AppFolio (APPF) Margin Compression In Q4 2025 Tests Bullish Growth Narrative

AppFolio (APPF) closed out FY 2025 with fourth quarter revenue of US$248.2 million and basic EPS of US$1.11, alongside net income of US$39.9 million, setting a clear marker for how the year finished. The company has seen revenue move from US$203.7 million and EPS of US$2.82 in Q4 2024 to US$248.2 million and EPS of US$1.11 in Q4 2025. The trailing twelve months show revenue of US$950.8 million and EPS of US$3.91 as investors weigh how a net profit margin of 14.8% on recent data fits with the growth story.

See our full analysis for AppFolio.

With the latest numbers on the table, the next step is to see how this earnings profile lines up with the prevailing narratives around AppFolio's growth, risks, and profitability.

Curious how numbers become stories that shape markets? Explore Community Narratives

Margins Slip From 25.7% To 14.8%

• On a trailing basis, net profit margin stands at 14.8%, compared with 25.7% a year earlier, alongside trailing net income of US$140.9 million on US$950.8 million of revenue.
• What stands out for the bearish view is the contrast between this weaker trailing profitability and the 27.2% 5 year earnings growth rate. This raises questions about how durable that past growth is in light of:
  • Trailing earnings showing a negative one year change despite the longer term growth record cited in the data.
  • Q4 2025 net income of US$39.9 million versus US$102.7 million in Q4 2024, which lines up with the pressure on margins shown in the trailing figures.

Premium 48.4x P/E With DCF Gap

• The shares change hands at a trailing P/E of 48.4x compared with a peer average of 17.3x and a US software industry average of 28.8x. The DCF fair value in the data is US$193.58 versus a share price of US$189.88.
• Analysts with a bullish stance point to the shares trading about 1.9% below that DCF fair value and to a cited ~45.8% potential upside, alongside:
  • Forecast earnings growth of about 20.1% a year and revenue growth of about 14.8% a year, both above the broader US market figures in the dataset.
  • Trailing data that describe past earnings quality as high, even though the latest one year change in earnings is weaker than the 5 year growth rate.

Overpaying for growth is a common worry, so it helps to see how this premium multiple stacks up against the full growth, risk, and valuation story in one place. 📊 Read the full AppFolio Consensus Narrative.

950.8m TTM Revenue Backs Growth Story

• Over the trailing twelve months, revenue totals US$950.8 million versus US$794.2 million in the prior trailing period from the dataset, while trailing EPS is US$3.91 against Q4 2025 quarterly EPS of US$1.11.
• Supporters of a bullish angle often frame AppFolio as a vertical SaaS and real estate software platform with AI driven automation, and the numbers here interact with that story in a few key ways:
  • The move from US$203.7 million of revenue in Q4 2024 to US$248.2 million in Q4 2025 sits alongside the 14.8% forecast annual revenue growth rate cited in the analysis data.
  • The trailing EPS of US$3.91 and Q4 2025 net income of US$39.9 million are consistent with a profitable software business, even as the margin compression in the same period gives bulls something important to factor in.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on AppFolio's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

AppFolio pairs solid revenue and EPS figures with a sharp drop in margins, which raises questions about how reliable its profitability trend really is.

If that margin pressure gives you pause, shift your focus to stable growth stocks screener (2167 results) to quickly zero in on businesses with steadier earnings and revenue profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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