AppFolio, Inc.

Ladies and gentlemen, thank you for standing by and welcome to APFOEU, Inc. announces third quarter 2020 financial results. At this time, all participants are in a listen-only mode. If you require any further assistance, please press star zero. I would now like to hand the conference over to Erica Abrams. Thank you. Please go ahead.

Thank you, Chris. Good afternoon, ladies and gentlemen, and thank you for joining us today as we report APFOEU's third quarter 2020 financial results. With me on the call today are Jason Randall, Appfolio's president and CEO, and Ida Kane, Appfolio's chief financial officer. 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 may be forward-looking statements within the meaning of the federal securities laws that 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, including any such statements referring to the potential effects or impacts of the COVID-19 pandemic on Appolio's business, They relate to future plans and financial conditions, results of operations, business forecasts and plans, strategic plans and objectives, product development plans, trends affecting our business and industry and the economy as a whole, capital needs and financing plans, and various commitments and contingencies, including with respect to the outcome of legal proceedings or regulatory matters. Please see our filings with the SEC, including our Form 10-Q, which was filed earlier today, for greater detail about risks and uncertainty. Forward-looking statements are based on reasonable 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, unless required by law. With that, I will turn the call over to Ida Kane, CFO. Ida, please go ahead.

Thank you, Erica, and welcome to everyone joining us on the call today for Efolia's third quarter of fiscal year 2020 financial results. First, I want to thank all Efolians for their continued dedication to our business and customer success during this challenging time. We believe our people and culture are the heart of our success, and the current environment has only amplified that belief. The commitment of our workforce, to developing and supporting our products and service offerings is reflected in the numbers and the morale and focus of our team remains high even while working remotely. Turning to the numbers, we reported total revenue of $84.1 million for the third quarter, a 24% increase year over year. Gap net income for the quarter was $137.7 million or $3.86 per diluted share. This includes a pre-tax gain of $187.6 million related to the sale of MyCase offset by a net tax expense of $48.9 million. Also included in GAAP net income is $3.1 million of non-cash charges related to stock-based compensation For those of you who track non-GAAP results, our Form 10-Q was filed today and includes more details than you may find helpful in calculating non-GAAP results on your own. Total third quarter revenue from core solutions increased 21% to $27.1 million, primarily driven by 16% growth in the average number of property management units under management. resulting from a nine percent increase in the average number of property management customers third quarter value plus services revenue was 53.4 million dollars a 28 increase year over year also driven by the increase in property management customers and units the majority of our value plus services comes directly and indirectly from our customers uses of our electronic payment services tenant screening services, and insurance services. Our electronic payment services continue to experience increased demand as residents, property managers, owners, and customers transacted more business online. We closed the third quarter with 15,352 real estate property management customers managing an aggregate of 5.12 million units in their portfolios. This compares to 14,034 customers and 4.41 million units under management reported one year ago. Turning to expenses, total costs and operating expenses for the third quarter increased 27% year-over-year on a gap basis compared to an overall 24% increase in total revenue. This year-over-year increase in costs is primarily related to our 17% year-over-year growth in headcounts. Furthermore, included in general and administrative expenses are one-time professional fees and other costs related to the MyCase transaction of $2.3 million. During the third quarter, we continue to operate as a remote workplace and expect to continue to do so at least through the end of the first quarter of 2021. As a result, we have experienced reduced costs associated with running our facilities, lack of travel and in-person events, and other downstream effects of the remote work environment. As a reminder, on September 30, 2020, we completed the divestiture of MyCase, our former wholly owned subsidiary, that provided legal practice and case management software solutions to our legal customers. The transaction was executed for $193 million. For more information about the MyCase transaction, please refer to Note 3, Divestitures and Business Combinations, of our condensed consolidated financial statement. For the three-month period end of September 30, 2020, MyCase total revenue was $9.5 million, of which $5.2 million was core revenue and $4.3 million related to Value Plus services. In addition, our total headcount as of September 30, 2020, included 118 MyCase employees, that left a folio in connection with the transaction. Moving to the balance sheet, as of September 30, our principal sources of liquidity were cash and cash equivalents and investment securities, which had an aggregate balance of $181.9 million. Our cash and cash equivalents increased during the quarter primarily as a result of the proceeds from the my case transaction. We also repaid a total of $97.2 million under our then existing credit agreement, leaving us debt free today. We generated $17.8 million from operating activities in the third quarter. Our primary uses of cash in the quarter were capital expenditures of $2.2 million. We also realized capitalized software development costs of $7 million in connection with continued investment in our technology and service offerings. We are pleased with our performance in the third quarter and year to date and continue to look ahead with caution given the uncertainty related to COVID-19. The potential impacts of the pandemic are only amplified by the length of time they affect our customers and the broader economy. As a result, we are not communicating revenue guidance for the remainder of the fiscal year. We continue to expect our diluted weighted share count for the year to be approximately 36 million shares. With that, I will turn the call over to Jason for additional comments.