk factor, the interchange-fee risk, the reliance on a limited number of third-party payment providers with no backup for some services, the seasonality of Value Added Services, and the 83% Class B voting share. Item 7: 9.4 million units under management, the statement that payments fees are recorded gross of interchange, and that usage-based fees carry generally no minimum usage commitments. Item 8: the FY2025 income statement, balance sheet, the single-segment determination, the Terra Mar reinsurance subsidiary and the $150.0M revolving credit facility.backsC01C03C04C05C09C10C12C14C15C16C18C20C21C22C23C25C26C27C30C32C35C36C38C41C42C47
- S10primaryregulator2026-09-16California Business and Professions Code section 10145 - handling of trust funds by a real estate broker State of CaliforniaThe statutory obligation that makes a property manager's accounting ledger a regulated record rather than a convenience - the mechanism behind the switching cost, stated by a state rather than by the seller.
Business and Professions Code section 10145. A real estate broker who accepts funds belonging to others in connection with a transaction subject to this part shall deposit all those funds that are not immediately placed into a neutral escrow depository or into the hands of the broker's principal, into a trust fund account maintained by the broker in a bank or recognized depository in this state. All funds deposited by the broker in a trust fund account shall be maintained there until disbursed by the broker in accordance with instructions from the person entitled to the funds.
backsC08C09 - S11primaryregulator2025-12-15The definition the statute turns on - a coordinating function means collecting price, supply or lease data from multiple independent property owners, analysing it, and recommending rents. Reached only by an agent fetch: nysenate.gov returns a bot-protection page to curl, so this quote is a model's reading of the page rather than a frozen document, and the claim it backs is graded accordingly.
any machine, device, computer program or computer software that on its own or with human assistance performs a coordinating function
backsC14 - S12primaryvendor data2026-09-16AppFolio research pack, frozen at content/APPF/research-pack.jsoncontent/APPF/research-pack.jsonThe market tier: the close of $225.95 on 15 September 2026, the market value of $8.07B and enterprise value of $7.89B, the 252-day and 126-day price-move decompositions, the trailing multiples against the company's own six-year medians, the analyst rating series, FINRA short interest at the 31 August 2026 settlement, the quarterly cash flow series and the adjusted-against-filed earnings per share history.backsC15C16C18C22C24C30C31C32C40
- S13primarycompany filing2026-09-16400 open-market sales and no open-market purchases in the year to 16 September 2026, of which 398 sales covering 99.0% of the shares sold were made under a plan adopted in advance, leaving two discretionary sales of 2,495 shares in total.backsC29
- S14primarycompany filing2026-02-05An executive who signed an employment agreement on 6 February 2025 left on 14 November 2025, and was barred from company systems from 27 October 2025 through the transition period.read, but no claim rests on it
- S15primarytranscript2026-04-23Five calls spanning two years, each ending with the chief executive saying 'Operator, this concludes today's call' straight after the prepared remarks. No analyst question is taken on any of them.backsC17
- S16primarycompany filing2026-04-28executive officer biographies and tenure, the 2025 bonus and PSU metrics, weights, payout curves and certified results, the 2025 grant values, and beneficial ownership by class and voting power at March 31, 2026backsC43C44C45C46
- S17primarycompany filing2026-08-13Schedule 13D/A (Amendment No. 3) filed by Maurice J. Duca on AppFolio Class A stock, August 13, 2026Maurice Duca's beneficial ownership of 6,410,682 shares including 6,107,513 Class B, 21.2% of Class A on an as-converted basis and 44.7% of total voting power, as of August 13, 2026backsC45
- S18primarycompany filing2026-10-22Q3 2026 revenue $295.691M, Value Added Services $231.948M, Subscription Services $61.525M, income from operations $57.411M, operating cash flow $96.766M, nine-month revenue $839.029M, cash $258.5M and investment securities $48.7M, the revised FY2026 outlook ($1.122B-$1.127B revenue, 26.5%-27.5% non-GAAP margin, about 36 million shares)backsC02C04C05C10C18C19C20C34C38
- S19primarytranscript2026-10-229.8 million units against 9.1 million and 23.1 thousand customers against 21.8 thousand; cost of revenue 35% on the non-GAAP measure; the statement that existing-customer unit expansion stays below last year's and comparable to the third quarter in the fourth; the margin range reflecting a deliberate sales and marketing push; cost of revenue guided flat on 2025; and the fact that the call ended after prepared remarks with no analyst question
We ended the quarter managing approximately 9.8 million units. An 8% increase from 9.1 million units a year ago. Customers grew to 23.1 thousand up 6% from 21.8 thousand.
