AppFolio (NASDAQ:APPF) reported fourth-quarter and full-year 2025 results that management said capped off a year of “AI-powered innovation and accelerating unit growth,” with revenue of $248 million for the quarter and $951 million for the year. President and CEO Shane Trigg said the company ended 2025 with 9.4 million units on its platform and positioned 2026 as a milestone year, with the company “poised to hit” a long-stated goal of reaching $1 billion in annual revenue.
Fourth-quarter and full-year results
Trigg said fourth-quarter revenue increased 22% year over year to $248 million, while non-GAAP operating margin was 24.9%. For the full year, he said revenue rose 20% year over year to $951 million, with a non-GAAP operating margin of 24.7%.
Value-added services revenue totaled $185 million in the fourth quarter, an increase of 20% year over year. Eaton said the increase reflected greater use of FolioGuard risk mitigation services, FolioScreen offerings, and online payments, along with growth in units under management. He also said Resident Onboarding Lift (through a partnership with Second Nature) and LiveEasy were “beginning to contribute” to value-added services. For the full year, value-added services revenue was $722 million, up 19% year over year.
Unit growth and premium-tier adoption
Management highlighted continued expansion in units under management and customer count. Eaton said AppFolio ended the quarter managing approximately 9.4 million units from 22,096 customers, compared with 8.7 million units from 20,784 customers a year earlier—an 8% increase in units and a 6% increase in customers.
Trigg emphasized that growth was supported by new business and broader product adoption, noting that AppFolio added more than 500,000 units in the second half of 2025 alone. He also said adoption of the company’s premium tiers, Plus and Max, has exceeded 25%, which he framed as evidence of momentum across both SMB and upmarket customers.
AI strategy and product expansion
Trigg positioned the company’s product roadmap around what he described as an “AI-native performance platform” that unifies “systems of record, action, and growth.” He said AppFolio is embedding “agentic AI” into daily workflows to help customers shift from “property managers to performance managers.”
Discussing industry conditions, Trigg cited the company’s property management benchmark report and said professionals are entering 2026 with confidence, with 81% of managers feeling positive and 77% expecting to increase unit counts, up from 65% a year ago. He said that optimism is “tempered” by rising operating costs and pressure on occupancy rates, and added that half of AI users in the industry report they “cannot rely on the AI features embedded in their core property management systems.” Trigg said AppFolio’s experience differs, citing that 98% of AppFolio customers are actively using at least one AI capability included in the platform.
He also pointed to consolidation as a theme, saying 45% of survey respondents plan to consolidate software solutions, and argued that a unified platform reduces fragmentation and improves the customer experience.
On product, Trigg said the company introduced its first three Realm-X “Performers” at its Future event and characterized them as a move beyond traditional automation to “agentic, goal-driven AI.” He said the transition from Smart Maintenance to the Realm-X Maintenance Performer is largely complete and that adoption of leasing performers is accelerating faster than prior leasing tools. Trigg also highlighted Realm-X Flows, which he said allow customers to codify and automate additional aspects of their business, including rent recovery. He noted that the company is bringing partners “directly into the user experience,” citing a new rent recovery partner, Genesis, as an example of integrations that can be triggered within workflows.
Customer examples and resident services
Trigg provided examples of customer outcomes and new services. He described Advanced Management Company, which manages 12,000 multifamily units in Southern California, and said the customer has adopted features including Realm-X Messages, Realm-X Flows, FolioGuard Smart Insure, and FolioScreen Trusted Renter, and is implementing the Realm-X Leasing Performer across its portfolio.
He also discussed what he called the company’s “system of growth,” including Resident Onboarding Lift, which he said was co-created with Second Nature to deliver a seamless move-in experience that activates resident services and creates revenue opportunities. Trigg said the newest service within Resident Onboarding Lift is Group Rate Internet, which allows property managers to offer residents managed high-speed internet “at an attractive rate.”
Trigg cited feedback from new customers who switched to AppFolio, stating that 96% said switching improved overall business performance and 94% said the platform improved resident satisfaction. He also said AppFolio was named the overall leader on the G2 Grid based on customer feedback.
Margins, expenses, and 2026 outlook
Eaton said fourth-quarter non-GAAP operating margin of 24.9% compared with 20.2% in the prior-year quarter. For the full year, non-GAAP operating margin was 24.7% compared with 25.2% in 2024. He attributed the year-over-year decline primarily to the company’s 2025 corporate incentive plan, saying over-attainment resulted in $15 million of additional expense, or 1.6% of revenue. Excluding that impact, he said full-year non-GAAP operating margin would have been 26.3%.
Cost of revenue (excluding depreciation and amortization) was 36% of revenue in the fourth quarter, compared with 37% a year earlier. For the full year, Eaton said cost of revenue increased to 36% from 35%, driven by payments mix, incremental data center spend to support AI usage, and the incentive plan over-attainment expense. Combined sales and marketing, R&D, and G&A expenses were 38% of revenue in the fourth quarter, compared with 41% last year. For the full year, he said operating expenses as a percent of revenue were 38%, comparable to 2024, as scale and operational efficiencies offset the incentive plan impact.
AppFolio ended the quarter with 1,702 employees, up 4% from the fourth quarter of 2024, which Eaton said reflected growth across most functional areas as the company invests in innovation and sales capacity.
Looking ahead, Eaton provided 2026 guidance calling for:
- Revenue: $1.10 billion to $1.12 billion (17% growth at the midpoint)
- Non-GAAP operating margin: 25.5% to 27.5%
- Cost of revenue (ex-D&A): relatively flat as a percentage of revenue versus 2025
- Diluted weighted average shares outstanding: 36 million to 37 million
Eaton said the revenue outlook is expected to be supported by adoption of premium tiers, growth in new business units, and increased adoption of products and services including “AI-native performers and new resident services,” and that revenue seasonality is expected to be mostly consistent with 2025.
About AppFolio (NASDAQ:APPF)
AppFolio, Inc is a Santa Barbara–based provider of cloud-based software solutions for the property management and legal industries. Founded in 2006 by former software executives, the company went public on the NASDAQ under the symbol APPF in 2015. Its original offering, AppFolio Property Manager, automates accounting, marketing, leasing, and maintenance functions for residential, commercial, student housing, and community association managers.
In 2019, AppFolio expanded its portfolio with the acquisition of MyCase, a web-based legal practice management platform for small to mid-size law firms.
