AppFolio revenue rises 19% year over year to $296 million as GAAP operating margin reaches 19.4%

AppFolio said third-quarter revenue rose 19% from a year earlier to $296 million, with GAAP operating income up 64% to $57 million and non-GAAP operating income up 38% to $81 million, and lifted the bottom of its 2026 revenue range.

The release states the top line in rounded millions and the financial statements in thousands. Revenue was $295.69 million for the three months ended September 30, 2026, against $249.35 million a year earlier, an 18.6% increase that the company describes as 19% growth to $296 million. The second quarter produced $281.12 million, so the sequential gain was 5.2%.

Value-added services outgrow subscriptions

Value Added Services contributed $231.95 million of the quarter's revenue, up 20.7% from $192.09 million, while Subscription Services rose 14.5% to $61.53 million from $53.75 million. Other revenue, reported as its own line, fell to $2.22 million from $3.51 million. Total units under management reached 9.8 million, 8% above a year earlier and up from the 9.6 million reported for June 30.

Shane Trigg, the chairman and chief executive, said the quarter showed "the strength and durability of our business" and that "new and existing customers continue to adopt our performance platform".

Operating leverage reaches the GAAP line

Cost of revenue rose 15.4% from a year earlier to $105.58 million, slower than revenue. Research and product development slipped to $53.13 million from $54.04 million, and general and administrative expense fell to $25.95 million from $27.45 million. Sales and marketing was the exception: it rose 35.4% to $48.62 million from $35.91 million, a jump the release reports without explanation. The result was GAAP operating income of $57 million, or 19.4% of revenue, against $35 million and 14.1%, and non-GAAP operating income of $81 million, or 27.3%, against $59 million and 23.5%. The $23.31 million gap between the two operating measures is fully accounted for by stock-based compensation of $20.6 million, purchased-intangible amortization of $2.56 million and $153,000 of amortization of capitalized stock-based compensation; stock-based compensation was $20.79 million a year earlier. Net income was $45.98 million, or $1.29 a diluted share, against $33.65 million and $0.93. Non-GAAP net income was $64.68 million, or $1.82 a diluted share against $1.31.

Guidance lifts the floor and lowers the margin ceiling

For the full year, AppFolio's revenue range is now $1.122 billion to $1.127 billion, against $1.117 billion to $1.127 billion in July: a $5 million increase at the bottom with the top unchanged. The non-GAAP operating margin range narrowed to 26.5% to 27.5% from 26.5% to 28.0%. The outlook pairs that range with no GAAP-equivalent margin figure; the release says AppFolio is "unable, at this time, to provide GAAP equivalent guidance measures" for non-GAAP operating margin and that "The effect of these excluded items may be significant". Diluted weighted average shares are still expected to be approximately 36 million. Nine-month revenue was $839.03 million, up 19.4% from $702.63 million, and nine-month net income was $129.95 million, or $3.65 a diluted share against $2.78. The release gives no fourth-quarter revenue or margin figure, but the full-year range and the nine-month total do imply one: the range less $839.03 million leaves roughly $283.0 million at the bottom and roughly $288.0 million at the top.

Cash builds while the buyback slows

Cash and cash equivalents were $258.54 million at September 30, 2026, against $106.97 million at December 31, 2025, after $218.67 million of nine-month operating cash flow against $177.12 million. Quarterly operating cash flow was $97 million, or 32.7% of revenue, against $86 million and 34.5%. AppFolio bought back $129.19 million of stock in the first nine months, but only $4.18 million of that came in the third quarter, and diluted shares fell to 35.58 million from 36.26 million. The smaller share count is why diluted earnings per share rose 38.7% while net income rose 36.7%, both against the third quarter of 2025.

The customer detail sits in the quarterly report

The release gives units, not accounts: it does not say how many customers AppFolio has, what retention or annual recurring revenue looked like, or how the two revenue lines differ in profitability. The fuller Form 10-Q for the quarter ended September 30, 2026, which the exhibit does not include, is where the expense detail behind the sales and marketing increase should appear. Fourth-quarter results will arrive the same way this one did, as an exhibit to a Form 8-K furnished under Item 2.02, the item the filing index lists for the October 22 report.