AppFolio (NASDAQ:APPF) reported strong second-quarter 2026 results, with management highlighting continued revenue growth, expanding margins, increased platform adoption and growing customer interest in artificial intelligence-powered real estate operations.
The property management software company said revenue rose 19% year over year to $281 million, compared with $236 million in the second quarter of 2025. Chairman and CEO Shane Trigg said AppFolio also crossed $1 billion in trailing 12-month revenue for the first time.
GAAP operating income increased to $53 million, or 18.8% of revenue, up from $41 million, or 17.2% of revenue, a year earlier. Non-GAAP operating income rose 24% year over year to $76 million, or 27.1% of revenue, compared with $62 million, or 26.2% of revenue, in the prior-year period.
Revenue Growth Driven by Subscriptions, Value-Added Services
CFO Tim Eaton said subscription services revenue grew 14% year over year to $60 million, driven by new customers, growth in units under management and upgrades to premium tiers. Nearly one in three units are now on a premium tier, up from approximately one in four, according to management.
Value-added services revenue increased 22% year over year to $219 million. Eaton said the growth was led by FolioGuard risk mitigation services, FolioScreen offerings and online payments, along with continued unit growth. He also pointed to newer offerings, including Resident Onboarding Lift, move-in services through LiveEasy and Realm-X Performers, AppFolio’s agentic AI products for leasing, maintenance and resident messaging.
AppFolio ended the quarter with approximately 9.6 million units on its platform, an 8% increase from 8.9 million a year earlier. The company’s customer count rose 6% to 22,751 from 21,403.
“New customer wins and new unit additions remained strong,” Eaton said. “Customer and unit retention continued to be healthy and consistent with historical averages.”
Management Emphasizes AI and Platform Consolidation
Trigg said conversations at the NAA Apartmentalize conference underscored broad industry interest in AI, but he said customers were focused less on adding tools and more on reducing complexity across disconnected systems.
He cited AppFolio’s Property Management Benchmark Report, which found that 45% of property managers are actively planning to streamline their software solutions. Trigg said customers that moved to AppFolio reduced reliance on multiple disconnected systems, pointing to examples including RST & Associates, Advanced Management Company and Northpoint Asset Management.
“Consolidation isn’t the end game,” Trigg said. “It’s simply removing blockers to what customers actually want: real performance.”
AppFolio is positioning its strategy around what it calls real estate performance management, or RPM. Trigg described RPM as a combination of “an AI-native architecture with interconnected systems of record, action, and growth.”
The company highlighted continued development of Realm-X Flows, its workflow automation layer. Trigg said AppFolio expanded Flows during the quarter to include five times the triggers and more than 1,000 conditional options to route and filter workflows. Among customers that have adopted Flows, runs grew triple digits year over year across areas including lead nurture, rental applications, move-ins, delinquency and renewals.
Trigg also said Leasing Performer is involved in roughly half of all completed showings for customers that have deployed it, while Maintenance Performer responds to resident inquiries in seconds. AppFolio announced a new Accounting Performer at Apartmentalize, which the company said is intended to streamline bill entry, financial close processes and budgeting.
Customer Examples Highlight Adoption
Management cited several customer examples to show how broader platform adoption is affecting operations. Trigg said PURE HomeRiver, which operates in 35 states and manages a 40,000-unit portfolio, renewed its commitment to AppFolio as its single platform of choice and anticipates growth to 60,000 units.
Trigg also discussed Stratton Vantage, a Phoenix-based operator managing 1,600 units, which implemented Resident Onboarding Lift earlier this year. According to Trigg, 100% of its leases have moved through the platform, and the company’s leasing team has reported recapturing nearly 20 hours a month.
Other examples included Yale Management Services, a 7,500-unit customer in Los Angeles that upgraded to AppFolio’s Max tier and achieved a 1.9 percentage point lift in occupancy over six months, and Bluestone, which manages 3,000 residential units in the Pacific Northwest. Trigg said Bluestone’s Leasing Performer handled more than 10,000 leads, with 55% arriving after hours and an average response time under nine seconds.
Costs, Cash Flow and Workforce
Eaton said cost of revenue, excluding depreciation and amortization, was 36% of revenue, up from 35% a year earlier. He attributed the increase to payments product mix and incremental data center capacity to support rising customer usage of AI capabilities, partially offset by operating efficiencies.
Sales and marketing expense was 14% of revenue, consistent with the prior-year quarter. Research and development declined to 15% of revenue from 16%, while general and administrative expense remained at 7% of revenue.
AppFolio ended the quarter with 1,732 employees, up 3% year over year. The company generated $88 million in operating cash flow and ended the quarter with $222 million in cash equivalents and current investment securities.
“Our capital allocation approach remains unchanged,” Eaton said. “We prioritize investing in the business, and our share repurchase program remains opportunistic.”
AppFolio Raises 2026 Guidance
AppFolio raised its full-year 2026 revenue outlook to a range of $1.117 billion to $1.127 billion, with the midpoint implying 18.0% growth. Eaton said the updated outlook is supported by premium tier adoption, growth in new business units and increasing adoption of products and services, including agentic AI performers and resident services.
The company also raised its non-GAAP operating margin guidance to a range of 26.5% to 28.0%, compared with 24.7% in 2025. AppFolio expects cost of revenue, excluding depreciation and amortization, to be relatively flat as a percentage of revenue compared with 2025.
Eaton said the company expects operating expenses as a percentage of revenue to decline modestly as AppFolio scales and uses AI to drive efficiency across internal operations. The company anticipates diluted weighted average shares outstanding of approximately 36 million for the full year.
“Our continued investment in AI and the resident experience is expanding the value customers receive from our platform,” Eaton said, adding that AppFolio remains focused on “durable revenue growth, margin expansion, and disciplined capital allocation.”
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.
