AppFolio, Inc.

Good afternoon. My name is Christine, and I'll be your conference operator today. At this time, I would like to welcome everyone to the At Folio, Inc. announces second quarter 2019 financial results conference call. All lines have been placed on mute to prevent any background noise. If you should need assistance during the call, please press star, then zero on your telephone keypad, and an operator will come back to assist you. Thank you. Erica Abrams, you may begin your conference.

Thank you, Christine. Good afternoon, ladies and gentlemen. Thank you for joining us today as we report AppFolio's second quarter 2019 financial results. I'm joined today by Jason Randall and Ida Kane of AppFolio to discuss these results. This call is simultaneously being webcast on the investor relations section of our website at www.appfolioinc.com. Before we get started, I would like to call everyone's attention to our safe harbor policy. Please note that certain statements made on this call will be forward-looking statements which are subject to considerable risks and uncertainties. Actual results or performance may be materially different from any results or performance expressed or implied by the forward-looking statements. Forward-looking statements may relate to future plans and financial conditions, results of operations, Business Forecasts and Plans, Strategic Plans and Objectives, and Product Development Plans. Please see our filings with the SEC for greater detail about risks and uncertainties. Forward-looking statements are based on assumptions as of today, and we assume no obligation to update any forward-looking statements after today, even if new information becomes available in the future. With that, I'll turn the call over to Ida. Ida, please go ahead.

Thank you, Erica, and welcome to everyone joining us on the call today for Outfolio's second quarter 2019 financial results. Total revenue for the quarter increased by 35% over the same period one year ago to $63.6 million. Gap net income was $23.2 million, or 65 cents per diluted share, which includes an income tax benefit of $21.3 million, primarily related to the release of our valuation allowance against deferred tax assets. Our second quarter performance reflects our continued investment in growth initiatives in advance of expected revenue generation. We believe these growth initiatives will positively impact long-term shareholder value and include the following. At Folio Property Manager Plus, are offering that serves larger, more complex real estate property manager customers. Abfolio Investment Management, which serves real estate investment managers. Lisa, Abfolio's AI leasing assistant, which we developed from the technology acquired through the Dynasty acquisition and is now offered as a value plus service to our real estate customers. And Abfolio Utility Management, which we developed from technology acquired through the WeGoWise acquisition and is now also offered as a value plus service to our real estate customers. Also included in our second quarter results is $1.7 million in non-cash charges related to stock-based compensation. For those of you who track non-GAAP results, our Form 10Q that was filed today includes more detailed information that you might find helpful in calculating non-GAAP results. Core Solutions revenue was $21.6 million in the second quarter, a 27% increase year-over-year, primarily due to a 19% increase in property manager units under management related to a 12% increase in the number of property manager customers. We closed the second quarter with 13,737 property manager customers managing 4.23 million units. As a reminder, we define real estate property manager customers as the number of customers subscribing to our core solutions. Customers that are not subscribing to our core solutions are not included in our customer and unit counts. In our legal vertical, customer count increased 6% year over year to 10,631. Second quarter value plus services revenue was $39.1 million A 36% increase year-over-year. Revenue from each of our Value Plus services increased year-over-year and new Value Plus services were introduced in the quarter. The majority of growth in Value Plus services was derived from increased usage of our electronic payments, screening, and insurance services by a larger base of property manager customers and a higher number of units under management. Turning to expenses, Total costs and operating expenses for the second quarter increased 54% year-over-year on a GAAP basis compared to an overall 35% increase in total revenue. Our year-over-year increase in costs primarily related to our 49% growth in headcount to support an expanding base of existing customers and our growth initiatives. We released our valuation allowance against our deferred tax assets during the second quarter which is the primary factor in our income tax benefit of $21.3 million. Our balance sheet at June 30th reflects a $21.7 million deferred tax asset which we believe we can use to offset future tax expenses. Also on the balance sheet, we close the quarter with approximately $42.5 million in cash, cash equivalents, and investment securities and $49.4 million of debt. We generated $11.5 million from operating activities, used $1.4 million to purchase property and equipment, and invested $4.8 million in additional product innovation via capitalized software. We did not initiate any stock repurchases during the second quarter. Given our performance to date, we now expect full-year 2019 revenue in the range of $253 to $255 million, which represents year-over-year revenue growth of 34% at the midpoint. We continue to expect our weighted average diluted shares for the full year to be approximately $36 million. As a reminder, investors are invited to submit questions via the investor Q&A form located on the investor overview section of our website. With that, I'll turn the call over to Jason for some additional comments.