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Investing.com -- Shares of AppFolio (NASDAQ: NASDAQ:APPF) fell 8% as the company’s financial guidance for the fiscal year 2025 failed to enthuse investors. Despite reporting fourth-quarter earnings per share of $0.92, which was slightly below the analyst estimate of $0.94, the technology firm’s revenue for the quarter exceeded expectations at $203.66 million against the consensus estimate of $199.86 million.
The company’s guidance for fiscal year 2025 indicated revenues ranging from $920-940 million, compared to the consensus forecast of $931.5 million. AppFolio’s projected revenue growth appears to be slowing down, which, coupled with an anticipated increase in expenses, is expected to impact operating leverage and earnings growth, according to analysts.
Keefe, Bruyette & Woods analyst Ryan Tomasello commented on the results, stating, "As APPF’s revenue growth slows meaningfully in 2025 and a reacceleration in expenses weighs on operating leverage/earnings growth, we expect this to drive multiple compression."
For the fourth quarter, AppFolio’s revenue grew by 19% YoY to $204 million, and the company saw a 6% YoY increase in total units under management, reaching 8.7 million. However, GAAP operating income was $23 million, or 11.3% of revenue, a decline from $28 million, or 16.4% of revenue, in the same quarter of the previous year.
The full-year financials also reflected growth, with revenue climbing 28% YoY to $794 million. GAAP operating income for the fiscal year 2024 significantly improved to $136 million, or 17.1% of revenue, from $1 million, or 0.2% of revenue, in fiscal year 2023.
AppFolio’s President and CEO, Shane Trigg, expressed pride in the company’s performance and its continued innovation in the real estate technology sector, emphasizing the value delivered to customers through investments in AI and the resident experience.
Despite the positive tone from the company’s CEO and the reported revenue growth, the stock’s decline reflects investor concerns over the future profitability and expense management. The company’s financial outlook suggests a cautious approach to revenue growth and margin expansion for the upcoming year.
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