backsC04C05C10C17C19C20C34C38 - S2primarycompany filing2026-07-23The Q2 2026 statements. Read for a customer-concentration note and there is none in the document, which is itself the disclosure answer.backsC25C41C42C47
- S3primarycompany release2026-07-23Revenue split by category for Q2 2026 and the year-ago quarter; the balance sheet at 30 June 2026; the cash flow statement with $125,010 thousand of share repurchases in the half; stock-based compensation by expense line; diluted share counts; GAAP and non-GAAP operating income; and the raised fiscal 2026 outlook of $1.117B to $1.127B of revenue at a 26.5% to 28.0% non-GAAP operating margin.backsC01C02C05C10C15C16C18C19C20C22C23C24C32C38C40C41
- S4primarytranscript2026-07-239.6 million units against 8.9 million a year ago and 22,751 customers against 21,403; 1,732 employees; premium tier adoption moving from about one unit in four to nearly one in three; the CFO's description of the go-to-market model as entry pricing under multiyear agreements followed by value-added services revenue; the statement that cost of revenue rose on payments product mix and data centre capacity for AI; the guidance assumption of a more moderate pace of unit expansion among existing customers; the note that 2025 Q4 carried one-time Stack partnership revenue; and the fact that the call ended after prepared remarks with no analyst question taken.backsC01C04C05C07C10C17C18C25C33C34C37C38
- S5primarycompany release2026-01-29FY2025 non-GAAP operating income of $235M at 24.7% of revenue against 25.2% in 2024 - the margin fell; 9.4 million units, up 8%; and the original fiscal 2026 outlook of $1,100M to $1,120M of revenue at a 25.5% to 27.5% non-GAAP operating margin on 36 to 37 million diluted shares, which is what the July raise is measured against.backsC04C05C19C20C22
- S6primarycompany filing2026-02-11Zillow Group Form 10-K for the fiscal year ended December 31, 2025 Zillow Group, Inc.Zillow's own description of what Zillow Rentals does for renters and for landlords, its definition of a longtail landlord, the 2.4 million average monthly active rental listings, the statement that Rentals was 24% of total revenue in 2025 growing 39%, the naming of AppFolio as a strategic partner, and the exclusive Elise AI integration behind its leasing assistant.backsC11C12
- S7primarygovernment data2026-07-28U.S. Census Bureau Housing Vacancy Survey - renter-occupied housing units in the United States, series ERNTOCCUSQ176N U.S. Census BureauThe base for the prize and the rate for the driver: 46.827 million renter-occupied housing units in the second quarter of 2026, against 46.355 million a year earlier.
Housing Inventory Estimate: Renter Occupied Housing Units in the United States - 46.827 million units at 2026-04-01 against 46.355 million at 2025-04-01, growth of 1.02%.
backsC06C07C33C39 - S8primarygovernment data2022-11-29HUD and Census Bureau release findings of the 2021 Rental Housing Finance Survey U.S. Department of Housing and Urban DevelopmentThe professional-management rate by property size, and the survey's count of 19.3 million rental properties containing 49.5 million rental units.
Among the 19.3 million rental properties, which contain 49.5 million rental units. About 22 percent of small rental properties (1-4 units) are managed professionally while 84 percent of properties with 150 or more units are managed professionally.
backsC28C39 - S9primaryregulator2026-07-16United States of America, et al. v. RealPage, Inc., et al.; Proposed Final Judgment and Competitive Impact Statement, published by the Antitrust Division in the Federal Register U.S. Department of Justice, Antitrust DivisionThe market structure nobody in this industry publishes: RealPage's share of rent-setting software, that Yardi and Entrata are the next two largest, the restrictions the settlement places on what data a pricing algorithm may use, and the 2021 American Housing Survey count of 21.1 million multifamily apartments against a conventional multifamily market of about 14 million units. AppFolio appears nowhere in the document.
As early as 2019, a RealPage presentation for clients stated that RealPage ``has around 80% of the Revenue Management market share.'' That share has proved durable over time. In 2023, during a sales pitch to a property owner, a RealPage representative noted that ``[RealPage] has 80% to 85% of the market share with the closest competitor around 12% (<750K units).''
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